HSBC Becomes First UK Bank To Exit NZBA Alliance

HSBC announced officially that it would be leaving the United Nations-backed Net-Zero Banking Alliance (NZBA), the first major UK-based bank to do so. The action follows a trend of some North American banks, specifically those in the United States and Canada, having withdrawn from climate-related financial groupings amid growing political and legal pressure. In spite of this high-profile exit, HSBC reaffirmed its broader climate ambitions, declaring its ongoing commitment to reaching net zero emissions by 2050 and helping customers transition.

The NZBA, in which HSBC was a founding member in 2021, has been formed to assist banks and other financial institutions to align lending and investment portfolios with net zero strategies. Participation in the alliances has, however, come under growing criticism, especially from Republican politicians in the U.S., who have contended that climate coalitions would be antitrust, as well as other laws. Political pressures have, indeed, spurred a wider backlash against financial sector ESG efforts, prompting a large-scale exodus of top U.S. banks like Goldman Sachs and all other large Wall Street firms.

The exodus wave bled into 2025 with global players like Australia's Macquarie and Japan's Sumitomo Mitsui divesting the NZBA. These had happened despite efforts to insulate discomfort by the coalition through a realignment of its very basis. In April 2025, the NZBA made wholesale reforms, including removing the mandatory requirement for member banks to make all financing activities within the 1.5°C global warming threshold. The step was viewed as a reaction to political and legal pressures on members, especially in the US.

In response to HSBC, the NZBA issued a statement in favor of the contribution and effect of the alliance. The spokesperson reiterated that the group, now with a new mandate given in April, is committed to enabling conditions for net zero investments. Current efforts have centered on advocating for transition finance, strengthening policy engagement, and uniting leaders from across sectors to spur action. NZBA asserts it is well-placed to help members put in place autonomous approaches that enable a net-zero world economy.

HSBC's exit, however, has alarmed climate activists and sustainability-focused investors. Jeanne Martin, ShareAction's Co-Director of Corporate Engagement, a responsible investment non-governmental organization, denounced the move, noting that it sends a bad message to governments and companies. It empowers the financial sector to disempower themselves to contribute towards addressing the worsening climate crisis and overlooks amplified financial risk introduced by climate change, including worsening and rising frequency of weather conditions, Martin further added.

Investor anxiety over HSBC’s climate stance has been growing for some time. Earlier in 2025, the bank extended its own operational net zero target from 2030 to 2050 and revealed that it was reviewing its interim emissions reduction goals in sectors like oil, gas, and heavy industry. The bank attributed the delays to a slower-than-expected pace of decarbonisation across global markets, which it said made previous timelines less attainable. Adding to the doubt, HSBC Group Chief Sustainability Officer Celine Herweijer resigned in November 2024 as part of a restructure that eliminated the CSO position from the Group Executive Committee, implying a potential de-prioritization of sustainability within the most senior levels.

A coalition of $1.6 trillion of investor assets at HSBC's May 2025 Annual General Meeting called for the bank to reaffirm its climate pledges. The group, which is organized by ShareAction, mentioned several recent HSBC decisions as not being in line with its net zero commitment. Whereas Chairman Mark Tucker reiterated the bank's ambition to become a net zero bank by 2050, he agreed that it is proving to be more costly than expected under prevailing external economic conditions in order to meet this ambition.

In its statement to exit the NZBA, HSBC confirmed that although it is exiting the NZBA, it will remain engaged in the Glasgow Financial Alliance for Net Zero (GFANZ). The GFANZ, initially established as a cover organization for an suite of financial sectorwide partnerships such as the NZBA, has itself recently refocused its mandate to focus on mobilizing finance towards the low-carbon transition. HSBC assured that it would continue to be involved with GFANZ to facilitate the directing of the flow of capital into climate-sensitive and sustainable investments.

The bank also reiterated its client-led approach, observing that the net-zero journey would not be one-size-fits-all across industries, regions, or sectors. HSBC committed to offering realistic and adaptive finance solutions that were bespoke to fit clients' individual decarbonisation journeys while underpinning energy security and meeting near-term economic needs.

In spite of this promise, the optics of HSBC's retreat from the NZBA call into question the institution's long-term leadership on climate. Like with global systemically important financial institutions at the vanguard of driving or stalling the net zero shift, HSBC's action can have far-reaching consequences on investor sentiment, regulatory compliance, and the speed at which the financial sector hurries to counteract climate change.