NEW YORK (Reuters) - Citigroup Inc. C.N, the largest U.S. bank, said on Tuesday it plans to commit $50 billion to environmental projects over the next decade, the biggest commitment from Wall Street to address climate change.
The amount includes nearly $10 billion in activities that the bank has already undertaken. Citigroup plans to increase to $10 billion from about $1 billion its commitment to reduce its own greenhouse gas emissions at its 14,500 locations worldwide. The bank operates in more than 100 countries.
“It’s a dramatic announcement,” said Daniel Esty, a Yale University environmental law professor who co-wrote “Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage.”
“To the extent it signals a sea change in Citigroup’s attitude toward the environment, it could have a sweeping impact across economies globally,” said Esty.
Citigroup's program comes as U.S. companies such as General Electric Co. GE.N and Wal-Mart Stores Inc. WMT.N look to boost environmental efficiency, amid growing demand for alternative energies and emissions reduction.
Charles Prince, the bank’s chief executive, said the program is “not a wish list, but a realistic, achievable plan that serves a critical global need and responds to an emerging investment opportunity.” He called for global and U.S. frameworks to reduce greenhouse gas emissions.
Last year, Citigroup’s profit totaled $21.54 billion on revenue of $89.62 billion.
In March, Bank of America Corp. BAC.N, the second-largest U.S. bank, pledged $20 billion over 10 years to support environmentally friendly activities and reduce global warming.
Citigroup’s markets and banking group plans to invest in and finance more than $31 billion in clean energy and alternative technology. It said it has nearly $7.5 billion in commitments.
“It’s the right thing to do,” said Michael Klein, co-head of markets and banking, in an interview. “Climate change is one of the single biggest drivers of investment decisions and capital expenditures. We are using all of our 100 countries to ... offer the best advice we can based on evolving policy, technology and regulatory standards.”
Citigroup said its consumer unit, its biggest business, will also offer climate-friendly mortgage, card and commercial finance products. For example, borrowers may obtain home equity loans to buy and install solar electric systems, the bank said.
The bank said it is upgrading two large office facilities in New York City and Dallas, and building an office tower in Long Island City, New York that will be environmentally friendly.
“We have reached a tipping point in business where the risks of inaction outweigh risks of dealing with a fluid and uncertain regulatory and competitive environment,” said Michael Lenox, a business professor at Duke University. “Corporations need to address climate change now.”
Bank of America is building environmentally efficient office towers in its Charlotte, North Carolina hometown and just east of New York’s Times Square.
Additional reporting by Christian Plumb
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