Banks are pivotal for the global climate and energy transition. Alliances like the Net-Zero Banking Alliance (NZBA) were one way of facilitating coordination among banks to reduce informational asymmetries pertaining to low-carbon capital-intensive technologies. We examine whether participation in NZBA was associated with structural shifts in bank lending away from fossil fuels toward renewable energy, and whether such effects propagate through syndicated lending networks to non-members. We conduct a technological level analysis of lending to fossil fuel projects and renewable energy projects using comprehensive loan-level data covering energy and utilities sectors from 2011 to 2024. We find that NZBA member banks significantly reduced fossil fuel corporate lending and increased renewable energy project lending following the alliance’s formation in 2021. However, we detect no robust effects in loan pricing. Additionally, non-members with greater exposure to systemically important large NZBA banks reduced fossil fuel lending post-2021. In contrast, we find no evidence that network exposure induced renewable energy lending expansion among non-members. The results contribute to the conditional and uneven impact of climate finance alliances, emphasizing the effective signaling role of large bank alliances in restricting negative behavior if not inducing positive one in rest of the banks.
