Friday, September 29

Citizens Financial Plans $50 Billion in ESG Financing, Climate Goal Advice

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(Bloomberg) — Citizens Financial Group Inc. is setting sustainability targets that stretch from now until 2035 — and it wants to advise companies in sectors that pump out greenhouse gases on how they can follow suit.

The bank wants to complete $50 billion in sustainable financing by 2030 and achieve carbon neutrality by 2035, according to a statement Tuesday. It also wants its bankers to advise clients whose businesses emit high levels of greenhouse gases on ways they can shrink their carbon footprints and achieve other climate goals. The first step in that plan is for bankers to discuss climate issues with all oil and gas clients by the end of next year.

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“At our core, Citizens is about supporting our customers,” Beth Johnson, a vice chair at the bank who oversees its environmental, social and governance practices, said in a phone interview. “We want to be practical in how we support them in the energy transition,” she said, adding that the bank sees being “part of the solution” as more beneficial than pulling away from clients in emission-heavy sectors.

The $50 billion financing target includes $5 billion that would specifically go toward renewable energy, clean technologies, clean buildings and other activities that support a “lower-carbon future,” the Providence, Rhode Island-based company said. Affordable housing, community-development projects and activities aimed at small businesses would be fair game for the broader program.

In the past several years, numerous banks have detailed specific benchmarks when it comes to financing ESG-linked projects. Lenders have also been grappling with whether to pull away from certain sectors based on their environmental or societal impacts, with some facing political backlash as a result.

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Several of the largest Wall Street firms, including Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co., were locked out of the municipal-finance market in Texas by a bill meant to punish them for their stance on the firearms industry.

European banks such as Societe Generale SA, BNP Paribas SA and HSBC Holdings Plc have taken steps to halt lending to some new oil and gas projects or otherwise restrict access to capital for companies tied to significant greenhouse gas emissions.

Read More: SocGen Plans to Halt New Oil, Gas Loans in Strategy Update

So far, discussions between Citizens and its clients about the effort have been positive, and the bank has even received some financing mandates as a result, according to Donald McCree, head of commercial banking.

“It’s not only resulting in robust conversations,” McCree said in an interview, “it’s actually resulting in early-stage business opportunities for us.”

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