Citi’s new CEO makes ambitious climate pledge on first day
On her very first day as CEO, Jane Fraser made a public pledge, that Citigroup Inc., the world’s most global bank, would achieve net-zero greenhouse-gas emissions by 2050.
Announced in a blog on the Citi site, Fraser, who is the first female CEO in the firm’s history, stated that she was proud “to make this commitment on my first day as CEO of Citi”.
Citi joins three other major Wall Street Banks
With this pledge, Citi follows three other major Wall Street Banks, JPMorgan Chase, Morgan Stanley and Bank of America, all of which have recently committed to ambitious net zero financing targets by 2050, and to measuring and disclosing progress towards those goals.
Morgan Stanley was the first US Bank out of the climate ambition blocks back in September 2020, when it made a commitment to reach net-zero financed emissions by 2050, joining many of its clients in this strategic goal.
The US’s largest bank, JPMorgan Chase, soon followed in November announcing it too would adopt a financing commitment aligned to the goals of the Paris Agreement, thereby achieving net-zero emissions by 2050.
And earlier this month, Bank of America, echoed the current sustainability spirit of the US finance sector announcing a commitment to also reduce its financed emissions in line with the Paris Agreement’s net-zero goal.
Citi already invested in low-carbon solutions
Admitting that global financial institutions like Citi have both the opportunity and responsibility to play “a leading role in helping drive the transition to a net zero global economy”, Fraser outlined in a blog both Citi’s achievements to date on the sustainability front, and its bold pledge.
From 2014 to 2019, Citi financed and facilitated US$164 billion in low-carbon solutions and last year committed to completing a further US$250 billion in environmental transactions by 2050, as well as reaching “our goal of purchasing 100% renewable electricity for our facilities”, announced Fraser.
“Our commitments to closing the gender pay gap, to advancing racial equity, and to pioneering the green agenda have demonstrated that this is good for business and not at odds with it. And we will continue to be part of the solution to these challenges and enable others to do so as well."
Citi outlines agenda to achieving climate goals
Making a bold commitment to net zero greenhouse gas emissions, Fraser announced the following commitments:
- 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.
Charting the rise of the chief sustainability officer
There has been a dramatic increase in the hiring of the chief sustainability officer (CSO) role among Fortune 500 companies, with demand for CSOs growing 228% in corporate America over the last decade, according to the latest report from CSO recruitment firm the Weinreb Group.
There were more first-time CSOs recruited by Fortune 500 companies in 2020 than the previous three years combined, with numbers of CSOs in corporate America soaring from just 29 in 2011 to 95 today, demonstrating the importance corporations are placing not just on reducing their environmental impacts, but also in supporting issues of social justice.
Businesses are increasingly under pressure to assume more responsible practices with customers, regulators and investors demanding increased transparency of business ESG performance.
And the past year in particular has been seen great upheaval, with increased new attention brought to “social justice, climate change, and an ever-widening political divide”, according to Ellen Weinreb, founder and CEO of the Weinreb Group, which has tracked the rising role of CSOs over the past decade.
CSO role is expanding and shifting
But it’s not just the number of CSOs that have changed, sustainability teams are getting bigger, with the average team size increasing from five professionals in 2011 to 15 today, according to the report.
This is in part due to the fact that the CSO role has expanded beyond simply ‘sustainability’ to incorporate social justice too. Sustainability isn’t exclusively about the environment anymore. The role has also come to incorporate social justice, especially with the rapid growth of, and increased attention on, environmental, social, and governance, or ESG.
And many roles recently have been renamed as such with Head of ESG or ESG Officer becoming increasingly prominent.
Women make up over half of CSO roles
What's also changed over the last decade is the percentage of women holding the title of Chief Sustainability Officer.
A decade ago, in 2011, the majority of CSO roles were held by men (72%), with just 10 of the 29 then CSO roles held by women. A decade on, in 2021, the percentage of women in CSO roles has almost doubled, now accounting for more than half (54%) of CSO positions.
However, according to the report ‘The Chief Sustainability Officer 10 Years Later’, despite the movement toward gender balance within the role and its expanded focus on social justice, in particular, in 2021 the CSO position remains overwhelmingly ‘white’.
Probably not surprising considering there are just three black CEOs at Fortune 500 firms.
How the chief sustainability officer role has grown
The first-ever named chief sustainability officer in a US publicly traded company was Linda Fisher for Dupont, who joined the chemical giant in 2004 as CSO, just at the time when innovative companies were looking at sustainability as a driver for business growth. Joining from the Environmental Protection Agency where she spent 13 years, Fisher was a corporate sustainability trailblazer, spending more than a decade as CSO here, and leading DuPont’s efforts to establish its first set of market-facing sustainability goals.
By 2006, a slew of firms had joined the CSO movement, including Mastercard, Nissan and Microsoft; and Kellogg’s became the first firm to replace a CSO with Dianne Holdorf taking over from Celeste Clarke. And by 2011, a decade ago, Coca-Cola, Verizon, AT&T and P&G had appointed their first CSOs.
In fact, it was in 2011 when Virginie Helias invented her idea of the perfect CSO job – to make sustainable consumption not only possible, but ‘irresistible’ – and pitched it P&G’s then CEO. A decade later, in 2021, and Helias is still in the job she first created.
The majority of CSOs have been internal hires, such as Peter Graf of SAP, who joined the software giant in 1996, and served as EVP for Marketing before being named CSO in 2009. The same is true at UPS, whose first-ever CSO, Scott Wicker, started at the package delivery giant 34 years before being named CSO in 2011. Increasingly, however, external hires are being made with organisations increasingly searching for more high-profile leading voices in the ESG forum.
In February 2021, JP Morgan hired former British high-profile Labour politician Chuka Umunna while just last month hotel chain Accor hired high-profile French politician Brune Poirson, who has previously championed the anti-waste law within the French government and was secretary of state for the environmental transition for three years.