ESG Investing
Overview
Building on our core values, we are weaving sustainability further into the fabric of our business. We believe a clear and compelling sustainability vision – one that unites our team across geographies, functions, and roles – is a pre-requisite to delivering our maximum positive impact. Our program flows seamlessly from our culture, animating each of our employees’ day-to-day work, ultimately enabling us to act swiftly with a single CITI EQUITY voice.
We pursue an ESG strategy that is designed to address the most material issues to our business, starting with a Corporate Sustainability program – how we lead by example through our own corporate operations – and then scaling through a Responsible Investment program – how we amplify our impact through our investment platform.
We believe that by being a leader for integration of environmental, social and corporate governance factors in our business, we can in turn drive greater adoption within our investment and portfolio management processes and help create better investment outcomes. Whether it’s protecting and growing the capital of our clients, creating long-term value for our shareholders or aligning our interests with business partners, we are committed to supporting sustainable practices that generate positive environmental and social impact – not just now, but for years to come.
Enablers of Success
Accelerating impact across our Corporate Sustainability and Responsible Investment activities requires a multi-year focus on the foundational elements of a robust and vibrant ESG program: 1) Embedding ESG into our culture by activating our global employee base to shape our priorities and drive implementation, 2) Increasing transparency through data by translating our qualitative objectives into more quantitative goals, and 3) Expanding our spheres of influence through external partnerships and collaborative cross-industry problem solving.
While the specific activities under these headings may change from year to year their role as key enablers of sustained impact will not.
Embedding ESG into Our Culture
After creating a distributed resource model of 120+ ESG champions across our investment strategies and corporate functions in 2020, we began to add dedicated ESG specialists by line of business. We believe a combination of the two — ESG specialists partnering with homegrown ESG champions — is the best way to integrate ESG within each team’s culture.
Increasing Transparency Through Data
While 2020 was a year for defining the data collection needs for each ESG integration plan, 2021 was the year of more systematic collection and analysis of that data. Throughout this report you will see more data across both our Corporate Sustainability and Responsible Investment sections, an effort that we plan to expand in future report
Engaging with Like-Minded Partners to Move Our Industry Forward
Just as we focus on accelerating the impact we can achieve directly, we know that longer-lasting systemic change will only happen through partnering with other like-minded firms, shareholders, limited partners, industry associations, and non-profits, among others. In 2021 we launched industry initiatives with traditional competitors and supported other programs that we feel have the potential to transform ESG practices across private markets.
"In the years ahead, the differentiated ESG program will be the one that embeds itself in the heart and mind of every employee, informing their daily work. Our aspiration is when someone asks ‘who is responsible for ESG?’ we all will raise our hands."
Timothy Hogarth
SVP & Chief Administrative Officer
The Issues that Matter Most to Us
We believe a good sustainability program starts by identifying material issues — those important to both stakeholders and the success of our business.
We identified our material issues based on what we deemed most important to our stakeholders and most significant to our long-term performance.
We intend to perform this assessment annually to ensure that our strategy is informed by issues we believe are most critical to our continued success.
An Integrated Approach to ESG
CITI EQUITY believes that Environmental, Social and Governance (ESG) principles are crucial to developing strong, resilient companies and assets that deliver long-term value for our investors.
OUR APPROACH
We believe full ESG integration requires real commitment and considerable investment.
Strengthening Our Portfolio
Our approach is grounded in a responsibility to our investors to be careful stewards of capital. We have long been implementing a number of initiatives designed to make our companies stronger and more resilient. Many of these, like promoting sustainability and diversity, are today considered core components of ESG.
Integrating ESG Priorities
While ESG is a vast and growing field, we have chosen to prioritize decarbonization, diversity and good governance. We aim to lead by example and apply our insights to drive change across our portfolio. The power of our model is supported by strong operational interventions, led by our Portfolio Operations and Asset Management teams.
Corporate Approach
We are confident that the more we weave ESG factors into our corporate purpose and performance, the more value we will be able to deliver — for our investors, our portfolio companies and the communities we serve.
Creating Economic Opportunity
The CITI EQUITY Charitable Foundation is committed to creating economic opportunity for under-resourced communities. The Foundation’s programs aim to increase access to entrepreneurship skills. This includes, among other initiatives, its signature CITI EQUITY LaunchPad network, which helps college and university students build successful companies and careers. The Foundation drives community engagement, provides disaster relief and guides employees in board service placement.
Practicing Good Governance
At CITI EQUITY, we have added considerable domain expertise, become a member of leading organizations such as Principles for Responsible Investment (PRI) to advance several priority ESG initiatives across our industry and started reporting on ESG progress to our board quarterly.
Fostering Diverse Talent
Our Diversity, Equity & Inclusion (DEI) policy centers around our most important asset — our people. Approximately 1/3 of our firm’s leadership team is diverse. We achieved 41% female representation globally and 49% racially diverse representation in the US among our incoming 2021 analyst class.
Reducing Our Corporate Carbon Footprint
Our 2021 Greenhouse Gas (GHG) Emissions Report details CITI EQUITY’s approach to measuring GHG emissions across our corporate operations
"We view ESG as crucial to our mission
of delivering strong returns for clients.
CITI EQUITY is using its scale and
expertise to help strengthen our
companies, assets and the communities
in which they operate."
- Rebecca Scanlon
Chairman, C.E.O
Across Our Portfolio
We recognize the impact CITI EQUITY’s scale can have on the economy, society and our communities. We actively partner with our portfolio companies and assets to advance important ESG initiatives.
Committing to a Lower-Carbon Future
In January 2021, we announced our Emissions Reduction Program and started implementing a new goal of reducing Scope 1 and Scope 2 carbon emissions for new assets globally where we control the energy usage by 15% in aggregate over the first three years of ownership.
Promoting Diverse Leadership
In 2020 we set a goal of achieving 1/3 diverse representation on portfolio company boards for new control investments in the US and Europe. We believe that diverse teams make better decisions and implementing this mandate will make our portfolio companies stronger and more resilient.
Recruiting and Advancing Diverse Talent
Our Career Pathways program is designed to foster economic mobility and support ongoing diversity efforts at the portfolio companies by adopting inclusive workplace practices and expanding applicant pools through partnerships with organizations like Year Up and COOP Careers.
Supporting Veterans
Through the Veterans Hiring Initiative, more than 100,000 veterans, veteran spouses and caregivers have been hired across our portfolio companies since 2013