Confidential report warns Citigroup of billions of loss in loan book from climate action
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Citigroup could face significant financial losses in its loan portfolio if global efforts to address climate change accelerate, as indicated by a confidential analysis conducted by the bank and reviewed by Reuters.
This analysis was prepared last summer by Citigroup in anticipation of a submission to the Federal Reserve outlining its strategy for addressing climate-related impacts.
Similar submissions were required from five other major US banks following instructions from the Fed.
Also read: Canada boosts biofuel industry with multi-billion dollar support package
Reuters could not determine how much of the information from the reviewed document was included in Citigroup’s official submission, as the bank declined to comment on this matter.
According to the analysis, if global actions to combat climate change accelerated to achieve net-zero greenhouse gas emissions by 2050, Citigroup could face $10.3 billion in loan losses over a 10-year period.
This amount is higher than the projected $7.1 billion loss if climate change efforts do not intensify.
“When a company’s pace of transition is too fast or too slow with respect to the actual underlying market transition pace, it can suffer losses,” Hopper said.
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