United Nations Sustainable Development Goals – Goal Number 7- Report for Citigroup

To: Michael Corbat

Chief Executive Officer / CitiGroup

Date: 21/08/2019

Subject: Citigroup’s current contributions to United Nations Sustainable Development

Goals Number 7 – Affordable and Clean Energy- and future recommendations.

Introduction

In the year 2014, the states that form the United Nations agreed on introducing new sets of

goals in order to ensure better future not only for the earth itself but also for the people who

live on it. During the Rio +20 Conference the nations of the world decided on an agenda that

is called The 2030 Agenda for Sustainable Development which contained 17 individual goals

that aim to encourage the nations of the businesses of the world to work towards achieving

sustainability and fighting against poverty (Le Blanc, 2015). One of these goals is

“Affordable and Clean Energy” which is also known as the goal number 7 which aims to

provide all parts of the world with affordable, reliable, sustainable and modern energy

(Sustainabledevelopment.un.org, 2019). The current trends indicate that Citigorup has been

investing significantly to achieve this goal around the world and the results of Citigroup’s

efforts can easily be observed (Business For 2030, 2019). This report will examine the

contributions that have been made by Citigroup to achieve the goal of “Affordable and Clean

Energy” and will provide recommendations that can be taken into consideration to achieve

more efficient outcomes.

1.1 Green Bond Project

Citigroup is one of the largest international firms that contribute to the United Nations

Sustainable Development Goals actively. One of the frameworks that has been developed by

Citigroup is the Green Bond Framework which aims to fund significant projects that will

provide the world with transportation system that is sustainable, sustainable energy for every

citizen of the world, water and energy conservation and efficiency and green buildings

(Citigroup.com, 2019).

Citigroup has agreed to use the green bond for the next three years to help provide more

affordable and clean energy for all the people in the world (Nhede, 2019). Citigroup has

developed its Green Bond Framework in accordance with the ICMA (International Capital

Market Association) Green Bond Principles, therefore, it follows the key components that

have been set by the ICMA: “use of proceeds; process for project evaluation and selection;

management of proceeds; and reporting. Besides, Citigroup has the benefit of having

subsidiaries that can issue green bonds under the scope of this framework (Citigroup.com,

2019). The current analysis that has been conducted by the consultancy Sustanialytics on the

€1 billion green bond has revealed that the sustainability objectives of Citi and the ICMA are

aligned. Citigroup’s treasurer Michael Verdeschi stated that since Citi co-founded the Green

Bond Principles in the year 2014, the company has become a leader in the development

process of green bond market. He also added that the company now looks forward to keeping

its place as the leader in the market by continuing its commitment to this noble cause (Nhede,

2019). These developments indicate that Citigroup has been putting great deal of effort into

achieving its objectives of achieving sustainable energy for all goal by investing in the Green

Bond project.
 1.2 Warehouse for Energy Efficient Loans

Warehouse for Energy Efficient Loans (WHEEL) is a program that has been established by

the Energy Programs Consortium (EPC) and the National Association of State Energy

Officials (NASEO) in order to provide low-cost, large-scale capital for both state and local

governments around the world to assist them with their efforts to achieve sustainable energy

for everyone. The strategic objective of the WHEEL program is to form a secondary market

for clean energy loans to be used in residential areas and pass on the benefits that can be

obtained from this market to the state and local energy loan programs (Kats et al., 2011).

Citi is one of the biggest contributors to the WHEEL program as it sees it as an effective

method to provide more affordable clean energy. Citigroup’s program allows the homeowners

to borrow up to $ 20,000 with very reasonable interest rates so that they can make some

improvements to their homes like installing HVAC (Heating, Ventilation, Air Conditioning)

systems, insulation materials, water heating equipment, energy saver house appliances and

new windows that can help reduce the energy consumption for heating and cooling. The

program has already received positive feedbacks from Pennsylvania where the homeowners

have recently taken the advantage of these low cost loans to improve their homes by making

them more energy efficient (Citigroup.com, 2019). This program can be considered very

significant and effective by the homeowners as it allows them to make a contribution to global

energy efficiency and clean energy for all projects by transforming their homes into a more

energy efficient residencies.

1.3 Clean Renewable Energy for Texas

Another project that has been initiated by Citigroup under the scope of “Affordable and Clean

Energy” goal is the Texas project which guarantees to use of renewable energy for all the
operations of Citigroup in this area for a multi-year term. This goal is a contribution to the

bank’s ultimate goal of supplying 100 percent renewable energy to be used in Citigroup’s

facilities by the year 2020 (Citigroup.com, 2019).

According to the plan, the renewable energy that is required to power the Citi’s facilities will

be supplied by the 163 MW Midway Wind project which is located in San Patricio County of

Texas. The Midway Wind Project is being developed by Sammons Renewable Energy and the

project is expected to be operational by the year 2019. Jagdish Rao, the Head of Citi

Enterprise Infrastructure, explained the significance of the project by saying “this unique

project is reflects our commitment to help accelerate the global transition to a low-carbon

economy. These type of investments are good for the environment and pave the way for a

sustainable future”. Citigroup’s plan to develop a project that will allow the company to use

100 percent clean renewable energy for its facilities was announced in 2017 and during the

year of 2018 Citigroup has made a comprehensive investment for the completion of the

Midway Wind Project as it considers this project as a great contribution to solving energy

problem of the world (Citigroup.com, 2019). The amount of investment that the Citigroup

has made towards the Texas projects demonstrates the importance the company gives to

providing affordable and renewable energy to the world.

1.4 $100 Billion Environmental Finance Initiative

All the contributions and investments Citigroup has made towards United Nations Sustainable

Development Goals first began in 2015 when Citi announced that it will invest $100 billion to

help solve environmental issues and help speed up the process of world’s transition to a low-

carbon economy. It can be said that almost all of the investments and contributions that Citi

has made so far were under the scope of original project of $100 Billion Environmental

Finance Initiative (Business For 2030, 2019). This initiative aimed to invest, lend and

facilitate $100 billion over 10 year period to projects that will help solve environmental
problems and provide a better world for everyone that lives in it. It can be said that this

project has encouraged many other global companies to come up with similar projects to help

make the world a better place for all.

2- Recommendations

Despite the significance of every effort that has been made by Citigroup towards achieving

the goal of “Affordable and Clean Energy”, there are still some improvements that can be

made to achieve more efficient results. One of these improvements can be extending the scope

of WHEEL project to the countries where Citigroup operates. It is a fact that holding this

project only in the borders of the United States will create a limited effect on the issue.

However, if the project transcends the borders of the US and reaches other developing

countries the effects can be more significant on the global scale as most of the houses in

developing countries are far from being energy efficient. Moreover, it appears that the Texas

project can be a great example for the other global companies but it can be recommended to

extend this project to different countries also in order to draw more attention to the issue and

get more companies involved in similar project. It is certain that there are many countries

where Citigroup operates can benefit from clean energy projects like the one in Texas. This

will also guarantee Citigroup’s position as the leader in such environmental projects.

Conclusion

As a conclusion it can be said that the wold benefits a lot from the projects that Citigroup has

been carrying out and it can be said that by the 2025 Citigroup will have made significant

contributions to providing clean and affordable energy to the people. Even though, the

projects that the company has been involved in can be carried out in more locations in the

world, their current status are also promising in the process of providing affordable and clean

Energy for the world.

1- BUSINESS FOR 2030. (2019). Citi — BUSINESS FOR 2030. [online] Available at:

http://www.businessfor2030.org/citi [Accessed 20 August. 2019].

2- Citigroup.com. (2019). Citi Green Bond Framework. [online] Available at:

https://www.citigroup.com/citi/fixedincome/data/Citi-green-bond-framework.pdf [Accessed 22

Aug. 2019].

3- Citigroup.com. (2019). Citi and Renew Financial Announce First-Ever Energy Efficiency Loan

Asset-Backed Security Transaction. [online] Available at:

https://www.citigroup.com/citi/news/2015/150615a.htm [Accessed 18 Aug. 2019].

4- Citigroup.com. (2019). Citi to Power Its Texas Operations with Clean, Renewable Energy.

[online] Available at: https://www.citigroup.com/citi/news/2019/190213a.htm [Accessed 15

Aug. 2019].

5- Kats, G., Menkin, A., Dommu, J., & DeBold, M. (2011). Energy efficiency financing–Models

and strategies. prepared by Capital E for the Energy Foundation.

6- Le Blanc, D. (2015). Towards integration at last? The sustainable development goals as a

network of targets. Sustainable Development, 23(3), 176-187.

7- Nhede, N. (2019). Global bank Citi announces first, €1 billion green bond. [online] Smart

Energy International. Available at: https://www.smart-energy.com/industry-sectors/business-

finance-regulation/global-bank-announces-first-e1-billion-green-bond/ [Accessed 20 Aug.

2019].