In a statement on Friday, the London-headquartered bank confirmed its decision to leave the NZBA, a flagship initiative under the Glasgow Financial Alliance for Net Zero (GFANZ).
“We remain resolute in this long-term ambition and in supporting our customers to finance their transition objectives,” the bank said. “We believe supporting our customers’ transition brings benefits to their businesses, helps generate long-term financial results for our shareholders, and contributes to making the global economy more resilient.”
HSBC cited the completion of foundational target-setting work as the reason for its exit, stating that the NZBA had “played a role in developing guiding frameworks to help banks establish their initial target-setting approach”.
“With this foundation in place, and as we work towards updating and implementing our Net Zero Transition Plan later in 2025, we, like many of our global peers, have decided to withdraw from the NZBA,” the bank said.
“We continue to remain engaged with the Glasgow Financial Alliance for Net Zero to support the mobilisation of capital towards the net zero transition. Our approach to setting financed emissions targets will continue to be informed by the latest scientific evidence and credible industry-specific pathways.”
The move comes as the NZBA faces growing political and legal headwinds, particularly in the US, where Republican-led states have launched coordinated campaigns against what they characterise as environmental, social and governance (ESG) overreach by financial institutions. HSBC has significant operations in the US and Asia.
HSBC follows peers such as Australia’s Macquarie Bank, Morgan Stanley, Citigroup, Bank of America, JPMorgan Chase and Goldman Sachs, all of which have exited amid escalating anti-ESG rhetoric linked to President Donald Trump. Major Canadian banks including BMO and National Bank have also recently followed suit.
Still part of the NZBA are Australia’s ANZ, Bank of Queensland, CBA, NAB and Westpac.
Campaign groups were quick to respond to HSBC’s departure with ShareAction, a UK-based responsible investment NGO, strongly condemning the move.
“[This] is yet another troubling signal around the bank's commitment to addressing the climate crisis. It sends a counterproductive message to governments and companies, despite the multiplying financial risks of global heating and the heatwaves, floods and extreme weather it will bring,” said Jeanne Martin, co-director of corporate engagement.
“Investors will be watching closely how this backsliding move will translate into its disclosures and policies.”
Australia’s Macquarie Bank exited the alliance in February for reasons nearly identical to HSBC’s, stating that while the alliance helped shape its initial decarbonisation plan, “with those building blocks now in place”, membership was no longer necessary.
Commenting on Macquarie’s exit at the time, Kyle Robertson, senior banks analyst at Market Forces, said: “It’s senseless that Macquarie has pulled out of the Net-Zero Banking Alliance when the goals of the Paris Agreement are in jeopardy.”
Late last year, Dugald Higgins, Zenith’s head of responsible investment and sustainability, warned that Trump 2.0 could usher in “ESG weaponisation 2.0”, forcing the concept further underground.
“You will probably see more US managers in this space shut down products, some of them might even shut down businesses because Trump 2.0 is effectively going to be leading to the ESG weaponisation 2.0,” he said.
“I think that is going to be the biggest risk that is going to drive the ESG as a term underground.”
Higgins at the time explained that many fund managers and businesses deploying capital anticipated this shift before the US election, with several moving to reposition portfolios in anticipation of Trump’s White House takeover.
However, recent research from BNP Paribas has revealed that globally, the majority of institutional investors (87 per cent) have maintained their ESG and sustainability goals, with 84 per cent believing that the pace of sustainability progress will either continue or accelerate through to 2030.
