Citigroup is setting up a sustainability and corporate transitions group in its global banking, capital markets and advisory unit as sustainability continues to drive change in companies’ business models and capital allocation.
ESG is a strategic priority for Citi and the bank said the coronavirus crisis is increasing its importance as clients focus on more sustainable and resilient strategies, and recovery plans.
“The action for sustainability is gaining momentum, and we see Covid-19 as providing an opportunity for the world to accelerate the just transition to a net-zero emissions future,” the bank said.
The corporate transitions group will be led globally by Keith Tuffley in Europe and Bridget Fawcett in the US. Tuffley co-led BCMA’s initial sustainability committee and Fawcett was chief strategy officer.
The cross-disciplinary group will build on Citi’s sustainability initiatives and work across the firm. It will maintain Citi’s focus on ESG and work with BCMA, and draw together sector, region, product, risk and content expertise.
"All sectors are facing pretty massive transformation and transition issues, that's why our team is embedded in our banking group. Transitioning a business model is hard work, clients need trusted advice and insight which extends into financing solutions," Tuffley said.
Citi will also establish a global sustainability client council in BCMA of senior leaders to drive client engagement on sustainability and corporate transitions. It has also created a science, policy and technology advisory group of experts on climate and earth sciences, emerging technologies, innovation, and the future of regulation.
The scientific group is designed to provide a two-way flow of expert information, to inform the banking team and ensure that scientific breakthroughs are quickly translated into action and innovation in the financial markets.
"In this new world of trying to achieve big global targets and with Covid-19, we need new ways of doing things, not just the same old. We have to be science-informed and put in place science-based targets," Tuffley said.
"AGENT FOR CHANGE"
Citi will also create a team of 100 "sustainability champions" in each of its global franchises.
The bank updated its global ESG policy in April. It applies to all businesses in nearly 100 countries, and includes a commitment to stop all underwriting and advisory services to thermal coal companies and cut credit exposure by 50% by 2025 and in full by 2030.
The bank has also been active in markets on its own behalf as well as for clients, and issued its inaugural US dollar green bond on May 7, raising US$1.5bn in fixed-to-floating-rate green notes.
Citi led the IPO of the world’s first ESG-focused special purpose acquisition company, raising US$300m for Sustainable Opportunities Acquisition Corp. The bank was also a bookrunner on the EIB’s US$1bn sustainability awareness bond.
Citi said last month it had financed and facilitated US$164bn in environmental finance since 2014, exceeding a US$100bn goal more than four years ahead of schedule.
"As a bank we see ourselves as a catalyst and agent for change," Tuffley said.