Do investors care about climate commitments? evidence from Net Zero Banking Alliance withdrawals

• We study market reactions to banks' withdrawals from the Net Zero Banking Alliance. • Exiting banks show no statistically significant abnormal returns, on average, around exit announcements. • Several exit dates generate negative spillover effects for remaining NZBA members. • Exiting U.S. banks tend to receive more positive market reactions, consistent with anti-ESG pressures. • The evidence suggests that continued NZBA participation is viewed as more costly as alliance credibility erodes. We examine market reactions to banks’ withdrawals from the Net-Zero Banking Alliance (NZBA) between December 2024 and August 2025. Using a hand-collected sample of 102 listed banks, we find that exits by the withdrawing banks do not, on average, yield statistically or economically meaningful abnormal returns. In contrast, several exit dates have negative spillover effects for remaining NZBA banks. Cross-sectional evidence is consistent with political-legal risk mitigation and cost-reduction motives for exits. Our paper provides evidence that investors perceive continued participation in the alliance as value-reducing once its credibility begins to erode.