Bank of America announced on 31 December 2024 that it was withdrawing from the Net-Zero Banking Alliance, becoming the fourth major US bank to exit the United Nations-convened coalition in December alone. The departure follows those of Goldman Sachs, Wells Fargo, and Citigroup, leaving the alliance without several of the world's largest financial institutions and intensifying debate over the viability of voluntary climate finance frameworks.
BofA had been a founding member of the NZBA when the group was launched in April 2021, and its net-zero financing goal dated to the same period. The bank had publicly committed to aligning its lending and capital-markets activities with a 1.5-degree warming scenario under the framework's requirements, which include setting sector-specific financed-emissions targets and publishing regular progress disclosures.
FROM FOUNDING MEMBER TO DEPARTURE
The NZBA sits within the broader Glasgow Financial Alliance for Net Zero, an umbrella body convened by former Bank of England Governor Mark Carney that spans banks, asset managers, and insurers. The banking sub-group carries the most prescriptive obligations, requiring members to disclose financed-emissions data across high-emitting sectors such as power generation, oil and gas, and commercial real estate, and to demonstrate year-on-year progress toward interim 2030 goals.
Despite the exit, Bank of America stated that it would continue to honour its commitment to GFANZ — the wider initiative — signalling that it does not intend to abandon climate finance frameworks altogether. The distinction between the NZBA's binding target-setting architecture and GFANZ's more flexible coalition structure has become a point of emphasis for several departing US institutions seeking to preserve climate credibility while reducing their exposure to the alliance's specific requirements.
Legal and political pressures have mounted on US banks over their participation in international climate groups. A coalition of Republican-led state attorneys general has pursued investigations into whether co-ordination within such alliances constitutes anticompetitive behaviour, while legislators in several states have advanced bills that would restrict public pension funds from doing business with institutions deemed to engage in ESG-related boycotts of fossil-fuel industries.
IMPLICATIONS FOR CLIMATE FINANCE COALITIONS
The concentration of departures in the final days of December 2024 underscores how quickly the political and legal risk calculation has shifted for large US financial institutions on climate commitments. When the NZBA was established, participation was widely viewed as a signal of strategic alignment with the direction of travel in global regulation and investor expectations. That calculus appears to have been revised by several boards as the domestic political environment has grown more hostile to organised climate action in finance.
For Bank of America, which has positioned itself as a leader in sustainable finance and has issued substantial volumes of green bonds and ESG-linked instruments, the withdrawal creates a communications challenge. The bank will need to demonstrate to institutional clients and ESG-focused investors that its climate strategy retains substance and accountability independent of NZBA membership.
The alliance itself faces a consequential decision about how to respond to the loss of several founding members. Its remaining signatories — which include large European, Canadian, and Asian institutions — will be under pressure to maintain the credibility of the framework and its reporting standards even as the US contingent narrows. The coming months are likely to prompt a broader reassessment of how voluntary climate finance coalitions can sustain momentum in the face of shifting political currents in major financial markets.