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Sustainability and
Innovation at Citi
Baruch College
April 1, 2008
Val Smith
Vice President
Environmental Affairs
Agenda
I. Citi Snapshot
II. Environmental and Social Risk Management
–Case Study: The Equator Principles
III. Climate Change Strategies
–Case Study: The Carbon Principles
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I. Citi Snapshot
• Founded in 1812, 400,000 employees, 200 million customer accounts,
100+ countries
• 14,500 properties, 94 million square feet
• 4 business units:
– Global Cards
– Consumer Banking
– Institutional Clients Group
– Global Wealth Management
Corporate Environmental Affairs works across business units to:
• Develop sustainability strategies
• Support and advise the business units on sustainability initiatives
• Engage with stakeholder groups
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II. Environmental and Social Risk Management
We know that environmental and social risk can translate to financial risk …
In Climate Controversy,
Industry Cedes Ground
News – England Protest over cement
factory plans
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Ecuador: Soldiers Clash
with Oil Protesters
Stones Kill 4 Indonesian
Officials in U.S. Mine
Protest
An Economic Boon In
Uruguay Becomes A Bane to
Argentina
II. The Equator Principles
•
The Equator Principles apply to project finance and are based on the
World Bank and IFC Performance Standards and Environmental
Health and Safety standards
•
Citi was a developer and founding adopter, and led the revision of the
Principles in July 2006
•
A total of 60 financial institutions are signatories, representing
approximately 88% of all project finance
•
Citi expanded the Equator Principles into a broad Environmental and
Social Risk Management Policy, which we apply to a wide range of
transactions where we know the use of proceeds.
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II. Equator Principles Case Study
• Large infrastructure project in India
• Client approached Citi to act as the sole
arranger for the project, in part because of our
expertise on environmental and social risk
• Project involved land acquisition and
resettlement of people, including vulnerable
groups such as scheduled tribes and castes,
and female-headed households
• We recommended an independent expert on
Indian resettlement to help advise
• Citi worked with the client and the independent
expert to develop a comprehensive plan for the
project to comply with the Equator Principles.
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III. Climate Change Strategies
Feb 2007: Position Statement on Climate Change
• Called on U.S. Congress to create a market-based national policy to
reduce greenhouse gas emissions
• U.S. Policy should:
– Recognize early actors
– Leverage market forces to establish price signals for GHGs
– Reward energy efficiency and emissions avoidance, encourage lowGHG technology R&D
– Ultimately fit into a global international framework
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III. Climate Change Strategies
May 2007: $50 billion climate announcement
– Demonstrates scale and breadth of client activities
– Represents Citi positioning to provide climate expertise and solutions
– Includes targets for all primary business units
– Includes $10 billion target for reducing our operational footprint
NEW YORK, May 8 (Reuters) - Citigroup Inc. (C.N:
Quote, Profile , Research), the largest U.S. bank,
said on Tuesday it plans to commit $50 billion to
environmental projects over the next decade, the
biggest commitment from Wall Street to address
climate change.
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III. Climate Change Strategies
$50 Billion Announcement – some examples
• Comverge IPO
– Wireless metering
• US Green Bonds
– Destiny USA (Syracuse, NY)
– 100% renewable
• Client advisory
– Exposure/mitigation analysis
• Sustainable Development Investing (private equity)
– Solarfun solar (China)
– SCC Sindicatum
• Investment Research Reports
– Approximately 300 climate-related reports in 2007
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III. Case Study: The Carbon Principles
Feb 2008: Carbon Principles are announced
– Enhanced due diligence framework for power financing
– Developed by Citi, JP Morgan Chase, and Morgan Stanley
– Purpose is to manage climate change risk in electric power
finance in the U.S.
– Advisors included environmental groups and power companies –
Environmental Defense Fund, Natural Resources Defense
Council, AEP, CMS Energy, DTE Energy, NRG, PSEG, Sempra
and Southern Co.
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III. Case Study: The Carbon Principles
• Growing climate change and CO2 concerns
• Federal and state confused policy landscape results in conflict at the
project level
• Banks held accountable for financing emissions
• Need for enhanced process (due diligence) to evaluate new financings
• Need for credible response to growing public and environmental
concerns
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III. Case Study: The Carbon Principles
• Energy Efficiency – encourage clients to invest in demand reduction
• Renewable and low-carbon energy technologies – encourage clients to
invest in cost-effective renewables, fuel cells and other low-carbon
technologies
• Conventional generation – the enhanced diligence process will assess
and reflect the risks in the financing considerations for fossil fuel
generation
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III. Climate Change Strategies
Stakeholder engagement and partnerships are key to our sustainability
strategy

Pew Center on Climate Business Environmental Leadership Council (BELC):
The BELC is now the largest U.S.-based association of corporations focused on
addressing the challenges of climate change.

Clinton Climate Initiative: Citi is one of six financial institutions that has committed to
arrange US $1 billion to help large cities around the world undertake energy efficiency
retrofits of their buildings.

World Resources Institute: Citi is a member of the Climate Northeast project, and has worked
with researchers at WRI to produce investment research reports

Columbia University's Global Roundtable on Climate Change (GROCC): Citi signed a
joint statement calling for global action on climate change in February 2007.

Citi Foundation Grants: In 2006 Citi provided $1.5 million in climate-related grants.
Partners include Rainforest Alliance, E+Co., and World Resources Institute.
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Questions?
Val Smith
VP, Citi Environmental Affairs
[email protected]
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