Why Costco Should Clean Up Its Citi Credit Card

This is a re-publication of a blog from Third Act. Read the original blog here.

Costco is in a pickle (and we’re not talking about free samples): they’re partnered with Citibank, one of the world’s dirtiest banks. Since 2016, Citi has funneled a staggering $332 billion into new fossil fuel investments. As the third largest retailer in the US, Costco, along with its vast membership base, is a massive client of Citi.

That’s where you come in. Sign this petition to tell Costco to drop Citi as its credit card issuer if Citi doesn’t clean up its act.

Climate-driven catastrophes are wreaking havoc worldwide with devastating consequences for communities. Even Costco’s own stores have had to evacuate due to wildfires and severe flooding. From dangerous heat waves to destructive hurricanes, climate extremes are worsening.

We all deserve a future worth living, free from climate chaos and the pollution caused by dirty fossil fuels. The giant oil, coal, and gas corporations––bankrolled by institutions like Citi––are obstructing our transition to clean, renewable energy. Big box retailers like Costco are uniquely positioned to hold the banks to account.

Costco is a beloved brand. It strives to keep prices low and recently adopted na decent climate policy. Its motto is simple but powerful, “do the right thing.”

Since our founding, Costco has operated under the guiding principle of doing the right thing – for our members, our employees, our suppliers, our communities, and the environment. We understand that when we do the right thing, good things happen.

We want Costco to do the right thing here and demand change from Citi. That’s why we’re launching the Costco: Clean Up Your Credit Card campaign, spearheaded by Third Act, Stop the Money Pipeline, Stand.earth, Climate Organizing Hub, New York Communities for Change, and other dedicated partners.

 

The Climate Problem with Costco’s Banking & Credit Card

We’ve got the receipts on Citi: Citi is the second biggest funder in the world of dirty fossil fuels, providing more than $330 billion in financing to fossil fuel companies and projects since 2016, and is the largest US funder of coal. This funding is making it possible for big oil, gas, and coal companies to keep expanding dirty, polluting projects that are contributing to relentless climate disasters. The Wall Street banks are growing even bigger from corporate cash, retail customers, and credit card profits. From credit card partners to the cash it keeps in the banks, large retailers like Costco need to take the climate impacts of its financial relationships into account and compel its banking partners to stop undermining its own climate progress..

To demonstrate the need for Costco to take into account the climate impacts of its banking, Third Act and Stop the Money Pipeline commissioned analysis of Costco’s “financial carbon footprint” by TOPO, a “think and do” tank known for its work on The Carbon Bankroll report in 2022, which revealed the hidden and substantial climate impacts of corporate finance. TOPO’s analysis estimated that the pollution stemming from Costco’s cash in the banks it uses is more than one-third of Costco’s greenhouse gas pollution from its own operations. TOPO’s analysis is based on an average across US banks and is not Citi-specific, since Costco does not disclose publicly which banks it uses, separate from its credit card partnership.

If Costco considered the emissions generated by its banking as part of its operational carbon footprint, these estimated “cash emissions”—a total of 1.53 million metric tons of planet-heating carbon dioxide—are its biggest single source of carbon pollution, even more than the emissions from all the energy used in Costco’s warehouse stores for lights, heating, refrigeration, and deliveries. This amount is equivalent to more than 340,500 gasoline-powered vehicles driven for one year, or 1.7 billion pounds of coal burned, or 3.8 gas-fired power plants operating for one year (using EPA’s Greenhouse Gas Calculator). That’s a lot of pollution!

 

The Solution: Costco, Push Citi on Climate or Else Drop Citi

Costco is one of Citi’s largest credit card clients. Citi makes a lot of money from its relationship with Costco, and you know what banks care about? Money. That’s why Costco has the power to persuade Citi to stop financing fossil fuel expansion or else to switch to a better credit card bank partner that isn’t wrecking the planet. By pushing Citi on climate or ending its credit card relationship with Citi, Costco can step up, keep its own climate promises, and compel Citi to stop funding fossil fuels.

In keeping with Costco’s existing climate policy and commitments, Costco should include the financed emissions associated with the banks it uses in its own annual reporting on its carbon footprint, just as it will report on the emissions associated with the suppliers of the products it sells. This will reflect Costco’s true carbon footprint. Lastly, Costco should include climate-friendly criteria in its requirements for how it selects its bank service providers, including credit cards.

Costco has the opportunity to be a leader among large retailers by addressing the climate impacts of its banking relationships. There are other credit card company options, and reporting a company’s complete carbon footprint will soon be required by a new law passed in California.

 

What You Can Do

We know that Costco cares about its reputation. Costco listens to its members, and Citi listens to Costco.

You can join us by signing this petition urging Costco to drop Citi as its credit card issuer if Citi doesn’t stop financing fossil fuels.

While Costco members have a special voice, anyone concerned about climate can sign the petition. To win this campaign, we will need lots and lots of people to sign. So, let’s make sure Costco hears from members and non-members alike!

There are other ways you can help too, as described in the FAQs below. Many of us like shopping at Costco—free samples, infamous cakes, bulk buys, $1.50 hot dogs—and we’d like it even more if Costco shopped for a better, cleaner, climate-friendly credit card.

Read the blog on Third Act’s website.

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Case Study: Citibank Funds Oil Expansion in Amazonia

In 2017, Citibank was the sole underwriter on $615.3 million USD in bonds issued by Petroamazonas (now PetroEcuador) to repay debts to vendors and service suppliers especially Schlumberger – the oil company owed over $850 million USD for oil drilling in the Shushufindi and Auca blocks in the Ecuadorian Amazon between 2015 and 2017. Citibank’s involvement in the deal also lent much-needed credibility to the state-run oil company, which went on to start a massive drilling campaign with Schlumberger in the ITT Block in Yasuni National Park.

In 2020 Citibank, along with Itaú Unibanco, provided GeoPark with a bridge loan to secure GeoPark’s acquisition of Amerisur — a small Colombian oil producer with a history of polluting Indigenous territory in the Amazon. Citibank and Itaú Unibanco then acted as book-runners for a $350 million USD bond issuance for GeoPark that raised the capital to pay for the purchase. The Amerisur acquisition brought GeoPark into the Colombian Amazon and with it all of Amerisur’s dirty legacy in the Putumayo, including the Platanillo block where Indigenous Siona peoples allege that Amerisur polluted their waterways and compromised their health and livelihoods. GeoPark saw the acquisition as an opportunity to use the Platanillo block, the most commercially viable block in Amerisur’s operations, as a “steady cash flow base” while expanding oil production in other “highly prospective exploration licenses” i.e. expanding oil production to other blocks that overlapped Indigenous territory in the Putumayo (e.g. PUT-8, PUT-9, and PUT-12) where GeoPark had capital commitments in 2021.

5 teal charts with white numbers in the upper middle and name of five banks below each of the five charts

In 2022, Citibank took a leading role in bond issuances made by Eneva SA, including raising capital for the construction of TPP Azulão, a 295-megawatt natural gas-fired thermoelectric plant in the state of Amazonas. The plant has faced opposition from Brazilian environmental groups who point out that the plant was rushed through environmental permitting with no time for proper impact assessment for a project that threatens local air and water quality and will contribute significantly to greenhouse gas emissions. The plant will generate electricity from the Azulão gas fields, which started production in 2021 and will expand to meet the growing demand.

Citibank has played a deciding factor in supplying the financing and credibility for oil expansion in Ecuador, Colombia, and Brazil.

In each case, Citibank has played a deciding factor in supplying the financing and credibility for oil expansion in Ecuador, Colombia, and Brazil. For a bank that wants to “drive the transition to a net zero economy and make good on the promise of the Paris agreement,” as CEO Jane Fraser was recently quoted as saying, Citibank is not putting its money where its mouth is. Citibank should immediately stop financing the expansion of oil and gas in Amazonia instead of continuing to do business on a path that will certainly break the promise of staying under 1.5C envisioned by the Paris Agreement.

This is a re-publication of a case study on Citibank from the 2023 Capitalizing on Collapse report. Read the original case study published at Stand.earth here.

TELL A FRIEND:

Read the full Capitalizing on Collapse Report

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Report: The Top Banks Financing Amazon oil and gas

A new report “Capitalizing on Collapse” by Stand Research Group shows the complicity of leading banks, including JPMorgan Chase, Citibank, Itau Unibanco, HSBC, and Banco Santander, in the deforestation of Amazonia.

Here are our top findings:

  • The culprits are clear: 8 fossil fuel banks are responsible for the majority of $20 billion USD in direct financing for oil and gas companies destroying the Amazon; 5% of banks provide over 55%.
  • Their influence runs deep: These banks act as enablers of influence and power of the fossil fuel industry in the region: including backing corruption, financing projects that will impact Uncontacted Peoples and Indigenous rights, or financing carbon bombs.
  • Big money flows through loopholes: Banks increasingly cannot trace how the money lent to oil and gas companies is spent, making it practically impossible to ensure financing compliance with their own environmental, social, and climate commitments.

As we enter a new era of climate chaos, it is imperative that banks financing oil and gas in Amazonia. Amazonia is a globally significant region for Indigenous stewardship, climate change mitigation, and biodiversity.

Read the full report at the Stand.earth’s website

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Citi talks green, but it’s a major coal backer

Coal is the most damaging fossil fuel. So a sustainable bank would want to make sure it’s not funding coal extraction right? Well, US bank Citi is a massive funder of coal companies. And not just any old coal companies – the ones that are still expanding their coal digging. It’s a huge threat to the climate.

Every week there seems to be fresh evidence of just how much Citi and other banks are helping fossil fuel companies to grow their business. And this week is no exception.

Global Energy Monitor set out to investigate why coal projects – like coal-fired power stations – are growing (mostly in Asia), when all the banks have supposedly cut off financing for them all together.

They found that banks haven’t actually cut off financing for all coal at all. Instead of lending money earmarked for building specific projects like power stations that run on coal, banks just hand large sums of money to the companies building and operating them. So they’re technically not giving money to “coal projects”, they’re handing it to the companies that own the projects.

Sneaky right?

Banks essentially just hand big credit cards to coal companies and pretend like they don’t know what they’re going to do with the money. But we all know what they’re doing with the money.

And which bank comes out as the biggest culprit for these sorts of deals? Hmmm maybe the next subheading will tell us:

Citi is the top funder of coal developers:

It’s our favourite bank – Citi. The same bank that said in August that its coal policies are “in sync with climate science”. The same bank that is supposedly all about transitioning to a ‘net-zero’ economy by 2050. The same bank that is supposedly a leader among US banks on climate.

Global Energy Monitor looked specifically at which of Citi’s clients are still building *new coal* developments despite having to resign coal to the bin in order to stay within safe climate levels. They found that Citi had lent nearly $16 billion to these clients between 2019 and 2021.

Richard Brooks, climate finance director at Stand.earth, says:

“In 2022 it requires willful ignorance, if not outright malice, to pour billions in financing into the dirtiest fossil fuel. Yet this data shows that Citi is all in on developing completely new coal projects to lock in carbon pollution for decades. Citi is the only member of the top 20 funders of coal that is not a Chinese or Japanese bank. By providing nearly $16 billion to new coal developers between 2019 and 2021, Citi surpasses the next US bank by over 50 per cent. These numbers are outrageous for a bank committed to ‘net-zero’ and with an existing coal policy. Citi must make a hard turn closing all loopholes in their existing coal policy and stop more money going into coal expansion otherwise any remaining illusion that Citi is a leader on climate change should be abandoned.”

So what do we need to happen?

We need Citi and all US banks to update their current policies to exclude any company from its loanbook that is still building new coal. It’s simple. And it’s doable.

What is a bond?

Another interesting finding from the report is that these nasty coal companies are accessing funding via a (slightly) secretive backdoor. Instead of relying on general loans, they are issuing bonds. It’s just another way of getting them money. Global Energy Monitor found that on average 82% of the money for coal companies comes from bonds, compared to loans.


And Citi plays a major role in the bond market. A bond is a way for companies to raise cash. Banks act as a gateway to connect the company with big investors and Citi is more than happy to ignore its climate commitments and oblige, because they can earn big fees on these deals.

Nick Haines, a campaign manager with SumOfUs working on the Toxic Bonds campaign, says: “Citi is performing sleight of hand – distracting investors and regulators with a half-finished coal policy, while behind its back facilitating a phenomenal amount of coal financing via bond markets without scrutiny. Does Citi think it can magically achieve its climate targets and ignore underwriting?”

Citi are greenwashing. They are not green or sustainable. They are cutting the brakes while the world is hurtling off a cliff. Citi MUST stop funding coal NOW. 

Read at Bank On Our Future

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Report: Citigroup: Top Financier of State-run Oil Companies in the Amazon

Indigenous leaders and federations directly impacted by oil drilling are calling on Citigroup to commit to exit Amazon oil and gas.

The Amazon is the last place on the planet that the oil industry and industrial extraction should be expanding and it is time for banks to step up and ensure that they aren’t complicit in harming Indigenous rights and the continued degradation of this critical region.

With the Amazon rainforest at the tipping point of ecological collapse, Citigroup’s lack of an exclusion policy and exit strategy on Amazon oil and gas presents a significant reputational risk

This is a re-publication from Stand.earth. Read the original post here.

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