Citis Environmental and Social Risk Management Policy

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Citis Environmental and Social Risk Management
Policy
Shawn Miller Director, Citi ESRM The Revolution
in Environmental Finance SPM, May 19, 2009
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Citi ESRM Policy and Equator Principles Basics

• Citi has a comprehensive Environmental and Social
  Risk Management Policy ESRM (developed in 2003
  following adoption of original Equator
  Principles)
• Citis ESRM Policy covers transactions, with
  known use of proceeds, that meet financial
  thresholds
• All ESRM Covered Transactions are reviewed by
  Citis ESRM Unit and categorized according to the
  IFC screening criteria of A, B or C (high, medium
  or low risk)
• Category A Transactions require elevated review
  by an ESRM Approver, in consultation with the
  ESRM Director, or designate
• Project Finance Transactions (subject to Equator)
  and Corporate Loans in emerging markets are
  reviewed utilizing the IFC Performance Standards
• Citi sits on the Steering Committee for Equator
  currently there are 67 Equator Banks from
  developed and developing countries covers 90
  of project finance market

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Citis Environmental and Social Risk Management
Policy Covered Transactions
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Some Future Challenges for ESRM in the Finance
Sector

• Impacts of climate change on the financial
  sector, for example
• ESRM in ghg intensive sectors in the face of
  uncertain future US and international regulation
  on carbon (Carbon Principles were developed to
  address this, but only address one sector)
• Increasing importance of water issues to project
• Equator Principles
• IFC is currently updating the Performance
  Standards on which the Principles rely will
  require an update of Equator
• Ensuring the quality of the Equator brand is
  not diluted by varying implementation of
  increasing number of signatories
• Balancing stakeholders expectations that Equator
  is a panacea for all environmental and social
  issues relating to global finance (i.e. pressure
  to resolve human rights issues via Equator)