The Net Zero Banking Alliance (NZBA) said on Friday it would cease operations with immediate effect, after remaining members voted to “move from a member-based alliance and establish its guidance as a framework”.

“The outcome of the vote provided a mandate to explore how best to move forward with this work,” an NZBA spokesperson said.

The decision was made about four months later by NZBA members They voted to ease the requirements This prompted them to align investment portfolios with the 1.5°C global warming target and set five-year targets to reduce financed emissions.

The alliance, which has more than 140 banks as members in 2024 with assets under management of more than $70 trillion, has been on shaky ground since the re-election of US President Donald Trump, who recently called climate change a “hoax”.

US banks, led by Goldman Sachs, began withdrawing from the alliance in late 2024, after which several European, Canadian and Japanese banks followed suit.

But Southeast Asian banks said they were committed to climate action despite the alliance’s end.

Banking group CIMB, which was part of the NZBA’s steering group, said climate action and accelerating the transition to a low-carbon economy remained a strategic priority for the group.

“The NZBA has made significant contributions by setting the market standard that sets out what strong net zero targets for the banking industry entail,” Luan Seah, chief sustainability officer at CIMB Group, told Eco-Business.

“We will continue to do our part in updating the valuable resources developed by NZBA, and work with stakeholders on credible and impactful strategies and initiatives that advance the net-zero transformation of the real economy,” she said.

Meanwhile, Eric Lim, chief sustainability officer at Singapore-based UOB Banking Group, said the bank still believes in the need to decarbonise the region while ensuring a just transition.

“In setting our net zero targets, we took into account structural differences across the region, and extracted regional pathways to targets that represent fair contributions to our key markets,” he told Eco-Business. “We have remained practical, even as we have been guided by science in setting our net-zero targets and adopting internationally recognized climate models.”

Other banks across Southeast Asia have also confirmed their climate commitments in recent months. Singapore DBS She reiterated her commitment to its emissions targets in March this year, while Shahril Gemin, Maybank’s chief sustainability officer, said in April that the bank Won’t shrink On strategic climate commitments.

The NBZA was one of eight independent initiatives established under the Glasgow Financial Alliance for Net Zero (GFANZ) in 2021, an alliance of leading financial institutions around the world committed to accelerating emissions reductions.

It is not the first of the financial sector’s net zero alliances to fold – the Net Zero Insurance Alliance was folded in April 2024 after nine major insurers exited. Earlier this year, the Net Zero Asset Managers Initiative suspended its activities and Launched an internal reviewCiting “recent developments in the US and different regulatory and customer expectations” in other operations.

Some observers said the end of such initiatives was inevitable. Lucy Benson, founder and CEO of Reclaim Finance NGO He said That most of the decarbonisation targets required of NZBA members are outdated, and that institutions already committed to climate action will continue to address emissions funded independently of NZBA.

“But make no mistake: a large-scale reallocation of financial flows toward sustainable solutions will not happen without strong public intervention,” Benson said, noting that banks still allocate twice as much capital to fossil fuels as they do to clean energy.

“The priority remains to stop the expansion of fossil fuel use and mobilize support for sustainable alternatives.”