Citizenship2004 Report Letter from Chuck Prince and Bob Willumstad

2004 was a year of many successes We have been taking significant steps We have embarked on a multiyear, global to ensure that we do not have future effort to reinforce our values and take the for Citigroup, both in terms of our occurrences like the incidents we next step in the evolution of our culture. financial results and our corporate experienced in 2004. Since last fall, we Based on the information gained from have spent a great deal of time traveling our talks with employees and our senior citizenship. But we also faced signif- to meet Citigroup employees around management team, we have created a icant reputational issues resulting the world and here in the U.S., engaging Five Point Plan that includes training, our employees in direct conversations talent and development, performance from two separate situations, one about our values and our future. We appraisal/compensation, communications in Japan and one in the U.K., where have talked about our need to focus on and controls. our long-term success, about the great These experiences have reaffirmed our we did not meet the high standards franchise that we have inherited from our belief that our reputation brings with predecessors and the importance of living that people have come to expect it responsibilities that are as important up to that legacy. As part of that dialogue, to our success as is our extraordinary of Citigroup and that we expect of we defined the “Shared Responsibilities” financial performance. With our breadth we have as employees of Citigroup: ourselves. Our goal for Citigroup of resources, we are creating financial is to be the most respected global ß We have a responsibility to our clients— solutions that meet the needs of consumers We must put our clients first, provide who live in a diverse range of communities financial services company. And superior advice, products and services, and around the world. Our name, “Citigroup,” these incidents were inconsistent always act with the highest level of integrity. must inspire trust and confidence. with the values adhered to by our ß We have a responsibility to each other— We want to emphasize that in 2004 we We must provide outstanding people the accomplished many things—some of 300,000 employees who understand best opportunity to realize their potential. which are described in this Citizenship our high standards and make the We must treat our teammates with respect, Report—of which we are very proud. champion our remarkable diversity, share We looked for opportunities to use the right choices every day. the responsibility for our successes and strength of Citigroup’s franchise, global accept accountability for our failures. reach and financial resources to make a difference in the communities where ß We have a responsibility to our our employees live and work. We have franchise—We must put Citigroup’s also described in this report a number long-term interests ahead of each unit’s of instances where our businesses have short-term gains and provide superior adopted programs or introduced products results for our shareholders. We must that make a positive contribution to respect the local culture and take an communities, as well as a profit. We active role in the communities where announced a ten-year, $200 million we work and live. We must honor those global commitment to financial educa- who came before us and extend our tion so that people can take charge of legacy for those who will come after us. their own finances—whether a small business in California, a microfinance And we have continued to celebrate the CHUCK PRINCE client in India or a retail customer in incredible diversity of Citigroup staff; Germany. Building on our 40-year employee networks, established by history of philanthropic support, we employees themselves, doubled in 2004. appointed a Global Director for Micro- Finally, we realize that our corporate finance to lead a new business group citizenship successes always involve focused on developing commercial rela- partnerships and listening to the many tionships with microfinance institutions stakeholders from whom we have around the globe in order to expand the learned. We commit to continuing number of poor consumers who have these exchanges as we focus on becom- access to finance. ing the most respected global financial Our community development finance services company. business—financing homes and com- munity facilities for low- and moderate- income families in the U.S.—continues BOB WILLUMSTAD to grow and exceeded $2 billion. We continued to expand our alliances and partnerships with nonprofits that can CHUCK PRINCE help us extend our financing reach. We Chief Executive Officer also maintained our discussions with Citigroup Inc. community groups with regard to our consumer finance business practices so that a consumer will get the best product at the best price for which they qualify, regardless of where they apply.

As part of our commitment to address BOB WILLUMSTAD social and environmental issues, we President and Chief Operating Officer appointed a new Director of Environ- Citigroup Inc. mental and Social Risk Management Policies for our Corporate and Invest- ment Bank. We have made real progress on implementing our environmental initiatives and, with three years of report- ing experience, will be setting goals for energy consumption in our buildings next year globally.

LETTER FROM CHUCK PRINCE AND BOB WILLUMSTAD 1 Citigroup Citizenship Report 2004 Letter from Sandy Weill

At Citigroup, we are proud of access to financial education and was businesses to distribute in the affected pleased when in 2004, Citigroup and the areas to local nongovernmental organiza- the leadership position we have Citigroup Foundation made an unprec- tions (NGOs) that are leading relief efforts. edented $200 million commitment over achieved in the financial services In addition, we have pledged to match ten years to support financial education with a donation to the Red Cross all of industry, both for the innovative initiatives around the world. The response our employees’ personal monetary con- from our stakeholders to this commit- products and services we offer our tributions made to registered nonprofits ment has been overwhelmingly positive. or NGOs working in support of tsunami clients and the standard-setting Along with this commitment, we also relief and rebuilding efforts. As of Febru- formed an Office of Financial Education practices and policies that we have ary 14, 2005, the total amount of money for Citigroup that is working with all of donated by Citigroup and its employees adopted for our businesses. our businesses to identify, support and was $12 million. implement those programs that promise And we understand that with our leader- to reach those most in need. Recognizing that our employees spend hundreds of hours as volunteers to better ship position comes the responsibility to Education is an area of community their communities, we introduced a new conduct business adhering to the very service in which I have been very Global Volunteer Initiative Program at highest standards, to apply our wealth of personally involved throughout my life. Citigroup in 2004. Through this program, diverse resources where they can do the The link between education and financial each employee will be able to take a most good and to build value for our and personal success was my inspiration paid day off to do volunteer work at the shareholders and employees. for launching the Academy of Finance in nonprofit organization of their choice. We are proud to have once again been 1982. Our most recent endeavor brought named to the Dow Jones Sustainability the Academy of Finance program abroad Financial education, microfinance, educa- World Index and the FTSE4Good Index to London, England. The Career Academy tion, disaster relief and volunteerism are for 2005, which recognize companies Foundation in London now operates just a few of the many ways in which we that are leaders in setting standards in 13 Academy of Finance programs in work to improve the quality of life in sustainable growth and in demonstrat- urban schools throughout the U.K. and the communities where we do business ing superior environmental, social and has served 340 students since its inception. around the world. economic performance. Our 2004 Another area of key importance for In closing, let me say how proud I am Citizenship Report highlights many of Citigroup is microfinance. For very low- of our people here at Citigroup who the initiatives that we have under way income families and individuals, microfi- each day generously give of their time that have helped us maintain our position nance provides access to capital that can and talents to help make a difference in on these prestigious Indexes. significantly improve their quality of life. their communities. In 2005, Citigroup continues its 40-plus Making the best financial choices can be Sincerely, challenging and being informed when years of leadership in supporting micro- you need to make those decisions can finance by serving as a major funder of help impact the results. I have always the United Nations’ International Year been a strong advocate of providing of Microcredit Initiative. We also have established a new business group, Global Microfinance, which is developing finan- cial products and services specifically for SANDY WEILL microfinance institutions. Chairman Citigroup Inc. There are also some unplanned-for events where we know immediate action must be taken to save lives. Such was the case with the tsunami that struck South Asia and Africa on December 26, 2004. Citigroup responded immediately by pledging a total of $3 million in philan- thropic support. Included in that support SANDY WEILL is $1 million targeted for our local

2 LETTER FROM SANDY WEILL Citigroup Citizenship Report 2004 ROBERT E. RUBIN

Letter from Robert E. Rubin

This is a time of extraordinary While there has been a decrease in Although the uncertainty and the extreme poverty in the last decade, it complexity of the outlook now is prob- uncertainty, complexity and poten- has been dominated by rapid growth ably the greatest in many years, there is tial for change that presents great in China and the East Asia and Pacific a tremendous amount of attention being region. Some regions have shown little focused on how to solve global poverty challenges for all of the actors change and Sub-Saharan Africa has actu- and promote economic growth in poor in our global economic system— ally experienced an increase in poverty. countries, and the private sector can play an important role. governments, investors, companies, Globalization and market-based economics are central to poverty reduction, but so is communities and civil society, and government. Governments must put in individuals. The division of eco- place policies to promote growth, and the broad-based sharing of growth, in areas nomic prowess and geopolitical that are central to these objectives but that power among the major regions markets won’t adequately address, such as ROBERT E. RUBIN education and law enforcement. Director, Chairman of the of the globe is likely to undergo Executive Committee; The private sector’s role in the develop- Member of the Office of the changes of historic proportions ment process is primarily doing what it Chairman at Citigroup Inc. over the decades ahead, with does best—running its business well, pro- viding employment, training people and profound implications for people promoting innovation. Citigroup helps in many parts of the globe. At the develop well-functioning emerging market capital markets and banking systems that same time, poverty continues to support and enable economic growth. We be an issue we must deal with. train local bankers and share expertise with central bankers, and Citigroup alumni In addition to the serious moral populate many banks and central banks issue, poverty affects all of us. around the world. We are the largest of the global financial services firms operating in Political instability, illegal immigra- Sub-Saharan Africa. tion, transnational environmental In addition, Citigroup has long been a impacts, nuclear proliferation, provider of philanthropic support and technical assistance to microfinance terrorism and the spread of disease institutions that provide capital to small all give each of us an immense and growing businesses in poorer coun- tries. This past year, Citigroup decided stake in far more energetically and to approach microfinance as a business effectively addressing challenges opportunity and has established a unit to help microfinance institutions raise funds related to global poverty. in the capital markets and partner with them to develop new products, such as insurance and savings. LETTER FROM ROBERT E. RUBIN 3 Citigroup Citizenship Report 2004 This Is Citigroup

As the preeminent global financial Citigroup publishes an annual services company with some 200 report for shareholders with million customer accounts in more detailed financial information than 100 countries, Citigroup (NYSE on the company. Annual reports symbol: C) provides consumers, are also published by Citigroup’s corporations, governments and Diversity Department and the institutions with a broad range of Citigroup Foundation containing financial products and services, more information on some of the including consumer banking and programs highlighted in Citigroup’s credit, corporate and investment Global Corporate Citizenship Report. banking, securities brokerage and Additional information and these asset management. Carrying reports are available on Citigroup’s Citigroup’s trademark red umbrella Web site at www.citigroup.com. is a family of companies that includes Citibank, CitiMortgage, CitiFinancial, Primerica, Smith Barney and Banamex. At the heart of these companies are 300,000 employees who are committed to maintaining a standard of excel- lence in serving customers and their local communities.

4 THIS IS CITIGROUP Citigroup Citizenship Report 2004 Table of Contents

The Company We Want to Be 6

Major Corporate Citizenship Accomplishments 7

Corporate Citizenship at Citigroup 8

Citigroup as a Participant in Local and Global Markets 10

Community 12

Environment 28

Workplace 46

Highlights of 2004 Awards and Recognition 52

Our 2004 Global Corporate Citizenship Report is organized so that our readers will be able to easily find topics of greatest interest to them. We lead off with a list of our major accomplishments, each of which is described in greater detail elsewhere in the report. The “Corporate Citizenship at Citigroup” section outlines our citizenship vision and strategy—how we fulfill our role as a corporate citizen, the importance we place on dialogue with our stakeholders relating to community issues and how we report on our citizenship activities. We organize our citizenship efforts into three categories—Community, Environment and Workplace. Each contains data that we use to quantify and identify results on specific programs, excerpts from our policies and Code of Conduct, and personal statements by our senior management, employees and various individu- als from the NGO (nongovernmental organization) community. In the “Community” and “Environment” sections, we show how good corporate citizenship is embedded in our operations, with examples of how our businesses are making a difference. And the “Workplace” section focuses on how we achieve an environment in which diversity and a work/life balance are embraced and nurtured through specific employee and recruitment programs. In all sections, we also try to identify challenges that we face.

TABLE OF CONTENTS 5 Citigroup Citizenship Report 2004 The Company We Want to Be

Citigroup’s objective is to be the In response to these instances, in late Our goal is to make sure that every 2004, our senior management held employee explicitly recognizes the most respected financial services in-person forums with thousands of long-term nature of our business, and the company in the world. We know employees around the globe, asking long-term value of our reputation and for and receiving from them candid brand—that every employee explicitly we already have one of the most suggestions for actions the company recognizes what has always been implicit respected names in financial should take. Citigroup’s senior manage- in our performance-based culture. ment team used their ideas to develop a services with a legacy and record comprehensive Five Point Plan designed Corporate Governance of accomplishment of which we are to foster a greater appreciation of our Our corporate governance guidelines company’s history and to highlight our were updated in January 2005. The full proud. However, in 2004, as Chuck responsibilities to pass on the legacy text is available at www.citigroup.com. Prince outlined in his letter, Citigroup of Citigroup to those who follow. They cover our corporate governance The Five Point Plan addresses cultural mission, the role and selection of the experienced two instances that were and behavioral issues and focuses on Board, structure of the Committees inconsistent with our goal. these five areas: training, talent and and specific rules for Board members. development, performance appraisal/ There is also a document specifying compensation, communications and con- the charters for the Committees of the trols. Each initiative has a clearly defined Board. Citigroup has a Code of Conduct, objective, as well as a series of specific which covers all employees and a Code steps with timelines for implementation. of Ethics for Finance Professionals, which applies to principal executive officers We believe that we can achieve our and worldwide professionals in finance, goal of being the most respected global accounting, treasury, tax or investor financial services company by adhering relations roles. to the following Shared Responsibilities: ß We have a responsibility to our clients. Our Code of Conduct We must put our clients first, provide In 2004, Citigroup completed its annual superior advice, products and services, review and update of its Code of and always act with the highest level Conduct. All employees worldwide are of integrity. required to read the Code of Conduct and sign and return a form acknowledg- ß We have a responsibility to each other. ing their understanding of the content. We must provide outstanding people Our Code of Conduct is now available the best opportunities to realize their online in ten languages. We also offer potential. We must treat our teammates periodic tutorials called “Know the with respect, champion our remarkable Code” on our intranet site so employees diversity, share the responsibility for our can test their knowledge of these impor- successes and accept accountability for tant principles. The Code of Conduct our failures. covers such issues as how to raise ethical ß We have a responsibility to our issues, workplace responsibilities (fair franchise. We must put Citigroup’s employment, harassment, safety), repre- long-term interests ahead of each unit’s senting Citigroup to external constituen- short-term gains, and provide superior cies, privacy, investments and outside results for our shareholders. We must activities and other legal and compliance respect the local culture and take an rules. The full document is available at active role in the communities where www.citigroup.com we work and live. We must honor those who came before us and extend our legacy for those who will come after us.

6 THE COMPANY WE WANT TO BE Citigroup Citizenship Report 2004 Major Corporate Citizenship Accomplishments in 2004

Reaffirmed for inclusion on Dow Jones Sustainability Indexes (DJSI) and the FTSE4Good Index for 2005. DJSI recognizes companies ranking among the top ten percent in environmental, social and economic performance; and FTSE4Good, of the Financial Times and London Stock Exchange, recognizes leading companies that meet criteria relating to environmental sustainability, corporate citizenship, shareholder returns and support of human rights.

Community Environment Workplace ß Announced an unprecedented ß Made first investment of $23 million ß Established 11 additional Citigroup $200 million commitment to in a wind energy converter global Employee Network Groups, which support financial education programs manufacturing firm in India through bring together employees with com- worldwide over the next ten years. Citigroup’s Sustainable Development mon experiences and perspectives, in Investment Program. seven U.S. locations and London, Eng- ß Launched a Global Volunteer Initiative land. Citigroup now has 21 Employee that gives each employee a paid day off ß Underwrote 168 environmentally ben- Network Groups. to do volunteer work at a nonprofit of eficial projects in the U.S. totaling more their choice. than $12.9 billion, including facilities for ß Doubled participation in Employee pollution control, water and sewerage, Network Groups to more than ß Achieved $28 billion in community recycling and solid waste disposal. 4,700 employees. lending and investing in low- and moderate-income communities in the U.S. ß Created an Environmental and Social ß Developed a new “work-life satisfac- Risk Management (ESRM) Director tion” approach to implementing our ß Lent $67 billion toward commitment position for Citigroup’s Corporate and employee assistance programs. made in 2003 to make available $200 Investment Bank (CIB). billion in affordable mortgages in the ß Opened four new on-site Wellness U.S. through 2010. ß Revised risk management policies, Centers in the U.S. and one in issued guidance tools, developed an Puerto Rico. ß Entered into agreement with the Associa- ESRM intranet site to ease policy tion of Community Organizations for implementation and launched a CIB Corporate Governance Reform Now (ACORN) to promote ESRM training program to ensure ß Developed a comprehensive Five Point homeownership, increase affordable credit adherence to the Equator Principles and Plan to foster greater appreciation of availability and foster financial education Citigroup’s enhanced ESRM policy. the company’s history and to highlight in lower-income communities in the U.S. our responsibilities to pass on the ß Completed third year of data collection ß Formed Global Microfinance, a legacy of Citigroup. to track use of electricity, heat, water business group focused on developing and waste production, and the resulting ß Instituted Shared Responsibilities for financial products and services for CO emissions, in Citigroup’s more all employees. microfinance institutions. 2 than 11,800 facilities worldwide in ß Updated Corporate Governance ß Awarded more than $111 million in preparation to set energy consumption guidelines. grants to nonprofit organizations and goals in 2005. NGOs (nongovernmental organizations) ß Named in top quartile of companies around the world through the Citigroup using space efficiently for employees in Foundation and our businesses. the Real Estate Executive Board’s 2004 ß Led U.S. consumer credit industry in Benchmarking for Financial Services overhauling criteria for funding credit Companies Study. counseling agencies. ß Selected for inclusion in Innovest’s ß Completed with 12 other multinational 2004 Climate Leadership Index, which corporations the European Supplier lists the 50 “Best in Class” companies Diversity Project research phase to for their climate change strategies and explore possibilities of setting up sup- transparency. plier diversity programs in Europe. MAJOR ACCOMPLISHMENTS 7 Citigroup Citizenship Report 2004 PAMELA P. FLAHERTY

Flaherty is Senior Vice President of Global Commu- nity Relations at Citigroup responsible for corporate citizenship, environmental affairs and addressing globalization issues that the company faces. Corporate Citizenship at Citigroup

We believe that we have a respon- Solutions Through Our Businesses use and waste production (and the resultant GHG emissions) in the 11,800 buildings sibility to make a positive contribu- The opening letter of this report from Chuck Prince, our CEO, and Bob we lease or own globally; and supporting tion in communities where we do Willumstad, our President and COO, financial education and general education programs that help people build assets and business. We do this by: acknowledges the reputational issues that we faced in 2004 resulting from two realize their dreams. separate situations, one in Japan and one We also play a role in helping to build ß Operating a profitable business that in the U.K. We did not measure up to the a robust and ethical financial sector in provides employment and career high standards people expect of us and we many places around the globe. We do this opportunities for 300,000 employees expect of ourselves. We have taken steps, by sharing our expertise through training (98 percent of our employees are which are outlined in their letter and and counsel, as well as by growing our native to the locations where they in this report, to ensure we do not have businesses to expand our employment work), serves our clients well and occurrences of this nature in the future. opportunities. builds shareholder value; Our businesses view their responsibil- In some instances, we experiment to ß Engaging in philanthropy and vol- ity to the community as part of their learn if there is a business opportunity. unteerism, often partnering with mandate. Citigroup’s Country Officers community leaders and organizations; (CCOs) and business managers ensure For example, in 2000 our U.S. Citibank that we are leaders in corporate citizen- Community Development (CCD) busi- ß Applying the power of our businesses, ness started out small with minimal profits. which, because of their size and reach, ship in their markets through partnerships among our local businesses, the Citigroup Since then, CCD has become a profitable as well as the power of the marketplace unit, lending and investing more than $2 to make initiatives self-sustaining, can Foundation, NGOs and, on occasion, our clients and local governments. billion in 2004. The unit is now develop- have a major impact; and ing expertise in financing environmentally ß Maintaining business practices that Because corporate citizenship is an sustainable low-income housing— reflect high ethical standards. extension of who we are, we focus on combining Citigroup’s environmental issues that are relevant to our business. This and community development expertise. includes supporting MFIs (microfinance institutions) that provide access to credit to We are also continuing to learn how very low-income entrepreneurs, primarily to identify promising investments glob- in emerging markets; lending and invest- ally in sustainable forestry in emerging ing in low- and moderate-income (LMI) markets, renewable energy and clean communities in the U.S. where we have technology. In 2003, we started a Sustain- extensive retail operations; implementing able Development Investment Program environmental and social risk policies for aimed at these sectors, and in 2004, our our Corporate and Investment Banking first investment was made. Group; measuring the energy and water

8 CORPORATE CITIZENSHIP AT CITIGROUP Citigroup Citizenship Report 2004 Throughout this report, we offer Our Global Consumer Business and U.S. Our Citizenship Report examples of how our businesses are Consumer Bank Community Relations As in previous years, we received making a difference. As we did last year, Teams maintain relationships with commu- feedback on our 2003 Global Corporate we try where we can to quantify or sum- nity groups, activists and socially responsible Citizenship Report from a group of marize the impact we are making. investors interested in consumer lending, socially responsible investors and NGOs community development and other issues. Stakeholder Engagement and have tried to incorporate a number Their interaction consists of forming of their recommendations into our At Citigroup, we have an expansive and partnerships to implement programs and 2004 Report. They complimented us diverse group of stakeholders around the sponsoring conferences that address issues. on our increased use of statistics, charts world. These include employees, clients, Our Corporate Global Community Relations and data in a number of areas, but shareholders, elected officials, commu- Team maintains relationships with socially stressed the need to report more on our nity organizations, NGOs and socially responsible investors, NGOs and activists financing activities. This year we have responsible investors. Because of our size, focused on sustainability issues. included both a description and data on global presence and highly recognizable our Equator Principles implementation. brand name, we understand that many The Citigroup Foundation Officers manage people have opinions on how we run our philanthropy globally in partnership They also requested the inclusion of our business. We also recognize that with local Citigroup businesses. more goals and targets. While we have many stakeholders have perspectives and not yet set targets for our facilities’ Our Corporate Legal Team maintains knowledge that we need and can learn greenhouse gas emissions, our confidence relationships with organizations and indi- from. We interact with our stakeholders in the quality of energy consumption viduals focused on corporate governance. in many ways, including one-on-one data that we are reporting and our ability conversations, group meetings, at confer- Addressing expectations up front helps us to make year-on-year comparisons will ences, written communications, surveys, discover solutions or narrow our differ- enable us to set targets in 2005 and we our Global Corporate Citizenship ences. While we fully expect that there have committed to do so. Report and our Web site. These ongoing will always be areas where we disagree We were also encouraged to speak more interactions foster the exchange of ideas, on specific issues, these interactions help openly about our challenges and we have allowing us to better understand our develop relationships that build trust on tried to do so. We were asked by some stakeholders and their interests. both sides. of our stakeholders to consider using the Our goal is to be accessible and transpar- We continue to learn enormously from our new Global Reporting Initiative (GRI) ent where we can. Our strategy is to stakeholders, some of whom are partners, draft sector supplement on environmen- develop multifaceted relationships with some of whom are critics and some of tal performance for financial institutions; organizations that are opinion leaders on whom are a combination of both. We view and we have done so, reporting on six of issues of importance to us—those with our interactions with them as an opportu- those new indicators. whom we want to partner on specific nity to explain what we do and how we do For the third year, we have developed our projects or programs. And we ensure that it. In the U.S., we have continued to meet Citizenship Report with reference to the we hear a wide range of opinions, includ- with community leaders to discuss our GRI guidelines. The intent of the GRI ing those that we do not agree with. consumer finance business practices and guidelines is to enhance the quality, rigor our lending in LMI communities. We have While many of us at Citigroup interact and utility of sustainability reporting and also continued to meet with a group of with external stakeholders, there are five to provide standardized definitions. Our shareholders and with a number of NGOs key areas that interact regularly. They are: goal is to use as many of these indicators to discuss our environmental stewardship, as we think are useful in reporting on Our Country Corporate Officers and Public particularly our efforts to embed environ- our corporate citizenship. Also, as part Affairs Officers, based in countries around mental and social considerations into our of our enhanced reporting on the the world where we have offices, represent risk assessment process for financing large Equator Principles implementation in Citigroup in their local communities. infrastructure projects. 2004, we used reporting proposals from Finally, we continue to operate the the NGO consortium BankTrack and Business Practices Committees that from Co-operative Insurance (CIS) as were established in 2002 to examine and points of reference. ensure that Citigroup’s business practices reflect the company’s core values and the highest standards of practice.

CORPORATE CITIZENSHIP AT CITIGROUP 9 Citigroup Citizenship Report 2004 “The expertise that we have amassed over our long history as financial services providers around the world gives us a very valuable resource and responsibility. In order for these emerging market economies to compete effectively and succeed, they need to continue to invest the time in learning how the world markets work, and we can help them do this.” WILLIAM (BILL) R. RHODES Senior Vice Chairman, Citigroup Inc.; Chairman, Citicorp/Citibank, N.A. Citigroup as a Participant in Local and Global Markets

Citigroup has a long-established Citigroup is the largest of the global During 2004, in conjunction with the financial service firms operating in Egyptian Banking Institute, Citigroup presence in many of the markets it Sub-Saharan Africa. The company also helped train 31 bankers in Egypt in serves. Operations date back to 1812 has a wide presence in Asia, Europe, Latin managing and making decisions related America, the Middle East and North to foreign exchange and money markets. in the U.S., and more than a century America. In all of the locations where we The training proved to be particularly in China, Hong Kong, Japan, the operate, we are focused on responding helpful since it occurred prior to the to our customers’ needs, while playing Central Bank’s introduction of a full- Philippines, Singapore, Panama and a positive role in the development of fledged interbank dealing system. local economies. We support hundreds of London, where banking branches In Ecuador, Citigroup partnered with the development programs, primarily in the Ecuadorian Private Banks Association, were opened in 1902. In 2004, we areas where we think we can do the most the Andean Development Corporation good: financial education, microfinance, celebrated our 90th anniversary and USAID to host a trilogy of courses training and technical assistance programs, related to credit risk administration. in the rest of Latin America, and and management expertise. We train Our employees who are members of bankers, hire local staff and introduce new Banamex, our bank in Mexico, Citigroup’s School of Banking in Ecua- products targeted to the communities dor delivered the seminars that attracted celebrated 120 years of operation. where we do business. more than 40 participants who received Promoting High Banking 4,800 hours of financial education. Standards Around the Globe We recognize that educating financial professionals is one of the most effec- tive ways to improve banking services, develop better banking standards and practices, and enhance investor confidence worldwide. With financial education a top priority for Citigroup, we are spearheading a variety of related initiatives around the world.

10 CITIGROUP AS A PARTICIPANT IN LOCAL AND GLOBAL MARKETS Citigroup Citizenship Report 2004 Our Commitment to Hiring Citigroup’s broad-based Global Anti- and Nurturing Local Talent Money Laundering Policy sets forth our At Citigroup, we place enormous value stringent customer due diligence require- on our individual clients, as well as the ments, as well as policy and procedures individuals who work for our organiza- designed to ensure compliance with U.S. tion. We are committed to hiring and laws and regulations and the laws and training local talent, aligning our hiring regulations of the jurisdictions in which practices with the needs of the countries we operate outside the U.S. Within where we do business. the corporate anti-money laundering function, we recently created a new team We are at the forefront of global staff whose sole purpose is to conduct reviews development and career training, as dem- of the anti-money laundering procedures Rajeev Kakar, head of Citibank in Turkey, the Middle East onstrated by our award-winning United that have been implemented in the and Africa, (third from the left), and Sajjad Razvi, UAE CCO Arab Emirates (UAE) nationalization various businesses. This team provides us (sixth from the right) with TANMIA officials and first Citibank program—the Citibank Academy. On with the ability to ensure the continued Academy students graduating in 2004. September 19, 2004, the first Academy effectiveness of our anti-money launder- class consisting of 23 women and one ing program. “The Citibank Academy has added value to my future. man graduated and joined Citibank. I have learned so much about banking and finance, and This program was recognized by UAE’s Several years ago, Citigroup played a cru- especially about the use of English in banking.” National Human Resources Develop- cial role in organizing an informal group AMNA SALBOOKH ment Committee, which cited Citibank’s of international financial institutions Graduate of the Higher College of Technology responsiveness to the nation’s policy of that came together to devote resources increasing the ratio of nationals to expa- to developing guidance specific to triate workers in key strategic sectors, perceived global money laundering risks. This group, now known as the Wolfsberg including banking. In 2004, Citibank Recognizing the complexity and Group, has issued guidance with regard reached a 28 percent emiratization level global nature of the fight against money to several relevant money-laundering and up from 22 percent in 2003. laundering, fraud, terrorist financing and terrorist financing risks. This guidance information security breaches, Citigroup Making the Global Financial System has been universally adopted by financial also works with law enforcement, More Transparent institutions and recognized by many administrative and regulatory agencies, as government officials. At Citigroup, we recognize that we well as a broad range of financial industry benefit from operating in open economies Our involvement in private sector organizations to foster cooperation, share with clear rules and regulations and strict anti-money laundering initiatives, such information on best practices and pro- standards of good governance for all as those with the Wolfsberg Group, the mote consistency in these ongoing efforts. participants. We have been active in many American Bankers Association and the These organizations include: Transparency ways to protect the global financial system New York Clearing House, has helped International, the Overseas Security from abuse. Knowing that our business provide needed guidance to the financial Advisory Counsel, the International benefits from a global financial system community. However, Citigroup also Security Management Association, the that is perceived as honest, transparent maintains an even deeper commitment to International Banking Security Associa- and efficient, we have taken a leadership ensuring that both the private and public tion, the American Society of Industrial role in adopting and promoting global sectors understand the risks associated Security, the International Association anti-money laundering principles. We with money laundering and terrorism of Credit Card Investigators, the Bank have also continued to be at the forefront financing. Over the last year, our staff has Industry Technical Secretariat and Busi- of efforts to identify the role that financial provided training and technical assistance ness Executives for National Security. institutions can play in the war against the to governments and financial institu- financing of terrorism. tions across the U.S. and in countries throughout Europe, Asia, Africa and South America.

CITIGROUP AS A PARTICIPANT IN LOCAL AND GLOBAL MARKETS 11 Citigroup Citizenship Report 2004 12 COMMUNITY Citigroup Citizenship Report 2004 Community HELPING TO MAKE COMMUNITIES BETTER

“We are a company dedicated to community service, taking a leadership role in every local community around the world in which we operate, and helping to make each community a better place.”

⁄ EXCERPT FROM CITIGROUP’S CODE OF CONDUCT

(Top to bottom) A microcredit client in China; Citigroup Chairman Chuck Prince during a financial education session in Harlem; and Citigroup employee Lula Rodriguez at the Simon Bolivar School in Panama. COMMUNITY 13 Citigroup Citizenship Report 2004 “At Citigroup, we have made a commitment to be the most respected global financial services company in communities where we do business. We plan to achieve this goal by offering products and services to meet the needs of our customers, broad access to financial education, innovative solutions to meet our customers’ needs, and the expertise and volunteer support of our people. With 300,000 employees in more than 100 countries spanning six continents, we know we can make a positive impact, and we embrace our responsibility to make a difference.” MARGE MAGNER Chairman and CEO Citigroup Global Consumer Group Chairman of the Citigroup Foundation Citigroup in the Community

Citigroup has a legacy of leadership CITIGROUP PLEDGES $200 To fulfill our financial education MILLION GLOBALLY FOR commitment, we are actively working in the world of finance that is nearly FINANCIAL EDUCATION with numerous NGOs and nonprofit organizations on a variety of initiatives. 200 years old. We believe that quality Believing that knowledge is your greatest financial products and services serve asset for achieving financial success, Financial Education for Individuals in 2004 Citigroup and the Citigroup Junior Achievement—In 2004, the as a catalyst in fostering economic Foundation committed $200 million Citigroup Foundation made grants over ten years in support of financial development and reach across our totaling more than $2.4 million to education initiatives around the world. support Junior Achievement (JA) businesses to provide cost-effective We also announced the formation of an programs in 46 countries, including Office of Financial Education, which will financing packages, affordable mort- the U.S., where we made 33 grants work across our businesses to evaluate and to support JA programs in 19 states. gages and other services tailored to select programs to support that will have meet the needs of underserved com- the greatest impact. Our financial educa- Banks in Action in Latin America—Since tion efforts are focused in three areas: 1996, Citigroup has teamed up with JA munities. We are focused as well on to offer its Banks in Action program to Personal—To help individuals and ß young people across Latin America. Banks helping individuals, entrepreneurs, families save, invest, borrow and spend in Action is an education program designed wisely, and manage debt responsibly. institutions and governments better to teach students about the principles of understand how to effectively use ß Small Business—To help entrepreneurs operating a bank in a competitive market save, invest and secure financing to and changing economic environment. financial resources to reach their better manage their capital and grow Student teams assume the role of bank goals. We also harness the power of their businesses. managers and the team that achieves the highest profits and return on shareholder Institutional—To help support pro- our people. In 2004, we introduced a ß investments wins. The 2004 Regional grams that assist governments, academic Banks in Action competition, held in new Global Volunteer Initiative policy and financial institutions, and nonprofit São Paolo, Brazil, included students repre- organizations to promote knowledge that will give each of our employees senting 14 Latin American countries. and sound management of economics, a paid day off to volunteer. markets and financial systems. ß More than 10,000 students participated in local Banks in Action programs in their respective countries prior to the 2004 regional competition. 14 COMMUNITY Citigroup Citizenship Report 2004 American Bankers Association Education Foundation’s (ABAEF) National Teach Children to Save Day and Get Smart Issue: Lack of knowledge about About Credit Day—For several years how to use credit wisely is an issue now, Citigroup employees across the of global concern. In some countries, U.S. have participated in the ABAEF’s people have a long history of access National Teach Children to Save Day to credit and are grappling with issues and Get Smart About Credit Day to such as reducing their debt level. In help teach young people the basics of other countries that are just introduc- saving and credit management. On April ing credit products, people need guid- DARA DUGUAY 28, 2004, for Teach Children to Save ance in how to use it effectively. Director of the Office of Day, Citigroup and the ABAEF teamed Financial Education at Citigroup up with the U.S. Department of the “The need for financial education transcends Treasury and the U.S. Mint to deliver all borders and is a natural extension of lessons at schools in 87 cities across the the work we do every day at Citigroup. We country. On October 21, 2004, for Get Citigroup Foundation. In partnership support financial education because it helps Smart About Credit Day, employees from with Citigroup, representatives of NUL people understand how to effectively use Citigroup, the ABAEF and Federal Trade affiliates are being trained to deliver financial resources to raise their quality of Commission taught credit lessons in financial education classes to their life while strengthening local communities.” eight U.S. cities. constituents. ß 153 employees reached nearly 5,000 ß Since the program’s launch, 521 people students by making ABAEF Teach have been trained in the financial Children to Save presentations at schools education program. National YWCA of Korea’s Economy Camp and nonprofit organizations in 23 states. for Teenagers—In Daegu City, Korea, Operation HOPE’s Banking on Our Future in Citigroup and the National YWCA ß 230 employees taught the dos and New York and Washington, D.C.—In 2004, of Korea hosted the third annual don’ts of credit to nearly 5,500 teens Citigroup expanded its partnership Economy Camp for Teenagers, a and young adults in 40 U.S. cities on with Operation HOPE for its Banking seminar series designed to help high Get Smart About Credit Day. on Our Future program by awarding school students develop personal a $250,000 grant from the Citigroup Do Something, Inc.’s Financial Education financial management skills. Foundation. Teaching sessions held were Challenge—The Do Something Financial at the Eastern Branch of the Boys & 50 middle and high school students Education Challenge in the U.S., supported ß Girls Club in Washington, D.C. and at from Daegu, Kyungbuk Province with a $237,000 grant from the Citigroup Countee Cullen Elementary School in attended the Economy Camp. Foundation, launched a two-week financial Harlem, New York. education program for K-12th graders Stock Challenge Program in Hong in April 2004. The program consisted of ß More than 100 employee volunteers, Kong—In 2004, Citigroup Hong Kong a curriculum and an online game that using Citigroup’s Financial Education launched the Stock Challenge Program, teaches young people how to take control Curriculum, have delivered basic money the first program of its kind in Hong of their personal finances in preparation for management lessons to 2,000 students. Kong, to more than 300 students from life’s unexpected challenges. 102 schools. The Stock Challenge enables The United Way in Texas—Nine local students with little or no knowledge ß More than 14,500 students signed up for United Way agencies in North Texas, with of how financial markets function to the Financial Education Challenge and programs focused on financial education, participate in an interactive learning close to 2,000 educators have down- were awarded more than $200,000 from activity that simulates a real stock market. loaded the curriculum with the potential the newly created Citigroup Community In 2004, Stock Challenge Programs in of reaching nearly 60,000 students. Fund, which includes a contribution Hong Kong, Malaysia and Singapore from the Citigroup Foundation, along Citigroup and the National Urban were funded by $123,000 in grants from with funds raised by local Citigroup League—In 2004, Citigroup proac- the Citigroup Foundation. employees. Selected recipients included: tively addressed concerns raised by the the YMCA, the Salvation Army, the Since its 2002 launch in Singapore, the National Urban League (NUL) regarding ß West Dallas Community Center, the Citigroup Stock Challenge Program low homeownership, investment and Girl Scouts, Practical Parenting of Collin has reached more than 2,500 students. savings rates among African Americans. County, Women’s Haven, Girls, Inc., and In Hong Kong, we reached 370 We responded by launching a financial the Boys & Girls Clubs. students during the program’s first year. education program with the NUL in six U.S. cities, supported with a $900,000 ß 12,000 adults and children expected to grant payable over three years from the be reached through combined programs.

COMMUNITY 15 Citigroup Citizenship Report 2004 Citi Scholastic Award—During 2004, understandable. The Economics for Leaders Citi Cards in partnership with Scholastic, Program is funded by $130,000 in grants the global children’s publishing and media from the Citigroup Foundation. company, implemented its award-winning MARC H. MORIAL ß 120 students and 170 teachers from Credit-ED program and contest. Scholar- President and CEO of the five countries participated. ship money was awarded through the National Urban League contest, which asked students to provide Financial Education for “Over the past 95 years, the National financial guidance to a Shakespearean Small Businesses Urban League has helped millions of African character, who needed $3,000 to pay for Citibank Financial Center Seminar Americans achieve economic self-sufficiency his freshman year at Belmont University. Series—Across the U.S., small business through job training, homeownership, business A total of $35,000 in scholarship money seminars are presented as part of the was awarded to students, and two teachers development and educational programs. Today, Citibank Financial Center seminar also each received a $2,500 savings bond economic empowerment is a new mission of the series. The small business seminar, which toward continuing education. civil rights movement. The financial education focuses on the Small Business Association program sponsored by Citigroup is an important ß Credit-ED was rolled out in more than (SBA), teaches entrepreneurs how to step toward accomplishing the National 5,200 U.S. high schools reaching more apply for loans, expand a business and Urban League’s mission of enabling African than 3.5 million college-bound students. purchase an existing business. Americans to secure economic empowerment. More than 450 established and aspiring We salute the work of Citigroup on behalf of the Financial Education for Institutions ß small business entrepreneurs attended. thousands who have attained homeownership, Corporate Finance Workshop in broadened employment opportunities and Jordan—On October 2, 2004, in Amman, Microfinance Training Center and Promo- made informed financial decisions through our Jordan, Citigroup employees trained tion Network—On November 16, 2004, financial education partnership.” 27 high-level officials from Jordanian Citigroup announced a $1.5 million grant ministries and governmental institutions from the Citigroup Foundation to provide on the latest corporate finance techniques. better training and support services for China’s microfinance sector by establish- National Academy Foundation—The The six-day intensive workshop, entitled ing a national Microfinance Training National Academy Foundation (NAF), “Capital Markets and Project Finance,” Center and Microfinance Promotion Net- founded and chaired by Citigroup’s sponsored with a $37,000 grant from work. The training courses will include Chairman Sandy Weill, is one of the the Citigroup Foundation, was designed microfinance product development, best examples of what Citigroup’s long- to provide participants with the skills to marketing, risk management and internal standing commitment to financial educa- address complex financial models pre- controls, operations and financial analysis. tion has accomplished. Created in 1982, sented by local and international partners and to familiarize them with funding NAF sustains a network of more than ß The Microfinance Training Center will techniques for large projects. 625 Career Academies in high schools provide training to more than 1,000 across 40 U.S. states and the District of ß 27 officials from Jordanian ministries management and staff from MFIs in Columbia. In 2000, the Career Academy and governmental institutions trained. China within the next five years. Foundation was established in London, Citigroup’s Economics for Leaders England, and now operates 13 Academy of Program in Eastern Europe— Finance (AOF) programs in urban schools In August throughout the U.K., which have served 2004, Citigroup teamed up with the 340 students. More than 20,000 students Foundation for Teaching Economics and participate in AOF programs to gain the General Electric to help improve economic knowledge needed to succeed in the education in Bulgaria, Hungary, Slovakia, financial services industry and to develop Romania and the Czech Republic. An personal financial management skills. extension of the U.S. Economics for Lead- ers Program conducted annually by the ß NAF prepares more than 40,000 stu- Foundation for Teaching Economics, the dents every year in the U.S. and abroad program is designed to give students a bet- for careers in the financial services, ter understanding of the free-market system hospitality and tourism, and informa- and to give these future leaders the skills to Citigroup Chairman Sandy Weill is pictured at tion technology industries. motivate others. Participating teachers are the July 2004 NAF Directors Institute with NAF instructed in ways to use interactive teach- President John Ferrandino and Andrew Hermalin, a student in the AOF program. 16 COMMUNITY ing methods to make economics more Citigroup Citizenship Report 2004 EDUCATING THE educators, parents and community NEXT GENERATION stakeholders are being trained to develop school plans to better manage their Investing in education is one of the most resources with a focus on improving important contributions Citigroup can Teachers and students in Cisaat and Pasawahan areas in teaching and learning. Each year, every make to support the economic and social Sukabumi, West Java are participating in the Creating school will receive a small grant to make progress of our communities. Our com- Learning Communities for Children program with UNICEF. improvements. Citibank Indonesia’s mitment provides grants to educational employee volunteers are joining with programs in 44 countries, including Bra- each school to participate in educational zil, Egypt, the Philippines and the U.K., activities and school improvement and helps prepare the next generation to students studying business at one of projects. Creating Learning Communities with the skills and knowledge needed for four tribal colleges in South Dakota. for Children has demonstrated that good personal and professional success. Doubling the scholarship amount was teaching and community participation critical to meet the needs of the popula- Creating Learning Communities can have a significant impact on student tion where the average student is female, for Children—Indonesia motivation, attendance and test scores. age 30 and a single mother with two dependent family members and often the The Citigroup Foundation is partner- The Educational and Assistance Center first in her family to attend college. In ing with UNICEF (United Nations of Pedreira—São Paulo, Brazil Children’s Funds) and Indonesia’s Minis- addition, Citibank employees collaborate There are not a lot of career options for try of Education to improve the quality with scholarship recipients to develop young men growing up in São Paulo’s of elementary education for more than a Career Exploration Day that is made poor neighborhoods, and as a result they 19,900 students in some of the country’s available to the entire tribal community. often drop out of school. Helping change poorer regions. From 2004 – 2006, 650 that is the Educational and Assistance New-York Historical Society— teachers from 85 schools will be trained Center of Pedreira, a school that delivers New York, NY in active learning techniques that engage technical education that prepares boys students and improve achievement. To Arts education is critical to the intel- ages 10 – 18 to enter the workforce. encourage community participation, lectual and creative development of Courses include industrial electricity, young people and can play a major role data processing, telecommunications in improving student achievement by and network administration. To ensure motivating children to learn, encourag- that all 480 students graduate with the ing creative expression and improving technology skills they need to succeed, communication. As the sole corporate the Citigroup Foundation has donated sponsor of New-York Historical Society’s a new Professional Data Processing Lab. American Musicals Project, the Citigroup Our employee volunteers will share their Foundation provides an opportunity expertise on a variety of topics, includ- for teachers to use the power and ing careers in data processing, financial energy of American musical theater and education and workplace professionalism. resources from the Society’s collections to bring history alive in the classroom. American Indian College Fund— As an example, seventh-grade teachers South Dakota, U.S. ZANNITA FAST HORSE introduce students to the Declaration Zannita Fast Horse, Member of the Oglala Sioux With a grant of $95,000, the Citigroup of Independence using film clips from Tribe and Citigroup/American Indian College Foundation expanded its support to the 1776 and articles from The Pennsylvania Fund Scholar majoring in Interdisciplinary American Indian College Fund by dou- Journal. This program reaches more than Environmental Science and Human Services bling the scholarship amount awarded 700 middle-school teachers in more than “I believe that with the help of Citigroup to each of the 19 recipients to $4,000 170 schools throughout New York City, and the American Indian College Fund, we annually. The need in this community Long Island and Westchester and more than can educate the Native American people to is tremendous, with approximately 10,000 middle-school students annually. understand what the criteria is for finding an 85 percent of all tribal college students effective job and standing up for one’s rights, living at or below the poverty line with and can let Native American people know that per capita incomes of less than $5,000 annually. The funding covers full tuition there is help out there.” and some living expenses and is provided

COMMUNITY 17 Citigroup Citizenship Report 2004 “We believe that an inclusive financial services industry is crucial to economic and social development. By supporting commercially sustainable MFIs, we are helping to expand access to capital, as well as to savings, insurance, remit- Citigroup’s goal to expand access to tances and other products that provide microentrepreneurs capital markets has fueled much of its and their families with financial choices and opportunities.” recent microfinance engagement. We are a major supporter of the 2005 United ROBERT ANNIBALE Nations’ (UN) International Year of Global Director of Microfinance, Microcredit initiative, with Citigroup Citigroup Inc. Vice Chairman, Stanley Fischer, serv- ing as UN Advisory Committee Chair. MICROFINANCE AT CITIGROUP More Inclusive Financial Markets An important component of the UN True economic development and family Encouraged by the growing number of microcredit initiative is the Data Project, security requires that individuals and well-managed and sustainable MFIs, in which has brought together leading households have access to high-quality 2004 Citigroup launched Global Micro- international institutions to gather the financial services. For poor families and finance, a new business group focused on information required to standardize data individuals, the access to capital that developing commercial relationships with collection, and monitor and report on Microfinance Institutions (MFIs) provide these institutions. We named a Global existing financial products and services can significantly improve their quality Director of Microfinance, who is work- for those who need them. Such data of life. MFIs offer services such as credit, ing with Citigroup’s businesses around will support MFIs and other financial savings, insurance and remittances to the world to offer MFIs a range of institutions in identifying needs and those outside the financial mainstream. financial products and services, including the opportunities for them to provide savings, insurance, remittance, com- products and services. Citigroup has provided MFIs with mercial loans, guarantees, securitizations philanthropic and technical support for and bonds to support both their client nearly 40 years. Together with MFIs, we outreach and their growth. share the objectives of expanding access to financial services and view more Among Global Microfinance’s first trans- inclusive financial markets as a critical actions was a bond issue by Citigroup/ component of community and economic Banamex that will enable Financiera development. We have a three-pronged Compartamos, a leading Mexican MFI, strategic approach in supporting MFIs to serve one million clients by 2008. We that aims to: 1. Expand access to capital view this transaction as critically impor- for MFIs; 2. Develop human resources tant in our work to connect MFIs to their for MFIs; and 3. Promote the field as a local capital markets and to new investors. way to alleviate poverty. STANLEY FISCHER Vice Chairman, Citigroup Inc. “One of the essential goals of the Inter- national Year of Microcredit is to improve Microfinance 2004 Results Against Strategy statistics on the penetration and scale of microfinance. But more importantly, we need ß Citigroup Global Director of Microfinance Appointed INCREASING MFI ACCESS to strengthen and spread the availability ß Bond Financing with Compartamos/Mexico TO CAPITAL ß Grameen Capital India Investment of good financial services, which offer the possibility and the hope to many poor people ß Citigroup Foundation Scholarship Program for MFI Staff of improving their own situations through ß Indian School of Microfinance for Women DEVELOPING MFI ß Chinese Academy of Social Sciences their own efforts.” HUMAN RESOURCES ß Russian Microfinance Center (CITIGROUP FOUNDATION GRANTS) ß Asian Institute of Management ß ACCION International ß Global Microentrepreneurship Awards PROMOTING THE ß Chinese Academy of Social Sciences MICROFINANCE FIELD ß United Nations Year of Microcredit ß The Data Project

18 COMMUNITY Citigroup Citizenship Report 2004 The importance of developing the Indian School of Microfinance is critical. There are hundreds of MFIs in India, all of which have needs for high-quality CHARLES V. RAYMOND training and little to no access to it. In President, Citigroup Foundation addition to our $3.5 million five-year “We support the evolution of MFIs into com- grant to the Indian School of Microfi- mercially self-sustaining organizations because nance for Women, Citigroup will have a we believe this will allow them to tap into Financial Literacy Chair who will train Zhao Xiufen, who lives in Yi County of Hebei Province in capital markets and grow to a size that really people to manage the financial products China, benefits from one of the microfinance programs will make a huge impact on global poverty.” now available to the poor. offered by the Rural Development Institute (RDI) of the Chinese Academy of Social Sciences. RDI is Citigroup’s In Africa, we are working with ACCION partner in managing its $1.5 million grant for the International in Mozambique, Nigeria, Microfinance Training Center and Promotion Network. Uganda and Tanzania to introduce inno- vations in lending methodologies and Developing Human Resources technologies in order to help MFI staff The microfinance field is growing faster reach more clients with more products. than the talent available to manage it. To address this issue, Citigroup focused Promoting Microfinance much of its philanthropic support and Its Promise for microfinance in 2004 on human In continuing to promote the importance resources development programs. of microfinance, in May 2004, Charles Organizations receiving grants for V. Raymond, President of the Citigroup training programs included the Indian Foundation, spoke to the 15th Annual School of Microfinance for Women; the General Assembly and Conference of Russian Microfinance Center; the Asian the European Foundation Centre in Institute of Management; Women’s World Athens, Greece. Raymond explained how Banking; ACCION International in Citigroup’s support of microfinance con- Mozambique; and the Chinese Academy tributes to the UN’s Millennium Project Women microentrepreneurs ring opening bell at the of Social Sciences. to reduce extreme poverty and hunger. Bombay Stock Exchange to herald in the International Supporting the development of the Awards programs are another way we Year of Microcredit. Indian School of Microfinance for highlight microfinance. As part of our Women allows us to partner once support for the International Year of again with SEWA Bank and Friends Microcredit, Citigroup will collaborate of Women’s World Banking (FWWB), with the UN Capital Development Fund The first Global Microentrepreneur- both in India, and for the first time and students from Harvard, Yale, Colum- ship Awards recognitions occurred on with the Coady International Institute bia, Wharton, Kellogg and New York the International Year of Microcredit’s in Canada. The Coady International University to launch the Global Micro- opening day—November 18, 2004. Institute, considered a center of excel- entrepreneurship Awards. Outstanding Outstanding microentrepreneurs were lence in sustainable community-based microentrepreneurs in 29 countries will selected to ring stock exchanges’ opening development and microfinance, will be honored. bells around the world. Citibank India design training programs to be offered partnered with the Bombay Stock by the Indian School of Microfinance Exchange in Mumbai where a women’s for Women for middle- and senior-level microentrepreneur group rang the bell. MFI managers, field staff, policy makers Issue: There are about 500 And in New York City, Fatima Lonfo, an and wholesale lenders. million low-income entrepreneurs ACCION New York microcredit client, around the world, and only five opened the day at NASDAQ. percent of them have access to financial services.

COMMUNITY 19 Citigroup Citizenship Report 2004 U.S. SUPPLIER DIVERSITY outlining the business case for supplier CITIGROUP IN THE SPENDING INCREASES diversity within five European countries COMMUNITY IN THE U.S. and task forces were created to explore 64 PERCENT IN THREE YEARS In 2004, Citigroup’s Global Consumer recruiting companies, certifying suppliers In 2004, Citigroup Supplier Diversity Group (GCG) Community Relations and implementing a strategy to promote continued to build its presence as it function strengthened its efforts in proac- the value of fostering supplier diversity. pursued its goal to increase opportunities tively advising the companies’ businesses for minority, women, service-disabled Mentor Protégé Program Update on issues affecting local communities and veterans and physically challenged helping design innovative solutions. Citigroup’s Mentor Protégé Program business enterprises. Our overall diversity helps diverse suppliers grow their To stimulate dialogue on community spending has increased by more than 64 businesses by pairing them with one of issues among our businesses, we also percent since 2001. For 2004, Citigroup’s our major suppliers for 12 – 18 month established a Community Council to total diversity spend was $725 million. periods. Several projects were completed manage our community strategy and European Supplier Diversity in 2004. One project paired a diverse coordinate community and social policy Business-Led Forum electrical distribution company with a development across the company. Meet- major Citigroup supplier to learn six- ing monthly, the Council is a coalition of In 2004, a team from Citigroup and 12 sigma process improvement as a strategy senior managers from various businesses, other multinational companies completed to improve its billing system. As a result of as well as advisory functions, such as pub- the research phase of the European this effort, the diverse supplier reduced its lic affairs, the State Leadership Councils Supplier Diversity Project formulated to billing errors by more than 50 percent and and government relations. introduce supplier diversity programs in significantly improved customer service. Europe. The companies worked in part- While the Council is the company’s prin- nership with the Migration Policy Group, Another success story from our Mentor cipal forum for leveraging expertise on a well-known think tank, to conduct Protégé Program involved the pairing community issues, local-level mechanisms three successful workshops in London of a woman-owned staffing firm with also have been developed. For example, attended by top-level government offi- a leading organizational consulting the State Leadership Councils, led by cials, including the U.K. Treasury Chief company. The staffing firm’s client base business heads of our U.S. facilities, work Secretary and a Commission for Racial had been growing faster than could together across business lines to develop Equality Director. Both officials have be managed but with expertise shared and strengthen community strategy, endorsed the project and pledged sup- through the Program, the firm improved and facilitate and encourage economic port. In addition, a demographic report its service and saved more than $100,000. and community development in their region. In times of crisis, the Council responds proactively to the needs of the U.S. Supplier Diversity 2004 Results Against Strategy community whether it is in the form of grant making, rebuilding a community ß 3 Mentor Protégé Programs Completed or providing volunteers. These Councils ß European Supplier Diversity Business Project Research have been established in 15 states and BUILD PROGRAMS Phase Completed continue to grow in number. ß Diverse Suppliers Selected for Key Commodities Enhancing Consumer Finance ß Satisfactorily Passed Audit for 2004 IMPROVE METRICS Policies and Practices ß Increased Reporting Capabilities Through Procurement Citigroup strives to set an example INTEGRATE CITIGROUP SUPPLIER ß Added Supplier Diversity Language into Contracts and RFP Templates of excellence. To achieve this, we DIVERSITY INTO ALL CITIGROUP ß Increased Participation by Our Businesses consult with a variety of community U.S. BUSINESSES ß Continued Diverse Broker-Dealer Expansion stakeholders to develop best practices. ß Hosted Selective Corporate Intern Program Here are some examples. ß Board Member of National Minority Supplier Development Council BUILD UPON CURRENT ß Board Member of Women’s Business Enterprise STRATEGIC ALLIANCES National Council—NY Chapter ß Emerging Venture Network Educational Program Partnership ß Expansion of CitiWest Procurement Initiative

20 COMMUNITY Citigroup Citizenship Report 2004 Consumer Credit Counseling Funding— As an example, in 2004 we entered into The consumer credit counseling industry an agreement with ACORN to reinforce has recently come under increased Citigroup’s commitment to responsible and scrutiny as a result of unscrupulous prac- innovative lending practices. The agreement “Together, ACORN and Citigroup have broken tices by a few counseling agencies. While encompasses several new initiatives: new ground in providing low- and moderate- we recognize that a handful of agencies ß To form an affordable mortgage- income families, especially new immigrants, have abused their position, we also know lending program between Citigroup with easier paths to homeownership. This that most agencies serve an important and ACORN Housing Corporation partnership has enabled ACORN to further purpose in helping consumers get out of (AHC) and to develop a specialized our mission of building stronger communities debt. To ensure that our customers get mortgage product; by providing low- and moderate-income the best counseling available, Citi Cards, ß To expand access to the Earned Income families with the basic financial tools they our consumer credit card operation, Tax Credit and, in immigrant com- need to fulfill their goals.” has led the industry in overhauling the munities, expand access to Citibank’s traditional “fair share” funding model MAUDE HURD Access Account and low-cost remit- in favor of a new program that rewards tance program; President of ACORN credit counseling agencies that provide ß To train and expand the capacity the best services to their clients. of ACORN to deliver financial Under the traditional “fair share” model, education; and CitiFinancial Real Estate Lending creditors provide funding to counseling ß To focus on lending to increase afford- Initiatives—Following our acquisition agencies based on payment amounts that able housing in areas where Citibank of The Associates in 2000, we responded they receive from customers on debt and ACORN’s footprints coincide. to the concerns of community advocates management plans developed by those relating to certain consumer credit prac- agencies. Recognizing the potential tices by developing a series of real estate conflict of interest inherent in this model, lending initiatives and enhancements for Citi Cards developed and uses a new CitiFinancial, our consumer credit unit. model that separates the funding made The CitiFinancial Real Estate Lending to an agency from the dollar amount Initiatives aim to provide the right bal- Citi Cards receives from that agency. ance between providing access to credit ACORN-Citigroup for those who need it most, while setting Citigroup’s Global Fair Lending Policy— industry-leading consumer protection To ensure that all Citigroup customers Mortgage Product standards. Both our senior management receive fair pricing, regardless of race, A year-long collaboration between Citibank, team and CitiFinancial employees have ethnicity, gender, age or other prohibited CitiMortgage and ACORN Housing Corpora- engaged in implementing these new factors, we have implemented a com- tion led to the development of an exclusive initiatives—a significant effort that has prehensive fair lending program in all ACORN-Citigroup mortgage product. Launched included putting new programs and our businesses. This program includes as part of the Citigroup and ACORN partnership policies into place and soliciting guidance an extensive analysis of lending perfor- announced in 2004, this product makes credit from community advocates as to their mance, matched pair testing, periodic more accessible and more affordable to LMI effectiveness. As a result, we have contin- evaluation of underwriting criteria borrowers, especially immigrants. Significant ued to refine these initiatives and evolve and examination of all marketing and product features include flexible credit and them into a comprehensive document of outreach initiatives. identification guidelines, expanded debt best practices that covers access to lower Partnering for Community Impact ratios, premium pricing and a no-mortgage- cost credit, loan products and terms, sales insurance requirement. More than 150 Citigroup practices, brokers and correspondents, In 2004, we worked diligently to and ACORN staff members across the U.S. are and foreclosure review. Recognizing their strengthen relationships with community focused on ensuring that this product reaches significance in driving industry change, development nonprofits, activists, advo- consumers. Since introducing this product in community advocates such as ACORN cates and other community stakeholders September 2004, 345 loan applications were have endorsed our initiatives. on both the national and local levels. GCG Community Relations works with submitted and 24 loans were closed through Citigroup’s businesses and the Citigroup year end 2004. Foundation to nurture these relationships.

COMMUNITY 21 Citigroup Citizenship Report 2004 CSU at Channel Islands, CA—In 2004, CCD continued to expand its relationship with California State University (CSU) by providing more than $100 million in credit enhance- ments for bonds used to finance workforce housing on its Channel Islands campus. This Our Community-Focused broadened CCD’s relationship with the uni- Businesses Making a Difference versity to more than $200 million. Part of the Community involvement and customer financing is being used for the construction of 216 rental units and a 30,000-square-foot service are values that are deeply embed- town center. The remainder is financing the ded in Citigroup’s culture. These values construction of 326 homes for the University’s guide us in the development of innova- staff and faculty that will be priced substan- tive and affordable business products tially below market. The innovative structure and services tailored to meet the needs of CCD’s financing provides a revolving source of underserved populations, nonprofit of funds at tax-exempt rates, resulting in organizations and business entrepreneurs. lower project costs. Community Development Financing Reaches $2.7 Billion Drawing resources from across Jazz on the Boulevard, Chicago, IL— Citigroup’s businesses, Citibank Com- In 2004, CCD partnered with the Chicago munity Development (CCD) provides Housing Authority (CHA) on one of the first of financing for affordable housing and several high-profile CHA “Plan for Transforma- community revitalization projects in tion” projects. These projects entail the markets throughout the U.S. and Puerto integration of public housing tenants within Rico. Formed in 2000, CCD’s innovative, mixed-income communities and provide comprehensive and cost-effective financ- replacement housing for large CHA buildings ing packages meet both the short- and that are being demolished. CCD provided a $28 million construction loan to fund the long-term borrowing needs of for-profit construction of Jazz on the Boulevard, which and nonprofit organizations that build consists of 137 new housing units in Chicago’s and operate affordable housing, com- North Kenwood/Oakland neighborhood. The mercial developments and community housing will consist of 98 for-sale units and facilities in lower-income communities. 39 affordable rental units. Deborah Adelman, CCD also makes equity investments in President of the Citi Commercial Real Estate low-income housing tax credit funds and Group (fourth from left, front row) is pictured in private equity funds that seek to foster with members of Citibank’s Chicago and economic development in underserved New York Community Team. neighborhoods. Citigroup’s size and scale enables CCD to finance large, increas- New Horizons Mall, Bronx, NY—July 2004 ingly complex projects that in turn have marked the opening of the New Horizons a broader impact on communities and Mall and Pathmark Superstore in the Bronx. benefit more individuals. Planned over several decades and the first of its kind in this neighborhood, CCD provided In 2004, Citigroup made more than $30 million in construction financing to help $2.7 billion in community development make this 134,000-square-foot shopping cen- loans and investments across the country. ter a reality. The New Horizons Mall will create Citigroup’s community development 300 permanent jobs, 75 percent of which lending and investment group, CCD, are expected to be filled by area residents. was responsible for more than $2 billion Serving as a perfect example of public-private of this activity. Additionally, Citigroup’s partnership at work, this project resulted Nonprofit Financial Services Group, from the collaborative efforts of the Mid- part of Citigroup Middle Markets Bronx Desperadoes, a nonprofit organization unit, booked just under $70 million in created by five women in 1974 seeking to reverse neighborhood deterioration; the Local community development lending, and Initiatives Support Corporation (LISC), a major we provided more than $652 million in funder of the project; and Citibank. multifamily housing loans in low- and moderate-income areas through Citi- group’s Commercial Real Estate Group.

22 COMMUNITY Citigroup Citizenship Report 2004 Annual U.S. Community Development$2.7 billion Lending and Investment$2.3 Results$2.7 billion $2.3 billion $2.7 billion $2.3 billion $67 Billion in Affordable During 2004, CML also took the $1.2 billion Mortgage Lending Achieved national lead in increasing immigrants’ $1.0 billion $849 In 2004, Citibank’s Community Mort- access to homeownership by accepting billion $1.2 the Individual Tax Identification Number million $1.0 billion gage Lending Department (CML), $849 billion $1.2 (ITIN) as a valid form of identifica- million in conjunction with CitiMortgage, $1.0 billion tion for borrowers that qualify for the $849 worked to increase homeowner- billion ship in underserved communities. ACORN-Citigroup mortgage product. million Together they offered both traditional Helping Create and Grow 2000 2001 2002 2003 2004 and nontraditional mortgage products, Small Businesses developed partnerships and homeowner- 2000 2001 2002 2003 2004 ship programs with nonprofits, worked Small businesses play an important role in with affordable housing developers and strengthening the economic well-being 2000 2001 2002 2003 2004 promoted financial and homebuyer of communities. To nurture entrepre- education and counseling services in neurship, Citibank offers many programs Citibank markets. aimed at helping create and grow small Annual U.S. Community businesses. We invest and lend to many Mortgage Lending Results In September 2003, Citigroup announced $67 economic development intermediar- billion an unprecedented commitment to ies that specialize in lending to small $67 provide $200 billion nationwide in businesses. Additionally, we team up with billion mortgage lending to LMI, minority and numerous agencies providing low- or $67 other underserved families through 2010. no-cost technical assistance and entrepre- billion This initiative has the potential to place neur training to small business owners. as many as two million families into new Our direct lending to small businesses $26 homes. In the first 18 months of this operating in LMI communities or owned billion commitment, we have already lent by LMI and/or minority individuals $14 $26 $9.7 billion $67 billion in affordable mortgages. totaled $1.4 billion in 2004. $6.3 billion billion $14 $26 CML makes mortgage financing more Citibank’s Small Business Administration billion $9.7 $6.3 billion billion obtainable for underserved homebuyers billion (SBA) Lending Team helps entrepreneurs billion $14 by permitting flexibility in underwriting $9.7 start or buy a small business, or expand $6.20003 2001 billion2002 2003 2004 billion guidelines and offering a selection of an existing one. As a designated SBA billion products that meet almost every com- Preferred Lender, we can provide a more 2000 2001 2002 2003 2004 bination of needs. A dedicated team of streamlined experience for the businesses relationship managers develops programs we serve. Our SBA team makes available 2000 2001 2002 2003 2004 with nonprofit organizations that we to business owners SBA Express Lines of Annual U.S. Community work with to ensure relevance and out- Credit, term loans and owner-occupied Small Business Lending Results reach. The team also provides technical real estate loans. Our goal is to be a Top assistance and conducts homeownership Tier SBA Lender. As a result, our SBA $1.4 seminars designed especially for first-time lending increased by 14 percent in 2004. $1.3 billion buyers. In 2004, we partnered with more billion $1.4 than 200 nonprofits and delivered more $1.3 billion $969 $994 billion than 300 homebuyer seminars for 7,400 $1.4 million million $1.3 $994 billion prospective homebuyers. $969 billion million million $969 $994 $474 million millionmillion $474 million $474 million

2000 2001 2002 2003 2004

2000 2001 2002 2003 2004 COMMUNITY 23 2000 2001 2002 2003 2004 Citigroup Citizenship Report 2004 Citibank’s CRA Results DATE ASSESSMENT LEGAL VEHICLE REGULATOR RESULTS OF LAST AREA(S) REVIEW Citibank, N.A. Earns New Castle County, DE “Outstanding” CRA Citicorp Trust Bank, fsb OTS Outstanding 2004 and Cecil County, MD Rating in 2004

Citibank Delaware FDIC Wilmington, DE Outstanding 2003 At Citigroup, we hold ourselves to a high standard and measure our suc- Portions of CT, DC, FL, Citibank, FSB OTS Outstanding 2003 IL, MD, NJ, TX and VA cess in a number of ways, including acknowledgement by advocates, Portions of NY, Guam Citibank, N.A. OCC Outstanding 2003 academics, community organizations and Puerto Rico and others, as well as business Citibank (Nevada), N.A. OCC Las Vegas, NV Outstanding 2003 generated from our community involvement. In the U.S., an important Citibank (South Dakota), N.A. OCC Sioux Falls, SD Outstanding 2003 benchmark for community impact is the recognition by regulators in the Citibank USA, N.A. OCC Sioux Falls, SD Satisfactory 2003 form of “Outstanding” Community Reinvestment Act (CRA) ratings. In California Commerce Bank FDIC Los Angeles, CA Outstanding 2002 2004, nine of our 11 legal vehicles had “Outstanding” ratings, including our Universal Financial Corp. FDIC Salt Lake City, UT Outstanding 2002 largest consumer bank, Citibank, N.A.

Associates Capital Bank FDIC Salt Lake City, UT Outstanding 1999

Citibank (West), FSB OTS Portions of CA and NV Unrated N/A

CitiFinancial Leads Industry take calls from borrowers who may be We work with local nonprofit organiza- in Foreclosure Prevention in default on their mortgages. Callers are tions and government agencies to ensure that any vacated homes are renovated and Throughout 2004, Citigroup’s nonprime offered free assistance by independent sold quickly to LMI families and indi- mortgage businesses continued to foster credit counselors. During 2004, the viduals. In 2004, Citigroup donated two innovative foreclosure prevention and hotline generated 2,000 calls. foreclosed houses to NHS of Chicago neighborhood revitalization programs. In addition, Citigroup’s nonprime mort- and two vacant lots to a Washington State CitiFinancial Mortgage Company, Inc. gage business, in partnership with NHS NHS affiliate. (CFMC), Citicorp Trust bank, fsb (CTB) of Chicago, sponsored a homeownership and the CitiFinancial Branch Network and foreclosure prevention symposium In addition, working in conjunction work with other nonprime lenders, local for their borrowers residing in a par- with other nonprofit organizations such governments and nonprofits to find ticular neighborhood that seemed to be as National Training Institute Coalition new ways to reach out to borrowers in vulnerable to defaults and foreclosures. (NTIC) and the Neighborhood Assistance danger of defaulting on their mortgages. Corporation of America (NACA), a group Borrowers acknowledging their financial While the programs are still evolving, of lenders led by Citigroup has been mak- difficulties early may find many more Citigroup, along with other lenders, is ing foreclosed homes available for sale at options for resolution, and in the process working to expand existing or establish a small discount to those individuals who avoid foreclosure and eviction. new 311 or other government-run have completed premortgage counseling. hotlines to handle foreclosure concerns. In 2004, Citigroup’s mortgage lending Foreclosure initiatives are also being Banking for Hispanic Consumers businesses worked with Neighborhood pursued in Baltimore, Atlanta, Detroit Citigroup is committed to serving Housing Services (NHS) of Chicago, and numerous cities in Ohio, where Hispanic individuals and communities the City of Chicago’s Department of foreclosure rates are high. in the U.S. by developing products and Housing and other lenders, to establish supporting initiatives that help serve their a pilot program to implement and While we work hard to prevent foreclo- unique needs. fund a foreclosure prevention initiative. sures, we cannot always be of help to a This program is focused on expanding borrower. In those cases, Citigroup tries Chicago’s nonemergency 311 hotline to to minimize the impact to a neighbor- hood of vacant or abandoned properties. 24 COMMUNITY Citigroup Citizenship Report 2004 Consumer Finance Initiatives Update

At Citigroup, we believe that we have greatly Monitoring Our improved our consumer finance businesses’ Businesses’ Performance products and services to benefit our customers and have helped drive the industry toward Citigroup’s GCG Community Relations greater consumer protections. Among changes group, in conjunction with our business ERIC EVE we have made over the last three years at our CRA and Fair Lending Officers, helps Executive Director for Citigroup CitiFinancial unit are: halting the sale of single- ensure that the company’s legal vehicles GCG Community Relations premium credit insurance on real estate secured remain in compliance with the Home loans; enhancing our sales practices to be more “We must focus on effectively meeting the Mortgage Disclosure Act (HMDA) and customer-friendly; and capping points on real needs of our community commitments in CRA and Fair Lending regulations. estate loans originated through CitiFinancial’s a disciplined and measurable manner. We Across Citigroup’s businesses, the branch network at three points. Also, as a part of continue to seek the advice of our external group sets consistent goals, optimizes the new Citigroup/ACORN partnership, CitiFinan- stakeholders to help us in reaching our goals. program efficiencies and ensures best cial agreed to remove prepayment penalties after At Citigroup, we continue to build long-term practice transfer between our corporate the third year of a real estate loan. CitiFinancial relationships that transcend philanthropy to resources and the local U.S. markets also gives borrowers the option of a loan with a enable economic and social self-sufficiency where we do business. higher rate but without a prepayment penalty. among LMI communities, minorities of all Goals are set each year for HMDA- income levels, small businesses, and the reportable lending and for small business nonprofits and advocacy and activist groups lending based on relevant CRA metrics. that represent these segments.” For each market where we do business, GCG Community Relations also works with Citibank Community Development We also work to ensure that we meet In 2003, Citibank introduced its new to set volume goals and with our Com- and exceed industry standards. We have Access Account designed specifically to munity Relations Officers to develop adopted guidelines and developed track- help the unbanked, particularly immi- and implement community development ing mechanisms to capture our commu- grant populations, become part of the services and grants programs. Our goals nity impact and we use online software financial mainstream. The Access Account are set so that we can obtain “Outstand- applications to track our grant-making helps ensure easy transfer of funds for ing” CRA ratings. activities, evaluate the effectiveness of consumers between the U.S. and Mexico. new and existing nonprofit partnerships, The group monitors CRA and fair lend- identify underserved markets and monitor Building on the Access Account’s success, ing performance on a monthly basis and the volunteer efforts of our employees. we launched the Bi-National Credit undertakes regular self-assessments. It also Card program in 2004. This program meets at least once a year with both the We recognize that we still have a great allows U.S.-based customers of Banamex, Public Affairs Committee of Citigroup’s deal of work to do in terms of building Citigroup’s primary subsidiary in Mexico, Board of Directors and with senior strong strategic partnerships, identifying to request that an additional credit card managers from Citigroup’s retail banks to key community issues and implementing be issued for their account and be sent review CRA and fair lending perfor- best practices. In 2005, we plan to survey to a relative of theirs in Mexico. The U.S. mance, and routinely works with business some of the nonprofit organizations customer is responsible for payment of all managers to ensure that the company is that we work with to obtain a better charges to their account. on track to reach its goals. understanding of their constituents’ needs and determine how we can more Another program targeted to benefit In addition to ensuring compliance effectively meet those needs with new Hispanic consumers is the Rent-to- with existing laws and regulations, GCG financial products and services. We also Ownership Program, a joint offering from Community Relations is also responsible will continue to develop and foster CitiMortgage and Citibank. Currently for identifying possible new issues for the partnerships with national organizations available through 49 Citibank Financial industry and Citigroup, and for develop- and design new signature programs for Centers, the strength of the program lies ing mechanisms for risk mitigation. We local communities. in its customer-focused approach, which strive to proactively address issues, reach- takes into account a marketplace’s cultural ing out to advocates to seek their input sensitivities and offers new homebuyers and share with them information on our financial education seminars. risk mitigation process.

COMMUNITY 25 Citigroup Citizenship Report 2004 Among other initiatives undertaken by Citibank’s Local Community Relations Team in 2004 was a training program with the New York City Housing Authority (NYCHA). Employees of Pictured at the presentation of the Citigroup Foundation NYCHA received training so that they Carl Rist, SEED Initiative Director at CFED; Andrea $250,000 grant to the Washington Area Women’s Foundation can deliver financial education classes Levere, President of CFED; and Denise Durham are: (from left) Bob Schellhas, Vice President, Citigroup to fellow employees and those who live Williams, National Community Relations Director Federal Government Relations; Dara Duguay, Director, in city-subsidized housing. The ultimate for Citibank; at the 2004 National IDA Conference. Citigroup Office of Financial Education; Anne Mosle, President, goal is to help those living in subsidized Washington Area Women’s Foundation; Alyson Klug, President housing improve their financial standing of Citibank MidAtlantic Region; Mike Conway, Citigroup so they can move into private hous- help low-income individuals work toward Chief of Staff, Global Government Affairs; and Sylvia Kidder, ing, maybe even become homeowners. financial independence. Those who par- Consultant, Washington Area Women’s Foundation. To date, Citibank trained a total of 55 ticipate in the program commit to a series NYCHA employees, who have the of seminars that help them effectively potential to reach and benefit NYCHA’s use the money they save to build their 15,000 employees city-wide and 420,008 personal assets. Our Local U.S. Community individuals living in NYCHA housing. Relations Involvement In 2004, we established eight new Helping Low-Income Renters programs with local nonprofits, bringing Citibanking North America’s (CBNA) Become Homeowners its total number of programs to 52 with Local Community Relations Team helps Citibank has been a leader among U.S. thousands of accounts. Citibank is also strengthen the company’s efforts to reach lenders in adopting the U.S. Department one of the only banks in the U.S. to offer out to LMI individuals, small business of Housing and Urban Development’s nonprofits an IDA financial management entrepreneurs and underserved com- Housing Choice Voucher Homeowner- product called CitiEscrow to manage IDA munities. The team coordinates the bank’s ship Program, which enables individuals savings and matching funds in a low-cost involvement in hundreds of programs who qualify to receive government-issued manner, while allowing IDA consumers each year working with community-based Section 8 vouchers to become homeown- to earn as high an interest rate as possible. nonprofit organizations, local elected ers. Section 8 participants receive vouchers officials and the local affiliates of national In 2004, we also began working with that supplement the cost of their rent so organizations. CBNA’s businesses and the nonprofit organizations to develop Savings that they pay no more than 30 percent of Citigroup Foundation help fund these for Education, Entrepreneurship and their income for housing. In the Voucher programs with grants, and employees Downpayment (SEED) accounts, the Homeownership Program, participants can from across the company’s businesses lend next generation of IDAs. The Citigroup dedicate their Section 8 rental voucher their support as volunteers. Following are Foundation provided $500,000 to support toward monthly mortgage costs. highlights of these programs. this initiative, and Citibank and Smith In New York City, Citibank became the Barney manage the matched accounts. Making an Impact Through first bank to participate in the Section 8 Financial Education program in December of 2004. We cur- Expanding Outreach to Entrepreneurs The Citibank community relations team rently participate in the program in 29 Citibank participates in numerous in the mid-Atlantic region is leading the cities and counties across the country. In programs targeted to reach minority small company’s partnership with the Washing- 2004, Citibank’s Community Mortgage business owners. One such initiative is “The ton (D.C.) Area Women’s Foundation for Lending Team used the program to help Global Diversity Group Business Exchange: its “Women and Families Financial Inde- 43 families become homeowners. Tour for Success,” led by Global Diversity pendence Initiative.” More than 10,000 Group, Inc. The Tour invites African low-income women-headed families Leadership in Financial Products American entrepreneurs to participate in are expected to benefit from this new that Build Assets free seminars and panel discussions on key program, which has been funded with a Citibank’s Local Community Relations business topics. In 2004, Citibank partici- $250,000 Citigroup Foundation grant. Team is responsible for implementing the pated in the Tour in four markets, reaching Using the Citigroup Financial Education company’s support of Individual Develop- a total of more than 1,500 attendees. Curriculum program, participants will ment Account (IDA) programs. Since learn money management. 1999, we have taken a leadership role in establishing IDAs, which are financial 26 COMMUNITY education-based savings programs that Citigroup Citizenship Report 2004 To support and even increase the great work that our employees already perform, Citigroup added a significant benefit to our existing volunteer programs in 2004 when it announced the launch of a Global Volunteer Initiative. The initiative gives our employees a paid day off per year to volunteer at a qualified nonprofit organization of their choice. Now avail- able in 62 countries, the initiative will be accessible to all employees by summer Lula Rodriguez, Managing Director of Corporate 2005. Citigroup also has further enhanced Bob Willumstad works on one of the Citigroup-sponsored Communications and Public Affairs for Citigroup its Volunteer Tracking System launched homes at the Jimmy Carter Work Project in Puebla, Mexico. Latin America, visits Simon Bolivar school in Pan- in April 2004. This online volunteer ama. Citigroup adopted the school in 1999 and the management tool helps employees track Citigroup Foundation has since provided $140,000 their volunteer hours and search for local in grants to help enhance the learning experience projects to get involved in. for its close to 350 students. Our employees also Citigroup continues to foster the culture volunteer to help tutor the children. of volunteerism and encourages employ- ees to get involved by offering exciting new opportunities. For example, in THE POWER OF OUR October 2004, 60 Citigroup employees PEOPLE—VOLUNTEERISM from the U.S., Mexico and Latin America AT CITIGROUP joined our President, Bob Willumstad; the CEO of our Global Consumer Group, Former First Lady Rosalind Carter stopped by to greet Citigroup With close to 300,000 employees world- Marge Magner; and Chairman and CEO senior managers and employee volunteers from the U.S., wide, Citigroup employees can be mobi- of Citigroup Latin America and Mexico Mexico and Latin America who participated in the 2004 JCWP. lized to make a positive difference in the and Banamex President, Manuel Medina- communities where they live and work. Mora to work on the Jimmy Carter We carry on our already-strong tradition Work Project 2004 in Puebla, Mexico. of volunteerism when we build homes Teaming up with volunteers from around for people who need them, deliver food the globe, we helped build 75 homes in to the homebound ill or elderly, teach just five days for deserving families in young people about finance or serve on partnership with Habitat for Humanity the boards of charitable organizations. International (HFHI). Our employees also tell us time and again how much personal satisfaction they get Our employees are also being trained from getting involved as volunteers. to deliver financial education lessons through programs such as Teach Children to Save, Junior Achievement, Get Smart Employee Jimmy Dancy building in Puebla, Mexico, during About Credit, and through their local the Jimmy Carter Work Project. schools and community groups. They build, paint, plant, clean up and restore through projects like One Day’s Pay, when 75 employees worked to com- memorate 9/11 by painting and cleaning up a school playground in New York City’s Chinatown neighborhood. Citigroup’s stellar participation in the 2004 USA Magazine Make a Difference Day program earned us an award. Make a Difference Day is a country-wide day of Theresia J. Dodit of CIB’s Customer Service Group community service. The award, sponsored Manual Medina-Mora is pictured with Hilario and Maria in Indonesia was one of the many employees who by USA Weekend Magazine and the Paul Zuñiga, who will live in one of the Habitat homes in Puebla immediately became a part of the efforts to help Newman Foundation, was given to that was dedicated in his honor. Habitat homes in Puebla those who suffered loss following the tsunami on Citigroup in recognition of the more than were also dedicated in honor of Bob Wullumstad and December 26. 1,000 employee volunteers who reached Citigroup Banamex. 10,000 people through various programs. COMMUNITY 27 Citigroup Citizenship Report 2004 © Conservation International, Sterling Zumbrunn 28 ENVIRONMENT Citigroup Citizenship Report 2004 Environment WORKING TOWARD A SUSTAINABLE FUTURE

“Citigroup is committed to conducting business in an environmentally responsible manner that protects human health, natural resources and the global environment.”

⁄ EXCERPT FROM CITIGROUP’S CODE OF CONDUCT

(Top to bottom) Brazilian agroforestry products (Conservation International); Palamedes Swallowtail at Citigroup habitat site; Installation of a solar heating unit in China’s Northwest Yunnan Province (The Nature Conservancy). ENVIRONMENT 29 Citigroup Citizenship Report 2004 “Citigroup’s increased focus on environmental stewardship and social responsibility is not only beneficial to communities around the world, it has also proven to be beneficial for our business. By taking a leadership position in developing the Equator Principles and engaging in ongoing dialogue with NGOs, Citigroup’s CIB has firmly established itself as a leader among financial institutions. In late 2004, I spoke to CIB professionals who participated in our ESRM training program to signal that these issues have senior management support. Indeed, I continue to strongly support our approach on environmental and social risk management. I believe imple- menting these policies and standards in a robust manner should be our focus moving forward.” ROBERT DRUSKIN Chief Executive Officer, Citigroup CIB Our Environmental Management System

Our Environmental Management environmental impact in the “Our System provides Citigroup and our Environmental Footprint” section, stakeholders with a framework to where we provide year-on-year guide our environmental initiatives. comparisons for our 11,800 owned We developed this system in 2002, and leased buildings around the and in 2003 we refined it based on world. Finally, in our “Evaluation external stakeholder feedback and and Future Planning” section, we our own experience. This year, we offer a self-assessment of our have expanded and deepened our progress in implementing the public reporting in some areas to reflect commitments we have made and the evolution of our activities. For describe some of our future goals. example, in the “Internal Policy” section we have included a detailed description of our Environmental and Social Risk Management (ESRM) Policy and related implementation efforts, including our work imple- menting the Equator Principles. We have also taken the next step in evaluating our own direct

30 ENVIRONMENT Citigroup Citizenship Report 2004 (I) EXTERNAL LISTENING Principles. Based on the policies of the World Bank and its private sector Citigroup defines its wide range of investment arm, International Finance stakeholders to include our individual Corporation (IFC), the Equator Prin- and institutional customers, employees, ciples are a voluntary set of guidelines for shareholders, competitors, governments managing environmental and social risks and governmental agencies, community La Esperanza hydropower project in Honduras. related to the financing of development organizations and nongovernmental projects. The financial institutions that “In 2004, the Citigroup Foundation provided support organizations (NGOs). We interact with a have adopted the Equator Principles range of opinion leaders, institutions and to E+Co so that it could work with developing country meet periodically to discuss a variety other stakeholders. A number of people entrepreneurs in their attempts to sell the carbon emission of issues. In July 2004, some of these throughout the company maintain reductions that result from their clean energy projects. institutions met in London with a group relationships and discuss issues of mutual Accessing carbon-based financing can make the incre- of NGOs interested in the implementa- interest and concern, depending on the mental difference for a small enterprise, but the required tion of the Equator Principles. All the issue. Global Community Relations holds process is often beyond these companies’ capacity and participants found this a useful forum primary responsibility for listening and know-how. E+Co assisted the developers of La Esperanza, and agreed to meet approximately twice responding to social and environmental a 12.9 MW hydro project in Honduras, in packaging its a year, with the most recent meeting held NGOs, but our businesses as well as our carbon-offset potential. The Foundation’s support enabled in February 2005 in Switzerland. local Citigroup offices around the world us to help the La Esperanza team prepare the assessment are involved as appropriate. Along with the other financial institu- and documentation required to sell their carbon-reduction tions that have adopted the Equator We engage in discussions with these emissions to the World Bank’s Community Development Principles, we have had periodic discus- stakeholders in several forums as well as Carbon Fund. In addition to the carbon finance, E+Co sions with IFC regarding their revisions directly one on one. In 1995, Citigroup’s provided services and start-up capital to La Esperanza, to their Safeguard Policies, which form a predecessor was a founding member which resulted in securing more than $12 million of local major part of the Equator Principles. and signatory to the United Nations financing for this innovative hydro project.” During 2004, Citigroup continued to Environment Program’s Statement by CHRISTINE EIBS SINGER Financial Institutions on Environment deepen relationships with a number Deputy Executive Director, E+Co and Sustainable Development, a group of NGOs. Rainforest Action Network known as UNEP FI. Our participation (RAN), which had in the past been in UNEP FI enables us to share best an active critic and campaigner against practices with other financial institutions. Citigroup, became a key NGO partner for Citigroup also meets and communicates We also participate in the Asset Manage- Citigroup in 2004, and we discuss issues periodically with a group of self-assembled ment Working Group and the North with them regularly. We also communicate socially responsible investment firms and American Task Force of UNEP FI. with other organizations interested in these one NGO. The group provides us with issues and we look to them for expertise, insights into a range of environmental As one of the leaders in the development guidance and feedback on our environ- issues and offers feedback on our efforts of the Equator Principles, Citigroup mental and social performance. Some of to implement our environmental policies engages regularly with other financial these organizations are described later in and programs, including the information institutions that have adopted the the section titled “NGO Partnerships.” provided in this report.

“Rainforest Action Network has witnessed Citigroup grapple with and embrace its environmental responsibility over the last five years. With the adoption of programs such as the Equator Principles and Citigroup’s new and more comprehensive Environmental Initiatives, Citigroup has positioned itself as a corporate leader addressing the twin issues of natural ecosystem preservation and the current climate crisis. Although these programs do not make Citigroup a sustainable company, they are evidence of a sincere commitment to integrate profit- ability and social responsibility—in essence, to do well by doing good. The severity of these environmental challenges requires bold leadership and a dedication to continuous improvement. We look forward to working with Citi to enhance these programs, and hope that the rest of Wall St. follows Citi’s example.” ILYSE HOGUE Campaign Director, Global Finance Campaign, ENVIRONMENT 31 Rainforest Action Network Citigroup Citizenship Report 2004 Environmental and Social Risk Categories for Citigroup’s ESRM Policy

ß Category A—Use of proceeds may have (II) INTERNAL POLICY ESRM Policy Responsibility significant adverse environmental impacts In 2003, Citigroup’s Corporate and Adhering to the ESRM Policy is a that are sensitive, diverse or unprecedented. Investment Bank (CIB) developed an true example of shared environmental A potential impact is considered “sensitive” Environmental and Social Risk Manage- responsibility. Transactors, or bankers, if it may be irreversible (e.g., lead to loss of ment (ESRM) Policy to help address are responsible for initial screening of a major natural habitat), affect vulnerable environmental and social issues from ESRM-covered transactions; complying groups or ethnic minorities, involve involun- both a credit risk perspective and a with the approval, analysis, documenta- tary displacement or resettlement, or affect reputation and franchise risk perspective. tion and process requirements; and significant cultural heritage sites. These This ESRM Policy and the risk categori- obtaining any required representations impacts may affect an area broader than the zation criteria were derived largely from from the client. The ESRM specialists sites or facilities subject to physical works. the Equator Principles. are senior credit officers appointed by ß Category B—Use of proceeds may have the CIB Risk Management head. These Transactions covered under Citigroup’s ESRM Specialists have designated review potential adverse environmental impacts CIB ESRM Policy include: on human populations or environmentally and approval responsibilities for transac- important areas, including wetlands, forests, ß Loans approved under CIB’s Infrastruc- tions with sensitive environmental and grasslands and other natural habitats, and ture and Energy Finance (IEF) Credit social risks. are less adverse than those of Category A. Program where the project capital costs Recognizing our need for additional These impacts are site-specific; few if any are $50 million or more (these transac- expertise, in 2004 Citigroup created the of them are irreversible; and in most cases tions are those where the Equator new position of CIB ESRM Director. mitigatory measures can be designed more Principles apply); The ESRM Director serves as a techni- readily than for Category A. ß Loans approved under CIB’s Export cal resource and counsel for ESRM ß Category C—Minimal or no adverse and Agency Finance (EAF) Credit specialists and also advises others in the environmental impact. Program where the loan facility CIB, including the Global Commitment amount is $50 million or more; and Committee, on policy interpretations and When a project finance transaction is deemed lending transactions that may have envi- Category A, a designated senior credit officer ß Corporate loans and debt securities ronmental or social risk concerns. The —or ESRM Specialist—must undertake review underwritings greater than $50 million Global Commitment Committee reviews and give sign-off approval for the transaction where the use of proceeds is known. and approves all public and private to proceed. The ESRM Director, who serves as Certain activities are precluded under offerings of common stock, preferred a technical resource on environmental and CIB’s ESRM Policy, such as activities securities and most debt issuance where social risk concerns, supports these senior that employ harmful child labor or Citigroup acts as lead or co-manager. credit officers. forced labor.

2004 Equator Principles Reporting EA UNDERTAKEN & PUBLIC CONSULTATION EMP PREPARED & INDEPENDENT EXPERT CATEGORY DISCLOSED LOCALLY? UNDERTAKEN? COVENANTED? REVIEW?

1. A Yes Yes Yes Yes 2. A Yes Yes Yes Yes

3. A Yes Yes Yes Yes

Please note: This summary of transactions does not include loan transactions outside project finance or bond transactions that are covered by other provisions of Citigroup’s ESRM Policy.

32 ENVIRONMENT Citigroup Citizenship Report 2004 Our public commitments represent the Equator Principles minimum standards for Citigroup’s CIB. Implementation at Citigroup In the spirit of conducting business in an In 2003, we committed publicly to report environmentally and socially responsible on our implementation of the Equator CHRIS BEALE manner, CIB may from time to time Principles. In doing so, Citigroup is com- Managing Director, revise the ESRM Policy to expand, clarify mitted to increasing our openness and Citigroup Global Markets or eliminate specific procedures, provided transparency while maintaining appropri- that the minimum standards are met. To ate levels of business confidentiality to “The Equator Principles represent an important reflect lessons learned from our first year ensure protection of both our clients’ and commitment by the banking industry to high of ESRM implementation, the Policy was shareholders’ interests. environmental and social standards in project revised in December 2004. financing. Their success has been demonstrated Transactions covered under the Equator in their rapid and widespread adoption and in Principles include Infrastructure and their implementation in several key projects.” Energy Finance (IEF) project finance transactions. The Equator Principles do not cover certain transactions such as advisory mandates or bonds. Category A Project Finance Transactions Subject to the More than 120 members of Citigroup’s Equator Principles project finance and risk management team are directly involved in implement- Citigroup is reporting the number of ing the Equator Principles. A number of project finance loans it closed during other people are also impacted, especially 2004 that have been deemed Category relationship managers in those industries A transactions. On page 32 is a summary SHAWN MILLER that are most involved in project finance of these loans and how they were treated Director of Environmental and Social Risk transactions, such as oil and gas, mining under Citigroup’s ESRM Policy, which is Management, Citigroup CIB and power. An intensive effort has been consistent with the Equator Principles. “Citigroup’s environmental and social policies undertaken to train the appropriate The three Category A projects, all in are making a difference and creating notice- Citigroup staff on the Equator Principles the oil and gas industry, were deemed and the ESRM Policy. This training was able change. Adherence to these standards by Citigroup to be fully compliant with initially targeted where it was needed the will have a positive impact on the ground the aspects of its ESRM policy that are most: at our project finance and risk man- for communities and the environment. But based on the Equator Principles. All three agement staff, who work on transactions they’re also helping to mold a new way of transactions prepared Environmental where the Equator Principles are applied. Assessment (EA) documentation that was doing business within CIB. They’re making disclosed and consulted on locally. All us think outside the box and find pragmatic In addition to the ESRM Policy, three projects also prepared an Environ- solutions to complex challenges. They’re guidance notes have been developed to mental Management Plan (EMP) that compelling us to listen and talk to a wide ensure that transactors and risk officers was covenanted by the borrower in loan range of stakeholders. In my short time here, receive the appropriate level of direc- documentation. Compliance with the I’ve seen that Citigroup wants to ‘do the tion and implementation advice. For example, a guidance note was developed Equator Principles was also confirmed right thing’—this is a steady and constant to describe when an Environmental through independent expert review of compass that guides decision-making.” Management Plan (EMP) is required and EA documentation. We worked either how and when to covenant this EMP directly with or through the lender into financing documentation. Although syndicate with all project sponsors to not required under the ESRM Policy, ensure that environmental and social risks another guidance note was developed were being managed appropriately. For to help transactors incorporate environ- Category A transactions subject to the mental and social considerations into Equator Principles, Citigroup requires advisory mandates. An ESRM Policy and that the borrower has covenanted to Implementation intranet site was also comply with the EMP in the construc- launched in late 2004. tion and operation of the project and

ENVIRONMENT 33 Citigroup Citizenship Report 2004 Illegal Logging

Illegal logging is seen by many to be a significant contributor to the degradation and loss of critical forest ecosystems in many best intentions, we have discovered that we Citigroup’s Environmental Affairs unit regions around the world. Citigroup has made have not yet perfected internal tracking includes a vice president and manager, a public commitment that we will not make of Equator Principles implementation. and is the primary source of expertise on loans to companies that we know to be in Particularly, in the absence of an ESRM environmental issues for the company. The violation of local or national laws regarding Director in early 2004, we did not yet have team develops and manages Citigroup’s illegal logging. To implement this commitment, a robust tracking mechanism in place. In sustainability strategy and supports the CIB has instituted as part of its ESRM Policy a addition, in the process of compiling infor- business units with advice and external portfolio review process to identify customers mation for this report, we now believe communications. The unit also advises the in high-risk sectors or countries that need to that we will need to clarify some of our Citigroup Foundation on its environmen- be reviewed more carefully, and an additional credit and risk policies to help transactors tal grant-making. Since 2002, a number of review for new transactions where the use of and risk officers determine when a project business units, including project finance, proceeds is specified for logging activities. In must comply with our ESRM Policy and/ credit risk, facilities management and pro- 2004, Citigroup worked with transactors and or the Equator Principles. Part of what we curement have also developed their own risk officers to embed this commitment into have learned relates to how we are orga- environmental expertise with support the way we do business in the forest products nized. We have articulated the applicability from Environmental Affairs. For example, sector. To raise awareness, illegal logging was of certain risk policies to discreet business an ESRM Director was hired in 2004 by a key topic of the ESRM training sessions. units and we are discovering that they may Citigroup’s CIB to serve as a resource on need to be revised. In addition, there are environmental and social risk. some transactions, such as refinancings, where the applicability of our ESRM Policy and the Equator Principles needs to be further refined. Learning from these provides regular reports prepared by lessons is a priority and we are currently in-house staff or third-party experts on dimensioning the changes we need to compliance with the EMP. make in our risk policies and procedures The Equator Principles are having a and our reporting process going forward. beneficial impact both within Citigroup and on local communities. For example, (III) ORGANIZATION a Citigroup business unit made an equity AND PEOPLE investment that was not subject to the At Citigroup, environmental responsibilities Equator Principles, but decided to use are shared among many different corporate them as a reference point to evaluate and business units. Ultimate responsibil- the investment from an environmental ity rests with the Board of Directors, and social risk perspective. In another whose Public Affairs Committee reviews JOHN GILLILAND instance, Equator Principles application Citigroup’s performance in this area annu- Managing Director, by a project sponsor in the extractive ally. The committee’s staff liaison is Pamela Structured Portfolio Management, industries facilitated the holding of the Flaherty, Senior Vice President for Global Citigroup CIB first Environmental Impact Assessment Community Relations, whose responsibili- “Illegal logging is harmful to the environment (EIA) public consultation meeting ever ties include Environmental Affairs. to be held in that particular country. and creates difficulties for local communities Citigroup’s environmental responsibili- that often depend on forest ecosystems for We have noted elsewhere in this report ties also reside with our Environmental their livelihoods. It is detrimental to local and that we have made great strides in the pro- and Social Policy Review Committee, national economies, as illegal logging reduces cess of deepening and strengthening envi- which is composed of senior managers tax revenue streams that would otherwise ronmental and social risk considerations from various business units who work come from legally sanctioned forestry activi- to implement environmental policies into Citigroup CIB’s corporate lending ties. We take illegal logging issues very seri- decisions. We are proud of the progress and initiatives. This committee offers ously and have instituted internal review and we’ve made. However, the implementation feedback and oversight to the Environ- control processes to assist us in meeting our of any policy or procedure requires an mental Affairs unit, and members meet public commitment. This makes good business institution to learn from mistakes, retool periodically with external stakeholders to sense, and further evidences our commitment its approach and do better. Despite our discuss Citigroup initiatives. to sound environmental practices.”

34 ENVIRONMENT Citigroup Citizenship Report 2004 Environmental Responsibility (IV) OUR ENVIRONMENTAL ORGANIZATION STAFFING RESPONSIBILITY FOOTPRINT Discuss company status, Citigroup initiated a comprehensive Board of Directors Public Affairs Committee initiatives and environmental process to track, report and manage and social issues our environmental performance in 2002. This was an enormous task that 15 senior managers representing CIB, Risk involved 400 staffers gathering detailed Environmental and Social Consult on policy and Management, Legal, Corporate data from more than 11,800 properties, Policy Review Committee environmental issues Governance, and Global encompassing 84 million feet of space, Community Relations in more than 100 countries. A Web-based environmental database was created to act Advise on environmental as a repository for this data. Four individuals led by senior policy development and Environmental Affairs vice president of Global grants, provide expertise to The project was made even more com- Community Relations business units and manage plex because 70 percent of our properties NGO and SRI relationships are leased, and we can only gather accu- More than 20 senior credit rate, metered data for a portion of those Independent Credit Risk Implement the ESRM Policy, officers supported by ESRM sites. As a result, the database contains real Management Group including Equator Principles Director data for 57 percent of the total portfolio. We estimated data for the remaining To identify and make properties by using consumption data investments under the Sustainable Development from buildings of similar size and use. Citigroup Venture Capital Investment Program, leveraging (CVC) International, a unit Team of 28 investment Since the database project’s inception, the skills of the team of CVC of Citigroup Alternative professionals senior management and Citigroup International investment Investments Realty Services have committed to professionals, the Environmental improving the quality of this data. There Affairs unit and other resources is widespread recognition that in order across Citigroup to improve our greenhouse gas emis- Infrastructure & Energy Entire professional sions, we must be able to measure them Finance Group (formerly Implement ESRM Policy staff of 70 accurately. As a result, enhancements were Project Finance Group) made to the database in 2003 and 2004, and in 2004 two studies were initiated. Implement ESRM Policy Entire professional and require adherence to Export and Agency Finance ß A large consulting firm with experi- staff of 62 partnering export agencies’ ence in environmental matters and environmental standards corporate reporting assisted Citigroup More than 50 community Identify brownfield in its review of the quality of the data development professionals; development projects; Global Consumer Bank and how it was gathered. CitiMortgage sales and market Energy Efficient ß Entech USB, a billing service group marketing staff Mortgage that operates in 54 countries, was Corporate Real Estate Reduce environmental 150 facilities managers retained to review and compare our Services footprint estimated consumption for leased 14 senior environmental Finance water, sewage, properties against their database of Public Finance bankers and ten senior solid waste, recycling and similar buildings. Entech conclusions housing bankers brownfield projects were based on actual billing data, not estimates. Identify environmentally preferable products and services Seven procurement Overall, the conclusion was that the data Procurement and communicate Citigroup’s professionals was reasonable. environmental commitment to our suppliers

ENVIRONMENT 35 Citigroup Citizenship Report 2004 “Over the past three years, we have gained experience in collecting and analyzing environmen- tal data, and we realize more than ever that aligning our objectives with sound environmental practice makes good business sense. We also now understand that it requires a long-term com- mitment to fully implement change throughout the corporation. Our work to minimize our own environmental footprint is being undertaken with a sense of commitment, urgency and integrity. We are looking forward to building on the progress we made in 2004 by establishing a corporate environmental ‘roadmap’ in 2005.” STEPHEN LANE Executive Vice President, Citigroup Realty Services, Citigroup Global Projects Group

Portfolio Dimension and Complexities emission levels is on a per-employee Regional Consumption and basis, rather than on an absolute basis. There are also challenges in reporting CO2 Emissions Report year-over-year comparisons. Our portfolio We believe this will be the most accurate As can be seen in the table on page 38, is continually changing through acquisi- way for us to assess improvements. The the absolute value of emissions in some tions, for example, to meet business needs. number of employees reported is based regions has increased while in others it has We attempt to optimize space utilization on information generated by Human decreased. It is significant to note that the to be cost efficient, and we think that’s Resources and represents the average absolute value of our CO emissions has annual staff count for a particular year. 2 good for the environment. A study by the grown by only 3.3 percent while our CO2 Real Estate Executive Board—the 2004 We grew from the 270,000 reported in emissions per employee has decreased by 1st Annual Benchmarking for Finan- last year’s report to 300,000 in 2004. seven percent. Yet, we are growing our cial Services Companies—found that As part of ongoing enhancements, we earnings at a much faster pace (annual Citigroup is in the top quartile of similar asked our regional personnel to recheck earnings before special charges grew at corporations in using space efficiently. 2003 entries concurrent with their 2004 the rate of 19 percent) and have added staff (up 11.1 percent from 2003); the Weighing all of these factors, we have data entry. After reviewing those entries, actions we are taking to improve our determined that the best way for us to it was necessary to restate some of the energy efficiency are achieving the desired track the trend of consumption and numbers that were reported in last year’s Citizenship Report. Most changes were results. This is, in part, due to our internal due to the incorrect application of unit Energy Allocation/Awareness Program. conversion formulas in the database, The program is designed to help build- incomplete data and/or the entry of data in ing management and building operators Wildlife Habitat Sites incorrect units. Also, the boundaries of our reduce energy consumption within their footprint were further refined to focus on respective facilities. Since 2002, Citigroup has implemented Wildlife at buildings with meaningful consumption. Worksm sites at several of its large U.S. facilities, Preparing for a Future in a including those in Albuquerque, New Mexico; Florence, Modifications to the database were made GHG-Constrained World Kentucky; Sioux Falls, South Dakota; and O’Fallon, in 2004 to help eliminate many of these Since 2003, Citigroup has participated Missouri. These programs have been developed by problems. The recently completed inde- in three initiatives that will help to shape Citigroup employees and community volunteers in pendent studies have identified additional our future efforts with regard to lowering partnership with Wildlife Habitat Council (WHC), an areas for improvement in processes, our greenhouse gas (GHG) intensity. international nonprofit that works to increase the controls and systems functionality that quality and amount of habitat on corporate, private we will look to implement in 2005. We ß Business Round Table “Climate and public lands. The Kentucky site was certified and remain committed to collecting data that RESOLVE” Project—Companies taking recognized by WHC as an outstanding wildlife habitat is as transparent, accurate, complete and voluntary actions to reduce, offset, management corporate site. Citigroup is also working consistent as is practical. sequester or avoid GHG emissions. at our Tampa, Florida, facility with local governmental agencies to maintain wetlands, which provide habitat While we have achieved our goal of ß World Resources Institute Project for wildlife such as the American alligator. improving data quality for this year, we “Climate Northeast”—Working recognize that there is much more to be to facilitate the development and Wildlife at Work programs are also being done. We also understand that it requires implementation of corporate climate considered for facilities in Jacksonville, Florida; long-term commitment to continuously change strategies that will enable Boise, Idaho; Greensboro, North Carolina; Louisville, improve our environmental performance. participating companies to thrive in Kentucky; and Irving, Texas. The tables on pages 37-38 provide a a GHG-constrained world. snapshot of our environmental footprint as of the end of 2004.

36 ENVIRONMENT Citigroup Citizenship Report 2004 Global Consumption Report 2004 ABSOLUTE VALUE RELATIVE VALUE Revised Data 2003 2004 Revised Data 2003 2004 Employees 270,000 emp. 300,000 emp. – – Surface Area Monitored 7,658,084 m2 7,673,324 m2 – – Surface Area Monitored 82,431,611 sq. ft. 82,595,655 sq. ft. – – in Sq. Ft. CONSUMPTION 22.1 GJ/Emp. 20.5 GJ/Emp. 6,153 kWh/Emp. 5,687 kWh/Emp. Electricity 5,980,421 Giga Joules 6,142,116 Giga Joules 216.9 kWh/m2 222.3 kWh/m2 20.2 kWh/sq. ft. 20.7 kWh/sq. ft. 2.6 GJ/Emp. 2.4 GJ/Emp

2 2 Heat 25.7 kWh/m 26.3 kWh/m 708,495 Giga Joules 727,806 Giga Joules (Gas, steam, chilled water) 2.4 kWh/sq. ft. 2.4 kWh/sq. ft. 8,149 BTU/sq. ft. 8,355 BTU/sq. ft. 10.50 lit./Emp. 9.5 lit./Emp. Fuel Oil 2,836 m3 2,843 m3 2.78 gallons/Emp. 2.5 gallons/Emp. 85.78 lit. (Emp.xday) 81.3 lit. (Emp.xday) Water 5,790,384 m3 6,094,087 m3 22.66 gallon (Emp.xday) 21.5 gallon (Emp.xday) 756 lit./m2 794 lit./m2

Total Waste 549 kg/Emp. 433.8 kg/Emp. 163,442 US Tons 143,454 US Tons (Rubbish and Recycled Material) 1,332 lbs/Emp. 1,052 lbs/Emp. Refuse & Other 129,119 US Tons 111,300 US Tons 79% 78% Office Paper Recycled 34,323 US Tons 32,154 US Tons 21% 22%

CONSUMPTION CONVERTED TO CO2 EMISSIONS 994,765 US Tons 1,027,730 US Tons 3,342 kg/Emp. 3,108 kg/Emp. Electricity 902,451 Metric Tons 932,357 Metric Tons 118 kg/m2 122 kg/m2 96,998 US Tons 101,399 US Tons 326 kg/Emp. 307 kg/Emp. Gas 87,997 Metric Tons 91,989 Metric Tons 11 kg/m2 12 kg/m2 18,813 US Tons 18,377 US Tons 63 kg/Emp. 56 kg/Emp. Fuel Oil 17,067 Metric Tons 16,672 Metric Tons 2 kg/m2 2 kg/m2 1,110,576 US Tons 1,147,506 US Tons 3,732 kg/Emp. 3,470 kg/Emp. CO Emissions Total 2 1,007,515 Metric Tons 1,041,018 Metric Tons 132 kg/m2 136 kg/m2

Ozone-Depleting Emissions 0.07 lbs/Emp. 0.05 lbs/Emp. from Refrigerant 18,240 lbs 13,612 lbs 2 2 (not a CO2 emission) 0.0024 lbs/m 0.0018 lbs/m

Notes: 1. The properties from the Koram and First American Bank acquisitions were not included in the analysis. These properties were added to the portfolio late in the year 2004. They will be included in the 2005 analysis. 2. The unit Giga Joules (1,000 million Joules) is used in accordance with the GRI guidelines (1MWh=3.6 GJ). Other units more commonly used in Europe and the United States have been included in the “Relative Value” column to facilitate comparisons with other financial institutions.

ENVIRONMENT 37 Citigroup Citizenship Report 2004 Regional Consumption and CO2 Emissions Report ß Green Power Purchasing—In 2004, REVISED DATA 2003 ACTUAL DATA 2004 VARIANCE % 2004 vs 2003 Citigroup made its first purchase of ELECTRIC energy certified as “green” by the U.S. states of New York and New Jersey. As Geographic MwH US Tons Metric Tons MwH US Tons Metric Tons Increase/ a result, five percent of the power used Region Electricity CO Emission CO Emission Electricity CO Emission CO Emission (Decrease) 2 2 2 2 by Citigroup in these states originates Asia/Pacific 164,952 124,075 112,561 195,238 145,375 131,884 18% from renewable sources. We intend to Canada 22,872 5,320 4,826 23,338 5,428 4,924 2% increase “green” energy purchasing in CEEMEA 88,166 60,534 54,917 83,648 57,924 52,548 (5%) U.S. states where we have that option Europe 192,334 96,301 87,365 194,575 97,518 88,468 1% and to investigate opportunities to use Latin more “green” power in other countries. 328,255 156,692 142,151 326,984 158,339 143,645 0% America Employing More Environmentally United States of 864,649 551,843 500,632 882,361 563,147 510,887 2% Efficient Building Technologies America As Citigroup designs new facilities GLOBAL TOTAL 1,661,228 994,765 902,451 1,706,143 1,027,730 932,357 3% or upgrades existing ones, significant GAS THERMS consideration is given to environmentally efficient building technologies. For Geographic US Tons Metric Tons US Tons Metric Tons Increase/ Gas Therms Gas Therms example, a new Citi Cards Customer Region CO Emission CO Emission CO Emission CO Emission (Decrease) 2 2 2 2 Service Center in Jacksonville, Florida, Asia/Pacific 50,507 762 691 50,723 765 694 0% is being designed with features that Canada 174,847 3,761 3,412 186,871 4,020 3,647 7% will enhance both working conditions CEEMEA 584,364 9,435 8,559 547,059 8,618 7,819 (6%) and the building’s environmental Europe 2,368,150 38,431 34,864 2,618,491 43,029 39,036 11% performance. The building’s orientation Latin minimizes heat gain, maximizes shading 292,417 2,492 2,260 304,267 2,698 2,447 4% America and provides views for all employees. United Air conditioning for the Jacksonville States of 1,803,711 42,118 38,210 1,810,169 42,269 38,346 0% America facility will use a central, electric chiller plant consisting of water-cooled, high- GLOBAL TOTAL 5,273,995 96,998 87,997 5,517,579 101,399 91,989 5% efficiency centrifugal chillers. And, the FUEL OIL building’s shell will use high-efficiency, Geographic Fuel Oil US Tons Metric Tons Fuel Oil US Tons Metric Tons Increase/ low “e” glass that will allow for a 70 per-

Region Gallons CO2 Emission CO2 Emission Gallons CO2 Emission CO2 Emission (Decrease) cent visible light transmission with a low Asia/Pacific – – – – – – – solar-heat gain coefficient—a 43 percent Canada – – – 4 0 0 – reduction in solar heat gain compared CEEMEA 219,446 4,020 3,647 238,572 4,562 4,139 9% to standard glazing, which exceeds the Florida Energy Code’s solar heat gain Europe 137,194 3,292 2,987 139,419 3,287 2,982 2% and thermal requirements. Latin 97,189 2,133 1,935 116,138 2,376 2,156 19% America Citigroup also partnered with Interface United in 2004 on the Interface America’s States of 295,483 9,368 8,499 257,116 8,152 7,395 (13%) ReEntry® carpet reclamation program. America Through this program, we diverted GLOBAL TOTAL 749,313 18,813 17,067 751,249 18,377 16,672 0% 160,930 lbs. of carpet from landfills. CO EMMISSIONS TOTAL 2 1,110,576 1,007,515 1,147,506 1,041,018 3.3% The material was recycled by Interface to use as feedstock for their vinyl carpet-backing product.

38 ENVIRONMENT Citigroup Citizenship Report 2004 Carbon Dioxide Emissions from Power Projects

In response to concerns regarding (V) TRAINING AND global warming, many of our clients COMMUNICATIONS have made efforts to reduce carbon In 2004, a large component of Citigroup’s emissions from the energy they environmental training program focused on use and produce. In addition to our implementing the enhanced CIB ESRM efforts to lessen our own carbon Policy. Building on successful results of footprint, Citigroup has committed initial training undertaken in 2003, ESRM to reporting the aggregate carbon training efforts expanded in 2004. The dioxide emissions from power ESRM Director created an intensive one- Glen Armstrong (of Sustainable Finance Ltd., representing projects that we finance in our day ESRM training program to provide project finance portfolio. IFC), leads Citigroup bankers through a training exercise on CIB professionals with a more in-depth Equator Principles implementation. We expect that the absolute carbon understanding of the ESRM Policy and the dioxide emissions from power projects Equator Principles, and to communicate (VI) we finance will fluctuate over time, best practices for managing social and envi- RISK MANAGEMENT depending on the number of deals ronmental risks in a variety of CIB transac- Our commitment to operating in an we close in that year and the nature, tion types. Through case study simulations environmentally and socially responsible scale and technology of each plant. and interactive discussions, project finance manner has strengthened significantly transactors, risk officers, and legal and other following the successful development and Our annual assessment includes CIB professionals acquired essential skills adoption of the Equator Principles and emissions data on Citigroup project needed to identify and categorize key the ESRM Policy by Citigroup’s CIB. The financing of new capacity only, includ- environmental and social risk issues. introduction of the policy, appointment of ing expansions of existing plants. It ESRM specialists and initial training held In the 2003 Citizenship Report, we set will include data from both fossil fuel in 2003 all established the fundamental a goal of completing ESRM training by and renewable plants. However, it will ESRM framework for the CIB. not include data on refinancings or on mid-2004. We had to adjust this timetable, deals that have not closed. however, because the hiring of an ESRM In 2003, the CIB adopted the ESRM Director and the preparation of new Policy to establish internal procedures In 2004, Citigroup closed one project training and guidance materials required to comply with the Equator Principles. finance transaction for a new power additional time. Late in 2004, the first Moreover, we chose to implement this plant. We calculate the lifetime two in-depth training sessions were held ESRM Policy in order to go beyond the emissions for this plant, using a in New York City and London and were Equator Principles. In addition to the 30- to 60-year range. The emissions conducted jointly by the ESRM Director project finance transactions with capital are derived from the plant’s capacity and an external expert representing IFC. and heat rate (both specific to each Training sessions will be held in hub cities facility), the carbon content of the in Asia and Latin America in 2005, and fuel (a publicly available figure) and further training in London and New York projected capacity utilization (which will be scheduled as needed. averages 80 percent in this case). We allocate to Citigroup the percentage It is worth noting that more general of total emissions that is equivalent environmental risk components have to the percentage of the debt that been included as part of Citigroup’s Citigroup provided to this plant. One broader risk-management skills training bank typically provides a small share program for some time. In 2004, nearly of the total debt to a facility. 1,050 people were exposed to environ- mental risk issues in classroom modules For 2004, Citigroup’s share of and via online courses. Our in-depth greenhouse gas emissions for this ESRM training augments this general project totaled 2.7 to 5.5 million tons. training program. The lower figure assumes a plant will operate for 30 years. The higher Along with these training sessions, we Valerie Cook Smith and Camilla Seth of Citigroup’s assumes it will operate for 60 years. communicate regularly via Citigroup’s Environmental Affairs unit participate in the ESRM intranet with our employees on a range training in New York City. of issues, including those related to sustainable development. ENVIRONMENT 39 Citigroup Citizenship Report 2004 Case Study #1 Case Study #2 Case Study #3

PROJECT: A large energy infrastructure project PROJECT: A transaction to provide equipment PROJECT: A large corporate bond financing was was proposed as a joint venture between a financing for use in a hydropower dam in an proposed for a client in an emerging market country. state-owned company and an existing Citigroup emerging market country. REVIEW PROCESS: Citigroup’s bond Commitment global corporate client. Citigroup, along with REVIEW PROCESS: Although the transactor Committee members were aware that the use of other financial competitors, was bidding for a realized that the transaction was less than $50 proceeds would be used partly for construction of lead arranger mandate. million and thus the ESRM Policy and Equator a hydropower dam. The committee consulted with REVIEW PROCESS: The project included signifi- Principles would not apply, a discussion took the ESRM Director and it was determined that the cant onshore and offshore development, and the place between the ESRM Director, the transactor ESRM Policy applied and that extra due diligence onshore facilities were proposed to be built on and others. Subsequent review of the hydro would be required to determine the environmental or near an existing industrial estate. We initially facility’s environmental and social impacts and social impacts and the appropriate categoriza- believed that this project warranted Category B found that there were serious environmental tion. As little information was available, the ESRM treatment. However, upon further review of the and social legacy issues, including large-scale Director asked the committee members to go EIA, the project was deemed to have a diversity resettlement that had not been conducted back to the client and ask further environmental of potential adverse environmental and social properly. Although neither the ESRM Policy nor due diligence questions. Questions were posed on impacts, including adverse impacts on an the Equator Principles applied, the ESRM Direc- issues such as dam height; reservoir inundation endangered species, that warranted Category A tor recommended that the transactor proceed size; whether the reservoir affected any environ- treatment. An EMP was being developed by the with caution and inform the ESRM specialist mentally or culturally sensitive areas; and whether client for state regulatory approval, but it was responsible in that region. resettlement was involved, and, if so, whether not clear whether the EMP had to be specifically locally affected people had been both consulted OUTCOME: The transaction was not executed. covenanted or whether Citigroup could rely on and compensated. Following responses received, a general representation of adherence to local it was determined that this was a Category A and national environmental laws. project, and that Citigroup’s proposed client had conducted an environmental assessment process OUTCOME: After further review and internal that resulted in host country regulatory approval discussion, CIB business and risk manage- and had devised consultation and compensation ment agreed that the Equator Principles processes for people adversely affected by the and Citigroup’s ESRM Policy required explicit hydropower development. mention and covenanting of the EMP. OUTCOME: The transaction was recommended to proceed.

costs over $50 million covered by the Our main challenges in 2004 were to Second, in July 2004, CIB Independent Equator Principles, the ESRM Policy ensure that internal procedures were Risk Management appointed an ESRM applies to corporate loans and debt secu- sufficiently robust yet pragmatic given Director, who developed a number of rities underwritings greater than $50 mil- Citigroup’s vast and global presence and guidance tools to facilitate the analysis lion where the specific use of proceeds business requirements. Significant prog- and review of transactions and works is known. This policy reinforces CIB’s ress was made toward these objectives. with the Environmental Affairs unit commitment to rigorously and effectively on broader policy issues and external First, in the new release of the CIB manage environmental and social risks in stakeholder engagement. Credit Policies and Procedures in April a wide variety of transactions. 2004, the consideration of environmental Third, the CIB revised its ESRM Policy Also in 2003, selected senior credit and social risks was explicitly incorpo- in late 2004 to implement Citigroup’s officers in CIB’s Independent Risk rated into our credit analysis standards. commitment against providing loans to Management unit were appointed The ESRM Policy also became an companies involved in illegal logging. ESRM specialists and given responsibil- official addendum to the Credit Poli- The ESRM Policy revision mandated a ity for review and approval of Category cies, and relevant sections of the Credit new review process to identify high-risk A transactions. All ESRM specialists are Policies referenced the ESRM Policy customers and sectors. Certain activities Independent Risk Managers and do not requirements. were also explicitly precluded in the have reporting lines to CIB’s business policy, such as the commitment not to management. engage in activities that involve harmful child labor or forced labor.

40 ENVIRONMENT Citigroup Citizenship Report 2004 (VII) OUR NGO PARTNERS and pilot of community plant nurser- ies to domesticate popular species and NGOs provide valuable assistance in alleviate stress on existing wild popula- helping us understand environmental tions; and in Vietnam, we supported a issues and in our efforts to address community-based ecotourism project environmental concerns. We partner to shift communities away from wildlife Richard Stanley, Citigroup Chief Executive Officer, China; with these organizations in a number of hunting and harvesting to more sustain- Chen Cong Hong, General Manager, Beijing Organic Farm, Inc. ways. We frequently meet with NGOs able income-generating and community (New Ventures China Winner); Luiz Ros, Director, New Ventures that are engaged in issues related to our development activities. Global Operations; and Jerry Lizhe, New Ventures China at business initiatives and commitments. For WRI’s New Ventures China Investor Forum in Shanghai. example, we are in regular contact with Ecologic Finance—We supported the NGOs that address illegal logging and the provision of affordable financial services “With private enterprise exploding in China, leveraging impact of project finance on social and to community-based businesses operating investments that enable sustainable use of natural environment issues. We also partner with a in environmentally sensitive areas of Latin resources is critical to maintaining economic growth number of environmental NGOs through America. Founded in late 1999, EcoLogic in the long term. Our New Ventures partnership with the Citigroup Foundation. In each case, Finance manages a portfolio of $25,000 Citigroup has allowed WRI to link investors with pioneer- our focus is on supporting sustainable to $500,000 loans made to small and ing entrepreneurs who are establishing the markets development—the effort to promote medium-sized enterprises that do not meet of the future. For our 2004 Investor Forum, we invited economic growth that is compatible with traditional requirements for accessing credit Gordon Lam, Managing Director of Citigroup, China Invest- the natural environment and with the well from local financial institutions. ment Management, to serve on the Judges Panel, which being of present and future generations. E+Co—We continued support for a evaluated the ten finalist enterprises. We are also working In 2004, the Citigroup Foundation con- program assisting small and medium-sized closely with Citigroup to set up the Executive Mentoring tinued to foster sustainable development in clean energy enterprises in develop- program, which will match the company’s executives with developing countries, along with providing ing countries to secure carbon-based relevant enterprises for short mentoring projects.” new support for work in the U.S. We financing, and provided new support for a LUIZ ROS awarded grants to enterprise development program that will help E+Co more effec- programs, which strengthen small and tively monitor and evaluate the impact of Director, Global Operations, New Ventures World Resources Institute medium-sized companies that incorporate their work on sustainable development. unique social and environmental benefits. Forest Trends—We supported two gain independence from the traditional We also expanded our grant-making to projects: the Ecosystem Marketplace, market system that disadvantages small include areas where we have sharpened which will develop an Internet-based farmers. Current support will expand our focus, such as forestry and climate information clearinghouse on the the model to the rest of Latin America. change. Highlights of the environmental various markets for ecosystem services, Support was also extended for a new grants made by the Citigroup Foundation including the developing markets for forestry project that will develop targeted in 2004 are summarized below. ecosystem-based carbon, water and information on the regulatory, environ- Aspen Institute and World Resources watershed services, biodiversity, and the mental and social context for forestry Institute—We continued support of burgeoning markets for wetlands and operations in Indonesia, Brazil and Russia. Beyond Grey Pinstripes, a survey and endangered species in the U.S.; and the This information will help a range of awards program for business schools Business Development Facility (BDF), interested parties, including financial that assesses how business schools are which will assist small to medium-sized institutions, that aim to ensure that they preparing MBA graduates for social and forest owners in understanding how to do not support environmentally or socially environmental stewardship. maximize their forests’ value by explor- damaging or illegal forestry activities. ing opportunities in ecosystem services, Conservation International—Grants were Sustainable Northwest—We provided such as carbon sequestration, biodiversity awarded to four programs: In Brazil, support for the Healthy Forests, Healthy protection, marketing certified forest we supported efforts to strengthen the Communities Partnership, a project products and watershed protection. economically viable conservation enter- dedicated to stimulating environmentally prises within the agroforestry sector; in Rainforest Alliance—We continued sound forest restoration and economic Peru, we supported a project to develop support for the Cocoa Trust Fund in revitalization in rural U.S. Pacific North- sustainable, community-based manage- Ecuador, which brings environmental west communities. ment of natural resources and value- and financial sustainability to cocoa added products such as coffee; in South farmers. The Cocoa Trust Fund is Africa, we supported the development designed to help small cocoa growers ENVIRONMENT 41 Citigroup Citizenship Report 2004 (VIII) BUSINESSES MAKING The Sustainable Development Investment A DIFFERENCE Program is housed within Citigroup Venture Capital (CVC) International, Citigroup’s business units are routinely Citigroup’s private equity investment TODD THOMSON involved in business opportunities that group. Our corporate Environmental add environmental and social value. Some Chairman and CEO, Affairs unit works closely with CVC Citigroup Global Wealth Management of these are programs that are focused on International investment professionals to Citigroup Foundation Board Member achieving triple-bottom-line (financial, screen and evaluate potential investments social and environmental) objectives, “The Citigroup Foundation is working to and to reach out to those involved in the such as the Sustainable Development address the key environmental challenges development of the targeted industries for Investment Program. In other instances facing our world, in particular the need to expertise and perspective. The initiative is and in the course of day-to-day business, focused on expansion-stage, growth capi- stimulate and grow private enterprises that Public Finance and other mainstream tal opportunities (as opposed to start-up contribute to global development, alleviate units engage in projects that have clear venture opportunities). This is consistent poverty and are compatible with the environ- financial returns along with environmen- with our broader private equity business ment. We are supporting a growing set of tal and social benefits. outstanding environmental groups and have and allows the initiative to draw on the learned a great deal from these partnerships First Investment Made in Sustainable existing CVC International expertise and business structure. and the inspiring work they are facilitating Development Investment Program across the globe.” Citigroup believes that there are invest- Citigroup has committed a significant ment opportunities in sectors that reduce level of funding for this initiative the environmental impact of industry commensurate with some of the largest through the efficient use of materials and investment funds targeting these sectors. Tropical Forest Trust (TFT)—We awarded energy. As part of our overall commitment In 2004, detailed analysis of the invest- a planning grant to help TFT explore to sustainable development, Citigroup has ment opportunities was completed and new timber-tracking technologies and created an initiative to target such oppor- the original scope of the initiative was processes to help address the problem of tunities in the sustainable forestry, clean expanded to include: illegal logging. energy, water and waste sectors globally. As ß Sustainable Forestry—Companies or more commercially viable opportunities World Resources Institute—We con- forestry operations that are dedicated develop and are discovered, Citigroup will tinued support for New Ventures, an to Forest Stewardship Council (FSC)- help to accelerate the flow of investment enterprise development program targeted certified and potentially non-FSC capital into these more sustainable forms to small and medium-sized companies forest products, and are committed to of business activity. in developing countries in fast-growth sectors, including organic foods and Citigroup made its first investment under fibers, nontimber forest products, renew- this initiative in 2004—a $23 million able energy and clean technologies. Our investment in Suzlon Energy Limited, support will focus on the program’s work Asia’s leading wind turbine manufacturer in China and Indonesia. Support has and among the world’s top ten wind also been provided for the Global Forest turbine manufacturers. Wind energy is Watch (GFW) program’s Timber Com- the fastest-growing source of energy pliance Assessment Partnership (TCAP) globally and over the last decade, Suzlon programs in Russia and Indonesia. TCAP has emerged as the leading player in is an innovative approach to address ille- the sector in India with 2004 fiscal year gal logging that will produce commonly installations of more than 200 MW. With accepted, high-quality information, based total installations of more than 600 MW, on GFW’s technical ability to document Suzlon accounts for approximately 25 per- evidence of illegal and unsustainable cent of the total wind power installations forestry activities using satellite imagery in the country. Suzlon is also making its and ancillary data. presence felt in the U.S. market through its 23 MW project in Minnesota. Suzlon’s Kavdya Dongar Wind Park in India.

42 ENVIRONMENT Citigroup Citizenship Report 2004 “For over 15 years, members of our Asset Management division have worked closely with clients and with the public to raise the awareness level of nonfinancial factors in the investment process. Such signals as environmental low-impact logging, maintaining forest- impact, workforce talent, health and safety play important based ecosystem function and marketing roles in the business context of sustainability for a variety branded products. FSC has established of industries.” an international “gold” standard for HERSH COHEN environmentally appropriate, socially Chief Investment Officer, beneficial and economically viable Active Platform, forest management. Citigroup Asset Management ß Renewable Energy—Companies or projects with opportunities dedicated management of water resources, The Citigroup Asset Management to renewable energy technologies, such including water conservation (drip Social Awareness Investment (SAI) Team as wind, solar, hydrogen, bio-power and irrigation), waste water treatment, works with faith-based organizations, bio-fuels (including feedstock resources water purification, and water pension funds, endowments, founda- and conversion and combustion distribution and infrastructure. tions and academic institutions, and also technologies), low-impact hydropower does public outreach and education on ß Waste Management—Companies or and geothermal. These investments socially responsible investing. The Social projects with opportunities in waste will help reduce the environmental Awareness Investment Program man- management with a preference for footprint of the energy sector. ages approximately $1 billion in assets, those with superior environmental employing rigorous supportive screens ß Water Resource Management— technology that are introducing as well as some avoidance screens. The Companies or projects with opportu- advanced waste management tech- Program offers a variety of products with nities related to the efficient use and niques to developing countries and social screening capabilities. have a focus on recycling waste and/or generating energy from waste through Citigroup Asset Management works environmentally benign methods. closely with key constituents of the SRI community and is a member of the ß Clean Technology and Energy Social Investment Forum and the Social Efficiency—Companies or projects Investment Research Analyst Network engaged in opportunities using or devel- (SIRAN). Smith Barney Asset Manage- oping technologies that increase the ment also is a long-standing affiliate efficiency of energy and material use, member of the Interfaith Center on lessen the ecological impact of infra- Corporate Responsibility (ICCR) and structure or are derived from biological a supporter of the National Association inputs (bio-fuels, bio-polymers.) These of Treasurers for Religious Institutes technologies are used in manufacturing, DIPAK RASTOGI (NATRI). In addition, since 2002 the transport, energy generation, storage and Head of Citigroup Venture Capital International Private Bank has been an annual sponsor distribution, and communications. of the Alliance of Religions and Conser- “Maximizing the use of renewable energy vation’s Ethic Investment Conference. sources and managing nonrenewable resources Serving the Socially Aware in an efficient and sustainable manner is key Investment Community The Social Awareness Investment team to satisfying the world’s increasing energy An increasing number of Citigroup’s is also a signatory to the Social Research and material resource requirements while clients seek to manage their assets in a Analysts’ Perspectives on Corporate preserving our environment. Companies way that is consistent with their values Sustainability Reporting Statement, in and technologies that bring benefit to the and beliefs, an approach to investing support of the Global Reporting Initia- environment and to people—particularly in that is commonly referred to as “socially tive (GRI) reporting guidelines. developing countries where both are under responsible investing” (SRI). In 1987, Citigroup established one of Wall Street’s myriad pressures—make a compelling first dedicated separate account programs 1 Citigroup Asset Management’s investment advisory investment argument. Over the years, we at services are provided by Salomon Brothers Asset in SRI, a program that continues today Citigroup Venture Capital International have Management Inc, Smith Barney Asset Management (a in Citigroup Asset Management’s Private division of Citigroup Global Markets Inc.), Citibank seen a number of such investment opportuni- Portfolio Group.1 Global Asset Management (a unit of Citibank, N.A.) ties, and we are excited to be increasingly and affiliated advisory entities. The Private Portfolio focused on them.” Group is a unit of Citigroup Asset Management’s Smith Barney Asset Management business.

ENVIRONMENT 43 Citigroup Citizenship Report 2004 The MyCommunityMortgage EEM In one example, Citigroup designed and recognizes that energy-efficient homes underwrote an inaugural transaction for cost homeowners less to operate on a High Point, North Carolina’s Water and monthly basis than standard homes. These Sewer System with a unique security future energy savings are counted as feature that provides the system with income for the purposes of a borrower’s important flexibility in moderating qualifying ratio. rate increases. Due to the specialized nature of the EEM Farmers in Sri Lanka Benefit from product and low consumer awareness, Solar-Powered Water Pumps we realized after several months that we Farmers’ crop production in Sri Lanka are not able to sell these mortgages just tends to be limited by erratic weather through the normal course of business. We patterns and a lack of grid electricity to are now evaluating the types of marketing support irrigation technologies. Most strategies and partnerships necessary to A solar-powered water pump in Sri Lanka. The pump, which rural farmers depend on manual or build momentum for this product. facilitates crop irrigation, is part of the Citigroup-financed generator-powered pumps to lift water Sustainable Water Assistance Management Project. Citigroup Financing of for irrigation purposes. Both types of Environmentally Beneficial pumps are cumbersome and time- Projects Increases 46 Percent consuming and have an adverse impact on human health and the environment. Citigroup Launches Energy- In 2004, Citigroup’s U.S. Public Finance Efficient Mortgage Product Group financed 168 environmentally The Sustainable Water Assistance Man- beneficial projects totaling over agement Project in rural Sri Lanka has Citigroup began offering an energy- $12.9 billion, including facilities for the potential to change this. Citigroup’s efficient mortgage (EEM) product in pollution control, water and sewerage, Export and Agency Finance team and mid-2004. The product was designed by recycling and solid waste disposal. This Citibank – Sri Lanka are working with Fannie Mae’s Housing and Environment represented a 46 percent increase over BP Solar, the government of Sri Lanka Initiative, which develops mortgage our 2003 volume, despite an overall and regional financial partners on a options that expand homeownership decrease in public finance market activity 100 percent comprehensive term financing opportunities while promoting the design, of six percent—$38.5 billion in 2003 vs. deal for the project, which will provide construction and purchase of more envi- $36.0 billion in 2004. Our total market 10,000 farmers with solar-powered ronmentally efficient homes. As our first share in environment-related financings water pumps to facilitate crop irrigation. foray into the EEM market, Citigroup is has grown from 23.1 percent to Citigroup is providing the $15 million offering the MyCommunityMortgageTM 36.0 percent over the last two years. investment required for the first phase, Energy Efficient Mortgage, which is which will make 5,000 pumps available. designed for borrowers who are at or We also increased market share in water Positive results of this project will include: below the median income for an area. and sewerage, a category that we cited in last year’s Citizenship Report as our ß More regular water supplies and biggest challenge. Although overall improved crop yields; industry volume fell from $30.3 billion ß Quality and uniformity of product; in 2003 to $26.9 billion in 2004, a drop ß Production of crops at a of 11 percent, Citigroup’s share increased competitive price; 25 percent from $8.1 billion in 2003 to ß Reduced health risks from not using $10.1 billion in 2004. fossil fuel generators; ß Savings of millions of gallons of groundwater; and ß Fuel and fertilizer savings of more than 50 percent.

Fortune Cement Plant in the Philippines.

44 ENVIRONMENT Citigroup Citizenship Report 2004 Loan Improves Cement Company’s There are three ways we evaluate Our businesses learn to own and cham- Environmental Profile in Manila progress. One is in the implementation pion issues that affect them. Finally, one of In 2004, Citigroup in Manila, Philippines, of specific policies and programs. They the most important elements is continuing arranged a $12.5 million loan facility for are outlined in this report. Especially interest and support from our CEO and the Fortune Cement Corporation to important are the training, policies and other members of the senior management improve its cement equipment as well practices associated with our Corporate team. They think good environmental and as its environmental facilities. The new and Investment Bank (CIB) Environ- social practices make good business sense. mental and Social Risk Management equipment, which includes a precalciner, The third component is ongoing dialogue (ESRM) Policy; the first investment in silo and bag filter, will be placed in the and communication with stakeholders, our Sustainable Development Investment preheater tower, raw mill area, kiln sec- including our NGO partners. We have met Program; completing two years of base- tion and clinker cooler. regularly with key stakeholders as described line reporting on our global greenhouse earlier in this report; improved our Web This improvement project will increase the gas emissions so that we can understand site (updating it more often and improving plant’s output to 3,200 tons of clinker per trends and begin to set goals; revisions content and readability); and, in partnership day at world-class environmental standards. and enhancements to our ESRM policy; with the Citigroup Foundation, are in the and implementation of policy with These new technologies will also reduce process of refining our grant program with regard to preventing the financing of the plant’s fuel and power consumption our NGO partners. Again, we have made illegal logging and participation in public and increase the use of by-products progress but have more to do. as ingredients for making the cement, policy conversations on this issue. We acknowledge that 2004 was not providing reductions of CO emissions The Sustainable Development Invest- 2 perfect. It took us longer than expected of approximately 215,000 tons per year. ment Program has made good progress to find the right person to become CIB The installation of a new bag filter on in creating a pipeline of prospective ESRM Director. However, we believe we the cooler exhaust will also significantly investments. Since these investments now have exactly the right person. We decrease particulate emissions. take a long time to evaluate and develop, have continued to work on our commu- the actual number of closings is hard to nications with stakeholders but know that (IX) EVALUATION AND predict going forward. FUTURE PLANNING requires continuous effort and refinement. The second way we measure progress We have described our learning with In Citigroup’s 2003 Corporate Citizenship is by our success in embedding these regard to Equator Principles implementa- report, Chuck Prince, CEO of Citigroup, programs and policies—as a way of doing tion in another section of this report. We and Bob Willumstad, President and Chief business and as part of the values of believe this year’s reporting on Equator Operating Officer, said, “We are proud the company—deeply into Citigroup’s implementation is a good first step, but we of our many accomplishments in 2003, businesses. On this front we believe we are already thinking about how we can do including the enhancements to our have also made significant progress. For better next year. In all these areas, we have environmental policies and programs. example, our Corporate Realty Services learned and made adjustments. We understand that the key is our ability (CRS) group has truly taken ownership of Our goals for 2005 include the following: and willingness to implement them; that the environmental database on energy and refine our criteria for our Sustainable will be our focus in 2004 and our efforts water use and waste production in our Development Investment Program and will include communication with our 11,800 buildings across the globe. CRS continue our learning; set targets for employees and our clients.” owns the database (in which they have our use of energy now that we have invested significant time and resources), Therefore, our primary focus in 2004 has two years of baseline data; continuously has participated in meetings to learn from been implementation of our many new revise our environmental and social risk other companies and has sought external initiatives. How do we think we have management criteria and approach to advice to help them analyze and validate done? The short answer is, we believe we incorporate lessons learned from 2004 results. The new ESRM Director is part of have made major progress, although we implementation; improve our reporting CIB’s independent risk management unit; acknowledge that we have more to do. on the implementation of the Equator they own the policy and oversee its imple- That progress is described more spe- Principles; continue our learning on mentation. The Sustainable Development cifically, and in quantitative terms where helping to prevent the financing of illegal Investment Program is run by Citigroup possible, throughout this report, but we are logging; and figure out next steps with Alternative Investments (with advisement summarizing our overall thoughts here. our environmental mortgage product. from Citigroup’s Environmental Affairs). This is how things get done in Citigroup:

ENVIRONMENT 45 Citigroup Citizenship Report 2004 Workplace BEING AN EMPLOYER OF CHOICE

“Citigroup believes that diversity in our staff is critical to our success as a global organization, and we seek to recruit, develop and retain the most talented people from a diverse candidate pool. We are fully committed to equal employment opportunity and compliance with the letter and spirit of the full range of fair employment practices and nondiscrimination laws.”

⁄ EXCERPT FROM CITIGROUP’S CODE OF CONDUCT

46 WORKPLACE Citigroup Citizenship Report 2004 “Attracting and retaining the best talent here at Citigroup is a key priority for us. We first and foremost want our employees to feel proud of the company they work for and feel that the contribution they are making is recognized and valued. Our senior management team travels the globe to visit our workplaces so they can meet face to face with employees and provide a forum for open and honest communications.” MICHAEL SCHLEIN Senior Vice President, Global Corporate Affairs, Human Resources and Business Practices, Citigroup Inc.

Workplace at Citigroup

At Citigroup, we make it a priority KEEPING OUR EMPLOYEES Voice of the Employee to foster a culture where the best INFORMED FIRST AND FOREMOST In 2004, Citigroup administered its Voice Keeping our employees informed is a of the Employee (VOE) Survey in more people want to work, where people key aspect of Citigroup’s culture. While than 40 languages with a response rate of are promoted on their merits, communicating in print, video and 87 percent, up from 82 percent in 2003. online to 300,000 employees in more This level of participation makes the where they treat each other with than 100 countries presents challenges, results more meaningful and shows our respect and where opportunities Citigroup commits the management employees’ commitment to helping us and resources necessary to make it work make this the best workplace possible. to develop are widely available to in meaningful ways. From “Town Hall” Citigroup’s VOE measures the most all—regardless of differences. communication forums with our senior important drivers of customer satisfac- management to employee broadcasts on tion, employee loyalty and employee our intranet to a daily global e-mail with engagement and enables a more open key announcements and top news stories dialogue within the organization. about the company, our communications Twenty-seven questions cover such topics team prides itself on sharing news about as manager effectiveness, workload, team- Citigroup with employees first rather than work, reward and recognition, growth letting them hear it from another source. and development, leadership and diver- Using a coordinated network of com- sity. Comparisons were made available for municators organized by business, region history, external norms, Citigroup overall and country, our internal communica- and across our businesses. tions group covers the world. We make Each manager for their respective busi- our employee newspaper and other ness receives a VOE report and has the critical communications available in ten responsibility, along with his or her team, languages. We offer summaries online on to help create solutions and execute topics ranging from the environment and them. In addition, Citigroup’s Manage- anti-money laundering to child care and ment Committee reviewed our VOE diversity to our employees and the public results and senior managers were asked under the “Corporate Citizenship” for feedback about how they are address- section of our Web site, where people can ing concerns within their businesses. also read about our many initiatives.

WORKPLACE 47 Citigroup Citizenship Report 2004 DIVERSITY AT CITIGROUP Our Diversity Training Commitment Our success—and the success of our In our Barcelona Service Center, entrepreneurial culture—depends not on 244 employees participated in the the schools we attended, and not on our Respect at Work Training curriculum. ANA DUARTE-MCCARTHY ethnicity, race, gender, sexual orientation, In the Czech Republic, an online diver- Director of Global Workforce religion, physical abilities or national ori- sity training tool was created to make Diversity, Citigroup Inc. gin. Instead, our success depends on every training available for all staff and 344 of “At Citigroup we are committed to creating one of us having a chance to succeed. It the management team participated in an inclusive and respectful work environment depends on all of us working together to diversity training. In the United Arab so our employees can reach their fullest deliver value for our customers and our Emirates, 480 employees were trained potential regardless of their differences.” shareholders, and feeling a sense of pride and the program was incorporated into and fulfillment in what we do. new-hire orientation. And in the U.S., the Corporate Center and members of a Our diversity strategy is based on four cross-business Training Council partnered Fostering the Next Generation of core components. We aim to be the: to offer a diversity module during leader- Leaders Through Partnerships ß Employer of choice ship and management training programs Throughout 2004, we continued to build ß Business provider of choice attended by 200 employees. our strategic partnerships with national ß Business partner of choice U.S. organizations, such as the National Diversity Councils Around the World ß Neighbor of choice Black MBA Association (NBMBAA) and Citigroup continues to promote diversity the National Society of Hispanic MBAs Our strategy for employer of choice through its diversity councils, through (NSHMBA). Through these partnerships, focuses on building management which employees take leadership roles we identify top talent and support the accountability, attracting talent, fostering in the development and execution of the economic empowerment of the com- workforce development and creating an business diversity strategy. We have 35 munities we serve. Citigroup was again inclusive work environment. Each of diversity councils around the world. In a lead sponsor of the NBMBAA and our lines of business has diversity plans. each, senior leadership champion NSHMBA annual conferences and hired We review progress against these plans the council, working in conjunction a total of 31 MBAs from the events. quarterly, and we foster best practices and with employees from various levels encourage consistency across our busi- and functional groups. nesses through our diversity councils.

Citigroup 2004 U.S. Workforce Information (Data effective July 2004)

MALE FEMALE JOB OVERALL AMER. AMER. CATEGORIES WHITE BLACK HISPANIC ASIAN WHITE BLACK HISPANIC ASIAN INDIAN INDIAN Officials & 21,176 9,069 710 781 662 31 7,391 1,046 867 589 30 Managers Professionals 29,230 10,996 1,155 1,302 2,966 39 8,128 1,713 1,171 1,719 41 Technicians 1,891 754 145 144 166 8 455 75 70 68 6 Sales Workers 19,324 12,296 472 762 660 37 3,451 426 618 583 19 Office & 63,884 9,343 3,206 2,551 1,029 103 28,719 9,630 6,683 2,311 309 Clerical Craft Workers 59 37 10 2 2 0 3 5 0 0 0 Operatives 1,015 156 126 95 91 2 249 101 56 133 6 Laborers 61 7 3 33 4 0 6 1 7 0 0 Service Workers 174 77 34 15 7 0 28 10 3 0 0 TOTALS 136,814 42,735 5,861 5,685 5,587 220 48,430 13,007 9,475 5,403 411

48 WORKPLACE Citigroup Citizenship Report 2004 Highlights of Key Minority Progress

Total minority representation in Citigroup’s U.S. employee population Other partners that we continues to show positive trending, have worked with include: going from 28.4 percent in 2003 to INROADS —INROADS is an internship 33.4 percent in 2004, a 5.0 percent ß program for minority students that AJAY BANGA representation increase. promotes excellence, develops leader- President of Citibank Retail Banking Our largest minority group is ship and helps bring greater diversity to North America African American, which represents the workplace. Citigroup’s participation “Our biggest opportunity is in harnessing the 13.8 percent of Citigroup’s U.S. in INROADS includes identifying and collective uniqueness of our employees to make workforce followed by Hispanic at hiring interns who spend two to four 11.1 percent, Asian at 8.0 percent and summers of their university careers our company the most exciting and welcoming American Indian at 0.5 percent. at Citigroup learning about our place to work—and our Employee Networks businesses through meaningful work are a critical stepping stone to that end.” Total minority representation assignments. In 2004, 64 interns were continues to increase in almost employed in Citigroup businesses. all job categories. In looking at our Officials & Managers and ß Management Leadership for Tomorrow Our Employee Networks Professional jobs, total minority (MLT)—Citigroup has initiated Continue to Grow representation was 19.4 percent in a partnership with Management Citigroup’s Employee Networks are management positions in 2002 and Leadership for Tomorrow, a non- groups initiated and led by employees. The increased to 22.3 percent in 2004, a profit organization that is committed Networks are open to all employees and 2.9 percent representation increase. to helping diverse students across the provide them with an opportunity to share Representation in professional jobs U.S. prepare for careers. Citigroup, in common experiences and build awareness rose from 26.3 percent in 2002 to partnership with two other corporate of diverse cultures and communities. 34.6 percent in 2004, a strong sponsors, PepsiCo and Booz Allen In 2004, Citigroup’s Employee Networks 8.3 percent representation increase. Hamilton, provided a financial training grew from ten to 21 in eight locations. program for MLT students beginning Citigroup Inc. and its subsidiaries Participation more than doubled to more their MBAs. A total of 90 students offer Equal Employment Opportunity than 4,700 employees. Recognized U.S. were involved in the program and (EEO) to everyone—regardless of groups include: African Heritage, Asian we hired 11 pre-MBA students for race, gender, gender identity or Pacific Heritage, Hispanic, Pride (a group summer internships. Citigroup also expression, color, creed, religion, focused on the lesbian, gay, bisexual and sponsored the Management Leadership national origin, citizenship, transgender communities), Women and for Tomorrow MBA Prep Program age, disability, marital status, Working Parents. In London, Pride, orientation which had over 80 under- sexual orientation, ancestry, veteran Women, Working Parents and a multi- graduates/early career professionals in status and socioeconomic status. cultural network called Roots have been attendance. Citigroup’s EEO policies apply to all recognized. Another 19 groups are now employment practices, including ß The American Association of in formation. recruiting, hiring, promoting and People with Disabilities (AAPD) and Employee Networks focus on: training. Citigroup’s commitment National Business and Disability Council to EEO includes the development (NBDC)—Citigroup partnered with ß Cross-business networking of Affirmative Action programs AAPD and NBDC to serve as a busi- opportunities for members; modeled after U.S. federal, state ness sponsor of Disability Mentoring ß Mentoring opportunities; and local employment laws and Day, a program that provides people ß Fostering employee growth and regulations. Executives and depart- with disabilities a chance to learn about development through guest speakers ment managers are responsible for career and employment opportunities, and panel discussions; making good-faith efforts to achieve and to meet one-on-one with mentors ß Assisting the businesses in recruiting a Affirmative Action goals. The primary who can offer insight and advice about diverse workforce; responsibility for developing and career paths. Citigroup businesses in ß Partnering with Citigroup’s community monitoring each program is assigned New York City and Long Island hosted relations departments on projects; and to a senior human resources officer, and mentored 12 high school students ß Working with other network groups and progress on Affirmative Action and 11 college students and profession- and professional organizations to foster efforts is regularly reviewed with als with disabilities. relationships within the company. senior management.

WORKPLACE 49 Citigroup Citizenship Report 2004 The LifeWorks® Program at Citigroup In 2004 the U.S. EAP launched an Citigroup’s LifeWorks® program helps awareness campaign in collaboration employees and their dependents better with the National Youth Anti-Drug manage the demands that individuals Media Campaign targeted to employees typically confront throughout their life- with teenage family members. The EAP times. Open to employees, their partners also provided resources for families and dependents in the U.S., Puerto Rico affected by military deployment, as and Canada, the program is available well as natural disasters. Members of Citigroup’s Asian Heritage Network in St. Louis, through a toll-free telephone number Dependent Care Options MO, perform the “Dandia,” a traditional Indian festival dance, and via the Web around the clock. It pro- at their Diwali celebration in November 2004. vides access to information, research and Citigroup offers full-time and backup resources, along with customized referrals child care programs, and elder care man- to help employees achieve practical solu- agement services and backup programs tions on a wide variety of topics. to over 81,000 employees in the U.S. A LEADER IN WORK/LIFE and Europe. In fact, Citigroup owns or PROGRAMS In 2004, LifeWorks resources addressed a participates in 14 child care centers. range of real-life issues, such as helping to Citigroup recognizes that its employees locate temporary child care and finding In the U.S., employees working in strive to succeed in their lives at work contractors to rebuild homes following participating businesses in 18 states have and outside of work. Often the needs the Florida hurricanes, to commuting access to a backup child and elder care of one impact the other. That’s why to work during the New York City and program that helps them identify and pay we continually seek to make tools and Boston national political conventions. In for care when their primary dependent programs available to our employees 2004, LifeWorks was used by employees care is unavailable for any reason. U.S. around the world to help them meet and their dependents 29,000 times, with employees may also receive discounts the challenges of their work and child care and senior services ranking as when they use leading national child care personal responsibilities. the top concerns. centers. More than 5,900 children and older family members of employees are The very concept of work-life balance Employee Assistance served through these programs. suggests a static, unchanging state where Programs at Citigroup employees are either living balanced lives Employees in the U.S. also have access or they are not. Recognizing that our The demands of business and pressures to elder care management services to employees’ needs and issues vary over outside of work can sometimes make assist them when their elder care needs their lifetimes, and that facing different things difficult. That’s why Citigroup become more critical. The program, circumstances, employees will make offers Employee Assistance Programs offered through Citigroup’s LifeWorks different choices, we have identified (EAP) to our employees and their imme- Program, provides assessment and evalu- programs to help employees during the diate family members in the U.S., Puerto ation, coordination of care and respite various stages of their lives. Rico, Australia, Canada, Ireland and the services free of charge during these United Kingdom, as well as to expatriate critical times. We know that if we provide resources to staff around the world. Access to the EAP employees both personally and profes- is available around the clock via toll-free sionally, it contributes to their satisfaction telephone numbers. The EAP provides a with both work and life, and results in place to begin to fully assess a problem focused and more productive employees. with the support of a licensed counselor. We understand that vast differences Callers can receive short-term confi- exist in the needs of employees dealing dential counseling and, for longer-term with new parenthood, elder care, family needs, referrals to professionally trained substance abuse concerns and natural counselors and other qualified service disasters, as well as employees striving to providers on a wide range of personal, improve their health. We aim to offer a family and work issues. unique blend of high-quality work-life programs to help meet their needs.

50 WORKPLACE Citigroup Citizenship Report 2004 “Why is it that the word ‘mammogram’ sounds scary and painful? That’s what I’ve always Highlights of 2004 thought, but I have recently changed my views. For me, mammogram now means lifesaving, on-site health and informative and thankful… thankful because if I hadn’t had one done upon turning 40 last year wellness programs: at the mammogram mobile at Citigroup, I would not have known that I have breast cancer. I am thankful because the cancer is in the early stages—just imagine what stage the cancer would be ß More than 1,000 women if I’d decided to wait another year. If someone had predicted that I was going to develop breast screened for breast cancer cancer, I would have doubted them. I have no history of cancer in my family, I don’t smoke and ß More than 1,700 employees barely drink alcohol. Cancer is a disease as unpredictable as a hurricane in who it strikes.” screened for cholesterol GRETCHEN KITZIS Citibank Latin America Employee ß More than 700 employees Tampa, FL screened for skin cancer ß More than 2,000 employees participated in on-site weight management classes In most locations where Citigroup has Helping Employees Take Steps operations, the majority of women in Toward Health Improvement ß 11,000 U.S. employees enrolled the workforce are under the age of 45. as wellness center members The first step is often the hardest for Statistically, at least 40 percent will have employees striving to make behavioral children. To help meet their specific changes like quitting smoking, starting needs, lactation facilities are available in a physical activity program or adopting the London, Dublin, New York, New healthier eating habits. Citigroup’s Health Jersey and Florida medical clinics, as well Management Program provides a wide as 25 other worksite locations in the U.S. GOOD HEALTH array of convenient options including: Citigroup posts an online tutorial about on-site, professionally staffed Well- CONTRIBUTES TOWARD the benefits of breastfeeding, along with STRONG PRODUCTIVITY ness Centers; lunchtime seminars and a list of U.S. lactation facility locations for programs; print and Web-based health Health and productivity are the focus of mothers returning to work. Also featured education information/resources; and Citigroup’s medical programs. On-site on this section of our intranet are guide- discounts for commercial health/fitness facilities are located in the U.S. in New lines for establishing lactation facilities. club memberships and the purchase of York, New Jersey and Florida; and in In addition to our on-site medical home exercise equipment. London, England and Dublin, Ireland. facilities, we also provide or arrange Services offered include: assessment, In 2004, Citigroup made a significant for medical services for our employees investment in employee health by treatment, recommendations and/or globally. We partner with and manage the referral for illness and injury; periodic opening five new U.S. on-site Wellness Citigroup Travel Health Assistance pro- Centers. International locations include: medical exams for expatriate staff and gram with International SOS to provide their spouses and partners; periodic Dublin, Ireland; London, England; and around-the-clock, worldwide medical Sydney, Australia. screening/health promotion programs; access and assistance for expatriates and immunizations for business travel; flu international business travelers via a dedi- shots; and, as directed by an employee’s cated emergency phone line. Additionally, physician, laboratory blood tests, allergy Citigroup Travel Health Assistance can injections and electrocardiograms. More arrange for medical transport and evacua- than 60,000 visits were documented at tion, if necessary. these sites in 2004. Our businesses in more than 30 countries Automatic External Defibrillators (AEDs) used International SOS’s services last also have been placed in Citigroup year. International SOS also helped us locations across the U.S. AEDs are devices deliver more than 12,000 Web-based designed to be used by lay people to e-mail medical alerts to our employees provide lifesaving technology to a who were traveling away from home person who has had a cardiac arrest. on business to inform them of health, To date, 410 AEDs have been placed in prescription and immunization needs to 270 different locations and more than specific destinations. 2,000 employees have been trained in Cardiopulmonary Resuscitation (CPR) Our employees’ children can participate in numerous and AED. By the end of 2005, more than activities during the time they spend at Citigroup’s Child 1,000 AEDs will be in place and more Care Centers. Pictured here are children at our Sioux Falls, SD, than 3,500 employees will be trained. Child Care Center.

WORKPLACE 51 Citigroup Citizenship Report 2004 Highlights of 2004 Awards and Recognition

We are proud to highlight some COSPAE—Panama Junior Achievement—Argentina of the more than 100 corporate Corporate Citizenship/Financial Volunteer Recognition Award Education Award citizenship awards and recognitions Latin Finance—Latin America that Citigroup and its businesses Diversitybusiness.com—U.S. Deal of the Year for Compartamos received in 2004. Div50 Award as Buyer of Diversity Products and Service LIDERES Magazine—Ecuador Most Respected Company Executive Economic Times—India American Chamber of Commerce—Romania Leadership—1st Place Corporate Excellence Award 2004 “People for People” Award Most Respected Company—15th Place

Exame Magazine—Brazil Big Tick in Business in the Community—U.K. National Urban League—U.S. Corporate Citizenship Award Award for Excellence Million Dollar Hall of Fame

Fortune Magazine—U.S. Capital Newspaper—Romania Operation Smile—Colombia 50 Best Companies for Minorities Oskar Capital Award 10,000 Smiles Award

France-Brazil Chamber of Chamber of Commerce—Ireland U.S. Department of State—Malaysia Commerce—Brazil Award for Community Commitment Corporate Excellence Award Freedom, Equality and Fraternity Award for Environmental Preservation Chiang Yi Magazine—Taiwan U.S. State Department—Bangladesh Best Corporate Citizen of 2004 Hispanic Chamber of Corporate Excellence Award Commerce—California, U.S. Chilean American Chamber of Corporation of the Year USA Weekend Magazine—U.S. Commerce—Chile Top “Make a Difference Day” Honorable Mention for Good Hong Kong Council of Participant Enterprise Citizen Award Social Services—Hong Kong A Caring Company Working Mother Magazine—U.S. Citizens Advisers—U.S. 100 Best Companies for Top 10 Corporate Citizen in Jump$tart Coalition—U.S. Working Mothers Environmental Stewardship Soaring Star Award for Financial Education

52 HIGHLIGHTS OF 2004 AWARDS AND RECOGNITION Citigroup Citizenship Report 2004 GRI Reporting Guide

Citigroup developed the 2004 Citizenship Report with reference to the guidelines developed by the Global Reporting Initiative. These guidelines are intended to enhance the quality, rigor and utility of sustainability reporting and to provide standardized definitions. This year, we have reported on a number of guidelines from the 2002 Sustainability Reporting Framework as well as the Financial Services Sector Supplements for Social Performance and Environmental Performance.

SUSTAINABILITY REPORTING GUIDELINES 3.15 Memberships in industry and pg. 4 FINANCIAL SERVICES SECTOR SUPPLEMENT Vision and Strategy business associations and/or (SOCIAL) advocacy organizations 1.1 Vision and strategy statement pg. 2 Management System 3.17 Approach to managing pgs. 32-34, CSR1 CSR policy pgs. 8, 32-34 1.2 Statement from senior management pg. 2 indirect economic, 39-40 CSR2 CSR organization pgs. 34-35 Profile environmental and social impacts 2.1 Name of organization pg. 4 CSR4 Management of pgs. 32-34, 3.18 Major decisions during the pg. 1 sensitive issues 39-40 2.2 Major products, services and brands pg. 4 reporting period regarding the CSR6 Stakeholder dialogue pgs. 9, 21, 31 2.3 Operational structure pgs. 4, 8 location of, or changes in, operations Internal Social Performance 3.19 Programs and procedures pgs. 32-40 2.4 Description of major divisions, pg. 4 INT1 Internal CSR policy pgs. 32-34 operating companies, subsidiaries pertaining to economic, and joint ventures environmental and social performance INT3 Employee satisfaction pg. 47 2.6 Nature of ownership pg. 4 Economic Performance Indicators INT7 Employee profile pg. 48 EC2 Geographic breakdown of markets* pg. 10 2.7 Nature of markets served pg. 4 Performance to Society Environmental Performance Indicators 2.8 Scale of the organization* pg. 4 SOC1 Charitable contributions pgs. 7, 14-19, EN3 Direct energy use segmented pgs. 35-38 27, 41-42 2.9 Stakeholders* pgs. 9, 21, 31 by primary source Suppliers SUP1 Screening of major suppliers* pg. 20 2.10 Contact person(s) for the report back cover EN5 Total water use pg. 37 SUP2 Supplier satisfaction* pg. 20 2.11 Reporting period front cover EN17 Initiatives to use renewable pg. 38 Retail Banking 2.12 Date of previous report pg. 9 energy sources and to increase energy efficiency RB1 Retail banking policy pgs. 20-25 2.13 Boundaries of report and any pgs. 5, 8-9 specific limitations on scope EN30 Other relevant indirect pg. 39 RB2 Lending profile pgs. 20-25 greenhouse gas emissions 2.16 Explanation of restatements of pg. 36 RB3 Lending with high social benefit* pgs. 18-19, information provided in earlier reports Social Performance Indicators: 22-25 Labor Practices Investment Banking 2.18 Criteria/definitions used in accounting pg. 5 LA1 Breakdown of workforce* pg. 48 IB1 Investment Policy pgs. 32-34 for economic, environmental and social costs and benefits LA10 Description of equal opportunity pgs. 46, 49 IB3 Transactions with high social benefit pgs. 42-45 policies or programs 2.19 Changes from measurement pg. 36 Asset Management methods in previous year LA11 Composition of senior management pgs. 6, 48 AM 2 Assets under management pg. 43 and corporate governance bodies with high social benefit 2.20 Practices to enhance and pgs. 24, 35 provide assurance about LA12 Employee benefits beyond those pgs. 50-51 FINANCIAL SERVICES SECTOR SUPPLEMENT the accuracy of the report legally mandated (ENVIRONMENTAL) 2.22 Additional information back cover LA13 Provision for formal worker pg. 47 F1 Environmental polices applied pgs. 32-34 representation in decision- to core business lines Governance Structure and Management Systems making or management 3.4 Board-level processes for overseeing pgs. 34-35 F2 Process(es) for assessing and pgs. 32-34, economic, environmental and social LA17 Policies and programs for skills pgs. 6, 47 screening environmental risks 39-40 risks and opportunities management or for lifelong learning in core business lines 3.5 Linkage between executive pg. 6 Social Performance Indicators: F3 Threshold(s) at which environmental pgs. 32-34, compensation and achievement Human Rights risk assessment procedures are 39-40 HR2 Consideration of human rights pgs. 32-34, applied to each core business line 3.6 Organizational structure relating pgs. 1, 34-35 impacts as part of investment 39-40 F4 Processes for monitoring clients’ pgs. 32-34 to managing economic, and procurement decisions* environmental and social policies implementation of and compliance HR4 Description of global policy and pg. 46 with environmental aspects raised in 3.7 Mission and values statements, pgs. 6, 32-34 programs preventing all forms of risk assessment process(es) internally developed codes of discrimination in operations conduct or principles, and policies F5 Process(es) for improving staff pg. 39 relevant to economic, environmental HR8 Employee training on policies and pg. 39 competency in addressing environmental and social performance and the status practices concerning all aspects of risks and opportunities of implementation human rights relevant to operations* F7 Interaction with clients regarding pgs. 32-40, 3.9 Identification and selection pgs. 9, 21, 31 HR12 Description of policies, pgs. 32-34, environmental risks and opportunities 39-40 of major stakeholders guidelines and procedures 39-40 to address the needs of 3.10 Approaches to stakeholder pgs. 9, 21, 31 indigenous people consultation Social Performance Indicators: Society 3.11 Type of information generated pgs. 9, 21, 31 by stakeholder consultations SO1 Description of policies to manage pgs. 32-34, impacts on communities in areas 39-40 3.12 Use of information resulting pgs. 9, 21, 31 affected by activities from stakeholder engagements SO4 Awards received relevant to social, pg. 52 3.14 Charters, principles or pgs. 4, 32-34 ethical and environmental performance initiatives that the organization

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*partially reported This report has been printed on paper produced from raw materials that are independently certified by the SmartWood program of the Rainforest Alliance, to the Forest Stewardship Council (FSC) standards. The paper was manufactured by Mohwak Paper Mills using 100% Post Consumer Waste and alternative energy provided by wind power. This report was also printed with soy ink.

For more information on the community and workplace programs described in Citigroup’s Citizenship Report, please e-mail [email protected]. For more information on Citigroup’s environmental and sustainability initiatives, please e-mail [email protected].

For addititional information on Citigroup’s Corporate Citizenship initatives, please visit: http://www.citigroup.com/citigroup/citizen/index.htm

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