• Banks’ commitment to net zero continues to grow and to spread. NZBA membership has tripled in number since its launch and banks from emerging markets now make up over a third of its membership.
• Over two thirds of NZBA banks have now set targets aligned with 1.5°C scenarios. This represents significant progress. In April 2021 when NZBA launched, no bank had set a science-based sectoral 2030 target using 1.5°C scenarios that included financed emissions.
• Member banks continue to focus on the most carbon-intensive sectors. 76% of banks that had set targets as of 30 September 2023 had done so for the power generation sector. The share of banks setting targets for iron and steel, and for cement grew from 18% to 23%, for oil and gas it rose from 51% to 57%, and went from 38% to 45% for real estate between September 2022 and September 2023.

Geneva, 04 December 2023 – On Finance Day at COP28, the industry-led, UN-convened Net-Zero Banking Alliance published a Progress Update. This report provides a stocktake of new targets set by Alliance members, highlights green financing case studies from NZBA banks that showcase the large and growing opportunities across different sectors and asset classes, and summarises relevant developments in climate-related voluntary frameworks and mandatory regulation.

“The Net-Zero Banking Alliance was founded to help banks to finance ambitious climate action to transition the real economy to net-zero greenhouse gas emissions by 2050. As of 30 September 2023, 96 members had set interim net-zero targets for 2030 or sooner. The setting of these targets, and the progress achieved against them, constitute the focus of our members’ efforts, and are a significant achievement,” wrote Tracey McDermott, Chair of the Steering Group of the Net-Zero Banking Alliance and Group Head of Conduct, Financial Crime and Compliance at Standard Chartered Bank in the report foreword.

In addition to providing an update on target setting, the report shows how the Alliance has grown. NZBA membership has risen from 43 banks at its launch in April 2021 to 136 banks by the end of September 2023, more than tripling in number in just two and a half years.

The membership is also becoming more diverse. Around three quarters of the banks that had joined the Alliance by the end of 2021 were from developed markets. Now more than a third of member banks come from emerging and other markets. The 20 banks that joined in the twelve months to September 2023 were evenly split between developed markets and emerging and other markets. This increased diversity may be due to the spread of climate-related policy and regulation to further jurisdictions and markets, the growing profile of NZBA, and banks increasingly seeing the business case for achieving net zero emissions by 2050.

The new report also highlights the need for predictable and enabling policy environments to accelerate the net-zero transition. As COP28 brings together leaders and experts from around the world, the Alliance reiterates its requests for policymakers to create supportive policy and regulatory environments that will facilitate an orderly transition to net zero across all sectors of the economy.