Our Net Zero Commitment In 2 021, w e an nounced ou r c ommitment to n et z ero g reenhouse g as ( GHG) emissions b y 2 050, i n a lignment w ith the o bjectives o f t he P aris A greement and p revailing c limate sc ience. R educing Scope 3 fi nanced e missions 1 is widely recognized a s t he m ost s ignificant contribution t he fi nancial i ndustry c an have t o a chieving a l ow-carbon e conomy. Our c ommitment w ill in clude in terim financed e missions r eduction t argets f or carbon-intensive se ctors, as d escribed b y the U N E nvironment P rogramme F inance Initiative ( UNEP F I) G uidelines f or C limate Target S etting f or B anks. T o d ate, w e h ave set 2030 e missions t argets for our Energy and P ower l oan p ortfolios. For our own operations, we are targeting net zero GHG emissions by 2030, which builds on our environmental footprint goals and the 100% renewable electricity goal that we achieved in 2020. (Learn more in the Sustainable Operations section .) The approach and activities related to our net zero commitment are distinct from our management of climate risk for our firm. While our net zero commitment is keenly focused on Citi’s impacts on the climate and reducing GHG emissions to net zero across our value chain, our climate risk management efforts are focused on Citi’s safety and soundness, and thus on the integration of climate risk into our risk management governance, processes and strategies. Although these two priorities differ in their primary focus, they are related to and reinforce each other, leading to mutual benefits. As we execute on our net zero commitment, the resulting reduction in financed emissions will help to reduce our climate transition risk. Citi’s net zero ambition builds on our commitment to the UNEP FI Principles for Responsible B anking , our leadership in climate disclosure in alignment with the TCFD and our ESRM Policy — specifically our Sector Approaches related to fossil fuels. Transparency and accountability are keys to success, and we will report annu - ally on our net zero progress. Our commitment to net zero is significant, given the size and breadth of our portfolios and businesses. To achieve it, we must meet our clients where they are in their sustainability journeys and help accelerate their progress in this area. We will work with all our clients, including our fossil fuel clients, to develop credible plans that include the responsible retirement of carbon-intensive assets as we transition to net zero together. We will prioritize partnering with clients on transition strategies, and exiting client relationships is a last resort. Banks a re f acing g rowing p ressure t o divest f rom f ossil fu els. I n s ome i nstances, such a s thermal c oal m ining , w here t here is c redit r isk f rom s tranded a ssets i n addition t o c limate r isk, w e h ave a lready established a t ransparent t ime f rame f or our t ransition e xpectations. H owever, we a re c ognizant t hat l arge-scale, r apid divestment c ould r esult i n a n a brupt a nd disorderly t ransition t o a l ow-carbon economy, c reating b oth ec onomic a nd social u pheaval o n a g lobal s cale. F or example, c ertain c arbon-intensive c ompa - nies m ay p lay c ritical r oles i n c hanneling the n ecessary cap ital e xpenditures an d providing t he r aw m aterials t o su pport new c limate t echnologies o r m ay p rovide necessary ba seload p ower f or de veloping countries. An orderly, responsible and equitable transition, which accounts for the imme - diate economic needs of communities and workers as well as environmental justice and broader economic development concerns, is essential to retaining polit - ical and social support for the shift to a low-carbon economy. Under the goals of our net zero plan, we seek to balance these needs to facilitate this complex transition. Initial Net Zero Plan We released our initial net zero plans for our Energy and Power loan portfolios in our 2021 TCFD Report . The plans for these portfolios build upon the calculation of our financed emissions and the setting of interim 2030 emissions reduction targets for these sectors. Our net zero plan incorporates a twofold approach: assess - ment of our clients’ climate profiles and engagement to understand their transition opportunities. Additionally, we will employ a number of tools, phased in over time, to help move these portfolios toward our 2030 targets. Underlying the implementa - tion of this plan is Citi’s continued effort to expand our climate-related resources and engage directly with our clients. 1. Financed emissions are the GHG emissions generated by the operations and entities that financial institutions lend money to or invest in. Contents ESGatCiti SustainableFinance SustainableProgress Equitable&ResilientCommunities Talent& DEI RiskManagement&ResponsibleBusiness Appendices CITI 2021 ESG REPORT 38