Environmental and Social Policy Framework | 5
Citi’s Approach to Climate Change
Climate change is one of the most critical challenges facing our global society and economy in the
21st century. The data is irrefutable, and the world’s climate scientists agree that urgent action must
be taken to address the current and potential impacts of climate change, including chronic changes
to temperature and precipitation, rising sea levels, and more intense and frequent extreme weather
events. Some of these impacts are already being felt in communities across the globe, and longer-
term climatic changes have the potential to cause wide-ranging impacts affecting business and
society, including disrupted supply chains, damaged infrastructure, reduced crop yields and a decline
in biodiversity. These risks and impacts are exacerbated by inequality and unsustainable economic
development, which put additional pressure on land, water, forests and other natural resources.
These interconnected challenges endanger the vitality of communities all over the world and present
a threat to global prosperity if not managed properly. The financial sector has an important role to
play in addressing this challenge by supporting the transition to a sustainable, low-carbon economy
that balances the environmental, social and economic needs of society. Citi understands these critical
sustainability issues and believes we must respect and support the environment and human rights in
our operations, supply chain and client transactions.
We also understand the complexity of developing solutions to these challenges, which require a
combination of strong governmental policy and regulatory frameworks, corporate leadership, investor
engagement and individual actions. As one of the largest financiers of carbon-intensive sectors such
as energy, power and industrials, we know that the ambition to bring our business into alignment with
the ambitions stated in the Paris Agreement will not be easy. Moreover, aligning the global economy
with the Paris Agreement will require rapid and far-reaching transitions in energy systems, industrial
processes, land-use, buildings, transport and other infrastructure, all supported by an enabling policy
environment. We also know that delaying this transition could increase the costs, lock in carbon-
emitting technology and infrastructure, increase the risks of stranded assets and reduce the range
of effective responses to the challenge in the medium and long term. In light of these opportunities
and risks, in 2021 we announced our intent to achieve net zero GHG emissions associated with our
financing by 2050 and net zero for our own operations by 2030. For details on our Net Zero Plan and
the underlying interim targets, please see our climate reporting.
Achieving a low-carbon economy will also require increased financing of climate solutions. Building
on our previous $50 billion climate initiative from 2007-2013 and our $100 billion environmental
finance goal from 2014-2019, in 2021 Citi announced a commitment to $1 trillion in sustainable
finance by 2030. This commitment extends our previous environmental finance goal from $250 billion
and includes environmental and social criteria such as renewable energy, sustainable transportation
and circular economy as well as affordable housing, economic inclusion, education, food security
and healthcare.
More than 20 years of working with clients, partners, employees and other key stakeholders to
address the growing risks and opportunities related to climate have positioned us to respond to this
challenge. We have participated in or contributed to the development of market-based frameworks,
such as the Equator Principles, Green Bond Principles, the Poseidon Principles, the Pegasus
Guidelines, Sustainable Aluminum Finance Framework, and the Sustainable STEEL Principles, and are
reporting Citi’s financed emissions for certain carbon intensive sectors per the Partnership for Carbon
Accounting Financials (PCAF) Standard, and supporting the development of evolving methodologies
from PCAF and the market to enhance understanding of financed and facilitated emissions
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. Citi was
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96% Financed emissions are the GHG emissions generated by the operations and entities that financial institutions lend money to or invest in.