Australia's Macquarie Group Joins US Banks In Exiting UN-Backed Climate Alliance

Australia-based Macquarie Group announced Tuesday its decision to leave the Net-Zero Banking Alliance (NZBA).

Macquarie Group will be joining the footsteps of several United States-based banks that have exited from the UN-backed coalition after President Donald Trump took office.

Although Macquarie didn't specify why it left the group, the company mentioned in its official statement that its net-zero strategy will still guide its actions.

However, it added its climate strategy was evolving to better meet the needs of clients and comply with government and regulatory requirements.

Rising political pressure

The NZBA -- focused on helping banks achieve global net-zero goals through their financing activities -- grew quickly from 43 banks to over 140 by 2024, representing $74 trillion. However, the group has faced increasing pressure, especially from Republican politicians in the United States.

They warned financial institutions, including banks, insurers, and investors, that participating in climate-focused alliances could lead to legal violations and exclusion from state business as part of a larger anti-ESG political movement.

Following Trump's victory, many banks started leaving the NZBA, beginning with Goldman Sachs. Eventually, all major Wall Street banks and Canadian banks followed.

Macquarie, the first major Australian bank to leave the alliance, has a massive business presence in the United States, with 34% of its net profit coming from the Americas in 2024. In October, Macquarie opened a new 250,000-square-foot headquarters in New York.

Macquarie expands emission reduction targets

Macquarie joined the NZBA in 2021 and set goals to align its financing activities with the global target of net-zero emissions by 2050.

In 2022, the company launched its net-zero strategy and set interim goals to reduce emissions in sectors such as oil and gas, coal, and automotive.

In 2023, it added Australian residential mortgage lending to its goals, bringing 80% of the bank's exposure to carbon-heavy sectors under emission reduction targets.

Macquarie was also a founding member of the Glasgow Financial Alliance for Net Zero (GFANZ), which previously brought together financial sector groups working towards net zero. However, GFANZ has recently restructured to focus on mobilizing capital for the low-carbon transition. Macquarie remains listed as a member of GFANZ.

Macquarie hinted at an exit earlier in January

Senior bank analyst Kyle Robertson said earlier this year Macquarie had hinted at its exit from the NZBA when the U.S.-based banks started leaving. However, he did not expect other banks with a large retail presence to follow, as it could harm their brand.

He explained that banks were facing growing pressure from both customers and shareholders to align with the goal of limiting global warming to 1.5°C.

Australian banks have made considerable progress in recent years, with a shift away from controversial investments like the Adani coal mine, which the major banks would no longer consider.