ESG at Citi Sustainable Finance Climate Risk & Net Zero Sustainable Operations Building Equitable & Resilient Communities Talent & DEI Responsible Business Appendices Transforming Our Risk and Controls Environment Ethics and Culture at Citi Risk Management Human Rights Serving Our Customers and Clients Responsibly Responsible Sourcing Environmental The Risk Management Committee of our Board of Directors provides oversight in the area of climate ESRM Policy at a Glance and Social Risk risk and reviews and approves key risk policies, including those focused on environmental and Management social risk. Environmental and Social Policy Our ESRM Sector Approaches apply Framework: The ESRM Policy is sector-specific review requirements for Our ESRM Policy summarized publicly in our Environmental certain clients in sensitive sectors and Social Policy Framework, which Our ESRM Policy guides our approach to engaging ESRM TRAINING includes the following: • Agribusiness • Military Equipment with clients to help us responsibly mitigate • Scope of our ESRM Policy • Coal Mining • Mining environmental and social risks in our financing. We offer three web-based training modules We established the Policy in 2003, and we for employees globally to raise awareness on • Transaction types that trigger a review • Coal-Fired Power • Oil and Gas continue to evolve our approach in response to the scope of our ESRM Policy, with additional • Detail about risk-screening practices • Firearms emerging risks. For example, in 2022, we updated training on use of proceeds transaction and categories, independent reviews and our ESRM Policy to outline our expectations in requirements and ESRM Sector-Specific action plans the Agribusiness sector in sensitive ecoregions requirements. In addition, we offer custom- • Overviews of our Areas of High Caution, (see following page). ized virtual or in-person trainings covering sector-specific approaches and policy Our ESRM Policy also includes a number of topics such as environmental and social prohibitions prohibitions for environmental and social The ESRM Policy covers a broad scope of financial risks relevant to certain regions and sectors, risks of highest concern, such as projects products and client sectors and guides how we implementation of the Equator Principles and using forced labor or harmful child labor. our Sector-Specific requirements, as well Refer to the ESRM section of our Environ- assess client impacts and associated risks related as specific topics such as human rights and ESRM Policy scope: A transaction or client to air quality, water quality, climate change, biodi- mental and Social Policy Framework for biodiversity. relationship may trigger the ESRM Policy for more information. versity, local communities, labor, human rights three reasons: and other environmental and social issues. Our policies and procedures reference international 1 Transactions with use of proceeds If a transaction impacts any of the industry standards, such as the International Policy Implementation directed to a specific physical asset or following Areas of High Caution, Finance Corporation’s Environmental and Social Our centralized ESRM team, part of the Risk project ESRM will conduct enhanced due Performance Standards; the World Bank Group’s Management function, evaluates transactions Clients in sectors considered diligence: Environmental, Health, and Safety Guidelines; 2 that trigger review under our ESRM Policy. Because particularly high-risk by Citi • Conflict risk the Roundtable on Sustainable Palm Oil; and the the Policy is applicable broadly throughout our Clients/transactions with impacts Forest Stewardship Council. financing activities, we engage across the firm 3 • Indigenous rights to an Area of High Caution • Critical habitat and cultural Under our ESRM Policy, Citi screens for environ- with colleagues in banking, credit risk, climate risk, heritage mental and social risks in project-related risk and controls, and regulatory teams, among The ESRM team reviews transactions subject others, to share ESRM subject matter knowledge to policy and benchmarks against relevant • Human rights, including environ- transactions and clients subject to ESRM and learn from internal expertise. We provide industry standards and best practice, mental justice sector-specific requirements. In addition, the ESRM training to key risk and banking personnel identifying opportunities for improvement • Involuntary resettlement Policy includes Areas of High Caution, which globally, to help them identify potential risks and and engagement. identify flags for heightened risk factors to opportunities to engage with our ESRM specialist escalate to the specialized ESRM team for review team more effectively. regardless of financial product or sector. Citi 2022 ESG Report Page 71