Citi bank on Thursday announced targets for cutting emissions tied to loans from it to coal mining, auto, steel and real estate clients by the end of this decade, in its latest update to its plan to reach net-zero emissions by 2050 as banks all over the world are laying out plans for reducing emissions for the sectors most responsible for greenhouse gases.
Although some lenders are beginning to restrict financing for the dirtiest energy projects, environmental groups have said they are not acting quickly enough to prevent global temperatures from rising more than 1.5 degrees Celsius (2.7 degees Fahrenheit) above pre-industrial times, the level needed to prevent the worst effects of climate change.
Citi’s targets contain a pledge to cut absolute emissions from lending to thermal coal mining by 90% by 2030 from a 2021 baseline, the intensity of emissions for auto manufacturing by 31% and for commercial real estate in North America by 41%, while it said more detail on steel emissions and alignment with the 1.5C goal would be disclosed in future.
The bank’s emissions in 2021 for its energy portfolio saw a significant drop when compared with 2020 and were broadly unchanged for power. However, Citi said financed emissions can fluctuate year-on-year, making analysis complicated.
The bank has previously announced restrictions on lending to some coal and unconventional oil and gas projects but it has not gone as far as some European lenders in tightening its policies, since the bank’s approach was to engage with clients rather than divest, according to Val Smith, Citi’s Chief Sustainability Officer.
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Meanwhile, according to an NGO-authored Banking on Climate Chaos report published last year, between 2016 and 2021, Citi was the second-largest funder of fossil fuels globally, although its financing has been falling since 2019, prompting Beau O’Sullivan, senior strategist for the Bank on our Future campaign, to call Citi’s sectoral updates disappointing when set against European banks restricting lending for new oil and gas.
“The success of engaging with their fossil fuel clients is a comforting fantasy that banks like Citi tell themselves: they could have more influence by restricting financing for companies that are expanding fossil fuels,” he said.
Citi also said on Thursday it intends to begin purchasing voluntary carbon credits to help its operational emissions hit net zero by 2030, and it acknowledged clients in some sectors would need to use credits to reach their absolute net zero emissions by 2050.
Story adapted from Reuters.
