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Environmental, Campaign & Website News > Citigroup Yields to Pressure by Environmentalists

Citigroup Yields to Pressure by Environmentalists

Date : 22nd April 2003, Source :

Published on Friday, April 18, 2003 by
Citigroup Yields to Pressure by Environmentalists
by Jim Lobe

WASHINGTON - A major environmental group has declared a ceasefire in its three-year campaign against Citigroup, the world's largest private financial institution, after new commitments by the giant lender to adopt more responsible social and environmental policies in deciding what projects to finance.

Citigroup's decision to more seriously engage one of its main critics, Rainforest Action Network (RAN) came one week after the San Francisco-based group launched a major ad campaign to persuade Citigroup credit card holders to destroy their cards to protest the company's support for projects and industries that environmentalists consider particularly harmful.

The campaign, which featured television ads by Hollywood celebrities such as Susan Sarandon, Ed Asner, Ali MacGraw, and Darryl Hannah debuted last week in New York and was set to begin running in other U.S. markets this week, before RAN agreed to suspend its efforts and enter into talks with Citigroup.

In a letter to Citigroup's Shareholder Dialogue Group and RAN, the company's management stressed that its goal is "to facilitate sustainable and beneficial development and promised "to take additional measures in the short term to reduce degradation or destruction of endangered ecosystems in the conduct of our business."

In addition, the letter said Citi was "aware of growing concern about climate change" and promised to "report greenhouse-gas intensity of future power projects in our project finance business (and) to identify investments in less carbon-intensive sources of energy."

As of the world's top funders of the fossil fuel and logging industries, Citi has been a major target of RAN and some other environmental groups. In the year 2000, it was the top lender to both the coal industry and fossil-fuel pipelines around the world, as well as the top underwriter of stocks and bonds across the energy sector.

Emissions caused by the combustion of fossil fuels are considered by most scientists to be the greatest contributor to global warming and associated changes in the world's climate and weather. Logging and deforestation also contribute to warming, both by releasing more carbon-based gases into the air and eliminating forests that absorb carbon from the atmosphere.

RAN and other groups have attacked what they say is Citi's disproportionate support for extractive industries around the world, particularly fossil fuels and logging. Among other projects that Citi has helped finance are the controversial Camisea pipeline project that will ship natural gas from the Amazon region of Peru to the Pacific Coast; oil drilling in Papua New Guinea and Colombia; oil pipelines in Chad, Cameroon, Ecuador, and Venezuela; and giant power plants in Thailand and the Philippines.

Many of the pipeline projects involve the construction of roads into remote forests. Those roads ordinarily make it easier for farmers in search of land to move into these areas and clear the forests.

RAN's campaign, which has featured a series of civil-disobedience protests, including office lock-outs at various Citi offices around the United States, has been aimed at persuading the company to reduc--and eventually eliminate--funding for fossil-fuel projects, beginning with an immediate ban on future investments in projects in endangered ecosystems--such as parts of the Andes--and terminate all projects that have a negative impact on endangered forests or traditional forest communities.

At the same time, RAN hopes Citi and other lenders will provide more funding to more ecologically and socially benign enterprises, such as renewable energy, tree-free paper, and certified wood alternatives, and work to integrate social and environmental criteria into all of its operations.

For its part, Citi has objected strongly to RAN's efforts, insisting that it shares RAN's concerns and has tried to improve its environmental record by, among other things, recently drafting the so-called "Equator Principles" with the World Bank's International Finance Corporation (IFC) that commits signers to comply with certain social and environmental guidelines in deciding on loans.

It also objected strongly to RAN's now-suspended ad campaign as "highly misleading and inaccurate." The ad features celebrities reading the names of former Citibank cardholders who have destroyed their cards while depicting scenes of timber-cutting in jungles, forest fires, and oil pollution on various bodies of water.

"We think they've made a good-faith commitment to sit down and work with us," said RAN spokeswoman Sara Brown Riggs Wednesday after announcing the campaign's suspension.

"We are aware that many of our employees and customers care deeply about environmental and social issues and expect Citigroup to act in accordance with those values," Citi management wrote in its letter.

Copyright 2003

Document last updated on Wednesday 01 August 2018

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