Accounting
Citi Joins Other U.S. Banks in Setting Net-Zero Financed Emissions Reductions Goal
Citi joins large U.S. banks Morgan Stanley, Bank of America, and JPMorgan Chase in setting long-term targets to reduce its financed emissions in line with the Paris Climate Agreement.
Mar. 01, 2021
Citigroup, whose CEO, Jane Fraser, took the helm this morning, today announced in a blog its commitment to achieve net-zero greenhouse gas emissions from its financing activities by 2050. Citi joins large U.S. banks Morgan Stanley, Bank of America, and JPMorgan Chase in setting long-term targets to reduce its financed emissions in line with the Paris Climate Agreement.
The announcement comes after engagement with investors regarding a shareholder resolution filed by As You Sow, Mercy Investment Services, Boston Common Asset Management, Arjuna Capital, Presbyterian Church USA, and the School Sisters of Notre Dame Cooperative Fund. The resolution, which asks the company to disclose whether and how it will reduce emissions from its financing in line with the global goal of limiting warming to 1.5 degrees Celsius, has been withdrawn in recognition of Citi’s new commitment.
“Investors applaud this commitment from Citi at this critical moment,” said Danielle Fugere, president of As You Sow. “By announcing a net-zero target on day one, Citi’s CEO is demonstrating much needed leadership in addressing the climate crisis. This announcement aligns Citi with other major banks taking action on climate change and sends a clear signal that client companies must either begin transitioning to net-zero business models or face higher costs of capital. We look forward to learning more about how Citi will meet this critical and urgent goal; there is much work to do.”
With this announcement, four of the top six U.S. banks have now set ambitious financed emission targets and have agreed to measure and disclose progress towards those goals. Bank of America earlier this month announced a commitment to reduce its financed emissions in line with the Paris Agreement’s net-zero goal, resolving a shareholder proposal. JPMorgan also resolved a shareholder proposal in agreeing to disclose its financed emissions for three high-carbon sectors; provide assumptions and methodologies; report on its success in portfolio decarbonization; and announce a timeline for adding additional sectors.
Investors are now increasingly concerned that Wells Fargo and Goldman Sachs are lagging their peers. While discussions with Goldman Sachs continue, Wells Fargo has chosen to fight shareholders at the Securities and Exchange Commission by attempting to keep the proposal to measure, disclose, and set net-zero targets off its proxy.
“Not only has Wells Fargo failed to take responsibility for its financed emissions by setting a reduction target in line with the Paris Agreement’s net-zero goal, or even take the first steps of measuring and disclosing its financed emissions, it is challenging shareholders’ basic right to ask the bank about these critical issues,” said Fugere.
“As the largest banks continue to up the ante on climate ambition, investors can better differentiate the leaders from the laggards,” said Lila Holzman, senior energy program manager at As You Sow. “The time is now for all banks to step up and take full responsibility for the emissions associated with their financing activities.”