Respecting Human Rights in Our Financing Decisions Effectively evaluating human rights risks related to our clients and the projects we finance is challenging. We work diligently to meet this challenge and respect the human rights of the individuals and communities impacted by the clients we finance and their projects. We have established policies and practices that help us influence the protection of human rights. For instance, our anti-money laundering efforts help us prevent crimi - nally sourced funds — including funds asso - ciated with human rights abuses, such as human trafficking — from passing through our bank. Disrupting the flow of money to those perpetrating human rights abuses and denying those abusers safe harbor for illicit proceeds tied to corruption or human rights violations are effective ways to undermine their efforts. Additionally, under our U.S. Commercial Firearms Policy, adopted in 2018, we require clients or partners that are U.S. firearms retailers or firearms manufacturers that sell through U.S. retail channels to adhere to a set of best practices regarding the sale of firearms. For retailers, these practices include selling firearms only to individuals who have completed a background check, not selling high-capacity magazines or bump stocks (which modify semiautomatic firearms to fire faster, at rates comparable to fully automatic firearms), and selling firearms to individuals under age 21 only if they have received firearms safety training (e.g., as part of active or former military or law en forcement em ployment o r v ia hu nter safety training). For manufacturers, best practice entails selling firearms only to retailers that follow these same practices. Such examples illustrate our ability to proactively avoid certain business trans - actions with adverse impacts on human rights, but other situations can occur in which the link between our financial services and human rights impacts is less direct. That complexity may mean we have less leverage, and it diminishes our ability to ensure that on-the-ground outcomes are consistent with Citi’s values. In these instances, we work to improve our clients’ awareness and business practices. In addition, where a transaction’s financial and legal structure allows it, we put loan covenants in place and monitor mitigation efforts through our ESRM systems and corrective action plans. Due Diligence in Client Transactions Citi has thousands of corporate and insti - tutional clients. The UN Guiding Principles acknowledge the challenges presented by extensive business relationships, and we have adopted the approach set out in the UN Guiding Principles of prioritizing our due diligence and risk mitigation first in areas where the risk of adverse human rights impact is most significant from the perspective of the people who may be affected. We use our ESRM Policy, where applicable, to assess and manage risks consis - tently and to evaluate client operations against a common set of standards grounded in international best practice, including the UN Guiding Principles on Business and Human Rights, ILO Forced Labour Indicators, Voluntary Principles on Security and Human Rights, and International Finance Corporation (IFC) Performance Standards, among other international human rights norms and emerging standards. Our ESRM team screens transactions covered by our ESRM Policy during the initial marketing Contents ESGatCiti SustainableFinance SustainableProgress Equitable&ResilientCommunities Talent&DEI RiskManagement&ResponsibleBusiness Appendices CITI 2021 ESG REPORT 130