Nuns urge Citigroup to rethink financing of fossil fuel projects

An order of nuns has called on Citigroup to repent and change its ways, accusing it of attempting to “minimise its role” in providing cash to a company involved in controversial oil pipelines in North America.

Ahead of Citi’s AGM on April 25, the Sisters of St Joseph of Peace, who own a small stake in the bank as part of their wider investment portfolio, filed a resolution calling on the board to report on what it was doing to protect indigenous rights affected by its project and corporate financing decisions.

In the resolution, the nuns and three co-filers, which are also religious groups, said Citi had “provided over $5bn to [pipeline company] Enbridge, enabling the widely opposed Enbridge Line 3 and Line 5 pipeline reroutes”.

The pipelines, which carry oil from the US to Canada, have been linked to oil spills, while projects to replace and reroute the lines have been opposed by indigenous communities, who say they are damaging to their lands and ways of life.

Citi has urged shareholders to oppose the nuns’ resolution, saying it is “untrue” it has financed the Enbridge Line 3 and Line 5 projects.

But in a response filed to the regulator this month, the nuns claimed Citi provided $5bn to Enbridge between 2016-2020, which “enabled projects like Line 3 and Line 5”. In the case of Line 3, they argued Enbridge did not apply for financing specifically for the project and instead used general corporate financing to fund its operations.

“Citigroup’s . . . statement makes claims about its financing activities related to Enbridge Line 3 and Line 5 pipeline projects in an attempt to minimise its role in enabling these projects.”

Citi declined to comment.

The row is a sign that corporate financing has become a new battleground for activists and shareholders who want to stop banks from financing polluting industries.

Sr Susan Francois, who is the treasurer of the Sisters of St Joseph of Peace, a Roman Catholic order based in the US and UK, said that whether it is through project financing or general corporate lending, Citigroup has a “responsibility to ensure its business activities aren’t contributing to indigenous rights violations.

“Investors are concerned to see Citigroup enabling projects like Enbridge Line 3, Line 5, and oil and gas operations . . . that threaten our climate, public health, and Indigenous communities,” she added.

A similar resolution last year received support from the one-third of Citi shareholders that voted.

Arielle Swernoff, campaign manager at climate finance NGO Stop the Money Pipeline, accused the bank of misleading its shareholders by claiming it did not provide financing to the Enbridge pipelines.

“The bank knows only too well that the money it has provided to Enbridge has enabled the company to fund the damaging Line 3 and Line 5 projects,” she said.

In a regulatory filing ahead of the AGM, Citi said: “In sensitive sectors such as oil and gas, Citi reviews clients to evaluate environmental and social policies and practices and to identify if these clients’ operations may pose potential risks to sensitive areas such as indigenous communities or traditional lands, or areas of high biodiversity.”

Many banks have made net zero commitments on carbon emissions and cut financing for coal and other carbon-intensive projects, but campaigners say they continue to support fossil fuels via general corporate financing.

Earlier this year, a group of more than 30 big investors wrote to European banks urging them to focus more on the climate implications of their general financing. Asset financing for specific oil and gas projects represents only eight per cent of total cash provided to the industry, the group said.

Additional reporting by Stephen Gandel and Patrick Temple-West