Citigroup has been implicated in facilitating a staggering $3.5 billion flow of funds to the Abu Dhabi National Oil Company (Adnoc), one of the world’s largest oil producers and significant contributors to global greenhouse gas emissions. This financial maneuver raises significant concerns about the integrity of climate commitments made by major financial institutions, particularly in light of the urgent need to combat climate change.

Citigroup’s involvement in this transaction was ostensibly indirect. The bank helped raise capital for two chemicals companies, Borouge and Fertiglobe, which are partially owned by Adnoc. This financial structuring allowed Citi to funnel substantial payouts to Adnoc without explicitly accounting for the emissions tied to lending directly to the oil giant.

A banker familiar with the transactions explained that arranging financing for chemicals companies is notably easier than securing loans for oil companies. The banker stated, “If you try and get a loan approved to an oil major, you get asked all sorts of questions: ‘Blah, blah, the ESG [environmental, social, and governance] ranking of the borrower.’ Basically, it’s a huge pain to get organized.” This indicates a systemic loophole that banks can exploit to bypass stringent environmental scrutiny while still enabling fossil fuel companies to thrive.

The mechanism involved a series of loans that collectively raised $4 billion for Borouge in December 2021. Following the loan, Adnoc profited significantly, earning $1.2 billion from the sale of its shares in Borouge and an additional $408 million from........

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