Global Citizenship Report 2017

Evolving Our Accounting Methodology In 2017, we shifted from counting the fair market value of the deals that were included in the $100 billion goal to a league table credit methodology to calculate Citi’s share. This new approach is based on third-party verifiable league table data, which better illustrates Citi’s direct contribution to environ- mental solutions on behalf of our clients, based on our role in each transaction, and more closely aligns overall with the way we measure other aspects of our business. In order to promote transparency, and to promote wider adoption of this approach among our industry peers, we have made this meth- odology publicly available. Using our league table accounting methodology, we’ve recal- culated all the activity that has counted toward the $100 billion goal, from 2014 through 2017, and determined that we have contributed $57 billion toward sustainable growth. Working Toward Our Goal Citi draws on the diverse expertise of our global teams to provide our clients with innovative products and services that best capture emerging opportunities to address climate challenges. Our Corporate Sustainability team works closely with contributing business units to track progress toward our $100 billion goal in each business category — Alternative Energy Banking and Financing, Green Bonds, Public Finance, Commodities, and Consumer Banking and Commercial Banking. Alternative Energy Banking and Financing Citi provides a full range of financing solutions for environmen- tal projects globally, and we continue to develop innovative, end-to-end solutions to meet our clients’ unique financing needs. Our Alternative Energy Banking and Financing teams have developed extensive expertise in financing solutions for a broad spectrum of renewable energy technologies, including wind, solar, geothermal and biomass. For larger, utility-scale projects, we are able to provide multiple services as a “one-stop shop” for our clients, including construction financing, commodities hedging and tax equity on a single deal. For example, on the 200MW Flat Top Wind Project completed in 2017, Citi provided construction financing and tax equity financ- ing to help enable the deal. By accessing multiple services from a single provider, our clients are able to reduce complexity and transaction costs, thereby enhancing project returns. WHAT IS A LEAGUE TABLE? A league table is a competitive ranking of banks, companies, industries, geographies or other groups of entities ordered according to a metric (e.g., deal volume, number of deals). For those transactions to which we can apply league table accounting measures — more than 90 percent of financial activity counted toward the goal — we use Dealogic, Thomson Reuters and Bloomberg New Energy Finance (BNEF) league tables. For deals that involve loans or other financial products from Citi where there are no established league tables, we count the amount that reflects Citi’s engagement in the deal. In 2017, Citi ranked No. 1 as bookrunner in the Dealogic Global and Renewables league tables for Project Finance, and we were ranked fourth in Dealogic’s Green Bond league table. We were also ranked second in the industry for our municipal finance activity by the Thomson Reuters SDC league table and No. 3 for Tax Equity by BNEF. ENERGY EFFICIENCY Energy-efficient design — for both building retrofits and new construction — is an important contributor to reducing overall greenhouse gas emissions around the world. Citi is working to create new, creative models for this market to help our clients reach their goals and build scalable, high-impact solutions. For instance, in 2017 we worked with Metrus Energy on a programmatic Efficiency Service Agreement (ESA) for a Fortune 100 company to deploy lighting efficiency upgrades at 13 of their sites across multiple U.S. states. This “efficiency as a service,” pay-for-performance model allows the client to finance efficiency upgrades without upfront capital by monetizing the energy savings under a services contract. Ultimately, the upgrades will reduce electricity use for lighting by 65 percent, equivalent to removing 18,600 cars off the road over the lifetime of the project. The ESA — a structure that can be likened to a power purchase agreement for renewable energy — is still an evolving market and represents a promising and impactful area of growth. 82