NET ZERO BANKING ALLIANCE: ECONOMY
NEWS: Exodus by Wall Street banks from climate group
worries advocates
WHAT’S IN
THE NEWS?
Several leading U.S. banks, including Citigroup and Bank
of America, have exited the Net Zero Banking Alliance (NZBA), citing shifting
political dynamics in favor of fossil fuels, raising concerns about global
climate commitments.
Net Zero Banking Alliance (NZBA)
- Founded:
April 21, 2021, under UNEP FI.
- Objective:
Align global banking practices with the Paris Agreement's net-zero
emissions goal by 2050.
- Key
Targets:
- Interim
goals for 2030, prioritizing carbon-intensive sectors.
- Annual
progress reporting on emissions reductions.
- Collaborative
Framework: Facilitates global decarbonization.
- Initial
Members: 43 global banks, including Citibank and Bank of America.
- Expanded
to: 142 members from 44 countries (~USD 64 trillion in assets).
- India:
No Indian banks are members.
Why Did U.S. Banks Exit the NZBA?
- Political
Shifts in the U.S.:
- Occurred
during the transition to a pro-fossil-fuel administration.
- New
policies favor oil and gas investments, creating a less favorable
environment for sustainable finance.
- U.S.
withdrawals shift influence to European banks like HSBC and Barclays.
United Nations Environment Programme Finance Initiative (UNEP FI)
- Foundation:
Established in 1992 to integrate sustainability in global finance.
- Frameworks:
- Principles
for Responsible Banking (PRB).
- Principles
for Sustainable Insurance (PSI).
- Participants: Over
500 banks and insurers, managing USD 170 trillion in assets.
- Role:
Pioneering sustainability integration in financial practices.
Source: https://www.thehindu.com/business/exodus-by-wall-street-banks-from-climate-group-worries-advocates/article69067884.ece