# Citi pledges to cut emissions for more sectors including coal
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-03-02
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Citi Sets Net-Zero Emissions Goals by 2050
Meta Description: Learn about Citi's commitment to cutting emissions tied to loans and its plan for reaching net-zero by 2050. Find out more here!
URL: https://financedigest.com/citi-pledges-to-cut-emissions-for-more-sectors-including-coalhtml

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LONDON (Reuters) -U.S. bank Citi on Thursday announced targets for cutting emissions tied to loans it makes to coal mining, auto, steel and real estate clients by the end of this decade, in its latest update to its plan to reach net-zero emissions by 2050.

Banks globally are laying out plans for reducing emissions for the sectors most responsible for greenhouse gases, and last year Citi announced [targets for its energy](https://www.financedigest.com/britains-tax-take-risks-blowing-green-energy-off-target.html "Britain’s tax take risks blowing green energy off target") and power portfolios.

Some lenders are also restricting [financing for the dirtiest energy](https://www.financedigest.com/the-future-of-finance-in-the-energy-industry.html "The future of finance in the energy industry") projects. But environmental groups say they are not acting quickly enough to prevent global temperatures from rising more than 1.5 degrees Celsius (2.7 degees Fahrenheit) above pre-industrial times, the level [needed to prevent the worst effects of climate](https://www.financedigest.com/analysis-global-climate-coalitions-need-safer-harbour-from-antitrust-turbulence.html "Analysis-Global climate coalitions need safer harbour from antitrust turbulence") change.

Deutsche Bank on Thursday drew criticism from climate activists when it said it had tightened its coal [financing policies but has yet to change its criteria for the oil](https://www.financedigest.com/ing-toughens-oil-and-gas-policy-to-include-trade-finance-midstream.html "ING toughens oil and gas policy to include trade finance, midstream") and gas industries.

Judging the ambition of banks’ sectoral targets can be tricky, given [lenders start with different exposures to industries](https://www.financedigest.com/is-googles-payday-lender-ad-ban-singling-out-the-industry.html "Is Google’s payday lender ad ban singling out the industry?") and clients’ emissions disclosures remain patchy. [Banks use different base years for their targets](https://www.financedigest.com/hsbc-ups-price-targets-on-greek-banks-with-eurobank-piraeus-top-picks.html "HSBC ups price targets on Greek banks, with Eurobank, Piraeus top picks"), and some lenders include underwriting while others like Citi do not.

Citi’s targets contain a pledge to cut absolute emissions from lending to thermal coal mining by 90% by 2030 from a 2021 baseline, the intensity of emissions for auto manufacturing by 31% and for commercial [real estate](https://www.financedigest.com/gold-london-real-estate-and-the-theresa-may-effect.html "GOLD, LONDON REAL ESTATE AND THE THERESA MAY EFFECT") in North America by 41%.

More detail on steel [emissions and alignment with the 1.5C goal](https://www.financedigest.com/norways-wealth-fund-tells-firms-to-set-net-zero-emission-goals.html "Norway’s wealth fund tells firms to set net zero emission goals") would be disclosed in future, Citi said.

METHODOLOGY AWAITED

Citi’s targets cover direct financing but exclude the underwriting of [stock and bonds](https://www.financedigest.com/stocks-bonds-extend-rally-on-hopes-rate-hikes-ease.html "Stocks, bonds extend rally on hopes rate hikes ease"), known as facilitated emissions, which it has said it will include once an agreed methodology for all banks is published.

The bank’s emissions in 2021 for its [energy portfolio dropped sharply versus a year earlier and were broadly unchanged for power](https://www.financedigest.com/france-strains-to-avert-power-cuts-as-cold-snap-tests-europes-energy-resolve.html "France strains to avert power cuts as cold snap tests Europe’s energy resolve"). But [Citi said financed](https://www.financedigest.com/citi-halted-financing-for-trafiguras-nickel-deals-in-october-bloomberg.html "Citi halted financing for Trafigura’s nickel deals in October – Bloomberg") emissions can fluctuate year-on-year, making analysis complicated.

The [bank has previously announced restrictions on lending to some coal and unconventional oil](https://www.financedigest.com/bank-funding-for-renewables-stagnates-vs-oil-and-gas-report.html "Bank funding for renewables stagnates vs oil and gas – report") and gas projects but it has not gone as far as some European lenders in tightening its policies.

Val Smith, Citi’s Chief Sustainability Officer, told Reuters that the [bank’s approach was to engage](https://www.financedigest.com/how-conversational-commerce-can-help-banks-engage-with-millennials.html "How conversational commerce can help banks engage with Millennials") with clients rather than divest.

According to an NGO-authored Banking on Climate Chaos report published last year, Citi between 2016 and 2021 was the second-largest funder of fossil fuels globally, although its financing has been [falling since](https://www.financedigest.com/biggest-uk-house-price-fall-recorded-since-financial-crisis.html "Biggest UK house price fall recorded since financial crisis") 2019.

Beau O’Sullivan, senior strategist for the [Bank on our Future](https://www.financedigest.com/bank-of-the-future.html "Bank of the future") campaign, called Citi’s sectoral updates disappointing when set against European banks restricting lending for new oil and gas.

The success of engaging with their fossil [fuel clients is a comforting fantasy that banks](https://www.financedigest.com/big-ecb-hike-adds-fuel-to-the-banking-sector-fire.html "Big ECB hike adds fuel to the banking sector fire") like Citi tell themselves: they could have more influence by restricting financing for companies that are expanding fossil fuels,” he said.

Citi also said on Thursday it intends to begin purchasing voluntary [carbon credits to help its operational emissions](https://www.financedigest.com/playground-xyz-study-finds-carbon-emissions-from-digital-ads-fall-by-63-on-average-when-measured-and-optimized-for-attention-time.html "Playground xyz study finds carbon emissions from digital ads fall by 63% on average when measured and optimized for attention time") hit net zero by 2030, and it acknowledged clients in some sectors would need to use credits to reach their absolute net zero emissions by 2050.

(Reporting by Tommy Reggiori Wilkes; Editing by Hugh Lawson and Barbara Lewis)


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