Sustainability Report 2018 - Santander UK Group Holdings plc
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Sustainability Report 2018 Santander UK Group Holdings plc
03 07
Contents
A message from Our business and
our Chair & CEO 2018 highlights
09 12 19
Sustainability Creating a Sustainable economic
strategy thriving workplace growth and
financial inclusion
32 37 Important information
for readers
Santander UK Group Holdings plc (the Company)
Inclusive Upholding the highest and its subsidiaries (collectively Santander UK or
the Santander UK group) operate primarily in the
digitalisation ethical standards and fighting UK, and are part of Banco Santander (comprising
Banco Santander SA and its subsidiaries). Santander
financial crime UK plc is regulated by the UK Prudential Regulation
Authority (PRA) and the Financial Conduct Authority
(FCA) and certain other companies within the
Santander UK group are regulated by the FCA.
3 Message from our Chair, Shriti Vadera
Message from our Chair,
Shriti Vadera
Sustainability must be at the heart of every We are committed to achieve this goal at
competitive business strategy, as it is for us Santander UK, and our second, stand-alone
at Santander UK. We want to build resilience annual Sustainability Report is an important
for our bank, whilst shaping a responsible milestone for us. Last year, we launched a new
operating environment which will benefit our approach to sustainable reporting; completing
customers and industry as a whole. As a part a materiality matrix to identify our priorities to
of the UK’s financial and economic ecosystem, create a responsible business, and publishing
we know that taking a responsible, sustainable our first Sustainability Report which set out
approach can have far-reaching consequences; these findings and our future aspirations.
influencing our communities, customers, and
business supply chains.
This year, we have focused our attention
Multilateral initiatives such as the Sustainable
Development Goals and Paris Accord on Climate on the activities which the materiality
Change, together with a wealth of research matrix clarified should generate inclusive
and consumer insight around the world, are and sustainable growth for both our
transforming the way businesses determine
business and customers. I am particularly
and measure long-term value creation. There
is also demand for greater transparency and committed to measures to improve financial
accountability from the financial community, so inclusion. Enabling every individual and all
that the people we serve can better understand communities to understand, access and
and challenge our contribution to them as
individuals, as well as wider society. This means
gain from high-quality financial services is
going beyond regulation and compliance, and core to our business and critical in creating
interrogating every aspect of our business stability and prosperity for all parts of
activity to demonstrate and quantify the value
our society. And while digital
of good business.
transformation can bring many benefits, we
also have a responsibility to ensure no one
is left behind.
4 Message from our Chair, Shriti Vadera As is often said, we measure what we value and we value what we measure. A study conducted over twenty years by Harvard Business School revealed companies which report against social and environmental issues offer significantly higher returns on investment1. Moreover, McKinsey has found that a sustainable approach is one the most important factors for attracting and retaining employees2. Good businesses know the long-term value of fostering a healthy banking culture, supporting small businesses to create jobs, helping more people to access finance easily and safely, and investing in the low carbon economy. These are our strategic priorities, and the data captured within this new report will help us move towards and benchmark a more holistic evaluation of our bank’s economic and social contribution. 1 Khan, M. Soon, Serafeim. (2015). Corporate Sustainability: First Evidence on Materiality. Cambridge: Harvard Business School. $1 investment in public companies focused solely on growing, realised $14.46. $1 investment in companies focused on environmental and social issues whilst growing, realised $28.36. 2 McKinsey: Sustainability’s deepening imprint (December 2017).
5 Message from our Chair, Shriti Vadera
Message from our CEO,
Nathan Bostock
Our 2018 Sustainability Report is the Defining these priorities, as set-out in this
culmination of a great deal of work by teams report, is helping my Executive Committee
across Santander UK, and I am enormously team fully appreciate and focus on the key
proud of the progress which has been made. ways we will improve our triple bottom line;
Last year, we decided to take a different for people, planet and profit. Namely, the
approach to reporting in order to reflect the ‘virtuous circle’, whereby the products and
fact that sustainability is at the heart of every services which bring financial security and
good business decision and activity. prosperity to retail and business customers,
also generate greater resilience and
sustainable growth for our bank. Moreover,
As Chief Executive, I aim to ensure that both the bank and its customers contribute to
our priorities deliver long-term value our communities; supporting supply-chains of
for our business, the customers we small businesses and other consumers.
serve and communities in which we In particular, we want to harness new
technology to bring genuine, inclusive benefit
operate. These segments are entirely
to our customers, including those with
interrelated, as it is simply not possible particular vulnerabilities or needs. In 2018, we
to build sustainable success for one made a strategic choice of new Charity Partner:
and not the others. Good business the Alzheimer’s Society. Going forward, their
knowledge and expertise will be invaluable
depends on a strong, healthy society
in helping our bank to meet a growing area
– and vice versa. This new report of customer need through dementia-friendly
is helping our bank recognise the digital banking services.
reality of this for us; revealing that
all our business activity stems from
fundamentally sustainable priorities.
6 Message from our CEO, Nathan Bostock
Many retail customers are already Finally, we are pleased to be taking a
profiting from innovative, customer-centric more joined-up approach to climate risk
investments such as our Digital Investment management, by working closely across
Adviser, which gives individuals access industry and with other stakeholders. As
to quick, high-quality, and personalised a result of investment by Santander UK in
investment advice. This is ‘financial inclusion’ renewables in 2018, including solar, biomass
and ‘inclusive digitalisation’ at work; also and wind farms, we are proud to be joint-first
demonstrated by our new online mortgage in the UK league tables for renewable energy
hub, which is being used to renew and lending; critical in meeting our country’s
purchase around 55% of deals. In 2018, both ambitions for a low-carbon economy.
online and in branch, we supported 27,000
first time buyers.
Our business customers are also benefiting It is paramount that we recognise and
from products such as our new 1I2I3 Business measure the sustainable value of all
Current Account, which attracted over 6,000
these activities and more, in order to
new customers in its first three months. Our
Breakthrough programme has provided make the right long-term investments
targeted advice, workshops and growth and be truly fit for the future. We
opportunities to thousands of start-ups and want to help people and businesses
small businesses; including those supported
prosper, which is synonymous with a
through last year’s collaboration with the
British Library Business and Intellectual sustainable agenda. Our new Report
Property Centre. Breakthrough also launched will help us take our next steps on this
our most ambitious Women Business Leaders’ important journey.
Mentoring Programme to date, supporting
female founders and company leaders across
the UK.
Meanwhile, our International team is opening
up new export markets to UK business,
through real and virtual trade missions,
webinars, inward trade visits, and tailored
research – including our Trade Barometer of
business attitudes and challenges.
7 Our business
Our business
Our culture is built on doing things The Santander Way Our business in 2018
We’re uniquely placed as a leading
Simple Personal Fair
scale challenger.
We offer our customers products that We treat our customers as valued We are open, honest and treat others
We have a simple and straightforward
are easy to understand and a service individuals, providing a professional as we would like to be treated. We
business model which focuses on retail and
which is convenient, no matter when service they can trust. We support our earn our investors a sustainable return
commercial banking customers.
or how they want to engage with us. colleagues to develop their skills and and do our part to support
We make our processes better so they achieve their ambition. our communities. We’re a large customer-focused bank and
are easy and clear for our customers possess the scale and breadth of proposition
and our people. to challenge the big four UK banks. With
our omni-channel approach, we serve our
customers through digital channels, in
“It’s clear that environmental, social and governance factors directly affect our operating particular mobile, alongside a network of
branches and Corporate Business Centres all
environment and touch all areas of our business. With this report, we want to give transparency
supported by telephone call centres.
to our investors and stakeholders about the value we’re creating by acting responsibly.”
Antonio Roman, Chief Financial Officer, Executive Director, Santander UK
We’re aware of our important
role in the UK economy and in the
communities where we operate. We
help people purchase their home, save
for the future and support business
growth. We employ around 23,800
15 million 755 64 £199.9 billion
active UK customers branches3 Corporate Business customer loans people and we paid £445 million
Centres
of corporation tax and £86 million
through the UK Bank Levy in 2018.
£172.1 billion 23,800 £445 million
customer deposits employees corporation tax paid
in 2018 3. As at 31 December 2018. Branches include 52 university branches.
4.8 rating for our £10.6 million invested Launched our Helped 27,000 first UK’s most resilient bank, Supported 7,900 start-
updated mobile app in training, focusing on Sustainability strategy, time home buyers with for the third year running ups and small businesses
on iOS app store. flexible learning and skills based on four mortgages, up 14%. in the PRA stress tests. with investment,
for the future. focus areas. training, internships and
international exposure.
£38m of fraud prevented Introduced a unique Piloted our vulnerable Focused on a pipeline
through our involvement approach to tackling payment customers specialist of talent, placing for the
2018
in the Banking Protocol. scams, providing guidance support service with over third year in a row as a
and cautions for customers 7,500 branch colleagues. Times Top 100 Graduate
making automated push Employer.
payments.
Reduced carbon emissions
by 11.5% year on year,
£3.2 million raised in
three years for our charity
HIGHLIGHTS Invested in small businesses
with £20.7 million of growth
We reached almost
72,000 students, up by
focusing on remote working partners Age UK and capital funding and £100.7 87%, with educational
and meetings. Barnardo’s. million of senior debt. workshops on money
management, careers and
digital safety.
Launched Digital Investment Ranked as joint Top three UK bank based FRS reported that we ranked 478 businesses benefited Colleagues completed
Adviser, helping to make our first lender to on The Sunday Times Top second in retail customer from our events aimed at 56,000 volunteering
products accessible to all. renewables. 25 Best Companies to satisfaction4 on a rolling international growth. hours in 2018, a 30%
Work For 2018. 12-month basis at December increase from 2017.
2018, achieving our 2018
target.
4. Retail customer satisfaction as measured by the Financial Research Survey (FRS) run by Ipsos MORI. Please see Appendix 1
9 Our Sustainability strategy
Our Sustainability strategy
We recently embarked on an exciting journey to further embed
our purpose to help people and business prosper in every business
decision. With our new sustainability approach we seek to be a
responsible, ethical business across all our activities. Our values
should be reflected in everything we do, from the everyday
decisions we take to our long-term plans and goals.
Understanding our priorities Banco Santander
In 2018, we used artificial intelligence We’re part of a Group that is committed
to understand which social and to being a responsible bank, and aims
environmental topics are most important to tackle two key challenges.
to our customers, shareholders, people 1. The banking environment:
and communities, and where we can ensuring we have the right culture,
have a real impact. skills, governance, digital and
We know that financial institutions have business practices to meet
an important role to play in addressing stakeholders’ expectations.
challenges such as financial crime and 2. Inclusive and sustainable growth:
financial inclusion, as well as broader supporting small businesses to
systemic issues including the effect create new jobs, helping people access
that technological change and climate finance, contributing to the low carbon
change are having on our lives, our economy and fostering sustainable
communities and our planet. consumption.
The Sustainability report will cover our ur sustainability strategy will
O
priority areas, describing our ambition enable our business to play its part in
and how we’re having an impact through addressing these challenges. We are
case studies and examples. fully aligned to the group priorities
and have a shared ambition to be a
responsible bank.
10 Our Sustainability strategy
Our sustainability approach sets a framework for action
around our material issues, under four main areas.
Creating a thriving Sustainable economic Inclusive digitalisation Upholding the highest
workplace growth and financial We aim to use technology in a ethical standards and
We aim to create a thriving inclusion way that creates value for all of fighting financial crime
workplace that attracts, retains our stakeholders and supports
We want to deliver long lasting, Ethics and integrity are the
and rewards the most talented financial inclusion. Technology
sustainable growth and positive foundation of a prosperous
and committed people. Our should help simplify our
socio-economic impact not only business and society. We’re
culture promotes diversity and processes, and make services
through our charitable giving determined to uphold the
inclusion, prioritises more accessible and convenient.
and community programmes, highest ethical standards,
wellbeing and develops our It is our responsibility to ensure
but also to our customers promote human rights and
people’s skills. best-in-class data security which
through our business operations. responsible corporate culture.
will help us earn the trust of all
our stakeholders.
Delivering on our purpose of helping people and businesses
prosper and on our strategic priorities.11 Our Sustainability strategy
Business strategic priorities 2016-2018
Grow customer loyalty and market share.
“I’m passionate about our Sustainability strategy and ambition for
Deliver operational and digital excellence. the future. We’re working hard to integrate this strategy across the
Achieve consistent, growing profitability and a strong balance sheet. business, at every level and in every business decision. If we work
Live The Santander Way through our behaviours. together, we can unlock the possibility of a better world.”
Support communities through skills, knowledge and innovation. Keith Moor, Chief Marketing Officer, Santander UK
Main UN Sustainable Development Goals impacted by our strategyCreating a thriving workplace Our ambition Attracting and rewarding talent Diverse and productive teams Our impact
13 Creating a thriving workplace
Our ambition Context
Mental health at work
We want to create a thriving workplace Studies5 have concluded that the UK faces a
that attracts, retains and rewards the most significant mental health challenge at work.
talented and committed people. Our culture There is a cost to large employers of over
promotes diversity and inclusion, prioritises £33 billion per year, but more importantly a
wellbeing and develops our people’s skills. significant human impact. Businesses have
an important role to play in promoting health
What this means for us and wellbeing in the workplace.
We know that talented people want to work for
Skills for the future
companies that act responsibly and are driven
by a purpose that goes beyond profits. Likewise, The banking industry is facing unprecedented
we want to be a company of choice for people change in the way we serve and interact
who share our values and passion for helping with our customers, driven by advances in
people and businesses prosper. technology. From a cultural perspective this
means we need to plan carefully to ensure we
We want to create a bank that is representative
are clear about the roles and skills we need for
of the society we operate in and where all
the future. The development of our colleagues
employees can have a voice and are able
and how we manage our talent is key to
to bring their true selves to work. Where
helping them meet these challenges.
our people feel comfortable, confident and
empowered no matter their age, race, religion,
gender, sexuality, ethnicity or disability.
Our culture of Simple, Personal and Fair is
“Investing in our people allows us
underpinned by our nine behaviours, enabling to be fit for the future with skilled
our colleagues to thrive and provide great and engaged colleagues who
outcomes for our customers. can truly thrive at Santander. We
continue to focus on creating a
great place to work”
Vicky Wallis, Chief HR Officer, Santander UK
5. Thriving at Work: a review of mental health and employers, Lord Dennis Stevenson and Paul Farmer, 2017.14 Creating a thriving workplace
Attracting and
rewarding talent Reward
We provide our people with a competitive
package of pay and benefits, to reward them
We’ve delivered ‘WorkWise’ sessions to over for their individual contribution to the business
Emerging talent and our sustainable performance. In 2018,
8,300 students in schools and colleges across
Our support of apprenticeships has 35% of our people participated in one or
continued to expand and in 2018 we had the UK, an increase of 158% on 2017. These both of our two HMRC-approved all employee
over 500 apprentices across 15 different sessions help students consider the different share schemes and 88% of our people
schemes which cover a range of levels up participated in our pension schemes.
routes to employment, and develop CV
to degree level programmes. We are a Living Wage and London Living
and interview skills. We provided 200 work
Wage employer. We have strategic
experience opportunities in 2018, including relationships with Advance and the
Over 500 supporting social mobility with partners Communication Workers Union (CWU),
apprenticeships
in 2018 Career Ready and National Citizen Service. our two recognised trade unions.
We also have over 200 graduates on 88%
programmes across the bank. We have of our people participated
been ranked for the third year in a row as a in our pension scheme
Times Top 100 Graduate Employer.
During 2018 we continued to expand
our ‘Emerging Talent’ programme which 200
work experience
supports local schools and colleges, opportunities in 2018
helping identify and develop new talent.
158%
more Workwise
sessions delivered
compared with 201715 Creating a thriving workplace
Skills for the future
We remain passionate about equipping
our people with the skills they need to
prosper in the future, and our Agile training
programme is helping us to achieve this.
We recognise there is a need to promote the
breadth of opportunities which are available
in our technology and cyber teams. In 2018
we partnered with the National Cyber Security
Centre and delivered our first Cyberfirst
event in Leicester. This was a one day course
delivered to more than 80 students aged 11
Investing in training to 14; showcasing the varied roles and jobs
We have made a number of enhancements that use technology in the workplace, in order
to our learning content throughout 2018, to enthuse and inspire the participants.
with further improvements in plan for 2019.
Our strategy is to produce engaging and
motivational learning content, deliberately
moving towards high quality digital learning. Investment in colleague training
In 2018, our people undertook 73,933
development days and we invested 2017 £8.8 million
£10.6 million, equipping them with
the skills they need for now and in the
2018 £10.6 million
future, including digital skills.
In order to maximise opportunities for our Million 0 1 2 3 4 5 6 7 8 9 10 11
(£)
people, new-to-role training in the retail bank
is now delivered through a Virtual Academies
programme. This approach means our people
no longer have to travel and spend time away
from home, but instead can learn new roles
in their local work environment, providing
greater flexibility.16 Creating a thriving workplace
Diverse and productive teams
2018 engagement score of 72%
Prioritising wellbeing
Our focus on wellbeing covers physical, 72%
mental, financial and social wellbeing.
In 2018, we placed greater focus on mental
wellbeing, aiming to challenge stigma and
support our colleagues’ mental health.
We launched our Mental Wellbeing
employee-led network, a hub to help
2018 employee
our people speak up and give support. 85%
The network is rapidly growing with over survey results
1,300 members. We provide free access
Smarter working to Thrive’s Mental Wellbeing App, provide
Our aim is to enable our people to work support via The Bank Workers Charity and
in the way that best suits their needs, the over 2,400 of our managers across the bank
needs of the business and our customers. have completed our ‘Positive about Mental 85% of our people agreed that
Our ‘smarter working’ programme supports Health’ training. we created an environment
our performance management strategy and
87% where people of diverse
During 2018 we partnered with Nudge to
allows for greater collaboration, efficiency and offer an interactive tool to support colleagues’ backgrounds can succeed
flexibility. By working smarter, our people can financial wellbeing.
choose the best place to work, helping them
to optimise their productivity and establish We expanded our partnership with Gympass,
a better balance between their work and whose growing network of gyms and classes 87% of employees agree that
personal lives. now help over 2,000 of our colleagues find we act responsibly and make a
an activity they love to improve physical positive contribution to society
Following our smarter working pilots, wellbeing. In social wellbeing we continued to
percpetions of the working environment in support our six employee-led networks which
those areas improved by 47% on average. collectively have over 10,000 colleagues from
across the bank. We run an comprehensive annual engagement survey which is open
to all our employees. This provides significant insights as to how our
colleagues feel about Santander as a place to work. From this we
create action plans to focus on our strengths and areas to develop.17 Creating a thriving workplace
Building a bank Gender pay We are committed to addressing
this gap through transparency,
for everyone Our gender pay and bonus gaps
understanding the root causes of
reflect our organisational structure.
issues and finding solutions that
We have proportionately more
are both practical and beneficial to
women than men in our branch and
We want to create a bank that’s employees. Further details on our
customer service centre roles, and
representative of the society we journey to create an inclusive culture
proportionately more men in our
and our latest annual Gender Pay Gap
operate in. We have a number senior leadership team. In December,
report are available here.
of initiatives, programmes we reported a mean average gender
pay gap of 33.6% (-1.7pp from 2017) In June 2016, we signed the HMT
and training designed to build Women in Finance Charter, setting a
inclusivity across our business. 50% (+/-10%) gender target for our
senior female population over five
years. In recognition of our approach
TOP 50
to creating a gender diverse bank, we
These include our employee-led
were a Times Top 50 Employer for
diversity networks, a returnship
EMPLOYERS FOR Women in 2018.
programme, and women’s
leadership development. We partner
with organisations such as Business
WOMEN
in the Community (BiTC), Stonewall,
Business Disability Forum, INvolve
2018 Women represent:
and Working Families. In 2018, we In association with
signed the BiTC Race at Work Charter,
committing to taking more action 54% of our board
to support ethnic minority career
progression and analyse our ethnicity
pay gap data. We also increased our
of our Executive
support for Pride in 2018, joining
and a mean average gender bonus
36% Committee
11 events across the UK along with
a campaign of visual support via our gap of 68.1% (-1pp from 2017).
cash machines and branches. While we are pleased there has been
some progress in our gender pay gap,
there is still much to do. 31% of senior managers
As of 1 January 201918 Creating a thriving workplace
Our impact What have we done?
As a result of the research, we identified
Financial Times.
The EMpower list for support of
Grand Prix award for our
training video
several areas of improvement in our own BAME diversity.
The transformation of our learning
business. In 2018, we:
Case study: ‘Equal Lives’ research The OUTstanding power list for
content has been recognised by
Increased transparency of our family- support of LGBT+. an award for our new ‘Vulnerable
Our cutting-edge ‘Equal Lives’ research in
friendly policies on our careers site. Customers’ learning programme which
partnership with BiTC uncovered the societal HERoes Role Models for support of
will launch in 2019.
and organisational biases that exist among Advertised flexible working adjustments
gender diversity.
men and women with caring responsibilities on all job adverts. High quality, inspiring internal videos
and how these can impact women’s career based on real customer stories have been
Doubled our paternity leave pay benefit
progression.
across the organisation. developed to provide plenty of food for
thought. The first episode was entered
The research comprised of a series of focus Launched a pilot ‘Carers Passport’ to prompt
into the Cannes Corporate Media & TV
groups, in-depth interviews, detailed case colleagues who are carers to consider how More transparency Awards and won two separate awards
study analysis from large UK employers, their caring responsibilities impact their role of our family-friendly policies including the overall Grand Prix award, a
semi-structured interviews and an online and what support they need. on our careers site
truly prestigious award in its field.
qualitative survey. In total, there were 82
interviewees and 10,225 survey participants. Extended our parental leave to carers.
What did we learn? Additionally, we have enhanced our Shared
Parental Leave policy to give colleagues more
Women are 8x more likely than men to take
flexibility and choice over when they can take
the primary role in childcare and are 1.5x their leave. This allows them to take paid
more likely to take the primary role in caring shared parental leave at any time within 12
for adults. months of the birth or adoption of their child. Extended
parental leave for carers
Two in three men said they would be
Role models
encouraged to use family-friendly policies if
they were confident that it would not impact Role models are essential for creating greater
their career. diversity within businesses. We’re proud
that seven colleagues have been externally
Flexible working is considered most
recognised for their inclusive leadership, x2
important when it comes to balancing work including four of our senior leaders. These
and care. However, take up is significantly benchmarks help identify future leaders,
lower than its perceived importance. advocates and executives and are published in
Doubled our paternity
Read the full study here partnership with the leave pay benefit
across the organisationSustainable economic growth
and financial inclusion
Our ambition Financial inclusion Environment Community investment Our impact20 Sustainable economic growth and financial inclusion
Our ambition Context
UK politics
We want to deliver long lasting, sustainable growth
The uncertainty surrounding the UK’s exit from the
and positive socio-economic impact not only through our
European Union is presenting challenges for the UK
charitable giving and community programmes,
economy, including an additional lag on business
but also through our business operations.
investment. There are also risks attached to the type of
exit the UK takes from the EU and so we are changing the
What this means for us
way we assess customer needs to take account of these
As a bank, our main activities need to deliver returns not new factors.
just for our shareholders but also to benefit our society
more broadly. To us, sustainable economic growth means Climate change
taking everyone with us on this journey, ensuring non-
Climate change is a shared global challenge and an
traditional businesses and those financially excluded have
increasing area of focus of the Bank of England and other
access to the right services and tools.
regulators. Both the Prudential Regulation Authority
We’ll do this by promoting financial inclusion for people (PRA) and Financial Conduct Authority (FCA) issued
and businesses, supporting the growth of Small and papers in 2018 on climate change risk management,
Medium Enterprises (SMEs) and social enterprises and
“With advances in technology and
building on the Financial Stability Board’s Task Force
considering the risks and opportunities of climate change evolving customer behaviour, we
recommendations. Banks are being challenged to embed
in the way we do business. climate change risks in governance arrangements and risk are seeing changes to the way
Our support of our vulnerable customers, helping small management practice. many customers access and use
businesses grow and prosper through our ‘Breakthrough’ financial services. This means
Financial inclusion: Small and Medium Enterprises
programme and advancing education through our it’s more important than ever to
universities scheme are just a few examples of our Small and Medium Enterprises (SMEs) play a critical role
keep customers at the heart of
commitment to drive sustainable economic growth. in the economy. They employ around half the UK private
sector workforce and drive job creation. Our research our business, especially those
shows that UK SMEs have created three times as many most vulnerable. That’s why I’m
jobs over the last five years than the UK’s large firms. so excited for our new partnership
However, access to finance is the main barrier to their with Alzheimer’s Society, aiming
growth, especially loans and equity finance.
to make us the UK’s best digital
dementia-friendly bank.”
usan Allen, Head of Retail and Business
S
Banking, Santander UK
Rhodes, C. (2017) Business Statistics, House of Commons Library Briefing Paper, No 0651221 Sustainable economic growth and financial inclusion
Financial inclusion We also organised knowledge masterclasses
We are proud to champion British businesses, and workshops with some of the UK’s most
from start-up to scale-up and beyond. innovative companies, including Auto Trader,
The Royal Mint and The Young Vic. Over 550
Santander Breakthrough helps ambitious SMEs grow and
businesses benefited from practical solutions
prosper through a range of activities focused on building
to grow their business across a wide range
connections, gaining knowledge, finding and retaining talent,
of topics including brand-led growth, cyber
and accessing opportunities for international growth and
finance. During 2018, we’re proud to have supported over 7,900
Key: security, communication and leadership.
businesses through these activities. l Breakthrough in
Branch events 2018 More than 1,700 SMEs have benefited
Tailored support for start-ups
from the Santander Universities
and SMEs
Internship Programme and its access
Our Breakthrough Connection events
to subsidised internships from over 80
provide an opportunity for peer-to-peer
networking and to learn from other partner universities.
successful entrepreneurs:
In 2018, over 4,200 businesses attended one
In 2018, Santander worked with the British
of 193 Breakthrough in Branch events, which Library to pilot a one-stop-shop for start-
connect business owners to their local business ups and SMEs through its national network
community across the UK. of Business and Intellectual Property
We’re proud to continue to support female
centres. The collaboration offered support
entrepreneurs through our Women in Business beyond everyday banking, including advice
mentoring scheme in collaboration with on securing intellectual property and free
Women Ahead. market intelligence.
Our Liverpool city incubator helps support
start-up founders, providing a workshop
programme, informal mentoring and a
network of like-minded businesses, all of
which help get a business through those first
challenging years. During 2018, we provided 4,200
tailored support to 28 businesses. businesses attended
Breakthrough in Branch events
https://www.insider.co.uk/news/smes-jobs-uk-santander-banking-13619316. European Commission Communication, ‘An action plan to improve access to finance for SMEs’ /* COM/2011/0870 final22 Sustainable economic growth and financial inclusion
Global ambitions Case study: RentalStep
Beyond everyday banking, we helped Santander UK’s incubator programme aims
businesses achieve their global ambitions, to accelerate the growth of start-ups and
with 478 companies benefiting from 67 small businesses through day-to-day business
activities aimed at supporting international support, office space and funded interns.
growth. These activities included a range of RentalStep was founded in 2016 with the aim
overseas and virtual trade missions in of making the renting process better for both
addition to webinars, roundtables and tenants and landlords, and has benefited from
‘meet the buyer’ events. our incubator programme since 2017, with a
total investment of over £600,000.
One trade mission in conjunction with the
Food & Drink Federation and the Department During a hugely successful 2018, RentalStep
of International Trade took 12 UK food and secured further funding as part of HM
drink manufacturers to India, showcasing Treasury’s Rent Recognition Challenge.
opportunities for manufacturers looking to Customer acquisition has continued to grow
export to the Indian food and drink sector, in the three months following the investment,
which is forecast to grow by 64% to £500 with a 500% increase in private tenants
billion by 2020. accessing their online services. RentalStep’s
growth has led to job opportunities, with
a new technical role thanks to the initial
funding, and a further two developer roles
and a customer role created.
Shaking up the SME switcher market
478 companies In 2018 we launched the new 1I2I3 Business
benefiting from 67 activities aimed at Current Account, to shake up the market for
supporting international growth
SMEs. This innovative, value-adding account
gives businesses up to £300 cashback per
annum, access to 1I2I3 Business World
preferential rates and offers, and a monthly
cash deposit limit of £1,000 at Santander
branches and Post Office counters. The account
has been rated as 5 Stars by Moneyfacts.
5 Stars
The 1I2I3 Business Current account
was rated as 5 Stars by Moneyfacts23 Sustainable economic growth and financial inclusion
Our branches remain a vital channel,
We are committed to taking into and we are committed to maintaining a
comprehensive national network. In 2018,
account the needs and expectations
we completed the refurbishment of 507
of all our customers. branches, and in order to deliver a branch
network for the future, we will refurbish a
further 100 branches over the next two years
with an investment of £55 million. We will
The future of branches: introduce community branches with spaces
our approach to host events catering for the financial needs
of our customers, such as fraud awareness
Banking habits are changing rapidly.
workshops or Breakthrough in Branch
Customers are increasingly using digital
events. Meanwhile, smaller branches will
channels to carry out their banking rather
use the latest technology to offer customers
than over the counter at our branches and
convenient access to services.
we expect this trend to continue across the
industry. With customers expecting continued Santander customers can also access over
investment in our digital banking platforms, the counter banking services through any of
we have had to review our branch network to the Post Office’s 11,500 branches across the
ensure that we have a model that is fit for the UK. This service is offered by 27 UK banks and
future. As a result of this, in January 2019 we provides a convenient way to bank for many
announced that we would be restructuring customers. In areas where we close branches,
our branch network, including closing our teams work closely with Post Offices
140 branches. to ensure local customers are aware of the
banking services available.
We are a signatory to the Access to Banking
Standard, which ensures open and fair
communication when banks decide to close
branches. In 2018, we closed 46 branches
in line with this standard and the changes in
2019 will also be carried out according to
these obligations.
£55 million
investment in our branches
in the next two years24 Sustainable economic growth and financial inclusion
Specialist support team for Money Advice Trust
vulnerable customers Santander and the Money Advice Trust
We remain committed to providing support for (the Trust) have a long-standing partnership
our vulnerable customers and have continued to to ensure that thousands of people in financial
make improvements in this area in 2018. A key difficulty, regardless who they bank with, Specialist Support Team Providing support
are able to access free, impartial debt advice. rolled out to over 7,500 for almost 900 vulnerable
focus has been making a dedicated specialist branch colleagues customers with complex needs
support team available to all colleagues in our We support National Debtline and Business
national network of branches. This has helped us Debtline with vital funding.
provide tailored support to almost 900 The Trust empowers people to engage with
vulnerable customers with complex or their banks and understand more about the
particular needs. financial challenges they face. This in turn
Through UK Finance, we’re also active members helps to ensure our customers become more
of the Financial Abuse Working Party, and have resilient, equipping them with the skills they
committed to the Code of Practice developed to need for a stable financial future.
support and protect victims of financial abuse.
Personalised and proactive support
for customers
We recognise that vulnerable customers need
to be treated with care and attention when
their local branch is closed. That is why we will
proactively contact them to ensure they are
supported and advised on how they can continue
to bank locally.
Where needed this can include walking with
customers to the Post Office to introduce them to
the Post Office team and demonstrate how they
carry out transactions. We can introduce them to
staff in a neighbouring Santander branch or help
customers switch their account to another nearby
provider. Our people will also take the time to talk
to vulnerable customers about how they bank,
changing the frequency of statements, ordering
cash cards and demonstrating how to use cash
machines and contactless cards.25 Sustainable economic growth and financial inclusion
Environment Climate change risk
We recognise that climate change is a significant
global issue and support the objectives of the Paris
Climate change Climate Agreement on limiting emissions. In response
to recent developments from the PRA, the FCA and
We understand that the banking sector has an important
the Financial Stability Board’s Task Force (TCFD), we
role to play in the transition to a low carbon economy,
which presents both risks and opportunities for our £922 million welcome an industry-wide approach to enhancing
of debt financing to 19 renewable our climate risk management practices, governance
business. Large investment in renewable energy
energy projects in 20186 and disclosure statements.
infrastructure is needed to fund this transition. At
the same time, we must continue to improve our In 2018, we formed a cross-functional working group
understanding and application of climate change risk on climate change to shape our response in this
to our lending activity. Renewable financing rapidly developing area. We are working alongside
other industry participants, as well as engaging with
United Nations Pilot Project our investors and other stakeholders.
We are one of the largest renewable energy
In 2017 Banco Santander, together with 15 other leading
financiers, ranking jointly as the number one
banks, joined a United Nations Environmental Programme
Financial Initiative (UNEP FI) aimed at implementing lender to the sector by number of transactions
recommendations from the Financial Stability Board’s in 2018 in Europe and the UK.7
Task Force for Climate-related Financial Disclosures
(TCFD). This involved developing scenarios, models Our Project & Infrastructure Finance team provides
and metrics to enable scenario-based, forward-looking financing to onshore and offshore wind, solar and biofuel
assessment and disclosure of climate-related risks and projects, both at a preconstruction and operational
opportunities. In 2018 two outcomes were published: stage. In addition to this, we offer advisory services to our
the first, a guidance focusing on transition risk (Extending renewable and alternative energy clients on how to raise
Our Horizons: accessing credit risk and opportunity in a capital to fund these types of projects.
changing climate) and the second, a report that helped
banks assess risks and opportunities arising from physical In 2018 we provided £922 million in debt financing to
risk (Navigating a New Climate). 19 renewable energy projects. Each of these projects
support our common objective to decarbonise society by
As part of the UNEP FI pilot project, Banco Santander’s risk producing renewable energy and reducing overall
function has been working on applying methodologies energy consumption.
and tools to stress test specific sectors and build expertise
on the analysis of transition and physical risks. Climate
change is included in the risk section of our annual reports
at both a UK and Group level.
6. To be consistent with prior year reporting this figure includes business that was transferred in 2018 as part of our ringfencing, and now sits within Santander London Branch. 7. Inframation Renewable league tables UK, 201826 Sustainable economic growth and financial inclusion
Internal environmental performance
Total energy usage (MWh)
Ranking second of UK banks
170,000
for emissions reduction
160,000
For the third year in a row, Santander has
ranked second among the top five retail banks 150,000
Electricity usage in the UK for environmental performance 140,000
fell by 4.9% related to the UK CRC (Carbon Reduction
in 2018 130,000
Commitment) Energy Efficiency Scheme.
Since 2010, we have reduced our emissions 120,000
year on year.
Robust management Our significant reductions can be attributed
110,000
100,000
Internally, we have a robust environmental to a switch to more efficient energy sources,
sustainability practice involving multiple a move away from coal, and a reduction in 2016 2017 2018
stakeholders across the business as well as energy consumption. Electricity usage fell by
governance through a dedicated Sustainability 4.9% and gas usage by 3.0% in 2018. MWh usage
Working Group (made up of senior managers
Our electricity is sourced entirely from green
across the business). Our Environmental &
supplies including biomass, wind and water.
Energy Management Systems provide an
operational management framework across Over 99.6% of the waste generated through
our 15 main offices and data centres in the UK. our operations (primarily paper, plastic, Gas usage (MWh) Electricity - Green Biomass (MWh)
Smart meter technology allows us to track the aluminium, glass and food), is either recycled 35,000 150,000
energy performance of our properties, helping or diverted from landfill. Our online banking
30,000 140,000
us to reduce energy wastage by optimising customers receive paperless statements (with
our plant operation. In 2018, we successfully an opt-out option), and our print suppliers 25,000 130,000
recertified the ISO 14001 and ISO 50001 have ISO 14001 certification and maintain full 20,000 120,000
accreditation across all of these properties. Forest Stewardship Council chain of custody.
15,000 110,000
We have a Go Green Network of more than 10,000 100,000
2,700 employees championing initiatives to 2016 2017 2018 2016 2017 2018
be more environmentally friendly, such as 99.8% MWh usage MWh usage
a successful plastic reduction campaign in
2018.
Over 99.8% of waste
is ethically recycled
or diverted from land fill27 Sustainable economic growth and financial inclusion
Community investment
We support and invest in communities across the UK to foster sustainable economic growth.
Helping our communities prosper Our ambition is to become the
Our volunteering and fundraising in 2018 focused In 2018 we increased the number of people best digital dementia-friendly bank
on building skills, developing knowledge and reached through our Wise workshops by in the UK
supporting innovation. Our people had the
87%
opportunity to volunteer for local community 397,466
organisations, and we saw over 11,500 colleagues In January 2019, we welcomed people reached
engage with this programme during 2018. in 2018
Alzheimer’s Society as our new charity
Through work experience initiatives with our
partners National Citizen Service and Career Ready,
partner, chosen by a colleague vote.
we offered work opportunities to students from
all backgrounds, which help swell the talent pools 2017 38,284
needed by all businesses and the wider economy. Our aim is to become the best digital dementia-
friendly bank in the UK. The focus of the
partnership will be to improve financial inclusion Over £5.4 million
Santander Foundation 2018 71,745 awarded in grants and matched
and help those within our communities who
In 2018, the Santander Foundation awarded donations by the Santander
may struggle to cope with new technology, as Foundation in 2018
over £3.3 million in grants to almost 700 well as fundraising activities and volunteering.
Thousand 0 10 20 30 40 50 60 70 80
organisations to deliver projects that improve skills Together with Alzheimer’s Society, we’ll seek to
and knowledge and promote innovative solutions explore ways in which we, as a bank, can make a
to help disadvantaged people in the UK. In
addition, the Foundation donated over £2.1 million
difference. We’ll work closely with the charity to 87%
Educational workshops better understand and respond to the needs and
through the Staff Matched Donation Scheme to challenges of both our customers who may be
support our employees’ fundraising for charities of We further developed our popular in-school
mentoring programme, ‘Wise workshops’, where
affected by dementia, and their carers. Workshop students
their choice. In 2019 the Foundation will undergo
a strategic review to redefine its purpose and Santander volunteers teach students about topics rose by 87%
such as responsible money management or career in 2018
activities with the ambition to deliver the greatest
positive impact in our communities. planning, to include a new module around staying
safe online. These workshops soared in popularity
in 2018, with enthusiastic uptake by colleagues. The
number of workshop students rose by 87%.28 Sustainable economic growth and financial inclusion Social enterprises and community projects
We know from our research with Social Enterprise UK
that small, socially-focused organisations can struggle to
Santander Universities
access the finance they need to realise their full potential.
Santander Universities is our global programme to The Changemaker Fund, running from 2017 to 2019,
support and advance education. Since 2002, Banco Over €1.6 billion was one part of our effort at Santander to help charities
Santander has donated over €1.6 billion to universities donated by Banco Santander
and community enterprises to get off the ground.
group to universities since 2002
across the globe. Partnering with Crowdfunder, we aimed to enable
‘Vision 2020’ sets out our aim to provide impactful, entrepreneurs to tackle social challenges. Analysis by the
diverse and inclusive support to future talent through Social Innovation Partnership found:
education, entrepreneurship and employability
programmes. Our goal is to provide life-changing
£1.15 million in funds raised
opportunities to more people over the next three years More than 29,000 with Santander contributing over £450,000
than we have in the previous ten. We’ll ensure 80% of people supported by our
recipients are from widening participation backgrounds Universities programme in 2018
and aspire to an equal gender balance.
75 new full-time jobs created
Santander Cycles across the funded projects
In the UK we’ve donated over £79 million to 84
Since launching in 2015, Santander Cycles continue to
UK partner universities in the last eleven years. help create a prosperous, connected and mobile society. As part of our partnership with Social Enterprise UK,
Cycling can help improve physical and mental health we also funded financial skills workshops for social
In 2018, we directly supported more than 29,000 by encouraging an active lifestyle, as well as boosting enterprises, training 607 people in 2018.
students, graduates and university staff. We also productivity at work. Public cycling schemes can also
funded internships for students and graduates in SMEs support local economies, by providing residents and Our future direction
across the UK, supporting 2,262 internships with 38% tourists with an alternative way to travel and commute. In 2019, we aim to go beyond traditional volunteering
of students going on to further employment. Our This can mean that local businesses receive more and fundraising to deliver long-term, meaningful
aspiration is to achieve a 75% employment rate from exposure, with increased choice for more customers. In value to society. Moving beyond skills, knowledge and
these internships by 2020. addition, cycling can avoid air pollution and greenhouse innovation, we will focus our resources on topics where
We also run the Santander Universities gas emissions caused by cars or taxis. For more findings, we can make a real difference such as financial inclusion,
Entrepreneurship Awards. In 2018, we included an please see our impact pathway, conducted by PwC, in the job creation, and education, digital inclusion and fighting
‘Accelerator Week’ to provide 18 of the best start-ups 2017 Sustainability Report. financial crime.
with 15 masterclasses from experts and business
leaders. Our £1 million Enterprise and Entrepreneurship
Fund, launched with 15 partner universities, aims to
help students start, run or scale a business.29 Sustainable economic growth and financial inclusion
Age UK and Barnardo’s partnership
In 2016 our colleagues chose to support Age UK
and Barnardo’s with a three year partnership
designed to help our communities prosper.
£3.2m
Over More than
£3.2 million 10,000 hours
raised to support of time to directly support
Age UK and Barnardo’s people for both charities
95%
Together, of participants
we’ve supported 57,533 people said events made
to have the skills, knowledge them feel proud to
and resilience to face the future work for Santander UK
with confidence30 Sustainable economic growth and financial inclusion
Our impact
Tackling financial and social exclusion with our charity partners
£82m
One of the aims of our partnership with Age UK and Barnardo’s was to tackle the
root causes of financial and social exclusion affecting older and younger people.
of unclaimed
Ambitions for Later Life On-Track project benefits accessed by
help of Age UK
The over-60s is the fastest-growing group We established the On-Track project with
in society, with many at risk of financial Barnardo’s to transform the lives of the
and social exclusion, and 1.9 million older most vulnerable young people in society,
people already living in poverty. Fewer than including care leavers, young people with 382
three in ten people at retirement age have learning difficulties, or those with mental
any plan for funding long term care. health issues.
Since 2016 the service has helped 382
young people
helped overcome major
With Santander funding, Age UK young people overcome major challenges challenges in their life
in their lives, enabling them to fully
launched ‘Ambitions for Later
participate in society and have access to
Life’. This initiative has supported financial services which meet their needs.
over 5,800 older people to plan Barnardo’s worked with local Santander
for the times ahead and be more branches to provide employability support
such as mentoring. This programme
financially resilient. provides a strong social return on
investment of £3.20 for every £1, based
The primary benefit of the initiative has on a robust cost-benefit methodology
been to support financial security, with developed and internally validated by
Age UK helping people to remain in their Barnardo’s; demonstrating the project’s
homes, afford to leave the house and use wider benefit to society.
transport such as taxis. This has been Although our three year corporate
transformative for many older people. partnership has now ended, together we
As of December 2018, Age UK have will continue to explore ways to provide
helped people access over £8.7 million in support where it’s needed most.
unclaimed benefits through
the programme.31 Sustainable economic growth and financial inclusion Growth capital study Case study
These interviews give us the confidence Flight Club is the London-based
Driving Sustainable Economic Growth in SMEs that our Growth Capital investment does birthplace of Social Darts, which
indeed boost growth meaningfully for uses ground-breaking technology
our customers. To supplement these and fast-paced multi-player games.
Understanding our value Customer interview results
qualitative findings, we commissioned Flight Club has secured £5 million
As part of our new approach to We believe that our funding has a positive a small study aimed at confirming and in Growth Capital funding from
sustainability, we aim to better understand impact on growth, across revenue, profits helping us quantify the impact of growth Santander Business Banking to help
and measure the value we create beyond and employee numbers. In order to better capital lending on firms’ revenue, profit it open additional venues across the
profit and across all stakeholder groups. We understand this impact, we interviewed a and employees’ growth. The study UK, the first of which is in Victoria. The
started by doing an impact assessment on representative sample of our portfolio which was limited in scope to 17 instances of business has seen staff numbers rise
Santander Breakthrough in 2017, available comprised of 18 companies. Our findings lending and so it is important to note the from 84 to over 250 to accommodate
in the 2017 report. This impact assessment were as follows: confidence interval1 around the this impressive growth.
describes in qualitative terms how the central results.
Our funding is used by customers for Flight Club has also benefited from
activities we deliver through Breakthrough
meaningful investment and capital Taking into account these limitations, a part-funded intern through the
have multiple impacts, for example, on
spend, including recruitment, improved the study provided additional evidence Santander Breakthrough programme.
employability, jobs, economic growth or
IT systems and platforms, expansion into of growth across revenue, profit and
even wellbeing.
new markets and international growth. employee numbers. It estimated that,
Growth Capital financing of SMEs within one year, for every £100,000 lent:
Growth Capital deals seem to also
“We’re delighted to be
As a financial institution, one of Santander have a positive impact on job creation, Revenues increase between £125,000
UK’s most important roles is supporting despite the increasing adoption of new and £255,000 the following year. opening in Victoria and
SME growth. Finance is essential for SMEs technologies or headcount measures have strong aspirations
Profits (EBIT) increase between £10,000
taken on acquisition deals.
to grow, but there is substantial evidence and £60,000 the following year. to grow further, taking
that SMEs face larger growth constraints
Often, our funding improved the Social Darts to as many
Employees increase between 0.5 and
and have less access to formal sources of
companies’ profitability. This is despite
external finance. Our Growth Capital team 2.7 the following year. people as possible,
the fact that entrepreneurs and start-ups
is designed to provide high growth SMEs The study compared our Growth Capital and the funding from
initially invest in higher overheads to scale
with innovative funding solutions. In 2018, customers against a control group from
their business, which can depress profits Santander will help us
we provided £20.7 million of growth capital FAME database with similar firms who had
in the short term.
and £100.7 million of senior debt to 35 not received any lending, from Santander
fulfil this ambition.”
companies, as part of our Breakthrough We also see an increase in revenues on Ross Shepley-Smith, Chief
UK or other providers.
programme. The team’s transactions fall the back of our support in most cases, Financial Officer, Flight Club
with outperformance in newer areas of These interviews, the quantitative
into two areas: those which facilitate
customers’ operations. study, our customer case studies and
organic growth, and those involving a
Breakthrough impact pathway together
change in ownership.
help demonstrate the value our support
brings to start-ups and small businesses.
We calculated the mean on a sample as a proxy for the mean on the full population, and on such a small sample it is prudent to quote the 90% confidence interval
– where we can be 90% certain this range contains the true mean of the population. A database of company information in the UK and IrelandYou can also read
