Global Citizenship Report 2017

concerns about the company’s treatment of them or others, we encourage them to use Citi’s grievance mechanism, the Ethics Hotline. The hotline is open to external parties and available in several formats and languages. Freedom of Association While the financial services industry is not heavily unionized, we do have unions or work councils in many of the countries where we operate. Approximately 12 percent of our employee population is covered by collective bargaining agreements. We engage directly with our employees and through these associa- tions to discuss issues such as health and safety, remuneration, work hours, training, career development, work time flexibility and equal opportunity. Extending Respect for Human Rights Through Our Suppliers and Partners Nondiscrimination policies also extend to Citi’s and the Citi Foundation’s philanthropic activity and to Citi’s suppliers. We do not provide funding to organizations that discriminate on the basis of personal characteristics, such as gender, race and sexual orientation, among others, nor do we work with suppli- ers that violate our policies. In addition, our suppliers must adhere to Citi standards, includ- ing those related to human rights, as outlined in our Statement of Supplier Principles and in our Supplier Standards. These expectations are reinforced by our Corporate Responsibility Questionnaire (CRQ), which helps our procurement team determine how well potential and current suppliers manage environmental, social and governance issues, including human rights issues. Our CRQ for the Europe, Middle East and Africa region includes questions specific to modern slavery concerns, and during 2017, we implemented those questions in the CRQ for other regions as well. As with our employees, suppliers are encouraged to use Citi’s Ethics Hotline to raise concerns. For more information on our supply chain, see the Operations and Supply Chain section. Respecting Human Rights in Our Financing Decisions The decisions we make about what to finance can have a bigger impact on human rights than anything else we do. The challenge to effectively evaluate human rights risks related to our clients and the projects we finance is significant. We work diligently to meet this challenge and respect the human rights of the individuals and communities touched by the projects we finance. In some situations, we are well positioned to avoid causing or contributing to adverse human rights impacts or to avoid entering into business relationships that are linked to human rights concerns. For example, our anti-money laundering efforts help us prevent criminally sourced funds — including funds associated with human rights abuses, such as human trafficking — from passing through our bank. Our ability to disrupt the flow of money to those perpetrating human rights abuses and to deny those abusers safe harbor for illicit proceeds tied to corruption or human rights violations is an effective way to undermine their efforts. In other situations, however, the link between our financial services and potential human rights impacts is more complex and less clear. The complexity leaves us with less leverage and 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 ESRM systems and corrective action plans. If proactive management of identified human rights risks is not possible, we might deny financing or involvement in a particular transaction. Or, if a client’s overall track record and relative commitment to improvement does not meet our standards, we will sometimes re-evaluate the client relationship — a move we take very seriously as we recognize that terminating the relationship removes any leverage we might otherwise have had to improve practices over time through constructive engagement. For example, in 2017 we exited one client relationship in the palm oil sector because of the client’s unwillingness to comply with our standard for the sector, which requires certification by the Roundtable on Sustainable Palm Oil. 48