In a major shift, financial powerhouses Citigroup (Citi) and Bank of America (BofA) have exited the Net-Zero Banking Alliance (NZBA), an association of banks aiming to align financing activities with net-zero global goals. The firms’ decision coincides with growing exits from climate-focused financial associations, such as Goldman Sachs and Wells Fargo in recent times, marking a significant shift in the climate landscape in the financial world.
Launched in 2021, the NZBA comprised more than 140 banks across 44 countries to further their net-zero targets. Citi and BofA were foundational members that defined the objectives of the alliance and included transitioning the greenhouse gas (GHG) emissions from the financing portfolios towards net-zero pathways by 2050. In addition, they had to have interim targets by 2030 for emissions-intensive sectors such as energy and power.
The NZBA functions within the context of a broader framework under the Glasgow Financial Alliance for Net Zero (GFANZ). This is a UN-backed coalition established to unify financial institutions against climate change. It has subgroups such as the Net Zero Asset Managers initiative, the Net Zero Asset Owner Alliance, the Net Zero Financial Service Providers Alliance, and others, that are intended to mobilize capital and expertise toward the low-carbon transition across the world.
However, the association has been continuously under pressure; this is because in the U.S., criticism of ESG has been highly intensified. More recently, anti-ESG rhetoric has dominated Republican lawmakers; they have labeled financial institutions engaging in climate-driven alliances as under the risk of legal breaches while promising to drop them from handling state business. This more general crackdown on ESG initiatives has provoked a spate of high-profile departures from GFANZ-related groups. For example, the Net Zero Insurance Alliance (NZIA) was dissolved in 2024 after many members resigned.
Even though they have quit the NZBA, Citi and BofA have confirmed their commitment to net-zero goals. Citi, led by CEO Jane Fraser, had set its net-zero financing target on Fraser’s first day as CEO in 2021. Since then, the bank has set sector-specific targets for reducing emissions. Citi highlighted its progress toward these goals in its exit statement and assured continued support for GFANZ, especially in its new direction of mobilizing capital to emerging markets to facilitate the low-carbon transition. Given this development and Citi’s progress in relation to our own net-zero ambitions, we have resolved to resign from the Net Zero Banking Alliance and instead to dedicate our attention to supporting GFANZ as this new stage gets underway,” said the bank.
Likewise, Bank of America continues to uphold its net-zero targets in operations and supply chains as well as in financing. It set sector-specific targets for reducing emissions, which included new goals for the iron, steel, and maritime shipping sectors. According to a BofA spokesperson talking to ESG Today, the institution reaffirmed its commitment to addressing climate issues, saying, “We will continue to work with clients on this issue and meet their needs.
Both of them remain within the GFANZ Principals Group, through which they collectively oversee the strategic direction and progress of the alliance. This will ensure that they remain influential in guiding global climate finance strategies while simultaneously navigating the hurdles of political and regulatory scrutiny.
Marking a pivotal moment for the NZBA and GFANZ is the departure of Citi and BofA, with its complexity of balancing climate commitments within an evolving political and regulatory landscape. The ongoing pressure of multiple stakeholders on financial institutions has further made their strategies on net-zero goals be revised and perfected in order to cut toward future sustainable finance.