Citigroup warms to climate change
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Citigroup warms to climate change
KAI RYSSDAL: Citigroup didn’t get to be the biggest bank in the country — and the second-largest in the world — by being slow on the uptake. So you can bet CEO Charles Prince had already run the numbers today when he called climate change an emerging investment opportunity. Prince said Citigroup will spend $50 billion over the next decade on reducing greenhouse gases.
We’ve dragged Sam Eaton out from behind the Marketplace Sustainability Desk to tell us more. Hey, Sam.
SAM EATON: Hey, Kai.
RYSSDAL: First question, it seems to me, has to be — $50 billion is a whole lot of money. What is Citigroup gonna do with it?
EATON: Kai, it’s $50 billion, but it’s spread across all of the sectors of the bank. And we’re seeing the bulk of that money, about $31 billion, is gonna go into its investment wing. Basically, the wing of the bank that will fund things like clean energy, alternative technology — that’s everything from solar power to wind to energy efficiency. On the consumer side, we’re talking about these new climate-friendly mortgages and credit cards. The company’s also looking at its own environmental impact, its environmental footprint so to speak. Ten-fold increase to reduce its own environmental footprint, $10 billion going into that — everything from energy efficiency, green power to new green buildings for all of its new construction.
RYSSDAL: It bares mention, I suppose, that Citigroup is not a nonprofit institution here. There’s gotta be some other motivation.
EATON: Sure. And they’re being very honest that they see this as good investment potential. We have to remember this is a global company that is not just operating in the United States, where climate change and CO2 emissions have yet to become an economic liability. They are operating in more than a hundred countries across the globe. Many of those are, you know, signed onto climate treaties, where you have to pay for CO2 emissions. I talked to Dan Bakal
with this green investment coalition called CERES
, which helped Citigroup craft this plan. And he says global warming is doing more than just heating up the planet — it’s changing the entire global economy.
DAN BAKAL: What that means is that different industries are going to change and transition over the next several years and several decades. And the financial community has an important role to play in that change.
EATON: And he says the bank’s role would be funding what could become the biggest economic transition since the Industrial Age. And you see this banks scrambling to get a piece of that now.
RYSSDAL: Right, good point. Because Citigroup’s not the first to spend a lot of money going green. Bank of America did it, right?
EATON: Sure. Last March, Bank of America announced a similar plan, but it was only for $20 billion. So you see Citigroup suddenly raising that offer. What we’re seeing is this race for these banks to kind of out-do one another and become the new, green global bank that businesses will go to in this new economy. But before we say that, you know, these banks are gonna save the world, you have to keep this in perspective. There’s a lot of money at play here. Citibank’s total assets are over $1 trillion. So suddenly, $50 billion doesn’t look like so much in that perspective. But we’re definitely, when you’re talking about $50 billion, experts will say this definitely moves Citigroup beyond what could be called “greenwashing.”
RYSSDAL: Greenwashing, the pejorative term for just spending the money to look good, right?
EATON: Exactly.
RYSSDAL: All right. Sam Eaton from the Sustainability Desk. Thank you, Sam.
EATON: Thanks, Kai.
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