Engaging with stakeholders

Over the past year we engaged actively with our many stakeholders, discussing the subjects they consider most important, and using this dialogue to inform our responsible banking agenda and to set the right priorities.

We took the deliberate decision to raise our profile in corporate responsibility, undertaking a much broader programme of consultation with stakeholders, particularly investors and NGOs. We have spoken more often, and more publicly, on corporate responsibility questions, because these events give us the opportunity to exchange views openly, and we have found that this has created a virtuous circle of further dialogue and action. Climate change, financial inclusion in the UK and Africa, and the incorporation of social and environmental concerns into lending guidelines, are all good examples of areas where we have benefited from external input.

How we prioritise our issues

The idea of sustainability is an integral part of our commercial strategy, as well as the way we do business. As a global business, we are concerned with a wide number of social, ethical and environmental issues. We have well-established procedures to ensure that we assign the right priority to each of them, which take account of our own business strategy alongside a careful assessment of their importance to our various stakeholders.

The judgements we make in our prioritisation take into account:

• Our overall business goals.
• An assessment of the strength and breadth of stakeholder views.
• How we can build employee and customer trust, and the reputation and value of our brand.
• How social and environmental insights can assist the development of our business around the world, and open up new commercial opportunities (for example, through the opportunity to develop innovative customer products and services).
• How we can best mitigate our operational and reputational risks.

The issues reflect both 'direct impacts' (which derive from our own business activity) and 'indirect impacts' (which are the result of actions taken by our customers or suppliers).

Looking ahead, our main challenges for 2007 are to:

• Ensure that our strategy remains responsive to the fast-developing issue of climate change.
• Develop our financial inclusion and microbanking programmes further, especially in the developing world.

To read more about our the targets we have been setting ourselves and how we are meeting them, please go here.