IN-DEPTH: Investor climate alliances at a crossroads

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Global climate investor alliances, once seen as a powerful force aligning trillions of dollars behind the transition to net-zero, have entered a make-or-break phase.

Political pushback, shifting regulatory expectations, and rising scrutiny over ESG policy have forced many to rethink their role with the Net-Zero Banking Alliance (NZBA) the latest to change course, calling time on operations. Since the first notable cracks appeared in late 2022 with Vanguard's retreat from the Net Zero Asset Managers (NZAM) initiative, many alliances have paused work or rolled back on their initial targets in a bid to stem the flow of exits by such large asset managers and retain some level of influence on how climate is perceived as a financial risk. Climate Action 100+ (CA100+) Climate Action 100+ (CA100+) was one of the first alliances to form in 2017 as companies rallied around the Paris Agreement’s call to keep global warming well below 2 degrees Celsius. By February 2024, however, pressure from Republican regulators spurred major exits with JP Morgan, State Street and PIMCO among them and all amid concern that new priorities, including policymaker engagement and transparency over company discussions, threatened their independence. Responding to the wave of exits, CA100+ argued that its initiatives do not come into conflict with investors' fiduciary duties but did acknowledge “the political pressure some investors are facing in certain markets.” In August 2025, the alliance said it would be simplifying and streamlining its company benchmark initiatives with a focus on “the challenges investor groups are facing in the current economic climate.” In an October statement to DMI, CA100+ confirmed that discussions are ongoing on how to potentially streamline the benchmark with signatories asked to provide feedback on their priorities through an online survey which will be used to inform the process. Net-Zero Asset Owner Alliance (NZAOA) The Net-Zero Asset Owner Alliance (NZAOA) was formed in 2019 and has the support of over 80 institutional investors members. The member-led initiative has also seen its share of departures in recent years with the withdrawal of Danish pension fund PKA and the Church of England Pensions Board. In an October statement, it announced the fifth iteration of its target setting protocol which provides guidance for asset owners to individually manage climate risks in their portfolios. The group also pointed to discussions on future focus options for the alliance including climate adaptation and resilience. Net Zero Asset Managers (NZAM) Formed in December 2020, the Net Zero Asset Managers initiative is endorsed by Investor Agenda and governed by six investor networks including Ceres and Principles for Responsible Investment. "Confusion" over membership was cited by two of its biggest-name departures with Vanguard cutting ties in late 2022 to ensure it "speaks independently on matters of importance to our investors" and BlackRock parting ways in January this year while citing the weight of "legal inquiries from various public officials." Early this year, while addressing the evolving regulatory environment and changing client expectations in investors’ respective jurisdictions, NZAM said it was launching a review of the initiative to ensure it remains “fit for purpose.” Since then and pending the outcome of the review, NZAM has suspended activities and removed the commitment statement and list of signatories from its website. Net-Zero Banking Alliance (NZBA) Four years on from its establishment, the Net-Zero Banking Alliance last week announced a decision to cease operations after a wave of exits that started in late 2024. Those to depart included U.K.-based HSBC, Barclays and Switzerland-based UBS Group with the exodus also extending to Asia-based members Sumitomo Mitsui and Nomura Holdings. While many reaffirmed net-zero goals, some, like Barclays, cited dwindling membership. The NZBA had fought to slow defections, with an April announcement to abandon its requirement for banks to align their lending portfolios with reaching the target of 1.5 degrees Celsius, moving to the “minimum ambition” of the Paris Agreement. However, the watered-down requirements faced backlash from some, with Netherlands-based Triodos Bank leaving the alliance arguing its new guidelines “fall short of the needed urgency.” By September, operations were paused and a subsequent vote saw members back a transition from an alliance to a guidance framework - a move responsible investment group ShareAction called “bitterly disappointing,” accusing big banks of stepping away from accountability. Glasgow Financial Alliance for Net Zero (GFANZ) Launched in 2021, Glasgow Financial Alliance for Net Zero (GFANZ) set out to unite global banks, insurers and investors to drive the net-zero transition. In January 2025, it broadened membership to boost private capital for clean energy, aiming to close a $5 trillion annual investment gap. It also revealed plans to transition to an independent principals group led by CEOs and leaders from financial institutions. The change in strategy was also called out by ShareAction which described the move as “dangerous” while warning that it could lead to GFANZ members lowering their net-zero ambitions. By February 2025, GFANZ said it had paused work related to consultations in the areas of nature in net-zero transition planning and index investing. A defining moment With boulders in the path to net-zero, experts have warned that the clock is ticking for delivering on climate ambition. 2024 was declared the hottest year on record by the World Meteorological Organization, with the group also deeming the Paris Agreement’s goal as “not yet dead but in grave danger.” For Michael Cohen, the outgoing chair of the Climate Action 100+ global steering committee, these headwinds are a call to adapt, not to retreat. “We have witnessed misrepresentation not only of the initiative but also investor stewardship of the risks posed by climate change,” he said. “We view these challenges not as setbacks, but rather as a catalyst to reassess our strategies and direction.”