HSBC Quits Net-Zero Banking Alliance Amid Shifting Climate Strategies

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Follows Exit of U.S. Banking Giants as Net-Zero Push Faces Headwinds

HSBC has announced its withdrawal from the Net-Zero Banking Alliance (NZBA), joining a growing list of global banks distancing themselves from the climate-focused coalition. The UK-based lender said the group had fulfilled its early purpose of guiding banks in setting emissions-reduction targets and that it would now independently update its own transition plan toward net-zero emissions by 2050.

“We remain resolutely focused on supporting our customers to finance their transition objectives and on making progress towards our net zero by 2050 ambition,” an HSBC spokesperson stated.

Formed in 2021, the NZBA aimed to align the banking sector with global climate goals, including by encouraging financial support for low-carbon projects and requiring members to set concrete targets to reduce the emissions associated with their lending activities.

Major U.S. banks, including JPMorgan Chase, Citi, Morgan Stanley, Macquarie, and Bank of Montreal, have all exited the alliance this year. Their departures follow increased scrutiny from Republican politicians in the U.S., who have accused such alliances of unfairly targeting fossil fuel companies and have launched congressional inquiries into the banks’ climate commitments.

Criticism and Concerns Over Climate Commitment

HSBC’s move has sparked criticism from environmental advocates. Jeanne Martin, Co-Director of Corporate Engagement at ShareAction, condemned the bank’s decision, saying it raises serious doubts about HSBC’s commitment to tackling the climate crisis.

The bank had already raised eyebrows in February when it dropped a 2030 emissions-reduction target, citing slow progress in the real economy. At the time, its Chief Sustainability Officer Julian Wentzel signaled a “more measured approach” to fossil fuel lending.

Despite these changes, HSBC maintains that its climate targets will continue to be shaped by the latest science and industry standards. Meanwhile, the UK government remains legally committed to reaching net-zero emissions by 2050.

The NZBA recently voted to revise its guidelines to address legal concerns and reaffirmed its role in supporting banks through the energy transition. However, the steady withdrawal of major members signals growing tension between environmental goals and political and economic pressures.