Barclays Follows HSBC Out the Door, Exits Net Zero Banking Alliance

Barclays has become the latest major financial institution to withdraw from the United Nations-backed Net-Zero Banking Alliance, a coalition established initially to align global banking operations with a net-zero future. Launched in 2021 under the broader umbrella of the Glasgow Financial Alliance for Net Zero, the initiative aimed to bring banks in line with climate goals by steering financing activities toward carbon neutrality by mid-century.

But that vision has shifted. Earlier this year, the alliance formally dropped its requirement for members to align with the 1.5°C global warming limit and the 2050 net-zero target. In its place, the group introduced a looser framework that encourages banks to aim for staying well below a two-degree rise in global temperatures, while still aspiring to the 1.5-degree benchmark. This adjustment reflects the original language of the Paris Agreement, but also signals a broader retreat from firm, time-bound targets. The changes were approved by an overwhelming majority of the alliance’s 129 member institutions and mark a move from mandatory action to voluntary best-practice guidance.

Barclays is not alone in stepping away. In the past year, other financial heavyweights, including HSBC, JPMorgan Chase, Citi, Morgan Stanley, Macquarie, and the Bank of Montreal, have also exited the group. The wave of withdrawals suggests a growing discomfort among banks with rigid climate requirements, especially as global economic conditions and client realities complicate implementation.

A statement from Barclays reads: “After consideration, we have decided to withdraw from the Net Zero Banking Alliance. With the departure of most of the global banks, the organisation no longer has the membership to support our transition.

“We are committed to our ambition to be a net-zero bank by 2050. Our targets to mobilise $ 1 trillion of Sustainable and Transition Financing and for financed emissions remain unchanged. We continue to work with our clients on their transition, finance the transition and scale climate tech, while helping to ensure energy security for our customers and clients.  This is an important commercial opportunity for Barclays; in 2024, we generated approximately half a billion pounds in revenues from sustainable and transition-related activity.”

In 2020, Barclays committed to achieving net-zero emissions across its operations, including all financed emissions, by 2050. That announcement was praised at the time, but the bank has since faced mounting criticism from environmental groups who argue that its financing activities still fall far short of what a net-zero trajectory requires.

Further scrutiny followed earlier this year when Barclays reportedly removed climate-related metrics from its annual bonus calculations. According to Personnel Today, these performance indicators have now been integrated into a long-term incentive structure and combined with broader client and customer engagement goals. Critics argue that the move weakens accountability and delays meaningful action.

HSBC, which exited the alliance just weeks before Barclays, also reaffirmed its net-zero ambitions. Yet behind the scenes, its climate strategy has seen notable changes. In February, the bank announced it would abandon its interim emissions-reduction targets for its own operations and supply chain. The decision was attributed to sluggish progress in the real economy and the complex challenge of decarbonising global supply networks. Following the release of its 2025 financial results, HSBC acknowledged that progress toward its environmental targets had been slower than anticipated.

Jeanne Martin, Co-Director of Corporate Engagement at responsible investment NGO ShareAction, said: “Barclays’ decision to leave the NZBA is incredibly disappointing and a step in the wrong direction at a time when the dangers of climate change are rapidly mounting.

“The announcement comes just three days after Barclays published a transition update reiterating its commitment to be a net-zero bank by 2050, sending mixed signals to governments and companies around the world.

“As the financial risks of global heating multiply and climate impacts like heatwaves, floods, and extreme weather events become more intense and frequent, we cannot afford half-measures. Responsible investors will be watching closely and raising the pressure on the bank to protect long-term economic prosperity and the livelihoods of people everywhere.”

The bank now plans to lean more heavily on carbon offsetting and has delayed its net-zero targets for operations, travel and procurement until 2050.

Together, these developments reflect a shifting landscape for sustainable finance. While many institutions remain publicly committed to climate goals, the practical realities of implementation, from supply chain inertia to investor pressure, are prompting a strategic recalibration. Whether this signals a temporary adjustment or a deeper retreat from science-based targets remains to be seen.