Citigroup raises record US$40b for ESG financing in Asia

[WASHINGTON] Citigroup raised a record US$40 billion for Asia-Pacific clients to finance sustainability projects this year, a sixfold increase from 2020 as the US lender strives to meet its global targets and help firms lower emissions.

Issuers in the region are taking advantage of cheaper financing by issuing green bonds, tapping increased demand for these products as environmental, social and governance investing becomes more mainstream, the bank said in a statement on Tuesday.

"We view sustainable financing both as a mandate and as an opportunity to partner with our clients across geographies - to help them decarbonise their operations and achieve their enterprise sustainability goals," said Peter Babej, chief executive officer for Asia-Pacific. New York-based Citigroup announced in April a US$500 billion environmental finance goal, as part of a wider US$1 trillion sustainable finance target by 2030.

The US bank is expanding efforts in sustainable financing, from helping investors reposition their portfolios toward greener industries to corporates realigning their business models through acquisitions and divestitures. It also created the ESG World Indices, offering a benchmark for investor clients to help them transition portfolios toward ESG.

Citigroup's deals included Alibaba Group Holding's US$5 billion offering in February, which featured a 20-year sustainability tranche. The bank also arranged a US$2.5 billion bond for SK Hynix in January with a 10-year green tranche. In Indonesia, it led a US$3 billion sukuk offering for the government which included a 30-year green bond - the longest-ever green Islamic offering, according to the release.

The bank has committed to reducing the environmental footprint of its 7,000 facilities in close to 100 markets, including installing 360 solar panels at its office in Hong Kong.

BLOOMBERG