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Citigroup – Citi Warns of ‘Significant’ Improvement in Carbon Tax Loan Losses | Zoom Fintech

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Citigroup – Citi warns of ‘significant’ improvement in carbon tax loan losses

Citigroup Inc. has found that swift enactment of a carbon tax would apparently lead to a major improvement in losses on loans the bank has made to certain oil and petroleum companies.

In a unique situation modeled by the lender, which applied a tax of $ 50 for every ton of carbon dioxide produced by exploration and manufacturing companies over a three-year interval, Citigroup noticed a “significant but manageable increase in expected losses, “according to a report. launched Thursday.

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“It’s an eye-catching train to check a portfolio of buyers in a rapidly emerging carbon price scheme and perceive what’s going on and which buyers are resilient and what are the substances for resilience, ”said Val Smith, Citigroup’s director of sustainability, in an interview.

Citigroup printed the report – the second of its form – as part of the agency’s pledge to implement a collection of suggestions made by employment pressure on monetary disclosures related to local weather. For the latest version of the report, shareholders asked the lender to assess additional short-term local weather risks that Citigroup buyers may face, Smith said.

Throughout the report, the lender has distinguished between the dangers of transition – those associated with the financial system’s transition to much less carbon use, such as new local weather insurance policies or applied science – and bodily hazards, as well as those produced by the bodily impacts of climate change, such as rising seas or excessive weather events.

In evaluating its portfolio, Citigroup found that it lends to 25 industries facing an excessive stage of transition threat or bodily threat.

“It was important to publish this information so that our investors and other stakeholders can really begin to understand where we are exposed and to what extent this is of higher climate risk,” Smith said. “It gives information on where we are going to focus.”

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Wall Street is making high calls for a higher measure and to manage the impacts of their loans on local climate change. Citigroup, one of the largest lenders to vitality businesses, said earlier this year that it would measure and disclose emissions linked to its loan portfolio and strive to fund $ 250 billion of sustainable stocks of by 2025.

Citigroup has already started pressuring President-elect Joe Biden and Congress to adopt “ambitious” local climate change options, government chief executive Michael Corbat said in Thursday’s report.

“We understand that climate change is an increasingly important issue for our regulators, investors and customers,” Corbat said. “We know there is a long way to go – and quickly.”

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