This excerpt taken from the C DEF 14A filed Mar 13, 2008.
Citigroup has invested in and financed alternative energy, and calls for early and aggressive actions, starting now, to avert increasingly costly and irreversible impacts of climate change and to account for long-term energy sector investment cycles.
Citigroup also set a goal of reducing greenhouse gas (GHG) emissions from its facilities and its real estate portfolio by 10%, by 2011. However, Citi has not adopted GHG reduction goals for its energy or utility portfolio, as has its competitor, Bank of America.
Citigroups greatest impact on climate change and the environment arises from its financing of businesses and activities, such as electric power from coal-burning plants, that emit substantial greenhouse gases (e.g., carbon dioxide) and other pollutants.
Citigroup provides financing for companies engaged in mountain top removal (MTR) coal mining and for coal-fired electric power, which in addition to having serious adverse impacts on communities, the environment, and public health, will increase long-term GHG emissions over the life of the investment.
MTR devastates the environment. Trees are clear- cut, the top of mountains blasted away to reveal coal seams and the rubble dumped in the valleys below, filling streams and destroying water resources. Between 1992 and 2012, the EPA estimates MTR will have destroyed approximately 7% of Appalachian forests in coal mining regions studied. http://www.epa.gov/Region3/mtntop/pdf/mtm-vf fpeis full-document.pdf
Deforestation is the second leading source of GHG emissions worldwide. http://www.gsfc.nasa.gov/gsfc/service/gallery/fact sheets/earthsci/green.htm Scientists estimate carbon sequestered in Appalachian forests exceeds 2.75 billion metric tons. (Forest Ecology and Management, Vol. 222, Issues 1-3, pp 191-201.) The carbon in forests destroyed by MTR each year is roughly equivalent to the annual emissions from two 800 mega-watt coal-fired power plants.
Coal-burning plants, which supply nearly half of U.S. electric power, emit 80% of the nations GHG emissions from this sector. They also release most of the sulfur dioxide, nitrogen oxide, particulate matter and mercury, which harms reproductive health and childrens mental development. http://www.ucsusa.org/clean energy/coalvswind/c02c.html
Dr. James Hanson, a leading climate scientist at NASAs Goddard Space Center, has urged an immediate moratorium on the construction of new coal fired power plants in the U.S. as a priority to avoid triggering dangerous destabilization of the Earths climate systems. http://www.columbia.edu/~jeh1/dots feb2007.ppt
Resolved: Shareholders request Citigroups board of directors amend its GHG emissions policies to cease all financing, investment and any further involvement in activities that support MTR coal mining or the construction of new coal-burning power plants that emit carbon dioxide.
Citi recognizes climate change as one of the most important issues facing the company, our clients, the communities we serve, our shareholders, our employees and other stakeholders. This is reflected today in the wide range and intensity of efforts across all of Citis business units and operations. Citi also recognizes the complexity and all-encompassing scope of the issue of climate
change, given its implications with respect to global economic activity and the extent to which fossil fuels have negatively contributed to climate
change while also helping to raise hundreds of millions of people out of poverty.
The proposal requests Citi to cease all involvement in new coal-fired power generation. Coal provides power at an affordable price in many parts of the world; in the United States, it is the source of approximately 50% of all electricity. Based on the vast reserves available in the United States, coal is also closely linked with the issue of energy independence. The extraction and combustion of
coal are heavily regulated operations and are currently under careful consideration for additional regulation as evidenced by numerous state and regional initiatives, as well as the recent conclusions of the United Nations Framework Convention on Climate Change (UNFCCC) in Bali.
Citis ability to engage with clients on important issues, such as climate change, is based primarily on shared credibility and trust. Disengagement from sectors, as the proposal recommends, and from the clients that comprise these sectors, would undermine Citis position, limit our ability to lead the sector, and cede control of our business and influence to competitor institutions. For these reasons, Citi remains committed to working with all of its clients, in all sectors, to fully understand the risks associated with climate change and to help them develop and implement effective solutions. In fact, we have created a model to evaluate potential climate-related risks for our clients that incorporates a range of carbon prices and policy scenarios.
Citis focus on climate change began in 2002 with efforts to understand and manage greenhouse gas (GHG) emissions from our own facilities, which led to a goal of 10% reduction of our own emissions. This effort has broadened significantly under the leadership of senior management and review by the Environmental and Social Policy Review Committee. In February 2007, Citi released a climate change position statement affirming our support for national and global market-based regulatory frameworks that reduce GHG emissions, drive innovation and opportunity, and bring clarity and certainty to markets. In May 2007, Citi announced that we will target $50 billion over ten years to address climate change through investments in and financing of alternative energy and clean technology within our businesses and operations. This target includes $10 billion of existing commitments, and is promoting new ideas and initiatives needed to help transition entire economies to lower GHG-intensive forms of energy
and production. In September 2007, Citi was recognized as best in class among global banks for its climate change disclosure in a report by the Carbon Disclosure Project, which is a coalition of 315 global investors with over $41 trillion in assets. In January 2008, Citi was ranked 6th among 40 global banks and 1st among US-based banks in the Ceres report, Corporate Governance and Climate Change: The Banking Sector.
In February 2008, Citi announced its release of and commitment to the Carbon Principles, an intensive effort to create an approach to evaluating and addressing carbon risks in the financing of electric power projects. These principles were developed over nine months of intensive engagement by Citi, JPMorgan Chase and Morgan Stanley, in consultation with leading power companies American Electric Power, CMS Energy, DTE Energy, NRG Energy, PSEG, Sempra and Southern Company. Environmental Defense and the Natural Resources Defense Council, environmental non-governmental organizations, advised on the creation of the principles. The principles recognize the benefits of a portfolio approach to meeting the power needs of consumers, without prescribing how power companies should act to meet these needs. In circumstances where power companies seek financing for high carbon dioxide-emitting technologies, Citi has agreed to follow the Enhanced Diligence process and factor these risks and potential mitigants into the final financing decision.
Given coals dominant role as a source of affordable electricity, its abundance in the United States, the all-encompassing scope of the issue of climate change, the extent to which the regulation of carbon is rapidly evolving, and Citis demonstrated commitment to engage with its clients on the issue of fossil fuels and advancing solutions to climate change, ceasing Citis involvement in coal-related industries would not be in the best interests of Citis stockholders, and adoption of this proposal could undermine Citis numerous initiatives.