Citi Perspectives Spring 2020

ESG risks are a core part of Citi’s risk management approach and have had a demonstrable impact on activity. As part of a broad environmental and social risk management (ESRM) policy, Citi has established sector standards for a number of high-risk sectors. If clients do not meet the relevant standards, Citi will work to get the client into alignment, or we may not be able to continue doing business with them. For instance, in support of sustainable palm oil, Citi only lends to firms that adhere to the Roundtable on Sustainable Palm Oil. Similarly, our sector standards for both coal-fired power and coal mining focus on key financial, environmental, social risks in those sectors. Taking action on climate risk Citi is at the forefront of efforts to improve climate disclosure in line with the work of the Task Force on Climate-related Financial Disclosures (TCFD), which was established by the G20 group of nations to develop voluntary, consistent climate-related financial risk disclosures for use by companies, banks, and investors in providing information to stakeholders. We see the TCFD framework as a critical tool for assessing and disclosing climate risk across our company. To further that investigation, we are evaluating methodologies to measure the carbon intensity of our credit portfolio and to guide engagement and financial solutions for clients seeking to reduce their own carbon impact. Citi is focused on taking the necessary steps to make our company more sustainable, with the understanding that this will help us to better manage our risks and will create new business value.