The collapse of the Net Zero Banking Alliance (NZBA) has exposed a vast accountability vacuum at the heart of corporate climate action. The global group has shut down, demonstrating the ultimate peril of toothless pledges that come with no mechanism for enforcement or accountability.
The NZBA was built on voluntary commitments. Members were encouraged, but not required, to set and meet climate targets. This lack of a binding contract meant there were no consequences for leaving the alliance or for failing to meet its standards.
This accountability vacuum was fully exposed when a political challenge arose. After the re-election of Donald Trump, US banks faced “anti-woke” pressure. Because their pledges were not binding, they could simply walk away to avoid the pressure, which is precisely what the six largest Wall Street firms did.
The departure of firms like JPMorgan Chase, Citigroup, and Bank of America, followed by international players like HSBC, revealed the core problem. Without accountability, these climate commitments were treated as disposable marketing tools rather than core business principles.
Sustainable investment campaigners like Jeanne Martin of ShareAction are now calling for “standards for accountability on climate.” The failure of the NZBA makes it clear that such standards cannot be voluntary. Critics argue that this accountability vacuum must be filled by regulators, who can impose real financial and legal penalties on institutions that fail to meet their climate obligations.
