Corporate Responsibility Report 2005 Responsible banking · Responsible banking Contents Introduction IFC Our businesses 1 Group Chief Executive’s statement 2 Corporate Responsibility

Corporate Responsibility Report 2005

Responsiblebanking

Responsible banking

Contents

Introduction

IFC Our businesses1 Group Chief Executive’s statement2 Corporate Responsibility

Director’s statement 2a Summary of targets and

achievements

Responsible banking

3 Customer service8 Financial inclusion

14 Responsible lending17 Dealing with environmental

and social issues in commercial lending

22 Carbon trading and renewable energy finance

24 Barclays in Africa

Inside Barclays

29 How we treat our people33 How we manage our

environmental impact36 Out in the community40 Where we stand on

key issues

Other information

44 Data tables48 External assurance statement

and commentaryIBC GRI summary and contact

information

UK Banking

UK Banking delivers bankingsolutions to retail and businessbanking customers in the UnitedKingdom, through a variety ofchannels comprising the branchnetwork, cash machines, telephonebanking, online banking andrelationship managers. It ismanaged through two businessareas, UK Retail Banking and UKBusiness Banking.

UK Retail Banking aims to build broaderand deeper relationships with bothexisting and new customers. It provides a wide range of products and services to retail customers, including currentaccounts, savings, mortgages, andgeneral insurance; banking services forsmall businesses and banking, investmentproducts and advice to affluentcustomers.

UK Business Banking provides relationshipbanking to larger and medium businesscustomers in the United Kingdom via a network of relationship and industrysector specialist managers; offers accessto the products and expertise of otherbusinesses in the Group, particularlyBarclays Capital; and provides assetfinancing and leasing solutions through a specialist business.

Barclays Capital

Barclays Capital is a leading globalinvestment bank which provideslarge corporate, institutional andgovernment clients with solutionsto their financing and riskmanagement needs.

Barclays Capital services a wide variety of client needs, from capital raising andmanaging foreign exchange, interest rate,equity and commodity risks, through toproviding technical advice and expertise.Activities are organised into three principalareas: Rates, which includes fixed income,foreign exchange, commodities, emergingmarkets, money markets sales, tradingand research, prime services and equityproducts; Credit, which includes primaryand secondary activities for loans andbonds for investment grade, high yieldand emerging market credits, as well as hybrid capital products, asset basedfinance, commercial mortgage backedsecurities, credit derivatives, structuredcapital markets and large asset leasing;and Private Equity.

Barclays GlobalInvestorsBarclays Global Investors (BGI)is one of the world’s largest assetmanagers and a leading globalprovider of investment managementproducts and services.

BGI offers structured investmentstrategies such as indexing, global asset allocation and risk-controlled active products, including hedge funds. BGI also provides related investmentservices such as securities lending, cashmanagement and portfolio transitionservices. In addition, BGI is the globalleader in assets and products in theexchange traded funds business, withover 140 funds for institutions andindividuals trading in eleven marketsglobally. BGI’s investment philosophy is founded on managing all dimensions of performance: a consistent focus on controlling risk, return and cost.

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“We touch the lives of manypeople around the world andour success as a business is inextricably linked with that of our customers, employees,suppliers and the strength of the communities in which we live and work.”

Alastair CampCorporate Responsibility Director Barclays

Our businesses

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PerCent ClubWe are a member of the Business in the Community PerCent Club – a group of companies undertakingto ensure that donations to thecommunity over time amount to at least 1% of UK pre-tax profit.

Wealth Management

Wealth Management servesaffluent, high net worth andcorporate clients, providing privatebanking, offshore banking,stockbroking, asset management,financial planning services andmanages the closed life fund.

Private banking offers bespoke bankingand investment solutions to high networth individuals in the UK and abroad,including investment and wealthstructuring advice and banking services.Offshore banking serves the corporatebanking needs of clients in the offshoreislands and overseas together with wealthmanagement and banking services forexpatriates and non-UK nationals living in the UK & overseas. Stockbroking offersexecution only stockbroking services.Asset management provides bespokeadvisory and discretionary investmentadvice and multi-manager investmentservices to mass affluent clients as well as some high net worth individuals.Financial Planning provides tailored and impartial financial advice on life,pensions, investments and inheritanceplanning including estates & trustsservices to both personal and businesscustomers.

Barclaycard

Barclaycard is a multi-brandinternational credit card andconsumer lending business; it is one of the leading credit cardbusinesses in Europe.

In the UK, Barclaycard manages theBarclaycard branded credit cards andother non-Barclaycard branded cardportfolios including Monument, SkyCardand Solution Personal Finance. Inconsumer lending, Barclaycard managesboth secured and unsecured loanportfolios, through Barclays brandedloans, mostly Barclayloan, and alsothrough the FirstPlus and ClydesdaleFinancial Services businesses.

Outside the UK, Barclaycard providescredit cards in the United States throughBarclaycard US (previously Juniper),Germany, Spain, Greece, Italy, Portugaland a number of other countries. In the Nordic region, Barclaycard operatesthrough Entercard, a joint venture withFöreningsSparbanken (Swedbank).

Barclaycard Business processes cardpayments for retailers and issuespurchasing and credit cards to businesscustomers and to the UK Government.

Barclaycard works closely with other partsof the Group, including UK Retail Banking,UK Business Banking and InternationalRetail and Commercial Banking, toleverage their distribution capabilities.

International Retail andCommercial BankingInternational Retail andCommercial Banking (IRCB)provides Barclays internationalpersonal and corporate customerswith banking services. It includesthe Absa Group in South Africa inwhich Barclays acquired a majoritystake on 27th July 2005.

IRCB provides a range of banking services,including current accounts, savings,investments, mortgages and loans topersonal and corporate customers across Spain, Portugal, France, Italy, theCaribbean, Africa and the Middle East.

It works closely with other parts of theGroup, including Barclaycard, UK Banking,Barclays Capital and Barclays GlobalInvestors, to leverage synergies fromproduct and service propositions.

Absa Group Limited is one of SouthAfrica’s largest financial servicesorganisations serving personal, commercialand corporate customers predominantly inSouth Africa. Absa serves retail customersthrough a variety of distribution channelsand offers a full range of banking services,including basic bank accounts, mortgages,instalment finance, credit cards,bancassurance products and wealthmanagement services; for commercial and large corporate customers Absa offers customised business solutions. As at 31st December 2005, Barclays owned 56.6% of Absa Group Limited’sordinary shares and has voting control.

UK Banking• 11.1 million Current Accounts.• 183,000 Business Banking

customers.

Barclays Capital• US$329.2bn loans and bonds

issued on behalf of clients.

Barclays Global Investors• US$1.5 trillion assets under

management.

Wealth Management• £78.3 billion of customers’ funds.

Barclaycard• 11.2 million UK customers.• 4.3 million international cards

in issue.

International Retail andCommercial Banking• 1,516 international branches,

including Absa.

1Barclays PLC Corporate Responsibility Report 2005

Group Chief Executive’s introduction

What is responsible banking?

“Responsible banking is an integral part of the way we do business, and a central element of ouroverall strategy to makeBarclays one of the world’sleading banks.”

In December 2005, the Daily Telegraphpublished their ‘Corporate Responsibility’supplement. In Barclays we havedevoted a lot of time and resource todeveloping our corporate responsibilityprinciples and activities. But my pride in our achievements to date deflatedsomewhat when I read in the article that“Sectors such as…banks are generallymuch further behind on CSR”*. It wasclear to me that, despite our efforts inthe past, we still had a lot more to do to convince our stakeholders that we are absolutely serious about corporateresponsibility. The best way I cantransmit this is to say that everything wedo under the ‘corporate responsibility’banner is directly relevant to ourbusiness goals. For too long, the term‘corporate responsibility’ has hadsomething of an abstract quality to it,with few people knowing what it looked

like in practice. In Barclays, our objective is to make it recognisable and meaningful which is why we writeabout it in some detail in this report.

By incorporating CR principles intoeverything that we do, we aim to beleaders, not followers, in corporateresponsibility. In support of thisapproach, we have recently appointedAlastair Camp as our CorporateResponsibility Director. Alastair hassuccessfully run a number of businessesin Barclays and his appointmentdemonstrates our commitment toprovide leadership in the CR arena.

We firmly believe that we make ourgreatest contribution to society bybeing good at what we do, and doing it in a responsible way – providingproducts and services that helpcustomers realise their financial goals,that drive economic growth, and thatsustain a healthy financial system. Thisis the context in which a major bank like Barclays has its most important role to play. Areas such as financialinclusion, responsible lending, and thefinancing of large-scale developmentprojects are questions of acute socialinterest – and rightly so. And they arealso areas where Barclays can make a significant and enduring impact.

To take two examples, I am proud of the fact that Barclays has one of themost extensive financial inclusionprogrammes in the UK. And we werealso one of the four banks that helped to develop the Equator Principles, which

have transformed the way in which thebanking sector as a whole approachesproject finance across the world. Wethink of this as ‘responsible banking’,and I believe it gets to the heart of whatit means to run a bank at once profitablyand in a responsible way. Responsiblebanking is an integral part of the way we do business, and a central elementof our overall strategy to make Barclaysone of the world’s leading banks. It alsounderpins the way we have presentedthis year’s report: the following pagesdescribe what we have achieved in2005, but they also set out what wemean by responsible banking, and how we seek to make it real for ourcustomers, for our colleagues and for the communities we serve.

Ranked 32nd in the Business in the CommunityCorporateResponsibilityIndex.

Member of the 2005 Dow JonesSustainabilityIndex. Ranked in the top quartile of thebanking sector.

Member of the2005 FTSE4GoodIndex.

John VarleyGroup Chief Executive

2

Corporate Responsibility Director’s statement

Putting it into practice

“Having looked at the feedbackwe received last year, we have aimed to make thisreport more readable, moreaccessible, and with a muchbroader international focus.”

This year’s report represents somethingof a change in both tone and style.Having looked at the feedback wereceived last year, we have aimed tomake this report more readable, moreaccessible and with a much broaderinternational focus. And as John Varleysaid, we have set it out as a clear storyin which we describe not only what wedo, but the context in which we do it,all under the overarching theme of‘responsible banking’.

The public debate about environmentaland ethical issues has continued toevolve in the last year, and ourunderstanding of the issues has beeninformed by the dialogue we have hadwith customers, employees, investors,governments, politicians, the voluntarysector and Non-GovernmentalOrganisations (NGOs).

We realise that many of thesestakeholders are less interested in how we spend our profits than in how we make them. Fine judgementsare often required but every decisionwe make is underpinned by our basic belief in treating customers,employees and other stakeholdersfairly, acting with integrity, honouringthe commitments we make, andrespecting people’s rights.

Coming new to this role, having runvarious Barclays businesses in the UK and overseas, I understand theimportance of CR and how it shouldinfluence business decisions. I can see that we made progress last year,especially in the areas of financial

inclusion, climate change andenvironmental practice, and in ourwork on human rights. Customerservice is a vital area where we haveachieved a good deal, but still havework to do, so it continues to be a top priority. The issue of consumerdebt is a growing concern in manydeveloped countries, and we talkabout this in more detail in thechapter on responsible lending. From an international perspective, our acquisition of a majority stake in Absa in South Africa means thatone-third of our employees are nowbased in Africa, and we recognise that this enhanced presence bringswith it additional responsibilities.

Listening to feedback

After we published last year’s report we carried out an extensiveconsultation programme withinvestors, NGOs, the voluntarysector, consumer groups,government, media and corporateresponsibility specialists.In particular, we were asked to:

• Explain more clearly whycorporate responsibility isimportant to us. Our new focus on ‘responsible banking’concentrates on the issues thatmatter to us, making corporateresponsibility inextricable from our strategic goals.

• Give more of the context aroundour key issues and initiatives. Again,the focus on responsible bankingaims to meet this requirement.

• Broaden the content internationally.In this report we have includedmuch more about our operationsaround the world.

• Clarify our commitments. We have made progress on this,and have brought our targets and achievements together in one section.

• Make the report more accessible.This year’s report is designed tobe more visually appealing, andeasier to read.

Alastair CampCorporate Responsibility Director

Page Issue Targets for 2005

3 Customer service Launch Barclays Global Investors iShares socially responsible exchange-traded fund

–

Meet the needs of our increasingly diverse customer base by adapting appropriate products and services

8 Financial inclusion Launch a programme of financial inclusion support for one-parent families in the UK

Extend the reach of basic banking to reduce the number of people in the UK without bank accounts

Play a leading role in the Money Advice Gateway to increase free independent money advice in the UK

14 Responsible lending –

–

17 Dealing with environmental and –social issues in commercial lending

–

22 Carbon trading and renewable energy finance –

24 Barclays in Africa –

29 How we treat our people Embed shared values and revitalise employee perceptions of the brand

Build leadership succession across all of our businesses

Continue work to encourage employees to focus on customer needs

Reduce turnover among new recruits

Continue embedding equality and diversity in people policies and practices

33 How we manage our environmental impact Meet 2005 targets for energy, water and paper consumption

Set new environmental targets for 2006 and beyond

Expand our EMS to key Barclays businesses worldwide

Develop environmental standards for office refurbishments

Expand recycling facilities at our main office sites in the UK

36 Out in the community Develop online facilities to handle employee volunteering and donations

Use branches and other channels to communicate our programme more effectively

Achieve greater synergies between community and commercial operations

Ensure donation and employee support meets stakeholder needs

Increase the international scope of our community involvement

40 Where we stand on key issues Strengthen ethical, social and environmental supplier-screening policies

Continue participation in Business Leaders’ Initiative on Human Rights (BLIHR)

–

Responsible bankingSummary of targets and achievements

2a

2b

How we are doing Objectives for 2006

iShares KLD Select Social Index Fund launched and gaining momentum Develop a new electronic payments service, ready for launch by end 2007

– Continue to improve customer satisfaction in UK Retail Banking

Improved products launched (e.g. Barclays Additions current account) Continue development of online banking security featuresSummary information added to Personal Card/Loan statements

Launched Barclaycard Horizons to support 50,000 disadvantaged lone Encourage a strong UK community finance sector through a focusedparents and their families with practical support including money management, programme of funding and supportadvice, training and help to get back to work

379,000 Cash Card Accounts opened since launch. We are working Review our UK basic banking proposition to ensure it meets the needsclosely with partners to help ‘hard-to-reach’ groups of a diverse customer base

The Gateway is on course for piloting in 2006 Embed the Ghanaian microbanking programme and apply learning todevelop further microfinance initiatives

– Encourage increase in the number of organisations sharingcredit information

– Pilot programme to identify and help customers who may be approaching financial difficulty

– –

– Improve understanding of social issues relating to Equator Principles andinclude in updated sectoral guidelines

– Commence trading in carbon options. Develop weather and floodmanagement products. Investigate the feasibility of carbon managementservices for SMEs, personal customers and staff

– Expand branch and cash machine network in South Africa. Increase take-upof Mzansi basic bank account in South Africa. Further develop HIV/AIDSawareness and participation in employee welfare programmes

‘Guiding Principles’ developed, and being shared across Barclays –

Employee survey shows 76% of employees feel proud to be associated Further improvement in key Employee Opinion Survey scoreswith Barclays (up from 71%)

We have invested in developing talent, including external recruitment. Acquire and develop talent with increased momentum via a systematic Employee survey shows a rise to 58% (from 51%) in Perceptions of Leadership talent management approach

Customer Orientation was 65% in the Employee Opinion Survey (up from 60%) Ensure line managers in Barclays have the tools they need to meet the‘Best People’ Guiding Principle

Resignation rates for UK employees with less than 12 months’ service –have fallen by 10%

8th placed organisation in Race for Opportunity; ranked 20th in –Stonewall’s Workplace Equality Index 2005; Barclays Capital US Employerof The Year (by National Business & Disability Council)

Water consumption and recycled paper targets achieved. Good progress made –in energy and overall paper consumption

New targets set for 2006-2010 including new measures for waste and Meet specific 2006 environmental improvement targets. Put in place thecarbon emissions processes necessary to achieve carbon neutrality for our UK operations

ISO 14001 achieved in Barclaycard. Absa in South Africa is working Implement our Environmental Management System in Italy and South Africatowards ISO 14001

New opportunities identified to increase the amount of recycled materials –used in office refurbishments

Achieved a 95% recycling rate during a trial at One Churchill Place and –improved waste data collection

66% of UK matched funding requests now online (2004: 42%). Ten other –countries now registered on our online system

Community investment programmes promoted through better profiling Launch programmes with NCH and Help the Aged, to support core themesin local branches, worldwide of ‘Financial Futures’, ‘Getting to Work’ and ‘Stronger Communities’

Launched Barclaycard Horizons, linked to Barclaycard’s commitment to Develop a co-ordinated global community investment programmeresponsible lending and ‘Barclays Spaces for Sports’, linked to our Premiershipfootball sponsorship

Community employee programmes redeveloped and launched Increase participation in UK and international employee community programmes (skills-based volunteering, matched funding)

Launched Barclays Miles Ahead involving 7,000 employees across the –UK, continental Europe and Africa, increasing participation in Barclaycard International, Barclays Capital (Asia Pacific) and the Americas, and Barclaysin the Middle East and Egypt

New supplier screening tool developed and now being implemented Review the supply chain using enhanced screening tool and build into new supplier contracts

Continued participation in BLIHR with input to debate and publications Support the continuing development of BLIHR

– Develop and launch an integrated Code of Ethics

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Responsible bankingCustomer service

We make our greatest contribution tosociety by supporting economic growtharound the world, and being responsibleabout how we do this. Our products and services give businesses the support they need to grow, help people managetheir everyday lives more efficiently, and invest for the future.

Better, fairer, safer

Treating customers fairlyThe UK banking sector as a whole has often been taken to task for notgiving customers good enough service, and some of this criticism has beenjustified. But in recent years the picturehas changed quite significantly. A greatdeal of effort and investment has goneinto improving our products, andgiving our customers better service,but more still remains to be done.

Treating customers fairly is both a toppriority and an absolute commitment.We are giving people more and betterinformation before they buy, so thatthey can make more informed decisionsand take more responsibility for theirown finances. In this, we share theFinancial Services Authority’s objectivesunder the ‘Treating Customers Fairly’approach and have a programme inplace to ensure that it is fully embeddedinto all aspects of our business. We have just appointed a former seniorregulator to the role of ‘ConsumerChampion’, reporting directly to theChief Executive of UK Retail Banking.

Better serviceOur Business Banking division in the UK has consistently received some of the highest customer satisfactionscores in the industry, as has BarclaysCapital. Absa in South Africa, and ourbusinesses in Botswana, Ghana, andKenya have the highest Brand Healthscores in their markets. The ‘touch pad’initiative in Botswana gives customersthe opportunity to leave instantfeedback at the counter, and this ishelping to strengthen our quality ofservice even further. In Portugal wewere the top-rated bank for counterservice, and in International Retail andCommercial Banking our overall clientnumbers were up 7% in 2005, withparticular increases in France, Portugal,and Absa in South Africa.

We have faced bigger challenges in UK Retail Banking. Having reached a low point in 2004, our customersatisfaction scores rose by 10% in2005, and our customers’ willingnessto recommend us increased 20%during the same period. This ranks

us alongside our major competitors,but our next ambition is to lead thefield on this measure, as part of ouroverall strategy to build the best bankin the UK. As part of this we have:

• Put 700 new cashiers and personal bankers in place.

• Raised entry-level salaries to ensure both a better rate and to help recruit the best.

• Invested heavily in training. • Introduced new technology

to speed up the time it takes to process transactions.

BranchesCustomers increasingly want flexibility in the way they deal with us – through branches, over the telephone and on the internet.Branches remain very important to us because they are important to our customers – our researchshows that nearly 80% of ouraccount-holders use branches at least some of the time. Hence thesubstantial investment that is goinginto upgrading the branch network.

This investment is already showingresults. Queuing times have been cutby an average of one-third, and thenumber of people who say they are‘completely satisfied’ with our serviceis up by 16%. Branch managers havebeen given more power to run theirbranch in the way that best suits theirneighbourhood, including deciding on their own opening hours. Somebranches now open on Saturdays,

“Our duty is to listen tocustomers, and to create a service which addresseswhat they want today.”

John VarleyGroup Chief ExecutiveBarclays

“The marketplace in which we operate is highlycompetitive. If we are tosucceed we must put thecustomer at the centre of our business. We mustdeliver propositions thatdemonstrate value andservice that sees us gettingthings right first time,every time.”

Deanna OppenheimerChief ExecutiveBarclays UK Retail Banking


4


for example, and others open at 8amand close at 6pm, to allow people todo their banking before or after work. We have also made a conscious effortto recruit store managers from leadingretailers so that we can combine ourown banking expertise with the sort ofconsumer understanding that comesfrom the best in retailing.

At the same time, if a branch becomesvery under used, or if there are highsecurity risks about its location, it may no longer be economic to keep itrunning. We appreciate that the issueof branch closures is an emotive oneso we have made a commitment notto close ‘the last bank in town’. If wedo have to close a branch we alwaysabide by the Banking Code.

In France our branches are mostlyconcentrated in Paris and the othermain urban areas, so we are investingin upgrading our online service, andthe Barclays France site now offers full banking facilities in both Frenchand English – a first in the Frenchbanking sector.

Cash machinesAnother area we have focused on isour cash machines – nearly 3,800 ofthem in the UK. Using our machines is free, and we currently have no plansto change that. Our customers canalso use over 30,000 LINK machines,get cash-back at shop tills, and usePost Office counters, all free of charge.Self-service kiosks are also beinginstalled in over 500 branches, and

our online service is being extended,giving people the chance to do alltheir banking in one place.

ComplaintsThe way we deal with complaints isvery much within the scope of our‘Treating Customers Fairly’ agenda.Our Group Complaints Programme,implemented across the businessthroughout 2005, has enabled us withmuch greater clarity to identify and,more importantly, address areas ofcustomer dissatisfaction. In the UK we now have teams of dedicatedcomplaint handling specialists whosupport our customers and colleagueswhen things do go wrong. The new ITsystem we introduced provides moretimely and better quality informationthan we have ever had before.

Six of our major African businesseshave developed their own service

improvement plan, which includesbetter staff training, faster complaint-handling and quicker turnaroundtimes for transactions. In Europe, Italy,Portugal and France all exceeded theirtargets on dealing with customercomplaints in 2005.

Fairer dealsThe way we market and sell ourproducts is a key element ofresponsible banking. It is importantthat our customers have all theinformation they need to make the right decisions for their owncircumstances.

Responsible sellingWe no longer have product-basedsales targets for individual members of staff. We have replaced theminstead with a system that we think isfairer for our customers: there is oneoverall financial goal for each branch,

Working withStonewallLeading up to the change in UK lawin December 2005 we worked withStonewall, the UK gay and lesbiancampaigning organisation, toproduce Getting Hitched – a Plain-English Guide to Civil Partnership,giving them the resources to producea print run of 300,000 rather than the initial 25,000 copies. We alsoworked with Stonewall on a parallel

series of seminars across the country.

In February 2005 Barclays was voted ‘Best Financial Institution’ in the annual poll of readers of thePink Paper.

Call centre of the year

Our contact centre in Cheshire wasvoted European Call Centre of theYear 2005 by Call Centre Focusmagazine.

6

but an equally important paralleltarget relating to local customersatisfaction levels. Our UK branchemployees are rewarded on that basis.

Transaction timesOne of the recurrent issues that allbanks face in the media is the amountof time it takes to clear payments. We offer personal customersimmediate access to their money: our free Instant Banking service allowscustomers to withdraw up to £1,000immediately, without waiting for thecheque to clear. Further progress onreducing the traditional clearing cyclewill come from our collaboration with

the other banks in the Association forPayment Clearing Services (APACS).We are working to provide betterelectronic payment services by theend of 2007.

Overdraft chargesWe know that some customersslip into overdraft by accident, and we now allow people to do this onceevery 12 months without chargingthem. Half a million customers havebenefited so far.

Payment Protection InsuranceAnother industry-wide issue hittingthe headlines is Payment Protection

Insurance, or PPI. These are policiesthat are sold alongside a loan to coverpayments if the borrower has anaccident, falls ill, or is made redundant.The Citizens Advice Bureau made asuper-complaint about PPI to the Officeof Fair Trading (OFT) in September2005. The OFT then looked at themarket as a whole and decided toundertake a formal market study,commencing in March 2006, andexpected to take nine months. The FSA is also monitoring how PPI is sold. Our view is that PPI is a goodproduct as long as it is sold in the rightway, to people who need it. Barclayscustomers do not have to buy PPIwhen they take out a loan and if theydo buy PPI from us we make sure theyhave a clear summary of the policy anda separate breakdown of the costs ofthe loan and the PPI (some providershave been criticised for lumping thesenumbers together). Customers thenhave 30 days to change their mind.

StatementsOur statements have been redesignedto make them clearer, easier tounderstand, and more informative. For example, we now notify people ofchanges to charges on the statementitself, rather than in a separate leaflet.

Unclaimed balancesDormant bank accounts are an issuefor the whole banking industry. We welcome the UK Government’srecognition that some deposits mayappropriately be left to lie in bankaccounts for long periods of time,


Helping disabledcustomersWe have spent over£78m on makingour services moreaccessible todisabled people, and 93% of our UKbranch network is now accessible.There are planning issues toovercome with the remaining 7% butour eventual target is for all our UKbranches to have accessible features.

92% of Barclays and Woolwichcash machines are at a height thatsuits wheelchair users, and two-thirds of the remainder will bemade accessible by the end of

2007. Every branch has inductionloops for those who are hard ofhearing. All our printed materials inthe UK are also produced in audio,large-text and Braille, includingstatements, letters and productinformation.

We are helping people with learningdisabilities get equal access, partlyby funding ‘It’s Your Money’, abooklet from the Employers’ Forumon Disability which explainsbanking in clear terms.

You can find more information by going towww.barclays.com/responsibilityand clicking ‘services for disabledcustomers’.


but that these should be classified as dormant if they are unclaimed for 15 years. We do everything we can to find the rightful owners ofaccounts like this, and we willcontinue to work with the BritishBankers’ Association and theGovernment on the best approach to this issue. We support theGovernment’s proposal to reinvestdormant funds in the community, particularly its focus on financialeducation, financial inclusion andyouth services.

Safer bankingWe take the problem of fraud veryseriously. All Barclays outdoor cashmachines are now protected by ‘anti-skimming’ technology (up from 44% at the end of 2004) which prevents fraudsters tamperingwith cash machines. There are also new security messages on all our cash machines.

Chip and PIN is increasingly making credit and debit cards easier and safer to use, and more improvementsare being made to make online

banking safer.

Customers are naturallyconcerned aboutthe security of

online banking.We areintroducingmore security

messages on

our online site, and a safer two-phaseauthentication process, which willwork alongside an expert transactionprofiling system designed to interceptsuspicious transactions. Thesechanges are designed to enhancefurther the security of online bankingwithout reducing ease of access byour customers; all these changes are in line with the requirements of theDisability Discrimination Act. We are working with other banks andspecialist anti-virus companies to dealwith Trojans and ‘phishing’, and wecollaborate with the authorities toclose down phishing sites as soon as they are identified.

For more details on online security and steps you can take to protect yourself, visitwww.barclays.co.uk/security

Anti-money launderingWe observe high standards of customer identification andverification, wherever we operatearound the world. We work closelywith all the relevant authorities,

and use sophisticated IT systems to monitor and report suspicioustransactions.

We have set out our 2005 targetsand achievements for customerservice, and our new goals for 2006,in the fold-out table behind page 2.

$85bnBarclays Global Investors manages$85bn in ethical funds on behalf ofour clients.

iShares

Barclays Global Investors iSharesKLD Select Social Index Fund,

available in the US, invests in largecapitalisation companies that have a positive social and environmentalrecord. The fund had grown from$20m under management inJanuary 2005, to $117m byDecember 2005.

8

Responsible bankingFinancial inclusion

A bank account is something manypeople take for granted, but billions of people around the world do not have one. Lack of access to banking isa big problem in developing countriesand contributes to exclusion even in adeveloped country like the UK.

Into themainstream


The United Kingdom“Two million families have no bankaccount. It costs them more to paytheir bills. Credit costs more. It makesit harder for them to get a job.”

This is UK Chancellor of theExchequer, Gordon Brown, in December 2004, announcing thecreation of a Government taskforceand £120m fund to tackle financialexclusion. Over a year on and thisissue is still high on the Government’slist of priorities. A key aim is to workwith banks to halve the number of UK households that have no bankaccount by the end of 2006. This is a challenging target for all concerned,but as a leading UK bank we recognisethat we have an important role to play.

Bringing ‘unbanked’ people into themainstream of financial services is anintegral part of responsible banking.Basic bank accounts have a part toplay in this, but they are only oneelement of a complex equation.

A business opportunityThinking about financial inclusion in both social and commercial terms is a good mindset to have and weapproach this issue as we would anyother business challenge. This means

“Barclays is the bank that hasdone the most to advanceboth thinking and action onfinancial inclusion in the UK,and its efforts put it ahead of other banks assessedworldwide.”

ANZ BankFinancial Literacy & Inclusion –Global Benchmarking ReportSeptember 2005

Microfinance in Ghana

Less than 10% of the population in Ghana has a bank account.However, the majority of the peopleuse traditional forms of banking that go back centuries.

Barclays is working with Ghana’sSusu collectors who look after thedaily spare income of their clients,who are mainly market traders. Thisis then returned by the Susu collectorat the end of each month, minus oneday’s deposit as exchange for thegreater security provided. Thougheach individual client’s deposit is too small for high street banking,collectively they amount to a £75m economy.

Barclays has invested 2.4 billion cedis(£150,000) into its Microbanking

initiative, providing Susu collectorswith deposit accounts and loans toon-lend, as well as providing trainingfor these Susu collectors andfinancial education for the traders.

As Dominic Bruynseels, ManagingDirector of Barclays Africa and Middle East, says: “This is aboutaccess to capital for market traders and smallindigenousprivate sectoroperators. We are learningabout how wemight operate – and how differentcultures handle the issue ofmicrocredit.”

having a full understanding of theneeds of the people we are trying toreach and taking a creative approachto addressing whatever barriers arestanding in their way. But in the caseof financial exclusion the causes arecomplex and especially sensitive. It is not just about the availability ofproducts and services but about a lackof confidence, a lack of understandingand many other practical issues thatare not always immediately obvious.Some people are not ready or willingto join mainstream banking and there

are some services that high streetbanks like Barclays simply are not set up to provide.

This is why we have to be realisticabout what we can do ourselves, and what can better be done by the Government, or communityorganisations. The key here is gettingall these groups to work together,which is why we put so muchemphasis on collaborations andpartnerships when we are dealing with this problem.

10

ABC – advice, banking, creditHowever complicated the causes ofexclusion, the areas that need to beaddressed are clear enough. Tacklingthe ‘ABC’ of financial inclusion meansgiving people better access to advice,banking, and credit. There are clearlywider questions that also need to beconsidered – including savings andpensions – but the ABC issues,underpinned by better financialeducation, are the real priorities if we are to help people out of cycles of exclusion and debt.

AdviceThere are two facets to this. Peoplestruggling with debt need specificguidance about how to manage it but there is also a broader need forbasic financial education so that fewer people get into problems in the first place. We have a part to playin both of these areas – both as alender to our own customers and as a supporter of organisations whospecialise in providing general adviceand information. Improving the overalllevel of financial literacy is a biggerchallenge, and the main responsibilityfor this has to lie with governments –not least because it has to start asearly as primary school.

Providing clear information and advice to our customers is an integral

part of responsible banking. We have been working hard to do this better,and to give customers more support if they get into difficulties. But peoplewho are financially excluded tend to have little experience of using financial services, which means thereis an even greater need for down-to-earth information and advice. That is why, for example, we supportedCitizens Advice’s recent successfulpilot researching ways to makefinancial advice more available tothose on low income, and since 2000 have been actively leading anumber of projects designed to tackle financial exclusion. And it isalso why we have been working with independent debt adviceorganisations like the Money AdviceTrust National Debtline, CitizensAdvice, and the Consumer CreditCounselling Service for over ten years (including contributing £3.15m in 2005 alone).

Appealing to young peopleIn the last year we have put particularemphasis on initiatives aimed atyoung people. These include:

• The ‘Thrifty Squid Challenge’ with the youth charity Kikass.

• Ker’ching, a project for 9 to 10 year olds in 75 Londonschools which has also involvedBarclays volunteers.

• Supporting the Personal FinanceEducation Group to support work in Pupil Referral Units.

Barclaycard HorizonsAlongside work like this, we have set up Barclaycard Horizons, a £3mprogramme to help over-indebtedlone parents. Research repeatedlyshows that they are at the greatestrisk of slipping into financialdifficulties. One Parent Families,Citizens Advice, Parentline Plus andthe Family Welfare Association are all supporting the programme, andcombining their skills to help 50,000struggling lone parents and theirchildren with practical support,including money management advice,training and help to get back to work.

In 2006, we will also be launching‘Financial Futures’, a scheme that will involve us working with NCH and Help the Aged.

There is more on all of these projects on our website atwww.barclays.com/community.

BankingWe believe that every high street bankhas a responsibility to provide a basicbank account for people who want itand we take this responsibilityseriously. Our version is the Cash CardAccount, introduced in 2000, andwhich now has over 379,000customers, with over 11.9% of themin more deprived neighbourhoods.

The Cash Card Account is a no-frillscurrent account that gives peoplebasic banking, without allowing themto become overdrawn. It has been

“I congratulate and applaudBarclaycard for the way it is bringing businesses andcharities together. This willmake a very real difference to the emotional and financial hardship that many lone parents and their children face.”

Rt Hon Gordon Brown MPUK Chancellor of the Exchequerat the launch of BarclaycardHorizons, July 2005



designed to be accessible and easy tomanage, but even so there will alwaysbe some groups who will be hard toreach for a mainstream bank. Forexample, homeless people may lackthe standard forms of identification.

With this in mind, in summer 2005 we completed a pilot project with ThePassage, a centre for homeless peoplein London. It was a great success, andhas been developed into an ongoingarrangement. By the end of 2005, 150 of their clients had opened a Cash Card Account.

Easier accessWe have made some importantchanges to the Cash Card Accountthis year. For example, we halved directdebit unpaid fees to reflect the factthat these customers have very lowincome or are on benefits. Followingfeedback from organisations includingThe Passage and SAFE (a Toynbee Halladult advice and education initiative), we have also introduced a moreflexible process for identification andverification, and the account pack isprominently displayed in our branches.These changes are also a response to

some of the points raised in the annual Banking Code Standards Board‘mystery shopper’ survey. They said we needed to raise the visibility of theaccount and make identification andverification easier. Moving forward we know there is more we still need to do to make this account genuinelyaccessible to everyone.

Alongside our own basic bank accountwe are continuing our support for theGovernment’s Universal Bankingprogramme and the Post Office CardAccount, which gives people another

“People come to us for amultitude of reasons, but inmany cases homelessness isconnected with losing a job. And to be employed in the 21stcentury you simply must have a bank account. The Passage isdeeply grateful to Barclays andtheir support with their basicbank account – with their helpmany homeless and unemployedpeople are returning toemployment and, from there, in time, to a normal home life.”

Sister Ellen FlynnDirector The Passage

Support for small businesses in deprived areas(a) of the UKAs at 31st December 2005The figures below refer to firms with a debit turnover of less than £1 million

All Deprived % share % shareBarclays areas 2005 2004(c)

Number of business current accounts 672,533 34,392 5.1 5.0

% in overdraft 24.0 24.4 5.2 5.0

Number of business deposit accounts 276,218 11,850 4.3 4.4

Number of loans 107,394 4,567 4.3 4.1

Loan and overdraft balances (£m) 9,021 356 4.0 4.4

Current and deposit balances (£m) 9,793 512 5.2 5.0

Number of business start-ups during 2005 92,648 7,236 7.8 6.9

2005 start-ups as a % of end-year business customers(b) 15.1 24.1

Ratio of savings to lending 1.09 1.44

Notes(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.(c) Definitional changes agreed by the Bank of England, British Bankers’ Association and contributing banks mean that data contained in this table cannot be compared with that previously supplied

by Barclays for 2000, 2001 and 2002. Data for 2004 has been revised to meet the new definitions.

UK Community Finance Organisations £546,000 Microbanking in Africa£150,000

Community placements £211,000 Research £56,600 Other £25,500

Global investment in financial inclusion 2005

12

option. Barclays is contributing £30mtowards the running costs of thisscheme over five years (2003-2008).

And it is not only in the UK that we are doing this sort of work. In SouthAfrica, Absa has been one of thepioneers of the basic ‘Mzansi’ bankaccount (there is more detail on thison page 25).

Affordable creditWe have a responsibility to provide fair access to loans and our lendingdecisions are based on a customer’sability to repay. We publish our lendingdata (see tables) to encourage widertransparency on lending in deprivedareas – we are currently the only bankto disclose the data for both personaland small business lending.

However, a high street bank likeBarclays is not always the mostappropriate organisation for some typesof loans. For example, high volumes ofvery low value loans, particularly forthose with limited credit histories, donot fit easily into our business. However,we realise that there is a need for thesetype of loans, and that is why wesupport other organisations that arebetter set up to do this.

Community financeWe are a major supporter ofcommunity finance organisations.These include Credit Unions, whichoffer basic savings facilities and loansfor individuals, and CommunityDevelopment Finance Institutions

(CDFIs), which lend to smallbusinesses, social enterprises andindividuals. In fact, Barclays is currentlythe biggest single corporate supporterof the Association of British CreditUnions Limited (ABCUL), the mainnational trade association for CreditUnions, and we have just agreed afurther two years support for the‘PEARLS’ IT system, which we havefunded since its introduction in 2002.This is a practical tool that can helpCredit Unions develop their business,and reach more excluded people.

As Peter Kelly, Head of BarclaysFinancial Inclusion team, says: “CreditUnions and CDFIs can play a crucialrole. It is important that communityfinance organisations develop scale andwe will continue to work in partnershipwith the sector to help make thishappen. Quite simply we need viablealternatives to high-cost lenders toprovide more choice to the mostdisadvantaged in society. The socialimpact of what we are doing is key. For instance, 17 of the organisationswe supported in 2005 provided 4,900loans worth over £10m, collectedsavings of over £1.2m and created orprotected almost 3,000 jobs in the UK.Naturally we hope that some peoplewill then graduate into mainstreambanking, so it makes good businesssense for us to be involved too.”

You can find more information on our website atwww.barclays.com/financialinclusion

Supporting community financeWe funded 35 community financeorganisations in disadvantaged areasacross the UK in 2005. Total supportin the UK amounted to £839,000,including community placements,research, loans and direct grants via two funds.

The Barclays Partnership Fundfocuses on development andongoing costs for organisationsworking in the area of financialinclusion, such as Lincolnshire Credit Union, and Fair Finance in East London.

The Barclays Financial InclusionFund supports smaller initiativesencouraging innovation. In 2005,we supported ten organisationswith a total of almost £130,000. All of the initiatives being fundedinvolved organisations workingtogether in partnerships to tackleexclusion – examples includeSouthwark Credit Union’scollaboration with the BlackfriarsAdvice Centre, and LASA CreditUnion working with local schools in Swansea, Wales.


“Barclays has played a uniquerole in facilitating many of the changes under way in the credit union movement.Their far-sighted sponsorshipof PEARLS has been a keycatalyst for change.”

Mark LyonetteChief Executive Association of British CreditUnions Limited

Social housing

We committed more than £1.2bn of new loans to regenerate socialhousing in 2005 and we have also been supporting communityfinance projects such as CHANGE,which is working with 14 housingassociations in London, helping togive their tenants better access tofinancial services and information.


Commercial opportunitiesWorking with community financeorganisations on a commercial basisopens up new opportunities for bothof us. One example is the growingnumber of cross-referrals between our Local Business Teams and CDFIs – in some situations where we couldnot offer a business loan ourselves wereferred the customer on to their localCDFI. In many cases the customer had been unaware this option even existed.

This is working well in a number ofcases, as it has with The EnterpriseFund in Manchester: our LocalBusiness Team has made 21 referralsto them since May 2005. In 2006 we have the challenge of turning this

into a more robust bank-wide process, but progress is definitelybeing made.

Another initiative that has a positivesocial impact as well as a soundcommercial rationale is the ‘StartRight’ seminar programme. We ranover 300 of these seminars with theNational Federation of EnterpriseAgencies in 2005, which helped morethan 5,000 entrepreneurs start theirfirst business and 10% of thesebusiness people came from deprived areas.

Involving our staffAs part of our wider communityprogramme, we have supportedBarclays volunteers and funded

former staff in community financeroles. This makes a lot of sense as it helps improve their awareness of the problems of financial exclusion,and their specialist skills can be veryuseful to the host organisations. At the end of 2005 there were eight ex-staff working in community finance organisations, including one who has worked in Africa and the Philippines for OpportunityInternational, an internationalmicrofinance organisation.

We have set out our 2005 targetsand achievements on financialinclusion, and our new goals for2006, in the fold-out table behindpage 2.

“Now that I have moved awayfrom the front line in Barclays,it does help me to maintainthose skills gained in retailand business banking –meeting members of thepublic and dealing with real-life issues and theirconsequences. It keeps megrounded and makes me feelI’m making a difference.”

Anne HussainBarclays volunteer at theClockwise Credit Union in Leicester

Support for personal customers in deprived areas(a) of the UKAs at 31st December 2005

2005 Analysis 2004 AnalysisAll Deprived All Deprived % share % share

Barclays areas Barclays areas 2005 2004

Number of current accounts(b) 11,093,000 627,000 10,709,000 592,000 5.7% 5.5%

Number of Cash Card Accounts(b) 379,000 45,000 309,100 36,000 11.9% 11.6%

Cash Cards as % of all current accounts 3.4% 7.2% 2.9% 6.1%

Unsecured loans and OD balances (£m) 11,100 630 10,500 570 5.6% 5.4%

Mortgage lending (£m) 59,600 1,970 61,800 2,060 3.3% 3.3%

Deposit and current account balances (£m) 67,300 2,140 63,000 2,040 3.2% 3.2%

Ratio of deposits to lending 0.95 0.82 0.87 0.78

Notes(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.(b) Data in 2005 reflects account numbers rather than customer numbers. 2004 data has been restated to reflect this for comparison.

Reaching outLincolnshire Credit Union andSalford Money Line, two of thecommunity finance organisationssupported by Barclays in 2005

14

Responsible bankingResponsible lending

Over the last decade UK consumerdebt has grown to over £1 trillion.Exercising responsibility in lending has never been more important.

Sensible limits


“The problems of people wehelp arise substantially frompenalties and charges. In thiscontext Barclaycard’s newinitiative…represents a moreintelligent approach by lenderswhich offers consumers a helpful choice.”

The Consumer Credit Counselling Service

Summary boxes on statements

Consumer lendingThere can be no arguing with thefigures, or the problems this level ofborrowing can cause – bankruptcyfilings rose by around 30% in 2005,indicating that a number of thosealready struggling to manage theirborrowing effectively are finding itincreasingly challenging. It is hardlysurprising that many commentators,politicians and campaigners areblaming the banks for being over-ready to lend money to people whocannot repay it, or who already havemounting debts from other lenders.

Bad debts are a cost to us as abusiness, so it is hardly in our intereststo lend money if there is no chance of getting it back. As far as we areconcerned, offering transparent,competitive deals is not irresponsiblein itself. Responsible lending meansproviding straightforward informationthat makes the terms of the loan orcredit agreement absolutely clear, sothat the customer understands the full implications for them. And thenapplying strict, sensible criteria abouthow much we lend to any individual.

Prevention is better than cureBarclaycard introduced ‘summaryboxes’ on its statements in 2004. They are relevant here because theyclearly set out the interest rates thatapply and what a customer has to doto manage their account. In addition, the financial consequences of makingonly the minimum repayment everymonth are spelled out on customerstatements. We have now extendedthis idea to our personal loanmarketing material, so new customers are given exactly the same sort ofinformation about the costs andimplications of taking on newborrowing before they sign up for it.

The criteria we use for granting loansis under constant review, and atpresent we typically turn down 55%of the people who come to us for new credit cards. When we lend to a customer who has never had a facility like this before, their initialcredit limits are set at a low level. The typical starting amount is £400 and this will only increase if the customer develops a good track record, and can cope with theincreased borrowing. Even then, thetypical increase is usually only £150,and there will only be one rise in thefirst year. We also reduce customers’credit limits if we become aware thatthey may be getting into difficulties.Early warning signs include regularcash withdrawals and only payingback the minimum amount everymonth – 200,000 accounts had theirlimits reduced in 2005.

This common-sense approach pays off: nearly 50% of Barclaycardcustomers settle their balance in full every month and pay no interest at all. Likewise nearly 70% of personalloans are repaid early.

Sharing informationWe can do more to prevent peoplefrom getting into difficulties in the first place if we pool more informationwith other banks and loan providers.The Government and the Bank ofEngland have put their weight behindthis idea, and in December 2005 wewere a prime mover behind a newindustry-wide scheme to share moreinformation about how people aremanaging their accounts. This willenable us to make better lendingdecisions and help us to spotcustomers who may be starting to have difficulties managing theirborrowing.

This builds on similar existingschemes, and by mid 2006 it will helpall the lenders involved to identify

“Barclaycard has written to100,000 customers offering an experimental product,Barclaycard Combinations, thatcombines features of a creditcard and a loan. Barclaycardsays Combinations is designedto help customers save moneyand reduce debts more quickly.”

The Daily Telegraph*2nd April 2005

Responsible bankingResponsible lending

customers in difficulties more quickly.Levels of debt are important but it isalso about how well customers arecoping with that debt. Frequent cashwithdrawals may be one sign thatthings may be going wrong, as somepeople will take cash from one card to pay another.

If customers do get into difficulties we have a number of ways of helping them deal with their debt. A structured repayment plan is oneoption, another is to reduce theminimum payments and suspend the interest charges until the loan is under control. We also work withthird parties like the Consumer CreditCounselling Service and CitizensAdvice. There is more on this in the chapter on financial inclusion. See page 10 for more detail.

New ideasIn the last year a range of newproducts has been introduced that are specifically designed to helppeople manage their borrowing more effectively.

The BarclaycardFlexi Rate is

the first creditcard thatoffers areduced rate

for customerswho pay off

more than theminimum eachmonth. There are

three levels of interest rate on the card and the more you pay off, thelower the rate on the remainder. Some have called it a gimmick, butorganisations like the Consumer Credit Counselling Service haverecognised that it is a genuine attempt to address a complicatedsocial problem.

We have also been piloting the UK’sfirst combined credit card and loan.Barclaycard Combinations works byshifting the balances that build up on the credit card element over to theloan. This helps cardholders managetheir money more efficiently andminimises the amount of interest they pay.

The third new idea this year ispersonalised messages on loan andcard statements. These allow us towarn customers in advance that theymay be slipping into difficulties, sothat they can take action immediately:debt advisers always advise people to take action as early as possible,which can often prevent thingsreaching a crisis point. Examples ofthese messages are provided in the box above.

Following a test last year we are usingour experience to create a computermodel that will help us identifycustomers who may be getting intofinancial difficulties. The aim will be to offer help and advice at a muchearlier stage. A pilot project started in January 2006.

Personalised messages

Business customersWe have a specialist business supportteam which works with Barclaysrelationship managers whenever oneof their business clients gets intofinancial difficulties. This combinedexpertise is applied to understandingthe problem, and developing robustand creative ways to address it. 853new cases were referred to BusinessSupport over the year and 78% ofcases were referred to the turnaroundteam. The turnaround team’s record is impressive – the team’s success ratein returning customers to financialstability was 80% during 2005.

We have set out our new goals for2006 in the fold-out table behindpage 2.

16


Responsible bankingDealing with environmental and social issues in commercial lending

On 4th June 2003, ten internationalbanks came to an agreement inWashington D.C. At first sight hardlyground-breaking news, but this particularagreement has been called “a shiningbeacon for responsible banking”, and ithas revolutionised the way our sectorapproaches project finance.

A differentenvironment

18

“Even if you use anextremely conservativeestimate [the EquatorPrinciples] will change the rules of the road forover $100bn in globalinvestment over the nextten years.”

Peter WoickeFormer Executive Vice-President International FinanceCorporation (IFC)

Responsible bankingDealing with environmentaland social issues incommercial lending

Project financeProject finance has always been oneof the more difficult and contentiousareas of bank lending, partly because it deals with big developmentschemes like dams, mines andpipelines, and partly because itrequires a balance between theadvantages of economic developmentand social and environmentalconcerns. Banks which have adoptedthe Equator Principles make avoluntary commitment to fund onlythose projects that can be “developedin a manner that is socially responsibleand reflects sound environmentalmanagement practices”.

A founder memberBarclays is the third largest projectfinance lender in the world, and we were among the first to develop a robust and structured approach to dealing with these issues. Westarted assessing and managingenvironmental risks in 1997, and five years down the line we were one of the first banks to recognise thatthere was a need to raise standards

across the whole sector. That was a bold step in itself, since projectfinance is a fiercely competitive field,but judging by the progress that hasbeen made it was clearly an ideawhose time had come.

In 2002, when the Equator discussionsfirst started, it was Chris Bray, our Head of Environmental Risk PolicyManagement, who was one of the four‘founding fathers’ of the agreement.He was Barclays representative on thefour-bank team that came up with the initial shape and scope of thePrinciples, based on their own bank’sexpertise and experience. By the timewe adopted the agreement there weresix more banks involved, and another30 have followed since.

Principles in practice Our own commitment to the EquatorPrinciples stems from a combinationof ethical and commercialmotivations: minimising a project’ssocial and environmental impact isunquestionably the right thing to do,but it also makes good commercialsense. As Gerard Holden, ManagingDirector of Barclays Capital’s Miningand Metals team observes: “In thesector we cover, the Equator Principlesare a key element of the businessdynamic, and we believe they are good for business. Not only must allour projects meet the letter of thePrinciples, but the team also worksdiligently to ensure there is realcompliance after the loan is signed.Taking a leading role in this area has

also attracted new business, becauseour team can assist clients as theydevelop their own mining projectsaround the world.”

Adopting the Equator Principles wasnot such a step change for us as it has been for some banks, because we were doing so much in this areaalready. But it has given us a newfocus, and prompted us to changesome of our decision-makingprocesses, and develop new ones.Something we have done this year is to create a new tool to categoriseprojects under the Equator system(see the box for more on this).

We have also spent a great deal oftime and effort on training, whicheveryone agrees is key to the realsuccess of the Principles. Top levelcommitment is crucial, but it is thepeople on the ground who make thepractical decisions. We focused inparticular on Asia this year, holding a seminar for staff from eight localoffices and Australia. Overall, wecoached over 350 people from 16 different locations in 2005,including staff from the lending, risk and legal departments in Barclays Capital and UK Banking.

Internal guidelinesWe also have guidelines that deal with the specific risks and industrypractices affecting 32 of the mostsensitive sectors. These includeairports, forestry and logging, dams,mining, oil and gas, pipelines,


“Integrating environmentaland broader social issuesinto [banks’] core creditrisk management isessential to managingcredit risk in the 21st century.”

Reed HuppmanPartner Environmental ResourcesManagement Washington D.C.

How the EquatorPrinciples work in practice…

The Equator Principles cover projectsin all sectors of industry, and anydeal over $50m in size. An EquatorBank must do a full environmentalassessment for any project coveredby these parameters, to evaluatewhether the scheme is high, mediumor low risk (Category A, B or C).Category A projects must then carryout a full public consultation aroundthe proposed site, and prepare anenvironmental management plan.But regardless of category, allEquator projects must observe locallaws, World Bank guidelines, and theInternational Finance Corporation’spollution prevention rules. Indeveloping countries there are alsostrict IFC Safeguard policies on issuessuch as habitat, indigenous people,involuntary resettlement and forestry.

…and at Barclays

We go beyond the basics of theEquator Principles by applying thesame standards to every A or Bcategory project, whatever its size.And when we categorise a project as A, B or C we always getindependent confirmation from anoutside expert, to avoid any dangerof a high-risk project slipping into a lower tier.

Our deal teams work side by sidewith the credit team, and the mainenvironmental and social risk teamto evaluate new loans. We also have a panel of top independentconsultants who undertakeenvironmental assessments for us.

For more information, go to:www.personal.barclays.co.uk/PFS/A/content/files/environment.and.social.risk.pdf

“When working to Barclays requirements [forenvironmental assessments],URS is always aware that theexpected scope is regularlyupdated and extended by the Bank to reflect currentconsultancy thinking…

…Such assignments presenttheir own unique challengesgiven the range of issues whichmust be addressed.”

Robert FitzsimmonsManaging Principal ConsultantURS London

of meetings with leading companies,government departments, and someof the key Non-GovernmentalOrganisations (NGOs). Most of thesegroups have supported the Principlesas a powerful force for positivechange, but it is fair to say that theapplause has not been universal.

Addressing the issuesSome NGOs criticise the Principlesbecause the social angle is not as welldeveloped as the environmental one.We accept that our environmentalexpertise is currently more developedthan our understanding of socialissues, and this will be a major area of focus for us in 2006. We will beupdating our sector guidelines toinclude more social risk, and makingmore extensive use of specialistconsultants to help us identify andmanage these issues.

Other NGOs criticise the Principlesbecause they only apply to deals over $50m capital cost, and only to project finance. In Barclays case we do not restrict ourselves to the $50m threshold, which means thatany sensitive project will get the full Equator treatment. But thelimitation of the Principles to project finance is more complicated to resolve. The nature of project finance suits the Equator Principlesbecause the banks have far greaterinfluence over the way funds are allocated during the life of the loan.

electricity production and wastemanagement. Wherever we can wemake use of international best practicein these briefings – for example, wefollow the Forest Stewardship Councilguidelines in the forestry guidancenote. In 2006 we will be revising all the guidance notes to take the newInternational Finance Corporation (IFC)Performance Standards into account

(the IFC is the private sectordevelopment arm of the World Bank).

Next stepsThe Principles are now being reviewed by the Equator Banks, in parallel with the IFC’s work toupgrade its Safeguard Policies intoPerformance Standards. As part of this process we have held a number

20

And project finance allows banks tonegotiate stricter covenants – which is the real strength of the EquatorPrinciples – and environmental andsocial covenants tend to be lessspecific in general corporate lending.All the same “there are other ways of screening environmental and socialimpacts in general lending”, as ChrisBray says: “So even if these are nottechnically Equator loans that doesnot mean we are not applying manyof the same principles. And if wecome across mainstream loans thatare actually project finance by anothername, then we apply the EquatorPrinciples: if it looks like a project andsmells like a project, then we treat itlike a project.” In 2005 we undertookenvironmental and social reviews of185 non-project finance transactions.

Openness and accountabilityPerhaps the thorniest issue, though, is that of transparency. NGOsunderstandably want moreinformation from us, so that they can make their own judgements about whether the banks are living upto both the spirit and the letter of thePrinciples, but that often runs directlycounter to the duty of confidentialitythat we have to our clients. As therecent Freshfields’ report on theEquator Principles notes, some wouldsay that “it is primarily for sponsorsand not for the banks to discloseinformation about sponsors’ projects”.

Freshfields also recommends, amongother things, that banks should

disclose the number of projects theyhave considered by sector and bycategory, and the number accepted or rejected. This sounds easy enoughin principle, and we have in factincluded information in this reportabout the number of deals we wereinvolved in during 2005, broken downby category. But as Claire Wallace, a manager in the Environmental Risk Policy Management team, says,statistics like these can be misleading:“There are a range of reasons whichdetermine whether or not we proceedwith a deal, one of which relates to environmental and social issues.Our business teams will not pursuedeals if they do not believe ourstandards will be met, but theserejections cannot easily be reflected in the figures.”

In the vanguardFor such a ‘shining beacon’, theEquator Principles have receivedsurprisingly little media coverage.There have been articles in thespecialist press, but very few peopleare aware of how much difference thePrinciples have made – and will makein the future. We think that is a pity.The success of the Principles is proofthat it is possible for banks to makemoney responsibly, and we are proudof the fact that Freshfields’ reportrecognises Barclays as being in the‘vanguard of Equator Banks’.

We have set out our new goals for2006 in the fold-out table behind page 2.

Project financeA B C

Higher Medium LowerProject category risk risk risk Total

Number of project finance deals(a) 6 44 18 68

Deals completed or pending 4 24 15 43

Deals considered, but not participated in 2 20 3 25

Projects referred from EU 4 38 16 58

Projects referred from Africa 1 5 2 8

Projects referred from Asia Pacific 1 1 – 2

Note(a) Project finance deals in line with the Basel II Definition, which can be found at www.bis.org/publ/bcbs107.pdf

Case study: forestry

Earlier this yearwe had thechance to start anew relationshipwith a clientoperatinginternationally in the forestrysector. This isobviously a verysensitive sector, and one whereNGOs have highlighted a number of unsustainable practices. The dealwe were asked to look at was notproject finance or a loan, but giventhe nature of the business we wentahead with a full review of theCompany’s environmental andsocial management systems andpolicies, following the spirit of theEquator Principles. Our reputationalrisk committee also considered the matter.

In the end we decided not to go ahead – even though theCompany had started to work in a more sustainable manner, wefelt we needed more proof that this was a long-term commitment.Forest Stewardship Councilcertification would be one way ofdemonstrating this, or membershipof a recognised industry body.

Responsible bankingDealing with environmentaland social issues incommercial lending


“Barclays have real in-houseenvironmental assessment expertise and leading projectfinance practices, but have less well-developed expertise in theassessment of social impacts.”

Banking on ResponsibilityFreshfields Bruckhaus DeringerJuly 2005

Non-project finance

Generalpurpose Leveraged Relationship Other

Review type lending deals review facilities(a) Total

No. of reviews 108 35 32 10 185

Note(a) Including letters of credit and bonds.

Case study: mining

We have been appointed projectadviser to a new, long-term miningdevelopment in Asia. This iscurrently at the ‘feasibility study’stage, which means that we arehelping the client to map out thescope of the project in line with the requirements of the EquatorPrinciples. As a result, the mine will be built and operated tointernationally accepted standardsand practices.

Partnerships with local and nationalgovernment will ensure thatsustainable benefits are deliveredduring the life of the project andbeyond. This demonstrates aresponsible approach to the ‘legacyissues’ that are often associated withmining projects, and which are nowa key focus of the InternationalCouncil of Mining and Metals‘Resource Endowment Project’.

As Martin Horgan, AssociateDirector in Barclays Capital Miningand Metals team says: “This minewill act as an engine of sustainablegrowth for the local communityand its surrounding region creating

many new long-term jobopportunities in what is currently a relatively underdeveloped area. In fully addressing the social andenvironmental aspects of the projectprior to development, not only doesthe community in which the mineoperates benefit, but the projectowners benefit through minimising,and where possible mitigating, thesocial and environmental risks oftenassociated with mining operations. Inreducing the project risks by utilisingthe Equator Principles, the mine willmost likely attract more sources offunding and at preferential rates thanan equivalent non-Equator Principlecompliant mining development.”

22

Responsible bankingCarbon trading and renewable energy finance

An important step towards a worldwidemarket in greenhouse gas emissions wasmade in January 2005, when the EU’sinternational emissions trading schemewent live. This will see 2.2 billiontradable carbon allowances given outannually across the 25 member states.

The business ofclimate change


Barclays was the first UK bank to setup a dedicated carbon trading desk to help companies and institutionsaccess this market. We made aconscious decision to get into themarket early, because we wanted tohelp shape its development, and thatcovered everything from the creationof standard contracts to the sharing of our trading experience with othernewer players. We also see this marketas an important new business for us, and one where the investmentbanking skills of Barclays Capital can give our clients new tools and techniques to manage theiremissions risks.

One year on from the opening of themarket and we are now the biggestbanking participant and one of themost active institutions in the market.Carbon trading has been integratedinto our other mainstream dealingoperations, and we have pioneeredsome of the key milestones in thedevelopment of carbon trading as aviable and increasingly mature marketin its own right. We did the very firstspot trade in the European market in March 2005, and were the firstbank to take physical delivery ofcarbon allowances. We were also the first bank to do a forward-datedemissions trade using the standarddocumentation used by the financialderivatives market. And in May 2005we did the first trade using the newLondon Energy Brokers’ Carbon Indexas the reference price.

It was to recognise all theseachievements that we were awardedthe Gold Award for Excellence inEmissions Trading at the 2005 EnergyBusiness Awards. Looking ahead, wewill start carbon options trading in2006, and we are already developingweather and flood risk managementproducts. We will also be exploring the possibility of offering ‘over the counter’ carbon services so that smaller businesses, personalcustomers and our own staff can take their own stand against climate change.

RenewablesWe have also played an active part in the development of the market in renewable energy. Our NaturalResources team has provided thelong-term finance behind over2,500MW of new renewablegenerating capacity, including onshore windfarms, landfill gasextraction plants, small-scalehydroelectric projects, biomass

plants and biodiesel conversion plants. Overall, this generates enoughelectricity to power nearly 1.4 millionhouseholds for a year, or a city the size of Los Angeles, California. We are also actively involved in the futuredevelopment of the renewables sector– we support the European WindEnergy Association, the EnvironmentalServices Association, the ScottishRenewables Forum, and we arerepresented on the UK Government’sRenewables Advisory Board and NewTechnologies Committee.

We have set out our 2005environmental achievements onpages 44 and 45 and our new goalsfor 2006 on page 35. And you canread about how we manage our ownemissions and environmental impactin the ‘Inside Barclays’ section onpage 33.

“Bravery, imagination and a willingness to back yourjudgement are necessaryqualities for leadingcompanies like Airtricity in the fast developing businessof Renewable Energy. Bankingpartners like Barclays whoshare those qualities standout from the herd and make a real difference to the pace of development.”

Eddie O’ConnorChief Executive Airtricity Ltd

“Barclays were really first out of the blocks on environmentalfinance and, in particular, seeing the opportunities in the growth of the renewableenergy industry in the UK andEurope. They supported uswhen we were small andstruggling and were there when we needed a competitivefinance package to grow ourbusiness. We couldn’t be morepleased with their support.”

David ScaysbrookFounderNovera Energy Limited

Gold Award forExcellence in Emissions Trading

24

Responsible bankingBarclays in Africa

It is 20 years since Barclays pulled out of South Africa. Two decades on, the political situation in South Africa has changed out of all recognition, and Barclays is once more back at the heart of the country’s economic life – and proud to be there.

Growth in Africa


“The decisions [to invest inSouth African businesses]taken by Barclays Bank andGeneral Motors constitute aninspiring and unequivocal voteof confidence in democraticSouth Africa.”

President Thabo Mbeki ANC Today 19th May 2005

“The make-up of banks,including their leadership,should reflect the communitiesthat they serve. The number ofAfricans in country leadershiproles in Barclays has increasedsharply over the past few years. Now 95% of our countrymanaging directors across thecontinent are African.”

John VarleyGroup Chief Executive Barclays

A stake in AbsaOur £2.6bn purchase of a majoritystake in Absa, South Africa’s largestretail bank, is the biggest internationaldeal we have ever done, and the largestdirect foreign investment in the historyof post-apartheid South Africa. This is a huge vote of confidence on our part,and a measure of our commitment to the future of the country, and the continent.

The tie-up with Absa is an excellentstrategic fit for us. We have said that we want to develop retail andcommercial banking in selectedcountries outside the UK, and theword ‘selected’ is important. We donot want a token branch in everymarket, but we do want to grow ourbusiness in countries where we canbuild on experience, products orrelationships that we already have.Our involvement in Africa goes backover 100 years, and we alreadyoperated in countries includingBotswana, Tanzania, Kenya andGhana, even before Absa’s 31,000employees joined the Barclays Group.

So, if we understand the uniquechallenges and opportunities of running a bank in Africa, we also accept that in Africa ourunderstanding of responsible banking has wider implications.

A stake in the futureIn Africa we have a responsibility toset standards and lead by example,especially in areas such as corporategovernance, and the fair treatment of employees. A bank like Barclays can also play a critical role in thedevelopment of a robust financialservices sector, as well as providingboth the funding and expertise thatAfrican business urgently needs –especially at the small- andmedium-sized end of the market. And our very presence can help build the international confidence in African countries that helps attract other foreign investment and reduce the historical reliance on mineral reserves and agriculture.

Financial inclusionThrough Absa, we are a major retailbank in South Africa, a market thathas huge potential, but very realissues. An estimated 13 million SouthAfricans have no bank account, whichis why thousands of migrant workersemployed in the cities send moneyback to their families by taxi, andnearly half of the population still keeptheir cash outside the banking system.But despite financial exclusion on thisenormous scale, Absa has alreadymade great strides – in 1992 only 8%of its customers were black, comparedto 50% now.

More recently it has also been in thevanguard of an industry-wide effort to make basic banking available topeople in the townships and in rural

districts. Theaim was to bringbanking withinreach of at least80% of thepopulation by the end of 2005, and in practice this meant bringing basic banking to 32 of the mostdisenfranchised regions. Each of thefour biggest banks undertook to coverat least a quarter of these sites – Absa’sanswer was mobile branches that couldcover several districts and 11 of thesehave been put into service this year.

Absa has taken a similar approach to the challenge of encouragingpeople to open new accounts, with 12 new specialist teams now workingall over South Africa from speciallyadapted vehicles with their owncommunications system, cashmachine and independent electricitysupply – essential for some of theremoter regions. Fifty new branchesand 400 new cash machines areplanned for 2006 as part of the same push.

Mzansi accountsSometimes the question is not justone of access but of having the righttype of accounts on offer (and as wehave seen, the same can apply even in a mature market like the UK). TheSouth African banks launched the‘Mzansi’ basic savings account, aimedat increasing access to banking, inOctober 2004 and over 1.8 millionnew accounts have since been opened– over 30% of them with Absa.

26

Responsible bankingBarclays in Africa

Black EconomicEmpowermentThe Financial Sector Charter dealswith issues like employment, equityownership, and how banks workwith their supply chain. All SouthAfrican banks will have to be 10%black-owned by 2008, for example,and will also have to have blackpeople in 20-25% of seniormanagement jobs by 2008, andblack women in 33% of all posts by 2014.

Absa is already well on track tomeeting these targets, and it wasone of the first banks in SouthAfrica to implement the new equityownership rules, allocating 10% of its total share capital to BathoBonke, Absa’s BEE partner. Thisstake remains in place now thatBarclays is Absa’s majorityshareholder – in fact Batho Bonkewere great supporters of the deal.As Absa’s CEO Steve Booysen says: “Black Economic Empowerment is a business imperative for us. It is not a ticking-the-box exercise.”

“Barclays is the firstmultinational bank in Africa tohave a union forum at whichemployee representativesthroughout Africa can jointlyinteract with the bank…

…Barclays handling of itstakeover of Absa, like itsapproach generally, sets anexample and indeed model for co-operation betweenmanagement and employeesacross borders and for takingcorporate social responsibilityseriously.”

Ben Venter Deputy General SecretarySasbo and Oliver RoethigHead, UNI Finance departmentLetter to the editor Financial Times27th July 2005

The impact of offering accounts likethis – coupled with the Mzansi MoneyTransfer service launched in August2005 – makes itself felt botheconomically and socially: as ColinDonian, the director of the Mzansiproject at the South African BankingCouncil says: “On a personal level, weare seeing thousands of people joiningthe formal banking sector every day.In their pocket is a card which bringsthem into the national banking fold, making them part of a globalnetwork…People no longer feeltrapped in a secondary economy andwith this comes a feeling of increasedsocial status.”

Access to basic banking can have thesame impact on the business sector,especially for small projects and newentrepreneurs.

Black Economic EmpowermentBlack Economic Empowerment is oneof the most important employmentissues in modern South Africa. Alllocal and foreign-owned companieswill eventually be covered by thislegislation, and the banking sectortook the initiative and set up its ownFinancial Sector Charter in 2003.

The other obvious and overwhelmingissue for any employer is health care,because any business that iscommitted to the long-term future of Africa, has to face up to thechallenges of HIV/AIDS.

HIV and AIDSIn most parts of the world we contribute to the fightagainst HIV/AIDS becausewe want to – as part of aconscientious communityprogramme. In Africa,

we also do it because we have to –HIV/AIDS is the biggest single threatto our own staff, the future of theeconomy, and the development of a thriving business sector. Workingalongside our colleagues in Absa, weare tackling this on three fronts – withour own people, with our customers,and out in the wider community.

Supporting our peopleWe have one of the best and mostsuccessful employee HIV/AIDSprogrammes in Africa, largely becausewe have refused to accept the stigmathat is commonly attached to thedisease. Our managing directorsacross the continent have taken the lead in our ‘know your status’campaign, and this is backed by acomprehensive programme based on prevention, treatment and coping. We offer free testing and counsellingto all employees, and free anti-retroviral treatment to those who areHIV-positive, as well as up to threemembers of their family. And we makea positive effort to create a supportiveworking environment for everyone,whatever their HIV status. The tradeunions have a big role to play here,and their support for testing, inparticular, has made a huge differenceto the numbers coming forward.


The facts aboutHIV/AIDS in Africa• Although only about 10% of

the world’s population lives in sub-Saharan Africa, almost two-thirds of all HIV-infectedpeople live there – a total of 26 million people.

• By the end of 2004, 2.2 millionAfricans had already died of AIDS. If nothing is done, UNAIDSestimates that another 4 millionwill be infected annually by 2020,and over 2.5 million will die of thedisease every year.

• Around 5.4 million South Africansare infected with HIV – the largestnumber living with the virus in anysingle country.

• Over 60% of the world’s HIV-positivepopulation is agedbetween 15 and 49and in the prime oftheir working lives.

• Some 1.1 million South Africanchildren have lost their parents to AIDS, which is one reason why 33% of South African adultsare illiterate – the high schoolenrolment rate is around 80% but thousands of children have to drop out to look after theirbrothers and sisters, or earnmoney to support the family.

Supporting our customersWhen it comes to our customers weknow that small- and medium-sizedbusinesses are bearing the brunt ofthe epidemic. Technical know-howand management experience are hard to replace even for big concernsin Africa, but for a smaller firm the loss of one key employee can becatastrophic for the whole business.This is where we have been able tohelp. As William Gibbon, the HRDirector of Barclays Africa and MiddleEast, says: “By working in partnershipwith our small business customers, we have helped them plan for theconsequences of HIV/AIDS, so thatnot only the firm but the people havethe best chance of survival.”

Supporting societyThe third element of our HIV/AIDSprogramme happens out in thecommunity. HIV/AIDS is theoverwhelming priority of ourcommunity programme across Africa.

There is a lot more about this on our website(www.barclays.com/community), including:

• Education and counselling. • Donations of medical equipment. • Support for AIDS orphans. • Funding for projects like the

Heartbeat Centre in Katlehong.

The thing that unites all of these is thefact that they are not one-off gifts –they are genuine attempts to get

involved in the life of the community,and more often than not they involveour own people as volunteers. As far as we are concerned, this goes to the heart of the issue. The war against HIV/AIDS will not be won by governments, or NGOs, orcorporations, if they act on their own,but if we all work together, then thereis some hope.

ZimbabweWe have operated in Zimbabwe forover 90 years. The challenges thiscountry faces have received extensivemedia attention, but as long as we are

able to continue to operate – and todo so within the spirit of our values – we believe these problems areoutweighed by the belief that thesituation in the country will ultimatelyimprove and by the responsibility wehave to our 180,000 customers and1,700 staff.

We have set out our new goals for2006 in the fold-out table behindpage 2.

Barclays activities in Africa

28

• How we treat our people

• How we manage our environmental impact

• Out in the community

• Where we stand on key issues

Inside Barclays


Inside Barclays

How we treat our people

Barclays has over 110,000employees in over 60 countriesaround the world. Like any serviceindustry company, our business is only as good as the people in it,which is why we put so muchemphasis on having the best people, and on helping themachieve their full potential.

Having the right culture and workingenvironment is a key part of this, andit can also go a long way towardscreating a sense of one unifiedorganisation across the world. A lot of work has been done in this area in 2005, and we have fixed on fivecentral ‘Guiding Principles’ to describethe Barclays ethos. These are winningtogether, customer focus, the bestpeople, pioneering, and trusted.

These five principles describe how we expect our employees to behavewith external stakeholders and each other.

The ‘best people’ principle links to a goal we set last year, which was to strengthen our leadership teamsacross the whole business, as anintegral part of our strategy forgrowing the bank. During 2005 theGroup Executive Committee held two ‘talent reviews’, which includedlooking at the succession plans in each of our businesses. We alsomade a number of key seniorappointments, bringing in world-class talent from within Barclays and outside.

PerformancePerformance assessments take intoaccount not just what an employeehas achieved, but how they achievedit. In other words, whether they havebehaved according to our GuidingPrinciples. All employees have theirown development plans, and these arebacked up by facilities like the BarclaysUniversity and by funding schemesthat help individual members of staffstudy for professional qualifications, orachieve their own personal objectives.

In November 2005 the first 25Barclays employees were awardedcertificates in leadership, aftercompleting a course run for us byNottingham University BusinessSchool. Another 43 people had started the course by January 2006.Last year we hired 60 graduates intoour Business Leadership Programme,and 408 graduates into BarclaysCapital. Fifty employees with particularpotential were sent on the ‘Lead toWin’ programme we run in partnershipwith the London Business School.

Pay and benefitsWe want to attract the best people to work for us, and as such our salarylevels are competitive, and reflect local market conditions.

In the UK we negotiated a new paydeal in 2005 with Amicus, the tradeunion that represents many of ouremployees. The agreement balancesfairness and affordability, andreinforces the key principle that

excellent performance will resultin excellent reward. Under theagreement, the annual salaryexpenditure in the UK is calculatedusing the November headline retail price index plus 0.85%. The agreement also formalises theBank’s commitment that salaries for lower paid employees should be brought up to market rates for the appropriate roles.

We also renewed our ‘partnershipprinciples’ with Amicus in 2005,extending them for another five years. Under this agreement we workjointly with them to make Barclays an employer of choice in the UK.

In Absa, agreements are in place withthe two unions that represent almost60% of employees. These cover issues such as freedom of association,collective bargaining, and proceduresfor settling disputes. In 2005, BarclaysAfrica also signed new partnershipagreements with trade unions and staff associations in all our sub-Saharanand Indian Ocean operations.

BenefitsBarclays employees are offered a widerange of benefits. In the UK theseinclude the monthly Sharepurchaseand Sharesave schemes which allowemployees to invest in Barclays sharesin a tax-efficient way. By the end of2005, 40,000 employees were part of Sharesave, and over 15,000 hadsigned up for Sharepurchase.

30

“The five Guiding Principlesrepresent the core values of Barclays. They will bind us together with a commonpurpose and strengthen ourculture – both of which arevital in achieving our visionof becoming the world’s most respected and valuedglobal bank in the eyes of our stakeholders.”

Robert E Diamond JrPresident Barclays

Inside BarclaysHow we treat our people Full time equivalent (FTE)

by region

UK 54% Africa & Middle East35%

Americas 3% Asia Pacific 1%

Continental Europe 7%

opportunity for employees to take theirpension from age 50 and remain inemployment at the same time.

Our health and wellbeing programmes,such as an independent advice line, offerconfidential counselling to employeesand their families, and there is also a‘Health at Hand’ information service.The Barclaysbuyacar programme givesemployees the benefits of groupdiscounts, and we have also introduceda new childcare savings plan.

In Africa our health care scheme is anexample of how we respond to localneeds in specific countries – there ismore on this in the section on Africa.In the case of pensions, there arearrangements in place in 57 countries,all of which are subject to our rigorousgovernance standards.

Work-life balanceBarclays aims to be a progressiveemployer, and as such we are keen to promote flexible working. 15% of our people work part-time.

Open communicationEvery year we carry out acomprehensive employee surveyacross the bank to track factors likethe level of employee engagement,their perceptions of the leadership,and our ambition to be an ‘employerof choice’. Having committed peoplemakes a very real difference to a bank’s business, as research by the independent firm, InternationalSurvey Research, has indicated.

In 2005 our UK pension scheme‘afterwork’ was voted the bestEuropean Corporate Fund and the bestUK Pension Fund by Investment andPensions Europe magazine. Followingthe introduction of the Pensions Act2004, our UK pension arrangementsallow a flexible retirement age and the

On that basis the 2005 employeesurvey made promising reading, withemployee engagement up to 66% forthe Barclays Group, and particularlystrong gains in Barclaycard and UK Banking. 84% of employeesresponded to the survey, up from 69% in 2004, and 88% of questionsreceived significantly more positiveresponses than in 2004. Employees’pride in Barclays continues to rise – up from 71% to 76% this year.

Equal treatment for a diverseworkforceWe believe that a more diverseworkforce is a more creative and moresuccessful workforce. And we alsobelieve that the make-up of our teamsshould reflect the mix of local societies.

In the 2005 employee opinion survey, 80% of our employees agreedthat ‘management supports equalityand diversity in the workplace’ (75%in 2004).

We are close to our target of having3% of senior executives from ethnicminority groups (see page 47 fordata), but progress has been sloweron the number of women in seniorjobs and we are not satisfied with this. Some headway has been made: 250 senior women attended our firstworldwide women’s conference and Barclays France sponsored theWomen’s Forum for the Economy and Society in Normandy as well as holding its own women’sdevelopment workshops. Barclays

Highlights for 2005

We were ranked 8th in the Race for Opportunity benchmark.

We came 20th in Stonewall’sWorkplace Equality Index for 2005(the 7th highest placing for aprivate sector company).

We were 27th out of 80 companiesin the first ever Employers Forumon Disability benchmarkingexercise.

Barclays Capital US was namedEmployer of the Year by theNational Business and DisabilityCouncil.

Barclays Kenya won the 2005International Family CongressFamily Friendly Policy Award.


Employee OpinionSurvey key categories• Employee engagement: 66%

in 2005 compared with 62% in 2004 and 53% in 2003.

• Positive perceptions ofleadership: 58% in 2005compared with 51% in 2004 and 44% in 2003.

• Barclays asan employerof choice: 63% agree in 2005, compared with 57% in 2004 and 48% in 2003.

Graduates

Corporate responsibility isbecoming increasingly importantto talented employees. Researchby the graduate websitemilkround.com found that 40%of graduates had ruled out at leastone potential employer becauseof the nature of their industry, orbecause it had a poor reputation for its environmental oremployment practices.

“We are going for the besttalent in the world – from theUS, from India or wherever.”

Paul T IdzikChief Operating OfficerBarclaysin the Independent on Sunday22nd January 2006

Leading on disabilityThe number of people identifyingthemselves as disabled in ourEmployee Opinion Survey has gone upby 22% since 2004. This suggests thatemployees trust the confidentiality ofthe survey, and their honesty helps usassess what we need to do to providea better working environment. Wehave increased the support availableto disabled employees, ensuring weremove as many barriers as possible to enable all colleagues to perform at their best.

We have introduced a new mentoringprogramme that offers every disabledemployee the chance to have aspecially-trained mentor. The schemehas its own accessible website andphone line, as well as backgroundinformation in all the necessaryformats, be that Braille, large print,audio tape, or CD-ROM. The schemewas started in the UK, but is nowbeing launched in Barclays Africa and Middle East. We have also started to work with independentcharities on recruitment, so that wecan attract more disabled people atboth graduate and non-graduate level. And Barclays Capital took aleading role in hosting an InterbankGraduate Diversity Group event at our headquarters in Canary Wharf in 2005. This brought togetherrepresentatives from investment banks and universities across the UK, to discuss how to increase thenumber of talented disabled studentsapplying for jobs in the sector.

In Europe, Barclays Spain has recentlysigned a new agreement with ONCE,the Spanish organisation for disabledpeople, with the aim of hiring 70 newdisabled employees in a wide range of disciplines over the next four years.

AfricaIn South Africa, Absa held workshopsattended by 400 senior managers in2005 as part of its commitmentsunder the Financial Sector Charter on Black Economic Empowerment.Over 2,300 people attended a separate series of diversity workshops,including over 80% of the seniormanagement team. Other initiativesincluded diversity forums giving staffthe chance to raise issues about raceand gender, and Absa’s hosting ofWomen’s Networking Breakfasts.Senior commitment in this area isstrong: David Roberts, Chief Executiveof International Retail and CommercialBanking, held three events in Londonand Johannesburg to give seniorwomen an opportunity to discuss any barriers they may face.

Offshore outsourcingIn an intensely competitiveenvironment, we have to ensure that we remain cost-efficient and keep pace with structural changes in our industry, while ensuring that we do so in a socially responsible way. We renewed our GlobalisationOffshore Framework Agreement with Amicus for another two years in November 2005. The agreement is designed to protect staff whose

Spain is working towards an ‘Optima’accreditation, only awarded whenevery aspect of a business can showthat it is actively promoting equalitybetween men and women in theworkplace. Banca Woolwich in Italylinked up with a local universitybusiness school to establish anetworking, mentoring and trainingprogramme for senior women. Theseare only some of the initiatives weundertook in 2005 and we will beredoubling our efforts in 2006.

Older employees also bring usvaluable insights and experience.Since 2004 our employees have hadthe opportunity to work to age 70,should they so choose.

32

Inside BarclaysHow we treat our people

Spectrum

Spectrum, Barclays employeenetwork for gay, lesbian, bisexualand transgender staff, hosts regularnetworking events for colleagues.Building on a review of Barclayspolicies and practices to ensure thatall our employees were being treatedequally, the network recently hosteda ‘benefits’ lunch so that memberscould ask questions in a supportiveenvironment. Spectrum has workedclosely with the Brighton communitysponsoring a local AIDS hospice,Sussex Beacon, enabling it toparticipate in Brighton Pride andworking with the local branch staff to provide help behind the scenes on the day of Pride.

Pos+Ability

Pos+Ability provides a confidentialforum for disabled employees andemployees with an interest indisability issues to raise concernsand discuss solutions. This year thenetwork has organised disabilityawareness sessions across ourbusiness and network membershelped to set up Barclays centrallyrun Reasonable Adjustmentprogramme. This programmeensures necessary adjustments are made to disabled colleagues’working environments to enablethem to do their jobs.

Cultural DiversityNetworkThe Cultural Diversity Network(CDN) gives members personaldevelopment and mentoringopportunities. It has been involvedin a wide range of activities across the UK over the last year,such as recruitment and careerdevelopment workshops, andcultural diversity and networkingtraining. Network members havebeen active in fundraising, carryingout a wide range of events to raisefunds for their chosen charities.

“The Employee OpinionSurvey is a vital source ofcommunication from staff to me, and to my ExecutiveCommittee colleagues, tellingme what they think; telling me what they like and whatthey don’t like; telling mewhat they want me toconcentrate on. Whenthey talk, I’m listening.”

John VarleyGroup Chief Executive Barclays

jobs might be affected if we decide tomove some of our activities offshore.It covers:

• Early notification of any decision to close a site.

• Possibilities for redeployment.• In- and out-placement.• Training.

This agreement is now seen as anindustry benchmark, both by Amicusand other external commentators.Since the agreement was signed wehave created the equivalent of over1,000 full-time jobs in India, which has affected 1,176 UK employees. 673 of these were redeployedelsewhere in the Bank, and the restopted for voluntary redundancy.

Health and safetyHealth and safety is an integral part of being a responsible employer. Ourpolicies go beyond the minimum legalstandards, and their implementation is the direct responsibility of ourmanagers. In the UK we fund sevenAmicus health and safety experts toadvise our staff and carry out officeinspections. We achieved an 11%reduction in accidents at work in theUK in 2005, and a 35% reduction inincidents that were serious enough to need to be reported to the relevant authorities.

Contract cleanersWe have continued to makeimprovements to our arrangementsfor contract cleaners. Atkins Asset

113,300Barclays directly employs 113,300people worldwide.

Management, Mitie, LancasterCleaning and AIM Hygiene have allworked with us on the UK branchnetwork, and new contracts ensurethat all cleaners receive ‘fair wage’ pay rates, sick pay, training, andholiday and pension entitlements.

We have set out our 2005 targetsand achievements and our new goals for 2006, in the fold-out tablebehind page 2.


Externalendorsement…We were included in the CarbonDisclosure Project’s ClimateLeadership Index for the first time in 2005. This makes Barclays one of the top 60 companies in the world in this field.

We received a ‘premier league’ranking in the Business in theCommunity Environment Index 2005,thanks to an overall score of over95%. This put Barclays in the top 20 of 300+ participant companies and 3rd in the banking category.

There was a ‘highly commended’ in the Liveable City awards for the

quality of ourenvironmental management system and we were short-listed for the Mayor of London’s Green Procurementawards 2005.

…and internalrecognition

Earlier this year we asked our employees if they would callBarclays an environmentallyresponsible company, and 72% of the 55,000 who replied said yes – compared with 69% in 2004.

How we manageour environmental impact

We have already talked about howwe apply environmental principles tothe business of banking; this sectionis about how we manage our ownenvironmental performance.

Take the issue of CO2 emissions andclimate change as an example. Wehave already seen how the businessis responding commercially to thechallenge of climate change, but we also have to deal with it as a risk management issue for us as a business.

We operate a central environmentalmanagement system which is certified to the international standardISO 14001:2004, and we use this to monitor and improve ourperformance. We also have separateISO systems in Barclays Spain,Barclays Portugal and Barclaycard, and all of these are audited byindependent third parties. Even wherewe do not have an ISO system in placewe still work hard to improve ourperformance. Environmental reviewshave taken place at Barclays Capital in New York, and Barclays GlobalInvestors in San Francisco. Fullenvironmental audits have also beenundertaken in Singapore, Hong Kongand Tokyo.

Absa has been working on anenvironmental management systemcomparable to ISO 14001. Thisincludes a reduction in energy use andmore recycling. And they have alsostarted to sponsor the South African

Wildlife College, where game rangersand wildlife vets are trained.

Reducing our impactThe direct environmental impact offinancial services is relatively smallcompared, say, to mining or oil andgas, but we are doing what we can toreduce it still further. There are fourmain ways that we are doing this:

• Reducing our energy consumption. • Increasing our use of renewables. • Working towards 100% carbon

offsetting. • Taking a more active and creative

approach to recycling.

Using less energy…As Andrew Flett, our Head ofEnvironmental Management, says:“The greenest form of energy is theenergy you don’t use.” As energycosts have risen and the climatechange debate has intensified, this isboth the responsible and the sensiblething to do. There is a lot more detailon our targets and achievements onpages 44 and 45, but our bestsuccesses so far have been to:

• Reduce total energy consumptionin the UK by 14% since 2000, andby 3% per square metre of officespace. This has resulted in a

34

Inside BarclaysHow we manage ourenvironmental impact

Europe’s highest ‘living roof’Our worldwide headquarters inCanary Wharf was constructed with environmental considerationsin mind, and an integral part of that has been the decision to usethe roof space as a habitat for birdsand insects – particularly the blackredstart, one of the UK’s mostendangered birds.

At 160 metres above ground level it is the highest ‘living roof ’ in Europe and has been speciallydesigned to recreate the type ofhabitat that has been lost as the Isle of Dogs and Deptford areas have been redeveloped.

“[The Barclays building] is a rare environmentalachievement and a testamentto what can be achieved whenenvironmental considerationsare put at the heart of a major project.”

Environment BusinessApril 2005

“Barclays has the highest living roof in the worldspecifically designed for nature conservation and the enhancement of localbiodiversity. It is a beacon for other businesses anddevelopers to provide similarroofs in the London area andelsewhere in the country.”

Dusty GedgeLondon Biodiversity Partnership

reduction of 23,000 tonnes of CO2 emissions. Over the next five years we plan to cut our UKenergy consumption by another20% which will also reduce our CO2 emissions even further.

• Meet the emission reductiontargets demanded of us as amember of the UK EmissionsTrading Scheme, saving over12,000 tonnes of CO2 in the firstthree years of the scheme. Thefinancial incentives we have beengiven in return have been reinvestedin new energy-efficiency projects,like better air conditioning at ourcomputer centre in Gloucester.

• Set a new UK CO2 reduction targetwhich compares the amount ofcarbon we produce to the amountof UK income we receive – our‘carbon footprint’. Even thoughbanking is not a high carbon-emitting activity we still aim toreduce this from the 2005 level of19.4 tonnes of CO2 per £1million of UK income to 14.0 tonnes in the next five years. Measuring our carbon footprint in this waymeans that our performance can be directly compared to companies in other sectors for the first time.

…and more renewablesIn 2005 we agreed a new contract tobuy 30GWh of renewable electricityover the next three years – our largestever purchase of renewables, andenough to power about 230 branches,or 12% of the entire Barclays networkin the UK. This deal will save 12,900

tonnes of CO2, or the equivalent of theemissions produced by 7,900 homesor 11,900 cars in the course of a year.The rest of our UK energy is boughtfrom Climate Change Levy-exemptsources, which produce lower carbonemissions than traditional fuels.

Going carbon neutralOver the next two years we plan tomake our UK operations fully carbonneutral by offsetting our remainingCO2 emissions. We will be doing thisby investing in sustainable energyprojects and community-based energyefficiency schemes, especially indeveloping countries, and ideally inSouth Africa, where we now have asubstantial presence. This is still arelatively new field, and it may taketime to find the right projects, but thecommitment is there. If this carbon-offsetting approach works, the nextlogical step will be to extend it outsidethe UK. There are a number of

practical issues to be tackled in somemarkets, but, again, this is somethingwe will be aiming for in the long term.

One area that remains problematic for us is business travel – it is hard foran international bank to reduce thissignificantly when so muchof our business depends onit. All the same, we are doingwhat we can. Staff onlytravel when there is a clearbusiness need, and areencouraged to use newtechnology instead. In theUK our employee car schemesets upper emissions limitsfor its vehicles.

Another issue that looks fairlydifficult in the near future isthe task of quantifying theamount of emissionsgenerated by our supplychain which are indirectly


“As a key player in the internationalfinancial market, it is encouragingto see Barclays positive approachto the environment. This isillustrated by their ‘premier league’performance in Business in theCommunity’s annual EnvironmentIndex. Barclays is a company which ‘walks the talk’ on theenvironment, and is a proactivemember of Business in theEnvironment’s leadership team.”

Jim HaywoodDirectorBusiness in the Environment

“With Barclays support we havebeen able to take out a ten-yearlease, create 12 new jobs and assist hundreds of charities,schools, community groups andeven start-ups to get low-costfurniture. More importantly, it has put us on a more sustainablefooting overall and means we canprovide a long-term resource toLondon and beyond.”

Colin CrooksChief Executive Green-Works

UK and Europeanperformance targets2006-2010

What are we going to do?We have set new environmentalimprovement targets which supportour approach to managing both ourclimate change impacts and ourgeneral environmental footprint.

We believe targets help drive costsavings and operational efficiency(e.g. reduced resource consumption),improve purchasing decisions andsupport and enhance our reputationas a company which takes itsenvironmental responsibilitiesseriously.

Climate change• Reduce total CO2 emissions by

20% (using 2000 as the baseline).• Reduce carbon intensity from

19.4 tonnes CO2 (2005) to 14.0 tonnes CO2 per £1million of UK income.

• Reduce energy consumption(kWh) per m2 of floor area by 20%at a rate of no less than 4% p.a.

Environmental management• Reduce water consumption (m3)

per m2 of floor area by 20% at a rate of no less than 4% p.a.

• Reduce A4 copier paperconsumption per head by 10% at a rate of no less than 2% p.a.

• Maintain percentage of recycledpaper used internally above 80%of total used.

• Reduce volume of general wastegenerated at major sites by 20% at a rate of no less than 4% p.a.

• Increase volume of waste recycledat major sites by 20% at a rate of no less than 4% p.a.

• Reuse or recycle 95% of waste IT equipment each year.

European performance targets • Reduce energy (kWh per m2 of

floor area) and water (m3 perhead) consumption by 5%.

• Reduce A4 copier paperconsumption per head by 10%.

• Reuse or recycle 45% of waste IT equipment each year.

attributable to us. However, we are working actively with suppliers to improve joint environmentalperformance (see the section onpage 43).

Recycling We have made very good progress this year on using more recycledcopier paper – 80% of our copierpaper now comes from recycled stock, which saves not only moneybut 23,000 trees every year. But ourbiggest recycling success in 2005 was recycling unwanted furniture.

When we moved 5,000 of our Londonemployees into our new headquartersin Canary Wharf over 2,500 tonnes offurniture were no longer needed.Instead of taking the risk that all thiswould be sent to landfill, we signedone of the biggest contracts to recyclefurniture that a British company hasever undertaken. Green-Works, a not-for-profit organisation, took on all theunwanted office desks, chairs andcabinets, and will be selling them onat low cost to community groups,schools and start-up businesses. Wealso worked with Green-Works and achildren’s charity to send some of thereconditioned furniture to Ghana,where it will be used in schools andhospitals. Like us, neither of theorganisations had done this before,but it has opened up new possibilitiesfor both of them.

Full technical information about ourenvironmental performance can befound on pages 44 and 45, and onour website at www.barclays.com/corporateresponsibility/

detaileddata.htm. And you candownload our environmental policy – revised this year – atwww.barclays.com/environment

Barclays Earthwatch FellowshipSince 2002, 30 employees haveparticipated in two-weekenvironmental research projects in Africa. Places are awarded toemployees who are committed toraising awareness of environmentalissues in their workplace orcommunity

36

Barclays has a long tradition ofcommunity involvement going backto our Quaker roots. Ideas aboutcommunity involvement havechanged a lot since then. As aresponsible bank it is vital to us thatwe invest in the communities wherewe operate, and ensure that ourfunding makes a positive impact.Our community work is based onpartnerships: we offer expertise and staff time, as well as financialinvestment, while our partnersprovide specialised knowledge and experience.

With 1% of our UK and African profits going into our communityprogramme, over 7,500 organisationsbenefited from our support in 2005.Our total support during the year was£39.1m. We have chosen to focus on a few examples here – you canread more about the rest of ourprogramme on our website atwww.barclays.com/community

The stories we have chosen illustratethree key themes:

• Making an impact worldwide acrossall our communities, in a way thatmost closely reflects local needs.

• Involving our employees. • Relating our community work

to our own business especiallywhere our expertise will make a real difference.

A worldwide impact…Our biggest international communitystory in 2005 was Barclays MilesAhead, a five-month sponsoredoverland expedition from London to Cape Town that united our UK,European and African communityprogrammes across 13 countries.Along the route Barclays people raisedfunds for charity and volunteered intheir communities. Over 7,000employees took part in the fundraisingevents, which ranged from footballevents for disadvantaged children in France, to building homes withHabitat for Humanity in Uganda, tohelping AIDS orphans in Zimbabwe.Over £1.7m was raised for Africancharities, including £350,000 forUnicef ’s Girls Education Movement inSouth Africa, which is helping to teach1.5 million children how to protectthemselves from HIV/AIDS.

…across all our communitiesWe are seeing real momentum in ourinternational programmes. BarclaycardInternational, in particular, madenotable progress in 2005. 70% ofemployees are participating in somesort of community activity, rising toover 90% in our Barclaycard USbusiness.

In Barclays Spain many employees are now involved in communityvolunteering, and from 2006 onwards0.5% of Barclays Spain’s pre-taxprofits will be invested in thecommunity.

In Asia Pacific, Barclays set up a region-wide corporate responsibilitycommittee in 2005 with an employeevolunteering group covering Singapore,Hong Kong and Japan. Highlights in 2005 included a charity footballtournament in Japan and a charityauction in Australia. In total, the AsiaPacific community programme hasresulted in over £65,000 going to good causes in the region.

Out in the community

Inside Barclays

A gain in Spain

The Nueva Luz project in Taranconinvolved seven Barclays volunteersfrom the local branch. The teamworked in partnership with 35people with learning disabilitiesfrom Nueva Luz – an organisationthat supports people with learningdisabilities. Together they planted a green zone in an industrial area,improving the environment for localpeople, and creating a place thatwill provide long-term opportunitiesfor education, employment andsocial integration for Nueva Luz and the people it works with.


In the ‘Growth in Africa’ chapter wetalked about the work both Barclaysand Absa are doing on HIV/AIDS. In2005 we refocused our communitystrategy in the region, moving awayfrom large pan-African projects, toconcentrate more on what mattersmost at a country level, with anemphasis on economic development.For example, in the Seychelles we haveinvested in environmental projects,whereas in Botswana the focus hasbeen on HIV/AIDS. Barclays Kenyasupports girls’ education, recentlypicking up plaudits for the ‘bestinitiative in support of millenniumdevelopment goals’ at the AfricaInvestor Awards in Johannesburg.

In the UKWe are proud to have one of the mostdeveloped corporate programmes inthe UK. We were ranked ninth largestcorporate donor in the 2004 GivingList, and in 2005 we supported 7,500charities, helped our people raise£13.4m through matching stafffundraising, and supported ouremployees to do 77,400 hours of volunteering.

Barclays Spaces for Sports is ourlargest project in the UK, with £30mbeing invested over three years increating and regenerating 150 sportssites, and providing coaching kit togroups across the country. Our charitypartners are the Football Foundationand Groundwork UK, building on ourearlier work with Groundwork whichregenerated over 800 open spaces for

communities, and helped manythousands of people to benefit fromthe positive power of sport.

Barclays Spaces for Sports is a grass-roots counterpart to our sponsorshipof the Barclays Premiership, with 21flagship community sports sites beingcreated with Premiership clubs suchas Liverpool and Tottenham Hotspur.It is building stronger communitiesand giving our people the chance to volunteer at their local sites – over 2,000 have already registeredan interest.

At the end of the first full year, threenew flagship sites have been openedand another 54 local sites have beencompleted. The coaching kit schemehas been very popular, and over 1,200disadvantaged clubs and communitygroups have taken part, benefitingover 40,000 people.

Responding to disasterIn the face of disasters around theworld, we made donations totalling£707,000 in 2005. This included£422,000 towards tsunami reliefefforts, with the remaining £285,000going to support aid agencies helpingvictims of the Asian earthquake,Hurricane Katrina, the Southern Africafamine, the West Africa famine andthe London bombings. Our employeesalways respond generously toemergencies, and we support theirefforts by matching fundraising efforts and donations made throughpayroll giving.

In the wake of Hurricane Katrina,Barclays Capital employees in NewYork raised an impressive $70,000which was donated to rebuild a clinic in Bayou La Batre, Alabama.Employees of Barclays Global Investorsraised $80,000 for the victims ofHurricane Katrina, and Barclaycard

Barclays Miles Ahead

Total community contribution(£m)

40

35

30

25

20

15

10

5

02001 2002 2003 2004 2005

UK

Overseas

Absa

Absa has a well-developedcommunity programme, focusingon health, education, and enterpriseprojects, especially those for womenand disabled people. Barclays andAbsa are increasingly workingtogether on projects – an examplebeing the joint collaboration on theWalter Sisulu Paediatric CardiacCentre, where we are supportinglife-saving heart surgery fordisadvantaged children from acrossAfrica. Likewise, Absa is leading thedevelopment of the first Spaces forSport sites in South Africa.

There is more on these initiatives on our websitewww.barclays.co.uk/spacesforsport and the Absa websitewww.absa.co.za

38

Inside BarclaysOut in the community

Helping Kenyan schools

At enrolment stage the numbers ofboys and girls in Kenyan schools areabout even, but by stage eight morethan half of the girls have beenforced to drop out, whether to helpwith the family, or because they are under other social pressures.Research has consistently shown that educating women is one of themost effective ways to raise livingstandards for the whole community –and hence our project. Working withUnicef, we have invested £140,000 in Kenyan schools, tackling the issueswhich can be a real obstacle to girlsstaying at school. In total, ourfunding has helped Unicef work with30 schools. We have also fundedscholarships for promising femalestudents, and put much-neededfunding into new science labs and IT facilities, including 430 computersfor schools in 2005.

“We have received all the items in the Barclays Spaces for SportsCoaching Pack and are quiteoverwhelmed with the quality and quantity of this award. Thankyou again most sincerely to allconcerned with granting thisaward to Special Olympics City of Birmingham. It will be of great benefit to our athletes and coaches alike.”

Christine EatonSpecial OlympicsBirmingham

Barclays Spaces for Sports

Local communities

A large part of the UKcommunitybudget isadministered by our regionalcommunitymanagers whosupport initiatives that meet the needs of local communities – everything from sea safetyprogrammes with the RNLI in theSouth West to the establishment ofan Asian community radio station – Spice FM – in Tyne and Wear. In2005 the themes we focused onwere arts, education, disability, theenvironment, and social inclusion.

You can read about these on our websitewww.barclays.com/community

VolunteeringThis is as much about time as it isabout money. Employee volunteeringis a cornerstone of our communityprogramme. Our staff enjoy gettinginvolved, they learn new skills, andtheir time and energy can make a bigdifference. This is why we sponsorCommunity Service Volunteers’(CSV’s) annual ‘Make a DifferenceDay’ which in 2005 got 114,000people across the UK involved insome sort of community activity.‘Make a Difference Day’ is the majorfocus for employee volunteeringactivity at Barclays. In 2005, over10,000 of our own staff took part, half from the UK, and half fromoverseas. In Botswana, participationlevels reached 96% for the secondyear running.

In Spain, 430 employees took part this year, a significant increase on2004. 70 different events took placethroughout the country, ranging from running an event for people with Alzheimer’s disease, to theNueva Luz project detailed previously.

The United Arab Emirates joined in forthe first time in 2005, and 65% of theteam took part, many helping out attwo centres for children with specialneeds in Abu Dhabi and Marzil.

Other employees were involved in a number of mentoring programmes,supporting a range of different groupsfrom homeless people to Prince’sTrust clients. For example, we have

employees in the US helped rehouse20 of the families in Delaware,donating furniture and raising over$50,000 to support them.

In addition, $40,000 was raised in New York for the InternationalRescue Committee’s work in Pakistanfollowing the Asian earthquake.

Involving Barclays peopleIn 2005, over 26,000 Barclaysemployees took part in supportedfundraising or volunteering.

been a member of the NationalMentoring Consortium’s ethnicminority undergraduate scheme fornearly ten years, and we are one oftheir largest sources of mentors, withsome 70 Barclays people volunteering

26,978 Barclays employees tookpart in supported fundraising orvolunteering in 2005.


“Barclays continues to be a key corporate supporterof the Red Cross. The speedwith which they respond isessential to the work we do in the UK and overseas,and I would personally liketo thank Barclays and itsemployees for their ongoinginvaluable support.”

Sir Nicholas YoungChief Executive British Red Cross

From Canary Wharf to Tower HamletsSimon Leathes, Vice-Chairman ofBarclays Capital and Chair of theBarclays Capital Charities Committee,explains how his colleagues sharedtheir own skills with young peoplefrom the local Community Linksproject: “20 unemployed youngadults came into our offices and ourHR team ran a CV and interview skillsworkshop session. It worked reallywell and we are going to do it againon a regular basis.”

The team are also helping one oftheir projects, Apna Ghar, become

an independent registered charity.Apna Ghar provides support for Asian women and children who have been victims of domesticviolence. As Simon says: “We have been involved with them for about five years, providing not just funding support, but legal advice,financial management assistanceand operational guidance. These things are second nature to us butchallenging to a small organisationwhich needs to focus its efforts on the people it aims to help.”

Barclays ‘Make a Difference Day’

every academic year. Each onesupports a black or Asian student who is planning a managerial orprofessional career. We were thescheme’s ‘Employer of the Year’ in2004-2005, and four of our staff werealso voted ‘Mentors of the Year’.

Matched fundingWherever they are in the world,Barclays people can raise money for their own favourite charity andhave the amount raised matched by Barclays, up to a set maximum.This scheme has always been verypopular with employees in the UK and Africa, and we have seen a big increase in the take-up fromemployees in Barclays Capital in theUS and Asia Pacific. One example wasOperation Santa Claus, a Christmasappeal for 12 Hong Kong charitieswhich raised HK$315,000.

Using our expertiseWe have referred to the work we do as a bank to tackle issues likefinancial exclusion, and the samethemes are mirrored in ourcommunity programme. We make the most difference where we canoffer not just money but expertise,including advice, employeevolunteers, and staff placements. In 2006, we are undertaking anumber of such projects in the UK.This includes work with NCH Actionfor Children and Help the Aged, aswell as the existing BarclaycardHorizons programme.

A new theme in 2006 will focus onhelping disadvantaged people get jobs or set up their own businesses. A significant proportion of ourcommunity spend in the UK will befocused on this theme, and we will beworking with partner organisationslike Crisis, Leonard Cheshire andBusiness in Prisons, among others.

A parallel project in Africa, whereemployees offer their expertise, isJunior Achievers International. Thishelps school children develop anunderstanding of business principlesand skills, and covers Botswana,Ghana, Kenya, South Africa, Tanzania,and Zimbabwe, with new projectsplanned in Uganda and Zambia.

In the first year over 3,500 studentswere involved at 88 schools, and 88 of our staff took part as volunteers. In Kenya, our employees worked with11 schools in Nairobi and Mombasa, and nearly 1,500 students were giventhe chance to do work experience orshadow a member of staff for a day.The feedback we received has provedthe value of the programme.

There is more information on allthese projects on our websitewww.barclays.com/community

26,978

40

Inside Barclays

Where we stand on key issues

GovernanceOur licence to do business depends on good governance. We continued to develop our approach to CRgovernance in 2005, ensuring clearaccountability for action through our internal control and riskmanagement systems.

More information on Barclaysgovernance is available in our Annual Report.

Brand and Reputation CommitteeThe Brand and Reputation Committee,a sub-committee of Group ExecutiveCommittee, is chaired by Sir NigelRudd, Deputy Chairman and a non-executive Director on the Board.Following a review led by the GroupChief Executive, the focus of theCommittee is on identifying andmanaging issues of ethical andreputational significance to theBarclays Group. The Committee met five times during the year.

Internal controlOur governance standards form thefoundation of our system of internalcontrol and governance, consistentwith the Turnbull Guidance forDirectors on Internal Control for UK listed companies.

A specific standard on CorporateResponsibility underpins our‘responsible banking’ philosophy.

Bribery and corruption preventionBarclays has policies on bribery/

corruption and gifts/entertainmentwhich outline clearly the behaviourand standards expected in dealingwith customers, business partners and suppliers so that our integrity isnot compromised – for example, themaking of facilitation payments by our employees or others acting on our behalf is prohibited. Breaches ofthese policies result in disciplinaryaction and reported incidences areinvestigated. Any employee mayreport allegations without fear and procedures for doing so aredetailed in our Raising Concerns(Whistleblowing) policy. Reports canbe made via their line manager orlocal compliance team or, if they feelunable to use these channels, via acentral confidential telephone andemail contact.

Codes of conductBarclays has a range of policiescovering standards of behaviour andbusiness conduct. An objective for2006 is to refine and communicatethese as a set of business principlesand guidance applicable globally to all parts of our organisation.

Stakeholder engagementOur primary stakeholders are ourcustomers, our employees, and ourshareholders, and we have alreadytalked in detail about the first twogroups earlier in this report.

ShareholdersOur shareholders number some808,000 institutions and private

Members of the Brand and ReputationCommittee

Sir Nigel Rudd* Deputy Chairman(Chairman of the Committee)

Gary Hoffman*° Chairman, UK Banking and Chairman,Barclaycard

Thomas L Kalaris Chief Executive,Wealth Management (representing Barclays Capital and Barclays Global Investors)

David Roberts*° Chief Executive, International Retail and Commercial Banking

Paul T Idzik° Chief Operating Officer

Naguib Kheraj*° Group Finance Director

Mark Harding General Counsel

Robert Le Blanc Risk Director

Stephen Whitehead Corporate Affairs Director

Jim Hytner Marketing Director

*denotes member of the Board° denotes member of Group

Executive Committee


individuals, including pension funds,mutual funds and insurancecompanies worldwide. Our seniorexecutives hold regular meetings withinstitutional shareholders in the UKand overseas, discussing strategy andfinancial performance. Our Chairman,Senior Independent Director andCorporate Responsibility Director also meet with investors and relatedorganisations to discuss corporategovernance and socially responsibleinvestment issues. Feedback fromboth mainstream and specialistinvestors is sought annually throughthird-party research and is reported to the Board.

We make constructive use of our Annual General Meeting tocommunicate with shareholders. Allresolutions are voted on a poll basis,so that the views of all shareholdersare reflected proportionately. The poll results are then madeavailable on our website,www.investorrelations.barclays.com.

During 2005 we proactively tracedand returned £10m to shareholderswho had lost touch with us.

Wider audiencesAlongside our primary stakeholderswe keep in touch with the views andconcerns of a much broader range ofaudiences through a programme ofresearch and dialogue.

We maintain contact with national andinternational NGOs, both directly, and

through collective initiatives. Forexample, our development work on theEquator Principles has involved dialoguewith NGOs. As we have discussed in thechapter ‘A different environment’, anumber of these groups asked forgreater transparency in this area whichwe are addressing both in this reportand going forward in 2006.

An annual consultation is undertakenspecifically related to our corporateresponsibility report. Discussions areheld with representatives from a widerange of groups including investors,NGOs, the voluntary sector, consumergroups, government, media andcorporate responsibility specialists.The independent consultancy NextSteps managed this for us in 2005,and we have taken on much of thefeedback in producing our report thisyear. Key observations included:

• The need to explain more clearlywhy corporate responsibility isimportant to us.

• The need for more detail on therationale behind our strategicdecisions, and more context around key issues and initiatives.

• The need to broaden the contentinternationally.

• That we did not give enoughattention to negative issues or areas where we need to improve.

• The need for more robustcommitments.

Regulation and complianceLegal and regulatory compliance is a

basic requirement for every responsiblebusiness and, as an international bank, we have extensive dealings withgovernments, central banks, regulators,and other agencies around the world.This currently extends to over 200relationships in the 60 countries inwhich we operate. These relationshipsusually stem from the requirement tohave licences and permissions tosupport our business operations, buttypically there is also ongoing contact

CorporateResponsibility risksenshrined in ourgovernance standard

• Treat customers fairly.• Ensure suppliers adhere to the

moral and ethical standardsrequired by Barclays.

• Consider the impact of business decisions or activity on the communities in which we operate.

• Identify and manage/reduce the environmental impact of our activities.

• Create an inclusive environmentfor employees.

42

as part of the supervision of the localbanking system. We take a proactiveapproach to this process, aiming to be open and transparent about ourstrategy and business performance,and our policies on risk managementand control.

IndicesA key performance indicator ofBarclays corporate responsibilitystatus is the outcome of performanceassessments by a number of ethical indices, rating agencies, andsocially responsible investors. Theseassessments are generally based oninformation provided by us, and theindex-compilers’ own research.

Barclays is a long-standing member of the Dow Jones Sustainability Index, or DJSI, and FTSE4Good ethical indexseries, and participates in the annualBusiness in the Community (BITC)Corporate Responsibility Index andEnvironment Index. In 2005, Barclayswas ranked as top quartile by the DJSIwithin our industry sector (based on theSAM methodology). We were rankedfirst in the investor relations and

environmental reporting categories, and second in the corporatecitizenship/philanthropy section.Barclays was ranked in the top 20 of300+ participant companies in the BITCEnvironment Index, and third in thebanking category. In the BITC CorporateResponsibility Index we ranked 32ndout of 132 participants, and weachieved outstanding performance(95% or above) in corporate strategy,environmental management andmarketplace management.

Shareholder voting Shareholder voting is an importantelement of corporate governance.Barclays Global Investors (BGI)manages funds on behalf of its clientsand therefore votes a substantialnumber of proxies on their behalfeach year. Our policy is to vote proxies(or not to vote as appropriate) foreach company in which we hold abeneficial interest on behalf of clients,based on the best economic interestof the underlying funds. Thesedecisions are made by a corporategovernance team overseen by senior managers and directors from across BGI.

Human rightsThe debate about the responsibilitiesof business in relation to human rights continues to be contentious,particularly in regions wheregovernment is weak or corrupt. Our approach has been to develop our own statement on human rights,which outlines the commitments we

make relating to our role as a providerof financial services, an employer, anda purchaser of goods and services.The UN Universal Declaration ofHuman Rights was the starting pointfor this statement, and it was alsoinformed by the International LabourOrganisation conventions and treaties.Other initiatives such as the content of the UN Draft Norms on the human rights responsibilities ofmultinational corporations, and theOECD Guidelines for MultinationalCompanies provided a helpful steer to the issues in scope. Our approachwas formally agreed by our Brand andReputation Committee in June 2004,and work on strengthening certainaspects continued through 2005. In particular we have focused on the screening process applied to oursuppliers. In 2006 we will be workingon further integrating social andhuman rights criteria into our lendingassessments, and providing moreexplicit guidance for our lendingmanagers.

We continued our work with theinternational Business Leaders’Initiative on Human Rights, or BLIHR,in 2005. Barclays is the only financialservices company in this group.Through this project we are exploringhow companies can best integratehuman rights issues into theirdecision-making processes. Wewelcomed the appointment by the UN of a Special Representative,Professor John Ruggie, to take forwardconsultation around corporate

Inside BarclaysWhere we stand on key issues


responsibilities in this area. The BLIHRgroup was one of the first businessaudiences consulted by ProfessorRuggie after his appointment. BLIHR has also joined forces with the UN Global Compact and HighCommission for Human Rights toproduce a practical toolkit forbusinesses wishing to address theissue of human rights. This will beupdated and extended in 2006following international consultation.

The Guide for Integrating HumanRights into Business Management canbe accessed via the BLIHR or GlobalCompact websites (www.blihr.org,www.unglobalcompact.org).

You can read our full human rights policy on our website atwww.barclays.com/responsibility

Supply chainIn 2005 our global sourcing teamreviewed and reissued our supplychain policy, with the aim ofstrengthening the corporateresponsibility aspects of ourprocurement processes. As a result, a detailed questionnaire has beendeveloped to assess new and existingsuppliers, and work is under way with 50 of our largest suppliers, whotogether account for over £2bn, or50%, of our worldwide spend. Wehave also earmarked 30 suppliers in markets and sectors with higherrisk potential, such as clothing andtextiles, and paper products, to takepart in the first phase.

New tenders will include a detailedrisk assessment based on the marketand the sector in question, and socialand environmental factors will play a larger part in the final decision.Aspects such as health and safety,child labour, freedom of employment,freedom of association, discrimination,disciplinary practices, working hours,and remuneration will be reviewed, as will equality and diversity inemployment standards, provision of products and services, andinteractions with other suppliers.

These considerations will be built intonew supply contracts, and we will alsobe working with our suppliers to helpthem improve performance in anyareas which we believe do not meetour benchmark.

You can read more detailedinformation on our Supply Chainpolicy on our website atwww.barclays.com/supplier/aiming_high_commercial_principles.html

Political donationsThe Group did not give any money for political purposes in the UnitedKingdom, nor did it make anydonations to EU political organisationsor incur any EU political expenditureduring the year. Absa Group Limited,in which the Group acquired a majoritystake in 2005, made donationstotalling £224,400 in 2005 inaccordance with its policy of makingpolitical donations to the major South African parties to support the

development of democracy in South Africa. The Group made noother political donations in 2005.

LobbyingNaturally we monitor legislativechanges in markets where we dobusiness, and review any newdevelopments that might affect us or our customers. If we have a strongview we will make that known togovernments and regulators eitherdirectly or via our trade associations.We have public policy specialists in the UK, US and Africa, who are wellacquainted with accepted goodpractice in making politicalrepresentations.

We collaborate with a number ofindustry and political working groups:for example, in the UK we are amember of the Financial ServicesAuthority’s Financial CapabilityWorking Group on ‘Borrowing: makinginformed decisions’. This workinggroup also includes other financialservice organisations, the Office of Fair Trading, the Department of Tradeand Industry, HM Treasury, and theMoney Advice Trust.

The Hong Kong Corporate SocialResponsibility Charter brings togethera unique group of business leaderswho all share a common commitmentto Corporate Social Responsibility(CSR). As one of the founding

Hong Kong CSR Charter

signatories of the Charter we havedemonstrated our commitment toprovide leadership in CSR and toincorporate it into our organisationalstrategy and operations.

44

Other information

UK Targets 2000-2005Target Actual Achieved

Reduce energy consumption per m2 of floor area –10% –3%

Reduce water consumption per m2 of floor area –10% –16%

Reduce CO2 emissions per km of car travel –6% –2%

Reduce copier paper consumption per head –10% –11%

Increase percentage of recycled copier paper used 62% 80%

Reuse or recycle waste IT equipment 87% 95%

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Environmental performance 2000-2005

Over the last five years we have hadmixed results but learnt a lot abouthow to manage our environmentalimpacts. This learning has beenfactored into new targets for 2006-2010.

UK energyOverall consumption is down 14% butonly by 3% when the decrease in floorarea since 2000 is taken into account.2005 was a particularly challengingyear for energy demand due tosignificant expansion of our BarclaysCapital operation and the dual running of London sites as we movedemployees to our new global HQ.

UK car travelDistances travelled reflect the growthin our operations since 2000. During2005 we experienced data collectiondifficulties requiring us to estimatemileage during the second half of the year. The ‘How we manage our environmental impact’ sectiondescribes some of the ways we plan to tackle the environmental impacts of our growing energy needs andbusiness travel.

UK paperAs a service-based industry we use a lot of paper and the need hasincreased as our business has grown.However, we have been successful insignificantly increasing the amount ofrecycled copier paper used. In 2005,

‘Total Paper’ includes statements andcustomer letters in addition to copierpaper, internal publications andmarketing materials.

UK waste and recyclingThis is the first year we have reportedgeneral waste data. We have also setUK targets on waste and recycling.

International data We have increased the coverage of our data collection: in Europe we havebuilt on what is already being providedby France, Spain and Portugal toinclude Barclays Capital in France and Germany, and Banca Woolwich in Italy. For the first time we have also been able to report on our otherinternational operations. We havegiven an indication where there aregaps in this data, notably the lack ofcoverage in Africa. This data excludesAbsa and highlights a level ofestimation that has gone into Barclays

Africa data due to the challenges ofimplementing an EMS in this region of the business.

Further detail on European targetsand performance is available atwww.barclays.com/corporateresponsibility/detaileddata.htm

Datatables


1st for EnvironmentalReporting

2005 Dow Jones Sustainability Index(Banking sector)

UK carbon intensityTonnes CO2/£m income(a)

25

20

15

10

5

02004 2005 2010

(target)

Africa (excludingAbsa) 4% Europe 6%

UK 82% US &Asia Pacific 8%

CO2 emissions from energy and travel

Environmental dataPercentage change Baseline

against baseline 2005 2004 (2000)

UK Estimated coverage of data (by employees) – 95%

CO2 emissions (Energy and all travel) tonnes –10% 207,650 200,145 230,627Energy GWh –14% 497 459 580Energy per m2 kWh/m2 –3% 309 298 320Business travel (car, rail, air) million km 11% 246 308 221Business travel by car g/km –2% 183.7 184.3 186.5(b)

Water use per m2 m3/m2 –16% 0.48 0.49 0.57Copier paper per person kg/FTE –11% 39.00 43.63 43.66(c)

% of recycled copier paper used % 48% 80% 57% 32%Paper (total) tonnes 17,198 15,944 n/aGeneral office waste tonnes 11,769 n/a n/aGeneral waste recycled tonnes 6,155 n/a n/a% of WEEE(d) reused/recycled % –4% 95% 98% 98%(c)

Employees No. 8% 62,682 60,000 58,200Floor space 000 m2 –11% 1,608 1,538 1,814

Continental EuropeEstimated coverage of data (by employees) – 85%

CO2 emissions (Energy and air travel) tonnes 15,965Energy GWh 40Energy per m2 kWh/m2 171Business air travel million km 4Water use per m2 m3/m2 0.35Copier paper per person kg/FTE 95.35Employees No. 6,419Floor space 000 m2 232

Africa, Americas and Asia Pacific(e)

Estimated coverage of data (by employees) – 25%

CO2 emissions (Energy and air travel) tonnes 31,415Energy GWh 58Energy per m2(f ) kWh/m2 551Business air travel million km 7Copier paper per person(f ) kg/FTE 118.17Employees No. 47,236Floor space(f ) 000 m2 66

Notes(a) Carbon intensity is calculated using UK income net of insurance claims.(b) Baseline figures are 2002.(c) Baseline figures are 2001.(d) Waste Electrical and Electronic Equipment.(e) This is the first year of data capture for sites outside Europe and excludes Absa.(f ) Excludes Barclays Africa.

46

Other informationData tables

Working with communities

Global 2005 2004 2003

Total community contribution £39.1m £32.0m £32.8m

Employees and pensioners receiving support for fundraising or volunteering(a) 26,978 25,194 20,053Amount raised by employees and pensioners through matched funding scheme (including Barclays matching)(b) £13.8m – –Number of activities match funded(b) 11,644 – –Employee volunteers(c) 18,608 18,946 15,170

UKDirect donations to UK charities £16.7m £11.2m £9.9mUK charities/voluntary organisations supported by Barclays(d) 7,515 6,774 6,230Amount given through UK Payroll Giving programme – including Barclays matching(e) £1.50m £1.29m £1.04mBank hours given to support UK volunteers 77,413 81,763 61,275Amount raised by employees and pensioners through matched funding £13.4m £10.7m £8.9mEmployees receiving paid time off for volunteering 9,926 9,855 8,188

Notes(a) UK volunteering and fundraising plus global Make A Difference Day volunteering.(b) Data first captured globally for 2005.(c) All UK volunteering plus global Make A Difference Day volunteering.(d) Any support from Barclays (volunteering, fundraising, donation, etc) – figures include local branches of national charities as separate organisations.(e) Excludes donations for Asian Tsunami.

Overseas community investment by region (£)

2005 2004 2003

Europe 882,000 375,000 415,000

Africa 1,696,000 1,507,000 1,996,000

USA/Canada 1,115,000 490,000 570,000

Asia Pacific 139,000 94,000 427,000

South America 19,000 14,000 8,000

Barclays PLC financial overview2005(a) 2004(a)

Profit before tax £5,280m £4,580m

Tax on profit on ordinary activities £1,439m £1,279m

Profit attributable to equity holders of the parent £3,447m £3,254m

Post-tax return on average shareholders’ equity 21.1% 21.7%

Earnings per share 54.4p 51.0p

Dividend per share 26.6p 24.0p

Staff costs £6,318m £5,227m

Employees: Full-Time Equivalent 113,300 78,400

Note(a) Figures reported according to International Financial Reporting Standards (IFRS). 2004 figures have been restated to reflect IFRS.

Further information on Barclays financial performance is available in the Annual Report 2005.


Notes(a) Staff numbers are Barclays Bank PLC UK permanent and fixed term contract staff only. These figures differ from those given in the Barclays PLC Annual Report which are based on

full-time equivalent.(b) Data to 30th September 2005.(c) Includes management and senior executive grades.(d) Data from Employee Opinion Survey.

Global employment statistics 2005(a)

Full-Time Equivalent (FTE) 113,300

Total employee headcount 126,000

Percentage of female employees 61.9%

Percentage working part time 15.4%

Turnover rate 17.8%

Resignation rate 10.9%

Note(a) 2005 is the first year this data has been captured on a

global basis. Data based on 85% coverage by headcount.

Barclays employees

UK employment statistics(a)(b) 2005 2004 2003

Total employees 62,682 62,928 61,093Average length of service (years) 10.7 11.3 11.0Percentage with parental responsibilities 29.6% 31.2% 36.0%Percentage working part time 25.5% 26.2% 25.0%Sickness absence rate 4.2% 4.6% 5.0%Turnover rate 20.4% 19.4% 20.1%Resignation rate 11.6% 12.1% 12.1%

Women in BarclaysPercentage of all employees 64.7% 65.5% 66.0%Percentage of management grades(c) 32.8% 33.0% 30.0%Percentage of senior executives 12.6% 12.8% 13.0%

Ethnic minorities in BarclaysPercentage of all employees 10.8% 9.8% 8.0%Percentage of management grades(c) 5.4% 5.0% 4.2%Percentage of senior executives 2.5% 2.4% 2.7%

Disabled employees in BarclaysPercentage of all employees(d) 3.4% 3.2% 3.0%

Age profileEmployees aged under 25 17.9% 17.8% 16.5%Employees aged 25-29 14.1% 12.9% 12.0%Employees aged 30-49 57.1% 58.5% 61.0%Employees aged 50+ 11.0% 10.5% 10.4%

PensionsBarclays Bank UK Retirement Fund active members 56,608 60,837 62,761Pensions in payment 42,258 40,926 39,292

48

Barclays has commissioned The CorporateCitizenship Company to provide it withexternal assurance and commentary on its Corporate Responsibility Report 2005.Barclays management has prepared the report and is responsible for its contents. Our objectives were to review its contents and presentation, to conduct selected checks to underlying corporate records, and to provide this statement for which we have sole responsibility.

A full statement of our external assuranceand commentary is available atwww.barclays.com/corporateresponsibility/detailassure.htm, including details aboutThe Corporate Citizenship Company, ourrelationship with Barclays and the assuranceprocess we have adopted. This statementsummarises our principal findings.

Our opinionIn our opinion, the report provides a fair and balanced representation of the progressBarclays is making in living out itscommitments to corporate responsibility.Where gaps in available performance dataand stakeholder views on material issuesexist, they are identified below.

In forming our opinion and making ourcomments, we have had regard to theprinciples underlying the internationalassurance standard AA1000(www.accountability.org.uk), notablyconcerning materiality, completeness andresponsiveness. We have also considered the 11 reporting principles judged essentialby the June 2002 GRI sustainability reportingguidelines (www.globalreporting.org).

CommentaryA corporate responsibility report should explainhow the company impacts on society, lookingat all the important economic, social andenvironmental concerns of its stakeholders. It

should show how crucial decisions are madeand differing interests are balanced. Honestabout shortcomings, it should demonstratehow the organisation is responsive, bylistening, learning and improving.

On this basis, we believe Barclays seventhcorporate responsibility report marks asignificant step forward. Last year’s reportstated: “If we are to achieve our ambitiousaims, we must be a leader in corporateresponsibility.” This year’s report strengthensBarclays credentials for aspiring to that role,particularly in relation to its role in the EquatorPrinciples, its work on carbon emissionstrading, and support of financial inclusion.

The new issues-led approach to reportingmakes it clear what the bank identifies as its most significant impacts and what itconsiders most material to stakeholders. This approach was informed by stakeholderconsultation and it helps to demonstrateBarclays responsiveness.

Looking aheadThe challenge for Barclays now is to build on this progress, and to provide stakeholderswith a more complete account of issuesmaterial to their respective interests. Webelieve this should focus on four areas:

First, Barclays should deepen and add to thoseareas most relevant to a bank’s stakeholders,where it can have most impact. For example,consumer indebtedness, where moreinformation on the nature and extent of thechallenges, and an expanded commentary onactions being taken, would be helpful. Barclaysshould also give more detail on how itsapproach to corporate responsibility supportsa broader vision for sustainable development.

Second, Barclays needs to systematise theapplication of its corporate responsibilitypolicies to ensure that practices are

embedded across the Group. Our limitedvisits to UK branches demonstrated the needto sustain efforts to ensure that policies areconsistently applied, particularly as theCompany continues to expand outside theUK. We also feel the report could be clearerabout the governance of corporateresponsibility and how line managementactually implements commitments.

Third, as a bank, Barclays most significantimpacts are economic. We believe futurereports should go beyond existinginformation to provide a fuller account of its business impacts, for example, through a value-added statement showing howwealth created is distributed to shareholders,employees and governments. It shouldexpand on the amounts and types ofpurchases from suppliers, and also on howthe company engages on sustainability issues with clients who have placed £700bnin assets under its management.

Finally, Barclays has stated intentions to beboth a leading global bank and a leader in thecorporate responsibility field. This will requireKPIs to be more comprehensively group-wideand global, underpinned by robust sets oftargets. This group-wide approach needs tobe balanced, while sustaining ownership inlocal markets and preserving diversity ofapplication to reflect different societal needs.

As Barclays sets more stretching goals in furthering the corporate responsibilityagenda, continuing its commitment to openand transparent reporting will be critical.

The Corporate Citizenship Companywww.corporate-citizenship.comMarch 2006

Other information

External assurance statement and commentary

GRIsummary

Contact usTo view the report online or downloada PDF version, please visitwww.barclays.com/corporateresponsibility

If you have any questions or feedback, please send an email [email protected], you can contact the following:

Alastair CampCorporate Responsibility Director

Richard HamiltonAssistant DirectorCorporate Responsibility

Peter KellyHead of Financial Inclusion

Diana WrightHead of Disability Issues

Address:Barclays PLC1 Churchill PlaceLondon E14 5HPTel: +44 (0)20 7116 1000

*© Daily Telegraph 2005

Sue ActonHead of Diversity

Rachael BarberHead of Global Community Investment

Philippa BirtwellHead of Public Issues

Chris BrayHead of Environmental Risk Policy Management

Andrew FlettHead of Environmental Management

Labour Human ProductEconomic Environment practices rights Society responsibility

Indicator Page Indicator Page Indicator Page Indicator Page Indicator Page Indicator Page

EC1 ARA EN3 45 LA1 30+47 HR1 42-43 SO1 36-39 PR2 3-13

EC2 IFC EN5 45 LA2 47 HR2 43 SO2 40 PR3 Web

EC3 ARA EN7 17-21 LA3 29 HR3 43 SO3 43

EC5 46 EN8 45 LA4 31 HR4 30+47 SO5 43

EC6 ARA EN11 45 LA7 32 HR5 43

EC7 ARA EN14 17-21 LA8 26-27 HR6 43

EC10 46 EN34 34 LA10 30+47 HR7 43

LA11 47 HR12 19

LA12 29

LA16 32

ARA: Annual Report and Accounts IFC: Inside Front Cover Web: Policy available on website

This report is printed on Retreeve FSCBrilliant White Vellum, which contains20% de-inked recycled post-consumerfibre. The remaining 80% of the fibreis made up of wood fibre sourcedfrom Uruguay and Morocco; 40%from forests independently certifiedaccording to the rules of the ForestStewardship Council (FSC), and 40%from other fully sustainable and wellmanaged plantations. All pulps areElemental Chlorine Free (ECF).The paper is produced in the UK at a mill with ISO 9002, ISO 4001, EMASand FSC accreditation.

Audio, Braille, large-print and CD-ROM versions are available, free of charge, by telephoning the Barclays Information Line on 0800 400 100 (via Text Direct if appropriate), or by emailing a request for your chosen format [email protected]

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Documents

Corporate Responsibility Report 2005 Responsible banking · Responsible banking Contents Introduction IFC Our businesses 1 Group Chief Executive’s statement 2 Corporate Responsibility