Corporate Social Responsibility and how it creates additional value to a company reputation

Corporate Social Responsibility and how it creates additional value to a company reputation

Swati Patel Head of Corporate Citizenship, EMEACiti March 6, 2008

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Also known as corporate social responsibility (CSR), sustainability, corporate citizenship, triple bottom line

We’ve agreed to call it citizenship

Requires a record of achievement in economic, social and environmental areas

“Citizenship is the positive impact that Citi has on society and the environment through its core business activities, its philanthropy, volunteerism and public policy engagement.”

Citizenship

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Citizenship: A Multi-Stakeholder Process

The Complex Web of Key Stakeholders

Share Price Performance and

SRI Investors

Employer of choice

Conscious Consumer

Brand and Reputation

Community

Employees

Export market

Regulators

Insurers Media

NGOS

Government

Shareholders

Clients

Financiers

Company

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There are Two Major Ways we Convey our Leadership

Our business practices

Our proactive citizenship

Programmers

E.g.: Equator Principles,

environmental footprint

E.g.:the Citi Foundation, community

programmes , volunteerism

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Our Business Practices

Citi was one of three companies to establish these principles four years ago to create higher standards in project finance

– Citi committed to 10 guiding principles, for example, not to lend to projects where the borrower cannot comply with environmental and social policies

– Today there are 33 signatories who represent 80% of all project financing world-wide

Being a leader in this field, gives Citi a competitive edge in assessing environmental and social issues and thereby winning client mandates

Climate Change & Sustainability

$50bn commitment over the next 10 years

In Greece, Citi has launched an innovative investment product which allows investors to invest in renewable energy

Clinton Climate Initiative (CCI) to implement the new Energy Efficiency Building Retrofit Programme in partnership with large city Governments

Established Leadership in Energy and Environmental Design (LEED) certification as a target for all new operation centres and offices

Conduct equity research related to climate issues that helps inform investors on risks and opportunities associated with the issue. Citi Investment Research issued 70+ climate related notes in 2006

Carbon Principles

Applicable to US utility companies finance for fossil-fired generation – 200 MW

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Our Proactive Citizenship Programmes

Citi Foundation – 3 Pillars of Engagement

2006 Citi Foundationgiving totalled $91 million

Community Programmes

Volunteerism

• Microfinance and Micro Entrepreneurship – helps individuals to become economically self sufficient

• Small and Growing businesses – leading to economic expansion and job creation

• Education – prepare young people for personal and professional success• Financial Education – helps individuals make informed financial decisions• Environment – focus on sustainable enterprises that generate jobs and stimulate

economic growth while preserving the environment

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EMEA: Citi Foundation Focus

Sweden

Nordics: focus on Job Creation

Stockholm School of Economics

UK

Focus on employability of youth

UK CAF, JA, BRAC

Italy

Cittadinanzattiva

Junior Achievement

Focus on young people

Poland

Strong focus on Financial Education

Junior Achievement

“ My Finances”

Nigeria

Focus on Microfinance

Hope Worldwide

LEAP Africa

Russia

Focus on youth education for the world of work

Regional Universities

Romania

JA Romania

Assoia Ovidu Rom

Access to education for individuals at risk

Greece

Helenic Children’s Museum

Lambrakis Foundation

Turkey

Focus on Fin Ed and microfinance for women

FSWW/TEGV

Jordan

Jordon River Foundation

SOS Children’s Villages

South Africa

Black Economic Empowerment Index (BEE)

Tanzania

Focus on Basic financial education

FINCA

Lebanon

Middle East Focus on Higher Education

Access to university education

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Community engagement in Russia

In partnership with Focus Media working with 3 universities and 30 Charities/NGO’s in: St Petersburg, Nizhniy Novgorod, Yekaterinburg

Project Goal : Provide an opportunity for 100 university students to understand how a charity/NGO operates . At the same time enabling the students to develop skills like: leadership, budgeting, planning.

Out comes- Community:

30 Charities better equipped to support the needs of the local community

stakeholders like corporations and local and national government will better understand the needs of the local community.

Which in turn will Increase the NGO’s capacity to work with young people

Outcome - Individual:

Developing their skills through active engagement in the Community

Prospect of a career in the NGO sector

Focus Media / Citi Intern Programme

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Financial EducationIn 2004 Citi made a 10 year, $200 million global commitment to financial education. To date Citi has invested nearly $85million in Financial Education Programmemes in 72 countries.

In 2006 Citi Foundation contributed $26million in Financial Education Programmes in 70 countries

South AfricaBanking on our Future – 20 Citi employees trained to deliver the Operation Hope International Banking on our Future curriculum. The employees will deliver Financial Education based on this curriculum to students in the area of Gauteng – These students come from the most underserved community in South Africa and this initiative enables them to learn about managing their finances – and on the road to economic empowerment.

BahrainCiti Foundation grant enables physically challenged youth of Bahrain to take part in the “Citibank Diploma in Banking for the physically challenged,” a training Programme which offered students high quality, lifelong vocational and entrepreneurship training in Banking and Finance to meet current and future employment requirements.

Turkey“Learning-by-doing’ Programme that teaches students how business and enterprise works. 203 students from vocational and high schools participated in the JA Company Programme . The purpose of the project was to create awareness of the importance and need of economical literacy and entrepreneurship on behalf of the young generation.

Poland Kronenberg Foundation at Citi Handlowy launched a nationwide Programme called "A Week For Saving Money". The initiative is carried out under the patronage of the Commission of Financial Supervision.

The main objective of the Programme is to promote saving money and the effective use of financial resources. As many as 270 schools from all over Poland entered the competition for the best Polish celebration of the World Savings Day. 135 thousand students took part in the Programme. in nationwide and regional media as well as on the Internet.

RussiaFinancial Services Volunteer Corps (FSVC) and the Citi Foundation announced the participation of 10 bankers from Russia and Ukraine in the seventh annual Bank Management Internship and Training Programme (BMIT), a Programme that delivers technical and practical understanding of effective credit and operational risk management.

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Microfinance and Micro EntrepreneurshipCurrently 2.5 billion people (40% of global population) do not have access to basic financial services

Integra

Project Goal : to reduce poverty and discrimination among “at risk” women through the creation of

economic empowerment through micro loans and business development plans.

Out comes- Community: Better working rights for women and helping to create a social economy in the local community

Outcome - Individual: Developing their skills through active engagement in the Community.

Prospect of a career in the NGO sector.

Citi Micro Entrepreneurship Awards Year of Microcredit 2005: Citi Foundation in Partnership U.N. implemented the Global Micro entrepreneurship Awards (GMA) Programme in 30 countries. The Programme brought substantial global attention to the role that microfinance plays as an effective poverty alleviation tool. In the following 2 years Citi Foundation continued with the Citi Micro Entrepreneurship Awards

In 2006 Citi support for CMA in 23 countries $1.3 mission

In 2007 Citi support for CMA in 27 countries $1.5million

More information on the Citi Micro Entrepreneurship Awards at www.citimicroawards.com

In 2006, the Citi Foundation made 1,172 grants to support organisations that help build and strengthen communities in 56 countries

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Volunteerism

The Power of Volunteering Employees Around the Globe

Global Community Day

58 000 Citi employees, friends and family members in more than 450 cities in 100 countries participated in Citi’s 2007 Global Community Day

Volunteer Day: Permanent employees can take one Volunteer Day each calendar year to volunteer for organisation of their choice

Volunteer Incentive Programme: Employees who volunteer 50 or more hours in a 12-month period for an eligible organisation will be recognised – Citigroup will contribute US$500 to that organisation

Employer of Choice survey: “Do employees really care about Corporate Social Responsibility?” 78% of employees would rather work for an ethical and reputable company than receive a higher salary. In competing for employees

employers increasingly need to demonstrate their CSR commitment in order to attract and retain talent.

Citi leading “ENGAGE” campaign:

the campaign is focused on increasing employee engagement across the world

Citi is working in collaboration with a number of corporates, including KPMG and Freshfields, to create volunteering opportunities across cities in Europe

Business case for employee engagement: building skills, increasing moral, team building, retention rates.

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Conclusions

Citizenship/CSR policies are an integral part of a company’s responsibilities to the community and environment. Equally, however, CSR is a business opportunity that benefits not only the community and environment, but also our key stakeholders e.g. shareholders, employees and NGO’s.

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Multinationals, and financial institutions in particular, given their influence on financial flows, have a critical role to play in promoting social inclusion.

Citi’s CSR approach is focused on responsibility to our community, our people and our franchise; it is part of our DNA.

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