Banks Back Sustainable Cities
Citi has been involved in a project in Brazil that demonstrates how cities can be more sustainable. For three weeks in April, myself and Derek Rego, from transaction banking, worked in Porto Alegre, the capital and largest city in the Brazilian state of Rio Grande do Sul, with a population of around 1.5 million people.
We were invited to participate in IBM’s Smarter Cities Challenge program, which has sent a team of executives (usually all from IBM), to 100 cities over the last three years. Porto Alegre’s goal for our three-week project was to learn about how technology – social media, mobile and data processing – can make their city smarter so that decision-making is better informed, citizens are more engaged and citizens’ daily lives are improved.
Citigroup launched its CitiBike program in New York. Hopefully, similar programs can spread to other cities around the world.
Urban expansion puts pressure on the natural environment, but there are solutions. Energy and resource efficiency can be encouraged with smart incentives and commuting times (and pollution) can be reduced with low-cost apps to make travel more efficient for cars, buses, and taxis. Citi has a role to play in sharing best practices between cities, capitalizing new urban technology companies, and helping cities access capital for their infrastructure projects. For example, Porto Alegre currently treats only 27 percent of its sewage but a new treatment plant will increase that to 80 percent in the next year. The cost is relatively modest for a city of 1.5mm, at roughly $600 million, and loans are repaid almost entirely from future revenues of the water & sewer system. A cleaner river will not only improve livability but will open up the old industrial waterfront for re-development, increasing the return of this kind of environmental investment for the local economy.
We can also use our knowledge for smaller scale solutions. For example, Porto Alegre is often flooded because surrounding trees have been cut down and the city is paved with impermeable surfaces. Here in the U.S., we’ve seen how Philadelphia consumers can install plants on their rooftops and replace impermeable surfaces with permeable surfaces in their parking lots, all through the levying of lower utility charges for these properties. Those sorts of investments take time to pay off. However, sustainability is not about tomorrow. It’s about building up long-term assets to enable a more sustainable planet for us and future generations.