tough questions, honest answers - barclays

Tough questions, honest answers

Barclays PLCCitizenship Report 2012

Strategic report

Index

The way we do business

Contributing to growth

Supporting our communities

How we report

At the heart of our strategy is the strong belief that there can be no conflict between good values and good results if we are to build a successful, sustainable business.

Our clients’ interests are at the heart of what we do. We seek to reinforce our business integrity every day by striving to improve the service that we provide, making responsible decisions in how we manage the business, and actively managing the social and environmental impacts of what we do.

We support economic growth and job creation by operating a strong, profitable business that is focused on helping individuals, businesses, institutions and governments pursue their goals.

We play a broader role in the communities in which we live and work, beyond what we deliver through core business activities. We do this through community investment programmes and the direct efforts of our employees.

Our Citizenship Report 2012 outlines progress on the priorities set out in our 2015 Citizenship Plan and details performance against issues that are important to our business and stakeholders.

Introduction from the Group Chief Executive

Chairman’s statement

About Barclays

Strategy

Governance

2015 Citizenship Plan

Progress against commitments in 2012

Tough questions, honest answers: 2012 challenges

In brief

Conduct and compliance

Improving the customer experience

Managing our impact on the environment

Environmental and social risk in lending

Managing our supply chain

Our people

In brief

Supporting individuals, businesses and economies

Increasing access to financial services

Creating commercial solutions to social challenges

In brief

Community investment

Flagship initiatives

Reporting standards and assurance

Materiality

Stakeholder engagement

Indices and benchmarks

Independent assurance statement

03

04

05

06

07

08

12

16

25

26

30

37

43

47

49

59

60

67

70

77

78

81

86

89

90

95

97


Barclays is changing. That means we are listening more than ever before, to our customers and clients, our employees and to all of the people our work impacts.

The portraits that appear in this Citizenship Report are of real Barclays customers. The tough questions featured throughout are the ones that we have been consistently asked, throughout this year by our stakeholders.


Barclays PLCCitizenship Report 2012

About this Report

This Citizenship Report (the Report) gives a comprehensive account of Barclays’ performance in 2012 across a range of social, ethical and environmental areas. It outlines progress on the priorities and targets identified in our 2015 Citizenship Plan, and how we are addressing issues identified as important to both our business and stakeholders.

The Report comprises a strategic report which includes an overview of key activity and the challenges we faced and detailed information providing in-depth discussion and data.

The term ‘Barclays’ or the ‘Group’ means Barclays PLC together with its subsidiaries. ‘Barclays’ and ‘Group’ are terms which are used to refer to either of the preceding groups when the subject matter is identical.

Basis of preparationWe disclose non-financial information on a voluntary basis in accordance with the AA1000 AccountAbility Principles Standard. KPMG provided limited assurance over selected data and commentary in the Report and our adherence to this standard. A full description of the standards we apply and an independent assurance statement is available in How we report. We report against the Global Reporting Initiative (GRI) G3 Indicator protocols and Financial Sector Supplement. We have self-declared our reporting to be Application Level B.See the Global Reporting Initiative Index online for more information.

I am determined that Barclayswill be a better bank, based onthe conviction that there can beno conflict between good valuesand good results.Antony Jenkins

Group Chief Executive

Introduction from the Group Chief ExecutiveBarclays’ heritage has been built on our contribution to the

communities we have served for more than three centuries,

whether providing people with their first bank account, helping

them buy their first home, grow their business or save for their

future.

However, there is no question that the banking sector as a whole

lost its way in recent years and has all too frequently found itself

in the headlines for the wrong reasons. Barclays was not immune

to this. We made serious mistakes and have a long way to go to

repair our reputation and rebuild trust. Nonetheless, I am

determined that Barclays will be a better bank, based on the conviction that there can be no conflict between good values and good

results.

Earlier this year, we launched Barclays’ new Purpose and Values.

This was a critical step in ensuring that there is no return to the

aggressive, short-term approaches of recent years. Our Purpose,

'Helping people achieve their ambitions – in the right way', will

guide everything we do, underpinned by our Values of Respect,

Integrity, Service, Excellence and Stewardship. We are also

changing the way we assess and reward the performance of our

employees. Going forward, this will be across five dimensions:

Customers and Clients, Company, Conduct, Colleagues and

Citizenship, and we will publish an annual scorecard to

demonstrate our progress.

Our Citizenship Plan, launched last year, is an evolving set of commitments which we aim to deliver by the end of 2015. In the first

part of 2013, we consulted our stakeholders extensively. We have updated the Plan to reflect our new Goal, Purpose and Values and

made new commitments, reflecting our focus on improving the way we do business. We recognise we have a long way to go to

realise our ambitions, but are pleased with our progress in 2012.

In 2012, we provided £33.4bn of new and renewed lending to households and raised £830bn in financing for businesses and

governments. At the same time, we helped improve the skills of more than 1.2 million young people through our community

investment activity and launched our flagship Apprenticeship Programme in the UK. In other areas, however, we clearly need to think

bigger and act quicker. For example, while our customer complaint volumes reduced by 6% globally, the number we receive is still

too high and we have much more to do.

I want Barclays to become a benchmark for the best that banking can be and the positive contribution it can make, not just to its

customers and clients, but in driving economic development and social prosperity. The challenge for us now is to turn these

aspirations into actions as we strive to deliver long-term, sustainable value for all those we serve.

Antony Jenkins

Group Chief Executive

barclays.com/citizenshipreport Barclays PLC Citizenship Report 2012 | 3

Strategic reportThe w

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Chairman’s statementChanging Barclays’ culture is crucial to establishing a way of

working that seeks to make a positive economic, social and

environmental contribution. In January 2013 we launched a

new corporate Purpose and defined the five Values that

underpin it. These now set the standards of behaviour to which

everyone in Barclays must commit.

To fully reflect the new environment in which we are operating,

we have created a new Board Committee, which I chair – the

Board Conduct, Reputation and Operational Risk Committee

which fully embraces all of our work on Citizenship.

This Citizenship Report in 2012 describes our Citizenship activities, strategy and policies, as well as progress made towards our 2015

commitments.

In 2013, the Board Conduct, Reputation and Operational Risk Committee will seek to ensure that Barclays’ Citizenship strategy takes

appropriate account of external developments and stakeholder expectations. We will recommend to the Board any changes

required to the strategy to ensure we have a positive impact on the communities in which we operate.

Sir David Walker

Chairman



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Total income by business segment £m

Shareholders Employees

Government Total community investment

About BarclaysBarclays is a major global financial services provider engaged in personal banking, credit cards, corporate and investment banking,

and wealth and investment management. We have an extensive international presence in Europe, the Americas, Africa and Asia.

Barclays' purpose is to help people achieve their ambitions – in the right way. With over 300 years of history and expertise in banking,

we operate in over 50 countries and employ approximately 140,000 people. We move, lend, invest and protect money for customers

and clients worldwide. Our Retail and Business Banking businesses are organised regionally, delivering products and services to

individuals and small businesses. Barclaycard and our Investment Bank, Corporate Banking, and Wealth and Investment Management

businesses operate internationally.

Distribution of earnings

We believe that the best way to support our stakeholders is by operating a strong, profitable and values-driven business which

creates jobs and contributes to the economic success of the communities in which we live and work. The charts below detail how the

earnings generated by our businesses are distributed to a number of key stakeholders. Read more about how our businesses create

value and our financial performance in the Barclays PLC Annual Report 2012.

NoteCalculated as dividend per share divided by adjusted earnings per share.Taxes borne are the Company’s own tax contribution, representing taxes paid by the Company in the year.Taxes collected are those collected from employees and customers on behalf of governments.

abc



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http://reports.barclays.com/ar12/strategicreport/strategicreview/howwecreatevalue.html

Finance and banking can play a critical role as an enabler of

social and economic progress, growth and development. It is

important that we consider the impact of our day-to-day

activities and create products and services that are not only

commercially viable but also benefit society.

At Barclays, Citizenship means taking into account the needs of

all our stakeholders and taking decisions which, in the long

term, are positive for our customers and clients, shareholders,

colleagues and the communities in which we operate.

This is a fundamental part of becoming the ‘Go-To’ bank for all

our stakeholders, and embedding our new Purpose and Values.

For society, this means we can enable greater, more inclusive

prosperity for current and future generations. We recognise that

we have a long way to go in delivering our aspirations and will

continue to work to build our vision.

Our Citizenship strategy, and the commitments we have

set out in our 2015 Citizenship Plan, are organised

around three areas. These are:




StrategyOur Transform programmeIn February 2013, we launched our Transform programme. This is our plan for achieving our goal of making Barclays the ‘Go-To’

bank – the partner of choice for all our stakeholders. This programme is grounded in a detailed Strategic Review undertaken last year

to assess the future performance, size and shape of the business.

As part of Transform, we also launched our new Purpose and Values.

Our Purpose is: helping people achieve their ambitions – in the right way

Our Values are: Respect, Integrity, Service, Excellence and Stewardship

Our Values focus our approach to doing business and represent a common set of standards under which everyone at Barclays will

work. Read more in the Barclays PLC Annual Report 2012.

To measure the success of our strategy, we are introducing a balanced scorecard of both financial and non-financial measures into

the appraisal process for our 125 most senior leaders this year, and for all employees from the middle of 2014.

Our five categories are: Customers and Clients, Colleagues, Citizenship, Conduct, and Company

Alongside this, we are focusing on fully implementing all 34 of the recommendations made by the Salz Review, an independent

review of our business practices published in April 2013. This review was commissioned by the Board last year to examine the bank’s

values, principles and standards of operation, with a view to providing a comprehensive roadmap for cultural change.

See the Barclays PLC Annual Report 2012 for comprehensive information about our Transform programme and Strategic Review, and

our website for more on the Salz Review.

Citizenship at Barclays



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http://reports.barclays.com/ar12/servicepages/welcome.html

http://reports.barclays.com/ar12/strategicreport/strategicreview/whatwewanttobe.html

http://group.barclays.com/about-barclays/citizenship/salz-review-report

GovernanceCorporate governanceAll of our corporate governance practices have been brought together in one document, Corporate Governance in Barclays, which is

available on our website. This framework provides the basis for promoting the highest standards of corporate governance in Barclays.

Citizenship governanceBoard-level accountability

During 2012, the Board Citizenship Committee provided oversight of our conduct with regard to our corporate and societal

obligations and our reputation as a responsible corporate citizen. This included reviewing and monitoring the effectiveness of our

Citizenship strategy, including the management of significant reputational, social and environmental issues. The Committee

comprised two non-executive Directors and the Group Chairman, who chaired the Committee. Sir David Walker joined the Committee

on his appointment to the Board on 1 September 2012 and took over as Chairman of the Committee on 1 November 2012. The

Committee met twice last year and further information on its responsibilities and 2012 activities is available in the Barclays

PLC Annual Report 2012.

This year, the Board Citizenship Committee’s responsibilities were incorporated into the remit of the new Board Conduct, Reputation

and Operational Risk Committee which has been established to take a broader oversight role covering Barclays' exposure to and

management of non-financial risks. This committee will also continue to have oversight of our Citizenship strategy.

Executive and management oversight

Our Executive Committee is responsible for managing the delivery of our Citizenship agenda. In 2012, a Citizenship Leadership

Council (CLC), comprised of senior leaders, was created to support the Executive Committee and the Board Citizenship Committee (as

was) in fulfilling their objectives. The CLC meets monthly to monitor progress against our strategy and 2015 Citizenship Plan,

and works towards the integration of Citizenship in day-to-day decision-making.

A range of specialist management committees also oversee specific aspects of the Citizenship agenda. For example, diversity and

inclusion issues are managed by an Executive Diversity Group and a Global Investment Committee – supported by regional

committees – oversees community programmes. We have a network of experts throughout the organisation to support, monitor and

ensure the delivery of our Citizenship objectives in specific areas; for example, our Environmental Risk Management team is part of

the overall Risk function.

A central Citizenship team works collaboratively with divisional Citizenship leaders, environmental managers, procurement

professionals and specialist commercial teams across the organisation.

Risk management

In an organisation of our scale and complexity, effective risk management is vital. We have a comprehensive risk control framework

for all our activities, including those relating to Citizenship, which is underpinned by robust key performance indicators, reporting

and governance.

Risks develop and evolve over time and their impact on Barclays will vary in response to internal and external events. Independent risk

teams are in place within each of our businesses to support close working relationships with the business teams taking on the risk.

These risk teams ultimately report to a Chief Risk Officer within each business, who in turn reports to the Group Chief Risk Officer and

the business Chief Executive.

A full account of our risk management approach is included in the Barclays PLC Annual Report 2012 and further detail of how we

manage conduct and reputation risk can be found in Conduct and Compliance.



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http://group.barclays.com/about-barclays/about-us#corporate-governance

http://reports.barclays.com/ar12/governance/corporategovernancereport/boardcitizenshipcommitteereport.html

http://reports.barclays.com/ar12/riskmanagement/riskmanagementstrategy.html

2015 Citizenship Plan

We must demonstrate that we are serious about transforming the way we do business and are responsive to the needs of all of our

customers, clients, colleagues, communities, shareholders and other opinion formers. Delivering this agenda is vital to Barclays long-

term success. Barclays 2015 Citizenship Plan is the mechanism through which we intend to demonstrate that commitment. See page

9 for an overview of our latest Plan commitments, and page 12 for a summary of our progress in 2012.



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1. We will: implement a global Code of Conduct to set clear and consistent expectations of behaviour

2. We will: ensure material business decisions reflect stakeholder considerations

3. We will: proactively manage the environmental, social & governance impacts of our business

4. We will: be market leading on transparency – being as open as possible about how we do business

5. We will: minimise our broader systemic risk to the economy and society

6. We will: leverage our products, capital networks and

expertise to drive sustainable progress

7. We will: help more businesses to start-up and grow

8. We will: improve youth employability


Deliver product and service solutions to help more

people and society progress in a sustainable way

9. We will: invest £250 million in community

programmes

10. We will: help build the enterprise, employability and

financial skills of five million disadvantaged young

people


Help disadvantaged young people develop the skills

they need to fulfil their potential

Our commitmentsOur Citizenship Plan, launched in June 2012, is an evolving set of commitments which we aim to deliver by the end of 2015.

Following the launch we consulted our stakeholders extensively. We have updated the Plan for 2013 in response to their feedback

and to align with our new Goal, Purpose and Values. We streamlined our existing commitments and made three new commitments:

to implement a Global Code of Conduct; to ensure our decisions take account of stakeholder considerations; and to improve youth

employability through apprenticeship and work experience programmes. Delivery of our Plan commitments will be monitored

through the ‘Citizenship’ dimension of the new balanced scorecard. See Strategy for more information on our our vision for Barclays

and how we will measure success.

We continue to engage with our stakeholders, to better understand their needs and expectations, and over time will modify the Plan

based on their feedback. To contribute, email [email protected].

Performance to date is summarised in Progress against commitments in 2012 and detailed throughout this Report. Unless otherwise

noted, our commitments are until the end of December 2015 and on a global basis.

Purpose: Helping people achieve their ambitions – in the right way

Values: Respect | Integrity | Service | Excellence | Stewardship


Ensure our decisions take account of stakeholder needs in the short and long term

‘Go-To’ Bank

1

In some cases, our 2012 Plan commitments will not be monitored through the ‘Citizenship’ segment of the balanced scorecard (e.g. reduction in complaintswill be monitored through the Customer and Client segment). Therefore, these commitments do not feature in the latest version of our Plan, but we willcontinue to monitor and publicly report progress against these areas.

1



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mailto:[email protected]


Why is this important? What will we deliver by 2015?

1 We must ensure our employees understand how our valuesunderpin every aspect of our business, and set out thebehaviours expected of our people across all their workingrelationships.

We will launch a Global Code of Conduct for all employees. Wewill train our people to ensure that they are aware of thestandards that drive behaviour. All employees will be requiredto attest against the Code on an annual basis.

2 We must understand the needs of our stakeholders in theshort- and long-term and integrate these considerations intocore decision-making.

We will enhance our capacity to understand and consider allour stakeholder needs in our decision-making. Building on ourpilots in 2012, refine and develop the tool and trackingmechanisms during 2013.

3 Businesses are expected to manage environmental, social andgovernance issues relevant to their activities, including ethicaland reputational concerns.

We will embed robust management frameworks, withassociated policies, governance structures and escalationprocedures, that apply to our business relationships,transactions, products and processes.

Businesses have a responsibility to manage their directenvironmental footprint, including energy use and carbonemissions.

We will drive initiatives to reduce total global carbon emissionsfrom buildings, technology and travel by 10%, from a 2012baseline.

We are committed to managing our supply chain responsibly,and to paying our suppliers promptly, especially in the currenteconomic environment.

We will launch a global Supplier Code and drive improvementsto our billing systems to ensure prompt payment.

4 We aspire to run our business in an open and transparentmanner with consistent engagement and clear disclosure for allour stakeholders.

We will ensure our financial reporting and other disclosuresmeet leading-industry requirements and communicate with ourstakeholders openly. We are exploring metrics to assess ourperformance in this area.

5 We must ensure that problems at any one individual bank neveragain pose a significant threat for the entire financial system.

Regulatory authorities around the world are putting in placethe powers, tools and capabilities to allow any institution to failwithout negatively impacting the economy. The term they usefor this is ‘resolution’.

Having submitted our first Resolution and Recovery Plans inJune 2012, we continue to work with authorities in the UK, EUand US on this issue. Our ambition is to meet all requirementsin advance of regulatory timelines. The future road map is stillbeing defined and we will update our plans accordingly.



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6 By supporting our customers and clients and working inpartnership with other stakeholders we can create anenvironment in which individuals, institutions andgovernments are able to invest in sustainable progress andenable growth.

Subject to economic conditions, our credit criteria andregulatory constraints, we intend to:

Provide at least £150 billion of new or renewed lending tohouseholds globally

Raise at least £2 trillion of financing for businesses andgovernments globally

Provide at least £50 billion of new or renewed lending forSmall and Medium-sized Enterprises (SMEs) globally

We will also drive new solutions that deliver a net positivebenefit to society and also generate business value.

We will invest £25 million through our Social InnovationFacility to support the development of these solutions.

7 Small and medium enterprises are vital parts of the economy inall our core markets. By helping these businesses to start up orgrow, we can contribute to wider prosperity.

We will support 120,000 SMEs with seminars, tools andtraining globally. We will work to better understand the needsof start-up and small businesses that we serve and supportthem with access to markets, suppliers and expertise.

8 As a global employer, we can help equip young people for theworkplace and give them the skills they need to succeed. Wecan achieve this by offering opportunities at Barclays orworking with partners to support wider employabilityinitiatives.

Our Apprenticeship Programme will attract 2,000 youngpeople into financial services in the UK by the end of 2015.

We will facilitate 50,000 work experience opportunities. Wewill also collaborate with other businesses and partners toimprove employability and work experience opportunities.



9 Barclays plays a broader role in the community, above what wedeliver through our core business activities. We invest money,based on our profitability, and the time and expertise ofBarclays employees to deliver a positive social impact in thecommunities where we operate.

We will deliver £250 million of new investment in ourcommunity programmes globally.

We will continue to work in partnership with NGOs and expertsto develop high-performing programmes and volunteeringopportunities that harness the skills and passion of Barclaysemployees.

10 Around the world, young people are facing unprecedentedsocial and financial challenges – and increasingly high levels ofunemployment. Developing vital skills will help them toovercome these challenges, so they can better provide forthemselves and for their families, and ultimately supportlonger-term growth in the economy.

5 Million Young Futures is Barclays’ commitment to enhancethe enterprise, employability and financial skills ofdisadvantaged 10- to 35-year-olds, to enable them to fulfiltheir potential.



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Progress against commitments in 2012This summary provides an overview of progress made to deliver our 2015 Citizenship Plan with links to more detailed information in

other sections of this Report. Unless otherwise stated, the commitments are from 2012 until the end of December 2015 and on a

global basis.

We will …… aim to be top-tier for customer and client satisfaction in all of our principal businesses

2015 commitment

2012 progresssummary

Performance in external customer satisfaction surveys

Achieve top-tiercustomer/clientsatisfaction ratings byprincipal businessesbased on independentsurveys by 2015.

Achieve a sustainedyear-on-year reductionin customer complaintvolumes in businessesthat serve individualsby 2015.

Overall, our businessesare on track to be top-tier for customer andclient satisfactionbased on independentsurveys.

We achieved a 6%reduction in globalcustomer complaintsbetween 2011 and2012. There was a15% year-on-yearreduction in UKcomplaints excludingPPI-relatedcomplaints.

Business Survey Position Absa Orange Index #1 Barclaycard JD Power (US) #4 Corporate Banking Charterhouse (UK) #1 UK Retail and Business Banking GfK =6 Investment Bank Greenwich #1

Global complaints(% change on 2011)

UK complaints(FSA reportable – in thousands)

Absa -10% Barclays Africa -2% Barclaycard -8% Corporate Banking -52% UKRBB +2% Europe RBB +36%

Wealth andInvestment Management -27%

Total -6%

Read more in Improving the customer experience

… eradicate ‘too big to fail’ by making Barclays resolvable

2015 commitment

2012 progress summary

Establish a credible plan(confirmed by relevantauthorities) to resolveour cross-borderoperations.

Deliver ahead of allrelated UK, US and EUregulatory guidelines.

We submitted a report to US and UKregulators on how any future financialdifficulties at Barclays might be resolvedin an orderly manner and not threatenthe wider financial system.

We are continuing to work withregulators to identify and address anyissues, both generally and specifically inrelation to Barclays.

In June 2012 wesubmitted our firstresolution and recoveryplans to regulatorybodies in:

the UK the US

Read more in 2012 challenges



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… strive to be market-leading on disclosure and transparency

2015 commitment


In the Barclays PLC Annual Report 2012, wehave:

Be top quartile amongdesignated peer bankson the quality of ourfinancial reportingdisclosures.

Be top quartile amongdesignated peer bankson the transparency andsimplicity of ourcustomer literature inbusinesses that serveindividuals.

We significantly improved theremuneration and risk disclosures in theBarclays PLC Annual Report 2012.

The Barclays PLC Annual Report 2012was prepared with reference to therecommendations of the EnhancedDisclosure Task Force and incompliance with the British Bankers'Association Code for FinancialReporting Disclosure.

We are committed to enhancingtransparency in this area but there arevery few robust external benchmarksthat we can use to assess our progressagainst our peers.

a significantly expanded and more transparentremuneration report

sought to provide a clearer guide to our riskdisclosures across our financial reports

streamlined our risk reporting by separatingout the discussion of our risk policy and thequantitative analysis of our risk exposures

provided greater information on regulatorycapital and risk-weighted assets

increased information on our fundingstructure and levels of encumbrance

disclosed further information on the credit riskof loans subject to forbearance.

Read more in the Barclays PLC Annual Report 2012

… proactively manage the social and environmental impacts of our business

2015 commitment


Total carbon emissions (tonnes)

Reduce operational CO2equivalent (CO2e)footprint by 4% by theend of 2013, comparedwith 2010 levels.

Offset CO2e emissionsarising from corebanking operations.

Report water, waste andpaper data for top 100buildings.

Implement a globalSupplier Code ofConduct.

We reduced our carbon emissions by12% in 2012 (from 2010 levels). Wewill set a new 2015 carbon target in thenext iteration of our Citizenship Plan.

We continued to offset our globalfootprint and purchased 1.1 millioncredits for 2012 emissions.

We will adopt a regional approach toincrease coverage. We have includedwater consumption and, for the firsttime, reported paper use data this year.

The Code was developed in 2012 andwill be piloted in 2013.

Total emissions by scope 2012 (tonnes CO2e)

See Managing our impact on the environment

and Conduct and compliance



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http://reports.barclays.com/ar12/governance/remunerationreport.html

… help more individuals, businesses and economies to progress and grow

2015 commitment*


Provide at least £150bnof new or renewedlending to households.

Raise at least £2 trillionof financing forbusinesses andgovernments. Provide at least £50bnof new or renewedlending for small andmedium-sizedenterprises (SMEs).

We provided £33.4bn of new andrenewed lending to households,including £18.2bn in new UK mortgagelending. We helped 18,000 UK first-timebuyers, up from 12,000 in 2011.

We raised £830bn in financing forbusinesses and governments in 2012, a23% increase from 2011, including£220bn for governments and publicsector entities.

We provided a total of £11.1bn in newand renewed lending to SMEs andpassed on benefits from the UK Fundingfor Lending Scheme to customers byoffering 2% cashback on loans toeligible SMEs.

£33.4bnLending to households

£830bnFinancing raised forbusinesses and governments

£11.1bnLending to SMEs

* These commitments are subject to economic conditions,our credit criteria and regulatory constraints

Read more in Supporting individuals, businesses and economies

… increase access to the financial system

2015 commitment


Provide entry-levelfinancial products andservices to one millionnew customers.

We added 500,000 new entry-levelbanking customers in South Africa in2012. However, as a result of the loss ofa welfare payments contract and theclosure of dormant accounts, the overallnumber of entry-level customersdropped 12% from 7.4 million in 2011to 5.8 million in 2012.

In the UK, the number of Cash CardAccount customers remained stable at1.2 million.

7 millionTotal entry-level banking customersin South Africa and the UK

Number of entry-level and inclusive bankingcustomers in South Africa (millions)

Number of Cash Card Accounts (UK)

Read more in Increasing access to financial services



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… create commercially viable solutions to help address social challenges

2015 commitment


Bring to market 15 newcommercial and materialsolutions to addressspecific socialchallenges.

We’ve launched a Social InnovationFacility to invest at least £25m (to2015) to accelerate the development ofnew products and services that deliverboth a commercial return and anongoing social impact.

In 2012, we committed £4m to sixprojects across Africa and the Americas.

£25mSocial Innovation Facility

Investment committed in 2012 by sector (%)

Read more in Creating commercial solutions to social challenges

Read our case study Financing ‘pay-as-you-go’ solar energy

… empower the next generation with the skills they need to achieve economicindependence and security

2015 commitment


Community investment 2012 (£m)

£250m of newinvestment incommunityprogrammes.

We invested £64.5m in communityprogrammes globally (up 2% from2011).

Improve the enterprise,employability andfinancial skills of fivemillion 10- to35-year-olds.

We helped improve the skills of morethan 1.2 million 10- to 35-year-olds.

Beneficiaries by type of skills (thousands)

Read more in Supporting our communities



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Tough questions, honest answers:2012 challenges

2012 was an extremely difficult year for Barclays. We made serious mistakes which damaged our reputation and a number of past

events and actions came to light which resulted in widespread criticism of our culture and the loss of our stakeholders' trust. In

addition to the topics covered elsewhere in this Report, we have set out below the key challenges we faced and how we are working

to put things right. We know that in the process of making changes, we could uncover more legacy problems or unsatisfactory

behaviours which may attract further criticism. Where this occurs we will be open and honest about our response.

17 LIBOR

18 Renumeration

19 Tax

22 Customer complaints

and mis-selling

23 UK Lending

24 Regulation



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“The LIBOR scandal sumsup the whole problemwith banks – they puttheir own interests abovethose of their customersand wider society. Whatis Barclays doing to putthings right?”

LIBORThe issue

The London Interbank Offered Rate, or LIBOR, is a benchmark

rate used to reference a variety of financial products. Barclays

announced on 27 June 2012 that it had reached settlements in

relation to investigations by the then UK Financial Services

Authority, the US Commodity Futures Trading Commission and

the US Department of Justice Fraud Section into submissions

made by Barclays and other panel members to the bodies that

set various interbank offered rates, including LIBOR.

The investigating authorities imposed financial penalties

totalling the equivalent of £290m (£59.5m by the then UK Financial Services Authority, US$160m by the US Department of Justice

and US$200m by the US Commodity Futures Trading Commission). We were the first bank to reach settlements in these industry-

wide investigations and other banks have since announced their settlements and larger total financial penalties.

What we are doing

While the findings involved only a relatively small number of our 140,000 employees, we have fully acknowledged and accepted

responsibility for this past conduct. Our participation in the submission of interbank lending rates between 2005 and 2009 fell short

of the high standards by which we aim to conduct business. We let down our customers and clients and regret that these actions

harmed trust and confidence among our stakeholders.

We cooperated proactively, consistently and extensively with the investigating authorities in an effort to identify the issues, accept

responsibility and remediate as quickly as possible. Following the June 2012 announcements, the Board established the Business

Practices Review Committee, chaired by Sir Michael Rake, our Deputy Chairman and Senior Independent Director. This committee’s

role is to provide oversight of the independent Salz Review of our business practices, to report to the Board on progress, consider the

recommendations of the review and oversee their implementation. There is more information on these recommendations on our

website.

We also established the LIBOR Employee Investigation Review Committee, chaired by Sir Michael Rake. This provided a level of Board

oversight of the review of the conduct of certain current and former employees in relation to LIBOR. The committee’s role was to

satisfy itself that proper processes had been followed and that outcomes were appropriate. At the conclusion of the review, 13

current employees were subject to disciplinary action – including five who were dismissed – and deferred compensation totalling

£24.6m was clawed back from 15 current and former employees. This excludes any sums voluntarily surrendered by individuals.



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“Bankers are overpaidand don’t have society’sinterests at heart.It’s that simple, isn’t it?”

RemunerationThe issue

The issue of pay in the banking sector continues to make

headlines and remains a key governance concern for many of

our stakeholders. There is no doubt that pay in some parts of the

industry became excessive in the years leading up to the

financial crisis.

We have been justifiably criticised for failing to explain our

remuneration decisions clearly enough to shareholders and the

wider public, as well as for some of the decisions we have made. We are determined to ensure that shareholders receive an increased

share of the income and pre-compensation profits earned by Barclays.

What we are doing

We made significant reductions in remuneration costs last year, reducing variable remuneration by 16% overall and by 20% in our

Investment Bank, despite a material increase in adjusted profit before tax. Fixed remuneration also decreased 7% year-on-year. The

average bonus across Barclays in 2012 (excluding the Investment Bank) fell by 8% to £4,800. In our Investment Bank, the average

bonus in 2012 fell by 17% to £54,100, with 45% of all Investment Bank employees receiving no bonus at all for 2012.

We assess how our levels of pay compare with the rest of the industry by looking at our compensation ratios (i.e. the proportions of

adjusted net operating income and adjusted profit before tax used to pay all remuneration). Compensation as a percentage of

adjusted net operating income declined to 38% in 2012 (2011: 42%). In terms of our peers, our ratio was at the market median in

2011 but for 2012 dropped to below the lower quartile. We intend to make more progress over time, enabling us to deliver an

increased share of the income we generate to our shareholders.

We have also announced a new remuneration policy aligned to our Purpose and Values. Under this, measurement of ‘what’ people

achieve will be balanced by an assessment of ‘how’ they achieved it. While we will continue to pay for performance and to pay

competitively for the best talent, performance assessment and variable remuneration decisions will now be measured against a

balanced scorecard of financial and non-financial measures in the following categories: Customers and Clients, Colleagues,

Citizenship, Conduct and Company. This new approach will be introduced for our 125 most senior leaders during 2013 and for all

other employees during 2014. We believe this is a significant way to drive culture change at Barclays.

A full account of our approach to remuneration and 2012 incentives is contained in the Barclays PLC Annual Report 2012. See also

Our people for further information on employee performance management and development.

Note

1

Details of Barclays Group compensation as a percentage of adjusted net operating income are disclosed in the Barclays PLC Annual Report 2012. Thefollowing peer group companies were used to compare Barclays’ compensation ratio (where full year 2012 ratios were unavailable as at 28 February 2013,data for Q3 2012 was used): BBVA, BNP Paribas, Bank of America, Citigroup, Credit Suisse, Deutsche Bank, HSBC, JP Morgan, Lloyds TSB, Morgan Stanley, RBS,Santander, Société Générale, UBS and Unicredit. The impact of own credit is excluded.

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http://reports.barclays.com/ar12/governance/remunerationreport.html

http://reports.barclays.com/ar12/governance/remunerationreport/2012incentives.html

“There has been a lot ofmedia discussion on theamount of taxescorporations pay relativeto the amount of profitthey make. How muchtax does Barclays actuallypay, and where?”

TaxThe issue

Following the financial crisis, governments around the world are

raising revenue, attracting investment and fostering growth.

They are doing looking to achieve these objectives, in part, by

reforming their tax systems and strengthening anti-avoidance

rules.

The negative impact of the financial crisis on bank profits since

2007 has resulted in lower profit-related tax payments,

including reduced UK corporation tax payments. Nevertheless,

banks remain very significant contributors of tax revenues

globally. In the UK, the banking sector remains one of the largest contributors to tax revenues because of other taxes paid, such as

irrecoverable VAT and the UK bank levy.

Transparency in tax reporting continues to receive considerable attention, particularly at the EU level where there has been

agreement for banks to disclose their activities, turnover and number of employees on a country-by-country basis. In addition, by

December 2014, the EU Commission will review the potential economic consequences of public disclosure, on a country-by-country

basis, of profit or loss before tax, tax on profit or loss, and public subsidies received.

What we are doing

Like other companies, we have a fiduciary duty to our shareholders to manage our tax affairs responsibly. We recognise that a

balance is required between the needs of our different stakeholders in determining how we manage our tax affairs. These

stakeholders include our customers and clients, the communities we serve, employees, shareholders, governments and regulators.

We provide our clients with tax solutions that support genuine commercial activity, like cross-border commercial transactions,

including advice on planning and risk management. This is a traditional and legitimate part of what banks do. However, our Strategic

Review identified a need to re-define and articulate our approach towards taxation within the framework of our new Purposes and

Values. As a result, we developed new Tax Principles that apply to all tax planning. These Tax Principles set higher standards for tax

planning activity, which in future must support genuine commercial activities of Barclays or our clients (read the Principles on our

website). Consequently, we announced the closure of our Structured Capital Markets tax-related business unit. Future transactions

that meet the new Tax Principles will be carried out by teams integrated into the commercial business units that serve our clients and

customers.

We ensure that all transactions we undertake are fully compliant with relevant tax laws wherever we do business. In the UK, we have

voluntarily adopted the UK government’s Code of Practice on Taxation for Banks. This commits us to applying the spirit - as well as

the letter - of the law in all tax dealings and to work together with HM Revenue and Customs (HMRC) in an open and transparent

way.

In addition, we recognise that tax influences decisions on where we base our business operations or invest in assets. This is the case

for all large multinational groups. We have a duty to stakeholders to make the right choices, provided there is genuine substance to

the activity we conduct in each country, in line with our Tax Principles.

We welcome constructive debate on taxation policy, as the payment of tax is an important element of the overall economic

contribution that responsible banking can make. We believe governments should work together to adopt a consistent global

approach on tax reporting, which establishes disclosure requirements and thresholds that are proportionate. Any such requirements

need to remain focused on the ultimate objectives, both for governments and for companies: clear and consistent tax policy,

accountability, transparency, and the fight against corruption.



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http://group.barclays.com/about-barclays/citizenship/policy-positions

Tax paid globally Tax paid by region

Tax paid globally in 2012

One measure of our contribution to society is through the total amount of tax we pay each year on our activities. We paid £3,234m

of tax in 2012 relating to our own business, including £1,516m on our income and profits. To be clear, this excludes tax collected on

behalf of governments from payments made to customers, clients and employees, for example, PAYE and VAT. In 2012, Barclays

collected £2,856m of taxes on behalf of governments.

The charts below show the different types of taxes paid in 2012 and the regions in which they were paid.

Many commentators seek to compare the corporate income taxes paid in a year, in a specific geography, to the profit generated in

that geography as a means to test if the tax paid is ‘fair’. However, it is not possible to make this direct link between profits and taxes

paid in any given year. The tax due on profits generated within a calendar year is very often paid across multiple years, so the taxes

paid in a year do not necessarily relate to that year’s profits. In addition, the tax law in most jurisdictions allows losses to be carried

forward to reduce future profits. As a result of these and other factors, there is a difference between accounting profits and taxable

profits.

In contrast to taxes paid, the accounting tax charge, being the amount of tax accrued under international accounting standards, is

the appropriate tax amount to compare to global profit before tax. In our case, the tax charge of £482m in 2012 is the relevant

amount to be compared to the profit generated of £246m in 2012 (as shown in the Barclays PLC Annual Report 2012), giving an

effective global tax rate of 196%. For a large multinational group like Barclays, there are many influences on the accounting tax

charge which can cause it to vary greatly relative to accounting profits and result in an unexpected effective tax rate. See the Barclays

PLC Annual Report 2012 for more detail on the factors that caused the high effective tax rate in 2012.

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http://reports.barclays.com/ar12/financialstatements/notes/significantaccountingpolicies.html

Barclays was the fourth largest corporate taxpayer in the most

recent PricewaterhouseCoopers (PwC) survey of the ‘The

Hundred Group’, which includes most of the UK’s largest

companies.

Our profits are taxed at the local tax rate in the country in which

the profits are earned. For example, a significant proportion of

the profits we earned in 2012 were from our operations in the

US and South Africa and were subject to tax in those countries,

respectively, at the local tax rates. In the UK tax system, these

foreign profits generally are not subject to further tax in the UK.

Therefore, the amount of UK corporation tax we paid cannot be

compared against our overall, global statutory profit before tax

of £246m in 2012. We paid £82m of corporation tax to HMRC in

2012, despite incurring a loss in the UK.

Our largest tax payments in the UK relate to irrecoverable VAT.

The figure for social security mainly relates to employer’s

National Insurance contributions.

Tax paid in the UK in 2012

Tax paid in the UK

Tax in offshore financial centres and developing countries

Barclays operates under the laws of low tax jurisdictions for valid business reasons. In many of these jurisdictions, we have substantial

businesses. For example, we operate full-service retail and corporate banking businesses in the Seychelles where we are the largest

retail bank in the country, having operated there for more than 50 years. Our operations in offshore financial centres are based

principally in the Isle of Man, Jersey and Guernsey, where our Wealth and Investment Management division is a long-term major local

employer. The income from these Crown Dependencies represented only 2% of our total income in 2012.

We have historically incorporated businesses under the laws of other jurisdictions, such as the Cayman Islands, because local

corporate law makes it easy and cost-effective to set up and liquidate companies. As at June 2013, we had 113 companies

incorporated under the laws of the Cayman Islands. Virtually all of the profits generated in these companies are subject to corporate

tax at the UK corporate tax rate. The total amount of profit not taxed in the UK across all our entities incorporated under Cayman

Islands law was less than £1m in each of 2010, 2011 and 2012. In 2012, 41 Cayman companies were liquidated and 55 were

dissolved.

We have disclosed the nature and scope of these activities to HMRC and any other relevant tax authorities.

Nonetheless, Barclays has been reducing the number of entities it operates in low tax jurisdictions. Since, 2009 we have reduced the

number of these entities by 25% to 253 (as at end of 2012). We plan to make further reductions in 2013.

We make significant tax payments in developing countries, which are often a major contributor to the overall tax revenue in these

countries. For instance, in 2012, we paid taxes of £501m in Africa (including corporate income tax, social security and VAT).

Notes

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Unless otherwise stated, ‘tax paid’ refers to ‘cash’ taxes paid to governments in a given period, as opposed to the tax ‘charge’ for that period shown in Barclays’accountsCorporate income tax - includes withholding taxes, in accordance with International Accounting Standard 12 (IAS12).Social security - includes employer national insurance contributions.Other - includes, for example, property taxes.Accounted for as deferred tax under IAS12Based on data in PwC’s Total Tax Contribution survey 2011.This arises because banks, unlike non-financial services companies, can only recover a small amount of the VAT incurred on the products and services theybuy.Excludes income earned by companies based in Jersey whose income is taxed in the UK.

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“Why do you receiveso many complaintsfrom your customers,and what are you doingabout this?”

Customer complaints and mis-sellingThe issue

The level of customer complaints remains a concern, particularly

as Payment Protection Insurance (PPI) continued to generate

very high volumes of complaints for the whole of the UK

banking sector, including Barclays, during 2012. We recognise

that genuine PPI complaints are absolutely valid, however, we

stopped selling new PPI policies in 2010. Complaints about the

misselling of this product, which accounted for approximately

two thirds of the complaints about Barclays reported to the UK

Financial Services Authority (FSA) in 2012 , do not necessarily relate to our current business activities.

Significant concerns were also raised about the sale of some Interest Rate Hedging Products (IRHPs) to corporate customers.

What we are doing

We strive to put the customer at the heart of our business and therefore avoid the need for customers to complain in the first place.

Through a sustained effort to identify and tackle the root causes of complaints, we achieved a 6% reduction in complaints across the

bank in 2012. In the UK, the number of complaints we received increased overall, but most of these related to PPI and other similar

products. If those are excluded, there was a 15% reduction in complaints reported to the FSA.

Payment Protection Insurance

We are working to address all valid PPI claims and in February 2013 we announced that we had set aside a further £600m to do this

taking the cumulative provision to £2.6bn. This increase was principally as a result of the response to proactive mailings to customers

(contacted in cases where we believed there was a possibility that the product had been mis-sold). This proactive activity will

continue throughout 2013.

Interest Rate Hedging Products

IRHPs are designed to help business customers manage fluctuations in interest rates. They can be useful for some companies.

However, we recognise that we have not met the standards expected of us by our regulator and customers in some cases concerning

small and medium-sized enterprises (SMEs).

We launched a review of sales of IRHPs to non-sophisticated SMEs in 2012 and submitted our initial review to the former FSA, which

was also looking at the sales of these products by a number of other retail banks. We then launched a full internal review in January

2013, which is being scrutinised by an independent party reporting to the new Financial Conduct Authority (FCA). The FCA

timeframe for the completion of the review is six to 12 months. Our priority is to review sales of these products to customers who are

now in financial difficulty, and we will not, save for exceptional circumstances, take any action against such businesses until our

review is complete. We will provide fair and reasonable redress wherever appropriate, ranging from cancelling the product at no cost

to the customer to offering an alternative product. In 2012 we set aside a total provision of £850m to cover the cost of redress.

See Improving the customer experience for more information on how we are working to address complaints.

Note

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On 1 April 2013 the Financial Services Authority (FSA) was replaced by two new regulatory bodies, the Financial Conduct Authority (FCA) and the PrudentialRegulation Authority (PRA), and the role performed by the FSA in relation to the review of past sales of IRHPs has been assumed by the FCA.

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“How can the economyrecover when banks arelocking up their cashrather than supportingnew businesses?”

UK lendingThe issue

Delivering finance for UK business and consumers continues to

be at the heart of the UK policy debate as policy leaders seek to

deliver long-term, sustainable growth. Traditional bank lending

has been the subject of significant focus and the government

has launched targeted initiatives to increase the supply of credit,

particularly the Funding for Lending Scheme (FLS).

What we are doing

We remain among the leading UK banks for lending performance, both directly and through government initiatives. In Q4 2012, we

lent a net sum of £1.9bn to businesses and households under the FLS, in comparison to a £2.6bn net industry decline, bringing our

cumulative net lending under the scheme to £5.7bn.

This success partly reflects the ongoing stability of Barclays and also the effectiveness of how we have chosen to implement the FLS.

We launched Cashback for Business last September, offering 2% cashback on loans to eligible SMEs under the FLS, demonstrating

our commitment to pass on the associated funding cost benefits from the government scheme to customers. This builds on our

previous involvement in the National Loan Guarantee Scheme (NLGS), a forerunner to the FLS cashback scheme. Of the £3bn of

funding passed on to customers before the NLGS closed in 2012, £1.5bn was from Barclays.

Meanwhile, we supported 112,000 start-up businesses in the UK last year, the highest since our records began in 1988. We also run a

range of programmes – open to customers and non-customers – to support UK businesses. These include Barclays Get Ready for

Business seminars for start-ups, Thrive Online workshops on online marketing and local clinics on specific topics such as

international trading, cash-flow management and lending. We reached 19,000 people in 2012 and hosted over 1,400 events across

the UK. See Supporting individuals, businesses and economies for more information on this.

Our Investment Bank raised more than £830bn in financing for businesses and governments around the world in 2012, ranking it the

fourth-largest provider of financing worldwide.

Additionally, we continue to work with policymakers to develop non-bank alternatives to traditional lending, including the proposals

for a British Investment Bank and improvements to the venture capital environment. We believe that our expertise can help support

these important projects and we are positive about their chances of succeeding.

Note

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For more detail on the scheme visit the website of the Bank of England.Gross and net lending: ‘gross lending’ is the total amount of new loans a bank provides in a given period, including refinancing. 'Net lending’ is the total amountof stock lending a bank has provided to its customers at any given time and is therefore increased by new (gross) lending and decreased by loan repayments.FLS performance data is published on the website of the Bank of England.Sources: Dealogic, Reuters, Bloomberg.

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http://www.bankofengland.co.uk/markets/Pages/FLS/default.aspx

“Are banks any safersince the financial crisis,and what does newregulation mean forBarclays?”

RegulationThe issue

The banking industry continues to be subject to unprecedented

levels of regulatory change and scrutiny. This has led to a more

intensive approach to supervision and oversight, increased

expectations and enhanced requirements – including liquidity

and capital requirements and what is known as ‘resolvability’.

Resolvability refers to the measures that need to be in place to

allow an institution to fail without impacting the whole financial

system or relying on public funds, and this will have major

consequences for all financial institutions, including Barclays.

What we are doing

We continue to support strong bank regulation. Much has been done but we agree there are still further steps to take. However, there

is clearly a careful balance to be struck. A healthy and profitable banking sector is essential to growth and it is vital that increased

regulation does not inadvertently result in some banks withdrawing services from customers and clients, which in turn might slow

economic recovery. The industry requires clarity and certainty in terms of the detail and proposed timeframes in order to implement

reforms effectively. It is also critical that these reforms are internationally consistent as far as possible, to avoid disadvantaging banks

in any particular jurisdiction and ensure that the reforms are effective.

We have carried out our own review of how we would be affected by some of the proposals under consideration by the authorities,

especially those recommending the separation of retail and investment banking operations. The new regulatory environment will

require changes to both business models and cost structures. Our Transform programme and Strategic Review (see Strategy) are

designed to address these issues.

The banking sector as a whole is significantly more resilient since the financial crisis. Our own capital, liquidity and funding remained

strong in 2012. The Barclays PLC Annual Report 2012 has more information on this and how specific regulatory changes will impact

Barclays.

Focus on resolvability

We want to lead our sector in eliminating the problem of banks being ‘too big to fail’. Regulators around the world want to

ensure that problems at any one individual bank never again pose a significant threat for the entire financial system. The

shorthand for this is ‘resolvability’. We are in active dialogue with regulatory bodies about how this can be achieved and our

2015 Citizenship Plan commits us to putting in place the steps required ahead of all UK, US and EU regulatory timelines. The

roadmap for resolvability is still being defined; regulatory authorities are expected to provide more clarity on the rules and

timeframes for implementation in 2013.

Good progress is already being made. We submitted our first formal UK and US analysis of this issue, and the implications for

Barclays, to the UK and US regulatory bodies in June 2012. These initial Recovery and Resolution Plan submissions focused

on the resolution of economic functions and legal entities. Our analysis since then has increasingly focused on resolution

planning that is consistent with a joint paper published by the Bank of England and the US Federal Deposit Insurance

Corporation in December 2012, looking at how major banks can be resolved in an orderly way across international borders.

In our view, this could be achieved for Barclays in a two-stage process: the first stage would be an initial stabilisation period

in which liabilities would be written down or converted into equity (i.e. ‘bail-in’), followed by a second, longer stage in which

the elements of the bank could be sold, transferred or unwound over time. This would need the co-operation of some key

stakeholders, including international regulators, counterparties and financial exchanges, as well as the potential need for

central bank liquidity support.



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http://reports.barclays.com/ar12/riskreview/supervisionandregulation.html#acc2

/PDF/barclays/en/working/servicepages/downloads/files/download.php?file=citizenship_plan_2015_barclays_cr12.pdf

In brief – The way we do business

Our customers' and clients' interests are at the heart of what we do. We seek to reinforce our business integrity every day by

improving the service that we provide, making responsible decisions about how we run the business and actively managing the social

and environmental impacts of what we do.

Last year we introduced a customer service-based incentive scheme for UK frontline employees, and we are changing the way we

assess and reward all employees. While there was a decrease in customer complaints globally we have much more to do to prevent

complaints arising in future. We worked to better manage our operational footprint, exceeding our carbon emissions reduction target

and developing a global Supplier Code of Conduct.

26 Conduct and compliance

30 Improving the

customer experience

37 Managing our impact

on the environment

43 Environmental and social

risk in lending

47 Managing our supply

chain

49 Our people

Carbon emissions in tonnes

6%reduction in global customercomplaints

277transactions screened forsocial and environmental risk

25%target for women on our Boardby 2015

At a glance



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Conduct and complianceOur approach

The landscape in which banks operate has fundamentally changed. Our reputation and that of the banking sector has been

severely damaged following the financial crisis and issues such as LIBOR and the mis-selling of Payment Protection Insurance

(see 2012 challenges for more information on these issues). We recognise these events have led to a breakdown in trust with

our stakeholders and that we must work hard to regain that trust.

Our aim is to make Barclays a business driven by high standards of integrity, honesty and transparency. We have a tremendous

opportunity to change our business in a way that will better serve our customers, clients, employees, shareholders and society as a

whole. We are launching a new Code of Conduct in 2013 which will explicitly set out the behaviour we expect of everyone at

Barclays and how our new Purpose and Values can be put into practice.

We have a responsibility to fight financial crime and prevent the banking system from being used for illegal purposes such as

organised crime and financing terrorism, or for bypassing national and international sanctions. We do this by working collaboratively

with regulators, governments and the rest of the banking industry.

We have consistent standards across the bank which, in many areas, are more rigorous than those set by local laws and regulations.

These include the application of sanctions, anti-bribery and anti-corruption activities, and policies relating to gifts and

entertainment, conflicts of interest and anti-competitive practices. Read more about these policy positions on our website.

Governance of compliance, reputation and conduct risk

In 2012, Barclays appointed a new Head of Compliance and Government and Regulatory Relations, reporting directly to the Group

Chief Executive. In a major change this will mean, for the first time, that all compliance staff within the bank report to one individual,

and operate independently of business and regional management teams.

We also established a Reputation Council to enhance our management of reputation risks and ensure the effective operation of our

Reputation Risk Control Framework. The Council evaluates referrals from our businesses on issues with the potential to create a

material reputational risk and determines an appropriate course of action, including escalation.

In 2013, the Board Citizenship Committee’s responsibilities were incorporated into the remit of the new Board Conduct, Reputation

and Operational Risk Committee. Membership comprises our Chairman and five independent non-executive Directors. The

Committee will help ensure that our business practices and culture appropriately reflect the needs of all of our stakeholders. It will

also oversee other areas of non-financial risk and retain oversight of our Citizenship strategy.

Conduct and Reputation risk are being categorised as new Principal Risks in 2013 in order to ensure appropriate oversight is being

applied. We will focus on embedding a new framework for managing these risks across the business and a new management

committee has been established to oversee this.

Read more about how we manage risk in Governance and the Barclays PLC Annual Report 2012.

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We classify reputation risk as the risk of damage to the Barclays’ brand from any association, action or inaction which is perceived by stakeholders to beinappropriate or unethical.We classify conduct risk as the risk of detriment to Barclays, our customers, clients or counterparties because of the inappropriate execution of our businessactivities.

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http://reports.barclays.com/ar12/strategicreport/strategicreview/whatwewanttobe.html

http://reports.barclays.com/ar12/riskmanagement/riskmanagementstrategy.html

Detailed performance and commentaryStrategy and business practices

In February 2013, we announced a number of financial and non-financial commitments as a result of our Strategic Review which

started in 2012. See Strategy for more detail on this. These commitments include ending or repositioning activities that we consider

incompatible with our Purpose or Values.

One of these commitments was that we will no longer participate in agricultural commodities trade transactions with counterparties

for speculative purposes. We took this decision because of public concern that the practice may be a potential cause of food price

inflation. Although the link between speculation and price fluctuations is not proven, we decided to take a precautionary approach.

This does not mean we have exited agricultural trading altogether; we continue to service clients such as food producers and pension

funds, who have a legitimate need to hedge against price volatility. Hedging provides producers of agricultural food staples with

predictability in terms of orders for their outputs. Hedging also enables long-term investors such as pension funds, who invest across

a diversified portfolio of assets including agricultural commodities, to manage longer-term liabilities and preserve future purchasing

power for their members as part of their investment mandate. We believe this activity is consistent with our Purpose and Values.

While agricultural commodities trading represents a very small part of our business, we will continue to monitor trends and research

to ensure we remain informed of developments.

In 2012, we also commissioned the independent Salz Review of our business practices which submitted its report recently.

Code of Conduct

We are currently revising our Code of Conduct in light of recent events and a global, more robust version will be introduced and

made publicly available this year. This revised code will cover the standards we expect of our employees, covering all aspects of their

working relationships, and specifically (but not exclusively) those with other Barclays employees, customers and clients, governments

and regulators, business partners, suppliers, competitors and the broader community. It will also set out how our Purpose and

Values will underpin every aspect of our business, align with existing policies and practices and translate into day-to-day decision-

making.

The Code will apply to all employees, including people working for any subsidiary in which we have a controlling interest Our aim is

to ensure that all employees are fully aware of what we expect from them and what will not be tolerated, regardless of their role or

location.

Note

Whistle-blowing

All employees, contractors, agency workers and consultants can access a confidential email address and phone line to report

concerns about the way we do business. All concerns raised are taken seriously and where appropriate, investigated in more depth.

The identity of those using the service can be kept confidential if they wish. No employee will experience retaliation in any way as a

result of reporting an issue in good faith.

The Board Audit Committee is responsible for ensuring arrangements are in place for employees to raise concerns, and receives

reports on any incidents reported and investigated.

1.

Other subsidiaries in which Barclays has a minority interest, and joint ventures in which we participate, are actively encouraged to adopt an equivalentapproach, as are any other entities or individuals contracted by Barclays to do work on our behalf.

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Preventing bribery and corruption

We have a zero-tolerance approach to any act of bribery or corruption, whether by our employees, suppliers or others with whom we

do business. Our Anti-Bribery and Anti-Corruption Policy complies with the UK Bribery Act 2010 and the US Foreign Corrupt

Practices Act. Our employees must also comply with any local anti-bribery legislation. We have a control framework in place to

monitor compliance and failure to adhere to these requirements can have serious consequences, ranging from internal disciplinary

action to dismissal or prosecution.

Human rights

We recognise the Universal Declaration of Human Rights and take account of other internationally-accepted human rights standards,

including International Labour Organization conventions and treaties and the Organisation for Economic Co-operation and

Development’s Guidelines for Multinational Enterprises.

We also promote human rights through our employment policies and practices, in the way we manage our supply chain, and by

conducting appropriate due diligence in the decisions we take when developing our products and services and when evaluating

lending transactions. We are collaborating with other European banks, as a member of the Thun Group, to examine how the new UN

Guiding Principles for Human Rights and Business can be integrated into bank policies and practices. We are also a member of the UN

Environment Programme Finance Initiative’s Social Issues Advisory Group.

Public policy engagements

We engage with policymakers across many of the jurisdictions in which we operate, including with governments, regulators and

industry groups. We conduct dialogue on issues where we have a legitimate interest and where public policy directly affects our

business, such as regulatory and structural reform. We ensure that any communication undertaken is honest, comprehensive, and

accurate. There’s more about specific engagements with governments in the Stakeholder engagement section and throughout this

Report.

Barclays is politically neutral and does not participate in party political activities or make party political contributions. Absa, in which

we have a majority stake, does make political donations to the major South African political parties as part of its Democracy Support

Programme. These are disclosed in the Barclays PLC Annual Report 2012.

Preventing financial crime

We have a legal, ethical and social responsibility to restrict access to financial services by criminals and to comply with official

restrictions on activity with any countries, individuals, entities or industries that are subject to sanctions.

Our employees may be personally liable if they fail to adhere to our policies on the implementation of sanctions and the prevention

of money laundering, terrorist financing and fraud. All employees are required to complete a financial crime training programme

when they first join Barclays and at regular intervals thereafter. They must also ensure they are familiar with the policy and practical

procedures that apply in specific circumstances, such as actual or suspected criminal activity.

We work closely with governments, regulators and law enforcement to detect and prevent financial crime and to help bring criminals

to justice. We also strive to achieve the right balance in our input to financial crime laws and regulations which protect the innocent

customer and ensure we can focus our efforts on the right areas.

Combating fraud

Preventing fraud is a high priority for us and we have detailed policies, procedures and frameworks in place to protect Barclays and

our customers. We ensure that fraud-related threats and risks are fully assessed, understood and managed. We do this by monitoring

activity across customers’ accounts, investing in state-of-the-art fraud detection systems and working with industry partners to

identify new and emerging risks. Our aim is always to maintain the right balance, ensuring that any fraud is detected and prosecuted

while continuing to treat our customers fairly and offering them accessible products and services.



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http://reports.barclays.com/ar12/governance/directorsreport.html#acc7

Preventing money laundering

We know that banking systems are sometimes used to carry out money laundering and we take this extremely seriously. Our Anti-

Money Laundering Policy requires every Barclays operation across the world to comply with all the relevant regulations and industry

guidelines that apply in its own jurisdiction. Our policy is designed to prevent criminals and terrorists from accessing the banking

system or our services and to support governments’ efforts to combat money laundering. The policy requires our business divisions

to identify and monitor closely the accounts of those who are known as ‘politically exposed customers’ – in other words individuals

holding public office who might be exposed to the risk of bribery and corruption. Anti-money laundering training is provided to all

our employees annually and more frequently if their job requires it.

We are a founder member of the Wolfsberg Group, which develops anti-money laundering and counter-terrorism policies for the

financial services sector and develops standards for our industry based on the principle of ‘know your customer’.

Applying sanctions

Sanctions are restrictions on activity with targeted countries, governments, entities, individuals and industries that are imposed by

bodies such as the UN, EU, individual countries or groups of countries. They are intended to prevent weapons proliferation and to

tackle organised crime and terrorism. Our Group Sanctions Policy is designed to ensure that we comply with applicable sanctions

laws in every jurisdiction in which we operate.

All employees receive training in this area at least once a year, with more detailed and advanced training for those whose roles

involve heightened sanctions risks. Failure to comply with the policy may give rise to disciplinary action, up to and including

dismissal.

In August 2010, we were instructed to pay US$298m (£187m) in fines in relation to US sanctions violations. Our settlement with the

US authorities requires certain actions and continued compliance and included entering into a Deferred Prosecution Agreement

(DPA) and a Cease and Desist Order with the appropriate US authorities. The DPA expired in August 2012 and was formally lifted in

December 2012, while the Cease and Desist Order remains in force and has no end date.

We continue to commit substantial resources to sanctions compliance, investing in both people and technology to improve our

systems and processes and minimise the risk of further breaches. We also continue to participate in an annual independent Office of

Foreign Assets Control compliance review.

Protecting customers’ personal data

We have robust controls in place to protect the personal information about our customers which we use in the course of our business

activities. We continually review our procedures to ensure that they comply with international privacy laws.

Our Group-wide data protection programme has been in place for a number of years and includes detailed reporting on how we are

complying with applicable laws, a review of third-party suppliers, education campaigns for employees and a global network of

privacy champions.

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Improving the customer experienceOur approach

We provide customers and clients in more than 50 countries with personal banking services, credit cards, corporate and

investment banking, and wealth and investment management. Our UK Retail and Business Banking network alone has 15

million personal customers and serves more than 750,000 businesses. To be successful, banks must treat customers and

clients with integrity, anticipate their needs and extend the services they offer.

Improving the experience we offer customers and clients is integral to achieving our ‘Go-To’ bank ambition. We have much further to

go in this area and are investing heavily in research and development to ensure our products and services are useful, appropriate,

simple and transparent.

As with all other UK banks, in 2012 we were bound by the former UK Financial Services Authority’s Treating Customers Fairly (TCF)

agenda. Each of our businesses has a TCF Accountable Executive who regularly reviews and addresses TCF-related issues. We also

have a dedicated TCF taskforce which monitors progress and drives improvement across the whole bank. The taskforce is overseen by

a bank-wide forum of senior executives. Topics discussed by the forum include customer complaints, mis-selling and redress,

emerging product issues and performance against the TCF framework.

Progress against commitments2015 commitment 2012 progress summary

Achieve top-tier customer/client satisfaction ratings by principalbusinesses based on independent surveys by 2015.

Overall, our businesses are on track to be top-tier for customerand client satisfaction based on independent surveys.

Achieve a sustained year-on-year reduction in customercomplaint volumes in businesses that serve individuals by 2015.

We achieved a 6% reduction in global customer complaintsbetween 2011 and 2012.

We achieved a 15% year-on-year reduction in UK complaintsexcluding PPI-related complaints.

Detailed performance and commentaryCustomer satisfaction

We monitor customer feedback and satisfaction using internal and external surveys. Customer and client satisfaction ratings

remained relatively stable at the end of 2012.

Our aim is to have independent surveys rank us in the top-tier of our peers for customer and client satisfaction for our main

businesses by 2015. We made good progress towards this in 2012 as summarised below. We have also set out below the results of

the internal surveys we use to measure customer satisfaction throughout the year (see graphs below). Methodologies differ

according to the nature of our business areas and the results are therefore not directly comparable.

In Barclays Africa customer satisfaction is measured on a country-by-country basis. All scores for advocacy and satisfaction were

greater than seven out of 10 last year.

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Internal satisfaction survey results % Independent survey

We ranked within the top six of the eight brands in our peer

group competitor set for overall satisfaction with current

account service in the six months to December 2012 on the

GfK FRS.


The 2012 J. D. Power and Associates US Credit Card

Satisfaction study saw Barclaycard US ranked fourth among 11

card providers, performing above the industry average.

Internal satisfaction survey results pts Independent survey

‘Mystery Shopping’ analysis in 2012 (conducted by

Multimetrica in Portugal and by STIGA in Spain) ranked us

second among 13 banks in Portugal and fourth among our 15

key competitors in Spain. In the same survey, we were also

rated number one in Spain for providing clear explanations of

our products and services to customers.

Internal satisfaction survey results pts Independent survey

Absa was ranked first in the 2012 Orange Index, a customer

service benchmark in South Africa (compiled by Ask Africa)

which assesses a range of service providers and retailers. Absa

was ranked second in the previous three years and was also

rated one of the top 20 service providers from across all

industries in South Africa in the same index.

UK Retail and Business Banking (UKRBB)

Barclaycard

European Retail and Business Banking (Europe RBB)

Absa

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In a 2012 Charterhouse Research survey, no other bank

achieved a higher rating from their corporate clients for the

‘Overall’, ‘Relationship Director’, ‘Relationship Support

Manager’ and ‘Servicing Centre’ satisfaction categories. The

division was named the number one ‘future choice of bank in

the corporate banking sector’ in the same survey.


Our Wealth and Investment Management business division is

driven by the quality of relationships between clients and their

relationship manager. Client satisfaction is therefore vital to its

success. In the US, satisfaction with our relationship managers

was at 83% in 2012, comparing favourably with the market

average.

Corporate Banking

Wealth and Investment Management

Investment Bank

Our Investment Bank was ranked first in the Greenwich Quality Index for client quality based on a survey of global fixed income

investors. We also monitor market share as an indicator of satisfaction and in 2012 we ranked in the top three banks for global

debt, bonds and M&A, and fifth for US equity and equity-linked issues.

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See footnotes 3-11 for information on the different data gathering methodologies used across business divisions.Includes Botswana, Egypt, Zambia, Kenya and Tanzania.This measure is based on asking customers three questions on a scale of 1-10 (overall satisfaction, comparison to expectations and comparison to ideal). The1-10 ratings are translated to a 0-100 score, and are then combined to produce the overall Strategic Satisfaction Index score. The score is reported as anindexed average at Q4 of the calendar year in a survey commissioned by Barclays.Source: GfK NOP Financial Research Survey (FRS), six months ending December 2012 data, main current account holders who are "extremely/very satisfied"with the service provided by their main current account provider. Barclays’ standard competitor set includes: First Direct, Halifax, HSBC, Lloyds TSB,Nationwide, NatWest, Santander. This measure is based on the percentage of customers reporting that they are in the top three boxes for satisfaction using latest available data at Q4 in surveyscommissioned by Barclays. Scores are weighted by businesses’ contribution to Barclaycard net income (adjusted for impairment). The movement in the Q42012 Barclaycard score is believed to be influenced by the change from telephony to online surveys.This measure is based on customers rating their overall satisfaction with Barclays on a scale of 1-10. Scores are weighted by the number of customers in eachcountry (Spain, Portugal, France and Italy). The overall result is based on an average of surveys conducted over a number of quarters.Absa scores are calculated using a Customer Satisfaction Measurement Index that derives an overall measure of satisfaction from a number of questions (witha maximum score of 100).This measure is based on the percentage of clients responding ‘excellent’ or ‘very good’ in a survey commissioned by Barclays. For 2010 this data is as at Q4,the data for 2011 and 2012 represents the Q3 score.Charterhouse Research data based on 2,076 interviews with companies turning over between £5m and £1bn carried out in year end 2012. Survey data isweighted by turnover and region to be representative of the total market in Great Britain. % Top Two Box Responses – excellent and very good.This measure is based on the percentage of customers reporting satisfaction in the top three boxes of a 10 point scale, across each of the Wealth businesses in2012 in a survey commissioned by Barclays. The 2011 results have been recalculated for greater consistency across Wealth and Investment Management andcomparability year-on-year.Spectrem Group research shows that 72% of millionaire investors, with US$1m (£629,000) to US$5m (£3m) in net worth, are satisfied overall with theirfinancial advisers.Greenwich Associates Global Fixed Income Survey 2012.Sources: Thomson Reuters, Dealogic and Bloomberg.

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Improving customer service

We are striving to make our services and products more transparent, easier to understand and more convenient for our customers.

In the UK, we now provide free SMS and email alerts to inform customers how we are progressing with requests such as updating

address details or replacing lost and stolen debit cards. Since April 2012, we have issued more than two million alerts. In Absa, we

have introduced banking fee ‘bundles’ to the Transact Account. These have simplified pricing structures so that our entry-level

customers understand exactly what they are paying for and include unlimited free debit and stop orders, electronic account

payments and a set amount of free ATM withdrawals and deposits. If any transactions are unused, they roll over to the next month.

We also introduced a service in 260 UK branches enabling customers to replace their debit cards immediately. At the end of 2012,

95% of customers were within 20 miles of a branch offering this service. This builds on improvements we made in 2011 to reduce

the time it takes to replace a lost or stolen debit card to 48 hours.

We are piloting the application of a ‘Citizenship lens’ to new product development in Barclaycard and Retail and Business Banking.

This will require employees and product approval committees to think more deeply about the decisions they make and understand

the wider impact of these decisions on society.

At the end of 2012, we also changed the way we incentivise all UK frontline retail banking employees. They are now rewarded

according to levels of customer satisfaction and no longer receive any payment relating to sales incentives or commission.

In Corporate Banking, we have a range of initiatives intended to enhance the quality of our relationships with clients, including

facilities such as account plans and financial need assessments to determine their individual requirements. We also continue to host

client events and seminars covering topical business-related issues.

In Wealth and Investment Management, we advanced our five-year programme to improve the client experience, including

enhancements to online banking services and new interactive facilities. Our Global Client Service Centre won the Best Customer

Satisfaction Strategy Award at the 2012 UK Customer Satisfaction Awards.

Complaint resolution

Our aim is to deliver excellent service every time, but there are occasions when we get it wrong. When this happens we make every

effort to put things right as quickly as possible.

Total global complaints received by business

In 2012, we saw a 6% decrease in all customer complaints compared with the previous year. The number of complaints we receive is

still too high and we need to do more to deal with them as efficiently and effectively as possible. Our focus is on preventing



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complaints arising in the future by addressing issues at their root cause. In our Barclaycard US business, for example, changes were

made to our card delivery processes which resulted in a 91% year-on-year reduction in related complaints.

The UK

Customer complaints remain a particular challenge in the UK, largely as a result of our past sales of Payment Protection Insurance

(PPI).

The majority of complaints we receive are resolved at the first point of contact. The graph below shows complaints received in 2012

where this was not possible, as reported to the Financial Services Authority.

UK complaints (reported to the FSA)

We recognise that genuine PPI complaints are absolutely valid, however, we stopped selling new PPI policies in 2010. UK complaints

increased overall in 2012, but if we exclude those relating to general insurance and pure protection, (the vast majority of which

concern PPI), we achieved a 15% reduction. On this basis, which we believe provides a clearer picture of customer complaints related

to our current business, we received approximately three complaints per 1,000 accounts.

When a customer is not satisfied with the way their complaint is handled or the outcome of their complaint, they can submit their

case to the Financial Ombudsman Service (FOS). Complaints referred to the FOS about Barclays rose significantly in 2012, with much

of this increase being driven by claims management companies in relation to PPI. While the number of cases where Barclays’

decisions were ‘overturned’ in favour of customers was broadly in line with the industry average for our peers of 52%, this remains

higher than we would like and is something we are working to address.

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The table below shows what we are doing about the main categories of complaint.

Reason for complaint Examples of what we are doing

PPI We have a dedicated team managing PPI complaints, in line with the commitments wehave made to our customers and to the former UK Financial Services Authority (FSA).This team is proactively contacting customers we believe may have been mis-sold PPIproducts. In February 2013, we announced that we had set aside a further £600m forPPI redress, taking the total cumulative provision to £2.6bn. This issue is also covered inTough questions, honest answers: 2012 challenges.

Fees and charges on current accounts andcredit cards

We are working to provide greater clarity and transparency on product pricing andwe’re responding to customer feedback with significant policy changes – such aspreventing cleared credit card purchase balances from incurring interest the followingmonth. We’re also helping customers avoid charges – for example, more than sevenmillion customers currently receive SMS alerts when they are nearing their overdraftlimit.

Account transactions – processing andhandling

To deal with transaction-related problems swiftly and effectively, we are making sureour employees can put things right at the first point of contact. We are also makingimprovements to processes, such as offering instant cheque processing, to maketransactions easier and more accurate.

Card security and fraud prevention We are making security identification processes more consistent to improve theexperience for customers when they contact us. We have also worked hard to increaseempowerment within our Fraud Operations team, avoiding the need for a lengthyinvestigation process in many circumstances.

Mortgages We have provided our mortgage staff with better information and training and giventhem more discretion to deal with customer issues to avoid unnecessary referrals.

Notes

Innovative products and services

Promoting diversity and inclusion

We are committed to a ‘multi-channel’ approach which lets our customers and clients access our services via the branch network,

internet, telephone banking, mobile phone apps and ATMs.

We have numerous facilities for customers with disabilities, such as hearing induction loops at branch counters. We support the

Royal National Institute of Blind People’s Make Money Talk campaign and in 2012 became the first UK high-street bank to offer

audio facilities at our cash machines.

There’s more about this in Case studies.

We have reviewed our design standards to ensure that new retail products and services take diversity and inclusion factors into

consideration from the outset.

We’re also participating in industry initiatives to improve services for vulnerable customers, including the UK Prime Minister’s

Challenge on Dementia which is run by the Alzheimer’s Society. As a result, we developed a power of attorney guide in 2012 which is

available online and offers clear and comprehensive guidance about this complex process.

Reportable complaints, as defined by the FSA, are those complaints not resolved by close of business on the business day following receipt with customeracceptance obtained.General insurance and pure protection is one of the product groups under which companies report complaint volumes to the former FSA. Other complaintcategories include: Banking, Home finance, Decumulation, Life and pensions, and Investments. See our website for full details of complaint categories.

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http://group.barclays.com/about-barclays/citizenship/uk-complaints-data

Digital technology

Digital technology is a major part of our innovation and underpins our efforts to put customers in control of their everyday banking

needs. Of our UK customers, 73% are registered for online banking and about half use it regularly. In 2012, we relaunched our online

banking facility to offer a faster service with additional features and improved navigation. The number of complaints relating to

online banking has subsequently been the lowest ever.

We continue to develop products and services that customers can personalise to suit their needs. Our new current account initiative,

Features Store, offers customers a range of free and paid-for features, and more than 434,000 customers have taken up the option to

personalise their debit card.

In 2012 we introduced Barclays Pingit, a free app which allows anyone with a UK current account and smartphone to make payments

by mobile phone. Users need only the recipient’s phone number (which doesn’t need to be a smart phone), avoiding the need to

share account details. At the end of 2012, this multiple award-winning product – the first of its kind in Europe – had been

downloaded more than 1.3 million times and handled more than £79m in payments. Barclays Pingit has gone live in Botswana, Kenya

and Ghana for international payments, making us the first bank to launch a free and instant mobile phone payment service

internationally.

After the success of Barclays Pingit, we launched a full mobile banking app enabling customers to access all their accounts in one

place, review transactions, manage statements and make payments and transfers. We also introduced thousands of iPads into

branches around the world last year to help customers explore our different products and speed up their transactions. For example,

customers can view demonstrations of Barclays Pingit and mobile banking functionality, while employees can fulfil simple requests

like balance information from the iPad rather than the customer queuing for service at the counter.

Barclaycard US launched the award-winning Barclaycard Ring MasterCard in 2012. This product is the first of its kind to be

developed with the input of an online community of card holders. In another industry first, it also offers a profit-sharing programme

called ‘Giveback’.

Barclaycard’s PayTag service, also launched last year, enables millions of customers to make contactless payments of up to £20 with

any mobile phone by simply attaching a free PayTag device to their handset.

We are also expanding the use of digital technology in our Investment Bank. For example, BARX, our suite of electronic trading

products and platforms, was used by more than 10,000 clients in 2012, enabling over US$50bn (£31.4bn) in transactions daily. In

February 2012, BARX FX, our foreign exchange trading platform, was named the best single-dealer platform by clients in the

inaugural EuromoneyFXNews buy-side e-trading survey.

Read more about our use of technology in Increasing access to financial services.

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Managing our impact on the environmentOur approach

Climate change and resource scarcity are among the greatest challenges of the 21st century. Banks can play a crucial role in

the move to a sustainable low-carbon economy, principally through the provision of financing and advisory services, as well

as through the decisions we make in relation to our supply chain. Barclays also has a direct – though smaller – environmental

impact by the consumption of natural resources in our operations across the world and we take responsibility for managing

this. Read more about this in Environmental and social risk in lending, Creating commercial solutions to social challenges and

Managing our supply chain.

The main focus of our environmental programme continues to be climate change mitigation, as set out in our Climate Action

Programme. This covers not only our direct operational impacts, such as energy use, but also the indirect consequences of our

lending and investments. Our 2015 Citizenship Plan commits us to proactively managing the social and environmental impacts of our

business and we have an environmental policy endorsed by our Board and Executive Committee. Environmental targets for our own

operations are agreed by our Board Conduct, Reputation and Operational Risk Committee (formerly the Board Citizenship

Committee), with performance reviewed every six months.

Looking ahead, we will focus on expanding our programme for waste and water management.

Climate Action Programme

Our Climate Action Programme was launched in 2010 and covers the period from 2011 to 2015. It focuses on the three areas

where we have most influence or the greatest potential to mitigate climate change:

Developing products and services for a low-carbon economy: this covers financing and risk management services for

clients which will help direct more capital to low-carbon opportunities

Managing climate change risks: this includes collaborating with our stakeholders to minimise the risk to our own

operations, as well as to our customers, clients and society at large

Managing our own carbon footprint: as part of our Climate Action Programme we are committed to reducing our

absolute carbon emissions and to offsetting the remainder.

Following the expiry of our organisation-wide certification to the ISO 14001 environmental management standard in late 2011, we

made the decision to move to a regional approach with certifications for individual buildings. This enables us to manage the impacts

of our global property estate in a more targeted and strategic manner and focus on those buildings with the highest proportion of

our employee base. At the end of 2012, this certification covered buildings where approximately 45% of our employees work and we

will continue to increase this coverage.

In addition, we have a Building Sustainability Policy which includes a commitment that any building investment over £5m will

achieve an independent best practice standard for environmental performance. Five buildings received certification in 2012: our

Investment Bank office in São Paulo, Brazil, and our Financial Centre in Singapore (which both achieved LEED Gold), our Absa head

office in Johannesburg, South Africa, (5-star, Green Star ‘As Built’ certification from the Green Building Council of South Africa) and

the Wakefield and Stratford Westfield retail branches in the UK (which received a Ska Bronze Rating).

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Leadership in Energy and Environmental Design (LEED ), developed by the US Green Building Council, is a global award for excellence in green design andthe performance of buildings.The Ska Rating, developed by the Royal Institute of Chartered Surveyors, measures the environmental performance of an office fit-out (as opposed to a newbuild).

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Total carbon emissionstonnes

CO e Total energy use MWh


Reduce operational CO2 equivalent (CO2e) footprint by 4% bythe end of 2013, compared with 2010 levels.

We reduced our carbon emissions by 12% in 2012 (from 2010),meeting our target two years early. As a result we have set aninterim target of 14% for this year, and will set a 2015 target forfurther reductions in the next iteration of our Citizenship Plan.

Offset CO2e emissions arising from core banking operations. We continued to offset our global footprint and purchased 1.1million credits for 2012 emissions.

Report water, waste and paper data for top 100 buildings. We have decided to adopt a regional approach which will lead toincreased coverage. We have included water consumption and,for the first time, reported paper use data.

Detailed performance and commentaryEmissions and energy use

Our total CO e emissions in 2012 were 998,585 tonnes, down from 1,075,261 tonnes in 2011 – a 7% reduction. This also represents

a 12% reduction compared with 2010 levels, exceeding our commitment by 8%. Absa, which generates approximately 35% of our

emissions, achieved a 22% reduction compared with 2010 levels.

The majority of our emissions in 2012 (79%) arose from the electricity used in our buildings (Scope 2). 5% was from company car

emissions, natural gas use and diesel generators (Scope 1 – see Total emissions by scope 2012 graph), and the remaining 16% was

business travel (Scope 3), of which the majority is from business flights.

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Total emissions by scope 2012 tonnes CO e

We continued to strengthen our environmental data collection during 2012; read more about this in How we report. We also

monitor our energy-reduction initiatives to drive savings across our buildings portfolio. In 2012, these initiatives contributed to our

12% emissions reduction. They include:

Initiative summaryEstimated carbon saved

in 2012Estimated financial savings

in 2012

Low-energy lighting introduced in 800 UK bank branches. 736 tonnes CO2e3 £124,000

19,000 high-efficiency desktops introduced across the UKbranch network.

1,200 tonnes CO2e £148,000

Carbon Aide campaign in UK branches, encouragingemployees to switch off lighting and equipment.

2,730 tonnes CO2e £525,000, with 10% of these savingsdonated to environmental charities.

Efficiency improvements to US data centres, includinginstallation of new fan blades and aisle containment (theseparation of chilled air and waste heat to avoid the need foradditional cooling).

2,000 tonnes CO2e £400,000 per year

Efficiency measures in Absa branches, including theintroduction of controlled lighting, heating and air-conditioning in 180 retail buildings, and efficientlighting/occupancy sensors in 120 buildings.

37,600 tonnes CO2e4 Installing energy-efficient lighting hasresulted in an annual saving of

£1.38m. Absa has also benefited froma £155,000 rebate from Eskom, theelectricity supplier in South Africa,

with future performance-basedpayments until 2015.

Our sustainable travel programme also led to a reduction of nearly 22,500 tonnes of CO e emissions in 2012. Promoting the use of

video and teleconferencing as an alternative to business travel and switching from air to rail for shorter journeys were the principal

drivers of this reduction. In early 2013, we achieved the ‘Project Icarus’ Gold Standard from the Global Business Travel Association

initiative. This recognised our work to make business travel more sustainable in 2012. Barclays was the only bank to achieve this

standard.

We also reduced our property portfolio footprint in 2012 by 6% in m and the number of our employees by 1%, which has

contributed to the decrease.

We remain committed to ensuring that our core banking operations are carbon-neutral. Our first priority is to reduce our emissions,

but where this is not possible we offset those that remain. We purchased 1.1 million carbon credits for our 2012 emissions from

projects located in India, China, Kenya and South Africa. We only buy credits that are certified to at least the Voluntary Carbon

Standard or Gold Standard and we aim to fund projects that have proven social and economic benefits as well as environmental ones.

For example, we support a Reducing Emissions from Deforestation and Degradation project in Kenya.

There’s more about this initiative in Case studies.

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Global water consumption m

Paper use tonnes

As part of our wider low-carbon investment strategy, we set up an African Carbon Fund to supply seed capital to carbon mitigation

projects with high social impact. This fund has now been incorporated into our Social Innovation Facility, which was set up in 2012

and is committing £25m over the next three years to supporting products and services that will deliver social and environmental

benefits, of which approximately 15% is ring-fenced specifically for environmentally-focused projects.

Read more about this in Creating commercial solutions to social challenges.

Notes

Water, paper and waste

Last year, as part of our 2015 Citizenship Plan, we committed to collecting data on water, paper usage and waste in our 100 largest

buildings by energy use. After examining the feasibility of this, we decided instead to collect data on a regional basis focusing as a

minimum on the UK, US, South Africa and India – which taken together constitute 77% of our property portfolio by m . We made

good progress during 2012 and included data on paper usage in our reporting for the first time this year.

Water

Although water data is collected from all regions it does not

represent complete coverage (42% of our portfolio by m ). We

are working to increase the completeness and accuracy of our

data. For the areas where data was available, our water

consumption remained stable from 2011 to 2012, despite a

reduction in employee headcount.

Paper

Our paper consumption decreased by 7% between 2011 and

2012. This was due to a headcount reduction across Barclays.

We currently collect paper data from central suppliers in the UK,

South Africa and North America, which covers approximately

65% of the portfolio.

This initiative was implemented towards the end of 2012. Emissions reductions will be approximately 3,000 tonnes for a full year.This reduction was due to a combination of efficiency measures and reduction in headcount/portfolio.

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Waste

We are working in partnership with our contractors to collect robust data and will establish a baseline of waste data in 2012 to enable

future reporting.

Some examples of how we managed our water, waste and paper in 2012 include:

Regional employee engagement programmes to encourage recycling and reductions in waste and water use. For example, in

Spain week-long activities were organised to raise environmental awareness among employees, offering them advice on how to

reduce their environmental footprints both inside and outside the office

Working with our suppliers to reduce our waste and improve recycling rates. We recycled 350 tonnes of plastic cash bags which

were converted into low-density polyethylene (a type of plastic) pellets and used in a variety of other applications

Installing a ‘greywater’ recycling unit at Absa Towers West in Johannesburg, South Africa, which recycles and purifies up to

45,000 litres of water used within the building per day. A metering system also helps to reduce consumption.

Notes

Engagement

We continue to engage stakeholders about our impact on the environment in order to raise awareness and keep them up to date on

changes in environmental regulation and emerging issues. See Stakeholder engagement for detailed examples of what we are doing

in this area.

The banking sector and regulators

We take part in debates relating to environmental regulation, especially where it affects our operations. We sit on the UK Environment

Agency Customer Operations Liaison Group, whose members comprise organisations that are required to comply with the Carbon

Reduction Commitment Energy Efficiency Scheme (CRCEES). We respond to government consultations on energy legislation and

white papers, including the CRCEES in the UK and the National Climate Change Response White Paper in South Africa. Our employees

also regularly participate in environmental conferences and initiatives to share best practice and influence the wider agenda.

We are a founder member of the Banking Environment Initiative and in 2013 our Group Chief Executive Antony Jenkins became the

Chairman of this forum. For more information on this initiative, see Environmental and social risk in lending and Creating commercial

solutions to social challenges.

Employees

We know that the way our employees behave at work can make a crucial difference to our environmental performance. We run many

internal campaigns to publicise our environmental programmes and raise awareness about climate change. Examples in 2012

included our UK ‘Switch It Off’ campaign in support of WWF’s Earth Hour project to promote energy efficiency, ‘Earth Day’ in North

America which focused on waste recycling, and numerous engagement events and competitions in Europe.

NGOs and partnerships

We engage with non-governmental organisations through a number of long-term partnerships and on specific issues as they arise.

Our PEARL (Protecting East African Resources and Livelihood) project with WWF – which tackles threats to biodiversity, natural

resources, and livelihoods in the region – was completed at the end of 2012. The project has generated excellent results for local

communities, including the first sustainable logging project in Kenya to receive Forest Stewardship Council certification and an

initiative which helps community groups sell sustainable charcoal produced from tree nurseries as an alternative to deforestation.

Based on employee location (Full-time equivalent).5



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Our partnership with SolarAid, which tackles climate change by helping local communities in Kenya switch from kerosene lighting to

cleaner solar energy, also finished in 2012. Thanks to our support, SolarAid was on track to grow its solar lighting social enterprise,

SunnyMoney, by up to 600% in the period from 2012 to 2013. Some 41,000 units were sold in Kenya alone, providing cheaper,

cleaner lighting for 200,000 people and environmental benefits for the wider community. See our website for more about this.

We are also backing renewable energy by supporting the PURE Community Energy Fund. This initiative, which was launched in

London last year by carbon reduction charity PURE, aims to fund 70 clean energy projects in communities across the UK. We donated

£200,000 along with a £1m investment from Big Society Capital, an independent financial institution established by the UK

government to provide affordable finance to social sector organisations. PURE will help local organisations access low-cost loans for

small-scale renewable energy projects, so that communities can benefit from carbon reduction and the reduced energy costs that

come from investing in clean energy.



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Environmental and social risk in lendingOur approach

A responsible approach to lending is an integral part of our day-to-day business practice. This includes the assessment and

management of the environmental and social risks associated with our lending, focusing on project finance transactions and

sensitive sectors. Both our external stakeholders and our employees take a keen interest in how we manage these indirect

impacts of our financing.

The risks that can arise from our loans can be wide-ranging and their severity will depend on the industry sector and regulatory

regime in which the client is operating, the region and the client’s ability and willingness to manage and minimise risks. These can be

categorised as:

Direct – there may be some circumstances in which Barclays could be held liable for environmental damage, for example for the

costs of cleaning up a site which may have been contaminated by a client

Indirect – these might arise through changes in market conditions, or if a client could not make payments due to unforeseen

social and environmental costs or liabilities

Reputational – our reputation might be damaged by our association with some clients if they are believed to be engaged in

environmentally and/or socially sensitive activities.

Risk management

Our approach to environmental and social risk management is based on a combination of policy and guidance. This allows us to

adopt a robust approach, while maintaining the flexibility to consider potential clients and transactions on their individual merits. We

consider environmental and social issues to be a mainstream business risk, which is why they are incorporated into our core credit

decision-making process.

We are committed to undertaking environmental assessments of any project finance application for more than US$10m (£6.3m), as

stipulated by the Equator Principles. We also review applications below this threshold on a case-by-case basis, depending on the

sector, region and nature of the loan application involved. We have a dedicated Environmental Risk Management (ERM) team as part

of our Head Office Credit Risk function in London, together with further ERM resource in the Absa Credit Risk function in

Johannesburg, South Africa, to advise on any transactions where there are particular environmental or social sensitivities.

We have provided training to a number of credit risk managers across the Group on environmental and social risk assessments,

reinforcing awareness of when to refer specific transactions to this specialist team. If they consider it necessary, specific transactions

can be escalated for further consideration at a more senior level. We will then, where applicable, work with the applicant company to

mitigate the risks causing concern, or if appropriate action isn’t taken or the risks are deemed too high, we may decline support for

the finance application.

Business loans in our Corporate Banking and Retail and Business Banking divisions are assessed for environmental risk. Where

necessary we have policies and processes in place to assess specific environmental risks – for example those associated with the

possible contamination of commercial land and property which are offered as security for a loan.



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Agriculture and fisheries

Chemicals and pharmaceuticals

Forestry and logging

Manufacturing

Infrastructure

Mining and metals

Oil and gas

Power generation

Service industries, including healthcare and

telecommunications

Utilities and waste management.

Governance structure for transaction review

Our policy explained

Our Environmental and Social Impact Assessment policy (ESIA) applies to project finance proposals, or where proposed funding is

raised for the development of a specific asset such as a mine or a pipeline that may give rise to environmental or social risks. Such

funding includes some types of commercial or bridge loans. It is also the mechanism through which we apply the Equator Principles.

The Equator Principles are an internationally recognised framework for assessing the social and environmental impacts of project

finance transactions, and are based on the International Finance Corporation Performance Standards. We were one of four banks that

helped establish the Principles in 2003 and we remain involved through our membership of the steering committee.

Our ESIA policy is supported by a toolkit for employees comprising a range of practical guidance documents. These include a

detailed process guide, a screening tool, guidance for engaging consultants for environmental assessments and sample clauses for

loan documentation.

For project finance transactions and other types of lending, we have developed detailed internal guidance notes for sectors where

environmental and social risks are common. These guidance notes have also been adopted by the UN Environment Programme

Finance Initiative (UNEP FI), through which they are available to all UNEP FI signatories. The notes cover:



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Project finance transactions by geography Project finance transactions by risk category

Transactions screened by sectorProjectfinance

Othertransactions

Infrastructure 3 14

Mining and metals 12 59

Oil and gas 1 41

Power (fossil fuels) 5 9

Other

Agriculture, fisheries, forestry andlogging 0 6

Manufacturing 0 19

Chemicals and pharmaceuticals 1 16

Power (non-fossil fuels) 6 48

Utilities and waste management 1 6

We also have specific policies in relation to lending to operators in the nuclear power sector and defence industries. These policies

recognise the particular sensitivities and challenges associated with these sectors, setting minimum criteria for any loans we may

approve. We review all our policies and guidance notes annually to ensure our risk analysis takes account of emerging issues and

trends.

For more information on our ESIA policy or to request copies of our guidance notes, email [email protected].

Detailed performance and commentaryTransaction screening

We screen both project finance and other high-risk transactions to assess the social and environmental risks posed, in line with our

Environmental and Social Impact Assessment policy (see Our approach in this chapter). A summary of this activity in 2012 is

provided below. The data is reported as part of our commitment to operate in accordance with the Equator Principles.

A total of 277 of these transactions were referred to our

specialist Environmental Risk Management (ERM) team for

further analysis, of which 30 were project finance transactions.

Overall transaction and project finance transactions rose in

2012, which reflects an increase in renewable energy

transactions globally, driven in some countries by government

initiatives such as South Africa’s Renewable Energy Independent

Power Producer Procurement Programme.

In our UK Corporate Banking and UK Retail and Business Banking

divisions, our panel of property and land valuers can use our

bespoke environmental screening product, SiteGuard, to assess

the commercial history of a piece of land, its potential for

environmental contamination and the operational implications

of a site’s current or intended commercial use. Where

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mailto:[email protected]

Service industry including healthcare 0 12

Engineering 0 13

Miscellaneous 1 4

Total 30 247

Transactions screened by sectorProjectfinance

Othertransactions

appropriate, cases are then referred to our ERM team for review.

Last year, 4,159 commercial properties were screened using this

tool, of which 1,280 were referred to the ERM team. Actions

taken in response to the screening process may include

requesting additional information from the client or

incorporating environmental covenants into loan

documentation. In addition, 397 cases were referred to the ERM

team where potential risks other than contaminated land

or property were identified.

In South Africa, Absa assesses the risks associated with contaminated land and has contracts with independent consultants to

conduct assessments on its behalf where required.

Notes

Engagement and awareness-raising

Environmental and social risks are now established as a key element of our ‘business as usual’ credit assessment. This means there is

less emphasis on formal employee training programmes and a greater focus on responding to developing industry or geographic

issues. For example, during the course of the year face-to-face meetings took place with business relationship directors in Africa to

brief them on the environmental and social risks they are likely to encounter in key and emerging sectors in their respective countries.

In addition, over 100 employees in Absa attended presentations or engaged directly with Absa’s Environmental Risk Management

team on environmental and social risk issues.

We are a founding member of the Banking Environment Initiative (BEI), and our Group Chief Executive Antony Jenkins became the

Chair of this group in 2013. BEI is a collaboration between 10 global financial institutions seeking to develop ways of redirecting

capital towards sustainable growth and a low-carbon economy. We have been actively engaged in the soft commodities working

group which is working with the Consumer Goods Forum to achieve zero net deforestation in its supply chains by 2020. The

discussions have, to date, focused on how the banking sector can help finance the transition towards a sustainable supply chain and

the standards and practices involved in doing this.

In 2012, Absa participated in the signing of the Power Purchase and Implementation Agreements for Renewable Energy Projects, a

government initiative that will open up opportunities for private power producers in South Africa to develop large-scale power

projects. Absa also worked with members of the Banking Association of South Africa, in conjunction with Bankseta, to develop a

sector-based employee training programme on environmental and social risk management.

The Equator Principles (see Our approach) were under review during 2012. Barclays and Absa both contributed to the consultation

process and are members of the Equator Principles reporting and transparency workforce and co-chair working groups on climate

change and social risk. Absa also hosted a series of workshops with environmental consultants and assurance providers to discuss the

implications of the proposed changes. We will update our ESIA policy to reflect new requirements published in June 2013.

Note

2

This includes transactions that commenced in 2012 but where review and engagement was ongoing in 2013. Transactions that required relatively minorinputs are not included.From a total of approximately 7,200 commercial property valuations commissioned.

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Zero net deforestation is reducing deforestation and increasing afforestation until the net deforestation is zero.3



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Managing our supply chainOur approach

We are a significant buyer of products and services, spending about £8.7bn in 2012 in 39 countries around the world. We

work in partnership with our suppliers to manage the social and environmental impacts associated with these, focusing in

particular on organisations that might present higher levels of risk in relation to the services they provide. We are committed

to working with suppliers that share our values in all the locations in which we operate. We are also committed to treating our

suppliers with respect. For example, we are a signatory to the UK Prompt Payment Code, committing us to paying suppliers on

time and encouraging best practice.

We conduct a risk assessment for all new suppliers above certain spend thresholds, depending on region, business division and

spend type. This requires the completion of a questionnaire on aspects of the business relationship, including sustainability criteria

which cover both the social and environmental elements of our Citizenship objectives. All suppliers identified through this process as

high-risk (or ‘in scope’) from both a commercial and a sustainability perspective will have specific terms in their contract to manage

the issues identified. For example, these could relate to health and safety, diversity and inclusion, human rights or the environment.

High-risk suppliers are also subject to a rolling three-year audit cycle and annual self-certification process. Results from these are

assessed by the supplier relationship manager and remediation plans developed where necessary. In instances where remediation

activities cannot be agreed or met, an escalation route will be followed to the accountable executive.


Implement a global Supplier Code of Conduct. A Supplier Code of Conduct was developed in 2012, outliningwhat we expect from suppliers in terms of environmentalperformance, human rights, health and safety, and diversity.

Detailed performance and commentaryWe are working to audit all of our high-risk suppliers (where sustainability is ‘in scope’ – see Our approach in this chapter for more

detail on supplier risk assessment) by the end of the three-year audit cycle initiated in 2011. A total of 43% were audited at the end

of 2012.

2012 2011 2010

Supplier spend, across number of countries. £8.7bn across40 countries

£8.8bn across40 countries3

£8.7bn across37 countries

% of total high-risk suppliers auditedon-site for sustainability performance.1

43%4 37% n/a

% of high-risk suppliers that completed self-certification process.

85% 47% n/a

% of suppliers paid on time.2 81% 89% 82%

NotesThe commitment is to audit all high-risk suppliers once every three years. The 43% constitutes a cumulative figure for years one and two. The remaining high-risk suppliers are due to be reviewed during year three (2013).Payment-on-time metrics are measured on a three-month rolling average. The average for the period January to December 2012 was 81% across ourCorporate Banking and Retail and Business Banking divisions in the UK and Head Office functions.Restated figure for 2011 due to improved accuracy of data collection system.Suppliers identified as being high-risk (or ‘in scope’) from both a commercial and a sustainability perspective are given contracts with specific terms relating tothe management of areas such as health and safety, diversity and inclusion, human rights and the environment.

1

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In 2012, 85% of our high-risk suppliers completed the self-certification process. This significant improvement from 2011 is due to a

higher level of engagement between our purchasing managers and our suppliers, which has led to a more collaborative approach

and more active management of their sustainability impacts.

The number of payments made to suppliers on time decreased from 89% in 2011 to 81% in 2012, meaning that we missed our initial

target to achieve a rate of 90%. This decrease is largely due to changes in internal systems and processes leading to incorrect

supplier billing. We are determined to make improvements by increasing engagement with suppliers, conducting an internal review

and examining payment data to make any necessary changes to to the way we measure performance and set targets.

In 2012, we brought Sourcing employees together into a single global function based in Singapore, to create operational efficiencies

and more consistent service levels. We also developed a new global Supplier Code of Conduct in 2012, which outlines what we

expect from every supplier in terms of environmental performance, human rights, health and safety, and diversity. The Code will be

supported by specific terms and conditions for individual suppliers. We are piloting the Code before implementing it more widely,

and the priority will be to cover categories of spend which have the largest social and environmental impacts. We will also be

providing training for our procurement managers. The Code will ultimately cover a much broader range of suppliers than our current

approach and will form an integral part of their regular performance assessments.

We are also focusing on diversity, drawing on the knowledge of experts in this field including Minority Supplier Development

UK (MSDUK) to help us access a wider range of suppliers.


Absa’s approach to supplier diversity is in line with South Africa’s Broad-Based Black Economic Empowerment agenda. There’s more

information about Absa’s approach to supplier diversity in the Absa 2012 Integrated Annual Report.

Engagement

In our UK Retail and Business Banking Division we continue to champion the UK Green Supplier Pledge which was launched in 2011,

working with suppliers to identify new opportunities to improve environmental performance. Another six suppliers signed up in

2012, bringing the total to 12. As part of this, we ran a second supplier roadshow in 2012, showcasing environmental initiatives such

as biodegradable debit cards and recycled paper made from our confidential waste. We hope to expand the initiative to 20 suppliers

this year.

We also launched a new initiative in early 2013 in response to feedback in our 2012 Employee Opinion Survey. Our employees said

we needed to do more to engage our Purchasing departments about our Citizenship agenda. As a result, we’ve created a new

Citizenship champions’ network to share best practice and better incorporate sustainability into our sourcing activities.

We continued to engage with industry groups on supply chain management in 2012, with a particular focus on supplier diversity, for

example the Financial Service Corporate Responsibility forum.



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Employees by region (Full-time equivalent) Employees working part-time %

Our peopleOur approach

We will only achieve our ambition of making Barclays the ‘Go-To’ bank if we attract, retain and develop the best people with

the right capabilities. Despite the many difficulties facing Barclays in the past year, our employees remained focused on

serving our customers and clients – as reflected by our 2012 financial performance. Going forward, every one of our 140,000

employees worldwide has a vital role to play in rebuilding our reputation and restoring trust with our stakeholders and wider

society.

Our new Purpose and Values (read more in the Strategic report) define the explicit behaviours we expect of our employees as we

embed a new culture and way of working at every level of the organisation. There can be no distinction between doing well and

behaving well at Barclays, so as we align behind our common Purpose and core Values we are changing our approach on pay. It is

our aim that in future it will not be possible for people whose behaviour does not align with our Values to join Barclays or succeed

within the organisation. We have therefore clearly defined what our behavioural expectations are for each Value and for each level of

leadership across the bank.

Our performance management and reward systems remain very important in reinforcing these behaviours. We are introducing a

balanced scorecard which includes financial and non-financial measures for business success. In support of the scorecard, individual

performance assessment will be based on what employees deliver and how they deliver it. Elsewhere, we are reviewing and, where

appropriate, standardising other employee polices, for example those relating to talent, in line with our programme to transform

Barclays and the way we do business.

We strive to be an employer of choice and to create a positive, safe and inclusive environment in which all employees thrive, are

engaged and can fulfil their potential.

Detailed performance and commentaryOur employees

Note This total includes temporary staff, who in 2012 comprised 6.3% of our global workforce.1



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Culture and values

Work to improve the culture of our organisation started in January with the launch of our new Purpose and Values and our business-

wide Strategic Review. We expect every employee to exemplify our Values and behaviours, regardless of their role, seniority or

location. Read more about this in the Strategic report.

Efforts to build a sustainable, values-driven culture will be reinforced throughout 2013 with training for all employees by 1,000

‘values leaders’ from across the business, while a new leadership curriculum will develop the knowledge, skills and behaviours of

senior employees.

We are introducing a Group-wide, standardised and assured induction process to ensure new joiners understand what is expected of

them, while a new Code of Conduct for all employees – rooted in our Purpose and Values – will be launched following and including

recommendations from the Salz Review. There’s more about the Code of Conduct in Conduct and Compliance.

Performance and remuneration

Remuneration has been a key concern for many of our stakeholders and there is no doubt that pay in some parts of the industry

became excessive in the years leading up to the financial crisis. The past year marked a turning point in our approach to

remuneration and to the balance between director and employee pay, and returns for shareholders.

While we remain committed to paying for performance and to paying competitively for the best people, we made significant

reductions to remuneration costs in 2012. Variable remuneration reduced by 16% overall and fixed remuneration by 7% year-on-

year, signalling our intention to deliver a greater share of the income we generate to shareholders.

We are making important changes to the way we measure performance and reward employees by incorporating a balanced scorecard

of both financial and non-financial measures into the appraisal process for senior executives during 2013 and for all employees from

the middle of 2014. This will be used to assess performance in five categories: Customers and Clients, Colleagues, Citizenship,

Conduct, and Company.

We have also removed all sales-based commission plans for UK retail branch-based employees with incentives for these employees

now based only on customer service metrics. Read more in Tough questions, honest answers: 2012 challenges and in the Barclays

PLC Annual Report 2012.

Training and development

All our employees are offered opportunities for personal and professional development. These range from volunteering and

mentoring, to leadership and impact training, international secondments, job rotations, mentoring, and support with qualifications

such as MBAs. Training can take place face-to-face, online or on the job. In addition, every employee receives any training that is

required to adhere either to regulatory requirements or to our own policies. There’s more on this in Conduct and compliance.

We offer work experience, internships and a global Future Leaders Development Programme – our graduate programme – which

offers tailored help with career development and which recruited 1,100 individuals last year.

Apprentices are an important part of our future workforce and in 2012 we launched a flagship initiative in the UK to attract people up

to the age of 24 to financial services. Read more about our employment initiatives in Creating commercial solutions to social

challenges.



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Employee engagement

Successful employment relationships are built on mutual benefit and trust, and a more engaged workforce is always a more

productive one. Ensuring employees are well-informed, feel connected and understand our culture and objectives is vital if we are to

deliver long-term value for our customers and clients.

We build trust and seek feedback through regular, informal dialogue between the Group Chief Executive, Executive Committee and

employees in events such as internal forums and via more formal mechanisms including our annual Employee Opinion Survey.

Our 2012 survey was completed by 84% of employees in advance of the announcement of Barclays’ settlement with various

regulators in relation to LIBOR and other interbank lending rates. For the first time, we asked the same core questions across all our

business divisions which will enable us to measure our progress going forward. These include whether employees are proud to work

for Barclays, would recommend it as a place to work and whether they believe in the goals and objectives of the organisation. The

overall score for engagement was 73%, which is broadly in line with the average for financial services globally.

Notes

Diversity

We have a global diversity and inclusion strategy to ensure that employees of all backgrounds are treated equitably and can

contribute fully to Barclays. The strategy is overseen by the Executive Diversity Group. This Group sets the overall direction and

progress is regularly reviewed by both our Board Nominations Committee and Group Executive Committee.

We have clear objectives to increase representation and reduce turnover of under-represented groups, foster a positive working

environment and increase external recognition of Barclays as an inclusive employer. Numerous initiatives are in place to help us

achieve these ambitions, including diversity councils in each business and diversity and inclusion training for all employees.

In South Africa, we remain aligned with the country’s Employment Equity Laws which require businesses to set targets for different

segments of the population. While overall progress has been slow, we did make excellent progress in increasing the number of

African females in our workforce. See the Absa 2012 Integrated Annual Report for more detail.

Gender

Achieving a better balance between male and female employees, particularly at senior levels, is a challenge that many financial

services organisations face. We are no exception, though our progress has been slower than planned. Increasing female

representation will continue to be a key priority for our diversity and inclusion strategy. The number of females in senior roles is

reviewed every six months.

As at 31 December 2012, female representation on the Board was 8% female, down from 16% in 2011. This was due to the

departure of the Remuneration Committee Chair during 2012. In early 2013, Diane de Saint Victor was appointed to the Board,

bringing current female representation to 15%. We recognise that we have a long way to go, but are committed to achieving a Board

that has 20% female representation by the end of 2013 and 25% by the end of 2015.

2

3

Historical results, using prior methodology, can be found in the Barclays PLC Annual Report 2012.Based on Global Financial Services benchmark data compiled by Towers Watson (using Towers Watson and Gelfond survey data in 2012).

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Female employees %

The turnover of female employees across the bank was 13% in 2012, below the 14.4% average for all our employees. Going forward,

we want more talented women to join Barclays and develop their careers with us. Our programme to provide high-potential female

employees with targeted development and mentoring currently has more than 100 participants, while global membership of our

Women’s Initiative Network has increased to 3,000 employees. Elsewhere, the Embark programme in our Wealth and Investment

Management business division for people wanting to make a career change into fund management saw its female intake rise to 85%

in 2012 from 35% in 2011.

Last year, we were included in The Times’ Top 50 Employers for Women list for the seventh consecutive year. We took part in the

FTSE 100 Cross-Company Mentoring Programme and sponsored both the UK Women of the Future Awards and the Female FTSE

Board Report from Cranfield University. Our Group Chief Executive Antony Jenkins gave a keynote speech at the Women’s Forum for

the Economy and Society in France and we signed up to the Think, Act, Report framework, a gender equality initiative by the UK

government. We also hosted an inaugural Barclays’ Women’s Leadership Forum in Singapore, while in France we are a founder

member of Financi’elles which works to bring more women into the financial services industry.

Our Women of the Year Awards, which celebrate employees who have achieved outstanding success or are inspiring role models,

attracted a record 1,600 entries from 40 countries.

LGBT

Membership of our award-winning Spectrum network for lesbian, gay, bisexual and transgender (LGBT) employees stands at more

than 1,000 globally. The network developed and launched a mobile phone app last year enabling employees to stay up to date with

the latest LGBT news and Spectrum events, making us one of the first global companies to use smartphones to further its diversity

and inclusion agenda.

We continue to support Pride events and awareness campaigns around the world, including World AIDS Day when fundraising and

other events take place across Barclays.

We were ranked third by the lesbian, gay and bi-sexual charity Stonewall in its 2012 UK Workplace Equality Index, up from 10th in

2011 and have maintained 100% on the Human Rights Campaign Corporate Equality Index in the US for five consecutive years. We

are also working with UK organisations such as Positive East, the Albert Kennedy Trust and the Lesbian and Gay Foundation on LGBT

equality, and formed a partnership with Asia’s Community Business and Hong Kong University to fund research into the work

experiences of LGBT people in Hong Kong. We also sponsored LGBT film festivals in Asia and India, and supported the Singapore

Pink Dot festival which campaigns for LGBT legal reform.

We have extended our benefits programme to same-sex partners across a number of locations in Asia Pacific and they now receive

the same full partner benefits as married couples, including health and medical cover. Work by Spectrum with the marketing teams in



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Employees by age %

UK Retail and Business Banking to promote our services more effectively to LGBT people resulted in a leading role for a gay couple in

a personalised debit card advert.

Disability

We offer comprehensive support and guidance for employees with a disability. In 2012 they comprised 3% of our global workforce,

including 2% of our senior manager population. We also monitor a number of indicators relating to disability in order to address the

underlying causes of workplace issues, for example the number of working days lost due to musculoskeletal problems.

Our fully-funded Reasonable Adjustments programme scheme in the UK provides practical and occupational health support, from

specialist equipment to adaptive technology. We offer extra help through dedicated disability helplines, listening groups led by

senior leaders across the organisation and a disability awareness network, Reach. Our annual Glenn Shaw Everest Awards celebrate

employees who champion disability awareness.

We ranked second in the 2012 UK Business Disability Forum benchmark and won its Accessible Technology Award for our audio-

enabled ATMs. We also signed up to the Business Taskforce on Accessible Technology to look at further opportunities for improving

our systems and facilities for disabled employees and customers. We participate in the Positive about Disability initiative – also known

as ‘Two Ticks’ – which recognises organisations whose recruitment, training, retention and engagement processes support disabled

people. As part of this, we launched a programme for injured ex-Service personnel and have recruited 20 new employees through it

to date. There’s more on this in Supporting our communities.

Age

There is no age limit on any career opportunity at Barclays. Our

employees range from 16 to 83 and we work hard to support

them at every stage of their career. We launched a multi-

generational network in 2012 to consult with employees about

how we approach the different stages of life, both within

Barclays and in developing services for our customers and

clients.

We have devised multiple initiatives to support youth

employment and careers in the industry, including our

Apprenticeships, LifeSkills and Bridges into Work programmes.

Read more about these in Creating commercial solutions to

social challenges. We also sponsored employees and apprentices

to attend the 2012 One Young World summit in Pittsburgh, US,

which brings together potential future leaders from 180

countries to discuss the world’s key challenges.

Elsewhere, we are developing products to help young people to

buy a property, while our community investment programmes

are helping young people gain the skills they need to

achieve economic independence. Read more about what we are doing in these areas in Contributing to growth and Supporting our

communities.



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Employees from under-represented populations (as defined by region ) %

Ethnicity

We are committed to supporting all our employees, regardless of nationality, race or background. We respect important cultural and

religious calendar dates and our UK canteens offer halal and kosher food. There are also quiet rooms available for prayer in many of

our larger sites.

Our Cultural Awareness Diversity Network was named Network of the Year by Race for Opportunity in 2012, with the judges

highlighting the help we offer young people from ethnic minorities to gain workplace skills.

In the UK, we recently joined forces with Minority Supplier Development UK. The organisation links corporations with certified

ethnic-minority businesses and is helping us access a diverse range of suppliers. Read more about this in Managing our supply chain.

In South Africa, Absa supports talented black people through bursaries, on-the-job training, leadership development, graduate

programmes, coaching and mentoring. Further information is available in the Absa 2012 Integrated Annual Report.

Notes

Health, safety and well-being

Our vision for health, safety and welfare at work is set out in a Statement of Commitment, underpinned by a more detailed policy

outlining what we expect of our businesses. These are reviewed annually and approved by the Group Chief Executive.

Our Group Health and Safety Steering Committee sets objectives, monitors progress and escalates issues to the Board Conduct,

Reputational and Operational Risk Committee.

In the UK, we inform the Health and Safety Executive of ‘reportable’ incidents (detailed below), which include major injuries and

accidents that prevent employees doing their job for an extended period of time. The table below only covers UK data at present, but

we are working to improve our data collection globally and designed an enhanced system for collecting data in 2012. Injury and

accident rates declined significantly in the UK in 2012 and our incident rate is now significantly lower than the average for our

industry in the UK. There were no fatalities in 2012, nor were there any significant breaches of regulations.

During 2012, the majority of our key sites were certified to the internationally-recognised OHSAS 18001 health and safety

standard.

5

Data categories have been restated from 2011 to reflect grades standardised across all our businesses.Under-represented populations are defined regionally.UK includes: Asian, Mixed, Black, Other and Not Disclosed.US includes: Hispanic/Latino, Asian, Mixed, Black, Other and Not Disclosed.South Africa includes: African, Indian, Coloured, Other and Not Disclosed.

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http://www.2012.absair.co.za/

Injuries

2012 2011 2010 2009

UK major injuries to employees 15 74 124 130

UK injuries resulting in more than three days off work 50 73

UK injury rate per 100,000 employees 96 109 181 215

New joiners have health and safety training as part of their induction process and all employees undertake annual updates. In-depth

training is provided for those whose jobs require it, including retail branch managers.

We belong to a number of external organisations that promote good health and safety management, including the CBI Health and

Safety Panel, Inter-Bank Group Health and Safety Forum, Institution of Occupational Safety and Health, British Safety Council, Royal

Society for the Prevention of Accidents and the London Banks Forum.

Benefits and well-being

Our employees enjoy a wide range of benefits which vary around the world to reflect different needs and priorities. For example, in

the UK we have an Employee Assistance Programme which offers free counselling and life management services. In South Africa,

employees can access medical specialists and an HIV/AIDS disease-management programme which encourages regular testing.

In 2012, we launched the My Rewards website in the UK offering comprehensive information on pay, pensions and benefits. We

also launched a new pension scheme option, the Barclays Pension Savings Plan, and an updated pension education website and

modelling tool to help employees plan their retirement.

Our commitment to work-life balance is set out in our Equality and Diversity Charter and our UK Carers Policy. Extensive support is

available for employees to combine careers with family life or other personal commitments, including job shares, flexible working and

career breaks. In some business areas, coaching is available for employees who are prospective parents, while our Working Families

and Carers Network offers seminars on subjects as diverse as child literacy and caring for those with dementia.

In the UK, we were named among the Top 10 Employers for Working Families in 2012 by independent benchmarking organisation,

Working Families.

Notes

11

Based on Health and Safety Executive statistics for financial intermediation standard industry classification 2012.This includes Wealth and Investment Management and our Investment Bank operations in the UK, Europe, Russia, the UAE, Singapore, and New York and NewJersey in the US. Our Retail and Business Banking division has its own health and safety management systems and in Portugal accreditation is to the OHSASstandard.All injuries presented in the table are those reported to the Health and Safety Executive.

910

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Employees covered by collective bargaining agreements/trade union membership %

Turnover and resignation rate %

Union representation

We maintain regular and constructive dialogue with more than 30 unions, works councils and employee associations worldwide. In

the UK, we have a partnership agreement with the Unite union which covers issues such as diversity and inclusion and health and

safety. This has enabled us to negotiate a number of long-term pay deals that have contributed to a stable industrial relations climate

in Barclays despite the challenging economic environment. It has also led to agreements relating to workplace representatives and

the secondment of health and safety representatives.

At a regional level, our European and African consultation forums facilitate dialogue between employees and management in

countries where we have a significant business presence.

Note

Organisational change

Where we have to restructure our business and this will result in

job losses, we work closely with employee representatives to

avoid compulsory redundancies where possible, ensuring

employees who are leaving Barclays are supported and treated

with respect.

If a significant organisational change is planned in the UK, we

consult with Unite as early as possible. Outside the UK we

consult with recognised unions, works councils and employee

associations or through employee forums. We have agreed

policies on how we manage major change.

12

Internal data is incomplete; figures are subject to partial estimation.12



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Case studies – The way we do businessProviding ‘talking ATMs’in the UKUsing a cash machine is an everyday task thatmost of us take for granted.

But for visually impaired people accessingtheir money this way can be challenging orsimply not possible.

That’s why we became the first major high-street bank to join the Royal National Institute for the Blind’s Make Money Talk campaign.

This aims to make the UK’s ATM network accessible to the nearly 400,000 people who are registered as blind or partially sighted.

Speech output is now available on more than 3,000 ‘talking ATMs’ at our branches across England and Wales. This amounts to 79%

of our ATMs in the UK and we will add the facility whenever we replace a machine. Our work in this area won us a 2012 Business

Disability Forum Award for Accessible Technology. Anyone with sight loss can now take along earphones and plug them into audio

jacks on the machines, listen to the options being read out and conduct their transactions.

The audio functionality offers greater access, choice, independence and privacy to thousands of visually impaired people and can

also benefit others with disabilities such as dyslexia. Hugh Huddy, who is blind and was one of the first to use the facility, said: “I

haven’t been able to use an ATM for over fifteen years in the way everyone else can because, until now, they haven’t been accessible

if you can’t read the screen. That’s why it’s so fantastic that Barclays has broken the mould and made their ATMs ‘talk’ for blind and

partially sighted people. They should be congratulated for being the first major bank to make this move.”

Carbon offsetting in KenyaAs part of our global offsetting programme,we are purchasing carbon credits to support apioneering initiative in Kenya to reducedeforestation, promote sustainable localdevelopment and protect valuableecosystems.

The Kasigau Corridor REDD+ (Reducing Emissions from Deforestation and Degradation) project in east Kenya is the first ever to be

issued Voluntary Emission Reductions under both the Verified Carbon Standard and the Climate Community and Biodiversity

Standard, the two most comprehensive standards used to assess projects of this kind. Through the REDD+ forest management

programme, trees that would otherwise be felled to make way for crops are protected and their ability to absorb carbon dioxide

preserved. The project will result in the avoidance of more than 1 million tonnes of CO e per year for the next thirty years.

The revenue generated by the sale of carbon credits is shared between local landowners, the local community and the project

developer and has given rise to a number of related benefits, with the money used to create new forestry jobs and agricultural

business opportunities. Chief Kizaka, who represents more than 12,000 members of the Kasigau community, said: “This is not charity.

Carbon money helps us meet basic needs and improve our lifestyle. And it is earned through conservation activities that help us to

protect our environment.”

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Championingsupplier diversityWe recognise the benefits of working with adiverse range of suppliers and are working toadd more ethnic minority businesses to ourglobal supply chains.

At the end of 2012, we became a charter member of Minority Supplier Development UK (MSDUK). MSDUK helps organisations deliver

successful supplier diversity programmes and links large corporations directly with ethnic minority businesses, with the aim of

developing commercially successful relationships.

Mayank Shah, MSDUK Director, said: “In joining MSDUK, Barclays has become the first high-street bank in the UK to demonstrate its

commitment to supplier diversity. The challenge now for Barclays is to take a leadership role in the industry by identifying and

creating direct procurement opportunities for ethnic minority companies to do business with Barclays.” We will focus throughout

2013 on aligning our strategy with best practice in this area and on hosting events across the UK to raise awareness of supplier

diversity among our employees.



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In brief – Contributing to growth

We support economic growth and job creation by operating a strong, profitable business that is focused on helping individuals,

businesses, institutions and governments pursue their goals.

Last year, we raised £830bn in financing for businesses and governments. In the UK, we helped 18,000 first-time buyers to take their

first step on the property ladder and welcomed the 500th recruit under our Apprenticeships Programme. In Africa, we promoted

access to the financial system through digital technology and piloted group-based savings accounts through our Banking on Change

initiative.

60 Supporting individuals,

businesses and economies

67 Increasing access to

financial services

70 Creating commercial

solutions to social

challenges

£830bnfinancing raised for businessesand governments

UK start-up businesses supported

Entry-level banking customers in South Africa(millions)

£25mfor new commercial solutionsto social challenges

At a glance



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Supporting individuals, businessesand economiesOur approach

Our customers and clients are at the heart of our business. Their success determines our success. We are committed to

supporting them globally and working in partnership with other stakeholders to create an environment in which individuals,

institutions and governments have the confidence to spend and invest.

The financial crisis and ongoing economic downturn creates challenges for banks like Barclays. We need to lend responsibly,

balancing the demands of regulators for greater stability, security and stricter capital requirements, against the need to provide credit

to households and businesses to help encourage economic recovery.

We provide individuals and households with personal loans, mortgages, overdrafts and credit cards, and businesses with loans and

specialised services such as trade finance and credit facilities. Our Investment Bank helps corporate, institutional and government

clients raise funding in the capital markets.

Progress against commitmentsIn 2012, we set out specific lending and financing commitments to deliver by the end of 2015, noting that our progress would be

dependent on market conditions, our credit criteria and regulatory constraints. Although we are on-track for our four-year

commitment, much has already changed since we published our Citizenship Plan in May 2012.

Governments, particularly in the UK, have launched targeted initiatives to increase the supply of finance such as the Funding for

Lending Scheme (FLS). As a result of the Strategic Review of our businesses announced in February, we are reducing our lending

exposure to small businesses in Europe. The continued low interest rate environment in 2012 encouraged corporates to raise finance

from the bond markets, significantly increasing volumes for our capital markets businesses.

We anticipate conditions will continue to evolve but remain committed to supporting our customers and clients access the funding

they need to meet their ambitions.

2015 commitment 2012 progress summary

Notes1 Includes new mortgage lending in the UK, Europe and Africa and new credit card lending globally. The definition of new credit card lending is based on a proxy

measure and we will align this with the Bank of England definition in 2013. Excludes lending to High Net Worth clients in the Wealth and InvestmentManagement business.

2 Financing raised is total fixed income and equities proceeds from all corporate, governmental and institutional clients in all regions.3 Includes new loans and renewed facilities such as overdrafts and sales finance. SMEs defined based on relevant threshold (under £25m turnover in the UK,

under Rand 20m turnover in South Africa). This excludes SME lending in Europe. Data is not reported for rest of Africa, excluding South Africa, due to a widerange of different SME definitions. We will work to harmonise definitions for global SME data in future reporting.

Provide at least £150bn of new or renewed lendingto households.

We provided a total of £33.4bn of new and renewed lending tohouseholds1, including £18.2bn in new UK mortgage lending, anincrease of 6% over 2011. We launched new products to supporthomeowners and helped a total of 18,000 first-time buyers in theUK, up from 12,000 in 2011.

Raise at least £2 trillion of financing for businessesand governments.

We raised £830bn in financing for businesses and governmentsglobally2 in 2012, an increase of 23% from 2011. This includesover £220bn raised for governments and public sector entities.

Provide at least £50bn of new or renewed lending for small andmedium-sized enterprises (SMEs).

We provided a total of £11.1bn in new and renewed lending toSMEs3 and launched Cashback for Business, offering 2%cashback on loans to eligible SMEs under the Funding forLending Scheme in the UK, demonstrating our commitment topass on the associated funding cost benefits to customers.



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Loans and advances by industry sector

As at 31 December 2012 £bn

Notes1 The overview is designed to be accessible for a non-technical audience.

Data referred to in this section is adapted from analysis of loans andadvances and impairment in the Barclays PLC Annual Report 2012.

2 Data includes loans and advances at amortised cost and held at fair value.Detailed analysis is available in the Barclays PLC Annual Report 2012.

Lending to households

Home loans 174.6

Cards, unsecured loans and other personal lending 53.7

Total 228.3

Lending to businesses by industry sector

Manufacturing 12.2

Construction 3.8

Property 31.5

Energy and water 7.8

Wholesale and retail distribution and leisure 14.9

Business and other services 28.3

Other sectors 22.0

Total 120.5

Loans and advances by industry sector

Detailed performance and commentaryLending overview

At the end of 2012, our total loans and advances to customers and banks amounted to £500bn globally. About half of this is lending

to individuals, mainly through home loans, credit cards and other personal lending. We also lend to governments, other banks and

financial institutions and large corporates and SMEs across a range of sectors.

Our 2015 commitments relate to new or renewed lending, where we are working to increase the flow of new credit to households

and businesses. The table below, in contrast, gives an overview of our total loans and advances as at the end of 2012. We are

providing this information to set the overall context and provide an accessible overview of our loan book by industry sector and

geographic region.

Home loans form the largest element of our overall portfolio, accounting for a total of £175bn. Of this, about £120bn is in the UK,

£37bn in continental Europe and £18bn in Africa. Cards, unsecured loans and other personal lending account for £54bn, of which

£30bn is in the UK.

Loans to businesses total £262bn, including lending to banks and other financial institutions. We have split this out as a separate

category within overall business lending.

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http://reports.barclays.com/ar12/riskreview/creditrisk/loansandadvancesandimpairment.html

http://reports.barclays.com/ar12/riskreview/creditrisk/loansandadvancesandimpairment.html

Notes3 Includes cash deposits held at banks and settlement balances.

Lending to banks and other financial institutions3

Banks 39.9

Other financial institutions 89.3

Government and central bank 12.6

Total 141.8

Total loans and advances by industry sector 490.6

Impairment allowance 9.7

Total loans and advances 500.3

Loans and advances by region

Helping homeowners and first-time buyers

We increased our gross mortgage lending in the UK to £18.2bn in 2012. The total mortgage balance, as at 31 December 2012, was

£114.7bn.

The mortgage environment has changed enormously since 2008 and for first-time buyers it is a particularly challenging one.

Affordability is a major issue as is raising the initial deposit; two reasons why the average age of unassisted first-time buyers is now as

high as 35.

We’ve launched a number of mortgage products designed to address these challenges. Our Helpful Start project provides families

and friends the opportunity to assist one another in obtaining a mortgage. So far we have launched two Helpful Start schemes: our

Family Affordability Plan lets family members pool their resources so parents can help their children buy their first home. Our Family

Springboard Mortgage, launched in early 2013, enables family members or ‘helpers’ to assist buyers with deposit requirements. After

three years, the helpers get their money back with interest, provided mortgage payments have been kept up to date.

As a result of work like this, we helped almost 18,000 first-time buyers in the UK take their first step on to the property ladder in

2012, up from 12,000 in 2011. We provided £2.8bn in mortgage lending, an increase of 65% over £1.7bn lent to first-time buyers

in 2011.

We are also one of the founding members of the UK government-backed NewBuy and FirstBuy schemes, which allow customers to

purchase a newly-built property with just a 5 to 10% deposit.

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We support mortgage customers who are facing difficulties in a number of ways. An affordability assessment takes into account the

nature of the customer’s difficulties and ability to repay, to ensure that any solutions are appropriate, responsible and sustainable.

Support for customers who meet our criteria could include:

Allowing them to switch from capital and interest loans to interest only

Offering short-term reductions in repayment amounts

Allowing the longer-term restructuring of mortgage loans, either by extending the term or reducing the interest rates.

We know that some of our mortgage customers experience difficulties with their payments from time to time, but repossession is

always our last resort. In 2012, we repossessed 825 properties in the UK.

Our approach is in line with the UK government’s Pre-Action Protocol and the key principles of its Homeowner Mortgage Support

Scheme. We also take part in other government initiatives, such as the Mortgage Rescue Scheme which helps vulnerable people stay

in their homes by working with local authorities, debt advice agencies and housing associations.

We were proud to win several awards for our mortgage products in 2012. These included two at the Moneyfacts Awards 2012

including Best Service from a Mortgage Provider, the Moneywise Award for Best Lender for Flexible Mortgages in 2012 and the Legal

& General Product Innovation Award.

Notes

Supporting customers in financial difficulty

We have dedicated teams that are trained to recognise signs that customers are in financial difficulty, such as unauthorised

borrowing, incurring significant fees or persistent overdraft balances. This enables us to intervene at an early stage and offer

proactive advice on the best way to get out of debt and back on track.

In the UK, we help customers do this in a variety of ways, including:

Reductions in minimum payment requirements for credit cards

Short-term reductions in loan repayment amounts

Short-term suspension or reduction of interest and charges on loans

Formal repayment plans that combine lower repayments with reduced interest rates.

We work hard to help customers with financial problems, but we also recognise that sometimes they need independent advice. We

have a Reach Out campaign in the UK encouraging branch-based employees to build relationships with local agencies that can

provide specialist support. These include the Citizens Advice service, credit unions and Community Development Finance Institutions.

We are collaborating with many of these organisations to develop better referral processes and we also run money management

workshops through our Money Skills programme. See Increasing access to financial services and Supporting our communities for

more information about what we are doing in this area.

In South Africa, economic recovery remains slow and unemployment and household debt levels remain high. Support for customers

who are in financial difficulty or debt is available through Absa’s Debt Solutions Helpline, including extended repayment terms on

loan accounts and new payment plans, a debt counselling process and tools for budgeting and monitoring income and expenditure.

In 2012, Absa worked with the Banking Association of South Africa, the National Treasury, the South African Reserve Bank and the

Financial Services Board to improve responsible lending and prevent households from being caught in a debt spiral. A range of new

measures have been introduced as a result, including a review of loan affordability assessments and debit orders.

5

Including buy-to-let lending.Including buy-to-let properties, our stock of repossessed properties as of December 2012 was 234.

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Number of start-up businesses supported in the UK

Barclays’ small business customers in deprived areas

Deprived areas UK

Business current accounts 14,009 740,909

Lending balances, £m 197 11,390

Business start-ups supported 3,296 111,574

Providing finance for businesses

We serve a wide range of businesses around the world, from small start-up ventures with a couple of employees to the largest global

corporations. We recognise that businesses – and SMEs in particular – are facing significant challenges in the current economic

environment and we are striving to give them the advice and support they need. We are also participating in government initiatives to

improve the flow of credit, particularly in the UK where SMEs account for half of total business turnover, half of employment and

roughly 99% of companies by number. We are also working with the UK government and the financial services industry to create a

more comprehensive picture of lending across the UK.

Supporting UK businesses

We increased net lending under the UK Funding for Lending Scheme (FLS) in both Q3 and Q4 of 2012, bringing our cumulative net

lending under the scheme to £5.7bn. This was the highest increase in net lending among all lenders participating in the FLS as at the

end of 2012.

We launched Cashback for Business last September, offering 2% cashback on loans to eligible SMEs under the FLS, demonstrating

our commitment to pass on the associated funding cost benefits from the government scheme to customers. This builds on our

previous involvement in the National Loan Guarantee Scheme, a forerunner of the FLS cashback scheme. Of the £3bn of funding

passed on to customers before the NLGS closed in 2012, £1.5bn was from Barclays. We also ranked first for making finance available

to UK businesses in a 2012 Charterhouse Research survey.

Almost 112,000 business start-ups in the UK began a banking

relationship with us in 2012, the highest since we started

keeping records in 1988.

Lending to UK businesses in deprived areas

Start-up businesses in deprived areas are less likely to have

survived the last two years than businesses across the breadth of

the UK (57% compared with 64% respectively). Our support for

this sector remained stable during 2012, while 78% of our

business start-up seminars and 28% of our growth seminars

were delivered in these areas (see more information

on this below).

The table to the right is a summary of our performance in this

area. Detailed information is available to download in our pdf Lending to small business customers in deprived areas.

Notes

6

7

8

9

10

Data available from the Department for Business, Innovation and Skills.Gross and net lending: ‘Gross lending’ is the total amount of new loans a bank provides in a given period, including refinancing. ‘Net lending’ is the totalamount of stock lending a bank has provided to its customers at any given time and is therefore increased by new (gross) lending and decreased by loanrepayments.See Bank of England Funding for Lending Scheme – usage and lending data for Q3 and Q4 2012.Source: Charterhouse Research based on 2,076 interviews with companies turning over between £5m and £1bn carried out in YE Q4 2012. Survey data isweighted by turnover and region to be representative of the total market in Great Britain.Small businesses are defined as those with turnover of less than £2m. Deprived is defined as the 5% most deprived postcode sectors of each country based onthe latest Indices of Multiple Deprivation published by the Department of Communities and Local Government. England (2010), Scotland (2009), Wales,(2008), Northern Ireland (2010).

67

89

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/PDF/barclays/en/working/servicepages/downloads/files/download.php?file=lending_uk_deprived_barclays_cr12.pdf

http://www.bis.gov.uk/assets/biscore/statistics/docs/b/12-92-bpe-2012-stats-release.pdf

http://www.bankofengland.co.uk/markets/Pages/FLS/data.aspx

Business turnaround and advice

We have a dedicated Business Support team that works around the world to help business customers with financial problems. The

team engages with clients at the earliest indication of difficulty, offering specialist financial and operational advice and agreeing

lending arrangements that are more suited to the company’s current needs. During 2012, we worked with clients to help their

businesses get on a sounder financial footing. We define this as removing the customer from our early-warning list system which

triggers the involvement of the Business Support team and returning to their normal relationship management arrangements. Last

year, our efforts in this area won us the Institute for Turnaround award for Turnaround Financier of the Year.

UK

We are a major investor in the Regional Growth Fund, which is part of a wider UK government-supported programme promoting

growth in areas disproportionally affected by the economic downturn.

We also run a range of event programmes – open to customers and non-customers – to support UK businesses. These include

Barclays Get Ready for Business seminars for start-ups, Thrive Online workshops on online marketing and local clinics on specific

topics such as international trading, cash flow management and lending. We reached 19,000 people in 2012, hosting over 1,400

events across the UK.

Recognising the importance of exports to economic recovery and job creation, we launched a Business Abroad package in 2012.

This offers tools and information to help small businesses begin exporting effectively, including credit checks, document preparation

and a free currency account.

South Africa

Business Markets, a division of Absa, offers a full range of commercial banking products and services to SMEs, which are categorised

as commercial and enterprise customers in South Africa.

In addition to providing access to credit, Absa has a wide range of programmes to support SMEs, including the new Procurement

Portal that connects SME suppliers with large corporates. Suppliers can register on the portal, create a company profile and promote

their business, while buyers can use the advanced search tools to filter accredited suppliers. Registration and interaction between

corporate suppliers and buyers take place on an independent website. Some 8,000 SMEs had registered on the portal as at 31

December 2012. We also run nine Enterprise Development Centres located across South Africa, offering SMEs seminars, financial

tools and training.

A further initiative is the Absa SME Index launched in partnership with Statistics South Africa, the country’s national statistical service.

This provides up-to-date information about business conditions in the country and related issues such as employment.

Note

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A commercial customer is a business with a turnover of between ZAR20m (£1.5m) and ZAR500m (£38m). An enterprise customer is a business with aturnover under ZAR20m (£1.5m).

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Total financing raised for businesses andgovernments 2010-2012 £bn

Supporting corporates, institutions and governments

We provide financing, risk management and advisory services to help corporate clients create jobs and grow their businesses,

institutional clients to meet the investment needs of an ageing population, and governmental clients to fund public services and

infrastructure.

Capital raising and financing

We enable companies, banks, cities and countries to raise equity

capital or issue debt in the capital markets. We raised over

£830bn in financing for businesses and governments in 2012,

making us the fourth largest provider of financing globally.

This uplift of 23% from 2011 was driven by increased borrowing

from corporate clients who are taking advantage of historically

low interest rates. This includes over £220bn raised for

governments and public sector entities, including supranational

agencies and national governments.

In 2012, clients included the governments of the UK, Sweden,

Spain, Austria, Belgium, Poland and Turkey. Our global teams

work closely with local teams to deliver solutions for our

governmental clients, including a highly successful international

bond issue for the Zambian government in 2012 which followed

our leading role in debut bond issues for the Republic of

Namibia and Federal Republic of Nigeria in 2011.


We have also been a leading bookrunner of bond issues for sovereigns, supranationals and agencies around the world for the past

five years.

Supporting clients in making investment decisions

We provide services to help pension funds meet their future obligations to their members in the most effective way. These range from

designing investment strategies and funding policies that maximise the value of the fund’s assets, to risk management programmes

that reduce exposures to market fluctuations, foreign exchange volatilities and inflation risk – all of which helps the pensions industry

improve its provision to customers.

Helping clients manage risk

We help our clients manage financial risks through the use of derivatives and structured products. These hedge against movements

in interest rates, foreign exchange and commodity prices.

Some clients need to manage these risks as part of their day-to-day business operations. For example, the cost of jet fuel is a major

cost for airlines and they look to manage this risk by trying to hedge against changes in future oil prices. In other circumstances,

clients might need to manage risks linked to a specific transaction. In 2012, we led the hedging process on numerous transactions

where clients faced interest rate and currency risks in relation to acquisitions and bond financings.

An additional concern for clients involved in acquiring another business is the contingent risk they face prior to the transaction

closing. We provide advice and guidance to clients who are concerned that movements in interest rates could significantly decrease

both the affordability and the ultimate returns of the transaction.

Notes12 Sources: Dealogic, Reuters, Bloomberg.13 Ibid.

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Increasing access to financial servicesOur approach

Financial inclusion stimulates economies, improves individuals’ lives and benefits wider society. One of our roles as a global

financial institution is to bring the benefits of banking to more people, helping them to turn their financial situation around,

become more self-sufficient and save for a better future. Increasing financial inclusion requires us to offer disadvantaged and

low-income customers services that are appropriate, affordable and efficient. These services include current and savings

accounts, credit and loans, insurance, and money and debt advice.

We concentrate our financial inclusion activities in the UK and South Africa. We do not offer mass-market retail banking services in

Europe, the Americas and Asia. In the UK, most people have access to financial services, but certain groups and individuals remain

vulnerable to exclusion and may lack a bank account, making it harder or more expensive for them to access essentials that the rest

of us take for granted, such as receiving wage payments, signing a home rental agreement or receiving discounts on utility bills for

paying by direct debit. In Africa, many countries have seen increased access to financial services in recent years, but multiple barriers

persist and exclusion remains endemic.

In seeking to extend financial inclusion worldwide, we are developing dedicated products and services that are cost-effective for us

and our customers, such as basic bank accounts. We also focus on using mobile phone and other technologies to reach customers

who can’t access traditional channels such as branches. And we work in partnership with organisations including charities and credit

unions that are helping financially excluded individuals and businesses in ways we cannot.

We also provide financial education to young people and vulnerable groups across the UK through our Money Skills programme and

are developing products and services that support access to finance for a wide range of customer groups. Read more about this in

Supporting our communities and Improving the customer experience.


Provide entry-level financial products and services to one millionnew customers.

We added 500,000 new entry-level banking customers in SouthAfrica in 2012.

However, as a result of the loss of a welfare payments contractand the closure of dormant accounts, the number of overallentry-level customers dropped 12% from 7.4 million in 2011 to5.8 million in 2012.

In the UK, the number of Cash Card Account customers remainedstable at 1.2 million.



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Number of Barclays Cash Card Accounts (UK)

Detailed performance and commentaryRemoving barriers to banking in the UK

Cash Card Account customers

In the UK, our Cash Card Account offers free, no-frills banking for customers who may not be able to open a regular current account.

We are currently the only UK bank to offer an account to

undischarged bankrupts. In general, undischarged bankrupts

(those who are yet to be 'discharged' of their debts by a court)

may not obtain credit beyond a certain limit without informing

the creditor of their undischarged status. However, people in

these circumstances urgently require access to basic banking

services in order to get their finances and lives back on track.

Our continued commitment to these customers is strongly

supported by Citizens Advice, a UK charity which helps people

resolve legal, money and other problems.

We also work in partnership with UNLOCK – the National Association of Reformed Offenders charity – to offer basic bank accounts to

prisoners in the east of England who are reaching the end of their sentences. Government figures indicate that key factors in reducing

re-offending are finding stable employment and accommodation, both of which require a bank account.

The community finance sector

The UK has a well-developed community finance network, making it easier for us to help those whose financial needs may be best

served by local organisations such as credit unions. In 2004, we became the first bank to fund the community finance sector and

have invested more than £4m and supported approximately 100 organisations since.

A key part of this support is our Community Finance Fund – a £1m three-year commitment to help the sector grow and become

sustainable by providing more affordable loans in communities where there is a strong reliance on illegal loan sharks and high-cost

credit. Six organisations made successful bids last year, receiving funding to help more people with savings accounts, small loans and

financial advice. Meanwhile, changes to the benefits system mean that up to a million people who do not have a transactional bank

account will need one in future to receive their benefits. Credit unions are one element of the UK government’s plans for meeting that

demand and in supporting these organisations we can play an important role in the transition.

In 2012, we also provided £25,000 each to the Association of British Credit Unions (ABCUL) and the Community Development

Finance Association (CDFA) for specific projects. ABCUL is developing a credit assessment scorecard to help credit unions evaluate

loan applications, while the CDFA is making it easier for community finance organisations to apply for the funds it manages and

therefore save themselves time and resources.

Entry-level and 'branchless' banking in South Africa

More than a third of the population in South Africa has no access to financial services, with poor financial literacy among many

groups along with practical barriers such as the cost of travelling from remote areas to bank outlets.

Our strategy focuses on providing appropriate products and services, consumer education, and the use of innovative delivery

channels to reach people who previously had limited or no access to mainstream financial services.

In South Africa, Absa has developed a number of basic banking products which are now used by 5.8 million (or one in two) Absa

customers. These include transactional accounts, savings, loans, and insurance products.



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Number of entry-level and inclusivebanking customers in South Africa millions

AllPay, a subsidiary of Absa, previously distributed social welfare

payments on behalf of third parties, including the South African

Social Services Agency. AllPay lost this contract in April 2012. As

a result of this, and the closure of dormant accounts, the

number of Absa’s entry-level customers dropped 12% from 7.4

million in 2011 to 5.8 million in 2012. Until the end of Q1 2012,

AllPay was providing payments to about 2.1 million grant

beneficiaries every month.

Developing cost-effective and convenient channels is

particularly crucial in South Africa where remote locations can make traditional access methods challenging. ‘Branchless’ banking is

helping Absa expand its reach to entry-level customers and offer greater choice. An Absa app for smartphones and tablet devices

enables employees to open transactional and savings accounts for customers remotely and issue new debit cards in less than 10

minutes. More than 40,000 accounts were opened this way last year.

In addition, Absa has an In-Store Banking facility that allows customers to deposit or withdraw money, get mini-statements, check

balances and buy pre-paid credits for their mobile phones at places such as local shops. This service has been launched at 1,000 sites

across South Africa, with almost 150,000 transactions worth a total of ZAR1bn (£78m) conducted through this channel during 2012.

This was a rise of 71% on 2011.

Absa also increased lending to customers earning less than ZAR16,500 (£1,266) per month by 13% compared with 2011. It offers

finance to owners of micro-enterprises with turnover of between ZAR15,000 (£1,151) and ZAR500,000 (£38,373), with the Absa

Siza loan providing working capital from ZAR1,000 (£77) to ZAR15,000 (£1,151) over a 12-month period. In 2012 Absa increased

the number of these loans by 40% and currently has nearly 8,000 active micro-enterprise customers.

Read more about this in the Absa 2012 Integrated Annual Report.

From microfinance to formal banking

Our commercial efforts are supported by our community investment programmes such as Banking on Change, a savings and loans

initiative which aims to transform the lives of 400,000 people in 11 countries (see Supporting our communities for more detail).

Programmes like this often enable people to take their first steps towards formal banking. We engage with village savings groups to

develop products – with our partners CARE International and Plan UK – that help meet their financial requirements. As a result, group-

based savings accounts were piloted in four countries in Africa in 2012 with direct delivery through bank branches. In addition, we

launched an overdraft facility for village savings groups in Uganda, providing a credit mechanism over which the savings groups

retain a high level of control as they can borrow and repay funds as needed without having to take on a longer-term loan. This is

intended as an additional facility for the savings groups rather than as a replacement for their regular activities.



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http://absa.investoreports.com/absa_iar_2012/

Creating commercial solutionsto social challengesOur approach

We believe that business has a crucial role to play in helping society address many of its toughest challenges. We operate in

more than 50 countries around the world, both in developed and emerging economies. Each faces its own challenges – from

combating poverty and youth unemployment, to improving access to healthcare and education and addressing climate

change and resource scarcity. By finding new ways of tackling these complex challenges we can enable self-sustaining

and replicable solutions.

We enable investment in social and physical infrastructure such as schools and hospitals, raise finance for social housing and provide

financial and advisory services to businesses that are spearheading the transition to a lower carbon economy. We are also developing

new mobile technology solutions that increase access to mainstream finance across emerging markets. To support this work, our new

Social Innovation Facility is helping us introduce products and services that deliver both business value and social impact. In many

cases, these solutions are yet to prove their commercial viability, but through further investment and development will present real

opportunities to scale innovative business models and partnerships.

As a global financial services organisation with client relationships across the economy, we also provide services in sectors that might

have negative social and environmental impacts. We identify and mitigate these risks by applying a set of policies and processes

which are embedded in our credit decision-making process. There’s more on this in Environmental and social risk in lending.


Bring to market 15 new commercial and material solutions toaddress specific social challenges.

We launched a Social Innovation Facility to invest £25m (to2015) in the development of innovative products and servicesthat deliver both commercial returns and ongoing social benefits.In 2012, we committed a total of £4m to six pilot projects inAfrica and the Americas.

We continued to deliver financing and advisory solutions forinfrastructure projects such as schools and hospitals, raisedfinance for social housing and were involved in severaltransactions in the clean energy and clean technology sectors.



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Detailed performance and commentaryFinancing social and physical infrastructure

Successful economies need good public infrastructure. This requires significant investment, both to maintain existing services and to

keep pace with growing and ageing populations, rapid technological developments and factors like climate change. Capital markets,

the banking sector and national budgets play a major role in financing these requirements, with governments increasingly seeking

partnerships with the private sector to deliver school, hospital, transport and other crucial infrastructure projects.

Our solutionsBarclays Infrastructure Fund continued to invest in long-term infrastructure assets during 2012. The fund had more than 100 assets

under management, predominantly in the health, education, transport, defence and renewables sectors as at the end of 2012. For

example, in 2012, it invested in a fleet of 100 hybrid buses for the city of Dijon in France. These replaced gas-powered vehicles,

reducing fuel consumption, CO emissions and noise pollution. In May 2013, 3i Group plc made an offer to acquire Barclays

Infrastructure Funds Management business. The transaction is expected to complete subject to requisite approvals.

In the UK, the higher education sector has not traditionally used the public bond markets, but funding pressures and greater

competition for students has increased the need for new sources of long-term finance. In 2012, we helped De Montfort University in

Leicester issue a £110m 30-year bond to fund investment in the campus, a move which should pave the way for similar institutions

to access funding from the bond market. We’ve been preparing for this by working with bond investors to help them gain a deeper

understanding of the sector.

In Africa, in October 2012, we agreed a US$163m (£102m) 12.5-year Export Credits Guarantee Department-backed export finance

facility together with a GHS55m (£19m) loan to the government of Ghana arranged by Barclays. This is to finance the design,

construction and equipping of seven district hospitals, including a centralised pharmaceutical and medical supply system. The

project is playing a significant role in supporting Ghana’s socio-economic development and the UN Millennium Development Goals

to narrow the gap between urban and rural healthcare.

Increasing social housing

Social housing providers are an increasingly important source of affordable housing for low-income communities. Demand for

social housing continues to grow with 1.8 million people on the waiting list in the UK alone. We have provided banking services for

the UK’s social housing sector for 15 years, so we understand the opportunities and challenges it faces and its methods of working.

The affordable housingsector in South Africa is severely constrained by the lack of stock available to buy or rent. The government has

primary responsibility for making land available and funding housing subsidies and infrastructure development, but faces numerous

financial and capacity limitations.

Our solutionsIn 2012, the UK social housing sector issued a record number of sterling-denominated bonds. A total of £3.4bn was raised in this

way during the year, allowing housing associations to diversify their funding mix and access long-term finance at historically low

interest rates. Many of the associations supported in 2012 had never raised bond finance before and we helped them make a

successful debut, as well as supporting others with previous experience of the sector. We were the lead manager for transactions

totalling £2bn in 2012.

Absa’s Home Loans affordable housing business unit has been helping to address the housing challenges faced by customers who

earn less than ZAR16,500 (£1,266) per month. In 2012, the loan book grew 13% to ZAR8.5bn (£652m) from ZAR7.4bn (£568m) in

2011. Absa Devco, Absa’s development company which builds social housing, has launched projects in six provinces across South

Africa in partnership with the government. These have resulted in the construction of 9,100 housing units to date. In 2012, Absa

Devco constructed another 1,100 subsidised units and started work on a further 640. An additional 400 bonded affordable housing

units are in the process of being built and sold.

Note

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2

Source: European Commission.Source: Dealogic.

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Climate change and resource scarcity

A sustainable low-carbon economy requires substantial investment from the private and public sectors, innovative partnerships and a

supportive policy framework.

We are memeber of several initiatives that contribute to the policy agenda, including the UK’s CBI Climate Change Board and the

Capital Markets Climate Initiative, South Africa’s National Climate Change Council, the Banking Environment Initiative (a group of 10

global banks convened by their chief executives to find ways of tackling key sustainability issues), the Clinton Global Initiative and

the UN Environment Programme Finance Initiative (UNEP FI).

We actively support industry groups that engage with policymakers on developing consistent global frameworks for reducing carbon

emissions. For example, we are signatories of the Cancun Communiqué, organised by the Corporate Leaders Group on Climate

Change, and sit on the World Economic Forum climate taskforce which works with government, policymakers and the private sector

to accelerate investment in low-carbon technology.

Our solutionsOur corporate and Investment Banking businesses provide financing and advisory services for all forms of renewable energy

generation, including wind, solar, energy-from-waste and geothermal. We work with clients across these sectors, providing financing

and advisory solutions in equity, debt and private capital markets. Our Cleantech initiative builds on our experience in the alternative

energy generation industry. Cleantech is a co-ordinated advisory and financing approach for clients interested in new and clean

forms of energy generation, energy efficiency and natural resource management.

In 2012, we led several transactions in the renewable energy and clean technology sectors globally (detailed below), which together

totalled £2.4bn. We also advised on many award-winning transactions, including:

Bond markets – We were the lead manager on a US$850m (£535m) bond issue and a US$345m (£217m) senior secured credit

facility for Topaz Solar Farm, a 550MW solar project in California. This was the largest renewable project finance bond issue to

date, the first large-scale solar financing completed without a US government guarantee and the first renewable energy bond to

receive investment grade ratings by all three agencies. It later won solar deal of the year from Environmental Finance magazine

Pension fund investments – We were the advisor to Borealis Infrastructure on its US$230m (£145m) acquisition of 49% of a

599MW portfolio of US wind farm assets. Borealis is the infrastructure investment arm of the Ontario Municipal Employees

Retirement System, a Canadian pension fund

African wind farms – We were awarded Project Finance magazine's African Wind Deal of the Year Award, for financing the Dorper

Wind Farm project. Dorper is an onshore wind farm in the Eastern Cape, South Africa, which will install 40 2.5MW wind turbines

resulting in 100MW of electricity generation capacity. We assisted Dorper in arranging South Africa’s first renewable energy deal

financed on an export credit-backed basis and provided global risk management and ongoing project finance expertise.

Select Cleantech transactions 2012

Joint bookrunner and joint lead arranger on US$400m (£252m) senior notes and US$1.2bn (£755m) senior

secured credit facilities for Covanta, a leading waste-to-energy company

Acting as ongoing financing advisor to a large US offshore wind project for its US Department of Energy Loan

Guarantee Project

Joint bookrunner on a US$650m (£409m) equity fundraising for a leading generator of renewable energy in

the United States

Joint bookrunner on a US$75m (£47m) initial public offering of Ceres, a biotechnology company that sells

seeds to produce renewable biomass feedstocks

Joint bookrunner on a US$120m (£75m) senior credit facility for Enviva, a supplier of wood pellets for power

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Youth unemployment

Youth unemployment is rising globally. The UN’s International Labour Organization estimates that more than 74 million people aged

15 to 24 worldwide will be unemployed in 2013, with young people three times more likely to be out of work than adults. Of

particular concern are those not in employment, education or training – often known by the acronym ‘NEET’. This group is growing

and risks both social and labour market exclusion.

Our solutionsLike any business, we want to have access to a pool of well-trained and well-qualified people as potential employees. As a major

employer, it’s also important that we help equip young people for the workplace and give them the skills they need to succeed,

whether by offering opportunities at Barclays or supporting employability schemes in the wider economy.

In the UK, we’ve introduced a flagship Apprenticeship Programme to attract young people up to the age of 24 into financial services.

We welcomed our 500th apprentice in January and plan to recruit a total of 2,000 apprentices by the end of 2015.


We also have a graduate recruitment programme which saw 1,100 young people hired last year. You can read more about

opportunities for employee development in Our people. In South Africa, Absa provides ‘learnerships’ – structured training schemes to

help disadvantaged school leavers and unemployed graduates to acquire the skills needed in the financial services sector. Over 1,400

young people benefited from this programme last year.

We’re also working in the wider economy through our community investment programmes and initiatives such as LifeSkills. This is an

education and work experience programme which aims to reach one million young people in the UK by 2015 and offer 50,000 work

experience opportunities in 2013 alone. Major business such as McDonald's, Centrica and ISS will be taking part and we will provide

6,000 of these placements ourselves.

Our new Bridges into Work programme is helping 10,000 young people in the UK into work by offering free support to businesses

looking to employ an apprentice. We are working in partnership on this with the National Apprenticeship Service, employment

charity Tomorrow’s People and The Prince’s Trust. The support includes training for the apprentices and advice for businesses in

finding the right candidate and accessing government grants, along with ongoing mentoring for both the employer and employee.

We have also collaborated with The Work Foundation and OpenIDEO to understand how young people can be better equipped to

succeed at work. This has resulted in the creation of a global online community, which is coming up with practical ideas to tackle

youth unemployment.

Note

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Source: International Labour Organization website.3



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/PDF/barclays/en/working/servicepages/welcome.html

http://www.ilo.org/

Social Innovation Facility

Many of the greatest challenges facing society will require solutions that are delivered through entirely new business models,

often requiring unconventional partnerships and propositions that are yet to prove their commercial viability.

In our 2015 Citizenship Plan, we committed to bring to market 15 new commercial solutions to address specific social

challenges and to launch a Social Innovation Facility (SIF). The SIF was launched in 2012 to help our business teams identify

and deliver new, innovative products and services that deliver both a commercial return and a sustained social impact. An

investment of £25m over three years will provide finance for research and development, feasibility studies, new technologies

and assistance with the testing, piloting and scaling of products and services.

In 2012, the SIF committed £4m to six projects across Africa and the Americas. For example, with support from the SIF our

Corporate Banking division has provided a £1m loan to a UK-based solar energy company that distributes pay-as-you-go

solar power units to rural Africa.

Read more about this in Case studies.

Other SIF projects undertaken in 2012 include a programme in the US to increase college applications from low-income

households by raising awareness of further education opportunities and encouraging students to save for college at an early

age, and an initiative in Ghana to give informal entrepreneurs a route into the mainstream banking sector. We also launched a

partnership with the Grameen Foundation AppLab in Uganda to identify and develop new mobile financial products and

technologies with the highest potential for sustainability and impact for people on a low income.



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Case studies – Contributing to growthFinancing ‘pay-as-you-go’solar energyWe provided a £1m loan to a UK-basedcompany that distributes pay-as-you-go solarpower units in sub-Saharan Africa, helping totransform the lives of thousands of people inrural areas.

The loan to Azuri Technologies was provided with support from our Social Innovation Facility. This was launched in 2012 to help our

business teams identify and deliver innovative products and services that deliver both a commercial return and a sustained social

impact.

Azuri has combined solar and mobile phone technologies, enabling users in off-grid markets to avoid unaffordable upfront costs and

instead pay for their solar electricity as they use it. The loan will be used to accelerate the production of Azuri’s Indigo home solar

systems and will help it build a credit profile, demonstrate the viability of its business model and make the case for further commercial

funding as the business grows. Access to electricity plays a crucial role in enabling social and economic progress throughout the

developing world. Households turning to solar as a sustainable and healthy alternative to kerosene can cut energy spending by 50%

or more.

Helping young people intoworkWe are offering apprenticeships across the UKto help young people gain invaluable workexperience and take their first step towards agreat career.

There are currently more than a million young people in the UK who are not in work, training or education. As a major employer, we

are ideally placed to help tackle this problem and in April 2012 launched our flagship Apprenticeships Programme. We have already

recruited 500 apprentices into branch, telephony and retail operations (as at January 2013). We plan to recruit a total of 2,000

apprentices by the end of 2015.

Our apprentices benefit from a competitive salary and on-the-job training towards a Qualifications and Credit Framework certificate

in Providing Financial Services. Eighteen-year-old Shelbie Sinclair, (pictured above) who was an apprentice cashier at our branch in

Barking, east London, said: “Some people said I wouldn’t amount to anything but since doing my apprenticeship my confidence and

self-worth is so much better. I really want to do well with Barclays and develop my skills as much as possible.”

Building on the success of our Apprenticeship Programme, we have launched our Bridges into Work initiative to support 10,000

young people in England, and LifeSkills which aims to create 50,000 work experience opportunities in partnership with businesses

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Raising financefor governmentsAs one of the largest banks in Africa, we arehelping sub-Saharan governments accessinternational investors for the first time.

Governments in emerging markets often find it challenging to attract external sources of finance due to perceived higher risks – such

as currency fluctuations – and unfamiliarity with their countries’ economic situation.

In 2012, we launched an innovative 10-year international bond issue on behalf of the Zambian government. The transaction raised

US$750m (£472m) and was an important milestone in the country’s history, marking the largest ever order-book for an inaugural

sub-Saharan Africa sovereign bond. Zambia’s government is using the proceeds for general budgetary purposes, including

infrastructure development in the transport and energy sectors. The transaction won the award for the Best Sovereign Bond in EMEA

for 2012 from EMEA Finance Magazine in recognition of its excellence as a debut sovereign international bond issue.



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In brief – Supporting our communities

We play a broader role in the communities in which we live and work, beyond what we deliver through core business activities. We

do this through community investment programmes and the direct efforts of our employees.

Barclays is helping five million disadvantaged young people, by 2015, develop the skills they need to fulfil their potential. To help

support this goal, more than 68,000 employees volunteered their time, skills and money to support local communities. In 2012, we

extended our Building Young Futures partnership to help more young people set up their own small business or find a job, and will

invest an additional £10m to increase access to basic financial services through our Banking on Change programme.

78 Community investment

81 Flagship initiatives

Total community investment (£m)

1.2 millionyoung people helped toimprove their skills

Employees involved in volunteering, fundraisingor giving initiatives (%)

458,000hours spent volunteeringby employees

At a glance



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Community investmentOur approach

In the current financial climate, young people across the world are facing increasingly high levels of unemployment. One of

the biggest challenges for communities now is equipping the next generation with the right skills to fulfil their potential.

We draw on our expertise as a global business to offer much more than a financial contribution to the communities in which

we operate. Our resources and knowledge can help young people gain the skills they need to achieve independence and

financial security.

Our global community investment strategy is focused on programmes that help build the enterprise, employability and financial skills

of disadvantaged young people, aged 10 to 35 years old. We invest money and the time and expertise of Barclays employees to

deliver a positive social impact in the communities where we operate. The strategy was developed in 2011 with extensive input from

customers, employees, non-governmental organisations and the business community.

Our programmes, which aim to help five million disadvantaged young people fulfil their potential, fall into three categories (there’s

more about these in Flagship initiatives):

Enterprise skills: Equipping young people with the knowledge and support to set up their own business or income-generating

activity

Employability skills: Teaching young people valuable work skills to enhance their future job prospects through job training,

literacy and numeracy programmes

Financial skills: Helping young people to manage their money more effectively and make sound financial decisions.

These are vital skills that, in turn, will help these young people overcome the social and financial challenges they face, to better

provide for themselves and their families and ultimately support longer-term growth in the economy.

During 2012, we continued aligning our existing projects to the new strategy and implemented a revised governance structure. The

Global Investment Committee is responsible for developing and implementing the strategy across Barclays and is supported by five

regional investment committees (Africa, America, Asia Pacific, Europe and UK), which provide local input and lead the strategy

regionally. We also have a number of other programmes around the world that reflect local priorities.

Progress in 20122015 commitment 2012 progress summary

Provide £250m of new investment in community programmes. In 2012, our first full year of reporting against our targets, weinvested £64.5m in community programmes globally.

Improve the enterprise, employability and financial skills of fivemillion 10- to 35-year-olds.

In 2012, we helped improve the skills of more than 1.2 million10- to 35-year-olds.



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Total community investment £m

In 2012, we committed £250m of new investment in community

programmes and pledged to improve the enterprise,

employability and financial skills of five million 10- to 35-year-

olds between 2012 and 2015. Read more about how we support

young people in Flagship initiatives. In our first full year of

reporting against these targets, the amount that we invested in

communities increased to £64.5m (up 2% from 2011).

Our community programmes around the world benefited more

than 1.2 million 10- to 35-year-olds and 1.9 million people in

total during 2012.

Types of community investment %

Note

Community investment key impacts

175,000 young people developed more confidence in, and

understanding, of money matters

28,500 young people improved their literacy or numeracy

skills

11,600 young people started a business or income-

generating activity

4,400 young people achieved employment

3,400 new jobs were created by the businesses we

supported.

Beneficiaries by type of skills (thousands)

Detailed performance and commentaryOverview

1

We categorise our community investment using the LondonBenchmarking Group (LBG) methodology. ‘Cash’ includes donations andlegitimate overheads incurred in enabling community contributions totake place, ‘management costs’ are those not associated with specificinvestment programmes (e.g. IT costs or office space), and ‘employee timecontribution’ is based on monetised volunteering hours in work time.

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http://www.lbg-online.net/

Employees involved in volunteering, fundraisingor giving initiatives %

Note

Employees in the community

Our employees can – and do – play a major role in supporting their local communities. We actively encourage our employees to take

part in our programmes and support their volunteering, fundraising and regular giving.

In 2012, nearly half of our employees were supported in the

following activities:

Volunteering – more than 32% (46,000) of employees

volunteered in their communities

Matched fundraising – £25.4m was donated to charities

through our matched fundraising programme (this includes

both the funds raised by employees and our matching

contribution). More than 20,000 employees took part in

over 17,000 fundraising events

Giving – Nearly 27,000 employees were involved in payroll

donation schemes throughout the year, giving more than

£4.8m to charities. This also includes the matching

contributions made by Barclays.

Employee participation in community programmes 2012 2011 2010

Total number of employees involved in volunteering, fundraising andgiving activities 68,000 70,000 59,000

Total volunteering hours 458,000 418,000 359,000

Total amount raised through fundraising and giving £30.3m £28.2m £21.4m

Total number of events receiving matched fundraising 17,104 17,167 12,805

Employee volunteering

In our experience, volunteering doesn’t just have a positive impact on our communities, but also provides development opportunities

for employees. For example, three quarters of employees participating in our annual volunteering campaign said it had a positive

impact on their communication, team-work and leadership skills.

Make a Difference Day is our annual volunteering campaign, organised by the UK charity Community Service Volunteers. It

encourages our employees to give their time and skills to support local communities. In 2012, we encouraged employees to focus on

activities that align with our community investment strategy: helping young disadvantaged people gain the skills they need to fulfil

their potential. Of the 17,000 employees across 34 countries that took part in the campaign, 60% participated in projects that help

develop young people’s enterprise, employability and financial skills.


Our annual Citizenship Awards celebrate the contribution our employees make to their local communities. In 2012, we introduced

the People’s Vote for our employees, their family and friends, our charity partners and beneficiaries of our employees’ efforts.

2

All 2010 and 2011 employee participation figures have been restated toexclude the number of Barclays’ pensioners who received support as partof our community investment programmes as pensioners are notincluded in Barclays’ headcount.

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Flagship initiativesEnterprise skillsWe’re helping to address youth unemployment by supporting projects that equip young people with the skills to set up a business. In

2012, there were 82,000 participants in our enterprise skills training programmes, with 11,600 going on to start a business or

another income-generating activity.


Building Young Futures

Our Building Young Futures partnership with UNICEF enables disadvantaged young people to develop the skills, knowledge and

confidence they need to set up their own small business or find a job.

We have worked with UNICEF since 2008. In 2012, we extended our partnership for three years, with an additional investment of

£5m. Building Young Futures will directly benefit 74,000 disadvantaged young people in Brazil, Egypt, India, Pakistan, Uganda and

Zambia.

Working in communities with high levels of youth unemployment, and working closely with governments to have a long-term

impact, this programme gives young people the skills they need to achieve economic independence.

Youth Business International

Our partnership with Youth Business International (YBI) helps young people start their own business, create jobs and develop

communities. YBI works with young people in more than 35 countries to provide training and access to capital and mentoring,

helping them become successful entrepreneurs. In 2012, our partnership with YBI has developed the enterprise skills of 19,500

young people and created over 1,400 youth-led businesses and 4,300 jobs globally. More than 100 of our employees have

volunteered their time to the partnership, either by working with the beneficiaries or offering strategic advice to YBI to improve the

scale and impact of their work. The volunteers included members of our senior leadership team.

Echoing Green

Echoing Green is a global not-for-profit social venture fund which identifies, invests in and supports emerging social

entrepreneurs. Since its launch in 1987, Echoing Green has provided US$31m (£19.5m) in start-up funding to more than 550 young

innovators working in in 49 countries. These entrepreneurs have collectively established more than 400 social enterprises and and

raised over US$1bn (£600bn) in additional private and public funding. We have partnered with Echoing Green since 2010. In

addition to our financial support, employees from around the world participate in the selection of the fund’s beneficiaries and and

members of our senior leadership team advise them on the business challenges faced in the early stages of their enterprises.

Desmond Tutu Centre for Leadership

Since 2010 Absa has partnered with the Desmond Tutu Centre for Leadership in a programme that empowers young South Africans

with skills that lead towards self-employment. The programme offers a mixture of technical and business training to young people

who for various reasons have been unable to complete their schooling or are unemployed. Beneficiaries are trained in areas such as

renewable energy technology. To date, we have helped more than 148 young people to become plumbers and solar technicians. This

initiative not only provides employment opportunities, but also contributes to a reduced dependency on mains electricity.

Employability skillsWe’re developing and investing in employability, literacy and numeracy programmes to help teach the next generation of young

people valuable work skills to enhance their future job prospects.

In 2012, we supported more than 185,000 young people with basic training and facilitated more than 4,000 work placements or

internships through our community activities.



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Barclays Spaces for Sports

Barclays Spaces for Sports is a global programme that uses sport to teach disadvantaged young people the employability skills they

need to fulfil their potential. We have invested £37.5m in the programme since its launch in 2004. Participants receive training in

workplace skills and money management to help them get a job and become financially independent.

In 2012, Barclays Spaces for Sports launched two new sport-for-development programmes, both in partnership with Barclays Premier

League football clubs. The Fulham Football Club Foundation is delivering a three-year employability programme while the Chelsea

Football Club Foundation is teaming up with Chelsea Football Club Soccer School and children’s charity Right To Play (an existing

Barclays’ partner) to deliver a three-year employability skills programme in Hong Kong.

In the UK, we continue to work with the Football Foundation to ensure the long-term sustainability of our 200 sports sites, offering

financial and non-financial support so that the sites will benefit their communities in the years to come.

AFTER

Our Armed Forces Transition Employment and Resettlement (AFTER) programme is a four-year partnership with the Army Recovery

Capability Unit and ABF The Soldiers’ Charity. It helps wounded and sick servicemen and women to develop the skills needed for

employment in civilian life. We fund vocational courses for them and create work placements in Barclays and with other business

partners. The AFTER programme is also linked to our Military Services Network, which alerts ex-Service personnel to job opportunities

in Barclays.

In 2012, we were recognised as one of the UK’s biggest employers of military reservists, winning the Supporting Britain’s Reservists

and Employers (SaBRE) award from the Ministry of Defence.

Music Potential

Barclaycard sponsors the Music Potential programme in collaboration with Choice FM’s I Have a Choice charity. Music Potential helps

young people who are not at work or studying to acquire the skills required for a career in the music industry. This includes support

with returning to education or training and other help to set up a business. By the end of 2012, over 1,200 young people had

participated in the programme, with 150 gaining a recognised qualification and more than 50 having benefited from work

experience or one-to-one mentoring from music or radio professionals.

Financial skillsWith the right financial skills, disadvantaged young people can manage their finances effectively, avoid debt, make more informed

choices about their lives and achieve future goals. In 2012, we provided more than 946,000 disadvantaged young people with

financial skills training.

Banking on Change

Our Banking on Change partnership with CARE International UK and Plan UK promotes access to basic financial services for people in

Africa, Asia, and South America. The programme benefits young people, their families and the communities in which they live and

work.

We launched the programme in 2009 with an investment of £10m, and committed a further £10m to Banking on Change in 2012 for

an additional 3 years. The partnership helps communities form Village Savings and Loans Associations, enabling members to save

collectively, manage their money better, access affordable loans and, in many cases, start or expand a small business. By the end of

2012, 513,000 people had joined more than 25,000 groups and saved US$7.5m (£4.7m).

As these groups mature, some are seeking access to more formal financial services such as basic bank accounts. We’ve developed a

number of products designed to meet the specific needs of these potential new customers.

In 2011, Banking on Change was recognised by the UN Business Call to Action network for its contribution to the Millennium

Development Goals. Last year, the programme was awarded the Business Charity Award for the Best Overseas Project and a

Corporate Engagement Award for the most effective long-term philanthropic scheme. Read more about our work in this area in

Increasing access to financial services.

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Barclays Money Skills

Barclays Money Skills helps young people and vulnerable or disadvantaged groups in the UK improve their financial skills, knowledge

and confidence. In the past three years, we’ve invested £15m in the programme and supported 18,498 employees to volunteer for it

(as of January 2013). More than one million people have benefited via workshops, one-to-one support and online materials and

tools.

We’re working with leading charities such as the UK’s National Youth Agency and the Citizens Advice service to develop new ways of

engaging young people in the programme, particularly those who are not in employment or education. One example is our

Champions project, which helps young people improve their financial skills and then share what they’ve learnt with friends.

We have set ourselves an ambitious goal of helping an additional one million young people through the programme in the year

ahead.

Aflatoun

This programme provides financial education to primary school children in Cambodia, China, Indonesia, Laos, Malaysia, Philippines,

Sri Lanka, Thailand and Vietnam. With the support of Barclays’ volunteers, children learn how to budget, save and spend responsibly.

They are also taught the value of using natural resources like water wisely and the importance of recycling. In addition to classroom-

based learning, the children can also set up Aflatoun clubs to put their new skills and knowledge into practice. In 2012, more than

38,500 young people benefited from this access to financial skills training, with 84% reporting that they feel more confident about

money management as a result.

Notes

The UN Millennium Development Goals

The Millennium Development Goals (MDGs) are eight ambitious pledges agreed by UN member countries to address the

world’s main development challenges by 2015. Many of our community investment flagship initiatives actively support the

achievement of the MDGs. For example:

To help eradicate extreme poverty we are equipping young people with the skills to manage their own money and to get

into work. Barclays Spaces for Sports programme helps disadvantaged young people in China, India, South Africa and

Zimbabwe to gain valuable employability skills

To develop global partnerships for development we are working with organisations around the world to support young

entrepreneurs and tackle unemployment among young people, including UNICEF, Youth Business International, CARE

International UK and Plan UK

To promote gender equality and empower women we are providing access to financial services for women in some of the

poorest countries in the world, enabling them to contribute to household income and participate in financial decision-

making. Our Banking on Change programme helps women save and invest in their own small businesses.

The Business Charity Awards, run by the UK’s Third Sector Magazine, celebrate the outstanding contribution made by businesses in the UK to good causes.The Europe-wide Corporate Engagement Awards recognise best practice in all aspects of the corporate partnership and sponsorship process.

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Case studies – Supporting our communitiesEncouraging future goalsBarclays Spaces for Sports is working with theFulham Football Club Foundation to deliver anemployability development programme fordisadvantaged young people in London.

The My Future Goal initiative uses sporting activities to help participants aged 16 to 25 develop team-work, communication and

leadership skills. It also provides opportunities to acquire the credentials needed for a job, training or further education. These

include sessions on CV writing, interview preparation and money management. To date, 59 people have completed the programme,

of which 34% entered immediately into education, employment or training.

Jephthe Gnapi, 20, from Streatham, south London, was unemployed and seeking work when he heard about My Future Goal. Jephthe

(pictured above, right), who wants to become an accountant for a football club, took full advantage of all the opportunities made

available to him on the programme. After completing 10 hours of volunteering on a Fulham FC Foundation holiday course, he

volunteered for an additional Saturday morning session and is currently completing the Football Association Coaching Award (Level

1) after which he can apply to become a part-time coach for the Foundation. Jephthe has since become one of two participants in the

My Future Goal programme to be recruited onto our flagship Apprenticeships Programme.

Making a difference in SpainMake a Difference Day is our annualvolunteering campaign that encouragesemployees to give their time and skills for thebenefit of local communities.

In Spain there are approximately 1.5 million people with disabilities. Many of these are of an age where they could be entering

employment, however, the reality is that only 27% of the country’s disabled population have a job.

Employees in Spain have been addressing this issue by hosting employability workshops for young people with mental disabilities

which include a visit to a Barclays’ branch in the centre of Spanish capital Madrid. Participants had an opportunity to meet employees

and discuss the nature of their roles and the skills they would need to develop a career in banking. Our 2012 Make a Difference Day

volunteering campaign encouraged employees to focus on activities that align with our community investment strategy – helping

young disadvantaged people gain the skills they need to fulfil their potential. In 2012, 17,000 employees from 34 countries took

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Developing enterprise skillsIn the US, our employees are helping youngpeople who have recently left foster care toacquire the skills needed for a successfultransition to independent life.

Employees in our Barclaycard US business have been working since 2001 with West End Neighborhood House, a Delaware-based

non-profit organisation which helps young people leaving foster care to attain independence by developing vital employability and

financial skills. We have committed US$500,000 (£326,000) over four years to our ‘Bright Spot Ventures’ initiative to help these

young people run three small businesses: an online bookshop, a bakery and a farmers’ market. In partnership with West End

Neighborhood House, the Delaware Governor’s Office and the Delaware Secretary of Agriculture, our employees devised and

launched the project, coming up with the name and logo, negotiating leases for premises and helping with business plans.

The aim is for the businesses to be self-sustaining at the end of the four years, with profits covering costs. The bakery is already

breaking even after one year. Many of our Barclaycard US employees have volunteered with Bright Spot Ventures, providing expertise

in areas such as marketing and HR. Internships with Barclays and other local businesses are also offered to participants.



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See Global Reporting

Initiative Index for more

information.

Household and SME lending

Supporting enterprise and government

Customer experience

Environmental data.

Reporting standards and assuranceOur Citizenship Report 2012 marks the 13th year that we have reported on our environmental and social performance. It outlines

progress on the priorities and targets identified in the Citizenship Report 2011 and 2015 Citizenship Plan (launched in 2012), along

with performance against issues identified as important to both our business and stakeholders. See Materiality for more information

on our process in this area.

This Report covers the performance of the Barclays Group in the financial year to 31 December 2012. Unless stated otherwise, it

covers our global operations. Information on our business divisions and geographies can be found on our website and in the Barclays

Annual Report 2012.

Reporting frameworkWe report against the Global Reporting Initiative (GRI) G3 Indicator protocols and Financial

Sector Supplement. We have self-declared our reporting to be Application Level B.

We also report in accordance with the AA1000 AccountAbility Principles Standard

(AA1000APS), specifically the three principles of materiality, reponsiveness and inclusivity, as

outlined in the table below.

Principle Definition Our response

Materiality Materiality is determining the relevance andsignificance of an issue to an organisation andits stakeholders. A material issue is an issuethat will influence the decisions, actions andperformance of an organisation or itsstakeholders.

We use the concept of materiality to determine whichissues should be included in our Citizenship strategy andreporting. Using the AccountAbility ‘five part materialitytest’, we identify issues of importance to both ourbusiness and stakeholders and allocate a score to eachone, which determines whether the issue is ‘Tier 1’ or‘Tier 2’ and the extent to which we focus on it in ourreporting and strategy. There’s a more detailed accountof this in Materiality.

Responsiveness Responsiveness is a measure of the extent towhich an organisation takes action inresponse to stakeholder issues that affect itssustainability performance and is realisedthrough decisions, actions and performance,as well as communication with stakeholders.

We engage with a wide range of stakeholders across ourbusiness divisions on a number of different issues thatare considered material from a business and/orstakeholder perspective. Through this dialogue, we learnabout our stakeholders’ priorities and concerns, andrespond accordingly. Read more about this process inour Stakeholder engagement section.

Inclusivity Inclusivity is the participation of stakeholdersin how an organisation develops and achievesan accountable and strategic response tosustainability.

We actively seek stakeholder participation in thedevelopment of our Citizenship strategy. For example,our 2015 Citizenship Plan was launched at a stakeholderevent in May 2012. This was followed by extensivestakeholder consultation. We have updated ourcommitments to reflect this feedback and align with ournew Goal, Purpose and Values.

AssuranceWe engaged KPMG to provide limited assurance over certain data and commentary in our Citizenship Report 2012 as well as our

adherence to the AA1000APS AccountAbility Principles Standard. In 2012, we requested a more rigorous analysis of a selection of

material topics to improve the quality and credibility of our disclosures in these areas. KPMG, having reviewed our approach to

identification of material issues and adherence to the AA1000APS, selected four focus areas for the 2012 assurance, three of which

were identified as ‘Tier 1’ issues in our materiality assessment:

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http://reports.barclays.com/cr11/

http://group.barclays.com/about-barclays/about-us/barclays-business-structure

http://reports.barclays.com/ar12/strategicreport/businessreview/ukretailandbusinessbankingukrbb.html

http://www.accountability.org/standards/aa1000aps.html


We plan to expand the material issues covered by our independent assurance over time, with the aim that all Tier 1 issues are covered

during the three-year assurance cycle.

KPMG reviewed the rest of the report in the context of the AA1000APS review and provided feedback where claims or data were

perceived as inconsistent with their observations. Read KPMG’s independent assurance statement here.

Our responses to last year’s assurance observations from Ernst & Young are outlined below.

Notes

Ernst & Young assurance recommendation (2011) Our response

Barclays has achieved increased completeness of energyconsumption data by cross-referencing reporting sites to aglobal property database. This has helped to identify which partsof the business were reporting actual consumption and whereestimations were required. However, the proportion ofestimations remains high in certain parts of the business andBarclays should continue its efforts to collect information for thisand other environmental parameters.

In 2012, we improved both the accuracy and timeliness of ourdata collection. This included collecting data on a monthly basisfrom our UK retail branches, tracking carbon and energyreductions arising from specific initiatives and implementingautomatic meter reading in Absa. This has reduced theproportion of estimated energy data from buildings and datacentres to 22% and 3% respectively. Our data coverage by m2 isnow 100% as we have expanded our estimation methodology tocover all buildings in the portfolio. Further detail is available inBarclays Environmental Reporting Guidelines.

These improvements are important preparation for theforthcoming mandatory carbon reporting requirements in theUK, which require us to report our global emissions in theBarclays PLC Annual Report 2013. We will achieve 100%coverage for carbon reporting in time for this regulatoryrequirement. For more performance information, see Managingour impact on the environment.

Barclays continues to engage with stakeholder groups as part ofits approach to Citizenship. It will be important for Barclays toplan regular stakeholder engagement activity to seek feedbackon the progress made on its Citizenship Plan and to ensure thatoutcomes are delivering on Barclays' Citizenship objectives.

We conducted a programme of targeted engagement with keystakeholders following the publication of our 2015 CitizenshipPlan. The outputs of this were fed into the latest iteration of thePlan, launched in 2013. For more information, see Stakeholderengagement.

Barclays community investment programme has been revised in2011 to align more closely with its Citizenship priorities.However, Barclays still faces challenges in obtaining completeemployee participation data because electronic reporting of thisinformation is only available in certain parts of the business.Barclays could consider extending this method of informationgathering across the business to help capture more complete andconsistent reporting of this data.

We are continually working to improve and streamline our datacollection and reporting processes. We are developing atechnology solution which will enable electronic reporting in allregions.

For more information on our community investment programme,see Supporting our communities.

We understand that in the run-up to the launch of the newCitizenship Plan in May 2012, Barclays' Retail and BusinessBanking division is examining the alignment of its own strategyand goals with those of the Group. In future reporting, Barclayswill need to explain how alignment across the Group is helpingto contribute to the 2015 Citizenship commitments.

We made significant progress in 2012 in developing aconsistent approach to Citizenship across all business divisions.This includes the launch of our new Purpose and Values anddevelopment of a balanced scorecard of financial and non-financial measures which will be introduced into the appraisalprocess of our 125 most senior leaders this year and for allemployees from the middle of 2014. The updated version of our2015 Citizenship Plan will aim to achieve a more aligned,balanced approach to Citizenship across the whole of Barclays.For more information, see Strategic report.

The extent of evidence-gathering procedures for a limited assurance engagement is less than for a reasonable assurance engagement, and therefore a lowerlevel of assurance is provided. KPMG will conclude that it has not found evidence of misstatement.Environmental data, although identified as a ‘Tier 2’ issue in our materiality process, was included in the assurance due to its importance internally and ourforthcoming regulatory requirements to disclose global carbon data in the Barclays PLC Annual Report 2013.

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/PDF/barclays/en/working/servicepages/downloads/files/download.php?file=environmental_reporting_guidelines_barclays_cr12.pdf

Exchange rates 31. December 2012

Average – US$/£ 1.59

Average – €/£ 1.23

Average – ZAR/£ 13.03

Currency conversionsAll currency conversions in this Report are based on average

rates as at 31 December 2012. These are the same rates we use

in our Results and the Barclays PLC Annual Report 2012. The

average rates are derived from daily spot rates during the year

used to convert foreign currency transactions into Sterling for

accounting purposes.



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MaterialityWe use the concept of materiality to determine which issues should be included in our Citizenship strategy and reporting. We want to

focus on areas that are important to our stakeholders and strategically significant to both our business performance and the

execution of our 2015 Citizenship Plan. We do this by using the five part materiality test developed by the think tank AccountAbility.

This considers each issue (as identified through a preliminary analysis based on stakeholder engagement results, and displayed

below) from five different perspectives: its impact on short-term financial performance; the way it is managed internally; its

importance to stakeholders; its inclusion in regulation and/or industry and social initiatives; and the priority given to it by our peers.

This annual analysis results in a relative materiality scoring for each issue which feeds into the planning stages of our Citizenship

Report.

We split identified issues into two ‘tiers’. Tier 1 includes our most pressing, current issues. These have been consistently highlighted

by us and our stakeholders as being of the highest priority this year. Tier 2 issues are those which are important, and are therefore

managed and monitored on an ongoing basis, but have not been flagged as being of critical significance in 2012. We tested the

results shown above with our own senior management and our assurance provider KPMG has commented on our process (see the

assurance statement for more information on this).

We engage extensively with internal and external stakeholders and the results of this engagement help us to identify and assess

our focus areas. At our inaugural Citizenship Day in 2012, we engaged with stakeholders on the commitments in our 2015

Citizenship Plan and will continue to engage on these as the Citizenship Plan evolves. Read more about this in the Stakeholder

engagement section. We will monitor current and emerging issues that are material to our business and our stakeholders throughout

the coming year.



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Stakeholder engagementWe engage with a wide range of stakeholders across all of our business divisions

to identify key concerns and respond accordingly. This engagement is a mixture

of day-to-day conversations that are core to business processes and dialogue on

specific issues. See Reporting standards and assurance for detail on how we

apply the AA1000 AccountAbility Principles Standard. The results of this

engagement are used to inform our Citizenship programme and reporting.

Customers and clientsEngagement mechanisms Issues identified Our response

Customer service teams andcomplaint management centres

Customer and client satisfactionsurveys and independentbenchmarks

Direct client engagement(Corporate Banking, InvestmentBank, and Wealth and InvestmentManagement)

Customer focus groups

Regular meetings with consumerand financial advice groups suchas Money Advice Trust, CitizensAdvice Bureau and Which?

Barclays Citizenship Day, the May2012 external launch event forour 2015 Citizenship Plan andsubsequent engagement

Customer serviceenhancements andTreating Customers Fairlyagenda

Introduced a new service enabling UK business customers to replacedebit cards immediately in 260 branches.

Changed the incentive structure for frontline retail bankingemployees who are now rewarded according to customer satisfactionlevels not sales.

Absa ranked first in the Orange 2012 Index, a national customerservice benchmark compiled by Ask Africa.

Achieved the highest rating in a Charterhouse Research survey fromCorporate Banking clients in a number of categories, includingoverall satisfaction.

Our Investment Bank ranked first in the 2012 Greenwich QualityIndex for client quality based on a survey of global fixed incomeinvestors.

Sent more than two million free SMS and email alerts to UKcustomers since April 2012, updating them on how we areprogressing with their requests.

In 2012, Absa introduced a number of training initiatives to enhancecustomer service and help staff adhere to the Treating CustomersFairly agenda.

Complaints and PaymentProtection Insurance(PPI)

Changed card delivery processes in our US Barclaycard business,resulting in a 91% reduction year-on-year in related complaints.

Reduced global customer complaints by 6%. Achieved a 15%reduction in UK complaints (excluding PPI-related complaints) in2012 compared with 2011 levels.

Established a dedicated team to manage PPI complaints andcontinue to improve our compensation processes.



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http://www.askafrika.co.za/

http://www.charterhouse-research.co.uk/home

http://www.greenwich.com/

Access to financialservices such as basicbank accounts

Remain the only bank in the UK to offer accounts to undischargedbankrupts. Working in partnership with UNLOCK, the NationalAssociation of Reformed Offenders charity, to offer basic bankaccounts to prisoners in the east of England who are reaching theend of their sentences.

Provided £25,000 each to the Association of British Credit Unionsand the Community Development Finance Association for specificprojects.

In South Africa, we have 7.4 million customers for our basic bankingservices – up from 7.2 million in 2010. This equates to more than onein two Absa customers

Developed an app for smartphones and tablet devices enabling Absaemployees to remotely open transactional and savings accounts forcustomers.

Launched an overdraft facility for village savings groups in Ugandathrough our Banking on Change community investment programme.

Individual and SMEsupport through theprovision of credit

Made cumulative net lending of £5.7bn under the UK government’sFunding for Lending scheme to increase lending to SMEs.

Launched the Family Affordability Plan, Helpful Start mortgages andSpringboard Mortgage to help more buyers, particularly youngpeople, get on the property ladder.

Set up Absa’s Enterprise Development Programme which supportsSMEs with access to markets, funding and business support.

Transparency andaccessibility of productsand services

Working to provide greater clarity and transparency on productpricing. For example, we stopped cleared credit card purchasebalances from incurring interest the following month.

Became the first UK high-street bank to provide audio facilities at3,000 of our cash machines, in partnership with the Royal NationalInstitute for the Blind.

Introduced Barclays Pingit, a free app which allows anyone with a UKcurrent account and smartphone to make payments by mobilephone.

Launched a full mobile banking app enabling customers to access alltheir accounts in one place, review transactions, manage statementsand make payments and transfers.

Engagement mechanisms Issues identified Our response

EmployeesEngagement mechanisms Issues identified Our response

Employee opinion surveys

Global employee dialogue eventsand other senior managementcommunications

Employee forums and networks

Strategy/brand workshops

Regular communicationcampaigns via monthlymagazines, intranet, posters andthemed events/roadshows

Social media

Benefits andcompensation

Announced a new remuneration policy in which performanceassessment and variable remuneration will be measured against abalanced scorecard of financial and non-financial measures.

Launched the My Rewards website in the UK offering comprehensiveinformation on pay, pensions and benefits, and introduced a newpension scheme option, the Barclays Pension Savings Plan.

In the UK our Employee Assistance Programme offers freecounselling and life management services. In South Africa,employees can access medical specialists and a disease managementprogramme.



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Conduct and compliance Introducing a new Group-wide, standardised and assured inductionprocess to ensure new joiners understand what is expected of them.

Launching a new Code of Conduct for all employees, rooted in ourPurpose and Values and incorporating recommendations from theindependent Salz Review of our business practices.

Making Citizenship an explicit element of our new balancedscorecard, with delivery on the commitments in our 2015 CitizenshipPlan becoming a key element of performance assessment for allemployees from 2014.

Diversity and inclusion Our programme to provide high potential female employees withtargeted development and mentoring currently has more than 100participants, while global membership of our Women’s InitiativeNetwork has increased to 3,000 employees.

Ranked third by lesbian, gay and bi-sexual charity Stonewall in its2012 UK Workplace Equality Index, up from 10th in 2011.

Launched a multi-generational network in 2012 to consult withemployees about how we approach the different stages of life, bothwithin Barclays and in developing services for our customers andclients.

Made excellent progress in increasing the number of African femalesin the Absa workforce.

Signed up to the Think, Act, Report framework, a gender equalityinitiative by the UK government.

Launched a smartphone app for our Spectrum network for lesbian,gay, bi-sexual and transsexual (LGBT) employees, with informationon LGBT news and Spectrum events.

Training anddevelopment

All our employees receive the training required to adhere either toregulatory requirements or to our own policies.

Launched our flagship Apprenticeship Programme in the UK in 2012to attract young people to a career in financial services.

Engagement mechanisms Issues identified Our response

ShareholdersEngagement mechanisms Issues identified Our response

One-to-one and group meetingswith analysts

Results announcements andstrategy presentations

Annual General Meeting

SRI engagement

Surveys of institutions

Turnaround – stabilisingBarclays and maintainingprofitable growth

Delivered our financial objectives for 2012.

Returns – deliveringReturn on Equity aboveCost of Equity

Conducted a review of 75 business units to determine which toinvest in, reposition or exit. The review focused on Return on Equity,growth prospects and reputation.

Sustaining forwardmomentum

Announced our new Group-wide Purpose and Values to define howwe will achieve our goal of being the ‘Go-To’ bank and the way wewill run Barclays going forward. Our Purpose is to help peopleachieve their ambitions in the right way. Our Values are Respect,Integrity, Service, Excellence and Stewardship.

Remuneration andcompensation

Changing the way that we measure and reward employees. Followinga review in 2012, we are launching a balanced scorecard of bothfinancial and non-financial measures to be built into the appraisalprocess for senior executives during 2013 and for all employees fromthe middle of 2014.

Frontline retail employees are no longer compensated for sales ofproducts and services, but for customer service levels.



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SuppliersEngagement mechanisms Issues identified Our response

Participation in supplier industrygroups

Participation in industry workinggroups and schemes

Membership of supply chaininitiatives (for example, PromptPayment Code and MinoritySupplier Diversity UK)

Engagement on development ofthe Supplier Code of Conduct via apilot with selected suppliers

Prompt payments Maintained involvement in the Prompt Payment Code and willconduct an internal review of payment processes to improveperformance.

Diversity and inclusion Joined Minority Supplier Development UK (MSDUK) which will helpus diversify our supplier base.

Launch of the Procurement Portal by Absa to connect SME supplierswith large corporates.

Our sustainabilityexpectations of suppliers

Developed our Supply Chain Code of Conduct in 2012 and willlaunch it in 2013. The Code sets out how we expect suppliers tobehave and will strengthen our assessment and management ofsustainability risks in our supply chain.

Worked with suppliers to reduce our waste and to improve recyclingrates, recycling 350 tonnes of plastic cash bags in 2012 for use inother applications.

Ran a supplier roadshow, highlighting initiatives such asbiodegradable debit cards and recycled paper made from ourconfidential waste.

Government and regulatorsEngagement mechanisms Issues identified Our response

Meetings/correspondence withMembers of Parliament andministers

Representation on trade bodiesand consumer groups

Policy and other scheduledmeetings

Responses to governmentconsultations on regulation

Lending to SMEs Supporting government schemes to improve the flow of credit toSMEs, particularly in the UK. In Q4 2012 to 2013, we lent £1.9bn netto businesses and households under the Funding for LendingScheme, in comparison with a £2.6bn net industry decline, bringingour cumulative net lending under the FLS to £5.7bn.

Working with government and the financial services industry tocreate a more comprehensive picture of lending across the UK.

Complaints and mis-selling

Established a team dedicated to resolving PPI complaints in line withour commitments to customers and the former Financial ServicesAuthority (FSA). In February 2013, we announced that we had setaside a further £600m for PPI redress, taking the total cumulativeprovision to £2.6bn.

Submitted an initial review to the FSA on our sale of Interest RateHedging Products and aim to complete a full internal review, whichwill be independently scrutinised, within the FSA timeframe of six to12 months. In 2012 our total provision to cover the mis-selling ofthese products was £850m.

Regulatory reforms Continued to engage on key regulatory proposals, particularlyaround banking structure, with relevant government and regulatoryofficials.

Maintained an active dialogue with regulatory bodies over‘resolvability’ – eliminating the problem of banks being ‘too big tofail’. We submitted our first formal UK and US analysis of this issue,and the implications for Barclays, to the UK and US regulatory bodiesin June 2012.

Conduct and compliance Engaged with the UK financial services industry and government onreform of banking practices and regulation. We supported thecreation of a banking code of conduct governed by a body tooversee standards, with a Register of Approved Bankers. We firstproposed this to the Parliamentary Commission on BankingStandards in 2012.



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Charities and NGOsEngagement mechanisms Issues identified Our response

Meetings and discussions withNGOs and charities on specificissues

Dialogue through events such asCitizenship Day and engagementon our Strategic Review

Partnerships and collaboration

Product consultation

Roundtables

Need for a change invalues, conduct andculture, along with alonger-term outlook

Launched our new Purpose and Values in January 2013 that outlinehow every employee should behave. Developing a new Code ofConduct that is due to launch later in 2013.

Impact of lending tosensitive sectors

Continued to apply a stringent risk management approach to projectfinance and other transactions and contributed to industry debateson the subject.

Banking sector approachto managing humanrights

Collaborating with other European banks, as a member of the ThunGroup, to examine how the new UN Guiding Principles for HumanRights and Business can be integrated into bank policies andpractices.

Supporting products andservices that addresssocial challenges and theconcept of ‘shared value’

Launched a Social Innovation Facility (SIF) in July 2012 to invest£25m over three years in developing products and services thatdeliver a sustainable commercial return and ongoing social impact. In2012, the SIF committed £4m to six projects across Africa and theAmericas.

Industry associationsEngagement mechanisms Issues identified Our response

Involvement in committees andworking groups

Contributing to industrydiscussions and regulatoryconsultations

The role of banks inenabling investment inlow-carbon technologyand business.

Continued participation in the Banking Environment Initiative (BEI),including the working groups on commodities and energy. Our ChiefExecutive Antony Jenkins became Chair of the BEI in 2013.

Improving services forvulnerable customers

Participated in the UK Prime Minister’s Challenge on Dementia whichis run by the Alzheimer’s Society. As a result, we developed a powerof attorney guide in 2012 which is available online.

Supply chainmanagement

Continued to engage, in 2012, with industry groups with a particularfocus on supplier diversity, for example the Financial ServicesCorporate Responsibility forum.



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Bloomberg Markets’ World’s Greenest Bank ranking

Business in the Community Corporate Responsibility Index

CDP (Carbon Disclosure Project)

Dow Jones Sustainability Index

Employers’ Forum on Disability

Female FTSE100 Index

(run by Cranfield University)

FTSE4Good Index

Johannesburg Stock Exchange

Socially Responsible Investment Index

MSCI Index

oekom research

Opportunity Now diversity benchmark

Stonewall Top 100 Employers

Sustainalytics RiskMetrics

Vigeo

Dow Jones Sustainability Index

The Dow Jones Sustainability Index (DJSI) tracks the financial

performance of the leading sustainability-driven companies

worldwide.

In 2012, we maintained our membership of the DJSI World Index,

which represents the top 10% of the leading companies in the

Dow Jones Global Total Stock Market Index. Our score remained

at 82% overall, with an increase of 7% in the environmental

dimension.

CDP

The CDP assesses an organisation’s management of its

greenhouse gas emissions and its climate change strategy.

In 2012, we were number two among financial services

providers in the FTSE 350 Disclosure Leadership Index (up two

places since 2011), and received a ‘B’ rating for our

performance. Our consistent improvement in this Index reflects

our ongoing commitment to transparent disclosures and

effective climate change management.

Indices and benchmarksWe participate in a number of performance indices, benchmarks and Environmental, Social and Governance (ESG) research:

We regularly score in the top quartile of banking sector ESG rankings. Highlights of our performance are given below.



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http://www.sustainability-index.com/

http://www.cdproject.net/

FTSE4Good

The FTSE4Good Index Series measures the

performance of companies that meet

globally-recognised corporate

responsibility standards. We have been a

member of the FTSE4Good index since its inception in 2001.

In March 2013, we scored 90 out of 100 on the Environmental,

Social and Governance Rating (relative to other companies in

our sector).

Bloomberg Markets’World’s Greenest Bankranking

The Bloomberg Markets’ World’s Greenest Bank ranking assesses

financial services institutions on their environmental

performance and their investment in clean technology.

We maintained our 10th place in the 2012 Bloomberg Green

Ranking, published in March 2013.

Business in the Community(BITC) CorporateResponsibility Index

The BITC Corporate Responsibility Index is

widely considered to be the leading UK

benchmark for corporate responsibility.

In 2012, we improved our performance, achieving an overall

score of 95% and ‘Platinum Big Tick’ rating – the highest

possible ranking (up from 91% and ‘Gold’ rating in 2011).

Stonewall Top 100 Employers2013: Workplace EqualityIndex

Stonewall is a charity working to achieve

equality and justice for lesbians, gay men

and bisexual people. The Stonewall Top 100 Employers Index

assesses more than 360 public and private organisations on a

number of measures including their implementation of equality

policies, recruitment and mentoring.

We were ranked 7th and recognised as the top financial services

employer in the UK.

CommunityMark

BITC’s CommunityMark is the UK’s only

national standard that publicly recognises

excellence in community investment.

We were one of the first companies to

achieve the CommunityMark in 2008.

The Times Top 100Graduate Employers

The Times Top 100 Graduate Employers

is a guide to Britain’s most respected

and sought-after graduate employers.

We were ranked 16th in 2012.

For a more comprehensive list of our partners, principles that we endorse and examples of Citizenship in action around the world,

visit barclays.com/citizenship.



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http://www.bloomberg.com/slideshow/2013-04-03/the-world-s-top-20-green-banks-in-2012.html#slide11

http://www.bitc.org.uk/cr_index/

http://www.stonewall.org.uk/at_work/stonewall_top_100_employers/default.asp

http://www.bitc.org.uk/communitymark

http://www.top100graduateemployers.com/

http://barclays.com/citizenship

Independent assurance statementby KPMG LLP (‘KPMG’ or 'we') to the Board and Management of Barclays PLC

Assurance opinionWe have been engaged by Barclays PLC (‘Barclays’ or ‘the Bank’) to provide limited assurance over selected aspects of the Barclays

Citizenship Report for the year ended 31 December 2012 (‘the Report’). We complied with KPMG’s independence policies which

address the requirements of the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants.

Our team consisted of a combination of Chartered Accountants with professional qualifications and professionals with a combination

of citizenship, environmental reporting and stakeholder engagement experience including many years' experience in providing

assurance of this type.

As Barclays acknowledges in the Report, 2012 has been a challenging year for its reputation and it is in this context that it is

reporting on its approach to Citizenship. We observe the commitment within Barclays to change and the efforts being made by

leadership to drive that change. We also recognise that this will require long-term investment and sustained commitment.

Assurance scope – what we looked at:

1. Barclays’ adherence to the AA1000 AccountAbility Principles Standard 2008 ('AA1000APS') principles of inclusivity, materiality

and responsiveness; and

2. The reliability of significant claims and data over the Citizenship areas of household and small and medium enterprise (‘SME’)

lending; supporting enterprise and government; customer experience; and of significant claims and data over environmental

performance reported by Barclays.

In addition, we read all of the information in the Report to identify any material inconsistencies with those parts of the Report which

were the subject matter of our assurance. If we become aware of any material misstatements or inconsistencies, we consider the

implications for our report.

Our conclusions – what we found:

Based on the procedures undertaken we conclude that nothing has come to our attention that would lead us to believe that the

following are not, in all material respects, fairly stated:

1. The description of adherence to AA1000APS and especially its three principles of inclusivity, materiality and responsiveness; and

2. Significant claims and data over the Citizenship areas of household and SME lending; supporting enterprise and government;

customer experience; and significant data over environmental performance.

Observations arising from our work

We have made a number of recommendations to Barclays that we consider to be relevant to its Citizenship reporting. These are not

qualifications affecting our conclusions. We recognise that Barclays’ Strategic Review is designed to address much of what we have

observed.

Barclays has been working towards reporting a balanced view of their Citizenship programme for several years. Progress towards

achieving this has not always been consistent across business divisions and geographies but as Barclays makes clear in the Report

there is a determination to embed Citizenship in its goals, Purpose and Values and in the measurement of individual performance.

The following observations will be made more formally and in greater detail to Barclays Citizenship Leadership Council and have been

taken into account in forming our conclusions.

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http://www.accountability.org/standards/aa1000aps.html

Stakeholder engagement process and materiality assessment

A key challenge of any citizenship or sustainability report is to determine the appropriate matters to be included in the report.

Barclays has engaged with a number of external and internal stakeholders at Group level and within some business divisions to

determine the content of the Report. It has also conducted a materiality assessment of the matters identified by applying the ‘five part

materiality test’ (see Materiality). These processes are adequate for the purposes of the Report, however we do not believe they are

adequate to contribute to the Bank achieving its ambitions to change.

As Citizenship will be given greater prominence across the Bank under the Strategic Review, it is clearly Barclays’ intention that these

processes should make this contribution and they will need to be sufficiently rigorous to do so. We recommend that Barclays

introduces significantly greater formality, consistency and regularity in both the stakeholder engagement process and the materiality

assessment which will have the benefit of making these a relevant part of the Bank’s internal control.

Citizenship performance will also be enhanced if Barclays' management systems, which identify and act on material issues, are

redesigned to respond more proactively and less reactively to issues being identified internally or by third parties.

Citizenship performance data

Through our assurance engagement we have formed a view of the rigour of the process by which certain Key Performance Indicators

(‘KPIs’) are selected to be reported and how the data for those KPIs is then collated, managed and reported. The Bank needs to

introduce a level of consistency in KPI definition, capture and control across divisions and geographies and apply processes that are

as robust as those used for financial and other management information.

Work performed – what we did

Assurance standards require that we must be able to point to the reporting criteria we used to form our judgements. For the

description of adherence to AA1000APS, we use the GRI reporting principles for defining report quality. AA1000APS aims to ensure

that reporters do not leave out anything important whether measured by business significance or the interests of a particular class of

stakeholder. Inclusivity implies identifying and engaging with stakeholders to understand all the issues fully. Materiality is used to

assess the relative importance of issues. Responsiveness is the measure of both how the reporter has responded to issues and how

they have reflected these in the Report.

Barclays has developed a number of its own guidelines for reporting its Citizenship data, derived from the Sustainability Reporting

Guidelines of the Global Reporting Initiative (G3.1) and the GRI Financial Sector Supplement. It also has its own Environmental

Reporting Guidelines based on the World Resources Institute/World Business Council for Sustainable Development Greenhouse Gas

Protocol and the Global Reporting Initiative (GRI) G3 Reporting Guidelines. Barclays’ guidelines, which are available here, are the

criteria for our second scope.

Barclays requested and we agreed to concentrate on three material issues and their environmental data for the current year. We

determined that the selection of the material issues was appropriate and unbiased by considering them against the following criteria:

That they were issues Barclays identified as materiality level Tier 1 and we agreed that this was the case; and

That they involved matters that Barclays was dealing with throughout 2012 where we could give a conclusion. For newer issues

the Bank rightly determined our conclusions would be less worthwhile because it only started addressing them during the year.

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/PDF/barclays/en/working/servicepages/downloads/files/download.php?file=environmental_reporting_guidelines_barclays_cr12.pdf

This is how we gathered our evidence:

We reviewed the work that the Bank had undertaken to identify and engage with stakeholders comparing that with our own

expectations of who should be included;

We reviewed the results of Barclays’ stakeholder engagement process at global level and the output, comparing that to our view

of what would amount to effective engagement;

We reviewed the Bank’s approach to determining materiality to check we were satisfied with it;

We conducted media analysis and internet searches for references to Barclays during the reporting period and reviewed

investment analyst reports to identify if there were material issues the Bank had not disclosed;

We reviewed selected Group-level documents relating to risk identification, stakeholder engagement and business strategy, again

to identify if there were material issues the Bank had not disclosed;

We compared the coverage and disclosure of material issues within the Report with our own risk analysis, Barclays’ own

assessment, the citizenship/sustainability reports of Barclays’ peers and the results of its stakeholder engagement to satisfy

ourselves that Barclays was reporting on issues identified;

We compared the coverage and disclosure of material issues within the Report with the issues discussed by Barclays Board

Conduct, Reputation and Operational Risk Committee and Citizenship Leadership Council to satisfy ourselves that those issues

were receiving management attention;

We interviewed senior management representatives from the Central Citizenship team and Barclays Business Divisions to satisfy

ourselves that Barclays was reporting on issues identified and that those issues were receiving management attention;

We reviewed drafts of the Report and relevant web text to ensure that disclosures are not misrepresented or inconsistent with our

findings;

We compared Barclays’ reporting guidelines against the relevant international reporting protocols on which they are based to

ensure they are suitable for use;

We interviewed management and other personnel at Barclays to understand the rigour of the data collection process, information

flows and the systems and controls used to generate, aggregate and report data;

We tested selected components of the reported data back through the data collection process to source;

We identified the significant claims and sought supporting evidence for those claims through our interviews, reviews of minutes

and reviews of data; and

We performed substantive analysis on selected measurements, re-performed selected calculations, and obtained a high level

understanding of supporting quality controls systems and procedures which support the data.

A full list of the claims and data that are subject to our conclusions can be found under Appendix – detailed scope.

Inherent limitations

There are inherent limitations to our work.

Non-financial performance information such as the results of customer surveys or calculations of greenhouse gas emissions is subject

to more inherent limitations than financial information, given the characteristics of the subject matter and the methods used for

determining such information. The absence of a significant body of established practice on which to draw allows for the selection of

different but acceptable measurement techniques which can result in materially different measurements and can impact accuracy.

The precision of different measurement techniques may also vary. Furthermore, the nature and methods used to determine such

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In particular we note the following inherent limitations in relation to material areas on which we have given our conclusions:

For Household and SME lending, sources of data used have limitations:

External sources used to determine the relative position of Barclays against its competitors can suffer from significant time

lags in their publication. Definitions may be inconsistent between jurisdictions, for example of what qualifies as an SME;

and

In certain instances data has been specifically collated for the purpose of this report, rather than for management

purposes. This data is not subject to the same quality of process and control as data captured for management purposes.

For customer experience there can be inherent bias in the design of questionnaires, the selection of customers to approach or the

type of customer who self-selects to provide feedback; and

In the context of environmental data, the conversion of electricity and fuel usage to carbon emissions is dependent on the quality

of the third-party emission factors used.

Applicable professional standards and independence

We conducted our work in accordance with International Standard on Assurance Engagements 3000: Assurance Engagements other

than Audits or Reviews of Historical Financial Information, issued by the International Auditing and Assurance Standards Board ('ISAE

3000'). That Standard requires that we comply with applicable ethical requirements, including independence requirements, and that

we obtain sufficient, appropriate evidence on which to base our conclusion.

We conducted our engagement with a multidisciplinary qualified and experienced team in non-financial assurance. The team

included Chartered Accountants and specialist professionals in auditing financial, environmental and non-financial information and

with many years' experience in similar engagements.

Who can use our report?

This independent assurance report is made solely to Barclays in accordance with the terms of our engagement. Our work has been

undertaken so that we might state to Barclays those matters that we have been engaged to state in this Report and for no other

purpose. To the fullest extent permitted by law, we do not accept or assume any responsibility to anyone other than Barclays for our

work, for this independent assurance report, or for the conclusions we have reached.

What are the management of Barclays and our respective responsibilities?

The management of Barclays is responsible for the Report and for the information and statements within it. They are responsible for

identification of stakeholders and material issues, for defining objectives with respect to citizenship performance, and for establishing

and maintaining appropriate performance management and internal control systems from which reported information is derived.

Our responsibility is to express our conclusions in relation to the assurance scope.

KPMG LLP

Chartered Accountants

London

30 July 2013

NotesWhen we are engaged to provide limited assurance, assurance standards allow us to collect less evidence than for a reasonable assurance engagementprovided we collect sufficient for a negative form of expression of our conclusion. We achieve this ordinarily by performing different types or fewer tests thanthose required for reasonable assurance or using smaller sample sizes for the tests performed.Our conclusions should be read in the context of the information set out in the sections headed “Inherent limitations”, “Who can use our report?” and “Whatare the management of Barclays and our respective responsibilities?”

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Appendix – Elements of the Barclays 2012 Citizenship Reportsubjected to assuranceSelection of subject matter

KPMG LLP ('KPMG' or 'we') was engaged by Barclays PLC ('Barclays' or 'the Bank') to provide limited assurance over selected aspects

of the Barclays Citizenship Report for the year ended 31 December 2012 (‘the Report’). The scope for the 2012 engagement was:

1. Up to three material Citizenship areas

2. Environmental data: global energy, carbon (emission scopes 1,2,3) and water; and

3. Adherence to the AA1000 AccountAbility Principles Standard (2008) ('AA1000APS') principles of inclusivity, materiality and

responsiveness.

KPMG's proposed three material Citizenship areas subjected to assurance were:

Household and small and medium enterprise ('SME') lending;

Supporting enterprise and government; and

Customer experience.

In this appendix we disclose the assertions covered by our assurance report, which are subject to our conclusions.

For Barclays’ adherence to the AA1000 principles of inclusivity, materiality and responsiveness: as described in the chapter

‘Reporting standards and assurance’ (section: 'Reporting Framework'); and

For environmental data and the three selected material citizenship areas, we have listed the claims and data subject to assurance

in the tables below. Please note that, for the purpose of this appendix, we have paraphrased the claims with the exception of

those presented within quotation marks.

Environmental data Located in chapter/s

Total energy use: 1,520,703 GWh Managing our impacton the environment

Total carbon emissions: 998,585 tonnes CO2e 2015 Citizenship Plan performance

In brief – the waywe do business

Managing our impacton the environment

Carbon emissions scope 1: 46,757 tonnes CO2e Managing our impacton the environment



Water use: 1,582,724 m3 Managing our impacton the environment

Total carbon emissions reduction in 2012 (from 2010): 12% Managing our impacton the environment

Breakdown narrative of total carbon emissions by scopes 1, 2 and 3 whichinclude reduction levels and composition splits.

Managing our impacton the environment

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Citizenship areas: Household and SME lending Located in chapter/s

New and renewed lending to households: £33.4bn

2015 Citizenship Plan performance


Supporting individuals, businesses and economies

New and renewed lending to SMEs: £11.1bn In brief – Contributing to growth

Supporting individual, businesses and economies

Number of first-time buyers provided a mortgage in the UK: almost 18,000first-time buyers in 2010, up from 12,000 in 2011



Mortgage lending to first-time buyers in the UK: £2.8bn Supporting individual, businesses and economies

Lending under the National Loan Guarantee Scheme (NLGS): £1.5bn Supporting individual, businesses and economies

New new lending under the Funding for Lending scheme (FLS): £5.7bn Supporting individual, businesses and economies

Narrative on FLS and NLGS, which includes quarterly league positions andBarclays’ prior and current involvement in such initiatives.

Tough questions, honest answers: 2012 Challenges


Number of start-up businesses supported in the UK: almost 112,000 In brief – Contributing to growth


Total mortgage balance: £114,7 bn as at 31 December 2012 Supporting individual, businesses and economies

2012 recorded the highest number of start-up businesses supported in the UKsince Barclays started keeping records in 1988.

Tough questions, honest answers: 2012 Challenges


Citizenship areas: Supporting enterprise and government Located in chapter/s

Financing raised for businesses and governments: £830bn 2015 Citizenship Plan performanceCreating commercial solutions for social challenges


Financing raised for social housing in the UK: £2bn in total transactions Creating commercial solutions for social challenges

Financing in the clean energy and cleantech sector: £2.4bn Creating commercial solutions for social challenges

'We welcomed our 500th apprentice in January 2013' In brief – Contributing to growth

Creating commercial solutions for social challenges

Narrative of Barclays Infrastructure Fund, including:

Assets covered by the fund;

Overall portfolio composition; and

Investment in hybrid buses for the city of Dijon in France, including anaward won in the Sustainable Mobility category at the Private PublicPartnership Forum in Paris.


Narrative regarding the UK social housing sector, including situationexperienced by the sector in 2012 and the financial value of transactionssupported by Barclays.


Breakdown narrative of the 2012 transactions in the renewable energy andclean technology sectors globally, which include:

Bond markets;

Pension fund investments; and

Africa wind farms.




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Citizenship areas: Customer experience (satisfaction) Located in chapter/s

Customer/client satisfaction – 2012 internal survey scores Improving the customer experience

Footnotes clarifying internal survey methodologies and score measurement forthe following business divisions:

Barclays Africa

UK Retail and Business Banking

Barclaycard

Absa

Corporate Banking; and

Wealth and Investment Management


Customer/client satisfaction based on the following independent rankings(including relevant narrative):

UK Retail and Business Banking: GfK NOP Financial Research Survey;

Barclaycard: the J.D. Power and Associates US Credit Card SatisfactionSurvey;

Europe Retail and Business Banking: Mystery Shopping analysis(conducted by Multimetrica Portugal and by STIGA in Spain);

Absa: 2012 Orange Index, a national customer service benchmarkcompiled by Ask Africa;

Corporate Banking: 2012 Charterhouse Research survey;

Wealth and Investment Management: Spectrum Group relationshipmanagement research and our Global Client Service Centre won the BestCustomer Satisfaction Strategy Award at the 2012 UK CustomerSatisfaction Awards; and

Investment Banking: Greenwich Associates.


‘Despite the reputational challenges faced by Barclays in 2012, customer andclient satisfaction ratings remained relatively stable at the end of the year.’

2015 Citizenship Plan performance


‘At the end of 2012, we also changed the way we incentivise all UK frontlineretail banking employees. They are now rewarded according to levels ofcustomer satisfaction and no longer receive any payment relating to salesincentives or commission.’


Citizenship areas: Customer experience (complaints) Located in chapter/s

Volume of total global complaints, represented in percentages per businessdivision

2015 Citizenship Plan performanceImproving the customer experience

Number of UK FSA-reportable complaints: 882,009 2015 Citizenship Plan performanceImproving the customer experience

Percentage of financial Ombudsman Service referrals: 8% Improving the customer experience

Percentage reduction of total global complaints: 6% 2015 Citizenship Plan performance

Narrative regarding reduction in number of total global complaints (6%) and areduction of UK FSA-reportable complaints (15%); including PPI clarifications.

Tough questions, honest answers: 2012 ChallengesIn brief – the way we do businessImproving the customer experience

‘Barclays received approximately three complaints per 1,000 accounts in theUK.’


NoteWhen we are engaged to provide limited assurance, assurance standards allow us to collect less evidence than for a reasonable assurance engagementprovided we collect sufficient for a negative form of expression of our conclusion. We achieve this ordinarily by performing different types or fewer tests thanthose required for reasonable assurance or using smaller sample sizes for the tests performed.

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Registered office:1 Churchill Place, London E14 5HP. Registered in England. Registered No: 48839. © Barclays Bank PLC 2013

To find out more visit Barclays.com/citizenship

tough questions, honest answers - barclays

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