Citizens Financial Group committed Tuesday to reaching carbon neutrality by 2035, while also pledging to engage with its high-emitting clients on climate-related topics in the coming years.
The Providence, Rhode Island-based bank did not commit to ending the financing of companies in sectors that have high emissions. But Citizens said it will train its commercial bankers to work with clients to develop decarbonization transition plans.
"This announcement is about leaning into Citizens' role as a trusted advisor to look for ways that our clients can seize on the business opportunity related to the transition to a lower-carbon future," said Rachel Greenberg, the bank's head of sustainability.
Citizens plans to engage with its entire portfolio of clients in the oil-and-gas sector by the end of next year, according to Beth Johnson, the bank's head of ESG, or environmental, social and governance initiatives. The $223 billion-asset bank will then prioritize other industries.
"The way we've thought about this is not to exclude any of our clients or any specific industries, but to really support them in that transition," Johnson said in an interview.
Citizens plans to encourage clients to use sustainability-linked products that the bank has unveiled in recent years. For commercial clients, those options include allocating deposits toward projects related to green initiatives, as well as
The bank also said Tuesday that it is targeting $50 billion in what it characterized as sustainable finance — or loans and investments to support the environment and community development — by 2030.
Ten percent of that target, or $5 billion, will finance renewable energy projects and technologies that support a transition to a lower-carbon economy, according to the bank.
The bank's sustainability pledge will be "supported by detailed disclosures, which we think is important to ensure that we're held accountable," Greenberg said.
Citizens' commitment to reach carbon neutrality by 2035 differs from pledges made by large banks such as JPMorgan Chase and Bank of America, which have made so-called "net-zero" commitments in recent years, pledging to decarbonize their portfolios by 2050.
Citizens timed its pledge with the release of its inaugural ESG report, as well as its second emissions report based on recommendations from the Task Force on Climate-related Financial Disclosures.
This week is also Climate Week NYC, during which business leaders, top government officials and activists are calling attention to climate change.
Banks are facing
James Vaccaro, executive director of Climate Safe Lending Network, a nonprofit organization that focuses on decarbonizing the banking sector, said that commitments like the one made by Citizens can be "quite significant," or they can be "performative."
The significance of such an announcement depends on the details, and on how the bank follows through to meet the pledge, Vaccaro said.
One factor in assessing the noteworthiness of a bank's commitment is how it compares with the size of the bank's balance sheet, as well as the forecasted growth of its balance sheet, Vaccaro said.
