Maybe you have to invert b and c position ?
I see that the c table appears to be the base table :
WITH CTE_Concat AS (
SELECT c.ListID,t.EntityID, STUFF(
(SELECT '; ' + c.ListName
FROM [server].[xxxxxx_MSCRM].[dbo].[ListMemberBase] b with (nowait)
WHERE b.ListID = c.ListID
FOR XML PATH('')
),1,1,'') AS ConcatValues
FROM [server].[xxxxx_MSCRM].[dbo].ListBase c with (nowait) INNER JOIN [server].[xxxxxx_MSCRM].[dbo].[ListMemberBase] b with (nowait) t ON c.ListID = b.ListID
)
UPDATE a
SET Con_Mailings = z.ConcatValues
FROM [xx_Temp].[dbo].[Lyris_CombinedTest] a INNER JOIN CTE_Concat z ON a.TmpContactID = z.EntityID
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