Transcript Citigroup and Globalization Challenges

Chatham House Illegal Logging Update
and Stakeholder Consultation
Citigroup Support for Legal/Sustainable Forestry
Policies and Foundation Initiatives
Bruce Schlein
[email protected]
21 July 2006
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Policy: Illegal Logging – Why a Citigroup Priority
• Our business is global:
102 countries
• Our stakeholders care about this
issue – clients, governments, civil
society, employees
• Financial and reputational risk for
financial institutions involved
• Represents risk to and
undermines the forestry industry
• Local and global impacts
The Lorax, copyright 1971, Dr. Suess
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Policy: Combating The Financing of Illegal Logging
• Citigroup’s “illegal logging” definition:
“When timber is harvested or traded in violation of local and national
law. This may include:
- Using corrupt means to gain access to forests,
- Extraction without permission or from a legally unauthorized area,
- Cutting of protected species or extraction of timber in excess of legal
limits or in violation of legally approved forest management plans,
- Violation of labor law or the improper use of private security forces.”
• Citigroup Environmental and Social Risk Management Policy:
“We will not make loans to companies whom we know to be in
violation of local or national laws regarding illegal logging”
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Policy: Citigroup’s Anti-Illegal Logging Commitment
• In January 2004, Citigroup made a public commitment to combat
the financing of illegal logging. The policy was further
strengthened in 2006. Key elements of this policy:
- Key component of GCIB ESRM Policy (no minimum threshold)
- Consistent with revised IFC Performance Standard Number 6
- Requires independent certification in certain high risk geographies
- Ensure that our businesses and risk management throughout the
world are aware of and alert to the issue of illegal logging
Trainings/case studies
- Participate in forums on illegal logging.
- Support partner organizations who work on:
Improving forest law enforcement
Policy reform
Improving information flows (mapping, tracking, communication)
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Foundation Initiatives
• Citigroup Foundation Grants related to Sustainable Development
and Sound Forest Management:
- Sustainable Northwest
Healthy Forests Healthy Communities
- World Resources Institute
Timber Compliance Partnership in Russia and Indonesia
- Ecologic Development Fund
Pico Bonito Honduras
- Rainforest Alliance
Environmental and Social Responsibility Verification
- Forest Trends
Ecosystem Marketplace and Business Development Facility
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Challenges and Opportunities
• Citigroup internal and external engagement on Forestry issues
poses challenges and opportunities:
- Consistent implementation
Issue awareness
- Financial institution standards
Collaboration with peer institutions
- Operations
Procurement, Paperless initiatives
- Investments
Combat illegal by investing in legal
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