Following new CEO Jane Fraser commitment to net-zero by 2050, Citigroup has issued an updated environmental policy making it the first major US bank to restrict financing for companies expanding coal power.

Citi will not take on any new clients after 2021 that have plans to expand coal-fired power generation and energy companies that generate 5 per cent or more of their electricity from coal will have a staggered phase-out process to stop financing any such clients by 2030 in OECD countries and by 2040 in the rest of the world.

Patrick McCully, climate and energy programme director at Rainforest Action Network said: “This new coal policy represents an important step forward for Citi and for the US megabanks as a whole. It sends another clear signal to utilities and other corporations involved in the coal sector that their major sources of capital are going to dry up unless they transition to clean energy. What companies once thought were coal assets are rapidly becoming coal liabilities.

“It is especially encouraging to see this commitment from Citi as it is the world’s worst non-Chinese banker of the world’s largest coal utilities. We hope that this is a positive sign of the progress on climate that we may see under the leadership of Citi’s new CEO, Jane Fraser.

The new policy also excludes companies involved in the production or shipment of cluster munitions. These weapons are banned by the international Convention on Cluster Munitions, signed by 110 state parties and one of the most widely recognised norms related to disarmament. Although companies producing cluster munitions are widely excluded by banks elsewhere, Citi is the first major US bank stepping back from such companies

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