The decisions by HSBC and Barclays to quit a key UN-backed climate group were the final blows that led to its collapse last month. The Net Zero Banking Alliance (NZBA) announced it would shut down in early October after the UK lenders followed their US peers in exiting the coalition.
The exodus began with US-based banks, a move some analysts linked to political pressure in the US. The withdrawal of the British banking giants, however, marked the end of the once-lauded group, which no longer had the backing of the world’s largest financial players.
This high-profile failure has raised questions about the banking sector’s dedication to environmental targets. However, the Bank of England’s regulatory arm appears unfazed by the development.
David Bailey, a PRA executive, downplayed the significance of the closure. He insisted that the regulator’s direct engagement with banks on climate-related financial risks remains robust and “vibrant.”
The PRA is reportedly still considering future climate stress tests to check the industry’s preparedness. This comes as Bailey, a potential frontrunner for the PRA’s top job, is also overseeing a raft of other reforms to reduce red tape and boost growth.