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Citigroup creates new investment-banking unit as part of clean energy commitment

March 29, 2021, 3:27 PM UTC

Citigroup Inc. will combine three of its investment-banking groups as part of its push to help large corporate clients transition away from using carbon.

Steve Trauber and Sandip Sen will oversee the new natural resources and clean energy transition group, which includes the energy, power and chemicals franchises. The unit will work with other coverage areas, including industrials and technology, according to a memo to staff from Tyler Dickson and Manolo Falco, global heads of Citigroup’s banking, capital markets and advisory unit.

“Energy transition, structural changes underway in global energy systems to drive toward low and zero carbon solutions, will unfold and accelerate over the next decade,” Dickson and Falco said in the memo Monday. “Our chemicals, energy, and power clients, ranging from multinationals to fast growing alternative and clean-energy companies, are at the heart of energy transition, helping to drive new products, services and technologies.”

The move is part of a broader push at New York-based Citigroup to reduce carbon emissions. Jane Fraser, who took over as chief executive officer on March 1, vowed on her first day that the bank would achieve net-zero greenhouse gas emissions in its financing activities by 2050.

Read more about Fraser’s vow to achieve net-zero emissions

Banks have long acknowledged that the hardest part of achieving such goals is ensuring the businesses they finance are also becoming carbon neutral. Citigroup, which was the third-largest provider of financing to fossil-fuel companies last year, has also promised to set specific targets for carbon-intensive sectors such as energy to reduce their emissions by 2030.

“Our view is, we want to be a leader in these industries and we want to be a leader in the evolution toward a future that includes decarbonization and clean energy,” Dickson said in an interview.

Citigroup is also among top Wall Street banks ramping up sales of bonds linked to environmental, social and governance issues. Last year, the company raised $1.5 billion with a dollar-denominated green bond, its first.

Citigroup last year created a new unit known as the sustainability and corporate-transitions group inside its investment bank, led by Keith Tuffley and Bridget Fawcett. The so-called “super group” announced Monday will work alongside Tuffley and Fawcett’s operation, according to the memo.

Trauber will primarily focus on the group’s efforts in investment banking, while Sen will oversee its corporate-banking relationships.

The firm’s chemicals, energy and power investment-banking groups will continue to be managed by their current heads: Paul Smith, Michael Jamieson, and Jack Paris and Philip ten Bosch, respectively. Todd Mogil, David Jaffe and Marie-Christine Olive will also continue in their roles on the corporate-banking side.

“Currently, energy, power and chemicals are separate groups,” Dickson said. “As we think about transition opportunities and the future of clean energy, uniting these teams makes a lot of sense to us.”

—With assistance from Caleb Mutua.