$100 billion for sustainability

The global banking giant Citi is committing USD 100 billion over 10 years for “lending, investing and facilitating” activities focused on mitigating climate and other sustainability solutions.

citi_buildingCiti’s financial commitment is part of a larger five-year plan of the bank. It outlines three “strategic priorities” for the bank that it says aligns the company’s corporate and sustainability strategies: combating climate change, championing sustainable cities, and promoting social progress, including “universal human rights.”

Three years early
This isn’t Citi’s first sustainability strategy — or its first big financial commitment. Eight years ago, it made a USD 50 billion, 10-year pledge to invest in and finance projects that reduce global carbon emission; it met that goal last year, three years early.

The company long has been ahead of the curve. It was one of the first major banks to set reduction goals for energy, waste and water. In 2003, it was one of 10 global banks — and the only U.S. company — to sign the Equator Principles, a framework to help financial institutions manage environmental and social risk in project finance.

The new USD 100 billion goal builds on the learning that they accumulated during the first USD 50 billion.

Encouraged by reaching the target three years early they decided to expand the scope to capture a lot of other activities. The group will cast a broad net, looking across industry sectors, including the energy and clean-tech sectors that had been the focus of the previous investment goal.

Citi for cities
Citi will still be very focused on energy efficiency as this is a low-hanging fruit with good return on investment. Another big focus of Citi’s sustainability efforts are, perhaps appropriately, cities. The company’s Citi for Cities program draws upon the company’s expertise in providing financing and advisory solutions to cities around the world.

Citi has partnered with the WRI Ross Center for Sustainable Cities and the C40 Sustainable Infrastructure Finance Network to think about new ways to build and finance infrastructure in cities.

For instance, instead of building new parking garages, cities are figuring out how to use sensors so that people can better understand where there is a parking space.

Green bonds
One financing mechanism is “green bonds,” a type of financial asset designed to fund a wide range of environmental initiatives and projects. In early 2014, Citi was one of four banks that helped draft the Green Bond Principles, a set of voluntary guidelines on the development and issuance of green bonds. They encourage transparency, disclosure and integrity in the development of the green bond market.

Citi sees a rise in green-bond financing both for states, municipalities and corporates to funds environmentally friendly projects like solar energy. 

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