Gabby Brown, Sierra Club
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Today, Citigroup announced new 2030 interim targets to reach its commitment to net-zero financed emissions by 2050. The plan includes a commitment to reduce absolute financed emissions from the energy sector by 29% and financed emissions intensity from the power sector by 63%.
By contrast, other major US banks — including JPMorgan Chase, Morgan Stanley, and Goldman Sachs — have announced 2030 emissions targets in recent months for their energy, power, and auto manufacturing portfolios, though all have been emissions “intensity” targets rather than commitments to absolute emissions reductions. In terms of energy production, emissions intensity reductions are compatible with increases in absolute emissions.
The bank also announced plans for a two-year period to assess and engage with its clients to determine whether they’re on a credible path to alignment with these targets, and whether they can get into alignment — ideally by stopping fossil fuel expansion and retiring carbon-intensive assets — or if it might be necessary for the bank to drop them as clients “as a last resort".
Last year, Citi became the first major US bank with a plan to restrict financing for some companies expanding coal power and to phase-out financing for nearly all coal power companies over the next two decades. However, its new net-zero plan does not rule out support for companies expanding development of oil and gas despite the scientific consensus that achieving net-zero emissions by 2050 requires an immediate stop to the expansion of fossil fuels.
“With these new commitments, Citigroup has surpassed the low bar set so far by its peers and taken an important first step toward aligning its lending practices with a climate-stable future,” said Sierra Club Fossil-Free Finance Campaign Manager Ben Cushing. “The targets Citi has laid out aren’t achievable if it continues to fund the expansion of fossil fuel development, and we are hopeful that this assessment period over the next two years will lead to cutting ties with polluters that are failing to change their practices accordingly.”
“While an absolute target for energy represents a step forward, Citi has not ruled out expansion of fossil fuels -- sidestepping the headline requirement of the IEA net-zero scenario that Citi's energy target is based on,” said Rainforest Action Network Climate and Energy Senior Campaigner Jason Opeña Disterhoft. “The bank should require companies to end expansion of fossil fuels as an explicit criterion in its client assessment, in line with climate science. This should also apply on power, where an intensity-only target leaves the door open for new fossil gas -- when the IEA has underlined the need for decarbonized power by 2035 in the rich world and 2040 worldwide.”
Over 2016-20, Citi’s top fossil fuel clients were Exxon, Occidental, Marathon Petroleum, Saudi Aramco and Chevron, in terms of amount of lending and underwriting provided.