SAN FRANCISCO - January 22 - After four years of grassroots mobilization, Rainforest Action Network today declared victory in its campaign to transform the environmental practices of the world's largest financial institution, Citigroup (NYSE: C). The release of Citigroup New Environmental Initiatives (www.citigroup.com/citigroup/citizen/environment.) raises the bar for the financial sector in areas related to deforestation and indigenous rights, endangered ecosystems and no-go zones, greenhouse gases and climate destabilization, and clean energy and sustainable development. Rainforest Action Network today also sent letters to ten of the most destructive U.S. banks challenging them to catch up with modern social values and meet or beat Citigroups policies.|
Among The Liquidators are the laggards of Wall Street, lenders that are liquidating the Earth's most valuable natural assets to post short-term profits at a long-term cost to the world. The Liquidators include JP Morgan Chase (NYSE: JPM), Bank One (NYSE: ONE), Bank of America (NYSE: BAC), Fleet Boston Financial (NYSE: FBF), Wells Fargo (NYSE: WFC), Goldman Sachs (NYSE: GS), John Hancock (NYSE: JHF), Wachovia (NYSE: WB), U.S. Bancorp (NYSE: USB) and SunTrust (NYSE: STI).
Citigroup New Environmental Initiatives
A first for the financial services sector, Citigroup has agreed to deny financing for commercial logging in tropical rainforests, a significant victory in the worldwide movement to stop deforestation. In another first, Citigroup is now the only private U.S. bank to recognize the need for environmental no-go zones, areas of high ecological value that are integral to a healthy planet. Recognizing that indigenous, forest-dwelling peoples make an invaluable contribution to the wealth of human culture, Citigroup is enacting progressive new lending practices to help support the rights, livelihoods and cultural integrity of their communities.
To begin confronting climate destabilization, Citigroup has committed to report the greenhouse gas emissions from its power sector projects while at the same time working to increase investment in clean, renewable energy. For consumers, Citigroup is prepared to offer and market Fannie Mae energy efficient mortgages, putting millions of patriotic American homeowners on the road to energy independence.
Nearly 80 percent of Earths virgin, old-growth forests have already been destroyed or degraded, and 96 percent of Americas original forests are gone forever. Tropical rainforests contain at least half of all life on Earth, and global deforestation along with climate destabilization are causing a mass extinction of life, unparalleled since the disappearance for the dinosaurs.
According to the IPCC, a United Nations panel of 2,000 of the worlds top climate scientists, human activities are changing Earths climate. By their projections, average temperatures on Earth will rise 2.5 to 10.4 degrees Fahrenheit by 2100. A 2004 analysis published in the journal Nature raised the status of global warming from that of a contributor to habitat loss to a full-fledged force for extinction. The report predicts that by 2050 global warming at current rates will drive up to 37 percent of living species past the point of no return on the road to extinction.
According to a 2003 survey by The Gallup Organization, 7 in 10 Americans believe that the effects of global warming have already begun to occur or will occur in their lifetimes. The same survey found that 6 in 10 believe that the reports about the seriousness of global warming are correct or underestimate the crisis. According to a 2002 poll by Zogby International, 78 percent of American voters believe that global warming either is a serious problem now or that it will be one in the future. The same poll found that 75 percent said that doing nothing is irresponsible and short-sighted, especially when the technology exists to do something about global warming by increasing our use of clean, renewable energy, building cars that get better gas mileage, and producing more energy efficient appliances.
An independent review commissioned by the World Bank and released in 2003 recommended that the bank stop financing all coal and oil projects in developing countries. The report recommended that the bank step up funding for renewable energy projects, citing the need to combat climate change.
Citigroups new environmental initiatives signal the beginning of an ecological u-turn in the global marketplace, said Michael Brune, executive director of Rainforest Action Network. This is a wake up call to Wall Street as well as Washington. Destroying endangered ecosystems for a few weeks supply of dirty power and toilet paper is as outdated as the abacus. We applaud Citigroup for being the first private bank in the world to deny financing for commercial logging in tropical rainforests. One bank is not enough. We wont save rainforests or ourselves until we deal head on with the ultimate WMD, climate destabilization, and the banks that fund the corporations causing it.
Today represents a triumph of democracy in the marketplace, said Ilyse Hogue director of Rainforest Action Networks Global Finance Campaign. Four years ago the prospect of moving the banking sector on these issues seemed inconceivable. The policies set forward by Citigroup today mark a sea change in business as usual in the banking sector. Smart financial institutions will wake up and realize that destroying our forests and destabilizing our climate was never a road to riches. Environmental ruin is no longer tolerated by a discerning public.
Robert Goodland, former senior environmental analyst for the World Bank welcomed the new policy, stating, "Since leaving the World Bank, I have examined the destructive impact private finance can have on sensitive ecosystems and local communities. What has been striking is the lack of even basic environmental and social safeguards in such a powerful economic sector. Increasingly intricate financial agreements generate profit for mega banks while shifting the financial, environmental and social risks to the host countries and their citizens. My independent report concluded that the OCP pipeline in Ecuador violated World Bank guidelines, but this did not stop banking giant JP Morgan Chase and insurance leader John Hancock from providing the necessary funding for the project. To truly protect endangered ecosystems and indigenous communities dependent on them, these institutions must follow Citi's lead in adopting policies that begin to reorient the global economy toward sustainable projects and clean energy sources. The new Citigroup policy allows the private finance sector to catch up and surpass the public finance sector in one move."
"Citigroup's new mortgages could make solar-powered, energy-efficient homes more affordable for millions of American households," stated Philip Radford, Partner with Clean Edge, Inc., a leading research and strategy firm on clean energy. "This type of innovative consumer financing has the potential to accelerate the growth of new solar installations."
Investors are starting to recognize that funding the destruction of endangered ecosystems and indigenous communities is hardly a growth strategy for the 21st century. Its like an ecological Enron, with long-term investors likely to be left paying the bills that will inevitably come due from financing irresponsible projects, said Steve Lippman, senior social research analyst with Boston-based Trillium Asset Management, a socially responsible investment firm with over $700 million in assets under management. Citigroups new policies lead the way in seeking to protect not just the planet, but also the company and its shareholders, from environmental risks.