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 Due Diligence in Client Transactions Identifying Human Rights Risks in Transactions Citi has thousands of corporate and institutional clients. The UN Guiding Principles acknowledge Our ESRM team screens transactions under the due diligence phase, our requirements we do in project-related financing, we still the challenges presented by extensive business the ESRM Policy for potential human rights include gaining access to project assessment identify sensitive sectors where we screen relationships, and we have adopted the risks. The specific types of human rights information that allows us to benchmark for potential elevated human rights risks and, approach set out in the UN Guiding Principles of risks we screen for are outlined in the table according to relevant standards, supported when identified, review our clients’ human prioritizing our due diligence and risk mitigation below. Further data related to ESRM Policy by a qualified independent consultant. rights policies and practices. This prioriti- first in areas where the risk of adverse human screening can be found in the Environmental If a project is not aligned with applicable zation leads us to evaluate our clients’ ability rights impact is most significant from the and Social Risk Management section. international standards, we will not approve to avoid, minimize, manage and mitigate perspective of the people who may be affected. financing unless we are satisfied that the potential human rights risks. We engage our We use our ESRM Policy and review process Project-related transactions: When human client has appropriate plans and capacity to clients to understand their implementation of to screen transactions for social impacts, rights risks are identified, the ESRM team mitigate project risks. those policies, whether they have adequate assess and manage risks consistently and might decline to approve the opportunity staffing to manage these issues, and we evaluate client operations against a common outright (if the risks are deemed too high to General corporate-level transactions (e.g., review and encourage strong disclosures of set of standards grounded in international best address) or outline what further due diligence renewing revolving credit facilities, issuing human rights policies. practices, including those related to human would be needed and which standards corporate bonds): Although we do not rights. See the Environmental and Social Risk would need to be met for the transaction have the same direct leverage and access Management section for details. to proceed. If an opportunity progresses to to information in general financing that Access to Remedy The UN Guiding Principles call on governments Human Rights Risks Screened During Transaction Reviews and companies to play their respective roles Conflict Risk: Project-induced conflict risk, which may be tied to competition for resources or land in ensuring that victims of human rights abuse have access to effective remedy. Remedy can Cultural Heritage: Properties and sites of archaeological, historical, cultural, artistic and religious significance; unique environmental features and cultural take many different forms, including apologies, knowledge; intangible forms of culture embodying traditional lifestyles financial or nonfinancial compensation, or Environmental Justice: Potential environmental risks to historically marginalized communities, especially surrounding industrial developments efforts to prevent future harm through policy Indigenous Peoples: Concerns regarding the extent to which Indigenous communities are consulted during project development and have consented to commitments and changes in operational impacts to their land, livelihood and cultural heritage practice. Labor Risks: Risks related to labor forces used in the construction of projects or other operations, including those associated with forced labor, child labor When we are made aware of potentially severe and human trafficking by project operators and their subcontractors adverse human rights impacts related to our Resettlement: Resettlement of local communities, including Indigenous groups, as necessary for project implementation; requires resettlement action plans financing of a client, our approach to remedy and should include efforts to gain the free, prior and informed consent of Indigenous communities usually involves working with clients to ensure Security Practices: Concerns about how project sponsors engage with public or private security forces protecting project sites they have the right policies in place and that channels are available to enable victims to lodge Water: Project-related impacts that hinder access to water or negatively affect water quality for local communities grievances. In addition, in line with our ability to prioritize adverse impacts based on severity, we Citi 2022 ESG Report Page 81