In April 2021, global banks and smaller lenders banded together in the world’s biggest climate finance coalition convened by the UK as host of the COP26 climate summit. A few short years later, a growing number have run for the exit, leaving the alliance in turmoil.
Members of the Net Zero Banking Alliance (NZBA) promised to progressively shift their investment dollars away from polluting industries and towards climate solutions such as renewable energy. They also pledged to set “science-based” goals for their businesses to reach net zero emissions no later than 2050.
UN special envoy and former central banker Mark Carney hailed the initiative – and its wider umbrella group called the Glasgow Financial Alliance for Net Zero – as the “breakthrough” in climate finance that the world needed to mobilise trillions of dollars in support of a low-carbon economy.
But, nearly four years on, with climate change-sceptic Donald Trump back in the White House, Wall Street banking giants have led an exodus from the coalition, emboldening some Canadian and Australian peers to follow suit.
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The flight of some of the NZBA’s most influential members risks further damaging the relevance of an initiative that has been facing questions over its real-world climate credentials for some time.
Planet-heating fossil fuels continue to attract close to $700 billion a year from global banks. A first large-scale assessment, published by the European Central Bank (ECB), last year showed that being a signatory to the voluntary alliance – and others like it – had made a negligible difference in advancing climate goals.
Today, with the NZBA facing a reputational crisis, its remaining 135 members and watchers of ESG efforts are sparring over its purpose and where it should head next.
“It is a matter of survival for the coalition,” Quentin Aubineau, a policy analyst at BankTrack, an NGO that monitors commercial banks’ activities, told Climate Home.
Trump effect
Last December, exactly one month after Trump’s election win, Goldman Sachs quit the Net Zero Banking Alliance, opening the floodgates. The other top five US banks – JPMorgan, Citigroup, Bank of America, Citigroup and Morgan Stanley – all left over the next month. Canada’s biggest lenders followed soon after, with Australia’s Macquarie being the latest out of the door.
While none of the banks gave an official reason for exiting the alliance, observers believe the move came in reaction to political pressure from Republican officials in the US – which is widely expected to ramp up under the new pro-fossil fuel administration.
In 2022, attorneys-general from 19 Republican-led states launched an investigation into whether leading US banks were colluding under the NZBA to “starve companies engaged in fossil fuel-related activities of credit”.
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The campaign spread to Washington and, last December, a House committee dominated by Republicans said it had found “substantial evidence of collusion and anticompetitive behavior” by the financial industry to “impose radical ESG goals” on US companies.
“They [the banks] joined in a political context, and they are withdrawing in a political context,” said Brian O’Hanlon, managing director of the climate finance programme at RMI, a US-based think-tank that supports clean energy. RMI’s Center for Climate-Aligned Finance is a collaborating partner of the NZBA.
He added that in 2021, when the alliance was formed, the new administration under former President Joe Biden, a Democrat, put pressure on Wall Street institutions that were lagging behind their European peers on sustainability disclosures and climate finance.
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Under the NZBA, lenders voluntarily commit to aligning their operations with the global aim of reaching net-zero emissions by 2050, setting targets to help achieve the goal and documenting their progress every year.
O’Hanlon said most banks saw the coalition primarily as an avenue to agree on standardised guidelines for drafting net zero policies and now, having built their internal capacity, some see more risk than benefit in being part of the club.
The banks that quit the NZBA have so far kept their net zero targets, but their track record raises questions about their commitment to reducing emissions.
Limited real-world impact
Big US and Canadian banks remain the world’s largest financial supporters of fossil fuels, according to a report by green groups called “Banking on Climate Chaos”. Some like Goldman Sachs and Bank of America even increased their fossil-fuel deals after joining the coalition, Bloomberg reported.
“NZBA was mostly an excuse for these banks because they haven’t done anything concrete to switch their business towards low-carbon except setting targets but without adopting clear policies,” said Aubineau of BankTrack, which contributed to the report.
North American lenders are not alone in this. While the NZBA includes some progressive signatories that do explicitly rule out support for climate-polluting businesses, member banks featured in the “Banking on Climate Chaos” assessment provided around $253 billion to companies expanding fossil fuels in 2023.
Meanwhile, for the ECB study, economists carried out a large-scale assessment of the lending behaviour of European banks and found virtually no difference between banks inside or outside of the coalition.
While European banks reduced their exposure to fossil fuels overall, NZBA members had neither divested from polluting companies nor engaged with them to push for emission-cutting measures any more than those without a climate commitment, according to the study.
“[The evidence] suggests that voluntary private-sector initiatives may have relatively little impact on decarbonization,” the authors concluded, calling on governments to improve the credibility of net zero promises in the private sector.
Expectation vs reality
The NZBA has been criticised repeatedly for a perceived failure to live up to its promise of fast-tracking a climate shift in finance.
BankTrack’s Aubineau said the NZBA leaves banks “a lot of room for manoeuvre” in how they set targets and communicate their actions, meaning “they can basically do whatever they want” with no accountability mechanism.
RMI’s O’Hanlon said the criticism is partly a consequence of the “inflated claims” made at the outset by the alliance which “raised expectations and obscured its meaning”.
“What GFANZ was doing in the first years was training for a race, but the rhetoric was that it was running the race and doing so with thoroughbred athletes,” he added.
Battle over NZBA’s future
Some of the NZBA’s remaining members, however, want to lead the pack and set a higher pace for transition. The Netherlands’ Triodos Bank and the UK’s Ecology Building Society threatened to quit the alliance in late 2023 over what they viewed as lax emissions reduction requirements.
But they eventually decided to stay, hoping to change the NZBA from the inside.
“By merely ‘encouraging’ disclosure of policies for the highest-emitting sectors, rather than requiring it, the [NZBA] guidelines undermine the transparency and action necessary to ensure safer climate outcomes,” they said in a letter written with the US-based Amalgamated Bank.
Following the US banks’ departure, the weight and make-up of the coalition have changed significantly. At its peak, the NZBA members had assets worth a combined $74 trillion – that is now down by a quarter. Meanwhile, European banks – which have so far stayed put – have gained greater influence.
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Aubineau told Climate Home the internal debate over the future direction of the coalition is now picking up pace.
“The NZBA is trying to choose between two options: lower the ambition again and try to keep as many banks as possible or try to strengthen the guidance and move forward with those that are really committed,” he said.
While the departure of the US banks should be “a key opportunity” to turn a page and bolster commitments, “unfortunately, I think the NZBA might be considering the first option”, he warned.
HSBC – a founding member of the NZBA – ditched on Wednesday a target of reaching net-zero carbon emissions across its business by 2030 citing slow change in the real economy.
A decision over the direction of travel is expected in the next few months by the steering group, which includes both progressive lenders, including Amalgamated Bank, and some of the world’s top fossil fuel financiers, like Japan’s MUFG and Spain’s BBVA.
RMI’s O’Hanlon said that, while NZBA members should work out what the coalition is trying to achieve, climate regulations and government economic policy provide stronger transition levers than a voluntary framework.
“Incentives have always shaped the economic case for these financial institutions,” he added. “If the government tilts the market and the playing field to disadvantage certain technologies that are lower carbon, you will see a knock-on effect,” he added.
The post The world’s biggest climate finance coalition is in crisis. Is it worth saving? appeared first on Climate Home News.
The world’s biggest climate finance coalition is in crisis. Is it worth saving?
Antarctic sea ice has recorded its third-smallest winter peak extent since satellite records began 48 years ago, new data reveals.
Provisional data from the US National Snow and Ice Data Center (NSIDC) shows that Antarctic sea ice hit its annual winter peak on 14 September, with an extent of 17.59m square kilometres (km2).
The organisation notes that the data is still preliminary, adding that “large fluctuations in extent are typical of Antarctic sea ice near the seasonal maximum”.
One expert tells Carbon Brief that it is “concerning to see these low values persisting”, but says that scientists need more time to determine whether this represents a “structural shift” in Antarctic sea ice extent.
Meanwhile, at the Earth’s other pole, Arctic sea ice reached its annual minimum on 12 September, ranking as the joint-10th lowest in the satellite record.
The NSIDC notes that the last 20 years have seen the lowest 20 Arctic sea ice extents in the satellite record.
Antarctic peak
Dr Lettie Roach, a polar climate scientist at the Alfred Wegener Institute in Germany, tells Carbon Brief that this year’s Antarctic sea ice maximum was “well below average for the season”. She warns that, “after several decades of stable or increasing winter Antarctic sea ice conditions, it is concerning to see these low values persisting”.
She adds:
“Compared with the Arctic, it’s less clear how recent changes in Antarctic sea ice are attributable to human-caused warming vs natural variability. We need more years of observations to better understand whether this is truly a structural shift.”
Dr Clare Eayrs, a postdoctoral researcher at the Korea Polar Research Institute (KOPRI), tells Carbon Brief that, since recording a “near-average February minimum” extent, Antarctic sea ice has “returned to unusually low winter coverage”.
She notes that Antarctic sea ice extent in July and August this year were the fifth and fourth lowest on record, respectively, adding that “all five of the lowest July extents have occurred since 2022 and all four of the lowest August extents since 2023”.
The chart below shows Antarctic sea ice extent in 2025 (dark blue) and 2026 (red) so far. For comparison, the chart shows decadal averages (dotted lines) as well as 2023 (mid blue), the year of the smallest winter sea-ice maximum on record.
Eayrs tells Carbon Brief that the regional pattern of Antarctic sea ice cover “changed substantially during the growth season”.
For example, she says that “in April, the Bellingshausen Sea remained almost entirely ice-free, while the neighbouring Amundsen Sea had more ice than usual”.
However, by late August, changes in atmospheric pressure and wind meant that “the Bellingshausen deficit had largely recovered, while ice was unusually scarce in the Amundsen Sea and across much of East Antarctica”.
Arctic minimum
Meanwhile, the Arctic recorded its minimum summer sea ice extent on 12 September. At 4.60m km2, this year ties with 2025, 2010 and 2008 as the 10th-lowest sea ice extent on record.
The chart below shows Arctic sea ice extent in 2025 (dark blue) and 2026 (red) so far. For comparison, the chart shows decadal averages (dotted lines) as well as 2012 (mid blue), the year of the smallest summer sea-ice minimum on record.
Roach tells Carbon Brief that although this minimum is not “record setting”, it is still “lower than any sea ice minimum before 2007”. She adds:
“Human-caused climate change has reduced Arctic sea ice cover and thickness, so the region is fundamentally different compared to a few decades ago.”
Scientists have been tracking Arctic sea ice thickness using a reanalysis produced called the Pan-Arctic Ice Ocean Modeling and Assimilation System (PIOMAS) since 1979.
In March 2026, the National Oceanographic and Atmospheric Administration (NOAA) terminated a global dataset of air pressure that scientists relied upon to produce PIOMAS, forcing both datasets to stop publishing updates.
The PIOMAS website says it will take “considerable effort and time” to find alternative data to use in their reanalysis. It adds that “we don’t yet have a good sense if that’s possible with available funds and if so, when we will be able to resume production of a new PIOMAS timeseries”.
Roach also notes that August saw record-breaking heat sweep across much of the world, explaining that high temperatures “extended into Arctic coastal regions, close to regions with substantial sea ice loss – particularly the Barents-Kara and East Siberian seas”.
Dr Zack Labe, a scientist at Climate Central, tells Carbon Brief that the absence of a new record does not mean that ice cover is becoming more “resilient”. He says:
“Local weather patterns across the Arctic play a really important role in year-to-year sea-ice extent, even as the long-term trend is clearly downward.”
Labe tells Carbon Brief that weather in the Arctic this summer was “influenced mainly by lower pressure toward the central Arctic, which brought cloudier and cooler conditions that limited surface melt and delayed the start of the melt season”.
He explains that this “was most obvious across parts of the Beaufort and Chukchi seas, where the melt season didn’t really kick off until after early July, which was more than two weeks later than normal”.
In contrast, he says, the Atlantic side of the Arctic “had a much more extreme summer”, with sea ice in the Barents Sea recording its “earliest melt-out on record”.
This was partly due to “unusually warm air and ocean temperatures”, Labe says. He notes, for example, that parts of western Siberia saw unusually persistent temperatures more than 5C above the 1981-2010 average for much of the summer, which extended out over the Kara Sea and contributed to substantial ice melt in this area”.
Labe tells Carbon Brief that, going forward, scientists need “more data and observations of other sea-ice metrics, like ice thickness, which may give us better insight into the overall condition of the ice pack, especially during years like 2026 when it is very fragmented”.
(In March 2026, Arctic sea ice reached its peak extent for this winter, clocking in as the joint-smallest in a satellite record going back almost half a century.)
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The post ‘Concerning’ low sea ice persists as Antarctic hits third-lowest winter peak appeared first on Carbon Brief.
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Participants at COP31 in Antalya will have a “duty” not to interfere in Türkiye’s internal affairs under the country’s hosting deal with the UN, reviving a clause dropped for last year’s climate summit in Brazil that human rights groups warn could put activists at risk.
Türkiye has faced growing criticism from human rights groups over the jailing of opposition figures, journalists and activists and imposed a blanket protest ban around July’s summit of the NATO military alliance in Ankara.
The contested provision is included in the binding agreement between the UN climate secretariat and the Turkish government that sets out responsibilities over logistical arrangements and details participants’ rights and obligations.
The document, signed in June but only made public on Wednesday, gives accredited COP31 attendees immunity from legal action over what they say, write or do in connection with the conference. Climate Home News understands that this safeguard can be applied to what takes place both inside and, in certain circumstances, outside of the UN-controlled COP “Blue Zone”. For the first time, this protection explicitly continues after the summit ends.
But participants enjoying these “privileges and immunities” also have a duty to respect Türkiye’s laws and regulations and not to interfere in its internal affairs, the agreement states. Rights groups fear its wide-ranging formulation could be used to discourage criticism of the host government.
Climate Home News understands that whether an action is covered by the immunity or infringes on the host’s internal affairs would be evaluated on a case-by-case basis, with close coordination between the country’s authorities and the UN climate change body.
A separate provision states that immunity shall be waived where the UN believes it would “impede the course of justice”.
‘Chilling effect’
Those same provisions featured in the host country agreements for COP28 in the United Arab Emirates and COP29 in Azerbaijan, both regarded as authoritarian regimes, before being dropped for COP30 in Brazil.
Ann Harrison, climate justice policy advisor at Amnesty International, said it is “extremely disappointing” that the COP31 agreement re-introduced clauses that could “hinder the ability of human rights defenders and civil society organisations to conduct their work safely”.
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She added the provisions could have a “wider chilling effect” on rights to freedom of expression and peaceful assembly, given concerns over the human rights situation in Türkiye, including laws that “have shrunk civic space” and their “abusive” implementation by authorities.
The UN climate change body declined to comment.
Rights groups have documented blanket protest bans, unlawful use of force by the police and prosecutions of journalists, human rights defenders and lawyers across Türkiye in the last year.
Arrests and protest bans
Last July, environmental activist Esra Işık was sentenced to more than two years for “resisting” a public official over what Amnesty International described as a peaceful protest against an urgent expropriation order linked to the expansion of coal mining in south-western Türkiye. She is appealing the conviction.
Ahead of a summit of the NATO alliance in the capital Ankara in July, authorities put in place a 13-day blanket ban on demonstrations, citing “national security”, and arrested over 200 people. Human Rights Watch said the crackdown showed Türkiye’s “ruthless intolerance of freedom of speech and assembly”.
Earlier this month, Turkish police detained dozens of people as part of what rights groups described as the government’s widening crackdown on LGBTQ+ activists and venues.
Questioned by media as to how he would guarantee the right to protest at COP31, Kurum said earlier in September that his team would “try to meet” any request they receive from civil society and give them “a free space to express themselves”.
“Don’t worry, thinking you will not be able to voice your opinions or really share your thoughts,” he said in an attempt to reassure campaigners, adding that he had put former deputy environment minister Mehmet Birpinar in charge of liaising with civil society.
Civic space needed
Camilla Pollera, human rights and climate change campaigner at the Center for International Environmental Law (CIEL), said meaningful participation at COP31 is fundamental to the legitimacy of climate action.
“At a climate summit, civil society participation necessarily includes being present, speaking out, scrutinising governments’ decisions and climate policies, and advocating for communities most vulnerable to climate change,” she added.
At last year’s COP30 summit, thousands of Indigenous people and climate activists peacefully marched through the Amazonian city of Belém in the first major demonstration outside the UN venue in four years. Smaller-scale demonstrations were largely confined to the “Blue Zone” at COP27 in Egypt, COP28 in the UAE and COP29 in Azerbaijan.
In two other separate incidents in Belém, members of the Munduruku tribe blocked access to the conference centre for hours, demanding an end to development projects in their ancestral land, and protesters stormed through the venue clashing with UN security officials.
The COP31 hosting agreement keeps some of the safeguards previously hailed by civil society groups. The government and the UN secretariat commit to upholding “the fundamental human rights” of all participants in the agreement’s preamble.
Under the deal, Türkiye also needs to ensure that security personnel follow “the highest ethical and professional standards and are expected to behave with integrity and respect”.
The post COP31 attendees told not to interfere in Türkiye’s “internal affairs” appeared first on Climate Home News.
COP31 attendees told not to interfere in Türkiye’s “internal affairs”
As rising seas submerge growing swathes of land, countries that lose territory should still keep their national boundaries, sovereign rights and UN membership, according to a political declaration adopted at the UN General Assembly in New York on Thursday.
The declaration, which was championed by climate-vulnerable small island states, affirms “the presumption in favour of continued statehood” in the face of sea level rise fuelled by climate change, and urges countries to work together to assist communities affected by encroaching oceans.
Speaking at a high-level UN meeting to address the existential threats posed by sea level rise, Cabo Verde’s Prime Minister Francisco Carvalho, one of the initiative’s co-facilitators along with Australia, said the adoption of the text by consensus sends “a message of hope”.
“This declaration has a very special meaning. For us, sea level rise is neither a distant threat nor a theoretical concern,” he said, adding that rising seas put at risk key infrastructure, water resources and economic growth in small island states.
In the Pacific, sea levels have risen at twice the global rate, dramatically increasing coastal flooding events from two to 20 a year in the Republic of the Marshall Islands, and from zero to 102 events per year in American Samoa, according to the World Meteorological Organization (WMO).
Surangel Whipps Jr., president of the Pacific island of Palau, said the summit in New York represents a “moment of international solidarity”, and highlighted that small island states will remain permanent members of the UN.
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Declaration recognises statehood
An advisory opinion by the world’s top maritime court, the International Tribunal on the Law of the Sea (ITLOS), first upheld in 2024 that countries do not have to shrink their maritime borders even if they lose land territory due to sea level rise. This was reiterated by the International Court of Justice in last year’s landmark ruling on the climate obligations of states.
The new declaration endorsed by all governments at the UN General Assembly stresses that sea level rise “is not a distant scenario but a real and lived experience for many”, and notes that international law must be implemented in global responses to rising seas.
UN Secretary-General António Guterres said the “milestone must now be translated into action”, adding that the declaration should encourage an “ongoing dialogue” at the “highest possible level” leading to practical outcomes. Pacific islands have proposed an international treaty on sea level rise that would provide more legal certainty.
“Those on the frontlines must be front and centre on every decision. We cannot allow countries and cultures to vanish beneath the waves,” he said. “The SOS has gone out. The world must answer.”
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Goodwin Friday, prime minister of St. Vincent and the Grenadines, said measures to protect vulnerable states will require adequate finance. “Investing in resilience now is more cost-effective than paying the far greater price for loss and damage later,” he added.
Championed by Australia’s COP31 co-presidency, Pacific islands have sought to put adaptation to sea level rise and ocean conservation at the top of the political agenda by inviting world leaders to attend the pre-COP31 summit co-hosted by Fiji and Tuvalu in October.
Tuvalu will also host the second global fossil fuel phase-out summit in April 2027, after around 60 governments met this year in Santa Marta, Colombia, to discuss ending their dependence on coal, oil and gas.
“Our coastlines, our reefs and our communities are living with the consequences of fossil fuel dependence every day, and our people have earned the right to help shape the way forward,” Lynda Tabuya, Fiji’s climate minister, said in a statement announcing details of the conference.
Ocean monitoring gets a boost in New York
Amid record-breaking marine heat and seas rising at unprecedented speed, governments in New York announced new commitments to protect the world’s ocean, as efforts to bolster marine ecosystems and coastal communities rise up the political agenda.
On Wednesday, the EU and Canada announced more funding for a new Europe-led ocean monitoring system called OceanEye, launched in the aftermath of a failed attempt by the Trump administration to dismantle the largest existing network of deep-sea observatories.
During an event at UN headquarters in New York, EU President Ursula von der Leyen and Canadian Prime Minister Mark Carney announced around $163 million in new funding for the initiative, with the EU pledging €92 million ($105m) on top of existing seed funding and Canada pledging C$82 million (US$58m) over five years.
According to an EU statement, while OceanEye will collaborate with the Global Ocean Observing System, that network “remains vulnerable to financial shortfalls and geopolitical disruptions”. A group of 30 countries from Europe, Africa and the Americas joined an international initiative in support of OceanEye, including large coastal nations like Brazil, Namibia and Mexico.
Von der Leyen said OceanEye “can make us the leading ocean data provider in a matter of years”, including by launching new satellites and installing new observatories in the deep ocean. “From outer space to the deepest ocean, our funding helps us keep watch beneath the waves,” she added.
Carney said the initiative would help protect Canada’s Arctic region with real-time monitoring operating year-round. “We can’t protect what we can’t see,” he said, also highlighting that Canada had expanded conservation of its ocean territory from 1% a decade ago to 15% now.
In New York, a group of 19 countries said they are either developing or implementing plans to sustainably manage all of their ocean territory, with 12 new nations joining the initiative. In a joint communiqué, they called on more countries to sign up ahead of COP31.
Warnings of El Niño-fuelled extreme heat
Scientists and world leaders have raised the alarm over this year’s record-breaking marine temperatures, which have persisted above historical peaks for more than 100 days as the naturally occurring El Niño phenomenon intensifies in the Pacific.
Extreme ocean heat could become a threat to coastal ecosystems and communities, experts fear. Water temperatures 1.5C above normal levels have also rapidly fuelled a strong hurricane in the Pacific in recent days.
Despite scientific calls for additional ocean conservation efforts, a report launched this week in New York warned that efforts to protect ocean ecosystems are lagging behind, with only 10% of the global ocean covered by conservation areas and just 3.5% designated as “effectively protected”.
The post Threatened by rising seas, small islands secure right to keep their statehood appeared first on Climate Home News.
Threatened by rising seas, small islands secure right to keep their statehood
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