By Armand SATCHIAN, Sustainable Investment Research Analyst, Crédit Mutuel Asset Management Crédit Mutuel Asset Management is an asset management company of Groupe La Française, the holding company of the asset management business line of Credit Mutuel Alliance Fédérale.
Up until a couple of months ago, the Net Zero Banking Alliance (NZBA) was gaining traction. Then came the nomination of Donald Trump which reshuffled the cards and no doubt partly justifies the withdrawal of several North American banks1 . Goldman Sachs withdrew from the alliance in December 2024, marking an end to a year which until then had been promising. The NZBA had continued to attract new members including Eurobank Holdings SA, Principality Building Society, SBAB Bank or Bank of Queensland, while certain banks began to withdraw from the Science Based Targets initiative2. In its latest report3 , the NZBA’s ability to stimulate engagement from the banking sector in 44 countries as well as its capacity to provide guidance to its members was apparent. By the end of May 2024 - 118 alliance banks had set decarbonization targets, 76 had published a transition plan, etc. Despite being sometimes criticized for its lack of clarity in regards to decarbonization targets requirements, the alliance has managed to secure the commitment of over 140 banks representing more than $56 trillion in assets4 . However, the NZBA now has to address a new challenge – the public disengagement of a number of stakeholders from sustainability initiatives.
This trend is not limited to the banking sector, but also extends to regulators such as the Federal Reserve (Fed), which withdrew from the Network for Greening the Financial System (NGFS) initiative in January 20255 , as well as asset managers such as Blackrock, which also left the Net Zero Asset Managers (NZAM) initiative in January 20256 . Disengagement not only extends to environmental issues but also to social issues. In early 2025, major corporations, including Google, Disney, McDonald’s, Ford and Meta either abandoned or scaled back their Diversity, Equity and Inclusion (IED) programs7 . This trend is widespread in the United States following Trump’s return to office. His campaign against sustainability-related themes has led to general skepticism regarding sustainability initiatives. According to the What Directors Think study8 , 85% of US board members believe that taking a stance on social issues could lead to a potential loss of clients (vs. 71% in 2017). Thus, while American Vice President JD Vance9 criticized so-called “freedom of speech” in Europe, several American stakeholders seem to think it best to avoid addressing sustainability issues publicly. It is too early to tell whether this public disengagement will systematically lead to a decline in sustainability efforts, particularly among less vocal players. Some interpret this shift as a simple evolution in ESG risk management, favoring concrete actions over public declarations. In some cases, disengagement has been accompanied by communication intended to be reassuring. North American banks, for example, quickly reiterated their intention to pursue their initiatives relative to the low-carbon transition. However, only 2025 annual integrated reports/sustainability reports will start to reveal the real impact of disengagement on the credibility of their sustainability strategies.
These postures remain, nonetheless, preoccupying because they limit open debate, hinder the progress made by collective action and, paradoxically, imply that it is unwise to publicly address growing sustainability risks. Indeed, this disengagement occurs at a pivotal moment. Scientists have proven that limiting global warming to below 1.5°C is not possible10 . In addition, in its latest report on global risks11 , the World Economic Forum highlighted that the polarization of society, which affects its stability, is one of the major short-term risks. In the long term, this same report indicates that the four most critical global risks are climate-related (extreme weather events, biodiversity loss and ecosystem collapse, critical change to Earth systems, natural resource shortages). In addition, addressing climate risk will be increasingly complicated as the probability of occurrence can no longer be assessed solely with historical data12 .
Meeting these challenges requires that economic stakeholders be well prepared. While public engagement does not guarantee the achievement of defined objectives, it certainly gives the various stakeholders the opportunity to debate the pertinence of proposed measures. It also creates a market dynamic that supports all players, regardless of their resources. Five smaller North American banks have so far decided to remain part of the NZBA and not follow in the footsteps of their fellow US banks. According to a recent report from the Transition Pathway Initiative (TPI)13 , most major banks, current and former members of the banking alliance, still have a long way to go in their low carbon transition. However, it is worth highlighting that the alliance has been playing a crucial role in raising collective awareness regarding future necessary action. Updated NZBA guidelines, published in March 2024 emphasized, for example, the need to address a key issue - the integration of “facilitated emissions” (emissions resulting from capital markets activities) into banks' decarbonization goals. Through disengagement, banks are no longer held accountable towards the initiative. In light of the four most critical global risks mentioned above, we can only hope that economic stakeholders will uphold their environmental and social commitments. However, due to the unstable political context, it is reasonable to wonder what would drive them to do so. Investors have a strong lobbying power and can greatly influence stakeholders to remain on target; certain investors have already publicly stated the importance of maintaining a strong climate commitment14 backed by robust legislation15 .
This commentary is provided for information purposes only. The reference to certain securities is given as an illustration. It is not intended to promote direct investment in these securities. The information contained in this publication is based on sources considered reliable, but Groupe La Française does not guarantee their accuracy, completeness, validity or relevance. Published by La Française Finance Services, registered office at 128 boulevard Raspail, 75006 Paris, France, a company regulated by the Autorité de Contrôle Prudentiel as an investment services provider, n° 18673 X, a subsidiary of La Française. Crédit Mutuel Asset Management: 128 boulevard Raspail, 75006 Paris is a management company approved by the Autorité des marchés financiers under number GP 97,138. Société Anonyme with a capital of €3871680, RCS Paris n° 388,555,021, Crédit Mutuel Asset Management is a subsidiary of Groupe La Française, the asset management holding company of Crédit Mutuel Alliance Fédérale.
1Top American banks exit net zero alliance: What does this mean for their European peers? | Euronews
2HSBC, Standard Chartered, other Major Banks Exit SBTi - ESG Today
3NZBA-2024-Progress Report.pdf
4Members - United Nations Environment - Finance Initiative
5Central banks' green push hits a hurdle as Fed drops out | Reuters
6Statement on Blackrock's departure from the initiative - The Net Zero Asset Managers initiative
7McDonald's Joins The Stampede Of Corporations retreating From DEI
8WDT.2025.pdf
9JD Vance attacks Europe over free speech and migration
10Climate change target of 2C is ‘dead’, says renowned climate scientist | Climate crisis | The Guardian
11WEF _ Global _ Risks _ Report _ 2025.pdf
12Climate intuition _ Navigating the new climate era _ Building intuition for strategic decision making
13State of transition in the banking sector report 2024 - Transition Pathway Initiative
14Asset owner statement on climate stewardship.pdf
15Investors warn Omnibus package could weaken EU sustainability disclosures, harming investment and economic competitiveness