Citi is the 2nd biggest funder of the fossil fuel industry of any bank in the world, and whilst claiming to be a green leader, it’s secretly abandoned the ‘bare minimum standards’ on the impact of its funding on the environment and vulnerable communities. It tried to do it quietly because Citi is a founding signatory of the standards it’s now bailing on.
The rules are called the Equator Principles, and in pulling out of them, Citi is walking away from a global approach to assessing the damage done to the environment when it funds oil and gas projects around the world.
No explanation
Citi has yet to explain the move to its investors, employees, customers or the communities where it funds high-risk projects. Citi’s exit from the Equator Principles is made all the worse given it mentions the Equator Principles a total of 13 times in its Global ESG Report and even details the process it uses to apply the principles to the 10 projects it identified as carrying risks to the environment or local communities in 2022.
US banks abandon ‘bare minimum’ environmental standards project, alarming climate groups
– Citi, BofA, JPMorgan Chase and Wells Fargo leave Equator Principles#climatecrisis
Story by @ninalakhani and @dominicru https://t.co/Y8UHeKUujo— Damian Carrington (@dpcarrington) March 6, 2024
Controversial projects
Some of the projects are indeed highly controversial. Citi is listed as having applied the Equator Principles to its funding of the expansion of the Corpus Christi liquified methane gas (LNG) project in Texas – which has repeatedly breached pollution limits and is opposed by local communities. The Equator Principles, while weak, do allow a global standard of scrutiny on Citi’s project financing. The same does not exist for the billions of dollars in funding Citi has given to controversial oil and gas companies, including Exxon Mobil, which for decades covered up climate change and delayed action on it; Enbridge, whose projects are opposed by Indigenous communities; and Saudi Aramco, which along with Citi stands accused of human rights violations.
Climate commitments
Should we be surprised? Remember Citi CEO Jane Fraser just last year renamed the “S” in ESG as representing security, not social. It is now three years since Citi announced its commitment to Net Zero by 2050 and two years since it set 2030 targets for getting there. It’s now just five years away from those targets and there is no evidence of progress from a bank that claims to be a leader on climate.
The planet can’t wait for Citi to make good on its promises. The time to act is now.