Citigroup has urged a Malaysian logging company to seek Forest Stewardship Council certification as part of new environmental policies adopted by the bank.
The bank’s stance has been commended by environmental groups who claim Rimbunan Hijau, a client of Citigroup, has a history of illegal logging actitivities and human rights abuses.
The Rainforest Action Network said the bank’s constructive engagement with the logger set a precedent in the business world and showed that Wall Street was taking a lead over Washington in tackling environmental issues.
A coalition of socially responsible investors has spent the past five years advising Citigroup to reduce business risks by considering impacts to ecosystems and local communities affected by its financing decisions.
One investor said Citigroup’s action showed how environmental policies could help protect endangered forest regions and long-term shareholder value. He predicted such policies would become more common in the banking industry.
