Citigroup Takes Step Toward Ending Coal Power Financing; Much More Work Remains

New York, NY - Today, Citigroup issued an updated environmental policy that makes it the first major US bank with a plan to restrict financing for companies expanding coal power and to phase-out financing for nearly all coal power companies over the next two decades.

In its new policy, Citi commits to not take on any new clients after 2021 that have plans to expand coal-fired power generation. In addition, for most power companies that generate 5% or more of their electricity from coal, Citi will have a staggered phase-out process to stop taking on any such new clients after 2025, and to stop financing any such clients by 2030 in OECD countries and by 2040 in the rest of the world.

Despite now having the strongest coal power policy from a major US bank to date, Citi falls far short of other major global banks that have made stronger and clearer commitments to exit the coal sector. The 2020 Banking on Climate Change report showed that, between 2016 - 2019, Citi was the world’s third largest funder of fossil fuels, as well as the world’s largest funder of coal power aside from Chinese banks.

Earlier this month, Citi pledged to reach net zero greenhouse gas emissions for its financing by 2050, but without key details for getting there. Last year, a coalition of more than 60 climate and human rights organizations around the world issued a set of Principles for Paris-Aligned Financial Institutions that details what true climate leadership from banks and other financial institutions would look like to meet the Paris Agreement’s goal of limiting global warming to 1.5°C.

In response, Sierra Club financial advocacy campaign manager Ben Cushing released the following statement:

“It’s encouraging to see Citigroup take an important step toward ending the financing of coal-fired power plants and provide a new bar for other major US banks to meet and exceed, yet there are significant shortcomings with this new policy, especially for one of the world’s largest coal power funders. Even with today’s announcement, Citi still has a long way to go to be on track with its goal of net zero financed emissions by 2050. Citi must stop financing the expansion of coal power immediately and set a clear timeline to stop financing coal power companies altogether, without loopholes, in line with what climate science and justice demands. This gives other major US banks an opportunity to quickly catch up and go further.”