by David Sassoon

It's a coincidence that this Tuesday both the registered Democrats of
Pennsylvania and CitiGroup's shareholders will be casting their votes.
In Pennsylvania, it's a choice between Obama and Clinton, and at Citi
there's a proxy statement full of issues -- but in both cases the
troubling face of climate and coal is on view.

With 47,000 coal workers in Pennsylvania and West Virginia --
critical states for both nomination and election -- Obama and Clinton
have been campaigning along a tight rope suspended between the opposite
poles of a glaring contradiction: promising strong climate action and a bright future for coal.

Citi's shareholders face a choice laden with a similar contradiction.
They have a stake in a bank that has promised vigorous action on
climate change, yet financing coal is an important source of profits.
In fact, Citi is one of the leading financiers of mountaintop removal
mining (MTR).

Now shareholder proposal #9 (on page 86 of the 2008 Proxy Statement available here) is asking shareholders to tell the bank to stop dirtying its hands with profits from coal:

Resolved: Shareholders request Citigroup’s board of directors amend
its GHG emissions policies to cease all financing, investment and any
further involvement in activities that support MTR coal mining or the
construction of new coal-burning power plants that emit carbon dioxide.

Management has written a comment in vigorous opposition to the measure.

Disengagement from sectors, as the proposal recommends, and from
the clients that comprise these sectors, would undermine Citi’s
position, limit our ability to lead the sector, and cede control of our
business and influence to competitor institutions....ceasing Citi’s
involvement in coal-related ndustries would not be in the best
interests of Citi’s stockholders, and adoption of this proposal could
undermine Citi’s numerous initiatives.

Among the other arguments management uses is its adoption of the
"Carbon Principles" for evaluating investments, and other green
credentials. But a document being circulated to the media
by the Rainforest Action Network (RAN) gives a detailed counterpoint to
the bank's progressive claims and turns the greenwash brown.

RAN explains that the Carbon Principles are merely a process
document which does "not lay out performance criteria for power
companies nor lay out certain transactions that signatories will
avoid." Furthermore,

Despite signing the Carbon Principles, Bank of America
and Citi continue to invest in coal-fired power plants. In March 2008,
just one month after the release of the Carbon Principles, both banks
were part of a lending syndicate that provided $3.2 billion in
financing to Duke Energy. Duke is moving forward with plans to build
several controversial coal-fired power plants in North Carolina and
Indiana.

Still, no one is under any illusion that the shareholder proposal #9
will win approval. There is still great tolerance for glaring
contradiction -- both in Pennsylvania and in the banquet rooms of the
NY Hilton where Citi will hold its Annual General Meeting -- so don't
expect the political and financial climate to change much on Tuesday.

The forecast will remain troubling -- climate action with a strong likelihood of a lot more coal.

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