Thank you, Brandee [McHale], for that very generous introduction.
And I'm pleased to see that Pam Flaherty is here—despite having retired 18 days ago! Pam, I know I speak for everyone at Citi—and a great many people beyond these walls—when I tell you how sorry we were to see you go … and also how proud we are of your legacy to our firm.
Our announcements today are part of that legacy. It's no exaggeration to say that Citi's sustainably function and efforts were created in part owing to Pam's steadfast determination and internal advocacy.
Congratulations on a great career … thank you for all you've done for Citi over your 46 years here … and for all the causes you've fought so hard for.
Pam was ahead of the curve in alerting Citi to this issue, but now most every company recognizes sustainability as a key challenge. In a recent McKinsey survey, nearly half of CEOs cited sustainability among their top three strategic priorities, with 13 percent noting it as their top priority.
Our clients are focused on this and customers are demanding it. As a global financial institution, Citi is well positioned to help finance and scale solutions that matter. And indeed, for the past decade and a half, Citi has been a leader—certainly in the financial sector, arguably among all companies—in promoting sustainability and financing sustainable growth.
Our strategy has three elements:
We're justifiably proud of our record and all that we've accomplished. And we're grateful that others have recognized what we've done—for instance, in 2013 Bloomberg named Citi the "World's Greenest Bank."
Today, we build on that record by announcing new efforts to drive sustainability, meaningfully impact climate change and help people all over the world build and improve sustainable cities.
In 2007, our firm committed to directing $50 billion to climate friendly projects over 10 years. We met that goal in 2013, three years early.
Today we commit Citi to a new, more ambitious goal—the same timeframe, but a broader scope and double the amount. Working with clients across sectors, we will lend, invest and facilitate $100 billion over 10 years for projects ranging from energy, to clean tech, to water, to green infrastructure. Simply put, it is a $100 billion investment in sustainable growth.
I don't think there is a financial institution better suited for meeting this goal. Citi has financed some of the largest renewable energy projects in the world—including the Solar Star photovoltaic project in Southern California for Berkshire Hathaway Energy in 2013, the largest single renewable energy project finance bond offering to date. This project is expected to generate 579 megawatts of power when it is completed by the end of this year, making it the largest solar project in the world. Solar Star is expected to provide enough energy to power more than a quarter million homes, with the electricity generated displacing approximately 570,000 metric tons of carbon dioxide per year—all while generating $500 million in regional economic activity.
That's the kind of game-changing project we're looking to do more of. Other examples include the Warehouse for Energy Efficiency Loans—known as WHEEL—and Kilowatt Financial, national platforms that support loans for home energy efficiency improvements. We financed the projects in 2014 and have been working with state and local governments—including Florida, Indiana, Kentucky, New York, Pennsylvania, and Virginia—the federal Department of Energy, and several non-profits to facilitate adoption of a new approach that opens the door to institutional investors. These platforms have so far served more than 6,700 households. We are fortunate to have with us Kilowatt's CEO, Dan Pillemer, who will share more details later in the program.
And we're innovating not just on the types of projects we finance, but also the way in which we finance them. For instance, this past November we sought outside funding for an operational improvement—a move that many might not expect a financial institution to make.
We developed an innovative energy efficiency measure to cut energy use by 10 percent at our London data center. Using a first-of-its-kind financing structure, the project is being funded through these energy savings and it involves no upfront capital from Citi. This is a model that's applicable and attractive to clients of all types, and one that we expect to use more and more going forward.
Regarding the second element of our strategy—helping projects meet the highest standards—one of Citi's proudest achievements was to co-found the Equator Principles in 2003 and then to lead the steering committee that refined those principles in 2013. That document sets high standards that are the bedrock of sound environmental and social risk management. For any company looking for the most experienced environmental and social risk managers, Citi has become—quite simply—THE bank to seek out.
Our Finance and Environmental and Social Risk Management teams work hand-in-hand with clients to ensure that projects meet international standards. By helping clients make their projects better, we not only benefit communities and countries, we help those clients reduce their reputational risks.
A great example is the Panama Metro project, the first-ever metro system in that country. This amazing project is getting people out of cars, getting cars off the road, and reducing emissions. It has already reduced some workers' commute times from two hours to a little more than 20 minutes and it transports 30,000 commuters per hour—a figure expected to rise by a third over the next two decades.
Citi raised $862 million for the project. No less important, we helped the government enhance its existing social programs to ensure that any economic displacement of local businesses was mitigated and managed in line with international standards. In fact, this expertise—no less than the financing itself—was instrumental in securing support for the project from the many government agencies involved.
We try not to be in the business of saying "no" … but sometimes it's necessary. We have a clear policy that delineates what we will support … and what we won't. Some projects we won't even bid for. Others, if we can't come to an agreement with the client to bring the project into line with our standards, we will walk away from.
With our help, clients are increasingly seeing the value of ingraining these considerations into their planning from the earliest stages. We say "yes" far more often than we say "no," and we expect that trend will accelerate.
Finally, regarding our own operations and supply chains, Don Callahan will go into this in more detail in a moment. But first, another announcement.
We at Citi have worked hard to improve the environmental impact of our own operations. For instance, in 2011 Citi pledged to reduce its greenhouse gas emissions 25 percent by 2015. We met that goal two years early. We also reduced by 40 percent the amount of waste sent to landfill.
We're now setting ambitious new goals for the future. For 2020, we're targeting reductions of 35 percent in greenhouse gas emissions, 30 percent in energy and water use, and 60 percent in waste. For 2050, our goal is to reduce greenhouse gas emissions by 80 percent.
And we've pledged that by 2020, a third of our real estate portfolio will be LEED Certified—meaning that they meet exacting environmental standards. As of now, 253 of our sites around the world hold this distinction.
Soon, there will be an important addition. We will seek the highest level of certification—LEED Platinum—for the renovated 388-390 Greenwich Street, which will become our new, consolidated global headquarters.
LEED Platinum is, to say the least, very hard to achieve for a renovation—for buildings constructed long before most of these new standards came into being. It involves getting inside the structure's skeleton and "guts" and changing much of its physical plant. Setting such a goal for this building is ambitious but—we believe—the only choice worthy of our firm's continuing aspiration to be the world's greenest bank.
I want to close with a very important point. These efforts do not constitute philanthropy, nor do they represent costs. In fact, they reduce costs—and also increase revenues, enhance client relationships, and help manage risk. In other words, these efforts are integral to Citi's business strategy.
For more than 200 years, Citi's mission has been to enable progress by facilitating economic growth and financing transformative projects. The core mission hasn't changed, but the way we approach it has. Incorporating the principles of sustainability into everything we do improves our own operations, enhances our clients' work, and contributes to a better world.
Thank you for joining us this morning. We ask that, as you hold us to our commitments, you will continue to work with us and together we will create sustainable progress.
Thank you.
