New Citi boss unveils net-zero financed emissions vision
Finance giant Citigroup's new chief executive, Jane Fraser, has unveiled a new commitment to reach net-zero financed emissions by 2050.
On her first day in post on Monday (1 March), Fraser confirmed that the business will publish its first roadmap to reaching net-zero within a year. The plan will cover emissions from all scopes, with a focus on Scope 3 (indirect) emissions from the projects and businesses which Citi finances.
As well as overarching targets for reducing emissions, the plan will contain interim sector-specific targets for high-carbon sectors. Energy and power sector players, for example, will get specific targets for 2030. Citigroup will assess which other sectors will benefit from such targets.
Citigroup said in a statement that it will review and assess “how best to incorporate additional areas of our business in a way that achieves meaningful emissions reductions in the real economy as part of a just transition”. It has not yet confirmed whether it will be updating its exclusions policy and eyeing divestment or opting for a more engagement-focused approach.
Previously, Citi has said that it will “continue to focus on helping our clients across all sectors, no matter where they are in their own sustainability journeys, to transition to more sustainable business models and practices that will advance our progress towards a low-carbon economy”. Under Fraser, however, approaches may yet be changed.
Fraser released a statement on Monday, which reads: “As the world's most global bank, we are interconnected with many carbon-intensive sectors that continue to help drive global economic development.
“We are committed to bringing as many clients as we can along with us on this journey and working with them relentlessly to get it right.
“We also know that staying on this path and accomplishing this goal will require help from our full set of stakeholders – our clients, colleagues, investors, NGO partners, communities and especially policymakers, as durable climate policy is essential for enabling a net-zero economy where we can all thrive."
Recognising that operations will be easier to decarbonise than supply chains and financed emissions, Citigroup has set a new target to reach net-zero operational emissions by 2030. The business already uses 100% renewable electricity across its facilities globally.
The move from Citi comes after it joined the Partnership for Carbon Accounting Financials (PCAF), a global framework aimed at aligning finance firms’ portfolios with the Paris Agreement, last year. More than 60 banks and investors, representing trillions of dollars of assets, are contributing to the PACF’s work to develop a global climate accounting standard for the financial sector.
Earlier this week, Aviva pledged to reach net-zero across its operations, supply chain and financing activities by 2040, in what it claims is the most ambitious net-zero pledge from a large, UK-based financial services firm.
Recent months have seen a swathe of similar commitments being made across the global financial sector. Scottish Widows unveiled a pathway to net-zero financed emissions by 2030, for example, in the same week that Bank of America set a 2050 net-zero financed emissions target.
In many cases, such commitments relate to legislation. Many major businesses in the UK are striving to move more rapidly than the legally binding deadline of 2050. In the US, businesses are bracing for Biden to introduce a 2050 net-zero plan in the coming months.