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PERSPECTIVES

COP28 and the Next Era of Sustainable Finance

November 29, 2023
Val Smith, Chief Sustainability Officer, Citi

Across the globe, we are experiencing more of the effects of climate change in our lives. 

Fast facts

  • Heatwaves throughout 2023 set records. October was 1.34˚C above the 20th century average globally, inching the planet closer to the edge of the Paris Agreement’s goal of limiting global warming to less than 1. 5˚C above pre-industrial temperatures. 
  • In the United States alone, extreme weather disasters are experienced every three weeks on average, costing the country about $150 billion per year. 
  • Yet, we are also beginning to see public policy solutions stimulating new levels of investment in clean energy and low-carbon technology, as preliminary data from developed countries this year indicates they have likely met their goal of mobilizing $100 billion a year to support climate finance. 

Amidst this complex backdrop, our senior delegation travels to Dubai this week for the 28th United Nations Climate Change “Conference of Parties,” or COP28, where we are focused on how Citi can help support countries and companies to scale up solutions for the transition to a low-carbon economy.

As our Citi team attends COP this year, we aim to play our part in building a financial ecosystem that can rise to the challenge of supporting the health of our economy and our planet’s ecosystem.

Tipping points

Just as impacts from climate change can gather momentum, we can see the growth in financial solutions focused on low-carbon and sustainable outcomes.  Climate finance flows reached an impressive $1.4 trillion total last year, according to the Climate Policy Initiative, and even though that feels like a tipping point, we know much more finance is needed, and more bankable and investable projects are needed as well. 

Of course, recognizing a tipping point is not always obvious when you’re in the middle of a period of change, but if we look for signs of transformation, many are already apparent:  

  • Renewables already are responsible for the bulk of new electricity generation in many countries.
  • Demand for electric vehicles is accelerating worldwide.
  • Long-talked-about climate solutions like green hydrogen, energy storage at scale, and sustainable aviation fuel are coming online faster than many anticipated. 
  • Just this week, Citi announced an innovative emission reduction and fuel offtake agreement with American Airlines to support the commercialization of sustainable aviation fuel, and contribute to reducing Citi’s carbon emissions associated with employee travel. 

For a bank, this means there are more ways to support clients as they seek to decarbonize their business models, work with innovators scaling clean energy and technology solutions, and provide access to affordable, clean energy in emerging markets. 

Our commitments

At Citi, we are committed to transparency about our progress and the challenges we face as we move through this transition. 

Since 2021, when Citi announced our commitment to reach net zero emissions, we have set interim emissions reduction targets for six carbon-intensive sectors, including Energy, Power, Auto Manufacturing and Steel. We also announced earlier this year that from 2020 to 2022, we have logged $348.5 billion toward our $1 trillion sustainable finance goal by 2030. 

At Citi and at COP, we continue to use our expertise to support our clients in addressing global challenges and navigating the energy transition, in areas such as: 

  • Supporting sustainable finance opportunities in carbon-intensive sectors;  
  • Mobilizing private capital in emerging markets for the energy transition with support from multilateral development banks;
  • Supporting the growth of nature-based solutions that address climate change and biodiversity challenges;
  • Addressing food security and helping to mobilize capital for the global food system; and
  • Building capacity to increase finance for climate adaptation and responses to extreme weather.

Engaging in productive conversations with clients and other stakeholders working across these issues at COP28 will inform our work as we all head into the next era of sustainable finance.

A full list of Citi’s COP28 activities can be found here.

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