For Citi and the environment, the key to a greener future means working issues like carbon emissions, pollution and sustainable forestry directly into the company's corporate strategy.

The world's largest bank is capable of influencing immense improvements toward sustainability in the financial world: Citi has stepped up to be a green leader with comprehensive reviews, new policies and open discourse with environmentalists and its own concerned shareholders.

After all, for Citi and other major banking institutions, environmentalism has its own rich rewards – and the realization that banks must hold themselves accountable for the environmental impact of their investments has spurred a transformation in the way Citi does business.

Environmental and social risk management policy

Citi was one of nine early adopters of the Equator Principles, a voluntary framework for managing environmental and social issues in project finance transactions. Launched in 2003, the Equator Principles help financial institutions analyze major development projects around the world and determine whether to provide loans to borrowers based on compliance with social and environmental policies.

Citi's business goes beyond just project financing so a far-reaching program had to be developed that applies to corporate and government loans, bonds, equity investment and other transactions. The Environmental and Social Risk Management Policy (ESRM) is the first of its kind among U.S. financial institutions, applying a rigorous review to each transaction and refusing loans to projects deemed environmentally or socially harmful.

Comprehensive and complex, the ESRM Policy places each transaction that meets or exceeds certain dollar amounts into environmental and social risk categories based on how many adverse social and environmental impacts the project may have and whether they're reversible or readily mitigated.

While not all transactions fall under either of these two policies, Citi doesn't allow smaller projects to fall through the cracks. In its 2008 Global Citizenship Report, Citi makes note of how its Sustainable Forestry Policy required a potential borrower who owned a palm oil plantation and forestry concessions to obtain certification for its forestry assets and join a Roundtable on Sustainable Palm Oil.

The Global Citizenship Report also outlines Citi's promises and progress, pledging to reduce water usage by 20 percent and landfill waste 40 percent over 2005 levels by 2015. The company has committed to having a minimum of 15 percent of its global real estate LEED-certified and to improve the energy efficiency of all of its buildings by 20 percent.

Climate change and the Carbon Principles

Citi recognizes that it isn't a matter of if climate change will affect the global economy, but when. Calling for a global solution achieved through the cooperation of governments and businesses around the world, Citi has stepped forward with a commitment to a 10 percent absolute reduction in greenhouse gas emissions by 2011 and has invested $50 billion over the past 10 years in alternative energy, clean technology and other activities that reduce carbon emissions.

In 2008, Citi established the Carbon Principles, a set of guidelines for banks and their clients in the U.S. power industry to look at the carbon risks of financing certain projects like coal-fired power plants. The Carbon Principles require clients seeking to finance carbon-intensive projects to prove that they have evaluated energy efficient and renewable energy options before proceeding. Proposed projects must be capable of meeting future government mandates on climate change.

Continuing commitment to responsible banking

In May 2010, Citi became the first major U.S.-based bank to sign the United Nations Global Compact, a corporate citizenship initiative encompassing 10 principles with respect to human rights, labor, environment and anti-corruption.

"We are committed to making the Global Compact and its principles part of the strategy and culture of our company, and to engage in projects which advance the broader development goals of the United Nations,” said Citi CEO Vikram Pandit in his letter to Secretary-General Ban Ki-moon of the United Nations.

While implementing all of these programs wasn't easy, Citi has proven that green business is good business. Today, Citi is known for its expertise in managing sustainability issues in high-risk sectors like utilities and manufacturing, giving the corporation a valuable edge when people think of Citi and the environment.

Read more: Check out the environmental section of Citi's website.