Citigroup Ponies Up $50 Billion to Fund Green Projects
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Citigroup said today that it will spend $50 billion over the next decade on companies and technologies that reduce greenhouse gas emissions. The announcement by the country's biggest bank comes at a time when many U.S. businesses are trying to assess the impact of climate change on their bottom line.
NPR's Jim Zarroli has more details.
JIM ZARROLI: Citigroup said the $50 billion include some money already Committed, but much of it will be new funds earmarked for environmental projects. Pamela Flaherty, the bank's director of corporate citizenship, says about $31 billion will go to companies that are working to reduce greenhouse gas emissions.
Ms. PAMELA FLAHERTY (Director of Corporate Citizenship, Citigroup): It could be a wind farm in Brazil. It could be a new kind of technology that will reduce emissions from power plants. It could be a whole set of activities that are aimed to reduce greenhouse gas emissions.
ZARROLI: Flaherty says the company will spend $10 billion to reduce energy consumption at the 15,000 properties around the world that it owns or rent. Flaherty says moves like this will ultimately save the company money.
Ms. FLAHERTY: These are business initiatives. These are things we can do with our clients. This is a better way we can run our company.
ZARROLI: The initiative by Citigroup follows a similar move by Bank of America, which promised to commit $20 billion to environmentally friendly businesses. Greg Larkin, an analyst at Innovest Strategic Advisers, says efforts like these are more than public relations. Larkin says businesses are trying to assess the risks and opportunities that climate change presents.
Mr. GREG LARKIN (Analyst, Innovest Strategic Advisers): The regulatory and financial environment is moving in a way and at a speed where we really have to re-evaluate how this works. It's a very strong force right now. I think if you ignore that as a financial company, there's a price to pay.
ZARROLI: And Larkin says big banks like Citigroup and Bank of America are having to think about the effect of climate change on a company's bottom line before deciding whether to lend money to it. Larkin says a watershed moment was the purchase of the utility company TXU by a private equity group in February.
The new owners agreed to scrap plans to build most of the coal-fired plants the company had in the works. Environmentalists said the decision was proof that business was finally taking climate change more seriously.
Chris Miller of Greenpeace says Citigroup's decision to invest in more green technology is another step forward.
Mr. CHRIS MILLER (Director, Global Warming Campaign, Greenpeace): Today's announcement indicates that Citibank understands that global warming is real, that it's a problem, that there is money to be made in solutions.
ZARROLI: Many environmentalists also note that the Bush administration has warned that confronting climate change would hurt the U.S. economy. They say efforts like these may provide a road map for environmentalists and businesses to address the issue in a way that mitigates the costs.
Jim Zarroli, NPR News, New York.
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