Citi, one of the largest US banks, announced an update to the decarbonizations plans it announced last year, saying that it will utilize the increasing supply of carbon credits to achieve its 2030 and 2050 emissions targets. It will also require the companies it invests in to use these types of credits in varying degrees.
The carbon credits it plans to purchase will be aimed at addressing the emissions from its own activities, also known as Scope 1. Specific notes were made about the quality of the credits, something relevant in the wake of revealing journalistic investigations into the carbon markets. A focus on additionality and permanence was also noticeable.
Banks and investment funds have been accused over the past several years that they are committing to ambitious targets only for their own carbon footprint, while deliberately leaving out those of the companies they invest in.
There were also observations that investment in fossil fuel companies are kept at previous levels, essentially maintaining their growth and increasing overall emissions.
In this latest announcement the bank was clear that it does not plan to divest or reduce its commitment to emission-intensive projects but will rather seek their full or almost complete decarbonization within aggressive timeframes.
The bank now pledges to reduce all scopes of emissions from the different sectors of its investments: from thermal coal mining with 90% by 2030, auto manufacturing with 31% and commercial real estate in North America by 41%.
The remaining emissions are to be compensated by the purchase of the aforementioned carbon credits by Citi portfolio companies.