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Citibank has announced its targets to reduce emissions linked to loans for coal mining, steel, auto, and real estate clients by 2030. The bank aims to cut 90% of thermal coal mining emissions, 31% of emissions for auto manufacturing, and 41% for North American commercial real estate. However, it has yet to reveal more detail on steel emissions and alignment with the 2015 Paris Agreement.
While Citibank pledged to reach net-zero emissions for its operations by 2030 and net zero for financing by 2050, it still relies on carbon credits to tackle unavoidable emissions. The bank will also require its clients to use carbon credits to offset their emissions.
Although banks worldwide are pledging to reduce carbon emissions for the sectors (where these banks have invested in) that emit the most carbon, some need to act faster to prevent global temperatures from rising beyond 1.5°C above pre-industrial times. Some lenders have restricted financing for the most controversial energy projects, and others ended fossil fuel financing entirely. Still, some of the world’s largest banks have financed $4.6 trillion in fossil fuels in the six years since the 2015 Paris Agreement.
Citibank's sectoral targets do not include the underwriting of stock and bonds, referred to as facilitated emissions; although, the bank has stated that it will include it if the agreed methodology for such targets for all banks is out. The bank’s approach is to engage with clients, rather than divest. However, some campaign groups find the lender's sectoral updates insufficient.
In 2021, Citibank’s emissions for energy portfolios declined significantly compared to 2020, but stayed the same for its power portfolios. The bank stated that climate-related reporting continues to fall short of the necessary quality, quantity, and consistency to permit comparability across clients, industries, and sectors.
Becoming net zero is one of the contemporary challenges for businesses nowadays. At DGB Group, we are ready to turn this challenge into a rewarding journey where you get to leave a positive mark on the environment.
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