Citigroup (NYSE:C) is launching a new arm within its investment banking division that will be dedicated to environmental sustainability, according to media reports.
The new Sustainability & Corporate Transitions group will be led by Banking, Capital Markets and Advisory Chief Strategy Officer Bridget Fawcett, and Keith Tuffley, who has led the unit’s sustainability efforts so far.
Many companies have been paying more attention to environmental, social, and governance issues, as activists and investors have put pressure on them to prioritize corporate social responsibility.
“The current Covid crisis will elevate the importance of ESG to our clients, as they increasingly focus on more sustainable and resilient strategies and on recovery plans that help drive the just transition to a net-zero emissions future,” global BCMA heads Tyler Dickson and Manolo Falcó said in a memo to bankers.
The move by Citi comes just a month after the financial giant announced it would stop providing services to thermal coal-mining companies over the next decade in order to quicken the economy’s shift away from fossil fuels.
Calls for better environmental practices have been building in the financial industry.
At JPMorgan Chase‘s (NYSE:JPM) annual meeting earlier this week, a proposal that would have required the bank to disclose more about how its activities impact the environment was narrowly defeated in a shareholder vote. The resolution received yes votes from investors representing 48.6% of its shares.
JPMorgan said earlier this year that it would phase out or end loans to fossil-fuel companies engaged in Arctic drilling and coal mining.
“The investment community has not missed the parallels between COVID-19 and the global disruption that has followed,” said Danielle Fugere, president of As You Sow, a nonprofit that promotes corporate social responsibility through shareholder advocacy. “Shareholders’ significant support of proposal underscores their position that banks are as responsible as any other company to heed the science of climate and to take early action to reduce systemic and growing risk.”