Citi CEO: Walk Away From Deals That Are Bad For The Climate

4 November, 2021

Citi CEO, Michael Corbat, shares with CNN Business the steps banks must take to address the environmental impacts of their business and progress the fight against climate change. While the early days of the pandemic offered a glimpse of what improvement in this area may look like – lockdowns causing a decrease in air pollution in major cities around the world – the reopening of global economies have brought this progress to an end. Corbat claims that to make any real difference we need systematic change – dictated by government policy and supported by science, resources and innovation in the private sector. Here Corbat shares how businesses in the financial sector can contribute.

Set the standard

Financial institutions can create a uniform set of standards for companies to identify and disclose the potential impacts of their businesses on the environment and the potential impacts of climate change on their businesses. This transparency, in turn, will help insurers, credit rating agencies, lenders and other investors better evaluate and price those risk opportunities. It will also give companies an incentive to disclose, take action on and address their environmental impacts.

Work with the fossil fuel industry 

As one of the world’s biggest backers of fossil fuels, Citi has heard calls to divest entirely from the industry. But that would mean knocking the legs out from under the global economy since we remain so dependent on oil and gas to drive our cars, heat our homes and fuel our ships and airplanes. 

So while we recognize that fossil fuel industry must drastically reduce its carbon footprint over the coming decade, we believe in working with them, not against them. For example, some energy producers are already taking steps to address their emissions.

Invest in innovation

As part of our efforts to drive the transition to a sustainable economy, we recently fulfilled a 10-year commitment to finance and facilitate $100 billion in environmental activities, including the world’s largest offshore wind farm off the coast of England, trains for Panama City’s new metro system and water conservation technology in Barbados.

None of these steps will be easy, but in many ways this is a false dilemma. Among the biggest lessons we must learn from the pandemic are the inextricable links between our economic health and our physical health and the immediacy of the threats to our planet. This is not a time to pull back from making our companies more sustainable and resilient. Instead, it’s time to double down. 

Via CNN Business, Michael Corbat, August 19, 2020. Read full article here.

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