Citi published its latest annual climate-related disclosures report on Thursday, March 2, which features new emissions reduction targets for key high-emitting sectors, and preliminary data on its financed emissions for recent years. Citi is now the only major US bank to adopt an absolute emissions reduction target for financing thermal coal mining, pledging to slash emissions from the sector 90% by 2030. Citi was already one of only two major US banks, along with Wells Fargo, to adopt an absolute emissions reduction target (rather than an emissions intensity target) for financing the oil and gas sector. Citi also adopted 2030 emissions intensity targets for its auto manufacturing, steel, and commercial real estate portfolios, along with its previous target for the power sector.

In addition to Citi’s new sectoral targets, the report reveals some early progress toward its emissions reduction targets set last year for the financing of energy (specifically oil and gas) and power generation. Citi’s report reveals a decline in absolute financed emissions from 2020 to 2021 for its energy and power sector portfolios, and a significant decline in its credit exposure to thermal coal mining in the past two years.

A key weakness of the report is the bank’s failure to provide meaningful insight into its strategy for engaging with high-emissions clients. The report includes only vague information about Citi’s client engagement process, and does not provide adequate expectations, standards, or timelines for how it will escalate engagement with polluting clients to ensure they align with the bank’s climate commitments. Citi is the second largest financier of fossil fuels in the world, and was the largest banker of fossil fuel expansion in the eighteen months after it joined the Net Zero Banking Alliance.   

In response to the announcement, Adele Shraiman, Campaign Representative with the Sierra Club’s Fossil-Free Finance campaign, issued the following statement:

“Citi’s new target for slashing its financed emissions from thermal coal mining sends a strong signal that coal’s demise is accelerating, and other major US banks should follow suit. But it’s not enough to be better than a bad bunch. While the bank has taken some modest steps forward, Citi has still failed to set clear expectations for how it will hold clients accountable to ensure its targets are met. The inescapable truth is that in order to reach net zero by 2050, and the 2030 emissions targets Citi has set for the oil, gas, and coal sectors, it must stop funding fossil fuel expansion. Big polluters will either need to change drastically, or be left behind.” 

BACKGROUND

In November 2022, the Sierra Club’s Fossil-Free Finance campaign released a report analysing the interim 2030 targets and exclusion policies of the six major US banks, including Citi, revealing that the banks’ commitments fall far short of what’s needed to meet global climate goals. The report also establishes recommendations for credible and robust targets and policies. 

Among the key recommendations of the report were the inclusion of absolute emissions reductions targets for oil and gas, and the demonstration of declining financed emissions for power generation on an absolute basis. In addition, the report recommends that banks include both lending and underwriting in their sectoral emissions reductions targets. 

In March 2023, the Sierra Club and hundreds of allied organizations with Stop the Money Pipeline announced support for a slate of shareholder resolutions filed at major US banks. The proposals include asking banks to adopt policies to phase out financing for fossil fuel expansion, adopt absolute emissions targets for the energy sector, disclose 2030 climate transition plans, and report on standards for upholding Indigenous rights. Citi will face votes from its shareholders on fossil fuel expansion and Indigenous rights at its annual general meeting in April.

Reposted from the original press release on the Sierra Club website here.