Tag Archives: Citigroup Inc

How much the largest banks have invested in fossil fuel: report

Major banks around the world are still financing fossil fuel companies to the tune of trillions of dollars.

A new report, published Wednesday from a collection of climate organizations and titled Banking on Climate Chaos 2021, finds 60 of the world’s largest commercial and investment banks have collectively put $3.8 trillion into fossil fuels from 2016 to 2020, the five after The Paris Agreement was signed.

“This report serves as a reality check for banks that think that vague ‘net-zero’ goals are enough to stop the climate crisis,” says Lorne Stockman, a Senior Research Analyst at Oil Change International, one of the organizations authoring the report, in a statement released with the report. “Our future goes where the money flows, and in 2020 these banks have ploughed billions into locking us into further climate chaos.”

On an annual basis, total fossil fuel financing dropped 9% in 2020. But the report attributes that to Covid-19-related restrictions on demand.

The report also found that “fossil fuel financing … from the world’s 60 largest commercial and investment banks was higher in 2020 than it was in 2016,” the first full year the Paris climate greement was in effect. It is worth noting that President Donald Trump withdrew from the international agreement in 2017. President Joe Biden rejoined The Paris Agreement on his first day in office.

The three banks that did the most fossil fuel financing in 2020, according to the report, were JPMorgan Chase at $51.3 billion; Citi at $48.4 billion; and Bank of America with $42.1 billion.

A representative of JPMorgan Chase told CNBC Make It that the bank could not comment on a third party report. But the bank did direct CNBC Make It to its initiatives addressing climate change, including “adopting a financing commitment that is aligned to the goals of the Paris Agreement” and facilitating $200 billion in clean, sustainable financing by 2025.

Citi directed CNBC Make It to a blog post published Tuesday from Val Smith, the bank’s Chief Sustainability Officer. In the post, Citi said it will work with existing fossil fuel banking clients to transition first to a public reporting of greenhouse gas emissions and then to a gradual phase out of financing offered to companies that don’t comply in adhering to carbon reduction standards.

“As the world’s most global bank, we acknowledge that we are connected with many carbon-intensive sectors that have driven global economic development for decades,” Smith wrote. “Our work to achieve net zero emissions by 2050 therefore makes it imperative that we work with our clients, including our fossil fuel clients, to help them and the energy systems that we all rely on to transition to a net-zero economy.”

Bank of America did not immediately respond to CNBC Make It’s request for comment.

The Banking on Climate Chaos 2021 report comes as indicators show global economies are not currently on track to meet the emissions reductions established as part of The Paris Agreement in 2015.

The 2020 report is the 12th annual, though the scope of the report has expanded in that time. The report was a collaboration by seven non-profits: Rainforest Action Network, Bank Track, Indigenous Environmental Network, Oil Change International, Reclaim Finance, and Sierra Club.

The report authors aggregate bank lending and underwriting data using Bloomberg’s league credit methodology, meaning credit is divided between banks playing a leading role in a given transaction, and uses data from Bloomberg Finance L.P. and the Global Coal Exit List.

Also, banks are given the opportunity to weigh in on the findings. “Draft report findings are shared with banks in advance, and they are given an opportunity to comment on financing and policy assessments,” the report says.

See also:

Here’s what you need to know about ‘the social cost of greenhouse gases’—a key climate metric

This Google X spin-off is offering a pathway to heat and cool your home with clean energy

Bill Gates: Nuclear power will ‘absolutely’ be politically acceptable again

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250 CEOs and execs express “alarm” over largest tax hike in New York history

New York state Gov. Andrew Cuomo speaks at a news conference on September 08, 2020 in New York City.

Spencer Platt | Getty Images

A group of 250 CEOs and business leaders sent a letter to New York’s governor and legislators expressing “alarm” at what they say could become the largest spending and tax increase in the state’s history.

The letter, delivered to Gov. Andrew Cuomo and Democratic members of the state Assembly and Senate, urged politicians to postpone any tax increases until after the state and New York City have more fully recovered from the pandemic and workers return. As employers of over 1.5 million people, the executives said many of their workers have moved out of the city and if taxes increase “they will vote with their feet.”

“Only about 10% of our colleagues are in the office and prospects for the future of a dense urban workplace are uncertain,” the letter said. “Many members of our workforce have resettled their families in other locations, generally with far lower taxes than New York, and the proposed tax increases will make it harder to get them to return.”

Signers of the letters include JPMorgan Chase CEO Jamie Dimon, BlackRock Inc. Chairman and CEO Larry Fink, Pfizer Chairman and CEO Albert Bourla, Citigroup CEO Jane Fraser and JetBlue CEO Robin Hayes. The group said “significant corporate and individual tax increases will make it far more difficult to restart the economic engine and reassemble the deep and diverse talent pool that makes New York the greatest city in the world.”

“This is not about companies threatening to leave the state; this is simply about our people voting with their feet,” the letter said. “Ultimately, these new taxes may trigger a major loss of economic activity and revenues as companies are pressured to relocate operations to where the talent wants to live and work. This is what happened to New York during the 1970s, when we lost half our Fortune 500 companies, and it took thirty years to recover. “

Gov. Cuomo’s office did not immediately respond to a request for comment.

Democratic members of the state Assembly and Senate have proposed a series of tax increases on companies and high earners that could top $6 billion a year. They say the pandemic increased inequality in New York and higher taxes on companies and high earners are needed to fund social programs and reduce the wealth gap.

Yet New York’s budget picture has improved recently. The state is set to receive $12.5 billion in unrestricted funds from the federal stimulus bill and New York State Director Robert Mujica said the stimulus funds and stronger-than-expected tax revenues would allow the state to avoid planned budget cuts.

The group said it understands the “urgent human needs” and inequities exposed by the pandemic but that proposed tax increases or changes in policy should come after New York’s recovery.

“Once we are on a path toward restoring more than one million jobs and thousands of small businesses that New York has lost in the past twelve months, there may well be need to raise new revenues to fill the gaps in our education, health and social welfare systems,” the letter stated. 

Rebecca Bailin, Campaign Manager for Invest in Our New York, an effort to fund social programs by taxing the wealthy, said the letter was “250 wealthy people in their homes pleading for status quo.”

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Hilton Grand Vacations, J&J, NRG Energy & more

Take a look at some of the biggest movers in the premarket:

Hilton Grand Vacations (HGV) – The timeshare company posted a wider-than-expected loss for its latest quarter, while revenue was also below Wall Street forecasts. Hilton Grand Vacations said the pandemic has created a challenging environment but said 85% of its properties are now open and operating. Its shares fell 2.3% in premarket trading.

NRG Energy (NRG) – The energy provider reported better-than-expected profit and revenue for its latest quarter, and also said the financial impact of the extreme weather in Texas is expected to be within NRG’s current guidance range. The company’s shares jumped 5.5% in the premarket.

Perrigo (PRGO) – Perrigo shares initially jumped 4.1% in premarket action after the drugmaker announced a deal to sell its Generic Rx Pharmaceuticals business to private-equity firm Altaris Capital for $1.55 billion in cash and other considerations. The gains disappeared, however, after Perrigo reported lower-than-expected earnings for its latest quarter as sales fell.

Johnson & Johnson (JNJ) – J&J rose 2.1% in the premarket after its Covid-19 vaccine received emergency use authorization from the Food and Drug Administration over the weekend, followed by an endorsement from the Centers for Disease Control and Prevention. Administration officials say deliveries of the vaccine should begin Tuesday.

Berkshire Hathaway (BRK.B) – Berkshire reported a 23% increase in fourth-quarter profit to $35.8 billion, helped by a surge in the value of Berkshire’s stock market holdings. Berkshire also bought back nearly $25 billion in stock during 2020, with CEO Warren Buffett explaining in his annual letter that the move increased shareholder value while still leaving ample cash for other opportunities that might arise. Berkshire Class B shares rose 2.1% premarket.

Twitter (TWTR) – Twitter rose 1% in premarket trading after it announced its intention to sell $1.25 billion in convertible notes due in 2026, subject to market conditions.

Walmart (WMT) – The retailer dropped its $35 minimum charge for its two-hour express delivery service. However, the $35 minimum will still apply for regularly delivery, curbside pickup and Walmart+ delivery services. Walmart shares rose 1% in the premarket.

L3Harris Technologies (LHX) – The defense contractor struck a deal to sell its military training division to Canadian aerospace company CAE (CAE) for $1.05 billion. The deal will enhance CAE’s defense business.

Logitech (LOGI) – Logitech shares fell 1.5% premarket after it said operating income for fiscal 2022 would be between $750 million and $800 million, down from the $1.1 billion it expects to report for fiscal 2021. Logitech had seen a boom in demand for devices like computer mice and keyboards due to the pandemic, with more people working and attending school from home.

Twilio (TWLO) – Twilio is in talks to invest up to $750 million in messaging company Syniverse Technologies, according to people familiar with the matter who spoke to The Wall Street Journal. They said that the expected investment by the cloud communications company would value Syniverse – currently owned by private-equity firm Carlyle Group (CG) – at $2 billion to $3 billion. Twilio rose 2.3% in premarket action.

AstraZeneca (AZN) – The drugmaker sold its stake in Moderna (MRNA) for more than $1 billion, according to the London Times. The paper said the sale occurred after Moderna shares soared following approval of its Covid-19 vaccine, although the exact timing was unclear. Moderna shares rose 1.8% in premarket trading.

Vector Acquisition (VACQ) – The special purpose acquisition company will take space transportation startup Rocket Lab public through a merger deal that values Rocket Lab at $4.1 billion. The deal is expected to be completed during the second quarter. Vector shares surged 17.1% in premarket trading.

Wayfair (W) – The home goods retailer’s shares rose 2.1% in the premarket after Truist Securities upgraded the stock to “buy” from “hold,” saying it sees an improved picture for long-term profitability and a faster growth trajectory.

Catalent (CTLT) – The pharmaceutical technology company has been struggling with vaccine production problems, according to a report in the Financial Times. Catalent fills vaccine vials for both Johnson & Johnson and Moderna, and the report said issues with automation technology have meant that vials have had to be checked by hand.

Citigroup (C) – Citigroup shares rose 2.1% in premarket trading as Jane Fraser takes over as Chief Executive Officer of the bank today, becoming the first woman to run a major U.S. bank.

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Forget bitcoin — fintech is the ‘real Covid-19 story,’ JPMorgan says

A woman uses a Bitcoin ATM machine placed within a safety cage on January 29, 2021 in Barcelona, Spain.

Cesc Maymo | Getty Images

Bitcoin is an “economic side show” and fintech innovation is the story that will dominate financial services, according to JPMorgan.

Analysts at the bank said that, despite bitcoin’s monster rally, the cryptocurrency is still beset by a number of issues that may prevent it from becoming a mainstream asset.

“Bitcoin prices have continued their meteoric rise with Tesla, BNY Mellon and Mastercard’s announcements of greater acceptance of cryptocurrencies,” JPMorgan said in a research note last week.

“But fintech innovation and increased demand for digital services are the real Covid-19 story with the rise of online start-ups and expansion of digital platforms into credit and payments.”

Bitcoin has gained traction with major Wall Street banks and Fortune 500 companies, a development which has boosted its price and saw it hit $1 trillion in market value last week.

Investors have drawn comparisons between bitcoin and gold, viewing the former as a new digital store of value thanks to its limited supply — the total number of bitcoins that will ever exist is capped at 21 million.

JPMorgan’s own strategists say that bitcoin could rally as high as $146,000 as it competes with gold as a potential hedge against inflation in the coronavirus crisis.

Still, skeptics remain unconvinced. Economists like Nouriel Roubini say that bitcoin and other cryptocurrencies have no intrinsic value. And a recent Deutsche Bank survey said investors view bitcoin as the most extreme bubble in financial markets.

Digital gold?

JPMorgan’s strategists said current bitcoin prices appear to be “unsustainable” unless the cryptocurrency becomes less volatile. They added their $146,000 price target hinged on bitcoin’s volatility “converging to that of gold,” which would likely take years to happen.

Meanwhile, cryptocurrencies have “questionable diversification benefits” and rank as the “poorest hedge” against significant drops in stock prices, JPMorgan’s analysts said.

JPMorgan has been making a push into blockchain technology with its own cryptocurrency called JPM Coin and a new business unit called Onyx.

The rise of digital finance and demand for fintech alternatives is the “real financial transformation story of the Covid-19 era,” according to JPMorgan.

“Competition between banks and fintech is intensifying, with Big Tech possessing the most potent digital platforms due to their access to customer data,” the bank said.

“‘Co-opetition’ between ‘Fin’ and ‘Tech’ players lies ahead, with banks stepping up investment to narrow the technology gap, and the battle between US banks and non-bank fintech is also playing out on the regulatory front.”

Major tech firms like Apple and Google have shown increased interest in financial services lately. Apple launched its own credit card in partnership with Goldman Sachs, while Google is letting its users open checking accounts following a tie-up with Citigroup.

“Traditional banks could emerge as endgame winners in the digital age of banking due to their advantage from deposit franchise, risk management and regulation,” JPMorgan said.

Digital banking has boomed in the coronavirus era, with large lenders and fintechs alike seeing a surge in adoption as people are spending more time at home due to public health restrictions.

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