High-Level Summary of Bank’s Response (continued) We also consider activities of the Citi Foundation and Impact Fund, where they complement Citi’s ESG-related goals and efforts alongside our core business activities. In the future we will consider corporate underwriting. Context and Relevance From the feedback pathways described in the Citi’s Approach section above, we maintain awareness of the most relevant sustainable development challenges and priorities in the countries and regions in which we operate. Below, we discuss our focus on climate change mitigation globally and racial equity in the United States. Global Context: The climate crisis is one of the most critical challenges facing our global society and economy in the 21st century. The data is irrefutable and the world’s climate scientists agree: Urgent action must be taken to address the current and potential impacts of climate change, including chronic changes to temperature and precipitation, diminishing polar sea ice, rising sea levels and more intense and frequent extreme weather events. 2021 was the sixth warmest year on record. That year, we experienced devastating wildfires on the West Coast of the U.S. and in Australia, and one of the most active hurricane seasons in the Atlantic. Additionally, the Intergovernmental Panel on Climate Change’s (IPCC’s) 6th Assessment Report, released in 2021, further highlights the urgent need to address climate change. Reports also show that vulnerable and marginalized communities are likely to bear a disproportionate share of any physical climate impacts. U.S. Context: A wide range of data and studies have found that many major gaps in economic opportunity, education, income, housing and wealth run along racial lines, particularly between Black and white households. Some gaps remain wide 60 years after the civil rights movement and some, including in homeownership rates and college degree attainment, are even wider now. These gaps have not only had implications for Black Americans and other people of color but the broader economy as well. Over the last few years, the disproportionate impact of COVID-19 on communities of color and growing demand for racial justice further highlighted the impacts of racial inequity. Intensity and Salience Climate Change: We have employed a number of tools to assess the intensity and salience of climate change impacts: We published baseline emissions for our Energy and Power loan portfolios in accordance with the Partnership for Carbon Accounting Financials (PCAF) standard and established emissions targets, with intentions to analyze the emissions of other carbon-intensive sectors in the future. Several industry-wide initiatives also identify corporate lending as a key impact area with potential to mitigate climate change: • The PCAF standard was established to assess financed emissions with an initial focus on lending • The UNEP FI Guidelines for Climate Target Setting for Banks (“UNEP FI Guidelines”) focus on lending and investment activities • PCAF also formed a Capital Markets Working Group, with which Citi has been involved, to develop standards for measuring emissions associated with underwrit - ing activity — an area of activity that Citi will also explore for its potential impacts. Racial Equity: For over 20 years, Citi and the Citi Foundation have invested in organizations and partnerships that support financial inclusion and expanding economic opportunities for low- income families and communities of color, such as the Asset Building Policy Network. Through engagement with these and other stakeholders, including minority depository institutions (MDIs), we have enhanced our understanding of the structural inequities that fuel the racial wealth gap and their impact on communities. Numerous publications and research reports articulate the scale, intensity and salience of racial equity (see External References). Additionally, the Citi GPS report, Closing the Racial Inequality Gaps, articulates the economic impacts of the racial wealth gap. The analysis in the report shows that if four key racial gaps for Black people — wages, education, housing and investment — had been closed 20 years ago, $16 trillion could have been added to the U.S. economy. And if the gaps were closed as of 2020, $5 trillion could have been added to U.S. GDP over the next five years. Next Steps Our work towards addressing our areas of greatest impact is never complete, and we anticipate the following areas of activity as we move toward further implementation of the principles. Climate Change: As per our NZBA commitments, we will set targets for and establish baseline emissions for additional carbon-intensive sectors, such as Auto Manufacturing, Commercial Real Estate, Steel and Thermal Coal Mining, with additional sectors such as Agriculture, Aluminum, Cement, Iron and other segments of the Transportation sector to follow, as methodological capabilities evolve to accommodate them. Additionally, once a capital markets methodology is finalized and published by PCAF, Citi plans to integrate these emissions into annual disclosures and targets. Racial Equity: As discussed in the Action for Racial Equity section of this report, we seek to lead and expand firmwide engagement with MDIs, diverse broker-dealers and diverse asset managers through our newly formed Diverse Financial Institutions Group. We are also conducting a third-party racial equity audit to assess our efforts to address the racial wealth gap in the United States through implementation of Action for Racial Equity . Biodiversity: We recognize that loss of biodiversity globally is an increasing emergency, and we are continuing to expand our understanding of the complex dynamics between climate and biodiversity. These two topics are interconnected, and there are increasing concerns that climate change, along with other human activity, has significantly stressed natural systems and contributed to ongoing extinction events. Although there is increasing focus on biodiversity, there has historically been limited information available to understand how companies rely on and impact natural capital as well as natural capital’s impact on climate. Citi is a member of the Taskforce on Nature-Related Financial Disclosures (TNFD) Forum and participated in an informal working group prior to the TNFD’s launch to develop its workplan to create a complementary framework to TCFD focused on reporting evolving nature-related risks. For our impact analysis, we have identified impacts associated with our core businesses and their portfolios as described in the introduction to this section. We may further refine this process and increase the scope of our impact analysis as we explore different methodologies in subsequent reporting. Contents ESGatCiti SustainableFinance SustainableProgress Equitable&ResilientCommunities Talent&DEI RiskManagement&ResponsibleBusiness Appendices ESGS ataC ius niblnG 159