Artifice, cunning, deception, hoax or sleight? Call it what you will, this wheeze allows Citigroup to invest in oil and gas projects without affecting its climate targets. How does it do it?
The Abu Dhabi National Oil Company (ADNOC), the UAE’s state oil company, wanted $3.5 billion to help it run its oil and gas operations. Citigroup was happy to help.
“But, but, but…don’t banks have climate targets?” you may expostulate. Well spotted. They do indeed. So the cash is loaned to two chemical companies, Borouge and Fertiglobe.
So, that’s OK then, surely.
Not quite. ADNOC owns a majority 54% stake in Borouge, and an 86.2% shareholding in Fertiglobe.
“So on paper, the bank lent some money to a chemicals business,” a banker with knowledge of the deals said. “But in reality they handed billions to one of the largest oil producers.” according to The Bureau of Investigative Journalism.
“You have to wonder how many other banks are doing similar things,” said Lucie Pinson, executive director of Reclaim Finance, a group campaigning for banks to stop financing fossil fuels.