This paper examines how banks’ public climate commitments, such as membership in the Net Zero Banking Alliance (NZBA), influence the composition and geographic distribution of cross-border syndicated lending. We use granular loan-level data and a staggered difference-in-differences approach to analyze changes in lending behavior following NZBA membership. We document three main findings. First, green lending increases after NZBA membership, but this growth is concentrated in advanced economies. It is often accompanied by a substantial decrease in conventional lending to green sectors, suggesting a shift in instruments rather than an expansion of climate-aligned finance. Second, cross-border green lending to emerging and developing economies declines, even among NZBA banks headquartered in those regions. Third, NZBA banks become more selective in their lending after joining the alliance, reducing the number of deals and focusing more on clients in advanced economies. These results suggest that while NZBA commitments help banks “green” their domestic portfolios, they may also reinforce global disparities in sustainable finance by reallocating both green and conventional lending away from less developed markets.
