Over 40 of the world's biggest banks have partnered to form the Net Zero Banking Alliance (NZBA), which aims to combine existing and new-net zero finance initiatives into one sector-wide forum.

The NZBA said it will work to mobilise the trillions of dollars necessary to build a zero emissions economy and deliver the goals of the Paris Agreement by 2050.

The organisation will include banks from 23 countries - including Santander, Barclays, and Citi – which it said have $28.5 trillion in combined assets.

The NZBA will be convened by the United Nations Environment Programme Finance Initiative and was co-launched by the Prince of Wales’ Sustainable Markets Initiative Financial Services Taskforce (FSTF).

The organisation forms part of the wider Glasgow Financial Alliance for Net Zero (GFANZ), which combines over 160 firms, said to be responsible for combined assets of over $70 trillion, which is chaired by ex-head of the Bank of England (BoE) Mark Carney.

The news comes during a week-long climate summit organised by US president Joe Biden, where 40 world leaders will attempt to negotiate agreements on future emissions.

It is anticipated that the US will announce an updated carbon pledge at the summit that will see its greenhouse gas (GHG) emissions almost halved by 2030.

The banks commitments include transitioning all operational and attributable GHG emissions from their lending and investment portfolios to align with net-zero by 2050.

The banks will also work towards setting intermediate targets for 2030, or sooner, for priority GHG-intensive sectors and facilitating real economy transition by offering products and services to support clients’ transformation.

“If we are to green the world’s economy, we need a truly global effort - banks, companies, governments, regulators and civil society working together at pace,” said Ana Botin, executive chairman at Banco Santander. “At Santander we are proud to be part of the founding members of this new alliance, and to accelerate progress towards net zero.”

“This is the breakthrough in mainstreaming climate finance the world needs. I welcome the leadership of the SMI Financial Services Task Force and other global banks for their new commitments to net zero and for joining forces with GFANZ, the gold standard for net zero commitments in the financial sector,” said Mark Carney, UN special envoy for climate action and finance. “Most fundamentally, GFANZ will act as the strategic forum to ensure the financial system works together to broaden, deepen, and accelerate the transition to a net zero economy.”

“Uniting the world’s banks and financial institutions behind the global transition to net zero is crucial to unlocking the finance we need to get there – from backing pioneering firms and new technologies to building resilient economies around the world,” said prime minister Boris Johnson. “The Glasgow Financial Alliance for Net Zero will lead this charge ahead of COP26 to scale-up our ambition, accelerate our shift and help us to build back greener together.”

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