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Citigroup to Introduce ESG-Focused Investment Banking Unit

Zacks Equity Research
·2 mins read

Citigroup C is introducing a new unit — Sustainability & Corporate Transitions group — in its corporate and investment bank, which would advise companies on their environment, social and governance (ESG) strategies. The news was reported by Reuters.

Tapping on the increasing popularity of environmental sustainability among corporate clients and investors amid the coronavirus pandemic, Citigroup is mulling to reallocate about 100 mid-ranking bankers and employ senior-level dealmakers into the new unit.

The new group will be headed by banking, capital markets and advisory chief strategy officer, Bridget Fawcett, and Keith Tuffley, who has been looking after the unit's sustainability initiatives.

The Wall Street biggie will also create a Global Sustainability Client Council, consisting of its senior bankers and a separate advisory group supported by external advisers with expertise in sustainability transactions and innovation in the sector.

The article quoted Tyler Dickson and Manuel Falco, global co-heads of Citigroup’s banking, capital markets and advisory group, “The current COVID crisis will elevate the importance of ESG to our clients, as they increasingly focus on more sustainable and resilient strategies,”.

Of late, investors have been showing interest in sustainable investing. BofA Global Research estimates that the amount invested in ESG funds could rise $15-20 trillion over the next two decades.

Thus, several major banks have made efforts in the space. PNC Financial PNC issued its first green bond in November 2019 to fund eligible projects that promote a transition to a low-carbon economy. Also, JP Morgan (JPM) pledged $200 billion between 2017 and 2025. Earlier this month, Deutsche Bank DB announced plans to invest €200 billion in sustainable business activities by the end of 2025.

Shares of Citigroup have slumped 39.9% over the past six months compared with a 36.4% decline recorded by the industry.

The company currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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