Modern Slavery Act 2015

This statement is made pursuant to Section 54(1) of the Modern Slavery Act 2015 and sets out the steps the Company has taken during the financial year from 1 August 2021 to 31 July 2022 to ensure that slavery and human trafficking is not taking place in our supply chains or in any part of our business.

Group overview

Close Brothers Group plc and its subsidiaries (“Close Brothers” or “the group”) is a leading merchant banking group providing lending, deposit taking, wealth management services and securities trading.

Close Brothers was established in 1878 and today employs approximately 4,000 people, principally in the UK. Close Brothers Group plc is listed on the London Stock Exchange and is a member of the FTSE 250.

The group is comprised of three divisions – Banking, Asset Management and Securities, the Banking division being the largest.

Close Brothers’ Banking division, comprising Close Brothers Limited and its subsidiaries, provides specialist lending to small and medium-sized businesses and individuals across a diverse range of asset classes, and also offers deposit taking services.

Close Brothers Asset Management provides a range of financial advice and investment management services to private clients and professional advisers in the UK.

The group’s Securities division comprises Winterflood, a leading UK market-maker offering execution services to retail stockbrokers and institutional clients.

The group is a financial services provider, with a limited supply chain which predominantly focusses on procuring professional and technology services, with most of its suppliers based in the UK and the EU.

Policy and principles

Close Brothers is committed to complying with its obligations under the Modern Slavery Act and other relevant legislation relating to the detection and prevention of modern slavery and human trafficking. Close Brothers is committed to implementing and enforcing effective systems and controls that seek to ensure that modern slavery is not taking place anywhere in its business or in its supply chains.

Consistent with its obligations under the Modern Slavery Act, the group is committed to ensuring there is transparency in its own business and in its approach to tackling modern slavery throughout its supply chains. Close Brothers expects and requests the same standards from its contractors, suppliers and other business partners.

Close Brothers has a Group Modern Slavery Policy as well as a Group Third Party Management Policy to ensure the identification, assessment, mitigation and monitoring of risk within its supply chain. This includes a third-party risk appetite statement which formalises the position that Close Brothers has no appetite for third parties taking risks on its behalf that would be unacceptable if taken internally. The Group Third Party Management Policy is further underpinned by standards and procedures which prescribe the risk assessment and due diligence requirements to consistently and effectively identify and mitigate against risks in the supply chain, including consideration of those related to modern slavery.

As a signatory of the United Nations supported Principles for Responsible Investment (“PRI”), our Asset Management division is committed to improving the way we measure, report and manage environmental, social and governance (“ESG”) issues throughout our investment activities.

Sourcing, contractual standards and due diligence

Close Brothers adopts a risk-based approach for selecting and managing its supply chain to ensure that risk is appropriately identified, assessed and mitigated. With a framework underpinned by technology to facilitate the process and drive MI and reporting, the group considers a broad range of risks, including those specifically relating to modern slavery. The Chartered Institute of Procurement and Supply (“CIPS”) Corporate Code of Ethics has been incorporated into our Third Party Management (“TPM”) framework.

Close Brothers has template contractual provisions which require suppliers to comply with laws and regulations, including the Modern Slavery Act. These are used wherever possible for new and renewed supplier relationships and include requirements for standards to be passed down the supply chain where appropriate. For suppliers performing more labour intensive services, like transportation or manufacturing for example, enhanced due diligence is performed to identify supplier policies in place to prevent modern slavery, including forced labour, child labour, discrimination and inappropriate labour rights practices.

Actions taken in financial year ended 31 July 2022

During the financial year ended 31 July 2022, Close Brothers took the following steps with the intention of further ensuring that slavery and human trafficking does not take place in its business or supply chains.

1. Group TPM Modern Slavery Policy

There is continued adherence to the Group TPM Modern Slavery Policy. The policy applies to all group companies, divisions and subsidiary businesses, and their respective permanent and fixed-term employees, temporary staff and contractors.

2. Third Party Management Framework

Continuing to review and update the Group Third Party Management Policy, and supporting standards and procedures to ensure that the framework continues to be in line with best practice and applicable regulatory requirements, including those in relation to modern slavery and human trafficking.

We have drafted our first iteration of our supplier code of conduct, including requirements relating to modern slavery. We are now looking to pilot with a group of our strategic suppliers in order to get their feedback, refine and finalise before rolling out more broadly.

Moreover, we have included sustainability related metrics as part of our annual supplier survey in order to monitor our supply chain, collate key data as well as introduce specific KRIs for some of our most critical suppliers.

3. Sourcing Practices and Due Diligence

Close Brothers has continued to consider the requirements of the Modern Slavery Act when sourcing new goods and services from the third-party supply market. This includes a risk assessment based on the nature of the services and supplier resulting in increased due diligence in heightened risk scenarios.

Members of the Banking Division’s Third Party Management function continue to be trained to the CIPS Ethical Procurement and Supply standard. Close Brothers Banking division also maintains its Corporate Certification for Ethical Procurement & Supply from CIPS through annual reassessments.

4. Third Party Monitoring

The group’s Third Party Monitoring function is continuing to undertake risk-based reviews via desktop assessments and has resumed on-site visits since Covid where possible. The team continues to assess and monitor our most critical suppliers’ control environment and gain assurance that they are operating within Close Brothers’ expectations, including with regard to modern slavery and human trafficking. The function continues to provide the mechanisms to ensure that providers are acting legally and responsibly, including from a modern slavery and human trafficking perspective.

The team continues to feed into the Sustainability Working Group with any relevant outcomes resulting from their reviews. This has enabled regular and open communication between both teams as well as opportunities for continued improvement.

The findings of these reviews continue to be categorised and formally tracked, reported and communicated to the supplier, where relevant, along with our expectations for the implementation of time-bound corrective actions. There were no instances of non-compliance identified in relation to Modern Slavery during FY22 as a result of these reviews.

Next Steps 

Actions currently planned for the 2023 financial year include:

• Continuing to demonstrate the highest levels of knowledge and awareness regarding ethical issues including the renewal of CIPS Ethical Procurement and Supply certifications and team members studying towards CIPS Commercial Procurement & Supply Apprenticeship Programme.

• Completing the pilot of the Code of Conduct with a selection of key suppliers before refining and rolling out to a broader third party population in the supply chain, and continuing to ensure a collaborative approach across our supplier relationships.

• Further refining our third party monitoring approach by developing sustainability standards that align to the supplier code of conduct and focusing on key sustainability related priorities.

• Continuing to review data in order to identify specific targeted

Approval

This statement is made with respect to the financial year ended 31 July 2022 in accordance with section 54(1) of the Modern Slavery Act 2015. This statement covers Close Brothers Group plc, Close Brothers Holdings Limited, Close Brothers Limited, Close Leasing Limited, Close Invoice Finance Limited, Close Brothers Vehicle Hire Limited, Winterflood Securities Limited, Close Asset Management Holdings Limited, Close Asset Management Limited and Novitas Loans Limited (each a “Group Company”), Close Asset Management (UK) Ltd and it has been approved by the Board of Directors of Close Brothers Group plc and each other Group Company. The statement will be reviewed and updated (if necessary) annually to reflect Close Brothers’ ongoing commitment to ensuring that its business and supply chains are free from slavery and human trafficking. The statement is signed by a director of Close Brothers Group plc, the holding company of the Close Brothers Group.

Adrian Sainsbury

Chief Executive, Close Brothers Group plc

26 January 2023