Citigroup said it will cut back on financing for coal mining projects, in the latest blow to the industry that's viewed as a key contributor of global warming.
Citigroup said its its credit exposure to coal mining had "declined materially" since 2011 and that the trend would continue into the future. The policy applies to companies that use mountaintop removal methods as well as coal-focused subsidiaries of diversified mining companies, according to a a copy of the guidelines posted online Monday.
"Climate change is a global challenge of tremendous magnitude, and Citi is helping to accelerate the transition from a high-carbon to a low-carbon economy," according to the New York-based company's Environmental & Social Policy Framework. "Going forward, we commit to continue this trend of reducing our global credit exposure to coal mining companies."
Bank of America and Credit Agricole both said they were turning away from financing coal this year, as activists and policymakers zero in on the fuel as the biggest source of the emissions blamed for heating up the planet to dangerous levels. Almost 200 countries will meet in Paris starting next month to negotiate a global deal reining in fossil-fuel pollution. The U.S. issued rules this year to wean its power- generating industry off coal.
"With Bank of America, Credit Agricole, and now Citigroup withdrawing support for coal mining, this announcement shows major momentum away from financing coal by the banking sector," said Lindsey Allen, executive director of the Rainforest Action Network, an advocacy group that has pressured banks to cut their support for the industry.
A call to Citigroup's media office in New York wasn't immediately returned Monday.
Future approvals for coal projects will require "escalation and senior approval," according to the Citigroup's new policy.
Other fuels that also produce greenhouse gases fared better under Citigroup's framework. Oil-sands projects have risks that "need to be identified, mitigated and managed," according to the guidelines, and the bank has "developed a risk-review process" for oil-sands clients.
The bank has a similar process for shale oil and gas, which must be "developed in a safe, transparent and environmentally and socially responsible manner," according to the guidelines.