Corporate Responsibility
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Corporate Responsibility Document Transcript

  • 1. Corporate Responsibility Report 2006 Responsible banking
  • 2. Key facts 2006 2005 % change Financial Total income net of insurance claims £21,595m £17,333m 25% Profit before tax £7,136m £5,280m 35% Tax £1,941m £1,439m 35% Earnings per share 71.9p 54.4p 32% Dividend per share 31p 26.6p 17% Tier 1 capital ratio 7.7% 7.0% – Total shareholder return 25% 21% – Customers Total customers 27m 25m 8% Number of branches outside the UK (including Absa) 1,613 1,516 6% Total UK current accounts 11.5m 11.1m 4% Barclaycard: International cards in issue 6.4m 4.3m 49% Employees Full-time equivalent (FTE) 122,600 113,300 8% Total employee remuneration £8,169m £6,318m 29% Employee opinion survey: Response rate 87% 84% – Employee opinion survey: Employee engagement 76% 72% – Environment UK CO2 emissions 222,773 tn 210,178 tn 6% UK carbon intensity (tonnes CO2/£m income) 16.2 16.8 (4%) UK energy consumption (offices) 472 GWh 497 GWh (5%) UK energy consumption (offices) per person 7,544 kWh/FTE 7,925 kWh/FTE (5%) Water use per person 11.9m3/FTE 12.3m3/FTE (3%) Environmental Management System coverage: • UK 100% 95% – • Africa, Americas and Asia Pacific 94% 25%(a) – Community Total investment £46.5m £39.1m 19% Volunteers: time committed 75,586 hrs 77,413 hrs (2%) Employee participation: community programmes 33,000 people 27,000 people 22% (a) 2005 figures do not include Absa. Member of the Member of the BITC Corporate PerCent Club Carbon Disclosure 2006 Dow Jones 2006 FTSE4Good Responsibility Project Sustainability Index Index Index Ranked in the top 3rd position 50 of the global FT 500 companies Contents Introduction Responsible banking Inside Barclays Measuring performance 1 Group Chief Executive’s 8 Our customers 37 Our people 57 Data tables introduction 13 Responsible lending 42 Managing our IBC External assurance 2 Barclays around the world 16 Financial inclusion environmental impact statement 4 Corporate Responsibility 22 Financing commercial 46 Barclays in the community BC Contact details Director’s statement customers 52 Our governance framework 6 Summary of our 26 Growing internationally 54 Creating value for commitments 31 Facing climate change stakeholders 34 Working with our suppliers 55 Engaging our stakeholders
  • 3. Introduction Group Chief Executive’s introduction Responsible banking John Varley Group Chief Executive In the year since we issued our last report, key stakeholders and have improved our there has been a further marked increase in performance in a number of ethical indices. the importance attached to Corporate In support of our commitment to raise the Responsibility (CR). Over the course of the profile of CR further, Gary Hoffman, the last 12 months, CR has become more than I want us to be leaders, Group Vice Chairman, now represents this just good business sense – in 2007 no not followers, in corporate agenda at Board level. We made progress organisation can afford to ignore its scope responsibility. with innovative financial inclusion and its implications for business. programmes in the UK and Africa, while Absa became the first major South African There are two key developments driving guidelines. But we need to plan for the years bank to achieve ISO14001 accreditation for this change. The first is the growing, and ahead so we are undertaking a thorough its environmental management system. increasingly widespread, understanding review of our environmental and climate of the consequences of climate change. Sustainability is an appropriate topic for an change strategy. The second development is the evolving organisation that can trace its roots back well debate around sustainability, and the long- Preserving the environment for future over 300 years. But I am looking to the future term impact business has on the societies generations reflects the evolution in when I say that we are fully committed to and economies in which it operates. Neither thinking on sustainability, and the need to action – we must debate, we must learn and of these issues is particularly new – what is assess the impact of business over decades, then we must act, to ensure the successful unprecedented, however, is their adoption rather than years. It shifts the emphasis and responsible development of our and embrace by so many different and from a relatively near-term focus on business in the years ahead. interested parties. managing social, ethical and environmental risk, towards a more active form of business Banks play an important role in influencing leadership, which identifies and embraces thinking and behaviour on both these the commercial opportunities arising from issues, through their relationships with this change in thinking. Sustainability is also This is our eighth Corporate Responsibility customers, clients, employees, suppliers, very much about playing our part in building Report. It is intended for all those governments, non-governmental a more inclusive and just society, by stakeholders who are interested in the organisations and other stakeholders. addressing acute challenges such as This role as influencer is a core tenet of Speeding up making towards our goal progress we are the mortgage financial exclusion. This has always been an of sustainability. responsible banking – which embodies area of strength for Barclays and we remain process the Barclays approach to CR. I repeat my We aim to set out why corporate determined to build upon it, both in the UK In 2006 we asked a panel of 100 message from last year’s report: I want us responsibility is an integral part of our and in our strongly growing business across customers about their experiences of our to be leaders, not followers, in corporate business strategy and how we are emerging markets – particularly in Africa. mortgage application process, and as a responsibility. addressing and prioritising the social, We make our greatest contribution to result we decided to bring the business If we look at climate change, it is right environmental and ethical challenges society by being good at what we do, and back in-house, including the servicing arm that Barclays should assess – as others and opportunities we face in our business so ensuring Barclays continued success. of it. quite properly will – whether we are around the world. This is at the heart of our ability to help our Even though the volume of business is doing enough to tackle an issue with Barclays is committed to transparency in customers and clients achieve their goals growing rapidly at the moment the such significant consequences. We have the reporting of these issues and, to this through providing competitive products feedback about the new approach is done much to address our direct end, our report has been produced taking and services, as well as supporting positive so far, and the average time it environmental footprint, and have fulfilled account of the international AA1000 economic growth and sustaining healthy takes to get from application to offer is the commitment we set last year to make Standard and in accordance with the financial systems. We must demonstrate down to 10 days from 16, an our UK operations carbon neutral. In our 2002 GRI sustainable reporting guidelines, by our actions how it is possible to make improvement of 37%. direct sphere of influence, we are well under including the Financial Sector Supplements. a significant and lasting difference. way with environmental as well as social A full GRI analysis is available at and ethical screening of our supply chain. Last year, we made encouraging progress in www.barclays.com/ In our lending activity, we have significantly CR. Under Alastair Camp’s leadership, we corporateresponsibility. updated our environmental as well as social are developing broader relationships with Barclays PLC Corporate Responsibility Report 2006 1
  • 4. Introduction Barclays around the world Canada Barclays Capital BGI USA Barclaycard Barclays Capital BGI The Caribbean Mexico Barclays Wealth Barclays Capital Brazil Barclays Capital Argentina Barclays Capital Operating in over 50 countries and employing 123,000 people, we move, lend, invest and protect money for over 27 million customers and clients the world over. UK Banking Barclaycard International Retail and Commercial Banking (IRCB) Delivers banking solutions to Barclays UK A multi-brand consumer lending business Provides Barclays international personal retail and business banking customers. which also processes card payments for and corporate customers with banking It offers a range of integrated products and retailers and merchants and issues credit and services. The products and services offered services and access to the expertise of other charge cards to corporate customers and to customers are tailored to meet the Group businesses. Customers are served the UK Government. It is one of Europe’s regulatory and commercial environments through a variety of channels comprising the leading credit card businesses and has an within each country. branch network, automated teller machines, increasing presence in the United States. telephone banking, online banking and relationship managers. UK Banking is managed through two business areas, UK Retail Banking and UK Business Banking, the latter providing relationship banking to medium-sized and larger business customers. www.barclays.co.uk/personal www.barclays.co.uk/business www.barclaycard.com www.barclays.com 2 Barclays PLC Corporate Responsibility Report 2006
  • 5. Sweden Barclaycard Norway UK Barclaycard UK Banking and all other businesses Isle of Man Barclays Wealth Denmark Ireland China Barclaycard UK Banking Barclays Capital Netherlands Barclays Capital Barclays Capital Jersey/Guernsey Germany Japan BGI Barclays Wealth Barclaycard Barclays Capital France Switzerland Barclays Capital BGI IRCB Barclays Capital BGI South Korea Barclays Capital BGI Luxembourg Barclays Capital Barclays Wealth Barclays Capital Spain Italy Taiwan Barclaycard Monaco Barclaycard Barclays Capital Portugal IRCB IRCB Barclays Capital Barclaycard Barclays Wealth Barclays Capital Cyprus Hong Kong Barclays Wealth IRCB Barclays Wealth Barclays Capital Malta Barclays Barclays Capital Wealth BGI Gibraltar Barclays Wealth Barclays Wealth Barclays Wealth Thailand United Arab Emirates Egypt Barclays Capital Barclaycard India Barclaycard IRCB Barclaycard IRCB Barclays Capital IRCB Uganda Barclays Wealth Barclays Capital IRCB Malaysia Kenya Barclays Capital Ghana Barclaycard IRCB IRCB Barclays Wealth Nigeria Barclays Wealth Tanzania Seychelles Singapore IRCB Barclaycard Angola Barclaycard Barclays Wealth IRCB IRCB Barclays Capital Zambia BGI Indonesia Barclaycard Barclays Wealth Mauritius Barclays Capital IRCB Barclaycard Botswana IRCB Barclaycard Mozambique IRCB IRCB Australia South Africa Zimbabwe Barclays Capital Barclaycard IRCB BGI IRCB Barclays Capital Barclays Wealth Barclays Capital Barclays Global Investors (BGI) Barclays Wealth A leading global investment bank which One of the world’s largest asset managers Serves affluent, high net worth and provides large corporate, institutional and and a leading global provider of investment intermediary clients worldwide, providing government clients with solutions to their management products and services. private banking, asset management, financing and risk management needs. BGI offers structured investment strategies stockbroking, offshore banking, wealth Barclays Capital services a wide variety of such as indexing, global asset allocation structuring and financial planning services. client needs, from capital raising and and risk controlled active products Barclays Wealth works closely with all other managing foreign exchange, interest rate, including hedge funds and provides related parts of the Group to leverage synergies equity and commodity risks, through to investment services such as securities from client relationships and product providing technical advice and expertise. lending, cash management and portfolio capabilities. transition services. www.barclayscapital.com www.barclaysglobal.com www.barclayswealth.com Barclays PLC Corporate Responsibility Report 2006 3
  • 6. Introduction Corporate Responsibility Director’s statement Setting the right priorities Alastair Camp Corporate Responsibility Director During the year we engaged actively Operating a responsible business with our many stakeholders. In this report, we discuss the subjects they consider most important, and how we use our dialogue Why we are in business: to inform our responsible banking agenda • Helping customers Our achieve their and to set the right priorities. We talk about Business financial goals. how we are responding to feedback, and Purpose • Total Shareholder Return. specifically to the annual consultation on our last Corporate Responsibility Report Our strategy and the opinions provided by our external assurer. Stakeholder Risk mitigation Economic and commercial input We took the deliberate decision to opportunity raise our profile in this area over the Social Environmental past year, undertaking a much broader programme of consultation with stakeholders, particularly investors and NGOs. We have spoken more often, and Our Foundation Stones Our values more publicly, on corporate responsibility Code of Statement questions, because these events give us Guiding of Human Principles Conduct the opportunity to exchange views openly, Rights and we have found that this has created a virtuous circle of further dialogue and action. Climate change, financial inclusion in the UK and Africa, and the incorporation of social and environmental concerns into lending guidelines, are all good examples The judgements we make in our The issues reflect both ‘direct impacts’ of areas where we have benefited from prioritisation take into account: (which derive from our own business external input. activity) and ‘indirect impacts’ (which are • Our overall business goals. the result of actions taken by our customers • An assessment of the strength and How we prioritise our issues or suppliers). breadth of stakeholder views. The idea of sustainability is an integral part • How we can build employee and Looking ahead, our main challenges for of our commercial strategy, as well as the customer trust, and the reputation and 2007 are to: way we do business. As a global business, value of our brand. we are concerned with a wide number of • Ensure that our strategy remains • How social and environmental insights social, ethical and environmental issues. responsive to the fast-developing issue can assist the development of our We have well-established procedures to of climate change. business around the world, and open ensure that we assign the right priority to • Develop our financial inclusion and up new commercial opportunities each of them, which take account of our Microbanking programmes further, (for example, through the opportunity to own business strategy alongside a careful especially in the developing world. develop innovative customer products assessment of their importance to our and services). These priorities are reflected in our progress various stakeholders. • How we can best mitigate our report and new commitments for the operational and reputational risks. forthcoming year. The structure of this report highlights the main topics on our corporate responsibility agenda, and shows how these relate to our business strategy, and to our business units. 4 Barclays PLC Corporate Responsibility Report 2006
  • 7. Linking CR issues to our business strategy We think it is important to link the CR issues covered in this report with our business Acting on feedback strategy and show the main business units to which the issues relate. After the publication of our last Corporate Barclays business strategy has four core priorities: Responsibility Report we undertook extensive consultation with investors, A Building the best bank in the UK. consumer groups, global and national B Accelerating the growth in our global businesses (investment banking, institutional NGOs, governments, media and corporate asset management, wealth management and international cards). responsibility specialists. Their views were C Developing retail and commercial banking in selected countries outside the UK. many and varied, but there were some D Enhancing our operational excellence. recurring themes. The table below shows these links in more detail. Report section – Key CR issues covered Link to Barclays Principal business units to Positive comments: business strategy which issue relates • Our ‘responsible banking’ theme was well received as a good way to integrate Responsible banking corporate responsibility with business Our customers strategy. Treating customers fairly, customer A, B, C, D All businesses • People liked the issues-based approach satisfaction, secure delivery channels, and context: 88% of respondents anti-money laundering agreed that the issues we chose should indeed be our major concerns. Responsible lending • 75% of previous respondents felt Levels of consumer indebtedness A, D UK Retail Banking, Barclaycard that we had acted on the feedback Financial inclusion they had given. Improving access, affordable credit A, C UK Retail Banking, Barclaycard, • The sections on financial inclusion, and savings for excluded groups; International Retail and Africa, community investment and environmental management were seen developing financial capability Commercial Banking (IRCB) as particularly strong. Financing commercial customers Sustainable lending: environmental A, B, C Barclays Capital, Negative comments – and how we and social impacts UK Business Banking, IRCB have responded • People felt that there was a need for Growing internationally more detail in the consumer lending Supporting development C IRCB section. We have included more and inclusion; HIV/AIDS background on this issue this time. Facing climate change • We were asked for more detail on how Managing our carbon emissions; A, B, C, D All businesses we prioritise our corporate responsibility developing climate related products issues. We cover that in this report, together with a statement of how we Working with our suppliers create value for all our stakeholders. Supplier management D All businesses • People wanted us to ensure that wider issues that are important to other stakeholders are also included. We have Inside Barclays aimed to give a broader context in this Our people report, as well as including candid Our values, talent and A, B, C, D All businesses views from other organisations development, diversity involved in these fields – even if we do not always agree with them – and say Managing our environmental impact where we disagree. Managing our physical resources, D All businesses • More detail was requested on how reducing our footprint corporate responsibility is integrated Barclays in the community into the business. A more detailed Global community A, B, C All businesses section on governance is included investment strategy this time. The Barclays Annual Report 2006 provides more detail on strategic and financial progress and can be found at www.investorrelations.barclays.com. Barclays PLC Corporate Responsibility Report 2006 5
  • 8. Summary of our commitments Goals in 2006 Progress Commitments for 2007 Our customers • Develop new electronic payments • New faster payments service is on • Maintain momentum on customer 27 million customers service, ready for launch by end 2007. track for November 2007 launch. service and satisfaction. and clients worldwide • Continue to improve customer • Progress sustained – customer • Complete the Barclays/Woolwich satisfaction in UK Retail Banking. advocacy up 10% since end 2004. branch and infrastructure integration programme. • Continue development of online • Strong focus of attention – • Continue to improve disability banking security features. continual improvements made. access to products and delivery channels. Responsible lending • Encourage an increase in the • Most major credit card issuers have • Drive progress on data sharing Taking a lead role on number of organisations sharing signed-up to ‘Behavioural data initiatives. data sharing credit information. sharing’ and good progress achieved • Continue data review to ensure we on current account data sharing. make the best credit decisions for our customers. • Pilot programme to identify and help • Pilot scheme implemented first • Develop electronic information customers who may be approaching half 2006. to help customers make informed financial difficulty. decisions. Financial inclusion • Embed the Ghanaian Microbanking • Programme has reached 80,000 • Reach 500,000 people through Barclays and Absa have programme; use learning to develop market traders; extended to credit Microbanking in Ghana. opened almost one million new microfinance initiatives. union sector. basic bank accounts • Review our UK basic banking • Consultation with three consumer • Target Cash Card customer proposition to ensure it meets the groups has led to product satisfaction score of 89%. needs of a diverse customer base. enhancements. • Encourage a strong UK community • We remain the leading private • Play a leading role in driving finance sector. sector supporter of credit unions sustainability in the credit union in the UK. sector to reduce financial exclusion. Financing commercial • Improve understanding of social • Lending sector guidance reviewed • Continue environmental and customers issues relating to Equator Principles and extended to cover our whole social risk training programme. Our revised environmental and include in updated sector commercial lending book and social sector guidance guidance. (over 50 sectors). has been shared with • Provide training on environmental • Training conducted for over 120 • Collaborate with United Nations 170 institutions risk and the Equator Principles to employees in project finance, Environment Programme to colleagues in Absa. investment banking and credit develop our approach to human teams. rights in risk management. Growing internationally • Expand branch and cash machine • Customers have access to some • Significant growth in branch and Ten million customers network in South Africa. 6,700 cash machines (up 16%) cash machine network across our in Africa and 749 branches. African businesses. • Increase take-up of Mzansi basic • We now have 518,000 Mzansi basic • Grow basic banking services bank account in South Africa. bank accounts in South Africa. targeting disadvantaged people. • Further develop HIV/AIDS • Leading HIV education, counselling • Continue progress towards the awareness and participation in and testing programmes in place achievement of Black Economic employee welfare programmes. across African businesses. Empowerment targets in South Africa. 6 Barclays PLC Corporate Responsibility Report 2006
  • 9. Goals in 2006 Progress Commitments for 2007 Facing climate change • Make UK operations carbon • UK carbon neutrality achieved. • Work towards becoming globally Our UK operations neutral. carbon neutral. are now carbon neutral • Renewable energy purchased for • Source renewable energy for 50% of UK operations. international operations. 100 % • Investigate carbon management services for SMEs, personal customers and employees. • UK carbon neutral debit card launched. • Develop further environmental products for personal customers and launch employee guide on climate change actions. Working with our • Review our suppliers using • New corporate responsibility • Continue application of suppliers enhanced screening tool and build supplier questionnaire launched. questionnaire to medium and 57 medium and high-risk into new supplier contracts. • 57 medium and high-risk suppliers high-risk new and existing suppliers and reviewed to date (see page 35). suppliers. £1.5 bn of supplier spend reviewed Our people • Further improvement in key • Good progress: employee • Improve employee opinion scores 123,000 employees in employee opinion survey scores. engagement up from 72% to 76%. to high-performing norm. over 50 countries • Acquire and develop talent with • Focus on talent sustained – 21% of • Improve satisfaction scores increased momentum. senior managers are now female. for disabled, gay and lesbian colleagues. • Ensure line managers have the • In place. Strong focus on talent • Increase the proportion of women tools they need to meet the ‘Best recruitment and development. in senior grades. People’ guiding principle. Managing • Meet 2006 environmental • Good progress on energy use in • Continue progress towards 2010 environmental impact improvement targets. offices, water and waste targets – CO2, energy, water and First position amongst management. waste (see page 58). banks in the Dow Jones • Implement our Environmental • Absa in South Africa and Barclays • Continue to extend the EMS Sustainability Index for Management System (EMS) in France achieved ISO14001 internationally. environmental reporting Italy and South Africa. certification. • Establish new programmes to eliminate sources of waste. Barclays in the • Launch programmes with Help • Partnerships successfully launched • Increase participation in employee community the Aged and NCH, the children’s in June 2006. community programmes by 5%. £46.5 million global charity. investment • Develop a co-ordinated global • New programme developed and • Drive globalisation of community in our communities community investment rolling out through 2007. programme, increasing non-UK programme. funding to 25% of total. • Increase participation in employee • 33,250 employees participated in • 30% of community investment to community programmes 2006, an increase of 22%. be focused on ‘Banking on brighter (volunteering, fundraising futures’ theme (see page 48). and giving). Barclays PLC Corporate Responsibility Report 2006 7
  • 10. Responsible banking Significant investments are being made to ensure that our customer service standards are consistently achieved. 8 Barclays PLC Corporate Responsibility Report 2006
  • 11. Our customers Work in progress Everything we do starts with our customers. That may sound like a truism but we are in business to help them. Our customers are at the heart of what we do, although the banking industry as a whole has not always had a strong reputation for customer service. From a Barclays perspective, we have set ourselves high standards for customer service right across the Bank. That clear intent is being backed up by significant investments to ensure that our standards are consistently achieved. Fair play Consumer Code. The main areas which There are certain basic principles that have been updated are access to basic underpin everything we do in relation to bank accounts, how changes to the interest our customers: we should be open and rates applicable to savings accounts are At a time of falling customer managed, and the way credit assessments transparent, we should ensure that our products always meet genuine needs, and trends [across the finance are conducted before loans are made. we should give people all the information industry], Barclays improved its they need to make an informed choice. position and is now first among Products Treating customers fairly is not just about We are embedding these principles into the UK banks in terms of good customer service, it is also about the way we do business by aligning many customers believing it takes developing the right products, and of our employees’ pay and performance targets with the quality of service which its CR seriously. providing clear and straightforward information about them. We are working customers receive. In the past we had a hard to make all of our products simpler Source: MORI survey, 2006 more traditional approach to sales and and more transparent. An example is the targets, but now customer satisfaction ‘lifetime tracker’ mortgage, which was plays a key role. For example, in Barclays Treating customers fairly Wealth, rather than have a sales incentive Investing in training Our own principles on fairness reflect the structure, our focus is on providing the right In the UK all our cashiers now go through Financial Services Authority’s agenda on product for each customer, adapted to their a 16-week induction programme, which treating customers fairly. This covers own circumstances and attitude to risk. covers detailed training on our systems subjects such as: Across our retail business we have made as well as modules on customer service. complaint-handling a particular priority. This is followed up with ongoing • Product design We have overhauled many of our assessments back at their branch, which • Marketing and promotion procedures, and improved the way we lead eventually to full accreditation. • Sales and advice processes investigate the root causes of the most Last year, 1,400 employees successfully • Remuneration common problems. A ‘Red Flag’ scheme completed the scheme. • After-sales information • Complaint handling has also been introduced which means In South Africa, Absa runs a full set of that customer feedback can be acted upon training programmes, and in 2006 a total within 24 hours. of ZAR 118 million was invested in the Barclays continues to support the Banking training of 21,000 employees. Codes in the UK which provide – via self- regulation – additional protections to consumers and to businesses, charities, clubs and associations. In 2006 we worked with the British Bankers’ Association to make further improvements to the Barclays PLC Corporate Responsibility Report 2006 9
  • 12. Responsible banking Our customers developed in response to customer We launched a revised and more feedback, and has no application fee and Assets under management comprehensive website, covering no tie-ins. Barclays Global Investors (BGI) is one of disability access to all our branches, the world's largest managers of exchange products and services. We also made We are responding to the growing requests traded funds under the iShares brand, changes to our online banking service to clear payments more quickly. We have which are index funds that trade like for visually impaired customers, been giving immediate value on personal shares. Each share represents a portfolio including improvements on-screen cheques up to £1,000 paid into Barclays of stocks designed to track closely one and new speech reader software (visit accounts for over eight years, but this is specific index. These investment products www.barclays.co.uk/accessibleservices/ an issue that affects the whole banking trade on a stock exchange and can be branch_banking.html for more sector, and it will only be fully resolved by bought through most stockbrokers, information, or call Barclays Information taking an industry-wide approach. We are allowing the flexibility to invest in indices Line 0800 400 100). working with other banks and APACS, the UK trade association for payments, to focusing on environmental, social and In preparation for the Mental Capacity develop an electronic payments service governance criteria, such as iShares KLD Act, Barclays is implementing processes that can transfer cleared funds within two Select Social Index Fund and iShares KLD and training to equip our frontline hours. This is scheduled for launch in 400 Social Index Fund. employees with the necessary knowledge November 2007. BGI is also one of the largest asset and skills they need to deliver the right management companies in the world with services. We applaud the goals of the Act, We have responded to the very different over US$1.8 trillion under management; it but believe that it represents a challenge, circumstances of the African market by has over 2,800 clients in 52 countries. By particularly with regard to employees being introducing a different way of assessing serving institutional asset management required to make judgements on the mental applications for loans from small- and clients with actively managed and indexed capacity of customers. medium-sized businesses. Many of these customers simply do not have traditional strategies, our investment returns are Our new offices in Zaragoza, Spain, are financial statements that they can show us, benefiting tens of millions of individual being designed with accessibility in mind. and we now make our decisions based on pension participants worldwide, providing So far 29 of our offices across Spain have their bank account and how they have consistent and reliable returns to finance been through the programme which will managed it. their retirements. be completed in 2007. In June last year we announced that we Branches and ATMs planned to integrate the branch networks For many customers, our branches are the UK, where some of our branches have and supporting infrastructure for Barclays Barclays front door. We are making large needed refurbishment. Likewise many and the Woolwich. This will mean extra investments in Spain, Portugal and Italy, branches have been made more accessible investment in the newly combined branch where we opened 50 new outlets in 2006, for disabled people. We have spent a total network, and in the Woolwich name as taking the number in those countries to of £84 million on this programme, and 95% our flagship mortgage brand. Under these some 590. And in Africa, Absa and our of our branch network now has disability plans Woolwich and Barclays branches other businesses on the continent are all access. This represents the large majority within 300 metres of each other will be focusing on extending their reach, of branches that can have their access consolidated onto one site. The aim is to especially into rural areas, where we are improved; whilst our ideal is complete avoid duplication and improve customer using creative new ways to offer branch accessibility, issues such as planning service by using the same IT systems across services even where we do not have a permission and the physical structure of the network. Woolwich customers will get traditional bricks-and-mortar building. some buildings make this impractical. access to four times as many branches as There is more detail on this in the chapters Where we cannot improve accessibility, we before, as well as to Barclays ATMs and on financial inclusion and growing still provide the same features for disabled some 12,000 Post Offices where Barclays internationally. customers as are found in our other current account customers can withdraw In terms of the overall Barclays branch branches, such as hearing induction loops cash free of charge. network the obvious priority has been and low-level writing surfaces. Improving our service Significant investment in the principles of Treating Customers Fairly means better products, more employee training and an improved experience for our customers. 10 Barclays PLC Corporate Responsibility Report 2006
  • 13. in the short term. However, through further investment in the network over the next two Speeding up the mortgage years, we expect our ATM numbers to process Once complete, these return to pre-integration levels. improvements will make all of our In 2006 we asked a panel of 100 Customer satisfaction customers about their experiences of our branches available to all of our mortgage application process. Their input In last year’s report we talked about the customers, who will see familiar fact that we needed to improve the levels helped us decide to bring the business faces serving them in better of customer satisfaction in our UK retail back in-house, including its servicing arm. looking and better equipped business. Our overall strategic aim for Even though the volume of business is premises. the UK Retail Bank is to build the best growing rapidly, the feedback about the bank in the UK, and our aim is to do that new approach is positive, and the average through sustained focus on excellence time it takes to get from application to Deanna Oppenheimer Chief Executive Officer, UK Retail Banking in customer service. offer is down by 32%. A great deal of effort has gone into this in the last 12 months: we have invested in modernising our branches, and we have sharpened up our internal processes. Our customer satisfaction scores are now Barclays Capital and Barclays Global We expect no frontline job losses as a result. improving, and the number of customers Investors. Likewise the operations in Africa However, three back offices are expected to who would recommend Barclays has also and the Indian Ocean are well ahead of their close. Our union, Amicus, has been advised gone up by 10% since the end of 2004. competitors, and Absa is ranked joint first in on the plans and employees informed of South Africa. We have succeeded in reducing queuing the potential future impact. These offices times in our branches this year – the Absa was rated the most caring company have a combined workforce of 1,200 but, average is now under three minutes, in the financial sector in the South African through employee turnover and taking compared with a high of 4.5 minutes Corporate Care Check survey. It was also steps to redeploy where possible, we are in 2004. third amongst all South African companies. working towards ensuring redundancies are significantly fewer than this. Overall, the We have always had a strong reputation Barclays Spain was ranked third in workforce of UK Retail Banking is expected for customer service in Spain and Portugal, the country for customer service in a to remain broadly in line with the current in UK Business Banking, Barclays Wealth, recent survey. number of 32,000. We continue our commitment to remaining in any town Safer banking where we are the last bank branch. UK branches reduced queuing time (minutes) The confidentiality and security of our data As for cash machines, we have the third- and transactions is one of our highest largest ATM estate in the UK, and our priorities, and we know that customers are customers also have access to some 34,500 increasingly concerned about this topic. 2006 free LINK cash machines. All of our ATMs Throughout the world we work closely with are free to use both for our customers and all the relevant authorities to ensure that our competitors’ customers, as our signage we play our full part in the fight against at these machines makes clear. And 92% financial crime and terrorism. of our machines are at a height that suits 2004 We know that our customers value the wheelchair users, a figure expected to freedom and convenience of online reach 98% by the end of 2007. As Barclays banking: in Spain, 54% of our customers and Woolwich fully integrate, there will be now use internet banking, and that some decrease in the number of our ATMs 0 1 2 3 4 5 number is rising annually by 25%; in South Free LINK cash machines Percentage of our cash machines that are Post Offices where our current account at a height that suits wheelchair users customers can withdraw cash free of charge 34,500 92 % 12,000 Barclays PLC Corporate Responsibility Report 2006 11
  • 14. Responsible banking Our customers Africa the growth rate is more like 90%. We guarantee to refund any UK customer However, the flexibility of internet banking who has innocently suffered internet Dealing with money laundering can come at a price. There are a number of fraud on their Barclays account. There is Our anti-money laundering policies are possible security concerns here, including more information about this at designed to make sure that we observe ‘trojan’ viruses and ‘phishing’ (scam email www.barclays.co.uk/security. the highest ethical standards. They cover attacks). In response to this we are making issues such as training and accreditation All Barclays cash machines are protected free anti-virus software available to for our employees, and the use of IT with ‘anti-skimming’ devices, which ensure customers in the UK, Spain and South systems to monitor and report on that customers’ card details cannot be Africa, and we update our online security anything that appears suspicious. Barclays stolen by fraudsters. Our ATM cards are pages on a regular basis. Wealth has reviewed its processes to protected by Integrated Chip and PIN We have also introduced a free SMS text technology and over one million customers ensure that they meet the strictest alert service in the UK and Spain, which are now using Barclaycard Secure, a process requirements of international compliance sends our online banking customers an which gives them better security when they and control, especially given the volume alert when they set up a new third-party are shopping online. of cross-border activity undertaken. payment, to check its authenticity. The next step will be the introduction of ‘two factor There is more detail about our authentication’– in other words Chip and customers on the website at PIN technology combined with a hand-held www.barclays.com/ourcustomers. card reader. Our goals, progress and commitments for 2007 can be found on page 6. 12 Barclays PLC Corporate Responsibility Report 2006
  • 15. Responsible lending Understanding the issue With UK consumer debt now standing at a record £1.3 trillion, the subject of responsible lending has understandably received a good deal of press coverage. But media reports have not always given an accurate picture of the wider context. We have dedicated considerable time and resources to dealing with this issue, but before we talk about what we are doing, here are some basic facts and figures about consumer lending in the UK. Lending in context Of the remaining £213 billion, a large As one of the leading credit card companies For several years now levels of consumer proportion is structured debt, in other words in Europe, Barclaycard clearly has a debt have been rising, but there are positive lending with a fixed repayment schedule. responsibility to listen to these criticisms as well as negative aspects to this. Consumer And of the remainder, credit card borrowing and take the lead in doing something borrowing has not only supported the accounts for £55 billion, and most of that is about them. We talk later in this section country’s economic prosperity, with growth either being repaid in full every month, or about the specific work we have in hand, fuelled by retail spending but, in general, being managed without problem. but the main point is that we are committed more flexible access to credit has also been to both fairness and transparency in lending Even though credit card borrowing only good for the individuals concerned. At the and, as the market continues to develop in accounts for a very small proportion of the same time, interest rates have been at response to customer demand, we will do total, the wide choice of products available historically low levels, and seem likely to more to look at the deeper causes of and level of marketing means that public remain relatively low. So while debt has risen excessive borrowing. attention tends to focus on this particular considerably, the majority of people are product whenever the issue of consumer Given the increasing complexity and variety managing that debt without difficulty. debt arises. Critics have said that the terms of lending products available in the market, It is also important to look behind the and interest rates that apply to cards are not we have put greater focus on ensuring that headline figures. As the diagram shows, clear enough, and that the industry as a our marketing practices are responsible and of the total £1.3 trillion that has attracted whole has encouraged people to borrow transparent. It is our responsibility to ensure so much attention, £1.08 trillion is more – and take out more cards – than they that our products and their terms are clear secured debt, most of it mortgages. can afford. to customers. Nevertheless there will always be some individuals who will get into Total consumer debt in 2006 difficulties with their borrowings, however strictly the banking sector is regulated – or regulates itself. Secured lending Total unsecured lending Regardless of how low this figure is, it is £1.08trn £213bn important to address the issue and at Barclays there are two fundamental aims: 84% 16% first, to ensure that the number of people in difficulty, or at risk of becoming so, is as of which, low as possible and, secondly, to provide credit card lending, support and guidance to those in difficulty, £55bn or to those who need our help. 4% Preventative measures There are two aspects to our work on this. Within Barclays we are making better decisions about how much we lend, and to whom, partly by sharing data with other Source: Bank of England lenders. And in parallel with this we are Barclays PLC Corporate Responsibility Report 2006 13
  • 16. Responsible banking Responsible lending encouraging customers to take more to highlight the potential value of having control and responsibility for their own access to other data sources, such as finances by developing better products, student loans, council tax payments, providing better and clearer information, and utility bills. and supporting financial capability And following extensive work across the initiatives. banking industry, in 2007 we are also in a position to share positive data, such as Data sharing limits and balances on current accounts. We talked in last year’s report about the This gives us access to additional benefits of data sharing for the industry as information which will help us to make a whole, and more progress has been made the best possible credit decisions. in the last 12 months. We fully understand the sensitivities The agreement we pioneered with other surrounding the disclosure of personal data lenders to share behavioural data is now and we want to be sure that it is secure and supported by the majority of the other big only used in responsible and appropriate credit card issuers. Barclaycard was the first ways. To achieve this, we continue to play a New services UK issuer to share data – such as a series of leading role in the industry-level work to minimum payments across multiple cards After text messages were sent to identify ongoing improvements to the UK’s or extensive cash advances – which can customers in May, 15,000 regular late- data sharing governance model. help us spot customers’ problems in the payers set up a direct debit. early stages. We expect other issuers to be We seek to improve lending practices to in a similar position over the course of 2007. keep pace with the market as it develops. Around 350 million accounts are already For some time we have maintained a ‘low For example, our Flexi-Rate card offers part of this scheme. A key objective for and grow’ approach whereby customers a lower APR to those who repay more of 2007 will be to start identifying sudden new to credit are given low credit limits. their balance each month. And we have and extreme changes in customers’ We will only increase this limit once they seen that Flexi-Rate customers are half circumstances, which look very different have shown that they are able to manage as likely, compared with other customers, in behavioural terms from a gradually their finances in a responsible fashion, consistently to repay only the minimum increasing problem. for example, by consistently meeting their amount. monthly commitment. We have also The behavioural data sharing project is one Alongside new products we have introduced other measures, such as of a number of data sharing initiatives in introduced additional services to give reduced credit limits, to help ensure that our which Barclays is playing a leading role. customers more control. For example, to customers do not over-commit themselves. Other opportunities include working with help people repay on time we can send text Callcredit (a UK credit reference agency) alerts to customers five days before their More appropriate products on an ‘over-indebtedness initiative’ which monthly repayment date, and put more One way to encourage responsible allows us to test the value of sharing certain personalised messages on their statements. card ownership is to develop products information relating to a customer’s These help people who often pay late or that reward customers who manage income, and working with Government only pay the minimum, by giving a useful their debt sensibly. Initiative Data shared Purpose Who is involved? Historic (‘Non- This is data from customers who signed To allow the inclusion of data A cross-industry effort, where Consensual’) agreements before Data Protection sharing for ‘long-standing’ customers, numerous responses to a DTI-led data sharing notification clauses allowed the sharing of helping to address the ‘gaps’ in credit files consultation were submitted in positive data January 2007 Behavioural Additional data to be shared for credit To increase our ability to identify sudden Barclays is playing a lead role on this data sharing cards, for example, payment amounts, and severe changes in customer project under the auspices of APACS, credit limit changes and cash advance circumstances the UK trade association for payments, activity with a majority of issuers now engaged Callcredit Over – Current account turnover and income To provide data about income and Being piloted by Barclays and four indebtedness declared on loan applications debt levels other banks initiative Data sharing A detailed review of the governance To ensure that processes remain effective Led by the British Bankers’ Association governance processes surrounding data sharing and managed through a cross-trade association stakeholder group 14 Barclays PLC Corporate Responsibility Report 2006
  • 17. website to make sections offering help address financial problems sooner rather and guidance more prominent. As part than later. of this we have added links to the FSA’s The Resolution Foundation, a www.moneymadeclear.fsa.gov.uk and We are working on improving the service we new think-tank, says that many offer to customers with serious difficulties. APACS’ www.choosingandusing.com in The basic principle is one-to-one contact, of the 12 million people on low- order to help customers make an informed and the development of a joint plan to deal decision about whether, and how, to to-moderate incomes are making with the problem effectively. We want to borrow. This is the first part of an ongoing the worst decisions. Yes, they plan to improve the way we communicate help people find the right solution for their situation, whether it be an agreement with should have read the small print. with our customers and help them make us, a structured debt management plan or, But the plethora of products is better decisions. in extreme cases, an Individual Voluntary extremely confusing. Another new idea this year was a leaflet Arrangement (IVA), or bankruptcy. called Seven Ways to Avoid Charges. The challenge is to continue to find The Times This was particularly targeted at customers additional, and better, ways of identifying 28th September 2006 who were starting to get into difficulties – the warning signs as early as possible. some had exceeded their limit, or had a This will then allow us to take action earlier payment returned. Over 48,000 people took in the debt cycle. This includes working with some sort of action as a result, ranging from customers to find the best repayment plan changing their payment date, to setting reminder, as well as more information about for them, as well as pointing them towards up a direct debit. the consequences of minimum repayments. independent sources of advice like Citizens We have already seen this working – after Advice and the Consumer Credit the message sent out in our May Supporting financial capability Counselling Service. We want people to choose our products statements, over 15,000 regular late-payers over those of our competitors, and if we contacted us to set up a direct debit, which Business customers are going to achieve this, we can be helped will solve this problem for them in future. We have a specialist business support team by two things. First, we have to make our which works with our relationship managers products and marketing as clear and Better and clearer information whenever one of their business clients gets transparent as possible so that customers We are now providing more and better into financial difficulties. In the last year this can make an informed decision. Second, advice on our own products, as well as team has helped over 400 businesses get we need potential customers to have a more detailed information in our branches. back on an even keel financially, representing sufficient level of financial awareness to We have made our credit cards easier to a success rate of 80%. understand the information we give them. understand by including illustrative To achieve this second objective we examples in our marketing material and There is more detail about our work on continue to support government financial we have done this ahead of industry responsible lending on the website at capability initiatives. requirements to do so. These show how www.barclaycard.co.uk/thinking_about long it would take to clear a given balance We know that third parties can sometimes _borrowing.html. under different scenarios, which makes it be in a better position to offer people free Our goals, progress and commitments for easier for people to understand the and independent guidance about all 2007 can be found on page 6. consequences of repaying different amounts. aspects of their finances, which is why we invest so much in supporting organisations We were one of the first credit card such as Citizens Advice, the Consumer companies to start using Summary Boxes. Credit Counselling Service, Payplan and These help people compare the different the Money Advice Trust (there is more on APRs, interest free periods and charges that this in the chapter on financial inclusion). apply to different products, so they can As we work more closely with these groups, choose the right one for them. These boxes I am very proud of the strength we are getting a deeper understanding of have now been introduced for other secured and unsecured lending. how customers’ needs evolve, and how of our commitment to support the advice they need changes at different businesses through financial Barclays worked with industry counterparts stages of their lives. Understanding how to create the Summary Box for credit card best to predict and address these needs is difficulty. In the last 12 months cheques to respond to concerns about the one of our next tasks. we have worked hard to help clarity and transparency of credit card more than 400 of our customers cheques. This has now become an industry Dealing with difficulties achieve turnaround in their standard, and we are expecting it to For a wide variety of reasons, a small become part of the UK Banking Code. percentage of our customers will businesses, thereby helping to We believe that responsible, clear credit card have problems managing their debt, sustain local economies and cheques can be part of a responsible credit or find themselves in danger of falling local jobs. card proposition. into that situation. If people are in this position we need to know about it as soon Peter Harvey Alongside changes to our marketing and as possible, because it is always better to Vice Chairman, UK Banking promotional material we have revised our Barclays PLC Corporate Responsibility Report 2006 15
  • 18. Responsible banking “Poor people, and especially poor women, have both the potential and the right to live a decent life, and microcredit helps to unleash that potential.” Professor Muhammad Yunus Nobel Peace Prize acceptance speech, 2006 16 Barclays PLC Corporate Responsibility Report 2006
  • 19. Financial inclusion Great strides, as well as small steps The World Bank estimates that 2.7 billion people – over half the population of the developing world – live on less than US$2 per day, while even in the UK it is believed that over a million adults are without a bank account. Clearly, while it may differ in form, financial exclusion is experienced by developing and developed economies alike – and it is an issue that banks have a responsibility to address. Our strategies in this context are varied, from microfinance in Ghana, to supporting credit unions in the UK and education projects in South Africa. Steps towards inclusion Key highlights We view the path to financial inclusion as invested in global stages in a journey. Most people will have financial inclusion their first experience of financial services when they open a bank account, but people Financial inclusion is not about £890,000+ initiatives in 2006. who feel excluded from mainstream financial big fast hits – it’s long term and market traders in services need to be confident enough to take we’re committed to this. It’s a Ghana benefited from that first step – and have the right products journey not a destination. our Microbanking and advice available to them when they do. programme with We seek to support them through every Deanna Oppenheimer 80,000+ Susu collectors. stage of the journey with advice, education Chief Executive Officer, UK Retail Banking of our funding for and easier access to banking. Where we are local community unable to provide this support directly we finance organisations work with intermediary organisations, such in the UK was as credit unions that are often better able to focused in the most reach excluded people. 85% deprived areas. Advice and education ranging and important issue that it needs to is the total value of Financial education and advice is needed be tackled in partnership with governments, our support for free throughout the journey. As a bank we can NGOs and other voluntary organisations. £3.5m money advice. provide support, but this is such a wide- basic bank accounts Some people need help and education to access even the most basic financial services, opened by Barclays in the UK and Absa in because at times financial exclusion is part of a more complex social exclusion issue. 1m South Africa to date. In the UK our educational support for disadvantaged groups is part of our ‘Banking Funding committed in 2006 towards on brighter futures’ strategy (there is more financial inclusion initiatives detail in the chapter on Barclays in the community). Access to banking support Working with Kikass, a youth charity, we £140,827 developed the Thrifty Squid Challenge, in which groups of excluded young people Community Community were challenged to develop a solution to finance finance/ trade microfinance financial exclusion that could be delivered associations institutions The Thrifty Squid Challenge – 300 young in their community. 300 young people were £223,961 £531,082 people were challenged to develop solutions involved, with 91% saying that participation to financial exclusion. had boosted their confidence in managing their money. Barclays PLC Corporate Responsibility Report 2006 17
  • 20. Responsible banking Financial inclusion Support for personal customers in deprived areas(a) of the UK 2006 Analysis 2005 Analysis Total Deprived % share Total Deprived % share Barclays areas of total Barclays areas of total Number of current accounts 11,468,000 689,300 6.0% 11,093,000 627,000 5.7% Number of Cash Card accounts 464,500 52,800 11.4% 379,000 45,000 11.9% Cash Cards as % of all current accounts 4.1% 7.7% 3.4% 7.2% Unsecured loans and overdraft balances (£m) 11,500 610 5.3% 11,100 630 5.6% Mortgage lending (£m) 61,900 2,220 3.6% 59,600 1,970 3.3% Deposit and current account balances (£m) 69,800 2,070 3.0% 65,500 2,140 3.3% Ratio of deposits to lending 0.95 0.73 0.93 0.82 Support for small businesses in deprived areas(a) of the UK The figures below refer to firms with a turnover of less than £1 million. % share Total Deprived % share of total As at 31st December 2006 Barclays areas of total 2005 Number of business current accounts 677,279 39,059 5.8 5.5 % in overdraft 23.9 26.3 6.4 5.8 Number of business deposit accounts 284,786 13,322 4.7 4.7 Number of loans 100,760 4,758 4.7 4.6 Loan and overdraft balances (£m) 9,570 426 4.5 4.2 Current and deposit balances (£m) 10,805 590 5.5 5.6 Number of business start-ups during 2006 94,477 7,427 7.9 7.6 2006 start-ups as a % of end-year business customers(b) 14.6 20.2 Ratio of deposits to lending 1.13 1.38 (a) ‘Deprived areas’ are those areas defined as such by the Bank of England in its report ‘Finance for small businesses in deprived communities’, November 2000. The term ‘small businesses’ refers to businesses so defined by the British Bankers’ Association. (b) Business customers are all small businesses (companies, partnerships and sole traders) holding a business current account. Further along within the reach of people at the lower end of The Treasury Select Committee People who are more advanced in the the mass market. The programme includes In the UK the issue of financial inclusion journey need to build their confidence and straightforward information on subjects like moved further up the public agenda. The gain a greater awareness of how they can long-term financial planning, budgeting and House of Commons Treasury Select manage their money and use financial personal finance. As illiteracy rates are high in Committee conducted an inquiry into products and services. We help not only by South Africa we are distributing these financial inclusion and published three working with our own customers, but also materials on DVD, video, and CD, as well as reports in November 2006. In the report by supporting independent and charitable through a specially designed board game for entitled ‘Banking the Unbanked’ Barclays organisations working in this field. school children. Absa is also in the process of was recognised for the way in which it launching dedicated business centres in the For example, during 2007 we are extending serves basic bank account customers: townships, to give better access to finance our sponsorship for a small pilot which aims specifically that the account is available and advice for small firms and start-ups. to evaluate whether joint working between to anyone except those with a history Citizens Advice Bureaux (CAB) and of fraud, that it has lower charges when Independent debt advice Independent Financial Advisers (IFAs) could payments have to be returned unpaid For those who are struggling with their improve access to generic financial advice compared to standard current accounts, finances in the UK we continue to fund for people on low and middle incomes. and that customers have full counter organisations like the Money Advice Trust The scheme is being expanded to a national access. We are continuing to explore ways National Debtline, Citizens Advice and the pilot which will include 25 CABs. to improve product features, employee Consumer Credit Counselling Service. training and the customer experience. In South Africa, Absa’s customer education In 2006 our support for money advice programme aims to bring basic banking totalled over £3.5 million. 18 Barclays PLC Corporate Responsibility Report 2006
  • 21. To ensure that the product meets customer The Barclays Financial needs we undertook an extensive A breakthrough in South Africa Inclusion Fund consultation with three well-known The number of people gaining access to consumer groups – Citizens Advice, the basic banking in South Africa is estimated In the UK we are using our own dedicated National Consumer Council and SAFE, an fund to support local community finance to be growing at 5% per year. In 2006 initiative of Toynbee Hall. Their insights the proportion of the total population organisations in England and Wales. This have enabled us to improve the account, year the theme was ‘Working Smarter’, and with a bank account exceeded 50% for making it more appropriate for financially the first time. over £280,000 has been committed to ten excluded consumers. We are now providing organisations to help them become more clearer information; simplifying procedures; efficient and professional – and therefore and enhancing its profile in our branches. more sustainable in the longer term. There is a more flexible policy for unpaid Five of the credit unions we support direct debits, we have introduced standing it the biggest provider among the banks. provided loans totalling £4 million to orders, and we are providing more regular Absa also offers the All-Pay facility and 6,600 people in 2006. A proportion of statements to aid money management. Sekulula account for people on social these customers might otherwise have Training for our employees has been welfare, enabling them to access their gone to high interest lenders, and we stepped up. In 2007 we will undertake pensions and benefits. To date, 2.3 million estimate that, as a result of the reduced customer research to assess how well these of these customers are using these services interest payments, £2.2 million has been changes are working. in the provinces of Gauteng, Eastern Cape, retained in local communities. These credit Western Cape and the Free State. For start-up businesses we continue to run unions have also helped 13,300 of their local seminars aimed at new entrepreneurs, The issue of access is not solved just by customers to save a total of £5.6 million. especially those living in deprived areas. having the right products – our customers 59% of our ‘Let’s Talk Business’ events have also need physical access to our services. taken place in deprived neighbourhoods, This is a particularly pressing issue in light with over 500 events held for some of the immense numbers of South Africans Access to banking 5,100 delegates. Around 200 of our own joining the banking system every year. To encourage people into mainstream employees have given their time as mentors banking, the first step is to provide them for young people as part of the Prince’s with a safe and straightforward current Trust scheme. account that they can access not just in a branch but via an ATM, or a Post Office. Barclays now has a greater proportion of Once the account is open it is important small business current accounts in deprived to provide customers with the appropriate areas, in part as a result of a higher share of Absa level of support they need to manage their start-ups in these areas during 2006. Absa already has the largest banking money more effectively. footprint in South Africa, with 749 South Africa branches and access to over 6,700 ATMs. The UK In South Africa, Absa’s customers have Strong growth is predicted in 2007 – and By the end of 2006 our customers had opened over 518,000 Mzansi accounts over 60% of it will be in previously opened over 460,000 Cash Card Accounts (the national basic bank account). Absa has disadvantaged areas. (our basic bank account in the UK). a 27% share of all such accounts, making Portable bank branches Absa’s first portable branch was in Soweto in 2005, and it is a measure of its success that it is now being replaced with a bricks-and- mortar building. Absa plans to roll out a further 30 portable branches in 2007, and the branch network will also be extended in line with its Financial Sector Charter commitments and its expansion plans. Barclays is looking to introduce portable branches in other parts of Africa. Barclays PLC Corporate Responsibility Report 2006 19
  • 22. Responsible banking Financial inclusion another £180,000 over two years to develop Access to cash further ABCUL’s PEARLS IT system, which We have over 3,700 ATMs in England helps credit unions to develop their The role of the credit unions is business and reach more excluded people. and Wales, of which 266 (7.2%) are in the most deprived areas. Our customers becoming more and more central In 2006, ten credit unions went through the (including Cash Card customers) can also to the battle to address financial intensive training needed to use this system. withdraw money from some 12,000 Post exclusion. We are seeing a In June we launched ‘Barclays Step Change’ Office branches across the UK. with the CDFA. This is providing over £90,000 progressively greater fit between towards training and development grants what the credit unions are doing focusing on marketing, business planning, to help their clients, and the loan management and loan delinquency. The solutions are innovative – for example, willingness of the banking Last year also marked our fifth year of Absa has ten mobile banks, each of which industry to encourage more involvement with Venturesome, to which reaches about 1,500 new customers a people to open bank accounts. we have provided £660,000. Venturesome month. These mobile banks show is a specialist provider of risk capital to customers how to use an ATM and how It’s a partnership that’s working, charities and social enterprises. In the last to operate an account. and gaining momentum and five years, approximately 380 charities have Alongside these are 13 portable branches, profile. worked with Venturesome, and of these 11 of which are in financially deprived around 130 have been offered financial districts. These portable branches John Varley support, worth £8 million. Group Chief Executive, Barclays enable customers to carry out the same transactions as in a traditional branch, while Commercial relationships being significantly cheaper and faster to Commercial support for community finance build. Absa is investing in a further 30 of is a growing opportunity for us, and in 2006 these in 2007. the Business Banking Regeneration Team One area where we see a real need for more invested £5 million in Bridges Community Absa is also part of an alliance called ZOK Ventures, the UK’s first venture capital fund local and practical support is access to which is introducing containers, similar to set up specifically to invest in ambitious affordable credit. As a lender we have a those used in shipping, which house an businesses in the most under-invested parts responsibility to provide fair access to ATM and internet kiosk. Over 2,300 such of England. credit and our decisions are based upon containers are planned to be installed over the customer’s ability to repay. However, We invested £1 million in Charity Bank, the next three years, creating 9,200 jobs. we are unable to provide credit to everyone, the not-for-profit organisation that particularly those on the lowest incomes, provides low interest loans for community Affordable credit and partnerships as it is uneconomic for us to provide high We work with other local, national and and voluntary groups. Charity Bank has volumes of low-value loans. At the same provided affordable loans of more than international organisations to ensure the time we need to ensure that alternatives to £55 million to about 500 charitable wider needs of financially excluded people the doorstep lender are available, offered in organisations without easy access to and enterprises are met. This helps us to the right way and at the right level. funds, unlocking a further £80 million for achieve scale and sustainability in both the commercial and the social aspects of our That is why working closely with community and voluntary activity. work on financial inclusion. organisations such as credit unions, community development finance institutions and microfinance institutions is integral to our inclusion strategy. These organisations enable individuals and smaller enterprises to deal with emergencies and plan ahead through careful budgeting and personal support. If we can help develop and grow the community finance sector it will be a big This investment from Barclays step towards creating a more seamless will boost significantly our journey into financial inclusion. lending capacity, enabling us to In the UK take the bank to the next level by Barclays is the leading corporate supporter providing financial support to of both the Association of British Credit hundreds more charitable Building the network Unions Limited (ABCUL) and the organisations across the UK. Community Development Finance Over 60% of Absa’s branch network growth Association (CDFA), the two main trade will be in previously deprived areas. associations for community finance Malcolm Hayday Chief Executive, Charity Bank providers. At the end of 2005 we committed 20 Barclays PLC Corporate Responsibility Report 2006
  • 23. Our Business Banking team is providing informal financial service providers to reach increasing amounts of funding for social the large numbers of unbanked people and Supporting credit unions housing and charities in the UK: this has small businesses in Africa. in Ghana grown from £2.2 billion at the end of 2003 to £5.5 billion at the end of 2006. We are Researching informal finance in Africa Our Microbanking programme in Ghana working closely with the social housing We are now carrying out a study of the aims to reach half a million market traders sector and individual housing associations, informal finance sector in 11 African and individuals in 2007. which have an important role to play, as a countries. This will help us understand the Our work with credit unions will contribute large number of their tenants are financially best way we can use our resources to address to this target, following the launch in excluded. In 2006 we launched our first exclusion on the continent and help us form November 2006 of the second phase of partnership, with Aspire Housing in the new partnerships to expand our programme. our Microbanking programme – a new West Midlands, to enable housing partnership with credit unions in Ghana. associations to support their tenants in In the US opening our basic bank account more Over the past five years in the US, Barclays We are providing a special account to easily. We plan to extend this to a number has invested over US$4 million in make it easier for some 270 credit unions of other housing associations in 2007. Community Re-investment Act related in Ghana to bank with us. In addition, we activities. This includes more than US$3 have invested £30,000 to support 20 rural In South Africa million that has been provided in mortgage credit unions. Absa has launched a dedicated Commercial backed securities, where the recipients are This is the largest support for the credit Property Finance team, focusing specifically low and moderate income earners, or union movement by a private sector on addressing the challenge of delivering looking to purchase a property in such company in Ghana. Mobilising rural affordable housing through financing social an area. Another US$1 million has been savings is vital to alleviating poverty in and integrated housing developments. invested as loans to support specific these areas. To date the unit has provided finance for projects, in particular through more than 25,000 units. redevelopment and regeneration schemes. In Ghana There is more detail about our financial In 2006, over 80,000 market traders inclusion activities on the website at benefited from our Microbanking www.barclays.com/financialinclusion. programme with Susu collectors. Our goals, progress and commitments for The programme is designed to work with 2007 can be found on page 6. Microbanking programme in Ghana In 2006, we worked with 200 Susu collectors, extending our coverage from two to six major cities across the country. We provided over £50,000 of loans through the Susu collectors who in turn deposited over £1.7 million. To date all the loans have been repaid. Over 120 Susu collectors have also completed special training courses designed to enhance their business. The Microbanking programme represents a 2.4 billion cedis (£150,000) investment in Ghana. Barclays PLC Corporate Responsibility Report 2006 21
  • 24. Responsible banking We have played a leading role in updating the Equator Principles – and in sharing our environmental and social sectoral lending guidance more widely. 22 Barclays PLC Corporate Responsibility Report 2006
  • 25. Financing commercial customers Beyond Equator Applying the concept of sustainability to financial services is challenging, but large- scale commercial lending is one area where the issues are very clear: our business will only be sustainable if we can balance the economic aspects of these loans with the social and environmental concerns they raise. That is why we have taken such an active part in the process of revising and extending the scope of the Equator Principles. And within Barclays we have moved much further. We have significantly extended the scope of our own environmental and social guidance for commercial lending, and we have collaborated with the United Nations Environment Programme to make this into the basis of a toolkit that other banks can use. The updated Equator Principles The original guidance notes have been Kimberley Process for the sustainable The Equator Principles have made a considerably expanded to include an sourcing of diamonds, and the Voluntary significant difference to the way the industry overview of each industry’s regulatory Principles on Security and Human Rights handles project finance, but even before the situation, and guidance about the sort of which are designed to guide companies in Principles were formally established, we had measures we would expect companies in maintaining the safety and security of their already extended this approach to other that sector to be taking to identify their risks operations while ensuring respect for commercial lending. It is six years since we and implement the appropriate actions and human rights. Proven adherence to such first revised the environmental risk guidance controls. For example, an issue that may not standards by our clients is a positive and briefing materials for our own loan be immediately obvious with health care indicator from a risk management book. In the early days these covered 32 companies is the disposal of surgical waste. perspective. business sectors, and included an overview Likewise the question of recycling and of the risks faced by different sectors, and product stewardship is becoming more pressing for telecoms companies. Our new internal guidance the sort of questions we should be asking potential clients in these industries. The revised internal guidance, for the first This guidance now covers all these time, places explicit emphasis on aspects of sectors, and a number of sub-sectors As a result of the extensive new work we social and human rights risk assessment, within them: have carried out in the last year, our internal guidance now covers our whole commercial which are of increasing public and political • Agriculture and fisheries lending book. This includes all loans to over interest and concern. This is in accordance • Metals and mining 50 different sectors, some of them new with our aim to integrate human rights • Oil and gas additions, such as health care, and some of considerations into decision-making • Power generation, supply and them subsets of the previous list, where we in our lending, sourcing and employee distribution have separated out the different risks management. For example, the guidance • Chemicals, pharmaceuticals involved in, for example, petrol retailing references internationally recognised manufacturing and bulk storage compared with oil exploration. standards and initiatives such as The • General manufacturing • Utilities and waste management 2006 Project finance deals – Barclays Group • Infrastructure Category • Service industry A B C Total • Forestry and logging Higher Risk Medium Risk Lower Risk The guidance places as much emphasis Number of project finance deals 8 10 18 36 on the social and environmental impact of Deals completed or pending 4 9 17 30 service industries like dry-cleaning or – of which, number where E/S(a) telecommunications as on the higher- related changes were made 4 9 17 30 profile sectors such as oil and gas, mining, Deals considered, but not participated in 4 1 1 6 and major infrastructure projects. Projects referred from EU 6 4 15 25 Projects referred from Africa 1 2 2 5 The detailed sector guidelines are on the Projects referred from Asia Pacific 1 2 0 3 UNEP FI website, available for members. Projects referred from North America 0 2 1 3 More can be found on www.unepfi.org. (a) E/S = Environmental and social. Barclays PLC Corporate Responsibility Report 2006 23
  • 26. Responsible banking Financing commercial customers Progress on the Equator Principles Barclays was one of the four founding Principles into practice. Our own This guidance [for key aspects of Equator banks, and there are now 45 processes already incorporated much of international lenders that use these the new material (for example, we had environmental risk assessment] Principles, between them accounting for been using the lower threshold for some represents an important first step the overwhelming majority of cross-border time), but we have revised our policies in a new phase of collaboration finance. At the same time, the Equator where necessary, updated our intranet across the financial sector to banks have built on this success by revising site, and produced new training materials. and strengthening the original Principles. New training has already been provided for address the shared threats and The threshold amount has been lowered teams in both London and New York. opportunities for long-term value from US$50 million to US$10 million, and We have taken part in a number of generation. The costs of huge the criteria have been made tougher, and consultations and meetings with NGOs challenges like climate change, now include more robust procedures for this year on the Equator Principles. poverty and natural resources public consultation. In addition, every The same team has also presented at a UN Equator bank now has to report on its human rights conference in Johannesburg, depletion cannot be mitigated by progress and performance every year. one bank alone. All financial a presentation to the Institute of We played a key role in the process of Environmental Management and organisations must act together revising the Principles, and John Varley and Assessment, and at the Ethical in ensuring greater accountability Gary Hoffman hosted the relaunch event Corporation Conference in London. at Barclays in July 2006. We have also done and sustainable innovation from The Equator Principles website is themselves and the companies a lot of work internally to put the new www.equator-principles.com. they finance. The assessment of environmental and structured finance teams. In the last year Dr Jem Bendell social risk is now an integral part of our our particular training priorities have been Senior Strategic Adviser, WWF formal credit approval and compliance Absa, Barclays Capital in New York, and the processes, and must be taken into account credit, global loans and business teams in market. In all, around 1,000 UK commercial in all lending to the revelant sectors. London. In 2007 we are continuing to focus loans were screened according to the on South Africa, and will work with the guidelines during 2006. Alongside this we are running an ongoing lending teams in Barclays Capital in Asia programme of training, to raise awareness and France, and UK Business Banking. Working with the UN of these risks, and equip our lending teams Whilst developing our own revised guidelines to deal with them. In 2006, 122 people went The UK bank trained 60 people from its we went further, and collaborated with the through this training in Africa, the UK, and credit risk teams during 2006, as well as United Nations Environment Programme – the US, including colleagues from credit, developing a dedicated intranet site on Finance Initiative (UNEP FI) in the creation of investment banking, legal, sales and the environmental and social risk for its own a practical ‘toolkit’. We worked with the UK lending by industry sector in 2006 Number of non- project finance Percentage of Project(a) deals referred total Group finance to E/S(b) Sector loans and advances Environmentally sensitive sub-sector deals Risk Team Agriculture, forestry, fishing 1.4 Agriculture and fisheries 0 5 Forestry and logging 0 17 Manufacturing 5.4 Manufacturing 1 23 Chemicals, pharmaceuticals manufacturing and bulk storage 0 14 Mining and metals 3 41 Energy and water 2.4 Power generation – fossil fuels 8 32 Power generation – non-fossil fuels 6 73 Power generation – total 14 105 Oil and gas 3 23 Utilities and waste management 1 17 Infrastructure (including dams, pipelines) 3 8 Business and other services 10.3 Service industry 11 15 Totals 19.5 36 268 (a) Project finance as defined by Basel II www.bis.org/publ/bcbs118.pdf. (b) E/S = Environmental and Social. 24 Barclays PLC Corporate Responsibility Report 2006
  • 27. Loans and advances to customers by industry (% of total amount) The Wardlaw Wood Windfarm Home loans We have provided £13.5 million of project Financial services finance to the Community Windfarm at Other personal Wardlaw Wood in Ayrshire, which is expected to generate enough renewable Business & other electricity to power 13,000 homes each year. Wholesale & retail Getting planning permission is one of the Property most difficult issues facing any windfarm development in the UK, because it is so Manufacturing difficult to get the support of local Energy & water communities. In line with our internal Finance lease policy we ensured that the client carried receivables out a full environmental and social impact Construction assessment. This confirmed that it was unlikely there would be any adverse Transport 2006 impacts on the wildlife or natural habitats Agriculture in the area. The public consultation that 2005 was undertaken as part of the process 0 5 10 15 20 25 30 35 identified the key concerns for local people, and this allowed the developer to take action to address them in a sensitive specialist environmental consultants URS As Chris Bray, Head of Environmental Risk and practical manner, while involving the and environmental stakeholders on this Management at Barclays, says, “These notes residents at every stage. toolkit, making it available to the UNEP FI’s aren’t designed to impose a rigid or dogmatic 170 member institutions to help inform approach to environmental and social risk Local residents and schools have now their own lending and risk management assessment, but we do hope they will be a been given the opportunity to invest in the decisions. This would be especially useful useful part of the process of informed windfarm, which will allow them to for the smaller and regional banks, who decision-making. And it’s not just about become stakeholders and own shares. recognise that this is a major issue for them, identifying possible risks – helping lenders This is one of the first onshore windfarms but may have fewer resources to devote to it. spot potential commercial opportunities is to have engaged with the community to just as valuable in the long run.” such a wide extent. The aim was to create a set of guidance notes that would cover key aspects of Martin Hancock, the chair of UNEP FI, says environmental risk assessment, whether for that the toolkit may help ‘promote the larger proportion of the financial services small loans or major project finance, and to sustainability agenda’ both inside and sector, and not just by the major lenders who give equal importance to the social as well as outside the member organisations, and it is have already adopted the Equator Principles. the environmental aspects of assessment. already helping to raise the UNEP FI’s profile and bolster its credibility in this area. The notes will be updated and reissued on a There is more detail about our finance for regular basis, and we intend to invite more This is one of the most important aspects of commercial customers on the website at involvement from sector specialists – for the briefings from our point of view, because www.barclays.com/environmentalrisk. example, the Forest Stewardship Council it means that social and environmental risk Our goals, progress and commitments for will be working with us on forestry issues. assessments may now be taken up by a much 2007 can be found on page 6. Project finance There are now 45 international lenders that use the Equator Principles, between them accounting for the overwhelming majority of cross-border finance, and projects such as hydro-electric dams and mines. The Principles were revised and strengthened in 2006, with the threshold amount lowered from US$50 million to US$10 million. Barclays and Absa participated in 30 project finance deals last year. Barclays PLC Corporate Responsibility Report 2006 25
  • 28. Responsible banking We serve 10 million customers in Africa and in other emerging markets – and have significant growth plans. 26 Barclays PLC Corporate Responsibility Report 2006
  • 29. Growing internationally New markets, new responsibilities Barclays ambition is to be one of the handful of universal banks leading the global industry – an organisation that can offer a full range of retail and commercial banking. 50% of our profit now comes from outside the UK. The acquisition of Absa in 2005 was a big step towards that, and with 30% of Barclays employees now in Africa, the shape and character of the Bank has fundamentally changed. We see major banking potential across emerging markets, and across a range of customers, which means more new branches, more new products – and the chance to act as partners in the sustainable development of those economies and their populations. Whilst we have been in Africa for over 100 Black Economic Empowerment – Absa(a) years, we see an even more exciting future there as more and more of the population moves into mainstream banking. And the With more than 100 years 22% of senior management now black (target 20-25% by 2008) same holds true elsewhere in the world, both in niche markets or powerhouse emerging economies such as India. experience of business in Africa we know that investing in 28% of middle management now black (target 30% by 2008) As we move into these new markets we do so in the full recognition of our own developing markets means acting to help those markets 35% of junior management now black (target 40-50% by 2008) of senior women and 19% responsibilities. The issues we face in develop: extending the reach of of female junior managers many of these countries are complex and financial services, encouraging sensitive, and have a social as well as an economic dimension – HIV/AIDS in Africa the growth of local businesses 7% are black (target 33% of the black complement by 2014) being the most obvious example. We know and building the skills and Access to financial services that a robust banking system can bring huge benefits to a developing economy, not just by encouraging enterprise and making capabilities of local management. 70% (transactions and savings) versus target 80% by 2008 capital more accessible, but by providing employment, contributing to social Frits Seegers Chief Executive, 10% Direct ownership (target 10% by 2008) integration and developing a more skilled workforce. This is why we believe that the expansion of the Barclays brand into a new Barclays Global Retail and Commercial Banking 39% Black people on the Board (target 33% by 2008) market should always make a positive impact, wherever we are in the world. 22% Black women on the Board (target 11% by 2008) (a) Figures subject to audit. South Africa South Africa is going through immense changes as it modernises its economy and population, especially among those who works through the full implementation of are currently outside the banking system Black Economic Empowerment. Absa has altogether. There are two aspects to this: already made real progress on this, being one is to develop products and services well on track with the targets set out in the that address the needs of disadvantaged Financial Sector Charter. The table on the people, and the other is to give those people right sets out where we are now compared physical access to banking, particularly in to the charter targets. rural areas. The results of our efforts are But Black Economic Empowerment is also clear: Absa has added 1.4 million retail about how we encourage greater access customers since 2004, and of the total, to financial services in the wider black 54% are black (up from 50% in 2005). Barclays PLC Corporate Responsibility Report 2006 27
  • 30. Responsible banking Growing internationally Our retail presence in emerging markets The mass market Over three-quarters of South Africa’s adult HIV/AIDS: an update on the Barclays and Absa programmes population are part of what is called the We talked in detail about this in last year’s Our wider work has concentrated on mass market, in other words those earning report, where we explained the thinking helping the community to care for those less than ZAR 5,000 per month (£360 per behind our extensive work on HIV/AIDS infected and affected, and we often do this month). This is an important and historically in Africa. We do this because it is the right by forming partnerships with NGOs like unbanked section of the population, and thing to do, and because the long-term Unicef. Over the past three years, Absa has one on which Absa is focusing, given its future of our own business and the wider spent over ZAR 12 million on projects like commercial importance – currently, mass economy relies on the health of our this in South Africa, and people now call us market customers comprise 4.4 million employees, our customers, and the the ‘AIDS Bank’ in recognition of what we accounts, or around half of Absa’s community as a whole. As we described have done. customer base. last year, we are tackling HIV/AIDS on all HIV education and voluntary counselling Across South Africa, two-thirds of the mass three fronts. and testing has been conducted in market is currently unbanked. However, this We have a comprehensive programme for Botswana, Kenya, Zambia, Uganda, is changing rapidly, and South Africa is our own employees, which is one of the Tanzania, Ghana, Zimbabwe and South experiencing 5% compounded growth in biggest in the whole continent. We are Africa. The highlights: the number of people with bank accounts. continuing to focus on early detection and • 2,020 colleagues attended the HIV proper treatment: our employees and their New products and services awareness education sessions. immediate family have access to free testing Basic banking remains a huge challenge, • 1,864 individuals participated in and full medical care, including anti- with around 50% of South Africa’s counselling and testing. retroviral drugs. population without any bank account at all. • Networks of preferred local health care Absa is working with the rest of the financial providers are being established in services sector to develop and promote each country. products that can reach out to these people. 28 Barclays PLC Corporate Responsibility Report 2006
  • 31. We talked about Mzansi accounts last year, providing affordable housing and better and the number of these has continued to Emerging Africa access to home ownership through our grow – Absa is one of the largest providers Infrastructure Fund own social housing projects like Cosmo City in the country, with 518,000 accounts, or in Gauteng, Brickfields, near Johannesburg, 27% of the total. Barclays is part of the Emerging Africa and Elangeni, in the centre of Johannesburg. Infrastructure Fund, which will provide There are also new services like All-Pay and more than US$300 million in long-term New branches accounts such as Sekulula, which allow debt finance for infrastructure projects in Absa is taking a number of creative individuals to cash government benefits and Africa in the power, telecommunications, approaches to the challenge of banking in grants. We have provided access to All-Pay transport, water and sanitation sectors. remote and country areas. By investing and Sekulula to over 2.3 million people, with ZAR 345 million we aim to have increased total payments exceeding ZAR 1 billion transactional, financial and business service the number of our branches from 749 every month. And for people on low products, with customers receiving advice to 810 by the end of 2007, and 60-70% incomes, the Flexi Select account offers a on legal, tax and accounting procedures. of this growth will be in previously wider range of services like insurance, as The Small Business Advisory Centre also disadvantaged areas. well as a basic current account. funnels applications for the Small Business We already have 13 portable branches, Absa’s Black Business Incubator Fund Advisory Fund, a ZAR 30 million fund to growing to 30 by the end of 2007, and we has ZAR 250 million to invest in black provide finance for BEE entrepreneurs. aim for our customers to have access to entrepreneurs, while its Flexi Loan account Plans call for new centres in KwaZulu-Natal, over 7,500 cash machines by the end of this now has over 80,000 customers. Many of which will be fully operational by mid-2007, year. This includes self-service and internet these have taken out micro-loans, and this and the Western Cape. kiosks, and hundreds of new ZOK type of finance is now a strategic priority containers, which offer phone and internet for Absa. We are reaching out to the Personal capital formation banking, as well as a cash machine. small business market in other ways. We believe the next step towards growth All these initiatives are bringing banking Absa is the major banking supporter of the and increasing financial inclusion for South to people who have no bricks-and-mortar government’s Khula scheme, which African society is through ‘personal capital branch within reach, and as a result no enables loans to be made to borrowers that formation’. This sees South Africa evolving other bank in South Africa has a wider otherwise would be considered too risky into an ‘ownership’ society with a strong network than Absa. There is more on our to finance. savings culture and increasing levels portable branches, and our customer of home ownership. A particular issue in banking mass market education programme, in the chapter on customers is the high illiteracy rate. That is Of all the ways in which to stimulate financial inclusion. why, for example, both All-Pay and Sekulula personal capital formation, home use biometric methods, such as retina ownership is the most natural, and an area Sending money scans, for identification. As a further step in which Absa has taken a lead role. Absa is Absa is addressing money transfer services towards financial inclusion, our telephone financing one in three home loans in South within Africa with the launch of a pan- banking service is available in eight out of Africa, making it the country’s leading African, online payments system called the 11 official languages of South Africa. provider. This complements Absa’s Gateway for African Payments. This sets out investment in social housing, which also to solve a large problem: because of the low Small Business contributes to urban renewal and growth. volume of payments within Africa and from Absa recently opened the doors of its first Absa has set up a dedicated unit that Africa to the rest of the world, the process is Small Business Advisory Centre in Pimville, concentrates on financing new social and often costly and cumbersome for individual Soweto, which aims to help fledgling affordable housing developments. So far, banks. “We’ve opened a highway along entrepreneurs establish new businesses it has funded more than 25,000 units. which anything can travel,” says Daisy Pillay, and build existing enterprises. The initiative Absa’s general manager for International The unit is also supporting the is part of Absa’s expansion into previously Financial Institutions. “The Gateway is government’s plans to rehouse those in the disadvantaged communities. Consultants available to all banks. It’s transparent, simple country’s squatter camps by 2014. We are at the centres help with applications for to use and charges a flat fee to all users.” Building the branch network Barclays has businesses in countries across Africa and the Indian Ocean, with an increasing focus on the largely unbanked mass market. Barclays PLC Corporate Responsibility Report 2006 29
  • 32. Responsible banking Growing internationally The system is the first on the continent to in last year’s report and this has not be available in all African countries. Millennium Development Goals substantially changed. For as long as we can During 2006 we estimate that Barclays in emerging markets conduct business in a way that accords with our own values, we will continue to have a transferred around £300 million for UK There is little doubt that a thriving banking presence there, and support our 150,000 customers to developing markets like sector will drive a thriving economy, and customers and our 1,000 colleagues. Africa, China and India. This money vice versa, leading to improvements in a supports their families and businesses, and society that range from education to India and the Middle East helps to build economic prosperity; it is a health. This reflects our own belief that our We opened two new branches in India this practical proof of the value of a reliable and greatest good is done by the work we do year, and the expansion of the business is secure banking network. everyday, through the stability and general going hand-in-hand with active work to prosperity that we help enable. tackle financial exclusion. As part of the Regulation Much of our work in Africa and emerging Reserve Bank of India’s financial inclusion In South Africa there are currently two key markets supports the objectives of the initiative, Barclays is developing its own regulatory issues: the National Credit Act Millennium Development Goals. basic bank account specially designed to and the Competition Commission’s inquiry. meet the needs of the under-banked The National Credit Act will come into force sections of the community. in June 2007 and is designed to improve have a bank account have the income and transparency and disclosure, prohibit Barclays India is also planning to launch financial profile to benefit from one, which unfair terms and practices, and support new microfinance projects, as well as rural represents an enormous opportunity, both over-indebted consumers – aims that we banking initiatives, which will include for them and for us. This new approach is support. The Competition Commission opening new branches in rural areas. backed up by a major programme to build inquiry is looking at competition in banking, or install new branches, employ a new and The biggest economy in North Africa is bank charges and access by institutions more mobile sales force, and develop a suite Egypt, and our operation there grew from other than banks to the South African of straightforward bank accounts, savings, 25,000 customers to 30,000 in 2006. payment system. and loans. We doubled the number of branches to 14 last year, with a total of 40 as the goal for And beyond And, as in South Africa, the management of 2007. In February we began retail banking We have businesses in 11 other countries the business is drawn from local talent: all in the United Arab Emirates. in Africa and the Indian Ocean with some 11 managing directors are African. And of 1.7 million customers, and many of the a total of 7,500 employees, less than 30 are There is more detail about our presence same themes apply there. Our strategy is UK expatriates. in emerging markets on the website at giving much increased focus to the mass www.barclays.com/africa. market. The figures suggest that around Zimbabwe Our goals, progress and commitments for 30% of the people who do not currently We explained our position on Zimbabwe 2007 can be found on page 6. Growth in Kenya In Kenya we are doubling the number of branches and cash machines in the next three years, from some 60 branches to 120, and from 80 cash machines to more than 200. We are also investing in our first call centre for our Kenyan customers, and in improving the credit card system, as well as in servicing the under-banked segment of the population with portable branches that can be deployed rapidly. 30 Barclays PLC Corporate Responsibility Report 2006
  • 33. Facing climate change Managing risk Global warming is perhaps the most significant threat to maintaining a sustainable business.The resulting climatic changes will have an impact on our own operations, those of our customers, and the economies in which we all operate. Climate change is a risk to be managed, but is also a significant business opportunity: we can help to support our customers in the gradual transition towards a lower carbon economy. This is why we are working hard to reduce our own carbon footprint, and putting investment and resources into developing products and services that can help our customers do the same. A watershed year 2006 may prove to be a watershed year Our climate change strategy for the issue of climate change. Thanks to Barclays has a five point strategy for high profile events such as Al Gore’s film Barclays has taken significant first dealing with climate change by: An Inconvenient Truth and the publication • Increasing energy efficiency. of the Stern Review, there is more public steps in cutting CO2 emissions • Buying green energy. awareness than ever before, as well as a both across its operations and • Making our UK operations carbon growing impetus to address the issue. through its presence in neutral. In this chapter we look at what we are renewable energy and carbon • Offering climate products and doing to tackle climate change; you can services for our customers. markets. The Bank now needs to • Engaging in the climate change debate. find details about our more general environmental activities in the chapter develop a strategic approach that on managing our environmental impact. mainstreams climate change and factors carbon reduction carbon emissions by 80,000 tonnes in 2007, Going carbon neutral in the UK opportunities into every aspect equating to the emissions of some 13,000 Last year we said that the greenest form homes. of energy is the energy you do not use, and of its business. Even with these actions there are still CO2 we still believe that. Over the next five Mark Kenber emissions that we cannot avoid. We have years we plan to increase UK energy Policy Director, The Climate Group offset these emissions from our energy efficiency by another 20%, as the result of use and business travel, making our a multimillion pound ‘invest to save’ UK operations carbon neutral for 2006. programme. For example, we are investing Our plan now is to make our global in energy-efficient technology such as boiler operations carbon neutral, but we have upgrades, low CO2-emitting IT equipment, started with the UK because we have a and modern air conditioning units. large number of operations there. There are examples of particular projects on the website at Barclays CO2 emissions from energy and travel www.barclays.com/climatechange. We have also increased the amount of green energy we use. 12% of the UK retail network is already powered by renewable electricity, Africa 37% and from April 2007 we have a new three- UK year contract with EDF Energy to supply 48% renewable electricity for the majority of our UK offices and large branches (again, there is more detail on our website). As a result, over 50% of our UK operation is supplied US & Asia 12% Europe from renewable sources, reducing our 3% Barclays PLC Corporate Responsibility Report 2006 31
  • 34. Responsible banking Facing climate change Offsetting is not the solution to climate Expert voices change, but it does help businesses to Barclays engaged ICF International to internalise the cost of carbon. Offsetting 1% of annual global GDP is currently costs us around £5-8 a tonne of provide an independent expert opinion on the pertinence, effectiveness and required to be invested in order to CO2, which means that for every 1MWh of environmental integrity of Barclays overall mitigate the effects of climate non-renewable energy we use, we pay to Climate Action Programme. offset the carbon dioxide emitted. This gives change; failure to do so could risk us a strong additional incentive to bring our “The overall approach to carbon neutrality a recession worth up to 20% of emissions down by investing in energy- taken by Barclays is sound and effective. annual global GDP. efficiency and low-carbon energy. It optimally minimises Barclays carbon footprint by giving priority to internal Taken as a whole, we have offset our UK Source: Stern Review carbon dioxide emissions, some 223,000 reductions. Barclays is bringing an innovative approach to carbon neutrality, tonnes, which represents one of the largest through creation of an internal cost of amounts of CO2 ever to be offset by a carbon, and through diversified options to company. Offsetting is a relatively new acquire existing offsets or invest in emission Climate change is a global issue, and as field, and our aim is to be as transparent reduction projects. Beyond the basis of the a global bank, there are a wide range as possible – our methodology is available Climate Action Programme laid in 2006, of options open to us to deal with it. on request. certain avenues are available for Barclays to Around 60% of our offsets have been However, like every other company trying expand further the scope and magnitude of purchased in the external market through to make progress in this area, we still face its internal efforts and consolidate its Barclays Capital’s Emissions Trading Desk. challenges. For example, we need to ensure emission offsetting processes.” These offsets are called Certified Emissions that we invest in the right offsetting Reductions and they are endorsed by the ICF International projects, as well as start looking at the UN Framework Convention on Climate emissions produced by our supply chain Change. For the remainder, we have and by our lending. There are real issues invested in low carbon projects in here – not just quantifying these emissions developing countries through carbon in a meaningful way, but also finding an offset providers The Carbon Neutral efficient way to exert a positive influence. Company and Climate Care. These include For the full expert opinion, please go to: In managing our own carbon footprint, solar power projects in rural India and www.barclays.com/climatechange. we have developed our understanding of wind power generation in India and China. climate change mitigation. We now hope In 2007, we will also be investing in a project to share the learning for the benefit of our to install energy-efficient stoves in Lesotho, suppliers and our customers. Southern Africa. This project brings social benefits to the community as well as environmental benefits. Focusing on the consumer Offering ‘green’ products to our retail customers is a business opportunity for us. That is why our approach to date has been to complement existing products, like our debit cards, with environmentally friendly features. Barclays customers in the UK, for example, are already using our new carbon neutral debit card – the first in the country. Working in close co- operation with our card manufacturer Axalto, the card is being rolled out to all our 11 million debit card users as their current cards expire. All the CO2 generated by making the card is offset by projects in the UK. 32 Barclays PLC Corporate Responsibility Report 2006
  • 35. The Carbon Disclosure Project Leading on emissions trading In the 2006 Climate Leadership Index, Barclays Capital was voted Best Trading Our partnership with Barclays is compiled by the Carbon Disclosure Company in the EU Emissions Trading Project, Barclays is among the top 50 ‘best effective because their people Scheme by readers of Environmental in class’ companies in the Global FT500 for share our vision for the future Finance magazine. Barclays Capital was initiatives addressing the challenges of growth of the renewable energy also voted Number One in European climate change. Amongst the banks in the Emissions Trading in the Risk magazine Index, we rank joint fifth. market. commodity rankings for 2006. Mark Edwards General Manager, Finance, Novera Macquarie Renewable Energy Developing products to meet this market was also recognised by the UK We are pleased to be working with the UK the challenge Secretary of State for the Environment, who Social Investment Forum on a project to The other area in which we are taking invited us to contribute to the Manifesto on harness the power of asset finance to active steps to combat climate change Emissions Trading which the UK is taking accelerate the shift to a lower carbon is in the development of carbon related into the EU debate on the review of the ETS economy. The project, funded by the products and services for our customers, post-2012. We were the only financial Carbon Trust, aims to accelerate the both companies and individuals. services company to be included in a group acquisition and use of low-carbon assets of NGOs, utilities, and other industries. by mainstream businesses and the Working with business voluntary sector. During 2006 the EU Emissions Trading Financing renewable energy Scheme (ETS) passed the one billion tonne Our Natural Resources Team has provided Our five-year targets, and our progress in mark, and Barclays Capital continues to long term-finance for over 2,600MW 2006, are set out on page 57. be the most active player in the market, of renewable generating capacity, including having traded some 300 million tonnes. onshore windfarms, landfill gas extraction There is more detail about climate change The market saw great fluctuation over the plants, small-scale hydroelectric on the website at last year, but we believe in its long-term projects, biomass plants and bio-diesel www.barclays.com/climatechange. viability and importance. conversion plants. We are also working with Our goals, progress and commitments for manufacturing clients to help them source 2007 can be found on page 7. The concept of emissions trading is their energy from greener power. And in beginning to spread beyond the EU, and June 2006, Barclays Capital acquired a 16% Barclays Capital has now started transacting stake in Greenergy International Limited, Certified Emissions Reductions in Asia and a market leader in the biofuels industry. the Americas. During 2006 our expertise in Helping you help the climate In 2006 Barclays launched a joint website with offset provider Climate Care that gives our customers the chance to offset the emissions generated when they travel by air. They pay the appropriate charge, and Climate Care invests the money in energy- efficiency projects in the developing world. We are raising awareness of the website by putting details about it on over one million travel-money wallets which customers receive with their purchases of foreign currency. There is more detail about the scheme on www.climatecare.org/Barclays Barclays PLC Corporate Responsibility Report 2006 33
  • 36. Responsible banking “Other banks and finance houses should follow Barclays example. The days of poverty pay for cleaners… are over.” Jack Dromey General Secretary, Transport and General Workers Union 34 Barclays PLC Corporate Responsibility Report 2006
  • 37. Working with our suppliers The wider context Our responsible sourcing principles further underpin the sustainability of our business. For Barclays, responsible sourcing is as much about managing the direct and indirect risks to our business as it is about ensuring good ethical practice. That is why we are committed to fair contract and payment terms with our suppliers – in return we expect good service, at a good price, supplied in a responsible fashion. To this end we have developed our Corporate Responsibility Supplier Questionnaire, which is helping us to identify and manage the social and environmental risks. good so far, and the new process has Our commitments already been extended to cover the top 57 Creating the questionnaire The results of the questionnaire have a medium to high-risk suppliers, which The questionnaire is based on our 10% weighting in assessing suitability as account for around £1.5 billion of our long experience of risks and issues a supplier. The information helps us to supplier spend. in the banking industry and in our ensure that we engage with the right All new medium and high-risk suppliers will supply chain. suppliers and that they have suitable be required to complete the questionnaire, For Barclays, the main sources of supply corporate responsibility policies in line and it is now a condition of renewing the chain risk derive from three areas: with Barclays standards. If a supplier contract for existing relevant suppliers. As a • Human rights scores poorly we will: result, we aim to have all existing suppliers • Environmental issues • work with them to help them to improve complete the questionnaire within the next • Business integrity their own performance; two years. • discontinue working with them if they These risks are prevalent in certain areas are unwilling to work towards agreed We will make the decision to extend the of sourcing, which is why we define the standards or are consistently unable scope of the questionnaire further down the following as high risk: to improve. supply chain on a case by case basis. • Printing • Direct mail If we have specific concerns we will work New Markets • Outsourcing in co-operation with the supplier and audit There are key issues with regard to sourcing • Paper their supply chain down to their second from emerging markets, particularly in • Corporate wear and third tier. respect of labour conditions and the environment. We engage in early due diligence with regard to these suppliers and use our questionnaire to anticipate and mitigate these risks. We are also implementing a training Corporate responsibility questionnaire programme covering the corporate Next steps In 2006 our global sourcing team began responsibility implications of sourcing. We are making the questionnaire a issuing our new Corporate Responsibility This is currently in progress, and by the standard part of the process for choosing Supplier Questionnaire to our medium and first half of 2007 we will have trained new Barclays suppliers throughout the high-risk suppliers, examining the social all our key sourcing and supplier world. The new ‘Aiming High’ website is and environmental risks to their business management personnel and a number a key part of this: all new suppliers are and, by extension, to ours. of our key suppliers. directed here first, and they can use it to We are now able to work more closely with download the initial forms they need, and For more information, visit our suppliers to identify potential issues, find out more about Barclays – not just how www.barclays.com/supplier/ and take steps to address them. Progress is we work but what we will expect from them. aiming_high_welcome.html. Barclays PLC Corporate Responsibility Report 2006 35
  • 38. Responsible banking Working with our suppliers holiday entitlements and annual leave. Sourcing energy The Transport and General Workers Union As part of its programme to address General Secretary, Jack Dromey, said of the move: “Other banks and finance houses In the low-profit, ferociously climate change, Barclays has a new three- year contract with EDF Energy to supply should follow Barclays example. The days of competitive world of contract renewable energy for the majority of our poverty pay for cleaners – because companies cleaning, such a package is UK offices and large branches. As a result, who can afford to, do not procure cleaning services ethically from contractors – are over.” unheard of. Yet, for once, the over 50% of the UK operation is now supplied from renewable sources, which significance is not in the details, Another area where we have made progress will reduce our carbon emissions by this year is in speeding up the time it takes to but in the principle. 80,000 tonnes in 2007. pay our suppliers. We have made significant improvements on this since 2002. Electronic Personnel Today There is more on this in our chapter on 3rd February 2006 climate change. procurement has also meant a considerable reduction in the amount of paper in the system: 80% of our invoices are now dealt with electronically, which has eliminated over 50,000 pieces of paper from the system. Fair play (approximately £220 million). Based on Supplier management in South Africa current performance, we are on course to Working with our supply chain does not Black Economic Empowerment (BEE) is only mean our right to demand high ethical exceed the 2008 target. designed to transform South Africa’s standards; it also includes our responsibility economy, and is a key part of the South In 2007 Absa will begin to look at other to treat them fairly too. African government’s plan to ensure that all ways to drive the BEE agenda by, for An example is our new deal with our cleaning its citizens have the opportunity to share in example, identifying small, regional firms Mitie Cleaning & Support Services, the wealth being created in the country. suppliers (turnover below ZAR 35 million Lancaster, and Aim Hygiene (all managed by p.a.) which qualify under BEE guidelines. Absa is a signatory and supporter of South Atkins Asset Management). These firms They will be considered for contracts under Africa’s Financial Sector Charter, which employ some 2,400 cleaning staff in our favourable payment terms. outlines the specific targets for procurement 2,000 UK branches. Thanks to the good from black suppliers: 50% of all third-party relationships we have established with our For more on BEE, visit www.absa.co.za spend by 2008, and 70% by 2014. cleaning contractors, their workers will now following the Corporate Citizenship link. get better pay and more training, as well as In 2006 Absa spent over 55% of its total Our goals, progress and commitments for access to a pension, sick pay, increased supply chain costs with BEE companies 2007 can be found on page 7. 4imprint 4imprint is one of Barclays preferred suppliers. It is the world’s fourth largest distributor of promotional merchandise, such as t-shirts (left) and serves around 200,000 customers. Whilst Barclays share of this market is relatively small, a good working relationship with 4imprint proved an ideal opportunity to create a ‘trickle down’ effect, where working standards adopted by Barclays are applied further down the supply chain. This industry is particularly important to Barclays because promotional materials are one of our higher-risk categories of supply, with many of these items sourced in Asia, India and Eastern Europe, where high corporate responsibility standards are often not well established. After our dialogue, 4imprint agreed to (and achieved) ISO14001 certification. In addition it has agreed to: • undertake annual audits on at least 25 of its overseas suppliers by value, rather than just auditing at the time a supplier is first appointed. This has entailed a significant financial investment in audits by 4imprint; • commit to adopting the principles of the Clean Clothes Campaign Code of Conduct, which are based on conventions relating to child labour, forced or bonded labour, discrimination, freedom of association and the right to collective bargaining; and • work with their own suppliers to improve the situation when standards are not being met. “Barclays made it clear that ongoing conformance to high standards was the key to continuing the contract,” said Nic Porter, Head of Procurement at 4imprint. “In turn, we were and are keen to further develop corporate responsibility in our supply chain, and see that our own new guidelines are met by auditing our own top suppliers.” 36 Barclays PLC Corporate Responsibility Report 2006
  • 39. Our people The heart of the business Our 123,000 full-time equivalent employees in over 50 countries are the foundation of Barclays success. Their commitment, motivation and talent have made the bank profitable, resilient and flexible in the face of change. We have a strong set of values, a culture based on performance, and a focus on talent and development. These things will underpin our ambitions for the next phase of Barclays future. Guiding Principles on what they have achieved during the We talked in last year’s report about the Our Guiding Principles year, but how. This includes the quality of new ‘Guiding Principles’ we developed • Winning Together customer service, how well they work as in the course of 2005, and during 2006 • Customer and Client Focus part of a team, and what they have done these were reinforced by the introduction • The Best People to support local communities. of a new Code of Conduct across the bank. • Pioneering Barclays employees have their own personal The Principles have been tailored to take • Trusted development plan, which includes a account of the many cultures we work structured approach to training and within, and the individual circumstances of development. Some get the chance to use each of our businesses. In Absa and BGI, for the Barclays University, and others are example, the new Principles were integrated funded to take professional qualifications. into previously-established values, while in Absa’s employees, including the leadership countries like France and Spain they have been launched afresh. We are putting the Principles into practice Full-time equivalent by world region in many different ways across the business. 2006 2005 During 2006 we introduced a new global standard for performance development. UK 62,530 60,103 The Human Resources Directors for each Africa and Middle East 44,326 40,134 business area now have to provide regular evidence that this standard is being met. Continental Europe 8,100 7,616 Furthermore, we are making the behaviour Americas 4,905 3,916 expected by the Principles central to our performance assessment process. Asia Pacific 2,739 1,531 Employees are now assessed not only Total 122,600 113,300 Full-time employees by world region Global employment statistics Americas Asia Pacific 2006 2005 4% 2% Continental Number of full-time equivalent employees 122,600 113,300 Europe 7% Total employee headcount 133,529 126,000 Percentage of female employees 60.6% 61.9% UK Africa and 51% Percentage of female senior executives 12.2% n/a Middle East 36% Percentage of female senior managers 20.8% n/a Percentage working part time 13.6% 15.4% Barclays PLC Corporate Responsibility Report 2006 37
  • 40. Inside Barclays Our people team, now have a personal development Partnering with trade unions plan. In the UK there is specialist training Across the world we recognise around The Equality Charter for managers dealing with disciplinary or 25 unions and staff associations in 14 Barclays and Amicus signed an Equality grievance procedures. countries, and there are two particular charter in 2006. This commits the bank partnerships worth highlighting here. to promoting equality among all our Growing talent In Absa, collective agreements are in place employees, and specifically to Talented individuals are the key to our with one registered trade union, Sasbo, and • run regular equal pay audits in success, and we are continuing to invest in with the staff association, ALBA, which partnership with Amicus; our people by blending experienced senior between them cover around 60% of • address any issues highlighted by these leadership from inside Barclays with world- employees. We are working towards audits; class people from outside the bank. The concluding a co-operative agreement with • identify best practice in the industry; and Group Executive Committee held three talent Sasbo similar to the partnership agreement • communicate what we are doing on this reviews in 2006. Barclays has with Amicus in the UK. to our employees. Fair reward Our partnership agreement with Amicus The principle of ‘the best people’ is was renewed for another five years in 2005. supported by our approach to pay and The foundation of our partnership has Since 2003, we have created 1,924 jobs in reward. We ensure that our remuneration been a commitment to undertake early India, which has affected 1,799 UK-based packages are competitive and match local and regular discussions on issues affecting employees. 1,079 of these have been market conditions. A common set of annual our people, in a spirit of collaboration. redeployed in Barclays and the others opted pay review processes operates across all A significant test of – and testimony to – for voluntary redundancy. our global operations, including Barclays this partnership approach has been the operations across Africa and the Indian integration of the branch networks and What our people think Ocean. This ensures consistency and supporting infrastructure of the Woolwich John Varley often talks about Barclays transparency overall, whilst allowing for and Barclays. There is more on this in the having three key ‘franchises’, and how some local variations in benefits, allowances chapter on our customers. important it is to gauge the ‘health’ of each and salary levels. of them – in other words, to assess our Managing change reputation in the minds of our most We want to use our reward policy to help As Barclays expands internationally it is important stakeholders. Measuring where drive excellence and high performance important that we remain cost-efficient and we stand with two of these groups – throughout Barclays, balancing short-term flexible enough to respond to structural customers and communities – is a key part success for individuals and teams with the changes in our industry. But at the same of the annual performance review, and our achievement of the Group’s longer-term time we must always do this in a Employee Opinion Survey addresses the goals relating to total shareholder return. responsible way. We have a landmark views of the third – our own people. We want to attract and retain people of agreement on offshoring in place with proven ability, experience and skills, and Amicus, which protects employees whose Every year we run a comprehensive encourage a culture that reflects our jobs are affected if we move activities employee survey across the bank, which Guiding Principles, especially in the areas of offshore. This includes early notification of covers the majority of our employees governance, control and risk management, initiatives, and a commitment to explore the around the world. We ask our people how customer service, people management, and possibilities for redeployment, as well as they view our leadership team, whether we brand and reputation management. out-placement support and training. are meeting our goal to be an ‘employer of Employee Opinion Survey results (% positive scores) 2006 2005 Employee surveys Participation rate 87 84 Employee engagement 76 72 Barclays Capital, Barclays Global Investors Perceptions of leadership 62 58 (BGI) and Barclays Wealth run separate Employer of choice 70 67 surveys. The highlights of these include: Barclays operates with integrity 84 80 • 85% of employees in Barclays Capital Barclays is an environmentally responsible company 77 76 feel proud to work for Barclays; Barclays is a socially responsible company 83 80 • 84% of BGI employees would I am proud to work for Barclays 84 80 recommend Barclays as a place to work; and • approval rates in 29 areas of Barclays Wealth either improved or stayed the same, with diversity showing very significant, favourable increases across the board. 38 Barclays PLC Corporate Responsibility Report 2006
  • 41. choice’, and how engaged they feel. Diversity This is important because research has Our philosophy on diversity is best summed Fundación Once consistently shown that committed people up by Gary Hoffman, our Group Vice In Spain we have been working with the are a crucial factor in achieving great Chairman: “Diversity at Barclays is not a disability specialists ‘Fundación Once’ customer service and excellent business ‘programme of the year’, where we do our since 2005, and as a result seven post- performance. best and then move onto something else graduates with disabilities have joined The latest trends in the employee survey are – this is a long-term commitment. the bank. There are also new training positive, with 87% of our employees taking Only when our own teams truly reflect initiatives that have helped all our part, compared with 69% in 2004. Pride in the diversity of our customers can we employees to understand the wider issues Barclays was up from 80% to 84% this year, best serve them and fulfil their needs.” facing both customers and colleagues and more employees now consider Barclays Gary chairs the Executive Diversity Group, with disabilities. to be a responsible company. Overall there which meets three times a year, and is were significant year on year improvements responsible for much of the progress we in all survey categories. For the first time, have made in recent years. And John Varley Gender is President of the Employers’ Forum on Despite the considerable efforts we have results exceeded the norm for financial Disability, as well as chairing our own made, the number of senior women in the sector companies across all categories, disability listening group. bank does not yet reflect the importance and the gap is closing on high-performing we attach to this. The proportion of women companies in the UK and globally. As study after study has shown, a more recruited to senior roles went up by 9% this Employee engagement scores rose to 76% diverse workforce is a more creative year, and around 21% globally of our most from 72% in 2005, with particularly strong workforce, and one better able to adapt senior managers are women, compared to gains in UK Retail Banking, Spain and to change. And as Barclays becomes 18% in 2003. The number of senior women Portugal, Italy, and New Markets. However, more international, it becomes more in Barclays compares well for similar large the engagement scores for disabled important that we should reflect the many companies, but this is not enough for us. employees (70%) and gay, lesbian and communities we serve. This is one reason In 2007 we will continue to focus our bisexual people (67%) show that there is why we held a diversity forum with our UK attention on identifying and developing still more work to be done. recruitment suppliers in 2006. We wanted internal talent as well as recruiting high them to share and understand our calibre female candidates from outside. Our Executive Diversity Group has taken ambitions in this area. this on, and has adopted a range of measures to address these trends. We will We encourage our employees to join Sexual orientation employee networks. In the UK, these A good example of our ‘pioneering’ be conducting a series of focus groups with include Spectrum, Pos+Ability (for principle in action is our partnership with gay, lesbian, bisexual and transgender employees with disabilities) and the Stonewall, the campaigning organisation (GLBT) employees to understand better Cultural Diversity Network (for ethnic for gay, lesbian, and bisexual people. We what issues are faced by these employees minorities). The regional and national sponsored their Equality Walk in March and how best to resolve them. We are also networks act as both a support group 2006 and their inaugural Stonewall awards working with the leading GLBT organisation and a source of information. in November. Barclays employees took part Stonewall on revitalising and relaunching in the two Gay Pride marches this year, and our GLBT employee network, Spectrum. supported the Stonewall Equality Walk in Barcelona. UK employment statistics 2006 2003 European and African forums Women in Barclays In May 2006, John Varley spoke to the Percentage of all employees 61.0% 64.0% Barclays Group European Forum, a Percentage of management grades 33.0% 29.4% consultative body that represents Percentage of senior executives 12.9% 11.4% employees from all the countries in the Ethnic minorities in Barclays European Union where Barclays has a Percentage of all employees 12.7% 9.0% presence. The Forum agreed a zero- Percentage of management grades 8.1% 6.3% tolerance policy to staff abuse by customers Percentage of senior executives 6.1% 3.7% to be communicated Europe-wide. Disabled employees in Barclays The parallel body in Africa is the Barclays Percentage of all employees 3.8% 3.0% Pan African Forum, which meets twice a Age profile year to discuss important strategic and Employees aged under 25 17.4% 16.0% operational issues. For the first time, this Employees aged 25-29 15.9% 12.9% year the Forum included representatives Employees aged 30-49 56.0% 61.0% from Absa and the five African countries Employees aged 50+ 10.7% 10.1% where it is present. Barclays PLC Corporate Responsibility Report 2006 39
  • 42. Inside Barclays Our people working with the RNIB and RNID in the UK to develop more targeted recruitment programmes for people with impaired Barclays was part of the small vision or hearing. I commend organisations that are group of companies in 1991 who proactive and in touch with those established the world’s first Ready to work that they serve. Barclays is a employers’ organisation to work Alongside this we are giving extra support leading example of how this can to existing employees with disabilities. to the mutual benefit of disabled We want to make it easier for colleagues to be achieved. They were the first people and business. They have tell us what they need, and for us to supply firm to incorporate diversity into been a key supporter and have it. As part of our Reasonable Adjustment the requirements for their scheme, we are now working with our been represented on our board occupational health partner, AXA PPP, to supplier base, ensuring they ever since. Barclays has played a carry out reviews with each employee, and reflect the wide range of local crucial role in helping the UK and so far this year nearly 700 have benefited suppliers available as common global business to position from new equipment or technology – an practice. increase of 50% on previous figures. disability as a business as well Employees also have access to both a Trevor Phillips as a societal priority. mentoring scheme, and a ‘one stop shop’ Chair, Commission for Racial Equality for help and advice on our intranet. Susan Scott-Parker CEO, Employers’ Forum on Disability. Race Six per cent of our senior managers are A number of further changes were made now from an ethnic minority, up from 4% in 2006, partly in response to the new in 2003. In the last three years, the number legislation. Our contractual retirement age Disability of Barclays UK employees from ethnic has risen from 60 to 65, and we have In 2006 we completely overhauled our minorities has risen from 9% to 13%, across amended some of our recruitment graduate internship programme, and all levels of the Bank (in the UK population processes to encourage applications from reviewed the way we recruited for it. As a as a whole the proportion is around 7%). people of all ages. At the same time, the age result, seven of the 30 students on this year’s at which our employees can draw a pension Issues of racial equality have particular programme had a registered disability. remains unchanged. We operate 60 importance for us in Africa. Absa already And in September 2006 we co-hosted a occupational pension schemes. has a number of diversity forums around recruitment event with Employment the country, and one overall Forum elected Opportunities, an organisation which at group level. There is more about our specialises in supporting job-seekers with Black Economic Empowerment activities in disabilities. Eighteen potential candidates South Africa in the chapters on financial Recruitment that Works were given the chance to go through a full inclusion and growing internationally. After working with disability specialists assessment process, and 15 are now being interviewed for roles in Barclays. We are also PosAbility, in September 2006 we started Age piloting ‘Recruitment that Works’, a Age discrimination legislation is a fairly government-supported initiative designed new development in the UK, but we have to attract back into work disabled Racial equality included it in our work on diversity for some jobseekers who are also long-term Barclays was key sponsor of the time. For example, in 2002 we introduced a unemployed. Eleven people have been Commission for Racial Equality Race new policy allowing people to ask to work employed at our Coventry call centre as part Convention, held to celebrate 30 years of beyond the normal retirement age, and this of the scheme, which is now being rolled the CRE, in November 2006. was recognised by the UK Government as out across the UK. an example for others to follow. 40 Barclays PLC Corporate Responsibility Report 2006
  • 43. Chief Executive, John Varley. Our reporting UK legislation by not confining requests Equality and Diversity – mechanisms are improving, and next year for flexible working to employees who highlights for 2006 we will be able to report global health and have children. safety metrics. Barclays was listed in The Times’ Top 50 We have plans in place to deal with a places ‘where women want to work’ in possible avian flu pandemic, as well as a Global statistics October 2006. Organisations were comprehensive HIV/AIDS programme, assessed according to a wide range of 2006 2005 particularly in countries across Africa. factors including work/life balance, Turnover rate 16.9% 17.8% There is more on this in the chapter networking, leadership and employee ‘Growing internationally’. satisfaction. Resignation rate 10.9% 10.9% Sickness absence 3.6% n/a There is more detail about employment Barclays France again partnered the at Barclays, including our Equality and Women’s Forum for the Economy and Diversity practices, on our website at Society, which was attended by Like all big companies, new technology is www.barclays.co.uk/careers. organisations such as Renault, Interbrand, making a huge contribution to the way we Our goals, progress and commitments Nestlé, and Lucent Technologies. do business, though we recognise that it for 2007 can be found on page 7. In 2006 the Spanish Labour Affairs can also lead to stress and other illnesses in minister awarded Barclays Spain an some cases. But the same technology can Optima accreditation for their active give people greater flexibility, especially commitment to equal opportunities when it comes to working from home. at work. We want technology to be a positive thing, giving our employees more choice about The Barclays Group legal team won the how they balance their work and family special ‘Judges award for Outstanding commitments. Contribution’ at the Commission for Racial Equality and Law Society Race Equality This is why Barclays operates a flexible awards. We were the first organisation in working policy. We give serious Europe to make a commitment to using consideration to all requests, with the law firms that have a good track record in commitment that we will agree to requests all areas of diversity, and the judges said wherever possible. In Spain we extend paid this “sent ripples through the industry”. maternity leave for up to a year after the birth of twins, or a child born with disabilities. And if an employee wants to transfer to a job closer to where they live, we Occupational health and will give extra consideration to those who flexible working have children under ten. We go further than In order to bring about greater consistency in global health and safety practices, we have established a common set of minimum standards for our businesses Workplace equality to achieve. Compliance with legal requirements is the starting point, though Since the launch of the Stonewall in some areas where it is reasonable and Workplace Equality Index, Barclays has practical, we expect our businesses to adopt always been in the top 20 organisations. higher standards. Our global Statement of In 2006 we were rated the16th best Commitment to Health and Safety was employer of gay people, up from 20th revised in 2006 and signed by the Group in 2005. Barclays PLC Corporate Responsibility Report 2006 41
  • 44. Inside Barclays Since January 2006, Barclays UK operations have used recycled copy paper, saving around £100,000 and 36,000 trees. 42 Barclays PLC Corporate Responsibility Report 2006
  • 45. Managing our environmental impact Reduce, recycle, renew In last year’s report we talked about the four ways in which we are working to minimise our environmental impact: reducing our energy consumption, increasing our use of renewables, working towards 100% carbon offsetting, and doing more to recycle our waste. In the chapter on climate change we have set out what we have done to achieve carbon neutrality in the UK. In this section we focus on our environmental policy and how we apply environmental standards throughout the business, which includes rethinking the way we use energy. Environmental management External recognition… During 2006 we continued our programme …and internal support Our scores in the Dow Jones Sustainability to use resources more efficiently, reduce In the 2006 Employee Opinion Survey 77% Index improved again last year – up 8% waste and increase recycling. We have of our employees said that they would call overall in the environmental dimension made progress on extending our ISO14001 Barclays an environmentally responsible for the banking sector. We retained our certified Environmental Management company, compared with 76% the year number one spot for environmental System (EMS) around the world, with before. This now exceeds the ‘high reporting and a score of 93% ranked both the Barclays Group’s central EMS performing’ standard for financial services us joint first in the environmental and operations in five countries now companies, both in the UK and worldwide. performance category. We also showed receiving certification. As part of this a double digit improvement in the system we have set targets for our UK Advanced Environmental Performance and European operations. In the UK our and Project Finance categories. environmental reporting procedures have It is clear that Barclays energy consumption been set according to the government’s and costs over the medium term will We moved up to 2nd in the Banking environmental reporting guidelines, increase – we are looking to manage this by category of the Business in the and our data is verified by an independent examining all opportunities for increasing Community Environment Index. third party. efficiency. For example, we are currently Barclaycard won a Green Apple Award for conducting trials using both water cooling In the last 12 months Barclays France its waste management at six key UK sites. and carbon dioxide cooling in one of achieved ISO14001 for all of their sites Recycling rates have reached 74% with our data centres to test both systems. (including the branch network), and we almost 450 tonnes of paper, plastics, cans, Energy efficiency improvements of completed site audits in the UK, the USA and wood and card recycled in the last six around 30% are expected. Europe. Barclays Capital and Barclays Global months of 2006. Investors have established environmental Potential improvements Barclays was ranked in the top ten for working groups in Asia and the USA Barclays Wealth has completed engineering environmental performance in the Sunday respectively. We have greatly improved the surveys at its 40 largest sites to identify Times ‘Best Big Companies To Work For’ coverage of our global data reporting and potential environmental improvements. in 2006. we are working to improve data quality. One such review resulted in immediate energy savings of almost 10% at one site. Appetite for energy A key challenge facing businesses globally is the increasing energy requirements of data centres. Forecasts from microchip producers Intel and AMD predict a 30% increase in power used per server per year, for at least the next five years. Against a backdrop of increased global energy prices (and strong growth in our own businesses), this represents both a financial and an environmental risk. Barclays PLC Corporate Responsibility Report 2006 43
  • 46. Inside Barclays Managing our environmental impact Recycling In the United Arab Emirates and Japan our We have new recycling programmes in operations are not only recycling all their Improving our systems progress in Barclays Capital, both at Canary used paper but buying new stock which A good example of investment in energy Wharf and the Northolt Data Centre. has been made from recycled waste paper. efficiency is our trial of the Atkins Remote A new baler (a machine for crushing As environmental NGOs point out, this is Technology system. This allows us to recyclables such as cardboard and paper) important because it ‘closes the loop’ from monitor our heating boilers remotely, and is expected to achieve a recycling rate of purchase to disposal. make adjustments where necessary. over 70% at Northolt. Another idea is our new mobile phone It means that each boiler uses less energy recycling scheme in the UK, which we are and can be turned off when it is not offering to customers, employees and the needed. During 2006 we installed the public. By working with the Woodland Trust system in 90 branches and have saved an we are making it easy for people to send average of 32% on our gas bills as a result, their old mobiles for recycling by offering as well as the equivalent of 836 tonnes of special freepost envelopes at over 1,000 CO2. We are now planning to put the same branches. The mobile phone recycler will technology into more branches. donate £2.50 per phone to the Woodland Trust towards the protection of ancient forests and the planting of new trees. Kathryn Mintoft, Environmental Manager if left in landfill. Recycling even a modest at Barclays, says “Millions of phones are fraction of these phones could make a thrown away every year which are harmful huge difference to the environment”. Energy efficiency in Barclays properties in the UK Investing to save Last year we launched a five-year Project Location Amount Energy multimillion pound investment in energy invested (£000) saving p.a. efficiency in properties in the UK. The table Air handling Barclays Capital, 750 3.3 GWh on the left shows progress in 2006. units upgrade London Lighting upgrade Barclays Capital, 250 1.6 GWh Environmental management in Absa Absa now has its own Environmental London Steering Committee, which is chaired by Remote monitoring Branch network 900 2.7 GWh Executive Director, Robert East and includes and boiler upgrades senior representatives of the main Absa divisions. A dedicated department in Absa Lighting and air conditioning Murray House, 75 2.6 GWh focuses on environmental management, London and in 2006 this team published a new Earthwatch Climate Challenge Jane Briggs, Branch Manager in Bude, Cornwall was one of 12 Barclays employees who won a place on our Earthwatch Climate Challenge. Jane travelled to the wild coastline of British Columbia in Canada to find out how climate change is affecting the migration patterns of 100 grey whales. Jane said: “My expedition was truly a once in a lifetime experience. Climate change is fact and is affecting all corners of the earth, the only question is ‘What can you do to help?’ ” Since returning, Jane has arranged for energy surveys to be carried out at both of the branches she manages, resulting in energy savings and best practice ideas being shared with other branches. 44 Barclays PLC Corporate Responsibility Report 2006
  • 47. environmental policy, based on a fully The bank is also supporting innovative Greener travel integrated Environmental Management programmes for the wider community – Travel and transport are a big cause of System certified to ISO14001 standard – a good example being the PlayPumps carbon emissions, and with increasing the first for a major bank in South Africa. scheme. This is a specially designed levels of traffic congestion and pressure playground roundabout that powers a Absa’s community investment takes on car-parking, Barclaycard introduced a borehole water-pump by the action of the account of the natural environment in new green travel plan in 2003. Their main children turning the roundabout. The result South Africa, aiming to protect its wildlife building on the outskirts of Northampton is more clean water, less time spent fetching and landscape for future generations. houses around 4,000 employees, and the and carrying supplies, and new play For example, Absa has donated plan was designed to make it easier for equipment for the children. By the end of ZAR 10 million over ten years to support employees to travel to work in a greener March 2007 Absa will have installed over the Peace Parks Foundation, to complement and more efficient way. Part of the car park 30 PlayPumps in the KwaZulu-Natal, the government’s agenda under the has been reserved for car-sharers, better Eastern Cape, Mpumalanga, Limpopo New Partnership for Africa’s Development. and larger cycle shelters have been and Free State provinces. This aims to create healthy economic provided, and a free bus service now links conditions in Africa and ultimately eradicate the train and bus stations directly to There is more information on this at poverty. The Peace Parks Foundation assists Barclaycard House. www.playpumps.org. governments in the Southern African We estimate that the amount of CO2 Development Community with the training There is more detail about managing our saved is over 300 tonnes a year on the of more than 10,000 game rangers, field environmental impact on the website at car-sharing scheme alone. The project guides, wildlife veterinarians and guest www.barclays.com/environment. has been featured in the UK Highways house managers. Our goals, progress and commitments for Agency’s brochure on ‘tackling congestion Inside Absa a number of recycling and 2007 can be found on page 7. by influencing travel behaviour’ and the energy efficiency initiatives are under way, Department for Transport’s Car Share supported by an extensive programme of and Car Clubs Transport for London – employee communication and training. Best Practice. Good progress is already being made on issues such as paper use, lighting and cooling. Green roofs The roof on our global headquarters in Canary Wharf is the highest in the world created specifically for biodiversity. This ‘living’ roof recreates habitat areas that have been lost as East London has redeveloped, and provides new havens for insect life and rare birds. The subject of a BITC Business in the Environment ‘Beacon Programme’ seminar, which brings together environmental experts and business to share best practice, the roof has been visited by over 200 architects, developers and regional development agency officials in the past six months. It also won the private sector section of the 2006 Kyocera GreenLight Environmental Awards. We are extending this ‘green’ approach to the new Barclaycard building in Wilmington, Delaware, where 50,000 square foot of roof is being planted with sedum plants. Barclays PLC Corporate Responsibility Report 2006 45
  • 48. Inside Barclays “Nobody is obliged to help anybody but it is your civil responsibility if you are in a position to do it… I think that if you are in business, you have to give back.” Consumer, South Africa Photograph: UNICEF/2005/Giacomo Pirozzi. 46 Barclays PLC Corporate Responsibility Report 2006
  • 49. Barclays in the community Common goals 2006 was a landmark year for our community investment programme. After extensive research and consultation with our many stakeholders both inside and outside the bank we now have a genuinely global programme that unites all our businesses across the world. It is the first time that Barclays has done this and it reflects our growing international presence as a company. It will also see us focus on the projects that are most closely aligned to our business, and using our own skills and expertise to maximum effect. We continue rolling out our new approach in 2007. Our global programme One framework, three themes Key highlights We believe the most effective community The new programme is underpinned global investment in investment programmes are those that not only provide real social benefits but also add by a stronger governance framework, which reflects the increased profile £46.5m our communities. value to our business. Programmes like and importance this area now has community these will always attract more support within Barclays. organisations internally, which in turn makes them more The Chairman, Group Vice Chairman and 8,300 supported. sustainable. employees actively Chief Operating Officer all now sit on the In establishing our new global programme new Community Partnerships Committee, participated in our priorities are: along with a senior representative of each our community • to make a real and positive difference to business. This committee makes the 33,000 + programmes. our local communities; strategic decisions about our community hours of work time • to build Barclays brand and reputation in investment and approves and monitors all were given to the eyes of our stakeholders; and • to increase employee engagement. major programmes. A small central team implements the committee’s decisions and 75,000 + volunteering. co-ordinates the global programmes, but raised by employees Adapting to a new approach is challenging. for charity, the majority of activity takes place in our While our existing projects in individual including matching businesses, each one setting its own countries have worked well, their integration into one global programme tailored approach within our global strategy. £13.8m from Barclays. This local ownership ensures that we means building a new level of co-ordination remain flexible about how best to meet the between our businesses and regions, and needs of each community, as well as those a shift to a more equitable distribution of of the business and its stakeholders. resources. At the same time, whilst Total community contribution £m awareness of our programmes amongst Taking into account what our stakeholders customers and employees is high in some have told us, and where we believe we UK places, it is less strong in others. This will be can have the maximum impact, we are Non-UK 50 a focus for us in 2007. concentrating our investment on three themes: 40 At the same time as developing our new global approach, we have continued to • Banking on brighter futures 30 grow community investment activity. In 2006 we contributed £46.5 million to • Looking after local communities 20 supporting good causes, up 19% on 2005 • Charity begins at work 10 (£39.1 million), with programmes being delivered in the UK, Europe, Asia-Pacific, 0 the Americas and Africa. 03 04 05 06 Barclays PLC Corporate Responsibility Report 2006 47
  • 50. Inside Barclays Barclays in the community Banking on brighter futures by the programme, with support ranging Listening Banking on brighter futures fits closely from financial literacy training and debt Our new approach to community with our business, and gives us the fullest advice, to financial support for education investment is based on detailed opportunity to use not only our investment related costs. We also had a new stakeholder consultation undertaken but also our skills and expertise to help programme delivered by One Parent in nine different countries during 2006. people out of poverty, disadvantage, Families in 2006 offering lone parents a Gathering feedback from customers, and debt. It is no surprise then, that our two week, work preparation programme employees and the public in Spain, stakeholders are quite clear that this is where they spend time at Barclaycard’s Germany, the USA, Ghana, South Africa, where we can – and should – be making Northampton HQ. The feedback so far has Hong Kong, China, and India, as well as the most impact. We also believe it is the been excellent and 33 parents have the UK, has supported our decision to area where we can make a real and benefited to date. focus on the themes we have chosen. tangible contribution to the UN Millennium Development Goals, particularly in playing These stakeholders told us that they a part in reducing poverty. The facts expect Barclays to support local projects, and that it is important for major financial Through the programme we are focusing on increasing financial inclusion, 13,300 services companies to do something parents and children helped by positive about financial inclusion, encouraging entrepreneurship and Citizens Advice. education and entrepreneurship. supporting education, particularly financial education. This not only led to the decision to focus a great part of our efforts under the ‘Banking 2,200 This is an extensive programme and parents attended financial literacy training. on brighter futures’ theme, but the you can find more on the website at consultation exercise has also shaped our thinking across the board. www.barclays.com/community. 1,500 The following are some of the highlights grants totalling “Education is the most important [focus for 2006. for a company undertaking community £280,000 Barclaycard Horizons distributed to 4,800 parents. investment] and should be top priority… you need education. Once you are educated This is a three-year, £3 million community no one can take it away from you.” programme in the UK that aims to support 12,200 Consumer, India 50,000 disadvantaged lone parents to lone parents and their children reached by work their way out of debt and poverty. Parentline Plus. “It is very important that a company is Barclaycard is working closely with Citizens conscious that it has a responsibility Overall, Advice, the Family Welfare Association, towards society and that it has to give something back to the community.” One Parent Families and Parentline Plus. 30,000 Employee, Spain By the end of 2006, over 30,000 lone lone parents and their children helped. parents and their children had been helped Training for a brighter future In Spain, the Northern Youth Association is helping to provide vocational skills training to 20 unemployed people. Each receives 800 hours of training and support, designed to help them become electricians and find employment. Backed by Barclays, with some of the funds raised by our employees, support for the initiative forms part of our Banking on brighter futures programme. 48 Barclays PLC Corporate Responsibility Report 2006
  • 51. Big Brothers Big Sisters The facts Big Brothers Big Sisters is a workplace Barclaycard has got the whole mentoring programme in New York City. 700 The programme matches corporate homeless people have received grants. company involved, working with volunteers with disadvantaged youths a number of charities. It is a brave aged 12 to 17 for twice-weekly educational and cultural activities. The programme 85% and visible initiative across the of those receiving grants say they have expanded in 2006, with 15 students from gained new work related skills as a result. business and meets the objective Harlem’s Park East High School being of responsible lending with mentored by Barclays Capital employees 84% Barclaycard committing to (up from ten in 2005). The activities say their motivation has increased and included workplace etiquette, community support the most vulnerable service and letter writing. for the long term. 82% The programme is being expanded to have increased self-confidence. support long-term mentoring for Judge, Credit Card Awards, 2006. underprivileged children. Barclaycard Horizons won the best Corporate Looking after local communities Social Responsibility category at these awards. This part of the programme is all about The facts investing in the many neighbourhoods around the world where Barclays has a Absa US$220,000 presence. Supporting the causes close to grant was provided to support the home is important to us and is one of the In 2006 Absa contributed ZAR 30 million mentoring programme through until 2009. best ways that we can meet local needs to community investment in South Africa and also engage local stakeholders, be they with 0.5% of post-tax profit allocated 15 customers, community representatives to the Absa Foundation for distribution students this year benefited from mentoring or employees. to non-profit and community-based by Barclays Capital employees. organisations. Absa has a vibrant community investment 2006 Barclays received the Big Brothers Big Focusing our community programme focused on the issues of health, Sisters Corporate Honoree Award for its education and entrepreneurship. In 2006 support. resources successful projects undertaken included a ZAR 600,000 donation to the Education We want to concentrate our investment with Enterprise Trust. Absa’s support is Changing lives where we can make the most impact, and designed to help tackle the problem of Barclays has supported Crisis Changing as a result there are some things that we youth unemployment in South Africa. Lives for four years, investing £100,000 have decided not to support. These The charity will reach over 5,000 every year. As a result the UK charity include: secondary school children from low- provides homeless people with grants • Sponsorship of individuals. income communities across five provinces, towards education, employment or self- • Support for political parties or bodies. teaching them about entrepreneurship employment, helping them help themselves • Promotion of religious beliefs (though and the skills needed to establish a and become independent. There have been we do consider projects run by religious successful business. some remarkable success stories and over groups that benefit the whole 63% of the recipients have successfully got community). In 2006 Absa was rated the most caring • Donations to Rotary, Lions Clubs and back into the job market, which is well financial services company in South Africa, other third-party giving organisations. beyond expectations. We are now working and ranked third most caring company in • Funding for hospital costs for with Crisis to set new targets for 2007 using all sectors according to Corporate Care individuals. the London Benchmarking Group model. Check report. • Medical research. Community events Make a Difference Day (left) Barclays single biggest volunteering day saw 11,700 employees in 25 countries involved in 900 projects, with international participation up by 70%. Spaces for Sports (right) Our £30 million programme has so far resulted in 120 community sports facilities and benefited 330,000 people. Barclays PLC Corporate Responsibility Report 2006 49
  • 52. Inside Barclays Barclays in the community 6 1 1 5 3 4 4 2 7 2 6 2 5 4 5 3 6 7 8 These are just a few examples 3 7 of Barclays community 1 programme at work. For more information please visit www.barclays.com/community. Banking on brighter futures Charity begins at work Looking after local communities 1 £1.8m 1 5,050 1 £20,000 Barclays and Help the Aged are Employees participate in GAYE (Give Donation to Aanchal Ltd, supporting working together over three years to as You Earn) in Absa. (Total donation Asian women who have experienced provide money management and debt of ZAR 16,381 in 2006.) domestic violence in London. advice to 30,000 older people in the UK. 2 40 2 ¤60,000 2 753 Events organised by the Asia Pacific Donation to Caritas supporting 345 Computers donated to Fundación Bip Charities and Volunteer Group, elderly people living alone in Galicia, Bip in Spain. The Fundacion helps supporting charities in Japan, Hong Spain. socially excluded people find Kong, Singapore and China. employment. 3 BRL$19,000 3 US$132,000 Building a play area for children living 3 ZWD$2.7bn Raised by 150 employees, friends and in favelas in Brazil. Building of four classrooms, ablution family for the Susan G Komen facilities and a science block at Foundation for Breast Cancer. 4 £100,000 Tabudirira school in Zimbabwe. Donation to the Red Cross to support 4 1,500 establishment of disaster 4 £12,000 Copies of a cookbook written and preparedness teams in India. Rhondda Housing Association is published by Barclaycard colleagues providing specialist support for in Germany, to raise funds for Unicef. 5 EGP350,000 tenants in financial difficulties. Funding for Mansoura University 5 51 Hospital and Shelby Hospital in Egypt 5 CS186m Barclaycard US employees act as for purchase of equipment. Donation to Oguaa Business mentors for disadvantaged children at Incubator in Ghana, to support young East Side Charter School. 6 £25,000 people in starting their own business. Assisting disaster relief efforts after 6 £643,000 the Indonesian earthquake. 6 ¤17,600 Raised for Cancer Research UK by To the Northern Youth Association in colleagues with matched funding 7 MUR1.7m Spain to provide vocational skills from Barclays. To Mauritius charities to raise training to unemployed people in awareness of, and tackle, diabetes. Madrid. 7 100 Elderly people taken on a day out and 8 20,000 7 £150,000 provided with food parcels by Barclays Mosquito nets distributed in malaria To Digital Links for provision of Capital employees in Shanghai, China. prone areas of Kenya. 10,000 computers to schools in Kenya, Tanzania and Uganda. 50 Barclays PLC Corporate Responsibility Report 2006
  • 53. Barclays Spaces for Sports relationships with the communities and By far our biggest community project in Intelligent giving customers whom we serve, which helps the UK is the £30 million Barclays ‘Spaces Barclays came third in the UK’s Intelligent fortify the Barclays brand and reputation.” for Sports’, which we reported on last year. Giving Index which recognises companies We are now into the final year of this three- that support employees’ community activity. Volunteering year initiative, which aims to provide 200 Thousands of our employees play an active community sports facilities, and 3,600 free role in their communities all year round. coaching packs to teams and groups in offer a range of assistance from matched Following are two typical examples of disadvantaged areas. fundraising to volunteering grants. Not only the work they have been doing, which does this make a real contribution to our demonstrate the increased priority we In 2006 we commissioned Manchester communities, it also motivates and engages are placing on skills-based volunteering. Metropolitan University to undertake a study into the impacts of the programme. our employees. In the UK, members of the Internal Their initial findings show that the Communications team worked with programme is helping to regenerate local CSV Make a Difference Day Westminster Volunteer Bureau to help small communities, having a positive influence on This is the single biggest event of the charities communicate their services better. youth behaviour and volunteering. volunteering year for Barclays. Our At least ten charities have already benefited involvement started in the UK seven years from the seminars and handbook. The facts ago, and now extends to 25 countries worldwide. In 2006, 11,700 employees In Zimbabwe we have established a Skills Training Centre at Marondera Prison to help 120 worldwide got involved in over 900 projects, with international participation up 70%. give prison inmates the skills they need to sites have been completed. be self-reliant after their sentence ends. To give just a flavour of the diversity of our For example, there is training in bricklaying, 2,544 projects: knitting and candle making, with our coaching packs awarded. employees helping to train the prisoners. • In the UK, employees visited local primary schools to help children learn This is the first time a bank has supported a 330,000 about money. project like this in Zimbabwe. This was one people have so far benefited from the • In Spain, 34 colleagues organised a of three Barclays projects that won a CSV programme. Special Olympics event for 175 people Make a Difference Day award. with disabilities. The Red Cross in Kenya • In Botswana, Barclays employees ran There is more detail about our community We have always done what we can to a workshop on culture, heritage and programme on the website at support emergency relief. Along with HIV/AIDS awareness. www.barclays.com/community. support for victims of the Indonesian • Barclays Capital Asia Pacific organised Our goals, progress and commitments for earthquake and the Lebanon crisis, and events for the first time, including an arts 2007 can be found on page 7. support for disaster preparedness in India, and crafts day for 60 children with HIV in Barclays donated £100,000 to the Red Cross Thailand. Benchmarking last year to help their Kenyan famine relief Leading from the front Another innovation this year efforts. The majority of the food was directed Barclays Group Chief Executive John Varley was our decision to start using to malnourished children, elderly people, took part in his own CSV Make a Difference the London Benchmarking and people living with AIDS. Barclays Kenya Day project, visiting Positive East, an HIV Group (LBG) model to evaluate Managing Director, Adan Mohamed, took charity based in Stratford in East London. all our major programmes. This allows us an active part in the programme, along with The charity works with around 1,500 people to measure what we do in the community many other colleagues, and a public appeal who have been diagnosed as HIV positive. against similar companies, and gauge the ran in our branches across the country. John was able to use his skills to assist the success of particular programmes. We like charity develop its strategy for the future – the LBG approach because it focuses on The facts everything from resourcing, to IT, the use real inputs, outputs and impacts. Nearly 300 of mentors, performance management, and marketing. This new approach has been welcomed by metric tonnes of food were distributed to our community partners, including James Since the meeting, John has arranged for Beeby, Corporate Fundraising and Projects 128,000 + Barclays people from marketing and IT to Manager at Leonard Cheshire. “I found it very useful to have set the parameters for people in ten famine-affected districts. provide support to Positive East; in addition, he has offered two mentoring sessions for our new programme at such an early one of their clients. stage. It made us focus a great deal more Charity begins at work not only on the outcomes we were looking This part of our programme is dedicated to As he said, “The visit underlined for to achieve from the Ready to Start – and driven by – our own people. Through me the value of Make a Difference Day. programme, but also on the mechanics we it we support and encourage our employees The communities where we operate benefit needed to have in place in order to be able to get involved in the community. It is their from the expertise and energy of Barclays to capture this data.” choice who, when and how to help and we people. In return, we are able to strengthen Barclays PLC Corporate Responsibility Report 2006 51
  • 54. Inside Barclays Our governance framework Shareholders Board Committees • Board Audit Committee(b) • Board Risk Committee(c) • Board HR and Remuneration Committee(d) • Board Corporate Governance and Nominations Committee(e) Board Sub Committees of ExCo Authority • Brand and Reputation Committee • Community Partnerships Committee Accountability, assurance, (a) CEO and Executive Committee reporting Business lines and central support functions Foundation stones of governance CR Guiding Code of Principal Principles Conduct Risks (a) Executive Committee members: John Varley, Group Chief Executive; Robert E Diamond Jr, President, Barclays PLC and CEO, Investment Banking and Investment Management; Paul Idzik, Chief Operating Officer; Naguib Kheraj, Group Finance Director; Frits Seegers, CEO, Global Retail and Commercial Banking. (b) Chairman: Stephen Russell. (c) Chairman: Sir Richard Broadbent. (d) Chairman: Sir Nigel Rudd to December 2006 (Sir Richard Broadbent from January 2007). (e) Chairman: Matthew Barrett to December 2006 (Marcus Agius from January 2007). Governance and control The Board and its committees All new Directors receive a comprehensive Clear systems of governance and control The Board is the decision-making body for induction, including briefings on social, underpin our licence to do business all matters deemed material to Barclays in environmental and ethical issues. The and ensure that accountability, risk strategic, financial and reputational terms. Board regularly discusses our corporate management and control are embedded Responsibility for the day to day responsibility strategy and progress, at the right levels. management of Barclays is delegated to and is supported in its work by four Board the Group Chief Executive, supported by committees, each chaired by and comprising the Group Executive Committee. only non-executive Directors. These Composition of the Board committees have clearly defined terms The Board comprises the Chairman, five of reference, responsibilities and powers. executive Directors and nine independent Further details can be found in the corporate non-executive Directors. Collectively, the governance section of our annual report Executive independent non-executive Directors have www.investorrelations.barclays.com. Directors considerable experience and influence 5 across many sectors and countries and Managing corporate responsibility comprise a majority of the Board. Their The Group Chief Executive Officer, independent status is reassessed annually, supported by the Group Executive Independent taking into account the Combined Code on Committee, has primary responsibility Chairman 1 non-executive Corporate Governance. At present there is for embedding ‘responsible banking’ Directors one woman on the board, and this is an area 9 and sustainability throughout Barclays. where we aim to make more progress. 52 Barclays PLC Corporate Responsibility Report 2006
  • 55. This includes setting strategy and the Conduct that was launched by the Group identification, review and reporting of all Chief Executive in 2006. For more on our Members of the Brand and business issues (both risks and commercial Code of Conduct and other policies, visit Reputation Committee opportunities) around the world that have www.barclays.com/corporateresponsibility/ a social, environmental, ethical or and choose the Responsible Banking Sir Nigel Rudd(a) reputational dimension. option. Deputy Chairman (Chairman of the Committee) Gary Hoffman(a) The Brand and Reputation Committee, The Code of Conduct consolidates the Group Vice Chairman (Vice Chairman of the a sub-committee of Group Executive business principles that apply across the Committee) Committee, is chaired by Sir Nigel Rudd, whole organisation around the world. It is Alastair Camp Deputy Chairman and a non-executive championed by senior business leaders, and Corporate Responsibility Director Director on the Board. The Committee’s role all employees are required to confirm their Christine Farnish is to identify, review and manage issues of ongoing compliance with it on an annual Public Policy Director ethical and reputational significance to basis. Training on the code is part of the Mark Harding Barclays. The Committee met three times induction process for new employees. General Counsel in 2006. A good example of its work was This is supplemented by specific programmes Jim Hytner its involvement in reviewing the proposals as appropriate to individual businesses. Barclays Brand and UK Banking for the integration of the branch networks For example, Barclaycard supports the Marketing Director and supporting infrastructure of Barclays code through its ‘Fit for Business’ online Paul Idzik(b) and Woolwich in the UK. questionnaire. This includes examination Chief Operating Officer of our values, behaviours and approach Thomas L Kalaris The Group Executive Committee is also to fraud, bribery and corruption. Chief Executive, Barclays Wealth supported by another sub-committee – The questionnaire must be completed as (representing Barclays Capital and Barclays the Community Partnerships Committee – Global Investors) part of the employee’s annual assessment. which sets the policy and provides Naguib Kheraj(a)(b) governance for our global community Group Finance Director Corporate responsibility principal risks investment, including our extensive financial Our governance standards form the Robert Le Blanc inclusion strategy. The Environmental Risk Director foundation of our system of internal Steering Group provides direction and governance and control, consistent with the Frits Seegers(a)(b) governance to support our environmental Turnbull guidance for directors on internal Chief Executive, Global Retail and Commercial and climate change strategies, and to spread Banking control for UK-listed companies. Corporate best practice across Barclays. responsibility is one of 12 ‘principal risks’ Stephen Whitehead of Group-level significance, which are an Corporate Affairs Director Code of Conduct integral part of Barclays risk reporting (a) member of the Board Our Guiding Principles establish the values (b) member of Group Executive Committee framework. The Brand and Reputation that underpin all our work, and these are Committee provides the oversight for this supported by a new Group-wide Code of principal risk. Corporate responsibility principal risks Risk How the risk is managed and controlled Example of areas covered Failure to manage the • Group environmental management system and • Reporting of environmental impact against 1 direct and indirect environmental and social impacts of our activities. • • policy, core components aligned to ISO14001. Barclays Environmental Steering Group. Social and environmental impact assessments. • • targets. Setting strategy, reviewing progress. Compliance with Equator Principles, e.g. financing dams and mines. • Social and environmental lending guidelines. • Financing and debt issuance activities. Failure to identify and • Monitoring of ‘franchise health’ measures • Customer and employee satisfaction, 2 manage the impact of business decisions or activity on the communities in which • • (customer, colleague, community). Escalation of significant issues to Brand and Reputation Committee. Barclays operational risk framework (includes • • health of our brand. As outlined above. Process changes, new product development. we operate. corporate responsibility). • Community Partnerships Committee. • Global strategy and authorisation of major investments. • Supplier screening policy. • Review of environmental and social impacts. Failure to treat existing and • Annual attestation by each employee of • Applies to all business issues. 3 potential customers fairly. • • compliance with the Code of Conduct. Barclays ‘treating customers fairly’ forum and principles. Policy and standards on managing complaints. • • Openness and transparency of products and services. Trends and root cause analysis. Barclays PLC Corporate Responsibility Report 2006 53
  • 56. Creating value for stakeholders Our primary objective is to generate value for our shareholders, as shown by the measure ‘Total Shareholder Return’. We aim to support our customers to achieve their financial goals and, as a global organisation, we also help to create economic growth in many countries around the world. Our aim is to do this in a sustainable way, as we have set out in this report. How we create value for stakeholders Governments Our payments of corporation tax amounted to £1.9 billion last year. In addition to this, governments around the world benefited Customers Shareholders indirectly from the personal taxes paid by Se l rvi p ita tu rn our employees and through the corporation ce s Ca re Pa ld er taxes levied on our suppliers. ym o en h re t sha t al Communities To We provided £46.5 million in direct Payment Commitment and skills community investment in 2006 (up 19%), Barclays focusing increasingly on our strategic Goods and services Remuneration/reward theme of ‘Banking on brighter futures’. Suppliers Employees So 33,000 employees participated in cia le nv community programmes, giving over s t xe en iro 75,000 hours of work time, with 37,000 Ta n nm Inv m en iro es t hours of personal time also committed. nv tm sse en t sine Bu Shareholders We paid £1.97 billion in dividends to Governments Communities our 750,000 shareholders in 2006. These shareholders include many of the major pension funds, mutual funds and Customers under Black Economic Empowerment guidelines. Our supplier policies are outlined insurance companies and our business As our business has grown, we generated in the chapter ‘Working with our suppliers’. success therefore benefits millions of £21.6 billion of income in 2006 (up 25%) individuals around the world who rely on and our customer base exceeded 27 million. Employees their pensions and individual savings for We also create indirect economic benefits We are a major employer around the their income. Taking into account our share by providing the finance our customers world with 123,000 full-time equivalent price as well as the dividends paid, for the need to grow their own businesses and to employees, of whom over 40,000 are based year to 31st December 2006 we delivered a sustain employment. in Africa. All our Managing Directors on the Total Shareholder Return of 25% and were positioned fifth against our benchmark Suppliers continent are African. We paid £8.2 billion in remuneration in 2006 (including peer group of 12 global banks. The Total Payments to our suppliers amounted to employment related social security costs), Shareholder Return for the FTSE 100 approximately £4.9 billion in 2006 and, and in many countries this is an important Companies was 14% for the year. again, we generate indirect benefits for all the companies in our supply chain. contribution to local employment and to the There is a table showing supporting data Our policies are also supporting diversity. local economy, both directly and indirectly. on page 59. For example, Absa paid over £220 million to Our investment in training also develops companies in its supply chain qualifying local talent and intellectual capital. 54 Barclays PLC Corporate Responsibility Report 2006
  • 57. Inside Barclays Engaging our stakeholders The why, the how and the who Barclays engages with a broad variety of audiences on a large number of issues across Europe, Africa, Asia and the US. Our philosophy is that the quality of our decision-making depends upon the insight we have into the communities in which we operate, including the social, environmental, ethical and economic issues that are important to them. Proactive engagement range of stakeholder groups. These were meeting by our Corporate Responsibility Our aim is to participate in an open dialogue climate change, consumer indebtedness, Director is available on our website at on issues of public interest that are relevant financial inclusion, and the integration of www.investorrelations.barclays.com. to our business and of interest to our environmental and social considerations Investors expressed a broad range of stakeholders. We believe this is essential to into our risk management procedures interest from employee policies to the promotion of understanding and trust. (particularly in relation to project finance). responsible lending, business ethics, Engagement happens in a variety of ways. Each of these issues is covered in this report environmental policies, access to bank We commission independent research into and includes reference to stakeholder views accounts, fraud prevention and offshoring. the opinion of stakeholder groups in the and how we are responding to them. The feedback from both mainstream and political, media, customer, investor and For example, the revision of the Equator specialist investors is sought annually voluntary sector areas. We reach out to Principles included consultation with the through third-party research and reported stakeholders through our website, through International Finance Corporation, client to the Board. discussion at conferences and seminars, companies, environmental and social Our main communication with private participation in sectoral and cross-sectoral consultants, and NGOs. shareholders is through the Annual Review initiatives, through contributions to These views were taken into account during which includes a summary of the Group’s published reports and through partnerships the drafting process to ensure that the end financial statements and a review of each with other businesses and Non product was practical and effective, and that business area. Many private shareholders Governmental Organisations (NGOs). it met stakeholder expectations while attend our Annual General Meeting, where We also participate in dialogue with trades avoiding being so onerous that it would deter all resolutions are voted on a poll basis, so unions, governments and regulators, trade other banks from adopting the criteria. that the views of all shareholders are associations, academia where relevant to reflected proportionately. The poll results our business, and with our suppliers. Listening to our investors are made available at the meeting and on Examples of our engagement with Barclays has around 750,000 institutional the investor relations website. customers, employees and the voluntary and private shareholders worldwide, sector appear in other parts of this report. including many of the major pension funds, Putting human rights into practice mutual funds and insurance companies. During 2006 we continued to extend the Aligning our reporting with focus on integrating human rights stakeholder expectations Our executives meet regularly with considerations into our decision-making. We conduct a comprehensive survey of institutional shareholders in many different We have strengthened our supplier a broad cross-section of stakeholders countries and discuss Barclays strategy and screening criteria and increased the following publication of our annual performance. Our Chairman, Senior weighting accorded to issues such as labour Corporate Responsibility Report. The most Independent Director and Corporate relations and environment. In our lending recent feedback is summarised on page five Responsibility Director also meet with activities, we adopted the revised Equator and indicates that our reporting continues investors to discuss corporate governance Principles in June 2006, which now include to improve in line with the high expectation and socially responsible investment (SRI) more specific human rights criteria than of companies such as Barclays. issues. The number of meetings rose in before, relating to issues such as 2006 reflecting our increasingly diverse During 2006, four themes recurred consultation with communities affected shareholder base. The presentation given consistently in conversations across the by the projects we support. during a Barclays investor road show Barclays PLC Corporate Responsibility Report 2006 55
  • 58. Inside Barclays Engaging our stakeholders Our approach goes further than the government organisations and contributes Principles in some areas. For example, Ethical indices to the development of effective standards we reference additional standards in our and legislation. Barclays is a founder guidance to lending managers and in signatory to the Wolfsberg Principles, our terms of reference for consultants developed in 2000 and supported by 12 conducting environmental and social impact international banks. The Wolfsberg group assessments of projects on our behalf. has issued principles and statements on aspects of money laundering, which can be Our general lending is supported by found at www.wolfsberg-principles.com. environmental and social guidance notes Barclays retained membership of the covering over 50 industrial and commercial FTSE4Good index series and the Dow Raising concerns sectors, which highlight the relevant human Jones Sustainability Index (DJSI) World and If employees encounter misconduct, fraud rights issues which should be taken into European indices. In the DJSI we improved or illegal activity at work, and do not feel account when considering a financial our overall score and the scores of each able to resolve the issue, Barclays has a transaction or a new customer relationship. of the three dimensions (economic, Raising Concerns policy and guidance. Barclays introduced a central Code of environmental and social). We retained There is a telephone number and email Conduct in 2006 which makes specific the number one position in environmental contact address for employees in need. reference to human rights and informs the reporting and a notable improvement was We take employees’ concerns seriously and separate codes adopted by the different recorded in the Occupational Health and respect confidentiality as far as possible. parts of our business to fit their specific Safety section where our score improved No employee will be treated differently as a operations. The Code can be found at: from 35 in 2005 to 93. We improved our result of raising a concern. www.barclays.com/codeofconduct. ranking in the Business in the Community Corporate Responsibility Index, achieving Engaging with political audiences We continued our membership of the third position out of 131 companies. The Group did not give any money for Business Leaders’ Initiative on Human In the Carbon Disclosure Project we political purposes in the UK, nor did it make Rights (BLIHR) and are supporting the were ranked in the top 50 of the global any donations to EU political organisations or second three-year phase of work, agreed FT 500 companies. Please see incur any EU political expenditure during the last year. The 2006 BLIHR report outlining www.sustainability-index.com/ year. Absa Group Limited, in which the Group outputs and evaluating the effectiveness and www.ftse4good.com acquired a majority stake in 2005, made of the initiative can be accessed on the for more information. donations totalling £212,000 in 2006. This is initiative’s website www.blihr.org. in accordance with its policy of making As a BLIHR member, we hosted an outreach political donations to the major South seminar on human rights for other banks in example, the International Labour African parties to support the development April 2006 which included presentations Organisation (ILO) Core Conventions. of democracy in South Africa. The Group from the legal, NGO, investor and ethical made no other political donations in 2006. index perspectives. This discussion initiated Acting to stop financial crime Naturally we monitor policy and regulatory further interest among banks which We have strict policies on issues such as developments in markets where we contributed to a human rights project fraud, bribery and corruption, and money do business, and review any new proposal being adopted by the United laundering prevention. These are geared to developments that might affect us or our Nations Environment Programme – Finance ensuring that our systems and processes customers. If we have a strong view we will Initiative (UNEP FI) in November 2006. are not used for illegal purposes, and that make that known to governments and our employees are clear on the required The project aims to provide context, regulators either directly or via our trade conduct in fulfilling their roles. For example guidance and an online reference tool for the associations. We have public policy our bribery and corruption policy prohibits financial services sector, primarily on how to specialists in the UK, Brussels, the US and all bribes, corrupt payments, rewards or identify and mitigate human rights risk in Africa, who are well acquainted with inducements which would not be lending transactions. The UNEP FI initiative accepted good practice in making political authorised in the ordinary course of has 170 member organisations worldwide representations. business and fall outside our stated and provides the potential to consult and definition of an acceptable gift. Facilitation We engage with governments, seek contributions from financial sector payments are contrary to this policy and will parliamentarians, regulators and policy- companies and other external stakeholders not be tolerated unless required for medical makers globally, both formally (for example, operating on every continent. or safety emergencies in jurisdictions where responding to consultations and inquiries) Barclays Group Statement on Human such payments are common practice. and informally (such as through working Rights can be found at groups and seminars). We also indirectly Our anti-money laundering policy and www.barclays.com/humanrights. engage with stakeholders, for example via assurance programme ensures that It outlines Barclays approach to the human trade associations and other industry bodies. Barclays has the necessary controls rights agenda, our commitment to operate Examples of such activity in 2006 include and systems to comply with all legal in accordance with the Universal responding to the UK Department of Trade and regulatory requirements in every Declaration of Human Rights (UDHR) and and Industry's consultation on data-sharing, jurisdiction in which we operate. to take account of other internationally and our appearance before the House of Our central anti-money laundering accepted human rights standards, for Commons Treasury Select Committee as team engages with trade, industry and part of its inquiry into financial inclusion. 56 Barclays PLC Corporate Responsibility Report 2006
  • 59. Measuring performance Targets and data Environmental performance UK energy Business travel 2005-2006 Our current UK energy target is to reduce Travel is also a challenging area. Our global We are in the first year of our new five-year total consumption per square metre by 20% business is expanding rapidly, and our targets. Good progress has been made and by 2010. This is an important area for us, business travel is growing at a similar rate. where we are not on-track we believe that given our carbon neutral commitment. While we are doing what we can to reduce the investments we have made in 2006 will During 2006 we looked again at our UK data this, we have to accept that it is often start to show results over the remaining centres’ future energy requirements, and necessary for our people to travel in order to four years. identified that their projected growth was serve our customers well. In 2006 we made much higher than had originally been progress in increasing and monitoring our UK carbon intensity forecast. In practice this will mean that it is use of rail services, and with our company Our carbon intensity target has now been highly unlikely we will be able to meet our car fleet, which is being reviewed by the restated. It was originally based on the overall energy reduction targets between Energy Savings Trust. However, air travel is geographical location of our customers, 2007 and 2010. This is disappointing, but still our biggest challenge. This increased in but the income figure we are using now is we are taking what action we can to ensure 2006, but some of this was due to the fact based on the locations of our offices; in that the shortfall is as small as possible. that we are now including information from other words we now take into account our international booking centres for the the cost of every customer serviced by our Compared with the rest of our buildings first time. However, there was still an UK operations, even if they live overseas. and branches, the energy needs of our data underlying growth in travel by air and in this For example, many of our Private Banking centres are very different. Because their respect we are no different from many other clients are based abroad, but are managed requirements are so much higher, we companies of a similar size and from the UK. intend to split the data centres out from the international scale. With this in mind, we main energy reduction target, and during have started to monitor how often we use Our overall reduction target is to reduce 2007 we will be identifying a separate video and audio conferencing facilities emissions by 20% by 2010 against a 2000 performance target for them – possibly instead, and we have also started to baseline (230,627 tonnes CO2). Our 2006 ‘million instructions per second’. This will upgrade these facilities across our sites, emissions of 222,773 tonnes CO2 have help us monitor how efficient our data to give our people a better, lower-carbon resulted in a 3% reduction overall, which falls centres are in processing and storing alternative. 1% short of our aim to reduce emissions by electronic data, which is their core business 4% per annum. This goal needs to be seen in activity. Separate reporting will also enable Global coverage of data the context of our strong business growth. outside observers to understand the energy We now report 100% of our environmental We also have a target for reducing UK CO2 performance of our conventional offices performance data in the UK, following the emissions per million pounds of income from and buildings, and assess whether these inclusion of the Barclays Capital data centre. 16.8 tonnes in 2005 to 12.6 tonnes by 2010. are being managed in an energy-efficient Around 80% of continental European To assist with this, from April 2007 Barclays way. Data centres are, of course, still part operations are covered. In our other will source 50% of the energy used by its of our overall CO2 reduction and carbon territories, coverage has reached 94% UK operations from green sources, which intensity targets. reflecting the inclusion of Absa for the will reduce our carbon emissions by first time. approximately 120,000 tonnes a year. There is more detail about our UK and European performance against targets on the website at UK carbon intensity UK carbon emissions www.barclays.com/environment/ Business detaileddatatables. air travel 11.9% 18.3 Business rail 16.8 20.0 16.2 Tonnes CO2/£m income and car travel The UK CO2 emissions data has been 5.4% independently verified by SGS. 12.6 15.0 Energy from data centres Energy from 12.3% 10.0 offices and buildings 70.4% 5.0 0 04 05 06 2010 (target) Barclays PLC Corporate Responsibility Report 2006 57
  • 60. Measuring performance Environmental data tables Environmental data % change 2010 2006 2005 against baseline target On track UK Estimated coverage of data (by employees) – 100% Carbon Intensity tonnes CO2/£m(a) 16.2 16.8 – 4% 12.6 ✔ CO2 emissions (energy and all travel) tonnes 222,773 210,178(b) –3%(c) –20% ✘ – which is made up of emissions from: Energy from offices and buildings GWh 472 497 –5% Energy from data centres(d) GWh 67 39(e) 73% Business travel (car, rail, air) million km 303 246 23% Energy (data centre) per m2 kWh/m2 38 22(e) 73% Energy (offices and buildings) per person kWh/FTE 7,544 7,925 –5% –20% ✔ Video- and telephone-conference usage No. of calls 3,301(f ) n/a Water use per person m3/FTE 11.9 12.3 –3% –20% ✔ Copier paper per person kg/FTE 39.7 39.0 2% –10% ✘ % of recycled copier paper used % 95% 80% 15% >80% ✔ Paper (total) tonnes 16,556 17,198 – 4% General office waste at major sites tonnes 9,393(g) 11,769 –20% –20% ✔ % of waste recycled at major sites % 35%(h) 52% –17% >20% ✘ % of WEEE(i) reused/recycled % 99% 95% 4% min 95% ✔ Employees (FTE) No. 62,530 62,682 0% Floor space 000 m2 1,828 1,608 14% Continental Europe (j) Estimated coverage of data (by employees) – 80% CO2 emissions (energy and all travel) tonnes 16,356 15,965 2% Energy GWh 40.3 39.7 2% Energy per person kWh/FTE 4,981 6,189 –20% Business air travel million km 19(k) 4 (l) Video- and telephone-conference usage No. of calls 62(f ) n/a Water use per person m3/FTE 8.56 12.5 –32% Copier paper per person kg/FTE 63.3 95.3 –34% Employees No. 8,100 6,419 26% Floor space 000 m2 240 232 4% Africa, Americas and Asia Pacific (n) – 2005 figures do not include Absa in South Africa(l) Estimated coverage of data (by employees) – 94% CO2 emissions (energy and all travel) tonnes 234,071 31,415 Energy GWh 256 58 Energy per person kWh/FTE 4,926 1,227 Business air travel million km 282(k) 7(m) Video- and telephone-conference usage No. of calls 947(f ) n/a Copier paper per person kg/FTE 58.1 118.2 Employees No. 51,970 47,236 Floor space 000 m2 1,227 66 Information on how we calculated these figures is available on request. (a) Carbon intensity is calculated using UK income net of insurance claims. (b) The 2005 emissions figure is restated post publication of data May 2005. (c) The baseline for the CO2 emissions target is against 2000 data, in which we emitted 230,627 tonnes of CO2. (d) Data centres refer to two buildings located in the UK. (e) BarCap’s data centre was in construction for the first nine months of 2005. This data estimates three months usage based on 2006 consumption figures. (f ) This is an estimation based on the number of calls between Jan-Oct 2006. (g) Landfill waste now includes cardboard. This data contains an estimation for our Category 2 sites (small offices and branches) to make it comparable to 2005. (h) Recycling figures now include glass. (i) WEEE is Waste and Electrical/Electronic Equipment. (j) European coverage has decreased as not all data was available. (k) Data from international booking centres. (l) It is not possible to compare year on year performance. (m) Data from only the UK’s booking centre (not fully captured in previous years). (n) 2005 figures do not include Absa, and for kWh/m2, kg/FTE and floorspace data excludes Barclays Africa. 58 Barclays PLC Corporate Responsibility Report 2006
  • 61. Community investment and financial overview data tables Community investment 2006 2005 2004 Total community investment £46.5m £39.1m £32.0m Employees receiving support for fundraising, giving and volunteering 33,419 26,978 25,194 (a) Charities supported by Barclays 8,279 7,515 6,774 Fundraising Total amount raised by employees through matched fundraising(b) £13.8m £13.8m – Total number of fundraising events receiving matched funding 11,399 11,644 – Volunteering Number of employee volunteers 19,672 18,608 18,946 Number of volunteering grants given(a) 1,317 1,496 1,715 Bank hours given to support employee volunteering activities 75,586 77,413 81,763 Employees’ personal hours given to support Barclays volunteering activities(c) 37,055 – – Giving Amount given by employees through payroll giving (UK and South Africa)(d) £1.08m £1.05m £0.9m Amount matched (UK and South Africa)(b)(d) £578,000 £517,000 £463,000 Number of people taking part in payroll giving (UK and South Africa)(d) 9,549 8,662 9,098 (a) This is the first year we have been able to collect accurate global data. 2004 data is UK only. (b) Matching from Barclays or Absa. (c) Data first captured in 2006. (d) Includes Absa data for first time. Community investment by region (£) 2006 2005 2004 UK 39,589,000 35,259,000 29,500,000 Europe 989,000 882,000 375,000 Africa 4,430,000 1,696,000 1,507,000 USA/Canada 1,153,000 1,115,000 490,000 Asia Pacific 316,000 139,000 94,000 South America 16,000 19,000 14,000 Extracts from Barclays PLC consolidated income statement 2006(a) 2005(a) change £m £m % Total income net of insurance claims 21,595 17,333 25 Operating expenses 12,674 10,527 20 Of these operating expenses: Employees – staff costs, including social security costs 8,169 6,318 29 Administrative expenses 3,980 3,443 16 Community investment 47 39 19 Taxes paid to governments 1,941 1,439 35 Dividends paid to shareholders 1,973 1,687 17 Dividend per share 31p 26.6p 17 Profit attributable to equity holders of the parent 4,571 3,447 33 Post-tax return on average shareholders’ equity 25% 21% – (a) Figures reported according to International Financial Reporting Standards (IFRS). Further information on Barclays financial performance is available in the Annual Report 2006. Barclays PLC Corporate Responsibility Report 2006 59
  • 62. Measuring performance Human resources data tables Barclays – an international picture 2006 2005 Global employment statistics FTE 122,600 113,300 Total employee headcount 133,529 126,000 Percentage of female employees 60.6% 61.9% Percentage of female senior executives 12.2% n/a Percentage of female senior managers 20.8% n/a Percentage working part time 13.6% 15.4% Turnover rate 16.9% 17.8% Resignation rate 10.9% 10.9% Sickness absence rate 3.6% n/a FTE by world region UK 62,530 60,103 Africa & Middle East 44,326 40,134 Continental Europe 8,100 7,616 Americas 4,905 3,916 Asia Pacific 2,739 1,531 Total 122,600 113,300 n/a = Not available. Barclays UK employees 2006 2005 2004 2003 UK employment statistics Total employee headcount 69,023 66,566 66,663 65,234 Average length of service (years) 9.8 10.2 10.5 11.0 Percentage working part time 21.8% 23.7% 24.6% 25.1% Sickness absence rate 4.0% 4.2% 4.4% 5.0% Turnover rate 19.0% 20.0% 19.3% 20.0% Resignation rate 12.0% 11.5% 11.8% 12.0% Women in Barclays Percentage of all employees 61.0% 62.2% 63.4% 64.0% Percentage of management grades 33.0% 30.9% 30.5% 29.4% Percentage of senior executives 12.9% 10.9% 10.5% 11.4% Ethnic minorities in Barclays Percentage of all employees 12.7% 11.3% 10.5% 9.0% Percentage of management grades 8.1% 7.1% 7.0% 6.3% Percentage of senior executives 6.1% 3.6% 3.3% 3.7% Disabled employees in Barclays Percentage of all employees 3.8% 3.4% 3.2% 3.0% Age profile Employees aged under 25 17.4% 17.1% 17.5% 16.0% Employees aged 25-29 15.9% 15.0% 13.9% 12.9% Employees aged 30-49 56.0% 57.3% 58.6% 61.0% Employees aged 50+ 10.7% 10.5% 10.0% 10.1% Pensions Barclays Bank UK Retirement Fund active members 55,558 56,608 60,837 62,761 Current pensioners 43,754 42,258 40,926 39,296 (a) All global headcount and FTE numbers relate to direct employees therefore excluding agency staff and contractors. (b) All employee statistics relate to Barclays PLC UK excluding BGI – Barclays Global Investors (approx 800 UK employees). (c) All data as at 31st December 2006 except pensions data which is as at 30th September 2006. (d) Percentage of disabled employees is derived using responses to the GRCB and Central Support Employee Opinion Survey, 84% of the UK population. (e) Sickness absence percentage excludes Barclays Capital population. (f ) UK historical data has been restated to include Barclays Capital and therefore will differ from previously reported figures. 60 Barclays PLC Corporate Responsibility Report 2006
  • 63. External assurance and commentary Barclays has commissioned The Corporate recommendations made by stakeholders and services play and how Barclays can Citizenship Company to provide it with about last year’s report. It focuses on support customers to manage their own external assurance and commentary on its material issues, including responsible climate changing emissions. Corporate Responsibility Report 2006. lending, financial inclusion, international Finally, this current report has presented a Barclays management has prepared the expansion and climate change. more complete understanding of Barclays report and is responsible for its contents. Barclays has strengthened reporting of its impacts on society, including a section on Our objectives were to review its contents management of corporate responsibility. some economic impacts. This could be and presentation, to conduct selected It has included information about the strengthened with an explanation of checks to underlying records and other business case for corporate responsibility, Barclays role in the international banking evidence, and to provide this statement for its governance framework, its engagement system, exploring the positive and potential which we have sole responsibility. with stakeholders and the distribution of negative impacts of flows of capital around The full statement of our external assurance economic value to them. the world, and ultimately therefore, how a and commentary is available at global bank like Barclays contributes to the In seeking to present a report that is www.barclays.com/detailedassurance goal of sustainable development. material, complete and responsive, Barclays which includes details about The Corporate has addressed recommendations we made Citizenship Company, our relationship with The Corporate Citizenship Company in our commentary last year. Going forward, Barclays and the assurance process we have www.corporate-citizenship.com we would like to see fuller reporting in adopted. This statement presents our 22nd March 2007 particular on: efforts to improve customer principal findings. service in the UK; further developments in its work with suppliers; and greater details Our opinion about how it seeks to influence government In our opinion, the report provides a fair and policy in its markets through lobbying and balanced representation of the material trade association membership. aspects of Barclays performance for the 2006 reporting period. We have examined Future reporting the processes Barclays has in place for Building on progress made, we believe identifying, understanding, managing and the next challenge is for future reports to responding to its corporate responsibility present a broader picture of the bank’s issues. Where we believe significant gaps in complete impacts, extending in-depth performance data and stakeholder views on reporting to all business divisions and material issues exist, they are identified addressing areas where Barclays has below. indirect impacts and influence rather In forming our opinion and making our than control. comments, we have based our work on the The report currently focuses on retail international assurance standard AA1000 banking and issues of concern to personal (www.accountability21.net), notably customers. Together, UK Banking, considering materiality, completeness and Barclaycard and International Retail and responsiveness. We have also had regard to Commercial Banking account for roughly the reporting principles judged essential by half of Group pre-tax profits. Of these the June 2002 GRI sustainability reporting divisions, however, a third of profits come guidelines, in accordance with which from UK Business Banking. Future reports Barclays has produced this report. should address in greater detail the impacts and corporate responsibility-related issues Commentary of business banking. A corporate responsibility report should explain how a company impacts on society, Similarly Barclays Global Investors has looking at all the important economic, $1.8 trillion in assets under management, social and environmental concerns of its held on behalf of clients who typically seek stakeholders. It should show how crucial to maximise their returns. Future reports decisions are made and differing interests should discuss Barclays management role are balanced. Honest about shortcomings, and how the bank engages with clients it should demonstrate how the organisation to advance the goal of sustainable is responsive, by listening, learning and development. improving. This year’s report has extended reporting on On this basis, we believe Barclays eighth climate change, focusing on how Barclays corporate responsibility report reflects manages its own operations and mitigates another step forwards in the bank’s its direct impacts. The challenge looking corporate responsibility reporting. It ahead is to consider the full climate change responds to many of the comments and ‘footprint’, especially the role that products
  • 64. Contact details To review the report online or download the PDF version please visit www.barclays.com/corporateresponsibility. If you have any questions or feedback, please send an email to corporate.responsibility@barclays.com. This Report is printed on Revive 100 Offset made from 100% FSC certified recycled fibre sourced from de-inked post-consumer waste. The printer and manufacturing mill are both credited with ISO 14001 Environmental This document contains forward-looking statements within the Management Systems Standard and both are FSC certified. meaning of the US securities laws. By their nature, forward-looking Designed by Pauffley statements involve risk and uncertainty and as a result Barclays actual results may differ materially from the plans, goals and Registered office: expectations set out here. Additional information about factors that 1 Churchill Place, London E14 5HP may cause actual results to differ materially can be found in our Registered in England. Registered No: 48839 Annual Report which is available on the Barclays and SEC websites. 9907091