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Citi's $100 Billion Downpayment On Clean Energy Future

Knowing the world needs to invest an additional trillion dollars per year into clean energy by 2030 might sound daunting. This week, however, we saw a down payment on that clean energy future we so desperately need: a new $100 billion environmental finance initiative announced by one of the world’s largest financial institutions, Citigroup.
by Mindy LubberForbes Sustainable Capitalism Blog Posted on Feb 20, 2015

Knowing the world needs to invest an additional trillion dollars per year into clean energy by 2030 might sound daunting. This week, however, we saw a down payment on that clean energy future we so desperately need: a new $100 billion environmental finance initiative announced by one of the world’s largest financial institutions, Citigroup.

In 2007, Citi set a similar goal: to lend, invest, and facilitate $50 billion by 2016. The company met that goal three years early, and is now upping the ante by doubling its commitment. Citi is showing that investing in clean energy is smart business, and that – with a bit of ambition and commitment – it can be done right now. It’s a clear market signal that should resonate with the industry.

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Ceres President Mindy Lubber addresses NGOs, investors and business partners at Citi event in NYC

At Ceres, we advocate for sustainability leadership. We work with corporations and investors to better integrate sustainability into business planning to build a sustainable global economy. Ceres supported the development of Citi’s sustainability strategy over the past several years, in large part by bringing together investors, NGOs and other experts to have a “no holds barred” discussion about the company’s vision for leadership in the financial services sector.

I joined Citi CEO Michael Corbat in New York this week as he announced the strategy, which will include – among other things – financing for large renewable-energy projects such as municipal infrastructure to reduce water waste; assistance for clients to address environmental risks; and an 80 percent absolute greenhouse gas reduction target.

Citi has a long road ahead as it strives to meet its goals, but this $100 billion commitment is bold and bigger than what we’ve seen before. It’s a critical step in the right direction, and shows what corporate leaders are capable of when they put their minds to it.

To be sure, Citi and its peers have a tremendous role to play in battling climate change. Now, we must call on the financial services industry to do more. We all share the responsibility of addressing climate change.

Last month, Bloomberg New Energy Finance released the clean energy investment numbers for 2014. The good news? clean energy investment jumped 16%, to $310 billion, in 2014, a near all-time high. The bad news? It’s just not enough.

Financial institutions must evaluate carbon asset risk in their portfolios and continue to move money into the clean energy projects we need to keep our economy moving forward, not stuck in the past. Together, we need to foster the growth of a credible, sustainable green bonds market.

Companies around the world must invest in clean energy solutions throughout their supply chains, setting measurable, time-bound goals to reduce emissions; improve the energy efficiency of operations; reduce electricity demand; and source renewable energy.

Investors must accelerate the transition to a clean energy economy by managing climate risks in their portfolios, investing in clean energy opportunities that offer competitive risk-adjusted returns across asset classes, and engaging with companies to improve their practices on clean energy and climate change.

Policymakers need to level the playing field by adopting policies that accelerate and expand investment in clean energy. We need policies that stimulate investment in energy efficiency, renewable energy and clean transportation; and put a limit and price on greenhouse gas emissions. And let’s not forget: it’s time for a global climate deal. And we have our chance this year in Paris.

We need more of the kinds of leadership demonstrated by Citi this week – across the financial services industry and beyond. There is strength in numbers, and the only way to protect the economy and environment for ourselves and future generations is to scale up our collective efforts. Here’s to always striving for bigger, better and bolder when it comes to securing that future.

Read the post at Forbes Sustainable Capitalism Blog

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Meet the Expert

Mindy S. Lubber JD, MBA

Mindy S. Lubber is the President and a founding board member of Ceres, a non-profit organization that is mobilizing many of the world’s largest investors and companies to take stronger action on climate change, water scarcity and other global sustainability challenges. She directs Ceres’ Investor Network on Climate Risk (INCR), a group of 120 institutional investors managing about $14 trillion in assets focused on the business risks and opportunities of climate change. Mindy also oversees engagements with 100-plus companies, many of them Fortune 500 firms, committed to sustainable business practices and the urgency for strong climate and clean energy policies.

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