One of the largest international green banking alliances moved to loosen its climate targets as an increasing number of banks have abandoned the group and its targets altogether in an apparent effort to get ahead of the Trump administration’s attempts to crack down on climate-focused initiatives and policies.

Launched in April 2021, the Net-Zero Banking Alliance aims to bring together global banks and institutions to set climate targets that align with the Paris Agreement. 

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Existing rules require members of the United Nations-backed coalition to commit to an energy transition in their portfolios and operations, putting them on a path to net zero. This means members are committed to removing as much carbon pollution from the atmosphere as they emit by 2050 or sooner. Members are also required to align their financing with the intention of limiting global warming to 1.5 degrees Celsius above preindustrial levels.

Roughly 80% of NBZA’s members voted Tuesday on changing these rules, with 90% of the financial institutions voting in favor of loosening the targets, according to Reuters. 

Members will now be able to align financing with a broader range of net-zero pathways looking to meet expanded Paris Agreement temperature targets, including “well below 2 C” and not just 1.5 C, according to briefing documents reviewed by Bloomberg.

They are also no longer required to set five-year emissions reduction targets. Those requirements are now being transitioned into recommendations. 

The group’s leadership has indicated that the loosened goals reflect the slowing transition to net zero with political and technological developments. 

“The knowledge we had in 2021 on what was achievable … has been very different than where we are today,” said Shargiil Bashir, chairman of the steering committee for NZBA and chief sustainability officer for First Abu Dhabi Bank, according to Reuters.

“Some of the industries are not transitioning as we expected four years ago because either the technology is not moving as fast or the policymaking is not moving as fast,” Bashir continued. 

The Net-Zero Banking Alliance has reportedly been considering changing its rules for weeks, as several major U.S.-headquartered and other Western banks withdrew from the coalition. 

In December and January, Goldman Sachs, Wells Fargo, Morgan Stanley, Citigroup, and Bank of America departed from the international alliance. 

The financial institutions did not explicitly explain why they left the group but insisted they would continue to focus on their sustainability goals. 

Following the U.S. exodus, a number of Canadian banks also followed suit. 

The departures coincided with the start of President Donald Trump’s second administration, sparking concerns among environmentalists that Wall Street was conceding to right-wing criticism of environmental, social, and governance initiatives. 

Before taking office, Trump was expected to reverse a number of climate-related initiatives, including withdrawing again from the Paris Agreement. The president swiftly followed suit on Day One and also moved to slash funding for climate-related programs within federal agencies such as the Environmental Protection Agency and National Oceanic Atmospheric Administration.

For years, Republican lawmakers and politicians have criticized NZBA, accusing it of antitrust violations. In 2022, 19 Republican attorneys general announced they were investigating the banking alliance, saying its actions were hurting their states.

After Wells Fargo and Goldman Sachs announced their departures from the group, the Republican-led House Judiciary Committee took to X to celebrate the news, posting, “ANOTHER WIN.” 

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While the banking alliance will loosen its goals, Bashir has insisted that many members of the group are still on course with 1.5 C-aligned goals. 

“We’re halfway through the critical decade for action on climate, and we need all sectors, including banking and finance, to commit to moving the needle on emissions reductions,” Bashir said.