U.S. bank Citi on March 2 announced targets for cutting emissions tied to loans it makes to coal mining, auto, steel and real estate clients by the end of this decade, in its latest update to its plan to reach net-zero emissions by 2050.
Banks globally are laying out plans for reducing emissions for the sectors most responsible for greenhouse gases, and last year Citi announced targets for its energy and power portfolios.
Some lenders are also restricting financing for the dirtiest energy projects. But environmental groups accuse banks of moving far too slowly in cutting support for fossil fuels if the world is to keep global temperatures from rising more than 1.5 C above pre-industrial levels.
Citi's new targets include a pledge to cut the absolute emissions from lending to thermal coal mining by 90% from a 2021 baseline, while the intensity of emissions for auto manufacturing by 31% and for commercial real estate in North America by 41%.
The bank's emissions for 2021 its energy portfolio dropped sharply versus a year earlier while it was broadly unchanged for power. But Citi cautioned that financed emissions can fluctuate from one year to the next and "distort meaningful analyses of client decarbonization progress," especially when climate-related reporting from clients remained inadequate.
All of Citi's targets cover direct financing and exclude underwriting of stock and bonds. Citi said it planned to include such activities in its targets once an agreed methodology for all banks to use was published.
The bank has previously announced restrictions on lending to some coal and oil and gas expansion projects but has not gone as far as some European lenders in tightening its policies.
Val Smith, Citi's Chief Sustainability Officer, told Reuters that the bank's "approach is a more thoughtful one to reaching net zero. We want to engage with clients in these sectors not divest."
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