Global financial services company Citi announced today new interim targets for financed emissions reductions in the emissions-intensive energy and power sectors, forming a key part of the bank’s plan to achieve its 2050 net zero greenhouse gas (GHG) financing goal.
Citi has pledged to target a 29% absolute emissions reduction in its energy portfolio, and a 63% reduction in portfolio emissions intensity in the Power sector.
The new targets were published in Citi’s annual Task Force on Climate-related Financial Disclosures (TCFD) report, along with details outlining the company’s progress on incorporating climate risk and opportunity identification into its business strategy and disclosure efforts.
The TCFD report includes a letter from Citi CEO Jane Fraser, highlighting some of the key aspects of the bank’s climate and sustainable finance strategy, pledging to support clients in their transitions to net zero, and to finance clean energy solutions.
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.
More recently, Fraser said that the bank will be expecting its clients to measure and communicate their emissions, and provide plans to improve the climate profile of their assets, warning that clients’ progress in moving to more sustainable forms of environmental impact will effect the services provided by the bank.
In today’s letter, Fraser said that Citi will work with all clients, including those in the fossil fuel sector, to develop credible net zero transition plans, encouraging responsible retirement of assets rather than divestment, and will exit clients only as a last resort. Beyond the energy and power sectors, Fraser said the bank will “actively engage with our clients across all relevant sectors to map out what decarbonization pathways look like for each industry.”
Fraser also stressed the importance of ensuring that the bank supports a responsible transition, taking into consideration the different stages of development in various regions of the world, and taking into account global energy needs, particularly in developing countries with limited access to energy and resources, in order to avoid negative social impacts or exacerbate inequalities.
Calling on a collaborative approach to addressing climate change, encompassing clients, industry peers, investors, NGOs and governments, Fraser wrote:
“The existential threat posed by climate change will be with us for generations, but we know that it is this generation’s time to act. We will act with urgency while understanding that our work to achieve net zero will not be a short-term effort. Supporting a fair and inclusive transition remains a top priority for Citi. This is part of who we are, and we will continue to learn and lead as the global community enters this next critical stage of climate action.”
Click here to view Citi’s TCFD report.