Dive Brief:
- Citi has pledged to stop providing financial services to thermal coal-mining companies by 2030, the bank said Monday in a statement, according to Bloomberg.
- The bank has long held a progressive stance toward environmentally responsible lending. Last July, it became the first major U.S. bank to endorse the United Nations’ Principles for Responsible Banking.
- Several banks, including Barclays and Goldman Sachs, have promised a greener lending profile in the past four months.
Dive Insight:
Banks are increasingly finding more responsible lending is not just good PR, it’s good business. The global responsible loans market totaled $111.5 billion in July 2019, a 40% increase from a year earlier, according to S&P Global Ratings.
Citi set an intermediate benchmark for itself to hit its 2030 goal. The bank said it won’t provide underwriting and advisory services to the thermal coal-mining industry and will cut its credit exposure in half by 2025.
“Citi recognizes that emissions from fossil-fuel sectors in particular must be drastically reduced in the coming decade,” the company said in the statement. “The shift away from fossil fuels in pursuit of renewable and other sources of low-carbon energy will have a significant effect on clients in coal-fired power generation, coal mining and certain segments of the energy sector.”
The bank included the new targets in its environmental and social policy framework Friday, and committed to rejecting financing for oil and gas exploration and production in the Arctic.
The company also pledged to stop providing project-related financial services for coal mines and coal-fired power plants.
The nation’s third-largest bank has a history of following through on its green objectives. It was four years ahead of schedule in 2019, when it financed $100 billion of activities to address climate change.
Citi was one of 130 banks representing $47 trillion in assets that committed in September to align their business with the goals of the U.N.’s Paris Agreement on Climate Change.
Barclays last month took a step in that direction, vowing to reduce the carbon emissions it creates or funds to net zero by 2050. The U.K. lender has provided more than $118 billion in funding for fossil fuels since 2016, making it Europe’s top lender in that category and the seventh-biggest globally, data from the Rainforest Action Network showed.
Goldman Sachs in December announced a target to commit $750 billion in loans, underwriting, advisory services and investments over the next 10 years toward companies focused on renewable energy, sustainable transportation and affordable education.
Original source: Utility Dive