Last week, two Citibank customers and I met with some of Citi’s top Sustainability leadership: Val Smith, the Head of Sustainability, and Nasser Malik, the Corporate Banking Head of Sustainability and Corporate Transitions.
Unfortunately, Citi’s leadership are spewing the same talking points we’ve heard for months. It’s becoming more and more clear: Citi’s sustainability team is little more than a greenwashing machine.
Here’s what happened:
No commitment to end financing for fossil fuel expansion
Citi’s Head of Sustainability Val Smith continued to claim that Citi is “aligned with the science,” and yet, we know, Citi is not even close to aligning their business practices with what the science is demanding: no financing for the expansion of the fossil fuel industry.
Nasser Malik, the Head of Corporate Transitions, made it clear that Citi is committed to keep doing business with fossil fuel companies. He said that they are in ongoing conversations with their clients about their targets and how they are going to transition. There is a huge logical flaw in this argument as we already know that none of the major oil companies have sufficient plans to transition, oil companies are continuing to fund anti-climate lobbying, and fossil fuel companies continue to pour billions into new oil and gas development every year.
No commitment to closing the loopholes in its coal policy
Although Citi is the United State’s top financier of coal, neither Ms. Smith or Mr. Malik committed to closing any of the many loopholes in its coal policy. For example, Citi’s current coal policy still allows Citi to do business with companies like Glencore, a huge coal producer. Citi only excludes clients that have more than 25% of their revenue generated by coal. While only 7% of Glencore’s revenue is from coal, Glencore produces 94 million tonnes of coal annually.
No commitment to clarify what “exit as a last resort” actually looks like
Time and time again, Citi has spewed the talking point “exiting our clients is a last resort.” When we asked Ms. Smith and Mr. Malik about what this meant and if Citi will release information about how they are going to decide if these clients are transitioning, their response was: in order to have a “competitive advantage,” Citi will have to keep some of these things private. This is how greed gets in the way of actual change.
A weak commitment to doing something about Citi’s underwriting of bonds for fossil fuel companies
Citi needs to include underwriting bonds as a part of their climate targets and immediately cease underwriting corporate bonds for the top companies expanding the coal, oil, and gas industry. As a senior research associate at Cambridge University pointed out in this recent Bloomberg article, “Debt finance, largely bank loans and bond issuances, accounts for 90% of new capital for fossil-fuel companies.” It’s a huge market for the fossil fuel industry and not a very huge market for the bank. We made it clear: Citi must adopt a climate policy that includes underwriting bonds and shares. Ms. Smith reported that Citi will release targets for their bond policy but only once the Partnerships for Carbon Accounting Financials (PCAF) establishes a methodology for underwriting, but made no commitment to include an end to underwriting corporate bonds for companies expanding the fossil fuel industry when they release these updates.
The need to address the bond market is clear when you look at Citi’s recent actions. In Citi’s 2021 TCFD report, the bank heralded a deal with Tesco PLC as an example of its leadership on climate. However, as was revealed by Bloomberg in the article ‘Empty ESG Pledges Ensure Bonds Benefit Companies, Not Planet’, the incentives that Citi attached to the deal were solely linked to Tesco’s direct emissions (also known as Scope 1 and 2 emissions) which misses 98.4% of Tesco’s overall emissions (Scope 3). Given the severity of the climate crisis, it is sickening that Citi is holding up a deal that will impact 1.6% of its clients emissions as an act of “leadership” on climate. It also underlines the urgent need for the bank to address its climate impact in the bond market.
Coming out of this meeting, I was deeply disappointed. I had hoped that with the latest series of climate disasters, from flooding in Pakistan to the devastation of Hurricane Ian, Citi might finally be ready to treat the climate crisis like the emergency it is. Tragically, it is crystal clear that is not what is happening.
The one thing that gives me hope is knowing that there are nearly 8,000 Citi customers who are paying attention and are willing to do what it takes to hold their bank accountable.
Customers have leverage to demand climate justice at their bank. Banks have to listen to their customers, it’s in their basic business model. And there are tons of ways to take action from taking a few minutes to write and email to your bank’s CEO to going into a bank branch and talking to your branch manager about your bank’s fossil-fuel financing.
If you bank with Citibank, you can join thousands of Citi customers in taking action: just go to CustomersforClimateJustice.com and sign on. We’ll let you know everything you need to take action after that.
-Sarah Lasoff, Campaign Manager for Stop the Money Pipeline’s Customers for Climate Justice Campaign