Citigroup Inc has announced plans to 'lend, invest and facilitate' 100billion in projects combating climate change by 2025.
The money will be used to support renewable energy, energy efficiency and sustainable transport projects.
Significantly, the bank confirmed that the announcement is due to the huge demand by clients for sustainable investments and the economic opportunity of such investments.
CEO, Michael Corbat said:
Simply put, it is a 100 billion investment in sustainable growth. These efforts do not constitute philanthropy, nor do they represent costs. In fact, they reduce costs.
Valerie Smith, Director of Corporate Sustainability explained:
Our clients are demanding it, our clients' clients are demanding it, our clients' investors are demanding it. There is a momentum and focus on solving big global societal problems that everybody is rallying to.
The bank will use of some of the funds to reduce the environmental impact of its operations and supply chain and help its clients address environmental risk.
This is not the first time the major global bank has committed to sustainability.
In 2007 Citigroup pledged 50bn to projects that reduce global carbon emissions by 2016, a goal achieved three years early.
The global head of Citi Alternative Energy Finance, Marshal Salant said:
We're only going to do business that makes sense for Citi as a regulated financial institution. We're not going to do business that's not economic just to hit an environmental goal.
A Green Trend
Other banks have also jumped on the green investment bandwagon, particularly with the recent bloom in the Green Bond market.
On Friday, Deutsche Bank AG announced plans to increase their EUR200 million investment in green bonds to 1.1billion.
According to data compiled by Bloomberg, securities linked to climate projects more than doubled to a record 38.8 billion last year, whilst investment in clean energy rose 16% hitting a record 310 billion.
In January 2014, a coalition of 13 banks including Bank of America Corp, JP Morgan Chase & Co and Deutsche Bank produced guiding principles for green bonds to act as a catalyst for further development of the market.
Bank of America and Wells Fargo committed 50bn in sustainable projects and low carbon transport in 2013, whilst Goldman Sachs Group Inc announced 40billion in 2012.
Simply put, banks are investing in sustainable projects due to client demand and economically viability.
The signal is clear, for the first time humanity is transitioning from fossil fuels to a clean economy and it makes both environmental and business sense.
Credit: renewable-energy-events.blogspot.com
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