Bank of both America and Citi have joined the Partnership for Carbon Accounting Financials (PCAF), a consortium that plans to standardize how banks quantify and reduce their climate change, the banks declared separately Wednesday.
Citi also vowed $250 billion within the next five years to fund and ease low-carbon options in the regions of renewable energy, clean technologies, water quality and conservation, renewable transport, green buildings, energy efficiency, and sustainable agriculture and land usage.
The movements come bit more than a week later Morgan Stanley became the first big U.S. bank to combine PCAF, a Dutch team that currently counts 70 members accounting for over $9 trillion in assets.
Citi’s $250 billion guarantee assembles to a 10-year, $100 billion ecological fund initiative the nation’s third-largest bank established in 2014. Last July, the bank declared it had been on course to exceed that threshold four decades ahead of schedule. Really, Citi said Wednesday it had funded $164 billion because endeavor.
Citi said it will examine its lending portfolios for transition dangers and physical dangers against situations that assume global warming of 1.5 and two degrees Celsius.
The bank also stated it plans to reduce its CO2 emissions by 45% by 2025 and origin 100% renewable energy across its global footprint at the end of 2020.
“If there is 1 lesson to be learned from the COVID-19 pandemic, It’s That our physical and economic wellbeing and endurance, our surroundings and our social stability are inextricably connected,” Michael Corbat, Citi’s CEO, stated in a press release Wednesday. “[Environmental, social and governance goals have] been front and centre in Citi’s answer to the health emergency, and evermore present in discussions with customers and partners.”
In linking PCAF, Bank of both America and Citi been the group’s biggest members, by advantage — and its most successful polluters, according to a study published in March from the Rainforest Action Network. Between 2016 and 2019, Citi has been the world’s third-highest creditor to fossil-fuel businesses, with $187.7 billion. Bank of America ranked fourth, with $156.9 billion.
“As a global financial institution, and as an industry, we have a critical role to play in accelerating the transition to a low-carbon, more sustainable economy,” Anne Finucane, vice chairman at Bank of America, said Wednesday in a press release. “By joining PCAF, we are helping to drive a consistent framework for institutions to measure financed emissions, as well as providing a useful tool in the management of these emissions.”
Val Smith, Citi’s chief sustainability officer, said she expects more banks will join PCAF in the near future. “This really does need to be a collaborative effort,” she told American Banker.
PCAF is looking to align banks’ business models with the U. ) N.’s Paris Agreement on Climate Change. Citi last year became the first major U.S. bank into sign on to that initiative.
U.S.-based banks have taken several steps over the past few months to boost their green profile. Goldman Sachs in December laid out some 10-year goal to commit $750 billion at loans, underwriting, advisory services and investments toward companies and projects focused renewable energy, sustainable transportation and affordable education.
Citi pledged at April to stop providing financial services to thermal coal-mining businesses by 2030. Wells Fargo has raised its investment in solar power.