Citi sustainability report highlights power of financing in fighting climate change
On the heels of releasing its 10th annual Global Citizenship Report, Citi has signed onto the United Nations Global Compact, a sweeping manifesto that sets out 10 principles that are supposed to govern an organization's policies with respect to the environment, human rights, labor practices, and anti-corruption.
The pledge requires certain policies on public accountability and disclosure, which is pretty much what Citi does with its annual Global Citizen Report, which the financial services and banking giant updated most recently in late April 2010.
The 55-page report covers pretty much everything you would expect, including its new environmental pledges to reduce water usage by 20 percent and landfill waste by 40 percent -- all by 2015. In the past year, Citi also boasted its greenhouse gas emissions reduction targets to 25 percent, committed to having at least 15 percent of its global real estate certified under the Leadership in Energy and Environmental Design (LEED) building program, and improve the overall energy efficiency of its building by 20 percent (under the Energy Star for Buildings program). All those reductions are based on 2005 base levels.
In all, the company has "directed" $24.3 billion toward addressing climate change (so far); by 2017, it will have spent $50 billion.
That's all fascinating, but I'm actually more intrigued by the role that Citi and other financial services firms have in funding projects that will impact the environment.
For example, in 2009 alone, the company touched more than $5 billion in "green investments," such as a biogas project in Honduras that will help diver 30,000 tons of carbon dioxide emissions annually and a 100-megawatt wind firm in the United States. It also has withheld money that would have funded projects less than favorable for the planet: One example was its decision to decline a loan to a thermal power plant in sub-Saharan Africa that would have put additional strain on the region's already low water availability.
On a more human level, the bank was orchestrated the first syndicated agricultural term financing program in Bangladesh, essentially creating a microlending source for small farmers, and it also is a partner of the Grameen America program in the United States, which provides "financial services to entrepreneurs living below the poverty line in the United States."
They say money makes the world go round, so being a responsible global citizen in the financial services world means extra scrutiny of potential deals for environmental and corporate responsibility factors. Just last week, JP Morgan Chase came under fire for allegedly loaning money to organizations that have a questionable track record in either of these areas.
Could the board of directors for your preferred banking institution in good conscience sign the United Nations Global Compact?
This post was originally published on Smartplanet.com