Citigroup 2020 Shareholder Proposal Number 7

Stockholder Proposal #7
Presented at Citigroup’s 2020 Annual Stockholder’s Virtual Meeting

New Economy Project and co-filers (School Sisters of Notre Dame Cooperative Investment Fund; LGPS Central Limited; and Greater Manchester Pension Fund) have submitted the following proposal for consideration at the 2020 Annual Meeting:

Whereas, full disclosure of Citigroup’s direct and indirect lobbying activities and expenditures is necessary to assess whether Citigroup’s lobbying is consistent with its expressed goals and in stockholders’ best interests.

Resolved, the stockholders of Citigroup request the preparation of a report, updated annually, disclosing:

1. Company policies and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.
2. Payments by Citigroup used for: (a) direct or indirect lobbying; or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.
3. Description of management’s and the Board’s decision-making process and oversight for making payments described in section 2 above.

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Citigroup is a member.

Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.

The report shall be presented to the Nomination, Governance and Public Affairs Committee and posted on Citigroup’s website.

Supporting Statement

Citigroup’s lobbying spending disclosures present significant reputational risks. Citigroup is a member of trade associations that lobby for policies that directly contradict the company’s public positions on critical issues like climate change. Despite reputational risks, Citigroup fails to disclose its trade association payments and the portions of those payments used for lobbying.

Citigroup spent more than $50 million on federal lobbying over the last ten years. This figure excludes Citigroup’s lobbying: (1) in the 42 states where Citigroup lobbies but disclosure is uneven or absent; and (2) in Europe, which totaled €700,000 — €799,000 in 2018. Citigroup belongs to the U.S. Chamber of Commerce, which has spent more than $1.5 billion on lobbying since 1998. Citigroup does not disclose how much it contributes to the Chamber or what portion of the company’s contributions the Chamber uses for lobbying.

Examples of policy contradictions that present clear reputational risks include:

• Citigroup supported the Paris Agreement on climate change. The Chamber has worked tirelessly to undermine the Paris Agreement.
• Citigroup has limited its investments in coal since 2015. The Chamber pushed to expand coal mining on federal lands in its 2017 platform.

Citigroup claims to use the Global Reporting Initiative (GRI) Standards for sustainability reporting, which require Citigroup to report “any differences between its lobbying positions and any stated policies, goals, or other public positions” (GRI Standard 415). Citigroup, however, fails to report the glaring contradictions between its stated positions on climate and the lobbying activities it funds, further demonstrating that Citigroup’s disclosures are inadequate.

We believe the reputational damage stemming from Citigroup’s direct and indirect lobbying efforts harms long-term value, and we urge the Board to immediately institute comprehensive lobbying disclosure