A long shadow cast by Donald Trump’s re-election has led to the scrapping of a major global banking climate pact. The Net Zero Banking Alliance (NZBA) has been forced to shut down, a direct casualty of the political environment created by an administration committed to a “drill, baby, drill” energy policy.
The alliance, which once represented a significant portion of global banking assets, began to falter as soon as Trump’s victory became clear. The prospect of a US administration hostile to environmental regulations created a chilling effect that spread through the boardrooms of the world’s largest banks.
The first to move out of the shadow were the six largest US banks. In a clear attempt to get on the right side of the new political power structure, JPMorgan Chase, Goldman Sachs, and others all quit the alliance. This was a direct response to the political risk posed by Trump’s anti-ESG stance.
The shadow then extended across the Atlantic and Pacific. European and Japanese banks, seeing the alliance crippled by the American exodus, also began to withdraw. The recent departures of UK firms HSBC and Barclays confirmed that the pact could not survive in the current political climate.
The scrapping of the NZBA under the shadow of Trump’s politics highlights the fragility of international corporate agreements. It has also intensified calls for climate policy to be more deeply entrenched in binding legal and regulatory frameworks, making it less susceptible to the shifting shadows of electoral politics.