Banking

A Citigroup executive offered details on a new group focused on helping clients transition to sustainable energy

  • Citigroup announced the formation of a new clean energy-focused advisory group Thursday.
  • The group is an outgrowth of its existing natural resources and clean energy transition group.
  • Sandip Sen, cohead of the NRCET group, shared more details with Insider about the new subdivision.
  • See more stories on Insider’s business page.

Citigroup is taking steps to build out a specialized unit within its banking, capital markets, and advisory division concentrated on advancing clients’ sustainability efforts.

The clean energy transition (CET) group, a division of Citi’s recently-established natural resources and clean energy transition (NRCET) banking advisory group, will be set up effective immediately, per an internal memo reviewed by Insider. The memo was sent by Steve Trauber and Sandip Sen, the NRCET group co-heads.

The CET bankers will address the needs of clients in sustainable subsectors like clean-energy technology and equipment, renewable natural gas, bio-fuels, and other arenas, Trauber and Sen said in the memo.

The CET group will work closely with other sectors within the banking, capital markets, and advisory division, including the energy, power, and chemical sectors, Trauber and Sen said. They named Serge Tisman and Shail Mehta, both Citigroup managing directors, as the co-heads of the nascent group.

Among the division’s priorities will be working on behalf of “private and public companies as well as VC and PE firms focused on energy transition and their respective portfolio companies,” the bankers wrote in the memo.

Speaking on Thursday at the Financing Net-Zero live forum hosted by Insider, Sen described the formation of the new group and expressed enthusiasm for it.

“The goal is really to expand the pie for ourselves, in a selfish way,” he said. “But more so, and equally important, helping existing clients and new ones that get borne out of this absolutely global super-mega trend that is energy transition.”

As part of its formation, existing bankers within the NRCET division would be assigned to work specifically within this new CET subdivision, Sen said.

Speaking more broadly about the formation of the NRCET group, which was first announced in late March, Sen said Citigroup has assessed a growing demand for sustainability-focused services and advisory.

“The thought behind setting up this group is to formalize and put discipline around the coverage and the nurturing of what we believe will be a new subsector of clean-energy transition companies,” Sen said during the live event.

“What it entails is the emergence of new companies, existing companies being restructured, and this can come about via IPO, via spinoff, via asset sales — all of the above.”

Citigroup has big goals for sustainability

Citigroup has made several recent announcements pertaining to moving toward sustainability commitments.

On her first day as CEO of the bank on March 1, chief executive Jane Fraser committed that Citigroup will achieve net-zero greenhouse gas emissions by the year 2050.

Speaking at Insider’s live event on Thursday, Sen described the connection between Citi’s own internal net-zero 2050 goal and its impact on how it advises clients as a “symbiotic relationship.”

“To the extent that our clients are not, sort of, complying or coming along, we are here to help them,” Sen said. “It’s not so much a warning shot,” but rather, he said, a way of supporting them in moving toward sustainable objectives.

“We’re helping clients think through how they allocate capital, how they are valued based on how they allocate that capital,” he said.

The market for sustainable-focused deals has been seeing a surge in growth in recent months. Indeed, sustainable-focused M&A amounted more than $58 billion in deal volumes in the first quarter of 2021, according to Refinitiv.

On the debt capital markets side, sustainable bond issuance reached $286.5 billion, an all-time high.

Reuters first reported the news of Citigroup’s new clean energy transition group on Thursday.

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