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Citigroup Says 42% of Clients Have No Energy Transition Plan

More than 40% of Citigroup’s clients lack a “substantive plan” for cutting their emissions to align with net-zero ambitions or are unlikely to transition at all, the bank’s latest climate report showed.

The report, published earlier this week, is based on initial results from its net zero review template, which monitors its clients’ readiness to adapt to the energy transition.

Among the energy sector, according to Citigroup, 42% of its clients have a “low” transition-plan alignment, and 29% have a “medium-low” score—meaning they do have a clear climate plan, but they may not have the means to execute that plan.

For the bank’s power-sector clients, things are more optimistic for reaching stated goals, with 59% of customers within this industry having “strong” transition plan alignment.

In 2022, Citigroup pledged net-zero emissions by 2050, with a 29% absolute reduction in financed emissions in the energy sector by 2030, and a 63% reduction in portfolio emissions intensity in the power sector. This only works, however, if their clients follow through with their own emissions reduction programs.

Citigroup’s CEO Jane Fraser said that the bank is “working side-by-side with clients to help them achieve their goals, whilst remaining highly mindful of near-term energy needs and related economic impacts.”

Fraser has suggested that talking about “energy evolution” rather than “energy transition” would be more appropriate.

“This shift will not be linear and will include a series of cumulative leaps and tipping points over the next few decades.”

Last summer, Citigroup recommended that traders short oil after summer was over, estimating a 200,000 bpd surplus in the oil markets in 2023, and a 1.8 million bpd surplus in 2024, with too little demand growth and extra supplies expected to come from non-OPEC+ and OPEC+ alike. In January of this year, Citi adjusted its Brent forecast to $74 this year.

At the time, Brent was trading around $84.60 per barrel—roughly $3 under where it is today.

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By Julianne Geiger for Oilprice.com

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  • Mamdouh Salameh on March 28 2024 said:
    Like increasing customers of ESG, 42% of Citigroup's clients are reported to have no energy transition plans.

    This trend is gaining momentum because many investors and customers either believe that the notions of energy transition and net-zero emissions by 2050 or 2100 or ever are illusion or they are too costly to implement. Moreover, many of them sincerely believe that oil and gas will be with us well into the future.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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