Macquarie Exits NZBA Amid Evolving Climate Strategy

Australia-based financial services group Macquarie has announced its departure from the Net-Zero Banking Alliance (NZBA), marking a significant shift in its approach to climate commitments. The move expands what had previously been a trend primarily seen among North American financial institutions, with several major banks in the U.S. and Canada exiting the UN-backed coalition in recent months. The NZBA was established to drive global net-zero goals through the financial sector by aligning banks’ lending and investment activities with the target of reaching net-zero emissions by 2050.

Although Macquarie did not explicitly outline its reasons for leaving the alliance, the company stated that it remains committed to its net-zero strategy, which will continue to guide its activities. The firm emphasized that its climate strategy is evolving to better align with the needs of its clients, as well as regulatory and government requirements. This departure signals a shift in how financial institutions, particularly those with significant global operations, are balancing their net-zero commitments with broader business considerations.

Macquarie initially joined the NZBA in 2021, committing to aligning its financing activities with net-zero emissions goals. In 2022, the company launched its Net Zero strategy and set interim financed emissions reduction targets across key sectors, including oil and gas, coal, and automotive industries. By 2023, the bank extended its climate targets to Australian residential mortgage lending, bringing 80% of its balance sheet exposure in carbon-intensive sectors under financed emissions reduction goals. These efforts underscored Macquarie’s commitment to transitioning its business in line with global sustainability objectives.

Beyond its involvement in the NZBA, Macquarie has also played a key role in other financial sector climate initiatives. It was a founding Principal member of the Glasgow Financial Alliance for Net Zero (GFANZ), an organization that previously served as an umbrella group for various net-zero financial coalitions, including the NZBA. However, GFANZ recently announced a restructuring, shifting its focus toward mobilizing capital at scale to support the global transition to a low-carbon economy. Despite exiting the NZBA, Macquarie remains listed as a member of the GFANZ Principals Group, signaling that it continues to engage with broader climate finance discussions at a high level.

The NZBA experienced rapid growth since its launch, expanding from 43 banks to over 140 members in 2024, collectively representing approximately $74 trillion in assets. However, the alliance has faced increasing political and regulatory scrutiny, particularly from Republican lawmakers in the United States. In recent years, U.S. politicians have warned financial institutions—including banks, insurers, and asset managers—about potential legal violations stemming from their participation in climate-focused coalitions. Additionally, they have threatened to exclude companies involved in such alliances from state business opportunities as part of a broader anti-ESG (environmental, social, and governance) political movement.

Following the election of Donald Trump, U.S.-based banks began withdrawing from the NZBA, starting with Goldman Sachs. Over time, every major Wall Street bank followed suit, with Canada’s leading banks also exiting the alliance in January 2024. Macquarie’s decision to leave the NZBA makes it the first major Australian bank to do so, reflecting the broader geopolitical and regulatory pressures affecting financial institutions engaged in climate initiatives.

Macquarie’s decision may also be influenced by its substantial business operations in the Americas. In 2024, the company reported that 34% of its net profit contribution originated from the region. The firm has been expanding its presence in the U.S., opening a new 250,000-square-foot Americas headquarters in Midtown New York in October. Given the growing resistance to ESG-focused policies in the U.S., the bank’s decision to exit the NZBA could be seen as a strategic move to avoid potential regulatory and political challenges in one of its most significant markets.

Despite leaving the NZBA, Macquarie acknowledged the alliance’s contributions to advancing global net-zero frameworks and assisting banks in developing decarbonization strategies. The company emphasized that with these foundational elements now in place, it, like many of its peers, will focus on updating and executing its plans while ensuring compliance with evolving regulatory requirements.

This development reflects the shifting landscape of climate finance, where financial institutions must navigate complex regulatory, political, and market pressures while maintaining their commitments to sustainability. Macquarie’s departure from the NZBA does not necessarily indicate a retreat from its net-zero goals but rather a recalibration of its approach to aligning its climate strategy with its broader business objectives. As financial institutions worldwide continue to grapple with these challenges, the future of collective climate coalitions like the NZBA remains uncertain, particularly as political and economic considerations shape corporate decision-making.