Barclays 2015 Annual Report Download - page 211

home.barclays/annualreport Barclays PLC Annual Report 2015 I 209
Such conduct related themes also carry material reputation risk
implications. Another area of reputation risk that continues to intensify
relates to public, regulatory and political concerns around the integration
of climate change issues and impacts into finance sector operations and
strategy.
 The intergovernmental conference on climate change in December
2015 agreed to keep global warming to within 2ºC, which will require
significant and far reaching policy and regulation to constrain the
combustion of fossil fuel reserves. This will impact many sectors,
however, there has been significant activity during 2015 on furthering
the finance sector’s understanding of the potential financial,
operational and strategic implications of climate change. In particular,
the Financial Stability Board (FSB) recommended a proposal to the
G20 for the creation of an industry-led disclosure task force on
climate-related risks in November 2015. This taskforce has been
established with the mandate to consider the physical, liability and
transition risks associated with climate change; identify effective
corporate financial disclosures and develop a set of recommendations
for climate-related disclosures. Improving the quality and consistency
of climate financial risk disclosures by companies will enable the
effective disclosure and analysis of material information by lenders,
insurers, investors and other stakeholders.
Barclays participates in a number of industry groups looking at these
issues and is assessing the implications for our global business.
Increasing the awareness of all staff of the importance of good customer
outcomes and protecting market integrity has been a priority in 2015.
Over 97% of Barclays staff have successfully completed training in this
area.
The Group continued to incur significant costs in relation to litigation
and conduct matters, please refer to Note 29 Legal, competition and
regulatory matters and Note 27 Provisions for further detail. Litigation
and conduct charges include customer redress as well as expenses
including damages, fines, remediation of affected customers or clients,
other penalties or settlements incurred in connection with legal,
competition and regulatory matters.
Resolution of these matters remains a necessary and important part of
delivering the Group’s strategy, but there are early signs that we are
driving better outcomes for customers from a more thoughtful
consideration of our customers’ needs.
As a result of increased awareness and early consideration of conduct
risk in the business, a number of actions have been taken to improve
customer outcomes including:
 proactive consideration and management of potential customer
detriment associated with Barclays’ strategy to simplify its business
and product. For example, change programmes monitoring customers
subject to multiple changes including platform and online migrations
 application of more stringent residential mortgage requirements to
buy-to-let mortgage applicants, ensuring better lending decisions
 enhanced surveillance monitoring in the Investment Bank identifying
and proactively managing activity which appear to cause unusual
market impact
 improvements in key areas such as bereavement and power of
Attorney and ongoing training to equip staff to support customers in
vulnerable circumstances and
 separation plans of Non-Core businesses to consider customer
outcomes.
Salz recommendations
The Board commissioned a review of Barclays’ business practices in July
2012, led by Sir Anthony Salz. The report contained 34
recommendations that can be categorised broadly under Regulatory,
Culture, Board Governance, People Pay and Management Oversight and
Risk Management. Please refer to previous annual updates for further
detail of past actions taken. All actions to implement the
recommendations have been completed and independently validated.
The Group continues to monitor the actions to ensure that they become
fully embedded throughout the organisation.
Conduct reputation measure
To aid monitoring of progress in the management of conduct, a
‘Conduct Reputation’ measure is included within Barclays’ Balanced
Scorecard. The conduct measure is developed through a conduct and
reputation survey, undertaken by YouGov, across a range of respondents
including business and political stakeholders, the media, NGOs, charities
and other opinion formers across key geographies (the UK, Europe,
Africa, the US and Asia).
In 2015 Barclays made progress on its Conduct measure recording a
score of 5.4 (2014: 5.3). ‘Operates openly and transparently’, ‘Has high
quality products and services’ and ‘Delivers value for money for
customers and clients’ have all improved according to audience
perception. Performance on two components, ‘Treats staff well at all
levels of the business’ and ‘it can be trusted’ have declined slightly. In
terms of target we are below where we would like to be for 2015,
although overall progress on the measure is in line with our expectations
and puts our 2018 target within reach.
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