Lloyds Banking Group (Lloyds) is a UK-based financial services group. The financial institution provides a wide range of banking and financial services, focused primarily on retail and commercial customers. It operates through three segments: Retail; Commercial Banking; and Insurance and Wealth. In 2021, Lloyds had GBP 886 billion in assets under management and 57,00 employees.
In terms of senior leadership accountability, the responsibility for sustainability issues lies with Lloyds’ board of directors. Moreover, the financial institution links the remuneration of its executive team to sustainability performance criteria. In terms of female representation in leadership positions, the financial institution has a gender-balanced board of directors where 4 out of 10 members are women. It also discloses a target to increase the representation of women in senior roles to 50% by 2025. The financial institution has identified and prioritised its impacts through a materiality assessment process which included feedback from external stakeholders. It also discloses a list of trade associations of which it is a member including sustainability- and non-sustainability-related organisations.
As a member of the Glasgow Financial Alliance for Net Zero (GFANZ), Lloyds has set a target of net-zero financed emissions by 2050. In terms of engagement, the financial institution discloses the key sectors it has identified as priorities to engage with on climate change, and the rationale for choosing these priorities. It also discloses that alignment with the Paris Agreement is one of its engagement topics and requires some of its clients to have a strategy aligned with the Paris Agreement. Lloyds also engages on nature- and biodiversity-related impacts. Looking to the future, the financial institution’s subsidiary, Scottish Widows, discloses time-bound targets for its climate solutions. By 2025 the subsidiary aims to have invested 1 billion in climate solutions. The financial institution is also committed to minimising its negative impacts on nature and biodiversity.
Lloyds has a grievance mechanism accessible to all workers and external stakeholders to raise human rights, as well as bribery and corruption concerns or complaints. It also commits to prohibiting bribery and corruption, respecting the health and safety of workers and protecting personal data, in public policy documents. In terms of workforce diversity, the financial institution discloses a breakdown of its total direct operations workforce for each employee category by gender and ethnicity. Additionally, it discloses the proportion of its workforce covered by collective bargaining agreements. Regarding transparency on financial inclusion, the financial institution discloses the amount of lending it directs towards SMEs. Finally, Lloyds discloses that its Chief Financial Officer has responsibility for its global tax strategy.
In terms of gender equality, Lloyds has an opportunity to reach at least 40% female representation in senior leadership positions. Currently it has 37.7% women in its leadership team. Furthermore, there is no evidence that the financial institution discloses the ratio of basic salary and remuneration of women to men in its total direct operations workforce for each employee category. While the financial institution discloses actions it takes to address gender equality, for example by increasing the representation of women in senior roles, it is not clear how these actions address any identified pay gaps. In terms of engagement, Lloyds has an opportunity to describe its engagement approach on sustainability themes and impact topics with clients and investees, across all its financing activities.
There is no evidence that Lloyds discloses that it collectively engages with companies to which it provides financial services on the topic of alignment with the Paris Agreement. In terms of climate solutions, while the financial institution discloses that it directed more than GBP 6.9 billion towards green and ESG-related finance in 2021, it has an opportunity to disclose the aggregate amount or share of finance it devotes to climate solutions specifically. Moreover, the financial institution has an opportunity to disclose progress against the targets it has set for its climate solutions. On the topic of fossil fuels, while the financial institution will no longer directly finance the development of new oil fields, and plans to completely exit thermal coal power in the UK by 2022, it has an opportunity to disclose that it will not provide any form of finance to any new fossil fuel project.
Lloyds publicly states that it respects human rights. However, it has an opportunity to use stronger language to turn this statement into a formal commitment. It could also describe a comprehensive process for identifying its human rights risks and impacts across all its activities, especially all its financing activities. In terms of workforce diversity, the financial institution discloses the ages of its board of directors but has an opportunity to disclose this information for each employee category. Finally, there is no evidence that Lloyds discloses the amount of finance directed towards usually excluded groups or low-income developing countries.
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Revenue: GBP 37.44 billion; Total assets: GBP 886.53 billion