Global Banking Group Abandons Climate Goal to "Well-Below 2°C"

(MENAFN) The Net Zero Banking Alliance, an international consortium of top financial institutions, announced on Tuesday a significant change to its climate policy.

Previously, member banks were expected to align their financing, investment, and capital market operations with the goal of restricting global temperature increases to 1.5°C.

However, the alliance has now relaxed this standard, opting instead for a broader target of keeping warming “well-below 2°C” as outlined in the Paris Agreement.

This adjustment was detailed in a newly published report—the third iteration of its guidelines—which lays out a roadmap for banks to establish climate objectives that align with international climate accords.

The UN-endorsed group, which includes more than 120 banks worldwide, emphasized a shift in tone from its earlier, more “ambitious” approach.

The revised guidance states, “Targets should align with the goals of the Paris Agreement, aiming to limit global warming to well below 2°C, striving for 1.5°C.”

This phrasing reflects a subtle but meaningful departure from the previous singular focus on the 1.5°C threshold, indicating a softening of expectations for member institutions.

Further, the document emphasizes that “Limiting global temperature increases to well-below 2°C, striving for 1.5°C, will require ambitious actions from all strands of the economy.” This acknowledges the complexity and collective responsibility required to meet such climate benchmarks.

The coalition pointed to a variety of challenges influencing this pivot. These include difficulties in coordination among stakeholders, slow-moving governmental policy frameworks, and concerns over fiduciary obligations.

These hurdles have led banks to reconsider the feasibility of the stricter 1.5°C goal in the current economic and regulatory environment.

Recognizing the evolving landscape, the report stresses the necessity for financial institutions to reshape their operational strategies.

It underscores the importance of designing “realistic strategies underpinned by robust, science-based targets and action plans,” signaling a continued commitment to meaningful climate action, albeit with more pragmatic expectations.

MENAFN16042025000045017167ID1109436884