Citi Shift on Amazon Oil Policy Will Still Allow Funding of Destruction

An updated policy included in Citi’s latest environmental and social risk management report will preclude the bank from directly financing new projects involving Amazon oil and gas expansion. But the vast majority of Citi’s financing goes to controversial companies operating in the Amazon, rather than the projects themselves. One of these clients includes state-run oil company Petroperú, which seeks to expand new oil drilling in blocks located in the Peruvian Amazon.

Citi poured $2.32 billion into oil and gas activities in the Amazon rainforest over the past 20 years, according to a recent report by Stand.earth and the Coordinating Body of Indigenous Organizations of the Amazon Basin (COICA). The report also shows that Citi’s policies exclude financing in areas that cover just 2% of the Amazon rainforest. 

Citi’s policy update comes as the bank faces weeks of disruptive protests at its headquarters in New York. On June 28, hundreds of protesters marched on the bank’s offices, including communities from Texas and Louisiana where Citi funds the LNG buildout in mainly Black and brown communities.

The shift in policy also follows pressure on the bank from investors over the impact of its funding on Indigenous communities, including those in the Amazon. Over one in four Citi investors for three years has backed a resolution on the issue by investor nuns from New Jersey, becoming a source of embarrassment for the bank. It also follows Citi’s move earlier this year to withdraw from the Equator Principles, a set of minimal guardrails on bank financing to limit their environmental impact and harms to frontline and Indigenous communities – removing a layer of accountability that Citi’s most recent policy change does not restore.

Companies that Citi will still be able to fund include Petroperú, which is responsible for oil spills and undermining Indigenous rights. Citi recently met a group of Indigenous leaders from the Peruvian Amazon who told the bank of the ongoing environmental destruction and the threats of violence they face for standing against it. In the weeks that followed, Petroperú suffered credit rating downgrades from Fitch and S&P Global. The company also admitted needing $2.2 billion to stay afloat, which also underscores the financial risks of pursuing controversial oil expansion in the Amazon. 

The delegation, which consisted of leaders from the Indigenous Achuar, Chapra, and Wampís Nations made the case that financing of clients such as Petroperú will push new oil expansion of the contentious oil Block 64 in the Peruvian Amazon, which groups say lacks free, prior, and informed consent. 

Citi has also funded Chilean oil and gas company Geopark, with a bridge loan of $350 million in 2020 alongside Itaú Unibanco. As with Petroperú, Geopark also faced stiff pushback from the Achuar against drilling in Block 64. Citi’s policy update will also allow it to fund state-run Petroecuador, which is drilling for oil in the Yasuní National Park, causing forest clearing, oil spills, and gas flaring which is affecting Indigenous communities and habitats. 

Olivia Bisa Tirko, President of the Autonomous Territorial Government of the Chapra Nation, said: 

“We are victims of the ethnocide of those who finance oil companies and especially Petroperú. Petroperú wants to exploit Block 8, Block 192, and Block 64. And we have said very clearly that we are going to give our lives to defend Block 64. We will not allow exploitation because it threatens the millions of biodiverse species in the Amazon and human lives. Defending the Amazon and the land is synonymous with defending human life.” 

Mary Mijares, Fossil Finance Campaigner at Amazon Watch said: 

“This policy is a hollow promise that fails to state meaningful measures on how Citi will hold clients like Petroperú accountable for destructive Amazon oil expansion plans and contamination threatening Indigenous peoples today.”

Sister Susan Francois of the Sisters of St Joseph of Peace, Citi shareholders and lead filers of a shareholder resolution on Indigenous rights which for three years has attracted support from more than one in four investors, said:

“We are concerned that this policy update at Citi will still allow funding of destruction in the Amazon. This updated policy will not address the risk that investors face through Citi’s funding of companies operating in the Amazon and it will not address the human rights abuses taking place there. Pope Francis has made clear the call of the Church to stand with Indigenous communities in protecting Earth, our common home. We will continue to use our influence as Citi investors to ask the bank to do better.”

Quentin Aubineau, Policy Analyst, BankTrack climate team:

“With the exclusion of project finance for Amazon oil and gas expansion, Citi’s new policy only tackles a tiny part of the bank’s activities. According to the Banking on Climate Chaos 2024 report, Citi’s total fossil fuel financing in 2023 was $30.2bn, but only $0.12bn for Amazon Oil and Gas. Citi should stop delaying significant climate action and urgently exclude finance for any oil and gas expansion projects and companies developing them.”

Jilianne Lyon of Investor Advocates for Social Justice, said:

“Bank policies that only address project-specific financing are insufficient. For three years, investors have demanded that Citi mitigate its harm to Indigenous Peoples. This policy update ignores the majority of the company’s impacts and exposes its investors to significant legal and reputational risk.”

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