In recent years, new initiatives have been sprouting up from businesses, governments and communities aimed at shaping a sustainable future, the result of increasing awareness and knowledge of the effects of climate change. However, many such efforts have been put on hold due to the COVID-19 crisis, which has caused a devastating impact not only on the many lives lost, but also severe economic disruption.
Even though the pandemic has presented headwinds and threatened some sustainability initiatives, it has also underscored the importance of building a sustainable future, connecting environmental and social issues. For a global bank like Citi, we have a responsibility to act as the catalyst to regenerate the efforts by leading the co-creation of innovative initiatives and solutions that accelerate the progress to build a sustainable world.
Forging a Sustainable Future
The financial services industry is an important pillar of the economy, and finance fuels economic growth. The good news is, sustainability, which has proven to deliver risk and performance benefits, has been a key area of focus for the financial services industry for many years now. As a result, we are seeing increasingly more investors joining forces and taking collective actions to further the agenda such as Climate Action 100.
We are also seeing forward-thinking bankers from across different sectors from mining, oil and gas, to investment banking among others, and their like-minded clients, incorporating environmental, social, and governance (ESG) factors into initiatives that contribute to advancing the United Nations’ (UN) Sustainable Development Goals (SDGs) in their sustainable finance investments.
For Citi, we have a long track record of engagement in sustainability, helping to drive the development and adoption of standards and principles for the sector beginning in the late 1990s by joining the UN Environment Finance Initiative. We were also one of the first banks to embark on this journey to accelerate the transition to a low-carbon economy by taking concrete actions in green financing and climate risk. As a global bank, we have a meaningful role to play and we are responding in several ways to accelerate the transition through green financing, increased climate related measurement and disclosure, enhanced Environmental and Social Risk Management (ESRM) policies and reductions in our own environmental footprint.
In the midst of the global COVID-19 health crisis in July this year, Citi launched its 2025 Sustainable Progress Strategy, which sees the bank pledging S$250 billion to finance and facilitate low-carbon solutions and committing to deepening climate risk assessment and disclosure as well as reducing the environmental impact of our operations. Citi’s latest action affirms its commitment to supporting its clients and community partners to help drive positive social and environmental impact around the world.
Collective Action is Key to Success
While we are of the view that sustainability is a global necessity for the betterment of our businesses, our economies, and our future, we also realize that the world is currently at a tipping point. We can charge forward into a greener and more inclusive future, or we can slide backwards and return to ground zero. The work ahead of us is immense, and we certainly can’t do it alone – we will need collective action and collaboration with governments, clients and competitors alike to achieve our common goals.
The new SDG (Sustainable Development Goals) Impact Partnership Program (the “Programme”) is a great example of how the different parties within the ecosystem are coming together for the common good. In this Programme, Citi, along with United Nations Development Programme (UNDP), Copenhagen Fintech and DBS, are joining forces to bring Nordic fintechs to ASEAN for a technology and innovation exchange, focusing on addressing and tackling the SDGs’ pain points that this programme seeks to solve, and at the same time, offering these startups a great opportunity to scale their solutions globally.
One of the key ways in which Citi supports this cross-border Programme is by mentoring a select group of Nordics fintechs who work on “Enabling Deep Tier Financing”. Specifically, on how to design products and platforms that enable working capital to trickle down deeper within supply chain networks and ensure supply chain resilience by improving access to funding for SMEs and mSMEs. This is particularly important for industries with multilayer supply chain networks, where there are huge potential for disruptive innovation.
For years, Citi has been actively engaged in identifying, connecting with and mentoring startups to help them make their ideas come to life. Citi is the bridge between brilliant ideas and the potential market. We have no plans to stop what we are doing and on the contrary, we intend to accelerate this forward momentum to foster more and relevant sustainability-driven innovations far beyond the financial industry that will help people and communities thrive.
Country Head, Citi Denmark
APAC head for Programs & Strategic Partnerships, Citi Ventures.