Citigroup CEO Jane Fraser said on Tuesday that the bank will be expecting its clients to measure and communicate their emissions, and that climate impact may determine which clients it chooses to serve in the future.
Speaking at The Wall Street Journal’s CEO Council Summit, Fraser said:
“We would be expecting of a client that they will be measuring their emissions, so that we have data upon which to measure the impact.”
Fraser became CEO of Citi in March 2021, and on her first day on the job committed the bank to a 2050 net zero greenhouse gas (GHG) financing target. In April, Citi followed up its climate pledge with a goal to facilitate $1 trillion in sustainable finance by 2030, including the deployment of $500 billion to environmental finance. At the WSJ conference on Tuesday, Fraser said that the bank is currently in the process of putting together its 2050 net zero plan, with determining what needs to be in place by 2030, including targets for its portfolio, as one of the first steps.
In addition to emissions disclosures, Fraser said that the bank will expect clients to have a plan to improve the climate profile of their assets. Fraser said:
“Another expectation that is likely of a client is that they have a credible plan to greenify. What are the going to do with assets that are brown? We don’t necessarily love divesting them, because that would just move it into different hands, as opposed to what can be done for responsible retirement, or what can be done to get those assets into a cleaner state.”
Ultimately, clients’ success in moving to more sustainable forms of environmental impact will effect the services provided by the bank:
“At the end of the day, that will mean that there are some choices as to which clients we will be serving and which clients we won’t be.”
Fraser also called for standardized disclosures in order to enable the bank to understand the emissions profile of its portfolio and move forward with its decarbonization plans. Calling the current situation a “veritable fruit basket of different disclosure regimes,” Fraser said:
“It will be a lot easier when we have disclosures that are apples to apples… So where we can see more standardization and harmonization of disclosures, that will certainly make everyone’s task easier.”