SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 20-F

(Mark One)

¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended 31 December 2022

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________to _______________

¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report _______________

Commission file number 1-09246

BARCLAYS PLC
(Exact Name of Registrant as Specified in its Charter)

England
(Jurisdiction of Incorporation or Organization)

1 CHURCHILL PLACE, LONDON E14 5HP, England
(Address of Principal Executive Offices)

GARTH WRIGHT, +44 (0)20 7116 3170, GARTH.WRIGHT@BARCLAYS.COM
1 CHURCHILL PLACE, LONDON E14 5HP, England
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

***

Securities registered or to be registered pursuant to Section 12(b) of the Act:

| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
| :--- | :--- | :--- |
| 25p ordinary shares* | Not applicable* | New York Stock Exchange* |
| American Depositary Shares, each representing four 25p ordinary shares | BCS | New York Stock Exchange |
| 4.338% Fixed-to-Floating Rate Senior Notes due 2024 | BCS24A | New York Stock Exchange |
| Floating Rate Senior Notes due 2024 | BCS24B | New York Stock Exchange |
| 4.972% Fixed-to-Floating Rate Senior Notes due 2029 | BCS29 | New York Stock Exchange |
| 4.375% Fixed Rate Subordinated Notes due 2024 | BCS24 | New York Stock Exchange |
| 3.65% Fixed Rate Senior Notes due 2025 | BCS25 | New York Stock Exchange |
| 5.25% Fixed Rate Senior Notes due 2045 | BCS45 | New York Stock Exchange |
| 4.375% Fixed Rate Senior Notes due 2026 | BCS26 | New York Stock Exchange |
| 5.20% Fixed Rate Subordinated Notes due 2026 | BCS26A | New York Stock Exchange |
| 4.337% Fixed Rate Senior Notes due 2028 | BCS28 | New York Stock Exchange |
| 4.950% Fixed Rate Senior Notes due 2047 | BCS47 | New York Stock Exchange |
| 4.836% Fixed Rate Subordinated Callable Notes due 2028 | BCS28A | New York Stock Exchange |
| 3.250% Fixed Rate Senior Notes due 2033 | BCS33 | New York Stock Exchange |
| 3.932% Fixed-to-Floating Rate Senior Notes due 2025 | BCS25A | New York Stock Exchange |
| 5.088% Fixed-to-Floating Rate Subordinated Notes due 2030 | BCS30 | New York Stock Exchange |
| 2.852% Fixed-to-Floating Rate Senior Notes due 2026 | BCS26B | New York Stock Exchange |
| 2.645% Fixed Rate Resetting Senior Callable Notes due 2031 | BCS31 | New York Stock Exchange |
| 3.564% Fixed Rate Resetting Subordinated Callable Notes due 2035 | BCS35 | New York Stock Exchange |
| 1.007% Fixed Rate Resetting Senior Callable Notes due 2024 | BCS24C | New York Stock Exchange |
| 2.667% Fixed Rate Resetting Senior Callable Notes due 2032 | BCS32 | New York Stock Exchange |
| 3.811% Fixed Rate Resetting Subordinated Callable Notes due 2042 | BCS42 | New York Stock Exchange |
| 2.279% Fixed Rate Resetting Senior Callable Notes due 2027 | BCS27 | New York Stock Exchange |
| 2.894% Fixed Rate Resetting Senior Callable Notes due 2032 | BCS32A | New York Stock Exchange |
| 3.330% Fixed Rate Resetting Senior Callable Notes due 2042 | BCS42A | New York Stock Exchange |
| 5.304% Fixed Rate Resetting Senior Callable Notes due 2026 | BCS26C | New York Stock Exchange |
| 5.501% Fixed Rate Resetting Senior Callable Notes due 2028 | BCS28B | New York Stock Exchange |
| 5.746% Fixed Rate Resetting Senior Callable Notes due 2033 | BCS33A | New York Stock Exchange |
| 7.325% Fixed Rate Resetting Senior Callable Notes due 2026 | BCS26D | New York Stock Exchange |
| 7.385% Fixed Rate Resetting Senior Callable Notes due 2028 | BCS28C | New York Stock Exchange |
| 7.437% Fixed Rate Resetting Senior Callable Notes due 2033 | BCS33B | New York Stock Exchange |

\* Not for trading, but in connection with the registration of American Depository Shares, pursuant to the requirements to the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
25p ordinary shares: 15,871,306,805

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes þ No ¨

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes ¨ No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large Accelerated Filer þ Accelerated Filer ¨ Non-Accelerated Filer ¨ Emerging growth company ¨

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ¨
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. þ

***

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ¨

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨

*Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ¨
International Financial Reporting Standards as issued by the International Accounting Standards Board þ
Other ¨

*If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:
Item 17 ¨
Item 18 ¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ¨ No þ

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes ¨ No ¨

***

# SEC Form 20-F Cross reference information

| Form 20-F item number | Page and caption references in this document* |
| :--- | :--- |
| 1 | Identity of Directors, Senior Management and Advisers: Not applicable |
| 2 | Offer Statistics and Expected Timetable: Not applicable |
| 3 | Key Information |
| | A. [Reserved] |
| | B. Capitalization and indebtedness: Not applicable |
| | C. Reason for the offer and use of proceeds: Not applicable |
| | D. Risk factor: 191-203 |
| 4 | Information on the Company |
| | A. History and development of the company: i (Notes), 66-68, 299-317, 385-390 (Note 26), 419-422 (Note 41), 427, 434 |
| | B. Business overview: ii (Market and other data), 193-194, 291-298, 336-337 (Note 2) |
| | C. Organizational structure: 406-411 (Notes 34 and 35), 445-447 |
| | D. Property, plants and equipment: 375-378 (Notes 20 and 21) |
| 4A | Unresolved staff comments: Not applicable |
| 5 | Operating and Financial Review and Prospects |
| | A. Operating results: 90-97, 198, 204-217, 283, 287-288, 291-317, 353-360 (Note 14) |
| | B. Liquidity and capital resources: 197-198, 209-210, 278, 328, 331, 353-360 (Note 14), 391-395 (Notes 27 and 28), 406-407 (Note 34), 413-414 (Note 37), 449-460 |
| | C. Research and development, patents and licenses, etc.: 104 |
| | D. Trend information: 191-203, 265-286, 299-317 |
| | E. Critical Accounting Estimates: Not applicable |
| 6 | Directors, Senior Management and Employees |
| | A. Directors and senior management: 55-58, 64, 102-108 |
| | B. Compensation: 119-167, 398-406 (Notes 32 and 33) 417-419 (Note 39), 443-444 |
| | C. Board practices: 55-58, 61-65, 81-89, 98-99, 136-137, 139, 166-167 |
| | D. Employees: 111-118, 306, 308, 312, 336-337 (Note 2) |
| | E. Share ownership: 163-164, 398-399 (Note 32), 417-419 (Note 39), 443-444 |
| | F. Disclosure of a registrant's action to recover erroneously awarded compensation: Not applicable |
| 7 | Major Shareholders and Related Party Transactions |
| | A. Major shareholders: 105-106, 437 |
| | B. Related party transactions: 417-419 (Note 39), 463 |
| | C. Interests of experts and counsel: Not applicable |
| 8 | Financial Information |
| | A. Consolidated statements and other financial information: 320-424, 430 |
| | B. Significant changes: Not applicable |
| 9 | The Offer and Listing |
| | A. Offer and listing details: 430, 436 |
| | B. Plan of distribution: Not applicable |
| | C. Markets: 430, 436 |
| | D. Selling shareholders: Not applicable |
| | E. Dilution: Not applicable |
| | F. Expenses of the issue: Not applicable |
| 10 | Additional Information |
| | A. Share capital: Not applicable |
| | B. Memorandum and Articles of Association: 102-108, 427-429 |
| | C. Material contracts: 131-139, 165 |
| | D. Exchange controls: 434 |
| | E. Taxation: 431-434 |
| | F. Dividends and paying agents: Not applicable |
| | G. Statement by experts: Not applicable |
| | H. Documents on display: 434 |
| | I. Subsidiary information: 406-407 (Note 34), 445-447 |
| | J. Annual Report to Security Holders: Not applicable |
| 11 | Quantitative and Qualitative Disclosure about Market Risk: 186-298, 353-373 (Notes 14-17) |
| 12 | Description of Securities Other than Equity Securities |
| | A. Debt Securities: Not applicable |
| | B. Warrants and Rights: Not applicable |
| | C. Other Securities: Not applicable |
| | D. American Depository Shares: 435 |
| 13 | Defaults, Dividend Averages and Delinquencies: Not applicable |
| 14 | Material Modifications to the Rights of Security Holders and Use of Proceeds: Not applicable |
| 15 | Controls and Procedures |
| | A. Disclosure controls and procedures: 438 |
| | B. Management's annual report on internal control over financial reporting: 99, 106 |
| | C. Attestation report of the registered public accounting firm: 320-322 |
| | D. Changes in internal control over financial reporting: 106-108 |
| 16 | [Reserved] |
| 16A | Audit Committee Financial Expert: 81-89 |
| 16B | Code of Ethics: 436 |
| 16C | Principal Accountant Fees and Services: 419 (Note 40) |
| 16D | Exemptions from Listing Standards for Audit Committees: Not applicable |
| 16E | Purchases of Equity Securities by the Issuer and Affiliated Purchasers: 440 |
| 16F | Change in Registrant's Certifying Accountant: Not applicable |
| 16G | Corporate Governance: 98-99, 436 |
| 16H | Mine Safety Disclosure: Not applicable |
| 16I | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections: Not applicable |
| 17 | Financial Statements: Not applicable (See item 8) |
| 18 | Financial Statements: Not applicable (See item 8) |
| 19 | Exhibits: Exhibit Index |

\* Captions have been included only in respect of pages with multiple sections on the same page in order to identify the relevant caption on that page covered by the corresponding Form 20-F item number.

***

# Notes

The terms Barclays or Group refer to Barclays PLC together with its subsidiaries. Unless otherwise stated, the income statement analysis compares the year ended 31 December 2022 to the corresponding twelve months of 2021 and balance sheet analysis as at 31 December 2022 with comparatives relating to 31 December 2021. The abbreviations ‘£m’ and ‘£bn’ represent millions and thousands of millions of Pounds Sterling respectively; the abbreviations ‘$m’ and ‘$bn’ represent millions and thousands of millions of US Dollars respectively; and the abbreviations ‘€m’ and ‘€bn’ represent millions and thousands of millions of Euros respectively.

There are a number of key judgement areas, for example impairment calculations, which are based on models and which are subject to ongoing adjustment and modifications. Reported numbers reflect best estimates and judgements at the given point in time.

Relevant terms that are used in this document but are not defined under applicable regulatory guidance or International Financial Reporting Standards (IFRS) are explained in the results glossary that can be accessed at home.barclays/investor-relations/reports-and-events/latest-financial-results.

The information in this document, which was approved by the Board of Directors on 14 February 2023, does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2022, which contain an unmodified audit report under Section 495 of the Companies Act 2006 (which does not make any statements under Section 498 of the Companies Act 2006), will be delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.

Barclays is a frequent issuer in the debt capital markets and regularly meets with investors via formal road-shows and other ad hoc meetings. Consistent with its usual practice, Barclays expects that from time to time over the coming quarter it will meet with investors globally to discuss these results and other matters relating to the Group.

# Non-IFRS performance measures

Barclays management believes that the non-IFRS performance measures included in this document provide valuable information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the businesses’ performance between financial periods and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by Barclays management. However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well. Refer to the appendix on pages 313 to 317 for further information and calculations of non-IFRS performance measures included throughout this document, and the most directly comparable IFRS measures.

Key non-IFRS measures included in this document, and the most directly comparable IFRS measures, are:

- Attributable profit/(loss) excluding litigation and conduct represents attributable profit/(loss) excluding litigation and conduct charges. The comparable IFRS measure is attributable profit/(loss);
- Average allocated equity represents the average shareholders’ equity that is allocated to the businesses. The comparable IFRS measure is average equity. A reconciliation is provided on pages 314 to 315;
- Average allocated tangible equity is calculated as the average of the previous month’s period end allocated tangible equity and the current month’s period end allocated tangible equity. The average allocated tangible equity for the period is the average of the monthly averages within that period. Period end allocated tangible equity is calculated as 13.5% (2021: 13.5%) of RWAs for each business, adjusted for capital deductions, excluding goodwill and intangible assets, reflecting the assumptions the Group uses for capital planning purposes. Head Office allocated tangible equity represents the difference between the Group’s tangible shareholders’ equity and the amounts allocated to businesses. The comparable IFRS measure is average equity. A reconciliation is provided on pages 314 to 315;
- Average tangible shareholders’ equity is calculated as the average of the previous month’s period end tangible equity and the current month’s period end tangible equity. The average tangible shareholders’ equity for the period is the average of the monthly averages within that period. The comparable IFRS measure is average equity. A reconciliation is provided on pages 314 to 315;
- Cost: income ratio is calculated as total operating expenses divided by total income;
- Loan: deposit ratio is calculated as loans and advances at amortised cost divided by deposits at amortised cost. The components of the calculation have been included on page 270;
- Loan loss rate is quoted in basis points and represents total impairment charges divided by gross loans and advances held at amortised cost at the balance sheet date. The components of the calculation have been included on page 226;
- Net interest margin is calculated by dividing net interest income by the sum of average customer assets. The components of the calculation have been included on page 313;
- Operating costs is a measure of total operating expenses excluding litigation and conduct charges, UK bank levy and GMP;
- Operating expenses excluding litigation and conduct represents operating expenses excluding litigation and conduct charges. The comparable IFRS measure is operating expenses;
- Performance measures excluding the impact of the Over-issuance of Securities is calculated by excluding the impact of the Over-issuance of Securities from performance measures. The components of the calculations have been included on page 315;
- Profit before impairment is calculated by excluding credit impairment charges or releases from profit before tax;
- Return on average allocated equity represents the return on shareholders’ equity that is allocated to the businesses. The comparable IFRS measure is return on equity. A reconciliation is provided on page 317;
- Return on average allocated tangible equity is calculated as the annualised profit after tax attributable to ordinary equity holders of the parent, as a proportion of average allocated tangible equity. The comparable IFRS measure is return on equity. A reconciliation is provided on page 317;
- Return on average allocated tangible equity excluding litigation and conduct is calculated as the annualised profit after tax attributable to ordinary equity holders of the parent excluding litigation and conduct charges, as a proportion of average allocated tangible equity. The comparable IFRS measure is return on equity. A reconciliation is provided on page 317;
- Return on average tangible shareholders’ equity is calculated as the annualised profit after tax attributable to ordinary equity holders of the parent, as a proportion of average shareholders’ equity excluding non-controlling interests and other equity instruments adjusted for the deduction of intangible assets and goodwill. The comparable IFRS measure is return on equity. A reconciliation is provided on page 317; and
- Tangible net asset value per share is calculated by dividing shareholders’ equity, excluding non-controlling interests and other equity instruments, less goodwill and intangible assets, by the number of issued ordinary shares. A reconciliation is provided on page 316.

***

# Forward-looking statements
This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to the Group. Barclays cautions readers that no forward-looking statement is a guarantee of future performance and that actual results or other financial condition or performance measures could differ materially from those contained in the forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as ‘may’, ‘will’, ‘seek’, ‘continue’, ‘aim’, ‘anticipate’, ‘target’, ‘projected’, ‘expect’, ‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘believe’, ‘achieve’ or other words of similar meaning. Forward-looking statements can be made in writing but also may be made verbally by directors, officers and employees of the Group (including during management presentations) in connection with this document. Examples of forward-looking statements include, among others, statements or guidance regarding or relating to the Group’s future financial position, income levels, costs, assets and liabilities, impairment charges, provisions, capital, leverage and other regulatory ratios, capital distributions (including dividend policy and share buybacks), return on tangible equity, projected levels of growth in banking and financial markets, industry trends, any commitments and targets (including environmental, social and governance (ESG) commitments and targets), business strategy, plans and objectives for future operations and other statements that are not historical or current facts. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements speak only as at the date on which they are made. Forward-looking statements may be affected by a number of factors, including, without limitation: changes in legislation, regulation and the interpretation thereof, changes in IFRS and other accounting standards, including practices with regard to the interpretation and application thereof and emerging and developing ESG reporting standards; the outcome of current and future legal proceedings and regulatory investigations; the policies and actions of governmental and regulatory authorities; the Group’s ability along with governments and other stakeholders to measure, manage and mitigate the impacts of climate change effectively; environmental, social and geopolitical risks and incidents and similar events beyond the Group’s control; the impact of competition; capital, leverage and other regulatory rules applicable to past, current and future periods; UK, US, Eurozone and global macroeconomic and business conditions, including inflation; volatility in credit and capital markets; market related risks such as changes in interest rates and foreign exchange rates; higher or lower asset valuations; changes in credit ratings of any entity within the Group or any securities issued by it; changes in counterparty risk; changes in consumer behaviour; the direct and indirect consequences of the Russia-Ukraine war on European and global macroeconomic conditions, political stability and financial markets; direct and indirect impacts of the coronavirus (COVID-19) pandemic; instability as a result of the UK’s exit from the European Union (EU), the effects of the EU-UK Trade and Cooperation Agreement and any disruption that may subsequently result in the UK and globally; the risk of cyber-attacks, information or security breaches or technology failures on the Group’s reputation, business or operations; the Group’s ability to access funding; and the success of acquisitions, disposals and other strategic transactions. A number of these factors are beyond the Group’s control. As a result, the Group’s actual financial position, results, financial and non-financial metrics or performance measures or its ability to meet commitments and targets may differ materially from the statements or guidance set forth in the Group’s forward-looking statements. Additional risks and factors which may impact the Group’s future financial condition and performance are identified in Barclays PLC’s filings with the SEC (including, without limitation, Barclays PLC’s Annual Report on Form 20-F for the financial year ended 31 December 2022), which are available on the SEC’s website at www.sec.gov.

Subject to Barclays PLC’s obligations under the applicable laws and regulations of any relevant jurisdiction (including, without limitation, the UK and the US) in relation to disclosure and ongoing information, we undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

# Market and other data
This document contains information, including statistical data, about certain Barclays markets and its competitive position. Except as otherwise indicated, this information is taken or derived from Datastream and other external sources. Barclays cannot guarantee the accuracy of information taken from external sources, or that, in respect of internal estimates, a third party using different methods would obtain the same estimates as Barclays.

# Uses of Internet addresses
This document contains inactive textual addresses to internet websites operated by us and third parties. Reference to such websites is made for information purposes only, and information found at such websites is not incorporated by reference into this document.

# References to Strategic Report and Pillar 3 Report
This document contains references throughout to the Barclays PLC Strategic Report and Pillar 3 Report. References to the aforementioned reports are made for information purposes only, and information found in said reports is not incorporated by reference into this document.

***

# Table of content

- Strategy: 2
- Climate and sustainability: 16
- Governance:
  - Governance contents: 53
  - Directors’ report: 55
  - Our people and culture: 111
  - Remuneration report: 119
- Risk review:
  - Risk review contents: 186
  - Risk management: 188
  - Material existing and emerging risks: 191
  - Climate change risk management: 207
  - Principal risk management: 204
  - Risk performance: 218
  - Supervision and regulation: 291
- Financial review:
  - Financial review contents: 299
  - Key performance indicators: 300
  - Consolidated summary income statement: 302
  - Income statement commentary: 303
  - Consolidated summary balance sheet: 304
  - Balance sheet commentary: 305
  - Analysis of results by business: 306
  - Non-IFRS performance measures: 313
- Financial statements:
  - Financial statements contents: 318
  - Consolidated financial statements: 323
  - Notes to the financial statements: 332
- Shareholder information:
  - Key dates, Annual General Meeting, dividends, and other useful information: 425

***

# Our business model

## Designed to create synergies

Our universal banking model enables us to create synergies, across the organisation and deliver long-term value for our stakeholders.

### We deploy our resources ...

We draw on tangible and intangible assets to drive long-term, sustainable value creation.

- **Our people, Purpose, Values and Mindset:** Our people are our organisation. We deliver success through a purpose-driven and inclusive culture.
- **Technology and infrastructure:** Our deep technology and infrastructure capabilities drive customer experiences and support strong resiliency.
- **Our brand:** Our brand equity instils trust, lowers the cost of acquiring customers and clients and helps retain them for longer.
- **Operations and governance:** Our risk management, governance and controls help ensure customer and client outcomes are delivered in the right way.

### to serve the financial needs of our diversified customer base...

Due to our wide range of products and services across markets, we define ourselves as a ‘universal bank’.

- **Moving:** We facilitate transactions and move money around the world.
- **Protecting:** We ensure the assets of our clients and customers are safe.
- **Lending:** We lend to customers and clients to support their needs.
- **Investing and advising:** We help our customers and clients invest assets to drive growth.
- **Connecting:** We connect companies seeking funding with the financial markets.

***

# Our business model (continued)

### delivering value through synergies ...

We bring our organisation together to create synergies and deliver greater value.

- Providing customers and clients with the full range of our products and services.
- Applying Group-wide technology platforms to deliver better products and services.
- Joining up different parts of the Group so capabilities in one can benefit another.
- Making the Group more efficient.

### providing clear outcomes for our stakeholders.

Our diversified model provides the resilience and consistency needed for the road ahead.

- **Customers and clients:** Supporting our customers and clients to achieve their goals with our products and services.
- **Society:** Providing support to our communities, and access to social and environmental financing to address societal need.
- **Colleagues:** Helping our colleagues across the world develop as professionals.
- **Investors:** Delivering attractive and sustainable shareholder returns on a foundation of a strong balance sheet.

***

# Our strategy

## Sustaining and growing in challenging times

Our strategy enables us to sustain and grow through different market conditions and evolving trends.

### Our Purpose informs our strategy

We deploy finance responsibly to support people and businesses, acting with empathy and integrity, championing innovation and sustainability, for the common good and the long term.

### Our diversification, built to deliver double-digit returns

Our diversification means we are resilient through economic cycles and can deliver double-digit returns.

- A large-scale retail and business bank in the UK.
- An international bank containing:
  - a top tier global corporate and investment bank
  - a broad international consumer lending, cards and payments franchise.

### Strategic priorities to sustain and grow

- Deliver next-generation, digitised consumer financial services
- Deliver sustainable growth in the CIB
- Capture opportunities as we transition to a low-carbon economy

***

# Our strategy (continued)

## Deliver next-generation, digitised consumer financial services

As technology transforms consumer financial services, we are building and delivering enhanced products and services for our customers, leveraging our payments interconnection and improving our efficiency.

### Our objectives

- Investing in digital capabilities to improve service for customers and unlock new sources of income:
  - accelerating digital access and adoption, while not leaving customers behind
  - building cost-effective infrastructure
  - using the quality and scale of our data to better understand customer needs, anticipate trends and deliver more competitive products and services
- Realising value from investment in Payments across the Group, delivering additional income streams
- Expanding unsecured lending through partnerships
- Creating a competitive Wealth franchise to efficiently service customers’ evolving needs

### Strategic context

Technology is transforming the way consumers access products and services. We are adapting to anticipate and meet those needs, and find effective means of ensuring non-digital customers can still access our services.

### Progress

We continue to invest in our digital capabilities, upgrading our systems, moving to cloud technology and implementing automation of manual processes. This is allowing us to deliver a more personalised digital journey, reduce cost and create additional capacity to support more of our customers.

We are introducing digital tools to the Barclays app to provide new products for our customers, improve the overall experience and enable individuals to manage their finances better. For example, mortgage customers can manage their mortgages seamlessly through the app, including switching onto a new rate up to 180 days before their current rate expires. This year, our active mobile customers have grown to 10.5 million and we hit a record of 15.4 million logins in a single day – demonstrating the impact of going digital-first.

In our US consumer business, we completed the acquisition of the Gap cards portfolio, doubling our customer base in the US.

We continue to adapt our service model by building out Barclays Local – an alternative branch presence for those who need in-person support. Our new Cashback Without Purchase programme was launched to give customers the ability to withdraw cash for free via thousands of small businesses across the country, supporting those communities without a branch or cashpoint.

### Evolution in 2023 and beyond

We are working to develop a seamless, digital customer journey that provides access to a full range of unsecured lending solutions and the ability to switch between different credit products - expanding beyond cards into merchant integrated point-of-sale lending and open market loans.

**59.8**
US Consumer Bank Digital tNPS
2022 Target: 55
The new Digital tNPS metric provides us with feedback on customer experience, and can be measured at the digital journey level.

**76%**
% of UK customer journeys digitally enabled
2021: 72%
As customers needs change with evolving technology, we are adapting to facilitate customer journeys digitally.

***

# Our strategy (continued)

## Deliver sustainable growth in the CIB

As the capital markets grow, we will seek to maintain our market position as a top six global investment bank while investing in new capabilities to serve our clients.

### Our objectives

- Building consistent strength in Investment Banking, expanding in high-growth sectors and deepening our M&A capabilities
- Consistently investing in our Global Markets business with particular priority given to digital investment to ensure we are an electronic-first markets business
- Capturing greater client flow in Equities and balances in Prime Financing while growing our share in Securitised Products and Macro Rates, FX and EM
- Broadening Corporate Banking product capabilities, particularly in Europe and US
- Optimising our global footprint by expanding the CIB internationally where we have an attractive opportunity

### Strategic context

A strong presence in the capital markets is important as this remains core to our clients’ needs.

Trading and investment banking income is subject to market volatility, and banks have sought to diversify CIB revenues to increase the predictability of earnings.

Our success will be judged on our absolute performance, as well as how we perform in terms of Investment Banking fee wallet share and Global Markets revenue relative to our competitors, which are industry standard markers for CIB performance.

### Progress

In 2022, we maintained our overall ranking of sixth globally across Investment Banking$^a$ and Global Markets$^b$, narrowing the gap to fifth. We increased the diversity and predictability of our income, growing our financing business in Global Markets, including in Prime. We further integrated our Corporate Banking services to global and UK multinationals with our Investment Banking business, focusing on growing our Transaction Banking share across our core CIB markets.

We actively recruited to strengthen our teams and in November, we opened new state-of-the-art trading floors in our London headquarters, bringing all CIB colleagues in London into one location to further enhance collaboration and client service.

### Evolution in 2023 and beyond

We will continue to invest in Investment Banking high-growth sectors and in our digital initiatives in Global Markets. We will also seek to further build our Corporate Banking business in the US and Europe – a key source of stable, high-returning income.

**700+**
Growth in Corporate Banking clients in Europe
2021: c.600

**£2.9bn**
Total Financing income$^c$
2021: £2.2bn

**Notes:**
a Dealogic Investment Banking global fee ranking and share demonstrating our performance vs peers, for the period covering 1 January 2020 to 31 December 2022.
b Global Markets market share and rank for Barclays is based on our share of Top 10 banks reported revenues. Peer banks include BoA, BNP, CITI, CS, DB, GS, JPM, MS and UBS.
c Global Markets Financing includes income related to client financing in both FICC and Equities. In FICC this includes fixed income securities repurchase agreements, structured credit, warehouse and asset backed lending. In Equities this includes prime brokerage margin lending, securities lending, quantitative prime services, futures clearing and settlement, synthetic financing, and equity structured financing. All other items are considered intermediation.

***

# Our strategy (continued)

## Capture opportunities as we transition to a low-carbon economy

We want to work alongside customers and clients as they transition to a low-carbon economy, using our advisory and financial expertise to help them navigate this period of extraordinary change.

### Our objectives

- Using our financial and capital markets expertise to support the scale-up of low carbon technologies, infrastructure and capacity
- Supporting clients to decarbonise by providing financial advice and finance, including supporting the transition towards a low-carbon economy
- Continuing to develop green and sustainable banking products, including green mortgages, bonds, loans and investment funds eligible under our updated Barclays’ Sustainable Finance Framework
- Investing in sustainability-focused start-ups with growth potential
- Continuing to make progress to achieve our ambition to become a net zero bank by 2050, including aligning all of our financing to the goals and timelines of the Paris Agreement, consistent with limiting the increase in global temperatures to 1.5°C
- Continuing to reinforce our social and environmental policies through our governance

### Strategic context

The scale of the investment needed for a timely transition is significant. The final decision text from COP27 stated that $4trn$^a per year needs to be invested in renewables to be able to reach net zero emissions by 2050 and furthermore, a global transformation to a low-carbon economy is expected to require investments of between $4-6trn$^a per year. We are determined to capture these opportunities by supporting our customers and clients in their transition.

### Progress

As defined by our Sustainable Finance Framework, in 2022 we facilitated £25.5bn of green financing, reflecting our ability to capture the opportunities from the transition.

After a strategic review of our capabilities, market demand and growth opportunities, in December we announced a new target to facilitate $1trn of Sustainable and Transition Financing between 2023 and the end of 2030.

In addition, we also announced that we will be increasing our investment into global climate-tech start-ups through our Sustainable Impact Capital portfolio to £500m by the end of 2027.

As noted in last year's Annual Report, we strengthened our risk and control governance, recognising climate as a Principal Risk.

### Evolution in 2023 and beyond

Aligned to our new $1trn target, we will continue to invest in our business, with the aim of creating a centre of excellence for sustainable finance within the CIB, delivering a fuller suite of products, solutions, and expertise to clients as they navigate the transition towards a low-carbon economy.

In the next phase of our Sustainable Impact Capital investments we expect will see an enhanced focus on decarbonisation technologies which are enabling the transition within carbon-intensive sectors, particularly carbon capture and hydrogen technologies.

**£89m**
invested through our Sustainable Impact Capital Programme

**£2.6bn**
Green home mortgages issued since 2018

Barclays was one of the first major lenders to launch a Green Mortgage in 2018 and in January 2022, we announced the launch of Green Home Buy-to-let Mortgages.

```mermaid
graph TD
    A[Green financing facilitated 2018-2030 £bn]
    B[62.2 Progress from 2018 to 2021]
    C[25.5 2022 progress]
    D[87.8 Total achieved to date]
    E[Target of £100bn by 2030]
```

**Note:**
a $4-6trn as referenced at COP27 at unfccc.int/documents/624444 as well as the United Nations Environment Programme - Emissions Gap Report 2022 at unep.org/resources/emissions-gap-report-2022.

***

# About Barclays

We are diversified by business, geography and income type. Our operations include consumer banking and payment services in the UK, US and Europe, as well as a global corporate and investment bank.

### Our structure

Barclays operates as two divisions, Barclays UK and Barclays International, supported by our service company, Barclays Execution Services.

#### Barclays UK
Barclays UK consists of our UK Personal Banking, UK Business Banking and Barclaycard Consumer UK businesses. These businesses are carried on by our UK ring-fenced bank (Barclays Bank UK PLC) and certain other entities within the Barclays Group.

- UK Personal Banking offers retail solutions to help customers with their day-to-day banking needs.
- UK Business Banking serves business clients, from high-growth start-ups to small and medium-sized enterprises, with specialist advice for their business banking needs.
- Barclaycard Consumer UK is a leading credit card provider, offering flexible borrowing and payment solutions, while seeking to deliver a leading customer experience.

#### Barclays International
Barclays International consists of our Corporate and Investment Bank and Consumer, Cards and Payments businesses. These businesses operate within our non ring-fenced bank (Barclays Bank PLC) and its subsidiaries, and certain other entities within the Group.

Barclays Corporate and Investment Bank is comprised of the Investment Banking, Corporate Banking and Global Markets businesses, aiding money managers, financial institutions, governments, supranational organisations and corporate clients to manage their funding, financing, strategic and risk management needs.

The Consumer, Cards and Payments division of Barclays International is comprised of our International Cards and Consumer Bank, Private Bank and Barclaycard Payments businesses.

As part of our International Cards and Consumer Bank, in the US we have a partnership-focused business model, offering credit cards to consumers through our relationships. We also offer online retail savings products, instalment payments and personal loans.

In Germany, we offer multiple consumer products including own-branded and co-branded credit cards, online loans, electronic Point of Sale (ePOS) financing and deposits.

Barclaycard Payments enables businesses of all sizes to make and receive payments.

Our Private Bank offers banking, credit and investment capabilities to meet the needs of our clients across the UK, Europe, the Middle East and Africa, and Asia.

#### Barclays Execution Services
Barclays Execution Services is the Group-wide service company providing technology, operations and functional services to businesses across the Group.

***

# Divisional reviews (continued)

## Barclays UK

Barclays UK consists of our UK Personal Banking, UK Business Banking and Barclaycard Consumer UK businesses.

### Highlights

- UK Personal Banking offers retail solutions to help customers with their day-to-day banking needs.
- UK Business Banking serves business clients, from high-growth start-ups to SMEs, with specialist advice for their business banking needs.
- Barclaycard Consumer UK is a leading credit card provider, offering flexible borrowing and payment solutions, while delivering a leading customer experience.

### Measuring where we are

- **Income:** £7.3bn (2021: £6.5bn)
- **Profit before tax:** £2.6bn (2021: £2.5bn)
- **Operating expenses:** £4.3bn (2021: £4.4bn)
- **Return on Equity:** 13.8% (2021: 13.0%)
- **Return on Tangible Equity:** 18.7% (2021: 17.6%)
- **Barclays UK NPS:** +11 (2021: +11)
- **Barclaycard NPS:** +12 (2021: +4)

### Market and operating environment

Against a challenging economic and political backdrop this year, customer confidence in both the UK economy and its impact on their personal finances fell. Inflationary pressures have put significant strain on our customers in the UK and elsewhere, with many adapting to address these challenges, from changing their spending habits to paying down higher cost debts. As a bank, we have an important duty to play in society, and use our expertise to help people with their financial wellbeing, providing them with the support they need to navigate these uncertain times, including help with money management and budgeting.

There continues to be a significant shift towards digital adoption and demand for digital financial services to meet day-to-day needs. The changes in competition over the past decade makes addressing these evolving customer expectations even more pertinent. We aim to provide customers with banking services in new and innovative ways, embracing technology as a means of making things simpler, more transparent and more secure. Whilst we have seen an increase in the number of customers moving to digital, there remains a cohort of customers who are digitally less confident, and require more traditional points of engagement.

UK regulation continues to evolve, seeking to provide higher levels of protection for the consumer. The Consumer Duty, due to come into force in July 2023, is focused on ensuring that firms deliver good customer and client outcomes through: ensuring those products and services provide fair value; enabling informed decision-making and providing support that meets the needs of customers and clients. These key principles align with the Barclays UK Purpose and strategy, and we are committed to ensuring that the Consumer Duty is demonstrably embedded throughout the organisation.

### Focus areas

- **Providing exceptional service and insights to customers:** We aim to provide simple, relevant and prompt services and propositions for our customers so they have greater choice and access to the support they need to make their money work for their individual circumstances.
- **Driving technology and digital innovation:** We continue to invest in our digital capabilities, upgrading our systems, moving to cloud technology and implementing automation of manual processes. This is intended to allow us to deliver a more personalised digital experience, reduce cost and create additional capacity to support more of our customers. It aims to give us the capability to drive service and improve financial inclusion.
- **Continuing to grow our business:** We are pursuing partnership and acquisition opportunities to build and deliver better propositions and services, while continuing to innovate across our Barclays platforms to unlock new and sustainable income streams. In the unsecured lending space, in particular, we are working with partners such as Avios, to adapt to evolving customer demands as they look for flexibility, convenience and safety from their lending solutions - driving a shift from overdrafts, towards reward credit cards and instalment lending.
- **Evolving our societal purpose:** We are working across the communities in which we serve to support financial inclusion and recognise our role in supporting the transition towards a low-carbon economy. We are reinventing how we support customers in the community and also seeking to preserve access to banking for consumers and businesses over the long term.

***

# Divisional reviews (continued)

## Year in review

Barclays UK delivered a RoE of 13.8% (2021: 13.0%) and a RoTE of 18.7% (2021: 17.6%), as the continued evolution into a next generation, digitised consumer bank delivered strong returns and cost efficiencies, which combined with rising interest rates, contributed to a cost: income ratio of 60% (2021: 68%).

This year, the UK has seen its fastest increase in inflationary pressure on household budgets in 40 years, and we have focused on making sure our customers have the support they need to navigate these challenging times. This includes our Money Management Hub, which provides tools and information directly to our customers, giving them a better grasp of their spending behaviours and the steps they can take to improve their financial wellbeing.

We have been focused on helping customers boost their financial resilience in the long term, by encouraging healthy saving habits through the launch of our Rainy Day Saver account, as well as providing one-to-one support for customers experiencing financial hardship through our expert financial assistance teams.

We continue to focus on improving the overall customer experience by identifying and supporting the removal of the root causes of customer complaints. Complaints in 2022 have further reduced, with volumes decreasing 17% year on year excluding PPI complaints, or decreasing 18% when looking at total complaints. This has been achieved through the continued stability of our platforms, alongside regular and direct communications with customers during times of change, particularly in relation to our service model.

We have seen acute pressures in areas impacted by economic events, such as an increase in complaints related to mortgages as customers rush to find the right rates for them in light of Bank of England interest rate changes.

The Net Promoter Score (NPS) for Barclays UK was relatively stable throughout 2022 at +11. This reflects the returning capability to service our customers after previous declines during the pandemic. However, we recognise that we need to continue to push forward our initiatives to drive further improvements in customer experience, including improving and expanding our digital journeys. Barclaycard UK NPS continued to trend upwards throughout 2022 to +12, in line with the market, as usage and availability of credit became more important to customers.

We continue to evolve our physical service model, expanding Barclays Local - an alternative branch presence for those who need in-person support - which includes mobile banking vans and pop-up banking sites in community centres, libraries and business hubs. This transformation reflects the reality of the rapid digitisation of transactional banking, as customers demand more convenient, simpler ways to bank that fit their lives.

These new formats seek to ensure we leave no one behind and remain available, in person, to support the small proportion of customers unable to self-serve digitally, who value physical presence when things go wrong or to support them through vulnerability.

Supporting vulnerable customers across all of our Barclays channels remains a key focus. We have trained over 16,000 frontline colleagues to better recognise the subtle signs of vulnerability when speaking to customers who might need additional support, and are encouraging them to allow us to put an indicator on their banking records to ensure that Barclays, holistically, understands their needs and can better serve them across all their touchpoints as a result. Whilst we have made progress, we have more to do to embed this with colleagues, including further training and support materials.

***

# Divisional reviews (continued)

As part of the changes to our physical branches, we are working to ensure that customers who rely on cash can still access it and get the support they need. Barclays is a member of the Cash Action Working Group (CAG), working with industry banks and consumer groups, the Post Office and LINK, in an agreement on shared services such as banking hubs, helping to ensure long-term cash availability across the UK.

We also rolled out a new Cashback Without Purchase service, in partnership with Barclaycard Payments, creating thousands of new locations for consumers to withdraw cash from shops, cafes, restaurants and other small businesses for free. We anticipate that it will also help local community cash recycling and boost business footfall.

We continue to invest in smarter technologies to improve the customer and colleague experience, particularly for our digital journeys. For example, our mortgage customers can now manage their mortgage through the Barclays app, including switching onto a new rate up to 180 days before their current rate expires instead of 90 days previously, and have the ability to apply for additional borrowing. This provides customers with greater choice of channel, and avoids the need for an appointment to be made when advice is not required. In 2022, our active mobile customers grew to 10.5 million and we hit a record of 15.4 million logins in a single day, demonstrating the impact of going digital-first.

We have delivered a regular programme of customer education on fraud, scams and mules alongside our new 'Scan for a Scam' campaign, leveraging social media and influencers to ensure as broad a reach as possible. We have also invested in upskilling and educating colleagues across economic crime, and as a result, complaints relating to fraud, scams and mules have reduced by 17% versus 2021.

We continued to unlock new and sustainable sources of income, which also provide innovative propositions for our customers. We have reached an agreement to acquire Kensington Mortgage Company, a specialist mortgage lending platform focused on providing mortgages via brokers to customers with complex incomes, together with a portfolio of UK mortgages. This will complement our existing residential mortgage offerings and give us the chance to support even more customers. Regulatory approval has been obtained and the transaction is expected to complete in Q1 2023. Within our unsecured lending proposition, we are also working with partners to provide differentiated solutions for our customers, helping them make the most of their day-to-day spending, including launching two new co-branded credit cards this year in partnership with Avios.

We continue to work on green finance products, recognising that uptake is relatively small but growing, reflecting economic constraints and the current immaturity of the policy environment. This year we expanded our green mortgages proposition to support the transition to a low-carbon economy, launching the Barclays Green Home Buy-to-Let Mortgage product. We also launched a Greener Home Reward pilot, providing eligible UK mortgage customers with cash rewards when retrofitting their homes, for example, when installing double or triple glazing, solar panels or insulation.

For our business customers, we continued to develop our partnership with Propel, helping to provide financing for businesses wanting to invest in renewable assets. To support this, in 2022, we launched a reduced interest rate proposition incentivising the purchase of electric vehicles.

### Looking ahead

Our aim remains putting customers and clients at the heart of the decisions we make, helping to ensure good customer outcomes for every customer and client. We are continuing to adapt our service model for customers, creating a more efficient, more resilient and seamless service at a pace that suits our customers' expectations. We’re also investing significantly in growing our financial assistance teams, to be on hand should customers and businesses run into some form of financial difficulty and need specialist support.

More interactions are moving to digital and virtual channels, with customers demanding better digital services and fewer customers using our branch network. Where traditional branches may have been the most appropriate point of engagement in the past, we are looking to increase the range of more flexible options for our customers; delivering human support for those customers who are digitally less confident.

This will continue to include physical branches, complemented with flexible banking pop-ups in community spaces, banking pods and mobile banking vans. We continue to ensure greater accessibility of cash in local and remote areas through our work with local businesses and the Post Office.

We are building partnerships in the open market and work across Barclays to deliver additional value for our customers and businesses through our size and scale, and continue to invest in digital platforms, remove unnecessary processes and costs and aim for a seamless self-service for customers.

We are acutely aware of increasing consumer expectations on climate and sustainability, and we are committed to supporting our customers and clients through the transition to a low-carbon economy with products and propositions which support greener choices.

For more information go online: home.barclays

***

# Divisional reviews (continued)

## Barclays International: Corporate and Investment Bank

Within Barclays International, the Corporate and Investment Bank comprises Investment Banking, Corporate Banking and Global Markets, aiding money managers, financial institutions, governments, supranational organisations and corporate clients to manage their funding, financing, strategic and risk management needs.

### Highlights

- Our Global Markets business provides a broad range of clients with market insight, execution services, tailored risk management and financing solutions across equities, credit, securitisations, rates and foreign exchange products.
- Investment Banking provides clients with strategic advice on mergers and acquisitions (M&A), corporate finance and financial risk management solutions, as well as equity and debt issuance services.
- Corporate Banking provides working capital, transaction banking (including trade and payments), and lending for multinational, large and medium corporates, and for financial institutions.

### Measuring where we are

- **Income:** £13.4bn (2021: £12.3bn)
- **Profit before tax:** £4.3bn (2021: £5.6bn)
- **Operating expenses:** £8.9bn (2021: £7.0bn)
- **Return on Equity:** 10.3% (2021: 14.2%)
- **Return on Tangible Equity:** 10.2% (2021: 14.3%)
- **Investment Banking global fee ranking:** 6th (2021: 6th)
- **Global markets revenue rank:** 6th (Largest non-US bank) (2021: 6th)

### Market and operating environment

We saw global inflationary pressures and responsive monetary policy action in the form of interest rate increases by central banks across the globe have a profound effect on financial markets in 2022. Bond markets in particular were affected, with growth in yields not seen for decades. Many global equity markets were off double digit percentages in the context of these macro drivers.$^a$

As a consequence of this macro instability, global capital markets retreated to pre-pandemic levels from their record highs in 2021. Market volatility, inflation and geopolitical uncertainty created headwinds for dealmaking across all products, with significant declines in High Yield bonds (-80%) and Initial Public Offerings (-70%).$^a$

Across our CIB businesses, the opportunities presented by the climate transition and the broader sustainability agenda continued to grow despite challenging market conditions.

### Focus areas

- **Investing in high-growth sectors and maintaining high returns in Investment Banking:** We are continuing to invest in high-growth sectors such as Technology and Healthcare, and we aim to sustain the investment we have made in our high-returning, fee-driven M&A and Equities businesses.
- **Becoming an electronic-first Global Markets business, growing in targeted areas:** In Global Markets, we are prioritising service excellence for our clients through simplification of our systems architecture, investing in Prime Brokerage, further bolstering our intermediation businesses and focusing on financing solutions to build a diversified portfolio that performs across the economic cycle.
- **Capturing opportunities as we transition to a low-carbon economy:** We aim to support clients who want to make their business models more sustainable, and use our scale and capital markets expertise to mobilise capital for the transition to a low-carbon economy.
- **Improving integration:** Across our businesses we are focused on serving clients in an integrated way. Our efforts to broaden and deepen our CIB offering across Europe will form an important part of this effort.

In Corporate Banking we will continue to focus on delivering enhancements to how we engage with clients through our digital proposition and will continue to build our capabilities in the US and Europe. Broadly, we are focused on being a leading provider of digitally-enabled lending and transaction banking services to our clients in our chosen markets across the globe.

**Notes**
a Dealogic for the period covering 1 January 2021 to 31 December 2022.
b Market share for Barclays is based on our share of top 10 banks' reported revenues. Peer banks include BoA, BNP, CITI, CS, DB, GS, JPM, MS and UBS.

***

# Divisional reviews (continued)

## Year in review

Corporate and Investment Bank RoE was 10.3% (2021: 14.2%) and RoTE was 10.2% (2021: 14.3%), a strong return in a year with challenging market conditions. This performance reflected the benefits of income diversification and continued investment in sustainable growth, partially offset by the net impact of the Over-issuance of Securities.

Investment Banking revenue declined compared with a strong performance in 2021, driven by significant declines in the overall market opportunity. We are ranked sixth in overall global fee share for the third year running and are top five in Debt Capital Markets$^a$.

We continued to invest in our Investment Banking coverage of high-growth sectors, including expanding our Sustainable Financing business. Founded in 2019, our sustainability-focused investment banking effort last year continued to advise and raise capital for companies seeking to address environmental or social challenges, helping our firm deliver on its strategic priority of assisting our clients with the transition to a low-carbon economy.

Our Global Markets business acted as a market-maker and liquidity provider to clients across the globe, playing an important role in helping them to find opportunities and manage risk during a continued period of heightened market disruption. During a year which experienced several distinct episodes of volatility, we materially increased revenues and captured share relative to our peers.

The importance of business diversification across Global Markets was evidenced by the gains in our FICC businesses, which helped to offset declines in our Equities business.

We continued to invest in enhancing our Global Markets digital proposition, including our electronic trading capabilities and our digital self-service platform, as well as our financing platforms across Fixed Income and Equities.

In Corporate Banking, revenues grew off the back of strong interest income given the rising interest rate environment, although this performance was partly offset by rising impairments owing to the increasingly challenging business environment.

2022 was defined by an increased focus on capital discipline, including increased selectivity around risk taking and a streamlined and consistent approval process across all of CIB lending.

We made significant progress in 2022 in expanding our international capabilities, particularly with the build out of our Corporate Banking businesses in the US and Europe. We have also continued to invest in strengthening our digital capabilities, including driving the adoption of iPortal to provide our clients with seamless access to our transaction banking product set.

Our Research team continued to deliver differentiated insights to our clients, acting as a driver of thought leadership for the CIB. We sought to further drive the ESG agenda in support of our climate strategy in 2022, through establishing a new Sustainable and Thematic Research team, focused on identifying multi-sector thematic trends that could shape the future business environment, and partnering with our Data and Investment Science teams to bring data-driven insights to our clients.

### Looking ahead

Across our Corporate and Investment Bank, we remain focused on maintaining our client-centric approach and developing opportunities to grow our business and increase returns. We continue to focus on growth in high-returning, capital efficient parts of our business and to sustain our focus on cost discipline and operational rigour.

In Global Markets we are focused on further developing our electronic trading-led business, investing in low touch and machine learning capabilities to drive efficiency and scale and better serve the needs of our investor base. We will continue to invest in growth in Securitised Products, Emerging Markets, and parts of our Rates and Foreign Exchange businesses.

Investment Banking continues to invest in high-priority sectors, particularly in Healthcare and in Technology in the US and Europe. More broadly, we aim to build on momentum and improve revenue contribution from our equity and advisory offerings.

Aligned to our new climate-related target to facilitate $1trn of Sustainable and Transition Financing, we will continue to invest in creating a centre of excellence for sustainable finance, and broaden the range of ESG capital market product types we offer across more client segments.

In Corporate Banking, we continue to monetise investments in our European and US offering with an emphasis on growing our Transaction Banking business. Our focus will remain on steadily improving our credit portfolio returns by reallocating risk weighted assets to higher-returning opportunities. We continue to invest in our trade, payments and wholesale lending offerings and look to further enhance our digital proposition.

For further information go online at barclayscorporate.com

**Note**
a Dealogic for the period covering 1 January 2020 to 31 December 2022.

***

# Divisional reviews (continued)

## Barclays International: Consumer, Cards and Payments

The Consumer, Cards and Payments division of Barclays International is comprised of our International Cards and Consumer Bank, Private Bank and Barclaycard Payments businesses.

### Highlights

- As part of our International Cards and Consumer Bank, in the US we have a partnership-focused business model, offering co-branded and private-label credit cards to consumers through our relationships with some of America’s well known brands, including American Airlines and Gap Inc. We also offer online retail deposits products (savings and certificates of deposit), personal loans, instalment payments, and point-of-sale financing.
- In Germany, we offer multiple consumer products, including own-branded and co-branded credit cards, online loans, electronic Point of Sale (ePOS) financing and deposits.
- Barclaycard Payments enables businesses of all sizes to make and receive payments.
- Our Private Bank offers banking, credit and investment capabilities to meet the needs of our clients across the UK, Europe, the Middle East and Africa, and Asia.

### Measuring where we are

- **Income:** £4.5bn (2021: £3.3bn)
- **Profit before tax:** £0.7bn (2021: £0.8bn)
- **Operating expenses:** £3.1bn (2021: £2.4bn)
- **Return on Equity:** 8.4% (2021: 12.8%)
- **Return on Tangible Equity:** 10.0% (2021: 15.0%)
- **US Consumer Bank Care tNPS:** +44 (2021: +43.4)
- **CC&P US customer digital engagement$^a$:** 74.1% (2021: 71.8%)

### Market and operating environment

We continue to see recovery in consumer activity and spending post the COVID-19 pandemic. As cash use declines and online transactions grow, the shift towards digital services and payments continues.

We are seeing a rise in the popularity of alternative payment methods such as Buy Now Pay Later and Open Banking, not only online but also face to face, as consumer behaviour continues to evolve and the need for omni-channel integrated solutions increases.

The rise in inflation and the interest rate environment is driving changes in consumer behaviour, particularly around demand for personal loans and the impact of the increasing cost of borrowing.

Market uncertainty has moderated Private Bank clients' appetite to invest in regular equity-related strategies while the comeback of significant positive fixed income yields has created strong tailwinds for alternate strategies. In parallel, higher market volatility is supporting strong investment in transactional activity and revenue as well as supporting demand for private market funds.

With an increasing regulatory focus on consumer protection (including the FCA’s Consumer Duty due to come into force in July 2023), we continue to provide customers and clients with the information and tools to select the right products and services best suited for their needs. This is at the foundation of our business, ensuring we act to deliver good outcomes and avoid harms for our customers and clients.

### Focus areas

- We strive to deliver next-generation consumer financial services, offering best-in-class finance, private banking and payment solutions.
- **Responding to changing consumer behaviour:** We continue to invest in the digitalisation of our businesses, delivering new products and capabilities to reflect growing trends. This includes focusing on scaling our existing e-commerce solutions to add further value to our digitally engaged customers, small businesses and corporates.
- **Building a more efficient and seamless business:** We are accelerating our automation agenda to drive operational efficiency and create a more seamless, digital customer experience.
- **Winning new partnerships:** We are focused on broadening relationships with our existing partners and pursuing new partnerships, particularly in the US. We are also building capabilities to offer new financing solutions across all our markets.
- **Growing in key markets:** We are continuing to drive growth in our strategic home and international markets. In 2023 the planned integration of the Private Bank and Barclays UK Wealth and Investment Management business will strengthen our position in the UK, while we continue to deepen our existing footprint outside the UK and further strengthen and expand our product capabilities.

**Note**
a Excluding new Gap customers.

***

# Divisional reviews (continued)

## Year in review

CC&P delivered a RoE of 8.4% (2021: 12.8%) and a RoTE of 10.0% (2021: 15.0%), and continued to invest for growth while absorbing a provision for customer remediation costs relating to legacy loan portfolios.

- We successfully launched a new long-term programme with Gap Inc., the largest specialty apparel company in the US$^a$, to issue both co-branded and private label credit cards and also renewed our existing partnership agreement with Carnival Cruise Lines, among other partners. Both are good examples of how we maintained our position as a top 10 credit card issuer$^b$ in the US.
- We continued to invest in our digital servicing model, reaching a digital active user rate of 74.1%$^c$. We have seen a slight improvement on the Care Net Promoter Score$^d$ in the US Consumer Bank, reaching +44, versus +43.4 in 2021.
- Our Payments business maintained its position as one of the foremost payment processors in Europe$^e$. We secured new client relationships, and retained others, including Ryanair and Getir UK. We’ve also added to our capabilities with the launch of Smartpay Touch, our new card acceptance solution as well as Cashback Without Purchase, a new service enabling UK consumers to withdraw cash for free from thousands of local retailers and small businesses.
- In Germany, we continue to be a leading provider of consumer finance$^f$ through our credit cards and personal loans business. We relaunched our Deposits Open Market offer to further diversify our revenue structure.
- The Private Bank continued to drive its market strategy, deepen its footprint in established markets, while monetising recent investments in Asia and EEA through new client acquisition. A Referral Agreement was also undertaken with Credit Suisse, enabling the Private Bank to grow its business in Africa. We continued to drive enhancements to client experience, as well as product offering, including asset management capabilities.

### Financial inclusion in our US consumer business

The Community Reinvestment Act (CRA) is a US federal law designed to encourage financial institutions to help meet the needs of borrowers in all segments of their communities, including low and moderate-income neighbourhoods. Barclays meets the CRA requirement by supporting and investing in local Community Development Financial Institutions (CDFIs), small-medium businesses and non-profits.

The success of CDFIs, small-medium businesses and non-profits are key to a thriving community. Barclays has predefined goals with specific performance targets that we must meet each year in order to be considered in compliance with CRA guidelines. Barclays has met its CRA goals for 2022, evidencing that we are continuing to invest in the communities where we live, work and serve.

Barclays Bank Delaware (BBDE) is committed to fair and equitable treatment of all prospective and existing customers without regard to race, sex, colour, national origin, religion, age, marital status, disability, sexual orientation, military status, gender identity, familial status, Limited English Proficiency, receipt of public assistance income, and good faith exercise of rights under the Consumer Credit Protection Act.

### Looking ahead

Within Consumer, Cards and Payments, we continue to invest in building our technology and digital capabilities, to meet consumer demand and responding to an increasingly difficult economic environment.

We aim to further scale our Payments business. Our goal is to deliver a world-class unified payments experience for customers, by combining payments and banking technology.

We continue to deepen our relationships with corporates by collaborating with the Corporate and Investment Bank; grow our offering to small businesses; and evolve with our multinational customers.

In Germany, we are leveraging proprietary and partner distribution channels, and developing seamless onboarding and underwriting capabilities, to grow our core business.

As we focus on our partnership-centric partnership in 2022 is helping to accelerate our entry into the US retail sector.

The Private Bank remains focused on targeted markets, deepening our client footprint in the UK, Europe, the Middle East and Africa, and Asia. The appetite for sustainable investing carries on growing at pace and we continue to manage sustainable portfolios for a broad range of clients. We intend to enhance product capabilities and drive better client experiences by improving end-to-end platform automation and delivering our digital agenda. We continue to make good progress in integrating BUK's Wealth and Investment Management business with our Private Bank to provide a more seamless client experience.

We believe Barclays’ core Values of Respect, Integrity, Service, Excellence, and Stewardship reflect our commitment to fair lending and fair treatment principles and practices. We strive to develop long-term relationships by providing products and services that meet prospective and existing customer needs, avoid causing prospective and existing customer detriment or harm, and place our prospective and existing customers' interests at the heart of our strategy, planning, and decision-making processes.

**Notes**
a Gap Inc., 2020.
b Nilson Report #1204 (mid-year ranking).
c Excluding Cap customers.
d Care tNPS provides an accurate measure of customer sentiment across our Fraud, Dispute, Credit and Care channels and replaces the relationship NPS reported in the 2021 Annual Report.
e Nilson Report #1197 (May 2022).
f Deutsche Bundesbank, Advanzia Bank S.A., plus own calculations.

For more information go online at home.barclays

***

# Introduction

## Barclays' Climate Strategy

Our climate strategy is driven by considerations of all relevant risks as well as our Purpose to deploy finance responsibly to support people and businesses, acting with empathy and integrity, championing innovation and sustainability for the common good and the long term.

1. **Achieving net zero operations:** Barclays is working to reduce its Scope 1, Scope 2 and Scope 3 operational$^a$ emissions consistent with a 1.5°C aligned pathway and counterbalance any residual emissions.
2. **Reducing our financed emissions:** Barclays is committed to aligning its financing with the goals and timelines of the Paris Agreement, consistent with limiting the increase in global temperatures to 1.5°C.
3. **Financing the transition:** Barclays is helping to provide the green and sustainable finance required to transform the economies, customers and clients we serve.

Our strategy is underpinned by the way we assess and manage our exposure to climate-related risk.

The financial sector has an important role to play in helping to address climate change. The final decision text from COP27 stated that $4trn$^b per year needs to be invested in renewables to be able to reach net zero emissions by 2050 and furthermore, a global transformation to a low-carbon economy is expected to require investments of between $4-6trn$^b per year.

As a global universal bank, Barclays is well-positioned to help scale the new climate technologies that will decarbonise industries and create green jobs. We are determined to play our part by leveraging our experience as an adviser, bank and investor (through our Sustainable Impact Capital Programme) to help the transition to a low-carbon economy.

In March 2020, we announced our ambition to be a net zero bank by 2050, becoming one of the first banks to do so. We have a three-part strategy to turn our net zero ambition into action.

Our strategy is underpinned by the way we assess and manage our exposure to climate-related risk. Climate risk became a Principal Risk in January 2022 under Barclays’ Enterprise Risk Management Framework, reflecting the complexity of the risks associated with a changing climate and decarbonising the economy.

Barclays recognises the importance of a just transition in planning the transition towards a low-carbon economy.

We also recognise the important role of the financial sector in stewarding responsible finance towards a nature-positive future.

### Our approach to TCFD climate-related financial disclosures
The Climate and sustainability report includes disclosures related to the Strategy and certain Metrics and Targets sections of the TCFD Recommendations. This includes the opportunities and risks identified as having an impact on Barclays over the short, medium and long term, our climate strategy, and our approach to scenario analysis and the resilience of our strategy. The TCFD Risk Management disclosures can be found in the Risk review on page 207, and the TCFD Governance disclosures can be found in the Governance report on page 168.

Barclays is participating in the FCA sandbox for the Transition Plan Taskforce. We have voluntarily considered elements of the November 2022 Transition Plan Taskforce guidance in preparing this report.

During 2023, we will look to further develop elements of our climate disclosures including transition planning, scenario analysis, stress testing, physical risk assessment, and embedding climate into strategy and financial planning. This will be reflected in future disclosures.

**Notes**
a We define our Scope 3 operational emissions to include supply chain, waste, business travel and leased assets.
b $4-6trn as referenced at COP27 at unfccc.int/documents/624444 as well as the United Nations Environment Programme - Emissions Gap Report 2022 at unep.org/resources/emissions-gap-report-2022.

+ Further details on how we identify and consider the impact of Climate risk on other Principal Risks facing Barclays can be found from page 195 to 211.

***

# Introduction (continued)

## Our strategy, selected targets and progress

The table below sets out selected targets and policies we have previously announced, progress against them, and the new announcements we are now making.

| Strategic pillar | Previously announced target/policy | Progress (2022 performance) | New announcement |
| :--- | :--- | :--- | :--- |
| **1. Achieving net zero operations** | **By end 2025** | | **We are working towards the following milestones** |
| Energy | 100% renewable electricity sourcing for our global real estate portfolio by end of 2025 | 100% sourced | By end of 2035, 115 kWh/m$^2$/year average energy use intensity across our corporate offices, against a 2022 baseline of 265 kWh/m$^2$/year |
| | | | By end of 2035, 10 MW on-site renewable electricity capacity installed across our global real estate portfolio, against a 2022 baseline of 0.26 MW |
| Reduction of GHG emissions | 90% reduction in Scope 1 and 2 GHG emissions (market-based, against a 2018 baseline) | -91% reduction | By end 2030, 90% of our suppliers, by addressable spend, to have science-based GHG emissions reduction targets in place |
| | | | By end 2030, 50% GHG supply chain emissions reduction against a 2018 baseline |
| | | | By end 2050, 90% GHG supply chain emissions reduction against a 2018 baseline |
| **2. Reducing our financed emissions** | **By the end of 2030** | **Cumulative change** | **By the end of 2030** |
| Energy | 40% reduction in absolute CO$_2$e emissions against a 2020 baseline of 75.7 MtCO$_2$e (Scopes 1, 2 & 3) | -32% | N/A |
| Power | 50-69% reduction in CO$_2$e emissions intensity against a 2020 baseline of 331 kgCO$_2$e/MWh (Scope 1) | -9% | N/A |
| Cement | 20-26% reduction in CO$_2$e emission intensity against a 2021 baseline of 0.625 tCO$_2$e/t (Scopes 1 & 2) | -2% | N/A |
| Steel | 20-40% reduction in CO$_2$e emissions intensity against a 2021 baseline of 1.945 tCO$_2$e/t (Scopes 1 & 2) | -11% | N/A |
| Automotive manufacturing | N/A | N/A | 40-64 % reduction in CO$_2$e emissions intensity against a 2022 baseline of 167.2 gCO$_2$e/km (Scopes 1, 2 & 3) |
| Residential real estate | N/A | N/A | Convergence point: 40% reduction in CO$_2$e emissions intensity against a 2022 baseline of 32.9 kgCO$_2$e/m$^2$ (Scopes 1 & 2) |

***

# Introduction (continued)

| Strategic pillar | Previously announced target/policy | New announcement |
| :--- | :--- | :--- |
| **2. Reducing our financed emissions (Restrictive policies)** | **Existing restrictions in relation to thermal coal financing will continue to apply other than as updated below** | |
| Thermal coal power policy | By 2030: in the UK and EU – phase out of financing to clients engaged$^a$ in coal-fired power generation. In the rest of the world (including USA) – no financing to clients that generate more than 10% revenue from coal-fired power generation. By 2035: phase out of financing to clients engaged in coal-fired power generation | By 2030: in EU and OECD phase out of financing to clients engaged$^a$ in coal-fired power generation. In the rest of the world, no longer provide financing to clients that generate more than 10% of revenue from coal-fired power generation. By 2035: phase out financing to clients engaged in coal-fired power generation |
| Oil sands policy | We will only provide financing to oil sands exploration and production clients who have projects to reduce materially their overall emissions intensity, and a plan for the company as a whole to have lower emissions intensity than the level of the median global oil producer by the end of the decade. | We will not provide financing: To oil sands exploration and production companies$^b$; or For the construction of new (i) oil sands exploration, production and/or processing assets; or (ii) oil sands pipelines$^c$. |

| Strategic pillar | Previously announced target/policy | Progress (2022 performance) | New announcement (Announced in December 2022) |
| :--- | :--- | :--- | :--- |
| **3. Financing the transition** | **Previously announced target** | | |
| Sustainable financing | Facilitate £150bn of social, environmental and sustainability-linked financing between 2018 and 2025. Facilitate £100bn green financing between 2018 and 2030 | £54.3bn (Cumulative performance: £247.6bn). £25.5bn (Cumulative performance: £87.8bn) | Facilitate $1trn of Sustainable and Transition Financing between 2023 and end of 2030 |
| Sustainable Impact Capital | Invest up to £175m of Barclays’ own capital in environmentally focused early-stage companies by 2025 | £35m (£89m invested by the end of 2022) | Increase investment of Barclays’ capital in global climate tech start-ups up to £500m by the end of 2027 |

**Notes:**
a A client is defined as "engaged in" coal-fired power generation if the client earns >5% revenue from that activity.
b Oil sands exploration and production companies are those that majority own (>50%) or operate oil sands exploration, production and processing assets, other than companies that generate less than 10% of revenue from these activities.
c Oil Sands Pipelines are pipelines whose primary use is for the transportation of crude oil extracted from oil sands.

***

# Risk and opportunities

## TCFD Strategy Recommendation (a)

### Climate-related risks identified over the short, medium and long term

Our climate strategy is underpinned by the way we assess and manage our exposure to climate-related risk. Climate risk became a Principal Risk within the Barclays Enterprise Risk Management Framework from 2022.

We broadly categorise climate risks into three categories – transition risk, physical risk and connected risk. Within these, we identify risk drivers from climate change which we monitor over the short, medium and long term.

#### Transition risks
As the world transitions to a low-carbon economy, financial institutions such as Barclays may face significant and rapid developments in stakeholder expectations, policy, law and regulation which could impact the lending activities Barclays undertakes, as well as the risks associated with its other portfolios, and the value of Barclays’ financial assets.

As new policies and regulations are enforced, market sentiment and societal preferences change and new technologies emerge, this may result in increased costs and reduced demand for product and services of a company, early retirement and impairment of assets, decreased revenue and profitability for Barclays customers. This in turn may impact creditworthiness of customers and their ability to repay loans. Additionally, Barclays may face greater scrutiny of the type of business it conducts, adverse media coverage, reputational damage, and an increase in financial and operational risks, which may impact customer demand for Barclays’ products, returns on certain business activities and the value of certain assets and trading positions resulting in impairment charges.

#### Physical risks
Physical risks from climate change arise from a number of factors and relate to specific weather events and longer-term shifts in the climate. The nature and timing of extreme weather events are uncertain but they are increasing in frequency and their impact on the economy is predicted to be more acute in the future. The potential impact on the economy includes, but is not limited to, lower GDP growth, higher unemployment, shortage of raw materials and products due to supply chain disruptions, significant changes in asset prices, and profitability of industries. Damage to properties, and operations of borrowers could decrease production capacity, increase operating costs, impair asset values and the creditworthiness of customers leading to increased default rates, delinquencies, write-offs and impairment charges in Barclays’ portfolios. In addition, Barclays’ premises and infrastructure may also suffer physical damage due to weather events leading to increased costs for Barclays.

#### Connected risks
In addition, the impacts of physical and transition climate risks can lead to second order connected risks, which have the potential to affect Barclays’ retail and wholesale portfolios. The impacts of climate change may increase losses for those sectors sensitive to the effects of physical and transition risks. Any subsequent increase in defaults and rising unemployment could create recessionary pressures, which may lead to wider deterioration in the creditworthiness of Barclays’ clients, higher expected credit losses (ECLs), and increased charge-offs and defaults among retail customers.

When considering climate-related risks, Barclays has categorised short, medium and long term to mean the following timescales:
- Short term (S) - 0-1 year
- Medium term (M) - 1-5 years
- Long term (L) - 5-30 years

#### Climate change as a driver of risk
Climate change may lead to economic and operational impacts and may increase the likelihood or severity of other risks, for example:
- cyclical: amplifying economic cycles, including deeper troughs
- event-driven: a singular event or series of events, for example severe weather events leading to physical risk impacts
- structural: macroeconomic shifts as economies transition to a low-carbon economy, driven by regulatory tightening such as introduction of carbon pricing mechanisms, emission trading schemes and technology evolution.

There is potential for tail risks and tipping points, including from chronic physical risks that are not currently clearly understood. This might include impacts from lack of access to clean water, mass human migration due to inhospitable conditions, biodiversity and ecosystem services loss, second order impacts on food chain, or conflict resulting from competition for environmental resources.

The tables below summarise the nature, drivers and potential impacts of physical and transition risks. Analysis of these drivers is undertaken as part of Barclays' annual review of elevated sectors, clients operating in these sectors and monthly horizon scanning of new developments leading to climate-related risks. These risk drivers have been assessed through qualitative analysis, external research and expert views. Quantitative analysis is also undertaken through our programme of scenario analysis.

+ Further details on how Barclays approaches scenario analysis can be found on pages 44 to 51.

The feedback effects of climate risk drivers through macro and micro transmissions channels are observed in Barclays' portfolio through traditional risk categories such as credit risk, market risk, operational risk etc. The approach to identify, measure and manage climate-related risks is consistent with other key risks, however the significant impact climate related financial risks are most likely to materialise in the longer term.

***

# Risk and opportunities (Continued)

## TCFD Strategy Recommendation (a)

| Transition risks | Policy and Regulatory | Legal | Technology | Market |
| :--- | :--- | :--- | :--- | :--- |
| **Example drivers** | • Carbon tax impacting sectors and clients<br>• Tightening of emissions and energy efficiency standards<br>• Imposing an absolute cap on GHG emissions at manufacturing sites<br>• Enhanced GHG reporting obligations | • Government and non-governmental organisations taking litigation actions<br>• Imposing legal liabilities on firms for their contribution to physical impacts of climate change | • Disruptive substitute technologies being favoured because of lower carbon footprint<br>• Development of emissions capture and recycling facilities<br>• Investments in new technologies<br>• Alternatives to fossil fuel | • Shift in Consumer preferences<br>• Changes in supply and demand of raw materials<br>• Shareholder perceptions and consumer pressures<br>• Changing market sentiment |
| **Potential impacts - examples** | • Increased operating cost for compliance<br>• Increased capital expenditure to meet regulatory standards<br>• Operating constraints<br>• Write-offs and early retirement of assets | • Increased costs due to fines and penalties from class action damages<br>• Changes in the valuation of assets<br>• Decreased demand for products and services<br>• Impairment of assets and early retirement of assets | • Research and development expenditure in new technologies<br>• Costs for adoption of new practices and processes | • Increased costs and reduced demand for products and services<br>• Increased production costs due to changing input prices and output requirements<br>• Decreased revenue and repricing of assets |
| **Expected time horizon** | S$^a$, M, L | S$^a$, M, L | S$^a$, M, L | S$^a$, M, L |
| **Classification** | Event-driven, Structural | Event-driven, Structural | Structural | Structural |
| **Primary risks impacted** | Credit Risk, Market Risk, Treasury and Capital Risk, Operational Risk, Reputational Risk | | | |
| **Secondary risks impacted** | Conduct Risk, Legal Risk | | | |
| **Trend** | Increasing | Increasing | Stable | Stable |

| Physical risks | Acute | Chronic |
| :--- | :--- | :--- |
| **Example drivers** | • Damage to fixed assets and infrastructure (property, power supplies) by climate events such as wildfires<br>• Adverse impact on agriculture and production of soft commodities due to drought<br>• Transport difficulties and damage to infrastructure due to severe storm and flooding | • Change in weather and precipitation patterns resulting in reduced agricultural yields and land no longer suitable for farming<br>• Potential population migration due to inhabitable land<br>• Increase in sea levels and consequent coastal erosion requiring building of new seawall and flood defences<br>• Rising temperatures resulting in diminished productivity and health issues |
| **Potential impacts - examples** | • Increased costs due to damage to facilities<br>• Reduced revenue from decreased production capacity<br>• Increased operating costs and decrease in sales due to unavailability of raw materials and supply chain disruptions | • Reduced revenue from decreased production capacity and early retirement of assets<br>• Decrease in property values<br>• Increased costs and insurance for assets in high risk locations<br>• Reduced revenue from lower sales and output |
| **Expected time horizon** | S$^a$, M, L | M, L |
| **Classification** | Event-driven | Structural |
| **Primary risks impacted** | Credit Risk, Market Risk, Treasury and Capital Risk, Operational Risk, Reputational Risk | |
| **Secondary risks impacted** | Conduct Risk, Legal Risk | |
| **Trend** | Increasing | Increasing |

**Notes:**
a Whilst these risks will start to manifest over these time horizons, we expect financial impact in the short term to be immaterial based on current information / circumstances, with no specifically identified charges related to climate risk in the 2022 reported expected credit losses.

***

# Risk and opportunities (Continued)

## TCFD Strategy Recommendation (a)

### Climate-related opportunities identified over the short, medium and long term

During 2022, Barclays completed a review and assessment of the global market opportunity for sustainable financing, focusing on the period to 2030 (i.e. short and medium term). This work considered the opportunity arising from the global transition to a low-carbon economy that will be needed if the world is to avoid the worst effects of climate change and the opportunity for the financial community to play its part in supporting the global Sustainable Development Goals. The work considered the size of the market opportunity and the potential addressable market for Barclays.

The work identified three thematic areas of potential opportunity for Barclays:
- Energy Transition Finance, including renewables and nascent/early-stage climate technologies that will need financing to scale as they support the transition to net zero
- Sustainable Finance Instruments, consisting of non-climate-related financial instruments, specifically social, sustainability-linked and transition bonds/loans
- Retail and Business Banking, which focuses on BUK and the retail market, including green mortgages (including retrofitting), electric vehicle loans and SME lending.

These three thematic areas cut across Barclays' businesses and do not align precisely to individual product and service areas or reporting segments. It is recognised that some technologies or solutions that will facilitate the world to align to net zero are not yet fully developed and will likely come to maturity beyond 2030. We will continue to review this area closely.

Following the analysis of market demand for sustainable financing, together with a review of the Group's capabilities, in December 2022 we announced a new target to facilitate $1trn of Sustainable and Transition Financing between 2023 and the end of 2030.

### Assessing the market opportunity

To determine the addressable global market for sustainable finance to 2030, Barclays leveraged widely used and credible third-party sources including the IEA, IRENA, Climate Bonds Initiative and the IFC, as well as Barclays' own industry, ESG and market research. The analysis considered the investment needed through to 2030 for the world to align to net zero, including accelerated scenarios reflecting possible policy and market developments.

Having determined the global addressable market, Barclays developed scenarios for the bank’s potential market for various asset classes, product sets, technological sectors and geographic markets, validated through comparison with historic growth rates and our projected share of the overall market.

### Energy Transition Finance

The analysis indicated that based on current policy, technology and market developments, Energy Transition Finance represents an estimated 10-year addressable opportunity of over $16trn across North America, Europe and Asia Pacific (excluding China). This extends to up to $24trn over the same time period if policy, technology and market developments step up to deliver on net zero by 2050. This consists of a number of mature and scaling technologies but with renewable energy (including wind and solar) and low emissions transport (expected to make up over half of the addressable market through to 2030.

Alongside this, there are significant longer-term opportunities in financing the scaling of capabilities in nascent technologies such as carbon capture utilisation and storage (CCUS) and hydrogen solutions, which we hope to capture as part of our $1trn target between 2023 and the end of 2030.

### Sustainable Finance Instruments

Sustainable Finance Instruments represent an estimated $3.5-6trn annual issuance opportunity through to 2030 across North America, Europe and Asia Pacific (excluding China), with Europe expected to remain the primary market for ESG debt. It was c.60% of global issuance in 2021.

While green bonds represented the largest individual market at c.$500 bn in 2021, all ESG instruments are expected to grow, including social loans/bonds (promoting positive social outcomes), sustainable loans/bonds (serving both green and social projects) and sustainability-linked bonds (loans/bonds indexed to green or social KPIs).

The analysis indicated that ESG debt (excluding green bonds and loans) represents an estimated 10-year $400-650 bn cumulative financing opportunity for Barclays based on our current global market share in sustainable finance instruments.

We see opportunities to expand our share and drive growth, particularly in the Utilities, Energy and Public Sector sectors and in sustainability-linked instrument issuances. Alongside growing green finance, we recognise we must also tackle the decarbonisation of "hard to abate" sectors that are carbon intensive, including through scaling and commercialising new technologies such as hydrogen and carbon capture, Barclays is developing a framework for such transition financing during 2023.

### Retail and Business Banking

Within the UK, sustainable opportunities in Retail and Business Banking represent a $225-286bn market opportunity by 2025, increasing to an estimated $640bn-1trn by 2030. This projected growth is split across three main sectors:
- green home loans,
- electric vehicle (EV) financing, and
- green SME lending.

Green home loans, including green mortgages for existing and new homes and retrofit financing, represent the largest individual market at $140-170bn in 2025, growing to $400-600bn in 2030, with new homes mortgages representing the largest proportion of the opportunity at c.60-70%. Growth is mainly dependent on UK government delivering on its ambition to achieve net zero. We recognise there are significant dependencies for that ambition to be realised.

+ Further details of the drivers of change in the Residential Real Estate sector can be found on page 33.

EV financing of new and used auto loans has an estimated 10-year addressable market of $240-400bn for Barclays, with EV sales expected to increase 10-fold in the next 10 years, reaching up to 97% of annual car sales by 2030 in the UK. Barclays expects the markets to be primarily driven by policy and legislation, for example, the UK policy to ban sale of new petrol and diesel cars from 2030.

Green SME lending represents a $10-16bn opportunity by 2030. Our analysis focuses on three sectors - agriculture, non-residential buildings and manufacturing and construction - with retrofitting non-residential buildings being the largest market opportunity at c.$7-10bn.

***

# Implementing our Climate Strategy

## TCFD Recommendation: B | Strategic Pilar: 1

### Achieving net zero operations

Although financed emissions account for the greatest proportion of our climate impact, addressing our operational emissions is also important in meeting our ambition to be a net zero bank by 2050. We are aiming to integrate sustainability into every aspect of how we run our business, from decarbonising our operations to managing our impact on biodiversity and nature.

#### Defining net zero operations

To reflect our commitment to reducing operational emissions beyond our Scope 1 and Scope 2 emissions, we are explicitly adding Scope 3 operational emissions to our net zero operations ambition.

We now define net zero operations as the state in which we will achieve a greenhouse gas reduction of our Scope 1, Scope 2 and our Scope 3 operational$^a$ emissions consistent with 1.5°C aligned pathway and counterbalance any residual emissions.

The standards available to understand and define net zero are rapidly evolving. We will continue to review and develop our own approach to net zero operations as this subject area matures.

### Our operational GHG emissions by scope

| Scope 1 | Scope 2 | Scope 3 |
| :--- | :--- | :--- |
| Emissions from our corporate vehicles’ exhaust, natural gas from our building boilers and the generators we might run | Emissions from the energy sources we use to power our data centres, branches, campuses and offices | Emissions from our upstream and downstream activities such as purchase of products and services, waste generated and air travel |
| Fuel combustion | Energy purchased | Supply chain |
| Fugitive emissions | | Waste |
| Company cars | | Leased assets |
| | | Business travel |

### Net zero operations strategy

Our net zero operations strategy has two components:

- Reduce our Scope 1 and 2 emissions through energy efficiency, electrification of our buildings and vehicles, renewable energy sourcing and replacing fossil fuels with low emission alternatives.
- Reduce Scope 3 operational emissions by, engaging with our key stakeholders including suppliers and colleagues to track, manage and reduce their GHG emissions, while embedding net zero principles across our policies and contractual requirements.

**Note:**
a We define our Scope 3 operational emissions to include supply chain, waste, business travel and leased assets.

**Notes:**
- Our reporting of supply chain emissions includes the following GHG Protocol Scope 3 categories: Category 1: Purchased Goods and Services, Category 2: Capital Goods, Category 4: Upstream transportation and distribution. In 2022 we reported GHG emissions of Categories 1, 2 and 4 by aggregating these under Category 1. It is our intent to assign emissions to each of these separate categories in due course.
- Leased assets include our third party co-located data centres and property we lease out to tenants.

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### Progress to date

We achieved our 90% GHG market-based emissions reduction target for Scope 1 and 2, having reduced our Scope 1 and 2 emissions by 91% since 2018 and sourced 100% renewable electricity for our global real estate portfolio$^a$ in 2022.

We achieved our renewable electricity target ahead of schedule by matching 100% of our electricity consumption with energy attribute certificates$^b$ and green tariffs$^c$ which we consider to be a transitional solution as we seek to increase the proportion of on-site renewable electricity sources and Power Purchase Agreements (PPA).

In 2022, we expanded our net zero operations approach to include our supply chain emissions as they account for the majority of our operational emissions.

Our supply chain emissions data is currently indicative. We will continue to develop our methodology and aim to improve the accuracy of our supply chain data over time. In the interim, we intend to work towards the milestone of a 50% reduction in our supply chain emissions by 2030 (against a 2018 base year) and a longer-term milestone of a 90% emissions reduction by 2050. In addition, we aim for 90% of our suppliers by addressable spend to have science-based emissions reduction targets in place by 2030.

Also, this year we evolved our energy use intensity and on-site renewable energy reporting approach to include our global real estate portfolio, beyond campuses.

We intend to work towards the milestones of a 115 kWh/m$^2$/year average energy use intensity across our corporate offices and installing 10MW on-site renewable electricity capacity across our global real estate portfolio by 2035.

**Approximately 47% of our suppliers by addressable spend have committed to or have science-based$^d$ targets in place**

### Our net zero operations approach

| Delivery year | Scope 1 and 2 | 2022 Performance | Scope 3 | 2022 Performance |
| :--- | :--- | :--- | :--- | :--- |
| **2025** | 100% renewable electricity sourcing for all our global real estate portfolio | 100% | 70% of our suppliers, by addressable spend, to have science-based GHG emissions reduction targets in place | 47%$^i$ |
| | 90% reduction for our Scope 1 and 2 GHG emissions (market-based$^e$, against a 2018 baseline) | (91)% | | |
| | 100% electric vehicles (EV) transition for UK company cars | 55% | | |
| **2030** | 100% electric vehicles (EV) or ultra-low emissions vehicles (ULEV) for all company cars | 24% | We intend to work towards the milestone of 90% of our suppliers, by addressable spend, to have science-based GHG emissions reduction targets in place | 47%$^g$ |
| | 50% reduction for our Scope 1 and 2 GHG emissions (location-based$^f$ against a 2018 baseline) | (43)% | We intend to work towards the milestone of 50% GHG supply chain emissions reduction (against a 2018 baseline) | 8%$^j$ |
| **2035** | We intend to work towards the milestone of 115 kWh/m$^2$/year average energy use intensity across our corporate offices$^g$ | 265 kWh/m$^2$/year (-18% against 2018 baseline) | Divert 90% of waste from the landfill, incineration and the environment across key campuses | 65% |
| | We intend to work towards the milestone of 10 MW on-site renewable electricity capacity installed across our portfolio$^h$ | 0.26MW (<1% total electricity use) | | |
| **2050** | | | We intend to work towards the milestone of 90% GHG supply chain emissions reduction (against a 2018 baseline) | 8%$^j$ |

**Notes:**
a Global real estate portfolio includes offices, branches, campuses and data centres.
b Energy attribution certificates (EACs) are the official documentation to prove renewable energy procurement. Each EAC represents proof that 1 MWh of renewable energy has been produced and added to the grid. Global EAC standards for renewable claims are primarily Guarantees of Origin in Europe, RECs in North America and International RECs (I-RECs) in a growing number of countries in Asia, Africa, the Middle East and Latin America.
c Green tariffs are programmes in regulated electricity markets offered by utilities that allow large commercial and industrial customers to buy bundled renewable electricity from a specific project through a special utility tariff rate.
d Targets are considered ‘science-based’ if they are in line with what the latest climate science deems necessary to meet the goals and timelines of the Paris Agreement – limiting global warming to well-below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C. Science Based Targets initiative (SBTi), a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF), provides companies with independent assessment and validation of targets and is currently the internationally accepted standard.
e Market-based method is a GHG Protocol accounting method for Scope 2 emissions, where a company's energy consumption emissions are calculated based on the electricity the company chose to purchase, often using contracts or instruments like Energy Attribute Certificates (EACs) or Power Purchase Agreements.
f Location-based method is a GHG Protocol accounting method for Scope 2 emissions, where a company's energy consumption emissions are calculated based on the average emissions intensity of local grids on which energy consumption occurs.
g Energy use intensity reporting approach expanded to include all our corporate offices, beyond campuses and align to UK Green Building Council energy performance metric for buildings.
h On-site renewable electricity reporting approach evolved to include installations across our global real estate portfolio, beyond campuses.
i Indicative number provided to illustrate the number of suppliers by addressable spend that have committed to or have science-based targets in place.
j Based on our indicative supply chain emissions inventory.

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### Operational footprint dashboard

#### Total GHG emissions by scope (market-based) ‘000 tonnes CO$_2$e
- 2022: 20.0 (Scope 1), 1.9 (Scope 2), 19.4 (Scope 3 - Business travel). Total: 41.3
- 2021: 23.2 (Scope 1), 13.6 (Scope 2), 2.4 (Scope 3 - Business travel). Total: 39.2
- 2020: 22.8 (Scope 1), 48.3 (Scope 2), 19.1 (Scope 3 - Business travel). Total: 90.2

#### Total GHG emissions by scope (location-based) ‘000 tonnes CO$_2$e
- 2022: 20.0 (Scope 1), 103.4 (Scope 2), 19.4 (Scope 3 - Business travel). Total: 142.9
- 2021: 23.2 (Scope 1), 124.2 (Scope 2), 2.4 (Scope 3 - Business travel). Total: 149.8
- 2020: 22.8 (Scope 1), 148.7 (Scope 2), 19.1 (Scope 3 - Business travel). Total: 190.6

#### GHG emissions intensity (market-based) tonnes CO$_2$e/FTE
- 2022: 0.47
- 2021: 0.48
- 2020: 1.09

#### Total energy use (MWh)
- 2022: 467,939
- 2021: 559,241
- 2020: 604,856

### Scope 1 and 2 (market-based) GHG emission reductions (against a 2018 baseline)
- **-91%**
- Against a target of -90% by the end of 2025
- 2021: -86%

### Renewable electricity sourcing for our global real estate portfolio
- **100%**
- Against a target of 100% by the end of 2025
- 2021: 94%

### Other sustainability-related highlights

- **On-site renewable electricity capacity installed across our global real estate portfolio (MW):** 2022 Progress: 0.26; By 2035: 10
- **Average energy use intensity across our corporate offices (kWh/m$^2$/year):** 2022 Progress: 265; By 2035: 115
- **Campus waste diverted (%):** 2022 Progress: 65; By 2035: 90
- **Improve water efficiency:** 86% recycled water used at our Pune campus in 2022

**Notes**
1. For 2022, our Supply chain categories 1, 2 and 4 GHG emissions are reported on an aggregated basis under Category 1 and will be reported independently in due course.
2. Emission reductions and intensities have been reported using the market based methodology.
3. The reporting year for our GHG emissions is 1 October to 30 September. The methodology used for emissions calculation is the WRI/ WBCSD Greenhouse Gas (GHG) Protocol. We have adopted the operational control approach on reporting boundaries. For more information, see the Barclays ESG Reporting Framework 2022 on our ESG Data Centre.
4. For 2022, we have applied the latest emission factors as of 31st December 2022. We continuously review and update our performance data based on updated carbon emission factors, improvements in data quality and updates to estimates previously applied. In 2022 prior year figures have been restated to reflect additional Scope 1 natural gas data that is now available for two of our large corporate offices. The restatement has been applied to all prior years to 2018. In addition, there is additional Scope 1 fuel data available for three locations globally that were not reported in prior years. We have also replaced estimated Scope 2 electricity data for select locations in the US with actual billing from utility providers that was not available at the time of reporting. Finally, corrections to Scope 2 electricity data in Switzerland & Netherlands have taken place due to incorrect meter reads. All location and market-based figures are gross and do not include netted figures from carbon credits.
5. In 2022 we have disclosed additional Scope 3 categories which can be found in the ESG Data Centre. Our overall Scope 3 emissions have increased compared to prior years due to the additional disclosure.
6. Campuses include 1 Churchill Place, Radbroke, Northampton, Glasgow, Pune, Whippany, 745 7th Avenue, Dryrock. Our operational footprint data follows a reporting period of 1 October 2021 to 30 September 2022.

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### Reducing our financed emissions

We are committed to aligning all of our financing to the goals and timelines of the Paris Agreement, consistent with limiting the increase in global temperatures to 1.5°C. To meet our ambition, we need to reduce the client emissions that we finance, not just for lending but for capital markets activities as well.

We aim to work closely with our clients to ensure that over time the activities we finance lead to lower financed emissions for the bank.

Consistent with our Purpose and taking into account considerations of all relevant business factors, we will undertake this by continuing to set emission reduction targets for our portfolios where possible, aligned with the ambitions of the Net-Zero Banking Alliance, of which we are a founding member. We will also continue to set and follow clear restrictions on financing certain activities.

We have assessed our financed emissions for six sectors, including two new sectors that have been assessed for the first time in 2022: Automotive manufacturing and Residential real estate.

+ Further details on our restrictive policies can be found on page 35.
+ Further details on our performance against our sector targets can be found from page 28.
+ Details of the new Automotive manufacturing and residential real estate sectors where financed emissions have been assessed can be found on pages 31 to 33.

We will keep our policies, targets and progress under review in light of the rapidly changing external environment and the need to support governments and clients both in delivering an orderly transition and providing energy security.

It is important to note that progress towards our targets will likely be variable and non linear. We may need to adapt our approach to respond to external circumstances and to manage the effectiveness and impact of our support for the transition, while remaining focused on our ambition of becoming a net zero bank by 2050.

### Financed emissions metrics

| Sector | Sector boundaries | Emissions scope | GHG included | Reference scenario | Target metric | Unit of measurement | Baseline year | Target vs. baseline | Cumulative change | Absolute emissions (MtCO$_2$e) | Physical intensity |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Energy | Upstream Energy | 1, 2 & 3 | CO$_2$ and methane | IEA SDS, IEA NZE2050 | Absolute emissions | MtCO$_2$e (Absolute) | 2020 | -15% by 2025; -40% by 2030 | -32% | 51.7 | 59.6 gCO$_2$e/MJ |
| Power | Power generators | 1 | CO$_2$ | IEA SDS, IEA NZE2050 | Physical intensity | kgCO$_2$e/MWh | 2020 | -30% by 2025; -50% to -69% by 2030 | -9% | 29.2 | 302 |
| Cement | Cement manufacturers | 1 & 2 | All GHGs | IEA NZE2050 | Physical intensity | tCO$_2$e/t | 2021 | -20% to -26% by 2030 | -2% | 0.7 | 0.61 |
| Steel | Steel manufacturers | 1 & 2 | All GHGs | IEA NZE2050 | Physical intensity | tCO$_2$e/t | 2021 | -20% to -40% by 2030 | -11% | 1.6 | 1.732 |
| Automotive manufacturing | Light Duty Vehicles manufacturers | 1, 2 & 3 | All GHGs for Scope 1 and 2; CO$_2$ for Scope 3 | IEA NZE2050 | Physical intensity | gCO$_2$e/km$^a$ | 2022 | -40% to -64% by 2030 | Baseline set in December 2022 | 6.2 | 167.2 |
| Residential real estate | UK buy-to-let and owner occupied mortgages | 1 & 2 | CO$_2$, methane and nitrous oxide | CCC BNZ | Physical Intensity | kgCO$_2$e/m$^2$ | 2022 | Portfolio convergence point vs. baseline; -40% by 2030 | Baseline set in December 2022 | 1.5 | 32.9 |

**Notes**
a Physical intensity (CO$_2$e emissions per v-km travelled by LDV produced), expressed in gCO$_2$e/km

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### Basis of preparation

#### BlueTrack$^{TM}$
We have developed our BlueTrack$^{TM}$ methodology to measure and track our financed emissions at a portfolio level against the goals and timelines of the Paris Agreement. BlueTrack$^{TM}$ builds on existing industry approaches to cover lending as well as capital markets financing, reflecting the breadth of our support for corporate clients through our Investment Bank.

| Main products included in financed emissions calculations | |
| :--- | :--- |
| **Financed (own balance sheet)** | Drawn loans<br>Undrawn committed loans<br>Trade financing<br>Mortgages (for residential real estate only)<br>Equity holdings |
| **Facilitated** | Bond issuances<br>Equity issuances<br>Syndicated loans |

In certain sectors product scope may vary, for example, the Residential Real Estate sector metrics only include mortgages. We continue to keep product inclusion under review. Additionally, BlueTrack$^{TM}$ is also being expanded to cover UK residential mortgages.

BlueTrack$^{TM}$ starts by selecting a benchmark for a sector which defines how financed emissions for a portfolio need to change over time, in line with the goals and timelines of the Paris Agreement, consistent with scenarios limiting the increase in global temperatures to 1.5°C. We then determine how our sector portfolios are performing against these benchmarks by estimating the emissions that our clients produce, determining how those emissions should be linked to the financing we provide and then aggregating those measurements into a portfolio-level metric. This portfolio-level metric is then compared to the benchmark. This helps to determine our target for each sector.

BlueTrack$^{TM}$ relies on modelling client emissions based on the most recent publicly reported asset-level production or client reported emissions.

+ Our 2023 BlueTrack$^{TM}$ Whitepaper provides more details of our methodology and can be found within the ESG Resource Hub online at: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/

#### Sector boundaries
For each sector, we aim to identify, measure and set targets on the segment of the value chain where either (i) it is generally recognised that decarbonisation efforts are likely to spur the rest of the sector value chain to fall into alignment or (ii) where financiers are likely to have more influence over companies active in that segment. Our choice of segment is based on Barclays' own view, informed by guidance and recommended practice from portfolio alignment initiatives such as PACTA, SBTi and others.

#### Emissions scope
For each sector target we must consider which of a company's emissions we should measure, for example, direct or indirect emissions. We define this according to the GHG Protocol definition of Scope 1, 2, and 3 emissions. Within the boundary of our target, we aim to capture a company's most material emissions, taking into account considerations including materiality, consistency to benchmark, level of control and whether the emissions can be abated by the company. For example, our Upstream Energy target includes Scope 3 emissions, recognising these emissions are significant for a company extracting fossil fuel.

BlueTrack$^{TM}$ financed emissions are therefore a subset of the total financed emissions for each customer or client, as they only include the portion of the client's activities that are both within the value chain we have chosen for the sector and the scope of emissions we deem material for that activity.

#### Greenhouse gases (GHGs) included
Metrics and targets for all sectors capture emissions on a CO$_2$e (carbon dioxide equivalent) basis, aligned to the guidance issued by the Net-Zero Banking Alliance. We assess which of the GHGs are relevant and material for each sector.

#### Target metrics
We use physical intensity metrics for all sector targets with the exception of Energy, where we use absolute emissions. We see carbon intensity as the most appropriate measure of our performance, at least in the earlier stages of decarbonisation, as it encourages transition to lower-emitting fuel sources.

The Energy sector cannot reduce its carbon emissions intensity below a certain point (for instance, a barrel of oil cannot be decarbonised), therefore a reduction in absolute carbon emissions is more appropriate for Energy.

#### Reference scenarios
Each of our 2030 target ranges is developed with reference to a 1.5°C aligned scenario. For the majority this is the IEA's Net Zero by 2050 (NZE2050) scenario. In calculating a convergence point for our Residential Mortgages portfolio, we use a UK focused Balanced Net Zero Scenario developed by the UK's Climate Change Committee (CCC BNZ).

#### Baseline year
We measure our financed emissions for each portfolio against a baseline metric that was determined in the year we first assessed that target. The baseline year therefore varies across the six sectors assessed to date, to ensure we are using the most up to date data available when we set our targets or convergence points.

### Use of target ranges
For Power, Cement, Steel and Automotive Manufacturing, we have set emissions intensity targets using a target range.

While we are clear on the reduction required to align with the IEA NZE2050 pathway (the higher emissions reduction in the range), we recognise there are dependencies outside our control that will determine how quickly our financed emissions intensity can reduce in these sectors.

The lower emissions reduction in the range reflects our view of the sector, client pathways and commitments at the time of setting the target. We seek to achieve the higher emissions reduction, consistent with our net zero ambition, but achieving it will depend on external factors.

### Use of carbon credits
BlueTrack$^{TM}$ does not allow company-purchased offsets (e.g. carbon credits) to reduce emissions, as we believe it is important to base a metric on operational activities under a company's control, rather than on unrelated credits (the availability of which may be limited). The methodology does allow company-operated removals, i.e. on-site carbon capture at a plant; however, given this is currently marginal in the context of emissions, there is currently no impact on the metrics.

### Top-down portfolio assessment
We aim to set granular targets for material high-emitting sectors in-line with the Net-Zero Banking Alliance commitments within our financing portfolio. However, we recognise it will take time to assess our entire portfolio using this approach. We are progressing work to develop a high-level, modelled assessment of our overall balance sheet emissions, consistent with the approach outlined by the Partnership for Carbon Accounting Financials (PCAF), of which Barclays is a member.

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### Data sourcing and data quality
Climate data, models and methodologies are evolving and not yet at the same standard as more traditional financial metrics. BlueTrack$^{TM}$ relies on externally sourced data which is mapped to internal customer and client identifiers. The externally sourced data has various limitations for each sector, including lack of coverage, low resolution, consistency and transparency of company reported data, and the time lag for external sources to report estimates or actuals.

Time lags could be as much as two years for data such as company value, company revenue share, emissions, production capacity and capacity factors. Due to these time lags, our financed emissions metrics are at best an estimate of our clients' activities on a given date, using the external data available at that point in time.

### Our approach to reporting financed emissions data
Given the evolving nature of climate data, models and methodologies, past period metrics may change to reflect updates. To manage the impact of these changes, we have adopted a principles-based approach to guide whether prior metrics and baselines should be restated or re-baselined.

- A restatement will involve updating the historical starting point for a period and recalculating the historical performance
- A re-baseline will involve keeping the historical performance constant and re-calculating the current period baseline to ensure consistency when reviewing performance. The indicative historical baseline will also be disclosed.

Due to this, direct like for like comparisons of financed emissions information disclosed may not always be possible from one reporting period to another. Where information is restated or re-baselined, this will be identified or explained.

For 2022, our methodologies have been updated for the Energy and Power sectors:
- Energy: updated to include methane, adding more granularity to our estimate of the Scope 1 and 2 emissions for energy producers
- Power: updated to account for the difference in capacity factors (or utilisation levels) for renewable power technologies, to improve the robustness of our intensity estimates for Power Generators.

Across both sectors, we have also updated the external dataset on production / capacity following a change in the data sourcing methodology adopted by our external data vendor.

Under our approach (as explained above), we have published a theoretical baseline for 2020.

### Our approach to reporting financed emissions data

| Scenario | Our approach |
| :--- | :--- |
| **Error identified in our internal finance data or methodology** | **Restatement:**<br>• Financed emissions metrics for all years impacted by the error will be restated, including the baseline year. |
| **Changes to our methodology and/or data sources to calculate financed emissions (e.g. including additional GHGs)** | **Re-baseline:**<br>• The updated methodology will be applied from the start of the current reporting period.<br>• The last reported financed emissions spot metric will be recalculated using the new methodology / data source to provide the new baseline. This will ensure consistency of data and methodology when calculating our performance.<br>• The recalculated baseline and the progress achieved to date will be used to disclose the theoretical baseline for the year the targets were originally set.<br>• The cumulative progress will be the progress for the current reporting period (using the new methodology) and the progress up until the last reporting period (using the old methodology). |
| **Updates to external counterparty data driven by timing lags when data is reported (e.g. counterparty valuations or emissions estimates)** | **Capture in-year:**<br>• The impact of updated external data will be included into the current period financed emissions data and the progress metric for the current reporting period.<br>• Data lags are inherent to the process and Barclays will endeavour to use the latest available data.<br>• Historically reported metrics will not be updated for data lags. |

### Baselines at December 2022

| Sector | Unit | Baseline year | Baseline metric | Previously reported metrics | Recalculated metrics |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| | | | | Financed emissions for Dec 2021 | Change at Dec 2021 (percentage change) | Recalculated financed emissions for Dec 2021 | Theoretical baseline metric (re-baselined) |
| Energy | MtCO$_2$e (Absolute) | 2020 | 75.2$^a$ | 58.6 | -22% | 59.0 | 75.7 |
| Power | kgCO$_2$e/MWh | 2020 | 322$^b$ | 296 | -8% | 304 | 331 |
| Cement | tCO$_2$e/t | 2021 | 0.625 | | | | |
| Steel | tCO$_2$e/t | 2021 | 1.945 | | | | |
| Automotive manufacturing | gCO$_2$e/km | 2022 | 167.2 | | | | |
| Residential real estate | kgCO$_2$e/m$^2$ | 2022 | 32.9 | | | | |

**Notes:**
a In calculating the 2022 metrics, we have restated the baseline for Energy from 75.0 MtCO$_2$ to 75.2 MtCO$_2$ resulting in no impact on our year-end 2021 metrics.
b For Power we have restated the baseline from 320 kgCO$_2$/MWh to 322 kgCO$_2$/MWh with a recalculated year-end 2021 number of 296 kgCO$_2$/MWh vs 295 kgCO$_2$/MWh with a consistent percentage reduction for 2021.

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### Progress against our existing sector targets

#### Financed emissions - Energy
Absolute emissions MtCO$_2$e (Indexed 2020 = 100)
- Dec ’22: 51.7 (-32%)

#### Financed emissions - Power
Physical Intensity kgCO$_2$e/MWh (Indexed 2020 = 100)
- Dec ’22: 302 (-9%)

#### Financed emissions - Cement
Physical Intensity tCO$_2$e/t (Indexed 2021 = 100)
- Dec ’22: 0.610 (-2%)

#### Financed emissions - Steel
Physical Intensity tCO$_2$e/t (Indexed 2021 = 100)
- Dec ’22: 1.732 (-11%)

*(Charts represent "IEA NZE Benchmark: World", "Portfolio target path", and "Barclays portfolio".)*

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### Progress against existing sector targets

In April 2022, we published new 2030 BlueTrack$^{TM}$ targets for the Power, Energy, Cement and Steel sectors, building on our existing 2025 targets for Power and Energy.

Against a backdrop of the conflict in Ukraine and the associated energy crisis, elevated energy prices for much of 2022 resulted in energy companies experiencing strong cash flows. Governments and corporations have prioritised energy security and (for consumers and SMEs) affordability.

Our progress in 2022 against our targets reflects the potential for volatility in these metrics and highlights that our future progress will likely continue to be non-linear due to the many external dependencies and variables beyond Barclays' control that may determine the pace of transition.

We remain focused on our ambition of becoming a net zero bank by 2050, in line with our stated Climate risk appetite, and acknowledge the need to adapt our approach in light of the rapidly changing external environment, including addressing legitimate concerns about energy security and ensuring we continue to support governments and clients in delivering the transition to a low-carbon economy.

+ Further details on Barclays' Climate risk appetite can be found on page 205.

We are continuing to invest in developing tools that will enhance the quality of our forecasting and better understand the potential volatility in our progress over the remaining target period.

Our Client Transition Framework (CTF), which we began developing in 2022, will also provide insight into key dependencies and levers that will impact our ability to meet our targets across sectors.

### Energy

For our energy portfolio we set targets to reduce our absolute financed emissions inclusive of clients' Scope 1, 2, and 3 emissions. We are targeting a 15% reduction in CO$_2$e by 2025 and a 40% reduction in CO$_2$e by 2030 against a 2020 baseline.

**In 2022 we reduced our Energy absolute financed emissions by a cumulative -32%, further exceeding our 2025 target.**

Our absolute financed emissions were down to 51.7 MtCO$_2$e, an additional 10% reduction from the 2021 level. Of our total attributed emissions, c. 70% was related to oil, gas and natural gas liquids (NGLs) production while the remaining c.30% was attributable to coal production, with natural gas liquids (NGLs) being generally immaterial.

+ Further details on our use of NGLs can be found in our latest BlueTrack$^{TM}$ Whitepaper in the ESG Resource Hub online at: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/

Our continued progress reflects year-on-year reductions in emissions from our financing, primarily a decrease in capital markets volumes as rising interest rates paired with strong cash flows tempered client appetite for raising capital. Lending activity showed a slight increase, mainly reflecting the strengthening of the US dollar.

Many energy producers have focused on capital discipline, returning capital to shareholders, rather than increasing investment in new production and continuing to deleverage their balance sheets. The impact of these capital allocation decisions had the effect of partially offsetting the reduction in our financed emissions metrics. This is a function of our BlueTrack$^{TM}$ methodology, whereby when a client's book value decreases, Barclays' financed emissions increase, all else being equal.

### Power

For our power portfolio, we have set targets to reduce our financed emission intensity resulting from clients’ Scope 1 emissions. We are targeting a 30% reduction in CO$_2$e by 2025 and a reduction in the range of 50% to 69% by 2030, both against our 2020 baseline.

In 2022, we achieved a 9% cumulative reduction in emission intensity across our power portfolio. This progress reflects net reductions in the intensity of our lending activity and updated input values used in our calculations (as outlined in our BlueTrack$^{TM}$ Whitepaper), however, this was partially offset by an increase in the intensity of our capital markets financing year-on-year.

Our progress reflects the challenges in the power sector during 2022. While many clients continued to invest in additional renewables capacity, they also needed financing to ensure they could continue to meet energy demands while managing elevated input costs. For companies across Europe particularly, this meant identifying how to rapidly replace Russian natural gas supplies, given the conflict in Ukraine, as well as shortfalls in hydroelectric power and nuclear power generation that resulted from heat and drought. This supply gap has been filled in part by an increased reliance on coal-fired power capacity, which offset some of the intensity improvements from their renewables investments. We have seen an increase in lending and capital markets activity, reflecting the market conditions. However, emissions intensity remained broadly flat, as we have focused on the relative intensity of our portfolio.

Despite this forced return to coal, clients and the governments in the jurisdictions in which they operate, have reiterated that this increase in coal power capacity will only be temporary. On balance, the consensus view is that the longer-term impacts of the Ukraine crisis will accelerate efforts to transition to renewables to avoid similar supply shocks in the future.

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### Cement

Last year we announced a 2030 target to reduce the scope 1 and 2 gross emissions intensity of financed emissions for our cement portfolio by 20% to 26% against a 2021 baseline.

During 2022, we reduced the intensity of this portfolio by 2%. This reflects a net increase in financing to clients with an intensity below our portfolio average.

### Steel

In 2022, we announced a 2030 target to reduce the intensity of financed emissions for our steel portfolio by 20% to 40% against a 2021 baseline.

In 2022 the intensity of this portfolio reduced by 11%. This progress was largely driven by decreases in some clients’ emission intensities as they built lower emission Electric Arc Furnace capacity, rather than as the result of changes in our financing.

Both our Steel and Cement portfolios are comprised of small populations of clients with a range of intensities, thus, changes in our financing activity even for a single client within a portfolio can have a significant impact on our metrics and reported progress.

### Future target progress

As previously noted in our disclosures, in the short term, we may experience significant decreases or increases in our metrics, partly due to the volatility of the mix and volume of capital markets financing included in our metrics.

Our future progress in achieving these targets is dependent on many external factors including, for example, our clients’ pace of progress on their individual transition pathways, the public policy and regulatory environment, technological advancement, geopolitical or regional developments, energy security, cost of living and just transition considerations. The transition to a low-carbon economy will be reflective of the specific pathways companies take. For some sectors progress can occur in the short term while, for others, the technologies required to transition are not yet fully available meaning they are likely to transition at a later point in time. Ultimately our progress may prove challenging and may be affected (positively or negatively) by these external factors.

Our Client Transition Framework will support our evaluation of our corporate clients' current and expected future progress as they transition to a low-carbon business model.

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### New sector target - Automotive Manufacturing

Over the next 10 years, the auto manufacturing industry will undergo significant change driven by policy and regulation, consumer demand, and the transition to low-carbon transport. The global vehicle fleet will transition from internal combustion engines, towards hybrid vehicles and vehicles powered by batteries (BEVs) or fuel cells (FCEVs).

#### Our automotive emission intensity target

To support this shift toward BEVs, we have set a target to reduce the financed emissions intensity of our automotive manufacturing portfolio by 40%-64% by 2030 against a 2022 baseline, calculated using our BlueTrack$^{TM}$ methodology.

Consistent with our target ranges for other sectors:
- the lower emissions reduction in the range reflects an estimated emissions reduction trajectory based on our current view of sector and client pathways and commitments
- the higher emissions reduction in the range is aligned to the IEA NZE2050 pathway consistent with limiting global warming to 1.5°C. This pathway incorporates an assumption that public policy interventions, shifts in demand and new technologies will transpire and enable our clients and the industry as a whole, to accelerate their transition plans beyond current commitments or expectations.

The scope of this portfolio target is limited to new light duty vehicle (LDV) manufacturers, including Scope 1, 2 and 3 downstream emissions (use of sold products) i.e. the combustion of fuel or ‘tank to wheel’ metrics.

Heavier vehicles may be dependent on future technology developments including green hydrogen to decarbonise and are not currently in scope of this target. We will keep this under review, as the transition of heavier vehicles will be required for the automotive sector as a whole to reach net zero.

#### Financed emissions - Automotive Manufacturing (LDVs)
Physical Intensity (gCO$_2$e/km) (Indexed Dec 2022 = 100)
- Dec ’22: 167.2

*(Chart represents "IEA NZE Benchmark: World", "Portfolio target path (range)", and "Barclays portfolio".)*

We are clear as to the level of emissions reductions required to align with the IEA NZE2050 pathway but we recognise there are dependencies and variables outside our control that will determine how quickly our financed emissions intensity can reduce in this sector.

We note that our clients’ ability to meet their targets is dependent on continued regulatory, policy and technical support for the industry, as well as consumer demand for BEVs and FCEVs, supply chain capacity and continued infrastructure building, for example, EV charging networks and related grid upgrades or green hydrogen production and hydrogen refuelling stations to support demand.

#### Estimating our financed emissions

Using our BlueTrack$^{TM}$ methodology, we have estimated the financed emissions and emissions intensity of our global autos manufacturing portfolio. The emission intensity benchmark is based on the IEA NZE2050 scenario.

Currently, the IEA only provides granular pathways for tailpipe emissions associated with the stock of vehicles on the road so we have made adjustments to convert this to a flow measure, including assessing the rate of retired LDVs and the growth in BEV, FCEVs and hybrid vehicle sales. Given our focus on automotive manufacturers, we believe a sales focused measure is more appropriate.

Our assessment of the NZE scenario indicates that the intensity of new vehicles sold needs to reduce by c.65% from 2022 to 2030.

The automotive value chain includes parts suppliers, manufacturers, in-house financing business, dealers and end users, including the use of fleets within companies. Our methodology focuses on the manufacturers and assigns all downstream tailpipe emissions to the manufacturer. We focus on auto manufacturers because they play a major role in the type of vehicle brought to market for consumers and fleet operators to buy and are in a strong position to influence their production process and upstream suppliers.

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### New sector assessed – Residential Real Estate

#### Estimating our financed emissions

Homes contributed to over 15% of total GHG UK emissions in 2021$^a$, primarily from the use of oil and gas in heating and hot water. Decarbonising UK homes is a complex challenge that will require widespread engagement and systemic change. In view of these challenges, we are announcing a convergence point for our UK residential real estate mortgage portfolio of a 40% reduction in CO$_2$e emissions intensity against a 2022 baseline of 32.9 kgCO$_2$e/m$^2$ (Scopes 1 and 2).

Barclays has estimated the financed emissions and emissions intensity of its UK residential real estate portfolio by integrating the PCAF$^b$ approach into BlueTrack$^{TM}$. This is the first sector where we are leveraging the well-established approach and data sourcing recommended by PCAF. Our in scope portfolio consists mostly of Barclays UK residential mortgages, including properties to let. It also includes a smaller portfolio of mortgages originated by the Private Banking division of Barclays Bank PLC$^c$.

We have selected the Balanced Net Zero (BNZ) scenario developed by the UK's Climate Change Committee (CCC) as a benchmark for this sector as it is specific to the UK, independent, developed by a credible institution and aims to achieve net zero emissions for the UK by 2050. In line with this scenario, our portfolio would need to reach an emissions intensity of 19.7kgCO$_2$e/m$^2$ by 2030 to be on a path to net zero by 2050, which would be a 40% reduction in emissions intensity from a 2022 baseline.

+ Further details on the methodology can be found in the 2023 BlueTrack$^{TM}$ Whitepaper at: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/

#### Financed emissions - Residential Mortgages
Physical Intensity (kgCO$_2$e/m$^2$) (Indexed Dec 2022 = 100)
- Dec ’22: 32.9

*(Chart represents "IEA NZE Benchmark: World", "Portfolio convergence point", and "Barclays portfolio".)*

The transition of the residential real estate sector to net zero depends mostly on external changes and public policy interventions to: steer the UK energy grid towards renewable electricity; reduce dependence on fossil fuels for home heating; drive retrofitting of existing homes to promote energy efficiency; and require that new homes are built to a net zero standard.

Without these external changes, Barclays cannot materially decrease the emissions intensity of its mortgage portfolio. Barclays has therefore chosen to identify the 2030 emissions intensity 'convergence point' and measure our progress towards it, but not to set a formal target at the current time.

### Barclays UK Residential Real Estate ambition

In addition to establishing a convergence point and measuring our progress towards it, we have set an ambition for 50% of homes in our Barclays UK mortgages book with known EPC rating to have an EPC of C or better by 2030. This will be an important improvement, but it will not be sufficient to reduce portfolio emissions intensity to the level required under a 1.5°C scenario.

As at the end of Q3 2022, 65.1%$^d$ of homes in our portfolio had an EPC rating, and of those, 42.3% of these are C or better (27.5% of total homes, including those without an EPC).

**Notes:**
a Climate Change Committee 2022 Progress Report to Parliament.
b Our Data Quality scope for the Residential Real Estate sector is 3.7. The PCAF framework provides guidance for a data quality score for each sector to help institutions rate the reliability of their information. The score ranges from one to five, with one being the highest quality date. For Residential Real Estate, our Data Quality score is 3.7. Please refer to the BlueTrack$^{TM}$ Whitepaper for further details on how the data quality score is calculated.
c Corporate counterparties such as social housing associations or house builders, mortgages on properties outside of the UK or mortgages originated through Barclays UK Business Banking have not been included in this sector.
d EPC rating metrics calculated based on volume of accounts. Data as of 30 Sept 2022.

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### Drivers of reduction in emissions in Residential Real Estate

The two most important drivers in the transition to net zero in this sector are the decarbonisation of the UK energy grid and the phasing out of fossil fuel in domestic heating through the switch to low-carbon heating bringing clean energy to our customers’ homes. This will be mostly driven by the transition of the energy sector and UK Government policy to drive the decarbonisation of the UK electricity grid and promote the take up of low-carbon heating.

Barclays can play a role through supporting renewable projects and clients in the Power sector, for example through our BlueTrack$^{TM}$ targets, our banking activity and Sustainable Impact Capital investments.

Another key driver required to reach net zero in the Residential Real Estate sector is improving the energy efficiency of existing homes, which includes our customers improving the fabric of their homes and other energy efficiency measures.

Other key contributors to the reduction in emissions intensity of this sector include new homes being built to net zero standard, with low carbon energy sources and high energy efficiency rating, and reduction in consumption through changes in behaviour.

As a mortgage lender, we can support our customers making the decision to retrofit their homes, switch to low-carbon heating e.g. heat pumps and reduce their energy consumption by providing education, financial incentives and partner offers, as well as financing through our wide range of lending products. However, we expect the overall impact of our actions to be low, given the barriers to retrofitting such as high upfront costs and low customer demand.

### High level assessment of drivers of net zero in Residential Real Estate

| Driver | Barclays' role |
| :--- | :--- |
| **Without external changes and public policy interventions, Barclays actions are expected to have limited impact in decreasing the emissions intensity of its mortgage portfolio.** | |
| Improvement in energy efficiency of existing homes | • Continue to offer education, financing products and services to incentivise retrofitting<br>• Advocating for external measures to drive take up of retrofitting |
| De-carbonisation of UK electricity grid | • Supporting our clients in the power sector in their net zero transition<br>• Advocating for the UK Government to deliver on its ambitions to decarbonise the electricity grid |
| Phasing out of fossil fuel in heating | • Continue to offer education, products and services to incentivise customers switching to low-carbon heating<br>• Opportunity to develop strategic partnerships, including with utilities providers, to drive electrification of domestic heating |
| New homes built to net zero standard | • Continue to promote energy efficiency in new builds through propositions such as Green Home Mortgages<br>• Continue supporting our Corporate Bank's real estate clients in their transition, for example, through Barclays' Sustainable Residential Development Framework |
| Behaviour change | • Continue to offer education to customers on energy efficiency and promoting reduction of usage through tools, awareness and partnerships |

### Barclays Green Homes strategy

Barclays is committed to supporting our customers' transition to a more sustainable way of living; our Green Homes strategy is to deliver products and propositions to support our customers to take steps to improve the energy efficiency of their homes, switch to low-carbon heating and reduce their energy consumption.

Our focus is on launching initiatives that aim to drive real benefit to society and to the environment.

We have continued to support customers purchasing a new build, energy efficient home through our Green Home Mortgage, launched in 2018 and under which we've already lent over £2.8bn to over 12,000 customers.

Barclays is also committed to working collaboratively with the UK Government to encourage and inform the development of strategies and policies to drive more energy efficient homes and retrofitting, including through industry groups where appropriate, and through our own engagement with policymakers.

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### Next sectors in our portfolio alignment

Using BlueTrack$^{TM}$, we have assessed our financed emissions in six high emitting sectors and have set targets in five of those.

We will continue to assess the financed emissions across our portfolio and measure the baseline emissions that we finance across sectors. In particular, we aim to assess our baseline financed emissions across the Agriculture, Commercial Real Estate, Aviation and Shipping sectors during 2023.

Our commitment under the Net-Zero Banking Alliance is to set science-based targets for all material high-emitting sectors in our portfolio by April 2024. Our assessment of our baseline financed emissions in these further sectors will inform our plan for target setting in the coming year.

This work to comply with our commitment under the Net-Zero Banking Alliance, as well as work that is ongoing to develop a high-level modelled assessment of our overall balance sheet, consistent with the approach outlined by the Partnership for Carbon Accounting Financials (PCAF), will aid our understanding of the extent to which our financing aligns with a 'well below 2°C' scenario.

The phasing of our work and progress we've made in portfolio alignment reflects the considerable effort required to establish our baseline emissions for each sector and to set appropriate targets, taking account of both our lending and capital markets financing activities.

### Corporate and Investment Bank: Managing our portfolios

In managing our portfolios, we taken into account all relevant climate-related risks and considerations, including how our portfolios are performing against our BlueTrack$^{TM}$ targets so that this can be considered in context, alongside our client transition analysis, counterparty risk and other relevant business considerations.

+ Further details of climate risk-related considerations are managed can be found in the Managing impacts in lending and financing section on page 175.

With regards to performance against targets, we have established regular senior management reporting and monitoring for each of our portfolios in the Corporate and Investment Bank. This includes both our current metrics as well as a forecast of how clients’ emissions and thus our overall portfolio may evolve over the remaining target period. By understanding how our estimated performance compares to our targets we are able to appropriately increase or decrease the degree of required management oversight.

- Where we believe we are currently likely to exceed our targets we continue monitoring our progress.
- For targets we believe will be met within a margin of error, we assess the portfolio impact of proposed new lending transactions above certain thresholds to ensure we are comfortable with the potential impacts.
- Where we expect meeting our targets will be challenging, the thresholds for the size of transactions to be reviewed are scaled down accordingly to ensure greater management oversight in the round of such transactions.

We are continuing to invest in building improved tools that allow us to enhance the quality of our forecasting and to help us better understand the potential impact of the uncertainty in our estimates of future performance.

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### Restrictive policies

In addition to setting sector-specific emission reduction targets, consistent with our Purpose and considering relevant risks and other factors, we have set explicit restrictions to curtail or prohibit financing of certain activities in sensitive sectors. These policies are listed below and set out in detail within our statements and policy positions.

They include clear restrictions on thermal coal mining and coal-fired power generation, Arctic oil and gas, oil sands and hydraulic fracturing (fracking). Our restrictive policies are regularly reviewed and updated based on a number of internal and external factors. In light of this we are aligning our thermal coal power phase-out date for all EU and OECD countries to 2030.

Since 2020, as part of our climate strategy we have only provided financing to oil sands exploration and production clients who have projects to reduce materially their overall emissions intensity, and a plan for the company as a whole to have lower emissions intensity than the level of the median global oil producer by the end of the decade. As a result of this policy, our lending exposure to oil sands exploration and production clients$^a$ had reduced to zero at the end of 2022.

In light of this position and consistent with Barclays’ business strategy, we are further restricting our business appetite so that with effect from 1 July 2023 we will not provide financing to oil sands exploration and production companies or for the construction of new oil sands exploration assets, production and processing infrastructure or Oil Sands Pipelines.

#### Position and policy statements on sensitive sectors

| Climate change | Forestry and Agricultural Commodities |
| :--- | :--- |
| • Coal mining<br>• Coal power<br>• Oil sands<br>• Fracking<br>• Arctic oil and gas | • Forestry, pulp and paper<br>• Palm oil<br>• Soy |

+ Further details can be found at: home.barclays/sustainability/esg-resource-hub/statements-and-policy-positions/

### Changes to our restrictive policies

| Restrictive policy | Previously announced policy | New announcement |
| :--- | :--- | :--- |
| **Thermal Coal Power** | By 2030: in the UK and EU – phase out of financing to clients engaged$^b$ in coal-fired power generation. In the rest of the world (including USA) – no financing to clients that generate more than 10% revenue from coal-fired power generation<br>By 2035: phase out of financing to clients engaged in coal-fired power generation | By 2030: in EU and OECD phase out of financing to clients engaged$^b$ in coal-fired power generation. In the rest of the world, no longer provide financing to clients that generate more than 10% of revenue from coal-fired power generation<br>By 2035: phase out financing to clients engaged in coal-fired power generation |
| **Oil Sands** | We will only provide financing to oil sands exploration and production clients who have projects to reduce materially their overall emissions intensity, and a plan for the company as a whole to have lower emissions intensity than the level of the median global oil producer by the end of the decade. | We will not provide financing:<br>To oil sands exploration and production companies$^a$; or<br>For the construction of new (i) oil sands exploration, production and/or processing assets; or (ii) oil sands pipelines$^c$. |

The experience of the last few years leads us to recognise that client transition pathways will vary and the ability of our clients to meet our requirements may be affected (positively or negatively) by external factors, including, for example, the public policy and regulatory environment, technological advancement, geopolitical or regional developments, energy security, cost of living and just transition factors. We intend to continue to work with and support our clients as they transition their business and will monitor and engage with them on their progress and the impact of external factors over time, through our Enhanced Due Diligence and Client Transition Framework.

We will continue to keep our policies, targets and progress under review in light of the output of that work, the external environment and the need to support an orderly energy transition and provide energy security.

Further restrictions are set out in our Position Statements in relation to Forestry and Agricultural Commodities and World Heritage and Ramsar Wetlands. We intend to update these Statements and related policies and procedures in Q2 2023.

**Notes**
a Oil sands exploration and production companies are those that majority own (>50%) or operate oil sands exploration, production and processing assets, other than companies that generate less than 10% of revenue from these activities.
b A client is defined as "engaged in" coal-fired power generation if the client earns >5% revenue from that activity.
c Oil Sands Pipelines are pipelines whose primary use is for the transportation of crude oil extracted from oil sands.

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### Financing the transition

Barclays is facilitating green and sustainable finance, alongside investing, to help the economies we serve to support the transition to a low-carbon model.

We are facilitating funding and investing into green technologies and low-carbon infrastructure projects. We are also using our advisory capabilities, product sets and financial expertise to help our customers and clients realise their own transitions to a low-carbon economy.

In 2018, we set two targets covering financing that we facilitate for our clients and customers: (i) £150bn of social, environmental and sustainability-linked financing by 2025; and (ii) £100bn of green financing by 2030.

In 2020, we also announced that we would invest up to £175m in environmentally-focused early-stage technology companies under our Sustainable Impact Capital investment mandate.

During 2022, we continued to facilitate finance and undertook a strategic review of the Group’s capabilities, market demand and growth opportunities across sustainable financing.

As a result in December 2022, we announced two new targets - to facilitate $1trn of Sustainable and Transition Financing between 2023 and the end of 2030 and to invest £500m into global climate tech start-ups through our Sustainable Impact Capital portfolio by the end of 2027.

### Financing the transition targets

```mermaid
graph TD
    A[Sustainable financing targets]
    B[£150bn social, environmental and sustainability-linked financing facilitated between 2018 and 2025. Progress: target exceeded in 2021, with £247.6bn facilitated by the end of 2022]
    C[£100bn green financing facilitated between 2018 and 2030. Progress: on track to meet target well ahead of the 2030 target date, with £87.8bn facilitated by the end of 2022]
    D[$1trn Sustainable and Transition Financing between 2023 and 2030. New target encompasses green, social, transition and sustainability-linked financing]
    E[Sustainable Impact Capital target]
    F[£175m between 2020 and 2025. Progress: £89m invested by the end of 2022]
    G[Extended to £500m by 2027]
    A --> B
    A --> C
    A --> D
    E --> F
    E --> G
```

#### Social, environmental and sustainability-linked financing
Barclays surpassed its target of facilitating £150bn of social, environmental and sustainability-linked financing between 2018 and 2025 in 2021, four years early. We facilitated £54.3bn of social, environmental and sustainability-linked financing during 2022 (£69.2bn in 2021) and a cumulative £247.6bn since 2018. The fall in financing facilitated in 2022 is consistent with the drop in overall market activity compared to 2021.

Social and environmental financing consists of financing for dedicated use of proceeds, financing for clients with an eligible business mix in relevant environmental and social categories, and sustainability-linked financing which refers to general purpose funding linked to specific sustainability performance metrics.

Debt issuance was the largest product category again this year accounting for 71% of the total (2021: 74%). Loans and equity accounted for 26% (2021: 19%) and 2% (2021: 7%) respectively.

#### Social financing
Raising finance for clients including supranational, national and regional development institutions continued to be a key driver of the £24.9bn of social financing facilitated in 2022, while also contributing 58% of the total social and environmental financing (excluding sustainability-linked).

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

As a growing area of sustainable finance, we have seen issuers aligning their financing commitments to social use of proceeds bonds which allocate funds to categories such as access to healthcare, affordable housing and essential services. We have also seen the use of social KPIs within sustainability-linked financing such as targets linked to gender diversity.

### Environmental financing
Our environmental financing consists of labelled, dedicated use of proceeds and general purpose financing in environmental categories. In 2022, we facilitated £18.0bn versus £22.6bn in 2021, reflecting continued strong demand for environmental financing and our strategy to work with our clients and customers to help facilitate their transitions towards a low-carbon economy.

### Sustainability-linked financing (including social)
In addition to dedicated use of proceeds transactions where financing is allocated to specific eligible green, social or sustainable activities, projects or assets, sustainability-linked bonds (SLBs) and sustainability-linked loans (SLLs) are forward-looking, performance-based debt instruments issued with specific KPIs and sustainability performance targets.

Our sustainability-linked financing totalled £11.4bn in 2022, up 5% from £10.8bn in 2021. The SLB market continues to be of significant importance to both investors and issuers alike who use these instruments to embed their sustainability targets into financing commitments.

### Barclays' Sustainable Finance Framework
Our sustainable financing is tracked using the methodology set out in the Barclays Sustainable Finance Framework, which defines the criteria we use for social financing, environmental financing, green financing and sustainability-linked financing for the purpose of recording progress against our sustainable finance targets. Barclays is developing a similar Transition Finance Framework, that will determine the eligibility of transition transactions.

+ Our Sustainable Finance Framework can be found online within our ESG Resource Hub at: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/

### Facilitating £100bn of green financing
We facilitated £25.5bn of green financing in 2022 (down from £29.8bn in 2021, reflecting lower market activity), comprising:
- labelled use of proceeds and general purpose financing in environmental categories (£18.0bn in 2022) and
- sustainability-linked financing that incorporates environmental performance targets (£7.5bn in 2022).

Since 2018, we have facilitated a total of £87.8bn across these categories. We are therefore on-track to meet our target of £100bn of green financing well ahead of the 2030 target date.

Breaking down our green financing by product type, the largest category was debt issuance, accounting for 61% (2021: 63%) of the total. Loans and equity made up 33% (2021: 21%) and 4% (2021: 15%) respectively.

### New $1trn Sustainable and Transition Financing target
In light of the progress made against our previously announced targets and after a strategic review of the Group's capabilities, market demand and growth opportunities, in December 2022 we announced a new target to facilitate $1trn of Sustainable and Transition Financing between 2023 and the end of 2030.

This encompasses the green, social, transition and broader sustainability-linked financing requirements of clients including corporates, governments and consumers. This includes financing of climate and environmental solutions including green mortgages, energy efficient technology and renewable energy, as well as financing for broader social and sustainability work, including sustainability-linked structures and areas such as affordable housing.

The inclusion of transition financing in this target reflects our recognition of the importance of supporting the decarbonisation of "hard to abate" sectors that are carbon intensive.

Progress towards this target may vary from year to year. Changes in market conditions, policy, laws, regulation and stakeholder expectations, including approaches to product labelling and regulatory scrutiny of green and sustainable products could impact lending and capital markets appetite. New climate and decarbonisation technologies may scale at varying rates, including being reliant on the supply and demand of raw materials. We will continue to review and adapt our approach to sustainable financing in response to the evolving market opportunities.

### Sustainable Impact Capital
We firmly believe that innovation is key to tackling climate change and we are committed to supporting transformative change by investing our own capital in entrepreneurial companies. In 2020 Barclays announced that it would invest up to £175m equity capital into environmentally-focused start-ups by 2025, helping to support our clients' transition towards a low-carbon economy.

To date, we have invested £89m into 16 innovative start-ups, helping them to scale solutions to environmental challenges and fill their growth-stage funding gaps.

These investments have supported many aspects of climate-tech innovation, from property retrofit solutions to long-duration energy storage and hydrogen technologies.

Momentum has so far been in-line with expectations creating strategic opportunities across the Group. The success of the investments to date meant that an increase in the investment mandate was required to allow Barclays to continue existing efforts and support new investments. As a consequence, in December 2022 we announced that the investment mandate will increase to £500m by the end of 2027.

We expect the next phase of investments will see an enhanced focus on decarbonisation technologies that are enabling transition within carbon intensive sectors, particularly where Barclays has meaningful client exposure such as energy and power, real estate and transport. A particular focus will be on carbon capture and hydrogen technologies.

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### Sustainable financing dashboard

#### £150bn social, environmental and sustainability-linked financing facilitated (2018-2025)
**Achieved to date: £247.6bn**

- **Annual breakdown by category (£bn):**
  - 2022: 18.0 (Env), 24.9 (Soc), 11.4 (Sust-linked)
  - 2021: 22.6 (Env), 35.7 (Soc), 10.8 (Sust-linked)
  - 2020: 14.8 (Env), 41.2 (Soc), 5.0 (Sust-linked)
  - 2019: 7.8 (Env), 23.9 (Soc), 3.1 (Sust-linked)
  - 2018: 5.3 (Env), 21.8 (Soc), 1.4 (Sust-linked)

- **Annual breakdown by region (£bn):**
  - 2022: 19.8 (Amer), 30.8 (UK/Eur), 3.6 (Asia)
  - 2021: 27.1 (Amer), 36.0 (UK/Eur), 6.1 (Asia)
  - 2020: 29.6 (Amer), 28.6 (UK/Eur), 2.7 (Asia)
  - 2019: 14.4 (Amer), 18.6 (UK/Eur), 1.8 (Asia)
  - 2018: 10.0 (Amer), 17.1 (UK/Eur), 1.5 (Asia)

- **Annual breakdown by product (£bn):**
  - 2022: 38.3 (Debt), 1.2 (Eq), 14.3 (Loan), 0.4 (Inv), 0.4 (Other)
  - 2021: 50.9 (Debt), 4.8 (Eq), 13.1 (Loan), 0.3 (Inv)
  - 2020: 49.1 (Debt), 2.6 (Eq), 9.2 (Loan)
  - 2019: 30.2 (Debt), 0.1 (Eq), 4.4 (Loan)
  - 2018: 25.8 (Debt), 0.4 (Eq), 2.3 (Loan)

#### £100bn green financing facilitated (2018-2030)
**Achieved to date: £87.8bn**

- **Breakdown by year (£bn):**
  - 2022: 18.0 (Env), 7.5 (Sust-linked green)
  - 2021: 22.6 (Env), 7.2 (Sust-linked green)
  - 2020: 14.8 (Env), 2.8 (Sust-linked green)
  - 2019: 7.8 (Env), 1.4 (Sust-linked green)
  - 2018: 5.3 (Env), 0.3 (Sust-linked green)

- **Breakdown by region (£bn):**
  - 2022: 7.1 (Amer), 16.8 (UK/Eur), 1.7 (Asia)
  - 2021: 12.7 (Amer), 14.7 (UK/Eur), 2.4 (Asia)
  - 2020: 7.9 (Amer), 9.0 (UK/Eur), 0.7 (Asia)
  - 2019: 3.3 (Amer), 5.0 (UK/Eur), 0.9 (Asia)
  - 2018: 2.3 (Amer), 3.0 (UK/Eur), 0.3 (Asia)

- **Breakdown by product (£bn):**
  - 2022: 15.6 (Debt), 0.9 (Eq), 8.3 (Loan), 0.7 (Inv)
  - 2021: 18.9 (Debt), 4.4 (Eq), 6.2 (Loan), 0.3 (Inv)
  - 2020: 12.2 (Debt), 1.5 (Eq), 3.8 (Loan)
  - 2019: 7.0 (Debt), 0.1 (Eq), 2.1 (Loan)
  - 2018: 4.8 (Debt), 0.3 (Eq), 0.6 (Loan)

+ Further details of the data provided, including further granularity of decimal points can be found in the ESG Data Centre located within the ESG Resource Hub at home.barclays/sustainability.esg-resource-hub/reporting-and-disclosures/

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### Barclays' Sustainable Finance Framework

We seek to be transparent about our approach to reporting against our sustainable finance targets. Our sustainable financing is tracked using the methodology set out in the Barclays Sustainable Finance Framework (SFF). This framework defines the criteria we use for social financing, environmental financing, green financing and sustainability-linked financing. This includes ‘dedicated purpose’ green and social financing, ‘general purpose’ financing based on eligible company business mix and sustainability-linked financing, and sets out applicable criteria drawing on industry guidelines and principles.

It should be noted that the methodology is reliant on a range of data sources including Dealogic and Bloomberg transaction listings and league tables, as well as other third-party data and verification sources including company disclosures to aid the classification of financing into eligible green and social categories.

We recognise that the quality, consistency and comparability of the data relied upon is not yet of the same standard as more traditional financial metrics and presents an inherent limitation to the performance reported. We will continue to review available data sources and enhance our methodology and processes to improve the robustness of the performance disclosed.

The legal and regulatory landscape relating to sustainable financing, including the naming and categorisation of products as ‘green’, ‘social’, ‘sustainability-linked’ and otherwise, is rapidly evolving with differing regulations across jurisdictions. We may wish to revisit our approach in that context in the future.

There is currently no globally accepted framework or definition (legal, regulatory or otherwise) governing what constitutes 'ESG', 'green', 'sustainable', or similarly-labelled products, nor is there unanimous agreement on what attributes a particular investment, product or asset should have to be labelled as such.

Furthermore, no assurance can be given that a globally accepted definition or consensus will develop over time. We will continue to monitor and comply with applicable jurisdictional regulatory taxonomy definitions and product labelling obligations as they emerge.

As innovation in sustainable finance continues to accelerate, we will continue to review and update our SFF, our measurement of our performance against targets, and keep our general approach under review.

To support the new sustainable finance target, we updated our SFF, published in December 2022, which will apply to financing volumes tracked against our new target to facilitate $1trn of Sustainable and Transition Financing between 2023 and the end of 2030.

+ Barclays' Sustainable Finance Framework can be found online in our ESG Resource Hub at: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### Treasury green programmes

Treasury partners with businesses to originate, structure and execute strategic ESG transactions in order to support the climate objectives of the bank and our clients. Together, we partner with key development stakeholders including the UK Infrastructure Bank, British Business Bank and Export Credit Agencies to design solutions which help unlock financing for emergent green technologies and social projects, leveraging on our unique principal risk transfer, structuring and investment capabilities to support these clients and projects to scale up.

#### Green notes programme
The Barclays Bank PLC green notes programme covers a wide range of Barclays issued products including structured and index-linked notes, asset-backed notes and commercial paper which are used to finance and / or refinance green assets originated by our corporate and investment banking teams and helping to finance these projects more economically.

**Green notes programme (Notional) £m**
- Green structured notes: 88
- ECP: 135

Markets and Treasury structure and manage the programme including the governance and note frameworks which underpin issuance.

Green Structured Notes, in particular, give our investors an opportunity to invest alongside us in green assets that help fund the transition to a low-carbon economy. It also helps Barclays provide financing for these projects more economically and thereby benefit borrowers.

+ Further details on our green notes programme can be found at: home.barclays/greenbonds/

### Green bond investment portfolio

In 2022, we remained engaged in the ESG market as an investor. After above average growth in ESG issuance volumes in 2021, the pace slowed in 2022, with labelled bond issuance down by approximately 30%. The market however continued to broaden, with several new issuers coming to the market. Barclays’ Treasury was involved in a number of these inaugural events, including debut issuance from the Canadian and Austrian governments.

We aim to reach our £4bn target portfolio size in the near term, as the green and sustainable bond markets continue to broaden and with issuance volume predicted to return to 2021 levels this year.

**Green bond investment portfolio size by year £bn**
- 2022: 2.8
- 2021: 3.4
- 2020: 3.1
Against an ambition to get to a portfolio size of £4bn over time.

**Green bond investment portfolio impact by sector (%)**
- Renewable energy: 39
- Transport: 45
- Other: 10
- Water and waste: 3
- Agriculture: 3

**Green bond investment portfolio impact by region (%)**
- Europe: 86
- Asia: 3
- South America: 3
- Africa: 4
- North America: 4

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

### Embedding ESG into our business

We are embedding Sustainability and ESG throughout the Barclays business, taking into account the impact of climate-related risks and opportunities on our businesses, strategy and financial planning.

Our climate strategy is underpinned by the way we assess and manage our exposure to climate-related risk.

The risks associated with climate change are subject to rapidly increasing societal, regulatory and policy focus, both in the UK and internationally. We are embedding climate risk into Barclays' risk framework taking into account regulatory expectations and requirements, and adapting Barclays' operations and business strategy to address the financial risks resulting from both the physical risk of climate change and the transition to a low-carbon economy.

In January 2022, climate risk became one of the Principal Risks in our Enterprise Risk Management Framework. We also identify and consider the impact of climate risk on other Principal Risks facing the bank.

+ Further details on climate risk identification, assessment and management can navigated via the Risk Review contents section on page 186.

In 2022, we included our climate strategy and climate-related risks and opportunities in our financial planning. We continue to work to embed these considerations into our products and services and operations.

We have also worked on embedding ESG considerations into the culture of the organisation through training and knowledge building. To embed ESG in culture, we cannot only train colleagues whose role includes ESG aspects, but all colleagues across the bank so in 2022, we have implemented a number of training initiatives and developed resources available to all colleagues.

### Impact of climate-related risks and opportunities on our business, strategy and financial planning

Barclays’ 2022 financial planning process included a review of our strategy and its implementation, as well as an initial view of climate-related risks and opportunities, which aligns with how we manage other risks. The implementation of our strategy is not only impacting our products and services, but also our operations. We continue to develop new processes and capabilities and are embedding them into our operations to address increasing complexity, including building technology solutions where required to support oversight, management and reporting processes.

Within Barclays' group change programme for climate, there is a workstream specifically related to finance and regulations. Within this, we have strategic deliverables (along with a set of actions we track) to seek to embed our climate strategy into the financial planning process, and prioritise it as appropriate in line with our overall strategy.

Barclays' latest financial plan, developed during 2022, leverages the three pillars of our climate strategy to estimate the future impact of climate on our financial performance. The financial plan also includes a section dedicated to climate. Further details on how this was included in our five-year financial planning process are set out below, including our approach to sustainable financing, targets and capital investments.

All key businesses and functions are involved and delivery is managed through a central programme, supported by extensive change management expertise. We are further developing processes and levers that have already started to impact the business we engage in.

For example:
- we strive to continue to decarbonise our own operations, reducing our Scope 1 and Scope 2 and our upstream and selective downstream Scope 3 emissions
- we are tracking progress towards portfolio alignment (i.e. of our financed emissions) with the goals and timelines of the Paris Agreement through BlueTrack$^{TM}$, which includes a number of portfolio alignment metrics. The metrics are subject to regular management review including second line review by the Climate Risk team to assess the strategy against the targets
- we continue to develop our green, sustainable and transition finance banking product sets, including for retail customers, such as green mortgages, bonds, loans and investment funds
- we continue to explore climate scenario analysis and stress testing as a tool to assess and quantify the potential impacts on our business from climate change
- we conduct portfolio reviews to monitor that business activities conducted are within Barclays’ mandate (i.e. aligned with expectations), and are of an appropriate scale (relative to the risk and reward of the underlying activities). Mandate & Scale Exposure Controls form part of our overall risk appetite control framework and climate risks have been integrated into annual credit portfolio reviews for elevated risk sectors since 2020.

Over the past year we have grown our existing talent with several strategic hires, including Heads of Sustainable Finance for CIB and BUK. Each hire will allow us to further support our climate strategy; increase co-ordination and accountability and aid engagement with colleagues across our businesses as part of our financial planning process; and help our customers and clients with their individual transitions to a low-carbon economy.

The 2022 financial planning process used a five year baseline scenario that assumed climate factors were already included in the wider macroeconomic variables, and therefore no further climate-related adjustments were necessary. We assessed the financial impact of embedding the individual parts of our climate strategy, new initiatives and targets across our businesses, including the wholesale credit book, sustainable financing and sustainable lending in the Corporate and Investment Bank and initiatives across our retail businesses, such as green mortgages and sustainable investing.

A strategic review of sustainable financing was also completed during the year. The review identified commercial opportunities and noted certain risks which could arise. The majority of opportunities continue to reside within Equity Capital Markets, Debt Capital Markets and lending. The output of the strategic review was considered in the planning process, including incremental revenue, cost and capital. Additionally, the planning process included an assessment of our financed emissions reduction targets for some of our highest emitting sectors: Energy, Power, Cement and Steel. Barclays has set absolute emissions or emissions intensity targets for these sectors. Barclays continues to engage with our clients to support the transition to a low-carbon economy and our current targets do not materially impact financial performance over the next five years.

***

# Implementing our Climate Strategy (Continued)

## TCFD Strategy Recommendation (b) | Strategic Pillar 1

The financial planning process also covered a review of our own net zero operations target, which supported decisions around how we redirect real estate and technology capital investment across our businesses, including the branch network in BUK, to deliver our stated targets.

We will continue to enhance how our climate strategy is embedded into the way we think about financial planning over the coming years.

***

# Resilience of our strategy

## TCFD Strategy Recommendation (c)

# Scenario Analysis

Scenario analysis forms a key part of Barclays’ approach in assessing and quantifying the impact of climate change$^1$. Since 2018, Barclays has progressively developed its scenario analysis capabilities, developing-in house methodologies, collaborating with external subject matter experts, and participating in regulatory exercises.

The outcomes, time horizon and future pathways for climate-related events and risks are highly uncertain, which presents challenges in understanding and quantifying the impact on financial systems and market participants. It is critical for organisations to evaluate the business implications of climate-related risks and opportunities to inform strategic thinking and to design appropriate risk management strategies in response to these risks. At Barclays, scenario analysis and stress testing tools are used to provide insights on the effects of transition and physical risks on our portfolios under a range of climate change scenarios, which we intend to increasingly use to inform financial planning and business strategy setting, risk appetite and risk management.

**Timeline:**
- **2018 (1. External case studies through UNEP FI):** Case study exercises covering Power Utilities, Oil & Gas and Residential Real Estate; Scenario assessment based on REMIND 2°C scenario, assessing a specific client set in each sector; Judgement-led and simplistic approach to calculate climate probabilities of default.
- **2019 (2. Internal short-term transition scenario):** Short-term assessment exploring the potential transition risk impact of a ‘Climate Minsky Moment’ with a rapid market correction, followed by broader macroeconomic shocks; Scenario narrative and shocks informed by external publications e.g. RA insurance climate stress, DNB energy transition stress test.
- **2021 (3. Internal climate scenarios informed by NCFS):** Long-term climate internal stress test; Scenario narrative and shocks informed by NCFS ‘Disorderly Transition’ combined with internal scenario of comparable sensitivity (pre-COVID IFRS 9 Downside 1); Second assessment considered incremental physical risk impact from the ‘Hot House World’ scenario.
- **2021 (4. Exploratory climate scenarios by the Bank of England (BoE)):** Barclays participated in the BoE’s Climate Biennial Exploratory Scenario (CBES); Stress test covers three long-term scenarios: Early Action, Late Action and No Action; Assessments focused on credit risk impacts to wholesale and retail portfolios.
- **2022 (5. Framework, regulatory and internal scenario analysis):** This year, Barclays has participated in regulatory stress tests (e.g. ECB CRST), conducted bespoke internal scenario analysis exercises and further developed frameworks for performing scenario-based climate risk measurement exercises.

**Notes:**
1 Informed by the Basel Committee on Banking Supervision's 2021 "Climate-related financial risks - measurement methodologies" report, Barclays considers climate scenario analysis as forward-looking projections of climate risk outcomes, with climate stress testing a subset of this where the exercise is designed to evaluate financial resiliency to a severe but plausible scenario.

***

# Resilience of our strategy (continued)

Barclays participated in the Bank of England’s Climate Biennial Exploratory Scenario (CBES) in 2021, which was a first phase. The bank also took part in the second phase of the CBES exercise in 2022. These exercises were exploratory and designed to assess financial institutions' capabilities and preparedness for dealing with financial and economic shocks stemming from climate risks. The CBES exercise was a significant undertaking for the bank, requiring a material uplift in our climate risk quantification capabilities and approaches.

The ECB Climate Risk Stress Test (CRST), held in 2022, was an exploratory exercise designed to test climate stress testing capabilities and assess the financial resilience of participating banks. Both CBES and CRST were learning exercises for both supervisors and financial institutions and without direct implications on the capital requirements for the supervised banks.

In 2022, Barclays performed a sector-specific scenario analysis exercise to understand the impact of transition risks to the specific sectors over the short and medium term. The details of these exercises are covered in the next sections.

In 2022, and considering learnings from CBES Phase 1, Barclays has further developed understanding and use of climate scenario analysis by performing deep dives on available third-party climate scenarios, benchmarking internal climate methodologies and approaches to industry practice, and developing a consistent approach for the development of climate models across asset classes.

**Banks' climate losses as a result of counterfactual losses (%)**

| | Early action | Late action | No additional action | No additional action (illustrative adjustment) |
| :--- | :--- | :--- | :--- | :--- |
| Mortgages | 40 | 65 | 36 | 60 |
| Consumer credit | 95 | 100 | 35 | 65 |
| Wholesale | 95 | 100 | 35 | 55 |

**Banks’ total losses in the transition scenarios versus expected losses in hypothetical counterfactual scenario ($bn)**

*(Chart displays losses for "Late action", "Early action", and "Counterfactual scenario" over time from 2020 to 2050.)*

The size of the losses published by the Bank of England here broadly aligned to those Barclays estimated from the exercise.

**Source:** https://www.bankofengland.co.uk//2022/results-of-the-2021-climate-biennial-exploratory-scenario

Barclays has developed its approach and methodologies, including:
- refining corporate transition risk modelling by sourcing additional datasets on company emissions and transition plans, while factoring in sector-specific dynamics that the transition will pose
- enhancing corporate physical risk modelling, a key area of focus across the industry given the challenges it poses, by incorporating additional physical risk considerations such as knock-on geopolitical impacts and supply chain disruptions
- developing methodologies for a wide range of climate transmission channels for mortgage assets, at a high resolution of granularity, across physical risk hazards such as flood, subsidence, coastal flooding and storm, and transition risks including EPC costs and energy prices
- further incorporating these methodological approaches and enhancements into Climate Risk Management processes and frameworks.

Throughout 2022, Barclays have built on these learnings to inform our vision and plan for undertaking climate scenario analysis exercises. As our capabilities for scenario analysis evolve and mature, we expect these to increasingly inform the financial planning process and business strategy.

***

# Resilience of our strategy (continued)

### Climate Scenario Analysis Exercises and Insights

A number of external and internal scenario analysis exercises have been continued or undertaken during 2022, the details of which are provided below.

#### Climate Biennial Exploratory Scenario (CBES)
The objectives of the CBES exercise were to: (1) assess the magnitude of the financial exposures of the firms and financial system to climate change; (2) understand implications and resilience of a firm’s business model to a range of different climate scenarios; and (3) improve firms’ management of the financial risks from climate change. In order to achieve these objectives, the CBES utilised three scenarios that test a wide variety of pathways: (1) Early Action; (2) Late Action; and (3) No Additional Action. In the CBES exercise, carbon prices provide an indication of the level of transition risks in the scenarios. A summary of these scenarios is included in the table below.

| CBES scenario | Early Action (EA) | Late Action (LA) | No Additional Action (NAA) |
| :--- | :--- | :--- | :--- |
| **Description** | **An Early and Orderly Transition:** The transition to a net zero economy starts in 2021. Carbon taxes and other policies intensify relatively gradually over the scenario horizon. Global carbon dioxide emissions are reduced to net zero by around 2050. Global warming is limited to 1.8°C by the end of the scenario (2050) relative to pre-industrial levels. | **A Late and Disorderly Transition:** The implementation of policies to drive the transition is delayed until 2031 and is then more sudden and disorderly. Global warming is limited to 1.8°C by the end of the scenario (2050) relative to pre-industrial levels. The more compressed nature of the reduction in emissions results in material short-term macroeconomic disruption. | **Includes only policies in place before 2021:** Primarily explores physical risks from climate change. Here there are no new climate policies introduced beyond those already implemented. The absence of transition policies leads to a growing concentration of greenhouse gas emissions in the atmosphere and, as a result, global temperature levels continue to increase, reaching 3.3°C relative to pre-industrial levels by the end of the scenario (2080). |

Barclays submitted results for the first phase of this exercise in October 2021 and participated in the second round of submissions during 2022. This stage focused on the implications of the first-round responses to financial institutions' ability to manage climate risks and adapt business models. The CBES results were published by the Bank of England in 2022, with Barclays losses broadly in line with our banking market share. The aggregate results of this exercise across all participants can be seen on page 45.

**Insights from this exercise**
Learnings from the CBES exercise have informed our risk management approaches. This includes our evaluation and assessment of elevated risk sectors and enhancing our climate risk metrics reported to Climate Risk Committee and Board Risk Committee.

Additionally, a new requirement has been incorporated into the Client Assessment and Aggregation Standard, so that any lending request to a corporate defaulting under the CBES scenario will include enhanced due diligence on the impact of climate change on borrowers' financial conditions.

The CBES exercise will also inform a series of credit risk deep dives to be conducted in 2023, which will also take into account quantitative metrics including carbon intensity and client transition plan assessments.

+ Further details on our Climate risk management approach can be found from page 204.

#### ECB Climate Risk Stress Test
The ECB Climate Risk Stress Test (CRST) was an exploratory exercise designed to test climate stress testing capabilities and assess the financial resilience of participating banks.

Specifically, it explored: (1) banks’ capabilities and progress in developing climate risk stress testing frameworks; (2) the capacity of banks to produce climate risk factors; (3) the capacity of banks to produce climate risk stress test projections; (4) the risks banks are facing in the form of transition risks (both short-term and long-term) and acute physical risk events. This exercise was conducted for Barclays Bank Ireland’s portfolio under the ECB jurisdiction.

For the specific stress testing component of the exercise, four scenarios were used spanning multiple time horizons, emissions pathways and climate risk types. A summary of these scenarios is included on the next page.

To model Barclays' exposures to these scenarios, existing internal approaches were leveraged, for example the Corporate Transition Risk Model.

+ Further details on this model can be found at: home.barclays/content/dam/home-barclays/documents/citizenship/ESG/2021/Corporate-Transition-Forecast-Model-2021.pdf

New bespoke approaches were also developed specifically for this exercise. For example, the assessment of drought combined the gross value added curves provided by the ECB, which indicate the relative performance of a sector, with granular physical risk data from Moody’s, which includes heat stress scores for over 5,000 companies. The final impacts were reviewed by credit risk subject matter experts to ensure that impacts appeared intuitive to the scenario narrative and company specific factors.

**Insights from this exercise**
Overall, the climate impacts from the scenarios were considered manageable, with highest losses observed in the Wholesale Credit Portfolio under the Drought & Heat Risk scenario. We set out below a heat map of losses, indicating the relative impact of the climate stress scenario against the baseline scenario used within the exercise. The ECB also provided general feedback with respect to banks' stress-testing capabilities and its expectation that further progress will be made in the coming years.

A climate risk dashboard has been developed to monitor risks identified and to inform Barclays Bank Ireland Board Risk Committee.

***

# Resilience of our strategy (continued)

| Type | Scenario | Time period | Projections | Scenario Description |
| :--- | :--- | :--- | :--- | :--- |
| **Transition Risk** | Short term | 3 years | Disorderly | The short-term Disorderly transition scenario reflects a delayed implementation of government policy to reduce carbon emissions. In order to still meet the goals and timelines of the Paris Agreement, this scenario assess a sharp, unexpected increase in carbon prices in 2022. This is a less adverse scenario that the EU-wide European Banking Authority stress test which reflects a broad-based economic crisis. The disorderly scenario results in sectors strongly linked to fossil fuels experiencing the largest impact. |
| | Long term | 30 years | Orderly | The long-term scenario reflects the implementation of transition strategies across three possible trajectories: 1. An Orderly transition assumes early, ambitious government action to transition to a net zero CO$_2$ emissions economy by 2050; 2. A Disorderly transition assumes CO$_2$ emissions do not decrease quickly enough until 2030. This triggers action that is late, disruptive, sudden and unanticipated to meet emission targets by 2050; 3. A Hot-house transition assumes CO$_2$ emissions are not reduced and the economy is confronted with the materialisation of increasing physical risks, leading to, amongst other things, GDP losses. |
| **Physical Risk** | Drought and Heat | 1 year | Stress | The short-term Drought and Heat scenario reflects the physical risk of an extended period of hot weather and low rainfall. This scenario results in material output losses across the agriculture, manufacturing and construction sectors. |
| | Flood | 1 year | Stress | The short-term Flood scenario reflects the physical risk of a severe flood scenario in Europe. This scenario results in changes in the value of bank's underlying collateral, with a specific focus on mortgage portfolios. |

| Scenario | Scope | Stress impact |
| :--- | :--- | :--- |
| **Short-term stress** | Credit Risk - Wholesale | High |
| | Credit Risk - Retail | High |
| | Market Risk | Moderate |
| **Long-term stress** | Credit Risk - Wholesale | Long-term stress scenario projections were exploratory, therefore did not stress against Baseline. The ECB recommends results be interpreted as qualitative rather than quantitative. Retail portfolio experienced greater shocks in Hot-House scenario due to the macroeconomic impact on production, unemployment and subsequent impact on house prices, in contrast, Wholesale experienced the greatest shock in Disorderly scenario due to the impact of both macroeconomic factors and late introduction of more severe carbon price shocks. |
| | Credit Risk - Retail | |
| **Drought and heat risk** | Credit Risk - Wholesale | Critical |
| **Flood risk** | Credit Risk - Retail | Moderate |

**Key**
- Moderate
- High
- Critical

***

# Resilience of our strategy (continued)

### Power Utilities Bespoke Assessment

During 2022, Barclays also performed a targeted scenario analysis exercise on Power Utility clients to better understand transition risks to the sector over a short to medium term. This exercise was designed to support climate risk management and evolve climate risk modelling, with outputs indicating the change in risk profile for the sector rather than quantifying financial losses.

The scenario was informed by the Network for Greening the Financial System (NGFS) Delayed Transition scenario, and was designed in line with the Programme Finance Initiative (UNEP FI) and National Institute of Economic and Social Research (NIESR) guidance on exploring short-term climate-related shocks. The scenario shifts the transition period experienced in the NGFS scenario from 2032 and beyond to today, representing greater tail risk from rapid transition policies being introduced in a disorderly manner. This was done to ensure the exercise was informative and appropriate for risk management purposes.

The exercise leveraged Barclays' Corporate Transition Risk Forecast Model. In addition, the exercise involved some key assumptions, principally that regulated financial entities are less sensitive to climate factors, owing to regulatory support and ability to cover costs.

1. **Carbon price ($/tCO$_2$e):** (Chart shows EU, US, RoW prices rising to 2030.)
2. **Electric capacity mix (GW):** (Chart shows Coal, Gas, Nuclear, Renewable Capacity increasing to 2030.)
3. **Renewable capital costs (Index):** (Chart shows index decreasing from 100% to 80% to 2030.)

### Insights from this exercise

The exercise highlighted key conclusions warranting further investigation and action:
- transition scenarios represent a significant risk for Power companies with high carbon-intensive operations, given the high costs of transition (e.g. carbon prices, investment in renewables)
- there are existing transition risks in the EU Emissions Trading System that may lead to financial stress for major Power Utilities, and current geopolitical issues may accelerate this as EU companies rely further on coal to offset gas supply issues, driving emissions higher and further away from legally binding targets
- if companies pass through carbon-related costs to consumers, this will likely lead to consumer affordability issues, the dynamics of which are being observed today albeit from different drivers
- carbon hedging represents a potential mitigant against carbon tax and further investigation is needed on the extent of this activity and its effectiveness
- given the short-term nature of the scenario, the exercise assumed that companies would meet their five-year plans as currently disclosed, and would not be assessed or discounted based on a credibility assessment

The learnings from this exercise will form a broader power sector deep dive, to be conducted in 2023, which will take into account quantitative metrics including carbon intensity and client transition plan assessment.

Whilst the exercise provided insight and learning into this sector, the nature of this exploratory exercise, along with high model uncertainty, means that there were limitations to the analysis. For instance, forecasting the exact nature and timing of government policy is challenging, meaning that estimations must be made as to the format and magnitude these will take. The outputs and insights gained from this exercise will be used to enhance climate risk management processes, including to better quantify the impacts of climate change on the Bank's portfolio, to improve our understanding of how climate risks manifest in this sector, and to support Barclays' resilience to climate risk.

***

# Resilience of our strategy (continued)

### Evolution of approach

Having undertaken a number of climate scenario analysis exercises over the last four years, and gained a greater understanding of the challenges and nuances of climate modelling, Barclays has created and continues to evolve its models, methodologies and scenarios for conducting climate scenario analysis and stress testing for its portfolios.

### Climate models

Informed by these climate scenarios, Barclays is embarking on a journey to develop new, and enhance existing, climate models for specific portfolios.

These models are designed to produce climate-relevant credit risk metrics applicable to different use cases, for example climate-adjusted probability of default. These models will work with a range of climate scenarios and evaluate the impact of specific physical and transition risk drivers.

The below schematic shows the outline of the model design.

Barclays has initially focused on developing this approach for credit risk, given that this risk type has been the focus of climate scenario analysis to date.

1. Models consume climate scenario variables e.g. carbon pricing or flood risk
2. Over time, models will be designed and developed across a wide range of asset classes
3. Relevant climate risk drivers are analysed and evaluated to understand how they interact with the asset class
4. These risks are applied to metrics that drive credit risks within the asset class e.g. LTV for mortgages
5. Using these metrics, credit risk parameters can be obtained e.g. PD or LGD
6. These outputs can be integrated into different downstream use cases e.g. stress testing
7. Models can be used across different business lines within Barclays.

***

# Resilience of our strategy (continued)

### Challenges

Having undertaken a number of climate scenario analysis exercises, Barclays has gained a greater understanding of the challenges and nuances of climate modelling and continues to develop new and enhance existing tools for scenario analysis and stress testing. However, unique and complex features of climate risks, with potential tipping points and non-linearities, represent major challenges in terms of accurately capturing the impact of climate risks and effectively using the results of these exercises to inform various business activities. Some of the challenges include:

- climate change scenarios are often derived using models such Integrated Assessment Models (IAMs), which are complex and require deep understanding of feedback loops and module interactions. Over long-term time horizons, such scenarios may struggle to identify inflection points, or periods of heightened volatility caused by physical climate risks, and understanding such as events is important for climate risk management
- climate scenario risk analysis requires approaches and tools that are more granular (e.g. focus on company level analysis) which differs from more traditional stress testing exercises which are conducted at portfolio or sector level. This creates a need for more granular data which Barclays may not typically have maintained
- modelling typically occurs over long time horizons, which are subject to significant uncertainty. When modelling large and diverse portfolios, pinpointing where and when risks will manifest, and the magnitude of these, is challenging.

### Planned activity: Group-wide climate stress test

Barclays will be performing a Group-wide climate scenario analysis exercise in 2023, to test the impact to Barclays' portfolios from a severe but plausible climate scenario. This exercise is split across four phases over a five-year time horizon, including paths for Physical, Connected and Transition risk events:

- severe physical risks emanating from a climate ‘tipping point’, causing widespread impacts to physical systems, including sea level rise, drought and more severe changes in temperature including colder winter weather
- amplifying affects to the wider economy as physical risk events lead to changes in society, such as declining agricultural production and increased migration from severely impacted regions, potentially leading to severe price rises and inflation
- this results in various stakeholders taking mitigating actions, including transition action from policy spheres and consumers switching consumption habits to more sustainable practices
- additional non-financial risk impacts including legal and conduct risks are explored, to holistically assess the plausible set of events that manifest from climate change.

Through detailed research, it has become clear that there is significant uncertainty within the scientific community around how major changes to the environment may impact weather patterns, given the complexity and interconnections involved. In order to calibrate the scenario, the following sources have been used: a) academic evidence where available, b) tail events that have occurred throughout history, or c) comparable events driven by non-climate factors. However, we acknowledge the limitations of running a scenario as outlined above.

The exercise will be used as part of Barclays' ongoing climate risk management, to better quantify the impacts of climate change on the Bank’s portfolios and balance sheet. This will enable Barclays to improve its understanding of how climate risks interact with macroeconomic stresses and to support Barclays' resilience to climate risk.

+ Further details on the impact of climate-related risks and opportunities on our business, strategy and financial planning can be found on pages 19 and 21.

***

# Resilience of our strategy (continued)

### Resilience of our strategy, taking into consideration different climate-related scenarios

As described above, we use scenario analysis to help us assess and quantify potential impacts of climate change.

Based on the stress tests undertaken to date, our current best understanding of the resilience of our business is that the impacts of the climate scenarios we have so far explored, even over the long term, are more benign than the scenarios we generally use to test the resilience of our business. Under the CBES exercise, our business remained resilient under all scenarios. Under the ECB exercise, we did find that the Barclays Europe portfolios (as a sub-set of the Barclays' Group exposures) were vulnerable under the long-term scenarios given their exposure to power and gas utilities.

Under the CBES exercise, we found that Barclays’ existing strategic plans to manage emerging climate risks and to align our financing to the goals and timelines of the Paris Agreement in part mitigate some of the risk in at least two of the three scenarios – the Early Action and Late Action scenarios.

The Late Action scenario indicated greater disruption compared with the Early Action scenario due to the delay in policy incentives, which amplified the transition risks faced by our clients. In this scenario, there would be a greater need and opportunity to support our clients to adapt, where they are in sectors most vulnerable to transition risks. However, our strategic plans to transition our portfolio reduces our risk exposure in both these scenarios.

In the No Additional Action scenario, the world would experience heightened physical risks in the longer-term. Without any additional policy support to incentivise the transition, the gap between our ambition to transition to net zero and the emissions reductions observed in the economy would increase. While we might see less transition risk in this scenario, Barclays would need to consider the implications of such divergence and manage increasing exposure to physical risks faced by certain segments of customers and clients we serve.

We recognise that we have more work to do in order to reach a more comprehensive and deeper understanding of the resilience of our business under various climate scenarios. We also aim to more fully integrate climate scenario analysis into our strategic and financial planning over time as our capabilities in the area of scenario analysis evolve further.

### Macro-dependencies and objectives

We consider that, at a high level, the following areas represent some of the macro-dependencies that may impact our clients, customers and suppliers, and thus our ability to deliver our climate strategy:

- policy clarity is needed across the real economy, sector by sector, and country by country, to ensure shared expectations and aligned objectives. Without clear milestones that lead to full decarbonisation, there is uncertainty around where finance should flow to support economy-wide decarbonisation
- a comprehensive carbon-pricing scheme could be an efficient way to support the transition to net zero. Barclays Research shows current prices (avg $6/tCO$_2$) are insufficient to achieve 1.5°C or 2°C targets
- many technological innovations and wider activities needed for the net zero transition need to become more attractive to lenders through improved risk / return ratios. Currently, technology solutions such as carbon capture or hydrogen are yet to achieve full commercial scalability, limiting access to less expensive forms of capital. Larger amounts and less costly capital could be unlocked via blended finance
- a wide variety of sector-specific, supply-side challenges need to be addressed on a case-by-case basis. For example, the UK is encountering a skills shortage in the construction sector which will impact retrofitting of housing stock
- greater confidence, action and awareness among consumers in wider society could facilitate private investment into the conduits where it could have the most impact to change behaviour. This includes the need for households to see sufficient return on investment in low-carbon products to create incentives to act
- improved access to client sustainability-related risk and impacts data would allow for better assessments of Scope 3 emissions, and therefore allow full integration of these factors into decision-making. Government and regulators should recognise that corporate and financial sector reporting will improve over time, with some challenges likely to persist over the coming years due to data gaps.

+ Further details on our assessment of material existing and emerging risks, including climate risk, can be found from page 195.

In addition to the risks arising from our clients' and suppliers' transitions, we are also dependent on wider market and geopolitical developments outside our control. For example, progress may be impacted by geopolitical developments that result in energy supply pressures, such as the conflict in Ukraine, or by the varying pathways that individual companies take as a result of the technologies available to them to transition.

***

# Important information / Disclaimers

### Disclaimers

In preparing the climate and sustainability content within this report wherever it appears, we have:

- made a number of key judgements, estimations and assumptions, and the processes and issues involved are complex. This is for example the case in relation to financed emissions, portfolio alignment, classification of environmental and social financing, operational emissions and measurement of climate risk.
- used ESG and climate data, models and methodologies that we consider to be appropriate and suitable for these purposes as at the date on which they were deployed. However, these data, models and methodologies are subject to future risks and uncertainties and may change over time. They are not of the same standard as those available in the context of other financial information, nor subject to the same or equivalent disclosure standards, historical reference points, benchmarks or globally accepted accounting principles. There is an inability to rely on historical data as a strong indicator of future trajectories, in the case of climate change and its evolution. Outputs of models, processed data and methodologies will also be affected by underlying data quality which can be hard to assess or challenges in accessing data on a timely basis.
- continued (and will continue) to review and develop our approach to data, models and methodologies in line with market principles and standards as this subject area matures. The data, models and methodologies used and the judgements estimates or assumptions made are rapidly evolving and this may directly or indirectly affect the metrics, data points and targets contained in the climate and sustainability content within the Annual Report. Further development of accounting and/or reporting standards could impact (potentially materially) the performance metrics, data points and targets contained in this report. In future reports we may present some or all of the information for this reporting period using updated or more granular data or improved models, methodologies, market practices or standards or recalibrated performance against targets on the basis of updated data. Such re-presented, updated or recalibrated information may result in different outcomes than those included in this section of the Annual Report. It is important for readers and users of this report to be aware that direct like-for-like comparisons of each piece of information disclosed may not always be possible from one reporting period to another. Where information is re-presented, recalibrated or updated from time to time, our principles based approach to reporting financed emissions data (see page 27) sets out when information in respect of a prior year will be identified and explained.

### Information provided in climate and sustainability disclosures

What is important to our investors and stakeholders evolves over time and we aim to anticipate and respond to these changes. Disclosure expectations in relation to climate change and sustainability matters are particularly fast moving and differ in some ways from more traditional areas of reporting in the level of detail and forward-looking nature of the information involved and the consideration of impacts on the environment and other persons.

We have adapted our approach in relation to disclosure of such matters. Our disclosures take into account the wider context relevant to these topics, including evolving stakeholder views, and longer time-frames for assessing potential risks and impacts having regard to international long-term climate and nature-based policy goals. Our climate and sustainability-related disclosures are subject to more uncertainty than disclosures relating to other subjects given market challenges in relation to data reliability, consistency and timeliness, and in relation to the use of estimates and assumptions and the application and development of methodologies. These factors mean disclosures may be amended, updated, and recalculated in future as market practice and data quality and availability develops.

***

# Governance

Our governance framework facilitates the effective management of the Group across its diverse businesses.

### Board Governance
- **Directors’ report**
- **Our Board of Directors:** 55
- **Our Group Executive Committee:** 59
- **Our Governance Framework:** 61
- **Key Board Activities in 2022:** 66
- **Board Nominations Committee report:** 69
- **Board Audit Committee report:** 81
- **Board Risk Committee report:** 90
- **How we comply:** 98
- **Shareholder Q&A:** 100
- **Other statutory and regulatory information:** 102
- **Remuneration report:** 119

### Other Governance
- **Climate and sustainability governance:** 169
- **Managing impacts in lending and financing:** 175
- **The Barclays Way:** 178
- **Whistleblowing:** 179
- **Tax:** 180
- **Financial crime:** 182
- **Health and safety:** 183
- **Managing data privacy, security and resilience:** 184

***

# Board Governance

Welcome to our 2022 Board Governance report. The report sets out the composition of our Board and our Executive Committee and explains how our Board governance framework operates, alongside the key areas of focus of our Board and Board Committees in 2022.

### Aim of our governance
The primary aim of our governance is that it:
- seeks to ensure that our decision-making is aligned to our Purpose, Values and Mindset
- creates long-term sustainable value for our shareholders, having regard to the interests of all our stakeholders
- is effective in providing constructive challenge, advice and support to management
- provides checks and balances and drives informed, collaborative and accountable decision-making.

### Compliance with the Code
- Our Board Governance report reflects the requirements of the 2018 UK Corporate Governance Code (the Code).
- To view how we comply with the Code, please see pages 98 to 99.

Certain additional information, signposted throughout this report, is available at home.barclays/corporategovernance

***

# Directors’ report: Our Board of Directors

Guided by our Purpose, Values and Mindset in leading the Group.

### Committee membership key:
- **AC:** Audit Committee Member
- **NC:** Nominations Committee Member
- **ReC:** Remuneration Committee Member
- **RiC:** Risk Committee Member
- **Chair:** Committee Chair

#### Nigel Higgins (Group Chairman)
- **Appointed:** March 2019 (Board), May 2019 (Chairman)
- **Skills, experience and contribution:** Seasoned business leader with extensive experience in, and understanding of, banking and the financial services industry; strong track record in leading and chairing organisations; significant experience in providing strategic advice to major international organisations and governments; keenly focused on culture and corporate governance.
- **Nigel's background:** Nigel spent 36 years at Rothschild & Co. where he was most recently Deputy Chairman. Prior to that he was Chairman of the Group Executive Committee and Managing Partner of Rothschild & Co.
- **Key current appointments:** Chairman, Sadler’s Wells; Non-Executive Director, Tetra Laval Group.

#### C.S. Venkatakrishnan (Group Chief Executive)
- **Appointed:** November 2021
- **Skills, experience and contribution:** Highly regarded leader with significant global banking experience; extensive background in financial markets and risk management; deep understanding of the business and the areas within which the Group operates.
- **Venkat's background:** Prior to his appointment as Group Chief Executive, Venkat served as Head of Global Markets and Co-President of Barclays Bank PLC from October 2020 and Group Chief Risk Officer from 2016 to 2020. Before joining Barclays in 2016, Venkat worked at JPMorgan Chase from 1994, holding senior roles in Asset Management, Investment Banking, and in Risk.
- **Key current appointments:** Board Member, Institute of International Finance; Advisory member to the Board, Massachusetts Institute of Technology Golub Centre for Finance and Policy; Member of the UN Environment Programme Finance Initiative Leadership Council.

#### Brian Gilvary (Senior Independent Director (SID))
- **Appointed:** February 2020 (Board), January 2021 (SID)
- **Skills, experience and contribution:** Extensive senior level experience of management, finance and strategy; deep experience of US and UK shareholder engagement; significant experience with, and understanding of, the challenges and opportunities inherent in advancing a sustainable energy future.
- **Brian's background:** Brian spent much of his career with BP p.l.c. in senior leadership roles, where he was most recently Chief Financial Officer. His other senior-level experience includes serving on the boards of various commercial and charitable organisations. Brian was Chair of The 100 Group of FTSE 100 Finance Directors, a member of the UK Treasury Financial Management Review Board and has served on various HRH Prince of Wales' Business in the Community Leadership Teams.
- **Key current appointments:** Non-Executive Chair, INEOS Energy, an INEOS group company.

***

# Directors’ report: Our Board of Directors (continued)

#### Mike Ashley (Independent Non-Executive Director)
- **Appointed:** September 2013
- **Skills, experience and contribution:** Specialised knowledge of accounting and audit related matters; extensive experience of auditing large international financial institutions; deep financial services and regulatory knowledge and experience.
- **Background:** Mike previously worked at KPMG for over 20 years. Mike's former roles include acting as the lead engagement partner on the audits of large financial services groups including HSBC, Standard Chartered and the Bank of England, as Head of Quality and Risk Management for KPMG Europe LLP and as KPMG UK's Ethics Partner. Mike will retire from the Board with effect from the conclusion of the 2023 AGM.
- **Key current appointments:** Member, Cabinet Office Board; Member, UK Endorsement Board; Treasurer, The Scout Association.

#### Robert Berry (Independent Non-Executive Director)
- **Appointed:** February 2022
- **Skills, experience and contribution:** Proven track record of management of risk exposure for a global financial institution and building a modern group-wide risk management organisation; strong record of integrating risk management with strategy; significant experience in finance, model development and trading.
- **Background:** Robert has robust risk management expertise having had a 28-year career at Goldman Sachs, where, prior to his retirement in 2018, he held the role of Co-Deputy Chief Risk Officer.
- **Key current appointments:** Board President, Alina Lodge.

#### Tim Breedon CBE (Independent Non-Executive Director)
- **Appointed:** November 2012
- **Skills, experience and contribution:** Significant experience in strategic planning; extensive financial services experience; detailed knowledge of risk management and UK and EU regulation. Tim is a member of the Board and is also Chair of Barclays Bank Ireland PLC (also referred to as Barclays Europe).
- **Background:** He had a distinguished career with Legal & General, where, among other roles, he was the Group Chief Executive Officer until June 2012. Tim also served as Chair of the Association of British Insurers.
- **Key current appointments:** Chairman, Apax Global Alpha Limited; Non-Executive Director, Quilter PLC.

#### Anna Cross (Group Finance Director)
- **Appointed:** April 2022
- **Skills, experience and contribution:** Extensive accounting and financial services expertise; deep understanding of banking and retail sectors; significant financial leadership experience of financial institutions. Anna is a chartered accountant and Group Finance Director with responsibility for Finance, including Tax, Treasury, Investor Relations and Strategy.
- **Background:** Prior to joining Barclays, Anna worked in both banking and retail and held various roles at Asda, HBOS and Lloyds Banking Group. Since joining Barclays in 2013, Anna was appointed Chief Financial Officer of Barclays Bank UK PLC in 2016, Group Financial Controller in 2019 and Deputy Group Finance Director in 2020. She joined the Group Executive Committee in February 2022, before taking up the role of Group Finance Director in April 2022.
- **Key current appointments:** None.

***

# Directors’ report: Our Board of Directors (continued)

#### Mohamed A. El-Erian (Independent Non-Executive Director)
- **Appointed:** January 2020
- **Skills, experience and contribution:** Highly respected economist and investor; extensive experience in the asset management industry and multilateral institutions; deep knowledge and understanding of international economics and financial services sector.
- **Background:** Mohamed currently serves as President of Queens' College, Cambridge University. He is Chief Economic Advisor at Allianz SE, the corporate parent of PIMCO (Pacific Investment Management Company LLC) where he formerly served as Chief Executive and Co-Chief Investment Officer. Mohamed is a regular columnist for Bloomberg Opinion and a contributing editor at the Financial Times. He spent 15 years at the IMF where he served as Deputy Director before moving to the private sector and financial services.
- **Key current appointments:** Lead Independent Director, Under Armour Inc.; Chief Economic Adviser, Allianz SE; Chairman, Gramercy Funds Management; Senior Advisor, Investcorp Bank BSC.

#### Dawn Fitzpatrick (Independent Non-Executive Director)
- **Appointed:** September 2019
- **Skills, experience and contribution:** Extensive management experience of international financial institutions; strong financial and strategic leadership experience; detailed knowledge of the markets in which the Group operates.
- **Background:** Dawn holds the role of Chief Executive Officer and Chief Investment Officer at Soros Fund Management LLC. Her previous experience includes 25 years with UBS, most recently as Head of Investments for UBS Asset Management.
- **Key current appointments:** Chief Executive Officer and Chief Investment Officer, Soros Fund Management LLC; Member, Advisory Board and Investment Committee of the Open Society Foundations’ Economic Justice Programme; Advisory Council Member, The Bretton Woods Committee.

#### Mary Francis CBE (Independent Non-Executive Director)
- **Appointed:** October 2016
- **Skills, experience and contribution:** Extensive board-level experience across a range of industries; strong focus on reputation management and promoting board governance values; detailed understanding of the interaction between public and private sectors.
- **Background:** Mary's previous appointments include Non-Executive Directorships at the Bank of England, Alliance & Leicester, Aviva, Centrica and Swiss Re Group. In her executive career, Mary held senior positions with both HM Treasury and the Prime Minister's Office and served as Director General of the Association of British Insurers.
- **Key current appointments:** Senior Independent Director, PensionBee Group PLC; Member, UK Takeover Appeal Board.

#### Crawford Gillies (Independent Non-Executive Director)
- **Appointed:** May 2014
- **Skills, experience and contribution:** Extensive business transformation and management experience in international and cross-sector organisations; deep understanding and experience of stakeholder engagement; strong leadership qualities and expert at strategic decision-making. Crawford is a member of the Board having previously held the roles of Senior Independent Director and Chair of the Board Remuneration Committee. He is Chair of Barclays Bank UK PLC.
- **Background:** Crawford has held a number of roles during his 30-year career including Managing Partner Europe of Bain & Company, Chair of Scottish Enterprise and the Confederation of British Industry London (CBI) and Non-Executive Director roles at both Standard Life and SSE. Crawford will retire from the Board with effect from 31 May 2023.
- **Key current appointments:** Chairman, Edrington Group.

***

# Directors’ report: Our Board of Directors (continued)

#### Marc Moses (Independent Non-Executive Director)
- **Appointed:** January 2023
- **Skills, experience and contribution:** Strong technical finance background in accounting and audit-related matters; significant board and senior executive-level risk management experience; extensive knowledge of banking and financial services.
- **Background:** Marc was appointed to the Board on 23 January 2023. His financial services experience extends over 43 years, initially as a trader and then in senior executive roles as an audit partner at PwC, and Chief Financial Officer of JPMorgan Europe. He joined HSBC in 2005 where he was Chief Risk Officer for nine years and joined the group board as an executive director in 2014. He retired from HSBC in 2019.
- **Key current appointments:** None.

#### Diane Schueneman (Independent Non-Executive Director)
- **Appointed:** June 2015
- **Skills, experience and contribution:** Significant experience of managing global, cross-discipline business operations and client services in the financial services industry; strong transformational programme experience; extensive technology and information security expertise. Diane is Chair of Barclays Execution Services Limited and a member of the Board of Barclays US LLC.
- **Background:** Diane was previously Global Chief Infrastructure Officer of Merrill Lynch, where she was responsible for all technology and operations across retail, corporates and banking.
- **Key current appointments:** None.

#### Julia Wilson (Independent Non-Executive Director)
- **Appointed:** April 2021
- **Skills, experience and contribution:** Significant board and executive-level strategic and financial leadership experience; extensive accounting, audit and financial services expertise; strong UK regulatory experience.
- **Background:** Julia is a chartered accountant and was the Group Finance Director of 3i Group plc, having served on its board since 2008 until she stepped down in June 2022. Prior to joining 3i she was Group Director of Corporate Finance at Cable & Wireless where she also held a number of finance-related roles. Julia was appointed as a Non-Executive Director at Legal & General Group PLC in 2011. She chaired L&G’s Audit Committee between 2013 and 2016 and was Senior Independent Director from 2016 until she stepped down from L&G in March 2021. Julia served as the Chair of The 100 Group of FTSE 100 Finance Directors from June 2020 until September 2022. Julia will take over the role of Chair of the Board Audit Committee (subject to regulatory approval) with effect from 1 April 2023.
- **Key current appointments:** None.

#### Stephen Shapiro (Group General Counsel and Group Company Secretary)
- **Appointed:** November 2017
- **Relevant skills and experience:** Stephen is an experienced lawyer and company secretary with a deep understanding of legal, corporate governance and regulatory matters. Holding the combined role of Group General Counsel and Group Company Secretary, he oversees Barclays’ global Legal and Corporate Secretariat functions. Stephen is also a member of the Group Executive Committee.
- **Career:** Stephen previously served as the Group Company Secretary and Deputy General Counsel of SABMiller plc. Prior to this, he practised law as a partner in a law firm in South Africa, and subsequently in corporate law and M&A at Hogan Lovells in the UK. He was appointed as Group Company Secretary of Barclays in November 2017 and was subsequently appointed Group General Counsel in August 2020, in addition to his role as Company Secretary. Stephen is an active industry contributor and serves as a member of the GC100 Executive Committee, the association of General Counsel and Company Secretaries working in FTSE 100 companies, having previously served as Vice-Chair until January 2022. Stephen also previously served as Chairman of the ICC UK’s Committee on Anti-Corruption.

***

# Directors’ report: Our Group Executive Committee

## Continuing to lead the delivery of Barclays’ strategic priorities

The right balance of skills and experience to lead the execution of the Group's strategy.

As our most senior management committee for the Group, our Group Executive Committee (ExCo) supports the Group Chief Executive in executing the Group’s strategy. As reported in our 2021 Annual Report, C.S. Venkatakrishnan (known as Venkat) was appointed as Group Chief Executive in November 2021, following which he made a series of changes to the composition of ExCo to bring together the right balance of skills and experience to deliver for our stakeholders and to lead the execution of the Group's strategy.

Over 2022, we have seen how ExCo has supported the Group in enabling us to deliver a robust performance.

### Changes to ExCo in 2022

#### Group Finance Director
Anna Cross joined ExCo on 23 February 2022, ahead of her appointment as Group Finance Director and Executive Director of Barclays PLC (BPLC) on 23 April 2022.

Anna brings significant skills and experience to ExCo, as set out in her biography on page 56. Anna joined the Group in 2013 and held the role of Deputy Group Finance Director from July 2020, prior to which she was appointed Group Financial Controller in 2019 and before that held the role of Chief Financial Officer for Barclays Bank UK PLC (BBUKPLC).

A qualified chartered accountant, Anna has worked in both banking and retail and had previously held finance roles at leading financial and retail institutions.

#### Interim Group Chief Compliance Officer
Matthew Fitzwater was appointed Interim Chief Compliance Officer and member of ExCo with effect from 1 November 2022, subject to regulatory approval, while we complete our search for a permanent successor. Matthew was most recently our General Counsel for Conduct, Customer and Client Affairs and brings to ExCo a wealth of legal and regulatory experience from a career spanning the US and the UK.

### Changes to ExCo in 2023

#### Group Chief Operating Officer and Chief Executive, BX
With effect from 1 February 2023, Alistair Currie was appointed Group Chief Operating Officer (subject to regulatory approval) and Chief Executive of Barclays Execution Services Limited (BX). With his experience leading customer delivery, as well as operational and business transformation, Alistair is ideally placed to continue the momentum created by his predecessor, Mark Ashton-Rigby.

#### Global Head of Consumer Banking and Payments
Vim Maru was appointed Global Head of Consumer Banking and Payments with effect from 1 February 2023, subject to regulatory approval. Vim brings to Barclays deep experience of consumer banking and a passion for leading the continued evolution of our industry. Vim's leadership will be a great asset to Barclays.

### Standing attendees and ex-officio posts

Recognising the strategic importance of our technology and cyber agenda, in October 2022 we welcomed Craig Bright, our Chief Information Officer, as a standing attendee to ExCo. Craig is responsible for Barclays’ technology strategy, leading the delivery of our digital transformation across both our consumer and wholesale businesses.

ExCo continues to utilise ex-officio positions on the Committee to broaden the scope of perspectives and contributions made, as well as to provide specialist input, with each appointee serving for a four-month rotation.

ExCo meetings are also attended on a regular basis by the Group Chief Internal Auditor, Lindsay O’Reilly.

We are grateful for the significant contributions made by the outgoing ExCo members, as set out below.

- Tushar Morzaria stepped down as Group Finance Director in April 2022.
- Laura Padovani stepped down as Group Chief Compliance Officer in October 2022.
- Mark Ashton-Rigby stepped down as Group Chief Operating Officer and Chief Executive, BX in January 2023.

***

# Directors’ report: Our Group Executive Committee (continued)

## Group Executive Committee

- **C.S. Venkatakrishnan:** Group Chief Executive
- **Anna Cross:** Group Finance Director
- **Paul Compton:** Global Head of the Corporate and Investment Bank and President of BBPLC
- **Alistair Currie:** Group Chief Operating Officer and Chief Executive, BX
- **Matthew Fitzwater:** Interim Group Chief Compliance Officer
- **Matt Hammerstein:** Chief Executive Officer, Barclays UK
- **Vim Maru:** Global Head of Consumer Banking and Payments
- **Tristram Roberts:** Group Human Resources Director
- **Taalib Shaah:** Group Chief Risk Officer
- **Stephen Shapiro:** Group General Counsel and Company Secretary
- **Sasha Wiggins:** Group Head of Public Policy and Corporate Responsibility

### Standing attendees
- **Craig Bright:** Chief Information Officer
- **Lindsay O’Reilly:** Group Chief Internal Auditor

### 2022/2023 Ex-officio posts
- **Koral Anderson:** Interim Chief Operating Officer, Barclays UK$^a$
- **Laura Barlow:** Group Head of Sustainability
- **Susannah Parden:** Group Chief Accounting Officer
- **Ingrid Hengster$^b$:** CEO, Barclays Germany

**a** During her tenure as ExCo ex-officio, Koral Anderson held the role of Chief Procurement Officer.
**b** Current ex-officio, February 2023.

***

# Directors’ report: Our Governance Framework

## A Group-wide governance framework facilitating effective decision making

Driving long-term sustainable value for our shareholders, with regard to the interests of our stakeholders.

### Board Governance Framework

**Barclays PLC Board**
Responsible for the overall leadership of the Group (with direct oversight of matters relating to strategy, reputation and culture)

| Board Nominations Committee | Board Audit Committee | Board Risk Committee | Board Remuneration Committee |
| :--- | :--- | :--- | :--- |
| Reviews the composition of, and appointments to, the Board, Board Committees, and ExCo | Reviews financial reports and monitors the internal control environment | Monitors financial, operational and legal risk appetite | Sets principles and parameters of remuneration policy across the Group |
| + For more information see page 69. | + For more information see page 81. | + For more information see page 90. | + For more information see page 119. |

### Governance framework
The Board recognises that effective governance is key to the successful development and execution of the Group’s strategy. We think of governance as how the Board makes decisions and provides oversight in order to promote Barclays’ success for the long-term sustainable benefit of our shareholders, having regard to the interests of our key stakeholders (including our clients, customers, colleagues and the society in which we operate).

Our Group-wide governance framework, described in this report, is designed to:
- facilitate the effective management of the Group across its diverse businesses by our Group Chief Executive and his ExCo
- preserve constructive challenge, and support and provide oversight of the Group’s major subsidiary boards in the UK, Ireland and the US, consistent with the legal, regulatory and independence requirements applicable to those entities.

Generally, there is one set of rules for the Group. Group-wide frameworks, policies and standards are adopted throughout the Group unless local laws or regulations, for example, the ring-fencing obligations applicable to BBUKPLC, require otherwise, or ExCo decides it would otherwise be appropriate in a particular instance.

### Group structure
BPLC is the Group’s parent company and has a premium listing on the London Stock Exchange.

Each of the Group’s key operating entities – Barclays Bank PLC (BBPLC), BBUKPLC, Barclays Europe, Barclays US LLC and Barclays Bank Delaware – has its own board (with Executive and Non-Executive Directors) and Board Committees.

These main operating companies are supported by our Group-wide service company, BX, which provides technology, operations and functional services to businesses across the Group.

***

# Directors’ report: Our Governance Framework (continued)

### Corporate Governance Operating Manual
Our Corporate Governance Operating Manual sets out how the Group’s entities (and their respective Boards and Board Committees) should interact with each other, while also providing guidance and clarity for management and Directors as to how these relationships and processes should work in practice. This is a dynamic document that continues to evolve with the changing nature of the Group.

### The role of the Board
The BPLC Board sets the purpose, strategic direction and risk appetite for the Group and is the ultimate decision-making body for matters of Group-wide strategic, financial, regulatory or reputational significance.

We partially consolidated and streamlined the membership of the BPLC and BBPLC Boards in 2019, to improve coordination and efficiency while reducing complexity and unnecessary duplication.

As a result, membership of the BBPLC Board is a subset of the BPLC Board, with all members of the BPLC Board (except the SID, Chair of BBUKPLC and at least one other Non-Executive Director) also serving on the Board of BBPLC.

We believe that having members of the BPLC Board serve as the Chairs of some of the Group’s main subsidiaries supports improved coordination, efficiency and escalation, whilst enabling an appropriate focus on matters relevant to each entity.

#### How the Board discharged its responsibilities in 2022
*(Diagram illustrating the flow of responsibilities: Setting strategy and, Challenging and supporting management to drive sustainable value creation through, Entrepreneurial and ethical leadership and by engaging with our stakeholders and, Promoting our culture, Purpose, Values and Mindset within, A framework of effective internal and financial control and prudent risk management all in, Compliance with law and regulation, Board responsibilities.)*

### Spotlight: Board engagement with stakeholders
The Board strongly believes in the value of engaging directly with our stakeholders and in 2022 Board members continued to engage with our shareholders, including extensive engagement by our Chairman and SID ahead of the 2022 AGM. The Chairman also met with institutional investors throughout the course of the year, and the Group Chief Executive and Group Finance Director held briefings with investors at each set of quarterly results.

The Board recognises that our colleagues are critical to our success, and our continued investment in them protects and strengthens our culture. In addition to receiving formal updates about colleague engagement and sentiment, the Board also met colleagues to hear their feedback at various events held during the year.

Board members also participated in events with other stakeholders. These engagements bring valuable outside perspectives to the Board. Other Board engagement with stakeholders in 2022 included:
- a site visit to the Barclays Radbroke campus to meet colleagues and explore first-hand their skills, experience and career aspirations
- the Board held a reception with senior female leaders in New York, together with members from the Boards of Barclays US LLC and Barclays Bank Delaware
- the Chairman, Tim Breedon and Crawford Gillies facilitated a Lifeskills workshop at a London school
- the Group Chief Executive held engagement sessions with colleagues, including quarterly Group results town halls, Business and Function town halls, and Employee Resource Group sessions
- the Group Finance Director participated in colleague events, including during Multi-Generational Week and Women in Junior Banking events. She also met with environmentally-focused companies that Barclays is supporting
- Mohamed A. El-Erian, Dawn Fitzpatrick and Brian Gilvary participated in various colleague and client events.

***

# Directors’ report: Our Governance Framework (continued)

### Matters reserved to the Board
Matters reserved solely for the decision-making power of the Board are set out in our bespoke Matters Reserved to the Board. Those matters include material decisions relating to strategy, risk appetite, medium term plans, capital and liquidity plans, risk management and controls frameworks, approval of financial statements, approval of large transactions and the approval of share allotments, dividends and share buybacks.

The Board has delegated the responsibility for making and implementing operational decisions and running the Group’s business on a day-to-day basis to the Group Chief Executive, supported by his ExCo.

### Board effectiveness
We assess the effectiveness of our Board, its Committees and individual Directors on an annual basis, in line with the requirements of the Code. Following an externally conducted evaluation in 2021, the Board, Board Committee and individual Director effectiveness review for 2022 was carried out internally, led by our SID and supported by the Deputy Company Secretary. You can read more about the 2022 effectiveness review, and progress against recommendations from the 2021 review, in the report of the Board Nominations Committee on pages 78 to 80.

+ You can read about the key activities of the Board during 2022 on pages 66 to 68.

### Attendance
Directors are expected to attend every Board meeting. Where a Director was not able to attend a Board meeting, the relevant Director's views were made known to the Chairman in advance of the meeting. The Chairman also met privately, on a regular basis, with each Non-Executive Director.

| Board attendance in 2022 | Independent/ Executive | Scheduled meetings eligible to attend | Scheduled meetings attended | % attendance | Ad hoc meetings eligible to attend | Ad hoc meetings attended$^a$ |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| **Chairman** | | | | | | |
| Nigel Higgins | On appointment$^b$ | 14 | 14 | 100% | 5 | 5 |
| **Executive Directors** | | | | | | |
| C.S. Venkatakrishnan | Executive | 14 | 14 | 100% | 5 | 5 |
| Anna Cross$^c$ | Executive | 12 | 12 | 100% | 3 | 3 |
| **Non-Executive Directors** | | | | | | |
| Mike Ashley | Independent | 14 | 14 | 100% | 5 | 5 |
| Robert Berry$^d$ | Independent | 14 | 14 | 100% | 5 | 5 |
| Tim Breedon | Independent | 14 | 12$^e$ | 86% | 5 | 5 |
| Mohamed A. El-Erian | Independent | 14 | 13$^f$ | 93% | 5 | 2 |
| Dawn Fitzpatrick | Independent | 14 | 12$^g$ | 86% | 5 | 5 |
| Mary Francis | Independent | 14 | 14 | 100% | 5 | 3 |
| Crawford Gillies | Independent | 14 | 14 | 100% | 5 | 5 |
| Brian Gilvary | Independent | 14 | 14 | 100% | 5 | 4 |
| Diane Schueneman | Independent | 14 | 14 | 100% | 5 | 4 |
| Julia Wilson | Independent | 14 | 14 | 100% | 5 | 5 |
| **Former Directors** | | | | | | |
| Tushar Morzaria$^h$ | Executive | 2 | 2 | 100% | 2 | 2 |

**Notes**
a A number of the ad hoc meetings were called at short notice, which resulted in some Directors being unable to attend.
b As required by the Code, the Chairman was independent on appointment.
c Anna Cross was appointed to the Board with effect from 23 April 2022.
d Robert Berry was appointed to the Board with effect from 8 February 2022.
e Tim Breedon was unable to attend the two meetings (held on consecutive days) due to illness.
f Mohamed A. El-Erian was unable to attend due to a prior commitment.
g Dawn Fitzpatrick was unable to attend the two meetings (held on consecutive days) due to a bereavement.
h Tushar Morzaria stepped down from the Board with effect from 22 April 2022.

***

# Directors’ report: Our Governance Framework (continued)

### Division of responsibilities

#### Roles on the Board and Charter of Expectations
In line with the provisions of the Code, a clear division of responsibilities has been established between Executive and Non-Executive Directors, as shown in the table below.

Our Charter of Expectations sets out individual role profiles and required behaviours and competencies for the Chair, SID, Non-Executive Directors, Executive Directors and Committee Chairs.

We review our Charter of Expectations annually, to ensure it remains relevant and accurately reflects the requirements of the Code, the Companies (Miscellaneous Reporting) Regulations 2018 and industry best practice.

| Role on Board | Responsibilities |
| :--- | :--- |
| **Chair** | As Chair, Nigel Higgins is responsible for:<br>• leading the Board and its overall effectiveness in directing the company<br>• demonstrating objective judgement<br>• promoting a culture of openness and inclusion, and facilitating and encouraging open constructive challenge and debate between all Directors, and which challenges executives where appropriate<br>• ensuring the Board as a whole has a clear understanding of the views of shareholders<br>• facilitating constructive board relations and the effective contribution of all Non-Executive Directors<br>• ensuring Directors receive all information in an accurate, timely and clear form that is relevant to discharge their obligations<br>• developing and monitoring, with the support of the Board Nominations Committee, effective induction, training and development for the Board. + You can read more about the skills and experience Nigel brings to the Board in his biography on page 55. |
| **Group Chief Executive** | As the Group Chief Executive, Venkat is supported in his role by the ExCo, and leads the Executive Directors in:<br>• making and implementing operational decisions and running the Group's business on a day-to-day basis<br>• leading Barclays towards the achievement of its strategic objectives and implementing the strategy decisions taken by the Board<br>• assisting the Board in considering strategic issues, and ensuring that decisions taken are in the Group's best interests<br>• actively promoting and demonstrating the appropriate culture, values and behaviours of the boardroom, including upholding Barclays' Values and Mindset. + You can read more about the skills and experience Venkat brings to the Board in his biography on page 55 and can find further information on the membership of ExCo on page 60. |
| **Senior Independent Director (SID)** | As our SID, Brian Gilvary:<br>• provides a sounding board for the Chair, serving as a trusted intermediary for the other Directors and shareholders when necessary<br>• is available to shareholders if they have any concerns which contact through the normal engagement channels has failed to resolve, or for which such contact is inappropriate<br>• maintains contact with major shareholders to understand their issues and concerns, and supports the Chair in ensuring the Board is aware of the views of major shareholders<br>• leads the Non-Executive Directors in meeting at least annually to appraise the Chair's performance, and on other occasions as necessary. + You can read more about the skills and experience Brian brings to the Board in his biography on page 55. |
| **Non-Executive Directors** | Our Non-Executive Directors have responsibility for:<br>• providing effective oversight, strategic guidance and constructive challenge, helping to develop proposals on strategy and then empowering the Executive Directors to implement the Group’s strategy while scrutinising and holding to account the performance of management and Executive Directors against agreed performance objectives<br>• having a prime role, led by the Board Nominations Committee, in appointing and, where necessary, removing Executive Directors, and in succession planning for these roles. + You can read more about the skills and experience each of our Non-Executive Directors bring to the Board in their biographies on pages 55 to 58. |

+ You can find a copy of our Charter of Expectations , which sets the role profiles and required competencies for each of the roles described above, at home.barclays/who-we-are/our-governance/board-responsibilities.

***

# Directors’ report: Our Governance Framework (continued)

### Information provided to the Board
Our Chair is responsible for setting the Board’s agenda, primarily focused on strategy, performance, value creation, culture, stakeholders and accountability, and ensuring that Board members receive timely and high-quality information to enable them to make sound decisions and promote the success of BPLC.

Our Group Company Secretary, working in collaboration with the Chair, is responsible for ensuring good governance and information flow, to support the Board’s effectiveness. In 2022, we continued to strive for simplicity and clear focus in the Board’s agendas, papers and presentations, building on progress made in previous years.

The Board was kept informed of key business developments throughout the year through regular updates from the Executive Directors and senior executives, in addition to the presentations delivered to the Board and the Board Committees as part of formal meetings.

+ You can read more about the Board’s key activities in 2022, including updates received, on pages 66 to 68.

Where required to enable them to fulfil their obligations as members of the Board, Directors are able to seek independent and professional advice at Barclays’ expense.

### Board Committees
The Board is supported in its work by its Committees - the Board Nominations Committee, Board Audit Committee, Board Risk Committee and Board Remuneration Committee - each of which has its own terms of reference clearly setting out its remit and decision-making powers. This structure allows the Board to spend a significant proportion of its time focusing on the strategic direction of the Group.

The Board Committees are comprised solely of Non-Executive Directors, in line with best practice, and cross-membership between each Committee is shown in the table below.

The Chairs of each Committee report on their Committee’s work at every Board meeting and provide periodic written updates to the Board on the work of the Committee.

+ You can read more about the Board Committees, their membership and their work during 2022 later in this report.

#### Board Committee cross-membership in 2022
The table below shows the number of cross-memberships of the Non-Executive Directors across the Board Committees as at 31 December 2022.

| | Board Audit Committee | Board Nominations Committee | Board Remuneration Committee |
| :--- | :--- | :--- | :--- |
| **Board Risk Committee** | 4 | 4 | 2 |
| **Board Remuneration Committee** | | 1 | |
| **Board Nominations Committee** | 2 | | 1 |

***

# Directors’ report: Key Board Activities

## Key Board Activities in 2022

Keenly focused on strategy and promoting our Purpose, Values and Mindset to drive the long-term success of Barclays.

Against the backdrop of a changing macroeconomic and geopolitical environment in 2022, the Board retained its focus on Barclays’ strategy, working with the Group Chief Executive and his leadership team to drive forward the implementation of the Group’s strategy as set by the Board. We commend the work of our thousands of colleagues across the globe in delivering a strong financial performance during these challenging times. Furthermore, with the challenges of increased cost of living, and many facing financial pressure, we are proud of the steps that Barclays has taken to ensure that our customers and clients are supported at this critical time.

Within our overarching consideration of Group strategy matters, the Board continued to give significant consideration to our climate strategy in an evolving landscape of environmental, legal, regulatory and social considerations. Engagement with our shareholders and other stakeholders continues to be a key area of focus for the Board, and we were delighted for the first time since the onset of COVID-19 in early 2020 to welcome back shareholders in person at our AGM in 2022, while at the same time providing the ability for shareholders to attend online.

The Board spent significant time throughout 2022 in both scheduled and ad hoc meetings considering the impact of the Over-issuance of Securities and the Group's response to it, including through the work of its Risk and Audit Committees. In addition, the Board Remuneration Committee has reflected the impact of the Over-issuance of Securities in its remuneration decisions, including the determination of the Group incentive pool and the incentive outcomes for the Executive Directors. Details can be found on page 125 of the Remuneration report. Please see page 100 for further information about the Over-issuance of Securities.

You can read more about the key areas of Board focus in 2022 in the rest of this section.

### Spotlight: New FCA Consumer Duty
In July 2022, the Financial Conduct Authority (FCA) confirmed the final details of its new Consumer Duty aimed at setting higher and clearer standards of consumer protection across financial services and requiring firms to deliver good outcomes for customers and clients. The FCA has emphasised that the successful application of the Consumer Duty requires a cultural shift within the financial services sector, with firms embedding the Consumer Duty across all relevant businesses, customer channels, conduct risk management processes, controls and governance structures at all organisational levels.

Monitoring the development of the Consumer Duty, assessing its application to the Group and planning for the first implementation deadline of 31 July 2023 have been a focus for the Board in 2022, with many of the requirements of the Consumer Duty being aligned with the Group’s existing priorities, including:
- the Barclays UK Customer Strategy to provide exceptional service and insights to customers; and
- The Barclays Way, Barclays' Values and Barclays Mindset initiatives.

In September 2022, the Board received an update on the Consumer Duty rules and noted its support for the FCA’s policy objectives in the implementation of the Consumer Duty and its requirement for board engagement within firms. The Board discussed how the rules apply across the organisation, the proposed governance structure to support implementation across the Group, and the Board’s role in providing Group-wide, holistic oversight. The Board received regular updates on the approach and activities undertaken across the Group to prepare for the implementation of the Consumer Duty. It also endorsed the appointment of board-level Consumer Duty Champions to key in-scope subsidiary boards, including BBPLC and BBUKPLC.

#### Board allocation of time$^a$ (%)

| | 2022$^b$ | 2021 |
| :--- | :--- | :--- |
| Strategy formulation and implementation monitoring | 46 | 60 |
| Finance (including capital and liquidity) | 20 | 14 |
| Governance and risk (including regulatory issues) | 31 | 23 |
| Other (including remuneration) | 3 | 4 |

**Notes**
a The percentages are subject to rounding and therefore may not equal 100% when rounded.
b The allocation of time in 2022 includes the time spent by the Board considering the impacts of the Over-issuance of Securities at scheduled and ad hoc meetings.

***

# Directors’ report: Key Board Activities (continued)

### Strategy formulation and monitoring

| Topic | Board activity | Key decisions |
| :--- | :--- | :--- |
| **Strategic review** | • Held regular business strategy sessions at meetings throughout the year and its annual corporate strategy session.<br>• Received Business/Function reviews to understand risks and opportunities in key business areas, including the Corporate and Investment Bank, US Consumer Bank, Private Bank and Barclays UK.<br>• Participated in focus sessions on key ‘horizontal topics’ such as cyber, data and climate to understand the impact of these on the Group and where opportunities and risks may arise. | ü Approved the Group's strategy.<br>ü Approved the 2022 Medium Term Plan (MTP). |
| **Strategic acquisitions** | • Considered the proposal to acquire Kensington Mortgage Company and its strategic fit within the Group. | ü Approved the acquisition of Kensington Mortgage Company. This transaction was also approved separately by the Board of BBUKPLC. |
| **Macroeconomic and geopolitical environment** | • Considered the Group’s overall risk profile and emerging risk themes in view of events in both the macroeconomic and geopolitical environment, including rising rates and inflation and the increased cost of living. Oversaw the Group's response to these pressures, including providing assistance to customers facing financial pressures and responding to the impacts of the war in Ukraine. | ü Approved the Barclays Risk Appetite Statement.<br>ü Approved the annual review of the Group Enterprise Risk Management Framework. |

### Building an inclusive and equitable culture

| Topic | Board activity | Key decisions |
| :--- | :--- | :--- |
| **Culture, including Mindset** | • Received updates on Group culture and colleague engagement, including by way of the 'Your View' survey results and monthly pulse surveys.<br>• Tracked management's progress in embedding the Barclays Mindset - Empower, Challenge and Drive - through detailed measurements including the Mindset Indices tracked within Your View results.<br>• Considered updates on the impact of hybrid working, including colleague experience of hybrid working to understand what works well for colleagues remotely and on site. | ü Confirmed that Barclays' workforce policies and practices are consistent with Barclays' Values and support Barclays' long-term sustainable success. |
| **Diversity, Equity and Inclusion (DEI)** | • Received and considered updates on Barclays’ DEI focused ambitions and activities, including the Race at Work Ambition, the Gender Ambition and progress towards creating an inclusive and equitable workforce to underpin business performance.<br>• Received updates on the new gender diversity targets set by the FTSE Women Leaders Review and considered the new FCA 'comply or explain' disclosure requirements regarding diversity reporting. | ü Approved an updated Board Diversity Policy in December 2022, which reflected new board diversity targets aligned with the FTSE Women Leaders Review and those set out in the FCA's diversity reporting requirements. |

+ You can read more about the Board's engagement with colleagues and other stakeholders during 2022 on page 62.
+ You can read more about the updated Board Diversity Policy on pages 73 to 74.

### Sustainability

| Topic | Board activity | Key decisions |
| :--- | :--- | :--- |
| **Sustainability** | • Discussed updates received from the Group Head of Public Policy and Corporate Responsibility, including on key government and regulatory policy, climate, and reputation risk. | ü Approved the Group’s ESG report for 2021.<br>ü Approved the Group’s Modern Slavery Statement for 2021. |

***

# Directors’ report: Key Board Activities (continued)

### Governance and regulatory matters

| Topic | Board activity | Key decisions |
| :--- | :--- | :--- |
| **AGM** | • Considered the best way to facilitate engagement with shareholders at the 2022 AGM, having been unable to engage with shareholders in person for the previous two years due to COVID-19 restrictions. | ü Approved holding a hybrid AGM for 2022, offering shareholders the ability to either attend in person or through an online portal, through which shareholders could also cast their vote. |
| **Succession** | • Working closely with the Board Nominations Committee, reviewed and shaped succession planning and proposed appointments for the Board, Board Committees and ExCo, having regard to the diversity targets adopted by the Board and wider Group. | ü Approved the appointment of Anna Cross as the new Group Finance Director.<br>ü Approved the appointment of Robert Berry as a Non-Executive Director, Chair of the Board Risk Committee and a member of the Board Audit Committee.<br>ü Approved changes to Board Committee membership, as outlined in the report of the Board Nominations Committee. |
| **Consumer Duty** | + For information on the Board's oversight of the FCA's new Consumer Duty, please see the spotlight on page 66. | |
| **Regulatory engagement and oversight** | • Invited representatives from key regulators, including the FCA, Prudential Regulation Authority (PRA) and FRBNY, to join meetings to hear first-hand their feedback and observations. | ü Supported continued direct engagement with key regulators to deepen relationships.<br>ü Encouraged continued visibility from management over regulatory matters across the Group. |
| **Over-issuance of Securities** | + You can read about the Board's response to the Over-issuance of Securities on pages 100 to 101. | |
| **Cyber** | • Discussed updates on cyber, cloud services and operational resilience, including the new resilience policy requirements of the PRA and FCA.<br>• Received reports from the Chair of the Board Risk Committee regarding Barclays’ participation in the PRA’s cyber stress test which assessed Barclays’ ability to respond to, and recover from, a severe but plausible cyber-attack and the results of that test and management actions. | ü Approved the Group Resilience Self-Assessment.<br>ü Requested that management conduct a ransomware attack simulation. |

### Finance

| Topic | Board activity | Key decisions |
| :--- | :--- | :--- |
| **Financial statements** | • Assessed financial performance of the Group and its main businesses through regular updates from the Group Finance Director. | ü Approved the Group’s Annual Report and Accounts for the year ended 31 December 2021.<br>ü Approved financial results announcements at Q1 2022, HY 2022 and Q3 2022. |
| **Capital distributions** | • Considered the Group’s capital position and distributions policy. | ü Approved a full year dividend for the year ended 31 December 2021 of 4.0p per ordinary share and a share buy-back of up to £1bn.<br>ü Approved a half year dividend for the period ended 30 June 2022 of 2.25p per ordinary share and a share buy-back of up to £500m. |

***

# Directors’ report: Board Nominations Committee report

## Overseeing effective composition, succession and evaluation

Supporting the continued delivery of the Group’s strategy through effective Board, Board Committee and ExCo composition, robust succession planning and evaluating Board performance.

### Introduction

With its focus on effective Board, Board Committee and ExCo composition, robust succession planning and evaluating Board performance, the Committee plays a crucial role in supporting the continued delivery of the Group’s strategy.

The Committee’s work ensures that we have a Board which strikes the right balance of skills, experience and diversity of background and opinion, is effective in providing informed and constructive challenge to management and acts fairly in the interests of all of our stakeholders.

### Key areas of focus during the year

With the support of the Committee, the Chair continued to oversee the execution of our succession planning for the Board and its Committees in 2022, and this work will continue as we move through 2023.

As part of the Committee’s executive succession planning, we welcomed Anna Cross to the Board on 23 April 2022, when she took up the role of Group Finance Director and Executive Director. Anna joined the Group in 2013 and has worked in a number of roles, most recently as Deputy Group Finance Director since 2020. The Committee and the Board were delighted to have identified, in Anna, such a strong internal successor, who was able to step immediately into the role, ensuring a smooth transition and supporting our Group Chief Executive and his leadership team with the ongoing delivery of our Group strategy.

We also welcomed Robert Berry to the Board, who joined as a Non-Executive Director on 8 February 2022, and as Chair of the Board Risk Committee and a member of the Board Audit Committee with effect from 1 March 2022. Robert brings with him a wealth of risk management experience from his distinguished career at Goldman Sachs.

#### Board Nominations Committee

| Member | Meetings attended/eligible to attend (including ad hoc meetings) |
| :--- | :--- |
| Nigel Higgins | 5/5 |
| Mike Ashley$^1$ | 3/3 |
| Tim Breedon$^2$ | 2/2 |
| Mohamed A. El-Erian$^3$ | 2/2 |
| Crawford Gillies$^1$ | 3/3 |
| Brian Gilvary | 5/5 |
| Diane Schueneman | 5/5 |
| Julia Wilson$^3$ | 2/2 |

**Notes**
a There were three scheduled meetings and two ad hoc meetings of the Committee in 2022.
**Committee membership in 2022**
1 Retired with effect from 1 September 2022.
2 Retired with effect from 28 February 2022.
3 Appointed with effect from 1 September 2022.

**Committee allocation of time$^b$ (%)**
- Corporate governance: 14 (2022), 9 (2021)
- Board and Board Committee composition: 14 (2022), 19 (2021)
- Succession planning and talent: 62 (2022), 54 (2021)
- Board effectiveness: 11 (2022), 11 (2021)
- Other: 0 (2022), 7 (2021)

**b** Including ad hoc meetings. The percentages are subject to rounding and therefore may not equal 100% when rounded.

Our former Group Finance Director, Tushar Morzaria, stepped down from that role and as a Director with effect from 22 April 2022. Tushar has remained with Barclays, and was appointed as Chairman of the Global Financial Institutions Group. Tushar has been an invaluable member of the senior management team at Barclays since 2013, when he joined as Group Finance Director, and he has played a significant role in the rebuilding of the Group’s financial and operational resilience. The Committee and the Board are grateful for his hard work and are delighted that Tushar has a continuing role with Barclays.

As announced on 23 January 2023, Mike Ashley will be retiring from the Board at the conclusion of our 2023 AGM, having served on the Board for more than nine years. Mike has served on the Board since 2013 and is our Board Audit Committee Chair.

Crawford Gillies will have completed nine years as a Non-Executive Director by the time of our AGM, having joined the Board in 2014, and will be retiring (subject to re-election) shortly thereafter on 31 May 2023. Mike and Crawford have supported Barclays through a period of significant change, both for the Group and for the industry, in the post-financial crisis period. The Committee and the Board are enormously grateful for Mike and Crawford's significant contributions to the Group during the course of their tenures, and the work they have each undertaken as valued members of the Board, and in their respective roles as Chair of the Board Audit Committee and Chair of the BBUKPLC Board in particular.

With effect from 1 April 2023, Julia Wilson will succeed Mike Ashley as Board Audit Committee Chair, subject to regulatory approval.

***

# Directors’ report: Board Nominations Committee report (continued)

approval. Having previously held the roles as Group Finance Director at 3i Group plc and Chair of the Audit Committee of Legal & General Group plc, the Committee and the Board are confident that Julia will make an excellent successor to Mike as Board Audit Committee Chair.

We were also delighted to welcome Marc Moses to the Board as a Non-Executive Director and member of the Board Audit and Risk Committees, with effect from 23 January 2023.

As previously announced on 23 January 2023, Sir John Kingman will take up his role as a Non-Executive Director with effect from 1 June 2023. He will succeed Crawford Gillies as Chair of BBUKPLC upon taking up his appointment, subject to regulatory approval.

The Committee also oversaw a series of changes to Board Committee composition during the course of the year, including with regard to the membership of this Committee, as described on page 72.

The Committee and the Board are confident that these changes will enhance the Board’s effectiveness, bringing new and diverse perspectives while also providing valuable input and support to the work of the Board Committees.

### Membership and principal activities during 2022

The Committee is composed solely of Non-Executive Directors and is chaired by our Group Chairman. Details of Committee membership, meeting attendance and allocation of time during 2022 are set out on page 69, and the Committee’s principal activities during the year are set out below. In discharging its responsibilities, the Committee takes into account feedback from key stakeholders, and from Board discussions more widely.

#### Key activities in 2022
- Approval of the appointment of Anna Cross as Group Finance Director. (1, 2, 3, 4)
- Approval of the appointment of Robert Berry as a Non-Executive Director. (1, 2, 3, 4)
- Candidate evaluation for both executive and non-executive current and future roles including review of core skills and (for internal candidates) scrutiny of internal feedback. (1, 2, 3, 4)
- Review of the balance of skills and diversity on the Board, and leading the search and recruitment process (including conflict analysis) for potential candidates. The Committee utilised external search consultants Spencer Stuart and Egon Zehnder to facilitate the targeted external mapping and search processes based on agreed and reviewed criteria. (1, 2, 3, 4, 6, 9)
- Review of Directors’ tenure and effectiveness, and identifying candidates for election or re-election at the AGM. (1, 2, 4, 5, 6, 7, 8)
- Approval of changes in Board Committee composition during the year:
  - Board Risk Committee: Tim Breedon stepping down (Chair and member), appointment of Robert Berry (Chair and member), and appointment of Julia Wilson (member)
  - Board Audit Committee: Appointment of Robert Berry (member)
  - Board Nominations Committee: Tim Breedon, Mike Ashley and Crawford Gillies stepping down (members) and appointments of Julia Wilson and Mohamed A. El-Erian (members). (1, 2, 3, 4, 5, 6)
- Review of ExCo composition and succession planning, including review of the balance of skills and diversity on the ExCo and for key successors. (1, 2, 3, 4, 6)
- Review of recommendations and suggested improvements arising from the 2021 Board effectiveness review. (1, 2, 7, 8)
- Approval of internally conducted 2022 Board, Board Committee and individual Director effectiveness reviews, led by the SID with the support of the Deputy Company Secretary. (7, 8)
- Consideration of Director training and development. (6, 7, 8)
- Review and approval of size, composition and succession planning for the Board and the Board Committees, including updates on succession planning for the Group’s main subsidiary company Boards. (1, 2, 4, 6)
- Review and recommendation to the Board for approval an updated Board Diversity Policy in December 2022, including adopting an increased gender diversity target and re-affirming the existing ethnic diversity target aligned with the Parker Review on the ethnic diversity of UK boards. Refer to page 73 for further information. (2, 6)

### Committee responsibilities
1. Ensuring the right individuals are appointed – in line with objective criteria – who can discharge the duties and responsibilities of Directors.
2. Planning for effective ExCo, Board and Committee composition, through focusing on appointment and succession based on merit and skill, through a diversity lens.
3. Leading candidate search and identification.
4. Regularly reviewing succession planning and recommendations for key executive and non-executive roles.
5. Monitoring time commitments for incoming and existing Directors to ensure sufficient time for effective discharge of duties.
6. Monitoring compliance against corporate governance guidelines and the Board Diversity Policy, including yearly review and any recommendations for enhancements.
7. Ensuring compliance by the Board with legal and regulatory requirements.
8. Agreeing the approach to individual Director, Board and Committee effectiveness reviews and implementing any required actions.
9. Considering and authorising, subject to ratification by the Board, conflicts of interest.

***

# Directors’ report: Board Nominations Committee report (continued)

## Composition

Regularly reviewing Board, Board Committee and ExCo composition is a key responsibility of the Committee. Through frequently considering the skills, experience, knowledge and diversity required for these roles, as well as the annual Board effectiveness evaluation (as outlined further below), the Committee is able to refresh its thinking on Board, Board Committee and ExCo composition and establish a timeline for any proposed appointments.

+ You can find biographies for each Director, including details of the skills, experience and knowledge they bring to the Board, and their Board Committee memberships and other principal appointments on pages 55 to 58.

### Changes to Board composition in 2022: Group Finance Director
As reported above, Tushar Morzaria stepped down from the Board on 22 April 2022 and was succeeded by Anna Cross, who took up the role of Group Finance Director and became an Executive Director with effect from 23 April 2022, having joined ExCo on 23 February 2022. Anna brings significant skills and experience to the Board, as set out in her biography on page 56. Anna joined the Group in 2013 and held the role of Deputy Group Finance Director from July 2020 until April 2022. Before that, she held the role of Group Financial Controller, prior to which she was the Chief Financial Officer for BBUKPLC. A qualified chartered accountant, Anna has worked in both banking and retail and previously held finance roles at leading financial and retail institutions.

In considering Anna’s appointment, the Committee – and the Board – took into account a number of factors, including her expanded leadership and commercial experience through her appointment as Deputy Group Finance Director. The Committee and the Board also had regard to the stability that Anna’s appointment as an internal candidate would bring to the Group’s key stakeholder groups, in particular shareholders, colleagues, and customers/clients.

Following Anna’s appointment to ExCo on 23 February 2022, and prior to her taking up her role as Group Finance Director on 23 April 2022, the Board was made aware of the Over-issuance of Securities. Anna was very much 'new in role' as our Group Finance Director, and took a leading role in the management and resolution of this matter throughout the course of 2022, alongside our Group Chief Executive and other members of his leadership team. As a Board, we would like to recognise the hard work and dedication that Anna has shown through this challenging period.

### Changes to Board composition in 2022: Non-Executive Directors
Robert Berry was appointed as a Non-Executive Director on 8 February 2022, and as Chair of the Board Risk Committee and a member of the Board Audit Committee with effect from 1 March 2022. Robert brings significant skills and experience to the Board and to the important role of Chair of the Board Risk Committee. He has extensive risk management experience, having worked in the financial services industry for the entirety of his 32-year career. The majority of Robert’s career was spent with Goldman Sachs, where he became a Partner in 2008 and then Co-Deputy Chief Risk Officer in 2016, prior to his retirement as a Partner at the end of 2018. Following his retirement, Robert was retained as an Advisory Director with Goldman Sachs, remaining as a member of its Enterprise Risk Committee, during the period from January 2019 to December 2019.

### Changes to Board composition in 2023: Non-Executive Directors
We welcomed Marc Moses to the Board as a Non-Executive Director and a member of both the Board Audit Committee and Board Risk Committee on 23 January 2023.

Marc brings a strong technical finance background with a deep knowledge of banking and financial services. His financial services experience extends to over 43 years in the industry, initially as a trader and then in senior executive roles as an Audit Partner at PwC, and Chief Financial Officer of JPMorgan Europe. He joined HSBC in 2005, and prior to retiring in 2019, was the Group Chief Risk Officer and an Executive Director of HSBC Holdings plc. Since formally retiring from HSBC, Marc has remained active, undertaking advisory work for start-ups and he is currently acting as advisor to a fintech company.

Marc’s appointment reflects our commitment to strengthening the Board through the addition of further highly respected individuals with recent and relevant financial experience, in accordance with our skills-based recruitment priorities.

### Appointment of Sir John Kingman
Sir John Kingman will take up his role as a Non-Executive Director with effect from 1 June 2023. He will succeed Crawford Gillies as Chair of BBUKPLC upon taking up his appointment, subject to regulatory approval.

Sir John has a deep background in financial services, gained from his executive and non-executive career, and will bring invaluable skills and experience to the Board, and to the Board of BBUKPLC. His experience spans the public and private sector, with his former roles including senior positions at HM Treasury, as the first Chief Executive of UK Financial Investments Ltd (UKFI), and as Global Co-Head of the Financial Institutions Group at Rothschild. Sir John is currently Chair of Legal & General Group plc, and stepped down as Chair of Tesco Bank on 22 January 2023.

***

# Directors’ report: Board Nominations Committee report (continued)

### Changes to Board Committee composition in 2022
The Committee oversaw changes in Board Committee composition in 2022, as outlined below.

#### Board Risk Committee
Having chaired the Board Risk Committee for eight years, Tim Breedon retired from that Committee on 28 February 2022. Robert Berry succeeded Tim as Chair of the Board Risk Committee on 1 March 2022.

Julia Wilson was appointed as a member of the Board Risk Committee with effect from 1 September 2022.

#### Board Nominations Committee
Tim Breedon retired from the Board Nominations Committee on 28 February 2022. Mike Ashley and Crawford Gillies retired from the Board Nominations Committee with effect from 1 September 2022.

We welcomed Julia Wilson and Mohamed A. El-Erian as additional members of the Board Nominations Committee on 1 September 2022.

The Board is grateful to Tim, Mike and Crawford for their valuable contribution to these Committees during their respective memberships.

### Changes to Board Committee composition in early 2023
As reported above, Julia Wilson will succeed Mike Ashley as Chair of the Board Audit Committee with effect from 1 April 2023, subject to regulatory approval. Julia will also take on the role of Group Whistleblowers' Champion in her capacity as Chair of the Board Audit Committee.

Julia joined the Board Audit Committee on her appointment to the Board in April 2021. Her time as a member of the Committee, together with her experience as former Group Finance Director at 3i Group plc and Chair of the Audit Committee of Legal & General Group plc make her well-placed to take up this important role.

+ You can read more about Julia, and the skills and experience she will bring to the role of Board Audit Committee Chair, in her biography on page 58.

Marc Moses was appointed as a member of both the Board Audit Committee and Board Risk Committee upon his appointment as a Non-Executive Director on 23 January 2023, as reported above.

### Board size
As at 31 December 2022, the size of the Board, following the appointments of Robert Berry and Anna Cross, and the resignation of Tushar Morzaria, was 13.

With the appointment of Marc Moses on 23 January 2023, the size of the Board increased to 14. Following the retirement of Mike Ashley from the Board at the conclusion of our 2023 AGM, the retirement of Crawford Gillies (subject to re-election at the AGM) shortly thereafter on 31 May 2023 and the appointment of Sir John Kingman on 1 June 2023, the size of the Board will return to 13.

The Committee continues to consider Board size as part of both its medium- and longer-term succession planning. The Committee remains confident that the size of the Board remains effective, taking into account the need to be small enough to operate in an efficient and collaborative manner but large enough to have an appropriate mix of skills and diversity and to support succession planning, as well as the additional roles and responsibilities of some of our Directors on Board Committees, and on the Boards of BBPLC, BBUKPLC, Barclays US LLC, BX and Barclays Europe.

#### Board composition as at 31 December 2022

**Length of tenure (Chairman and Non-Executive Directors) (number of Directors)**
- 0-3 years: 4
- 3-6 years: 2
- 6-9 years: 3
- 9+ years$^a$: 2

**International experience$^c$ (number of Directors)**
- International (UK): 11
- International (US): 8
- International (Rest of the World): 7

**Industry and leadership experience$^b$ (number of Directors)**
- Financial services: 13
- Political/Regulatory experience: 8
- Current/Recent Chair/CEO: 10
- Accountancy/Auditing: 4
- Operations/Technology: 1
- Retail/Marketing: 2

**Notes**
a Please refer to page 78 in relation to the tenure and continued independence of Tim Breedon and Mike Ashley, who have served on the Board for more than nine years.
b Individual Directors may fall into one or more categories.
c International experience is based on the location of the headquarters/registered office of a company, excluding entities within the Barclays Group.

***

# Directors’ report: Board Nominations Committee report (continued)

### Diversity

Promoting and delivering diversity – of skills, regional and industry experience, social and ethnic background, race, gender and other distinctions, such as cognitive and personal strengths- is a vital element of the Committee’s role in leading appointments and succession planning for the Board, Board Committees and ExCo. Both the Committee and the Board consider increasing diversity essential to maintaining our competitive advantage, driving effective governance and mitigating the risk of ‘group think’.

Further to the Committee’s recommendation, the Board adopted a revised version of the Board Diversity Policy on 15 December 2022.

In considering the proposed amendments to the policy, the Committee and the Board had regard to the following voluntary targets recommended by the FTSE Women Leaders Review (which builds on the work of both the Hampton Alexander and Davies reviews) on gender diversity which were published in February 2022:
- that FTSE 350 Boards and FTSE 350 Leadership teams have a minimum of 40% women’s representation; and
- that FTSE 350 companies should have at least one woman in the Chair or Senior Independent Director role and/or one woman in the CEO or CFO role.

Following publication of those targets, in April 2022 the FCA published amendments to its Listing Rules which will require that Barclays, in future reporting periods, include a ‘comply or explain’ statement in its annual report stating whether it has achieved certain board gender and ethnic diversity targets, and requiring that Barclays disclose certain numerical data relating to the gender identity and ethnic background of Board and ExCo members, together with an explanation of Barclays’ approach to data collection for the purposes of making the required disclosures.

The Board gender diversity targets are aligned with those set out the FTSE Women Leaders Review, and the Board ethnic diversity target is aligned with the target recommended by the Parker Review Committee Report into the Ethnic Diversity of UK Boards.

While the Listing Rules reporting requirements are not yet mandatory for Barclays in the current reporting period, in December the Board adopted an updated Board Diversity Policy which is aligned with the board diversity targets recommended by the FTSE Women Leaders Review and continues to be aligned with the ethnic diversity target in the Parker Review.

+ Please refer to our statements on Board gender and ethnic diversity, as at the reporting reference date of 31 December 2022, on this page and page 74.

The updated policy reaffirms that the Committee will consider candidates on merit against objective criteria with due regard to the benefits of diversity when identifying suitable candidates for appointment to the Board, and sets out the Board gender and ethnic diversity targets detailed in the table at the bottom of this page. The Policy also confirms the Board's commitment to operating in a way that supports diversity and inclusivity.

### Gender diversity
With the appointment of Anna Cross as Group Finance Director and Executive Director, and Tushar Morzaria stepping down as an Executive Director, as at 31 December 2022, Board gender diversity was 38% female. This fell short of our 40% target for Board gender diversity, but the Board satisfied the target contained within the Board Diversity Policy of having at least one woman holding a senior board role.

Following the appointment of Marc Moses on 23 January 2023, Board gender diversity has, in the short term, fallen to 36% female. With Mike Ashley retiring from the Board at the conclusion of our 2023 AGM, Crawford Gillies (subject to re-election) retiring shortly thereafter on 31 May 2023 and the appointment of Sir John Kingman on 1 June 2023, Board gender diversity will return to 38% female.

#### Updated Board Diversity Policy - Targets

| | |
| :--- | :--- |
| **Gender diversity target** | To ensure that by 2025: the proportion of women on the Board is at least 40%; and at least one of the following senior Board positions is held by a woman: Chair, Chief Executive, Senior Independent Director or Chief Financial Officer, and that this is maintained going forward. |
| **Ethnic diversity target** | To ensure that at least one Board member is from a minority ethnic background excluding white ethnic groups and that this is maintained going forward. |

We recognise that this continues to fall short of our 40% Board gender diversity target but, as we continue to develop our Board succession planning, this Committee and the Board remain focused on meeting the new gender diversity targets by 2025 while continuing to bring the very best, diverse talent we can attract to the Board.

The Committee and the Board also recognise and embrace the clear benefits of diversity at Board Committee level. As at 31 December 2022, Board Committee gender diversity was as follows: Board Audit Committee – 50% female, Board Remuneration Committee – 67% female, Board Risk Committee – 43% female and Board Nominations Committee – 40% female.

Group-wide, Barclays remains committed to its DEI vision and strategy, which was refreshed in 2022, and includes a series of guiding principles and strategic priorities designed to help Barclays deliver against its core DEI agendas including its Gender Ambition, which is focused on improving gender diversity across Barclays. In 2022, Barclays announced its refreshed Gender Ambition of 33% representation of women in senior leadership roles - Managing Directors and Directors - by the end of 2025, having achieved its initial target of 28% female representation in these roles by the end of 2021.

+ You can find a copy of our Board Diversity policy at home.barclays/who-we-are/our-governance/our-framework-code-and-rules.

***

# Directors’ report: Board Nominations Committee report (continued)

To achieve this ambition, Barclays has been building a strong pipeline of female talent at all levels through hiring initiatives and development programmes, as well as reporting regularly to its senior leaders to keep them informed on progress in this area (including detailed information about hiring, promotion, and retention in their respective business areas). As at 31 December 2022, female representation amongst Managing Directors and Directors was at 29% globally, and Barclays is focused on continuing its efforts to identify and develop female talent within Barclays and in the market.

You can read more about Barclays' DEI vision and strategy and gender diversity at Barclays, including data on the percentage of females in Barclays’ wider workforce in the Our people and culture section on pages 111 to 118.

The Committee is also mindful of the voluntary target recommended by the FTSE Women Leaders Review of 40% female representation for ExCo and their direct reports by the end of 2025. As at 31 December 2022, female representation among ExCo and their direct reports stood at 27%.

While this falls short of the FTSE Women Leaders Review recommendation, increasing gender diversity within both ExCo and their direct reports, to ensure a diverse pipeline for ExCo succession, remains a key priority for Barclays and the Committee and the hiring initiatives and development programmes referred to above are part of the way in which we are looking to make progress against these targets. In 2022, Barclays continued to have one ex-officio position on ExCo, with each appointee serving for a four-month rotation.

This initiative, first introduced in 2016, broadens the scope of perspectives and contributions made to ExCo, while also providing appointees with exposure to matters of Group-wide significance and further leadership experience. In 2022, all three holders of this position were female.

You can find details of ExCo membership, including ex-officio appointees during the course of 2022, on page 60 and you can find data on the percentage of females on ExCo and within ExCo direct reports in the Our people and culture section in this report.

Further information will be made available in our Diversity, Equity and Inclusion Report, which will be available on our website later in 2023.

### Ethnic diversity

As at 31 December 2022, 15% of the Board (two members) were from a minority ethnic background (excluding white ethnic groups), meeting the recommendations contained within the Parker Review Committee Report into the Ethnic Diversity of UK Boards and the ethnic diversity target in the Board Diversity Policy.

Alongside the Board, the Committee continues to support the Group’s Multicultural agenda, including Barclays' Race at Work Ambition. Venkat, our Group Chief Executive, has made a significant contribution to Barclays’ diversity agenda. Having achieved our Race at Work ambition to double the number of Black Managing Directors globally from nine to 18 by 2022, in January 2023, we set a new ambition to increase the population of Managing Directors from underrepresented ethnicities by at least 50% by the end of 2025. As described on page 67, the Board considered updates during the year on Barclays' progress on DEI initiatives, including our Race at Work Ambition.

You can find more information on Barclays’ continued commitment to its Multicultural agenda, including data relating to ethnic diversity in Barclays' wider workforce, in the Our People and Culture section in this report.

**Diversified Board$^1$**

**Leadership balance (number of Directors)**
- Chairman: 1
- Non-Executive Directors: 10
- Executive Directors: 2

**Gender balance (number of Directors)**
- Male: 8
- Female: 5

**Ethnic diversity (number of Directors)**
- White: 11
- Ethnic minority background excluding white ethnic groups: 2

**Note:**
1 Data as at 31 December 2022.

***

# Directors’ report: Board Nominations Committee report (continued)

### Process for appointments

In leading the process for Board and senior management appointments, the Committee promotes diversity of background and opinion, and ensures that all appointments are based on merit and objective criteria, focusing on the skills, experience and knowledge required for the Board’s effectiveness and to support the continued delivery of the Group’s strategy.

Appointments to the Board are made following a formal, rigorous and transparent procedure, facilitated by the Committee with the aid of external search consultancy firms, as outlined in further detail below.

### Non-Executive Director recruitment

As reported in our last Annual Report, the Committee approved a series of skills-based recruitment priorities in 2021, reflective of the skills and experience anticipated to be required for the Board over the next three years, and which take into account of the needs of the Board, its Committees and the business, as well as ordinary course retirements of long-serving Directors.

Based on the agreed priorities, the Committee has set rigorous criteria for the roles it is seeking to fill, both in terms of experience and personal qualities.

Independent external search firms Spencer Stuart and Egon Zehnder supported our search for additional Non-Executive Directors to complement the range of skills on the Board in 2022, with diversity of background and opinion at the forefront of that search. Spencer Stuart and Egon Zehnder do not have any connection to Barclays or any of the Directors other than to assist with searches