JPMorgan is one of the banks to leave the Net-Zero Banking Alliance in recent months. © Ben Sutherland
Banks have made very little progress on climate action despite making net zero promises, a new report has found.
The latest State of the Banking Transition report found that banks’ performance of climate policies based on the Net Zero Banking Assessment Framework (NZBAF) was lacking overall. No bank that was assessed had committed to end on and off balance sheet activities on new oil, gas and coal investments.
Meanwhile, 61% of banks had no policy to encourage the transition of their high-emitting clients, according to the report by the Transition Pathway Initiative’s Global Climate Transition Centre (TPI Centre) at the London School of Economics.
An exodus of banks from the Net-Zero Banking Alliance has led to questions about the effectiveness of voluntary commitments, as financial institutions have backtracked on their green goals amid political backlash in the US.
“Given banks’ central role in the economy and their far-reaching influence on climate, their slow progress on the climate transition coupled with the recent dissolution of the Net-Zero Banking Alliance suggest that the objectives of the Paris Agreement are slipping further out of reach,” said Algirdas Brochard, banking project lead at TPI Centre.
The report looks at the climate policies of 36 of the largest banks by market capitalisation and total assets, looking at which sectors have decarbonisation targets set by banks and if their pathways align with the Paris Agreement. On average, banks only scored 18% and progress on transitions has stalled, with 95% of scores unchanged year on year.
Banks that did update their policies tended to weaken disclosures such as net-zero commitments and financing conditions for sectors with high carbon emissions, the report says. Some have withdrawn their commitments or changed the wording to be less precise, such as using “ambition” or “aspiration” rather than “commitment” or “target”.
The report also finds that only 34% of decarbonisation pathways aligned with benchmarks of 1.5°C or below 2°C in 2030, with alignment particularly low in the aluminium, oil and gas, and steel sectors. However, 96% of bank pathways were aligned with global low-carbon benchmarks in the electricity sector.
Sonja Gibbs, managing director and head of sustainable finance at the Institute of International Finance (IIF), said there was still demand among members for data and insights on navigating the green transition.
“In an increasingly fragmented policy and regulatory landscape around sustainable finance, the work being done to help understand banks’ progress and improve the transparency and availability of transition-related information is a valuable contribution to informed dialogue between banks, investors and policymakers.”
This page was last updated November 4, 2025
Written by
Moriah Costa is the Editor-in-Chief of Green Central Banking and has over a decade of experience writing about banking and finance. She is an award-winning American journalist based in Paris and has written for major international publications, including Reuters, The Guardian, and S&P Global. Having grown up in water-stressed Arizona, she has always had a strong interest in bringing awareness to climate and environmental issues.
