The 129 member banks of the Net Zero Banking Alliance (NZBA) have voted overwhelmingly for a new protocol that converts what were once mandatory requirements for banks to reduce their clients’ emissions into “best practice” guidance (1). Most significantly, the vote scraps the requirements for banks to set targets aligned with the globally agreed goals of keeping warming under 1.5°C and reaching net zero by 2050.
These goals have been replaced with a recommendation that targets should align with “well below 2°C, aiming for 1.5°C”. Banks are advised to still aim for carbon neutrality but can choose the year for when this goal may be reached.
This new language echoes that in the 2015 Paris Agreement, but ignores the tightening of the Paris targets at UN climate conferences over the past decade due to the emerging science on the disastrous impacts of surpassing 1.5°C.
The NZBA has taken a giant leap backwards. In joining the alliance its members had admitted their responsibility to change the way they do business to accelerate the transition, but now, almost all have voted to say they are just going to follow the emissions trajectory of the economy and no longer feel a responsibility to shape it.
While individual banks’ votes remain secret, we expect each NZBA member bank to declare its own position. If they fail to reaffirm their commitment to 1.5 degrees their stakeholders, including supervisors, investors and the public, will know that the banks cannot be expected to reduce climate risks but will continue driving the world toward climate disaster.
Lucie Pinson, director of Reclaim Finance
