ASIATODAY.ID, JAKARTA – Morgan Stanley announced that it was withdrawing from the Net-Zero Banking Alliance (NZBA), on Thursday, December 2 2025 following Citigroup Inc and Bank of America Corp which had previously announced that they were withdrawing from NZBA membership.
The exit of leading investment banks from the NZBA comes amid heated legal and political pressure in the United States. Republicans accused a number of financial institutions of violating antitrust rules by limiting financing to the fossil energy sector.
The peak was when the state of Texas launched lawsuits against BlackRock Inc., Vanguard Group Inc. and State Street Corp. in November 2024. These companies were deemed to have disrupted coal supplies because of the environmentally friendly investment rules they implemented.
Other major banks that have announced withdrawals from the NZBA include Goldman Sachs Group Inc. and Wells Fargo & Co. Even though they no longer hold member status, all of these banks emphasized that they remain committed to their own net zero emissions targets, as well as supporting clients to reduce their carbon footprint.
As a reference, NZBA is a banking sector coalition committed to aligning lending and investment with global efforts to reduce greenhouse gas emissions. This coalition consists of 142 leading banks from 44 countries with total assets under management of US$ 64 trillion. In addition, banks that voluntarily join the NZBA have an obligation to follow the net zero emissions target by 2050.
Several banks from Asia Pacific that have joined the NZBA include DBS Bank Ltd. from Singapore, Sumitomo Mitsui Financial and Sumitomo Mitsui Trust from Japan, to Maybank from Malaysia. There are no banking entities from Indonesia recorded as members of the NZBA until early January 2025.
The NZBA was previously part of the financial industry group affiliated with the Glasgow Financial Alliance for Net Zero (GFANZ). However, in late 2024, GFANZ changed the way it works. The GFANZ mechanism now allows financial institutions to use guidance and support without being a member of a sectoral alliance.
This wave of retreat from the NZBA follows a similar pattern in other financial sectors. In 2023, there will be a massive wave of exodus in the insurance coalition due to the threat of litigation. In 2022, a similar coalition among asset managers also lost important members, including Vanguard Group, the world’s second-largest asset manager, which was joined by several other investment firms.
GFANZ, which was formed more than three years ago ahead of the COP26 climate conference in Glasgow, Scotland, initially aimed to increase the number of financial institutions committing to zero emissions and facilitate industry discussions regarding the challenges of a low-carbon transition.
In the latest statement, GFANZ said it had achieved its initial goal of building the foundations of a financial system capable of financing a low-carbon transition. To succeed in this economic transition, GFANZ emphasizes the need to accelerate public policy, technology development and bridge three key gaps: data, action and investment.
GFANZ is now focused on closing the investment gap to unlock opportunities of more than US$5 trillion per year, as the energy system modernizes and the economy shifts to a low-carbon pathway in the next decade. (AT Network)
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