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News Article

Citi Combines Investment Banking Groups to Push Sustainability

By Cas Biekmann | Tue, 03/30/2021 - 10:01

With the goal to transition toward decarbonization, prominent global bank Citi is combining three of its investment banking groups: energy, power and chemicals.

Bloomberg News reported that the new natural resources and clean energy transition group is to be headed by Steve Trauber and Sandip Sen. Other areas including technology and industrials. Citi Group, also present in the financing of green energy projects in Mexico, for example, initiated the move as part of its own decarbonization goals. New CEO Jane Fraser set the goal for Citi to become a net-zero emitter of greenhouse gasses by 2050. Citi Group was still the third-largest financier of fossil fuel-based business during 2020 but also successfully issued its first green bond that same year, raising US$1.5 billion.

In this regard, the group has vowed to set out a path for its energy sector investment to become net-zero by 2030. “Our view is, we want to be a leader in these industries and we want to be a leader in the evolution toward a future that includes decarbonization and clean energy,” said Tyler Dickinson, Co-Head of Citi's Banking, Capital Markets and Advisory division to Bloomberg News. “Currently, energy, power and chemicals are separate groups… As we think about transition opportunities and the future of clean energy, uniting these teams makes a lot of sense to us,” continued Dickinson.

According to Business Insider, Dickinson sees that demand for clean energy banking is being pushed forward by the pandemic. Across the globe, companies are taking steps to ‘go green,’ which often incorporates switching to what many experts confirm to be cost-effective, renewable energy supply strategies. The concept of ‘green finance’ continues to grow alongside this trend, providing considerable opportunities for the financial sector as well. In Mexico, however, investment opportunities have been hampered by the efforts of the López Obrador administration to bring state-owned utility CFE back to the forefront of the energy sector. As a result, the landscape set during the 2014 Energy Reform is rapidly changing. Investment banks will have to change along, said Salomon Amkie, Director of Banking, Capital Markets and Advisory at Citi during MEF2021: “We will have to look at new opportunities depending on how the government renegotiates its contracts with private players and how it sets the new rules of the game.” Nevertheless, Mexico’s potential will always attract investment: “If clear rules are re-established and the route forward is clear, investors will renew their large investment appetite. Mexico’s potential is massive,” he continued.

The data used in this article was sourced from:  
Bloomberg News, Business Insider, MEF 2021
Cas Biekmann Cas Biekmann Journalist and Industry Analyst