Global Citizenship Report 2017

practices for consultation with Indigenous Peoples. The policy updates also include a new Area of High Caution for projects with certain elevated human rights risks, such as large migrant labor forces or significant vulnerable populations in project-affected areas. We are proud to have been among the first to identify the need for change and to have taken quick and decisive steps in that direction. Human rights is a material citizenship issue for our company, and protection of Indigenous Peoples is a human rights priority . The changes to our ESRM Policy demonstrate our commitment in this area. To accompany our ESRM Policy update, we developed addi- tional internal guidance for use by our Banking and Risk teams. This guidance includes questions and reference materials to help identify aspects of host country laws, project sponsor policies and project characteristics that might indicate a potential high risk related to Indigenous Peoples or human rights. When developing this guidance we referred to First Peoples Worldwide’s Indigenous Rights Risk Report as well as Foley Hoag’s Good Practice for Managing the Social Impacts of Oil Pipelines in the United States. The new internal guidance will assist us in identifying projects that may require inde- pendent review by a qualified social expert or, in some cases, projects we should avoid due to their heightened social risks. The updated policy and guidance are already being imple- mented and have led to changes in our approach to client due diligence and business selection. For example, Citi declined to participate in two transactions in high-income OECD countries during 2017 due to Indigenous Peoples risks. GRI INDICATOR: 102-44 Policy Implementation Our centralized team of ESRM specialists evaluates all transactions that trigger a review according to our ESRM Policy. We also rely on employees throughout our organi- zation globally to help spot potential risks. For instance, ESRM Champions — credit risk officers who have expertise in regional and product-related ESRM issues — provide important regional insight that improves our ability to make responsible lending decisions. This network approach greatly enhances the global coverage capacity of our centralized specialist team. The ESRM team works collaboratively and shares information and best practices in bimonthly network calls that help support and strengthen the entire network. For example, our ESRM Champion in Southeast Asia presented at a sustainable marine finance seminar, hosted by World Wildlife Fund and the Stock Exchange of Thailand, for banks and companies in the seafood industry. Citi participated in a panel discussion about sustainable seafood supply chains, addressing the policies of Thailand-based fisheries and strategies for resolving labor issues. Our ESRM Champion in Brazil has been working closely with the Brazilian financial authorities and regional bankers to develop a greenhouse gas disclosure framework and update the tools and resources we use to identify, measure, mitigate and manage environmental and social risks in the Brazilian market in line with the local central bank’s environmental and social regulation. Meanwhile our Champions across geographies work closely with our key internal banking divisions to screen transactions and train teams on our ESRM Policy and how and why we address envi- ronmental and social risks at Citi. Citi’s ESRM team categorizes the project-related transactions they review as A, B or C with A indicating the highest risk. General corporate transactions are categorized as GR (general review). The categorization is based on the magnitude of poten- tial adverse social and environmental impacts associated with the project. For general reviews, we evaluate a client’s envi- ronmental and social policies and performance, as well as their commitment and capacity to manage environmental and social issues. Our ESRM Policy helps us ensure responsible financing of projects while managing and minimizing impacts and effec- tively engaging our clients on sustainability best practices. Citi 2017 Global Citizenship Report 55 CONTENTS    INTRODUCTION    HOW WE DO BUSINESS     SOLUTIONS FOR IMPACT    APPENDICES Conduct and Culture    Digital Innovation    Talent and Diversity    Human Rights    Environmental and Social Risk Management     Operations and Supply Chain