The climate coalition within the banking sector, a global leader, is currently consulting its members regarding changes to its regulations. According to Shargiil Bashir, the Chief Sustainability Officer and Executive Vice President at First Abu Dhabi Bank, this decision, communicated to members late on Tuesday, is prompted by the withdrawal of major banks and the inadequacy of climate action in the real economy.
Bashir mentioned that the revisions consider advancements in science, policies, methodologies, and regulations. Although he did not disclose the specific proposals, an anonymous source familiar with the matter revealed that they may involve eliminating the requirement to align lending with a target of limiting global warming to 3.6 degrees Fahrenheit above the pre-industrial average.
The review of the membership rules of the Net Zero Banking Alliance (NZBA) has been ongoing for over a year, intensifying since a climate-skeptic secured a second term as U.S. president. In anticipation of Trump's presidency, major U.S. banks exited the alliance, later joined by others, including Japanese financial institutions.
In October, a prominent U.S. investment bank became the first among major banks to adjust its emission reduction targets.
Bashir stated, "NZBA is adapting its services in response to changing external circumstances and member requirements. Since its establishment four years ago, the external environment has rapidly evolved, impacting the banking sector's ability to facilitate clients in advancing toward a net-zero transition."