Citi creates investment-banking unit in sustainability drive

By Kate Birch
Citigroup Inc. combines existing investment-banking groups to help clients move towards low and zero carbon solutions, aims for net-zero by 2050...

Led by new chief executive officer Jane Fraser, who took over on March 1 vowing to achieve net-zero greenhouse gas emissions in financing activities by 2050, New York-based Citigroup Inc. is combining three of its investment-banking groups as part of this sustainability push.

In a memo sent to staff from Tyler Dickson and Manolo Falco – global heads of Citigroup’s banking, capital markets and advisory unit – Steve Trauber and Sandip Sen will oversee a new natural resources and clean energy transition group. 

Trauber will mainly focus on investment banking, while Sen will oversee corporate-banking relationships.

“Energy transition, structural changes underway in global energy systems to drive toward low and zero carbon solutions, will unfold and accelerate over the next decade,” the memo said. “Our chemicals, energy, and power clients, ranging from multinationals to fast growing alternative and clean-energy companies, are at the heart of energy transition, helping to drive new products, services and technologies.”

Banks are somewhat exposed when it comes to achieving sustainability targets as they need to consider the activities of all of the businesses they finance. Last year, Citigroup was the third largest provider of financing to fossil fuel companies. As a result, the bank has identified sectors like energy as requiring extra attention as they aim to reduce emissions by 2030.

Citigroup is already working hard to address climate change and carbon emissions – last year it raised US$1.5 billion with its first dollar-denominated green bond. It also created a new unit known as the sustainability and corporate-transitions group led by Keith Tuffley and Bridget Fawcett.

Citi boss Fraser outlines agenda

Making a bold commitment to net zero greenhouse gas emissions when she was appointed CEO on March 1, Fraser pledged:

  • To publish Citi’s initial Net Zero by 2050 plan
  • To include within the plan emissions reduction targets for carbon-intensive sectors that also have low-carbon transition opportunities, including interim emissions targets for 2030 for Citi’s Energy and Power portfolios
  • To report on progress made “as we’ve done in our efforts to advance pay equity, racial equity and our previous sustainability goals”.
  • To review, after an initial implementation period, the scope of the net zero plan to assess which additional sectors to include and how best to incorporate additional areas of the business in a way that achieves meaningful emissions reductions in the real economy as part of a just transition. 
  • To target net zero greenhouse gas emissions in Citi’s own operations by 2030.
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