Financiers Go Green:
An Environmental Victory

compiled from press releases and reports

Four years of protests and demonstrations by the Rainforest Action Network and New York University students have persuaded America’s largest financial institution to refrain from any further financing for commercial logging in primary, tropical forests. Investments in mining and drilling projects in certain rainforests will also be curtailed.

Citigroup of New York, a mammoth multinational group of financial companies with operations in 100 countries, agreed January 22 to a change in policy that includes a number of provisions designed to direct investments more towards environmentally friendly projects and away from companies with projects destructive to the environment. It is the first American bank to adopt such a comprehensive policy, according to the Rainforest Action Network, a San Francisco-based environmental activist group.

“We think this is the most significant environmental commitment to date in the financial services sector … and perhaps in the corporate sector, because of the potential ripple effects,” said Ilyse Hogue, global finance campaign director for the environmental group.

“Today, Citigroup has articulated the strongest environmental policies yet of any private financial institution in the world,” said Michael Brune, executive director of Rainforest Action Network. “This moment marks a milestone in the worldwide movement to stop global warming and deforestation. We cannot overstate the importance of changing such a vast enterprise and look forward to working together with Citigroup in the coming years.”

While the activist group organized the campaign for the policy nationally, students at NYU organized locally and participated in rallies at Citigroup’s Midtown New York headquarters.

Pam Flaherty, head of global community relations and environmental affairs for Citigroup, said the new policy builds on the Equator Principles, a set of voluntary guidelines that 18 global financial institutions have signed since last June. The principles require the banks to adopt procedures to evaluate the social and environmental impacts of infrastructure projects that they finance.

“What we’ve done is moved beyond that, building on it and making it more comprehensive,” Flaherty said.

As reported by the Associated Press, the bank said the main points of the new policy are:

• Additional screening of loan requests for projects Citigroup determines could adversely impact a critical natural habitat. Included is a ban on loans for commercial logging in rainforests.
  
  
• Refusing loans to companies engaged in illegal logging.
  
  
• Developing a program to invest in sustainable forestry and renewable energy, including financing for solar panels, residential wind turbines and fuel cells.
  
  
• Reporting “greenhouse” emissions — gasses linked to global warming — from power projects in its portfolio.

The new policy also requires that indigenous people near investment projects have access to information about those projects. The new policy in its entirety is online at Citigroup’s website at this link: http://www.citigroup.com/citigroup/environment/initiatives.htm.

In light of the success of its Citigroup campaign, the Rainforest Action Network has sent letters to other banking companies, challenging them to adopt similar standards. The public is invited to join those follow-up campaigns by signing letters to the chief executive officers of seven banks at the network’s website, http://www.ran.org.