Harrington Investments’ Shareholder Resolution
At Citibank’s annual general meeting on April 26, 2022, we are calling on investors to vote in favor of Harrington Investments’ shareholder resolution. The resolution calls on the company to adopt a policy by the end of 2022 committing to proactive measures to ensure that the company’s lending and underwriting do not contribute to new fossil fuel supplies inconsistent with fulfilling the IEA’s Net Zero Emissions by 2050 Roadmap and the United Nations Environmental Program Finance Initiative recommendations to the G20 Sustainable Finance Working Group for credible net zero commitments.
Harrington Investments has filed a proxy resolution for consideration at Citi’s annual meeting on April 26th, 2022.
In 2021 Citi became a founding member of the Net-Zero Banking Alliance, committing to a target of net-zero emission associated with its operations and financing activities by 2050. To close the gap between words and action, a change in policy is needed on financing of fossil fuel exploration and development.
The United Nations Environmental Program Finance Initiative (UNEPFI), which convenes the NZBA, published an Input Paper to the G20 Sustainable Finance Working Group which defines credible net zero commitments of financial institutions, including that a financial institution establishing a net-zero commitment should begin aligning with the required assumptions and implications of IPCC 1.5°C no/low overshoot pathways as soon as possible. All no/low overshoot scenarios indicate an immediate reduction in fossil fuels, signalling that investment in new fossil fuel development is not aligned with 1.5°C. The International Energy Agency (IEA) has concluded there cannot be investment in new fossil fuel supply in our net zero pathway.
Citigroup has not committed to end funding of fossil fuel expansion. It reportedly recently financed an expanding coal operation in Russia. In September 2021 Bloomberg reported that Russia’s largest coal producer and coal plant operator, JSC SUEK, had mandated nine banks, including Citigroup, for a bond issuance with a 5-year maturity. JSC SUEK produces over 100 million tons of coal per year. It is expanding coal mining operations for an additional 25 million tons per year. SUEK’s coal exports are set for expansion by around 28 million tons per year.
A spokesperson for urgewald noted, SUEK plays a central, if not THE central role in Russia’s scheme to profit as much as possible from the coal industry before the fossil era ends. It is outrageous that US and German banks were still helping to raise money for one of the world’s largest coal companies only two months before the global climate summit, COP26 in Glasgow.
Citigroup has significant exposure to fossil fuels. It ranked second in the world in fossil fuel funding according to Rainforest Action Network’s 2021 Banking on Climate Chaos report. The report identified that Citi has provided $237 Billion in financing for the fossil fuel sector, in the five years since the signing of the global Paris Climate Agreement.
Financing of new oil and gas exploration and development is also inconsistent with the global goals. A study in Nature found oil and gas production needs to fall by 3% each year until 2050 to meet the goals of the Paris Agreement.
We need to see more from Citi than signing global netzero initiatives. On April 26, investors must vote for the Harrington Investments’ resolution.