Sumitomo Mitsui Financial Group Inc. (SMFG) has become the first Japanese bank to exit the Net-Zero Banking Alliance (NZBA), a global initiative to decarbonise the financial sector. The decision, announced on 4 March, follows a wave of similar withdrawals by major US banks.
Japan’s two other largest financial institutions, Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc., are reportedly considering similar moves.
The NZBA, established in 2021, includes over 130 financial institutions committed to achieving net-zero greenhouse gas emissions in their lending and investment portfolios by 2050. However, growing criticism from US Republicans, who argue that restricting fossil fuel financing could breach antitrust laws, has put pressure on participating banks.
The return of Donald Trump, a known climate change sceptic, to the White House has further accelerated the exodus of American banks from the alliance. Among those withdrawing are Goldman Sachs, Citigroup Inc., and JPMorgan Chase & Co.
Despite its departure from the NZBA, SMFG insisted that its commitment to climate action remains unchanged.
Meanwhile, other Japanese financial institutions—including Sumitomo Mitsui Trust Group Inc., Norinchukin Bank, and Nomura Holdings Inc.—remain part of the alliance. Norinchukin Bank officials confirmed they are still evaluating their stance on continued membership.
