If a transaction impacts any of the following Areas of High Caution, ESRM will conduct enhanced due diligence The ESRM team reviews transactions subject to policy and benchmarks against relevant industry standards/ best practice, identifying opportunities for improvement and engagement. Environmental and Social Risk Management Our Environmental and Social Risk Management (ESRM) Policy helps us identify potential risks within the billions of dollars in global transactions we facilitate worldwide. This policy also sets a frame - work for us to evaluate how our clients are managing those risks. Our ESRM Policy Our E SRM P olicy, w hich i s su mmarized publicly i n o ur Environmental a nd So cial Policy F ramework , h elps u s fi nance projects a nd a ctivities r esponsibly b y engaging o ur c lients o n en vironmental and s ocial r isks a nd b est p ractices. W e established t he P olicy i n 2 003, a nd we c ontinue t o e volve o ur a pproach i n response t o e merging r isks a nd n ew product d evelopment. I n 2 021, w e updated o ur E SRM P olicy b y a dding a policy p rohibition a gainst fi nancing f or companies c onstructing or op erating private p risons a s a p rimary b usiness. Although t his h as n ot b een a n i ssue f or our c ompany i n t he pa st, w e dec ided t o formalize t his c ommitment t hrough a n official p olicy u pdate. Our comprehensive ESRM Policy covers a broad scope of financial products and client sectors and guides how we assess client impacts on air quality, water quality, c limate c hange, b iodiversity, l ocal communities, labor, human rights and other environmental and social issues. Our i nternal p olicies a nd p rocedures reference i nternational i ndustry s tan - dards, such as the International Finance Corporation’s Environmental and Social Performance Standards and the World Bank G roup’s E nvironmental, H ealth, a nd Safety Guidelines. Where relevant, we also require clients to adhere to sector and commodity-specific guidelines and certifications such as the Roundtable on Sustainable Palm Oil and the Forest Stewardship C ouncil. Citi’s ESRM Policy at a Glance ESRM Policy objective: Effectively assess and manage the environmental and social risks associated with financing client activities in sectors with sensitive environmental and social impacts. A transaction or client relationship may trigger the ESRM Policy for three reasons: Citi’s ESRM Sector Approaches apply sector-specific review requirements for certain clients in sensitive sectors Citi’s ESRM Policy also includes a number of prohibitions for highest concern environmental and social risks. Refer to the ESRM section of Citi’s Environmental and Social Policy Framework for more information. Transactions with use of proceeds directed to a specific physical asset or project Clients in sectors considered particularly high risk by Citi Clients/transactions with impacts to an Area of High Caution 1 2 3 Coal Mining Oil & Gas Military Equipment Mining Palm Oil Coal-Fired Power Forestry Firearms • Conflict risk • Indigenous rights • Critical habitat and cultural heritage • Human rights, including environmental justice • Involuntary resettlement Contents ESGatCiti SustainableFinance SustainableProgress Equitable&ResilientCommunities Talent&DEI RiskManagement&ResponsibleBusiness Appendices CITI 2021 ESG REPORT 115