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Citigroup adopts environmental policy
Date: 2020-02-03
Source: Associated Press
Citigroup adopts environmental policy
January 22, 2020
Citigroup intends to become more environmentally friendly.
The nation's largest financial institution announced Thursday that it is adopting a corporate policy to carefully evaluate requests for project financing that could adversely affect the environment and ban any funding for illegal logging operations. It also commits Citigroup "to invest in sustainable forestry and renewable energy."
Adoption of the initiatives comes after two years of anti-Citi demonstrations by the Rainforest Action Network aimed at getting the bank to make a commitment to environmental causes.
Ilyse Hogue, global finance campaign director for the environmental activist group, which is headquartered in San Francisco, said Citi is the first American bank to adopt such a comprehensive policy.
"We think this is the most significant environmental commitment to date in the financial services sector ... and perhaps in the corporate sector, because of the potential ripple effects," Hogue said.
She spoke in a joint announcement of the policy with Pam Flaherty, head of global community relations and environmental affairs for Citigroup.
Flaherty said the new initiative builds on voluntary guidelines known as the Equator Principles that 18 global financial institutions have signed since last June. The principles require the banks to adopt procedures to evaluate the social and environmental impacts of infrastructure projects that they finance.
"What we've done is moved beyond that, building on it and making it more comprehensive," Flaherty said.
The bank said the new policy's main points are:
- Putting in place additional screening of financing requests for projects "that Citigroup determines could adversely impact a critical natural habitat." Included will be a ban on lending for commercial logging in primary, tropical moist forests.
- Refusing loans to companies known to be in violation of local or national laws against illegal logging.
- Developing "a program to invest in sustainable forestry and renewable energy." It will include consumer financing for solar panels, residential wind turbines and fuel cells and other forms of clean energy.
- Reporting the "greenhouse" gas emissions from power projects in its portfolio. Greenhouse gas is produced when fossil fuels are burned and has been linked to global warming.
She said that the policy had been discussed companywide - and with clients - to ensure cooperation. Citigroup has operations in 100 countries.
It is not the first time Citigroup has changed its policies after public protests.
The bank adopted reforms to eliminate practices that took advantage of low-income borrowers after community groups bitterly protested its 2000 purchase of Associates First Capital Corp., which specialized in loans to high-risk borrowers. Associates was later merger into CitiFinancial.
By EILEEN ALT POWELL
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