Barclays
Annual Report 2022

Plain-text annual report

Fulfilling our Purpose Our Purpose... and our Values... influence our strategy... delivered through Group synergies... 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. Respect Integrity Service Excellence Stewardship Our diversification, built to deliver double-digit returns We work as one organisation to create synergies and deliver greater value. Strategic priorities to sustain and grow creating positive outcomes for our stakeholders. Customers and clients Colleagues Society Investors Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 01 Parts 1, 2 and 3 of Barclays PLC 2022 Annual Report together comprise Barclays PLC’s annual accounts and report for the purposes of Section 423 of the Companies Act 2006. Please note that throughout the document, graphical representation of component parts may not cast due to rounding. Strategic report The Barclays PLC Strategic Report 2022 was approved by the Board of Directors on 14 February 2023 and signed on its behalf by the Chairman. The Strategic Report 2022 is a part of Barclays PLC’s Annual Report 2022 and is not the Group’s statutory accounts. It does not contain the full text of the Directors’ Report, and it does not contain sufficient information to allow as full an understanding of the results and state of affairs of the Group and of its policies and arrangements concerning Directors’ remuneration as would be provided by the full Annual Report 2022. Report of the auditor The Auditor’s report on the Financial statements of Barclays PLC for the year ended 31 December 2022 was unmodified, and its statement under Section 496 of the Companies Act 2006 was also unmodified (see page 399 of Part 3 of the Annual Report 2022). Inside Part 1 Strategic report Group overview Prepared for the road ahead Chairman’s introduction Chief Executive’s review Our business model Our strategy Section 172(1) statement Engaging with our stakeholders Key performance indicators Customers and clients Supporting our customers and clients Colleagues Our people and culture Society Making a difference Investors Summary financial review Barclays UK Barclays International: Corporate and Investment Bank Barclays International: Consumer, Cards and Payments Managing risk Viability statement Non-financial information statement ESG ratings performance ESG-related reporting and disclosures TCFD Content Index Shareholder information Key dates, Annual General Meeting, dividends, and other useful information 1 2 3 4 6 10 12 16 21 23 26 31 39 45 49 52 54 56 58 60 63 64 65 66 66 Inside Part 2 Climate and sustainability report Introduction Risks and opportunities Implementing our climate strategy Resilience of our strategy Inside Part 3 Governance Governance contents Board Governance Directors’ report Remuneration report 69 70 73 77 127 Other Governance Risk review Risk review contents Risk management Material existing and emerging risks Principal risk management Risk performance Supervision and regulation Financial review Financial review contents Key performance indicators Consolidated summary income statement Income statement commentary Consolidated summary balance sheet Balance sheet commentary Analysis of results by business Non-IFRS performance measures Financial statements Financial statements contents Consolidated financial statements Notes to the financial statements 141 141 142 143 197 246 264 264 266 269 282 296 370 378 378 379 381 382 383 384 385 392 397 397 416 424 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 02 Group overview A resilient universal bank built to deliver double digit returns Barclays supports individuals and small businesses through our consumer banking services, and larger businesses and institutions through our corporate and investment banking services. Barclays is diversified by business, geography and income type. £7.0bn Profit before tax (PBT) £336.5bn Risk weighted assets (RWAs) 10.4% Return on tangible equity (RoTE) Barclays UK Barclays International £2.6bn PBT £73.1bn RWAs 18.7% RoTE £5.0bn PBT £254.8bn RWAs 10.2% RoTE UK retail and business banking Helping customers with their day-to-day banking needs and business services for clients from high-growth start-ups to small and medium enterprises (SMEs), Consumer, Cards and Payments Offering credit cards and retail products outside of the UK, a global private bank, and enabling businesses around the world to make and receive payments. Corporate and Investment Bank Aiding money managers, financial institutions, governments, supranational organisations and corporate clients to manage their funding, financing, strategic and risk management needs. + Read more Page 49 + Read more Page 54 + Read more Page 52 + Read more Page 48 Barclays Execution Services (BX) is the Group-wide service company providing technology, operations and functional services to businesses across the Group. Barclays Execution Services Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 03 Prepared for the road ahead Our Purpose is to deploy finance responsibly to support people and businesses, for the common good and the long term. To do so we must be strong as an institution, prepared for the future, able to navigate change and focused on the evolving needs of our stakeholders. Our model and strategy are designed to ensure we remain resilient through market cycles and long-term trends. In recent years our diversified model has delivered sustained income growth even through significant macroeconomic change. Our strategic priorities anticipate three major trends: The impact of technology on consumer products and services As the impact of technology on consumers continues to drive innovation and market access, our UK retail and business bank, combined with our international consumer lending, cards and payments franchise, give us breadth across consumer financial services. We have invested in our platforms including cloud technology and our mobile applications, creating more versatile, lower cost infrastructure. Combined with the depth and quality of our customer data and insight, we are well placed to anticipate the ever-changing needs and expectations of consumers and small businesses, delivering more personalised products and services. The role of capital markets as the principal driver of global growth The long-term shift to capital markets as the principal source of funding has continued across both public and private markets, growing the investment banking fee wallet. As one of the few global diversified banks headquartered outside of the US, but with a scale Corporate and Investment Bank in the US, our model allows us to support our clients' financing activity. We offer expertise in a wide range of services, including financial advisory, capital raising, financing and risk management services. These services help corporations, financial institutions and governments worldwide to raise capital and manage their risks. As the competitor market evolves, we have adapted to capture new opportunities including growing our franchise in Europe and the US, expanding in certain sectors or products, and integrating our approach to our clients to offer the best solutions to the most complex needs. The transition of the global economy towards low-carbon energy The transition towards a low-carbon economy is one of the defining challenges in the current and coming decades. Helping customers and clients to navigate this complex challenge will be an important part of fulfilling our Purpose and capturing the opportunity this global economic shift offers. We are building our expertise in this area to help customers and clients with their needs, as well as working to reduce our financed and own operational emissions. Furthermore, we are investing in businesses developing innovative new technologies which address the challenge, helping them to grow and to support the transition. We continually review our operating environment for emerging trends, including regulation, and adapt to address them, as we have with our strategic priorities. These trends are considered throughout the report, including on pages detailing progress against our strategy and in the divisional reporting. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 04 Chairman’s introduction We are resilient for the future 2022 was a year of almost unprecedented challenges for Barclays and for society more broadly. As a bank, we continued to demonstrate our resilience, our ability and commitment to support customers, clients and wider stakeholders in ever- changing economic conditions. In my letter in last year’s Annual Report, I talked about the challenging times ahead. It is clear this was an understatement. The intervening year has seen war in Europe, increasingly frequent climate disasters, COVID-19 still a great threat in large parts of the world, a partial reeling-in of globalisation and considerable pressure on households and businesses from rising costs. We have left behind the economic comfort zone of low inflation and predictable interest rates. The reasonably free flow of goods, including sources of energy, around the world can no longer be so easily taken for granted. As a result of these and other factors, free market capitalism is not just under increasing pressure but, rightly, faces a more forceful requirement to demonstrate how it can contribute to inclusive, sustainable and global economic growth. In such times it is good to be able to report that Barclays remains financially and operationally resilient. We finished the year with both a return on capital and a capital ratio that met the target levels which we had set. All of our businesses, across consumer and wholesale, performed well. I am also pleased to report that Venkat and Anna, the new Chief Executive and Chief Financial Officer respectively, have navigated well the challenges of their first year. However, they, their Executive Committee colleagues, and the Board as a whole, are very conscious that there is much work ahead. First, the very uncertainty that has created the volatility that in turn powered the results in Markets can have adverse consequences for households and corporate customers; we will work hard to support our customers and clients through this period. Secondly, we have to improve aspects of the way Barclays operates in order to eliminate the type of error that led to the loss relating to the issuance of securities materially in excess of the limits under certain of our US registration statements. This incident reflects internal failings which we are determined to remedy; elsewhere in this report we cover in more detail this issue, its causes and consequences and what we have done and are doing to mitigate the risk of any similar failings. Free market capitalism faces a more forceful requirement to demonstrate how it can contribute to inclusive, sustainable and global economic growth. In light of this incident and the environment in which we operate, we must make sure that our programmes embed a higher standard of operational performance, and demonstrate measurable progress to shareholders. Thirdly, our share price performance has not reflected the underlying business strength. It is only with consistent performance, without the negative impact of avoidable incidents, that we can hope to earn a better reputation for reliable earnings and thereby materially reduce the discount at which the bank’s shares trade to our book value. Facts and figures 30.8p EPS 2021: 36.5p 7.25p Dividend 2021: 6.0p £1.0bn Announced buyback of shares 2021: £1.5bn c.13.4p Total payout per sharea 2021: 15.0p Note: a Includes total dividend for 2022 of 7.25p per share and total share buybacks announced in relation to 2022 of £1.0bn. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Chairman’s introduction (continued) As Venkat says in his letter, we therefore go into 2023 determined to remain resilient in all respects, whilst performing at a more consistently excellent level. Considerable investment and progress have been made over the last five or so years to enhance the resilience of our business, but there are still investments to be made, processes to simplify and behaviours to change before we can be more satisfied with our overall performance. Returning to the broader theme of the role of business in addressing today’s socio-economic and other challenges, I would like to comment on the ever-increasing need for partnership between the public and the private sector. Let me begin by emphasising that we welcome constructive dialogue between finance, industry and government. Finance has a big role to play in supporting growth initiatives in the UK whilst at the same time protecting households and smaller businesses as far as we can from the immediate ramifications of high inflation, higher interest rates and other disruptions in the economy. Barclays has the people and skills to compete with the best internationally, to bring best-in-class business practices to the UK and to export its services elsewhere. To do so, it is important that its ability to compete is supported by developments at home, political and regulatory. We welcome the UK Government’s ‘Edinburgh Reforms’ and it is good too that the UK Government and regulators embrace the importance of both competition and of competitiveness, and the need to re-energise the UK’s capital markets. A strong prudential regime is part of that, provided it operates in coherence with international standards and practices. But it is not, alone, sufficient as a means to facilitate the domestic and international competitiveness of our major financial institutions and capital markets. There is a purpose, energy and creativity in the people of Barclays which will continue to be deployed for the benefit of the communities we serve. Good engagement between authorities and industry about the outcomes of policy and supervision, and the complex interactions of policy with broader market dynamics, are necessary to deliver the agility and innovation both government and business want to see from the UK’s financial sector. The new measures and obligations in the Financial Services and Markets Bill helpfully clarify the importance both of competitiveness as an outcome of policy and of transparent and informed public debate in this regard. The success of these measures will not be in the legislation per se, but in the quality of debate it establishes between government, regulators, business and parliamentarians, and the direction it thereby informs and creates. Secondly, I have written before about our role in addressing effectively the climate challenge, whilst meeting the world’s energy demands at the same time. In the last year, energy security has joined sustainability and affordability as a major challenge. The financial sector has an important part to play in ensuring that we help address all three dimensions – the energy trilemma. We recognise that a faster transition from fossil fuels to lower carbon energy is necessary to meet the Paris Agreement goals. Barclays PLC Annual Report 2022 05 both the demand-side and supply-side issues which have led to a decline in equity ownership in the UK, a reduction in UK listings and IPOs, and a diminution of the risk appetite of UK capital. Thank you I would like to start by thanking all my Board colleagues for their contributions this last year. Following their long service to the Board, I would like to single out Mike Ashley and Crawford Gillies in particular and wish them the very best as they retire in 2023. They have supported Barclays through a period of considerable change and made a real difference to the organisation in their roles. I am very pleased that Julia Wilson, who joined us in 2021, will take over as Chair of the Audit Committees of Barclays and Barclays Bank PLC in April. In January we announced the appointments of Marc Moses and Sir John Kingman, both of whom have deep experience of financial services and will further strengthen the Board. Sir John will succeed Crawford as Chair of Barclays Bank UK PLC in June. Barclays has nearly 90,000 employees. As I have remarked before, I have always been humbled by the dedication of colleagues to the pursuit of our Purpose and by the way they embrace the societal and climate challenges I have described. Without full engagement of colleagues our LifeSkills programme would not have been able to reach and make a difference to the lives of more than 18 million young people in almost a decade. There is a purpose, energy and creativity in the people of Barclays which will continue to be deployed for the benefit of the communities we serve as we head into the uncertainties ahead. Nigel Higgins Chairman All this needs to be done affordably and in an orderly fashion and in collaboration and alignment with governments' energy strategies. The Inflation Reduction Act in the US has been a significant step forward. Barclays has committed to play a full role in supporting our clients in their transition and we have now developed a framework to assess our high emitting clients’ transition plans. In 2022 we facilitated £25bn of new green financing and we have also now announced a new target to facilitate $1trn of Sustainable and Transition Financing between 2023 and the end of 2030. At a more micro level in the UK, we are piloting schemes to help retail customers finance energy-efficiency solutions and the adoption, where possible, of non-fossil fuel energy in the home. We look forward to working with the UK Government on more extensive versions of these schemes. Thirdly, and to some extent bringing these two themes together, Barclays has a big role to play in financing innovation and technology, whether at the start-up point or as companies mature. Barclays as a whole operates as an ecosystem to support innovation and entrepreneurship, creating new opportunities for employment with both our Sustainable Impact Capital fund and our work with the inspiring entrepreneurs we meet through the Unreasonable Impact Partnership. Many of these innovators are of course focused on adapting existing technology and practice to reduce carbon intensity in a way that supports consumers and business to adapt their activities to become less carbon-intensive. As companies mature, many of them seek further funding through the public stock markets and it is important for the UK and its growth agenda that reforms are undertaken to rekindle the appetite for equity growth, which was once a stronger feature of the London markets. Barclays is committed to playing its part, with government and asset owners, in addressing Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 06 Chief Executive’s introduction Strong and supportive franchise in testing times Our strong operating performance in 2022 has been powered across all our businesses - they have individually generated strong returns in an uncertain operating environment, and they fit well together. We played an important role in delivering value for our stakeholders, and in helping them overcome the challenges they faced this year. We see clear opportunity for financial services to contribute new approaches to address complex issues including energy independence and efficiency, housing and economic growth. I write to you at the end of a year which saw many unexpected events. It followed a sequence of such years and may not be the last one. In 2022, we witnessed the largest conflict in Europe since World War II, a resulting energy security crisis, a sustained rise in interest rates across the developed world, political uncertainty in the UK with associated movement in gilt yields and in sterling, and the first re-alignment of global geopolitical lines since the end of the Cold War. A year ago, I wrote that we were entering a period of unusual uncertainty. I had far more benign scenarios in mind than what has actually transpired. Not only was this an eventful year, but it has followed the devastating human and economic tragedy of COVID-19, the repercussions of which still persist. Lastly, in Barclays, in 2022 we faced our own challenge of discovering and reacting to a costly over- issuance of securities in the US. I want to use this letter to share my views on our performance and our priorities, and also my thoughts on the UK as we look ahead into 2023. Our performance has been strong but we must remain prepared for testing economic and market conditions. Our performance Our business performed well in 2022 and we have demonstrated our continued financial resilience, notwithstanding the unusual events of the year. We created broad-based income growth even as we continued to take a cautious approach to the macro environment. We produced an annual income of £25.0bn, PBT of £7.0bn, Return on Tangible Equity of 10.4% and ended the year with a CET1 ratio of 13.9%. We have approved dividends of 7.25p per share and announced buybacks of £1.0bn worth of shares for the year ended 31 December 2022. Our share count has decreased by over 9% since December 2020. I attribute this performance to the strength of our franchise — our businesses are operating well individually and complement each other collectively. Barclays UK, which serves consumers and small businesses across the country, produced income of £7.3bn, PBT of £2.6bn and a RoTE of 18.7%. The income growth in the business was the result of higher interest rates, increased transaction- based revenues and higher mortgage balances. It was particularly important that we kept our costs flat at £4.3bn (2021: £4.4bn), as a result of a long- term ongoing programme of digitising the production and delivery of our offerings. Our Consumer, Cards and Payments business which includes our partnership cards business in the US, the Payments business and our growing Private Bank, generated income of £4.5bn, PBT of £0.7bn and a RoTE of 10.0%. We also continue to make good progress in combining Barclays UK Wealth and Investment Management business with our Private Banking business.  Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Chief Executive’s introduction (continued) Barclays PLC Annual Report 2022 07 Facts and figures £25.0bn Total income 2021: 21.9bn £7.0bn Profit before tax 2021: £8.2bn 10.4% Return on Tangible Equity 2021: 13.1% 13.9% CET1 capital 2021: 15.1% This is the first step in an integrated approach to help clients manage their personal finances over their lifetimes. In the Corporate and Investment Bank (CIB), we have ranked number six for Global Markets for the last three years, growing market share, particularly in our trading businesses. These desks, especially in Fixed Income, managed their risk well and provided excellent market access and liquidity to clients during the many periods of tumult in 2022. The revenues in trading compensated for a weaker performance in Investment Banking, which was consistent with declines in capital markets activity across the industry. In addition to our operating businesses performing well in 2022, we managed our interest rate risk prudently. Rising interest rates deliver a net interest margin benefit but can reduce the value of our capital holdings. Through careful Treasury management in anticipation of rising rates, we have benefited from the former and minimised the latter. Managing our interest rate exposure programmatically through a 'structural hedge' allowed us to capture and spread out the benefits of rising rates on our Net Interest Income (NII) across many years. As a result, we expect our NII to have a tailwind in 2023 and beyond. Technology has allowed many tasks to be completed digitally, at the customer’s convenience and unbounded by opening hours. Technology has allowed many of those tasks to be completed digitally, at the customer’s convenience and unbounded by opening hours. Even in the context of digital service, there is an important place for face-to-face interaction for some customers and for certain needs. This year, we began testing different approaches to serving communities which can no longer support a branch but where there is a need for a physical presence. These formats include pop- up services, mobile vans and pods, all of which can be located conveniently for customers. By year end we had deployed 200 around the country. We also deployed our Cashback Without Purchase programme allowing customers to withdraw cash from merchants where other means aren’t easily available. Our priorities Our strong operating performance has been in the context of the three priorities which I outlined in my letter last year. The first priority is to build next generation, digitised consumer financial services. This year, we took important steps towards that goal. In the US, we completed the acquisition of a partnership credit card portfolio from Gap, increasing our balances by $3.3bn and adding 10 million new customers, doubling our customer base. Our US consumers are mostly served digitally and, as this transaction demonstrated, it is a more scalable business. Second, in the UK we agreed to purchase Kensington Mortgage Company, a specialist mortgages lending platform which lends via brokers to customers with complex incomes using proprietary technology and data analytics. Lastly, we continue to increase our provision of digital services to customers in the UK, particularly to those customers who once depended almost entirely on branches for most everyday banking needs. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Chief Executive’s introduction (continued) The second growth priority is to produce sustainable growth in the CIB. We have continued to diversify our income in the CIB, growing our financing business in Markets to balance the intermediary business. For example, our investment in Financing has continued and income has grown by c.16% CAGR from 2019-2022. This diversification allows us to generate income even in periods of relatively low market volatility, creating more predictable revenues. We are focused on being the corporate banking partner of choice for clients across our CIB core markets and delivered increased transaction banking revenue in 2022. We have continued to invest in people and technology. We have broadened our trading teams, and our capability in Investment Banking coverage and advisory, and in November we opened new state-of-the-art trading floors in our London headquarters. Our third priority is to continue to support our clients and capture opportunities as the world transitions to a low-carbon economy. We are building capability and reputation with clients in this area. We continued to invest in senior talent to help build expertise in sustainable finance, so that we are better able to support our clients as they transition their businesses to a low-carbon economy. An example of our growing strength was acting as the sole M&A advisor to ConEdison in the $6.8bn sale of its clean energy business. We have made good progress in two priority areas to support the transition to a low-carbon economy: investing in sustainable technology start-ups, and facilitating sustainable finance. With the former, our early commitment of Sustainable Impact Capital of up to £175m by 2025 generated substantial demand and in December 2022 we announced we would increase that to £500m by the end of 2027. This scale of early investment has helped to stimulate innovation in climate technology from residential property retrofit to energy storage and hydrogen technologies. This next phase of Sustainable Impact Capital investments we expect will see a focus on decarbonisation technologies within carbon-intensive sectors, particularly where Barclays has meaningful client exposure such as energy and power, real estate and transport. In respect of financing the transition, Barclays has passed its 2018 target to deliver £150bn of Social, Environmental and Sustainability-linked financing by 2025 and is on track to meet its target to deliver £100bn of Green Finance well ahead of the 2030 target date. As a result of a strategic review of our capabilities, market demand and new growth opportunities, we announced a new target to facilitate $1trn of Sustainable and Transition Financing between 2023 and the end of 2030. Alongside global capital markets, support from governments and regulators is critical to setting the right frameworks to guide action and support investment decisions. This theme of governments and the capital markets working together to solve large and complex issues is one to which I will return later in this letter. Supporting customers and clients Barclays’ financial performance and our progress against our strategic priorities is inextricably linked to the global economy and the financial wellbeing of our customers and clients. Barclays has long sought to build the employability skills and improve the financial health of our communities by providing people with the information and tools more confidently to manage their money. Our LifeSkills programme has been the nucleus of this effort for almost a decade, reaching 18 million people. We continued to invest in senior talent to help build expertise in sustainable finance, so that we are better able to support our clients as they transition their businesses. Barclays PLC Annual Report 2022 08 This year, we have expanded the programme in partnership with charities like the Trussell Trust to help communities most in need. In the face of a sharply rising cost of living, we also launched a Money Worries hub in September, to help UK customers evaluate and manage the impact of rising inflation and interest rates on their personal finances. In particular cases where we identify customers entering financial distress we have offered tailored help to support them. Skills and information are one way we can build financial resilience. In September we launched another, the Rainy Day Saver, a new instant- access account with an interest rate of 5% on balances up to £5,000. The product is designed specifically to help customers build savings equivalent to three months of outgoings for an average household, providing a cushion should they need it. A major effect of rising rates is the increased cost of mortgage interest. With approximately a quarter of customers approaching the end of their fixed-rate terms each year, we increased the window for renewing from 90 days to 180 days prior to the fixed rate ending, enabling customers to lock in a new fixed rate, should they so wish, in anticipation of further rate rises. Small and Medium Enterprises (SME) customers are also facing pressure from rising wages and input costs without being able to pass them onward. We held 450 'Masterclasses' for these customers, helping them anticipate and manage pressures common to many small businesses. This focus on supporting the needs of our retail and SME customers is matched in our wholesale business, through which we support governments and some of the largest financial and industrial enterprises in the world by managing their financial risk and growth ambitions. In volatile markets, through tremendous economic uncertainty, that ability to deliver for clients is critical. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Chief Executive’s introduction (continued) Managing Barclays excellently Our strong support of wholesale clients and consumers this year has shown Barclays operating at its best, with empathy, skill and drive. Unfortunately, in 2022, we also discovered that we had issued approximately $17.7bn of securities more than we were permitted to do under shelf registration statements we had filed with the US Securities and Exchange Commission (SEC). When the matter surfaced, we promptly reported it to our regulators, elected to make a rescission offer to eligible purchasers, and settled the related regulatory investigation by the SEC. The net cost to Barclays was £720m, including $200m (£165ma) in penalties paid to the SEC. We commissioned an internal review and an external one, led by experienced outside counsel. Our shareholders and the management want Barclays to perform at a consistently very high level, day in and day out. Therefore, towards the end of 2022, we established a change programme, alongside our Purpose, Values and Mindset, to set such a standard of consistent excellence. We are holding ourselves to that high standard across: • Service: accepting nothing less than world- class service for clients and customers • Precision: our operations, risk management and controls should run efficiently with no unacceptable disruptions or unanticipated losses • Focus: we pursue projects and businesses where we can be consistently excellent, and do not dilute our energy or focus with activity where we will not Note: a Exchange rate USD/GBP 1.22 as at 30 June 2022. Our strong support of wholesale clients and consumers this year has shown Barclays operating at its best, with empathy, skill and drive. • Simplicity: we strive for simplicity and efficiency in product design and delivery, seeking out opportunity for automation • Diversity of thought: we champion new thinking, and challenge the status quo, to help us achieve excellence. Only by achieving these objectives to the fullest will we create leading franchises and leave a strong legacy for the future. Supporting the UK The United Kingdom has been our home for 330 years. Here we have helped the nation prosper, and here we have prospered. Serving the UK has been a central tenet of our history, from 1690, when our Quaker founders financed maritime trade from Lombard Street in London, to 2022, when, in the throes of a sell off in UK assets, we led the issuance of £4.5bn of Green Gilts for the Treasury. Core to our own success has been the institutional strength of the UK: the rule of law, the fairness and transparency of our regulators, an availability of superb financial talent and infrastructure and a disciplined business culture. The health of the financial sector in the UK depends on the overall health of the UK and vice- versa, given the importance of finance to the UK. As I described above in relation to the transition to a low-carbon economy, the combination of government and capital markets skilfully applied is a strong lever to achieve powerful and far- reaching goals. We are ambitious to help with forming and executing an agenda for progress in the UK. We recognise that public spending is constrained and essential services like education, health and social care are a priority for the UK Government. We also recognise that capital markets are complex and, given a chequered history in the deployment of private capital for public good, we are still rebuilding public trust in financial services. Barclays PLC Annual Report 2022 09 We see clear opportunity for financial services to contribute new approaches to address complex issues including energy independence and efficiency, housing and economic growth, where the scale would be challenging for public finance alone. With Brexit behind us, the UK has an opportunity to shape the UK financial services sector best to support that work. We will use our data and our expertise in markets, sectors and our clients to advance ideas, build common cause with others and ultimately be good stewards for our Company and for our country. Thank you We have achieved a great deal this year, progressing our objectives and supporting customers and clients. None of this would be possible without the skill and dedication of our colleagues across Barclays. I am grateful to every one of them for their hard work and commitment to our Purpose. C. S. Venkatakrishnan Group Chief Executive, Barclays + See our strategy Page 12 See our approach to managing risk Page 56 See how we act in our society and environment Page 39 Go online at home.barclays/annualreport Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 10 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. Our brand Our brand equity instils trust, lowers the cost of acquiring customers and clients and helps retain them for longer. Technology and infrastructure Our deep technology and infrastructure capabilities drive customer experiences and support strong resiliency. 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 11 Our business model (continued) delivering value through synergies ... providing clear outcomes for our stakeholders. We bring our organisation together to create synergies and deliver greater value. Our diversified model provides the resilience and consistency needed for the road ahead. Providing customers and clients with the full range of our products and services. Joining up different parts of the Group so capabilities in one can benefit another. Applying Group-wide technology platforms to deliver better products and services. Making the Group more efficient. Customers and clients Supporting our customers and clients to achieve their goals with our products and services. Colleagues Helping our colleagues across the world develop as professionals. Society Providing support to our communities, and access to social and environmental financing to address societal need. Investors Delivering attractive and sustainable shareholder returns on a foundation of a strong balance sheet. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 12 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 Our diversification, built to deliver double-digit returns Strategic priorities to sustain and grow 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 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. Deliver next-generation, digitised consumer financial services Deliver sustainable growth in the CIB Capture opportunities as we transition to a low-carbon economy Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 13 Our strategy (continued) 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. Barclays Local In areas where demand has fallen and the bank branch is no longer sustainable, we are testing alternative solutions to remain part of the community and to support customers who require face-to-face assistance. Barclays has now launched almost 200 flexible banking pop-ups, enabling colleagues to reach customers in places such as town halls, libraries and community centres. We also have a growing Barclays mobile van network which can be deployed wherever support is most needed, including rural and remote locations. These spaces help customers with cashless banking needs including digital transactions and bill payments. We also host workshops on topics such as digital skills, money management and fraud and scams prevention. 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 14 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 Bankinga and Global Marketsb, 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. Global service that delivers Colleagues across the globe have enabled leading French bank La Banque Postale to expand its services to customers by taking full control of CNP Assurances, the leading French life insurer, which was previously listed on the Paris Stock Exchange. Barclays won the mandate to lead the acquisition for La Banque Postale, with colleagues in Investment Banking, Corporate Banking and Principal Investments working together seamlessly to deliver a complex transaction for the client. The transaction is one of the most significant insurance deals in the French market for over 15 years, the first guarantee issued by Barclays in France for an M&A mandate, and an example of the power of collaboration to deliver great client outcomes. 700+ Growth in Corporate Banking clients in Europe 2021: c.600 £2.9bn Total Financing incomec 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 15 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 $4trna 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 $4-6trna 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 £25.5bnΔ 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. Powering Portland General Electric’s future with innovative green financing Bringing together experts from its Power & Utilities, Equity Capital Markets and Sustainable Capital Markets teams in October 2022, Barclays structured a Green Use of Proceeds equity offering for Portland General Electric, which saw the issuance of 11.615m shares of common stock. This novel structure gives investors publicly tradable common shares, whose proceeds are earmarked for investment toward the issuer's decarbonisation goals. Investor reaction was strong for the nearly $500m offering, which was oversubscribed and priced at a tight discount relative to the size of the deal. The proceeds of this offering are designated to the construction of a 311 MW wind energy facility, as well as additional renewable and battery storage projects. £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 Green financing facilitated (2018-2030) £bn n Progress from 2018 to 2021 n 2022 progress n Total achieved to date n Against a target of £100bn by 2030 Notes: 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. Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/ reporting-and-disclosures/ 62.225.5△87.8Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 16 Section 172(1) statement How the Board has regard to the views of our stakeholders The Directors have acted in the way that they considered, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole and this section forms our Section 172 disclosure, describing how, in doing so, the Directors considered the matters set out in Section 172(1)(a) to (f) of the Companies Act 2006. The Directors provide this statement setting out how they have had regard to the matters set out in Section 172(1)(a) – (f) of the Companies Act 2006 when performing their duty to promote the success of the Company under Section 172. + For further details of the key activities of the Board in 2022, refer to page 154 of our Governance report in Part 3 of the Annual Report. How does the Board engage with stakeholders? Throughout the year, the Board engages directly and indirectly with stakeholders to ensure it has a comprehensive understanding of the impact of the Group's operations on key stakeholders, as well as their interests and views. This engagement, both directly and through regular reports from individual business areas and key Group functions ensures the Board is well-versed on key issues to enable the Directors to comply with their legal duty under Section 172(1). + Read more on how Barclays engages with its stakeholders on pages 21 to 22. Engagement in action See pages 17 to 20 below to find out about how the Directors have had regard to the matters set out in Section 172 when discharging their duties, and the effect of those considerations in reaching certain decisions taken by them in the context of: The Board’s response to the Over-issuance of Securities by BBPLC Responding to the impacts of the Russian invasion of Ukraine Supporting our customers, clients, colleagues and communities through challenging times Say on Climate: Understanding the views of our shareholders and other stakeholders in relation to our climate strategy Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Section 172(1) statement (continued) Barclays PLC Annual Report 2022 17 The Board’s response to the Over-issuance of Securities by BBPLC The Board has worked alongside management this year to assess and respond to the Over- issuance of Securities. The Group operates a structured products business in BBPLC, through which it issues structured notes and exchange traded notes to customers in the US and elsewhere. In March 2022, management became aware that BBPLC had issued securities materially in excess of the amount registered under BBPLC's shelf registration statement on Form F-3, as declared effective by the SEC in August 2019 (2019 F-3). Subsequently, management also became aware of issuances in excess of the amount registered under BBPLC's prior shelf registration statement (the Predecessor Shelf). Due to an SEC settlement order in 2017, at the time the 2019 F-3 was filed and the Predecessor Shelf was amended, BBPLC had ceased to be a 'well known seasoned issuer' (or WKSI) and was required to register upfront a fixed amount of securities with the SEC . When management became aware of the Over-issuance of Securities, the matter was escalated to senior management and to the Board, and Barclays’ regulators in the US and the UK were notified. As part of its response, the Board considered both the immediate impact of the Over-issuance of Securities, and the underlying causes of this issue. The securities issued in excess of the registered amounts were considered to be ‘unregistered securities’ for the purposes of US securities law and certain offers and sales of these securities were not made in compliance with the US Securities Act of 1933, which requires that offers and sales of securities be registered unless there is an exemption from registration. This gave rise to rights of rescission for certain purchasers of relevant securities under US securities laws. As a result, BBPLC elected to conduct a rescission offer, as approved by the Board, to eligible purchasers of relevant securities. Barclays also commissioned a review led by external counsel of the facts and circumstances relating to the Over-issuance of Securities and, among other matters, the control environment related to such issuances (the Review). The Board then considered carefully the outcome of the Review which concluded that the Over- issuance of Securities occurred because Barclays did not put in place a mechanism to track issuances after BBPLC became subject to a limit on such issuances, as a result of losing WKSI status. The Board has supported the creation of a Group-wide programme, seeking to identify issues and lessons learned. Among the principal causes of the Over- issuance of Securities were, first, the failure to identify and escalate to senior executives the consequences of the loss of WKSI status and, secondly, a decentralised ownership structure for securities issuances. The Review further concluded that the occurrence of the Over-issuance of Securities was not the result of a general lack of attention to controls by Barclays, and that Barclays’ management has consistently emphasised the importance of maintaining effective controls. The Board has worked to address the root cause and impacts of the Over-issuance of Securities, including through the Review, and deeply regrets its occurrence. The Over-issuance of Securities also underlined to the Board the need to continue to focus on embedding Barclays' Values and Mindset at all levels of the organisation to achieve operational and controls excellence. Further, the Board has supported the creation of a Group-wide programme, established by the Group Chief Executive. This programme will seek to identify issues and lessons learned across the Group's remediation initiatives to help ensure that Barclays is consistently excellent, in customer and client service, in operational capability and in financial performance, with all activities underpinned by a strong risk management culture. + Read more about the work of the Board and its Committees in Part 3 of the Annual Report Page 141 Find details of the impact of the Over-issuance of Securities on remuneration in Part 3 of the Annual Report Page 197 Read our Shareholder Q&A on the Over-issuance of Securities in Part 3 of the Annual Report Page 188 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Section 172(1) statement (continued) Supporting our customers, clients, colleagues and communities through challenging times The Board is acutely aware of how current inflationary pressures are impacting our customers’ and clients’ financial wellbeing, and that a 'one size fits all' approach is not appropriate. The impact of high inflation and increasing interest rates, coupled with rising energy costs are creating financial pressures across wider society. The Board recognises that customers and clients have different needs, and throughout the year received regular reports on the work undertaken across the Group to support each of them. In September, the Board met directly with a delegation of FCA senior management where, among other matters, the Group’s response to the increased cost of living and the pressure this has placed on our customer base was discussed. In November we expanded our engagement, launching a nationwide campaign and sending 13.5 million segmented emails to our customer base, directing them to our cost of living content. With specific reference to our Business Banking clients, many of whom are also facing financial pressures, not least from increased operating costs and rising wages, we have delivered over 600 'Business Health Pledge Masterclasses', talking to small businesses about the issues impacting them. In response to unusually large increases to living costs experienced by our UK colleagues, we brought forward part of the 2023 pay increase, awarding 35,000 UK-based junior colleagues a £1,200 salary increase effective from August 2022, ahead of our annual salary review. In January 2023, Barclays worked closely with Unite the Union to agree a 2023 UK pay deal which, combined with the August 2022 increases, brought the total average salary increase for our lowest paid colleagues up to 11%. By doing this we ensured that our minimum rate of pay in the UK remains well ahead of Living Wage Foundation benchmarks. Similarly, we brought forward part of the 2023 pay increase for our most junior colleagues in Belgium, France, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain, awarding them €1,500 effective 1 November 2022. Throughout 2022, the Board Risk Committee maintained close oversight of the Group's ongoing review of the retail and business banking portfolios to identify areas of stress where customers and clients might be facing financial pressures. The Committee also considered the actions taken to provide support, balancing our duty to lend responsibly alongside the need to support customers and clients who might be struggling in this current challenging environment, particularly those who are characterised as vulnerable. During 2022, the Board has also received updates and discussed with management the measures being taken across the Group to support our stakeholders, some examples of which are described below. For those customers who are already facing financial hardship, we have increased resource within our Barclays Financial Assistance (BFA) team, which provides a range of support to customers, including referrals to debt support charities, and targeted forbearance. For customers who may start to struggle, we are proactively monitoring their financial resilience in order to identify when and where targeted support might be required (including contacting c.200,000 customers each month to offer pre- emptive support before they miss a payment). Recognising the pressures faced by our customers, in August we expanded our Money Management and Money Worries hubs to include a Cost of Living focus, with improved navigation to help direct customers to relevant content, to guide and help them better understand and manage the impact of rising inflation and interest rates on their personal finances. Barclays PLC Annual Report 2022 18 In November, we also awarded junior colleagues in Germany a one-off payment of €2,000 as that was more appropriate under local rules. The Board, through the Board Remuneration Committee, continued to have regard to the impact of the current macroeconomic environment as it reviewed pay across the organisation during the year-end cycle. More information can be found in the Remuneration report within the Annual Report and the Barclays PLC Fair Pay Report 2022. In monitoring our response to the increased cost of living, we are working with a wide range of stakeholders – including the FCA, the UK Government and our peers – to ensure our customers and clients are supported during these difficult times. This includes consistent, industry-wide communications, where appropriate, so that all customers and clients, irrespective of who they bank with, can know what to expect from their financial services provider. We also remain committed to supporting the financial health and literacy of our communities. Our LifeSkills programme is at the heart of this work and this year we have evolved the programme, partnering with organisations like the Trussell Trust which work with local communities to help those most in need, building awareness of the help available to people facing financial difficulties, increasing access to the support they are entitled to and helping them maximise their incomes. The Board will keep the overarching situation under close review in order to ensure that Barclays continues to play its role in supporting our customers, clients, colleagues and our communities through these challenging times. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Section 172(1) statement (continued) Say on Climate: Understanding the views of our shareholders and other stakeholders in relation to our climate strategy The Board takes Barclays' role in supporting the transition to a low-carbon economy very seriously. This commitment was reflected in Barclays’ announcement, at the 2021 AGM, that it would offer shareholders a ‘Say on Climate’ advisory vote, whereby shareholders would be asked to vote on Barclays' climate strategy at the 2022 AGM. This vote would serve as a touchstone for Barclays as to whether the climate strategy set by the Board had the support of shareholders. Throughout 2021 and continuing into 2022, Barclays engaged with major shareholders, their representative bodies, connected activist groups and other stakeholders on a one-to- one and group basis, with our Group Chairman attending a number of these meetings. This included engagements with 15 of our largest shareholders, the Investor Forum, the Institutional Investors Group on Climate Change and ShareAction. Stakeholder feedback was received on a range of matters including: • the evolution of Barclays’ fossil fuel policies, in particular the phase out of thermal coal financing; • Barclays’ oil sands policy; • our 2030 target-setting, including the integration of 1.5oC aligned scenarios such as the IEA Net Zero 2050 scenario in our financed emission targets and the use of ranges for certain sectors; • incorporation of other greenhouse gases including methane in our BlueTrackTM methodology; • green and sustainable financing targets and insight into how Barclays’ climate strategy is embedded into operational practices including client engagement. Stakeholders also asked about the impact of the conflict in Ukraine within the context of just transition, and in relation to our approach to energy security. The Board received a series of updates on the feedback which followed the engagement with investors and stakeholders more broadly. In February 2022, the Board reviewed a report on the 2021 progress against Barclays’ climate commitments and was asked to endorse a number of proposals: • revisions to Barclays' thermal coal policy (including setting final exit dates with respect to the financing of thermal coal mining and coal-fired power generation); The industrial revolution took over a century to transform the planet, and we cannot hope to undo overnight its deleterious impact on the environment. We are still at an early stage of an important journey but are committed to the destination and will persevere to reach it. One of my foremost priorities in view of market and risk factors is for Barclays to demonstrate progress against our net zero ambition. C.S. Venkatakrishnan Group Chief Executive Barclays PLC Annual Report 2022 19 • proposed 2030 emissions intensity reduction target ranges for Cement, Steel and Power, and absolute emissions reduction targets for Energy; and • new operational emissions ambition and updated operational targets, further details of which were to be included in the Barclays’ Climate Strategy, Targets and Progress 2022 document, which would form the basis of the Say on Climate advisory vote. The Board noted the varying feedback received from investors and other stakeholders regarding the purpose and frequency of the Say on Climate vote. Acknowledging that it is ultimately the responsibility of the Board and executive management to set the strategy of the Barclays Group, including climate strategy, it was the Board's view, announced at the 2021 AGM, that the vote should be advisory only in nature. At the 2022 AGM, our Chairman spoke directly with a number of our shareholders on a series of questions posed by them covering topics such as Barclays’ climate strategy, targets and progress, green and sustainable financing, Barclays' involvement with and views on climate change, fossil fuels, fracking, deforestation, renewable/sustainable energy and our ambition to be a net zero bank by 2050. The Say on Climate resolution received the support of over 80% of votes cast. The Board acknowledged the spectrum of views across the share register, but was pleased that the resolution was supported by such a strong majority of votes cast. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Section 172(1) statement (continued) The Board viewed the Say on Climate advisory vote as an important part of its ongoing engagement with shareholders and Barclays has continued to engage with shareholders and other stakeholders on our climate strategy and ambitions following the 2022 AGM. Since the AGM, in September 2022, the Board reviewed a further proposal to strengthen the thermal coal policy and endorsed the proposal to update the US thermal coal power phase- out date from 2035 to 2030 and the Board has also reviewed a change to the oil sands policy and new green and sustainable finance targets. The Board continues to receive updates on the evolution of our climate strategy and progress against targets. In line with our commitment in the Barclays’ Climate Strategy, Targets and Progress 2022 document to provide further updates on targets for sustainable financing in 2022, the Board was also updated on Barclays' new target to facilitate $1trn of Sustainable and Transition Financing between 2023 and the end of 2030. + More on climate strategy Page 15. Responding to the impacts of the Russian invasion of Ukraine The Board has closely overseen the Group’s response to the Russian invasion of Ukraine. The impacts of the war are numerous and widespread, with implications for Barclays, its clients and customers and other stakeholders. Recognising the urgency of situation, the Group Chairman convened a Board meeting in mid- March 2022 to assess developments and the Group’s response. Since then, the Board and its Committees have received ongoing updates. Notwithstanding that Barclays has no onshore presence in Ukraine or in Russia, this situation has required a multi-faceted response by Barclays, with the Board and its Committees overseeing a number of matters including the Group’s response to the rapidly imposed global sanctions, the management of the Group’s financial exposure to Russia-specific market, credit and liquidity risks and management actions taken to reduce the Group’s exposure to the heightened risk of cyber attack. Barclays PLC Annual Report 2022 20 Across the financial services sector, cyber risk remains heightened. The Board and its Committees have heard from management on the measures implemented to address these concerns to ensure that Barclays is, and will remain, well placed to react in the event of any such attack, which could target Barclays directly or the wider financial services infrastructure. The Board Risk Committee has also received a briefing on the operational and risk learnings from the Group's response to this situation in order that the Group is best placed to respond should conflict arise in another jurisdiction requiring similar actions to be taken. The Board and senior management will continue to monitor the situation and its implications for the Group and our stakeholders. The sanctions imposed represent the most significant change to the global sanctions regime since the 9/11 terrorist attack in the US, requiring the Group to act at pace. The Board received reports on the significant work done by colleagues in the compliance and legal functions, along with other areas of the business, to ensure that Barclays was able to take swift action to respond to these sanctions. The response was aimed at reducing the potential for financial crime, directing substantial resources into the management of potential conflicts between sanctions regimes as new sanctions were rolled out across different jurisdictions, obtaining required licences and playing a strategic role on policy developments and sanctions implementation. With regard to the management of risk associated with the Russian invasion of Ukraine, the Board received updates on operational risk, credit risk and market risk exposures and on actions taken to reduce these, manage funds and de-risk positions effectively. The impacts of the war are numerous and widespread, with implications for Barclays, its clients and customers and other stakeholders. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 21 Engaging with our stakeholders Listening and responding to our stakeholders Barclays aims to create sustainable value for all those we serve, through the economic cycle. Customers and clients Colleagues How we responded For customers, we have developed the Barclays Money Management Hub, containing advice on how to better understand their spending behaviours and improve their financial wellbeing. We continued to develop both our personal and corporate apps, to provide our customers and clients with the tools required to effectively manage their finances and transactions. The newly launched Barclays Corporate app is now available in 150+ countries. We are developing a Client Transition Framework, a methodology that allows us to evaluate our corporate clients' current and expected future progress in transitioning to a low-carbon economy. The framework comprises both a quantitative and qualitative component to assess clients' trajectory against our targets and benchmarks, and the ambition and achievability of their plans, allowing us to engage with them at a more granular level for their transition financing needs. 150+ countries covered by our Corporate app How we responded The 2022 Your View survey results showed progress on colleague engagement as well as against the primary cultural topics we measure. • We brought forward part of the 2023 pay increase, awarding 35,000 UK-based junior colleagues a £1,200 salary increase effective from August 2022, ahead of our annual salary review • During 2022, we made enhancements to drive further global consistency in how we support our colleagues with disabilities and health conditions, providing them with greater control over their own individual requirements, as well as improving the processes to self-serve and get the right equipment they need for office and/or home working • We supported colleagues with their next career move within Barclays, with 43% of vacancies being filled by internal candidates, helping to retain our diverse and inclusive workforce and mitigate redundancies 90% of colleagues believe their line manager supports their wellbeing Our people and culture are our greatest assets. Together, they make a critical difference to our success, and our investment in our colleagues strengthens and protects our culture. What did they tell us? We have an established colleague engagement programme across a number of platforms. These provide us with a robust body of information and ensure we are attuned and listening to the different perspectives, and responding accordingly to colleague feedback. Further detail can be found on page 32. • Our colleagues told us that with rising costs, they needed financial support • As colleagues embraced hybrid working, they required the right tools to undertake their roles • Our colleagues wanted support to be able to develop their own careers We are committed to serving our customers' and clients' best interests, and engage with them regularly so we can understand how best to adapt our products and services to their evolving needs. What did they tell us? We engage in a wide variety of ways, including running regular surveys, analysing customer complaints, and drawing on data from millions of individual transactions and personal customer interactions. • As customers face a rising interest rate environment and inflationary cost pressures, they have asked for more support and advice on their finances • Customers are looking for full integration of services to ensure seamless digital transactions • Clients are asking for advice and finance in support of their efforts to decarbonise their operations. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Engaging with our stakeholders (continued) Barclays PLC Annual Report 2022 22 Society Investors How we responded We engaged with stakeholders at our 2022 AGM, through our 'Say on Climate' advisory vote and attended COP15 on biodiversity as well as COP27 on climate change. We engaged with NGOs, such as ShareAction, by participating in their recent survey on key climate and biodiversity metrics. We spoke to our suppliers and promoted the importance of diversity, equity and inclusion, as well as the importance of our focus on modern slavery across our supply chain. In support of the communities in which we operate, through our LifeSkills programme we have reached 18.1 millionΔ people since 2013. Through our Unreasonable Impact programme, since 2016 we have supported 269 ventures that are helping to deliver innovative solutions to pressing social and environmental challenges. Notes Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/ esg-resource-hub/reporting-and-disclosures/ $1 trillion target announced in December 2022 to facilitate Sustainable and Transition Financing by the end of 2030 How we responded • We provided further detail on our Markets performance, more granular transactional activity and additional insights into interest rate sensitivity • We delivered on our priority to return capital to shareholders, with an appropriate mix of returns amounting to a total capital return equivalent to c.13.4p per share • We listened to feedback on our Say on Climate advisory vote at the 2022 AGM as well as other factors, published new a $1trn Sustainable and Transition Financing target, and are announcing in this report an updated policy on coal-fired power financing • Investor Relations helped establish ESG engagement with investors, which contributed to key investment decisions • We continued to enhance transparency in our external disclosures • Our efforts were recognised through Barclays winning the PwC award for Building Public Trust, and the Investor Relations team being shortlisted for best IR team at the IR Society awards c.13.4p Total capital return equivalent per share Engaging with our shareholders and other market participants has helped us to understand their priorities and drive better outcomes for all stakeholders. What did they tell us? We continue to enjoy productive bilateral engagement with institutional equity and fixed income investors, rating agencies, as well as our private shareholders. We were able to further our efforts in hybrid meetings, enabling deeper engagement with investors irrespective of their individual location. In 2022, the focus of our dialogue has been: ▪ the factors driving current performance and expectation of further momentum from changes in the macro economic environment ▪ capital return to shareholders ▪ continued engagement and progress on the climate agenda ▪ the need for clearer, transparent messaging on business performance Deep and thoughtful engagement with the numerous individuals and interest groups that represent our wider society help us to shape our approach and ultimately deliver long-term sustainable value. What did they tell us? We engaged with a wide range of stakeholders, including non-governmental organisations (NGOs) and others where appropriate. We participated in various sustainability forums including global and regional industry initiatives. Major themes we heard from them included: ▪ wanting to see continued progress, targets and development of the global climate agenda, including appropriate social and environmental governance ▪ support for communities facing hardship ▪ an increased focus on nature and biodiversity ▪ transparency and harmonisation of data Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 23 Key performance indicators Measuring success for all stakeholders We analyse a broad range of financial and non- financial measures to support the execution of our strategy. We use a number of sources to assess the success of our strategy and provide a balanced review of our performance during the year, taking into consideration financial and non-financial metrics across all stakeholder groups. A number of these performance measures are also linked to the way we pay our colleagues, including at executive management level. For more information, please see the Directors’ Remuneration Report in Part 3 of the Annual Report. In order to reflect our strategic priorities, we have further refined the performance metrics we use, most notably with respect to our societal stakeholders. Key measures used in our 2022 assessment include the metrics reported on this page, as well as the broader discussion of our performance on the subsequent pages of this report. We aim to build trust by offering innovative products and services, with an excellent customer and client experience, increasing advocacy. + Customers and clients Page 26 We strive to manage the environmental and societal impact of our business, helping stakeholders access a prosperous and sustainable future. + Colleagues Page 31 Our ambition is to generate attractive and sustainable returns through the economic cycle, measured through our Group targets. + Society Page 39 We promote and maintain a diverse and inclusive workforce within a positive, values-based culture. + Investors Page 45 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Key performance indicators (continued) Barclays PLC Annual Report 2022 24 Customers and clients Barclays UK Net Promoter Score (NPS)a Barclays UK complaints excluding PPI (% movement year on year) Colleagues Colleague engagement (%)a “I would recommend Barclays to people I know as a great place to work” (%)b 2022 2021 2020 2022 2021 2020 2022 2021 2020 2022 2021 2020 The NPS is a view of how willing customers are to recommend our products and services to others. We measure our volume of complaints and review root causes to inform what changes we should make to our products and services to improve them for customers. This is a measure derived from responses to three colleague engagement questions in the Your View survey. A question in the Your View employee survey that measures colleague advocacy. Consumer, Cards and Payments US customer digital engagement (%)b Corporate and Investment Bank revenue ranks and market shares (#,%) Females at Managing Director and Director level (%) “I believe that my team and I do a good job of role modelling the Values every day” (%) Metric shows percentage of digitally active Consumer, Cards and Payments US consumers. 2022 2021 2020 n Global Markets revenue ranking and sharec n Dealogicd Investment Banking global fee ranking and share demonstrating our performance vs peers. #6 #6 #6 #6 #6 #7 2022 2021 2020 2022 2021 2020 Metric reflects % of females at Managing Director and Director level within Barclays, against 2025 ambition of 33%. A question from the Your View employee survey showing colleagues’ connection to the Barclays Values which underpin the desired culture. Notes a ®Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc. b Excluding new Gap customers. c Global Markets 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. d Dealogic for the period covering 1 January 2020 to 31 December 2022. Notes: a As part of our efforts to improve our measurement frameworks, we have transitioned to a new three question engagement model. This was after collecting four years of concurrent data and running analysis to affirm the new model’s validity. Historic figures have been updated to reflect results from the new three question model. b KPI adjusted in line with new engagement model. The previous KPI “I would recommend Barclays as a good place to work” would have been 86% (2021:83%). Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/ reporting-and- disclosures/ 111115995-17-17-327.33.16.43.63.66.46.73.63.36.484828229△2826858284929294 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Key performance indicators (continued) Barclays PLC Annual Report 2022 25 Society Operational GHG emissions (market-based) (tonnes CO2e) Social, environmental and sustainability- linked financing facilitated (£bn) Investors Common Equity Tier 1 (CET1) ratioa (%) Group return on tangible equity (RoTE)a (%) 2022 2021 2020 2022 2021 2020 2022 2021 2020 2022 2021 2020 Notes: Total gross Scope 1 and 2 (market-based) emissions generated from Barclays’ branches, offices and data centres, including all indirect emissions from electricity consumption. Notes: Financing in social and environmental segments aligned to Version 3 of Barclays’ Sustainable Finance Framework. Version 4 was released in December 2022 upon announcing new sustainable financing targets. The Group maintained a strong CET1 ratio of 13.9% in 2022, within the Group target range of 13-14%. Group RoTE was 10.4% in 2022, down on prior year from the normalisation of credit impairment charges and higher litigation and conduct costs, partially offset by income growth across all operating divisions. The Group targets a RoTE of greater than 10.0% in 2023 in line with our medium-term target. Our current estimate of our financed emissions based on our disclosed BlueTrackTM methodology Portfolio December 2022 Cumulative performance vs. baseline LifeSkills: Number of people upskilled (millions) 2022 2021 2020 Achieved the target to upskill 10 million people between 2018 and 2022. Notes: Number of people participating in the Barclays LifeSkills programme focused on employability skills. LifeSkills: Number of people placed into work 77,200△ 2021: 77,100 2020: 49,700 Achieved the target to place 250,000 people into work between 2019 and 2022. Notes: Number of people placed into work following training provided by Barclays LifeSkills partner organisations. Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub - for further details: home.barclays/sustainability/ esg-resource-hub/reporting-and-disclosures/ Δ 51.7 MtCO2e (Absolute emissions) Δ KgCO2e / MWh 302 (Physical intensity) Δ tCO2e / t 0.610 (Physical intensity) Δ tCO2e / t 1.732 (Physical intensity) Δ 167.2 gCO2e / km (Physical intensity) Δ kgCO2e / m2 32.9 (Physical intensity) Energy Power Cement Metals (Steel) Automotive manufacturing Residential real estate Date baseline set: n December 2020 n December 2021 n December 2022 -32% -9% -2% -11% N/A N/A Total operating expensesa (£bn) Cost: income ratioa (%) 2022 2021 2020 Group operating expenses increased 14% to £16.7bn including £1.6bn of litigation and conduct chargesb. Excluding litigation and conduct charges, costs were £15.1bn, up 6%, reflecting the impact of FX and inflation. The Group is targeting a cost: income ratio percentage in the low 60s in 2023 and below 60% over the medium-term. Notes: Energy and Power cumulative performance assessed against a 2020 baseline whereas Cement and Steel are against a 2021 baseline. Further details on reducing our financed emissions can be found on page 87 including our approach to reporting financed emissions data. Notes a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Impact of the Over- issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. Litigation and conduct in 2022: £1,597m, which includes £966m related to the Over-issuance of Securities, 2021: £397m and 2020: £153m. b 21,91936,84271,0382.74△2.92.354.3△69.260.914.9△8.313.915.115.11.210.413.13.22.79.96767643 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 26 Customers and clients Supporting our customers and clients We seek to understand our customers' and clients’ expectations and aspirations, and develop products and services which support them, especially during difficult economic conditions. We believe that transparency of information in our products and services is key to empowering consumers to make sound financial decisions. Highlights 11 Barclays UK Net Promoter Score (NPS)* 2021: 11 44 Barclays US Consumer Bank Care Net Promoter Score 2021: 43.4a −17 Barclays UK complaints excluding PPI (% movement year on year) 2021: -17% 74.1% Consumer, Cards and Payments US customer digital b 2021: 71.8% The importance of delivering value for our customers and clients Customers and clients are at the heart of our business. For us to deliver value for them, we need to continue building confidence in our organisation, our products and services, understand and anticipate our customers and clients' needs, and use our expertise to become a trusted partner. In order to understand those needs and measure our progress towards delivering on them, we use a range of non-financial measures. Net Promoter Score Net Promoter Score® (NPS) is used widely across industries to measure the strength of customer relationships. We track NPS to identify both our strengths and where there is room for improvement. This, combined with our transactional NPS data, becomes a powerful tool to inform how we should develop our services and products in the future, and benchmark our performance against the rest of the market. Barclays UK NPS 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 improvements in customer experience, including improving and expanding our digital journeys. Barclays UK NPS (#) 2022 2021 Barclaycard NPS Barclaycard 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. Barclaycard NPS (#) 2022 2021 US Consumer Bank Digital tNPS The Digital tNPS is a newly tracked metric for US Consumer Bank which is measured at the digital journey level. This is a recognised and respected industry measure of customer experience. Digital tNPS is trending positive, attributed to increased web and app ease of use.  US Consumer Bank Digital tNPS % Target: 55 and over 2022 Notes a Care tNPS provides an accurate measure of customer sentiment across our Fraud, Dispute, Credit and Care channels and replaces the relationship NPS reported in 2021 Annual Report. b Excluding new Gap customers. 111112459.8 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Customers and clients (continued) Barclays PLC Annual Report 2022 27 Consumer, Cards and Payments US customer digital engagement Digital engagement is used as a KPI to assess the performance of our digital value proposition and the quality of the user experience. We measure usage over a 90-day period, as a percentage of the total of active customers, to illustrate the interactivity with our platforms and uncover potential use cases for our online and app channels. This KPI reflects the general health of the digital experience, and allows us to look at how this is performing and what issues, if any, we should address. We launched significant digital engagement features and technology advancements. Highlights included Gap ecommerce integration, asynchronous chat for servicing, card delivery tracking, payments journey enhancements, as well as ongoing human-centred UX improvements. The addition of the Gap partnership initially decreased the overall digital engagement rate due to retail segment behaviour differences. Excluding Gap, the rate increased YoY to 74.1%. Consumer, Cards and Payments US customer digital engagementa (%) 2022 2021 Notes a Excluding new Gap customers Complaints data The FCA publishes complaints information in relation to reportable complaints across the UK financial industry every six months and it is a good measure of how well UK institutions are driving customer outcomes. We measure our volume of complaints, tracking against goals and reviewing root causes to inform what changes we should make to our products and services to improve them for customers. Through doing this, we hope to see improved customer satisfaction, improved reputation in the industry and reduced costs. Barclays UK In Barclays UK, as in previous years we continue to be focused on improving the overall customer experience by identifying and supporting the removal of the root causes of customer complaints. Complaints across Barclays UK in 2022 have further reduced on those received in 2021, with volumes excluding PPI complaints decreasing 17% YoY (18% including PPI). This is despite an 8% rise in interactions across our channels which therefore lowers the rate of complaints per 10k interactions annually by 24%. This has been achieved through continued stability of our platforms alongside regular and direct communications with customers during times of change, particularly in relation to our service model. Some acute pressures exist in areas impacted by the economic changes seen in 2022 with volumes rising across Mortgage complaints as customers rushed to find the right rates for them in light of the Bank of England interest rate changes and unpredicted demand for Mortgages with rate switch applications up 30% in the second half of the year. Barclays UK complaints excluding PPI (%) 2022 2021 We received a significant volume of PPI-related claims leading up to the FCA deadline of 29 August 2019. As such, the underlying trend provides a more meaningful comparison. + Further details can be found at: home.barclays/citizenship/our reporting-and-policy-positions/UK-complaints-data Barclays Bank PLC (BBPLC) BBPLC's reportablea complaint volumes in 2022 increased 2% in comparison to 2021. This reflects the return to normality after the coronavirus pandemic which saw business closures/restrictions on non-essential business in 2021. Volumes of transactions and customer interactions increased in 2022 and whilst complaints saw a small increase, the complaints received per 1,000 accounts held reduced during 2022 from 6.8 to 6.1. BBPLC remains focused on improving the overall customer experience by identifying and supporting the removal of the root causes of customer complaints where possible. Barclays Bank PLC complaints (%) In 2022, we maintained our performance of prior years, illustrating the continued success of the CIB for the clients we work for. In Markets, we maintained our ranking of 6th and grew share by 90bps, a particularly strong result given challenging market conditions and driven by the excellent performance of our FICC businesses. In Banking we solidly maintained our overall ranking of 6th in a year of suppressed dealmaking. Corporate and Investment Bank revenue ranks and market shares (#,%) 2022 2021 #6 #6 #6 #6 2022 2021 n Global Markets revenue ranking and share n Dealogica Investment Banking global fee ranking and share demonstrating our performance vs peers. Notes: a Reportable reflects the FCA’s definition of a complaint which must be reported to the FCA on a half-yearly basis and published externally on the Barclays website. Notes a Dealogic for the period covering 1 January 2020 to 31 December 2022. + Further details can be found at: fca.org.uk/data/complaints-data Corporate and Investment Bank revenue ranks and market shares Revenue ranks and market shares are a good indicator to monitor success. We use them to measure how successful our Corporate and Investment Bank has been, and where there is the ability to progress. By using Dealogic Investment Banking global fee ranking and share, and a comparison to global peers share of reported revenues for Global Markets, we can assess our relative performance versus a defined peer group, clearly and transparently. We have adopted a new performance measure for Global Markets based on its share of reported revenues of the Markets businesses of the top 10 banks. The peer group contains BoA, BNP, CITI, CS, DB, GS, JPM, MS and UBS. Where any of the peer group have not published results when we report, we use the consensus estimate for their quarterly performance. While acknowledging accounting treatment differences in peer reporting (e.g. treatment of cost of income) and inclusions of business lines we do not operate in (e.g. Commodities), we have adopted this measure as it provides the most consistent and timely view of the performance of our Global Markets business relative to our global competitor set. The measure is a simple and effective way of understanding relative performance on a global scale. 74.171.8-17-17+2-217.33.16.43.6Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Customers and clients (continued) Barclays PLC Annual Report 2022 28 Supporting customers through Barclays UK Barclays has a large retail presence in the UK, offering a wide range of products and services to c.20 million customers through Barclays UK. We recognise that there is a heightened need to help customers who may be experiencing financial vulnerability due to the current inflationary pressures on household budgets. We are endeavouring to support customers during these challenging times, by focusing on four key areas: 1. using data analytics to determine which customers are in need of support and the appropriate type of support; 2. engaging those customers impacted to increase awareness of products, tools and support available; 3. understanding customers’ needs and developing solutions to provide greater support; and 4. ensuring colleagues have, and are aware of, the financial health tools to enable them to support customers. Barclays defines vulnerability as any existing or potential customers who, due to their personal circumstances e.g. financial difficulty, long-term medical conditions, or other personal circumstances, are especially susceptible to detriment. Our aim at Barclays is to offer an accessible, empathetic and inclusive service for our customers, including for those who may typically face barriers to accessing banking services, such as customers living with disabilities, complex needs or experiencing difficult life events. To better support financially vulnerable customers, we are enhancing our Barclays' tools, training, support and systems, continuing to improve our ongoing support when customers need us the most. Our key measures in 2022 have included: • Extending unsecured borrowing solutions for consumers allowing them to borrow money without offering up security based on a major asset, while being protected by the Consumer Credit Legislation and the FCA’s Consumer Credit Sourcebook. + Further details can be found on page 154 in relation to Consumer Duty within the Governance section in Part 3 of the Annual Report • Cost of living support by proactively contacting over 13.5 million customers in 2022 with targeted emails based on their financial needs, providing support and guidance on managing their finances, offering them help ranging from budgeting to direct financial support and guiding them towards dedicated functions such as Barclays Financial Assistance (BFA) or external agencies such as Step Change. • Providing knowledge and expertise through our colleagues with the aim to offer our customers more tools and features to educate them on managing their money, including by giving them guidance on how to use our digital platforms via the Digital Eagles, or supporting them in their understanding of financial products, how to build financial plans, and save money through budgeting via our Barclays Money Mentors®. Our early intervention strategies assess all customers who hold a retail product to determine if we think they would benefit from our support. These customer engagement strategies are bank-initiated and largely focused around proactive communications, based on sets of customer behavioural triggers, whilst we also support customers who initiate contact with us. Our primary focus is to support customers whose account behaviours are showing signs of possible early financial difficulty, and look to help customers maintain or regain control of their finances. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Customers and clients (continued) Some of the other ways we seek to support vulnerability and provide responsible and inclusive banking are set out below: Access to banking Customers are looking for more convenient, simpler ways to bank that fit their lives, including banking digitally: our mobile app has over 10.5 million active users. We are continuing to help deliver these solutions at pace. Alongside our investment in technology enabling digital customers to access tools and products whenever they need them, we’re transforming the role of physical locations across the UK to ensure older and more vulnerable customers can still access banking. We have launched our own initiatives, including a cashback without purchase service and Barclays Local, and we are working with other banks, the Post Office and LINK, to keep Barclays at the heart of the community. Alongside these changes, we are investing in multi-skilled training for our colleagues so they are better able to serve customers in ways that meet their needs today as well as breaking down internal barriers to enable quicker resolution of customer queries. + Further details on mobile banking vans and how to book an appointment can be found at: events.uk.barclays/barclaysvan/ Economic crime and scams We have an established programme to educate customers and prevent them from falling victim to scams. We have also launched a new Fraud and Scams hub on the Barclays website, which hosts a variety of content and resources to help the public learn how to keep themselves safe. Additionally, to help keep our customers safe, we’ve continued to invest in multi-layered security systems that protect against fraud and scams, including ‘Confirmation of Payee’, an account name checking service that helps to make sure payments aren’t sent to the wrong bank or building society account. We introduced app ID, which allows Barclays colleagues to verify to customers that they’re a legitimate caller and not an impersonator. We are part of the ‘Do not originate’ scheme, created in partnership with the telecommunications industry, UK Finance and Ofcom, to prevent our most common inbound helpline phone numbers from being used in a scam. We are also proud initial signatories of the Contingent Reimbursement Model Code, providing measures to help prevent Authorised Push Payments scams taking place and building increased consumer protection standards for customers of signatory firms. We are founding members of Stop Scams UK, a cross-industry group made up of banks, telecoms and tech firms that have come together to seek to put an end to scams by collaborating, sharing best practices and engaging with the government and regulators to make it harder for scammers to operate. Through Stop Scams UK, we have created a dedicated hotline for customers to call if they think they are being targeted by a scammer. Further detail and evidence with regards to our position can be found in the Frontier Economics report published earlier this year, in conjunction with Barclays, which includes Barclays’ Scams Manifesto, outlining specific and actionable recommendations. If you suspect that you have been approached by fraudsters please tell the FCA using the share fraud reporting form at fca.org.uk/scams You can also call the FCA Helpline on 0800 111 6768 or through Action Fraud on 0300 123 2040 + Frontier Economics report on Tacking Fraud and Scams: home.barclays/content/dam/home-barclays/documents/ news/PressReleases/Tackling-Fraud-and-Scams-An- Ecosystem-Wide-Approach.pdf Digital accessibility We aim to ensure that our digital services are easy to see, hear, understand and use for all customers, including those with disabilities. Collectively we seek to deliver digital services and workplace tools that promote disability inclusion and meet accessibility requirements set out in the Web Content Accessibility Guidelines (WCAG) 2.1 AA level. + The Barclays Accessibility statement barclays.co.uk/accessibility/statement/ Gambling Barclays understands that gambling and financial difficulty can often go hand in hand and that customers may sometimes find it hard to ask for help. We have continued to work in partnership with GamCare, a UK charity which provides information, advice and support for anyone affected by problem gambling. GamCare provided additional training for our specialist financial assistance teams helping them have conversations with customers who are impacted by problem gambling, directly transferring those who need further support to trained GamCare advisers. + Further details can be found at: barclays.co.uk/gambling-support/ Barclays PLC Annual Report 2022 29 Domestic abuse To support customers impacted by domestic abuse, we have partnered with Refuge, a UK charity providing specialist support for women and children experiencing domestic abuse. This enables us to direct those impacted by domestic abuse to expert advice and assist survivors with the opening of bank accounts and gaining access to banking services in situations where they may not have the requisite documentation. In 2022, the Barclays Refuge Partnership, has been recognised at the Better Society Awards and the Charity Times Awards. We have also signed up to the revised UK Finance Domestic Abuse Code of Practice, which sets out how participating banks and building societies should support customers who are victims and survivors of economic or financial abuse. Homelessness We continue to support those with limited documentation such as homeless people to open a basic current account. This year, the UK has seen its fastest cost of living increase in 40 years. Barclays has partnered with charities to help those most impacted by the current environment through dedicated financial inclusion support. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Customers and clients (continued) Barclays PLC Annual Report 2022 30 Bereavement We continue to support customers through the bereavement process. Throughout 2022 we have seen increased customer satisfaction scores in our surveys and a reduction in complaints year on year. We have an ongoing programme of work to enhance the customer experience across all of our channels including physical locations and online. In particular, we are improving our handling and processing of documentation to make it easier for customers to supply important information to us. Further enhancements are planned for 2023. + Further details can be found at: barclays.co.uk/what-to-do-when-someone-dies/notify-us/ Authorised users Barclays was one of the first in the UK to launch a new way in connecting customers to those they trust - Barclays 'Authorised Users’. The launch of ‘Authorised Users’ in June 2022, enables Barclays customers to digitally and instantly add someone that they trust to their current account to support them with spending on their behalf or supervising their account, This empowers sometimes vulnerable - but capable - customers to manage their finances effectively with support of another, while retaining full control of their account. + Further details can be found at: barclays.co.uk/ways-to-bank/authorised-users/manage- account/ Specialist support team We continue to support our frontline colleagues when handling cases of complex or extreme vulnerability through a Specialist Support Team. This ensures frontline colleagues are better equipped to support customers in vulnerable circumstances. Accessibility & Vulnerability (A&V) Indicators Platform In July 2022 we launched a new framework across Barclays UK, giving colleagues within Barclays the ability to record disclosed customer vulnerability on our systems, so allowing us to provide customers with the correct level of service based on their particular needs and/or adjustments. Training for colleagues Over 28,000 Barclays UK colleagues completed the mandatory Customers in Vulnerable Circumstances annual e-learning modules. The training improves awareness and understanding of vulnerability for our frontline and head office colleagues. Additional training modules were also updated with a view to greater depth of understanding for colleagues on the overarching drivers of vulnerability. We are further enhancing our training materials for our colleagues in 2023, with the addition of a ‘Threat to Life’ module to help further support colleagues when liaising with customers. Banking Made Clearer brochure We have also partnered with the British Institute of Learning Disabilities to refresh our Banking Made Clearer brochure; an easier to read guide which uses simple, clear language and imagery. Barclays UK Performance Framework Within Barclays UK, the Performance Framework is in place to ensure a sustainable commercial performance. The framework looks to mitigate the risks of inappropriate practices, such as ensuring there is no undue pressure on colleagues to sell products, which can result in mis-selling. Alongside the Performance Framework we have introduced Performance Standards to set clear expectations, identify development opportunities, and deliver sustainable performance for our customers and clients. Basic current account Since 2015, we have been offering our basic current account to individuals who may not be eligible for a standard account access to banking, including over the counter services, access to ATMs, and digital banking and free text alerts to manage finances. There were over 660,000 Barclays basic current accounts open at the end of 2022. Access to a transactional bank account enables consumers to benefit from bill reductions through paying by direct debit and access to cheaper goods and services on the internet, to help them along their financial journey. If their circumstances change, customers on the basic current account are able to apply for a standard Barclays current account at any time. Number of basic current accounts (#) 2022 2021 2020 Barclays mortgages and first-time buyers In 2022, we helped almost 40,000 first-time buyers get onto the property ladder, near the level achieved in 2021. We have continued to support customers buying their first home with 95% loan-to-value mortgages through UK Government schemes including Help to Buy and Mortgage Guarantee Schemes, and Barclays Family Springboard Mortgage. The Help to Buy scheme allows first-time buyers to get on the property ladder with the help of an equity loan from the Government. Customers put down a 5% deposit which is ‘topped up’ with an equity loan of 20% (or 40% in London) to support their property purchase. Help to Buy is only available on new build properties. Our Mortgage Guarantee Scheme offers 95% LTV mortgages which are backed by a UK Government guarantee. Customers can apply for the scheme with a minimum deposit of 5% of the property purchase price, and it is available for first-time buyers and those looking to make their next move on the property ladder. 661,991642,468614,000 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 31 Our people and culture Empowering our colleagues Our people and our culture are our greatest assets. We are committed to making Barclays a great place to work, enabling colleagues to deliver strong results for our customers, clients, communities and each other. Mindset Indices 90% Empower 2021: 87% 85% Challenge 2021: 83% 2022 Your View survey 85% “I would recommend Barclays to people I know as a great place to work” 2021: 82% 92% “I believe my team and I do a good job of role modelling our Mindset every day” 2021: 89% 87% Drive 2021: 84% 86% Wellbeing Index 2021: 84% We further embedded hybrid working, with colleagues spending a mix of time between Barclays' sites and at home. We provided support and practical guidance to all people leaders seeking to ensure we were balancing the needs of our colleagues, alongside those of our customers and clients, as well as providing colleagues with the collaboration tools and technology we believe they need to succeed in a hybrid environment. We continue to develop and optimise our workspaces. Our support for colleagues extends beyond the tools and environment that we provide. We have evolved our Be Well programme to provide a holistic and inclusive perspective on wellbeing which supports the needs of our diverse workforce with a focus on: • sustainable high performance: giving colleagues the skills and knowledge to enhance their physical and mental fitness; and • supportive culture: building confidence to address stigma and offer support around mental health and other aspects of wellbeing from financial welfare to the menopause. W During 2022, we continued to embed the Barclays Mindset, helped colleagues to adapt to hybrid working, supported colleague wellbeing and made further progress against our diversity, equity and inclusion (DEI) ambitions. Through our colleague listening survey, Your View, we saw improved scores across all our indices. We remain committed to attracting, developing and retaining a diverse and inclusive workforce. Against a competitive hiring market, we hired 22,759 new colleagues into Barclays, and supported our colleagues into their next career moves through internal mobility, with 43% of vacancies being filled by internal candidates. This was in addition to welcoming 841 graduates, 1,190 interns and 440 apprentices to Barclays throughout 2022. To support colleague development, an average of 2.2 days/17 hours of development and training was completed per colleague in 2022, including enrolment of 1,035 colleagues in our flagship leadership development programmes (The Enterprise Leaders Summit, Aspire and Strategic Leaders Programme). We launched the Barclays Mindset in 2021, taking the best of what we learnt from our ways of working through the course of the pandemic, and sought to embed the behaviours (empower, challenge and drive) into everyday working practices. In 2022, we formally incorporated this into our hiring, performance management, reward and recognition frameworks. + For further information on our Purpose and Values, please visit home.barclays/who-we-are/our-strategy/purpose-and- values/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Our people and culture (continued) Our approach to diversity, equity and inclusion We launched our refreshed DEI vision and strategy to incorporate 'equity’ into how we talk about, and take action to progress, our DEI activities. Our vision is to strengthen our diverse, equitable and inclusive culture, with a view to attracting and retaining the best talent, building high- performing teams which generate better outcomes for our customers and clients, whilst also meeting the expectations of our regulators, shareholders and other stakeholders. We have five strategic priorities: • Workforce diversity • Inclusive and equitable culture • Leadership accountability • Data transparency and accountability • Optimisation of external relationships. These priorities are underpinned by our guiding principles of accountability, transparency and engagement. These principles and priorities help us to deliver against our six core agendas – disability, gender, LGBT+, multicultural, multigenerational and socio-economic. Our data-led approach, underpinned by our Wellbeing Index (now in its second year), brings together actionable insights for people leaders. It also enables curation of content for colleagues that is grounded in clinical evidence to help them better manage their own health. Ongoing leader- led campaigns are at the forefront of the way we engage with colleagues, with regular expert speaker events chaired by senior executives. Our ‘Talk Money’ week in the UK challenged the stigma around talking about money, building confidence with financial management and signposting to free and confidential support. This is complemented by practical resources and guidance offered through our global Be Well portal (with 45% of colleagues registered), and our Employee Assistance Programme. In response to increases in living costs experienced by our UK colleagues, we brought forward part of the 2023 pay increase, awarding 35,000 UK-based junior colleagues a £1,200 salary increase effective from August 2022, ahead of our annual salary review. In January 2023, Barclays worked closely with Unite the Union to agree a 2023 UK pay deal which, combined with the August 2022 increases, brought the total average salary increase for our lowest paid colleagues up to 11%. By doing this we ensured that our minimum rate of pay in the UK remains well ahead of Living Wage Foundation benchmarks. Similarly, we brought forward part of the 2023 pay increase for our most junior colleagues in Belgium, France, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain, awarding them €1,500 effective from 1 November 2022. In November, we also awarded junior colleagues in Germany a one-off payment of €2,000 as that approach, whilst having the same effect, was more appropriate under local rules. + For further information on the resources and support available to colleagues relating to financial wellness, please visit the 2022 Fair Pay Report. Barclays PLC Annual Report 2022 32 2022 highlights We have: • Achieved our ambition to double the number of Black Managing Directors in the UK and US by the end of 2022, going from nine to 18. • Increased our female representation at Director/Managing Director grades to 29%∆, in line with our gender ambitions of 33% female representation at this level by 2025. • Launched partnerships with Historically Black Colleges and Universities (HBCUs) and Hispanic-Serving Institutions (HSI) in the US, creating a pipeline of diverse talent into Barclays. • Our Inclusion Index score improved to 82% (from 79% in 2021) and we increased engagement with colleagues through webcasts, workshops and events including our inaugural ‘Inclusion Unleashed’ week • Appointed Accountable Executives (AEs) to champion and galvanise support for each of our six agendas with an emphasis on intersectionality. Note ∆ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Refer to the ESG Resource Hub for details: home.barclays/sustainability/esg-resource-hub/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Our people and culture (continued) Workforce diversity Developing diverse talent pipelines We are focused on recruiting the best talent and have created, and participated in, dedicated recruitment schemes across our agendas and regions to increase access to diverse talent. This has included: • Continued support for our internal programmes, such as the Barclays Military and Veterans Outreach programme, in the UK and US, supporting active duty service members into secondment opportunities at Barclays. In 2022, we welcomed 45 service leavers into permanent roles across Barclays through our Military Talent Scheme and Hiring Our Heroes programmes alongside 120+ military talent hired with support from Barclays' Military and Veterans Outreach (MVO) team. • Establishing a partnership with the Thurgood Marshall College Fund, which represents a network of 47 Historically Black Colleges and Universities (HBCUs) and Predominantly Black Institutions (PBIs) in the US. Through this partnership, we will work to increase the diversity of our talent pipelines in the US. • Participation in the Grace Hopper Celebration Event in the US, which focuses on supporting women and non-binary technologists with careers in Technology, resulting in over 400 job offers to join our Technology division. Globally, there is training and support available for all hiring managers and interviewers to ensure inclusivity and consistency throughout the hiring journey. We are an equal opportunities employer and give full and fair consideration to all populations based on their competencies, strengths and potential. Additionally, as part of the UK Government Disability Confident scheme, we encourage applications from people with a disability, or a physical or mental health condition. We require people leaders to give full and fair consideration to those with a disability on the basis of strengths, potential and ability, both when hiring and managing. We also ensure opportunities for training, career development and promotion are available to all. + For further information on our work on developing diverse talent pipelines, please visit our DEI website. Providing tools and support for colleagues to succeed and progress at every stage of their career We offer multiple development programmes to support the growth of our colleagues, providing them with the opportunities and resources necessary to strengthen key skills to progress and reach their full potential. The Black Professionals Resource Group (BPRG) created Ascent, a six-month programme for Analysts in the UK and US, to support the development of Black colleagues across Barclays and was the first such programme conceived and delivered by a Barclays Employee Resource Group (ERG). + For further information on development programmes, please visit the Talent Now and for the Future section. Inclusive and equitable culture At Barclays, we are committed to building a supportive and inclusive culture. We believe that making our organisation more equitable will help us to make the most of the different backgrounds, perspectives and experiences of our colleagues, and to better serve our customers and clients. As part of our Continuous Listening strategy, we ask colleagues to participate in surveys, providing regular opportunities to feed back on their experience of working at Barclays. Colleagues are asked to share their feedback on topics ranging from inclusion to wellbeing, and responses help us to assess progress on our DEI journey and identify areas of focus. + To learn more about the 2022 Your View survey results, please visit the Listening to our colleagues section. Employee Resource Groups (ERGs) Colleague networks have long played an important role at Barclays, through creating communities and fostering belonging. More recently, they have acted as a sounding board for the business, driving a better understanding of the needs of our customers, clients and communities. With over 24,000 colleagues globally participating in one or more of the ERGs, these colleague-led communities amplify the unique challenges of diverse groups at Barclays and provide insight into colleague sentiment and experience. Barclays PLC Annual Report 2022 33 Socio-economic inclusion agenda To support the launch of the socio-economic agenda, colleagues created the Inspire ERG, which aims to amplify the voices of those who identify as coming from a lower socio-economic background. Members and allies of the ERG are encouraged to develop their understanding of how socio-economic status can impact a person’s work and life experiences. Through Inspire, we are also connecting with schools and universities to remove barriers for people of varied backgrounds to join Barclays. In July, colleagues across the organisation were invited to join the socio-economic Inclusion Week. Speakers shared insights on a range of topics, including: social mobility, socio-economic background and bias, ethnicity, accents and the differences across the regions in which we operate. Throughout the week, we shared how we are supporting the career progression of colleagues from lower socio-economic backgrounds, and the removal of barriers from the workplace. These include mentoring and education initiatives which aim to tackle the barriers to development and promotion, partnerships with schools and universities, as well as through our LifeSkills programme, which provides opportunities for colleagues to volunteer within the community and amplify the breadth of opportunities available to young people within the business. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Our people and culture (continued) Pronouns In 2022, we added two new features to our internal phonebook where colleagues can opt to display their personal pronouns, as well as the phonetic spelling or audio recording of their name. We also proudly partnered with Microsoft, to pilot a pronoun feature on Microsoft Teams. Branch colleagues in the UK are also now able to add their pronouns, as well as markers indicating health conditions and flags denoting spoken languages, to their name badges. This helps to create a safe space for our trans, non-binary and LGBT+ colleagues, and promotes inclusivity of diverse nationalities, abilities and backgrounds. We support the sharing of pronouns as a personal choice. Wellbeing and policies Prioritising the wellbeing of our colleagues is central to creating productive teams where all individuals feel valued and included. Our holistic and inclusive perspective requires us to measure wellbeing, using our Wellbeing Index and to educate and empower our colleagues and leaders to actively manage their health and support that of others. We continue to deploy training, which recognises the importance of mental wellbeing and building a supportive and inclusive culture. We have also partnered with our DEI ERGs and leaders on global campaigns to normalise conversations about mental health and wellbeing topics. In the UK, Barclays pioneered ‘This is Me’, now in its ninth year, where individual colleagues talk openly about the challenges they have faced, with the aim of tackling the stigma associated with mental ill health. For the first time in 2022 we expanded the DEI performance objective to include wellbeing, with colleagues now being asked to develop their understanding of the factors contributing to their resilience and sustaining high performance; and managers now being asked to champion and support team wellbeing. This was bolstered by the launch, on World Mental Health Day, of a new toolkit to help people leaders lead their teams in a way that protects and enhances colleague health with a focus on practices such as workload management, fostering autonomy and enabling growth. We also made enhancements to our provision of workplace adjustments for colleagues with disabilities and health conditions, to drive consistency in how we support our colleagues globally. Colleagues now have greater control over their own individual requirements and an improved experience through the implementation of a new self-service process for the ordering of equipment for office and home working use, as required. We regularly revisit our people policies to ensure they are in line with our broader DEI and people strategy. This includes making updates to our HR policies, processes and support materials on a range of topics such as flexible working and workplace support for menopause. + To learn more about the policies reviewed in 2022, please visit the Our Policies section. Barclays PLC Annual Report 2022 34 Leadership accountability Data transparency and accountability Our leadership play an important role in progressing our DEI journey and meeting the rising expectations of colleagues, customers, clients and communities. Accountable Executives (AEs) from the Barclays Group Executive Committee have been appointed as visible advocates for the DEI agendas, shaping priorities and delivering against these. We also hosted the second annual Inclusion Summit, a virtual two-day event to engage and mobilise senior leaders in respect of the DEI strategy. The event, consisting of a series of speaker events and focused discussions, reached over 1,000 Barclays leaders and ERG representatives from across the organisation. It was met with positive feedback from participants, with 71% agreeing or strongly agreeing that Barclays has made meaningful progress on inclusion since the 2021 Summit. Every colleague continues to have a mandatory inclusion performance objective against which they are assessed as part of their performance review. The objective encourages inclusive and supportive behaviours that recognise every individual’s background as key drivers of our Purpose, Values and Mindset. Data plays an essential role in delivering our DEI strategy, allowing senior leaders to make informed decisions and track our progress. In an effort to ensure colleagues’ personal data records are accurate, this year we held another ‘Count Me In’ campaign, inviting colleagues in the UK and US to review and share their personal details in our HR systems, in line with local privacy laws. Maintaining up to date personal data records also helps us to develop and update programmes, practices and policies to best support colleagues at every level. In late summer, we began producing an enhanced monthly management pack for senior leaders, containing a detailed breakdown of their team's progress against our Race at Work and gender ambitions. Note Under the Companies Act 2006 (the 'Companies Act'), Barclays is required to report on the gender breakdown of our employees, ‘senior managers’, and the Board of Barclays PLC's Directors. The Group’s global workforce was 92,898 (50,967 male, 41,720 female, 211 unavailable), with 432 senior managers (329 male, 103 female), and the Board of Barclays PLC had 13 directors (8 male, 5 female) as at 31 December 2022. This is on a headcount basis, including colleagues on long-term leave. Unavailable refers to colleagues who do not record their gender in our systems. The ‘male’ and ‘female’ gender splits disclosed in this paragraph are based on Companies Act disclosure requirements and numbers are taken from our employee records which are maintained pursuant to applicable rules and regulations on employee record keeping. For further information on the Group’s approach to building a more inclusive company, please see our DEI website - at home.barclays/who-we-are/ our-strategy/diversity-and-inclusion/. ‘Senior managers’ is defined by the Companies Act, and is different to both our Senior Managers under the FCA and PRA Senior Managers regime, and our Director and Managing Director corporate grades. It includes Barclays PLC Group Executive Committee members, their direct reports and directors on the boards of undertakings of the Group, but excludes Directors on the Board of Barclays PLC. Where such persons hold multiple directorships across the Group they are only counted once. The definition of 'senior managers' within this disclosure has a narrower scope than the Managing Director and Director female representation data provided above. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Our people and culture (continued) Barclays PLC Annual Report 2022 35 Recognising our colleagues Over the past year, Barclays and several of our colleagues have been recognised for our efforts to advance diversity, equity and inclusion. Americas • 100% - Disability Equality Index (Disability:IN) UK • Top 100 - Stonewall UK Workplace Equality Index (Stonewall) • Employer of the Year – 2022 Forces Families Awards (Forces Families) • Gold Award – Employer Recognition Scheme (UK Ministry of Defence) Optimisation of external relationships We develop relationships with external partners to challenge our thinking, leverage best practices and access diverse pools of talent. We partner with organisations across all six agendas (disability, gender, LGBT+, multicultural, multigenerational and socio-economic) and in each region. Relationships with organisations such as the Business Disability Forum, Disability Confident and Disability:IN help us make our workplace and policies more inclusive, while providing resources and support to colleagues with disabilities, neurodiversity and health conditions. Stonewall, Pride Circle and Working Mother Media provide us with valuable feedback on our LGBT+ and gender inclusivity in the form of benchmarks and conferences. Partners in the multicultural space such as COQUAL, Thurgood Marshall Fund, National Urban League, Executive Leadership Council, Black Young Professionals UK, RARE UK and the Hispanic Association for Corporate Responsibility (HACR), among others, provide us with platforms to connect with diverse talent. Work with organisations including Working Families, Carers UK and the UK Socio-economic Taskforce is helping to position us as an employer of choice for talent across all generations and socio-economic backgrounds. Asia Pacific • Top 10 - 2022 India Workplace Equality Index (Stonewall, Pride Circle, Keshav Suri Foundation) Workforce diversity 38% Female members of the Board of Directors 2021: 33% 27%∆ Female Group ExCo and ExCo direct reports 2021: 25% 29%∆ Females at MD/D level 2021: 28% 40% Female hiring rate 2021: 39% 45% Female promotion rate 2021: 47% 13% Female voluntary attrition ratea 2021: 11% • Best Companies for Women in India (Working Mother Media and AVTAR) • City of Good Award - President’s Volunteerism & Philanthropy Awards Singapore (President of Republic of Singapore) Notes: Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/ esg-resource-hub/reporting-and-disclosures/ a Volume of leavers in 2022 divided by the average headcount in 2022 that have recorded their gender as female Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Our people and culture (continued) Talent now and for the future Talent attraction – now and for the future Across 2022, demand for talent has remained high, alongside a greater focus from candidates seeking flexible working options and on wellness and wellbeing. In response, we have pursued opportunities to attract and recruit talent as quickly and efficiently as possible, including doubling the number of recruiters to support our businesses and the launch of the Onboarding app, giving new joiners and their people leaders access to information required prior to joining Barclays, including the ability to sign employment contracts via the app. Barclays was ranked number one in the LinkedIn Top Companies UK 2022 list for the second year in a row. Based on LinkedIn-owned data, the list is a resource for jobseekers and career builders to explore open vacancies, enhance their skills and identify companies that invest in their talent. This was further recognised by the Learning and Performance Institute, where Barclays won a Bronze Learning Leader Award. The Financial Service Skills Commission (FSSC) brings together industry, government and the education sector to help overcome the top five skills gaps in Financial Services (Data and Analytics; Tech Design and Management; Business Process and Customer Experience Design; Personal Effectiveness, Thinking and Problem Solving; and Leadership and Social Influence), working to identify solutions and increase our access to diverse talent. Barclays is proud to partner with the FSSC, and has used the insights gleaned from the partnership to inform our approach to talent, particularly in Technology. Delivering world-class customer service and care remains of paramount importance to Barclays. In order to meet the demand, we significantly grew our customer care teams globally; for example, following the acquisition of the Gap credit card portfolio in the US, we nearly doubled our footprint in our US contact centre in Nevada, with over 1,800 new hires and saw demand triple for roles supporting our customers in the UK. Developing our colleagues We remain committed to our culture of lifelong learning, through a development proposition that supports colleagues at every stage of their career. On completion of a research-led review of our Graduate Programmes in 2020, we have re- designed our approach to managing high- potential, junior talent. Launched in 2022, we welcomed 841 graduates on to our new Scholar programme, which provides support, development and training in either technical skills through our Expert programme, or leadership pathways through our Explorer programme. Both programmes are underpinned by a suite of baseline learning experiences, which aim to maximise graduate experience and development, while also equipping them with the skills needed to build their future career. The Barclays Learning Lab is our learning ecosystem. Consisting of Barclays-designed knowledge and skills modules, as well as modules from external specialists, it provides our colleagues with the development tools needed to support them in their current and future roles. Colleagues can access a wide range of workshops, split between colleague and people leader development. This is complemented by our digital content providers, whose content has been mapped against role-specific learning pathways, making it easy for colleagues to navigate development resources suitable for their needs. Barclays PLC Annual Report 2022 36 The Learning Lab also offers a selection of self- assessment tools, empowering colleagues to understand their strengths and development areas. These are supported by business-led solutions that encompass professional and technical resources encouraging colleagues to drive their own development. People leadership at Barclays is about helping others to achieve their potential. To equip our people leaders with the critical skills and behaviours to inspire, develop and support their teams today and into the future, we have refreshed our Management Unlocked programme. The programme provides participants with extensive digital content, as well as our Evolution programme, which supports new people leaders as they transition into leadership roles. We also operate three high-potential flagship leadership programmes: The Enterprise Leaders Summit, for Managing Directors; the Strategic Leaders Programme, for Directors; and Aspire, for Vice Presidents. These programmes aim to build enterprise-wide leadership, alongside strong people leadership capabilities, helping colleagues tackle people management situations confidently, in line with our Values and Mindset. Developing digital skills across Barclays As our organisation evolves, we have implemented strategies to actively upskill, reskill and realign talent across Barclays, supporting colleagues’ career growth and our future skills needs. Our Destination Technology and Destination Security Apprenticeship schemes focus on developing digital capabilities and provide opportunities for UK-based colleagues to reskill via a clear and structured career pathway, leading to increased internal mobility and employment in a variety of roles such as Testers, Developers and User Experience (UX) Designers. Apprentices are provided with a range of support, from team buddies and talent coaches to more structured learning courses and study time to achieve industry-recognised qualifications, with over 190 colleagues having successfully transitioned into their new roles. Here’s what two of our 2022 cohort had to say about how Destination Technology has transformed their careers. “This is the most incredible opportunity I could ever have asked for; I had no idea how to get into Technology and no idea how to code. I am now coding in five different languages in my first 12 weeks. This experience has been life- changing and it has really improved my mental health." “This is a golden ticket and a life- changing opportunity. The support I have received has been amazing and I will be forever grateful." Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Our people and culture (continued) Barclays PLC Annual Report 2022 37 Employee statistics Number of employees split by region (000s) Number of employees split by grade (%) Talent and development 2022 2021 4.0 3.6 Total 87.4 Total 81.6 2022 2021 n Senior (Managing Director and Director) n Middle (Assistant Vice President and Vice President) n Junior (Business Analyst grades) n UK n Europe n Americas n Asia Pacific Split by full time/part time (%) Employees by employment contract type and gender (%) n Full time n Part time 93 7 Payroll Agency n Female n Male Our hires By age group % By gender % By ethnicity % By management level % n Below 20 n 20-30 n 30-40 n 40-50 n 50-60 n Over 60 1 46 32 10 10 1 n Female n Male 40 60 n White n Asian n Black n Other ethnicities 19 71 6 4 n Junior n Middle n Senior 72 25 3 Aspire 471 participants in 2022 which is 3% of the overall VP population Strategic leaders 278 participants in 2022 which is 5% of the overall Director population The Enterprise Leaders Summit 286 MDs completed the programme in 2022 which is 18% of the overall MD population Nominations (%) n Female n Male Note The pool of females to select from at the VP level is 32%. Nominations (%) n Female n Male Note The pool of females to select from at the D level is 29%. 50 50 49 51 People leadership training 807 Number of people leaders that took part in Management Unlocked training 1,580 Number of people leaders that took part in Evolution Programme 4444.111.410.12823.8884241505145445556 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Our people and culture (continued) Listening to our colleagues Listening to colleagues allows us to obtain insights into what we are doing well and areas where we need to focus our attention. Our biannual all-colleague Your View surveys measure colleague considerations across a breadth of topics including colleague engagement, organisational culture, including the Mindset and Values, wellbeing, inclusion and working practices and tools. The Your View survey is the primary mechanism for how we track engagement and monitor our culture, with the 2022 survey results indicating good progress for both engagement and cultural measures. Senior leaders continue to receive and review the results from these surveys to inform decisions. We have also evolved our Continuous Listening strategy, leveraging pulse surveys, as well as additional surveys deployed throughout the employee lifecycle, to capture insights which help us better understand our culture and improve colleague experience. We have adopted a number of methods for engagement with our workforce, in line with the UK Corporate Governance Code. These engagement mechanisms, including all- colleague townhalls, skip-level meetings, DEI summits, site visits and engagement surveys, enable colleagues to share ideas and feedback with senior management and the Board. We keep colleagues updated on the strategy, performance and progress of the organisation through a combination of leader-led engagement, digital and print communication, blogs, vlogs and podcasts. In 2022, the Barclays Group CEO held over 50 engagement sessions throughout the year with colleagues, including quarterly townhalls on financial performance, listening sessions on flagship talent programmes and Q&A sessions. Other workforce engagement activities have also been carried out by both Board and management to deliver meaningful, regular two-way dialogue with colleagues. This helps our Board reflect colleague feedback in their decision-making. The range of direct engagement mechanisms we use, across multiple channels throughout the year, combined with a comprehensive reporting approach, enables us to effectively engage with our workforce. Results from our surveys and other employee engagement mechanisms were shared with colleagues and discussed with the Barclays Board, the Executive Committee and people leaders. We maintain a strong and effective partnership with Unite and the Barclays Group European Forum, whom we brief on our strategy and progress to obtain feedback on how we can improve the colleague experience. In 2022, we engaged with Unite on the transition to hybrid working and our updated DEI strategy. We also consult with colleague representatives on major change programmes which impact our people, to minimise compulsory job losses, and focus on reskilling and redeployment. In 2022, this included the launch of an enhanced mobility service to further mitigate redundancies across the organisation, redeploying colleagues into roles commensurate with their skills and experience, and upskilling colleagues where required. The collective bargaining coverage of Unite in the UK represents 83% (2021: 84%) of our UK workforce and 43% (2021: 48%) of our global workforce. Highlights 84% Colleague engagement scorea 2021: 82% 85% “I would recommend Barclays to people I  know as a great place to work” 2021: 82% 92% “I believe that my team and I do a good job of role modelling our Values every day” 2021: 92% 92% “I believe my team and I do a good job of role modelling our Mindset every day" 2021: 89% 83% “It is safe to Speak Up” 2021: 79% 13% Voluntary employee turnover 2021: 11% 16% Employee turnover 2021: 14% Barclays PLC Annual Report 2022 38 Our policies Our people policies are designed to recruit the best people, provide equal opportunities and create an inclusive culture, in line with our Purpose, Values and Mindset, and in support of our long-term success. They also reflect relevant employment law, including the provisions of the Universal Declaration of Human Rights and the International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work. We regularly review and update these policies to ensure that they are in line with our broader DEI and people strategy. To support the transition to hybrid working in 2022, we updated our policies on Working Flexibly to enable an approach that meets the requirements of each role, while also taking into account the needs of our colleagues. We also updated our policies and guidance on a range of topics including workplace support for menopause and baby loss. We are committed to paying our people fairly and appropriately relative to their role, skills, experience and performance. This means our remuneration policies reward performance that is in line with our Purpose, Values and Mindset, as well as our risk expectations. We also encourage our people to benefit from Barclays’ performance by enrolling in our share ownership plans. + For further information, please see our Fair Pay Report 2022 and UK Pay Gaps 2022. Note a As part of our efforts to improve our measurement frameworks, we have transitioned to a new three question engagement model. This was after collecting four years of concurrent data and running analysis to affirm the new model’s validity. Historic figures have been updated to reflect results from the new three question model Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 39 Society Making a difference Our success is judged not only by commercial performance, but also by our contribution to society and in the way 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. Highlights 1.5°C aligned-targets set against five NZBAa high-emitting sectors New target to facilitate $1 trillion of Sustainable and Transition Financing between 2023 and the end of 2030 269 Unreasonable Impact ventures supported since 2016 93% Prompt payment rate We believe that we can, and should, make a positive difference for society – globally and locally. We do that through the choices we make about how we run our business in light of all relevant risk and other factors and through the commitments we make to support our clients and communities and to champion sustainability for the long term. We recognise that we are at our best when our clients, customers, communities and colleagues all progress. Our focus on society falls broadly into three categories: Climate, Communities and Suppliers. Climate Addressing climate change is an urgent and complex challenge but also an opportunity. It requires a fundamental transformation of the global economy. The financial sector has an important role to play in supporting the transition to a low-carbon economy and at Barclays, we are determined to play our part consistent with our Purpose and relevant business and risk considerations. In 2020, Barclays announced an ambition to be a net zero bank by 2050, across all of our direct and indirect emissions and we committed to align all of our financing activities with the goals and timelines of the Paris Agreement. We made it clear at the time that we would approach the climate challenge thoughtfully and transparently, engaging with our shareholders and other stakeholders and reporting our progress. In doing so, we also recognise the importance of supporting a just transition considering the social risks and opportunities of the transition and seeking to ensure effective dialogue with affected stakeholders. + For further details on our integration of social and environmental issues into our business, please refer to our ESG-related reporting and disclosures on page 64 For further details on our climate-related progress, please refer to our climate-related financial disclosures (TCFD) Content Index from page 65 Communities In the communities in which we operate, Barclays is supporting people to develop the skills and confidence they need to succeed, now and in the future and working to help businesses create jobs. We collaborate with experienced partners, employability experts and businesses to develop meaningful and innovative programmes that aim to deliver a significant positive impact over the long term. + More information on how we are supporting our communities can be found from page 41 Suppliers As a global institution, we have responsibility for a large supply chain. We engage directly with our suppliers seeking to promote diversity, equity and inclusion and we work to identify and address modern slavery risks across our operations, supply chain, and customer and client relationships. + More information on how we engage with our supply chain can be found from page 43 Engagement We engage with stakeholders internally and externally to assess our areas of focus against their priorities. That happens through ongoing conversations, as well as surveys and information requests from investors and ratings agencies. We also monitor closely the relevant ESG frameworks and reporting guidelines. Notes: a Net-Zero Banking Alliance (NZBA) Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 40 Society (continued) Barclays’ climate strategy Our climate strategy is driven by consideration of relevant risks and opportunities and 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. In March 2020, Barclays announced its ambition to be a net zero bank by 2050, becoming one of the first banks to do so. We are committed to achieving net zero operations and have made progress, having sourced 100% renewable electricity for our global real estate portfolio operationsb and created a pathway to address our supply chain emissions. We are also committed to reducing our financed emissions, those deriving from the activities of the clients that we finance and those generated in their respective value chains by providing financial advice and support as they transition to a low- carbon economy. We have now set 2030 reduction targets across five of the highest- emitting sectors in our portfolio: Energy, Power, Cement, Steel and Automotive manufacturing and have assessed the baseline and convergence point for our Residential real estate portfolio. We have developed a methodology for measuring our financed emissions and tracking them at a portfolio level against the goals and timelines of the Paris Agreement – this methodology is called BlueTrack™. All of our 2030 target-setting includes the integration of 1.5oC aligned scenarios, such as the IEA Net Zero 2050 scenario in our financed emission targets, and including the upper end of ranges for certain sectors. 1 Achieving net zero operations 2 Reducing our financed emissions 3 Financing the transition Barclays is working to reduce its Scope 1, Scope 2 and Scope 3 operationala emissions consistent with a 1.5°C aligned pathway and counterbalance any residual 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. 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. As a large global financial intermediary, Barclays also has an important role in helping channel investment into new green technologies and low-carbon infrastructure projects. The transition to a low-carbon economy is today’s defining opportunity for innovation and growth. With the scale of investment needed estimated to be $4trn per year in renewables and a further $4-6trnc per year to get to a low-carbon economy over the next 30 years, Barclays is helping to provide the green and sustainable finance required to transform the economies we serve. We surpassed our 2018 target to deliver £150bn of social and environmental financing by 2025 and we are still on track to meet our goal  to deliver £100bn of green finance well ahead of 2030. We keep our policies, targets and progress under review in light of the rapidly changing external environment and the need to support governments and clients in delivering an orderly energy transition and providing energy security. The trajectory for our clients’ transition to a low- carbon economy is influenced by a number of external factors, including market developments, technological advancement, the public policy environment, geopolitical developments and regional variations, behavioural change in society and the scale of change needed to adapt their business models. Client transition pathways will vary, even within the same sectors and geographies. Many highly carbon-intensive sectors require finance to transition. Restricting the flow of capital to these sectors could be harmful to the pace of the transition, limiting the real terms impact on global warming. However, we anticipate that companies which are unwilling to reduce or eliminate their emissions consistent with internationally accepted pathways may find it increasingly difficult to access financing, including through Barclays. Our strategy is underpinned by the way we assess and manage our exposure to climate- related risk. Climate risk became a Principal Risk at Barclays in 2022. We monitor financing transactions through our due diligence and have declined financing to clients that have not been able to meet our policies after taking into account all relevant considerations. Notes a We define our Scope 3 operational emissions to include supply chain, waste, business travel and leased assets. b Global real estate portfolio includes offices, branches, campuses and data centres. c $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. After a strategic review of the Group’s capabilities, market demand and growth opportunities, we announced in December 2022, new targets to: • facilitate $1 trillion of Sustainable and Transition Financing between 2023 and the end of 2030. • increase investment into global climate tech start-ups to £500m through our Sustainable Impact Capital portfolio by the end of 2027. Over the coming years, our strategy will continue to evolve and adapt to reflect external factors affecting the shape and timing of the transition to a low-carbon economy, similar to those impacting our clients' transitions. Progress is likely to vary year to year and we need to be able to adapt our approach to respond to external circumstances and to manage the effectiveness and impact of our support for the transition, whilst remaining focused on our ambition of becoming a net zero bank by 2050. + Please see the Barclays Climate and Sustainability report from page 69 for further details on Barclays' ambition to be a net zero bank. Barclays' climate and ESG-related data, targets and progress can be found within the ESG (non-financial) Data Centre within our ESG Resource Hub Further details on our BlueTrackTM methodology can be found within our Whitepaper accessible at: home.barclays/sustainability/esg-resource-hub/ reporting-and-disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 41 Society (continued) Supporting our communities At Barclays, we believe that a strong, inclusive economy is a better economy for everyone. With rising costs likely to exacerbate social and economic inequalities, it is more important than ever to support communities facing hardship. We work with experienced partners and employability experts to design programmes that make a positive and enduring difference in the communities around the world in which we live and work. Our LifeSkills programme is enabling people to develop the employability and financial skills they need to get into work and manage their money and our Unreasonable Impact programme is supporting ventures that are solving key social and environmental challenges, driving innovation and creating jobs. Enhancing people’s skills and confidence Through our LifeSkills programme, Barclays committed to help a further 10 milliona people to develop the skills and confidence they need to succeed, as well as place 250,000b people into work by the end of 2022. The programme has now reached this milestone with 12.6 million people upskilled and 270,600 people placed into work. Since LifeSkills first began in 2013, it has reached 18.1 millionΔ people. Sectors of companies in which people have been placed into work (%) n Technology n Retail and customer service n Financial services n Other 58% 15% 12% 15% Celebrating 10 years of upskilling communities across New York City with Per Scholas Barclays has a long history of delivering Citizenship programmes that are designed for inclusion. Through its community partnerships, we are upskilling and creating pathways into work for Black and ethnically diverse people, and working with ethnically diverse leaders to promote social equity in our communities. In 2022, we celebrated 10 years of upskilling historically underserved communities across New York City with LifeSkills partner Per Scholas, and continue to evolve this partnership to empower even more of their learners – 87% of whom are Black and ethnically diverse, with the skills to be successful in technology careers. Barclays has played a key role in helping Per Scholas to launch technology training campuses in Brooklyn and in Newark, New Jersey, and more recently supporting the expansion of its Brooklyn campus. We have also helped develop curricula for Java developer and cybersecurity courses. As a result of Barclays' investment, more than 1,800 Per Scholas graduates have been placed into work, including more than 60 who have been hired as apprentices, interns or full-time employees at Barclays. As the partnership continues, Barclays is working closely with Per Scholas to create and extend more pathways into work by taking advantage of remote learning opportunities and establishing satellite locations in partnership with community-based organisations. This is enabling them to expand their footprint and reach underserved populations in every borough across New York City. + You can find out more about this approach and its impact in a newly launched report, accessible at: perscholas.org/wp- content/uploads/2022/10/Partnering-For-Impact-Per- Scholas-Satellite-Model.pdf Notes: a. Over a five-year period, 2018-2022. b. Over a four-year period, 2019-2022. Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/ reporting-and-disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 42 Society (continued) Partnership with Trussell Trust to help UK households with rising cost of living In 2022, Barclays launched a new 3-year partnership with the Trussell Trust to help unlock income for people struggling to afford essentials and help them to access financial assistance that they’re entitled to, but not receiving, such as benefits and grants. Staff and volunteers at food banks are being upskilled to provide bespoke support to tackle the underlying causes of hardship in their community, provide effective financial advice and be able to signpost to other relevant services such as mental health support. Since April 2022, the Trussell Trust has unlocked more than £2.3m for people through the financial inclusion initiatives that Barclays is supporting, as well as writing off more than £500,000 of unaffordable debt for families. 43% of food banks in the Trussell Trust network currently offer financial inclusion services. Looking forward, the partnership is committed to increasing this to 75% of their network by March 2025. Highlights 18.1m∆ LifeSkills – Overall participation since launch in 2013 2021: 15.3m 2.74m∆ LifeSkills – No. of people upskilled 2021: 2.89m Enabling sustainable growth Through the Unreasonable Impact programme, in 2022, Barclays celebrated delivering its Citizenship commitment of supporting 250 high- growth entrepreneurs to scale their companies and address key global issues. The programme is now reaching 269a companies that have positively affected the lives of more than 300 million people around the world, and employ over 19,500 people full-time (FTE). From air-based protein which makes meat from the air, to hybrid solar panels that generate both electricity and water – these companies are delivering innovative solutions to address pressing social and environmental challenges. Notes: a Cumulative ventures supported since 2016 Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/ reporting-and-disclosures/ 77,200∆ LifeSkills – No. of people placed into work 2021: 77,100 269a Unreasonable Impact – Ventures supported since 2016 2021: 216 Charitable giving and investment in our communities Alongside these high-impact programmes, we help our employees to make a difference to the causes that matter most to them personally through our matching programmes. In 2022, we supported more than 5,700 colleagues around the world to fundraise and donate to their chosen charities, including organisations providing vital humanitarian assistance in Ukraine. With Barclays matching, a total of £9.3m was raised for more than 1,800 charities. We also supported 11,900 colleagues to donate via our UK Payroll Giving programme, which saw us match more than £720,000 in 2022. We also support communities directly by investing money and skills in partnerships with respected non-governmental organisations, charities and social enterprises. Our investment amounted to £44.7m in 2022, including charitable giving, management costs and monetised work hours of Barclays colleagues. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 43 Society (continued) Championing equality through sport At Barclays, we believe in creating opportunities for all through access to football. In 2022, in partnership with Sported, we launched the Barclays Community Football Fund which helps to reduce inequalities in football, with grants available to groups that wish to start offering football, or expand their existing programmes to new, under-represented audiences. The programme focuses on including girls and young people from lower socio-economic and under-represented groups, including racially diverse communities, people with disabilities, and people from the LGBTQ+ community. With a target to support 5,500 community groups across the UK by 2025, the fund delivered support to over 2,000 organisations in 2022 – engaging more than 268,800 young people in inclusive football activities. Lithium Urban Technologies: Pioneering sustainable urban mobility Unreasonable Impact company Lithium Urban Technologies is one of India’s largest electric corporate transport services, operating a fleet of electric vehicles (EVs) that Lithium estimates have cumulatively prevented more than 50,000 metric tons of carbon dioxide equivalent (MtCO2e) since 2015, and support businesses to reduce their carbon footprint. Barclays is utilising vehicles from Lithium’s EV fleet to transport colleagues to its offices in Pune and Noida. Following their involvement in Unreasonable Impact, Lithium formed a partnership with another Unreasonable Impact company, Fourth Partner Energy, to set up solar- powered EV charging infrastructure across India under a joint venture, laying the groundwork for the company’s growth. ~50,000 metric tons of carbon dioxide equivalent prevented since 2015 Supporting our supply chain With nearly 9,000a companies coming from 28 countries supplying us, our supply chain helps our businesses deliver for our customers, clients and colleagues. Though our businesses are geographically diverse, more than 90%b of our supplier relationships are concentrated in the UK and the US with many of them having their own extensive supply chains. Our supply base is diverse across scale, ownership type and structure from privately-held start-ups to publicly-listed multinational corporations. Barclays has sought to reduce the size of its supply chain over recent years and while this has now stabilised, our focus continues to be on embedding preferred suppliers for products and services that ensure adequate geographical coverage and at the same time, create opportunities for diverse suppliersc which encompass small or medium-sized enterprises and diverse-ownedd businesses. + Please see further details on our requirements of external suppliers at: home.barclays/who-we-are/our-suppliers/our- requirements-of-external-suppliers/ Third party operational and reputational risk management Barclays must effectively manage, monitor and mitigate risks in our supply chain. Our suppliers act on behalf of Barclays and we expect them to make responsible decisions that take our stakeholders’ needs into account in both the short and long term. We have therefore put measures in place to encourage high standards of conduct and accessibility across our supply chain. Barclays expects suppliers to comply with applicable laws, regulations and standards within the geographies in which they operate. Barclays’ standard approach to new supplier on-boarding and renewal begins by assessing the services that are being provided and ascertaining the level of risk. Suppliers that are assessed as being at a heightened risk from a business risk perspective are subject to Barclays’ Supplier Control Obligations (SCOs). Suppliers to whom the SCOs apply become managed suppliers and are subject to ongoing management and controls assurance during the term of service. These suppliers are required to complete a pre-contractual questionnaire which captures their adherence to the SCOs and Barclays’ Third Party Code of Conduct (TPCoC). Highlights 8.5% Global spend with small and medium-sized enterprises and diverse-owned suppliers (2021: 8%) 93% Prompt payment rate (2021: 90%) Includes non-addressable spend and One Time Vendors (OTV). Notes a b 90% by invoice value c Spending between Barclays and diverse suppliers is considered first- tier spending. Spending between Barclays’ first-tier suppliers that can trace subcontracted spend with diverse suppliers on Barclays-specific work is considered second-tier direct spending. d For Barclays, diverse suppliers are defined as either size diverse (small and medium sized enterprises) or ownership diverse (majority owned, controlled and operated by protected class groups, such as women, ethnic minorities, LGBT+, persons with disabilities, military veterans and for-profit social enterprises). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 44 Society (continued) The TPCoC encourages our suppliers to adopt our approach to doing business when acting on behalf of Barclays and details our expectations for matters including environmental management, human rights, diversity and inclusion and also for living the Barclays Values. Managed suppliers are asked to complete an annual self-certification against the individual topics contained within the TPCoC, as well as providing annual assurance that the controls required of them under the SCOs are maintained and operating effectively. Where suppliers are unable to meet our expectations under the TPCOC and SCOs, the issue will be escalated and we will look for options to manage the risk, which may include electing not to do business with the supplier. The TPCoC and SCOs are published on the Barclays public website for all new and existing suppliers to view and are refreshed periodically. For example in 2022, we upgraded our TPCoC to strengthen the expectations relating to environmental, climate change and human rights. In addition, we have included certain key elements from the TPCoC in our General Contracting Terms used with suppliers with a view to strengthening their impact. + Please see further details on our climate change initiatives in our supply chain within our Achieving net zero operations section from page 78 within the Climate and Sustainability report. Payment on time Prompt payment is critical to the cash flow of every business, and especially to smaller businesses within the supply chain as cash flow issues are a major contributor to business failure. We aim to pay our suppliers within clearly defined terms, and to help ensure there is a proper process for dealing with any issues that may arise. We measure prompt payment globally by calculating the percentage of third-party supplier spend paid within 45 days following invoice date. The measurement applies against all invoices by value over a three-month rolling period for all entities where invoices are managed centrally. In 2022, we achieved 93% (2021: 90%) on-time payment to our suppliers (by invoice value), exceeding our public commitment to pay 85% of suppliers on time (by invoice value). The need to promptly pay our diverse suppliers became even more important during the COVID-19 pandemic. Barclays established a process to expedite the payments for diverse suppliers at this critical time. This process remained in place during 2022. Barclays is proud to be a signatory of the Prompt Payment Code in the UK and we also work closely with the Small Business Commissioner and other organisations, including Good Business Pays, to educate the public on late payments and the impact they can have on businesses and business owners, and to raise the social conscience of larger businesses who do not pay on time. We are also calling on other large businesses to join us to make sure their smallest suppliers are paid promptly. Diversity, Equity and Inclusion in our value chain Barclays believes that diversity across our value chain expands our ability to attract and harness innovative solutions in the market that complement our own capabilities, while simultaneously creating value for customers and clients, and economic opportunities for wider, under-represented segments of society. This is why we launched our first Global Supplier Diversity (GSD) initiative in 2013. As part of our GSD initiative in 2022, 8.5% of our global addressable spenda was placed with small and medium-sized enterprises and diverse-owned businesses as measured by first- and second-tier direct spending. Ownership- diverse businesses are majority owned, controlled and operated by protected class groups, such as women, ethnic minorities, LGBT+, persons with disabilities, military veterans and for-profit social enterprises. In support of the GSD initiative, Barclays is a corporate member of, and plays an important role with, several of the most prominent domestic and international diverse supplier certification organisations including National Minority Supplier Development Council (nmsdc.org), Women’s Business Enterprise National Council (wbenc.org), WeConnect International (weconnectinternational.org), National LGBTQ Chamber of Commerce (nglcc.org), National Veteran Owned Businesses Association (NaVoba.org), Minority Supplier Development UK (msduk.org.uk), Disability:IN (disabilityIn.org) and Social Enterprise UK (socialenterprise.org.uk). In 2021, we pledged to double our spend with black and female-owned businesses by 2025 and to grow overall spend with SMEs and diverse- owned businesses to 10% of Barclays annual global addressable spend. We have made structural changes to improve how we measure and report spending with diverse, Black and female-owned businesses, increasing transparency to stakeholders and driving greater accountability with those authorised to direct spend with third-party providers. The aim is for service providers, which make up 70% of our addressable spend, to have a diversity and inclusion policy or standard in place by 2025. We are continuing to engage and assess our suppliers and will report against our progress in the future. Note a Addressable spend is defined as external costs incurred by Barclays in the normal course of business where Procurement has influence over where the spend is placed. It excludes costs such as regulatory fines or charges, exchange fees, taxation, employee expenses or litigation costs, property rent. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 45 Investors Resilient franchise built to deliver double-digit returns Our strong, diversified business is built to deliver attractive and sustainable returns despite an uncertain operating environment. C. S. Venkatakrishnan, Group Chief Executive, commented “Barclays performed strongly in 2022. Each business delivered income growth, with Group income up 14%. We achieved our RoTE target of over 10%, maintained a strong Common Equity Tier 1 (CET1) capital ratio of 13.9%, and returned capital to shareholders. We are cautious about global economic conditions, but continue to see growth opportunities across our businesses through 2023.” Highlightsa £25.0bn Income 2021: £21.9bn £7.0bn Profit before tax 2021: £8.2bn 67% Cost: income ratio 2021: 67% 10.4% Return on Tangible Equity 2021: 13.1% Financial performance in 2022a,b Barclays delivered a profit before tax of £7.0bn (2021: £8.2bn), RoTE of 10.4% (2021: 13.1%) and earnings per share (EPS) of 30.8p (2021: 36.5p). Total income increased 14% to £25.0bn versus prior year, with income momentum across all businesses: Barclays UK income of £7.3bn increased 11% versus prior year, primarily driven by rising interest rates, higher customer spend volumes in UK cards and improved transaction-based revenue in Business Banking. This was partially offset by mortgage margin compression, lower interest earning lending (IEL) balances in UK cards and lower government-backed lending income as repayments continue. Within Barclays International, CIB income of £13.4bn was up 8% versus prior year. Global Markets income increased 38% to £8.8bn representing the best full year for both Global Markets and FICC on a comparable basisc. In Corporate, Transaction banking income increased 52% to £2.5bn driven by improved margins and growth in deposits, and higher fee income. This was partially offset by Investment Banking fees declining 39% to £2.2bn due to the reduced fee pool. In CC&P income of £4.5bn was up 35%, reflecting higher balances in US cards which included the impact of the Gap portfolio acquisitiond, client balance growth and improved margins in Private Bank as well as turnover growth in Payments following the easing of lockdown restrictions, which was partially offset by higher customer acquisition costs. Group operating expenses increased to £16.7bn (2021: £14.7bn) mainly due to higher litigation and conduct charges: Group operating expenses excluding litigation and conduct charges increased 6% to £15.1bn, reflecting the impact of inflation and the appreciation of average USD against GBP Litigation and conduct charges were £1.6bn (2021: £0.4bn) including £1.0bn from the Over- issuance of Securitiesa. Credit impairment charges were £1.2bn (2021: £0.7bn net release). The increase in charges reflect macroeconomic deterioration and a gradual increase in delinquencies, partially offset by the utilisation of macroeconomic uncertainty post-model adjustments (PMAs) and the release of COVID-19 related adjustments informed by refreshed scenarios. Total coverage ratio decreased to 1.4% (December 2021: 1.6%) driven by changes in portfolio mix and write-offs. Coverage levels remain strong. Our CET1 capital ratio was 13.9% (2021: 15.1%), within our target of 13-14%, and TNAV per share increased 3% to 295p. Capital distributions: total dividend for 2022 of 7.25p per share (2021: 6.0p), including a 5.0p per share 2022 full year dividend. Intend to initiate a share buyback of up to £0.5bn, bringing the total share buybacks announced in relation to 2022 to £1.0bn and total capital return equivalent to c.13.4p per share. Notes a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Impact of the Over- issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. The 10% appreciation of average USD against GBP positively impacted income and profits and adversely impacted credit impairment charges and total operating expense. Period covering 2014-2022. Pre 2014 data was not restated following re-segmentation in 2016. The Gap portfolio refers to the Gap Inc. US credit card portfolio. b c d Barclays PLC Annual Report 2022 46 Total operating expenses Barclays views total operating expenses as a key strategic area for banks; those which actively manage costs and control them effectively will gain a strong competitive advantage. Cost: income ratio The cost: income ratio measures total operating expenses as a percentage of total income and is used to assess the productivity of our business operations. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Summary financial review (continued) Financial metrics CET1 ratio CET1 ratio is a measure of the capital strength and resilience of Barclays, determined in accordance with regulatory requirements. The Group’s capital management objective is to maximise shareholder value by prudently managing the level and mix of its capital. This is to ensure the Group is appropriately capitalised relative to the minimum regulatory and stressed capital requirements, and to support the Group’s risk appetite, growth, and strategy while seeking to maintain a robust credit proposition for the Group. The ratio expresses the Group’s CET1 capital as a percentage of its RWAs. RWAs are a measure of the Group’s assets adjusted for their respective associated risks. Group RoTE RoTE measures our ability to generate returns for shareholders. It is calculated as profit after tax attributable to ordinary shareholders as a proportion of average shareholders’ equity excluding non-controlling interests and other equity instruments adjusted for the deduction of intangible assets and goodwill. This measure indicates the return generated by the management of the business based on shareholders’ tangible equity. Achieving a target RoTE demonstrates the organisation’s ability to execute its strategy and to align management’s interests with those of its shareholders. RoTE lies at the heart of the Group’s capital allocation and performance management process. CET1 ratioa (%) . 2022 2021 2020 Group RoTEa (%) 2022 2021 2020 Total operating expensesa (£bn) Cost: income ratioa (%) 2022 2021 2020 Performance in 2022 RoTE was 10.4% (2021: 13.1%) from the normalisation of credit impairment charges and higher litigation and conduct costs, partially offset by income growth across all operating divisions. The Group targets a RoTE of greater than 10.0% in 2023 in line with our medium-term target. Performance in 2022 The CET1 ratio decreased to 13.9% (2021: 15.1%) as £5.0bn of attributable profit was offset by returns to shareholders, impacts of regulatory change from 1 January 2022, pension deficit contribution payments and decreases in the fair value of the bond portfolio through other comprehensive income and other capital deductions. Increases in RWAs, largely as a result of foreign exchange movements, were broadly offset by an increase in the currency translation reserve within CET1. The Group targets CET1 ratio in the range of 13-14%. Performance in 2022 Group operating expenses increased to £16.7bn (2021: £14.7bn) mainly due to higher litigation and conduct charges: Group operating expenses excluding litigation and conduct increased 6% to £15.1bn, reflecting the impact of inflation and the appreciation of average USD against GBP. Litigation and conduct charges were £1.6bn (2021: £0.4bn) including £1.0bn impact from the Over- issuance of Securities. The Group will continue to drive efficiencies while investing in its franchise where appropriate. Note a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Impact of the Over- issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. Performance in 2022 The Group cost: income ratio was 67% (2021: 67%), as increased income was offset by higher litigation and conduct charges, primarily from the Over-issuance of Securities. The Group is targeting a cost: income ratio percentage in the low 60s in 2023 and below 60% over the medium-term. + For further detailed analysis of our financial performance in 2022, please see our full Financial review and our Financial statements on pages 378 to 396, and pages 397 to 423 respectively of Part 3 of the Annual Report. For more information on our global tax contribution as well as our approach to tax, please see our Country Snapshot report available at home.barclays/annualreport 13.915.115.110.413.13.2676764Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Summary financial review (continued) Consolidated summary income statement For the year ended 31 December Net interest income Net fee, commission and other income Total income Operating costs UK bank levy Litigation and conduct Total operating expenses Other net income Profit before impairment Credit impairment (charges)/releases Profit before tax Tax charge Profit after tax Non-controlling interests Other equity instrument holders Attributable profit Selected financial statistics Basic earnings per share Diluted earnings per share Return on average tangible shareholders’ equity Cost: income ratio 2022 £m 10,572 14,384 24,956 (14,957) (176) (1,597) (16,730) 6 8,232 (1,220) 7,012 (1,039) 5,973 (45) (905) 5,023 30.8p 29.8p 10.4% 67% Restateda 2021 £m 8,073 13,867 21,940 (14,092) (170) (397) (14,659) 260 7,541 653 8,194 (1,138) 7,056 (47) (804) 6,205 36.5p 35.6p 13.1% 67% Note a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. Consolidated summary balance sheet As at 31 December Assets Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending Trading portfolio assets Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Other assets Total assets Liabilities Deposits at amortised cost Cash collateral and settlement balances Repurchase agreements and other similar secured borrowings Debt securities in issue Subordinated liabilities Trading portfolio liabilities Financial liabilities designated at fair value Derivative financial instruments Other liabilities Total liabilities Equity Called up share capital and share premium Other equity instruments Other reserves Retained earnings Total equity excluding non-controlling interests Non-controlling interests Total equity Total liabilities and equity Net asset value per ordinary share Tangible net asset value per share Number of ordinary shares of Barclays PLC (in millions) Year-end USD exchange rate Year-end EUR exchange rate Barclays PLC Annual Report 2022 47 2022 £m 256,351 112,597 398,779 776 133,813 213,568 302,380 65,062 30,373 1,513,699 545,782 96,927 27,052 112,881 11,423 72,924 271,637 289,620 16,193 1,444,439 4,373 13,284 (2,192) 52,827 68,292 968 69,260 1,513,699 347p 295p 15,871 1.20 1.13 Restateda 2021 £m 238,574 92,542 361,451 3,227 147,035 191,972 262,572 61,753 25,159 1,384,285 519,433 79,371 28,352 98,867 12,759 54,169 250,960 256,883 13,450 1,314,244 4,536 12,259 1,770 50,487 69,052 989 70,041 1,384,285 339p 291p 16,752 1.35 1.19 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 48 Divisional reviews 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 49 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 £7.3bn Income 2021: £6.5bn £2.6bn Profit before tax 2021: £2.5bn +11 Barclays UK NPS 2021: +11 £4.3bn Operating expenses 2021: £4.4bn 18.7% Return on Tangible Equity 2021: 17.6% +12 Barclaycard NPS 2021: +4 Market and operating environment Focus areas 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. 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 50 Divisional reviews (continued) Year in review Barclays UK delivered 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. Barclays mobile banking vans We are working to reduce our own emissions at Barclays and have recently introduced our first fully electric mobile banking van. Vans are just one of the ways Barclays provides an accessible in-person service, supporting customers in remote and rural locations, as well as growing our business in strategic locations. Since launching our first van in August 2020, we’ve supported c.9,500 customers across 238 locations such as hospitals, schools, markets and retail parks. We are at the start of this journey, introducing another six electric mobile banking vans in early 2023, as part of our ambition to transform our entire existing fleet of vehicles in the UK to electric by 2025. c.9,500 customers supported since launching our first van 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. + Further details on mobile banking vans and how to book an appointment can be found at: events.uk.barclays/ barclaysvan/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 51 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. 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. 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. 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 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 52 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 £13.4bn Income 2021: £12.3bn £4.3bn Profit before tax 2021: £5.6bn £8.9bn Operating expenses 2021: £7.0bn 10.2% Return on Tangible Equity 2021:14.3% 6th Investment Banking global fee ranking (2021: 6th) Dealogic rankinga 6th Global markets revenue rank Largest non-US bank (2021: 6th) Based on external reported Markets revenuesb Market and operating environment Focus areas 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. 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. 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 53 Divisional reviews (continued) Year in review Corporate and Investment Bank 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 Marketsa. 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. Note a Dealogic for the period covering 1 January 2020 to 31 December 2022. Powering Portland General Electric’s future with innovative Bringing together experts from its Power & Utilities, Equity Capital Markets and Sustainable Capital Markets teams, in October 2022 Barclays structured a Green Use of Proceeds equity offering for Portland General Electric, which saw the issuance of 11.615 million shares of common stock. This unique structure gives investors publicly tradable common shares, whose proceeds are earmarked for investment toward its decarbonisation goals. 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 Investor reaction was strong for the nearly $500 million offering, which was multiple times oversubscribed and priced at a tight discount relative to the size of the deal. The proceeds of this offering are designated to the construction a 311 MW wind energy facility, as well as additional renewable and battery storage projects. + For further information go online at barclayscorporate.com 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 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 54 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 £4.5bn Income 2021: £3.3bn £0.7bn Profit before tax 2021: £0.8bn +44 US Consumer Bank Care tNPS 2021: +43.4 £3.1bn Operating expenses 2021: £2.4bn 10.0% Return on Tangible Equity 2021: 15.0% 74.1% CC&P US customer digital engagementa 2021: 71.8% Market and operating environment Focus areas 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. 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 55 Divisional reviews (continued) Year in review CC&P delivered a RoTE of 10% (2021: 15%), 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 USa, 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 issuerb 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 Scored in the US Consumer Bank, reaching +44, versus +43.4 in 2021. Launching Gap Inc. credit card programme The Barclays US Consumer Banking business is now the exclusive credit card issuer for Gap Inc.’s family of purpose-led, lifestyle brands following the successful migration of nearly 10 million existing card members and doubled the size of our US customer base. Delivering next generation retail digitised consumer financial services is a strategic growth priority for Barclays, and following a year-long effort to build, test and launch the new programme, Gap, Old Navy, Banana Republic and Athleta customers can now apply for and use a new, Barclays-issued credit card through multiple digital and online channels and in over 2,100 retail stores across the United States and Puerto Rico. • Our Payments business maintained its position as one of the foremost payment processors in Europee. 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 financef 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. 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. 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 business model in the US, we will also scale our existing proposition to deliver more value to our partners across a broader range of sectors, diversifying our business. 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. + For more information go online at home.barclays Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 56 Managing risk Prudently managing risk for stakeholders Barclays is exposed to internal and external risks as part of its ongoing activities. These risks are managed as part of our business model. Enterprise Risk Management Framework (ERMF) At Barclays, risks are identified and overseen in accordance with the ERMF, which supports the business in its aim to embed effective risk management and a strong risk management culture. The ERMF governs the way in which Barclays identifies and manages its risks. The management of risk is then embedded into each level of the business, with all colleagues being responsible for identifying and controlling risk. Given the increasing risks associated with climate change, and to support the Group’s ambition to be a net zero bank by 2050, Climate risk became a Principal Risk at the start of 2022. Risk appetite Risk appetite defines the level of risk we are prepared to accept across the different risk types, taking into consideration varying levels of financial and operational stress. Risk appetite is key to our decision-making processes, including ongoing business planning and setting of strategy, new product approvals and business change initiatives. The Group sets its risk appetite in terms of performance metrics as well as a set of mandate and scale limits to monitor risks (i.e. to ensure business activities are aligned with expectations and are of an appropriate scale relative to the risk and reward of the underlying activities). During 2022, the Group’s performance remained within its risk appetite limits. Three lines of defence The first line of defence is comprised of the revenue-generating and client-facing areas, along with all associated support functions, including Finance, Treasury, Human Resources and Operations and Technology. The first line identifies the risks, sets the controls and escalates risk events to the second line of defence. Employees in the first line have primary responsibility for their risks and their activities are subject to oversight from the relevant parts of the second and third lines. The second line of defence is made up of Risk and Compliance and oversees the first line by setting limits, rules and constraints on their operations, consistent with the risk appetite. The third line of defence is comprised of Internal Audit, providing independent assurance to the Board and Executive Committee on the effectiveness of governance, risk management and control over current, systemic and evolving risks. The Legal function provides support to all areas of the business and is not formally part of any of the three lines of defence, The Legal function is responsible for the identification of all legal and regulatory risks. Except in relation to the legal advice it provides or procures, it is subject to second line oversight with respect to its own operational and conduct risks, as well as with respect to the legal and regulatory risks to which the Group is exposed. Monitoring the risk profile Together with a strong governance process, using business and Group level Risk Committees as well as Board level forums, the Board receives regular information in respect of the risk profile of the Group, and has ultimate responsibility for Group risk appetite and capital plans. Information received includes measures of risk profile against risk appetite as well as the identification of new and emerging risks, which are derived by mapping risk drivers, identified through horizon scanning, to risk themes, and similar analysis. To support the Group’s ambition to be a net zero bank by 2050, Climate risk became a Principal Risk at the start of 2022. During 2022, Barclays ran a stress test to assess its capital adequacy and resilience under a severe but plausible macroeconomic scenario. The internal stress test was informed by the Bank of England 2022 regulatory stress test featuring high and persistent inflation, rising global interest rates, a severe UK recession brought by falling household real incomes, job losses leading to a high unemployment rate, energy and cost of goods shocks, increasing corporate defaults, and severe house and real estate price shocks. For further details of the stress test, please refer to page 59. We believe that our structure and governance supports us in managing risk in the changing economic, political and market environments. + For further detailed analysis of approach to risk management and risk performance, please see our full Risk review on pages 266 to 377 of Part 3 of the Annual Report Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 57 Managing risk (continued) The Enterprise Risk Management Framework defines nine Principal Risks Principal Risks Risks are classified into Principal Risks, as below How risks are managed Credit risk Market risk Treasury and Capital risk The risk of loss to the Group from the failure of clients, customers or counterparties (including sovereigns), to fully honour their obligations to the Group, including the whole and timely payment of principal, interest, collateral and other receivables. The risk of loss arising from potential adverse changes in the value of the Group’s assets and liabilities from fluctuation in market variables including, but not limited to, interest rates, foreign exchange, equity prices, commodity prices, credit spreads, implied volatilities and asset correlations. Liquidity risk The risk that the Group is unable to meet its contractual or contingent obligations or that it does not have the appropriate amount, tenor and composition of funding and liquidity to support its assets. Capital risk The risk that the Group has an insufficient level or composition of capital to support its normal business activities and to meet its regulatory capital requirements under normal operating environments and stressed conditions (both actual and as defined for internal planning or regulatory testing purposes). This also includes the risk from the Group’s pension plans. Interest rate risk in the banking book The risk that the Group is exposed to capital or income volatility because of a mismatch between the interest rate exposures of its (non-traded) assets and liabilities. Climate risk The impact on Financial and Operational Risks arising from climate change through physical risks, risks associated with transitioning to a low-carbon economy and connected risks arising as a result of second order impacts on portfolios of these two drivers. Operational risk The risk of loss to the Group from inadequate or failed processes or systems, human factors or due to external events (for example, fraud) where the root cause is not due to credit or market risks. Model risk Conduct risk The potential for adverse consequences from decisions based on incorrect or misused model outputs and reports. The risk of poor outcomes for, or harm to, customers, clients and markets, arising from the delivery of the Group's products and services. Reputation risk The risk that an action, transaction, investment, event, decision, or business relationship will reduce trust in the Group’s integrity and/or competence. Credit risk teams identify, evaluate, sanction, limit and monitor various forms of credit exposure, individually and in aggregate. A range of complementary approaches to identify and evaluate Market risk are used to capture exposure to Market risk. These are measured, limited and monitored by market risk specialists. Treasury and Capital risk is identified and managed by specialists in Capital Planning, Liquidity, Asset and Liability Management and Market Risk. A range of approaches are used appropriate to the risk, such as limits; plan monitoring; and stress testing. The Group assesses and manages its Climate risk across its businesses and functions in line with its net zero ambition by monitoring exposure to elevated risk sectors, conducting scenario analysis and risk assessments for key portfolios. Climate risk controls are embedded across the financial and Operational Principal Risk types through the Barclays Group's frameworks, policies and standards. The Group assesses and manages its Operational risk and control environment across its businesses and functions with a view to maintaining an acceptable level of residual risk. Models are evaluated for approval prior to implementation, and on an ongoing basis. The Conduct Risk Management Framework (CRMF) sets out the control objectives and minimum control requirements which must be implemented to manage Conduct risk. A selection of tools is mandated in the CRMF and Barclays Control Framework to support with the assessment of conduct risks, whilst the governance of Conduct risk is fulfilled through management committees and forums with clear escalation and reporting lines to Board-level committees. Reputation risk is managed by embedding our Purpose and Values, and maintaining a controlled culture within the Group, with the objective of acting with integrity, enabling strong and trusted relationships to be built with customers and clients, colleagues and broader society. Each business assesses Reputation risk using standardised tools and the governance is fulfilled through management committees and forums, clear escalation and reporting lines to the Group Board. Legal risk The risk of loss or imposition of penalties, damages or fines from the failure of the Group to meet its legal obligations, including regulatory or contractual requirements. Legal risk is managed by the identification of legal risks by the Legal function, the engagement of the Legal function in situations that have the potential for legal risk, and the escalation of legal risk as necessary. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 58 Viability statement Consideration of the long-term viability of Barclays The financial statements and accounts have been prepared on a going concern basis. Provision 31 of the 2018 UK Corporate Governance Code requires the Directors to make a statement in the Annual Report regarding the viability of the Group, including an explanation of how they assessed the prospects of the Group, the period of time for which they have made the assessment and why they consider that period to be appropriate. Time horizon In light of the analysis summarised below, the Board has assessed the Group’s current viability, and confirms that the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the next three years. This time frame is used in management’s Working Capital and Viability Report (WCR), prepared at the start of February 2023. The WCR is a formal projection of capital and liquidity based upon formal profitability forecasts. The availability of the WCR gives management and the Board sufficient visibility and confidence on the future operating environment for this time period. The three-year time frame has also been chosen because: ▪ ▪ ▪ it is within the period covered by the formal medium-term plans approved by the Board which contain projections of profitability, cash flows, capital requirements and capital resources it is also within the period over which internal stress testing is carried out it is an appropriate horizon over which to consider the impacts of new regulations in the financial services industry. The Directors are satisfied that this period is sufficient to enable a reasonable assessment of viability to be made. Considerations In making its assessment the Board has: ▪ carried out a robust and detailed assessment of the Group’s risk profile and material existing and emerging risks (see below for further details), in particular those risks which senior management believes could cause the Group’s future results of operations or financial condition to differ materially from current expectations or could adversely impact the Group’s ability to meet its material regulatory requirements ▪ reviewed how those risks are identified, managed and controlled (further detail provided on pages 56 to 57) ▪ considered the WCR which provides an assessment of forecast CET1, leverage, Tier 1 and total capital ratios, as well as the build-up of minimum requirement for own funds and eligible liabilities (MREL) up to the end of 2025 ▪ considered the Group’s Medium Term Plan reviewed the Group’s liquidity and funding ▪ profile, including forecasts of the Group’s internal Liquidity Risk Appetite (LRA) and regulatory liquidity coverage ratios ▪ considered the Group’s viability under a specific internal stress scenario (see below for further detail) ▪ considered the stability of the major markets in which it operates, supply chain resilience and material known regulatory changes to be enacted ▪ considered the sustainability of any future capital distributions ▪ considered scenarios which might affect the operational resilience of the Group ▪ considered factors that may inform the impact of a severe recession in major economies with affordability pressures on consumers from high inflation and rising interest rates, energy supply pressures, and financial markets instability ▪ considered the impact of the Group’s ambition to be a net zero bank by 2050 and support its clients’ transition to a low-carbon economy, including the need to continue to incorporate climate considerations into its strategy, business model, the products and services it provides to customers and its financial and non-financial risk management processes ▪ ▪ reviewed the draft statutory accounts and the financial performance of the Group reviewed the possible impact of legal, competition and regulatory matters set out in Note 26 to the financial statements on pages 479 to 484. The Group's Medium Term Plan is based on assumptions for macroeconomic variables such as interest rates, inflation, unemployment, which have been consistently applied for the purpose of forecasting the Group’s capital and liquidity position and ratios, as well as any credit impairment charges or releases. Assessment of the Group's risk profile Risks faced by the Group’s business, including in respect of financial, conduct and operational risks, are controlled and managed within the Group in line with the ERMF. Executive management sets a risk appetite for the Group, which is then approved by the Board. Limits are set to control risk appetite, within which businesses are required to operate. Management and the Board then oversee the ongoing risk profile. Internal Audit provides independent assurance to the Board and Executive Committee over the effectiveness of governance, risk management and control over current and evolving risks. A full set of material risks to which the organisation is exposed can be found in the material existing and emerging risks on pages 269 to 281 in Part 3 of the Report. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 59 Viability statement (continued) Certain risks are additionally identified as key themes and monitored closely by the Board and Board Committees. These are chosen on the basis of their potential to impact viability during the time frame of the assessment but in some instances the risks may continue beyond this time frame. These particular risks include: ▪ the potential impact of: (i) further rises in cost of living pressures including inflation and interest rates, particularly in developed markets and the possibility of elevated unemployment; (ii) a resurgence in COVID-19 and/or restrictions on movement imposed locally to combat outbreaks or new strains; and (iii) further trading disruption between the UK and the EU and general supply chain disruption. These risks may result in an adverse impact on profitability and capital through increased costs and increased expected credit losses failure to successfully adapt the Group’s operations and business strategy to address the financial risks resulting from both: (i) the physical risk of climate change; and (ii) the risk from the transition to a low-carbon economy legal proceedings, competition, regulatory and conduct matters giving rise to the potential risk of fines, loss of regulatory licences and permissions and other sanctions, as well as potential adverse impacts on our reputation with clients and customers and on investor confidence and/or potentially resulting in adverse impacts on capital, liquidity and funding ▪ ▪ ▪ sudden shocks or geopolitical instability in any of the major economies in which the Group operates which could alter the behaviour of depositors and other counterparties, affect the ability of the firm to maintain appropriate capital and liquidity ratios or impact the Group's credit ratings ▪ evolving operational risks (notably cyber security, technology and resilience) and the ability to respond to the new and emerging technologies in a controlled fashion. As a universal bank with a diversified and connected portfolio of businesses, servicing customers and clients globally, the Group is impacted in the longer term by a wide range of macroeconomic, political, regulatory and accounting, technological, social and environmental developments. The evolving operating environment presents opportunities and risks in respect of which we continue to evaluate and take steps to appropriately adapt our strategy and its delivery. Stress tests The Board has also considered the Group’s viability under a specific internal stress scenario. The latest macroeconomic internal stress test, conducted in Q4 2022, was informed by the Bank of England 2022 regulatory stress test with the following narrative: • high and persistent inflation (peaks at 17%) coupled with rising global interest rates (peak 6% UK, 6.5% US) in an attempt to curb inflation drives considerable affordability pressures on customers • severe UK recession brought by falling household real incomes, job losses leading to 8.5% unemployment rate, declining economic confidence and tight financial conditions. Other major economies experience very similar shocks • cost of goods increase coupled with energy price inflation at a time of falling demand putting significant pressure on small and medium businesses, increasing their default rates • residential house prices in the UK decline 31%. Commercial real estate prices are stressed even more, at 45%, reflecting more cyclical occupier demand and contagion effects from the financial markets. The above stress test outcome for the macroeconomic internal stress test assesses the Group's full financial performance over the horizon of the scenario in terms of profitability, capital, liquidity and leverage to ensure the Group remains viable. Climate risk was not part of the internal stress test this year but is being explored separately as part of a pilot scenario analysis assessing tail event climate risks. Additionally, the Board considered the results of the following external climate-related stress tests: • The BoE announced in Q2 the results of the Climate Stress Test undertaken in 2021 which considered the impact of three climate scenarios covering both 'transition' and 'physical' risks. This was an exploratory exercise across the banking industry with a focus on the banking book. The aim was to size financial exposures to climate-related risks, understand the challenges to business models from these risks and enhance management of climate-related financial risks. The exploratory nature of the exercise was specifically stated, acknowledging climate stress testing capabilities are in their infancy hence it was not used to set capital requirements. • in addition, Barclays Bank Ireland undertook the ECB Climate Risk Stress Test (CRST), an exploratory exercise designed to test both the Bank's Climate Risk Framework as well as its financial resilience to climate risk. The Group-wide stress testing framework also includes internal reverse stress testing assessments, conducted once a year, which aim to identify the circumstances under which the Group’s business model would no longer be viable, leading to a significant change in business strategy and to the identification of appropriate mitigating actions. Examples include extreme macroeconomic downturn (‘severely adverse’) scenarios, or specific one-off events, covering both operational risk and capital/liquidity items. Reverse stress testing is used to help support ongoing risk management and is an input to the Group’s recovery planning process. Legal proceedings, competition, regulatory and remediation/redress conduct matters are also assessed as part of the stress testing process. Capital and LRA are set at a level designed to enable the Group to withstand various stress scenarios. As part of this process, management also identified actions, including cost reductions and withdrawal from lines of business, available to restore the Group to its desired capital flight path. These internal stress tests informed the conclusions of the WCR. The results of the macroeconomic internal stress test were approved by the Board Risk Committee and allowed the Board to approve the Medium Term Plan as being able to sustain a severe but plausible scenario and remain within Risk Appetite. Based on current forecasts, taking account of material known regulatory changes to be enacted and having considered possible stress scenarios, the current liquidity and capital position of the Group continues to support the Board’s assessment of the Group’s viability. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Non-financial information statement Non-financial information statement We use a variety of tools to track and measure our strategic delivery, and collect both quantitative and qualitative information to have a holistic view of our performance. Certain elements of the non-financial information required pursuant to the Companies Act 2006 is provided within this Report by reference to the following locations: Non-financial information Section Business model Business model Policies Non-financial information statement Principal Risks Managing risk Principal Risk management Risk performance Key performance indicators Key performance indicators * in Part 3 of the Report Pages 10-11 60-62 56-57 282-295* 296-369* 23-25 The Non-Financial Reporting requirements contained in Sections 414CA and 414CB of the Companies Act 2006 are addressed within this section by means of cross reference in order to indicate in which part of the strategic narrative the respective requirements are embedded. We have used cross referencing as appropriate to deliver clear, concise and transparent reporting. We have a range of policies and guidance (also available at home.barclays/esg-resource-hub/ reporting-and-disclosures/) that support our key outcomes for all of our stakeholders. Performance against our strategic non-financial performance measures, as shown from page 23, is one indicator of the effectiveness and outcome of policies and guidance. Across Barclays, policies and statements of intent are in place to ensure consistent governance on a range of issues. For the purposes of the Non-Financial Reporting requirements, these include, but are not limited to: Barclays PLC Annual Report 2022 60 Environmental statements Statement or policy position Climate Change statement Forestry and Agricultural Commodities statement Description The Barclays Position on Climate Change sets out our approach based on a consideration of all risk and market factors to certain energy sectors with higher carbon-related exposures or emissions from extraction or consumption, or those which may have an impact in certain sensitive environments or on communities, namely thermal coal mining, coal-fired power generation, mountain top coal removal, oil sands, Arctic oil and gas and hydraulic fracturing ('fracking') The statement outlines Barclays' focus on supporting our clients to transition to a low- carbon economy, while helping to limit the threat that climate change poses to people and to the natural environment. We recognise that forestry and agribusiness industries are responsible for producing a range of commodities such as timber, palm oil and soy that are often associated with significant environmental and social impacts, particularly in relation to biodiversity loss, tropical deforestation and climate change. Our Forestry and Agricultural Commodities Statement outlines our due diligence approach for clients involved in these activities, ensuring that we support clients that promote sustainable forestry and agribusiness practices while respecting the rights of workers and local communities. World Heritage Site and Ramsar Wetlands statement We understand that industries can impact areas of high biodiversity value including United Nations Educational, Scientific and Cultural Organization (UNESCO) World Heritage Sites and Ramsar Wetlands. Our statement outlines our client due diligence approach to preserving and safeguarding these sites. Environmental risk in lending Barclays is committed to managing the direct and indirect environmental risks associated with commercial lending. Environmental risk is regarded as a credit risk driver, and is considered in the Barclays credit risk assessment process through our Environmental Risk Standard. A dedicated Environmental and Climate Risk team is responsible for advising on environmental and climate related credit risks to Barclays associated with particular transactions and industries. Environmental risks in credit are governed under the Client Assessment and Aggregation Policy and Standard, which are embedded within the Wholesale Credit Risk Control Framework, which is part of the Enterprise Risk Management Framework. Information to help understand our Group and its impact, policies, due diligence and outcomes • See our Climate and Sustainability report from page 69 in Part 2 of the Annual Report. • See the managing impacts in lending and financing section from page 246 in Other Governance within the Governance report in Part 3 of the Annual Report. • See our Nature and biodiversity section from page 119 within our Climate and Sustainability report in Part 2 of the Annual Report. • See our Climate risk section within the Risk review section from page 282 in Part 3 of the Annual Report. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Non-financial information statement (continued) Barclays PLC Annual Report 2022 61 Other Environmental-related policies and statements Data protection Statement or policy position Climate Change Financial and Operational Risk Policy Description The Climate Change Financial Risk and Operational Risk Policy outlines the requirements and policy objectives for assessing and managing the impact on Financial and Operational Risks arising from the physical, transition and connected risks associated with climate change. This incorporates identification, measurement, management and reporting. Financial and Operational Risks / Themes associated with Climate Change are being managed in accordance with the requirements set out in this policy. Governance and Financial Crime statements Statement or policy position Financial Crime: Bribery and corruption Description The Financial Crime Policy is designed to ensure that Barclays' employees know how to identify and manage the legal, regulatory and reputational risks associated with all forms of bribery and corruption. Financial Crime: Anti-money laundering and counter-terrorist financing Financial Crime: Sanctions Barclays’ Anti-Money Laundering Policy is designed to ensure that we comply with the requirements and obligations set out in UK legislation, regulations, rules and industry guidance for the financial services sector, including the need to have adequate systems and controls in place to mitigate the risk of the Group being used to facilitate financial crime. Sanctions are restrictions on activity with targeted countries, governments, entities, individuals and industries that are imposed by bodies such as the United Nations (UN), the EU, individual countries or groups of countries. The Barclays Group Sanctions Policy is designed to ensure that the Group complies with applicable sanctions laws in every jurisdiction in which it operates. Information to help understand our Group and its impact, policies, due diligence and outcomes • See our Climate risk section from page 282 in Risk Review in Part 3 of the Annual Report. Information to help understand our Group and its impact, policies, due diligence and outcomes • See the Financial Crime section from page 246 in Other Governance within the Governance report in Part 3 of the Annual Report. • See the Financial Crime section from page 246 Other Governance within the Governance report in Part 3 of the Annual Report. • See the Financial Crime section from page 246 in Other Governance within the Governance report in Part 3 of the Annual Report. Donations Resilience Tax Across Barclays, the privacy and security of personal information is respected and protected. Our Privacy website page governs how we collect, handle, store, share, use and dispose of information about people. We regard sound privacy practices as a key element of corporate governance and accountability. Barclays works in partnership with non-profit organisations, including charities and NGOs, to develop high-performing programmes and volunteering opportunities that harness the skills and passion of our employees. Barclays has chosen to partner with a small number of organisations, allowing us to have deeper relationships and ultimately enabling us to have the greatest impact on our communities in which we operate. Barclays does not accept unsolicited donation requests. Barclays maintains a robust resilience framework with our clients’ and customers’ interests at the centre. Our aim is to be able to continue delivering services and meet our clients’ and customers’ needs during business disruptions, crises, adverse events and other types of threats. Our Tax Principles are central to our approach to tax planning, for ourselves or on behalf of our clients. We believe our Tax Principles have been a strong addition to the way we manage tax, ensuring that we take into account all of our stakeholders when making decisions related to our tax affairs. The same applies to our Tax Code of Conduct. Colleagues Statement or policy position Description Board Diversity Policy The Board Diversity Policy confirms that the Board Nominations Committee will consider candidates on merit against objective criteria and with due regard to the benefits of diversity in identifying suitable candidates for appointment to the Board. • See the managing data privacy, security and resilience section from page 246 in Other Governance within the Governance report in Part 3 of the Annual Report. • home.barclays/ content/dam/home- barclays/documents/ citizenship/our- reporting-and-policy- positions/Barclays- donation- guidelines.pdf • See the managing data privacy, security and resilience section from page 246 in Other Governance within the Governance report in Part 3 of the Annual Report. • See the tax section from page 246 in Other Governance within the Governance report • Barclays PLC Country Snapshot report at home.barclays/ annualreport Information to help understand our Group and its impact, policies, due diligence and outcomes • See our section on diversity within the report of the Board Nominations Committee on page 161 of Part 3 of the Annual Report Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Non-financial information statement (continued) Barclays PLC Annual Report 2022 62 Human Rights-related statements Codes of conduct Statement or policy position Defence sector Human rights Modern slavery Description Information to help understand our Group and its impact, policies, due diligence and outcomes Barclays Statement on the Defence Sector outlines our appetite for defence-related transactions and relationships. We provide financial services to the defence sector within a specific policy framework. Transactions and relationships are assessed on a case-by-case basis and legal compliance alone does not automatically guarantee our support. N/A Barclays is committed to operating in accordance with the International Bill of Human Rights and takes account of other internationally accepted human rights standards, including the UN Guiding Principles on Business and Human Rights (UNGPs). We take steps to ensure we are respecting human rights in our own operations through our employment policies and practices, in our supply chain through screening and engagement, and through the responsible provision of our products and services. Barclays recognises its responsibility to comply with all relevant legislation including the UK Modern Slavery Act 2015 and the Australian Modern Slavery Act 2018 (Cth). In accordance with the requirements of these two Acts, we release an annual Barclays Group Statement on Modern Slavery, which outlines the actions we have taken in seeking to identify and address the risks of modern slavery and human trafficking in our operations, supply chain, and customer and client relationships. • See our managing impacts in lending and financing section from page 246 in Other Governance within the Governance report in Part 3 of the Annual Report. • See our managing impacts in lending and financing section from page 246 in Other Governance within the Governance report in Part 3 of the Annual Report. Statement or policy position Code of Conduct Third-party code of conduct Description The Barclays Way is our code of conduct and outlines the Purpose, Values and Mindset which govern our way of working across our business globally. It constitutes a reference point covering all aspects of colleagues’ working relationships, and provides guidance on working with colleagues, customers and clients, governments and regulators, business partners, suppliers, competitors and the broader community. Our approach to the way we do business needs to be adopted by our suppliers when acting on behalf of Barclays. To ensure a common understanding of our approach which will help us collectively drive the highest standards of conduct, we have created our Third Party Code of Conduct, which details our expectations for Environmental Management, Human Rights, Diversity and Inclusion; and living the Barclays Values. Information to help understand our Group and its impact, policies, due diligence and outcomes • See The Barclays Way section from page 246 in Other Governance within the Governance report in Part 3 of the Annual Report. • See our supply chain section within the Society section of the strategic report from page 43 Statement of Commitment to Health & Safety Our statement itself is an expression of Barclays commitment to managing health and safety across the organisation to protect the safety and wellbeing of our colleagues, customers, suppliers, and any individual using our premises by providing and maintaining a safe working environment that protects both physical and mental wellbeing. • See our health and safety section from page 246 in Other Governance within the Governance report in Part 3 of the Annual Report. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 63 ESG Ratings and Benchmarks ESG ratings performance We are firmly committed to enhancing our disclosures and in engaging with industry-led initiatives intended to support an effective and trusted ESG ratings market. In 2022, we remained stable or improved for most ratings, although we continue to focus on improving certain underlying activities in accordance with our overall sustainability strategy. Where our performance improved, we believe this was driven by our new targets in relation to climate, alongside enhancements in the granularity of our disclosures. In addition to providing key ratings agencies with relevant data and information when requested, we also engage when they consult on changes to their methodologies. We recognise markets and stakeholders need clear and consistent information, and we fully support this objective. While the ESG ratings market is evolving rapidly, significant challenges remain. The ratings landscape has increasingly become the focus of reform. Regulators and other market participants are looking to introduce principles to support the consistency, clarity and robustness of ESG ratings. We strongly support these initiatives and are contributing to efforts to develop a voluntary code of conduct as a member of the ESG Data and Ratings Code of Conduct Working Group convened by the UK Financial Conduct Authority. + Please also refer to page 142 in Part 3 of the Annual Report for details of BPLC Board consideration of matters relating to the reporting and monitoring of ESG-related data in addition to how we manage Climate across our Board structures within the Other Governance section from page 246 in Part 3 of the Annual Report. Select ESG ratings and benchmarks MSCI ESG Rating ISS QualityScore Environment Scale (best to worst): AAA to CCC Barclays’ rating was stable AA 2021: AA 2020: A 1 2021: 1 2020: 1 Scale (best to worst): 1 to 10 Barclays’ rating was stable Sustainalytics ESG Risk Rating ISS QualityScore Social Scale (best to worst): 0-100 Barclays’ rating improved 1 Scale (best to worst): 1 to 10 Barclays’ rating was stable 2021: 1 2020: 1 ISS QualityScore Governance Scale (best to worst): 100 to 0 Barclays’ rating declined slightly, but relative performance improved 9 2021: 7 2020: 8 Scale (best to worst): 1 to 10 Barclays' rating declined 23.8 2021: 25.1 2020: 23.9 S&P Global CSA 75 (95th percentile) 2021: 78 (92nd percentile) 2020: 77 (88th percentile) CDP Climate Change ISS ESG Corporate Score Scale (best to worst): A to D- Barclays’ rating improved A- 2021: B 2020: B Scale (best to worst): A+ to D Barclays’ rating was stable C- 2021: C- 2020: C- FTSE Russell ESG Rating Moody’s ESG Solutions Scale (best to worst): 5 to 0 Barclays’ rating improved 4.7 (98th percentile) 2021: 4.2 (92nd percentile) 2020: 4.7 (94th percentile) Scale (best to worst): 100 to 0 with advanced (>60) Barclays’ rating was stable 55 2021: 55 2020: 49 Note: All scores updated as of 31 December 2022. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements ESG-related reporting and disclosures Barclays PLC Annual Report 2022 64 ESG-related reporting and disclosures Our approach to ESG reporting is driven by recognised external standards and frameworks. As these frameworks evolve, we will continue to assess and amend our approach to ESG disclosures appropriately. The aim with our ESG-related disclosures within this Annual Report is to outline the progress we have made over the past year on ESG criteria that we have identified as important to our customers and clients, shareholders and stakeholders. Barclays continues to support efforts for enhanced ESG reporting and advocates for improved consistency across disclosures, ratings and benchmarks. We support the work of the International Sustainability Standards Board (ISSB) and continue to participate in a range of regional and global industry efforts to promote increased harmonisation on data, taxonomies and disclosures. ESG Additional Reporting Disclosures Barclays provides additional disclosures within the ESG Resource Hub. This includes our reporting with reference to the material topics from the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI). Our ESG-related disclosures: ESG Resource Hub Barclays' ESG Resource Hub provides more detailed technical information, disclosures and our position statements on environmental, social and governance matters. It is intended to be relevant for analysts, ESG investors, rating agencies, suppliers, clients and all other stakeholders. + Further details can be found on the ESG Resource Hub at: home.barclays/sustainability/esg-resource-hub/ UN Principles for Responsible Banking (PRB) Barclays was one of the founding signatories of the UN PRB. We report annually on how we are implementing the Principles. TCFD reporting and disclosures Our climate-related financial disclosures are now included within this Annual Report. The majority of the content can be found in our new climate and sustainability report in Part 2 in addition to the Other Governance section within the Governance report and Risk review sections in Part 3 of the report. + For further details on where to access TCFD-related topics, ESG Data Centre Within the ESG Resource Hub, our ESG (non- financial) Data Centrea continues to provide a central repository of all ESG-related data that is published within the Barclays PLC Annual Report as well as additional information and granularity. please see the TCFD content index on page 65. + The Barclays PLC PRB Report 2022 can be found at: home.barclays/sustainability/esg-resource-hub/reporting- and-disclosures/ + The ESG (non-financial) Data Centre can be accessed online within the ESG Resource Hub at: home.barclays/ sustainability/esg-resource-hub/reporting-and-disclosures/ Note a Re-named from ESG Data Hub to ESG Data Centre in 2022. Annual Report ESG-related reporting ESG data resources Other ESG resources Statements and policy positions Indices Taskforce for Climate- related Financial Disclosures (TCFD) Recommendations ESG-related disclosures Principles for Responsible Banking (PRB) ESG (non-financial) Data Centre ESG Investor Presentations ESG Resource Hub - Statements and policy positions Global Reporting Index (GRI) Fair Pay report / UK Pay Gaps report (Tax) Country Snapshot report Board Diversity Policy Diversity, Equity and Inclusion report Limited Independent Assurance statement Barclays' Sustainable Finance Framework BlueTrackTM Whitepaper Corporate Transition Forecast Model Sustainability Accounting Standards Board (SASB) KPMG LLP Limited Assurance Barclays appoints KPMG LLP to perform limited independent assurance over selected ESG content, which have been marked with the symbol Δ. The assurance engagement was planned and performed in accordance with the International Standard on Assurance Engagements (UK) 3000 Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and the International Standard on Assurance Engagements 3410 Assurance of Greenhouse Gas Statements. A limited assurance opinion was issued and is available at the website link below. This includes details of the scope, reporting criteria, respective responsibilities, work performed, limitations and conclusion. No other information in this Annual Report has been subject to this external limited assurance. + Further details on Limited Assurance can be found at: home.barclays/sustainability/esg-resource-hub/reporting- and-disclosures/ ESG disclosures As ESG criteria have become increasingly embedded into what we do, for the 2022 Barclays PLC Annual Report we have taken the decision to further integrate our ESG- related disclosures into relevant sections of Parts 1, 2 and 3 within the Annual Report. To clearly signpost the location of our ESG- related disclosures, we have included a detailed ESG Content Index within our ESG (non-financial) Data Centre. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 65 TCFD Content Index TCFD Content Index Our climate-related financial disclosures form part of the Barclays PLC Annual Report. UK Listing Rules statement of compliance This year, our climate-related financial disclosures are included in the bank's annual report instead of a standalone report. Our strategy is set out in the Climate and Sustainability report, climate governance in our Governance report and our approach to Climate risk is in our Risk review section. We have considered our obligations in respect of climate-related disclosure under the UK's Financial Conduct Authority's Listing Rules and confirm that we have made disclosures consistent with the relevant Listing Rules and the Taskforce for Climate-related Financial Disclosures (TCFD) Recommendations and Recommended Disclosures (including the implementing guidance set out in the 2021 TCFD Annex), save for certain items which we describe below: Strategy Recommendation disclosure c) relating to quantitative climate-related scenario analysis We have disclosed our current understanding of the resilience of our strategy, taking into consideration the different climate-related scenarios that we have explored. However, in undertaking these climate scenario exercises we are gaining a greater understanding of the challenges and nuances of climate scenario analysis which is in part driven by the unique and complex features of climate science. We recognise that we have further work to do in order to evolve our approach to the analysis and to reach a more comprehensive and deeper understanding of the resilience of our business under various climate scenarios. The work we have already done in this regard and which we plan to undertake in 2023 is set out in "Resilience of our strategy" from page 128 in Part 2 of the Annual Report. Metrics and targets Recommended Disclosures a), Supplemental Guidance for Banks, the extent to which lending and other financial intermediary business activities, where relevant, are aligned with a well below 2°C scenario We have developed a methodology for measuring our financed emissions and tracking them at a portfolio level in BlueTrackTM. This methodology currently applies to six high carbon-emitting sectors in our portfolio, five of which are tracked against the IEA Net Zero by 2050 scenario (which is aligned with a goal to limit global temperature rises by 1.5°C with a 50% probability). In relation to Residential Real Estate, we have assessed this sector against the UK Climate Change Committee's Balanced Net Zero (CCC BNZ) scenario, and which takes into consideration the UK's net zero commitments and Sixth Carbon Budget. We will continue to assess the financed emissions across our portfolio and measure the baseline emissions that we finance across sectors. In particular, our commitment under the Net-Zero Banking Alliance is to set science- based targets for all material high-emitting sectors (as defined by the NZBA) in our portfolio by April 2024. We aim to assess our baseline financed emissions across the Agriculture, Commercial Real Estate, Aviation and Shipping sectors during 2023. This assessment will inform our plan for target setting in the coming years and will, together with our ongoing 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), support our better understanding of the extent to which our financing aligns with a 'well below 2°C' scenario. Looking ahead: TCFD sector specific requirements for asset managers We have started to assess the TCFD sector specific guidance for asset managers (which represents a small part of our overall business) and are working towards reporting next year in accordance with the FCA Enhanced Climate- Related Disclosure Requirements for Asset Managers, recognising the industry-wide TCFD Content index Section Recommendation challenge with data availability and accuracy to meet these requirements. We will publish more granular information in line with the requirements in future reporting periods. + Further details on the TCFD Recommendations and Recommended Disclosures are available at: fsb-tcfd.org Full list of metrics and targets can be found in the ESG Data Centre at: home.barclays/sustainability/esg-resource-hub/ reporting-and-disclosures/ Page references within Parts 2 and 3 of the Annual Report 155, 248 – 249 Governance a) We describe the Board's oversight of climate-related risks and opportunities b) We describe management's role in assessing and managing climate- related risks and opportunities 117, 250 – 252 Strategy a) We describe the climate-related risks and opportunities the organisation has identified over the short, medium and long term 74 – 76, 282, 296 – 299 b) We describe the impact of climate-related risks and opportunities on the organisation's businesses, strategy and financial planning 77 – 126 c) We describe the resilience of the organisation's strategy, taking into consideration different climate-related scenarios, including a 2oC or lower scenario 128 – 135 Risk management a) We describe the organisation's processes for identifying and assessing climate-related risks b) We describe the organisation's processes for managing climate- related risks c) We describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation's overall risk management 74 – 76, 282 – 289 Metrics & Targets a) Our metrics used to assess climate-related risks and opportunities in line with our strategy and risk management processes 74 – 76 b) Our Scope 1, Scope 2 and Scope 3 greenhouse gas (GHG) emissions and the related risks 80, 88 c) Our performance against the targets used to manage climate-related risks and opportunities and performance against targets 80, 88, 101 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial information Barclays PLC Annual Report 2022 66 Shareholder information Annual General Meeting (AGM) Location QEII Centre, Broad Sanctuary, Westminster, London SW1P 3EE And virtually on an electronic platform Date Wednesday, 3 May 2023 Time 11.00am The arrangements for the Company’s 2023 AGM and details of the resolutions to be proposed, together with explanatory notes, will be set out in the Notice of AGM to be published on the Company’s website (home.barclays/agm). Preparations for the Coronation of His Majesty The King and Her Majesty The Queen Consort in the Westminster area of London may require changes to the 2023 AGM arrangements set out above. If changes are required, details will be provided in the Notice of AGM. Key dates 31 March 2023 Full year dividend payment date 27 April 2023 Q1 2023 Results Announcement 3 May 2023 Annual General Meeting at 11.00am Keep your personal details up to date Please remember to tell Equiniti if: • you move; or • you need to update your bank or building society details. If you are a Shareview member, you can update your bank or building society account or address details online. If you are not a Shareview member you can update details quickly and easily over the telephone using the Equiniti contact details overleaf. Dividends The Barclays PLC 2022 full year dividend for the year ended 31 December 2022 will be 5.0p per share, making the 2022 total dividend 7.25p per share. Dividend Re-investment Plan Barclays offers a share alternative in the form of a dividend reinvestment plan (DRIP) for those shareholders who wish to elect to use their dividend payments to purchase additional ordinary shares, rather than receive a cash payment. The DRIP is provided and administered by Barclays’ registrar, Equiniti. + Further details regarding the DRIP can be found at home.barclays/dividends and www.shareview.co.uk/info/drip Dividend Payments Barclays has made the decision that dividends will no longer be paid by cheque. All future dividends will be credited to a shareholder’s nominated bank account or building society. We believe this decision is beneficial for our shareholders to safeguard dividends by using a more secure payment method, as well as removing our environmental impact of printing and posting cheques. It is easy to set up payment directly to your bank account by completing a bank mandate, meaning your money will be in your bank account on the dividend payment date. You can provide your bank or building society details quickly and easily over the telephone using the Equiniti contact details overleaf. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Shareholder information (continued) Shareholder security Shareholders should be wary of any cold calls with an offer to buy or sell shares. Fraudsters use persuasive and high pressure techniques to lure shareholders into high-risk investments or scams. You should treat any unsolicited calls with caution. Please keep in mind that firms authorised by the Financial Conduct Authority (FCA) are unlikely to contact you out of the blue. You should consider getting independent financial or professional advice from someone unconnected to the respective firm before you hand over any money. Report a scam If you suspect that you have been approached by fraudsters please tell the FCA using the share fraud reporting form at fca.org.uk/scams. You can also call the FCA Helpline on 0800 111 6768 or through Action Fraud on 0300 123 2040. Donations to Charity We launched a Share Dealing Service in October 2017 aimed at shareholders with relatively small shareholdings for whom it might otherwise be uneconomical to deal. One option open to shareholders was to donate their sale proceeds to ShareGift. As a result of this initiative, £90,379 was donated in 2022, taking the total donated since 2017 to over £493,000. Managing your shares online Shareview Barclays shareholders can go online to manage their shareholding and find out about Barclays performance by joining Shareview. Through Shareview, you: • will receive the latest updates from Barclays direct to your email; • can update your address and bank details online; • can vote in advance of general meetings. To join Shareview, please follow these three easy steps: Step 1 Go to portfolio.shareview.co.uk Step 2 Register for electronic communications by following the instructions on screen You will be sent an activation code in the post the next working day Step 3 Returning funds to shareholders Over 60,000 shareholders did not cash their Shares Not Taken Up (SNTU) cheque following the Rights Issue in September 2013. In 2022, we continued the tracing process to reunite these shareholders with their SNTU monies and any unclaimed dividends and by the end of the year, we had returned approximately £482,800 to our shareholders, in addition to the approximately £4.7m returned since 2015. Useful contact details Equiniti The Barclays share register is maintained by Equiniti. If you have any questions about your Barclays shares, please contact Equiniti by visiting shareview.co.uk + 44 (0)371 384 2055 (UK & International telephone number) +44 (0)371 384 2255 (for the hearing impaired in the UK & international) Aspect House Spencer Road, Lancing, West Sussex BN99 6DA To find out more, contact Equiniti or visit: home.barclays/dividends American Depositary Receipts (ADRs) ADRs represent the ownership of Barclays PLC shares which are traded on the New York Stock Exchange. ADRs carry prices, and pay dividends, in US dollars. If you have any questions about ADRs, please contact Shareowner Services: StockTransfer@equiniti.com or visit adr.com +1 800 990 1135  (toll free in the US and Canada) +1 651 453 2128  (outside the US and Canada) Barclays PLC Annual Report 2022 67 Shareowner Services PO Box 64504, St Paul, MN 55164-0504, USA Delivery of ADR certificates and overnight mail Shareowner Services, 1110 Centre Point Curve, Suite 101, Mendota Heights, MN 55120, USA Qualifying US and Canadian resident ADR holders should contact Shareowner Services for further details regarding the DRIP Shareholder Relations To give us your feedback or if you have any questions, please contact: privateshareholderrelations@barclays.com Shareholder Relations Barclays PLC 1 Churchill Place London E14 5HP Share price Information on the Barclays share price and other share price tools are available at: home.barclays/investorrelations Copies of the Annual Report 2022 The Strategic Report 2022 and Annual Report 2022 can be downloaded from Barclays’ website home.barclays Shareholders who wish to receive a hard copy of the Strategic Report 2022 or Annual Report 2022 should contact Barclays’ share registrars, Equiniti. Alternative formats Shareholder documents can be provided in large print, audio CD or Braille free of charge by calling Equiniti. +44 (0)371 384 2055a (UK & International telephone number) Audio versions of the Strategic Report will also be available at the AGM. Note a Lines open 8.30am to 5.30pm (UK time) Monday to Friday, excluding public holidays. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 68 Important Information 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. 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 conflict in Ukraine 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 the description of material existing and emerging risks from page 269 of this Annual Report. Climate and sustainability report The Climate and sustainability report is Part 2 of Barclays PLC 2022 Annual Report. Parts1, 2 and 3 of Barclays PLC 2022 Annual Report together comprise Barclays PLC's annual accounts and report for the purposes of Section 423 of the Companies Act 2006. TCFD Strategy Recommendation A: Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term. TCFD Strategy Recommendation B: Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning. TCFD Strategy Recommendation C: Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. Risks and opportunities Risks Opportunities 73 74 76 Resilience of our strategy Scenario analysis Resilience of our strategy, taking into consideration different climate-related scenarios Macro-dependencies and objectives Important information / disclaimers 127 128 135 135 136 Implementing our climate strategy Achieving net zero operations Operational footprint dashboard All other narrative Reducing our financed emissions BlueTrackTM dashboard All other narrative Financing the transition Sustainable finance dashboard All other narrative Working with our clients Embedding ESG into our business Just transition and nature and biodiversity Engaging with industry Barclays' approach to public policy 77 78 80 81 85 88 89 99 101 102 103 117 119 122 126 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 70 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 2 Reducing our financed emissions 3 Financing the transition Barclays is working to reduce its Scope 1, Scope 2 and Scope 3 operationala emissions consistent with a 1.5°C aligned pathway and counterbalance any residual 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. 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 $4trnb 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 $4-6trnb 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. + Further details on how we identify and consider the impact of Climate risk on other Principal Risks facing Barclays can be found from page 273 to 289. Barclays recognises the importance of a just transition in planning the transition towards a low-carbon economy. + Further details of our work on a just transition can be found on page 119. We also recognise the important role of the financial sector in stewarding responsible finance towards a nature-positive future. + Further details on how we're considering nature and biodiversity can be found on pages 119 to 120. 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. 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 282, and the TCFD Governance disclosures can be found in the Governance report on page 246. We have provided a TCFD index on page 65 for ease of reference. 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 71 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 1.Achieving net zero operations By end 2025 Energy Previously announced target/policy • 100% renewable electricity sourcing for our global real estate portfolio by end of 2025 Progress 2022 performance 100%Δ sourced Reduction of GHG emissions • 90% reduction in Scope 1 and 2 GHG emissions (market-based, −91%Δ reduction against a 2018 baseline) New announcement We are working towards the following milestones • By end of 2035, 115 kWh/m2/year average energy use intensity across our corporate offices, against a 2022 baseline of 265 kWh/m2/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 • 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 By the end of 2030 financed emissions Energy Portfolio reduction targets/convergence point Power Cement Steel • 40% reduction in absolute CO2e emissions against a 2020 baseline of 75.7Δ MtCO2e (Scopes 1, 2 & 3) • 50-69% reduction in CO2e emissions intensity against a 2020 baseline of 331Δ kgCO2e/MWh (Scope 1) • 20-26% reduction in CO2e emission intensity against a 2021 baseline of 0.625Δ tCO2e/t (Scopes 1 & 2) • 20-40% reduction in CO2e emissions intensity against a 2021 baseline of 1.945Δ tCO2e/t (Scopes 1 & 2) Automotive manufacturing N/A Residential real estate N/A Cumulative change By the end of 2030 -32% -9% -2% -11% N/A N/A N/A N/A N/A N/A • 40-64 % reduction in CO2e emissions intensity against a 2022 baseline of 167.2Δ gCO2e/km (Scopes 1, 2 & 3) • Convergence point: 40% reduction in CO2e emissions intensity against a 2022 baseline of 32.9Δ kgCO2e/m2 (Scopes 1 & 2) Notes: Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 72 Introduction (continued) Strategic pillar 2.Reducing our Existing restrictions in relation to thermal coal financing will continue to apply other than as updated below Previously announced target/policy New announcement • By 2030: in the UK and EU – phase out of financing to clients engageda in coal- • By 2030: in EU and OECD phase out of financing to clients engageda in coal- financed emissions Thermal coal power policy Restrictive policies 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 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. 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 We will not provide financing: • To oil sands exploration and production companiesb ; or • For the construction of new (i) oil sands exploration, production and/or processing assets; or (ii) oil sands pipelinesc. Strategic pillar 3.Financing the transition Previously announced target/policy Progress 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 2022 performance • £54.3bnΔ (Cumulative performance: £247.6bnΔ) • £25.5bnΔ (Cumulative performance: £87.8bnΔ) New announcement Announced in December 2022 • 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. Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/ Risk and opportunities TCFD Strategy Recommendation A: Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term. TCFD Strategy Recommendation B: Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning. TCFD Strategy Recommendation C: Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. Risks and opportunities Risks Opportunities 73 74 76 Resilience of our strategy Scenario analysis Resilience of our strategy, taking into consideration different climate-related scenarios Macro-dependencies and objectives Important information / disclaimers 127 128 135 135 136 Implementing our climate strategy Achieving net zero operations Operational footprint dashboard All other narrative Reducing our financed emissions BlueTrackTM dashboard All other narrative Financing the transition Sustainable finance dashboard All other narrative Working with our clients Embedding ESG into our business Just transition and nature and biodiversity Engaging with industry Barclays' approach to public policy 77 78 80 81 85 88 89 99 101 102 103 117 119 122 126 Barclays PLC Annual Report 2022 74 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 128 to 134. 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Risk and opportunities (continued) 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Risk and opportunities (continued) Barclays PLC Annual Report 2022 75 TCFD Strategy Recommendation (a) Transition risks Example drivers Potential impacts - examples Expected time horizon Classification Primary risks impacted Secondary risks impacted Trend Physical risks Example drivers Policy and Regulatory Legal Technology Market • Disruptive substitute technologies being • Shift in Consumer preferences • Carbon tax impacting sectors and clients • Tightening of emissions and energy efficiency standards • Imposing an absolute cap on GHG emissions at manufacturing sites • Enhanced GHG reporting obligations • • Increased operating cost for compliance Increased capital expenditure to meet regulatory standards • Operating constraints • Write-offs and early retirement of assets • • • Government and non-governmental organisations taking litigation actions Imposing legal liabilities on firms for their contribution to physical impacts of climate change favoured because of lower carbon footprint • Development of emissions capture and recycling facilities • Investments in new technologies • Alternatives to fossil fuel Increased costs due to fines and penalties from class action damages • Impairment of assets and early retirement of assets • Changes in the valuation of assets • Decreased demand for products and • Research and development expenditure in new technologies • Changes in supply and demand of raw materials • Shareholder perceptions and consumer pressures • Changing market sentiment • • Increased costs and reduced demand for products and services Increased production costs due to changing input prices and output requirements services • Costs for adoption of new practices and • Decreased revenue and repricing of assets Sa, M, L Sa, M, L Event-driven, Structural Event-driven, Structural processes Sa, M, L Structural Sa, M, L Structural Credit Risk, Market Risk, Treasury and Capital Risk, Operational Risk, Reputational Risk Conduct Risk, Legal Risk Increasing Increasing Stable Stable Acute Chronic • Damage to fixed assets and infrastructure (property, power supplies) by climate events • Change in weather and precipitation patterns resulting in reduced agricultural yields and such as wildfires land no longer suitable for farming • Adverse impact on agriculture and production of soft commodities due to drought • Potential population migration due to inhabitable land • Transport difficulties and damage to infrastructure due to severe storm and flooding Potential impacts - examples • Increased costs due to damage to facilities • Increase in sea levels and consequent coastal erosion requiring building of new seawall and flood defences • Rising temperatures resulting in diminished productivity and health issues • Reduced revenue from decreased production capacity and early retirement of assets • Reduced revenue from decreased production capacity • Decrease in property values • Increased operating costs and decrease in sales due to unavailability of raw materials and supply chain disruptions • Increased costs and insurance for assets in high risk locations • Reduced revenue from lower sales and output Expected time horizon Classification Primary risks impacted Secondary risks impacted Trend Sa, M, L Event-driven M, L Structural Credit Risk, Market Risk, Treasury and Capital Risk, Operational Risk, Reputational Risk Conduct Risk, Legal Risk 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Risk and opportunities (continued) Barclays PLC Annual Report 2022 76 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. + Further details of Barclays' sustainable finance targets can be found on page 99 and further details on how Barclays' products and services are harnessing this opportunity on pages 103 to 116. 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 (including electric vehicles, fuel cell electric vehicles and mass transit) 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 93. 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 Strategy Recommendation A: Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term. TCFD Strategy Recommendation B: Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning. TCFD Strategy Recommendation C: Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. Risks and opportunities Risks Opportunities 73 74 76 Resilience of our strategy Scenario analysis Resilience of our strategy, taking into consideration different climate-related scenarios Macro-dependencies and objectives Important information / disclaimers 127 128 135 135 136 Implementing our climate strategy Achieving net zero operations Operational footprint dashboard All other narrative Reducing our financed emissions BlueTrackTM dashboard All other narrative Financing the transition Sustainable finance dashboard All other narrative Working with our clients Embedding ESG into our business Just transition and nature and biodiversity Engaging with industry Barclays' approach to public policy 77 78 80 81 85 88 89 99 101 102 103 117 119 122 126 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 1 Achieving net zero operations Our operational GHG emissions by scope 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 operationala emissions consistent with 1.5oC 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. 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 Fugitive emissions Supply chain Waste Company cars Leased assets Business travel Barclays PLC Annual Report 2022 78 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 • Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2022 79 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 portfolioa in 2022. We achieved our renewable electricity target ahead of schedule by matching 100% of our electricity consumption with energy attribute certificatesb and green tariffsc 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 spendd to have science-based emissions reduction targets in place by 2030. Approximately 47% of our suppliers by addressable spend have committed to or have science-based targets in place 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/m2/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. Our net zero operations approach Delivery year Scope 1 and 2 2022 Performance Scope 3 2022 Performance 100% renewable electricity sourcing for all our global real estate portfolio 2025 90% reduction for our Scope 1 and 2 GHG emissions (market-basede, against a 2018 baseline) 100% electric vehicles (EV) transition for UK company cars 100% electric vehicles (EV) or ultra-low emissions vehicles (ULEV) for all company cars 100%Δ -91%Δ 55% 24% 2030 2035 2050 50% reduction for our Scope 1 and 2 GHG emissions (location-basedf, against a 2018 baseline) -43%Δ We intend to work towards the milestone of 115 kWh/m2/year average energy use intensity across our corporate officesg 265 kWh/m2/year (-18% against 2018 baseline) We intend to work towards the milestone of 10 MW on-site renewable electricity capacity installed across our portfolioh 0.26MW (<1% total electricity use) 70% of our suppliers, by addressable spend, to have science-based GHG emissions reduction targets in place 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 We intend to work towards the milestone of 50% GHG supply chain emissions reduction (against a 2018 baseline) Divert 90% of waste from the landfill, incineration and the environment across key campuses We intend to work towards the milestone of 90% GHG supply chain emissions reduction (against a 2018 baseline) 47%i 47%g 8%j 65% 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 Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/ sustainability/esg-resource-hub/reporting-and-disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 1 Operational footprint dashboard Barclays PLC Annual Report 2022 80 Total GHG emissions by scope (market-based) ‘000 tonnes CO2e Total GHG emissions by scope (location- based) ‘000 tonnes CO2e Scope 1 and 2 (market-based) GHG emission reductions (against a 2018 baseline) Scope 3 GHG inventory ('000 tonnes CO2e) 2022 2021 2020 Total 41.3△ Total 39.2 Total 90.2 2022 2021 2020 n Scope 1 n Scope 2 n Scope 3 (Business travel) n Scope 1 n Scope 2 n Scope 3 (Business travel) Total 142.9△ Total 149.8 Total 190.6 -91%△ Against a target of -90% by the end of 2025 2021: -86% GHG emissions intensity (market-based) tonnes CO2e/FTE Total energy use (MWh) 2022 2021 2020 2022 2021 2020 Other sustainability-related highlights Renewable electricity sourcing for our global real estate portfolio 100%△ Against a target of 100% by the end of 2025 2021: 94% n Purchased goods and services n Fuel and energy- related activities n Waste generated in operations n Business travel n Leased assets On-site renewable electricity capacity installed across our global real estate portfolio (MW) Average energy use intensity across our corporate offices (kWh/m2/year) Campus waste diverted (%) 2022 Progress By 2035 2022 Progress By 2035 2022 Progress By 2035 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. 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. 5. 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 Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/ 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. ESG Data Centre See our ESG (non-financial) Data Centre for further details of our annual operational GHG emissions since 2018, including our Scope 1, 2 and 3 business travel with location-based and market-based emissions data. As of 2022, we also detail our Scope 3 operational emissions. We further provide insights on our annual waste production, energy and water consumption and renewable electricity consumption by country. + Further data granularity relating to our operational footprint can be found at: home.barclays/sustainability/esg-resource-hub/reporting-and- disclosures/ 20.0△23.222.81.9△13.648.319.4△2.419.10.47△0.481.0920.0△23.222.8103.4△124.2148.719.4△2.419.1467,939△559,241604,856599.24.610.719.4△21.10.26102651156590Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2022 81 Electrify our real estate portfolio and vehicles We are also transitioning, where possible, to all- electric technology to heat and cool our global real estate portfolio such as our new air source heat pumps at our Glasgow Sustainability Centre. As part of our commitment to Climate Group’s EV100 initiative, we are transitioning our global fleet to electric vehicles. By the end of 2022, 55% of our UK fleet was converted to electric. To support the programme, we also increased the number of EV charging stations across our global locations, which as of the end of 2022 totals approximately 500 stations. Replace our reliance on fossil fuels with renewable energy In 2022, we also accelerated our commitment to source 100% renewable electricity for all our global real estate portfolio by 2025 and have achieved this ahead of schedule through instruments including green tariffsa (59%) and energy attribute certificatesb (41%). Our intent moving forward is to source renewable electricity primarily from on-site renewable installations or from new renewable energy facilities that add clean energy to the grid for example via PPAs. In 2022, we installed solar photovoltaic systems at our Pune and Glasgow campuses and have planned more installations across our global real estate portfolio to work towards installing 10MW of on-site renewable electricity capacity by 2035. Factors such as supply chain disruptions, material availability and market volatility may impact the type of renewable energy projects we can support and the speed of execution. Notes: a 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. b Energy attribute certificates (EAC) 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. Retail branches In 2022, we procured 100% of all retail branch electricity from renewable sources and introduced electric mobile banking vans as part of our flexible ways of serving customers. Power Purchase Agreements In February 2022, Barclays signed a 10-year PPA in support of Barclays' goal of sourcing renewable electricity to power our global real estate portfolio by 2025. Through this PPA, Barclays will support Creag Riabhach, an onshore wind farm project in Scotland. Beginning in 2024 through to 2032, Barclays has committed to purchase up to 160 GWh per year of power from this new-build renewable power asset, which will meet approximately 80% of Barclays' future electricity needs in the UK and enhance the UK grid's renewable energy capacity. This PPA will avoid approximately 30,000 tonnes of CO2e per year. In addition, the Creag Riabhach project is expected to provide social and environmental benefits through new employment opportunities within the local area and the Scottish economy, supporting a local community benefit fund, and establishing a riparian tree planting programme to promote soil conservation and habitat biodiversity. 160 GWh of power Barclays has committed to purchase from the new-build renewable power asset TCFD Strategy Recommendation (b) | Strategic Pillar 1 Reducing our Scope 1 and 2 emissions Improve efficiency We reduced our global real estate portfolio energy consumption by 30% against a 2018 baseline. At the end of 2021, we launched an Energy Optimisation Programme to help improve the energy efficiency of our global real estate portfolio. In the first 12 months of our five-year programme, we saved 6GWh of energy, equivalent to the annual electricity consumption of approximately 2,000 UK households. We have also focused on our own data centres, which consume a large amount of energy to operate. For example, we upgraded our cooling systems at our Cranford, New Jersey data centre. In just four months this upgrade led to an approximately 19% energy reduction for cooling alone, in comparison to the same period in 2021. We will continue to make investments in technology and systems to reduce the amount of energy we need to power our global real estate portfolio. Technology Office of Sustainability Technology has an instrumental role to play in reducing operational emissions. For example, data centres account for 29% of our Scope 1 and 2 emissions. Barclays has established a Technology Office of Sustainability responsible for integrating sustainable practices and processes into technology hardware lifecycles, applications, data management and supply chain decisions. The new team helps identify infrastructure and application efficiency improvements, work with internal partners to manage building efficiencies and engage with technology suppliers to reduce supply chain footprint. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2022 82 TCFD Strategy Recommendation (b) | Strategic Pillar 1 Addressing our Scope 3 operational emissions Supply chain In 2022, we expanded our GHG emissions inventory by accounting for our Scope 3 supply chain emissions. We used the GHG Protocol's Corporate Accounting and Reporting Standard to establish a base year emissions inventory for 2018 and calculate emissions associated with our supply chain. Following the GHG Protocol guidelines, we used a hybrid method to calculate our 2022 emissions inventory. The spend-based method (the economic value of goods and services purchased multiplied by industry average emission factors) has been used to calculate emissions for most suppliers. Primary supplier-sourced data has been used where available. It is important to recognise that our emissions inventory for 2022 is indicative. The emission factors used represent average emissions for a particular service or product group, and not the emissions from the actual service or product. The method provides us with insights that help us to determine which procurement categories and companies in our supply chain are responsible for the highest proportion of our GHG emissions and enables us to identify focus areas for emissions reduction and supplier engagement. Over time, we will evolve our methodology and improve the accuracy of our supply chain emissions inventory by increasing use of primary, supplier-sourced and product/service specific data as it becomes more widely available. This will ultimately support consistent and transparent year-on-year accounting and reporting and enable us to better measure progress. In the interim, we anticipate seeing fluctuations in our inventory as we improve our data methodology. In 2022, we developed a supply chain net zero pathway which sets out our strategies and action plan and details the accountability mechanisms in place to track progress. The pathway defines organisational and operational boundaries and explains how we will identify and track supply chain GHG emissions over time. It also sets our interim emissions reduction and supplier engagement milestones, and describes the activities required to achieve them. Finally, it establishes the governance mechanisms for the supply chain net zero programme and the stewardship necessary to deliver and track progress. In developing our net zero supply chain emissions plan, we used the Science Based Target Initiative's (SBTi) Corporate Net Zero Standard and Target Setting Tool, consistent with a 1.5ºC aligned pathway. We will continue to develop our methodology and our approach. 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 spenda to have science-based emissions reduction targets in place by 2030. As of 2022, approximately 47% of our suppliers by addressable spend have science-based targets in place or have committed to implementing targets. To support our net zero operations strategy, we updated our general terms to include contractual expectations relating to climate change which will apply to new contracts and contract renewals moving forward. We are also looking to further embed climate change considerations in our procurement processes. We understand that our success depends on our suppliers reducing their emissions, and that progress may be volatile and non-linear. Geographic considerations, resource capacities, data availability, legal requirements, market conditions and the varying pathways that individual companies take as a result of the technologies available to them to transition may all affect the speed at which our suppliers can reduce emissions and track their progress against their transition plan. To mitigate these variables, we are proactively engaging with our suppliers to drive process improvements and innovations and learn from them where we can. We will adapt our approach as needed to respond to external circumstances and manage the effectiveness and impact of our support for the transition, while remaining focused on our ambition of achieving net zero emissions in our supply chain. In 2022, we significantly scaled up our climate- related engagement with our suppliers. For example, we invited 475 of our suppliers, representing approximately 80% of our addressable spend, to report their GHG and climate strategy to the Carbon Disclosure Project (CDP), which is an increase of 385 suppliers invited compared to 2021. We have also directly approached over 100 suppliers to discuss their climate strategy, including for example data quality, reporting mechanism and reduction efforts. Supplier Engagement We invited suppliers representing approximately 80% of our addressable spend to disclose through CDP in 2022. As the landscape evolves, we will refine our approach and develop tools and resources to help our suppliers in their journey to reduce their greenhouse gas emissions. Note a Addressable spend is defined as external costs incurred by Barclays in the normal course of business where Procurement has influence over where the spend is placed. It excludes costs such as regulatory fines or charges, exchange fees, taxation, employee expenses or litigation costs, property rent. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 1 Business travel In 2022, total colleague air travel emissions reduced by 73% against a 2018 baseline. While emissions have decreased from our baseline, emissions increased between 2021 and 2022 by a percentage difference of 24% due to return to business travel post-COVID. Though a small percentage of our operational emissions, we use a variety of solutions to reduce our travel emissions including using digital technology where practicable as an alternative to face-to-face meetings, adjusting our travel policy to promote lower carbon solutions (such as promoting train versus air travel when feasible), avoiding non-essential business trips and using our booking and reporting platforms to improve colleagues’ awareness of their individual carbon footprint. In 2022, we also completed a review of our preferred airline partners and have selected those with strong sustainability credentials, including the use of sustainable aviation fuel (SAF), and are actively pursuing a number of initiatives to work with our partners to increase capacity and use of SAF. Leased assets and waste We have established a baseline for our leased assets and waste GHG emissions detailed in our ESG Data Centre. Though these emissions are minimal in comparison to all other operational emissions, we will develop activities to address those emissions. Supporting our colleagues In support of our net zero operations ambition we are engaging with colleagues and implementing initiatives to reduce our individual environmental footprints. In 2022, we implemented several programmes to increase colleague understanding of our net zero ambition and opportunities to support it: • We provided colleague green benefits including the relaunch of our UK salary sacrifice car scheme as an electric vehicle scheme. We have worked with our third party discounts platform provider in the UK and US to curate and promote offers that support a more sustainable lifestyle, and are seeking to roll this platform out to more jurisdictions throughout 2023 • We deployed Barclays Go Green sustainability gamification programme globally, which led to employees avoiding approximately 139tCO2e through their sustainable actions • Our 12 employee-led environment networks across the globe created and participated in activities aligned with Barclays’ net zero ambition. In 2022 they hosted a variety of activities and engaged with more than 6,200 Barclays employees + Further information about how Barclays engages with colleagues can be found on page 118. Carbon credits We plan to purchase at least 42,000 voluntary carbon credits to remain carbon neutrala for our 2022 Scope 1, Scope 2 and Scope 3 business travel market-based emissions. We will look to purchase a portfolio of certified carbon credits that follow industry standards and GHG crediting programmes including Verified Carbon Standard (VCS) Programme and Climate Action Reserve (CAR). We periodically review our carbon credits procurement process. We currently conduct due diligence as part of our carbon credits procurement process, that will include a third party review of the project portfolio from an independent voluntary carbon markets advisory firm which is not directly involved in the sourcing process. All final projects must pass independent due diligence screening based on risk assessment in five key areas: location, technology, additionality, environmental and social impacts as well as potential benefits. + Further details on our carbon credits can be found on Barclays ESG Data Centre at: home.barclays/sustainability/esg- resource-hub/reporting-and-disclosures/ Nature and biodiversity in our operations Nature and biodiversity are intrinsically connected to our efforts to mitigate and adapt to climate change and maintain healthy communities. As such, we focus on improving our resource use and protecting natural environments through our circular design principles including designing out waste and pollution across our operations, recycling, and regenerating natural ecosystems. Barclays PLC Annual Report 2022 83 Zero waste In 2022, we produced 5,616 tonnes of waste across our sites, 69% of which was recycled. Due to return to the office, post-COVID, we have seen an increase in waste produced compared to last year. All sites in our UK real estate portfolio (offices, branches, campuses and data centres) are zero waste to landfill certified. We have an ambition to achieve and maintain TRUE (Total Resource Use and Efficiency) zero waste certified projects across our key campuses by 2035, which means we must divert a minimum of 90% of solid, non- hazardous wastes from the environment, landfill and incineration (waste-to-energy) to recycling facilities or locations where the waste can be reused. Our Pune campus in India was the first to achieve the TRUE certification in 2022. To deliver our ambition across the rest of our campuses, we are removing single use items, using on-site composters to reduce food waste and promoting recycling. We are using on-site composters across numerous global offices including Singapore, Glasgow, and Pune. In addition, at our New York offices we work with Goodr, which participated in Barclays' Unreasonable Impact accelerator programme, to re-route our surplus food to local charities. Note a We define carbon neutral as first reducing carbon dioxide emissions then counterbalancing carbon dioxide emissions from Scope 1, Scope 2 and Scope 3 business travel with carbon credit offsets. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2022 84 TCFD Strategy Recommendation (b) | Strategic Pillar 1 Water management Although our operational water footprint is relatively small, we are investing in new technologies to reduce our water consumption and increase our use of recycled water. For example, in 2022 the grey water recycling system at our Pune campus enabled us to repurpose approximately 38,000 kilolitres of grey water, so that 85% of the campus’ water consumption came from on-site recycled water. Biodiversity As part of our location strategy and ongoing management of our operational assets, we consider how biodiversity and ecosystems are impacted – both positively and negatively – by our activities. We conduct pollution risk assessments across our property portfolio where we hold generators, to ensure no fuel escapes outside its containment and therefore does not pollute land and water systems. We also seek to enhance biodiversity across our buildings. For example, as part of the redevelopment of the Radbroke campus, we are seeking a 10% increase in biodiversity by 're-greening' 800m2 of the site by 2025. Recognising the importance of this agenda, we will be developing our understanding and we will be evaluating nature-related risks and opportunities on an ongoing basis. + Further details on Barclays’ approach to biodiversity can be found on pages 119 to 120. Sustainability in our building design and operations As of December 2022, 57% of our global real estate portfolio by area has a third-party verified green building certification. These certifications comprise of US Green Building Council’s Leadership in Energy and Environmental Design (LEED) certification programme, Building Research Establishment Environmental Assessment Method (BREEAM), Energy Star certification and WELL Building Certification™. This achievement includes: • LEED certifications at our Chicago, Boston, Whippany, and Pune sites • WELL Gold certified™ at our Pune site, the first in our property portfolio in addition to Barclays’ participation in the WELL at Scale programme • Energy Star certification at our Piscataway data centre for the 10th consecutive year. Additionally, 41% of our global real estate portfolio remain certified to ISO 14001, the international standard for designing and implementing an Environmental Management System (EMS). All sites in our UK real estate portfolio (offices, branches, campuses and data centres) were zero waste to landfill certified. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2022 85 TCFD Strategy Recommendation (b) | Strategic Pillar 2 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. + Further details on our restrictive policies can be found on page 98. 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. 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. + Further details on our performance against our sector targets can be found from page 88. Details of the new Automotive manufacturing and residential real estate sectors where financed emissions have been assessed can be found on pages 91 to 93. 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. Notes: Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/reporting-and- disclosures/ Financed emissions metrics Sector Sector Sector boundaries Emissions scope GHG included Reference scenario Target metric Setting our targets Unit of measurement Baseline year Monitoring our progress in 2022 Target vs. baseline Cumulative change Absolute emissions (MtCO2e) Physical intensity Energy Upstream Energy 1,2,& 3 CO2 and methane Power Power generators 1 CO2 IEA SDS IEA NZE2050 IEA SDS IEA NZE2050 Cement Steel Cement manufacturers Steel manufacturers 1 & 2 All GHGs IEA NZE2050 1 & 2 All GHGs IEA NZE2050 Automotive manufacturing Light Duty Vehicles manufacturers 1,2 & 3 All GHGs for Scope 1 and 2; CO2 for Scope 3 IEA NZE2050 Physical intensity Physical intensity Physical intensity Physical intensity Absolute emissions MtCO2e (Absolute) 2020 -32% 51.7Δ 59.6 gCO2e/MJ -15% by 2025 -40% by 2030 -30% by 2025 kgCO2e/MWh 2020 -9% 29.2 -50% to -69% by 2030 tCO2e/t 2021 -20% to -26% by 2030 -2% tCO2e/t 2021 -20% to -40% by 2030 -11% gCO2e/kma 2022 -40% to -64% by 2030 0.7 1.6 6.2 1.5 Baseline set in December 2022 Baseline set in December 2022 302Δ 0.610Δ 1.732Δ 167.2Δ 32.9Δ Residential real estate UK buy-to-let and owner occupied mortgages 1 & 2 CO2, methane and nitrous oxide CCC BNZ Physical Intensity kgCO2e/m2 2022 Portfolio convergence point vs. baseline -40% by 2030 Notes a Physical intensity (CO2e emissions per v-km travelled by LDV produced), expressed in gCO2e/km. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 Basis of preparation BlueTrackTM We have developed our BlueTrackTM methodology to measure and track our financed emissions at a portfolio level against the goals and timelines of the Paris Agreement. BlueTrackTM 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 Undrawn committed loans Trade financing Mortgages (for residential real estate only) Facilitated Equity holdings Bond issuances Equity issuances 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, BlueTrackTM is also being expanded to cover UK residential mortgages. BlueTrackTM 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. BlueTrackTM relies on modelling client emissions based on the most recent publicly reported asset-level production or client reported emissions. + Our 2023 BlueTrackTM 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. BlueTrackTM 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 Barclays PLC Annual Report 2022 86 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 CO2e (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 BlueTrackTM 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2022 87 TCFD Strategy Recommendation (b) | Strategic Pillar 2 Data sourcing and data quality Climate data, models and methodologies are evolving and not yet at the same standard as more traditional financial metrics. BlueTrackTM 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: Our approach to reporting financed emissions data Scenario Error identified in our internal finance data or methodology Restatement • Financed emissions metrics for all years impacted by the error will be restated, including the baseline year. Our approach Changes to our methodology and/ or data sources to calculate financed emissions (e.g. including additional GHGs) Re-baseline • The updated methodology will be applied from the start of the current reporting period. • 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. • 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. • 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 • 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. • Data lags are inherent to the process and Barclays will endeavour to use the latest available data . Historically reported metrics will not be updated for data lags. • 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. Notes: a In calculating the 2022 metrics, we have restated the baseline for Energy from 75.0 MtCO2 to 75.2 MtCO2 resulting in no impact on our year-end 2021 metrics. b For Power we have restated the baseline from 320 kgCO2/MWh to 322 kgCO2/MWh with a recalculated year-end 2021 number of 296 kgCO2/MWh vs 295 kgCO2/MWh with a consistent percentage reduction for 2021. Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/ reporting-and-disclosures/ Baselines at December 2022 Sector Energy Power 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) MtCO2e (Absolute) kgCO2e/ MWh 2020 75.2a 58.6 -22% 59.0 2020 322b 296 -8% 304 75.7Δ 331Δ Cement tCO2e/t 2021 Steel tCO2e/t 2021 Automotive manufacturing Residential real estate gCO2e/km 2022 kgCO2e/m2 2022 32.9Δ 0.625Δ 1.945Δ 167.2Δ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 Progress against our existing sector targets Financed emissions - Energy Absolute emissions MtCO2e (Indexed 2020 = 100) Financed emissions - Power Physical Intensity kgCO2e/MWh (Indexed 2020 = 100) Barclays PLC Annual Report 2022 88 IEA NZE Benchmark: World Portfolio target path ¢ Barclays portfolio IEA NZE Benchmark: World Portfolio target path (range) ¢ Barclays portfolio Financed emissions - Cement Physical Intensity tCO2e/t (Indexed 2021 = 100) Financed emissions - Steel Physical Intensity tCO2e/t (Indexed 2021 = 100) IEA NZE Benchmark: World Portfolio target path (range) ¢ Barclays portfolio IEA NZE Benchmark: World Portfolio target path (range) ¢ Barclays portfolio Notes: Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 Progress against existing sector targets In April 2022, we published new 2030 BlueTrackTM 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 283. 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 BlueTrackTM 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 CO2e 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 BlueTrackTM Whitepaper), however, this was partially offset by an increase in the intensity of our capital markets financing year-on-year. 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. + Further details on management and oversight of our performance can be found on page 95. 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. + Further details on our Client Transition Framework can be found on page 96. 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 CO2e by 2025 and a 40% reduction in CO2e 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 MtCO2e, 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 BlueTrackTM Whitepaper in the ESG Resource Hub online at: home.barclays/sustainability/esg-resource-hub/reporting-and- disclosures/ Barclays PLC Annual Report 2022 89 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2022 90 TCFD Strategy Recommendation (b) | Strategic Pillar 2 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2022 91 TCFD Strategy Recommendation (b) | Strategic Pillar 2 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 BlueTrackTM 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. + Further details on our financed emissions methodology can be found in our latest BlueTrackTM Whitepaper at: home.barclays/esg-resource-hub/reporting-and-disclosures/ Financed emissions - Automotive Manufacturing (LDVs) Physical Intensity (gCO2e/km) (Indexed Dec 2022 = 100) Power of One Barclays helps create a cleaner, more efficient way to move goods Barclays colleagues across the Corporate and Investment Bank partnered to deliver a US$300m securitisation transaction and commit US$150m of financing. Einride designs, develops and deploys technologies for freight mobility – including electric and autonomous trucking fleets, charging infrastructure and connectivity networks – with the vision to create a more resilient, cost-effective and intelligent way to transport goods. Founded in 2016, Einride’s connected electric trucks and charging solutions, intelligently co-ordinated by Einride Saga, allow shippers and carriers to go electric, improve operational outcomes and reduce their carbon footprint. Einride will use this securitisation programme to finance their global truck assets and customer contracts - permitting them to continue to scale their fleet, increase investment in research and development, and further develop relationships with partners. IEA NZE Benchmark: World Portfolio target path (range) ¢ 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 BlueTrackTM 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. Notes: Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/ reporting-and-disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Financed emissions - Residential Mortgages Physical Intensity (kgCO2e/m2) (Indexed Dec 2022 = 100) CCC - Synthetic BNZP Scenario: UK ▲ Portfolio convergence point ¢ 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. TCFD Strategy Recommendation (b) | Strategic Pillar 2 New sector assessed – Residential Real Estate Estimating our financed emissions Homes contributed to over 15% of total GHG UK emissions in 2021a, 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 CO2e emissions intensity against a 2022 baseline of 32.9 kgCO2e/m2 (Scopes 1 and 2)” Barclays has estimated the financed emissions and emissions intensity of its UK residential real estate portfolio by integrating the PCAFb approach into BlueTrackTM. 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 PLCc. 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 19.7kgCO2e/ m2 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 BlueTrackTM Whitepaper at: home.barclays/sustainability/esg- resource-hub/reporting-and-disclosures/ Barclays PLC Annual Report 2022 92 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 1.5oC 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 BlueTrackTM 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. Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/ reporting-and-disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2022 93 TCFD Strategy Recommendation (b) | Strategic Pillar 2 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 BlueTrackTM 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 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. De-carbonisation of UK electricity grid • Advocating for external measures to drive take up of retrofitting • Supporting our clients in the power sector in their net zero transition • 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 • 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 Behaviour change • Continue supporting our Corporate Bank's real estate clients in their transition, for example, through Barclays' Sustainable Residential Development Framework • 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. + Further details on our role in supporting supporting our customers' transition in Barclays UK can be found on pages 107 and 108. Barclays' approach to advocacy in residential real estate We have recommended that policymakers, in collaboration with the industry, take the following steps: • increase policy clarity through a national decarbonisation roadmap and retrofitting strategy to create a clear framework for action • introduce measures to build trust and confidence in taking action, such as improved access to practical advice about retrofitting and installers who are TrustMark accredited • long-term funding which will give supply chains confidence to grow • improving accuracy and confidence in EPC Standards as key basis for measuring change. Barclays PLC Annual Report 2022 94 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 Barclays UK Greener Home Reward In 2022, we conducted research exploring homeowner attitudes towards sustainability and the barriers preventing action. Our research showed that while the vast majority (90%) of homeownersa intend to make energy efficiency-related changes to their homes within the next five years, cost is a prohibitive barrier. Retrofit types at registration Solar Energy Doors & windows Insulation Low-carbon heating Solid wall insulation n Solar energy n Doors and windows n Insulation n Low-carbon heating n Solid wall insulation In response, we launched our Greener Home Reward pilot in October. It offers a cash reward of up to £2,000 for mortgage customers who install energy efficiency measures in their homes. The objective of the pilot, which remains ongoing, is to help us to understand consumer behaviour and motivations for taking sustainable action. The pilot will provide empirical evidence to evaluate real and perceived barriers, and whether such incentives from mortgage providers would help to reduce these barriers and enable homeowners to take proactive action on the energy efficiency improvements they want. As of December 2022, we have seen continuing interest from our customers. 44% of applications have been for solar panels and solar battery storage, but there is clear demand for a range of energy efficiency measures. The insights from this pilot will help us to develop relevant products and propositions to support our customers' transition to low-carbon, energy efficient homes. Notes: a Consumer data and insights taken from a nationally representative research study of 2,000 homeowners, commissioned by Barclays, and carried out by Mortar Research from 26 August - 1 September 2022. 442017154 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Working to support future sector target setting Barclays has been working with the Banking for Impact on Climate in Agriculture (B4ICA) initiative, along with other peers, to consider the particular challenges of setting financed emission reduction targets in the agricultural sector, given the heterogeneity of practices, products and conditions. In December 2022, the group published non-binding guidance for financial institutions aimed at supplementing existing guidance relating to agriculture and climate change, with practical advice for banks setting targets and supporting companies within their agricultural sector portfolio. The report covers some of the key considerations for the agricultural sector including appropriate scope of emissions and activities to include in targets; data and measurement of emissions; use of offsets; treatment of land-use-change; net versus gross targets; and absolute versus intensity targets. + The report can be found at: www.wbcsd.org/contentwbc/ download/15359/224482/1 TCFD Strategy Recommendation (b) | Strategic Pillar 2 Next sectors in our portfolio alignment Using BlueTrackTM, 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. Barclays PLC Annual Report 2022 95 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 BlueTrackTM 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 253. 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. Barclays PLC Annual Report 2022 96 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 Short and medium-term actions to deliver on emission reduction targets In 2020, we started to measure and assess our clients' emissions by building our financed emissions methodology (BlueTrackTM) and setting interim emission reduction targets, To achieve these targets, we will need to support our clients to reduce the emissions that result from their activities and those generated in their respective value chains. New tool: Client Transition Framework (CTF) In our Climate Strategy, Targets and Progress document published in March 2022 we noted our intention to develop a Client Transition Framework (CTF). This has been underway during 2022 and the CTF will become a key tool in implementing our climate strategy. The CTF will support our evaluation of our corporate clients' current and expected future progress as they transition to a low-carbon business model. The CTF includes quantitative and qualitative elements. The quantitative element assesses a client's alignment with our emissions targets and sector benchmarks. The qualitative element seeks to assess the credibility of a client’s transition plan. It considers criteria that serve as indicators of intent and ambition, and therefore the likelihood that a client will meet its targets. For example, the low-carbon technologies employed, and green capital or operational expenditure plans. Most of these criteria are consistent across sectors, however we also consider some sector- specific criteria. This includes Energy sector clients' commitments on methane emissions reduction and Power sector clients' commitments to phase-out thermal coal. The assessments under the two elements are combined to arrive at an overall CTF score from T1 (best) to T5 (worst). The development of the CTF has been a cross- bank exercise utilising the breadth of climate expertise across Barclays. It has been informed by a review of third-party frameworks (e.g. TPI, CA100+, SBTi) and other industry initiatives (e.g. UK's Transition Plan Taskforce, GFANZ). Design choices regarding material criteria have also been informed by internal sector analysis and insights from our stress testing exercises. Today, the CTF is primarily a benchmarking tool. Our initial assessments have been conducted for the majority of our corporate clients in sectors where BlueTrackTM targets have previously been set: Power, Energy, Cement and Steel - over 150 clients in total. As new BlueTrackTM targets are set, the CTF will be applied to corporate clients in those sectors. Findings from those initial assessments include: • c.80% of assessed clients have climate targets • c.60% of clients assessed have executive compensation tied to achievement of their climate goals. The review process has also revealed a number of challenges in gaining an accurate assessment of clients' transition preparedness, in particular the availability and consistency of data. We will continue to work to address data quality challenges we have identified in the next iteration of the CTF. The CTF has also provided insight into key dependencies and levers that will impact our ability to meet our targets across sectors. + Further details on the dependencies impacting our strategy can be found on page 135. Barclays PLC Annual Report 2022 97 Other tools considered We have developed tools to monitor and report on progress to date against our financed emission targets, as well as to estimate potential future paths. Client commitments and our Client Transition Framework feed into this analysis and help us determine where to best deploy capital. We have considered other tools to help steer our financing and portfolios, including applying an internal carbon price or capital weightings. We will continue to explore carbon pricing as a tool to support the transition but, at this stage, we have decided not to progress with it as we think there are other levers that are more effective. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 Just transition within the CTF We have launched a pilot assessment, which is ongoing, to evaluate whether our clients are seeking to decarbonise in line with a just transition for their stakeholders, considering the social risks and opportunities of the transition, and ensuring effective dialogue with affected stakeholders. Relevant stakeholders include workers, communities, consumers, and suppliers impacted by the client’s decarbonisation strategy. We will iterate this assessment and expect our criteria to evolve. In this pilot, we are assessing whether our clients' approach to a just transition includes consideration of: • adverse impacts on stakeholder groups from their activity (e.g. job loss, loss of tax revenue) • actions to address identified impacts (e.g. upskilling, remuneration, psychological support) • engagement with impacted stakeholder groups in decision-making that affects them. We engaged Oliver Wyman, a leading management consultancy, to review and benchmark the CTF. This will allow us to identify enhancements to the CTF to ensure it is a robust mechanism for assessing the credibility of clients' transition plans. As the framework is improved and refined, the CTF results will be integrated into key processes across the bank and capital allocation, as well as informing client engagement. CTF scores may also be used alongside other relevant factors to inform other processes, including credit risk assessments, Climate Enhanced Due Diligence, and portfolio alignment strategy. This will allow us over time to: • measure, monitor and report on our clients' decarbonisation progress and their implications for our targets • understand how we can support our clients' transition activities • identify engagement opportunities to support clients' decarbonisation progress in line with market expectations and consistent with our own approach, through the provision of financing advice and solutions; and inform decision-making should engagement be ineffective over time • inform our own transition plan and progress, including key dependencies, risks to meeting our interim emissions reduction targets, and levers to address those risks. Additionally, these evaluations will increasingly feed into our wider climate scenario analysis, such as being used to inform sensitivity analyses that will in turn inform our strategy. + Further details on our approach to climate EDD and climate risk can be found on pages 253, 273 and 285. Engaging clients with the CTF We believe that Barclays can make the greatest difference by supporting our clients as they transition to a low-carbon business model, rather than by simply phasing out support for them. This is particularly true for our clients in highly carbon-intensive sectors. Where companies are unwilling to reduce their emissions consistent with internationally accepted pathways, they may find it difficult to access financing, including from Barclays. As part of the roll-out of the CTF, we will begin climate-specific engagement for those clients with scores of T4 and T5. This will ensure that we are directing efforts towards the clients that are most at risk of failing to transition in line with our targets and our approach to climate risk. We will track our climate engagement efforts and ensure we clearly communicate our expectations for an appropriate transition plan while working with them to understand any unique challenges they may face in pursuing their transition. As the economy progresses along the pathway to net zero and we get closer to our interim targets, we may adjust our expectations of clients. We will report on the progress from our engagement in our 2023 Annual Report. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2022 98 TCFD Strategy Recommendation (b) | Strategic Pillar 2 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 clientsa 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 • Coal mining • Coal power • Oil sands • Fracking • Arctic oil and gas Forestry and Agricultural Commodities • Forestry, pulp and paper • Palm oil • Soy + Further details can be found at: home.barclays/ sustainability/esg-resource-hub/statements-and-policy- positions/ 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. Changes to our restrictive policies Previously announced policy New announcement Restrictive policy Thermal Coal Power Existing restrictions in relation to thermal coal financing will continue to apply other than as updated below • By 2030: in the UK and EU – phase out of financing to clients engagedb 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 2030: in EU and OECD phase out of financing to clients engagedb 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 of financing to clients engaged in coal-fired • By 2035: phase out financing to clients engaged in coal-fired power generation 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: • To oil sands exploration and production companiesa ; or • For the construction of new (i) oil sands exploration, production and/or processing assets; or (ii) oil sands pipelinesc. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Financing the transition Financing the transition targets Barclays PLC Annual Report 2022 99 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. £150bn social, environmental and sustainability - linked financing facilitated between 2018 and 2025 Progress: target exceeded in 2021, with £247.6bnΔ facilitated by the end of 2022 Sustainable financing targets Sustainable Impact Capital target £100bn green financing facilitated between 2018 and 2030 Progress: on track to meet target well ahead of the 2030 target date, with £87.8bnΔ facilitated by the end of 2022 $1trn Sustainable and Transition Financing between 2023 and 2030 New target encompasses green, social, transition and sustainability-linked financing £175m between 2020 and 2025 Progress: £89m invested by the end of 2022 Extended to £500m by 2027 Existing targets New targets announced in 2022 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 £54.3bnΔ of social, environmental and sustainability-linked financing during 2022 (£69.2bn in 2021) and a cumulative £247.6bnΔ 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 £24.9bnΔ of social financing facilitated in 2022, while also contributing 58% of the total social and environmental financing (excluding sustainability-linked). Notes: Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/reporting-and- disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 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 £18.0bnΔ 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 £11.4bnΔ 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 £25.5bnΔ 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 (£18.0bnΔ in 2022) and • sustainability-linked financing that incorporates environmental performance targets (£7.5bnΔ in 2022). Since 2018, we have facilitated a total of £87.8bnΔ 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. Barclays PLC Annual Report 2022 100 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. Notes: Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/reporting-and- disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Sustainable financing dashboard Barclays PLC Annual Report 2022 101 £150bn social, environmental and sustainability-linked financing facilitated (2018-2025) Annual breakdown by category (£bn) Annual breakdown by region (£bn) Achieved to date £247.6bnΔ Annual breakdown by product (£bn) 2022 2021 2020 2019 2018 2022 2021 2020 2019 2018 2022 2021 2020 2019 2018 n Environmental n Social n Sustainability-linked n Americas n UK / Europe n Asia and Rest of World n Debt n Equity n Loan n Investments n Other (Contingent) £100bn green financing facilitated (2018-2030) Breakdown by year (£bn) Breakdown by region (£bn) 2022 2021 2020 2019 2018 2022 2021 2020 2019 2018 Achieved to date £87.8bnΔ Breakdown by product (£bn) 2022 2021 2020 2019 2018 n Environmental n Sustainability-linked (green) n Americas n UK / Europe n Asia and Rest of World n Debt n Equity n Loan n Investments n Other (Contingent) Notes Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/ + 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/ 18.0△22.614.87.85.324.9△35.741.223.921.811.4△10.85.03.11.419.827.129.614.410.030.836.028.618.617.13.66.12.71.81.538.350.949.130.2 25.8 1.24.82.60.10.414.313.19.24.4 2.30.40.318.0△22.614.87.85.37.5△7.22.81.40.37.112.77.93.32.316.814.79.05.03.01.72.40.70.90.315.618.912.27.0 4.8 0.94.41.50.10.38.36.23.82.1 0.60.70.34.312.320.5824.1Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 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/ How our sustainable financing supports the Sustainable Development Goals (SDGs) The 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015, provides a shared blueprint for peace and prosperity for people and the planet, now and into the future. At its heart are the 17 SDGs, which are a call for action by all countries - developed and developing - in a global partnership. Barclays is pleased to play its part, working in partnership with our stakeholders to support the delivery of the SDGs. Since 2018, we have tracked our annual contribution to the SDGs, through our financing activities. An illustrative breakdown of our social and environmental financing is provided in the chart above. Barclays PLC Annual Report 2022 102 SDG illustrative breakdown of 2022 social and environmental financing £bn 8.7bn 5.9bn 4.7bn 4.5bn 3.7bn 0.3 0 0.5 0.6 0.1 n Clean water and sanitation n Affordable and clean energy n Sustainable cities and communities n Reduced inequalities n No poverty n Zero hunger n Good health and wellbeing n Decent work and economic growth n Quality education n Gender equality n Industry, innovation and infrastructure n Responsible consumption and protections n Climate action n Life below water n Life on land n Peace and Justice Strong Insititutions n Partnerships for the goals Note: Includes 2022 social and environmental financing and excludes sustainability-linked financing. Our financing covers a range of financing activities including debt and equity capital markets, corporate lending, trade finance and consumer lending. It helps to generate positive social and environmental outcomes through financing of activities such as, but not limited to, energy efficiency, renewable energy, affordable housing, basic infrastructure and services. Financing of activities set out in the SFF in turn supports progress towards achieving the SDGs. For a full list of eligible social and environmental activities see the Barclays Sustainable Finance Framework, which shows how eligible social and environmental activities contribute to individual SDGs, supported through an analysis of underlying SDG targets. As we evolve our understanding of how our financing contributes to the SDGs, we will refine our methodology accordingly. Beyond our financing activities, our community programmes contribute to Goal 8 – decent work and economic growth. We also contribute to the SDGs through our work implementing the UN Principles for Responsible Banking (PRB). We continue to analyse the potential positive and negative impacts of our business through these principles. Barclays has set targets in line with some of our significant impact areas to drive alignment with the goals and timelines of the Paris Agreement and to contribute to the SDGs. + For further details, our PRB disclosure can be found online in our ESG Resource Hub at: home.barclays/sustainability/esg- resource-hub/reporting-and-disclosures/ 4.52.35.94.71.28.72.41.63.72.62.01.6 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Working with our clients We want to be by our clients' side as they transition their businesses to operate in a low-carbon economy. We are working on expanding our sustainable finance offering through our specialist teams to help clients navigate this period of extraordinary change. Engaging clients through our Client Transition Framework The Client Transition Framework, outlined on page 96, will enable us to direct engagement efforts towards clients that are most exposed to the risk of failing to transition in line with sectoral pathways as reflected in our targets. Engagement through business/ events As trusted advisers, we continue to proactively engage with many of our clients on the risks and opportunities for their businesses from the transition to a low-carbon economy. This includes working with higher-intensity clients on their transition journey. We help clients execute on their climate strategies including facilitation of initial public offerings for climate-focused growth companies, acquisitions of emerging climate technology start-ups to diversify incumbent clients’ business models and financing to mobilise decarbonisation of operational activities. Over the course of 2022, we had over 15,000 engagements with clients within the Corporate Bank on ESG topics, around triple the number of ESG engagements delivered over 2021 (5,000), thanks to focused efforts by relationship teams to raise ESG topics proactively. We also held numerous client events on ESG and sustainability topics, reaching nearly 2,000 contacts over 2022. Engagement through research We provide thought leadership to support our clients, using our in-house ESG Research capability. Clients who have access to our research publications tell us it prompts greater evaluation of their business needs, and we have seen a number of instances of this leading to broader conversations about the transition to a low-carbon economy and the ways Barclays is on hand to support. In 2022, we published over 400 ESG-focused research reports. We will continue to provide support to our clients in their efforts to transition. This will be informed by the outcomes of the Client Transition Framework assessments, allowing us to be targeted in our engagement efforts and provide clients with clear communication on our expectations for transition planning and how to take advantage of the opportunities from the transition. Barclays PLC Annual Report 2022 103 Products and services As a British universal bank, we support a wide range of customers and clients from individuals and small businesses through our consumer banking services, to mid-sized and larger businesses and institutions, including governments, through our corporate and investment banking services. We believe the transition to a low-carbon economy is a defining opportunity for innovation and growth and we are determined to play our part in the transition. There is an opportunity for Barclays to play a significant role in helping to meet the demand for climate-related financing to support the transition. We believe it is an advantage that we serve clients across the spectrum from small to large, across different sectors, and in some cases supporting these clients as they grow. We are also building capabilities to help support the innovation that is needed to make the transition a success. We have developed dedicated teams, capabilities and propositions to help scale the start-up businesses that are developing and growing the technologies that will help the world reduce emissions - through our Sustainable Impact Capital mandate but also through Sustainable and Impact Banking, ESG Research and our network of accelerators. In each of the business areas and product teams we have been building expertise and knowledge that will enable us to better support clients as they chart their way through the journey to a low- carbon economy. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Barclays PLC Annual Report 2022 104 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Entrepreneur and innovation programmes Barclays is finding new ways to collaborate with innovative start-ups, bringing new ideas to life and enabling sustainable growth, supporting individuals, businesses, communities and the wider economy. Barclays' open financial technology (fintech) innovation strategy is focused on sourcing ideas, technology and talent outside the bank and supporting its adoption and dissemination within Barclays. Our wider programme of fintech initiatives includes, among other things, support for fintechs in-line with Barclays' Climate Strategy and societal goals. Strategic initiatives Initiative Goal Rise Start-Up Academy Rise Growth Academy 750 founders supported by the end of 2025 50 fintechs supported by the end of 2025 Female Innovators Lab Fund Deploy $30m capital into female fintechs FinTech Venture Studio 6 new ventures launched by the end of 2027 Eagle Labs Unreasonable Impact In 2023, aim to provide: • 1500 mentorship hours • 18 Growth Programmes Support 250 businesses solving social and environmental challenges by the end of 2022 + Further details on Barclays Innovation can be found at: home.barclays/who-we-are/innovation/ The transition to a low-carbon economy requires financing to scale the start-up businesses that provide the technologies needed to reduce emissions. Fintech is an important driver to the commercialisation of climate-focused technology for mass market adoption. Barclays Rise Rise, Barclays' global fintech platform, seeks to create, explore and support new business models and ideas in the latest fintech trends, including climate fintech. Since 2015, Rise has focused on building a global community of the best minds in fintech to disrupt, challenge and confront the way things are done in our industry. Barclays Rise Start-Up Academy The Start-Up Academy helps create future fintechs, supporting emerging founders to transition their idea into minimum viable propositions. A special edition was launched in 2022 to support the increased talent in the market due to layoffs across the tech sector. The history of innovation has shown some of the most successful new companies are built during a market downturn. Barclays Rise Growth Academy The Growth Academy helps scale strategically relevant fintechs and transition their founders into CEOs with a 10 week, digital first curriculum with coaching, MD mentorship and access to a community. Participants may also be considered for a potential strategic investment. + Further details on Barclays Rise and its programmes can be found at: rise.barclays/ Barclays PLC Annual Report 2022 105 Climate FinTech Tackling climate change is one of the defining issues of our lifetime. For the fintech sector, this creates opportunities for innovative, fast-growth companies that are developing financial technology in supporting the transition to a low-carbon economy. + Barclays Rise publishes FinTech Insights from across the world. Further details can be found at: rise.barclays/news/reports/ Barclays Female Innovators Lab Fund The Female Innovators Lab Fund is a US, UK and Europe-based studio and fund co-created by Barclays and Anthemis, and backed by Aviva. The Lab’s mission is to identify female founders at the idea stage of their journey and match them with the resources and mentorship required to develop a company and bring it to its first round of fundraising. Anthemis’ record as early-stage fintech investors and venture builders, coupled with the resources and global footprint of Barclays, makes this an exceptional opportunity for prospective founders to progress their business ideas. Participating start-ups will have access to Barclays’ fintech hub Rise, and Anthemis’ dedicated office spaces, with mentorship and networking opportunities. + Further details on Barclays Female Innovators Lab can be found at: home.barclays/who-we-are/innovation/female- innovators-lab-/ iWarranty, supported by the Female Innovators Lab Fund, is digitising end to end warranties to reduce electrical waste Responding to new EU legislation and the sustainability challenge to ensure appliances can be repaired for up to 10 years to reduce the mountain of electrical waste, iWarranty is digitising the end-to-end warranty market as well as connecting consumers with local repair networks. + Further details on iWarranty can be found at: iwarranty.co/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Barclays FinTech Venture Studio Barclays Fintech Venture Studio, powered by Rainmaking, is seeking to develop a portfolio of new growth opportunities, transforming finance for Barclays teams and clients across the bank through effective fintech partnerships and co- creation. We identify strategic opportunities across the breadth of the bank, and design and deliver pilots to ensure the success of our scaled partnerships. Our approach leverages deep market knowledge, extensive experience in delivering innovation across complex environments, and a repeatable model enabling us to scale innovation at pace. A dedicated Climate Fintech Innovation Strategy has been developed to identify and drive growth opportunities within this framework. Unreasonable Impact Through its Unreasonable Impact programme, Barclays is supporting high-growth entrepreneurs with the network and resources they need to address pressing social and environmental challenges. This strategic global partnership with Unreasonable Group has enabled Barclays to deliver on its Citizenship commitment to support more than 250 entrepreneurs by the end of 2022, whose ventures have the potential to create jobs of the future while solving key social and environmental issues. With billions in financing already raised by its portfolio, the partnership’s momentum continues to grow, and the ventures are driving innovations in a variety of industries, from energy and environment to food and water. + Further details on Unreasonable Impact can be found at: home.barclays/sustainability/supporting-our-communities/ unreasonable-impact/ Barclays Eagle Labs Barclays Eagle Labs look to help incubate, inspire and educate UK founders, start-ups and scale- ups and help them to succeed and grow. + Further details on Barclays Eagle Labs can be found at: labs.uk.barclays Eagle Labs Demo Directory Eagle Labs run a proposition which supports growth stage companies and investors across all industries. Investors can use the platform to identify sustainability-related businesses including those seeking to raise capital to help the transition to a low-carbon economy. + Further details on Eagle Labs Demo Directory can be found at: labs.uk.barclays/demo-directory/ Etopia - Building for a lower carbon future Etopia, a participant in the Unreasonable Impact programme, is creating a more sustainable, efficient, affordable, and resilient approach to net zero carbon home building through modern methods of construction. They are doing this by producing sustainable building systems that enable contractors, developers, and housing providers to deliver net zero ready carbon homes that are built to the UK's Future Homes and Buildings Standard. + Further details on Etopia and how Barclays has been supporting them on their journey to build more sustainable homes, can be found at: barclayscorporate.com/client-experience/client-stories/ etopia/ Carbon13 Incubator via Cambridge Eagle Labs In October 2022, Barclays Eagle Labs and Carbon13 announced a new partnership which will support start-ups focused on sustainability and climate-tech innovation. Through the partnership Barclays is committing up to £2.5m investment to deliver the Carbon13 Venture Launchpad programme from 2023. The programme will provide founders with support and mentoring to tackle significant challenges that UK start-ups face on the road to net zero, and drive innovation in the green technology sector. It will also provide them with access to potential investors. Barclays PLC Annual Report 2022 106 Eagle Labs Green Tech Eagle Labs is building a community of start-ups working on disruptive technology and more established companies with deep domain expertise, to accelerate the innovation needed to create the new technology that will deliver a more sustainable future and achieve our net zero goals. EnergyTech Bridge has helped 10 large corporate energy industry customers as they transition to a lower carbon economy by connecting them to promising UK start-ups and innovative leaders from the tech industry. + Further details on climate-related topics with Energy and technology can be found at: labs.uk.barclays/our-industries/ energytech/ Eagle Labs Agri Tech We connect traditional agriculture with new and emerging innovation to help create sustainable efficiencies in farming and agriculture to close supply chain gaps in food production. + Further details on climate-related topics with Agriculture and technology can be found at: labs.uk.barclays/our-industries/ agritech/ in addition to insights available at: labs.uk.barclays/ learning-and-insights/agritech/ Barclays Eagle Labs also offers our Barclays Eagle Labs Female Founder Accelerator in partnership with AccelerateHER to support 40 innovative female-led technology businesses as well as the Barclays Black Founder Accelerator, a programme especially designed to champion diversity in entrepreneurship and showcase Black Founder-led businesses. + Further details on Barclays Eagle Labs and Carbon13 Incubator can be found at: labs.uk.barclays/learning-and- insights/news-and-insights/news/ c.9,600a businesses supported by Eagle Labs throughout 2022 Notes: a Covering all our members, alumni, programme attendees and ecosystem engaged businesses Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Barclays UK Consumer and Business Banking Sustainability is a key focus area for Barclays UK. We are actively engaging with our retail and business customers to better understand the steps they want to take to become more sustainable, and the role that finance can play. We are using this insight- led approach to design and develop sustainable finance solutions that meet the needs of our customers. We have started embedding environmental considerations and climate risk into product and proposition standards, and we plan to further embed this into product governance through the New and Amended Product Approval (NAPA) process. We have recruited specialists into sustainability-focused roles across Barclays UK and we intend to roll out colleague training for the retail bank. In 2022, we began issuing recycled cards for our retail credit and debit cards, as well as across our commercial card issuing portfolio. We have also used new digital journeys in the app and online banking to support an additional 1.8 million customers to become paperless and reduce their paper waste. We are also switching to a different paper type sourced from an integrated paper mill which has a lower environmental impact as it uses less energy. We have launched our first electric mobile banking van to provide a lower emitting way of serving our customers and communities. Complementary to this, our electric mobile banking colleagues have been trained with a government approved Alternative Fuelled Vehicle (AFV) driving certification. Additional electric mobile banking vans will be introduced next year, in line with our intention to fully electrify our mobile banking vans by 2025. As part of our physical network, we are developing ‘Print’ and ‘Energy’ dashboards for our branch colleagues to provide information about usage and insights to encourage them to reduce the carbon footprint. By working collaboratively under a unified strategy across Barclays UK, we aim to further expand our sustainable products and propositions to meet customers’ needs and support them in seeking to reduce emissions. Consumer Bank Barclays UK Consumer Sustainability Hub We launched a Sustainability Hub to engage consumers and provide them information on financial products and services we offer that may support them in making more sustainable choices. This includes sharing Barclays’ approach to tackling climate change. Given the current energy crisis and consumer interest in reducing home energy usage, we are engaging customers on this topic by featuring information about making homes more energy efficient. We are also providing information on moving towards sustainable travel and we aim to focus on this area, particularly by helping to scale the adoption of electric vehicles across the UK for consumers through partnerships and propositions. We plan to expand the content on the Sustainability Hub and integrate the content into the Barclays app. + Further details on the consumer-facing Sustainability Hub can be found at: barclays.co.uk/sustainability/ Green home propositions In 2018, Barclays led the market as one of the first UK lenders to launch a Green Mortgage. Since inception, Barclays has lent over £2.6bn to Green Home mortgage customers with £1.6bn of financing delivered in 2022. In 2022, Barclays expanded Green Home mortgages to include buy-to-let properties, supporting more customers to purchase an energy efficient new- build home. + Further details on our progress to estimate emissions intensity for our UK mortgage portfolio can be found on pages 92 to 94. Barclays PLC Annual Report 2022 107 Green Mortgage completions Number of completions n 2022 progress n Total since 2018 Value of completions (£m) n 2022 progress n Total since 2018 Based on the enhanced EPC matching, as of the end of Q3 2022, a valid EPC rating was available for 65.1% of our mortgage book by volume compared to Q3 2021, where we had a valid EPC rating for 55.7% of our mortgage book. There are industry-wide challenges regarding obtaining greater coverage of EPC ratings as this data is sourced directly from the government EPC register and is released on a quarterly basis. Mortgages balance by EPC rating (£m) as of 30 September 2022 In October 2022, Barclays launched the Greener Home Reward pilot. 2022 total: 116,644 + Further details on Barclays Greener Home Reward can be found at: barclays.co.uk/mortgages/greener-home-reward/ We have piloted training on energy efficiency of homes with a small group of mortgage advisors and will roll this out further in 2023. + Further details on Barclays Green Home Mortgages can be found at: barclays.co.uk/mortgages/green-home-mortgage/ Further details on Barclays Buy-To-Let Mortgages can be found at: barclays.co.uk/mortgages/green-buy-to-let- mortgage/ Our UK mortgages by EPC rating Barclays UK regularly monitors the Energy Performance Certificate (EPC) rating of its mortgage portfolio, to support our management of climate risk and our understanding of the impact of our financing on the environment. In line with our commitment to the improvement in energy efficiency of our mortgages portfolio, Barclays UK has set an ambition for 50% of homes in its mortgage portfolio with a known EPC to be rated EPC band C or better by 2030. As at the end of Q3 2022, 42.3% were rated EPC C or better (out of homes with a valid EPC, or 27.5% including homes without an EPC). In 2022, Barclays UK onboarded a third party to provide enhanced EPC matching in addition to a broad suite of climate data for assessing physical and transition risks in the Barclays UK Mortgages portfolio (owner-occupied and buy to let). 782 4,275 n EPC rating G n EPC rating F n EPC rating E n EPC rating D n EPC rating C n EPC rating B n EPC rating A 358 EPC A & B Mortgages 18% of mortgage balances rated A or B against available EPCs (2021: 17%) 7,08011,6861,6012,65619,08844,62426,63920,878 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Business Bank Barclays' Business Bank has a dedicated strategy to: • prepare colleagues by upskilling them on sustainability and client needs • support clients to understand the case for sustainability and know how to take action • develop products to finance the transition • embed sustainability into the business Colleague engagement We have provided training to our Business Banking Relationship Managers and Specialist Client Solutions Team, this is a key limb of the Business Bank's strategy. + Further details on colleague training can be found on page 118. We have expanded our Specialist offering, with an initiative to introduce net zero as a new area of expertise within our Specialist Client Solutions Team. Colleagues can now refer clients in to the team to discuss how the transition to a low- carbon economy can impact their business. This is intended to extend across all regions in 2023. Recognising that Agriculture is a high emitting sector, we have announced a three-year agri- climate partnership with Oxford University on a project that will establish sector decarbonisation pathways and methodologies for measuring farm-level greenhouse gas emissions. The partnership is aimed at supporting the sector’s transition to more sustainable practices and will inform financial decision-making. The outcomes will be shared publicly and we aim to use these to set emissions reduction targets for the agriculture sector, in support of the bank’s net zero ambition. + Further details on our partnership with Oxford University can be found at: home.barclays/news/press- releases/2022/10/barclays-and-oxford-university- announce-3-year-agri-climate-part/ We have also created a Dairy & Livestock Forum to consider carbon emissions as part of our lending decisions to livestock farms. The aim is to drive awareness of clients' emissions and help both colleagues and clients understand and share best practice and practical actions that can be taken to reduce them. Topics on our ‘Let’s Talk Business’ client podcast this year have also covered sustainability. Recognising that our business customers have experienced unprecedented challenges over the last two years, and to support them on their journey from recovery to growth, in 2022 we launched Barclays Business Health Pledge. Sustainability has been a key theme covered under this pledge and two masterclasses have been filmed with a sustainability expert, alongside hosting over 50 local Business Health Pledge events, supporting over 1,300 attendees. We have also held a ‘High Growth Live’ panel event on sustainable funding with over 300 attendees. + Further details on our Health Pledge can be found at: labs.uk.barclays/business-health-hub/barclays-business- health-hub/introducing-the-barclays-business-health-pledge/ To recognise the positive impact of ESG- focused entrepreneurs on the wider economy, we have created a new ‘Sustainability Award’ category for the Barclays Entrepreneur Awards this year which saw a total of 112 entries across the whole breadth of the UK. The Business Bank’s Sustainability Hub launched this year to support customers as they get started on their sustainability journey, to understand how they might be impacted and signposting them to support and financing options. It has content and resources on EVs and other green assets, as well as customer case studies to help customers explore options that may be right for them. + Further details on our Business Banking Sustainability Hub can be found at: barclays.co.uk/business-banking/ sustainability-for-business/ Barclays PLC Annual Report 2022 108 External engagement Barclays worked with the Cambridge Institute of Sustainability Leadership (CISL)’s Banking Environment Initiative (BEI) and BSR on a series of innovation sprints to better address the barriers SMEs face to reach net zero. The sprints produced a number of potential solutions to drive change and support SME net zero action. + Further details on the 'Financial innovation for SME net zero transition: Role of banks and buyers' report can be found at: cisl.cam.ac.uk/resources/publications/financial-innovation- sme-net-zero-transition-role-banks-and-buyers Electric Vehicle proposition In July 2022, we created an initial £20m fund and launched a proposition with Propel Finance, our Asset Finance provider, to offer competitively priced fixed rate asset finance, supporting business clients who are looking to purchase new electric vehicles. + Further details on our Business Banking sustainability journey can be found at: barclays.co.uk/business-banking/ sustainability-for-business/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) We expect that industry groups will begin to dedicate more resources to the coverage of sustainable technologies and related companies. As this happens, we plan to evaluate how sectors and companies are best covered by the bank and adapt our model accordingly to provide the support and resources required by our clients. We will also use incentives to drive the commercial success of our strategy by setting appropriate key performance indicators and tracking progress against them. Sustainable Capital Markets The Sustainable Capital Markets team is a key part of Barclays’ dedicated ESG specialist CIB teams and sits within the broader Barclays Global Capital Markets function. This global team offers a broad range of ESG capital markets product types and delivers across multiple client segments to help clients finance their sustainability and transition journeys, as well as formalise their sustainability commitments. TCFD Strategy Recommendation (b) | Strategic Pillar 3 Corporate and Investment Bank How we serve clients We continue to evolve our model to support our clients and capture the opportunities as they transition to a low-carbon business model. In 2022 we expanded our leadership in the Corporate and Investment Bank (CIB) and established the role of Global Head of Sustainable Finance to create a centre of excellence for sustainable finance in the CIB. At Barclays we already use the concept of the Power of One Barclays, which brings our organisation closer together to create synergies and provide customers and clients with the full range of our products and services. We are extending this mindset to consider how we can best serve our clients’ needs relating to ESG and the climate transition through an integrated approach across Barclays’ products and services. Examples of this include our ESG advisory, industry coverage and Sustainable and Impact Banking teams collaborating on M&A opportunities; or our industry teams bringing technical experts into client meetings to discuss decarbonisation options. We believe this approach incentivises proactive partnerships and drives better outcomes for our clients. How our model will evolve Over time, we expect an evolution in our coverage model so that sustainability becomes increasingly embedded in our sector and industry coverage teams. We intend to expand the knowledge of our bankers and ensure subject matter experts partner with the relevant teams to develop content and expertise. Barclays PLC Annual Report 2022 109 The team focuses on underwriting and structuring green, social, sustainable, transition and sustainability-linked capital markets financing solutions. Supporting the UK Government in their Green Finance ambitions The UK Chancellor announced at the Budget in early 2021 that the UK Government’s ambition to issue a minimum of £15bn of green gilts during the financial year 2021/22. In June 2021, HM Treasury released the UK Government Green Financing Framework ahead of an inaugural green gilt issuance in September 2021 of £10bn, with a second issuance of £6.1bn in October 2021. In addition to participating in the UK’s first green gilt issuance, Barclays also acted as Duration Manager on the £4.5bn tap of the UK’s second Green Gilt in September 2022. Despite a highly volatile market at that point in time, the transaction was well received by investors; a testament to the markets’ support for the UK Debt Management Office and the commitment of the Syndicate for the transaction. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Sustainable and Impact Banking The Sustainable and Impact Banking team is a dedicated sector coverage team focused on advising and raising capital for emerging climate technology companies across four key verticals: clean energy, sustainable materials and recycling, food and agriculture tech and carbon management. The team also provides financial advisory services to existing banking clients on energy transition matters via our ESG advisory team. Regular interaction with funds with ESG mandates and other stakeholders inform our client dialogue. Advancing decarbonisation with Haffner Energy Barclays supported decarbonisation and green hydrogen leader Haffner Energy IPO, raising €74.4 million in one of Europe’s first IPOs in 2022. €74.4m raised by Barclays supporting decarbonisation and green hydrogen leader Haffner Energy IPO Barclays PLC Annual Report 2022 110 The family-owned business, based in north east France has 30 years’ experience in providing engineering, procurement, construction and construction management solutions for global biomass-to-energy projects. In 2021, Haffner Energy sought guidance to help shape and manage the company’s IPO ambitions. Barclays’ Equity Capital Markets team partnered closely with its Sustainability and Impact Investment Banking colleagues and Haffner Energy executives to align the company’s equity story to its unique modular carbon sequestration and hydrogen technology, HYNOCA®, which converts sustainable biomass into carbon-negative green hydrogen. This repositioned the offering from a story of a green hydrogen solutions provider, to one of a decarbonisation solutions provider in the global transition to a low-carbon economy. This combination of innovative technology alongside the strength of the management team provided an attractive proposition for investors, despite the strong volatility and market backdrop of early 2022. + Further details on Haffner Energy can be found online at: cib.barclays/investment-banking/advancing- decarbonisation-with-haffner-energys-ipo.html Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 ESG across our research teams Barclays Research has continued to invest in its ESG research capabilities and thought leadership this year. We hired a Head of Asia ESG Research and further strengthened our ESG teams in Europe and the US. Our approach to ESG Research is differentiated through broad-based engagement with ESG issues and higher quality insights with our investor clients. The ESG Research team works closely with coverage teams to identify and analyse material ESG opportunities and risks and to integrate ESG into their analysis and recommendations. The team also analyses how investors measure and consider ESG factors in the investment process to help asset managers structure their portfolios and investment decisions. There have been over 400 ESG-focused research reports published in 2022 and over 800 bottom-up, company- specific ESG profiles published to date. Our expectation is that topics such as climate change and decarbonisation, as well as other sustainability themes and specific ESG attributes will continue to grow in importance, and that the global momentum behind ESG investing will continue at pace, making it an essential requisite for a large and growing number of investors. During 2022, ESG Research hosted over 25 ESG- related client events, including the third annual Barclays ESG Research conference and Barclays ESG Emerging Market Corporate Day. + Further details on ESG Research can be found at: cib.barclays/research Sustainable and Thematic Investing The Sustainable and Thematic Investing Research team at Barclays focuses on sustainability and long-term thematic disruption. Their reports are produced in conjunction with sector analysts with the aim of identifying multi- year sector trends that could help shape the future business environment. Typically, the team identify topics with a 5 to 10 year time horizon, with the investment opportunities spanning both public and private companies. To aid thematic and ESG investors, the team maintain an investment framework known as the ‘2030 Thematic Roadmap: 150 Trends’ and have published reports on various trends relating to disruptive technology, sustainability and demographic change. The team have also developed a range of investment tools including trend momentum scores, UN SDG mapping and company revenue tagging. Relevant 2022 publications include Biodiversity, Food Security, Sustainable Aviation Fuel, Food Waste, Virtual Try-On, Electronic Waste and Social Inclusion. + Further details on the Sustainable and Thematic Investing Research team can be found at: cib.barclays/ our-insights Sustainable Product Group The Sustainable Product Group focuses on increasing sustainability-related dialogue with our clients and delivers a broad range of green and sustainability-linked banking products. The Sustainable Product Group’s offering includes project finance; green and sustainability-linked trade; corporate lending and fund financing products. Clients benefit not only from sustainability-related products but also from the greater connectivity with Corporate and Investment Banking teams as well as the wider Group. Barclays PLC Annual Report 2022 111 Supporting Motability Operations with its financing needs Barclays has a longstanding and established relationship with Motability Operations Group PLC, a purpose-driven company and the UK’s largest vehicle lessor who provide the Motability Scheme to over 650,000 disabled people. Having launched its Social Bond framework in 2020, which Barclays supported as a joint ESG structuring advisor and in 2022, Motability Operations continued to align its financing requirements to its sustainability strategy. Motability Operations worked with Barclays, leveraging our ESG expertise, to develop and structure bespoke KPIs and targets to account for its evolving sustainability strategy, priorities and needs of its customer base. In October 2022, Barclays, acting as both Joint Mandated Lead Arranger and Sustainability and Documentation Coordinator, helped Motability Operations secure £1.9bn of sustainability- linked term and revolving credit facilities. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2022 112 TCFD Strategy Recommendation (b) | Strategic Pillar 3 Treasury green programmes Barclays Treasury plays a key role in helping Barclays to meet its climate goals by allocating, managing and governing its financial resources effectively, and executing sustainable principal investments and transactions, partnering with businesses to advance strategic climate objectives in the transition towards a low-carbon economy. Sustainable Impact Capital Our Sustainable Impact Capital portfolio, led by the Barclays Principal Investments team in Treasury, has a mandate to invest £500m into global climate tech start-ups through our Sustainable Impact Capital portfolio by the end of 2027, helping to support our clients’ transition towards a low-carbon economy. + Further examples of our green innovation financing can be found at: home.barclays/sustainability/our-position-on- climate-change/accelerating-the-transition/sustainable- impact-capital/ From the acceleration of innovative carbon efficient technologies and supply chains to supporting the development of viable markets for carbon capture and sequestration, the programme is seeking out and supporting clear, scalable propositions that deliver both environmental benefits and economic returns. We aim to fill growth stage funding gaps to help accelerate and scale catalytic and strategic solutions to environmental challenges. We have made meaningful progress towards building a portfolio of strategic investments which have a focus on reducing carbon footprints and accelerating the transition towards a low- carbon economy. £89m of the £175m overall target has been deployed since 2020, with £35m invested in 2022, up 16% from 2021. 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. + Further examples of our entrepreneur and innovation programmes can be found on pages 105 and 106. Achieved to date £89m Sustainable Impact Capital £m n 2020 n 2021 n 2022 n Target by 2027 MOF Technologies An example of how Barclays is supporting technology that will drive the transition to a low-carbon economy is the investment in MOF Technologies. A spin-out from Queen’s University Belfast, MOF Tech has developed an energy efficient carbon capture system, Nuada, to reduce harmful emissions from cement works, steel works, or energy-from- waste plants. They have expertise in a class of nanomaterials known as Metal-Organic Frameworks (MOFs). MOFs are solid, sponge-like materials tailor- made to capture and separate gases like CO2. In May 2022, MOF Technologies announced that it would start work on an infield pilot involving three of the world’s major cement companies – Heidelberg Materials, Cementir Holding and Buzzi Unicem - as part of the Global Cement and Concrete Association’s Innovandi ‘Open Challenge’ to achieve net zero concrete by 2050. With the cement industry accounting for 7-8% of global carbon emissions, the impact opportunity for MOF Tech’s pioneering technology is substantial and Barclays looks forward to supporting them as they scale. + Further details can be found at: home.barclays/news/press- releases/2022/10/barclays-invest-in-mof-technologies-/ 243035500Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Naked Energy Barclays is actively supporting the energy transition through Sustainable Impact Capital investment in the British design and engineering business Naked Energy. It specialises in global innovation in solar thermal and solar PVT (PV-Thermal) with a mission to ‘change energy for good’ by heat decarbonisation. Heat is responsible for 51% of all energy demand and accountable for 40% of carbon emissions globally. 90% of all heat consumption still comes from fossil fuels. The key to decarbonising heat is through large- scale deployment of distributed renewable heating solutions, such as solar thermal. Solar thermal heating systems provide a reliable, and more resilient energy infrastructure by offering zero carbon heat affordably and space efficiently. Additionally, modern thermal storage technology allows end-customers to benefit from affordable clean heat throughout the year. The International Energy Agency estimates solar thermal and geothermal production will meet 75% of all heat demand by 2050 – putting solar thermal energy at the heart of working to meet the goals and timelines of the Paris Agreement. Naked Energy’s Virtu product range addresses end- customers with a constant heat demand, such as hospitals, multi-dwelling residential developments, hotels, leisure centres and manufacturing, e.g. food and beverage industries. Virtu allows businesses to maximise the potential of their roof space by generating more energy per m2 than other solar technologies. VirtuHOT (solar thermal) and VirtuPVT (combined solar heat and power) produce 50-100% more energy per m2, deliver three to four times more carbon savings (when compared with PV) and up to 50% greater returns. It is a versatile solution to delivering on a company’s ESG targets. Decarbonisation impact Since becoming commercially active in 2018 Naked Energy has sold more than 5,000 Virtu collectors, to over 60 projects in 13 countries. In total Virtu has abated over 274 tonnes of carbon emissions. + Further details can be found at: nakedenergy.com/ or home.barclays/news/ for press release updates Barclays PLC Annual Report 2022 113 ECOncrete Barclays’ Sustainable Impact Capital investment in ECOncrete Tech, a pioneering start-up delivering high-performance ecological concrete technologies, demonstrates our support for innovative environmental solutions. The technology seeks to enhance marine life on offshore and coastal infrastructure, which can be used for shoreline protection, waterfront infrastructure and offshore applications. The technology creates new biologically available surfaces for marine life such as oysters, corals or barnacles, while preserving and strengthening the infrastructure’s functional and structural properties. Species like oysters, for example, become a critical ecological stepping stone for additional organisms to live on and around a structure and also act as biological glue, enhancing the strength and durability of structures. Compared with traditional concrete, ECOncrete’s technology has shown the ability to double the biodiversity and abundance of marine species, provide an active carbon sink over the lifespan of the structure, and significantly improve water quality. This is due to their patented admixture and unique design which has been peer revieweda and evaluated by marine scientists. ECOncrete’s activities are helping to solve a key environmental challenge for the coastal and marine industries, improving the health and resilience of surrounding ocean life. Barclays’ support in ECOncrete’s growth ambitions through Sustainable Impact Capital equity investment will help enable ECOncrete to expand rapidly into new markets and scale operations into large-scale projects. Note a icevirtuallibrary.com/doi/abs/10.1680/fsts.59757.124 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Strategic ESG transactions 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 n Green structured notes n ECP 88 135 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 2021 2020 Against an ambition to get to a portfolio size of £4bn over time Barclays PLC Annual Report 2022 114 Green bond investment portfolio impact by sector (%) n Renewable energy n Transport n Other 39 45 10 n Water and waste n Agriculture 3 3 Green bond investment portfolio impact by region (%) n Europe n Asia n South America 86 3 3 n Africa n North America 4 4 2.83.43.139451033863344Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Private Bank Responsible Investing In our Private Bank, Responsible Investing means integrating material ESG considerations (among others) into our investment decisions and fulfilling our stewardship responsibilities through engagement and voting. We regard Responsible Investing as an integral element in meeting our fiduciary duties towards our clients. Our Discretionary Portfolio Management (DPM) services are offered across the Private Bank and sit at the core of the Private Bank's long-term strategy. Our DPM Traditional strategies include the Global Multi-Asset Class Strategy, Equity strategies and Fixed Income strategies. Our DPM Sustainable strategies are the Multi-Asset Class Sustainable Total Return Strategy and the Sustainable Global Equity Strategy. While we incorporate the same approach in each of our discretionary strategies and in all jurisdictionsa in which we operate, we may have portfolios with specific requirements where we need to vary our approach to our core strategies. For our Traditional strategies, we maintain a standard set of exclusions that do not allow us to invest in businesses we view as being involved in the manufacture of controversial weapons and we consider material ESG risks as part of the standard investment process. For our Sustainable strategies, more detail can be found in the Sustainable Investing Solutions section below. All our DPM strategies seek to deliver competitive investment returns for our clients and create long-term value for stakeholders. We believe that Responsible Investing helps us achieve this. As a long-term investor, we believe material ESG issues can impact portfolio returns and are relevant considerations in managing risk effectively and delivering successful investing outcomes for our clients. Understanding how businesses are, for example, impacting the environment, engaging with employees and key stakeholders and practising good governance helps us understand how well these businesses are positioned now and for the future. Engagement and voting . We undertake engagement and voting in partnership with our stewardship services provider, EOS at Federated Hermes (EOS)b. We view engagement and voting as an important mechanism through which to hold management to account and act as a lever to promote change in investee companies on material ESG issues where appropriate. We believe companies that can better manage material ESG issues could be less prone to severe incidents, such as fraud, litigation or reputational risks. In 2022, across our UK and Jersey DPM services, we voted at 125 shareholder meetings, supporting management on 88% of the resolutions we voted on. This, alongside our engagement practices, reflects our approach of promoting constructive dialogue with our investee companies by building long- term relationships to seek to influence ESG and other practices. Our engagement and voting activities are publicly available to all stakeholders on the Barclays Private Bank website. We believe that such transparency is an integral part of good governance. + Further details on our responsible investing can be found at: privatebank.barclays.com/what-we-offer/investments/ responsible-investing-engagement-and-voting-activities Sustainable Investing Solutions Launched in 2018, our Sustainable Investment strategies seek to invest in businesses that provide products and services to support the transition to a more sustainable economy. These strategies exclude certain companies that generate revenues over our internally defined thresholds from adult entertainment, alcohol, armaments, gambling, fossil fuels tobacco and controversial weapons. We also identify businesses that we believe are able to mitigate ESG risks from an investment perspective and also demonstrate high standards of non-financial ESG quality (e.g. high quality environmental standards or safe working environment). These businesses must also address sustainability considerations through their economic activities, by aligning to at least one of the United Nations' Sustainable Development Goals (UN SDGs). Responsible Lending We are expanding our credit offering with Green Private Bank Mortgages, launching in 2023. We intend to offer a discounted arrangement fee for UK-based new-build properties with an EPC rating of A-B to incentivise clients to seek out energy efficient properties and to encourage home builders to achieve maximum energy efficiency from their projects. Clients will also be supported in improving the energy efficiency of their existing properties, primarily through retrofitting their homes. We are enhancing our lending policy in order to support clients who wish to make their homes more energy efficient and will work with industry experts to understand how best to do this with the properties in our portfolio. For example, listed buildings are subject to strict planning regulations and therefore require a bespoke approach. Barclays PLC Annual Report 2022 115 To further support clients in making their homes more energy efficient, we have a plan of education and guidance for clients and we intend to launch our Private Bank ‘Sustainability Hub’, which will provide clients with information on financial products and services we offer that may support them to refurbish their home in ways that may improve their home's energy efficiency. This information is available to all clients and throughout 2023 we will produce an Insights series to provide further education specific to the types of properties in our portfolio. We are building relationships with partners in the wider real estate domain, such as freeholders, brokers, and estate agents, to ensure a joint approach to reducing carbon emissions on properties. Notes: a The exception is India where we offer strategies developed for the local market. ESG integration and engagement and voting are not undertaken. b Engagement (on select material ESG issues) and voting activities are being exercised in relation to all of our Private Bank DPM investment strategies globally with the exception of services provided in India. Engagement activity is undertaken for our fixed income and equity holdings, while voting activity is only undertaken for our equity holdings. Please note, engagement and voting activities have been undertaken for portfolios managed in Ireland, Switzerland and Monaco since Q4 2022 and relevant reports for these regions are expected to be publicly available commencing Q1 2023. It is our intention to exercise voting in all markets, although at times our ability to do so may be hindered by regulatory and practical considerations as well as internal restrictions. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2022 116 TCFD Strategy Recommendation (b) | Strategic Pillar 3 Wealth Management and Investments Barclays Wealth and Investments factors Responsible Investing into our discretionary portfolio and fund investment solutions. The vast majority of our clients’ assets are managed by external fund managers. We aim to assess each of those active investment managers based on their ESG credentials amongst other relevant factors. Every manager’s offering is given a single standalone score from A to C for ESG considerations – reflecting both their intent and their outcome. We focus on how ESG is embedded across each of five key areas: the Parent company; the People managing the assets; the investment Philosophy employed; the robustness of the Process; as well as the Performance achieved (‘The 5 Ps’). Ultimately, we award an ESG score for every fund that we recommend or invest in. The team uses data from different sources including investment managers and MSCI ESG Manager, and as such there may be some limitations. We are involved in a number of industry initiatives. Examples include the United Nations Principles of Responsible Investments (UNPRI) to which we have been a signatory since 1 April 2016 and which rated us 4* for our Manager Research (note that this latest rating covers the period before we started to formally vote and engage with our underlying holdings). Additionally, we have a Multi-Impact Fund that incorporates not just responsible investment principles but investments targeting specific sustainability and societal outcomes. We are also working towards becoming a signatory of the Stewardship Code in 2023. EOS, as our voting and engagement provider, regularly provides voting recommendations to us on our company holdings. We operate a filtering process on these recommendations ensuring that we review, and amend if necessary, any particularly noteworthy votes. They also engage on behalf of clients and Barclays with a wide range of stakeholders including government authorities, trade bodies, unions, investors, and NGOs, to seek to identify and respond to market-wide and systemic risks. In addition, EOS provides a range of formal qualitative and quantitative reporting for Barclays on a regular basis outlining how they have implemented our engagement policy. Our engagement and voting activities are publicly available to all stakeholders on the Barclays Wealth & Investments website. We believe that such transparency is an integral part of good governance. Under the EU Sustainable Finance Disclosure Regulation (SFDR), we have converted most of our Irish-domiciled fund range to satisfy the criteria of Article 8. This was introduced to improve transparency in the market for sustainable investment products, to prevent greenwashing and to increase transparency around sustainability claims made by financial market participants. It is primarily predicated upon adding several exclusionary screens and seeking to mitigate climate change. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2022 117 TCFD Strategy Recommendation (b) 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 264. 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™, 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) 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. Skills, culture and training Building our expertise We continue to invest in our resource and capabilities to ensure colleagues across the organisation have the appropriate skills, competencies and knowledge to execute our climate strategy and transition plan. During 2022, we had two main objectives. Firstly to ensure our people had a good understanding of climate change risks and opportunities, as well as their responsibilities under the bank's evolving approach and policies - training was developed to address this and was targeted at impacted colleagues. Secondly we wanted to embed a more general understanding among a broader internal audience of climate change, its impacts on society and the bank's strategy and response. During 2022, mandatory online training modules were provided to over 14,600 colleagues across Risk, Compliance, Internal Audit and other functions covering climate as a Principal Risk. A separate mandatory online module was implemented across the Corporate and Investment Bank, Trade and Working Capital as well as other client-facing teams, which covered climate change, how the firm manages Climate risk, as well as the Group's sustainability-related statements and policy positions and how they should be applied. + Further details on Barclays' sustainability statements and policy positions can be found from page 60. In addition, for the benefit of a broader internal audience, a centralised resource on the internal employee training website was created called 'Sustainability' with the focus on 'Addressing climate change' where selected existing and new ESG-related training material was placed. This included e-learning modules and videos on a range of topics including but not limited to climate change and its impacts, Barclays' climate change strategy, BlueTrackTM, and climate change and the financial sector. This provides colleagues the opportunity to enhance their understanding of the topic. Barclays PLC Annual Report 2022 118 Incentives For Executive Directors, a proportion of both bonus and Long Term Incentive Plan (LTIP) is driven by non-financial performance measures, including measures related to climate and sustainability and colleague measures, including diversity, inclusion and engagement. + Further details on Barclays' remuneration can be found from page 197. Barclays’ performance against non-financial measures (including ESG metrics) is also explicitly considered in the determination of the incentive pool and therefore directly impacts pay levels of employees as a whole. In 2022, non-financial performance was assessed against three categories: Customers and clients, Colleagues and Climate and sustainability. The Colleague category included measures of diversity, inclusion and engagement. The Climate and sustainability category included climate-related measures including performance against green financing targets, emissions financing reduction targets, carbon footprint reduction and increase in renewable energy usage, as well as measures relating to our investment in communities. A series of three educational videos to explain how Barclays is addressing climate change were widely publicised to colleagues via a dedicated internal communications campaign, each video explaining one of Barclays' three climate strategy pillars. Since the creation of the initial series, we have published two further videos providing colleagues with updates to our progress against two of the pillars: achieving net zero operations and financing the transition. Across the Corporate and Investment Bank, colleagues attended a series of talks titled ‘Confident ESG Conversations’ featuring internal experts who delivered insights and briefings on Barclays' climate strategy, with a focus on action needed to both deliver for Barclays and to support our clients’ own climate objectives. A 'Sustainability Academy' was launched on 12 December 2022; the programme enables c.300 Corporate Bank employees to trial two separate 16-week ESG training initiatives co-delivered by Barclays and two external ESG training providers. The training will serve as a pilot, with a view of further expansion within Barclays following completion. The Sustainability Academy seeks to deepen ESG knowledge and capability within our front office teams so that we can best help clients transition to net zero whilst also driving growth and Client Satisfaction scores. In the Business Bank, a core training module was delivered to over 1,200 colleagues which covered climate-related concepts, risks, opportunities and legislation. There were also targeted training modules to meet the needs of bankers who cover customers in the agriculture sector and in the specialist client solutions team. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) Just transition and nature and biodiversity We have continued to develop our work on just transition and nature and biodiversity, which are intrinsically connected to efforts to mitigate and adapt to climate change. We aim to enhance our understanding of the interdependencies between climate action, nature and biodiversity and the social aspects of the transition to net zero. This is in line with the increasing support of international policy frameworks to address just transition as part of climate strategies, as well as the new Global Biodiversity Framework, adopted at COP15, which references the impacts of climate action and social dimensions related to nature. This also aligns with ongoing work in the development of the Taskforce on Nature-related Financial Disclosures (TNFD) and initial guidance of the UK Transition Plan Taskforce. There is clear evidence that climate change and nature and biodiversity loss have significant interdependencies, where change in one area can impact the other. We are reviewing ways in which these interlinkages could be addressed together when considering the bank's environmental impacts, dependencies and opportunities. One example of this is our participation in the UNEP FI TNFD pilot, as part of which we have tested a number of nature and climate scenarios on our European Agriculture and Food portfolio. + Further details on the TNFD pilot can be found on page 120. Barclays recognises the need for financial institutions to integrate social considerations into their net zero plans and targets, and in their contributions to nature-positive goals. Just transition International policy frameworks provide broad support to address just transition within climate strategies. The Just Transition Declaration, adopted at COP26, committed governments to ensure that workers, businesses and communities are supported as countries transition. At COP27, Barclays participated in a panel discussion with the International Chamber of Commerce regarding unleashing the full potential of sustainable finance, highlighting that a just transition is crucial for reaching net zero and financial institutions need to put it at the heart of what they do. More broadly, efforts were intensified during COP27 to ensure that Just Transition was a prevalent theme throughout conversations for governments, business and finance, trade unions and civil society. Notably, a breakthrough for climate justice was reached with the 'loss and damage' fund providing financial assistance for vulnerable countries impacted by climate disasters. While still at a relatively nascent stage, the strategic importance of the just transition is rapidly becoming clearer, and first efforts are being made by governments, businesses and financial institutions to deliver a transition to net zero underpinned by the principles of social justice. Barclays is working to build an approach to a just transition cognisant of the important dynamic between climate actions and social justice, while being mindful of the potential interconnectedness with biodiversity. We are playing our part to translate the concept of a just transition into tangible actions for the industry, by continuing our engagement with Financing a Just Transition Alliance (FJTA) and other key initiatives: • as part of our engagement with the FJTA, we actively participated in the development of the 'Making Transition Plans Just' report that begins to provide non-binding guidance to financial institutions on how they can integrate the social dimension of climate action in their net zero transition plans • Barclays is also a member of the CISL Banking Environmental Initiative (BEI) and through this initiative, Barclays has engaged with member banks on practical steps that banks can take to support SME customers with a just transition • we have worked closely with Ceres to develop an understanding of just transition in the US context. As part of our work on client transition plans, we have launched a pilot assessment to evaluate whether certain of our clients are considering how to decarbonise in line with a just transition for their stakeholders, considering the social risks and opportunities of the transition and ensuring effective dialogue with affected stakeholders. + Further details on the just transition within the Client Transition Framework can be found on page 97. Barclays PLC Annual Report 2022 119 Our approach to nature and biodiversity Banks have an important role to play in stewarding nature-positive finance and managing their nature-related risks. Nature and biodiversity is a growing ESG focus for Barclays and the wider industry, given that nature and its ecosystem services fundamentally underpin economies and societies. Nature and biodiversity are also important to the sector due to their interlinkages with climate change. During 2022, nature and biodiversity loss continued to be recognised at a global scale. The Convention on Biological Diversity (CBD) COP15 in December saw the agreement of the new Global Biodiversity Framework, which will be the framework for national and international action. For companies and financial institutions, the Taskforce on Nature-related Financial Disclosures (TNFD) released its third draft iteration of the framework for organisations to assess and disclose on nature-related risk and opportunity. At Barclays we recognise the important role of the finance sector in stewarding responsible finance towards a nature-positive future. We continue to work to build an understanding of the ways in which our financing activities impact nature, as well as the ways in which the bank and our clients depend on nature. This includes engaging with industry groups and our membership of the TNFD Forum. We also continue to review the ways in which our financing activities can help to facilitate a nature-positive future. We recognise interlinkages across environmental and social themes, in particular key crossovers with our approaches to climate change and human rights. Given these interdependencies, it is important for banks to consider nature-related considerations alongside other ESG factors, such as climate change and social considerations. + Further details on our approach to nature and biodiversity in our own operations can be found on page 83. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) Nature-related risk in financing We include financing restrictions that seek to address nature-related risk within our position statements on Forestry and Agricultural Commodities, World Heritage Sites and Ramsar Wetlands, and Climate Change. We continue to review and monitor the ways in which we can strengthen our approach. For example, see page 253 for details of our due diligence approaches to climate change and deforestation. We have continued to develop our understanding and ability to evaluate nature- related risk in financing, building on the work started in 2021. This included working with an external expert on a materiality exercise to produce an initial portfolio heatmap to analyse nature-related risk by sector and exposure across our lending portfolio. This involved a qualitative review of sector impacts and dependencies across a number of key risk drivers representing both physical and transition risks, to determine where in the portfolio were the likely areas of highest risk. TNFD pilot with UNEP FI - European Agriculture and Food In 2022, the TNFD published a draft version of its risk management and disclosure framework for organisations to report and act on evolving nature-related risks. UNEP FI is piloting this framework with approximately 40 financial institutions - Barclays is participating in their pilot group focused on European agriculture and fisheries, which in the Barclays context means agriculture and food sectors. As part of the pilot programme, we worked with an external expert to test the draft TNFD framework, including the proposed risk assessment process (LEAP FI), on our agriculture and food portfolio in Europe, with a focus on UK farming. We have been part of a TNFD pilot group led by UNEP FI to test the draft TNFD Framework. As part of the pilot, we looked specifically at agriculture and food in Europe, with a focus on UK farming, in which Barclays has a significant presence. We recognise the need for continuous improvement with regard to available data and technologies, in particular noting the complexity and challenge given the number of nature attributes and their associated metrics. We will therefore continue to support the development of methodologies which seek to better evaluate risk impacts and dependencies at a portfolio level. For example, we have trialled an emerging modelling methodology in order to support our participation with the UNEP FI work, which draws upon a wide range of available data and also adopts assumptions where there are gaps. + Further details can be found in our position statements on the Barclays ESG Resource Hub at: home.barclays/ sustainability/esg-resource-hub/ Further details on our position statements can be found in the non-financial information statement from page 60. This involved assessing our clients’ locations in terms of production and sales and applying a number of biodiversity metrics to each location to determine where key impacts and risks may arise. A number of different 2030 scenarios were also used to stress the portfolio and individual counterparties, to see whether material financial impact could arise as a result of nature-related transition and physical risks. The results are currently being reviewed internally to assess how they could be used alongside existing climate risk procedures. Barclays PLC Annual Report 2022 120 From a biodiversity perspective, the annual targets include a commitment to increase biodiversity net gain (BNG) across Cairn’s new developments measured as a percentage of overall new homes commenced. BNG delivers measurable improvements for ecology by protecting, enhancing and creating habitats in association with development and Cairn's approach includes a development-specific biodiversity programme that replaces or improves the local biodiversity of each new Cairn development or otherwise contributes to the improvement of Ireland’s biodiversity. Barclays nature-linked financing - Cairn Homes plc Biodiversity Linked SLL Barclays Corporate Banking Sustainable Product Group (SPG) provided support to Cairn Homes plc (Cairn) in the selection of meaningful targets and indicators linked to certain sustainability performance targets. In July 2022, Cairn completed a refinancing of its €277.5m syndicate facility into a sustainability linked term loan (SLL) and revolving credit facility (RCF), one of the largest of its type arranged in the Irish homebuilding sector, with AIB, Bank of Ireland and Barclays Bank Ireland. The term loan and revolving credit facility interest rates are linked to Cairn meeting certain sustainability performance targets on biodiversity, decarbonisation and its people strategy. Nature-related financing While the market is at a relatively early stage, nature-related financing presents significant future opportunities for the financial sector given the capital requirements to address and reverse nature loss: the biodiversity financing gap is estimated to be in the region of $598-824bn per yeara. At Barclays, we will continue to work towards green and sustainable finance targets which include financing relevant to nature and biodiversity. This includes categories such as ‘sustainable food, agriculture, forestry, aquaculture and fisheries’ in addition to financing that tracks against Sustainable Development Goal (SDG) 14, Life Under Water, as well as SDG 15, Life on Land. Examples include a sustainability-linked facility that includes biodiversity targets, as well as investment by Barclays Principal Investments. We seek to support impactful projects through our partnership with Blue Marine Foundation through which Barclays has financed projects which help to support the protection, restoration and sustainable management of the world’s ocean. + A breakdown of Barclays' sustainable financing, including against the SDGs, can be found on pages 99 to 102. Details of Barclays Principal Investments team investment in ECOncrete can be found on page 113. Note a Paulson Institute, Financing Nature: Closing the Global Biodiversity Financing Gap (2020) Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2022 121 TCFD Strategy Recommendation (b) Engagement We see collaboration and engagement across industry as essential for sharing learnings across the sector and a successful transition to nature- positive future. A key component of this is our membership of the TNFD Forum. During 2022, we provided feedback to the TNFD on their draft framework and conducted an internal mock disclosure exercise to understand our progress towards making a comprehensive disclosure against the framework in the future. + A table signposting our disclosures on nature and biodiversity can be found within the ESG Data Centre on Barclays ESG Resource Hub at: home.barclays/sustainability/ esg-resource-hub/reporting-and-disclosures/ In 2022, we have continued engagement with a number of industry and cross-sector groups, including the Banking Environment Initiative (BEI), part of the Cambridge Institute of Sustainability Leadership (CISL). As part of the BEI’s nature- related finance steering group we fed into to the paper ‘Integrating climate and nature: The rationale for financial institutions’. We further worked with the Association for Financial Markets in Europe (AFME) and EY to contribute to their paper 'Into the wild: why nature may be the next frontier for capital markets.' + The' Integrating climate and nature: The rationale for financial institutions' paper can be found at: www.cisl.cam.ac.uk/resources/publications/integrating- climate-and-nature-rationale-financial-institutions The 'Into the wild: why nature may be the next frontier for capital markets' paper can be found at: www.afme.eu/ publications/reports/details/Into-The-Wild-Why-nature-may- be-the-next-frontier-for-capital-markets Barclays' partnership with Blue Marine Foundation Barclays completed the second year of our three-year partnership with the Blue Marine Foundation to support them in seeking to deliver their goal of ensuring that at least 30% of the global ocean is effectively protected and the other 70% sustainably managed by 2030. Protecting blue carbon habitats is a critical part of mitigating against climate change as they act as significant carbon sinks. Our donation has, so far, contributed to this by helping to secure the protection of 300km2 of seabed and kelp forests on the south coast of the UK, and catalysing an ecosystem restoration project in the Solent. In 2022, Blue Marine built the case for a network of highly protected marine areas (HPMAs) using pilot sites, and was a key stakeholder in the process resulting in a commitment from Government to designate and manage a network of HPMAs in England. Our donation continues to support thought leadership with a focus on conservation finance, blue carbon and oceanic climate change. Recognising the critical links between the ocean and the issues of climate change and biodiversity loss, this partnership is an example of how collaboration between NGOs and the corporate sector can bring together new opportunities for nature-positive action and seek to make progress against the gap in financing for climate and biodiversity solutions. + Further details on the Blue Marine Foundation can be found at: bluemarinefoundation.com/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) Engaging with industry We know that leveraging the relationships we hold with stakeholders can support all of us in achieving our objectives. For the world to transition at pace and to keep global warming at 1.5 ° above pre-industrial levels, all actors in the economy have to play their part, adapt and innovate. Against this backdrop, engagement with others in our industry - experts, key stakeholders and our peers - and sharing knowledge is vital, noting that in doing so we remain mindful of regulatory considerations. Through appropriate engagement with industry experts, academics and peers, we have benefited from, as well as contributed to conceptual discussions assessing the pathways to a low- carbon economy, considered emerging methodologies and taxonomies and worked to develop tools and best practice in data sourcing. By sharing and being open about challenges in this new discipline where permissible, the industry is building knowledge and thought leadership to enable advancement. We have partnered with civil society organisations, such as RMI whereby we have joined 12 other FIs to become a strategic partner of their Centre for Climate Aligned Finance. Barclays has contributed to sector-wide ambitions and the development of solutions through participation in initiatives including the Net-Zero Banking Alliance (NZBA), the Glasgow Financial Alliance for Net Zero (GFANZ) and the Sustainable Markets Initiative’s Financial Services Taskforce. These groups bring together peers under a common set of principles, and help to support members’ unilateral implementation of those principles through the independent targets and plans they adopt, through sharing knowledge and publishing additional guidance or research. The issues we grapple with are shared by many in the industry. One example is the work we are doing with the Global Financial Markets Association (GFMA) Climate Data Standard working group, which is working towards development of a voluntary industry wide, standardised data collection template for decision relevant data. To prevent inefficiencies, for example through unnecessary duplication of effort, and encourage widespread adoption of a solution, Barclays joined peers and industry experts to try and tackle one of the biggest challenges facing the industry: a lack of robust and comparable data. We have publicly supported industry-wide engagements, including at events, roundtables and panel discussions including at COP27 and COP15. Topics covered included improving reporting for accelerated reductions, unleashing the full potential of sustainable financing, supporting a timely transition and embedding climate and nature into corporate decision- making. + Further details of our just transition related engagements can be found on page 119. Further details of our nature and biodiversity related engagements can be found on page 121. Barclays' register of our engagement with industry initiatives, working groups and memberships can be found at: home.barclays/sustainability/esg-resource-hub/reporting- and-disclosures/ Barclays PLC Annual Report 2022 122 Department for International Trade’s Green Trade & Investment Expo Barclays has joined forces with the Department for International Trade (DIT) to sign an industry-leading five-year partnership agreement to broaden, deepen and sharpen efforts to drive increased exports and trade and investment opportunities for UK businesses of all sizes. The Green Trade and Investment Expo (GTIE) is a UK Government-led conference to position net zero as a key driver of the UK’s future economic growth and highlight the commercial opportunities around the transition. GTIE is the precursor to the next Global Investment Summit in 2023, for which Barclays was the headline sponsor in 2021. This partnership underlines the importance of building strong private and public sector relationships to unlock increased trade, export and investment opportunities post- COVID. From start-ups looking to step onto the exporting ladder, or established corporates looking to expand their global offering, clients from across the bank will be able to capitalise on the benefits of closer working between Barclays and the DIT. + Further details can be found at: home.barclays/news/ press-releases/2022/060/barclays-and-department-for- international-trade--dit--announce-i/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) In addition to our engagements with industry working groups and events, we have worked with governments in the geographies where we operate to support them in their adoption of net zero targets and strategies. + Further details of our engagements with governments can be found on page 126. PCAF Working Group on Capital Markets Activities Since 2020, Barclays has been an active member of the Partnership for Carbon Accounting Financials (PCAF), an industry-wide initiative which aims to build consensus on approaches to carbon accounting, disclosure and portfolio alignment. In 2022, and for the second year running, Barclays co-chaired the PCAF Capital Markets working group which is tasked with In striving towards a common reporting framework to help support comparability and accountability, we were an early adopter of TCFD reporting in the UK, adopting and promoting the framework in 2017, prior to it become a regulatory requirement. We have also responded to the Transition Plan Taskforce’s call for evidence, and are part of the sandbox testing their recommendations. formulating an industry-wide standard for accounting for the emissions associated with capital markets activity. This year the working group built on the feedback from their November 2021 discussion paper and put out a proposed methodology to public consultation in September 2022. Final discussions are ongoing and a finalised methodology is expected to be published in 2023. + Further details can be found at: carbonaccountingfinancials.com/files/ downloads/pcaf-capital-market-instruments- proposed-methodology-2022.pdf Barclays PLC Annual Report 2022 123 Sponsor of Net Zero Delivery Summit Barclays was a sponsor of the Net Zero Delivery Summit 2022, an international summit that took place in London in May 2022, focused on net zero delivery and the progress being made against the key priorities for finance agreed at COP26. Our Group CEO, C.S. Venkatakrishnan, spoke as part of a panel of CEOs discussing net zero implementation and how the financial sector and the real economy can realise their net zero ambitions through credible, ambitious, transition plans. Commenting on the role of banks in the transition to net zero, Venkat reflected on how financial institutions were critical to driving progress during the industrial revolution through offering and pricing credit. Around 200 leaders from the Glasgow Financial Alliance for Net Zero, as well as from business, and financial and professional services, attended. + Further details can be accessed at: www.theglobalcity.uk/sustainable-finance/net- zero-delivery-summit-2022 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) Engaging with industry External initiatives, signatories or memberships Additional information Multi-thematic Barclays PLC Annual Report 2022 124 Cambridge Institute of Sustainability Leadership's Banking Environment Initiative Barclays is a founding member of the Banking Environment Initiative (BEI), a group of global banks working on actionable pathways towards a sustainable economy, convened by the Cambridge Institute for Sustainability Leadership (CISL). In 2022, Barclays engaged with member banks on the topics of just transition and nature. Ceres Barclays has been an active member of Ceres since 2019, participating in various working groups across environmental and climate justice, climate-related disclosures, policy engagement and biodiversity. In 2022, we partnered with Ceres to integrate a US perspective on just transition, conducting research to organise a stakeholder dialogue on the topic and spoke at their Financing a Net Zero Economy conference during New York Climate week on a Just Transition panel. United Nations Environment Programme - Finance Initiative Barclays has been a member of United Nations Environment Programme - Finance Initiative (UNEP FI) for more than 20 years and was a founding signatory of the Principles for Responsible Banking (PRB) as well as joining the Net-Zero Banking Alliance in 2021. From 2021, Barclays' Group Head of Sustainability has sat on the Western Europe Banking Board and our CEO joined the Leadership Council in 2022. LSE/Grantham Institute In 2021, Barclays joined over 40 financial institutions and stakeholders to form the Financing a Just Transition Alliance. In 2022 Barclays contributed to the report 'Making Transition Plans Just'. Taskforce on Nature-related Financial Disclosures Forum Barclays is a member of the Taskforce on Nature-related Financial Disclosures Forum (TNFD), which is a consultative network of institutional supporters who share the vision and mission of the TNFD. In 2022, we participated in a pilot led by UNEP FI to test the draft TNFD framework. Just transition Nature and biodiversity Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) Engaging with industry Industry collaboration Climate and sustainability Additional information Barclays PLC Annual Report 2022 125 Glasgow Financial Alliance for Net Zero In 2022, Barclays contributed to a publication ‘Guidance on Use of Sectoral Pathways for Financial institutions’ published in June. Net-Zero Banking Alliance In 2021, Barclays was a founding member of the Net-Zero Banking Alliance. Since 2022, Barclays has co-led the Sector Work Track within NZBA. Oxford Sustainable Finance Group & the UK Centre for Greening Finance and Investment In October 2022, Barclays announced a three-year partnership with Oxford to work on developing a credible methodology for monitoring emissions and creating transition pathways in the agriculture sector, Partnership for Carbon Accounting Financials Barclays has been a member of PCAF since 2020. During 2022, Barclays co-chaired a Capital Markets Working Group of eight global banks that have developed a proposed methodology to account for the emissions associated with capital markets transactions. PRA/FCA Climate Financial Risk Forum The Climate Financial Risk Forum (CFRF) brings together UK regulators and senior financial sector representatives to share their experiences in managing climate-related risks and opportunities. During 2022, Barclays chaired the Transition to Net Zero Working Group (TNZWG). RMI's Center for Climate Aligned Finance In September 2022, Barclays became a Strategic Partner of Rocky Mountain Institute (RMI) Center for Climate Aligned Finance (CCAF). The Center acts as an implementation partner to banks seeking to align their investments with a net zero future. Sustainable Markets Initiative Barclays is a member of the SMI Financial Services Taskforce (FSTF) and co-chairs the Net Zero Group. The SMI was launched in 2020 by His Majesty King Charles III when in role as The Prince of Wales. World Business Council for Sustainable Development In 2021, Barclays became a member of the Banking for Impact on Climate in Agriculture (B4ICA) initiative which brings together banks to develop technical data-solutions to support themselves and their clients to align their financial portfolios in the food, agriculture, and land use space towards net zero and Paris Agreement goals. + Barclays' register of our engagement with industry initiatives, working groups and memberships can be found at: home.barclays/sustainability/esg-resource-hub/reporting-and- disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) Barclays' approach to public policy We have a responsibility to engage with governments and policymakers appropriately, whilst remaining politically neutral. Transparency and governance As a major economic and societal contributor to the communities in which we operate – whether via the products we offer, customers and clients we serve, the colleagues we employ, or contribution we make through our community investment programme – we believe it is also important to contribute to relevant public policy debates. We seek to engage constructively with policymakers in jurisdictions where the firm operates, including with governments, legislatures, regulators and other organisations. In our discussions, we have a responsibility to make contributions that are accurate, honest and evidence-based. We also believe that Barclays should only engage on issues where we have a legitimate interest (for example, where there is a direct consequence for our business, our customers and clients, or our colleagues). Responsibility for the co-ordination and oversight of public policy advocacy lies with the Group Head of Strategic Policy. Barclays retains the services of public affairs agencies in certain jurisdictions. These agencies primarily assist with political monitoring and strategic advice. We work very closely with these agencies, on a day-to-day basis, to help ensure that the Strategic Policy Group has oversight of the work being undertaken for the firm. Advocacy with public officials in the US is publicly reported, as required by the Lobbying Disclosure Act. Barclays also discloses its EU advocacy activities on the European Commission’s Transparency Register. Additionally, Barclays is a member of a number of trade associations globally. These associations work to represent their members, and for many this involves undertaking work to shape industry’s collective response to various public policy issues. We seek to be an engaged and productive member of all associations in which the firm participates, in respect of areas where we have a legitimate interest or expertise. The main mechanism for achieving this is through the committees and working group structures that exist within each trade association. To manage our major trade association engagement, the Strategic Policy Group monitors who from the firm sits on which working group and, where appropriate, supports senior executives occupying trade association Board positions. On our Public Policy Engagement website, we publish material Barclays responses to governmental public policy consultations in the UK and EU, along with the agencies we work with in different jurisdictions, and key trade association memberships. In the US and Asia, responses to public consultations are published on government websites. Active participation in trade association discussions to develop policy positions, such as working groups, helps to ensure that the public policy and advocacy positions adopted by trade associations are generally in line with Barclays’ own public policy objectives and any positions that are in conflict are identified. + Our Public Policy website can be found at: home.barclays/ sustainability/esg-resource-hub/reporting-and-disclosures/ public-policy-engagement/ Barclays PLC Annual Report 2022 126 Climate Policy Engagement We proactively seek opportunities for senior- level dialogue with policymakers to demonstrate private sector leadership on sustainable finance and the energy transition. We also provide feedback, as an individual institution and/or via trade associations to relevant consultation processes launched by standard setters and multilateral organisations and NGOs that could eventually inform policy recommendations. We also discuss green investment plans and policies with governments and other key stakeholders to help attract investment for climate solutions. This includes participating in key international fora, such as the United Nations Climate Change Conference, to promote net zero-aligned public policy at senior levels. Barclays seeks to be actively involved in relevant trade association working groups and to influence the development of policy positions in relation to aspects of climate and sustainable finance to be consistent with our own, stated ambition to be a net zero bank by 2050. Many of the trade associations of which we are members do not exclusively focus on sustainability, but rather engage across the full breadth of financial services policy and so do not have stated positions in relation to net zero. We engage with many trade associations on climate issues and will continue to do so to promote our net zero objectives. Given the pace of developments and regional differences in approaches to sustainability, there can be diverging views within trade associations. Barclays seeks to ensure risks of misalignment between an association’s advocacy position and its own net zero ambitions are managed appropriately, including seeking to address any misalignment through engagement where possible. Where there is a material and ongoing difference that we identify through our routine engagement, Barclays reserves the right to publicly dissent from a trade association’s position. Should a trade association adopt a material position that, following engagement, remains irreconcilable with our values or strategy, we are prepared to end our membership. In addition to our ordinary course engagement with trade associations described above, we have begun to undertake an internal review of the climate policy positions of the 35 material trade associations of which we are members, which are listed on our Public Policy Engagement website, in order to assess the extent to which they are aligned with achieving net zero by 2050 and limiting global warming to 1.5 C above pre- industrial levels. This includes sampling publicly available press releases, speeches, responses to consultations and other published statements. For the majority of trade associations in-scope for the review, to date we have not identified a clearly defined position on net zero. For those that have a position, they were generally considered to be in line with achieving net zero by 2050. We will continue to keep our approach under review. Resilience of our strategy TCFD Strategy Recommendation A: Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term. TCFD Strategy Recommendation B: Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning. TCFD Strategy Recommendation C: Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. Risks and opportunities Risks Opportunities 73 74 76 Resilience of our strategy Scenario analysis Resilience of our strategy, taking into consideration different climate-related scenarios Macro-dependencies and objectives Important information / disclaimers 127 128 135 135 136 Implementing our climate strategy Achieving net zero operations Operational footprint dashboard All other narrative Reducing our financed emissions BlueTrackTM dashboard All other narrative Financing the transition Sustainable finance dashboard All other narrative Working with our clients Embedding ESG into our business Just transition and nature and biodiversity Engaging with industry Barclays' approach to public policy 77 78 80 81 85 88 89 99 101 102 103 117 119 122 126 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 128 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 change1. 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. 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. 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 1. External case studies through UNEP FI 3. Internal climate scenarios informed by • Case study exercises covering Power Utilities, Oil & Gas and Residential Real Estate • Scenario assessment based on REMIND 2oC scenario, assessing a specific client set in each sector • Judgement-led and simplistic approach to calculate climate probabilities of default NGFS • Long-term climate internal stress test • Scenario narrative and shocks informed by NGFS ‘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 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements 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 (%) Mortgages Consumer credit Wholesale n Early action n Late action n No additional action n No additional action (illustrative adjustment) Banks’ total losses in the transition scenarios versus expected losses in hypothetical counterfactual scenario ($bn ) n Late action n Early action n Counterfactual scenario 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 PLC Annual Report 2022 129 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. 40653695100359510035603564—65—552020202520302035204020452050050100150200250Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements 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. 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 129. 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. CBES scenario Early Action (EA) Late Action (LA) No Additional Action (NAA) Description An Early and Orderly Transition A Late and Disorderly Transition Includes only policies in place before 2021 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 1.8oC by the end of the scenario (2050) relative to pre-industrial levels. The implementation of policies to drive the transition is delayed until 2031 and is then more sudden and disorderly. Global warming is limited to 1.8oC 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. 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 3.3oC relative to pre-industrial levels by the end of the scenario (2080). Barclays PLC Annual Report 2022 130 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 282. 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 427, 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Resilience of our strategy (continued) Barclays PLC Annual Report 2022 131 Type Scenario Transition Risk Short term Time period 3 years Projections Disorderly Scenario Description 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 CO2 emissions economy by 2050 2. A Disorderly transition assumes CO2 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 CO2 emissions are not reduced and the economy is confronted with the materialisation of increasing physical risks, leading to, amongst other things, GDP losses. Disorderly Hot-house 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 £ High Credit Risk - Retail £ Moderate Market Risk 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 Credit Risk - Retail 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. Drought and heat risk Credit Risk - Wholesale £ Critical Flood risk Credit Risk - Retail £ Moderate Key £ Moderate £ High £ Critical Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements 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 ($/tCO2e) 3. Renewable capital costs (Index) n EU n US n RoW Key scenario variables include 1) Carbon Price, representing an overall proxy for transition costs applied to companies as an additional cost to doing business. n CapEx Cost Key scenario variables include 3) Renewable Investment Cost, a component of capital expenditure where marginal renewable investment costs fall as the technologies mature. 2. Electric capacity mix (GW) n Gas Capacity n Coal Capacity n Nuclear Capacity n Renewable Capacity Key scenario variables include 2) Electricity Capacity Mix, reflecting changing fuel types for power generation as economies decarbonise. 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 Barclays PLC Annual Report 2022 132 • 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. 2022202320242025202620272028202920300100200300400500600202220252027203005,00010,00015,00020,00025,00020222023202420252026202720282029203080%84%88%92%96%100% Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Resilience of our strategy (continued) Barclays PLC Annual Report 2022 133 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 5. Using these metrics, credit risk parameters e.g. carbon pricing or flood risk can be obtained e.g. PD or LGD 2. Over time, models will be designed and 6. These outputs can be integrated into different 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 downstream use cases e.g. stress testing 7. Models can be used across different business lines within Barclays. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Resilience of our strategy (continued) Barclays PLC Annual Report 2022 134 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 74 and 76. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Resilience of our strategy (continued) 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. 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. Barclays PLC Annual Report 2022 135 • 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 273. 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. 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/tCO2) 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 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Important information / Disclaimers Disclaimers In preparing the climate and sustainability content within the Barclays PLC Annual 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 87) sets out when information in respect of a prior year will be identified and explained. • appointed KPMG LLP to perform limited independent assurance over selected ESG content, which have been marked with the symbol Δ. The assurance engagement was planned and performed in accordance with the International Standard on Assurance Engagements (UK) 3000 Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and the International Standard on Assurance Engagements 3410 Assurance of Greenhouse Gas Statements. A limited assurance opinion was issued and is available at the website link below. This includes details of the scope, reporting criteria, respective responsibilities, work performed, limitations and conclusion. No other information in this Annual Report has been subject to this external limited assurance. + The limited assurance opinion is available at: home.barclays/ sustainability/esg-resource-hub/reporting-and-disclosures/ Barclays PLC Annual Report 2022 136 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.   Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 137 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 the description of material existing and emerging risks from page 269 of this Annual Report. 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 139 Fulfilling our Purpose Our Purpose... 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. and our Values… Respect Integrity Service Stewardship Excellence influence our strategy… Our diversification, built to deliver double-digit returns Strategic priorities to sustain and grow delivered through Group synergies... We work as one organisation to create synergies and deliver greater value. creating positive outcomes for our stakeholders. Customers and clients Colleagues Society Investors Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 140 Contents Parts 1, 2 and 3 of Barclays PLC 2022 Annual Report together comprise Barclays PLC’s annual accounts and report for the purposes of Section 423 of the Companies Act 2006. Inside Part 3 Governance Governance contents Board Governance Directors’ report Remuneration report Other Governance Risk review Risk review contents Risk management Material existing and emerging risks Principal risk management Risk performance Supervision and regulation Financial review Financial review contents Key performance indicators Consolidated summary income statement Income statement commentary Consolidated summary balance sheet Balance sheet commentary Analysis of results by business Non-IFRS performance measures Financial statements Financial statements contents Consolidated financial statements Notes to the financial statements 141 141 142 143 197 246 264 264 266 269 282 296 370 378 378 379 381 382 383 384 385 392 397 397 416 424 Inside Part 1 Strategic report Group overview Prepared for the road ahead Chairman’s introduction Chief Executive's review Our business model Our strategy Section 172(1) statement Engaging with our stakeholders Key performance indicators Customers and clients Supporting our customers and clients Colleague Our people and culture Society Making a difference Investors Summary financial review Barclays UK Barclays International: Corporate and Investment Bank Barclays International: Consumer, Cards and Payments Managing risk Viability statement Non-financial information statement ESG ratings performance ESG-related reporting and disclosures TCFD Content Index Shareholder information Key dates, Annual General Meeting, dividends, and other useful information Inside Part 2 Climate and sustainability report Introduction Risks and opportunities Implementing our climate strategy Resilience of our strategy Please note that throughout the document, graphical representation of component parts may not cast due to rounding 1 2 3 4 6 10 12 16 21 23 26 31 39 45 49 52 54 56 58 60 63 64 65 66 66 69 70 73 77 127 Governance Our governance framework facilitates the effective management of the Group across its diverse businesses. Board Governance Directors’ report Our Board of Directors Other Governance Climate and sustainability governance 143 Managing impacts in lending and financing Our Group Executive Committee 147 The Barclays Way Our Governance Framework Key Board Activities in 2022 Board Nominations Committee report Board Audit Committee report 149 Whistleblowing 154 157 169 Tax Financial crime Health and safety Board Risk Committee report 178 Managing data privacy, security and resilience 247 253 256 257 258 260 261 262 How we comply Shareholder Q&A Other statutory and regulatory information Remuneration report 186 188 190 197 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 142 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 186 to 187. Certain additional information, signposted throughout this report, is available at home.barclays/corporategovernance Directors’ report Our Board of Directors Our Group Executive Committee Our Governance Framework Key Board Activities in 2022 Board Nominations Committee report Board Audit Committee report Board Risk Committee report How we comply Shareholder Q&A Other statutory and regulatory information Remuneration report 143 147 149 154 157 169 178 186 188 190 197 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 143 Directors’ report: Our Board of Directors Guided by our Purpose, Values and Mindset in leading the Group Board Committee membership Audit Committee Member Nominations Committee Member Remuneration Committee Member Risk Committee Member 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 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 Brian Gilvary Senior Independent Director (SID) Appointed: February 2020 (Board), January 2021 (SID) 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. 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 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 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 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 144 Directors’ report: Our Board of Directors (continued) Mike Ashley Independent Non-Executive Director Skills, experience and contribution: • specialised knowledge of accounting and Appointed: September 2013 audit related matters • extensive experience of auditing large international financial institutions • deep financial services and regulatory knowledge and experience. 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. 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 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). 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 Appointed: November 2012 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. 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 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 145 Directors’ report: Our Board of Directors (continued) Mohamed A. El-Erian Independent Non-Executive Director Appointed: January 2020 Dawn Fitzpatrick Independent Non-Executive Director Appointed: September 2019 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. 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. 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. Dawn holds the role of Chief Executive Officer and Chief Investment Officer at Soros Fund Management LLC. 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 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 Skills, experience and contribution: • extensive board-level experience across a Appointed: October 2016 range of industries • strong focus on reputation management and promoting board governance values • detailed understanding of the interaction between public and private sectors. 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. 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 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 146 Directors’ report: Our Board of Directors (continued) Marc Moses Independent Non-Executive Director Appointed: January 2023 Diane Schueneman Independent Non-Executive Director Appointed: June 2015 Julia Wilson Independent Non-Executive Director Appointed: April 2021 Stephen Shapiro Group General Counsel and Group Company Secretary Appointed: November 2017 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. 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. 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. 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 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 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. 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 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 147 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 composition during the course of 2022 and up to the date of this report are set out below, and remain subject to regulatory approval where stated. 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 144. 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 148 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 UKa Laura Barlow Group Head of Sustainability Susannah Parden Group Chief Accounting Officer Ingrid Hengsterb 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 149 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 Reviews the composition of, and appointments to, the Board, Board Committees, and ExCo Board Audit Committee Reviews financial reports and monitors the internal control environment Board Risk Committee Monitors financial, operational and legal risk appetite Board Remuneration Committee Sets principles and parameters of remuneration policy across the Group + For more information see page 157. + For more information see page 169. + For more information see page 178. + For more information see page 197. 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 150 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. 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. How the Board discharged its responsibilities in 2022 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. + Further information about how we engage with stakeholders can be found in the Strategic Report on pages 21 to 22. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 151 Directors’ report: Our Governance Framework (continued) + You can read about the key activities of the Board during 2022 on pages 154 to 156. You can read about how the Board considered the interests of our stakeholders in 2022 in our Section 172 statement in the Strategic Report on pages 16 to 20. 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 166 to 168. 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 Chairman Nigel Higgins Executive Directors C.S. Venkatakrishnan Anna Crossc Non-Executive Directors Mike Ashley Robert Berryd Tim Breedon Mohamed A. El-Erian Dawn Fitzpatrick Mary Francis Crawford Gillies Brian Gilvary Diane Schueneman Julia Wilson Former Directors Tushar Morzariah Independent/ Executive Scheduled meetings eligible to attend Scheduled meetings attended % attendance Ad hoc meetings eligible to attend Ad hoc meetings attendeda On appointmentb Executive Director Executive Director Independent Independent Independent Independent Independent Independent Independent Independent Independent Independent Executive Director 14 14 12 14 14 14 14 14 14 14 14 14 14 2 14 14 12 14 14 12e 13f 12g 14 14 14 14 14 2 100 % 100 % 100 % 100 % 100 % 86 % 93 % 86 % 100 % 100 % 100 % 100 % 100 % 100 % 5 5 3 5 5 5 5 5 5 5 5 5 5 2 5 5 3 5 5 5 2 5 3 5 4 4 5 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 152 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 Chair Responsibilities As Chair, Nigel Higgins is responsible for: • leading the Board and its overall effectiveness in directing the company • demonstrating objective judgement • 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 • ensuring the Board as a whole has a clear understanding of the views of shareholders • facilitating constructive board relations and the effective contribution of all Non-Executive Directors • ensuring Directors receive all information in an accurate, timely and clear form that is relevant to discharge their obligations • 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 143. Group Chief Executive As the Group Chief Executive, Venkat is supported in his role by the ExCo, and leads the Executive Directors in: Senior Independent Director (SID) • making and implementing operational decisions and running the Group's business on a day-to-day basis • leading Barclays towards the achievement of its strategic objectives and implementing the strategy decisions taken by the Board • assisting the Board in considering strategic issues, and ensuring that decisions taken are in the Group's best interests • 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 143 and can find further information on the membership of ExCo on page 148. As our SID, Brian Gilvary: • provides a sounding board for the Chair, serving as a trusted intermediary for the other Directors and shareholders when necessary • 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 • 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 • 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 143. Non-Executive Directors Our Non-Executive Directors have responsibility for: • 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 • 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 144 to 146. + 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 153 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 154 to 156. 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 Board Remuneration Committee Board Nominations Committee 4 2 4 1 2 1 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 154 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. You can read about what we've done in our Section 172 statement in the Strategic Report. 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 201 of the Remuneration report. Please see page 188 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. 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. 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. Board allocation of timea (%) n Strategy formulation and implementation monitoring n Finance (including capital and liquidity) n Governance and risk (including regulatory issues) n Other (including remuneration) 2022b 2021 46 20 31 3 60 14 23 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 155 Directors’ report: Key Board Activities (continued) Strategy formulation and monitoring Topic Board activity Key decisions Strategic review • Held regular business strategy sessions at meetings ü Approved the Group's strategy. ü Approved the 2022 Medium Term Plan (MTP). throughout the year and its annual corporate strategy session. • 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. • 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. Strategic acquisitions Macroeconomic and geopolitical environment • Considered the proposal to acquire Kensington ü Approved the acquisition of Kensington Mortgage Mortgage Company and its strategic fit within the Group. • 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. Company. This transaction was also approved separately by the Board of BBUKPLC. ü Approved the Barclays Risk Appetite Statement. ü Approved the annual review of the Group Enterprise Risk Management Framework. + Details of the Board's response to the war in Ukraine are set out in our Section 172 statement in the Strategic Report on page 20. 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. 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) • 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. • 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. • 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. • 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. + You can read more about the Board's engagement with colleagues and other stakeholders during 2022 on page 150. 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 updated Board Diversity Policy on pages 161 to 162. Sustainability and climate Topic Board activity Key decisions Sustainability Climate • Discussed updates received from the Group Head of ü Approved the Group’s ESG report for 2021. Public Policy and Corporate Responsibility, including on key government and regulatory policy, climate, and reputation risk. ü Approved the Group’s Modern Slavery Statement for 2021. + For information about the Board's activities in relation to climate matters, please see our Section 172 statement in the Strategic Report on pages 19 to 20 and the climate spotlight on page 249. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 156 Directors’ report: Key Board Activities (continued) Governance and regulatory matters Topic AGM Succession Board activity Key decisions • 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. • 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. + For further information, please refer to the report of the Board Nominations Committee on pages 157 to 168. ü Approved the appointment of Anna Cross as the new Group Finance Director. 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. 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 154. 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. ü Encouraged continued visibility from management over regulatory matters across the Group. Over-issuance of Securities Cyber + You can read about the Board's response to the Over-issuance of Securities in our Section 172 statement in the Strategic Report on page 17 and in the Shareholder Q&A on pages 188 to 189. • Discussed updates on cyber, cloud services and ü Approved the Group Resilience Self-Assessment. operational resilience, including the new resilience policy requirements of the PRA and FCA. • 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 Requested that management conduct a ransomware attack simulation. Finance Topic Board activity Key decisions Financial statements Capital distributions • Assessed financial performance of the Group and its main ü Approved the Group’s Annual Report and Accounts for the businesses through regular updates from the Group Finance Director. year ended 31 December 2021. ü Approved financial results announcements at Q1 2022, HY 2022 and Q3 2022. • Considered the Group’s capital position and distributions ü Approved a full year dividend for the year ended policy. 31 December 2021 of 4.0p per ordinary share and a share buy-back of up to £1bn. 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 157 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 Committee membership and meeting attendance during 2022a Member Meetings attended/eligible to attend (including ad hoc meetings) Nigel Higgins Mike Ashley1 Tim Breedon2 Mohamed A. El-Erian3 Crawford Gillies1 Brian Gilvary Diane Schueneman Julia Wilson3 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. 5/5 3/3 2/2 2/2 3/3 5/5 5/5 2/2 Nigel Higgins Chair, Board Nominations Committee Notes a There were three scheduled meetings and two ad hoc meetings of the Committee in 2022. Committee allocation of timeb (%) n Corporate governance n Board and Board Committee composition n Succession planning and talent n Board effectiveness n Other 2022 2021 14 14 62 11 0 9 19 54 11 7 Notes 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 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 158 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 160. 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 157, 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. uvwx • Approval of the appointment of Robert Berry as a Non-Executive Director. uvwx • 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. uvwx • 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. uvwxz” • 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). uvwxy • Review of ExCo composition and succession planning, including review of the balance of skills and diversity on the ExCo and for key successors. uvwxz • Review of recommendations and suggested improvements arising from the 2021 Board effectiveness review. uv{| • 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. {| • Consideration of Director training and development. z{| • 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. uvxz • 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 161 for further information. vz • Review of Directors’ tenure and effectiveness, and identifying candidates for election or re-election at the AGM. uvxyz{| Committee responsibilities u Ensuring the right individuals are appointed – in line with objective criteria – who can discharge the duties and responsibilities of Directors. v Planning for effective ExCo, Board and Committee composition, through focusing on appointment and succession based on merit and skill, through a diversity lens. w Leading candidate search and identification. x Regularly reviewing succession planning and recommendations for key executive and non-executive roles. y Monitoring time commitments for incoming and existing Directors to ensure sufficient time for effective discharge of duties. z Monitoring compliance against corporate governance guidelines and the Board Diversity Policy, including yearly review and any recommendations for enhancements. { Ensuring compliance by the Board with legal and regulatory requirements. | Agreeing the approach to individual Director, Board and Committee effectiveness reviews and implementing any required actions. } Considering and authorising, subject to ratification by the Board, conflicts of interest. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 159 Directors’ report: Board Nominations Committee report (continued) 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. 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 143 to 146. 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 144. 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. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 160 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 146. 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) Industry and leadership experienceb (number of Directors) n 0-3 years n 3-6 years n 6-9 years n 9+ yearsa International experiencec (number of Directors) International (UK) International (US) International (Rest of the World) Financial services Political/Regulatory experience Current/Recent Chair/CEO Accountancy/ Auditing Operations/ Technology Retail/ Marketing Notes a Please refer to page 166 in relation to the tenure and continued independence of Tim Breedon b c and Mike Ashley, who have served on the Board for more than nine years. Individual Directors may fall into one or more categories. International experience is based on the location of the headquarters/registered office of a company, excluding entities within the Barclays Group. 4232118713810412Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 161 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 162. 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. 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. 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. 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. Ethnic diversity target Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 162 Directors’ report: Board Nominations Committee report (continued) Diversified Board1 Leadership balance (number of Directors) Chairman Non-Executive Directors Executive Directors Gender balance (number of Directors) Male Female Ethnic diversity (number of Directors) White Ethnic minority background excluding white ethnic groups Note: 1 Data as at 31 December 2022. 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 Our people and culture section on pages 31 to 38. 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 148 and you can find data on the percentage of females on ExCo and within ExCo direct reports in Our people and culture section in the Strategic Report on page 35. 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 155, 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 Our People and Culture section in the Strategic Report on Pages 31 to 38. 110285112Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 163 Directors’ report: Board Nominations Committee report (continued) f o r a p p 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 for executive and non-executive talent. Open advertising for Board positions was not used in 2022. As reported above, we have recently welcomed Marc Moses to the Board, following our search for candidates with recent and relevant financial experience, in line with our recruitment priorities described above. We also recently announced that Sir John Kingman will join the Board with effect from 1 June 2023, and will succeed Crawford Gillies as Chair of the BBUKPLC Board upon taking up his appointment, subject to regulatory approval. + You can read more about the appointments of Marc Moses and Sir John Kingman on page 159. In line with disclosures in our previous Annual Report, we continue to focus on identifying candidates with technology experience. To ensure due consideration is given to strong potential candidates who would enhance the effectiveness of the Board, the Committee continues to review the recruitment priorities and give further consideration to the desired skills and experience for potential candidates. Non-Executive Director independence A majority of our Board comprises independent Non-Executive Directors, in line with the requirements of the Code. The Committee considers the independence of our Non-Executive Directors on an annual basis, having regard to the independence criteria set out in the Code. As part of this process, the Committee reviews the length of tenure of all Directors, which can affect independence, and makes any recommendations to the Board accordingly. The Committee reviewed the independence of all Non-Executive Directors in 2022. The independence of those who had served on the Board for more than six years (Crawford Gillies and Diane Schueneman) and more than nine years (Tim Breedon and Mike Ashley) was subject to a more rigorous review. The Committee remains satisfied that the length of their tenure has no impact on their respective levels of independence or the effectiveness of their contributions. The Committee and the Board consider all of the Non-Executive Directors to be independent. For further details of the Committee’s review of the independence of Tim Breedon, Mike Ashley and Crawford Gillies, please refer to the Succession section below. During 2022, Tushar Morzaria stepped down from the Board. Tushar did not raise any concerns about the operation of the Board or management. Director appointments and re-appointments Non-Executive Director selection and appointment process Director term The Committee reviewed the Non-Executive Director selection and appointment process in 2022, which was refreshed in 2019, and concluded that no material changes were required to the current process. We continue to ensure that all Board members have the opportunity to meet potential candidates where possible, and that searches for potential candidates should be coordinated across the Group’s significant subsidiaries where appropriate. Our standard practice is to appoint any new Non-Executive Director or Chair to the Board for an initial three-year term, subject to annual re-election at the AGM (as outlined below). This may be extended for a further term of up to three years. As such, our Non-Executive Directors typically serve up to a minimum of six years, although this period may be extended where considered appropriate by the Committee. Director re-election at the AGM All Directors are subject to election or re-election (as appropriate) each year by shareholders at the AGM. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 164 Directors’ report: Board Nominations Committee report (continued) On appointment, all Directors receive a comprehensive induction tailored to their individual requirements, designed to provide them with an understanding of how the Group works and the key issues that it faces. When designing each bespoke induction schedule, the Group Company Secretary consults the Chairman, taking into account the particular needs of the new Director. When a Director is joining a Board Committee, the schedule will also include an induction to the operation of that Committee. + You can find details of new Director and Committee- specific inductions delivered to Board members during the course of 2022 on page 165. Conflicts of interest In accordance with the Companies Act 2006 and BPLC's articles of association (Articles), the Board has the authority to authorise conflicts of interest, and this ensures that the influence of third parties does not compromise the independent judgement of the Board. Directors are required to declare any potential or actual conflicts of interest that could interfere with their ability to act in the best interests of the Group. A conflicts register is maintained, which is a record of actual and potential conflicts, together with any Board authorisation of the conflicts. The authorisations are for an indefinite period but are reviewed annually by the Committee, which also considers the effectiveness of the process for authorising Directors’ conflicts of interest. The Board retains the power to vary or terminate these authorisations at any time. Director training and development The Committee supports the Chairman in developing and monitoring effective induction, training and development for the Board in accordance with its Terms of Reference (available at home.barclays/ who-we-are/our-governance/board- committees). As well as Barclays providing Directors with the opportunity to take part in ongoing training and development, Directors can also request specific training, as required. An overview of existing training and development arrangements for the Board is described on the next page, which encompasses business and function reviews and horizontal topics to deepen and broaden the Board’s understanding of the business. + You can find details of training and development delivered to the Board during the course of 2022 on page 165. Time commitment We ask all potential new Directors to disclose their other significant commitments, which the Committee then takes into account when considering any proposed appointment to ensure that Directors can discharge their responsibilities to Barclays effectively. As well as attending and preparing for formal Board and Board Committee meetings, the Directors’ time commitment to Barclays includes allowing time to understand the business and complete training. We agree expected time commitments with each Non-Executive Director on an individual basis. The Committee was comfortable that the existing commitments disclosed by each of Marc Moses and Sir John Kingman ahead of their respective appointments would not impact their ability to devote such time as is necessary to discharge their duties to Barclays effectively. All Directors must seek approval (providing an indication of expected time commitments) before accepting any significant new commitment outside of Barclays. Before approving any significant new external commitment for a Director, the Board reviews all relevant facts and circumstances (including the expected role and time commitment, as well as the nature of the external organisation). In 2022, all external appointment requests were approved on the basis that the Board was satisfied with any actual or potential conflicts and the Board was confident that the Director in question remained able to devote such time necessary to discharge their duties to Barclays effectively. Where circumstances require it, all Directors are expected to commit additional time as necessary to their work on the Board. For the year ended 31 December 2022 and as at the date of publication, the Board is satisfied that none of the Directors is over-committed and that each of the Directors allocates sufficient time to their role in order to discharge their responsibilities effectively. A record of each Director’s time commitments is maintained. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 165 Directors’ report: Board Nominations Committee report (continued) Training, development and updates for the Board in 2022 Topic Description Areas covered included Business and function reviews Updates from key business areas and Group functions, to deepen the Board’s understanding of the Group businesses. Business areas: Corporate and Investment Bank, Consumer Cards and Payments, Barclays UK, US Consumer Bank. 'Horizontal topics' Updates covering areas relevant across the Group. Public Policy and Corporate Responsibility Regular updates on Public Policy and Corporate Responsibility matters. Regulatory responsibilities Annual briefing on regulatory responsibilities. Corporate governance Regular updates on corporate governance. Group functions: Risk, Markets, Legal, HR, Internal Audit, and Compliance. Climate, cyber, Reputation risk, Mindset (including Culture), data strategy, whistleblowing, complaints, resilience and artificial intelligence. Reputation Risk matters (for which the Board has direct oversight) and a broad range of topics including regulatory engagement and oversight, and climate and sustainability matters. Senior Managers Regime and Barclays’ conduct and financial crime policies and standards. DEI matters, regulatory developments and cybersecurity disclosure obligations. Competition law Briefing for Board members (ad hoc). Competition law-related matters. External speakers External input to the Board. Attendance at Board meetings by external speakers and key regulators, enabling the Board to hear their feedback and observations. Board engagement with stakeholders Various events enabling the Board to engage directly with stakeholders. + You can read more about the Board's engagement with stakeholders on page 150. Committee specific inductions Committee-specific induction for Julia Wilson, following her appointment as a member of the Board Risk Committee. Details of Robert Berry's induction, including in relation to his role as Board Risk Committee Chair, can be found in the table below. Committee engagement, including sessions with the Board Risk Committee Chair, Group Chief Risk Officer, Interim Group Chief Compliance Officer and Chief Controls Officer. Briefings on Conduct, Reputation and Compliance and Legal risk, and various briefings with members of the Risk Executive Committee, as well as the Group Treasurer. New Director inductions delivered in 2022 Director Description Induction sessions included Meetings during induction period Anna Cross Tailored Executive Director induction, following Anna’s appointment as Group Finance Director and Executive Director. • Board governance framework and Directors’ duties. • SMR and Conduct rules. • Disclosure requirements pursuant to the Market Abuse Regime and the Group Securities Dealing Code. Robert Berry Tailored Non-Executive Director induction following Robert’s appointment as a Non- Executive Director, Chair and member of the Board Risk Committee and member of the Board Audit Committee. • The Group’s strategy and culture. • Stakeholder landscape and relationships. • Governance matters. • Briefings from the Chief Risk Officer and Chief Compliance Officer (relevant to his responsibilities as Board Risk Committee Chair). Series of meetings undertaken during Anna’s induction period, including: • • regular one-to-one meetings with the Chairman, Group Chief Executive, and other members of the Board induction meetings with senior executives from across the business. Series of meetings with various senior executives from across the business during Robert's induction period including from Risk, Compliance, Finance, Legal, Internal Audit, BX and Operations, BBUKPLC, Corporate and Investment Banking, and Consumer Banking and Payments. Handover in accordance with requirements of Senior Managers Regime (SMR) Formal SMR handover from Tushar Morzaria (as outgoing Group Finance Director). Formal SMR handover from Tim Breedon (as outgoing Board Risk Committee Chair). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 166 Directors’ report: Board Nominations Committee report (continued) Evaluation Each year, the Committee plays a key role in ensuring that a formal and rigorous review of the performance of the Board, the Board Committees and individual Directors is undertaken in line with the requirements of the Code. Feedback from the 2022 internally facilitated effectiveness reviews indicate that Board, Board Committees and individual Directors continue to be effective, as described below. Progress against the 2021 Board effectiveness review and process for 2022 review As reported in our last Annual Report, the 2021 Board effectiveness review was externally facilitated, as required by the Code, by Christopher Saul Associates (CSA)1. Recommendations from the 2021 effectiveness review and actions taken during the course of 2022 to address them are shown in the table on the next page. The 2022 Board, Board Committee and individual Director effectiveness reviews were facilitated internally, in line with the Code, and were led by the SID with the support of the Deputy Company Secretary. Further detail on the process is shown in the diagram on the next page. Note: 1 As reported in our 2021 Annual Report, the Committee considered CSA's independence prior to the firm's appointment and was confident that CSA would not be constrained in its ability to express an independent view as external facilitator. For further details, please refer to page 129 of the Barclays PLC 2021 Annual Report. Succession Robust succession planning ensures we have the right balance of skills, experience and effectiveness on the Board, Board Committees and ExCo, embracing the clear benefits of diversity while also taking into account current and anticipated future business needs. This includes contingency planning (for any unforeseen departures or unexpected absences), medium- term planning (orderly refreshing of the Board, Committees and ExCo) and long-term planning (looking ahead to the skills that may be required on the Board and the ExCo in the future). Committee consideration of succession in 2022 Succession remained a key focus for the Board and Committee in 2022. The Board and the Committee discussed succession in detail at regular points in 2022, in addition to discussions at formal Committee meetings. Mike Ashley had served on the Board for nine years as of September 2022, and Crawford Gillies will have served on the Board for nine years by the time of our 2023 AGM . As reported above, Mike will remain on the Board until the conclusion of the AGM, at which he will not seek re- election and, subject to re-election at the 2023 AGM, Crawford will retire from the Board shortly thereafter on 31 May 2023. As at 1 November 2022, Tim Breedon had served on the Board for ten years. As reported in our 2021 Annual Report, the Committee undertook a rigorous assessment and concluded that it remained appropriate for Tim to continue to serve on the Board beyond his nine-year tenure. A similar review has been undertaken this year and the Committee and the Board remain satisfied that Tim's breadth of financial services sector experience and deep knowledge of risk and regulatory issues continues to bring significant value to Board discussions, and that his continued tenure as a Non- Executive Director is advantageous to Group-wide decision making and is appropriate in the near-term. The Committee and the Board recognise the clear benefits for Group-wide decision-making of having the Chairs of the Group’s significant subsidiaries sit on the BPLC Board, bringing important insight to Board discussions and connectivity with BPLC’s significant subsidiaries. With this in mind, given Tim’s ongoing role as Chair of Barclays Europe, the Group’s principal European subsidiary, the Committee and the Board consider it is appropriate for Tim to continue as an independent Non- Executive Director on the BPLC Board. The Committee and the Board are confident that Tim, Mike and Crawford remain independent and continue to provide effective challenge, advice and support to management on business performance and decision-making. Having undertaken a rigorous review of Tim, Mike and Crawford's performance as Non- Executive Directors and taking into account other relevant factors that might be considered likely to impair, or could appear to impair, their independence including as set out in Provision 10 of the Code, the Board considers Tim, Mike and Crawford to be independent. ExCo succession The Committee reviews and discusses all changes to ExCo prior to announcement, taking into account executive succession plans. With regard to ExCo succession, Anna Cross joined ExCo on 23 February 2022 ahead of succeeding Tushar Morzaria as Group Finance Director on 23 April 2022. Laura Padovani stepped down as Group Chief Compliance Officer on 31 October 2022 and was succeeded by Matthew Fitzwater on an interim basis with effect from 1 November 2022, subject to regulatory approval. Mark Ashton-Rigby stepped down as Group Chief Operating Officer and Chief Executive, BX in January 2023, and was succeeded by Alistair Currie with effect from 1 February 2023, subject to regulatory approval. Vim Maru was appointed Global Head of Consumer Banking and Payments with effect from 1 February 2023, subject to regulatory approval. + You can read more about the changes to ExCo during the year on page 147. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 167 Directors’ report: Board Nominations Committee report (continued) Progress against the 2021 Board effectiveness review The recommendations from the 2021 Board effectiveness review and actions taken during the course of 2022 to address them are shown in the table below. Areas Board deep dives Recommendations from the 2021 evaluation Actions taken during the year Consider how the approach to Board deep dive sessions might be refreshed. • A refreshed approach consisting of Business and Function reviews and 'horizontal topics' was designed to provide targeted consideration of each key area and to provide the Board with an holistic view of the business. • You can read more about the topics considered in these sessions on page 165 of this report. Corporate strategy Review how Board agendas might focus more on corporate strategy as we move away from matters focusing on the COVID-19 pandemic. • The Board reviewed and made changes to its approach to considering corporate strategy, reviewing a series of themes and questions in the lead up to the annual corporate strategy review in September 2022, and the detailed MTP discussion in November 2022. Outside perspectives Consider how to increase input to the Board from thought leaders, customers and others to provide relevant outside perspectives. Board materials Continue to make Board papers shorter and more focused. • During 2022, the Board sought opportunities to obtain outside perspectives on key matters, including inviting external speakers to discuss with the Board topical issues, including the US regulatory and political environment. • The Board has also invited its principal regulators to meet with Board members to discuss their feedback and views on Barclays. • During the course of this year, the Board has also received feedback from customers, clients and other stakeholders through participation in events such as conferences and regulatory round tables and visits to Barclays businesses and sites, including a visit to the Radbroke campus following the 2022 AGM. You can read more about these on page 150. • The Chairman continues to encourage management to ensure that their papers are as concise as possible and focused on the matters of relevance to the Board and on key questions for discussion. Board, Committee and individual Director evaluation process Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 168 Directors’ report: Board Nominations Committee report (continued) The Committee’s interaction with the Board, Board Committees and senior management is considered effective. The review noted that all Non-Executive Directors had been invited to participate in certain Committee discussions during the course of the year, which was considered helpful, as was the approach of ensuring more strategic matters were discussed with the Board. Feedback indicated that concurrent meetings of the BPLC and BBPLC Board Nominations Committee continue to be appropriate. Individual Director effectiveness All Directors in office at the end of 2022 were subject to an individual effectiveness review. The Chairman considered each Director’s individual contribution to the Board as well as any feedback received as part of the broader Board and Committee effectiveness reviews. The reviews were conducted by the Chairman and the Chairman’s review was conducted by the SID. Based on these reviews, the Board accepted the view of the Committee that each Director to be proposed for election or re-election at the 2023 AGM continues to be effective and contributes to Barclays’ long-term sustainable success. Except for Mike Ashley, all of the current Directors of the Company, who will be continuing in office, and Marc Moses in his capacity as a Director from 23 January 2023, intend to submit themselves for election or re-election at the 2023 AGM and will be unanimously recommended by the Board for election or re-election as appropriate. Board effectiveness review The 2022 Board effectiveness review followed a structured interview process with Board members. The full and frank feedback of interviewees provides important input into the further development of the performance and effectiveness of the Board, in particular in identifying areas in which the Board could be more effective. This feedback is shared with the Chairman and the other members of the Board by reference to the key themes and recommendations that have been identified. Feedback from 2022 review Feedback from this review indicated that the Board is operating well and effectively, with Board members commenting favourably on the open and collaborative culture of the Board, supported by the values-driven and inclusive style of the Chairman. The review indicated that Board composition is considered to be a strength, bringing together a range of diverse and complementary backgrounds and expertise. The Chairman’s critical role in supporting the transition of the new Group Chief Executive and Group Finance Director was commented on favourably, with the review highlighting the positive relationship between the Board and management, and an appropriate level of support and challenge to management. Recommendations from 2022 review The 2022 review outlined the following key recommendations: • in the context of what is understandably a structured meeting agenda, Board members would welcome the opportunity for more unstructured discussion of key areas of focus for the Board - whether in regard to particular matters on the agenda or other macro or external developments since the previous meeting • consideration should continue to be given to the structure of Board agendas to ensure that time allocations are appropriate • continued focus on ensuring balanced papers which clearly identify substantive points and key issues for the Board’s attention • continued focus on Committee reporting to the Board, to ensure the Board has the right level of visibility on key areas of focus • continue to identify opportunities to bring external perspectives into the Board. Review of Committee effectiveness The 2022 effectiveness review of each Committee was facilitated internally, as permitted by the Code. The internal review involved completion of a tailored questionnaire by Committee members and senior management. The review is an important part of the way Barclays monitors and improves Committee performance and effectiveness, maximising strengths and highlighting areas for further development. The results of the review for the Committee are set out in the next section. In addition to reviewing its own effectiveness, the Committee also reviewed the outcomes of the effectiveness reviews conducted by the Board Audit, Remuneration and Risk Committees, which had also been conducted by way of tailored questionnaires. You can read about those reviews in the individual Committee reports elsewhere in this Board Governance report. Following consideration of the findings of the 2022 Board and Board Committee effectiveness reviews, the Committee remains satisfied that the Board and each of the Board Committees are operating effectively. Review of Nominations Committee effectiveness The 2022 Committee effectiveness review was facilitated internally in accordance with the Code. This internal review involved completion of a tailored questionnaire by Committee members and standing attendees, in line with the approach adopted for all Board Committees in 2022. The review is an important part of the way Barclays monitors and improves Committee performance and effectiveness, maximising strengths and highlighting areas for further development. The results of the review confirm the Committee is operating effectively. It is considered well constituted, providing an effective and appropriate level of challenge and oversight of the areas within its remit. Feedback acknowledged progress during the year with regard to executive succession planning. • continue to identify opportunities for more informal engagement between the Non-Executive Directors and senior executives outside the boardroom The review noted that sufficient time is allocated to the matters within the Committee's remit to enable appropriate discussion and challenge. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 169 Directors’ report: Board Audit Committee report Driving sustainable improvements to the internal control environment Overseeing the integrity of our financial disclosures and the effectiveness of the internal control environment. Dear Fellow Shareholders The Committee had a busy year in 2022, as it closely monitored the reporting of the Group’s financial performance in an increasingly challenging macroeconomic environment, while remaining focused on driving sustainable improvements to the internal control environment. The Over-issuance of Securities was a significant area of focus for the Committee in 2022 in terms of both the financial reporting and internal controls aspects. The Committee oversaw the restatement of the BPLC 2021 financial statements included in the amended Annual Report on Form 20-F for the year ended 31 December 2021. The Committee also carefully considered the implications of the Over-issuance of Securities on the Group’s 2021 UK financial statements, ultimately concluding that these did not require refiling, although the prior year comparatives have been restated in this 2022 Annual Report and Accounts so that the UK and US reported figures are now aligned. The Committee monitored together with the Board the launch and progression of the rescission offer and its impact on the Group’s financial statements. The presentation of the financial impact of the Over-issuance of Securities, including the associated hedging, was a key consideration in the Committee’s review of the quarterly, half- year and full-year financial statements for 2022. Throughout the year, the Committee monitored management’s remediation of the material weakness in internal control over financial reporting (ICOFR) identified in respect of the Over- issuance of Securities. The Committee also monitored, towards the end of the year, the work carried out to address the specific requirements of the SEC set out in its order of 29 September 2022, and in early 2023 considered the assurance work conducted by Barclays Internal Audit (BIA) on the matter. Board Audit Committee Mike Ashley Chair, Board Audit Committee Notes a There were 10 scheduled meetings and four ad hoc meetings of the Committee in 2022. Owing to prior commitments, Diane Schueneman was unable to attend two ad hoc meetings and Julia Wilson was unable to attend one ad hoc meeting of the Committee. All ad hoc meetings had been scheduled at short notice. Committee allocation of timeb (%) n Control issues n Business control environment n Financial results n Internal audit matters n External audit matters n Other 2022c 2021 12 15 42 7 9 14 11 20 33 8 12 16 b Including ad hoc meetings. The percentages are subject to rounding and therefore may not equal 100% when rounded. c The allocation of time in 2022 includes the time spent by the Committee considering the Over-issuance of Securities at scheduled and ad hoc meetings The macroeconomic environment remained challenging against a backdrop of the increased cost of living, rising interest rates, relatively high inflation, declining GDP and rising energy costs. The Committee received regular updates from the Group Finance Director and Group Chief Accounting Officer, and focused in particular on management’s judgement on credit impairment, post-model adjustments and expected credit loss (ECL) build. This is an area which the Committee will continue to monitor closely during 2023. A key element of the Committee’s remit is oversight of the Group’s internal control environment. Throughout 2022, the Committee membership and meeting attendance in 2022a Member Meetings attended/eligible to attend (including ad hoc meetings) Mike Ashley Robert Berry1 Diane Schueneman Julia Wilson 14/14 12/12 12/14 13/14 Committee membership in 2022 1 Appointed with effect from 1 March 2022. Committee received regular updates on this and continued to monitor the progress of programmes aimed at strengthening the internal control environment across the Group’s businesses. The Over- issuance of Securities highlighted the need for further improvements both in specific controls and also the control mindset required at all levels in the organisation. In addition to this specific issue, the Committee has continued to pay close attention to a number of existing control remediation and enhancement programmes. These continued to include significant work in the trading areas (as highlighted last year) and also on financial crime controls. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 170 Directors’ report: Board Audit Committee report (continued) The Committee provided oversight of an internal programme established towards the end of 2022 aimed at bringing together the more material remediation programmes with a view to embedding controls and lessons learned on a holistic basis in order to achieve a consistently excellent operating environment across the Group. The Committee encouraged and challenged management to ensure that outcomes are delivered at the times committed, but in a sustainable manner and that they drive a strong culture of continuous improvement which is essential to keep pace with changes both within the Group and in the external environment. As part of its determination of whether any control issues required specific disclosure in this Annual Report, the Committee continued to apply similar concepts to those used for assessing internal control over financial reporting for the purposes of the US Sarbanes-Oxley Act (SOx). The Committee is satisfied that management has effectively remediated the material weakness relating to the Over-issuance of Securities and reached the conclusion that there are no other control issues that are considered to be a material weakness and which merit specific disclosure for the year ended 31 December 2022. The Committee has oversight of Barclays’ whistleblowing programme and I continued to act as the Group Whistleblowers' Champion. During 2022, the Committee scrutinised the results of a benchmarking review of Barclays’ whistleblowing programme undertaken by an independent third party aimed at identifying areas where certain elements of the programme can be enhanced. Moving into 2023, the Committee will oversee the enhancements to our whistleblowing programme that are being implemented by management. As will be evident from the Strategic report set out on page 15, Barclays’ climate strategy continues to be a significant area of focus for the Group. The Committee provides oversight of the Group’s climate and sustainability disclosures and was supportive of management’s decision to incorporate Barclays' TCFD disclosures into the 2022 Annual Report. Whilst the Committee continues to monitor the impact of climate change on the Group’s financial statements, the impacts are not material at this time. Consistent with previous years, I held regular meetings with the Chair of the BBUKPLC Board Audit Committee to ensure I had visibility over any material and emerging key issues impacting BBUKPLC. Since my last report I have also had discussions with the Chairs of the Board Audit Committees of Barclays US LLC and Barclays Bank Ireland PLC, and attended a meeting of the Barclays Bank Ireland PLC Board Audit Committee and BBUKPLC Board Audit Committee. I will be attending the Barclays US LLC Board Audit Committee when it meets to approve the financial results of the US holding company in March. I continued to meet frequently with members of senior management, including in particular the Group Finance Director and Group Chief Internal Auditor. As Committee Chair, throughout the year I engage regularly with the Group’s key regulators, including holding meetings with representatives of the PRA and FRBNY. Barclays Internal Audit and external auditors Given the key role of BIA in supporting the Committee’s work, I held regular monthly meetings with the Group Chief Internal Auditor and members of her senior management team to ensure that I had visibility of their programme of work and key emerging issues. In early 2022, the Committee commissioned Ernst & Young to perform an independent External Quality Assurance assessment of BIA, which is required every five years. The Committee was pleased to note the report’s conclusions that BIA generally conformed with industry standards and guidance, and was an independent and effective function, a view also supported by feedback from our key regulatory stakeholders. The Committee also conducted a performance assessment of BIA for 2022 and I am pleased to report that the Committee was satisfied with BIA's performance against its objectives agreed with me at the beginning of the year. The relationship with the Group’s external auditor remains a key element of the Committee’s role, and the Committee welcomed a new lead audit engagement partner, Stuart Crisp, for the 2022 financial year following the retirement of the previous lead audit partner. The Committee received regular updates on KPMG’s progress on the 2022 audit, as well as on the joint inspection by the US Public Company Accounting Oversight Board (PCAOB) and the UK Financial Reporting Council (FRC) Audit Quality Review (AQR) team of KPMG’s audit of Barclays’ 2021 financial statements (including the impact of the discovery of the Over-issuance of Securities). The outcome of those inspections are set out on page 176 of this report. Committee effectiveness The 2022 Committee effectiveness review was facilitated internally in accordance with the Code. This internal review involved completion of a tailored questionnaire by Committee members and standing attendees, in line with the approach adopted for all Board Committees in 2022. The review is an important part of the way Barclays monitors and improves Committee performance and effectiveness, maximising strengths and highlighting areas for further development. The results of the review confirm the Committee is operating effectively. It is considered well constituted, providing an effective and appropriate level of challenge and oversight of the areas within its remit. The review noted that the Committee was considered to have the right level of skills and experience, including recent and relevant financial experience. Feedback indicates that the Committee is considered to operate at the right level of debate, whilst acknowledging the technical and detailed nature of the Committee’s discussions at times, which is reflective of the nature of the matters within the Committee’s broad remit. The review noted that the Committee’s interaction with the Board, Board Committees and senior management is considered effective, noting that sufficient time is allocated at Board meetings for the Chair to report to the Board on the work of the Committee. Feedback indicated that concurrent meetings of the BPLC and BBPLC Board Audit Committee continue to be effective, with coverage of BBPLC matters within concurrent meetings considered adequate. Interaction with BBUKPLC Board Audit Committee was also considered effective, confirming that the Committee continues to exercise sufficient oversight of issues relevant to the Committee’s remit relating to BBUKPLC. Changes to Committee composition On 1 March 2022, we welcomed Robert Berry to the Committee and have benefited from his expertise and perspectives, including through his cross- membership as Chair of the Board Risk Committee. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 171 Directors’ report: Board Audit Committee report (continued) The Board, together with the Committee, is responsible for ensuring the independence and effectiveness of the internal audit function and external auditors. For this reason, the Committee held a number of separate private sessions with each of the Group Chief Internal Auditor and the lead KPMG audit engagement partner during 2022, without management present. The appointment and removal of the Group Chief Internal Auditor is a matter reserved to the Committee, and the appointment and removal of the external auditor is a matter reserved to the Board based on the recommendation of the Committee. Neither task is delegated to management. Role of the Committee The role of the Committee is to review and monitor, among other things: • the integrity of the Group’s financial statements and related announcements • the effectiveness of the Group’s internal controls • the independence and effectiveness of the internal and external audit processes • the Group’s relationship with the external auditor • the effectiveness of the Group’s whistleblowing procedures. The Committee’s Terms of Reference are available at home.barclays/who- we-are/our-governance/board- committees. Committee composition and meetings The Committee is composed solely of independent Non-Executive Directors. Membership of the Committee is designed to provide the breadth of financial expertise and commercial acumen that the Committee needs to fulfil its responsibilities. Its members as a whole have recent and relevant experience of the banking and financial services sector, in addition to general management and commercial experience; and are financially literate. Mike Ashley, the Committee Chair, who is the designated financial expert on the Committee for the purposes of SOx, is a former audit partner who, during his executive career, acted as lead engagement partner on the audits of a number of large financial services groups. + Read more about the experience of the current Committee members in their biographies on pages 144 to 146. During 2022, the Committee met 14 times including four ad hoc meetings (2021: 11 times, including one ad hoc meeting) and the chart on page 169 shows how the Committee allocated its time. Attendance by members at Committee meetings is also shown on page 169. Committee meetings were attended by representatives from management, including the Group Chief Executive, Group Finance Director, Group Chief Internal Auditor, Group Chief Controls Officer, Group Chief Risk Officer, Group Chief Operating Officer, Group General Counsel and Group Chief Compliance Officer, as well as representatives from the businesses and other functions, and from BBPLC senior management reflecting the partially consolidated operation of the BPLC and BBPLC Committee meetings. The lead audit engagement partner of KPMG also attended Committee meetings. Marc Moses recently joined the Committee on taking up his appointment as a Non-Executive Director of the Board on 23 January 2023. Marc brings a strong technical finance background with a deep knowledge of banking and financial services. Looking ahead In 2023, it is anticipated that a key focus of the Committee will remain activities to enhance and strengthen the internal control environment and overseeing management in closing out the more significant remediation programmes. The Committee welcomes management's proposals to enhance the 2023 Risk and Control Self-Assessment (RCSA) process in view of lessons learnt from 2022 and see this as a further step towards strengthening the internal control environment. In respect of financial reporting, the Committee’s focus will be on the ECL charge, impairment levels and provisions to ensure they continue to reflect appropriately the macroeconomic conditions. The Committee will also be considering the impact of the UK audit reforms and any steps that may need to be undertaken in preparation for the introduction of new legislation and regulation implementing the changes. I will be stepping down from the Board with effect from the conclusion of the 2023 AGM, and ahead of that, on 1 April 2023, Julia Wilson will, subject to regulatory approval, succeed me as Chair of this Committee and also as the Group Whistleblowers' Champion. Julia has served as a member of the Committee since her appointment to the Board on 1 April 2021, and has significant corporate finance, tax and accounting experience including, amongst her other senior executive and non-executive roles, serving as Chair of the board audit committee at Legal & General Group PLC. Ahead of my stepping down from the Board, I will be working closely with Julia to ensure a smooth transition of my Chair role to her and I am confident that she will make an excellent Chair of the Committee. Finally, I would like to formally record my thanks to my fellow Committee members, members of senior management, BIA and our external auditors for their support during my tenure as Committee Chair. Mike Ashley Chair, Board Audit Committee 14 February 2023 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 172 Directors’ report: Board Audit Committee report (continued) Primary activities The Committee discharged its responsibilities in 2022 through monitoring the effectiveness of the internal control environment, and internal and external audit processes, as well as the integrity of financial statements and related announcements having regard to the current macroeconomic environment. Areas of focus Matters addressed Role of Committee Conclusion/action taken Fair, balanced and understandable reporting (including Country- by- Country Reporting and Modern Slavery Statement) In light of the Board’s obligation under the Code, the Committee assesses external reporting to ensure it is fair, balanced and understandable. In addition to this Annual Report and associated year-end reports, the Committee also reviewed the Group’s half-year and quarterly reports and the presentations to analysts. The Committee informed these reviews through: • consideration of reports of the Disclosure Committee, which included views on content, accuracy and tone • direct questioning of management, including the Group Chief Executive and Group Finance Director, on the transparency and accuracy of disclosures • consideration of management’s response to letters issued by the FRC and other industry reporting guidance • evaluation of the output of the Group’s internal control assessments and SOx s404 internal control process • consideration of the results of management’s processes relating to financial reporting matters and evidencing the representations provided to the external auditors. Distributions and return of capital to shareholders The Committee assesses the distributable reserves position. The Committee considered management’s proposals for distributions (dividends and share buy-backs) for the full year ended 31 December 2021 and for the half year ended 30 June 2022. Going concern and long-term viability (refer to the Viability Statement on pages 58 to 59) Barclays is required to assess whether it is appropriate to prepare the financial statements on a going concern basis. In accordance with the Code, Barclays must provide a statement of its viability. The Committee considered both the going concern assumption and the form and content of the Viability Statement taking into account: • • • the MTP and Working Capital Report the forecast capital, liquidity and funding profiles the results of stress tests based on internal and regulatory assumptions • current risk and strategy disclosures. In light of a deteriorating macroeconomic environment, including the increased cost of living, and rising base rates and inflation, the Committee closely considered the Group's disclosures, including in particular management’s approach to ECL and impairment charges. The Committee scrutinised the disclosures regarding the Over-issuance of Securities, and the impact of the Over-issuance of Securities and the related rescission offer on the financial statements. The Committee recommended to the Board for approval the restated BPLC financial statements for the year ended 31 December 2021, as filed with the SEC on 23 May 2022 in an amended annual report on Form 20-F. The Committee further recommended to the Board that it did not believe that it was necessary or appropriate to revise the 2021 UK financial statements to reflect the impact of the Over-issuance of Securities. Instead, the prior year comparatives have been restated in this 2022 Annual Report and Accounts to reflect the impact of the Over-issuance of Securities. Having evaluated all of the available information, the assurances by management and underlying processes used to prepare the published financial information, the Committee concluded and recommended to the Board that the 2022 Annual Report and Accounts are fair, balanced and understandable. Having regard to the distributable reserves available to the Company, the Committee reviewed and reported to the Board on proposals for (1) a dividend for the financial year ended 31 December 2021 of 4.0p per share along with a share buy-back of up to £1bn; and (2) a dividend for the half year ended 30 June 2022 of 2.25p per share, along with a share buy-back of up to £500m. In early 2023, the Committee reviewed and reported to the Board on the proposals for the full year dividend for the year ended 31 December 2022 along with a proposed share buy-back. The Committee recommended to the Board that the financial statements should be prepared on a going concern basis and that there were no material uncertainties that would impact the going concern statement which required disclosure. The Committee recommended the Viability Statement to the Board for approval. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 173 Directors’ report: Board Audit Committee report (continued) Areas of focus Matters addressed Role of Committee Conclusion/action taken Conduct provisions (refer to Note 24 to the financial statements) Barclays makes certain assumptions and estimates, analysis of which underpins provisions made for the costs of customer redress. With a view to evaluating the adequacy of the provisions, the Committee analysed the judgements and estimates made with regards to Barclays' provisioning for legacy conduct issues. Impairment of financial instruments (refer to Note 8 to the financial statements) Impairments of Goodwill and Intangibles (refer to Note 22 to the financial statements) Legal, competition and regulatory provisions (refer to Notes 24 and 26 to the financial statements) Valuations (refer to Notes 13 to 17 to the financial statements) ECLs are modelled using a range of forecast economic scenarios. They use forward-looking models which require judgements to be made over modelling assumptions, including: • • • • the determination of macroeconomic scenarios to be used the methodology for weighting of scenarios the criteria used to determine significant deterioration in credit quality the application of management adjustments to the ECL modelled output. The carrying value of goodwill and intangible assets is assessed on the basis of discounted forecast future earnings. Given the significant component of earnings attributable to net interest income, such forecasts are particularly sensitive to the level of long-term interest rates and assumed levels of future lending. The period over which intangible assets are amortised appropriately reflects the useful economic life. Barclays is engaged in various legal, competition and regulatory matters which may give rise to provisioning based on the facts. The level of provisioning is subject to management judgement on the basis of legal advice and is, therefore, an area of focus for the Committee. Barclays exercises judgement in the valuation and disclosure of financial instruments, derivative assets and certain portfolios, particularly where quoted market prices are not available. As part of its monitoring, the Committee considered a number of reports from management on: • the impact of the uncertain macroeconomic environment, delinquency levels in the loan portfolios and impact of rising interest rates and inflation • model changes and model validation • refresh of the macroeconomic variables and associated weighting • adjustments made to the modelled output to reflect updated data and known model deficiencies • comparisons between actual experience and forecast losses. The Committee reviewed the Group's goodwill balances and intangibles to identify any indicators of impairment. The Committee evaluated advice on the status of current legal, competition and regulatory matters. It considered management’s judgements on the level of provision to be taken and accompanying disclosures. The Committee: • evaluated reports outlining the Group's material valuation judgements • received reports of the Valuation Committee. The Committee scrutinised management’s approach to conduct provisions throughout the year and was satisfied that management's judgement and approach resulted in an adequate and appropriate level of provision in relation to the various conduct matters. The Committee reviewed, and was comfortable with, the judgement exercised by management in determining post- model adjustments, in particular in view of slowing GDP and rising unemployment. Having considered and scrutinised the reports, the Committee agreed with management’s conclusion that the impairment provision was appropriate. The Committee was satisfied with management's determination that no indicators of impairment had been identified. The Committee reviewed the disclosures made to ensure that the key sensitivities and the potential impacts were appropriately highlighted. The Committee discussed provisions and utilisation and, having reviewed the information available to determine what was both probable and could be reliably estimated, the Committee agreed that the level of provision at the year end was appropriate. The Committee reviewed the disclosures made in respect of legal, competition and regulatory matters and concluded that they provided appropriate information for investors. The Committee scrutinised management's approach to valuation, including in particular the Principal Investments and Leverage Finance portfolios. The Committee was satisfied with the accounting treatment in respect of the various matters. The Committee reviewed the disclosures made to ensure that the Level 3 sensitivities and the potential impacts were appropriately highlighted. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 174 Directors’ report: Board Audit Committee report (continued) Areas of focus Matters addressed Role of Committee Conclusion/action taken Tax (refer to Note 9 to the financial statements) Barclays is subject to taxation in a number of jurisdictions globally and makes judgements with regard to provisioning for tax at risk and to the recognition and measurement of deferred tax assets. The Committee was satisfied that specific strategies were in line with the Group's Tax Principles and on behalf of the Board approved the UK Tax Strategy statement published in the Country Snapshot report and recommended the Country Snapshot to the Board for approval. The Committee is responsible for considering the Group's tax strategy and overseeing compliance with the Group's Tax Principles. To support this, the Committee received reports from the Global Head of Tax. The Committee considered the impact of: • announcements made by the UK government in relation to the future rate of corporation tax • the OECD’s proposal to introduce a global minimum tax • the tax treatment of the Group’s holding of index-linked gilts. The Committee reviewed the appropriateness of provisions made for uncertain tax positions. The Committee also reviewed the Group's tax risks and its interactions with tax authorities. Internal controls and business control environment (read more about Barclays' internal control and risk management processes on page 187) The effectiveness of the overall control environment, including the status of any significant control issues and the progress of specific remediation plans. The Committee: In 2022, the Committee: • considered regulatory views expressed on the Group’s internal control environment and management’s response • evaluated and tracked the status of the more significant control matters through regular reports from the Chief Controls Officer, including updates on the impact of hybrid working and cyber risks on the control environment • scrutinised the pathway to 'Return to Satisfactory' in respect of internal controls (operated by the various functions and businesses) that were not already rated 'Satisfactory' and satisfied themselves that management’s plan, once implemented, should achieve the objective • considered management’s progress in • monitored the remediation of internal control over financial reporting in relation to the identification and monitoring of issuance limits, following the Over- issuance of Securities • discussed reports relating to individual Group entities, businesses and functions on the control aspects of key matters such as financial crime, the use of personal devices for business communications and trading controls • • received an annual update on data protection received independent evaluations from BIA and external auditors • monitored Client Assets Sourcebook (CASS) updates and compliance with CASS. Raising concerns The adequacy of the Group’s arrangements to allow colleagues to raise concerns in confidence and anonymously without fear of retaliation, and the outcomes of any substantiated cases. The Committee received reports from management and monitored whistleblowing metrics and retaliation reports, including consideration as to potential whistleblowing trends which might emerge. remediating internal control over financial reporting following the Over- issuance of Securities and SOx testing in relation to the same, and agreed with management’s conclusion that it was remediated as at 31 December 2022 • monitored the progress of other significant remediation programmes, challenging management to take a forward looking view to create sustainable outcomes • commenced oversight of an internal programme aimed at considering the more material remediation activities on a holistic basis in order to embed controls to achieve a consistently excellent operating environment. In early 2023, the Committee considered management’s proposals for evolving the RCSA process in 2023 taking into account lessons learned from the Over-issuance of Securities, and agreed with the aim to improve the identification of the low probability / high impact events and the associated controls. The Committee received detailed semi- annual reports on whistleblowing from management. The Committee approved proposals by management to enhance certain elements of the Group-wide whistleblowing process following an external benchmarking exercise. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 175 Directors’ report: Board Audit Committee report (continued) Areas of focus Matters addressed Role of Committee Conclusion/action taken Internal audit The performance of BIA and delivery of the internal audit plan, including scope of work performed, the level of resources, and the methodology and coverage of the internal audit plan. External audit The work and performance of KPMG. During the year, the Committee: • scrutinised and agreed internal audit plans, methodology and deliverables for 2022 • • • reviewed BIA's audit reports in relation to specific audits, key areas of focus and themes tracked the levels of adverse audits and issues raised by BIA and monitored related remediation plans received regular updates on resourcing and results of colleague engagement surveys for BIA • discussed BIA's assessment of the management control approach and control environment in the Group companies and functions • continued to monitor BIA's implementation of its three-year internal audit strategy ending December 2022. The Committee: • met with key members of the KPMG audit team to discuss the 2022 Audit Plan and KPMG’s areas of focus • assessed regular reports from KPMG on the progress of the 2022 audit and any material accounting and control issues identified • discussed KPMG’s feedback on Barclays’ critical accounting estimates and judgements • discussed KPMG’s draft report on certain control areas and the control environment ahead of the 2022 year end • received reports on the progress of the PCAOB and AQR joint inspection of KPMG's audit of Barclays' 2021 financial statements. The Committee reviewed BIA's audit results and performance reports, and quality assurance reports. The Committee also reviewed and approved the annual review of BIA's Audit Charter. At the end of the year, the Committee approved the 2023 Audit Plan, detailing the number of audits to be undertaken in 2023 and the focus areas. The Committee reviewed the results of the external quality assurance exercise carried out in respect of BIA and conducted an evaluation of BIA for 2022, the results of which are summarised in the Chair’s letter on page 170. The Committee approved the 2022 Audit Plan and the main areas of focus for the year. The Committee received and considered reports from KPMG on the results of their 2021 CASS audits and management's responses thereto. The Committee considered the results of the PRA Written Auditor Reporting for 2022 and the PRA's feedback thereon, and has also reviewed management's response to the matters raised. Read more about the PCAOB and AQR inspection results and the Committee’s role in assessing the performance, effectiveness and independence of the external auditor on the next page. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 176 Directors’ report: Board Audit Committee report (continued) External auditor Following an external audit tender in 2015, KPMG was appointed as Barclays’ statutory auditor with effect from the 2017 financial year. Stuart Crisp of KPMG is Barclays’ lead audit engagement partner and was appointed to this role with effect for the 2022 financial year following the retirement of the previous lead audit engagement partner, Michelle Hinchliffe. Assessing external auditor effectiveness, objectivity and independence and non-audit services The Committee is responsible for assessing the effectiveness, objectivity and independence of the Group’s auditor, KPMG. This responsibility was discharged by the Committee throughout the year at formal meetings, during private meetings with KPMG and through discussions with key Group executives. In addition to the matters noted above, the Committee also: • approved the terms of the audit engagement letter and associated fees, on behalf of the Board • discussed the Group Policy on the Provision of Services by the Group Statutory Auditor (the Policy) and reviewed regular reports from management on the non-audit services provided by KPMG to Barclays • evaluated and recommended to the Board for approval revisions to the Group Policy on Engagement of Employees and Workers of the Statutory Auditor and ensured compliance with this by regularly assessing reports from management detailing any appointments made • received reports on KPMG’s assessment of the financial impact of the Over-issuance of Securities on both the Group's UK and US financial statements • was briefed by KPMG on critical accounting judgements and estimates and internal controls over financial reporting • met with senior members of the KPMG Barclays team both from the UK and US to discuss the approach to the 2022 audit • assessed any potential threats to independence that were self-identified and reported by KPMG, all of which were regarded by the Committee as being adequately addressed. KPMG’s audit of Barclays' 2021 financial statements was subject to inspection by the AQR team from the FRC and the US PCAOB. The AQR inspection covered three key audit matters (impairment allowances on loans and advances, valuation of financial instruments held at fair value and IT user access management) as well as four other areas of audit focus (general IT controls and automated IT controls, settlement and clearing and the overall payments process, existence and accuracy of unconfirmed OTC bilateral derivatives and cash and cash equivalents). The AQR also inspected the work carried out by KPMG in assessing the restatement that was reported in the Group's first quarter’s results, arising from the impact of the Over-issuance of Securities. The final report from the AQR was received last week and the Committee was pleased to note that there were no significant findings and that the AQR called out examples of best practice in KPMG’s work on IT automated controls, on the partial model rebuild and evaluation of reasonable ranges for expected credit losses, on valuation models and on their climate risk assessment including their reporting thereon in the audit report. There were a number of areas included for improvement, which the Committee will be discussing with KPMG following a meeting to be arranged between the current and incoming Chair of the Committee with the AQR. The Committee noted however that KPMG’s proposed actions did not envisage significant additional work, but clearly recognised the need to better articulate the rationale for and evidence of the audit work carried out in the relevant areas. The PCAOB’s inspection also covered the impairment allowances on loans and advances and the valuation of financial instruments held at fair value both as regards the valuations themselves and the presentation and disclosure thereof. In addition, the PCAOB inspected the work carried out by KPMG on their revised audit report on the restated financial statements included in the amended 2021 20-F, which incorporated the impact of the Over-issuance of Securities. KPMG have not yet received a report from the PCAOB, but have informed us that the PCAOB verbally communicated to them that they had no formal comments on the work supporting their audit opinion. KPMG did inform us that the PCAOB had provided them with one comment as regards required communications with the Committee in respect of the inadvertent omission of two overseas KPMG member firms who provided some limited assistance on the audit and a reference to three other KPMG member firms in a specific country which did not specify their legal names. The Group undertakes an annual formal assessment of KPMG’s performance, independence and objectivity. This assessment was conducted in early 2023, by way of a questionnaire completed by key stakeholders across the Group, including the chairs of the Board Audit Committees of the Group’s main operating companies (BBUKPLC, Barclays US LLC and Barclays Europe). The questionnaire was designed to evaluate KPMG’s audit process and addressed matters such as the quality of planning and communication, technical knowledge, the level of scrutiny and challenge applied and KPMG’s understanding of the business. In line with the approach taken in previous years, in 2022 KPMG also nominated a senior partner of the audit team to have specific responsibility for ensuring audit quality. The Committee met with the partner concerned on a number of occasions, without the lead audit engagement partner present, to receive a report on his assessment of audit quality. Taking into account the result of all of the above, the Committee considered that KPMG maintained its independence and objectivity and that the audit process was effective. Non-audit services In order to safeguard the auditor’s independence and objectivity, Barclays has in place the Policy setting out the circumstances in which the auditor may be engaged to provide services other than those covered by the Group audit. The Policy applies to all Barclays’ subsidiaries and other material entities over which Barclays has significant influence. The core principle of the Policy is that non-audit services (other than those legally required to be carried out by the Group’s auditor) should be performed by the auditor only in certain controlled circumstances. The Policy sets out those types of services that are permitted (Permitted services). A summary of the Policy can be found at home.barclays/who-we-are/our- governance/auditor-independence/. The Policy is reviewed on an annual basis to ensure that it is fit for purpose and that it reflects applicable rules and guidelines. The Policy is aligned with both the FRC’s requirements and KPMG’s own internal policy on non-audit services for FTSE 350 companies, which broadly restricts non- audit work to services that are ‘closely related’ to the audit. During 2022, the Committee reviewed and approved the Policy in its current form on Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 177 Directors’ report: Board Audit Committee report (continued) the basis it continued to reflect current applicable rules and guidelines and met the needs of the business. Any changes to the Policy are required to be approved at a Group level by the Committee. This is in accordance with laws applicable in the UK and FRC guidance, pursuant to which audit committees of Public Interest Entities (such as Barclays) are required to approve non-audit services provided by their auditors to such entities; and subsidiary Public Interest Entities in the UK – such as BBUKPLC and BBPLC – can rely on the approval of non-audit services by the ultimate parent’s Board Audit Committee. Pursuant to the Policy, audit services and the fee cap are monitored by the relevant Board Audit Committee, as appropriate. Under the Policy, except for specific categories of permitted services that require explicit Committee approval, the Committee has pre-approved all Permitted services for which fees are less than £100,000. However, all proposed work, regardless of the amount of the fees, must be sponsored by a senior executive and recorded on a centralised online system, with a detailed explanation of the clear commercial benefit arising from engaging the auditor over other potential service providers. The lead audit engagement partner must also confirm that the engagement has been approved in accordance with the auditor’s own internal ethical standards and does not pose any threat to the auditor’s independence or objectivity. All requests to engage the auditor are assessed by senior management, who are not involved in any work to which the proposed engagement relates, before work can commence. Requests for Permitted service types in respect of which the fees are expected to meet or exceed the above threshold but expected to be less than £250,000 must be approved by the Chair of the Committee (or an appropriate alternate) before work is permitted to begin. Services where the fees are expected to be £250,000 or higher must be approved by the Committee as a whole. All expenses and disbursements must be included in the fees calculation. During 2022, all engagements for which expected fees met or exceeded the above thresholds were evaluated by either the Committee Chair or the Committee members as a whole, who, before confirming any approval, assured themselves that there was justifiable reason for engaging the auditor and that its independence and objectivity would not be threatened. No requests to use KPMG were declined by the Committee in 2022 (2021: none). On a quarterly basis, the Committee scrutinised details of individually approved and pre-approved services undertaken by KPMG in order to satisfy itself that they posed no risk to independence, either in isolation or on an aggregated basis. For the purposes of the Policy, the Committee has determined that any service of a value of under £50,000 is to be regarded as trivial in terms of its impact on Barclays' financial statements and has required the Group Financial Controller to specifically review and confirm to the Committee that any service with a value of between £50,000 and £100,000 may also be regarded as such. Accordingly, any service with a value of less than £100,000 is treated as a pre-approved service, subject to satisfactory review and certain exceptions. The Committee undertook a review of pre-approved services at its meeting in December 2022. KPMG have however recently advised the Committee that, as more fully described in their audit report, a KPMG member firm has provided services in connection with the preparation of local statutory accounts of a small overseas subsidiary not in scope for the group audit. KPMG has assured the Committee, having made appropriate enquiries of their member firms providing services to the Group, this is an isolated instance. In these circumstances the Committee agrees with KPMG’s assessment that this has not impaired their integrity or objectivity. The Committee have also asked management to reinforce the necessity for requests for non-audit services to clearly distinguish the different elements of the service to be provided to ensure they are all permitted. The Committee will also consider if any revisions of the Policy are required to make it clearer in this respect. The fees payable to KPMG for the year ended 31 December 2022 amounted to £71m (2021: £62m), of which £13m (2021: £12m) was payable in respect of non-audit services. A breakdown of the fees payable to the auditor for statutory audit and non- audit work can be found in Note 40 of the financial statements. Of the £13m of non- audit services provided by KPMG during 2022, the significant categories of engagement, i.e. services where the fees amounted to more than £500,000, included: • audit-related services: services in connection with CASS audits • other services in connection with regulatory, compliance and internal control reports and specific audit procedures, required by law or regulation to be provided by the statutory auditor • other attestation and assurance services, such as ongoing attestation and assurance services for treasury and capital markets transactions to meet regulatory requirements, including regular reporting obligations and verification reports. The Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014 An external audit tender was conducted in 2015 and the decision was made to appoint KPMG as Barclays’ external auditor with effect from the 2017 financial year, with PwC resigning as the Group’s statutory auditor at the conclusion of the 2016 audit. Barclays is in compliance with the requirements of The Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014, which relates to the frequency and governance of tenders for the appointment of the external auditor and the setting of a policy on the provision of non-audit services. As explained in previous Committee reports, provided that KPMG continues to maintain its independence and objectivity, and the Committee remains satisfied with its performance, the Group has no intention of tendering for an alternative external auditor before the end of the current required period of 10 years. Accordingly, any tender would be in respect of the 2027 financial year onwards and is likely to take place in 2025. The Committee believes it would not be appropriate to tender before this date as it recognises that while it is important to ensure the audit firm remains objective and does not become overly familiar with management, there is an important balance to be struck with the investment of time required both from management and any completely new audit team for them to gain sufficient understanding of a large and complex organisation as Barclays to ensure a top quality audit. The Committee also observes that there has been significant turnover of the senior members of the audit team since 2017 and more recent changes of the Barclays senior finance team, both of which have reduced any potential familiarisation threat. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 178 Directors’ report: Board Risk Committee report Prudent oversight of the risks facing the Group Dynamic Risk management in the face of challenging geopolitical and macroeconomic conditions. Dear Fellow Shareholders Since I joined the Board and took on the role of Risk Committee Chair in early 2022, there have continued to be many opportunities and challenges that have required careful and considered risk management. As the threat of COVID-19 in our key operating regions receded in 2022, geopolitical risks have heightened with the Russian invasion of Ukraine and continued US/China political tensions. Macroeconomic risks have also increased as most major economies faced slowing growth against a backdrop of high inflation, energy market shocks and rising interest rates, resulting in increased affordability pressures for consumers. Another theme for Barclays throughout this year has been UK political uncertainty, with the ‘mini-budget’ in September causing market disruption, notably the sudden shifts in demand for UK gilts, closely followed by the appointment of another new Prime Minister and a further fiscal budget. Given the ongoing uncertain macroeconomic and geopolitical environment, as a Committee, we spent a significant amount of time during the year hearing directly from the business, alongside risk and compliance colleagues, about how they are managing the associated risks and what mitigating actions are being taken. The Committee remains watchful of the implications of these themes, as well as the longer term consequences of the UK’s withdrawal from the EU, possible political uncertainty in other key jurisdictions and the potential for disorderly market corrections and economic slowdowns across the globe. In addition to the geopolitical and macroeconomic climate, the Committee has continued to focus on the management of the Group’s non-financial risks, including operational risks, such as cyber-related vulnerabilities, conduct risks, including those related to the facilitation of financial crime, and the work undertaken to mitigate the risks associated with the Over-issuance of Securities. Board Risk Committee Robert Berry Chair, Board Risk Committee Committee membership and meeting attendance in 2022a Meetings attended/eligible to attend (including ad hoc meetings) Member Robert Berry1 Mike Ashley Tim Breedon2 Mohamed A. El-Erian Dawn Fitzpatrick Brian Gilvary Diane Schueneman Julia Wilson3 Committee membership in 2022 1 Appointed with effect from 1 March 2022. 2 Retired with effect from 28 February 2022. 3 Appointed with effect from 1 September 2022. 11/11 12/12 2/2 9/12 12/12 11/12 8/12 5/5 Notes a There were nine scheduled meetings and three ad-hoc meetings of the Committee in 2022. Owing to prior commitments, Mohamed A. El-Erian was unable to attend one scheduled meeting and two ad-hoc meetings, Notes Diane Schueneman was unable to attend three scheduled meetings and one ad-hoc meeting and Brian Gilvary was unable to attend one ad-hoc meeting. Committee allocation of timeb (%) n Risk profile/appetite n Key risk issues/monitoring n Internal controls/risk policies n Other b Including ad hoc meetings. 2022 2021 36 50 9 5 46 34 18 2 The Committee also devoted attention to assessing the full range of risks associated with implementing strategic opportunities, such as the digital transformation programme within Barclays UK, acquisitions and growth initiatives. The Committee continues to encourage management to be alert to areas of emerging risk, particularly in light of the rapidly evolving macroeconomic and geopolitical climate. Set out below are some of the key areas of the Committee's work in 2022, but you can read more about how the Committee discharged its duties in the table on pages 182 to 185. Risk appetite A key role of the Committee is to recommend to the Board an appropriate risk appetite for the Group. Risk appetite represents the amount of risk the Group is able to take to earn an appropriate return while meeting minimum internal and regulatory capital requirements in a severe but plausible stress environment. The Committee analyses Barclays’ performance in both its internally generated stress tests and those developed externally by such bodies as the Bank of England (BoE) and the FRB in the US and, following such analysis, may recommend adjustments to the Group’s overall risk profile. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 179 Directors’ report: Board Risk Committee report (continued) Treasury and Capital risks have been actively monitored by the Committee, including, in particular, the appetite for risk going into this higher-rate environment and the adequacy of liquidity levels to mitigate risks associated with a potential UK sovereign downgrade. The Committee reviewed and approved the Group’s Internal Capital Adequacy Assessment Process (ICAAP) and Internal Liquidity Adequacy Assessment Process (ILAAP) during the course of 2022, concluding that the Group was appropriately capitalised and had adequate liquidity resources, including allowing for the impact of the Over-issuance of Securities. Conduct risk The risk of poor outcomes or harm to customers, clients and markets arising from the delivery of Barclays’ products and services continued to be an area of ongoing focus for the Committee. The Committee considered the heightened inherent risk associated with the rapidly changing Russian sanctions regime and the impact on customers and clients of challenging market conditions. The introduction by the FCA of the new Consumer Duty in July 2023, aimed at setting higher and clearer standards of consumer protection across financial services and requiring firms to put customers’ needs first, will increase the regulatory focus on conduct issues and customer outcomes. Current cost of living pressures also re-enforce the need to remain focused on ensuring Barclays delivers good customer outcomes. The Committee received briefings on the Group’s plans for implementation of the Consumer Duty and will continue to receive updates as this work progresses Oversight of the management of financial crime risk was also a core focus of the Committee, reflecting the increase in the risks of money laundering, sanctions circumvention and organised crime taking advantage of economic pressure on companies and individuals. In 2022, the BoE returned to its annual cyclical scenario (ACS) stress testing (paused for two years during the pandemic), which assesses the UK banking system and its capital resilience to a severe but plausible shock. The Committee reviewed and approved the results of the ACS 2022, and approved its use, subject to certain adjustments, for the Group’s internal stress test (IST). The Committee received a briefing on the results of the IST and was satisfied that the Group would meet internal and regulatory requirements for capital and liquidity. Financial risk The Committee continued to monitor closely the rapidly changing macroeconomic environment, including the broad range of impacts stemming from the war in Ukraine, inflationary pressures and rising interest rates. The Committee discussed updates on the multi-faceted response required to the Russian invasion of Ukraine, including the Group’s response to rapidly imposed global sanctions and the management of the Group’s financial exposures to Russia- specific market, credit and liquidity risks. The Committee also oversaw action taken by management to assess and mitigate the financial risks associated with the Over-issuance of Securities. The Committee considered assessments of the potential impacts of heightened inflation and the evolving interest rate environment on consumer spending and affordability, with a view to ensuring the consumer and business banking portfolios were appropriately positioned for the emerging environment and to identify areas of stress where customers and clients might be facing financial pressures and the actions taken to support them. The Committee also continued to monitor the risks associated with the collection and recovery of loans provided under the government loan schemes during the pandemic. Throughout the year, the Committee received regular updates on Credit and Market risk within the Corporate and Investment Bank (CIB), with particular consideration given to the structured lending and finance and leveraged finance portfolios, including management’s actions to manage the size of these portfolios in light of the deterioration in market conditions. Operational risk Operational risk remained heightened in 2022, driven by an increase in risks associated with geopolitical instability and uncertain economic conditions, as well as changes to working practices following the COVID-19 pandemic. Against this backdrop, the Committee discussed updates on a multi-year effort to increase Barclays’ Operational Risk capabilities, and on management actions to enhance the security and resilience of the Group, including the risks associated with third party reliance, hybrid working and ransomware cyber-attack. The Committee oversaw the Group’s participation in the PRA’s cyber stress test and will continue to oversee related management actions and preparations for US legislative changes in the cyber sphere in 2023. The Committee also considered management of risks associated with new activities, including the onboarding of a significant new partnership business in the US Consumer Bank, the Barclays UK digital transformation programme and the announced acquisition of Kensington Mortgage Company; the Committee will continue to oversee execution risk relating to these as they progress. In addition, the Committee continues to oversee management’s review of the New and Amended Product Approval (NAPA) process, which is designed to ensure that any new activity and change implementation is appropriately controlled and supported. Climate risk Acknowledging the importance of this global issue, at the start of 2022, Climate risk became a Principal Risk within our ERMF and the Committee has overseen the continued development and embedment of Climate risk methodologies and capabilities. The Committee approved the Group’s Round 2 submission to the BoE's industry-wide Climate Biennial Exploratory Scenario (CBES) and received updates on the regulatory feedback received and follow- up actions to be taken by management, including that Climate risk is adequately considered as part of business planning activities across the Group. In particular, the Committee has discussed with senior management of both Barclays International and Barclays UK their respective climate strategies and plans for the embedment and delivery of those strategies within their businesses, in line with Barclays' ambition to become a net zero bank by 2050. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 180 Directors’ report: Board Risk Committee report (continued) Board Risk Committee was also considered effective, confirming that the Committee continues to exercise appropriate oversight of issues relevant to the Committee’s remit relating to BBUKPLC. Changes to Committee composition We welcomed Julia Wilson as a member of the Committee with effect from 1 September 2022. The Committee has benefited from Julia’s expertise and the insights she brings, particularly with her cross-Committee membership as a member (and, subject to regulatory approval, as Chair from 1 April 2023) of the Board Audit Committee. We also welcome Marc Moses who recently joined the Committee on taking up his appointment as a Non-Executive Director of the Board on 23 January 2023. You can find details of Julia's and Marc's skills and experience in their biographies on page 146. Looking ahead As we move into 2023, geopolitical risk remains heightened and macroeconomic conditions continue to be uncertain. With this in mind, the Committee will continue to work with management to position the Group prudently in response to the challenging risk environment, remaining watchful and ready to respond to any new areas of emerging risk. Robert Berry Chair, Board Risk Committee 14 February 2023 The Committee will continue to oversee the evolution and delivery of each business’ climate strategy, including development of quantitative risk appetites across a range of metrics. Model risk Models are a core foundation upon which the majority of the Group’s internal assessment processes run and, as such, the Committee closely monitors the development of the Group’s approach to models and its regulators’ expectations in this regard. The Committee continued to oversee Model risk management, including the ongoing validation of the Group’s models and challenging the reliability of existing models in the changing economic climate. In 2022, a Model Strategy and Oversight function was established to steer the approach to model development throughout the Group. Committee effectiveness The 2022 Committee effectiveness review was facilitated internally in accordance with the Code. This internal review involved completion of a tailored questionnaire by Committee members and standing attendees, in line with the approach adopted for all Board Committees in 2022. The review is an important part of the way Barclays monitors and improves Committee performance and effectiveness, maximising strengths and highlighting areas for further development. The results of the review confirm the Committee is operating effectively. It is considered well constituted, providing an effective and appropriate level of challenge and oversight of the areas within its remit. The review acknowledged the Chair’s inclusive approach, with feedback noting strong levels of engagement across the Committee and members’ diverse and valuable range of expertise. The Committee has a broad remit and is considered to allocate time appropriately to cover matters effectively in meetings, with sufficient time for discussion and challenge. The review recognised that it might be beneficial to give further consideration to the cadence of meetings during the year. The review concluded that the Committee’s interaction with the Board, Board Committees and senior management is considered effective. Feedback indicated that concurrent meetings of the BPLC and BBPLC Board Risk Committee continue to be effective, with coverage of BBPLC matters within concurrent meetings considered adequate. Interaction with BBUKPLC Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 181 Directors’ report: Board Risk Committee report (continued) Committee roles and responsibilities The Committee is responsible for reviewing, on behalf of the Board, management’s recommendations on the Principal Risks as set out in the ERMF (with the exception of Reputation risk, which is a matter reserved to the Board), and in particular: • reviewing, on behalf of the Board, the management of those Principal Risks in the ERMF • considering and recommending to the Board the Group’s risk appetite and tolerances for those Principal Risks • reviewing, on behalf of the Board, the Group’s risk profile for those Principal Risks • commissioning, receiving and considering reports on key risk issues • safeguarding the independence, and overseeing the performance, of Barclays’ Risk and Compliance functions. The Committee’s terms of reference are available at home.barclays/who- we-are/our-governance/board- committees/. The Committee monitored the delivery of, and approved updates to, the Compliance function's Annual Plan for 2022 and approved the Annual Plan for 2023. During 2022, a benchmarking review of the design effectiveness of the Compliance function was undertaken by an independent third party. The Committee received an update on the findings of that review, and was pleased to note the conclusion that the Compliance function was considered to have a well-structured design relative to firms of a similar size, complexity, business model and geographical position. The Committee will oversee management’s plans to implement and embed the enhancement opportunities identified by that review. Committee meetings During 2022, the Committee met 12 times (including three ad hoc meetings) and the attendance by members at these meetings is shown on page 178. As well as its members, Committee meetings were attended by representatives from management, including the Group Chief Executive, Group Chief Risk Officer, Group Finance Director, Group Chief Internal Auditor, Group Treasurer, Group Chief Compliance Officer and Group General Counsel, as well as representatives from the businesses and additional members from the Risk function. The Committee held a number of sessions with the Group Chief Risk Officer and the Group Chief Compliance Officer, which were not attended by other members of management. The lead audit engagement partner of KPMG also attended Committee meetings. Committee oversight of the Risk function The Committee is responsible for ensuring the independence and effectiveness of the Risk function, whose primary role is the oversight and challenge of risk taking as the second line of defence. It accomplishes this by establishing the risk policies, limits, rules and constraints under which activities of the first line of defence shall be performed, consistent with the Group’s risk appetite and through monitoring the adherence of the first line of defence against these risk policies, limits and constraints. The Committee reviewed the Risk function’s own assessment of its risk capability and effectiveness in late 2022 which showed that the function continues to meet expectations in providing effective risk management and independent oversight. The report identified areas for enhancement, including continuing to enhance its Operational risk and Model risk capabilities, which the Committee will monitor into 2023. The Committee will oversee the work of the Risk function to upgrade and enhance its infrastructure, which will be pivotal to meeting regulatory expectations for the Market risk framework. During 2022, the Committee oversaw a change to the senior management of the Risk function with the appointment of a new Chief Risk Officer for BBPLC who took up the role in early 2023. Committee oversight of the Compliance function The Compliance function plays a key role in strengthening the culture of Barclays by providing oversight of the management of Conduct risk. Compliance oversees that Conduct risks are effectively identified, managed, monitored and escalated, and has a key role in helping Barclays achieve the right conduct outcomes and evolve a conduct-focused culture. The Committee maintains oversight of the Compliance function, and supports the independence of the function from the operational functions to ensure that Compliance has sufficient authority, stature, resources and access to the management body. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 182 Directors’ report: Board Risk Committee report (continued) Primary activities The Committee discharged its responsibilities in 2022 through reviewing and monitoring Group exposures in the context of the current and emerging risks facing the Group. The Committee seeks to promote a strong culture of disciplined risk management. Areas of focus Matters addressed Role of Committee Conclusion/action taken Risk appetite and stress testing i.e. the level of risk the Group chooses to take in pursuit of its business objectives, including testing whether the Group’s financial position and risk profile provide sufficient resilience to withstand the impact of severe but plausible economic scenarios. Treasury and capital risk i.e. having sufficient capital and financial resources to meet the Group’s regulatory requirements and its obligations as they fall due, to maintain its credit rating, to support growth and strategic options. The risk context to the MTP, the financial parameters and constraints and mandate and scale limits for specific business risk exposures; the Group’s internal stress testing exercises, including scenario selection and financial constraints, stress testing themes and the results and implications of stress tests, including those run by the BoE. • To advise the Board on the appropriate risk appetite and tolerance for the Principal Risks, including the proposed overall Group risk appetite and limits. • To discuss and agree stress loss and mandate and scale limits for Credit risk, Market risk, Operational risk and Treasury and Capital risk. • To consider and approve internal stress test themes, and consider the financial constraints and scenarios, for stress testing risk appetite for the MTP. • To evaluate the results of the BoE’s ACS stress test and the BoE’s Biennial Exploratory Scenario. • To consider the feedback from the FRB on Barclays US LLC’s Comprehensive Capital Analysis and Review (CCAR) following the submission of the CCAR stress test results. The Committee recommended the proposed risk appetite to the Board for approval in early 2022. The Committee also discussed and approved the mandate and scale as well as the stress loss limits for the Group during 2022. Subsequent changes were reviewed and approved during the course of the year. During 2022, stress test results were considered and approved by the Committee including: the 2021 reverse IST results and risk appetite for the MTP; the 2022 ACS stress test results; and the 2022 IST results. The Committee received updates on regulatory stress testing submissions to regulators, including an assessment of the models used and overlays applied. The updates covered both the quantitative and qualitative results of the submissions. The Committee reviewed feedback received from the BoE, including the BoE’s CBES 2021 Round 2 Results prior to submission to the PRA. The trajectory to achieving required regulatory and internal targets and capital and leverage ratios. • To review, on a regular basis, capital performance against plan, tracking the capital trajectory, any challenges and opportunities and regulatory policy developments. The Committee reviewed capital and liquidity performance and the forecast capital and funding trajectory, including the actions identified by management to manage the Group's capital position, taking into account relevant macroeconomic factors. • To assess, on a regular basis, liquidity performance against both internal and regulatory requirements. • To monitor capital and funding requirements. • To consider the ICAAP and ILAAP scenario review. The Committee received a preliminary assessment of the ICAAP and the ILAAP in January 2022. Q&A sessions regarding the ICAAP and the ILAAP were held between management and Committee members. The Committee subsequently discussed and approved the Group's 2022 ICAAP and the Group's 2022 ILAAP prior to their submission to the PRA. Regulatory feedback on the ICAAP and ILAAP was noted throughout the year. As a result of the Over-issuance of Securities, the Committee considered the trigger for refresh of each of the ICAAP and ILAAP. The Committee then approved the results of the Group ICAAP refresh for submission to the PRA. The Committee recommended to the Board for approval the Group Recovery Plan, which forms a part of the Group’s capital and liquidity risk management framework. The Committee also discussed feedback received from the BoE and the PRA on the Group Resolvability Self- Assessment and approved, on behalf of the Board, the public disclosure required to be made in respect of the Group's resolvability arrangements. The Committee also considered the structural hedge programme and reviewed and discussed management’s hedging strategy proposals. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 183 Directors’ report: Board Risk Committee report (continued) Areas of focus Matters addressed Role of Committee Conclusion/action taken The potential impact on the Group’s risk profile of geopolitical and macroeconomic developments. Risk profile i.e. the impact on the Group’s risk profile of geopolitical and macroeconomic developments and conditions Climate risk i.e. the impact on financial and operational risks arising from climate change The impact on financial and operational risks arising from climate change through physical risks and risks associated with transitioning to a lower-carbon economy, and connected risks arising as a result of second order impacts of these two drivers on portfolios. Credit risk and Market risk i.e. the potential for financial loss if customers, clients or counterparties fail to fully honour their obligations; or due to market movements Conditions in the UK housing market; levels of UK consumer indebtedness; unemployment levels in the US and UK; the performance of the UK and US cards businesses, including levels of impairment; and credit and market risk exposures within the CIB. ▪ To consider trends in the economies of our key markets, in particular the UK and US. • To assess the geopolitical tensions across the globe. • To review exposures to emerging markets. • To establish and examine key risk themes in order to monitor the evolving risk environment in which Barclays operates, the response of management, and the changing risk profile of the Group. ▪ To consider and assess the impact of Climate risk on the Group’s activities. ▪ To assess conditions in the UK property market and monitor signs of stress. • To monitor management’s tracking and responding to persistent rising levels of consumer indebtedness, particularly unsecured credit in both the UK and US. • To review leveraged finance portfolios in order to assess maintenance within risk appetite and manageable limits. • To review business development activities in the CIB. The Committee considered macroeconomic trends, including economic slowdown in most major economies, inflationary pressures, energy market disruption, rising interest rates, affordability pressures for consumers, and increased risk of disorderly market corrections. The Committee monitored the Group's exposures to geopolitical risks, including the Russian invasion of Ukraine, continued US/China political tensions and UK political uncertainty. The Committee also considered the risk management implications of initiatives in emerging markets. The Committee approved changes to key risk themes, including the global pandemic being a declining trend and a new overview on the subject of Challenges to the Global Order. The Committee received regular updates on Climate risk including areas of elevated Climate risk and progress against sector targets in the form of a Climate Risk Dashboard. The Committee reviewed the conclusions of Round 2 of the CBES and approved the results and conclusions for submission to the PRA. The Committee received updates from businesses on their climate strategies, with a focus on ensuring Climate risk is appropriately considered in business planning activities. In the prevailing macroeconomic conditions, the Committee reviewed the UK housing market and affordability criteria and the risk of default on certain loan portfolios. The Committee discussed reports from management on consumer indebtedness, where stress was expected both in the UK and US, with trends including US consumer credit weakness. The Committee received regular updates on Credit and Market risk within the CIB, with a particular focus on the structured lending and finance and leveraged finance portfolios. The Committee considered updates on the Over- issuance of Securities, including the hedging arrangements designed to manage the risks of the rescission offer. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 184 Directors’ report: Board Risk Committee report (continued) Areas of focus Matters addressed Role of Committee Conclusion/action taken The Group’s operational risk capital requirements and any material changes to the Group’s operational risk profile and performance of specific operational risks against agreed risk appetite. Operational risk and operational resilience i.e. the risk of loss arising from inadequate or failed processes and systems, human factors or due to external events • To track operational risk key indicators. • To consider specific areas of operational risks, including fraud, conduct risk, cyber risk, execution risk, technology and data, including the controls that had been put in place for managing and avoiding such risks. • To review Barclays’ approach to scenario analyses as a risk management tool. • To consider the operational resilience tolerance statement and review status against it. Model risk i.e. the potential for adverse consequences from decisions based on incorrect or misused model outputs and reports Conduct risk i.e. the risk of poor outcomes to customers, clients and markets, arising from the delivery of the Group's products and services Model risk governance. ▪ To evaluate the appropriateness of the Model risk management framework and monitor progress on the implementation of an enhanced modelling framework, including receiving updates on findings in relation to specific modelling processes. • To receive updates from management on Conduct risk and consider performance against key Conduct risk indicators and the status of initiatives in place to address those risks to further strengthen the culture of the business. • To review the effectiveness of the Conduct risk framework. • To review the Compliance function’s Annual Compliance Plan. Conduct robust reviews of any current and emerging risks arising from the delivery of Barclays' products and services. The Committee approved and recommended to the Board the 2022 Operational Risk Appetite Statement. The Committee received regular reporting on key operational risk indicators and was briefed by management on a number of operational risks topics, including those relating to third party risk management, hybrid working, fraud, erroneous payments, cybersecurity and the use of cloud platforms and the risk associated with new business activities. The Committee continued to monitor the review of the processes for new and amended product approvals within the Group. The Committee also considered operational resilience, including approving a new operational resilience tolerance statement. The Committee received updates on cyber resilience and reviewed the results of, and recommended the outcome of, the PRA cyber stress test to the Board for its approval. The Committee also considered the analysis of a severe and prolonged ransomware cyber-attack scenario and, consequently, the importance of the ongoing Operational resilience work. The Committee reviewed and discussed regular updates on Model risk including the ongoing validation of the Group’s models and whether model assumptions needed to be updated given the rapidly changing economic climate. Through quarterly updates, the Committee monitored improvements to the Model risk management framework, including the introduction of a Model Strategy and Oversight function to steer the approach to model development across the Group. During 2022, the Committee was provided with regular updates on Conduct risk, and assessments of potential risks to the Group following market events. The Committee also received updates on lessons learned reviews undertaken in response to industry developments and events, and continued to monitor ongoing remediation activities. The Committee considered the heightened risks associated with the rapidly changing Russian sanctions regime and the impact to clients and customers of challenging market conditions. The Committee also received regular updates on the management of the Group’s financial crime risk. The Committee received briefings on the Group’s implementation plans for the FCA’s new Consumer Duty and the conduct and risk culture within the Group. During the year, the Committee reviewed the Compliance function's effectiveness and performance of activities against its Compliance Plan for 2022, and towards year end approved the Annual Compliance Plan for 2023. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 185 Directors’ report: Board Risk Committee report (continued) Areas of focus Legal risk Risk framework and governance Matters addressed Role of Committee Conclusion/action taken Conduct robust reviews of any current and emerging legal risks faced by the Group. The frameworks, policies and tools in place to support effective risk management and oversight. • To monitor the Group's legal risk profile, including considering potential material emerging legal risks. The Committee received regular updates on the Legal risk faced by the Group, including horizon scanning for key areas of emerging legal risk and Barclays' ability to manage these and other risk trends. ▪ To track the progress of significant risk management projects, achieving compliance with the Basel Committee on Banking Supervision (BCBS239) risk data aggregation and risk reporting principles. The Committee discussed the annual refresh of the Principal Risk Frameworks as well as recommending the updated ERMF to the Board for approval. Updates included: (i) the addition of Climate risk as a Principal Risk; and (ii) the removal of Brexit as a standalone item in the risk factors. • To assess risk management matters raised by Barclays’ regulators and the actions being taken by management to respond. • To review the design of the ERMF. Remuneration The scope of any risk adjustments to be taken into account by the Board Remuneration Committee when making remuneration decisions for 2022. • To debate the Risk and Compliance function’s view of performance, making a recommendation to the Board Remuneration Committee on the financial and operational risk factors to be taken into account in remuneration decisions for 2022. The Committee continued to oversee management's progress towards achieving full compliance with all aspects of BCBS239, receiving regular reports on levels of compliance and expected milestones. The Committee reviewed reports from management on guidance, letters and reviews received from regulators. The Committee examined management's responses to the matters raised and monitored remediation programmes. The Committee considered reports of the Group Chief Risk Officer and the Group Chief Compliance Officer and considered the 2022 ex-ante risk adjustment methodology. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 186 Directors’ report: How we comply Reporting against the Code's principles and provisions As Barclays PLC is listed on the London Stock Exchange, the principles and provisions of the Code apply, a copy of which can be found at frc.org.uk. For the year ended 31 December 2022, and as at the date of this report, we are pleased to confirm that Barclays PLC has complied in full with the requirements of the Code. This section and our Board Governance Report sets out how we comply with the Code. By virtue of the information included in the Annual Report, we comply with the corporate governance statement requirements of the FCA’s Disclosure and Transparency Rules (DTRs). The information required to be disclosed pursuant to DTR 7.2.6 is located on pages 190 to 196. Information in relation to the Board Diversity Policy, as required to be disclosed pursuant to DTR 7.2.8A, can be found on pages 161 to 162. Barclays is permitted by NYSE rules to follow UK corporate governance practices instead of those applied in the US. Any significant variations must be explained in Barclays' Form 20-F filing, found at the Securities and Exchange Commission’s EDGAR database or on our website, home.barclays. Board Leadership and Company Purpose Division of Responsibility Remuneration Our Board governance is designed to deliver an effective and entrepreneurial Board, which discharges its role effectively and efficiently. Details can be found on pages 149 to 153, including our Group- wide governance framework and the Board's responsibilities. Key Board Activities for 2022 are set out on pages 154 to 156. The Board is fully supportive of The Barclays Way, which sets out our Purpose, Values and Mindset, and is our Code of Conduct, providing a path for achieving a dynamic and positive culture in the Group. Refer to page 256 for further detail. Our Group Whistleblowing Standard enables colleagues to raise any matters of concern anonymously and is embedded into our business. Further information can be found on page 257. Throughout 2022, we engaged with our stakeholders through a variety of means. Further detail about how we engage with our stakeholders is set out on pages 21 to 22. You can read more about how the Board engages with stakeholders in our Section 172 statement in the Strategic Report on page 16. The majority of the Board comprises Independent Non-Executive Directors. The Chair and Company Secretary work in collaboration to ensure an effective and efficient Board, as further described in Our Governance Framework on page 153. The roles of Non-Executive and Executive Directors on the Board are defined within the Barclays Charter of Expectations, along with the behaviours and competencies for each role, as outlined on page 152. Directors are expected to commit sufficient time to ensure they can discharge their obligations to Barclays effectively, as detailed in our Board Nominations Committee report on page 164. The Board is responsible for setting the strategy for the Group. The day-to-day management of the Group is delegated from the Board to the Group Chief Executive who is supported by his ExCo, the composition of which is outlined on page 148. The Remuneration report on pages 197 to 245 outlines the purpose and activities of the Board Remuneration Committee, the proposed remuneration policies for Executive and Non-Executive Directors, and for the wider workforce, as well as the Directors’ remuneration outcomes for 2022. The remuneration policies and procedures support the strategy and enable us to reward sustainable performance, which is a key element of our Remuneration Philosophy, in line with our Values, Mindset and risk expectations. All Executive Director and senior management remuneration policies are developed in accordance with the Group's formal and transparent procedures (ensuring that no Director is involved in deciding their own remuneration outcome) and are, where possible, aligned to wider workforce policies. Board Remuneration Committee members exercise independent judgement and discretion when determining remuneration outcomes, considering the company and individual performance, wider workforce and other relevant stakeholder considerations. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 187 Directors’ report: How we comply (continued) Composition, Succession and Evaluation Audit, Risk and Internal Control All Board and senior management appointments are viewed through a diversity lens and are based on merit and objective criteria, which focus on the skills and experience required for the Board's effectiveness and the delivery of the Group's strategy. Board appointments are made following a rigorous and transparent process facilitated by the Board Nominations Committee, with the aid of external search consultancy firms. A revised Board Diversity Policy was adopted on 15 December 2022. Refer to the Board Nominations Committee Report on pages 157 to 168 for further detail. Biographies for each member of the Board, including details of their relevant skills, experience and contribution to the Board are provided on pages 143 to 146. Each year, we carry out an effectiveness review to evaluate the performance of the Board, Board Committees and individual Directors. The review was conducted internally in 2022, as detailed in the Board Nominations Committee report on pages 166 to 168. The Board, together with the Board Audit Committee, is responsible for ensuring the integrity of this Annual Report and that the financial statements as a whole present a fair, balanced and understandable assessment of our performance, position and prospects. The Board, together with the Board Audit Committee, is responsible for ensuring the independence and effectiveness of the internal audit function and external auditors. You can read more about the Board Audit Committee and its work on pages 169 to 177. The Directors are responsible for ensuring that management maintains an effective system of risk management and internal control and for assessing its effectiveness. Such a system is designed to identify, evaluate and manage, rather than eliminate, the risk of failure to achieve business objectives and can only provide reasonable, and not absolute, assurance against material misstatement or loss. Processes are in place for identifying, evaluating and managing the Principal Risks facing the Group. A key component of The Barclays Guide is the ERMF. The purpose of the ERMF is to identify and set minimum requirements of the main risks to the strategic objectives of the Group. The Group is committed to operating within a strong system of internal control. The Barclays Guide contains the overarching framework setting out the approach of the Group to internal governance. Key controls are assessed on a regular basis for both design and operating effectiveness. Issues arising out of these assessments, where appropriate, are reported to the Board Audit Committee. The Board Audit Committee oversees the control environment (and remediation of related issues). The Board Audit Committee also reviews annually the risk management and internal control system. It has concluded that, save for the material weakness relating to the Over-issuance of Securities, throughout the year ended 31 December 2022 and to date, the Group has operated an effective system of internal control that provides reasonable assurance of financial and operational controls and compliance with laws and regulations. Whilst the control environment was determined to be effective, the Over- issuance of Securities underlined to the Board the need to continue to focus on embedding Barclays' Values and Mindset at all levels of the organisation to achieve operational and controls excellence. The Board has therefore supported the creation of a Group-wide programme, established by the Group Chief Executive. This programme will seek to identify issues and lessons learned across the Group's remediation initiatives to help ensure that Barclays is consistently excellent, in customer and client service, in operational capability and in financial performance, with all activities underpinned by a strong risk management culture. For further information in relation to controls over financial reporting, including the remediation of material weakness relating to the Over-issuance of Securities, please see pages 194 to 195. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 188 Directors' report: Over-issuance of Securities – Shareholder Q&A To help shareholders understand the circumstances relating to the Over- issuance of Securities and remediation activity taken by Barclays to resolve this matter, we have set out below a series of questions and answers. Shareholders should refer to the underlying disclosures, including the Group’s results and stock exchange announcements, for more information about the matters discussed below. What was the legal significance of the Over-issuance of Securities? The securities issued in excess of the registered amounts were considered to be ‘unregistered securities’ for the purposes of US securities law and certain offers and sales of these securities were not made in compliance with the US Securities Act of 1933, which requires that offers and sales of securities be registered unless there is an exemption from registration. This gave rise to rights of rescission for certain purchasers of relevant securities under US securities laws, whereby such purchasers had a right to recover either, upon the tender of such security, the consideration paid for such security (together with interest but less the amount of any income received), or damages if the purchaser had sold the security at a loss. As a result, BBPLC elected to conduct a rescission offer, as approved by the Board, to eligible purchasers of relevant securities. The rescission offer was launched on 1 August 2022 and settled on 15 September 2022. Why did the Over-issuance of Securities happen and what were the findings of Barclays’ review? Barclays commissioned a review led by external counsel of the facts and circumstances relating to the Over- issuance of Securities and, among other matters, the control environment related to such issuances (the Review). The Review concluded that the Over-issuance of Securities occurred because Barclays did not put in place a mechanism to track issuances after BBPLC became subject to a limit on such issuances, as a result of losing WKSI status. Among the principal causes of the Over-issuance of Securities were, first, the failure to identify and escalate to senior executives the consequences of the loss of WKSI status and, secondly, a decentralised ownership structure for securities issuances. Where did the Over-issuance of Securities occur? The Group operates a structured products business in BBPLC, through which it issues structured notes and exchange traded notes to customers in the US and elsewhere. In order to issue securities of this nature in the US, BBPLC maintains a shelf registration statement with the US SEC. What securities were over- issued? In March 2022, management became aware that BBPLC had issued securities materially in excess of the amount registered under BBPLC's shelf registration statement on Form F-3, as declared effective by the SEC in August 2019 (2019 F-3). The amount registered should have operated as a limit on the amount of BBPLC’s issuances. Subsequently, management also became aware of issuances in excess of the amount registered under BBPLC's prior shelf registration statement (the Predecessor Shelf). Across both shelf registration statements, BBPLC issued a cumulative total of approximately $17.7 billion in securities in excess of the amounts it had registered with the SEC. Why did BBPLC’s US Shelf have limited capacity? In May 2017, Barclays Capital Inc. entered into a settlement with the SEC in connection with a matter arising out of its former Wealth and Investment Management business. As a result, at the time the 2019 F-3 was filed and the Predecessor Shelf was amended, BBPLC had become an ’ineligible issuer’ thereby ceasing to be a 'well known seasoned issuer' (or WKSI). This meant that BBPLC was not able to take advantage of SEC rules that allow WKSIs to file shelf registration statements to register unspecified amounts of securities (and then issue securities without limit), and was instead required to pre-register a fixed amount of securities under its shelf registration statements and only issue securities up to that amount. The Review further concluded that the occurrence of the Over-issuance of Securities was not the result of a general lack of attention to controls by Barclays, and that Barclays’ management has consistently emphasised the importance of maintaining effective controls. What was the Board’s response? The Board has worked to address the root cause and impacts of the Over-issuance of Securities, including through the Review, and deeply regrets its occurrence. The Over-issuance of Securities also underlined to the Board the need to continue to focus on embedding Barclays' Values and Mindset at all levels of the organisation to achieve operational and controls excellence. Further, the Board has supported the creation of a Group-wide programme, established by the Group Chief Executive. This programme will seek to identify issues and lessons learned across the Group's remediation initiatives to help ensure that Barclays is consistently excellent, in customer and client service, in operational capability and in financial performance, with all activities underpinned by a strong risk management culture. What actions has the Board taken in response to the Over-issuance of Securities? The Board spent significant time throughout 2022 in both scheduled and ad hoc meetings considering the impacts of the Over-issuance of Securities and the Group’s response to it, including through the work of its Risk and Audit Committees. This work has included the following: • the assessment of the financial impacts of the Over-issuance of Securities and the associated hedging arrangements undertaken to help manage the risks associated with the rescission offer and Barclays’ financial exposure • the review and approval of disclosures to the market regarding the Over- issuance of Securities • considering the findings of the Review and, among other matters, the control environment related to such issuance Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 189 Directors' report: Over-issuance of Securities – Shareholder Q&A (continued) • oversight of discussions with the Group’s key regulators including the SEC, PRA, FCA and FRC • engagement with Barclays’ shareholders to discuss the Over-issuance of Securities and Barclays’ response to it; • consideration of the implications of the Over-issuance of Securities for BPLC’s financial statements, including the approval of the restatement of the financial statements included in the BPLC 2021 Annual Report on Form 20-F filed with the SEC, as well as the amendment of such report • noting the approval by BBPLC of the launch of the rescission offer; • oversight of the settlement with the SEC in relation to the Over-issuance of Securities • oversight of the remediation of the material weakness in internal control over financial reporting which led to the Over-issuance of Securities, as well as the work required to address the specific requirements of the SEC set out in its order of 29 September 2022. What were the main financial consequences of the Over- issuance of Securities? In addition to a £0.2bn net attributable loss referable to the year ended 31 December 2021, Barclays has recognised a net attributable loss of £0.6bn in the year ended 31 December 2022 in relation to the Over-issuance of Securities, materially in line with the anticipated financial impact disclosed in BPLC’s and BBPLC’s H1 2022 results announcements. These amounts represent the net attributable loss to Barclays in connection with the Over- issuance of Securities, taking into account the costs of the rescission offer, the hedging arrangements entered into to manage the risks associated with the rescission offer and the $200m (£165m1) penalty paid following the resolution of the SEC’s investigation into the Over-issuance of Securities (see below for further detail). How has Barclays reflected the financial consequences of the Over-issuance of Securities in its financial statements? It was concluded that it was not necessary or appropriate, under UK company law and financial reporting standards, to revise the financial statements of BPLC or BBPLC for the year ended 31 December 2021 included in their respective 2021 UK Annual Report and Accounts to reflect the impact of the Over-issuance of Securities. Instead, each of BPLC and BBPLC has restated the prior period comparatives in the Group’s quarterly and half-year results in 2022, and in their respective 2022 UK Annual Report and Accounts, to reflect the impact of the Over-issuance of Securities. As a US foreign private issuer, each of BPLC and BBPLC is required to file with the SEC annual reports on Form 20-F, including financial statements. In May 2022, BPLC and BBPLC amended their respective annual reports on Form 20-F for the year ended 31 December 2021 to include restated financial statements for this period reflecting the impact of the Over-issuance of Securities. Such amended annual reports on Form 20-F also disclosed the existence of a material weakness in internal control over financial reporting (as defined in the applicable SEC rules) and management’s conclusions that BPLC’s and BBPLC’s internal control over financial reporting and disclosure controls and procedures were not effective as at 31 December 2021. The material weakness that had been identified related to a weakness in controls over the identification of external regulatory limits related to securities issuance and monitoring against these limits. What remediation activity has been taken to address the material weakness identified? Since the identification of this material weakness, the Group has strengthened the internal controls relating to the tracking of issuance programme limits through the implementation and strengthening of a series of controls across the Group, together with central governance. Accordingly, as at 31 December 2022, management concluded that the previously disclosed material weakness in internal control had been resolved. Please see pages 194 to 195 for details on how this material weakness was remediated. Has Barclays been the subject of any regulatory enforcement action in relation to the Over- issuance of Securities? In September 2022, the SEC issued an order announcing the resolution of its investigation of BPLC and BBPLC relating to the Over-issuance of Securities. Pursuant to the terms of the resolution, BPLC and BBPLC paid a combined penalty of $200m (£165m1) , without admitting or denying the SEC’s findings, and BBPLC agreed to undertakings requiring the adoption and implementation of certain enhancements to controls and governance with respect to its shelf registration statements filed with the SEC. The SEC found that BBPLC’s previously announced rescission offer satisfied its requirements for disgorgement and prejudgment interest. How has Barclays assessed the consequences for remuneration and for individuals? The Board Remuneration Committee has adjusted its remuneration decisions to reflect the Over-issuance of Securities, and in doing so has taken into consideration the financial impact, reputational impacts and how these events reflect on the Group’s control environment. More detail can be found in the Remuneration report on page 201. How does the Over-issuance of Securities continue to impact Barclays? The Group is engaged with, and responding to inquiries and requests for information from, various other regulators and BBPLC and/or its affiliates is involved in purported class action litigation in relation to the Over-issuance of Securities. The Group may face other potential private civil claims, class actions or other enforcement actions in relation to the Over-issuance of Securities. Please see Note 26 (Legal, competition and regulatory matters) to the audited financial statements for the year ended 31 December 2022 for further information. Note: 1 Exchange rate USD/GBP 1.22 as at 30 June 2022 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 190 Directors’ report: Other statutory and regulatory information The Directors present their report together with the audited accounts for the year ended 31 December 2022. Other statutory and regulatory information Other information that is relevant to the Directors’ report, and which is incorporated by reference into this report, can be located as follows: Remuneration policy, including details of the remuneration of each Director and Directors’ interests in shares Corporate Governance Statement Risk review Page 209, 240 to 241 186 to 187 264 Disclosures required pursuant to Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 as updated by Companies (Miscellaneous Reporting) Regulations 2018 can be found on the following pages: Engagement with employees (Sch. 7, Para 11 and 11A 2008/2018 Regs) Policy concerning the employment of disabled persons (Sch. 7, para 10 2008 Regs) Page 31 to 38 33 Engagement with suppliers, customers and others in a business relationship (Sch. 7, Para 11 B 2008/2018 Regs) 16 to 30 and 39 to 44 Financial instruments (Sch. 7, para 6 2008 Regs) Hedge accounting policy (Sch. 7, para 6 2008 Regs) Disclosures required pursuant to Listing Rule 9.8.4R can be found on the following pages: 447 447 Page 488 190 Allotment for cash of equity securities Waiver of dividends Section 414A of the Companies Act 2006 requires the Directors to present a Strategic report in the Annual Report and Financial Statements. This report can be found on page 1 to 65. The Company has chosen, in accordance with section 414C (11) of the Companies Act 2006, and as noted in this Directors’ report, to include certain matters in its Strategic report that would otherwise be disclosed in this Directors’ report: • an indication of likely future developments may be found in the Strategic report • the particulars of important events affecting the Company since the financial year end can be found in the Strategic report and Note 26 (Legal, competition and regulatory matters) to the financial statements. Profit and dividends Statutory profit after tax for 2022 was £5,973m (2021: £7,056m1). The 2022 full year dividend of 5.0p per ordinary share will be paid on 31 March 2023 to shareholders whose names are on the Register of Members at the close of business on 24 February 2023. With the 2022 half year dividend totalling 2.25p per ordinary share, paid in September 2022, the total dividend for 2022 is 7.25p (2021: 6.0p) per ordinary share. The half year and full year dividends for 2022 amounted to £1,028m (2021: £512m). BPLC also completed share buy- back programmes during 2022, further details of which can be found on page 194. Shareholders may have their dividends reinvested in Barclays by joining the Barclays DRIP. Further details regarding the DRIP can be found at home.barclays/ dividends and shareview.co.uk/info/drip. Note 1 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Impact of the Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details The nominee company of certain Employee Benefit Trusts (EBTs) holding shares in Barclays in connection with the operation of our employee share plans has lodged evergreen dividend waivers on shares held by it that have not been allocated to employees. The total amount of dividends waived during the year ended 31 December 2022 was £6.28m (2021: £1.02m). Board of Directors The names of the current Directors of BPLC, along with their biographical details, are set out on pages 143 to 146 and are incorporated into this Directors’ report by reference. Changes to Directors during the year and up to the date of this report are set out below. Name Robert Berry Non- Role Tushar Morzaria Anna Cross Executive Director Executive Director Executive Director Marc Moses Non- Executive Director Effective date Appointed 8 February 2022 Resigned 22 April 2022 Appointed 23 April 2022 Appointed 23 January 2023 Appointment and retirement of Directors The appointment and retirement of Directors is governed by our Articles, the Code, the Companies Act 2006 and related legislation. The Articles may be amended only by a special resolution of the shareholders. The Board has the power to appoint additional Directors or to fill a casual vacancy among the Directors and any Director so appointed holds office only until the next AGM and may offer themselves for re- election. The Code recommends that all directors of FTSE 350 companies should be subject to annual re-election. All Directors who will be continuing in office intend to offer themselves for election or re-election at the 2023 AGM save for Mike Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 191 Directors’ report: Other statutory and regulatory information (continued) Ashley who will step down at the end of the AGM and who will not stand for re-election. Directors’ indemnities ‘Qualifying third party indemnity’ provisions (as defined by Section 234 of the Companies Act 2006) were in force during the course of the financial year ended 31 December 2022 for the benefit of the then Directors of the Company and the then Directors of certain of the Company's subsidiaries and, at the date of this report, are in force for the benefit of the Directors of the Company and the Directors of certain of the Company's subsidiaries in relation to certain losses and liabilities which they may incur (or have incurred) in connection with their duties, powers or office. The Group also maintains Directors’ and Officers’ Liability Insurance which gives appropriate cover for legal action brought against its Directors. Qualifying pension scheme indemnity provisions (as defined by Section 235 of the Companies Act 2006) were in force during the course of the financial year ended 31 December 2022 for the benefit of the then directors, and at the date of this report are in force for the benefit of directors of Barclays Pension Funds Trustees Limited as trustee of the Barclays Bank UK Retirement Fund, and Barclays Executive Schemes Trustees Limited as Trustee of Barclays Capital International Pension Scheme (No.1) and Barclays PLC Funded Unapproved Retirement Benefits Scheme. The directors of the trustees are indemnified against liability incurred in connection with the trustees’ activities in relation to the Barclays Bank UK Retirement Fund, Barclays Capital International Pension Scheme (No.1) and Barclays PLC Funded Unapproved Retirement Benefits Scheme. Political donations The Group did not give any money for political purposes in the UK or outside the UK, nor did it make any political donations to political parties or other political organisations or to any independent election candidates, nor did it incur any political expenditure during the year. In accordance with the US Federal Election Campaign Act, Barclays provides administrative support to a federal Political Action Committee (PAC) in the US, funded by the voluntary political contributions of eligible employees. The PAC is not controlled or funded by Barclays and all decisions regarding the amounts and recipients of contributions are directed by a steering committee comprising employees eligible to contribute to the PAC. Contributions to political organisations reported by the PAC during the calendar year 2022 totalled $105,000 (2021: $29,000). Country-by-Country reporting The Capital Requirements (Country-by- Country reporting) Regulations 2013 require the Company to publish additional information in respect of the year ended 31 December 2022. This information is included in the Barclays Country Snapshot available on the Barclays website: home.barclays/annualreport. Environment Although financed emissions account for the greatest proportion of our climate impact, addressing our operational emissions is also important to meeting our net zero by 2050 ambition. We are aiming to integrate sustainability across the way 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 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 operationala emissions consistent with a 1.5oC 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. Please see from page 78 for more details of our net zero operations strategy. Progress to date We achieved our 90% GHG market-based emissions reduction target for Scope 1 and Scope 2, having reduced our Scope 1 and Scope 2 emissions by 91% since 2018 and sourced 100% renewable electricity for our global real estate portfoliob in 2022. We achieved our renewable electricity target ahead of schedule by matching 100% of our electricity consumption with energy attribute certificates and green tariffs which is for us a transitional solution as we seek to increase the proportion of on-site renewable electricity sources and Power Purchase Agreements. 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/m2/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. We have disclosed global GHG emissions and energy use data as required by the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008. See the ESG Data Centre for further details on our annual operational GHG emissions since 2018, including our Scope 1, Scope 2 and Scope 3 business travel location-based and market-based emissions. We further provide insights on our annual waste production, energy and water consumption and renewable electricity consumption by country. + The ESG Data Centre within the ESG Resource Hub can be found at home.barclays/sustainability/esg- resource-hub/reporting-and-disclosures Notes: a We define our Scope 3 operational emissions to include supply chain, waste, business travel and leased assets b Global real estate portfolio includes offices, branches, campuses and data centres Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 192 Directors’ report: Other statutory and regulatory information (continued) GHG Emissions Table and Notes Group GHG Emissionsb (CO2e) Total CO2e emissons (000' tonnes) Scope 1 CO2e emissions (000' tonnes)c Scope 2 CO2e emissions (000' tonnes)d Scope 3 Business travel CO2e emissions (000' tonnes)e Energy consumption used to calculate above Scope 1 and 2 emissions (MWh) Intensity Ratio Total Full-Time Employees (FTE) Total CO2e per FTE (tonnes)f Market-based emissions Scope 2 CO2e market-based emissions (000' tonnes)d Total gross Scope 1 and 2 market-based CO2e emissions (000' tonnes) Current Reporting Year 2022a Previous Reporting Year 2021 UK & Offshore Area Global GHG Emissions UK & Offshore Area Global GHG Emissions 68.6 12.8 47.3 8.5 286,727 44,000 1.56 0 12.8 142.9Δ 20.0Δ 103.4Δ 19.4Δ 467,939Δ 86.2 16.5 68.7 0.9 149.8 23.2 124.2 2.4 375,121 559,240 87,400 1.63Δ 44,100 1.95 1.9Δ 21.9 4.0 20.5 81,600 1.84 13.6 36.8 Notes a The carbon reporting year for our GHG emissions is 1 October to 30 September. The carbon reporting year is not fully aligned to the financial reporting year covered by this Directors’ Report. Details of our approach to assurance over the data is set out in the 2022 Barclays Strategic Report. b The methodology used to calculate our GHG emissions follows the 'Greenhouse Gas Protocol (GHG): A Corporate Accounting and Reporting Standard (Revised Edition)', defined by the World Resources Institute/World Business Council for Sustainable Development (WRI/WBCSD). We have adopted the operational control approach to define our reporting boundary. Emissions from leased buildings where Barclays do not manage the utility are excluded. Where Barclays is responsible for the utility costs, these emissions are included. Estimating the GHG emissions of working from home is a new activity with little or no precedent and with no common standard which is why we have not yet included it in our annual GHG inventory. We are evaluating different methodologies to estimate our remote working emissions moving forward. 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 GHG 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 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 and Netherlands have taken place due to incorrect meter reads. c Scope 1 emissions include our direct GHG emissions from natural gas, fuel oil, company cars and HFC refrigerants. In the case of company-owned vehicles, emissions are limited to UK vehicles only as this is the only country in which data is available. d Scope 2 GHG emissions include our direct GHG emissions from purchased electricity, purchased heat, cooling and steam . Market-based emissions have been reported for 2022 and 2021. We have used a zero emission factor where we have green tariffs or energy attribute certificates in place globally. e Scope 3 covers indirect emissions from business travel only. Business travel for these purposes compromises of: global flights and ground transport within the UK, US and India, however, in the case of the US and India ground transport covers onwards car hire only which has been provided directly by the supplier. Ground transportation data (excluding Scope 1 emissions from company-owned vehicles) covers only countries where robust data is available directly from the supplier. Intensity ratio calculations have been calculated using location-based emission factors only. f g Energy consumption data is captured through utility billing; meter reads or estimates. Principal measures we have undertaken in 2022 to improve energy efficiency include the following: • We have reduced our operational energy consumption by 30% against a 2018 baseline. At the end of 2021, we launched an Energy Optimisation Programme to help improve the energy efficiency of our global property portfolio. In the first 12 months of our five-year programme we saved 6GWh of energy, equivalent to the annual electricity consumption of approximately 2,000 UK households. • We have also focused on our own data centres, which consume a large amount of energy to operate. For example, we upgraded our cooling systems at our Cranford, New Jersey data centre, In just four months this upgrade led to an approximately 19% energy reduction for cooling alone, in comparison to the same period in 2021. We will continue to make investments in technology and systems to reduce the amount of energy we need to power our operations. Please refer to our Achieving net zero operations pillar for more details on our strategy. Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/ Research and development In the ordinary course of business, the Group develops new products and services in each of its business divisions. Share capital Share capital structure The Company has ordinary shares in issue. The Company’s Articles also allow for the issuance of sterling, US dollar, euro and yen preference shares (preference shares). No preference shares have been issued as at 13 February 2023 (the latest practicable date for inclusion in this report). Ordinary shares therefore represent 100% of the total issued share capital as at 31 December 2022 and as at 13 February 2023 (the latest practicable date for inclusion in this report). Details of the movement in ordinary share capital during the year can be found in Note 28 on page 488. The rights and obligations attaching to the Company's ordinary shares and preference shares are set out in the Company's Articles, copies of which are available on the Company's website at home.barclays/corporategovernance. Voting Every member who is present in person or represented at any general meeting of the Company, and who is entitled to vote, has one vote on a show of hands. Every proxy present has one vote. The proxy will have one vote for, and one vote against, a resolution if he/she has been instructed to vote for, or against, the resolution by different members or in one direction by a member while another member has permitted the proxy discretion as to how to vote. On a poll, every member who is present in person or by proxy and who is entitled to vote has one vote for every share held. In the case of joint holders, only the vote of the senior holder (as determined by the order in the share register) or his/her proxy may be counted. If any sum payable remains unpaid in relation to a member’s shareholding, that member is not entitled to vote that share or exercise any other right in relation to a meeting of the Company unless the Board otherwise determines. If any member, or any other person appearing to be interested in any of the Company’s ordinary shares, is served with a notice under Section 793 of the Companies Act 2006 and does not supply the Company with the information required in the notice, then the Board, in its absolute discretion, may direct that that member shall not be entitled to attend or vote at any meeting of the Company. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 193 Directors’ report: Other statutory and regulatory information (continued) The Board may further direct that, if the shares of the defaulting member represent 0.25% or more of the issued shares of the relevant class, dividends or other monies payable on those shares shall be retained by the Company until the direction ceases to have effect and no transfer of those shares shall be registered (other than certain specified ‘excepted transfers’). A direction ceases to have effect seven days after the Company has received the information requested, or when the Company is notified that an excepted transfer of all of the relevant shares to a third party has occurred, or as the Board otherwise determines. Transfers Ordinary shares may be held in either certificated or uncertificated form. Certificated ordinary shares may be transferred in writing in any usual or other form approved by the Group Company Secretary and executed by or on behalf of the transferor. Transfers of uncertificated ordinary shares must be made in accordance with the Companies Act 2006 and the CREST Regulations. The Board is not bound to register a transfer of partly paid ordinary shares or fully paid shares in exceptional circumstances approved by the FCA. The Board may also decline to register an instrument of transfer of certificated ordinary shares unless (i) it is duly stamped, deposited at the prescribed place and accompanied by the share certificate(s) and such other evidence as reasonably required by the Board to evidence right to transfer, (ii) it is in respect of one class of shares only, and (iii) it is in favour of a single transferee or not more than four joint transferees (except in the case of executors or trustees of a member). The Company is not aware of any agreements between holders of securities that may result in restrictions on the transfer of securities or voting rights. Variation of rights The rights attached to any class of shares may be varied either with the consent in writing of the holders of at least 75% in nominal value of the issued shares of that class, or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class. The rights of shares shall not (unless expressly provided by the rights attached to such shares) be deemed varied by the creation of further shares ranking equally with them or subsequent to them. Limitations on foreign shareholders There are no restrictions imposed by the Articles or (subject to the effect of any economic sanctions that may be in force from time to time) by current UK laws which relate only to non-residents of the UK and which limit the rights of such non- residents to hold or (when entitled to do so) vote the ordinary shares. Exercisability of rights under an employee share scheme EBTs operate in connection with certain of the Group’s Employee Share Plans (Plans). The trustees of the EBTs may exercise all rights attached to the shares in accordance with their fiduciary duties, other than as specifically restricted in the documents governing the Plans. The trustees of the EBTs have informed the Company that their normal policy is to abstain from voting in respect of the Barclays shares held in trust. The trustees of the Global Sharepurchase EBT and UK Sharepurchase EBT may vote in respect of Barclays shares held in the EBTs, but only as instructed by participants in those Plans in respect of their partnership shares and (when vested) matching and dividend shares. The trustees will not otherwise vote in respect of shares held in the Sharepurchase EBTs. Special rights There are no persons holding securities that carry special rights with regard to the control of the Company. Major shareholders Major shareholders do not have different voting rights from those of other shareholders. Information provided to the Company by substantial shareholders (holding voting rights of 3% or more in the financial instruments of the Company) pursuant to the DTRs are published via a Regulatory Information Service and is available on the Company’s website. As at 31 December 2022, the Company had been notified under Rule 5 of the DTRs of the following holdings of voting rights in its shares. Person interested BlackRock Incb Qatar Holding LLCc Number of Barclays Shares 944,022,209 1,017,455,690 % of total voting rights attaching to issued share capitala Nature of holding (direct or indirect) 5.78 5.99 indirect direct Notes a The percentage of voting rights detailed above was calculated at the time of the relevant disclosures made in accordance with Rule 5 of the DTRs. b Total shown includes 6,687,206 contracts for difference to which voting rights are attached. Part of the holding is held as American Depositary Receipts. On 7 February 2023, BlackRock, Inc. disclosed by way of a Schedule 13G filed with the SEC beneficial ownership of 1,383,730,106 ordinary shares of the Company as at 31 December 2022, representing 8.7% of that class of shares. c Qatar Holding LLC is wholly owned by Qatar Investment Authority. On 16 January 2023, Qatar Investment Authority disclosed by way of a Schedule 13G filed with the SEC beneficial ownership of 800,120,690 ordinary shares of the Company as at 31 December 2022, representing 5.04% of that class of shares. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 194 Directors’ report: Other statutory and regulatory information (continued) Between 31 December 2022 and 13 February 2023 (the latest practicable date for inclusion in this report), the Company has not received any additional notifications pursuant to Rule 5 of the DTRs. Powers of Directors to issue and allot or buy back the Company’s shares The powers of the Directors are determined by the Companies Act 2006 and the Company’s Articles. The Directors are authorised to issue and allot shares and to buy back shares subject to, and on the terms of, the annual shareholder approval at the AGM. Such authorities were granted by shareholders at the 2022 AGM. It will be proposed at the 2023 AGM that the Directors be granted new authorities to issue and allot and buy back shares. Repurchase of shares On 24 May 2022 and 17 August 2022 the Company commenced share buy-back programmes to purchase its ordinary shares of £0.25p each up a maximum consideration of £1,000m and £500m, respectively. The first share buy-back programme concluded on 16 August 2022 and the second share buy-back programme concluded on 3 October 2022. The Company repurchased for cancellation 625,019,884 ordinary shares at a volume weighted average price of 159.9949 pence per ordinary share during the first buy-back programme and 306,326,717 ordinary shares at a volume weighted average price of 163.2241 pence per ordinary share during the second buy- back programme. The purpose of the buy- back programmes was to reduce the Company’s number of outstanding ordinary shares. In aggregate, the Company purchased 931,346,601 ordinary shares during 2022 with an aggregate nominal value of approximately £233m (this represented approximately 5.9% of the Company's issued share capital as at 31 December 2022) for an aggregate consideration of £1,500m excluding taxes and expenses. All of the repurchased ordinary shares have been cancelled. No further shares have been repurchased since the completion of the second share buy-back programme on 3 October 2022. The maximum number of ordinary shares which could be repurchased by the Company as part of any share buy-back under the authority for on-market share buy-backs granted at the 2022 AGM is 744,815,359 ordinary shares (being 1,676,161,960 less the 931,346,601 shares repurchased as part of the first and second share buy-back programmes). Distributable reserves As at 31 December 2022, the distributable reserves of the Company were £21,701m (2021: £20,750m). Change of control There are no significant agreements to which the Company is a party that take effect, alter or terminate on a change of control of the Company following a takeover bid. There are no agreements between the Company and its Directors or employees providing for compensation for loss of office or employment that occurs because of a takeover bid. Controls over financial reporting A framework of disclosure controls and procedures is in place to support the approval of the financial statements of the Group. Specific governance committees are responsible for examining the financial reports and disclosures to help ensure that they have been subject to adequate verification and comply with applicable standards and legislation. Where appropriate, these committees report their conclusions to the Board Audit Committee, which debates such conclusions and provides further challenge. Finally, the Board scrutinises and approves results announcements and the Annual Report to ensure that appropriate disclosures have been made. This governance process is designed to ensure that both management and the Board are given sufficient opportunity to debate and challenge the financial statements of the Group and other significant disclosures before they are made public. Management’s report on internal control over financial reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting under the supervision of the principal executive and financial officers, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements, in accordance with (a) UK-adopted international accounting standards; and (b) International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), including interpretations issued by the IFRS Interpretations Committee. Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail: • accurately and fairly reflect transactions and dispositions of assets • provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with UK- adopted international accounting standards and IFRS and that receipts and expenditures are being made only in accordance with authorisations of management and the respective Directors • provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use or disposition of assets that could have a material effect on the financial statements. Internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that internal control over financial reporting may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Management has assessed internal control over financial reporting as at 31 December 2022. In making its assessment, management utilised the criteria set out in the 2013 COSO framework. Management has specifically assessed the controls put in place to address the material weakness in internal control over financial reporting relating to the Over-issuance of Securities, as further discussed below. Management has concluded that, based on its assessment, internal control over financial reporting was effective as at 31 December 2022. The system of internal financial and operational controls is also subject to regulatory oversight in the UK and overseas. Further information on supervision by financial services regulators is provided under Supervision and Regulation in the Risk review section on pages 370 to 377. Identification and remediation of a material weakness A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 195 Directors’ report: Other statutory and regulatory information (continued) Changes in internal control over financial reporting As noted above, management has strengthened and effectively operated controls to remediate the material weakness in respect of the Over-issuance of Securities which was identified in March 2022. These remediation efforts represent a significant improvement to the Company’s internal control environment. There have been no other changes to highlight during the period covered by this report, which have materially affected or are reasonably likely to materially affect the Group’s internal control over financial reporting. Disclosure of information to the auditor Each Director confirms that, so far as he/ she is aware, there is no relevant audit information of which our auditor is unaware and that each of the Directors has taken all the steps that he/she ought to have taken as a Director to make himself/herself aware of any relevant audit information and to establish that our auditor is aware of that information. This confirmation is given pursuant to Section 418 of the Companies Act 2006 and should be interpreted in accordance with, and subject to, those provisions. Directors’ responsibilities The following statement, which should be read in conjunction with the Auditor’s report set out on pages 399 to 415, is made with a view to distinguishing for shareholders the respective responsibilities of the Directors and of the auditor in relation to the accounts. Going concern The Group’s business activities and factors likely to affect its future development and performance are disclosed in the Strategic report and Risk Review sections of this report. The financial performance is disclosed within the Financial Review with funding, liquidity and capital details contained within the Risk Performance section. The Group’s objectives and policies in managing the financial risks to which it is exposed are discussed in the Risk Management section. The Directors considered it appropriate to prepare the financial statements on a going concern basis. In March 2022, the Company’s management became aware that BBPLC had issued securities materially in excess of the amount BBPLC had registered with the SEC under its 2019 US shelf registration statement and subsequently became aware that securities had also been issued in excess of the set amount under the predecessor US shelf registration statement. A proportion of the costs associated with the impact of the Over-issuance of Securities was attributable to the Company’s financial statements for the year ended 31 December 2021. Accordingly, in the UK, the Company has restated the prior period comparatives in this 2022 Annual Report and Accounts to reflect the impact of the Over-issuance of Securities. In the US, the Company amended its annual report on Form 20-F for the year ended 31 December 2021 to include restated financial statements to reflect the impact of the Over-issuance of Securities. The fact that the Over-issuance of Securities occurred and was not immediately identified highlighted a weakness in controls over the identification of external regulatory limits related to securities issuance and monitoring against these limits that constituted a material weakness in internal control over financial reporting under “COSO Principle 9: Identifies and Analyses Significant Change - The organisation identifies and assesses changes that could significantly impact the system of internal control”. Since the identification of this material weakness, management has strengthened the internal controls relating to the tracking of issuance programme limits through the implementation and strengthening of a series of controls across the Group, together with central governance, with key actions being: • development of a Group Issuance Standard, which includes minimum control requirements • documentation of, and agreement on, roles and responsibilities • implementation of a Group Issuance Oversight Committee, with senior management representation, to monitor issuance activity against agreed limits. The strengthened controls over financial reporting have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. In preparing each of the Group and company financial statements, the Directors are required to: • assess the Group and company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern • use the going concern basis of accounting unless they either intend to liquidate the Group or the Parent company or to cease operations, or have no realistic alternative but to do so. Preparation of accounts The Directors are required by the Companies Act 2006 to prepare Group and Company accounts for each financial year and, with regard to Group accounts, in accordance with UK-adopted international accounting standards. The Directors have prepared these accounts in accordance with (a) UK-adopted international accounting standards; and (b) IFRS as issued by the IASB, including interpretations issued by the IFRS Interpretations Committee. Pursuant to the Companies Act 2006, the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of their profit or loss for that period. The Directors consider that, in preparing the financial statements, the Group and the Company have used appropriate accounting policies, supported by reasonable judgements and estimates, and that all accounting standards which they consider to be applicable have been followed. The Directors are satisfied that the Annual Report and financial statements, taken as a whole, are fair, balanced and understandable, and provide the information necessary for shareholders to assess the Group and Company’s position and performance, business model and strategy. The Directors are responsible for such internal controls as they determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Directors’ responsibility statement The Directors have responsibility for ensuring that the Company and the Group keep accounting records which disclose with reasonable accuracy the financial position of the Company and the Group and which enable them to ensure that the accounts comply with the Companies Act 2006. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 196 Directors’ report: Other statutory and regulatory information (continued) The Directors are also responsible for preparing a Strategic report, Directors’ report, Directors’ Remuneration report and Corporate Governance Statement in accordance with applicable law and regulations. The Directors are responsible for the maintenance and integrity of the Annual Report and Financial Statements as they appear on our website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. The Directors have a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. The Directors, whose names and functions are set out on pages 143 to 146, confirm to the best of their knowledge that: (a) the financial statements, prepared in accordance with (i) UK-adopted international accounting standards; and (ii) IFRS as issued by the IASB, including interpretations issued by the IFRS Interpretations Committee, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and (b) the management report, on pages 2 to 68, which is incorporated in the Directors’ report, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the Principal Risks and uncertainties that they face. Auditor’s report The Auditor’s report on the Financial Statements of Barclays PLC for the year ended 31 December 2022 was unmodified and its statement under Section 496 of the Companies Act 2006 was also unmodified. By order of the Board Stephen Shapiro Company Secretary 14 February 2023 Registered in England. Company No. 48839 Registered office: 1 Churchill Place, London E14 5HP Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 197 Remuneration report Annual statement from the Chair of the Board Remuneration Committee Contents Annual statement Remuneration philosophy Fair Pay at a glance Employee remuneration policy summary Directors’ remuneration policy Annual report on Directors’ remuneration 197 204 207 208 209 218 Board Remuneration Committee Brian Gilvary Chair, Board Remuneration Committee Committee membership and meeting attendancea Member Brian Gilvary Dawn Fitzpatrick Mary Francis Meetings attended/ eligible to attend (including ad hoc meetings) 7/7 6/7 7/7 Note a There were five scheduled meetings and two ad hoc meetings of the Committee in 2022. Owing to a prior commitment, Dawn Fitzpatrick was unable to attend one scheduled meeting of the Committee. + You can find more information on our approach to pay fairness in our Fair Pay Report at: home.barclays/ annualreport + Our UK pay gap figures for 2022 and narrative explaining them are available at: home.barclays/ diversity Dear Fellow Shareholders On behalf of the Board, I am pleased to present the Remuneration report for 2022. 2022 was another year of extraordinary economic and political uncertainty, with far-reaching consequences for our economy and society. Our strategy and diversified universal banking model were once again put to the test and proved resilient and robust, delivering double-digit returns in each of our three main lines of business. We achieved our target of generating a Group return on tangible equity (RoTE) greater than 10%, while providing much-needed support to customers, clients and communities in periods of difficulty. The Group has provided stability and support in an uncertain economic environment. Our performance this year is set against a backdrop of higher inflation, slower economic growth, political uncertainty and extreme shock of the Russian invasion of Ukraine, during an already-challenging time as the world still suffers the longer-term impacts of the COVID-19 pandemic. Our employees have been steadfast in their commitment to meeting the needs of our customers and clients, whether helping retail customers manage their finances, providing additional support to vulnerable customers facing challenges due to inflationary pressures, or helping institutional and corporate clients navigate market volatility. We have considered stakeholder perspectives carefully when making remuneration decisions. Those decisions reflect our financial and non-financial performance, both absolute and relative, as well as the execution of our strategy, our risk and controls and our commitment to Fair Pay. You can read more about our approach to pay fairness in our fifth annual Fair Pay Report, published alongside this Annual Report. We have also published our pay gap figures for employees in the UK and in Ireland. The Over-issuance of Securities under BBPLC's US shelf registration statements was a deeply disappointing feature of 2022. A review of the facts and circumstances was completed by external counsel and the Committee has taken the findings of that review seriously. We have thoughtfully and deliberately adjusted our remuneration decisions to ensure that this over-issuance matter is reflected. With all of the above in mind, I explain in this statement our key stakeholder considerations this year, the remuneration decisions we’ve made and our areas of focus for 2023. Our new Directors’ remuneration policy I would like to thank shareholders for supporting the 2021 implementation of our current Directors’ remuneration policy (DRP) at our last Annual General Meeting (AGM), in May 2022, where it received 89% of votes in favour. Shareholders approved our current DRP in 2020, to apply for three years. In this report we set out our proposed new DRP, which – but for one relatively minor change – is substantially the same as the current DRP, for shareholder approval at the upcoming 2023 AGM. The Committee reviewed the current DRP and concluded that it has been operating effectively and is well aligned with our remuneration philosophy. We were keen to ensure that the remuneration policy for Executive Directors remains aligned with that for the wider workforce wherever appropriate. Over the three-year life of the current DRP, we have regularly discussed remuneration policies and outcomes with major shareholders, to explain our thinking and gather feedback, and we are grateful to those shareholders for their helpful and productive engagement. As a result, the only material change proposed is to simplify the shareholding requirements for the Executive Directors and align the operation of those requirements with market practice, as summarised in the table overleaf. The full new DRP is set out later in this Remuneration report. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 198 Remuneration report (continued) Proposed changes to the DRP DRP element Proposed change and rationale Shareholding requirement The level of shareholding that the Executive Directors are required to build up will remain unchanged. We propose to align the definition of which shares count towards that requirement with market practice, which is simpler and provides a more consistent treatment during and after employment. Currently, shares from unvested deferred bonuses and unvested Long Term Incentive Plan (LTIP) awards do not count towards the shareholding requirement during employment, but do count towards post- termination shareholding requirements (net of estimated taxes) provided there are no remaining performance conditions. In the new DRP those shares will count towards the requirement during employment, as well as post-termination. We also propose to simplify and align with market norms the post-employment requirement. For two years after stepping down as an Executive Director, they must maintain a shareholding equal to the number of shares required to be held immediately prior to stepping down as an Executive Director, or the actual number of shares held on stepping down if lower (provided that the Committee is satisfied that the resulting shareholding is appropriate given the relevant Executive Director’s tenure). The Bank of England published a consultation paper in December 2022 setting out joint proposals from the PRA and FCA to remove the regulatory limit on the level of variable pay relative to fixed pay in banks. The consultation timings would suggest that for Barclays any such change would come into effect from performance year 2024. We will consider the implications of any revised rules – both for the DRP and more widely within Barclays – over the course of 2023 and engage with shareholders if we are considering making changes to the DRP. Performance in 2022 Our commitment, as ever, is to a remuneration approach that rewards sustainable performance, which is a key element of our remuneration philosophy, as outlined on page 204. The robust operating performance we achieved in 2021 was sustained and extended through 2022. In 2022, we saw broad-based income momentum across all three of our operating businesses, delivering a 14% increase in Group income. The strength and consistency of our underlying performance further demonstrates the value of our diversified business model in delivering for our stakeholders through a range of economic conditions. 2022 saw another year of strong performance in the Corporate and Investment Bank (CIB), with Global Markets income up 38% as we supported our clients in very challenging market conditions and performed strongly against competitors, more than offsetting subdued Investment Banking fees. Income was also up in Barclays UK and in Consumer, Cards and Payments, supported by balanced growth and rising interest rates. We continue to invest in our business while maintaining focus on costs. Statutory costs for 2022 were £16.7bn, including the impact of the Over-issuance of Securities in the US. Operating costs, which exclude litigation and conduct, increased 6% compared to income growth of 14%, including the impact of sizeable movements in foreign exchange rates and inflation. This translated into a 9% increase in profit before impairment (having moved from a net credit impairment release in 2021 to a net impairment charge in 2022). We generated a RoTE of 10.4%, achieving our greater-than-10% target, and ended the year with a CET1 ratio of 13.9%, within our target range of 13% to 14%. We will return £2.2bn to shareholders in respect of 2022, via a total dividend for the year of 7.25p per share and £1.0bn of announced share buy-backs, which is equivalent to a total pay-out of c.13.4p per share. Colleague remuneration Our Fair Pay Agenda is at the heart of the decisions we make on colleague remuneration. This is particularly pertinent given the challenges faced by colleagues due to sharp increases in the cost of living, particularly for our lower-paid colleagues. Effective 1 August 2022, Barclays increased by £1,200 the full-time equivalent annual pensionable salary for 35,000 more-junior UK employees in customer-facing and support roles, bringing forward part of the March 2023 annual pay review. We also brought a portion of the March 2023 annual pay review forward into 2022 for junior employees across most of our main European offices, or in Germany made one-off payments as that was more appropriate under local rules. We worked closely with Unite, our recognised UK trade union, to agree a 2023 UK pay deal that, combined with the increases in August 2022, brought the total salary increase budget to 11% for our lowest-paid colleagues, or 6.75% for other union-recognised colleagues. We recognise the need to manage costs and as such these higher-than-normal increases do not apply to senior management roles or to most business areas within CIB. Paying at least a living wage to all our colleagues is a central element of our Fair Pay Agenda and we continue to ensure we at least meet living wage benchmarks for each country and consider the inflationary pressures our employees face. We are increasing our minimum UK full time equivalent salary to £22,250 and we continue to exceed the Living Wage Foundation's benchmarks. In the US, we reviewed the pay of our lowest paid colleagues resulting in a salary increase budget of 9% and colleagues will be paid at least $22.50 per hour. Our lowest-paid colleagues in India will receive an average increase of 10%. In all other locations, we continue to exceed the Fair Wage Network living wage benchmarks for each country. We are also taking tangible actions to drive greater transparency in our pay approach, continuing to simplify reward for junior colleagues. From March 2023, for our most junior roles in Barclays UK and support functions, pay levels and annual increases will be determined by role type, bonus approaches will be harmonised for future years, and starting salaries will be published. This is simpler and more transparent, making it easier for colleagues to understand how their pay is set and managed. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 199 Remuneration report (continued) This year’s incentive pool reflects all the elements set out at the start of this statement. The Committee wanted to recognise the strong performance across our three operating businesses, and in particular that of our Global Markets business. As well as good operating performance and delivery against our targets in 2022, colleagues have adapted to the rapidly changing external environment to support clients and customers in an extraordinary year. Whether it was CIB support for clients in the immediate aftermath of the Ukraine invasion or during the pension fund liquidity issue in the early autumn, or retail and small business customers requiring urgent assistance to manage their daily expenses, colleagues responded with dedication, pace and professionalism. Set against those positive factors, the Committee was mindful of the unsatisfactory impact of litigation and conduct issues, including the Over- issuance of Securities in the US, on both our financial performance and our reputation. Our incentive funding incorporates a significant reduction to reflect the impact of risk and control issues, as set out later in this statement. Taking all of this into account, the Committee has approved a Group incentive pool of £1,790m (2021: £1,945m). This level of incentive pool funding has enabled us to recognise the strong performance that has been achieved and to reward the teams and individuals responsible for that performance. It has also allowed us to continue to manage the challenges of the competitive global market, to attract and retain the talent required to deliver against our objectives. We fully recognised the importance of maintaining cost discipline, not paying more than is necessary, and ensuring the cost of litigation and conduct issues has a clear impact on pay outcomes. Furthermore, changes in foreign exchange rates mean the cost of paying bonuses outside the UK has increased year-on-year so in practice the incentive pool is down more than it appears at the headline level. The Committee considered this range of complex factors and concluded that this year’s incentive funding achieves the right balance. A significant downward adjustment of c.£500m to reflect risk and control issues, including the Over- issuance of Securities in the US and the monetary penalties imposed by the SEC and CFTC for the use of unauthorised business communications channels, is balanced against the strong performance in most parts of the Group during the year, which the Committee believes it is right to recognise. We believe that this level of incentive funding is appropriate given delivery against our targets and that it is consistent with our philosophy of rewarding sustainable performance, which in turn supports our long-term strategy to deliver attractive returns to shareholders. As always, a significant portion of the pool is delivered in shares, most of which will be deferred over a number of years, ensuring further alignment with shareholders. Those deferrals are subject to malus conditions. For Material Risk Takers, including the Executive Directors, deferrals and the upfront elements of incentive awards are also subject to clawback conditions, which may apply in a broad set of circumstances including individual misbehaviour or material failures of risk management. Executive Director remuneration Remuneration arrangements in respect of the Group Finance Director succession On 22 February 2022, Tushar Morzaria informed the Board of his intention to retire from the Board and as Group Finance Director, and the Board agreed that would take effect on 22 April 2022. Due to the timing, the remuneration arrangements in connection with his retirement from the Board and those for his successor, Anna Cross, were not reflected in last year’s Remuneration report but rather were set out in a separate announcement to the market on 23 February 2022. Group income £24,956m 2021: £21,940m Group profit before tax (before impairment) £8,232m 2021: £7,541ma Group profit before tax £7,012m 2021: £8,194ma Group RoTE 10.4% 2021: 13.1%a Cost: income ratio 67% 2021: 67%a CET1 ratio 13.9% 2021: 15.1%a Group compensation to income ratio 33.5% 2021: 34.7% Group incentive pool £1,790m 2021: £1,945m Note a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Impact of the Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 200 Remuneration report (continued) For 2022, Anna and Tushar were each awarded a pro-rata discretionary annual bonus award for the respective portions of 2022 that they served as Group Finance Director. They also each received a separate discretionary incentive award in respect of the portion of 2022 during which they were carrying out other roles in Barclays, which are not included within this report as they do not relate to service as an Executive Director. Determining Executive Directors' pay outcomes The Committee considered the Executive Directors’ annual bonus and LTIP outcomes in the context of the Group’s performance, and the performance of each Executive Director, during 2022. On the financial measures for the annual bonus, profit before tax provided a 40.8% outcome out of 50% and the cost: income ratio provided a 3.6% outcome out of 10%. With good performance against the strategic non-financial measures, this resulted in a 2022 bonus outcome equal to 75.4% of maximum for C.S. Venkatakrishnan (known as Venkat), 75.4% of maximum for Anna and 74.4% of maximum for Tushar, after factoring in the performance of each against their personal objectives. Neither Venkat nor Anna received a 2020-2022 LTIP award as they were not Executive Directors at the time it was granted. The outcome for Tushar’s 2020-2022 LTIP was 70.0%, reflecting strong pro-forma RoTE and good performance against the strategic non- financial measures. In light of the Over- issuance of Securities, the Committee did not assess the Control environment element of the LTIP Risk scorecard but instead elected to set this element of the LTIP to zero. In response to Tushar stepping down as an Executive Director, the Committee determined that the 2022-2024 LTIP award and the 1 March 2022 Fixed Pay increase for Tushar that were disclosed in last year’s Remuneration report would not be implemented. Tushar’s bonus in respect of performance in 2021 remained as disclosed in the Remuneration report, save that a larger portion will vest over years 3 to 7 and a smaller portion over years 1 to 2 because of the LTIP award not being granted. For 2022, Tushar is eligible to receive a pro-rata discretionary annual bonus award for his part-year performance as Group Finance Director, in line with the DRP. There are no other remuneration payments in relation to his stepping down as an Executive Director. He continues to work within Barclays in other roles and so is not treated as a leaver in respect of any deferred bonus or LTIP awards. Anna Cross was appointed Group Finance Director from 23 April 2022. The remuneration arrangements that the Committee agreed on her appointment reflect her role and responsibilities and are in accordance with the current DRP. Anna’s Fixed Pay was set at £1,725,000, delivered 50% in cash, paid monthly, and 50% in Barclays shares. Fixed Pay shares are delivered quarterly, subject to a holding period with restrictions lifting over 5 years. Anna receives a cash allowance in lieu of pension equal to 5% of Fixed Pay, and standard benefits including medical cover and life assurance. Each year, Anna is eligible to be considered for a discretionary annual bonus award and LTIP award in line with the DRP, up to a maximum value of 90% of Fixed Pay for bonus and 134% of Fixed Pay for the LTIP. In setting the remuneration for Anna, the Committee considered the skills and relevant experience that she brings, and the benefits of strong and sustainable leadership in this critical role. We also considered pay levels at comparable firms and the competitive market for talent. We concluded that this level of Fixed Pay was an appropriate starting point, while noting that the maximum total compensation opportunity that this provides is low compared with our international banking peer group. This LTIP award was granted in line with our usual annual timetable, in March 2020, at a time when global markets were falling as the start of the COVID-19 pandemic unfolded. The market share price at grant was 22% below the market share price at the time of the previous year’s LTIP grant. The Committee reviewed a range of analyses to assess whether any element of this LTIP vesting represents a ‘windfall gain’. The 2020-2022 LTIP was not granted at the bottom of the market, as the share price (and the value of the LTIP awards) dropped by a third over the following weeks. The Committee did not consider Barclays’ share price increase over the performance period since grant, equivalent to 9% per annum, to have been excessive but rather that it was commensurate with underlying corporate performance. Group RoTE exceeded 10% in both 2021 and 2022, up from 9.0%a in the financial year immediately prior to grant and building on the Group’s RoTE progression from 2017 through 2019. As a result, we concluded that there was no windfall gain and therefore no adjustment was required. More information on the Committee's considerations in relation to windfall gains is provided in the 2020-2022 LTIP section of the Annual report on Directors' remuneration. The Committee reflected on the appropriateness of the outcomes for both the 2022 bonus and 2020-2022 LTIP. We reviewed the underlying financial health of the Group, which is strong and well- capitalised. We considered the bonus outcomes in the context of the bonus outcomes for the wider workforce, ensuring appropriate alignment both this year and over a multi-year period, and also compared to historical outcomes for the Executive Directors in the context of performance each year. We concluded that the outcomes are appropriate in the context of the performance achieved and that no further discretionary adjustment was warranted. The Committee decided to grant awards under the 2023-2025 LTIP cycle with a face value at grant of 140% of Fixed Pay for Venkat and 134% of Fixed Pay for Anna, reflecting the personal contribution made by each to strong 2022 performance and to provide each with a significant incentive award subject to forward-looking performance conditions during 2023-2025. Note a Excludes litigation and conduct. Group RoTE for 2019 including litigation and conduct was 5.3%. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 201 Remuneration report (continued) Reduction in Executive Director bonus for 2021 and 2019-2021 LTIP vesting The Over-issuance of Securities resulted in the restatement of the 2021 financial statements, as well as adversely impacting 2022 performance. Consequently, we revisited the 2021 annual bonus outcomes for Venkat and Tushar, and the 2019-2021 LTIP outcome for Tushar. The Committee reduced the outcomes of the financial measures to reflect that restatement, and the outstanding deferred elements of those annual bonus and LTIP awards will be reduced accordingly. Venkat and Tushar were both supportive of this. No changes were made to any in-flight LTIP awards and the performance measures and targets for those awards have not been altered. The Committee will determine the vesting of those awards in due course, following the end of the relevant performance period. The Executive Directors' pay in 2023 In February 2023, the Committee reviewed the level of Fixed Pay for Venkat and Anna, in the same way and at the same time as fixed pay was reviewed for the wider workforce. The maximum total compensation opportunity for each is driven by their level of Fixed Pay, and for both is materially behind market when compared to the equivalent total compensation opportunity for comparable roles in our international banking peer group. The Committee considered this relative market positioning, in the context of the strong performance and significant personal contribution made by each of the Executive Directors, and their continued development in their respective roles. The Committee increased Fixed Pay by 3.4% for Venkat and 4.3% for Anna, in line with the current DRP, resulting in Fixed Pay of £2,875,000 and £1,800,000 respectively from 1 March 2023. This percentage increase is significantly lower than the average increase across the wider workforce, including the 11% and 6.75% spend on salary increases that were agreed as part of the 2023 UK pay deal. Even after these Fixed Pay increases, the total compensation opportunity for each Executive Director remains well behind the equivalent opportunity across our international banking peer group. The Committee carefully considered the performance measures for the Executive Directors' 2023 annual bonus and the 2023-2025 LTIP. Our conclusion was that the measures that we adopted last year continue to represent the most relevant building blocks towards our key longer- term financial and non-financial goals. The Committee will continue to review the measures and weightings for the Executive Directors' incentives to ensure that they appropriately support the delivery of our strategy. Shareholder alignment Of the total variable pay awards (annual bonus plus LTIP) to be granted to Venkat and Anna, 97% and 96% respectively will be in shares that must be retained for a period of between one and eight years from grant, aligning the Executive Directors' interests more closely to the shareholder experience. Both Venkat and Anna already have significant shareholdings and will continue building these over the coming years towards the level stipulated under the personal shareholding requirements. Group Chair and Non-Executive Director fees The Committee reviews the Group Chair's fee from time to time and the current DRP allows for fee increases of up to 20% during the three-year term of the policy. In practice, the Group Chair's fee has remained at the same level since 2015. In February 2023, the Committee considered the fee in the context of the chair fees paid across our international banking peer group, with a particular focus on the UK banks, given the regional differences in both the role and pay for non-executive directors including chairs. The Committee approved an increase in the Group Chair's fee of 5%, from £800,000 to £840,000, effective 1 January 2023, equivalent to 1.6% per annum compounded over the three-year life of the current DRP. Of this, £100,000 each year will continue to be used to purchase Barclays shares that are retained on the Group Chair's behalf until he retires from the Board. No other changes to the Group Chair's remuneration arrangements or benefits were made. The Board reviewed the other Non- Executive Directors’ fees during 2022 and in December approved (with the impacted Non-Executive Directors having recused themselves from discussion) an increase in those fees of 5% with effect from 1 January 2023. This is equivalent to 1.6% per annum compounded over the period since any of these fees were last increased, with effect from 1 January 2020. There have been no other increases in those fees during the three-year term of the current DRP. Risk and control impacts on remuneration We have considered the significant impact on the Group of risk and control issues during 2022 throughout our remuneration decision-making this year, including the financial impact, the reputational impacts and how these events reflect on our control environment. Principally, our consideration has been focused on the incentive pool for 2022. Our incentive funding incorporates a significant reduction to reflect the impact of risk and control issues, as referenced above. The Over-issuance of Securities in the US was a key factor in determining these remuneration impacts and accounts for the majority of the incentive pool reduction. The monetary penalties imposed by the SEC and CFTC for the use of unauthorised business communications channels were also taken into account. Incentive pool 2022 incentive pool reduction Reduction c.£500m This reduction was c.£500m, which had an impact across the whole of Barclays but was more focused in the areas of the Group closest to where the incidents occurred, resulting in larger year-on-year reductions in those areas. The Committee ensured that certain individuals who identified and escalated the over-issuance or who were most central to its remediation have been specifically recognised and rewarded, reinforcing the culture that colleagues should speak out, raise issues and work collaboratively to resolve those issues. On the other hand, our review of individuals who may be considered responsible or otherwise accountable for the over-issuance is progressing. Once concluded, appropriate action will be taken including negative adjustment to variable remuneration where applicable. As that review is ongoing, unvested variable remuneration of relevant persons will be suspended as required to allow the review to run its course. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 202 Remuneration report (continued) For the Executive Directors, the financial measures for both the 2022 bonus and the 2020-2022 LTIP awards are defined as excluding material items (material one-off items that are typically called out within our financial reporting). The Committee exercised its discretion not to exclude the impacts associated with the Over- issuance of Securities in the US or the monetary penalties imposed by the SEC and CFTC for the use of unauthorised business communications channels. As a result, the 2022 annual bonus awards were £403,000, £166,000 and £76,000 lower than they would otherwise have been, for Venkat, Anna and Tushar respectively (after pro-rating for Anna and Tushar). The 2020-2022 LTIP vesting outcome was 5% less than it might have been, as the Committee set the Control environment element of the LTIP Risk scorecard to zero. In addition, the Committee reduced the 2021 annual bonus outcomes for Venkat and Tushar, and the 2019-2021 LTIP outcome for Tushar, to reflect the impact of the restatement of the 2021 financial statements on the financial metrics for those awards, as outlined earlier. In summary, the aggregate remuneration impacts for the Executive Directors in this respect are as shown in the following table: Executive Directors' incentive outcomes Reduction 2022 bonus outcomes 2020-2022 LTIP outcome 2021 bonus outcomes 2019-2021 LTIP outcome Total £645,000 £213,000 £30,000 £116,000 £1,004,000 The review by external counsel into the facts and circumstances relating to the Over-issuance of Securities concluded that the occurrence of the over-issuance was not the result of a general lack of attention to controls by Barclays, and that Barclays’ management has consistently emphasised the importance of maintaining effective controls. As such, although the financial impact of the over-issuance on the Group was significant, the Committee concluded that reducing the Executive Directors’ incentive outcomes via the financial performance metrics, plus setting the Control environment element of the 2020-2022 LTIP Risk scorecard to zero, was sufficient and appropriate. Update in respect of Jes Staley’s remuneration As outlined in last year’s Annual Report, on 31 October 2021 the Board agreed with Jes Staley that he would step down from the role of Group Chief Executive with immediate effect. In doing so, Mr Staley was legally and contractually entitled to 12 months’ notice, during which he continued to receive his Fixed Pay and other benefits. Accordingly, his employment came to an end in the usual way at the end of his notice period, on 31 October 2022. No further remuneration decisions have been made in respect of Mr Staley. As outlined in last year’s Remuneration report, his unvested awards remain suspended pending further developments in respect of the regulatory and legal proceedings related to the FCA and PRA investigation regarding Mr Staley, including LTIP awards that otherwise might have vested. Those proceedings are ongoing. Looking ahead As the Group Chief Executive sets out in his review, although we have demonstrated that our diversified model can deliver attractive returns, our focus is to be prepared for the road ahead to create further value for our customers, clients, investors and other stakeholders. As we move into 2023, the Committee maintains its commitment to rewarding sustainable performance. We will continue our focus on supporting management to use our performance management and remuneration policies and practices to incentivise and reward progress as we deliver our strategic goals, reinforce the importance of good conduct, strong controls and risk management, and support Barclays' Values, Mindset and culture. We will continue to engage with our shareholders and other stakeholders on pay, and will be meeting with our largest shareholders to discuss our pay outcomes for 2022. Beyond this, we will maintain focus on our Fair Pay Agenda, continuing to support colleagues through the challenges we all face and furthering our work on pay simplification. We remain committed to making sure that the way we pay our people continues to support the long- term health and success of the Group. Brian Gilvary Chair, Board Remuneration Committee 14 February 2023 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 203 Remuneration report (continued) Executive Director remuneration outcomes at a glance C.S. Venkatakrishnan Annual bonus £1,949k 75.4% of maximum Annual bonus performance measures (% weighting) Financial (60%) Profit before tax (excluding material items) (50%) Cost:income ratio (excluding material items) (10%) Strategic non-financial (25%) Personal objectives (15%) Anna Cross Annual bonusb £803k 75.4% of maximum Annual bonus performance measures (% weighting) Financial (60%) Profit before tax (excluding material items) (50%) Cost:income ratio (excluding material items) (10%) Strategic non-financial (25%) Personal objectives (15%) Total remuneration outcomesa (£m) 2022 Max for 2022 5.197 9.725 n Fixed Pay n Pension and benefits n Annual bonus n LTIP Share ownership (£000) Date of appointment 1 November 2021 C.S. Venkatakrishnan has until 1 November 2026 (five years from the date of his appointment as an Executive Director) to meet this shareholding requirement. As at 31 December 2022, based on vested shares only, as per the current DRP, Q4 2022 average share price of £1.5315 and an annualised Fixed Pay of £2,780k for C.S. Venkatakrishnan. n Actual n Requirement Total remuneration outcomesc (£m) 2022 Max for 2022 n Fixed Pay n Pension and benefits n Annual bonus Share ownership (£000) Date of appointment 23 April 2022 2.057 2.321 Anna Cross has until 23 April 2027 (five years from the date of her appointment as Executive Director) to meet this shareholding requirement. As at 31 December 2022, based on vested shares only, as per the current DRP, Q4 2022 average share price of £1.5315 and an annualised Fixed Pay of £1,725k for Anna Cross. n Actual n Requirement a C.S. Venkatakrishnan's LTIP value for 2022 is nil as he was not a participant in the 2020-2022 LTIP cycle. The LTIP value shown for his 2022 maximum is the maximum LTIP award value that he could have been granted under the current DRP (140% of Fixed Pay) multiplied by his 2022 year-end Fixed Pay. b Anna Cross was appointed as Group Finance Director on 23 April 2022. The bonus shown for 2022 is in respect of her service as an Executive Director during 2022. c Anna Cross was appointed as Group Finance Director on 23 April 2022. The values shown are in respect of her services as an Executive Director during 2022, with both the actual and maximum values pro-rated for the proportion of the year in that role. The LTIP value for 2022 is nil as she was not a participant in the 2020-2022 LTIP cycle. No LTIP value is shown for the 2022 maximum as she was only appointed as an Executive Director during the year. 75.4%81.6%36.0%72.0%86.7%75.4%81.6%36.0%72.0%86.7%Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 204 Remuneration report (continued) Remuneration philosophy To attract and retain the people who can best deliver for our customers and clients, we must pay fairly and appropriately – balancing the interests of all our stakeholders. Our policies and practices are transparently communicated and enable us to reward sustainable performance in line with our Values, Mindset and risk expectations. This is our remuneration philosophy. Philosophy Attract and retain talent needed to deliver Barclays’ strategy Align pay with investor and other stakeholder interests Reward sustainable performance Long-term success depends on the talent of our employees. This means attracting and retaining an appropriate range of talent to deliver against our strategy, and paying the right amount for that talent. Remuneration should be designed with appropriate consideration of the views, rights and interests of stakeholders. This means listening to our shareholders, other investors, regulators, government, customers and employees and ensuring their views are appropriately represented in remuneration decision-making. Sustainable performance means making a positive and enduring difference to investors, customers and communities, taking pride in leaving things better than we found them and playing a valuable role in society. Support Barclays’ Values and culture Results must be achieved in a manner consistent with our Values. Our Values, culture and Mindset should drive the way that business is conducted. Align with risk appetite, risk exposure and conduct expectations Be fair, transparent and as simple as possible Designed to reward employees for achieving results in line with the Group’s risk appetite and conduct expectations. We are committed to ensuring pay is fair, simple and transparent for all our stakeholders. All employees and stakeholders should understand how we reward our employees, and fairness should be a lens through which we make remuneration decisions. Specifically relating to our Executive Directors, we review the performance measures for the forward-looking incentives each year to ensure that we maintain alignment with our strategic priorities and KPIs, and to ensure that the measures we select continue to be appropriate in light of current circumstances and challenges. Alongside our key financial measures, our strategic non-financial performance objectives aim to ensure that the link between individual incentive outcomes and the delivery of our strategy, and the achievement of sustainable long-term performance, continues to be reinforced. The alignment of executive pay to our culture was further supported by the continued inclusion in the personal objectives for our Group Chief Executive of the responsibility to embed our Mindset across the organisation and continue to develop a high-performing culture in line with our Values. Our philosophy in action Our remuneration philosophy applies to all of our employees globally, including our Executive Directors. The pay decisions set out in this report are a result of the application of our remuneration philosophy during 2022. Our philosophy and the way that we approach remuneration is designed to be as simple and clear as possible, while ensuring strong alignment with risk and conduct as well as our Values and Mindset. It is closely aligned with Provision 40 of the FRC’s UK Corporate Governance Code, as shown in the table later in this section, and we have continued to be transparent on the resulting outcomes in this report. We seek to consider the views of all of our stakeholders in remuneration decision-making. In 2022, we achieved this by meeting with institutional shareholders to understand their views on our 2021 pay outcomes, engaging extensively with our regulators to ensure appropriate compliance with regulatory requirements, and continuing our partnership with Unite the Union in the UK to understand the views of their members and agree a new pay deal. We used our 2021 Fair Pay Report and internal communication channels to share information on our approach to pay with colleagues, including how executive remuneration aligns with the wider workforce pay policy, and we are now publishing our fifth Fair Pay Report to help do the same for 2022. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 205 Remuneration report (continued) Alignment with strategic priorities and stakeholder groups Our three strategic priorities are reflected in the measures that determine colleague incentives, including bonus and LTIP outcomes for the Executive Directors. The table below sets out the performance measures used in the 2023 Executive Director bonus and the 2023-2025 LTIP, and outlines how these align to our strategic priorities, and to each of our key stakeholder groups. Some of these performance measures are assessed annually while the full impact of delivering our strategy will only be seen over several years. Performance measures Included in 2023 annual bonus Included in 2023-2025 LTIP Alignment to strategic pillars Alignment to stakeholder groups Deliver sustainable growth in the CIB Capture opportunities as we transition to a low-carbon economy Customers and clients, Colleagues, Society and Investors Deliver next generation, digitised consumer financial services Financial Profit before tax with CET1 ratio underpin Cost:income ratio Return on tangible equity (RoTE) CET1 ratio Relative total shareholder return (TSR) Personal Individual objectives for the Executive Directors are aligned to our Purpose and strategic priorities Strategic non-financial A number of sources are used to assess the success of our strategy and to provide a balanced review of our performance, including both non-financial and financial measures Risk scorecard Captures a range of risks aligned with the annual risk alignment framework Stakeholder groups Including Customer and client measures, such as: Including Customer and client measures, such as: Including Climate and sustainability measures, such as: Barclays UK Net Promoter Score (NPS) Barclays UK complaints Consumer, Cards and Payments US customer digital engagement Global Markets revenue ranking and share Social, environmental and sustainability-linked financing facilitated Investment Banking global fee ranking and share Reducing our financed emissions (our current estimate of our clients’ activities based on our disclosed methodology) Including Colleague measures, such as: Measures of colleague engagement and colleague advocacy Gender and ethnicity diversity Achievement against our Strategic non- financial measures also benefits Investors The management of risk underpins the execution of our strategy. The internal and external risks that the Group is exposed to as part of its ongoing activities are managed as part of our business model. The current LTIP Risk scorecard measures performance against three broad categories – Capital and liquidity, Control environment and Conduct – using a combination of quantitative and qualitative metrics Customers and clients – Supporting our customers and clients to achieve their goals with our products and services. Colleagues – Helping our colleagues across the world develop as professionals. Society – Providing support to our communities, and access to social and environmental financing to address societal need. Investors – Delivering attractive and sustainable shareholder returns on a foundation of a strong balance sheet. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 206 Remuneration report (continued) Alignment with Provision 40 of the UK Corporate Governance Code Code requirements How the Committee has addressed the requirement Clarity – remuneration arrangements should be transparent and promote effective engagement with shareholders and the workforce Simplicity – remuneration structures should avoid complexity and their rationale and operation should be easy to understand Risk – remuneration arrangements should ensure reputational and other risks from excessive rewards, and behavioural risks that can arise from target-based incentive plans, are identified and mitigated Predictability – the range of possible values of rewards to individual Directors and any other limits or discretions should be identified and explained at the time of approving the policy Proportionality – the link between individual awards, the delivery of strategy and the long-term performance of the company should be clear. Outcomes should not reward poor performance Alignment to culture – incentive schemes should drive behaviours consistent with company Purpose, Values and strategy • A clear remuneration philosophy with aligned policies and practices for Executive Directors and the wider workforce • Our Fair Pay Report, which sets out how pay fairness is central to what we stand for, is used to engage with our shareholders and our colleagues • Regular engagement on remuneration with our largest institutional shareholders • Clear disclosure of rationale for and operation of each element of the DRP • Executive Directors incentivised via annual bonus with deferral and LTIP • Prospective disclosure of bonus metrics and LTIP targets, and full retrospective disclosure of outcomes against financial and non- financial targets and criteria, with full supporting commentary • Assessment of 'What' and 'How' performance is achieved • Ex-ante and ex-post risk factored into the assessment of business performance • Significant deferral into shares, to align with shareholder experience • Committee discretion to adjust all variable remuneration outcomes • Malus and clawback provisions apply to all elements of variable remuneration • Regulatory caps on incentive outcomes • Scenario charts illustrate potential pay-outs under each element of the DRP • Key areas of Committee discretion clearly outlined in the DRP • Annual bonus and LTIP measures reviewed each year to maintain alignment to strategic priorities / KPIs • Very significant deferral into shares, to align with shareholder experience • Committee discretion, malus and clawback provisions apply to all elements of variable remuneration, to ensure risk alignment for the Executive Directors • The Committee reviews all policies and practices, including incentive schemes, ensuring alignment to the Group's Purpose, Values, Mindset and conduct expectations • A key aspect of remuneration philosophy is rewarding sustainable performance • Executive Directors' bonus and LTIP based on a balanced scorecard of financial and non-financial measures, with financial measures aligned to external financial targets and non financial measures aligned to supporting Customers and clients, Colleagues and Climate and sustainability • Commitment to pay fairness across the workforce • Executive Director remuneration outcomes considered in the context of outcomes across the wider workforce Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 207 Remuneration report (continued) Fair pay at a glance We have developed our fair pay approach over a number of years and we continue to ensure that fairness is a key, and explicit, consideration in the way we make all of our pay decisions. + Barclays PLC Fair Pay Report 2022 can be found online at home.barclays/annualreport With the rising cost of living, our commitment to fair and appropriate pay is more important than ever. During 2022, we continued our work on this and as a result we were well positioned to take rapid action to support colleagues in response to sharp increases in the cost of living, through pay increases for our lowest paid colleagues. We also factored in cost inflation during the annual salary review impacting 2023 salaries. We continue to strive for greater transparency in our approach to pay, and as part of this during 2022, we simplified the reward structures for some of our lowest paid colleagues in the UK and US. This is our fifth year publishing a Fair Pay Report and we will continue to use the report to engage with our stakeholders on pay, explaining our approach to fair pay, including the alignment of approaches to Executive Directors’ and employee pay. We encourage you to read the full report. Fair pay for the lowest paid Paying fairly for work done, in a simple and transparent way. • Continued to progress our work on global living wages, reviewing all our locations around the world to ensure we pay at least the living wage • Simplified incentives for colleagues in US contact centres by replacing four historical plans with a single, consistent and more transparent approach Equal opportunities to progress • Responded to cost-of-living challenges by bringing forward part of the 2023 pay increase budget, awarding our most junior colleagues in the UK and in some European countries a salary increase effective from August 2022 and November 2022 respectively • Introducing a simpler and more transparent approach to pay for most junior UK roles from March 2023 Providing equal employment opportunities to all, so everyone can enjoy a successful career at Barclays. • Reinforced the right behaviours through our recognition programme, with a colleague being recognised on average every 45 seconds in 2022 • Enhanced our continuous performance • Achieved our Race at Work Ambition to double the management cycle to focus on two of our global priorities, Diversity, Equity and Inclusion, and Risk and Control, through communication and eLearning number of Black Managing Directors by the end of 2022 • Set a new Race at Work Ambition to increase the population of Managing Directors from underrepresented ethnicities by at least 50% by the end of 2025 Communicating with colleagues Engaging with colleagues to understand their views on the culture of the organisation and enabling the representation of employees in our remuneration decision-making process. • Engaged with Unite the union on a range of topics including cost-of-living and fair pay, and agreed a 2023 UK pay deal providing our lowest-paid colleagues a total average annual salary increase budget of 11% • Published additional information for colleagues to explain how the Group’s pay and performance approach aligns to the Fair Pay Agenda • Our Inclusion Index measures how included our colleagues feel. For 2022 it is 82%, up from 79% in 2021 • Our Wellbeing Index measures how colleagues feel about their wellbeing. For 2022 it is 86%, up from 84% in 2021 Alignment of employee and Executive Director pay Linking both Executive and employee pay to sustainable business performance. • Pay outcomes continue to be aligned with financial and non-financial performance • Our pay policies are strongly aligned across the wider workforce, senior employees and Executive Directors of Barclays PLC • Where pay policies differ, this is aligned to differences in seniority and ability to influence business performance • 2023 salary increase budget for the most junior colleagues in the UK is 11%, US is 9% and India is 10%. The budget for more senior employees is smaller. The Group Chief Executive and Group Finance Director will receive 3.4% and 4.3% respectively Equal pay commitment Rewarding employees fairly for their contribution and making sure pay and performance decisions never take into account any protected characteristics • Explicit communication to managers that pay decisions must not take into account gender, age, ethnicity, disability, sexual orientation, religion, marital status, pregnancy, maternity, parental leave or any other protected characteristic • All grievances raised by employees, including any issues relating to pay, are investigated • Robust processes in place to review pay and performance decisions to ensure outcomes remain fair and free from bias Key milestones: Five years of fair pay reporting Published our Equal Pay Commitment for the first time in the 2018 Fair Pay Report Published additional fair pay communication materials to our colleagues to explain how the pay and performance approach aligns to the Fair Pay Agenda Published our Fair Pay Agenda for the first time to articulate how we think about fair pay at Barclays First global review of living wages, increasing minimum hourly rates in the US and India Aligned Executive Directors’ pension contribution with the wider workforce while simultaneously increasing the contribution for our most junior UK colleagues from 10% to 12% Responded to the cost-of-living challenges in the UK and Europe by bringing forward a portion of the annual salary increase budget Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 208 Remuneration report (continued) Employee remuneration policy summary As outlined earlier, Barclays has a clearly articulated remuneration philosophy. This continues to drive our thinking in how we structure and determine remuneration for all employees, from the most senior (including our Executive Directors) to our new apprentices and graduates. As part of our annual review we assessed our remuneration policies and practices for alignment with Barclays’ Purpose, Values and Mindset, our remuneration philosophy and our Fair Pay agenda, including ensuring appropriate alignment between the Directors’ remuneration policy and remuneration approaches for senior management and the wider workforce. We continue to ensure that we comply with all prevailing regulations. We identify individuals whose roles may expose Barclays to material risk, and assess and structure their pay in a way which encourages alignment of their interests with those of Barclays and our shareholders. The table below provides a summary of the remuneration approach for employees below Board level. Summary remuneration policy – employees below Board level Element Salary Operation Salaries reflect individuals’ skills and experience and are reviewed annually. Role Based Pay (RBP) Pension and benefits Annual bonus Share plans Performance management Risk and conduct They are increased where justified by role change, increased responsibility or a change in the appropriate market rate. Salaries may also be increased in line with local statutory requirements and in line with union and works council commitments. We have been a living wage employer in the UK since 2013, and continue to work with the Fair Wage Network to complete an annual review of our pay levels against living wage benchmarks across locations globally. A small number of senior employees (c.2% UK employees) receive a class of Fixed Pay called RBP to recognise the seniority, scale and complexity of their role. This may change where justified by role or responsibility change or a change in the appropriate market rate. The provision of a competitive package of benefits is important to attracting and retaining the talent needed to deliver Barclays’ strategy. Employees have access to a range of country-specific company-funded benefits, including pension schemes, healthcare, life assurance and other voluntary employee-funded benefits. Employer pension contributions for the UK workforce are at least at the level of those for the Executive Directors, and are set at a minimum of 10% of salary (a minimum of 12% for more junior colleagues). Annual bonuses incentivise and reward the achievement of Group, business and individual objectives, and reward employees for demonstrating individual behaviours in line with Barclays’ Values and Mindset. All employees are considered, subject to eligibility criteria. For senior employees, an appropriate proportion of their annual bonus is deferred to future years. Deferred bonuses are generally delivered in equal portions as deferred cash and shares. They are subject to either a three, four, five or seven-year deferral period (and for Material Risk Takers (MRTs) further holding periods of six or 12 months for deferrals in shares) in line with regulatory requirements. Consistent with regulation, the remuneration of MRTs is subject to the 2:1 maximum ratio of variable to fixed remuneration. We encourage wider employee share ownership through the all-employee share plans, with plans available to 99% of colleagues globally. Performance assessment is based on two core dimensions: ‘what’ has been delivered against agreed individual, team and business objectives, as well as ‘how’ this has been achieved in line with our Barclays’ Values and Mindset. Both dimensions are assessed and rated independently of each other with no requirement to have an overall rating. This reinforces the equal importance of the ‘what’ and ‘how’. Risk and conduct is taken seriously at Barclays and the Committee ensures that there are in-year adjustments, malus or clawback applied to individual remuneration, where appropriate. In addition to individual adjustments, the Committee considers collective adjustments to the incentive pool for risk and conduct. For 2022, the total impact of risk and conduct-related collective adjustments is a reduction of c.£500m. More information on our approach to performance management, and risk and conduct, as well as information in relation to Material Risk Takers, are set out in Appendix C of the Barclays PLC Pillar 3 Report 2022. Barclays PLC Pillar 3 Report 2022 can be found online at home.barclays/annualreport Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 209 Remuneration report (continued) Directors’ remuneration policy This section sets out the proposed new Directors’ remuneration policy, which is intended to apply for three years beginning on the date of the 2023 AGM, subject to shareholder approval. Key elements of the policy remain unchanged from the existing policy. Minor changes have been made to simplify the shareholding requirement and align its operation with market practice, and to simplify other elements of the policy wording, including moving items relating to the implementation of the policy out of the policy itself and into the Annual report on Directors’ remuneration. The existing policy can be found on pages 93 to 122 of the 2019 Annual Report or at home.barclays/annualreport. Remuneration policy – Executive Directors Element and purpose Operation Fixed Pay To reward skills and experience appropriate for the scale, complexity and responsibilities of the role and to provide the basis for a competitive remuneration package. Fixed Pay is determined based on the individual’s role, skills and experience with reference to market practice and market data (on which the Committee receives independent advice). The Committee aims to set the Fixed Pay for each Executive Director at a level that provides an appropriately competitive total compensation, within regulatory maximums and policy limits on the level of variable pay relative to fixed pay. Executive Directors’ total compensation is benchmarked against similar roles at a peer group of international banks of comparable size and complexity, as determined by the Committee. The Committee may amend the peer group from time to time to ensure it remains a relevant comparison to Barclays or if circumstances make this necessary (for example, as a result of takeovers or mergers). 50% of Fixed Pay is delivered in cash (paid monthly), and 50% is delivered in shares. The shares are delivered in four equal quarterly instalments (after deduction of applicable payroll taxes) and are then subject to a holding period, with restrictions lifting over five years from the date of delivery (20% each year). The Executive Directors beneficially own the shares from the date of delivery and are entitled to receive any dividends that are subsequently paid on those shares. Risk and conduct adjustment, malus and clawback provisions do not apply to Fixed Pay. Pension To support Executive Directors to build long- term retirement savings. Executive Directors receive an annual cash allowance in lieu of participation in a pension arrangement. Risk and conduct adjustments, malus and clawback provisions do not apply to pension. Maximum value and performance measures Fixed Pay for each Executive Director is reviewed annually and set to provide an appropriate total compensation opportunity compared to the peer group, as determined by the Committee, taking into account the Executive Director’s skills, experience and performance. Increases will normally be no more than the average annual increase for UK employees. The Committee may determine larger increases in circumstances such as changes in responsibilities, when the overall total compensation opportunity is materially below the market or when it is justified based on skills, experience and performance in the role. Payment of Fixed Pay is not contingent on any performance measures. The maximum annual cash allowance value is currently 5% of Fixed Pay (equivalent to 10% of the cash element of Fixed Pay). The Committee may change the maximum annual cash allowance in lieu of pension, provided that the maximum allowance as a percentage of the cash element of Fixed Pay will not exceed the employer pension contribution rate provided to the wider UK workforce. There are no performance measures. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 210 Remuneration report (continued) Element and purpose Operation Benefits To provide a competitive and cost-effective benefits package appropriate to the role and reflecting local market practice, and to support the health and wellbeing of the Executive Directors. Executive Directors’ benefits provision includes, but is not restricted to, private medical cover, annual health check, life and ill health income protection, and use of a Company vehicle and driver when required for business purposes (including any tax liabilities that may arise from these benefits). If an Executive Director relocates to perform their role, additional support may be provided for a defined and limited period of time, in line with Barclays’ general employee mobility policies and practices. This would include, but is not restricted to, the provision of temporary accommodation, tax advice, home leave flights, removals assistance and relocation flights for the Executive Director and their dependents as well as tax and/or social security costs arising in connection with such benefits. Annual bonus Determination of annual bonus To reward delivery of short-term financial targets and strategic objectives, and the individual performance of the Executive Directors in achieving those. Delivery in part in shares with holding periods increases alignment with shareholders. Bonus deferral encourages longer-term focus and longer-term share retention. Individual bonuses are entirely discretionary and decisions are based on the Committee’s judgement of Executive Directors’ performance in the year, measured against Group and personal objectives. Delivery structure Annual bonuses are delivered as a combination of cash and shares, a proportion of which may be deferred and/or subject to a holding period. Clawback provisions apply to the bonus (described later in this policy). Deferral proportions and vesting profiles will be structured so that, in combination with any LTIP award, the proportion of variable pay that is deferred is no less than that required by regulations (currently 60%). Deferred bonuses are granted subject to the relevant plan rules, with vesting subject to certain requirements including continued employment and the malus provisions (described later in this policy). The number of deferred bonus shares to be awarded may be based on a share price discounted by reference to an expected dividend yield over the vesting period, where dividend equivalents cannot be awarded due to regulations. In such circumstances, the Committee has discretion to reduce (not increase) the number of shares that vest if actual dividends paid over the period are materially lower than the original dividend assumption. Maximum value and performance measures The maximum value of benefits is determined by the nature of the benefit itself and costs of provision may depend on external factors, e.g. insurance costs. There are no performance measures. The maximum annual bonus opportunity is 93% of Fixed Pay for the Group Chief Executive and 90% of Fixed Pay for the Group Finance Director. Although the Committee takes a structured approach to considering the level of bonus outcome each year, as outlined below, any bonus award is discretionary and any amount may be awarded from zero to the maximum value. Each year, the Committee sets forward- looking performance measures, weightings and targets near the start of the year, covering financial and non- financial measures. Financial factors will normally guide at least 60% of the bonus opportunity. The Committee will consider performance against those measures in determining the annual bonus for the Executive Directors. The Committee has the discretion to vary the measures and their respective weightings. The measures and weightings will be disclosed annually as part of the Annual Report on Directors’ remuneration, at the beginning of the performance year. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 211 Remuneration report (continued) Element and purpose Operation Long Term Incentive Plan (LTIP) award To incentivise execution of Barclays’ strategy over a multi-year period. Long-term performance measurement, deferral into Barclays shares and holding periods encourage a long-term view and align Executive Directors’ interests with those of shareholders. Determination of LTIP award LTIP awards are determined by the Committee following discussion of recommendations made by the Chairman (for the Group Chief Executive’s LTIP award) and by the Group Chief Executive (for other Executive Directors’ LTIP awards) based on satisfactory performance over the prior year. Delivery structure LTIP awards are granted subject to the plan rules and are conditional awards to receive Barclays shares at no cost (although they may be satisfied in other instruments as may be required by regulation). Vesting is dependent on certain requirements including the achievement of performance measures, continued employment and malus and clawback provisions. LTIP awards are structured so that when combined with the annual bonus the proportion of variable pay that is deferred is no less than that required by regulations (currently 60%). No award vests before the third anniversary of grant and award vests no faster than permitted by regulations (currently in five equal tranches with the first tranche vesting on or around the third anniversary of grant and the last tranche vesting on or around the seventh anniversary of grant). Any shares that vest are subject to an additional holding period with restrictions lifting no faster than permitted by regulations (currently 1 year following vesting, though sufficient shares may be sold to settle personal tax liabilities). The number of shares to be awarded may be based on a share price discounted by reference to an expected dividend yield over the vesting period, where dividend equivalents cannot be awarded due to regulations. In such circumstances, the Committee has discretion to reduce (not increase) the number of shares that vest if actual dividends paid over the period are materially lower than the original dividend assumption. Maximum value and performance measures The maximum annual LTIP award for the Group Chief Executive is 140% of Fixed Pay and 134% of Fixed Pay for the Group Finance Director. For each award, the Committee sets forward-looking performance measures, weightings and targets at grant. These will be disclosed prospectively as part of the Annual Report on Directors’ remuneration, including the threshold and maximum level of performance for each financial measure. Financial measures will normally be at least 70% of the total opportunity. Straight-line vesting applies between threshold and maximum performance. For each measure, no more than 25% will vest at threshold performance. There is no retesting allowed of those conditions. In exceptional circumstances, the Committee has discretion (permitted under the plan rules approved by shareholders) to amend targets, measures, or the number of shares under awards if an event happens (for example, a major transaction) that, in the opinion of the Committee, causes the original targets or measures no longer to be appropriate or such adjustment to be reasonable. The Committee also has the discretion to reduce the vesting of any award, including to nil, if it deems that the outcome is not consistent with performance delivered. Risk and conduct adjustment - malus and clawback Malus and clawback provisions discourage excessive risk-taking and inappropriate behaviours. Any bonus or LTIP awarded is subject to malus and clawback provisions. The malus provisions enable the Committee to reduce the amount of unvested bonus or LTIP (including to nil) prior to vesting in specified circumstances, including, but not limited to: ▪ a participant deliberately misleading Barclays, the market and/or shareholders in relation to the financial performance of the Barclays Group ▪ a participant causing harm to Barclays’ reputation or where his/her actions have amounted to misconduct, incompetence or negligence ▪ a material restatement of the financial statements of the Barclays Group or any subsidiary, or the Group or any business unit suffering a material downturn in its financial performance ▪ a material failure of risk management in the Barclays Group ▪ a significant deterioration in the financial health of the Barclays Group. The clawback provisions enable amounts to be recovered after they have vested, for a period in line with applicable regulation – currently seven years from grant (which can be extended to up to ten years in circumstances where a relevant investigation is ongoing at the end of the initial seven-year period) where (i) a participant’s actions or omissions have amounted to misbehaviour or material error and/or (ii) Barclays or the relevant business unit has suffered a material failure of risk management. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 212 Remuneration report (continued) Element and purpose Operation All-employee share plans To help increase the number of employee shareholders and increase their participation as shareholders. Provides potential UK tax benefits. Executive Directors are entitled to participate in the following all-employee share plans: (i) Barclays Sharesave under which they can make monthly savings out of post-tax pay over a period of three or five years linked to the grant of an option over Barclays’ shares which can be at a discount of up to 20% on the share price set at the start. (ii) Barclays Sharepurchase under which they can make contributions (monthly or as a lump sum) out of pre-tax pay (if based in the UK) which are used to acquire Barclays’ shares. Maximum value and performance measures (i) Savings per month between £5 and the maximum set by Barclays (currently £300), which will be no more than the statutory maximum that applies for all employees. There are no performance measures. (ii) Contributions per tax year of between £10 and the maximum set by Barclays (currently £1,800), which will be no more than the statutory maximum that applies for all employees. Barclays may match contributions up to the statutory maximum (current match is 1:1 for employee contributions up to £600 per tax year). There are no performance measures. Shareholding requirement To further enhance the alignment of Executive Directors’ interests with those of shareholders, in long-term value creation. Executive Directors have a contractual obligation to build up a shareholding, within five years from their date of appointment as Executive Director, with a value equivalent to: No maximum, the requirement sets out the minimum required shareholding and timeframes. • Group Chief Executive: 233% of Fixed Pay • Group Finance Director: 224% of Fixed Pay which, for each Executive Director, is equivalent to their maximum annual variable pay opportunity. Executive Directors will have a reasonable period to build up to this requirement again if it is not met because of a significant share price depreciation. For two years after stepping down as an Executive Director, they must maintain a shareholding at a level equal to: (i) the number of shares to be held under the shareholding requirement, as determined immediately prior to their stepping down as an Executive Director; or (ii) the actual number of shares held on stepping down, if lower (subject to the Committee determining that the resulting level of shareholding is appropriate given the relevant Executive Director’s tenure). Shares that count towards the shareholding requirement are those that the Executive Director beneficially owns, plus the value of any vested share awards subject only to holding periods (including Fixed Pay shares, vested bonus shares and vested LTIP awards), the estimated after-tax value of any shares from unvested deferred share bonuses, and the estimated after-tax value of any unvested LTIP awards provided that no performance conditions remain untested. After the Executive Director has stepped down, the shareholding requirement will be maintained through self- certification, to the extent it is not met via shares held within the Group’s employee share plans and nominee accounts. In approving the application of this policy to the Executive Directors, authority is given for the Group to honour any commitments entered into with current or former Directors prior to the approval and implementation of the policy (such as the grandfathering of past deferred compensation awards), provided that such commitments complied with any applicable remuneration policy in effect at the time they were entered into. Any remuneration commitment made prior to an individual becoming a Director and not in anticipation of their appointment to the Board may be honoured, even where it is not consistent with the Directors’ remuneration policy in place at the time the commitment was made or at the time it is fulfilled. For these purposes, commitments include but are not restricted to the satisfaction of past awards of variable remuneration, the terms of which are set at the time the award is granted. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 213 Remuneration report (continued) How shareholder views are taken into account by the Committee in setting the policy We recognise that remuneration is an area of particular interest to some shareholders and that it is important that we listen to shareholder views and take these into account when setting and considering changes to remuneration. Accordingly, a series of meetings are held each year with major shareholders and shareholder representative groups to understand their views. The Group Chair or Committee Chair attended these meetings, accompanied by senior Barclays employees (including the Group Reward and Performance Director and the Group Company Secretary). In developing the new policy, we engaged with shareholders and had meetings with shareholder representative bodies and proxy agencies, in the latter part of 2022 and in early 2023. The Committee notes that shareholder views on some matters are not always unanimous; however, the interactions are constructive and insightful. The engagement is meaningful and helpful to the Committee in its work and contributes directly to the decisions made by the Committee. Discretion In addition to the various operational discretions that the Committee can exercise in the performance of its duties (including those discretions set out in the Company’s share plans), the Committee reserves the right to make either minor or administrative amendments to the policy to benefit its operation or to make more material amendments in light of new laws, regulations and/or regulatory guidance. The Committee would only exercise this right if it believed it was in the best interests of the Company to do so and where it is not possible, practicable or proportionate to seek or await shareholder approval in General Meeting. Executive Directors' policy on recruitment Barclays operates in a highly specialised sector and many of its competitors for talent are outside of the UK. The Committee’s approach to remuneration on recruitment is to pay the amount necessary to fill the role with a suitable candidate. Approval of the remuneration package offered on appointment to any new Executive Director is a specific requirement of the Committee’s Terms of Reference. The terms of such packages must be approved by the Committee in consultation with the Chairman and (except for the terms of his own remuneration) the Group Chief Executive. Any new Executive Director’s package would include the same elements as those of the existing Executive Directors, as shown on the next page. Performance measures and targets The Committee selects financial performance measures that are fundamental to delivery against the Bank’s strategy and are considered to be the most important financial measures used by the Executive Directors and the Board to oversee the direction of the business. The non-financial performance measures are chosen to represent key indicators of the success of our strategy, to provide a balanced view of our performance during the period, that are robustly monitored and reported on to management. Financial targets for both the annual bonus and LTIP are set to be stretching but achievable and are aligned to enhancing shareholder value. In respect of the annual bonus, the financial measures and weightings will be disclosed at the start of the relevant performance year. The Committee considers the annual bonus targets to be commercially sensitive and that it would be detrimental to disclose the targets at the start of the relevant performance year so the specific targets, and performance against those targets, will be disclosed at the end of the relevant performance year, in that year’s Annual report on Directors’ remuneration, subject to commercial sensitivity no longer remaining. In respect of the LTIP, the financial measures, weightings and targets will be disclosed in the Remuneration report published shortly after at the start of the relevant performance period. Alignment between the Executive Directors’ remuneration policy and all employees’ policy of the Group The structure of remuneration packages for the Executive Directors is closely aligned with that for the broader employee population. Employees receive salary, pension and benefits and are eligible to be considered for a bonus and to participate in all- employee share plans. The broader employee population typically does not have a contractual limit on the quantum of remuneration (though regulatory limits currently apply for MRTs) and does not receive any of their fixed pay in shares (with the exception of the members of the Group Executive Committee and some other senior employees). As for the Executive Directors, variable pay for the broader employee population is performance based. Variable pay for both the Executive Directors and the broader employee population is subject to deferral requirements. Executive Directors and other MRTs are subject to deferral at least equal to that required by regulation, currently a minimum rate of 40% to 60%, depending on the total value of variable pay. For non-MRTs, bonuses in excess of £65,000 are currently subject to a graduated level of deferral. The terms of deferred bonus awards for Executive Directors and the wider employee population are broadly the same, in particular the vesting of all deferred bonuses is subject to service and malus conditions. The broader employee population does not participate in the Barclays LTIP. While we have not sought employee views on the DRP, we have considered remuneration policies for the broader employee population when reviewing the DRP. In our Fair Pay Report, we explain in more detail how employee and Executive Director pay is aligned. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 214 Remuneration report (continued) Element and purpose Operation Fixed Pay Pension Benefits Annual bonus and LTIP award Buy-out In line with policy In line with policy In line with policy In line with policy for the Group Chief Executive and Group Finance Director. If any new Executive Director role is appointed to the Board, the Committee will consider the appropriate maximum annual bonus and maximum LTIP opportunities for the role, as a multiple of Fixed Pay. Neither of these will exceed the parameters of the policy for the Group Chief Executive. The Committee can consider buying out forfeited bonus opportunity and/ or incentive awards that the new Executive Director has forfeited as a result of accepting the appointment with Barclays, subject to proof of forfeiture where applicable. The Committee will take reasonable steps to ensure that any award made to compensate for forfeited remuneration from the new Executive Director’s previous employment is not more generous than, and mirrors as far as possible the expected value, timing and form of delivery of, the terms of the forfeited remuneration, and ensure the award is in the long-term best interests of Barclays. Barclays’ deferral policy shall however apply as a minimum to any buy-out of annual bonus opportunity. The value of any buy-out is not included within the maximum incentive levels above since it relates to a buy- out of forfeited bonus opportunity or incentive awards from a previous employer. Where a senior executive is promoted to the Board, his or her existing contractual commitments agreed prior to his or her appointment will still be honoured in accordance with the terms of the relevant commitment, including vesting of any pre-existing deferred bonus or long-term incentive awards, even where it is not consistent with the Directors’ remuneration policy that is in place at the time it is fulfilled. Prior to his appointment to the Board. Executive Directors’ policy on payment for loss of office (including following a takeover) The Committee’s approach to payments in the event of termination is to take account of the individual circumstances including the reason for termination, individual performance, contractual obligations and the terms of the deferred bonus plans and LTIPs in which the Executive Director participates. Standard provision Commentary Notice period in Executive Directors' service contracts Notice from the Company and from the Executive Director will normally be 6 months. Executive Directors may be required to work during the notice period or may be placed on garden leave or, if not required to work the full notice period, may be provided with pay in lieu of notice. For C.S. Venkatakrishnan, the contractual notice period is 12 months’ notice from the Company and six months’ notice from the Executive Director, as his existing notice period prior to his appointment to the Board was honoured when he was promoted to the Board. For Anna Cross, the contractual notice period is six months’ notice from the Company and six months’ notice from the Executive Director (she did not have any pre-existing contractual commitment to a longer period). Pay during notice period or payment in lieu of notice per service contracts Fixed Pay delivered in cash and pension allowance will continue to be paid monthly, and other contractual benefits provided, through the notice period. Fixed Pay delivered in shares will also continue to be delivered quarterly for the notice period and the final quarterly award will be pro-rated for the number of days from the start of the relevant quarter to the termination date. Where Barclays elects to terminate employment with immediate effect by making a payment in lieu of notice, the Executive Director will receive Fixed Pay delivered in cash as a lump sum or in instalments but will not receive any Fixed Pay shares that would otherwise have been payable during the period for which the payment in lieu is made (unless required otherwise by regulations or local law). Any payments whether in instalments or as a lump sum may be subject to mitigation as relevant. In the event of termination for gross misconduct neither notice nor payment in lieu of notice is given. Eligibility for annual bonus and LTIP awards There is no automatic entitlement to be granted a bonus or LTIP award for the year of termination, but eligibility for either or both may be considered at the Committee’s discretion, pro-rated for service, and subject to performance measures being met. No annual bonus or LTIP award would be granted in the case of gross misconduct or resignation. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 215 Remuneration report (continued) Standard provision Commentary Treatment of unvested deferred bonus and LTIP awards Repatriation Other The treatment of unvested deferred bonus or LTIP awards will be in accordance with the relevant plan rules. Unvested deferred bonus and LTIP awards normally lapse if the Executive Director leaves by reason of resignation prior to fifth anniversary of the date of grant, is terminated for gross misconduct or cause, or is otherwise not an ‘eligible leaver’. ‘Eligible leaver’ is defined as leaving due to injury, disability or ill health, retirement, redundancy, the business or company which employs the Executive Director ceasing to be part of the Group, or otherwise at the discretion of the Committee. The Committee will normally apply its discretion to apply eligible leaver status in the event of resignation after the fifth anniversary of grant, or in the case of deferred bonuses if it is the employer that terminates employment (other than in circumstances that amount to gross misconduct or dismissal for cause). Where ‘eligible leaver’ treatment applies, deferred bonus and LTIP awards will normally continue to vest, on the scheduled vesting dates and subject to the rules of the relevant plan, unless the Committee determines otherwise in exceptional circumstances. On death, deferred bonus and LTIP awards are accelerated and deferred bonus awards are released in full. In an ‘eligible leaver’ situation and in the case of death, LTIP awards are pro-rated for time (over the whole performance period, including the assessment period prior to grant) and with the proportion that vests remaining subject to performance against the performance conditions, subject to the Committee’s discretion to determine otherwise, in accordance with the plan rules, as amended from time to time. After release, the shares are subject to an additional holding period to the extent required by regulations (currently a minimum 12 month holding period applies). Unvested awards that continue beyond termination remain subject to malus provisions, which enable the Committee to reduce the vesting level of deferred bonuses and LTIP awards (including to nil), and after vesting awards remain subject to clawback provisions (as described in the main policy). In the event of a takeover or other major corporate event, the Committee has absolute discretion to determine whether all outstanding awards would vest early (subject to achievement of any performance conditions for the LTIP and applicable regulation) or whether they should continue in the same or revised form following the change of control. The Committee may also determine that participants may exchange existing awards for awards over shares in an acquiring company with the agreement of that company. In the event of an internal reorganisation, the Committee may determine that outstanding awards will be exchanged for equivalent awards in another company. Except in the case of gross misconduct or resignation, where an Executive Director has been relocated at the commencement of or during their employment, the Company may pay for the Executive Director’s repatriation costs in line with Barclays’ general employee mobility policy including temporary accommodation, payment of removal costs and relocation flights for the Executive Director, spouse and children. The Company will pay the Executive Director’s tax on the relocation costs but will not tax equalise and will also not pay tax on his or her other income relating to the termination of employment. Except in the case of gross misconduct or resignation, the Company may pay for the Executive Director’s legal fees and tax advice relating to the termination of employment and provide outplacement services and any other reasonable costs. The Company may pay the Executive Director’s tax on these particular costs. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 216 Remuneration report (continued) Illustrative scenarios for Executive Directors' remuneration The charts below show the potential value of the current Executive Directors’ 2023 total remuneration in four scenarios: ‘Minimum’ (i.e. Fixed Pay, pension and benefits), ‘Mid-point’ (i.e. Fixed Pay, pension, benefits and 50% of the maximum variable pay that may be awarded), ‘Maximum’ (i.e. Fixed Pay, pension, benefits and the maximum variable pay that may be awarded) and ‘Maximum with illustrative share price increase’ (‘Maximum’ scenario, assuming share price appreciation of 50% on the LTIP). The value of benefits in these charts is based on an estimated annual value for regular contractual benefits provision during 2023. Additional ad hoc benefits may arise, for example, overseas relocation of Executive Directors, but will always be provided in line with the DRP. A significant proportion of the potential remuneration of the Executive Directors is performance related, delivered in Barclays shares and subject to deferral, additional holding periods, malus and clawback. These charts assume a constant share price, save for the share price appreciation applied to the LTIP value only in the 'Maximum with illustrative share price increase' scenario. Group Chief Executive £m Group Finance Director £m n Fixed Pay n Pension and benefitsa n Annual bonus a. Pension and benefits include the value of cash in lieu of pension and the anticipated value of taxable benefits. For C.S. Venkatakrishnan this includes relocation costs to which he is contractually entitled, n LTIP n Potential outcome of a 50% share price increase on the LTIP including temporary accommodation in London (annualised figure including tax gross up is expected to be c.£140k as well as shipping costs c.£118k). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 217 Remuneration report (continued) Remuneration policy – Non-Executive Directors Element and purpose Operation Maximum value Fees Reflect individual responsibilities and membership of Board Committees and are set to attract Non-Executive Directors who have relevant skills and experience to oversee the implementation of our strategy Fees are set at a level which reflects the role, responsibilities and time commitment which are expected from the Chair and Non-Executive Directors The Chair is paid an all-inclusive fee for all Board responsibilities. The Chair has a time commitment equivalent of up to 80% of a full-time role. The other Non-Executive Directors receive a basic Board fee, with additional fees payable where individuals take on additional roles or responsibilities, including, but not limited to, serving as a member or Chair of a Committee of the Board or as a Senior Independent Director. Fees are periodically reviewed by the Board. Non-Executive Directors may also receive fees where they serve as directors of subsidiary companies of Barclays PLC. In the case of certain subsidiary appointments, such additional remuneration is approved by the Barclays PLC Board Remuneration Committee. No variable pay is provided, enabling the Chair and Non- Executive Directors to maintain appropriate independence, focus on long-term decision-making and constructively review and challenge the performance of the Executive Directors. Fees are reviewed against those for Non- Executive Directors in banks and other companies of similar size and complexity. Other than in exceptional circumstances, fees will not increase by more than 20% above the current fee levels during this policy period. Additional fees may be paid for new Committees of the Board and / or where a Non-Executive Director takes on additional responsibilities and / or performs an additional role, provided these are not greater than fees payable for the existing roles on the Committees of the Board as detailed in the Annual report on Directors' remuneration. Any increases to such additional fees over the period of the policy will be made in accordance with the principles set out above for current fees. Benefits To provide a competitive and cost effective benefits package appropriate to the role and location Expenses Bonus and share plans Shareholding requirements Notice and termination provisions The Chair is provided with private medical cover subject to the terms of the Barclays’ scheme rules from time to time, and is provided with the use of a Company vehicle and driver when required for business purposes (including settlement of any tax liabilities that may arise from this benefit). Benefits which are minor in nature and in any event do not exceed a cost of £500 may be provided to Non- Executive Directors. Non-Executive Directors are not eligible to join Barclays’ pension plans. The Chair and Non-Executive Directors are reimbursed for any reasonable and appropriate expenses incurred for business reasons. Any tax that arises on these reimbursed expenses is paid by Barclays. The Chair may be invited to participate in Sharesave, an HMRC employee tax advantaged share scheme, due to the level of their time commitment to the role. The Chair is not eligible to participate in any other Barclays’ cash, share or long-term incentive plans. All other Non-Executive Directors are not eligible to participate in Barclays’ cash, share or long-term incentive plans. An element of the basic fee before deduction of tax and other statutory deductions, equal to £100,000 for the Chair and £30,000 for each Non-Executive Director, is used to purchase Barclays’ shares which are retained on the Non-Executive Director’s behalf until they retire from the Board. Instead of service contracts, the Chair and the Non-Executive Directors each have a letter of appointment that reflect their responsibilities and time commitments. Non-Executive Directors are entitled to notice under their letters of appointment but, other than in respect of the Chair, no compensation is due in the event of termination, other than standard payments for the period served up to the termination date. Each Director’s appointment is for an initial three-year term, renewable at Barclays’ discretion for a further term of three years thereafter and subject to annual re-election by shareholders. Non-Executive Directors appointed beyond six years will be at the discretion of the Board Nominations Committee. Notice period Chair: Six months from the Company, six months from the Chair. Termination payment policy The Chair’s appointment may be terminated by Barclays on six months’ notice or immediately in which case six months’ fees are payable in instalments at the times they would have been received had the appointment continued, but subject to mitigation if they were to obtain alternative employment. No continuing payments of fees (or benefits) are due if a Non-Executive Director is not re-elected by shareholders at the Barclays PLC AGM. In accordance with the policy table above, any new Chair would be paid an all-inclusive fee only and any new Non-Executive Director would be paid a basic fee for their appointment as a Non- Executive Director, plus fees for their participation on and/or chairing of any Board committees and for taking on additional responsibilities and/ or performing an additional role, time apportioned in the first year as necessary. No sign-on payments are offered to Non-Executive Directors. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 218 Remuneration report (continued) Annual report on Directors’ remuneration This section explains how our Directors’ remuneration policy was implemented for 2022 Executive Directors Single total figure for 2022 remuneration (audited) The following table shows a single total figure for 2022 remuneration in respect of qualifying service for each Executive Director together with comparative figures for 2021. 1) Fixed Pay £000 2) Pension £000 3) Taxable benefits £000 Total Fixed Pay £000 C.S. Venkatakrishnana Anna Crossd Tushar Morzariae 2022 2021 2022 2021 2022 2021 2,767 450 1,185 — 540 1,688 138 343 23 59 — 27 84 6 10 — 30 52 4) Annual bonus £000 1,949 395 803 — 362 3,248 479 1,254 — 597 1,824 1,467 6) Reduction of unvested awards £000 — (8)c — — — (138)c 5) LTIP £000 —b —b —b —b 2,974f 1,599g Total variable pay £000 1,949 387 803 — 3,336 2,928 Total £000 5,197 866 2,057 — 3,933 4,752 Notes a C. S. Venkatakrishnan was appointed to the Board and as Group Chief Executive on 1 November 2021. The remuneration shown for 2021 is in respect of his services as Group Chief Executive during 2021. On his appointment as Group Chief Executive, the Remuneration Committee set his level of Fixed Pay (and the resulting maximum total compensation opportunity) at a lower level than he received for his previous role as Head of Global Markets and Co-President of Barclays Bank PLC. b The LTIP amount shown for 2022 relates to awards granted in 2020, and the amount shown for 2021 relates to awards granted in 2019. No LTIP award was granted to C.S. Venkatakrishnan or Anna Cross in 2020 or 2019 as neither was an Executive Director at that time. c Financial outcomes for 2021 bonus and 2019-2021 LTIP were recalculated to reflect the restatement of the 2021 financial statements. The figures shown reflect reductions that will be applied to outstanding deferred elements of the impacted awards, the 2021 bonus for C.S. Venkatakrishnan and 2021 bonus and 2019-2021 LTIP for Tushar Morzaria. More details are provided on page 228. d Anna Cross was appointed to the Board and as Group Finance Director on 23 April 2022. The remuneration shown for 2022 is in respect of her services as Group Finance Director during 2022. e Tushar Morzaria stepped down as Group Finance Director and an Executive Director on 22 April 2022. The remuneration included in the table above for 2022 is in respect of his services as an Executive Director during 2022, plus the value of the 2020-2022 LTIP award (described in note f). f The LTIP amount for 2022 relates to awards granted in 2020, with vesting based on performance measured over 2020 to 2022. The value shown includes a 23% share price appreciation between the date of grant and the vesting date of the first tranche, estimated based on the share price on the date of grant (pre discounting of share price to reflect that shares under award are not entitled to dividends or dividend equivalents) and the Q4 2022 average share price of £1.53, as the 2022 Annual Report was finalised prior to the vesting date. g The LTIP amount for 2021 relates to awards granted in 2019, with vesting based on performance measured over 2019 to 2021. The values shown include a 1% share price appreciation between the date of grant and the vesting date, based on the share price on the date of grant (pre discounting of share price to reflect that shares under award are not entitled to dividends or dividend equivalents) and share price on the vesting date of the first tranche, which was £1.61. The 2021 LTIP values disclosed in the 2021 Remuneration report were estimates, based on the Q4 2021 average share price, as the 2021 Annual Report was finalised prior to the vesting date. Additional information in respect of each element of pay for the Executive Directors (audited) 1) Fixed Pay Fixed Pay is delivered 50% in cash, paid monthly, and 50% in shares, delivered quarterly. The shares are subject to a holding period, with restrictions lifting over five years, 20% each year. On appointment as Group Finance Director, Fixed Pay for Anna Cross was set at £1,725,000, to deliver an appropriate starting total compensation opportunity, in line with the DRP. More information on the Committee's considerations in respect of the Executive Directors' Fixed Pay is set out on page 231. 2) Pension Executive Directors are paid cash in lieu of pension contributions equal to 5% of their Fixed Pay (equivalent to 10% of the cash element of Fixed Pay). The pension cash allowance paid during 2022 was £138,350 for C.S. Venkatakrishnan, and was £59,300 for Anna Cross and £27,050 for Tushar Morzaria for the respective periods they each served as Group Finance Director during the year. No other benefits were received by Executive Directors from any Barclays' pension plan. 3) Taxable benefits Taxable benefits include private medical cover, life assurance, income protection, tax advice and the use of a Company vehicle and driver when required for business purposes. For C.S. Venkatakrishnan, the benefits figure also includes the cost to the Company during 2022 of providing him with relocation support, in line with the current DRP, including immigration assistance, temporary accommodation and home search support in London. Those costs came to c.£284,000 including the cost to Barclays of paying the income tax and social security resulting from the provision of that relocation support. As referenced in last year's Remuneration report, under the terms of his relocation to London, temporary accommodation in London will be provided to him for a period of up to two years following his appointment in November 2021 as Group Chief Executive. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 219 Remuneration report (continued) 4) 2022 annual bonus The bonus amount included in the single total figure is the value awarded or scheduled to be awarded in Q1 following the financial year to which it relates. In determining the bonus in respect of 2022 performance, the Committee considered the performance achieved against the Financial (60% weighting) and Strategic non-financial (25% weighting) performance measures that had been set to reflect Company priorities for 2022. Performance against their personal objectives (15% weighting) for 2022 was assessed on an individual basis. The approach taken to assessing financial performance against each of the financial measures was based on a straight-line outcome between the amount that vests for threshold performance, which was nil for the profit before tax measure or 20% for the cost: income ratio measure, and 100% applicable to each measure for achievement of maximum performance. A summary of the assessment is provided in the table that follows. 2022 annual bonus outcomes Profit before tax (excluding material items), with CET1 ratio underpin Cost: income ratio (excluding material items) Strategic non-financial Personal Weighting Threshold Maximum 50 % £5.0bn £8.0bn 2022 Actual £7.445bna C.S. Venkatakrishnan Anna Cross Tushar Morzaria 40.8 % 40.8 % 40.8 % Outcome 10 % 66.1 % 62.1 % 65.3%a 25 % Performance against strategic measures, organised around three main categories: Customers and clients, Colleagues and Climate and Sustainability 15 % Individual performance against each of the Executive Director's personal objectives assessed by the Committee 3.6% 18.0 % 3.6% 18.0 % 3.6% 18.0 % 13.0 % 13.0 % 12.0 % Total Final 2022 annual bonus outcome approved by the Committee 75.4 % 75.4 % 75.4 % 75.4 % 74.4 % 74.4 % Note a Material items excluded from the above measures consist of structural cost actions £151m (2021: £648m) and a customer remediation provision of £282m relating to legacy loan portfolios. As disclosed in the 2021 Annual Report, the financial measures for the 2022 bonus are defined as excluding material items (material one-off items that are typically called out within our financial reporting). The Committee however exercised its discretion not to exclude the impacts associated with the Over-issuance of Securities in the US or the monetary penalties imposed by the SEC and CFTC for the use of unauthorised business communications channels in the assessment of the 2022 bonus. Based on the assessment outlined above, the Committee determined an overall formulaic bonus outcome for C.S. Venkatakrishnan, Anna Cross and Tushar Morzaria respectively that equates to £1,949,000, £803,000 and £362,000 respectively, after pro-rating the bonus opportunity for both Anna and Tushar for the proportion of 2022 that each served as Group Finance Director. Of those amounts, 79%, 66% and 65% respectively will be deferred under the Share Value Plan, and a total of 90%, 83% and 83% respectively will be delivered in Barclays shares. The Committee reflected on the appropriateness of these outcomes for the 2022 bonus, in the context of the performance achieved against the Financial measures, Strategic non-financial measures and Personal objectives. The Committee considered the underlying financial health of the Group, which is strong and well-capitalised. Consideration was also given holistically to the performance and contribution of each Executive Director during 2022. The bonus outcomes were considered in the context of the bonus outcomes for the wider workforce, ensuring appropriate alignment both this year and over a multi-year period, and also by comparing to historical outcomes for the Executive Directors in the context of performance year on year. The Committee believes that the overall 2022 bonus outcomes above are aligned appropriately with stakeholder considerations and with the performance achieved. Based on this, the Committee concluded that no discretionary adjustment was warranted. In line with the DRP, and due to the regulations prohibiting dividend equivalents being paid on unvested deferred share awards, the number of shares awarded to each Executive Director under the Share Value Plan (the Group's main employee share plan for granting deferred bonus shares to employees) will be calculated using the share price at the date of award, discounted to reflect the absence of dividend equivalents during the vesting period. The valuation will be aligned to IFRS 2, with the market expectations of dividends during the deferral period being assessed by an independent adviser. The deferred bonus shares in respect of the 2022 annual bonus for C.S. Venkatakrishnan and Anna Cross will vest in two equal tranches on the first and second anniversary of grant. The deferred bonus shares for Tushar Morzaria will vest in equal tranches on the first four anniversaries of grant, which is the standard based on the nature of his current role. All shares (whether deferred or not) are subject to a further one-year holding period from the point of vesting. 2022 bonuses are subject to clawback provisions and the deferred elements of 2022 bonuses are subject to malus provisions, which enable the Committee to delay or reduce the vesting of unvested deferred bonuses (including reducing to nil). Further detail follows on the assessment of the Strategic non-financial measures, and performance against Personal objectives where applicable. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 220 Remuneration report (continued) Assessment of the Strategic non-financial measures for the 2022 annual bonus For 2022, the weighting of the Strategic non-financial element was 25%, within which the Customers and clients and Colleagues sections are each weighted at 7.5% and the Climate and sustainability section is weighted at 10%. Progress in relation to each of the Strategic non-financial measures was assessed by the Committee. The overall assessment was based on the following scale: For Customer and Clients and Colleagues (max weighting 7.5%) 0% to 1% For Climate and sustainability (max weighting 10%) 0% to 2% 1.5% to 3.0% 3.5% to 6.0% 6.5% to 7.5% 2.5% to 4.5% 5.0% to 7.5% 8% to 10% Overall outcome Behind track on most measures Slightly behind track on most measures On track or slightly ahead of track for most measures Ahead of track on most measures On this basis, the Committee agreed an overall outcome for the Strategic non-financial measures of 18% out of a maximum of 25%. The detail supporting this assessment is provided in the table that follows. The measures used in the Strategic non-financial assessment for bonus reflect key strategic priorities of the Bank. Most outcomes are either measured by an external provider, such as NPS or Banking fee ranking and share, or are subject to independent ‘limited assurance’ (indicated by the KPMG Δ in other sections of the Annual Report), which includes all Climate and sustainability measures with the exception of the Unreasonable Impact measure (delivered in partnership with the Unreasonable Group). Customers and clients Measure Criteria Performance Commentary • Global Markets revenue ranking maintained with an increase in revenue share. Largest non-US bank Outcome Slightly ahead of track Global Markets revenue ranking and share Investment Banking fee ranking and share Maintain client rankings and market share Net promoter scores® (NPS) Improve Complaints Reduce BUK customer complaints and improve resolution time 6th (maintained since 2021) Revenue share increased to 7.3% (from 6.4% in 2021)a 6th (maintained since 2021) Fee share decreased to 3.1% (down from 3.6% in 2021)b Barclays UK: +11 (2021: +11) Barclaycard UK: +12 (2021: +4) US Consumer Bank Care tNPSc: +44 (2021: +43) BUK Total Complaints (% movement year on year): -18% • Maintained our overall revenue share ranking of sixth globally across Investment Banking and Global Markets, narrowing the gap to fifth Slightly behind track • Investment Banking fees decreased in 2022, driven by significant declines in overall market opportunity, with decrease in fee share in comparison to 2021 • NPS score for Barclays UK remained at +11 for 2022 On track • Barclaycard NPS continued to trend upwards throughout 2022, as usage and availability of credit became more important to customers • US Consumer Bank Care tNPS increased slightly, driven by a focus during 2022 on improving the customer experience by fixing identified pain points in customer interactions • Rate of complaints per 10k interaction reduced by 24%, despite an 8% increase in interactions with the bank across channels, driven by continued stability of our platforms, alongside actions taken to mitigate potential increases from changes to our servicing model • 61% of complaints resolved within 3 days (2020: 60%) Ahead of track Digital Increase digital engagement Percentage of customer journeys digitally enabled: 76% (2021:  72%) • Number of mobile active customers continues to increase. Reached 10.5m mobile active customers and hit a record of 15.4m logins to the Barclays App in a single day On track Mobile active customers: 10.5m (2021: 9.7m) CCP US customer digital engagement: 74.1%d (2021: 71.8%) • Made significant improvements to our Barclays App, including enabling mortgage customers to switch onto a new rate up to 180 days before their current rate expires without the need to book an appointment when advice is not required • The US Consumer business continued to invest in the digital servicing model, partner app functionalities and expanding the product range. Digital active user rate increased from 2021 a Global Markets share and rank for Barclays is based on our share of Top 10 banks reported revenues. Peer banks include Bank of America, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan Chase & Co, Morgan Stanley and UBS. b Dealogic for the period covering 1 January 2021 to 31 December 2022. FY21 market share has been restated from last year’s published value based on latest analysis. c Care tNPS provides an accurate measure of customer sentiment across our Fraud, Dispute, Credit and Care channels and replaces the relationship NPS reported in 2021 Annual Report. d Excludes new Gap customers. Total Customers and clients: 5.0% Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 221 Remuneration report (continued) Colleagues Measure Diversity Criteria Performance Commentary Outcome 33% females at Managing Director and Director level by 2025 Increase under- represented minority representation in the UK to 5% and in the US to 21% by 2025 Double the number of Black Managing Directors by 2022 29% in 2022, increasing from 28% in 2021 UK: 4.6% (2020 baseline of 4.1%) US: 20.3% (2020 baseline of 18.1%)a 18 Black MDs globally, up from 9 at the end of 2020 • Continued to make progress towards 2025 Gender On track and Race at Work Ambitions • In the UK, females occupied 31% of Managing Director and Director level roles at the end of 2022 • Achieved our Ambition to double the number of Black MDs by end of 2022 Inclusion Improve inclusion indicators Inclusion Index score from Your View survey 82% (2021: 79%) Engagement Maintain engagement at healthy levels Conduct and culture Maintain culture and conduct indicators Employee Engagement score from Your View survey 84% (2021: 82%)b 85% of employees in Your View survey would recommend Barclays to people they know as a great place to work (2021: 82%) 92% of employees in Your View survey believe that they and their team do a good job of role modelling the Values every day (2021: 92%) 92% of employees in Your View survey believe that they and their team do a good job of role modelling our Mindset every day (2021: 89%) • 88% of employees in ‘Your View’ employee survey told us they feel included in their team (2021: 88%) On track • 84% of employee in Your View survey told us they believe that senior leaders are truly committed to building a diverse workforce (2021: 82%) • Overall Wellbeing Index score from Your View survey of 86% (2021: 84%) Slightly ahead of track • 90% of employees in Your View survey told us that their line managers are supporting their efforts to maintain their wellbeing (2021: 88%) On track • Improvement in the percentage of employees in Your View survey who said they feel it is “safe to speak up at Barclays”, up four percentage points on 2021 • Over 90% of employees in Your View survey believe that they and their teams do a good job of role modelling the Values and our Mindset every day and the three Mindset Indices in the Your View survey have all improved on 2021 Notes a Represented to 1dp for the purposes of the assessment, rounded to 0dp in the Strategic Report. b As part of our efforts to improve our measurement frameworks, we have transitioned to a new 3 question engagement model. This was after collecting 4 years of concurrent data and running analysis to affirm the new model’s validity. Historic figures have been updated to reflect results from the new “3 question” model. Total Colleagues: 5.0% Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 222 Remuneration report (continued) Climate and sustainability Measure Green financing Emissions financing Global greenhouse gas (GHG) emissions reduction in our operations Outcome Ahead of track Criteria Performance Commentary £25.5bn (2021: £29.8bn) Progress towards our commitment to facilitate £100bn of green financing by 2030 • Significant increase in green financing, with a total of £87.8bn of green financing facilitated since 2018 against our 2030 target of £100bn • Social, Environment and Sustainability linked financing commitment of £150bn for 2018-2025 delivered four years early in 2021. A further £54.3bn of financing delivered in 2022 bring the cumulative outcome to £247.6bn • In December 2022 we announced a new target to facilitate $1trn of Sustainable and Transition Financing between 2023 and the end of 2030 • In 2022 invested £35m in sustainability-focused start-ups through our Sustainable Impact Capital programme Power portfolio emissions intensity (in KgCO2e/MWh): 9% down versus 2020 Energy portfolio absolute emissions (in MtCO2e): 32% down versus 2020 • Good progress in setting out strategy to be a net On track zero bank by 2050 and to align our financing with the Paris Agreement, including setting targets for two new high emitting sectors, Cement and Steel, in 2022 • Financed emissions target for Automotive manufacturing in addition to a Portfolio convergence point for Residential Real Estate announced with 2022 FY results, five high emitting sectors now covered by targets • Currently ahead of target for Energy and broadly on- track for Power, though progress is likely to be non- linear and will be reflective of the specific pathways that companies take 91% reduction against 2018 baseline • Achieved our 90% GHG market-based emissions reduction target for Scope 1 and Scope 2 Ahead of track Deliver the strategy to achieve our ambition to be a net zero bank by 2050 and our commitment to align our financing with the goals and timelines of the Paris Agreement 30% reduction in power portfolio emissions intensity (2020-2025) 15% reduction in energy portfolio absolute emissions (2020-2025) GHG scope 1 and 2 emissions (market- based) reduced against 2018 baseline by 90% by 2025 Renewable electricity 100% renewable electricity by 2025 100% (2021: 94%) • Sourced 100% renewable electricity for our global real estate portfolio operationsa Ahead of track • Moving forward, continue to purchase 100% renewable electricity, and improve the energy efficiency of our buildings and data centres LifeSkills – people upskilled LifeSkills – people placed into work Unreasonable Impact (partnership with the Unreasonable Group) 10 million people upskilled (2018-2022) 2.7 million upskilled in 2022 (2021: 2.9 million) • Exceeded our target of upskilling 10 million people between 2018 and 2022, with 12.6 million people upskilled by the end of 2022 Ahead of track 250,000 people placed into work (2019-2022) 77,200 people placed into work in 2022 (2021: 77,100) • Exceeded our target of 250,000 people placed into work between 2019 and 2022, with 270,600 people placed into work by the end of 2022 250 businesses solving social and environmental challenges to be supported (2016-2022) 269 growth-stage ventures had joined the programme by end of 2022 • Surpassed 2022 target • Barclays and Unreasonable Group celebrated six years of partnership, with Unreasonable Impact now supporting 269 growth-stage ventures solving social and environmental challenges and collectively supporting thousands of jobs across the world Slightly ahead of track Slightly ahead of track Total Climate and sustainability: 8.0% Overall strategic non-financial outcome (out of a maximum possible 25%) 18.0% a Global real estate portfolio includes offices, branches, campuses and data centres. Further details on our approach to Key Performance Indicators are included in the Strategic report. Refer to home.barclays/sustainability/esg-resource-hub/ for more information on the ESG measures. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 223 Remuneration report (continued) Assessment of performance against the Personal objectives set for the 2022 annual bonus (15% weighting) Individual performance against each of the Executive Directors’ personal objectives for 2022 (15% weighting overall) was assessed by the Committee. C.S. Venkatakrishanan’s performance was assessed against the individual objectives set for him as the Group Chief Executive and those set for him jointly with the Group Finance Director. As Anna Cross succeeded Tushar Morzaria as Group Finance Director on 23 April 2022, the Committee assessed her performance against the objectives that were originally set for Tushar Morzaria in early 2022, both the joint objectives with the Group Chief Executive and the individual objectives as the Group Finance Director. The Committee separately assessed Tushar Morzaria’s contributions towards the achievement of these same objectives alongside his overall contribution to the smooth transition of responsibilities to Anna Cross. The table below summarises performance against the shared personal objectives. Shared objectives for C.S. Venkatakrishnan, Anna Cross and Tushar Morzaria Deliver improving shareholder returns, with a focus on RoTE Maintain robust capital ratios across the Group and within the main operating entities Actively deploy the range of Barclays’ businesses and capabilities to support customers and clients as we collectively transition to a low carbon economy Continue to deliver sustainable growth in the Corporate and Investment Bank Continue to drive our technology agenda across the Group to support improving customer and client services and experience Outcomes • The benefits of Barclays diversified business model continue to be demonstrated, with each operating division delivering double-digit returns • Group RoTE remained aligned with our medium-term target of greater than 10%, for the second consecutive year • Delivered Group profit before impairment of £8.2bn, up 9% on 2021 • Total shareholder distributions in respect of 2022 equivalent to c.13.4p per share • Strong capital position maintained, with Group CET1 of 13.9%, within our target range of 13% to 14% • Similarly strong capital ratios prevail in all main operating entities: at the end of 2022, Barclays Bank PLC’s CET1 ratio was 12.7% and Barclays Bank UK PLC’s CET1 ratio was 14.7%, well in excess of regulatory minimums • Continued to develop green and sustainable banking products, including green mortgages, bonds, loans and investment funds • Launched the Barclays Green Home Buy-to-Let Mortgage product and the Greener Home Reward pilot, offering Barclays UK mortgage customers cash rewards to install energy-efficient measures • For Barclays UK business customers, launched a partnership with Propel, helping provide asset financing to support investment in renewable assets • Advised and helped companies raise capital for emerging climate technology, including the Haffner Energy IPO • Announced a new target to facilitate $1 trillion of Sustainable and Transition Financing between 2023 and the end of 2030 and increased the investment mandate for sustainability-focused start- ups to £500m by 2027 • Grew income in CIB by 8%, driven by the best full year for both Global Markets and FICC and strong performance in Transaction Banking, more than offsetting the impact of a reduced fee pool in Investment Banking • Maintained our overall ranking of 6th globally across Investment Banking and across Global Markets, narrowing the gap to 5th, as well as increased the diversity and predictability of our income, growing our financing business in Global Markets, including in Prime • Integrated International Corporate Banking with our Investment Banking business, with a focus on growing our Transaction Banking share, and actively recruited to strengthen our teams • Continued to invest in enhancing our Global Markets digital proposition, including our electronic trading capabilities and our digital self-service platform, and our financing platforms across Fixed Income and Equities • Continued to adapt our service model by building out Barclays Local – an alternative branch presence for those who need in-person support • Enhanced the Barclays App to enable all mortgage customers to manage their mortgage through the app, including switching onto a new rate • Rolled out Microsoft Teams across all geographies to help colleagues to collaborate and support customers and clients Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 224 Remuneration report (continued) In addition to the shared personal objectives described above, the table below summarises performance against the personal objectives specific to C.S. Venkatakrishnan. C.S. Venkatakrishnan's objectives Outcomes Ensure a continued focus on customer and client outcomes Continue to embed the Mindset across the organisation in support of our Purpose Continue to develop a high- performing culture in line with our Values, with a focus on employee engagement, succession planning, talent and diversity • Continued to act as a market maker and liquidity provider to clients across the globe, helping them find opportunities and manage risk during a continued period of heightened market disruption • Continued the focus on improving the overall customer experience in Barclays UK by identifying the root causes of customer complaints and supporting their removal. Complaints in Barclays UK reduced by 18% vs. 2021, despite an 8% rise in interactions with the bank across all channels • Introduced additional support for vulnerable customers who may be experiencing financial vulnerability due to inflationary pressures, including training over 16,000 colleagues to better recognise signs of vulnerability, raising awareness of tools and support available and adapting products, including increased resource in our Barclays Financial Assistance team • Reached an agreement to acquire Kensington Mortgage Company, a specialist mortgage lending platform focused on customers with complex incomes, which will enable us to provide residential mortgages to more customers • Significantly grew our customer care teams globally, including nearly doubling our footprint in our US Contact Centre in the US following the acquisition of the GAP credit card portfolio, with over 1,800 new hires • Further embedded the Barclays Mindset into our hiring, performance management, reward and recognition frameworks • Increased the number of colleagues who believe that they and their team do a good job of role modelling our Mindset every day (2022: 92%; 2021: 89%) • Over 260,000 recognitions were sent to colleagues during 2022 specifically recognising our Mindset in action • Colleague engagement increased across the Group to 84%, an increase of 2% points versus 2021, with the annual YourView survey also showing positive results across most other measures • Inclusion Index score for 2022 was 82%, up 3% points on 2021, with 88% of colleagues telling us that they feel included in their team • Launched a refreshed DEI vision and strategy to our colleagues and the community, incorporating ‘Equity’ into how we talk about our DEI strategy and take action to progress that strategy • Continued to make progress towards our 2025 Gender and Race at Work Ambitions, increasing senior female representation globally and representation of underrepresented minority groups in the UK and the US • Appointed Anna Cross as an internal successor to our Group Finance Director role Empower the effective management of the risk and controls agenda • Drove sustainable improvements to the internal control environment, including in response to the Over-issuance of Securities, both in specific controls and also the control mindset required at all levels in the organisation • Established a change programme, alongside our Purpose, Values and Mindset, to set a standard of consistent excellence and help ensure that Barclays performs at a very high level, consistently, day in and day out Effectively manage relationships with key external stakeholders and society more broadly • Venkat has built strong connections and proactively collaborated with UK and US regulators throughout the year, working to support the broader UK economy • Engaged extensively with stakeholders, including in relation to Barclays' climate strategy, the Say on Climate advisory vote at the 2022 AGM and the Over-issuance of Securities Recognising C.S. Venkatakrishnan's very strong performance against both his individual and shared personal objectives, and his leadership of the organisation through 2022, the Committee assessed that an outcome of 13% out of a maximum of 15% was appropriate. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 225 Remuneration report (continued) The table below summarises performance against the personal objectives for the Group Finance Director, which were originally set for Tushar Morzaria but also applied to Anna Cross after she succeeded him in that role. Objectives for the Group Finance Director Continue to optimise financial management and reporting (particularly through technology) to drive benefits across the Group Continue to progress the transformation of the Treasury function, including strategic treasury and liquidity platforms Oversee the effective management of the risk and controls agenda across Group Finance, Strategy, Tax and Treasury Retain focus on the colleague agenda across Group Finance, Strategy, Tax and Treasury, driving employee engagement, continuing to improve diversity, developing senior talent and succession planning Effectively manage relationships with key external stakeholders including regulators and investors Outcomes • Enhancements made to delivery of quarterly results, providing more granular performance commentary, greater transparency on notable items and more accessible narrative • Leveraged technology to enhance the delivery of financial management reporting, increase efficiency and automation • Liquidity Transformation delivered, resulting in greater automation, accelerated reporting, improved controls, and improved liquidity buffer management • Successful delivery of the Bank of England-mandated programme to ensure Barclays is able to manage its funding and liquidity in a resolution scenario, commented on in the Bank of England UK bank resolvability assessment as ‘above peers’ • Control Environment and Management Control Approach overall rated satisfactory in 2022 • Strong personal contribution to the response and remediation of the Over-issuance of Securities • The risk-free rates transition is in progress with USD LIBOR exposures decreasing throughout 2022 • High level of colleague engagement across Finance, at 85% (2021: 82%) • Strong progress again this year against three key areas of people focus: Diversity, Equity & Inclusion; Skills for the Future; and Operational Efficiency & Ways of Working • Continued focus on embedding the Barclays Mindset with positive increases on all three indices: Empower at 89% (2021:86%); Challenge at 85% (2021:83%); and Drive at 87% (2021:84%) • Established effective and open relationships with regulators and the investment community The Committee recognised the high level of achievement during 2022 against these objectives. Anna Cross stepped into the Group Finance Director role as a natural successor, considering the skills and relevant experience that she brings, and the Committee’s assessment was that during 2022 she provided strong leadership in this critical role. She performed exceptionally well in her first eight months as Group Finance Director and was instrumental in the delivery against both the personal objectives set for the Group Finance Director and those shared with the Group Chief Executive. Based on her contribution to those achievements, the Committee assessed that an outcome of 13% out of a maximum of 15% was appropriate. The Committee separately assessed Tushar Morzaria’s contribution in the earlier part of 2022 to the achievement against these same objectives, noting his strong contribution throughout his tenure as Group Finance Director, including over the last few months in this role. His key achievements in 2022 in relation to his Executive Director role included supporting a highly effective transition of responsibilities to Anna, positioning her well to succeed him as part of a clear and effective internal succession plan, and the contributions he made from the beginning of 2022 through the delivery of full-year results for 2021 and Q1 results for 2022. Based on his contribution to the achievements against the personal objectives above, the Committee assessed that an outcome of 12% out of a maximum of 15% was appropriate. 5) Vesting of the 2020-2022 LTIP cycle The LTIP value included in the single total figure for 2022 for Tushar Morzaria is based on the amount that will be released on 8 March 2023 in relation to the 2020-2022 LTIP award granted in 2020. The value that will vest has been estimated using the Q4 2022 average share price of £1.5315. Release is dependent on, among other things, performance over the period from 1 January 2020 to 31 December 2022, with straight-line vesting applied between the threshold and maximum points for the financial measures. The performance achieved against the performance targets is shown in the table that follows. No LTIP awards were granted to C.S. Venkatakrishnan and Anna Cross in 2020 as they were not Executive Directors at that time. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 226 Remuneration report (continued) 2020-2022 LTIP outcomes Performance measure Average return on tangible equity (RoTE) (excluding litigation and conduct and other material items)a,b Average cost: income ratio (excluding litigation and conduct and other material items)c Risk scorecard (detailed below) Weighting 50% Threshold 10% of award vests for RoTE of 9.0% Maximum vesting 50% of award vests for RoTE of 10.5% A CET1 underpin also applied % of award vesting Actual 10.7% 50.0% 20% 15% 4% of award vests for average cost: income ratio of 60% 20% of award vests for Cost: income ratio of 58.5% 62.9% 0.0% The Risk scorecard captures a range of risks and is aligned with the annual incentive risk alignment framework reviewed with the regulators. The current framework measures performance against three broad categories – Capital and liquidity, Control environment and Conduct – using a combination of quantitative and qualitative metrics. 8.0% Strategic non-financial 15% (detailed on pages 227 and 228) Total Performance is measured against the Strategic non-financial measures. The Committee determined the percentage of the award that may vest between 0% and 15%. The measures are organised around three categories: Customers and clients, Colleagues and Society. Each of the three main categories has equal weighting. Final 2020-2022 LTIP vesting outcome approved by the Committee 12.0% 70.0% 70.0% Notes a Based on adjusting tangible equity to be consistent with a CET1 ratio that aligns with the assumptions the Group uses for capital planning purposes (13.0% to 13.5% over the performance period and broadly in line with the Group CET1 ratio target). b Material items consist of post-tax structural cost actions (2022: £110m, 2021: £489m, 2020: £268m), Barclays’ 2020 COVID-19 Community Aid package (post-tax £66m) and re-measurement of UK DTAs (2022: £346m, 2021: -£462m). The litigation and conduct impacts from the Over-issuance of Securities and the devices settlements are not excluded. c Material items consist of structural cost actions (2022: £151m, 2021: £648m, 2020: £368m) and Barclays’ 2020 COVID-19 Community Aid package (£95m). The litigation and conduct impacts from the Over-issuance of Securities and the devices settlements are not excluded. Assessment of the Risk scorecard for the 2020-2022 LTIP A summary of the Committee’s assessment against the Risk scorecard performance measure over the three-year performance period is provided below. Each category was equally weighted at 5%. Category Performance Capital and liquidity • Group CET1 ratio stands at 13.9%, toward the upper end of the 13% to 14% target range. Outcome 5.0% • Stress tests results indicate that Barclays is positioned to withstand a severe recession scenario featuring considerable affordability pressures on consumers from high and persistent inflation. • Our Liquidity Coverage Ratio was significantly above the 100% regulatory requirement in the period, and there were no breaches. Control environment • In light of the Over-issuance of Securities, the Committee did not assess the Control 0.0% Conduct environment element of the LTIP Risk scorecard but instead elected to set this element of the LTIP to zero. • Trading Entity conduct risk dashboards, setting out key indicators in relation to conduct risk are provided to the respective Board Risk Committees and senior management to support effective oversight and decision making. 3.0% • These dashboards provide an insight into the Conduct Risk Control Environment to ensure any issues are addressed in a timely and effective manner, so that the Group continues to operate within Risk Appetite. Overall Risk scorecard outcome for the 2020-2022 LTIP 8.0% Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 227 Remuneration report (continued) Assessment of the Strategic non-financial measures for the 2020-2022 LTIP A summary of the Committee’s assessment against the Strategic non-financial performance measures over the three-year performance period follows. Each category was equally weighted at 5%. Measure Criteria Performance Outcome 3.5% Customer and clients Global Markets ranking Global Markets revenue share Investment Banking ranking Investment Banking fee share Maintain client ranking and increase market share Barclays UK NPS® Improve Barclaycard UK NPS® US Consumer Bank Care tNPS®c Barclays UK complaints reduction (ex PPI) Reduce complaints BUK digitally active customers Increase digital engagement Mobile Active Customers CCP US Customer Digital Engagement Colleagues Diversity % of females at Managing Director and Director level • Global Markets ranking was maintained at 6th over the period, fee share increased from 6.2% in 2019 to 7.3% in 2022a • Global Banking fee rank was 6th in 2019 and remains at 6th in 2022, fee share fell from 4.1% in 2019 to 3.1% in 2022b • Barclays UK NPS ranking remained broadly consistent over the period, starting and ending at 7th, while Barclaycard UK NPS ranking improved from 4th in 2019 to 2nd in 2022 • Barclays UK NPS score reduced over the period in line with what has been observed for UK peers over the COVID-19 pandemic. Barclaycard UK NPS score reduced initially, but recovered in 2022 • US Consumer Care tNPS has only been measured since 2020. After a reduction in 2021, Care tNPS improved in 2022 • Consistent progress in Complaints reduction in Barclays UK each year since 2019 • In 2022, reduction in customer complaints despite an increase in interactions with the bank across our channels • Steady increase in BUK digitally active customers over the period • Significant increase in number of Mobile Active Customers over the period from 8.4m in 2019 to 10.5m in 2022, with new app features introduced throughout this period • CCP US Customer Digital Engagement increased to 74.1d 2025 target of 33% • Women in senior leadership (Managing Directors and Directors) increased from 25% in 2019 to 29% in 2022, making steady progress towards the 2025 target of 33% 3.5% Inclusion "I feel included in my team" Maintain at healthy levels • Equivalent figure for Barclays in the UK is now 31% • The percentage of employees in Your View survey who feel included in their team has increased from 85% in 2019 to 88% in 2022 • The Inclusion Index is at 82% for 2022 up from 76% in 2020, the first year it was introduced Employee engagement Maintain at healthy levels • Engagement levels across Barclays are now at 84%, up 10% points since 2019e "Enable" measures, including measures relating to tools and resources Improve key metrics from 2019, including Enable scores • The percentage of employees in Your View survey who would recommend Barclays as a good place to work has remained at healthy levels throughout the period, 80% or above in each year • Significant improvement over the period in percentage of employees in Your View survey who report that they have the tools and resources they need to achieve excellent performance • Began measuring "getting things done at Barclays is simple and straightforward" in 2021 as an outcome related to enable, with a slight improvement observed from 2021 to 2022 Notes a Global Markets share and rank for Barclays is based on our share of Top 10 banks reported revenues. Peer banks include Bank of America, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan Chase & Co, Morgan Stanley and UBS. b Dealogic for the period covering 1 January 2019 to 31 December 2022. FY21 market share has been restated from last year’s published value based on latest analysis. c Care tNPS provides an accurate measure of customer sentiment across our Fraud, Dispute, Credit and Care channels and replaces the relationship NPS reported in 2021 Annual Report. d Excludes new Gap customers. e As part of our efforts to improve our measurement frameworks, we have transitioned to a new 3 question engagement model. This was after collecting 4 years of concurrent data and running analysis to affirm the new model’s validity. Historic figures have been updated to reflect results from the new “3 question” model. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 228 Remuneration report (continued) Measure Society Criteria Performance Outcome 5.0% Social, environmental and sustainability-linked financing Facilitate £150bn over 2018-2025 • On a cumulative basis, a total of £247.6bn of social, environmental and sustainability-linked financing facilitated between 2018 and the end of 2022, exceeding the 2025 target GHG emissions reduction in our operations and renewable energy usage LifeSkills GHG scope 1 and 2 emissions (market-based) reduced by 90% by 2025 Renewable electricity to 100% by 2025 Upskill 10 million people from 2018-2022 Place 250,000 people into work from 2019-2022 • In December 2022, we announced a new target to facilitate $1trn of Sustainable and Transition Financing between 2023 and the end of 2030 • GHG scope 1 and 2 emissions (market-based) reduced each year of the performance period. Achieved our target in 2022, three years ahead of target • Significant increase in renewable electricity use over the period, with 100% of electricity now coming from renewable sources • 12.6m people upskilled between 2018 and 2022, exceeding aspiration of helping 10m people by 2022 • LifeSkills - placed into work target also exceeded, with more than 270,600 people placed into work since 2019 Overall Strategic non-financial outcome for the 2020-2022 LTIP 12.0% The Committee was satisfied that the level of vesting appropriately reflected the underlying financial health of the Group, and accordingly determined that the award should vest at 70.0% of the maximum number of shares under the total award, to be released in five equal tranches annually, starting from March 2023. After release, the shares are subject to an additional 12-month holding period. The 2020-2022 LTIP award was granted in line with our usual annual timetable, in early March 2020. This coincided with the start of a period of particularly high market volatility, as the start of the COVID-19 pandemic unfolded, and meant that the share price at grant (124.46p) was 22% lower than the share price at the time of the prior year LTIP grant. The Committee recognised that awards made in periods of unusual share price volatility have the potential to give rise to 'windfall gains' related solely to the timing of the grant rather than the underlying performance of the business. They carefully considered a range of analyses in advance of determining the vesting of the award, based on which they concluded that the value vesting appropriately reflected corporate performance over the performance period and did not represent a windfall gain. This included consideration of the following: • The 22% fall in the Barclays share price between successive grants was not in itself unusual. The Barclays share price has moved by 20% or more several times over the past ten years and so a year-on-year movement of this kind is not exceptional. • The timing of the grant was in line with the usual annual process and this LTIP award was not granted at the bottom of the market. The share price (and the value of the LTIP awards) dropped by a further third over the following weeks, to less than 80.24p. By the end of the performance period, the share price had increased to 158.52p. While this corresponds to share price growth of 28% per annum from the low point, from the share price at grant it corresponds to share price growth of 9% per annum. The Committee concluded that this is within the range of share price movements that might be expected over an LTIP cycle. • Furthermore, the Committee considers Barclays’ overall share price increase over the performance period since grant to have been commensurate with the improvement in underlying corporate performance. For example, Group RoTE was 10.4% for 2022, exceeding the Group’s medium-term target for the second successive year, up from 9%a in 2019 (the financial year immediately prior to grant) and building on the RoTE progression in 2017 through 2019. As a result, the Committee concluded that there is no windfall gain and that therefore no adjustment was required. 6) Reduction of unvested awards As set out earlier in the Remuneration report, the 2021 financial statements were restated in 2022 to include a £220m provision and a contingent liability in respect of the Over-issuance of Securities under the BBPLC's US shelf registration statement. As a result, the Committee revisited the 2021 annual bonus outcomes for C.S. Venkatakrishnan and Tushar Morzaria, and the 2019-2021 LTIP outcome for Tushar Morzaria, and reduced those outcomes to reflect the impact of the restatement on the financial measures for those awards. The impact on each financial measure, and associated impact on the incentive pay-out, is shown in the table that follows. The outstanding deferred elements of these awards will be reduced accordingly. Tushar Morzaria and C.S.Venkatakrishnan were both supportive of the reductions. Anna Cross was not subject to these reductions because she did not participate in the Executive Director 2021 annual bonus or the 2019-2021 LTIP, as she was not an Executive Directors at that time. Note a Excluding litigation and conduct. Group RoTE for 2019 including litigation and conduct was 5.3%. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 229 Remuneration report (continued) Adjustment of 2021 annual bonus and 2019-2021 LTIP vesting outcomes Incentive Financial measure 2021 annual bonus 2019-2021 LTIP Profit before tax (excluding material items), with CET1 ratio underpina Cost: income ratio (excluding material items)a Average return on tangible equity (RoTE) (excluding litigation and conduct and other material items)b,c 2021 Cost: income ratio (excluding litigation and conduct and other material items)d Outcome determined in 2021 £9.1bn Pay-out (% max) Restated outcome Resulting pay-out (% max) C.S. Venkatakrishnan Tushar Morzaria Reduction of unvested awards (£000) 100 % £8.8bn 100 % 62.9% 100 % 63.9% 9.6 64% 9.4 86 % 56% — 8 n/a — 22 116 62.1% 0% 63.1% 0% n/a — Notes a £648m of structural cost actions treated as material items and excluded from 2021 profit before tax and cost: income ratio. Structural cost actions primarily relate to the real estate review in Q221 and Barclays UK transformation costs. b Based on adjusting tangible equity to be consistent with a CET1 ratio that aligns with the assumptions the Group uses for capital planning purposes (13.0% to 13.5% over the performance period and broadly in line with the Group CET1 ratio target). c RoTE excludes material items and litigation & conduct. Material items for 2021 consist of structural cost actions (£489m post-tax) and a tax benefit (£462m) due to the remeasurement of UK deferred tax assets. Material items for 2020 consist of structural cost actions (post-tax £268m) and Barclays’ COVID -19 Community Aid package (post-tax £66m). Structural cost actions for 2021 primarily relate to the real estate review in Q221 and Barclays UK transformation costs. d 2021 CIR excludes material items and litigation & conduct. Material items for 2021 consist of structural cost actions (£648m). Structural cost actions primarily relate to the real estate review in Q221 and Barclays UK transformation costs. LTIP awards granted during 2022 An award was granted to C.S. Venkatakrishnan on 9th March 2022 under the 2022-2024 LTIP, based on a value per share of £1.2495, which was derived from the share price less a discount to reflect the absence of dividends or equivalents during the vesting period, in accordance with the DRP. This is the value used to calculate the number of shares below. No LTIP award was granted in March 2022 to Tushar Morzaria, as he was due to step down as an Executive Director on 22 April 2022, or to Anna Cross, as she was not an Executive Director at that time. C.S. Venkatakrishnan 140% 3,025,210 £3,780,000 2022-2024 % of Fixed Pay Number of shares Face value at grant Performance period The performance measures for the 2022-2024 LTIP awards are as follows: Performance measure Weighting Threshold Maximum vesting 0% of award vests for RoTE of 7.0%, rising on a straight-line basis 25% of award vests for RoTE of 11.0% or higher Average return on tangible equity (RoTE) (excluding material items)a Average cost: income ratio (excluding material items) Maintain CET 1 ratio within the target range 25% 10% 10% 0% of award vests for average cost: income ratio of 65.0%, rising on a straight-line basis If CET1 is below MDA hurdleb +190bps during the period, the Committee will consider what portion of this element should vest, based on the causes of the CET1 reduction. If CET1 is above MDA hurdle +290bps but does not make progress towards the range over the period, the Committee will consider what portion of this element should vest, based on the reasons for the elevated levels of CET1 versus target range and the associated impacts. 10% of award vests for average cost: income ratio of 59.0% or lower If CET1 ratio between 190bps and 290bps above the MDA hurdle throughout the period or if CET1 is above MDA hurdle +290bps but making progress towards the target range 25% of award vests for performance at or above the peer groupd upper quartile Relative Total Shareholder Return (TSR)c 25% 6.25% of award vests for performance at the median of the peer groupd, rising on a straight-line basis Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 230 Remuneration report (continued) Performance measure Weighting Threshold Strategic non-financials 20% Risk scorecard 10% The evaluation will focus on key performance measures from the Performance Measurement Framework, with a detailed retrospective narrative on progress against each category throughout the period. Performance against the strategic non-financial measures will be assessed by the Committee to determine the percentage of the award that may vest between 0% and 20%. The measures are organised around three main categories and measures will likely include, but not be limited to, the following: Customers and clients (weighted 5%) – drive world class outcomes for customers and clients: Improve Net Promoter Scores; reduce BUK customer complaints and improve resolution time; maintain client rankings and market share within CIB; and increase digital engagement. Colleagues (weighted 5%) – protect and strengthen our culture through our Purpose, Values and Mindset: Continue to improve diversity in leadership roles; improve inclusion indicators; maintain engagement at healthy levels; and maintain culture and conduct indicators. Climate and sustainability (weighted 10%) – progress to be measured against four key objectives: Progress towards our green financing commitments; reduce operational and supply chain carbon footprint and increase use of renewable energy; progress towards achieving our ambition to be a net zero bank by 2050 and our commitment to aligning our financing with the goals and timelines of the Paris Agreement; and continue to invest in our communities. The Risk scorecard captures a range of risks and is aligned with the annual incentive risk alignment framework shared with the regulators. The current framework measures performance against three broad categories – Capital and liquidity, Control environment and Conduct – using a combination of quantitative and qualitative metrics. The framework may be updated from time to time in line with the Group’s risk strategy. Specific targets within each of the categories are deemed to be commercially sensitive. Retrospective narrative on performance will be disclosed in the 2024 Remuneration report, subject to commercial sensitivity no longer remaining. Notes a Based on an assumed CET1 ratio at the mid-point of the Group range, 13-14%. b Currently 11.3%. c Performance assessed over the period from 1 January 2022 to 31 December 2024. Start and end TSR data will be the Q4 average for 2021 and 2024 respectively and will be measured in GBP for each company. d The peer group is comprised of multinational banks in the UK, Europe and North America of comparable size to Barclays and whose weekly returns have a high degree of correlation with Barclays’. The peer group for the 2022–2024 LTIP award is: Banco Santander, Bank of America, BBVA, BNP Paribas, Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank, HSBC, ING Groep, Lloyds Banking Group, Morgan Stanley, NatWest Group, Societe Generale, Standard Chartered, UBS, Unicredit. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 231 Remuneration report (continued) Executive Directors: Statement of implementation of remuneration policy in 2023 An overview of how the DRP will be implemented for Executive Directors in 2023 is set out in the subsequent sections. The following chart illustrates how 2023 remuneration will be delivered to the Executive Directors. Implementation of policy in 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Implementation 2023 Cash Fixed Pay Shares Restrictions lifting over 5 years Pension Cash in lieu of pension Annual bonus Performance period Cash LTIP Preliminary performance period Shares Holding period Shares Holding period Shares Holding period Performance period Shares Holding period Shares Holding period Shares Holding period Shares Holding period Shares Holding period C.S. Venkatakrishnan £2,875,000 Anna Cross £1,800,000 C.S. Venkatakrishnan 5% of Fixed Pay Anna Cross 5% of Fixed Pay C.S. Venkatakrishnan up to 93% of Fixed Pay Anna Cross up to 90% of Fixed Pay C.S. Venkatakrishnan up to 140% of Fixed Pay Anna Cross up to 134% of Fixed Pay 2023 Fixed Pay and market competitiveness of the Executive Directors’ total compensation opportunity Tushar Morzaria informed the Board on 22 February 2022 of his intention to retire from the Board and step down as Group Finance Director. Immediately following the decision that Anna Cross would be appointed to succeed him with effect from 23 April 2022, the Committee considered the level of Fixed Pay Anna Cross should receive, taking into account the role, her relevant skills and experience, and pay levels at other comparable firms (on which the Committee receives independent advice), in the context of wider workforce pay levels and the experience of our stakeholders. Banking regulation in the UK and Europe caps variable pay as a percentage of Fixed Pay for senior roles including the Executive Directors and so providing a suitable level of total compensation within the constraint of those regulations is a key driver of the Executive Directors’ Fixed Pay levels. Pay benchmarking data is used as a reference point to ensure that the total compensation opportunity provided to the Executive Directors is appropriately positioned compared to other similar large and complex international banks. Comparing the Executive Directors' pay solely with other UK-listed banks would not recognise the Group's global footprint and diversified universal banking model, which includes significant corporate banking, investment banking and global markets businesses. The international banking peer group used by the Committee when considering the Executive Directors' pay includes other large universal banks from continental Europe, and the large US universal and investment banks, plus the most comparable to Barclays of the larger UK-listed banks and BNP Paribas in France, to help maintain balance. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 232 Remuneration report (continued) The Committee determined the level of Fixed Pay for Anna Cross on appointment as Group Finance Director as £1,725,000 per annum. In doing so, they concluded that the total compensation opportunity that this provides was an appropriate starting point, while noting that it was low compared with international banking peers and that this should be kept under review each year. An annual review of the Executive Directors' Fixed Pay, in the same way and at the same time as for the wider workforce, is a feature of the DRP approved by shareholders in 2020. In February 2023, the Committee reviewed the Fixed Pay for each Executive Director as part of the year-end pay review process for colleagues across the Group. The Committee considered the maximum total compensation opportunity of each Executive Director, driven by their respective levels of Fixed Pay, and noted that in each case the total compensation opportunity is materially less than that offered for the equivalent role at most companies within the international banking peer group. As a result, the Committee determined that Fixed Pay would be increased to £2,875,000 for C.S. Venkatakrishnan, a 3.4% increase, and to £1,800,000 for Anna Cross, a 4.3% increase, effective 1 March 2023. The Committee noted that these are lower percentage increases than the average fixed pay increase for the wider workforce, and in particular for other UK colleagues within the scope of the 2023 UK pay deal with Unite the Union, with an 11% budget for salary increases for the most-junior UK employees and a 6.75% budget for the remainder of the union-recognised population. The 2:1 cap on variable pay relative to fixed pay in banks results in the need to provide both Executive Directors with a level of Fixed Pay that is higher than the Committee might otherwise choose, to ensure the total compensation opportunity is competitive. To mitigate some of the impacts of that higher Fixed Pay, it is delivered half in cash, paid monthly via payroll in a similar way to salary for other employees, and half in shares, which are granted quarterly and released in instalments over 5 years, creating significant alignment with shareholder interests over the longer term. The charts that follow compare each Executive Director's maximum total compensation opportunity for 2023 against the equivalent opportunity across international banking peers. This shows that even after these Fixed Pay increases the maximum total compensation opportunity is significantly behind international banking peers, falling in the lower part of the third quartile for C.S. Venkatakrishnan and in the bottom quartile for Anna Cross. The charts also show a comparison of the maximum total compensation opportunity of each Executive Director with the equivalent roles at the companies that make up the FTSE 30 (i.e. the 30 largest FTSE 100 constituents by market capitalisation). This shows that the Executive Directors’ maximum total compensation opportunity is more competitive, but not inappropriate, compared to the FTSE 30 group. The Committee noted that it would be unlikely for the Group to fill either of the Executive Director roles by recruiting from the other FTSE 30 companies, recognising the necessity for candidates for these roles to have the right breadth and depth of banking knowledge and experience, particularly given that Barclays’ diversified business model includes significant corporate banking, investment banking and global markets businesses. However, this comparison is provided alongside the international banking peer group to provide additional UK context. Executive Director total maximum compensation opportunity relative to market benchmarks Group Chief Executive C.S Venkatakrishnan International banking peer group Group Finance Director Anna Cross International banking peer group FTSE 30 FTSE 30 n Bottom Quartile n 3rd Quartile n Top Quartile Positioning of maximum total compensation opportunity at Barclays relative to market benchmarks n 2nd Quartile Notes: • Barclays and market benchmark data reflects maximum total compensation opportunity, excluding pensions and benefits. • Benchmark data for the international banking peer group and FTSE 30 was provided by Willis Towers Watson, based on publicly disclosed data in respect of each firm's 2021 or 2021/22 financial years, incorporating assumptions where companies do not disclose a maximum total compensation opportunity. • Barclays’ current peer group comprises the following international banks: Bank of America, BNP Paribas, Citigroup, Credit Suisse Group, Deutsche Bank, Goldman Sachs, HSBC Holdings, JP Morgan Chase & Co, Lloyds Banking Group, Morgan Stanley, Standard Chartered and UBS Group. The Committee added Goldman Sachs to the peer group during 2022. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 233 Remuneration report (continued) 2023 annual bonus performance measures Performance measures with appropriately stretching targets have been selected to cover a range of financial and non-financial goals that support the key strategic objectives of the Company. The bonus measures for 2023 are in line with those for 2022. The performance measures and weightings are shown below: Performance measure Weighting Metrics Profit before tax (excluding material items) 50% Cost: income ratio (excluding material items) Strategic non-financial 10% 25% The evaluation will focus on a range of key metrics across stakeholder groups, with a detailed retrospective narrative on progress against each category throughout the period. Performance against the measures will be assessed by the Committee to determine the percentage of the award that may vest between 0% and 25%. Each of the three main categories is weighted as shown. Personal 15% A performance target range has been set for this financial measure, which will be disclosed in the next Remuneration report. Pay-out of this element will also depend on the CET1 ratio at the end of the performance year. In line with regulatory requirements, if the CET1 ratio is below the MDA hurdle at the end of the performance year, the Committee will consider what part if any of this element should pay out. A performance target range has been set for this financial measure, which will be disclosed in the next Remuneration report. The measures are organised around three main categories and measures will likely include, but not be limited to, the following: Customers and clients (weighted 7.5%) - drive world class outcomes for customers and clients • Improve Net Promoter Scores • Reduce BUK customer complaints and improve resolution time • Maintain client ranking and market share within CIB • Increase digital engagement Colleagues (weighted 7.5%) - protect and strengthen our culture through our Purpose, Values and Mindset: • Continue to improve diversity in leadership positions • Improve inclusion indicators • Maintain engagement at healthy levels • Maintain culture and conduct indicators Climate and sustainability (weighted 10%) - progress to be measured against four key objectives: • Reduce operational emissions • Progress towards our Sustainability and Transition financing target • Reducing our financed emissions • Supporting our communities Joint personal objectives: • Deliver improving shareholder returns, with a focus on RoTE • Maintain robust capital ratios across the Group and within the main operating entities • Continue to invest in capabilities to deliver next-generation, digitised consumer financial services • Continue to deliver sustainable growth in the Corporate and Investment Bank • Actively deploy the range of Barclays’ businesses and capabilities to support customers and clients and capture opportunities as we collectively transition to a low carbon economy • Continue to drive our data strategy and technology agenda across the Group to support improving customer and client services and experience C.S. Venkatakrishnan: • Ensure a continued focus on customer and client outcomes • Continue to embed the Mindset across the organisation in support of our Purpose • Continue to develop a high-performing culture in line with our Values, with a focus on employee engagement, succession planning, talent and diversity • Effectively manage relationships with key external stakeholders, including societal stewardship • Drive leadership accountability to further strengthen our risk management and controls culture Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 234 Remuneration report (continued) Performance measure Personal (continued) Metrics Anna Cross: • Support the Business to grow sustainably, in line with the Group’s strategy, with specific focus on climate, capital and costs • Continue to optimise financial management reporting (particularly through technology) to drive benefits across the Group and to ensure a smooth transition to new rules and regulations • Continue to progress the transformation of the Treasury function, including strategic treasury and liquidity platforms • Oversee the effective management of the risk and controls agenda across Group Finance, and transform for the future where necessary • Retain focus on the colleague agenda across Group Finance – driving employee engagement, continuing to improve diversity, developing senior talent and succession planning • Effectively manage relationships with key external stakeholders including regulators and investors 2023-2025 LTIP awards and performance measures The Committee decided to grant awards under the 2023-2025 LTIP cycle to C.S. Venkatakrishnan and Anna Cross with face values at grant equal to 140% and 134% of Fixed Pay respectively, which will be based on Fixed Pay before applying the 1 March 2023 increases outlined earlier in this Remuneration report. Those maximum award multiples were determined following a detailed review of their individual performance throughout 2022 and recognising their significant personal contributions. This share-based award ensures alignment with future performance over the three-year assessment period, as well as shareholder alignment over the long release period (up to eight years from initial date of grant). The Committee carefully considered the performance measures for the Executive Directors' 2023-2025 LTIP and concluded that the measures adopted last year for the 2022-2024 LTIP continue to represent the most relevant building blocks toward our key longer- term financial and non-financial goals. The 2023-2025 LTIP award will be subject to the following forward-looking performance measures. Performance measure Weighting Threshold Maximum vesting Average return on tangible equity (RoTE) (excluding material items)a Average cost: income ratio (excluding material items) 25% 10% Maintain CET1 ratio within the target rangeb 10% Relative Total Shareholder Return (TSR)c 25% 0% of award vests for RoTE of 8.0%, rising on a straight-line basis 25% of award vests for RoTE of 12.5% or higher 0% of award vests for average cost: income ratio of 62.5%, rising on a straight-line basis If CET1 is below the target range during the period, the Committee will consider what portion of this element should vest, based on the reasons for the CET1 shortfall If CET1 is above the range and does not make progress towards the range over the period, the Committee will consider what portion of the element should vest, based on the reasons for the elevated levels of CET1 versus target range and the associated impacts 6.25% vests for performance at the median of the peer groupd, rising on a straight-line basis 10% of award vests for average cost: income ratio of 58.0% or lower 10% vests if either: • CET1 is within the range during the period or • CET1 is above but making progress towards the target range 25% of award vests for performance at or above the peer groupd upper quartile Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 235 Remuneration report (continued) Performance measure Weighting Threshold Maximum vesting Strategic non-financials 20% Risk scorecard 10% The evaluation will focus on key performance measures from the Performance Measurement Framework, with a detailed retrospective narrative on progress against each category throughout the period. Performance against the strategic non-financial measures will be assessed by the Committee to determine the percentage of the award that may vest between 0% and 20%. The measures are organised around three main categories and measures will likely include, but not be limited to, the following: Customers and clients (weighted 5%) – drive world class outcomes for customers and clients; Improve Net Promoter Scores; reduce BUK customer complaints and improve resolution time; maintain client rankings and market share within CIB; and increase digital engagement. Colleagues (weighted 5%) – protect and strengthen our culture through our Purpose, Values and Mindset; Continue to improve diversity in leadership roles; improve inclusion indicators; maintain engagement at healthy levels; and maintain culture and conduct indicators. Climate and sustainability (weighted 10%) – progress to be measured against four key objectives: Reduce operational emissions; progress towards our Sustainability and Transition financing target; reducing our financed emissions; and supporting our communities. The Risk scorecard captures a range of risks and is aligned with the annual incentive risk alignment framework shared with the regulators. The current framework measures performance against three broad categories – Capital and liquidity, Control environment and Conduct – using a combination of quantitative and qualitative metrics. The framework may be updated from time to time in line with the Group’s risk strategy. Specific targets within each of the categories are deemed to be commercially sensitive. Retrospective narrative on performance will be disclosed in the 2025 Remuneration report, subject to commercial sensitivity no longer remaining. Notes a Calculated assuming a CET1 ratio at the mid-point of the Group target range, 13-14%. b Currently 13-14%. c Performance assessed over the period from 1 January 2023 to 31 December 2025. Start and end TSR will be the Q4 average for 2022 and 2025 respectively and will be measured in GBP for each company. d The peer group is comprised of banks in the UK, Europe and North America of comparable size to Barclays and whose weekly returns have a high degree of correlation with Barclays'.The peer group for the 2023-2025 LTIP award is Banco Santander, Bank of America, BBVA, BNP Paribas, Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank, HSBC, ING Groep, Lloyds Banking Group, Morgan Stanley, NatWest Group, Societe Generale, Standard Chartered, UBS, Unicredit. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 236 Remuneration report (continued) Additional remuneration disclosures Group performance graph and Group Chief Executive remuneration The performance graph below compares the total shareholder return of Barclays shares with the total shareholder return of the FTSE 100 index over the ten years ended 31 December 2022. The FTSE 100 index has been selected because it represents a cross-section of leading UK companies, of which Barclays is a long-standing constituent. Total Shareholder Return – rebased to 100 in 2012 Year ended 31 December Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 Antony Jenkins 1,602 Antony Jenkins 5,467a Antony Jenkins John McFarlane 3,399 305 Jes Staley 277 Jes Staley Jes Staley Jes Staley Jes Staley 4,233 3,873 3,362 5,929 Jes Staley 4,220b Jes Staley 2,121c C.S. Venkata- krishnan 866d 2022 C.S. Venkata- krishnan 5,197 0.0% 57.0% 48.0% n/a n/a 60.0% 48.5% 48.3% 75.0% 38.6% n/ac 92.6%d 75.4% n/ae 30.0% 39.0% n/ae n/ae n/ae n/ae n/ae 48.5% 23.0% n/ac n/ae n/ae Group Chief Executive Single total remuneration figure Group Chief Executive Annual bonus award as a % of maximum Long-term incentive plan vesting as a % of maximum Notes a Antony Jenkins’ 2014 pay is higher than in 2013 since he declined a bonus and did not have an LTIP vesting in 2013. b 2020 remuneration outcomes reflect 2018-2020 LTIP value restated for the actual share price on the date of vesting. c Jes Staley stepped down as Group Chief Executive on 31 October 2021. The remuneration shown for 2021 is in respect of his services as an Executive Director between 1 January 2021 and 31 October 2021. This figure does not include variable remuneration as the Committee has made no decisions in respect of Mr Staley's variable remuneration in respect of performance during 2021, and has suspended the vesting of all of his unvested deferred remuneration awards including the LTIP award granted to him in March 2019, as explained earlier in this Remuneration report. d The 2021 remuneration shown is in respect of C.S. Venkatakrishnan's services during 2021 following his appointment as Group Chief Executive on 1 November 2021. It includes the subsequent reduction to reflect the lower outcomes of the financial measures following the restatement of the 2021 financial statements and as a result the figure has been restated from the value disclosed in the 2021 Annual Report. e Not applicable as the individual was not a participant in a long-term incentive award that vested in the period. 10011510597102947189739483100119119118140157143168149176184BarclaysFTSE10020122013201420152016201720182019202020212022Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 237 Remuneration report (continued) Group Chief Executive pay ratio The table below shows the ratios of the Group Chief Executive’s total remuneration to the total remuneration of UK employees since 2018 and the change in the pay ratios for 2022 is explained below. 2022 2021a 2020 2019 2018 Option 25th percentile Median 75th percentile A A A A A 154 x 95 x 144 x 213 x 126 x 101 x 62 x 95 x 140 x 85 x 58 x 35 x 53 x 77 x 45 x Note a 2021 Group Chief Executive pay ratio figures are calculated using the sum of the 2021 single total figure for remuneration for C.S. Venkatakrishnan and Jes Staley for their respective periods of service as Group Chief Executive in 2021. The 2021 pay ratio figures have been recalculated to reflect the reduction that will be applied to the deferred elements of C.S. Venkatakrishnan’s 2021 bonus, after the financial outcomes were recalculated to reflect the restatement of the 2021 financial statements, though after rounding the pay ratios shown are unchanged from those disclosed in the 2021 Annual Report. The regulations provide three options that companies may use to calculate total pay for the employees at the 25th percentile, median and 75th percentile. Option A was selected as this is the most robust methodology, calculating total pay for all employees on the same basis that the single total figure for remuneration is calculated for Executive Directors. Total pay for each employee includes earned fixed pay, which is made up of salary, any Role Based Pay and relevant allowances, annual incentives awarded for the 2022 calendar year, and an estimate of pension and benefits for 2022. Other elements of pay such as overtime and shift allowances have been excluded. The estimate of pension for each employee is based on the percentage currently available to new hires in the UK (10% of salary for the more senior and 12% for the more junior corporate grades). The estimate of benefits is based on the cost of core benefits available at each corporate grade, including private medical insurance, income protection and life assurance. Calculations use full-time equivalent pay data taken from our HR systems for all UK employees, for each year using the employee population on 31 December. Total pay and fixed pay for the UK employees at the 25th percentile, median and 75th percentile are set out in the table below. 2022 2021 2020 2019 2018 25th percentile Median 75th percentile Total pay £33,711 £31,404 £29,380 £27,875 £26,587 Fixed Pay £28,300 £26,035 £24,706 £23,348 £21,899 Total pay £51,493 £48,253 £44,631 £42,362 £39,390 Fixed Pay £41,608 £39,461 £37,460 £35,158 £32,202 Total pay £89,911 £85,407 £79,324 £77,488 £74,685 Fixed Pay £71,071 £67,408 £64,272 £62,263 £60,000 The Group Chief Executive pay ratios for 2022 are higher than the pay ratios for 2021. The 2021 pay ratios were calculated using the sum of the 2021 single total remuneration figure for C.S. Venkatakrishnan and Jes Staley for their respective periods of service during 2021 as Group Chief Executive. The figure for Jes Staley did not include any value for bonus or LTIP as no remuneration decisions were made in respect of Mr Staley for performance-year 2021, and the 2019-2021 LTIP award granted to him in March 2019 that would otherwise have vested to him in March 2022 was suspended, as explained earlier in this Remuneration report. On a like-for-like annualized basis, C.S. Venkatakrishnan’s bonus for 2022 is lower than his 2021 bonus as Group Chief Executive, while the median bonus for UK employees has increased by 3% in 2022, as is discussed in more detail on the next page. The Group Chief Executive pay ratios for 2022 are more similar to the 2020 pay ratios, which is the most recent year that the single figure for remuneration included a full-year bonus for the Group Chief Executive. Looking back over the four-year period shown in the tables, total pay for the more junior employees in the UK has increased by almost a third (27% at 25th percentile and 31% at median), and fixed pay has increased by a similar amount (29% at both 25th percentile and median). Pay at the 75th percentile (more senior colleagues) has increased by less (20% for total pay and 18% for fixed pay). This is consistent with our commitment to fair pay for the lowest paid. Salary levels are reviewed annually to ensure these exceed living wage benchmarks and salary increases are focused on the more junior colleagues. In addition, more junior employees are largely protected from decreases in bonus pool. Barclays remuneration philosophy is set out earlier in this report, and all remuneration decisions for Executive Directors and the wider workforce are made within this framework. The Group Chief Executive pay ratio is one of the outcomes of all of these decisions, which are explained in more detail in the Committee Chair’s annual statement. To ensure that Executive Director remuneration outcomes are commensurate with experience for the wider workforce, the Remuneration Committee each year specifically considers whether the bonus and LTIP outcomes for the Executive Directors appropriately reflect the Group’s performance, shareholder experience and the remuneration outcomes for the wider workforce, as part of determining whether a discretionary adjustment should be made to the Executive Directors’ incentive outcomes. The Committee concluded that this remains the case for this year's remuneration outcomes. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 238 Remuneration report (continued) Annual percentage change in remuneration of Directors and employees The table below shows the percentage change in the Executive Directors’ Fixed Pay, benefits and bonus each year between 2020 and 2022 compared with the percentage change in each of those components of pay for UK-based employees of Barclays Group and for employees of the Barclays PLC (BPLC), the parent company of the Group. 2021/2022 2020/2021 2019/2020 C.S. Venkatakrishnana Anna Crossb Tushar Morzariac Median UK employee Median employee of BPLCd C.S. Venkatakrishnana Tushar Morzariac Jes Staleye Median UK employee Median employee of BPLCd Tushar Morzaria Jes Staley Median UK employee Median employee of BPLCd Fixed pay Benefits Annual bonus 2% n/a 2% 5% 10% n/a 2% 1% 5% 11% 0% 0% 7% 7% 853% n/a 82% 10% 15% n/a (10%) (12%) 6% 0% 9% 10% 20% 26% (16%) n/a (20%) 3% (2%) n/a 152% n/a 42% 38% (49%) (49%) (16%) (16%) Notes a C.S. Venkatakrishnan was appointed as Group Chief Executive with effect from 1 November 2021. His remuneration figures for 2021 are pro-rated up to a full-year equivalent for the purpose of this comparison. The value of his benefits in 2022 includes the cost of providing relocation support, including immigration assistance, temporary accommodation and home search support in London. No percentage change figures can be calculated for 2020/21 as he did not receive any remuneration in respect of services provided as an Executive Director in 2020. b Anna Cross was appointed as Group Finance Director with effect from 23 April 2022. No percentage change figures can be calculated for 2021/22 as she did not receive any remuneration in respect of services provided as an Executive Director in 2021. c Tushar Morzaria retired from the Board and stepped down as Group Finance Director on 22 April 2022. His remuneration figures for 2022 are pro-rated up to a full-year equivalent for the purpose of this comparison. The value of his benefits in 2022 includes the cost of advice on tax return preparation incurred in 2021 and 2022 that were all invoiced in 2022. The annual bonus percentage change for Tushar Morzaria reflects the reduction that will be applied to the deferred elements of his 2021 bonus, to reflect the restatement of the 2021 financial statements, and as a result the 2020/2021 percentage change has been restated from the value disclosed in the 2021 Annual Report. d The BPLC comparison is included because this is a statutory requirement, though BPLC employs only a very small number of Head Office employees (51 for 2022). e Jes Staley's remuneration figures for 2021 are pro-rated up for the purpose of this comparison. The Committee has not made any remuneration decisions to date in respect of 2021 variable pay, as explained earlier in this Remuneration report. For the Executive Directors, percentage change figures for 2021 to 2022 are calculated using the single total figures for remuneration. For the purpose of this comparison, these have been pro-rated up to full year based on their respective periods of service as Executive Directors each year. As such, C.S. Venkatakrishnan’s 2021 single total figure for remuneration, which reflects remuneration for his two months’ service as an Executive Director in 2021, was pro-rated up to a full-year equivalent, as was Tushar Morzaria’s single total figure for 2022, which reflects remuneration from the start of 2022 until he stepped down as Group Finance Director and an Executive Director on 22 April 2022. For Fixed Pay, the 2021 to 2022 increase shown for C.S. Venkatakrishnan is due to the 3% Fixed Pay increase agreed for him with effect from 1 March 2022. The increase shown for Tushar Morzaria is due to the 4.5% Fixed Pay increase implemented with effect from 1 July 2021, which was originally approved by shareholders at the 2020 AGM and postponed due to the COVID-19 pandemic. The large percentage change in benefits for C.S. Venkatakrishnan from 2021 to 2022 is predominantly due to the cost during 2022 of providing him with relocation support, including immigration assistance, temporary accommodation and home search support in London, in line with the current DRP. As referenced in last year's Remuneration report, under the terms of his relocation to London, temporary accommodation in London will be provided to him for a period of up to two years following his appointment as Group Chief Executive in November 2021. Tushar’s benefits (on an annualised basis) have increased in comparison to 2021 largely due to the cost of advice on tax return preparation incurred in 2021 and 2022 all being invoiced in 2022, the total value of which is c.£15,000. The bonus outcomes for C.S. Venkatakrishnan and Tushar Morzaria are down 16% and 20% respectively (based on full-time equivalents each year). This is reflective of the financial and non-financial performance factors outlined earlier in this Remuneration report, in the section on the 2022 annual bonus outcomes, including the impact of the Over-issuance of Securities on the financial results for 2022. For UK employees across the Group overall, the 5% increase in median fixed pay reflects increases awarded during 2022 in the normal course of business and the decision taken to bring forward part of the 2023 pay increase, to give 35,000 UK-based junior colleagues a £1,200 salary increase effective from August 2022 to provide support to colleagues in light of high cost-of-living inflation, ahead of our annual salary review (which will be effective 1 March 2023). The increase in benefits is largely due an increase in the cost to Company of income protection and private medical insurance. For bonus, although the overall incentives pool is down on 2021, the Committee chose to focus the reductions on more-senior colleagues so that year-on-year bonus outcomes for junior colleagues see less of a decline, consistent with our Fair Pay Agenda. As a result, the greatest reductions in incentives from 2021 to 2022 were seen for more senior colleagues. This is reflected in the bonus percentage change figure for the median employee, which is up 3% from 2021 to 2022, despite the overall incentives pool reduction. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 239 Remuneration report (continued) BPLC only employs a very small number of Head Office employees (51 for 2022) and there is frequent movement of employees between BPLC and other entities within the Barclays Group. To make a meaningful year-on-year comparison, the figures are therefore based on those individuals who were employed by BPLC in both years (34 individuals). The fixed pay increase for this population of 10% is due to a few fixed pay increases following material changes in role in this very small population. The average bonus decrease of 2% is principally a consequence of the decrease in Group-wide incentive pool in 2022. The benefits value has increased due an increase in the cost of income protection and private medical insurance. The table below shows the percentage change in fees each year between 2019 and 2022 for the Chairman and the Non-Executive Directors serving on Barclays PLC Board during 2022, including fees for Board Committee memberships and/or subsidiary board positions. Non-Executive Directors who joined on or after 1 January 2022 are not included. The changes in fees shown relate to changes in responsibilities of the Non-Executive Directors. Nigel Higgins Mike Ashley Tim Breedon Mohamed A. El-Erian Dawn Fitzpatrick Mary Francis Crawford Gillies Brian Gilvary Diane Schueneman Julia Wilson 2021 / 2022 Feesa 2020 / 2021 Feesa 2019 / 2020 Feesa 0% (2%) (19%)b 3% 18%c 5% (2%) 3% 4% 13%d 0% 0% 64% 11% 14% 8% 108% 95% (4%) n/a 0% 19% 24% n/a 36% (3%) 4% n/a 3% n/a Notes a For those who were appointed to Barclays PLC Board or those who stood down from Barclays PLC Board in any of the years covered by the table, fees are pro-rated up for the relevant year for the purpose of this comparison. Additional information has been provided where 2021/2022 percentage changes in fees were greater than 10%. b The decrease in fees from 2021 to 2022 is primarily due to Tim Breedon having retired from his responsibilities as a member of the Board Remuneration Committee of Barclays PLC and Barclays Bank PLC on 31 October 2021; he also retired as Chair of the Board Risk Committee of Barclays PLC and Barclays Bank PLC, and as a member of the Barclays Bank PLC Board, in each case with effect from 28 February 2022. c Dawn Fitzpatrick joined the Board Remuneration Committee with effect from 1 July 2021 and the BCSL Board with effect from 27 September 2021 and received pro-rata fees for that year. For 2022, the full year fees of £30,000 and £20,000 respectively were paid, therefore increasing the fees paid from 2021 to 2022. d The increase in fees from 2021 to 2022 is primarily due to Julia Wilson's additional responsibilities in 2022, including becoming a member of the Board Risk Committee and the Board Nominations Committee with effect from 1 September 2022. Relative importance of spend on pay A year-on-year comparison of Group compensation costs and of distributions to shareholders is shown below. The distributions shown relate to dividends paid and share buyback programmes completed during the year. The distributions for 2022 do not include the dividends and share buyback programme announced on 15 February 2023. Group compensation costs £m 2022 2021 n Other compensation-related income statement chargesa n Performance costs Distribution to shareholdersb £m 2022 2021 n Share buybacks n Dividends Notes a Relates to costs arising from salaries and other elements of fixed pay, social security costs, post-retirement benefits and other compensation costs. b The chart shows dividends paid and share buyback programmes completed during the year, i.e. for 2022, the figure represents the 2021 full year dividend paid, the share buyback programme announced with the 2021 results, the 2022 half year dividend, and the share buyback programme announced with the half year results. The shareholder distributions announced on 15 February 2023 are not reflected in this chart. 8,3497,6246,5135,8791,8361,7452,5281,7121,5001,2001,028512Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 240 Remuneration report (continued) Chairman and Non-Executive Directors Remuneration for Non-Executive Directors reflects their responsibilities, time commitment and the level of fees paid to Non-Executive Directors of comparable major UK companies. Fees are pro-rated for periods of service. Non-Executive Directors are reimbursed expenses that are incurred for business reasons. Any tax that arises on these reimbursed expenses is paid by Barclays. Chairman and Non-Executive Directors: Single total figure for 2022 remuneration (audited) Chairman Nigel Higginsb Non-Executive Directors Mike Ashley Robert Berryc Tim Breedond Mohamed A. El-Erian Dawn Fitzpatricke Mary Francis Crawford Gillies Brian Gilvary Diane Schueneman Julia Wilsonf Total 2022 £000 800 260 213 392 155 200 170 490 241 388 135 Feesa 2021 £000 800 265 — 483 150 170 162 502 234 374 90 3,444 3,230 2022 £000 7 — — — — — — — — — — 7 Benefits 2021 £000 8 — — — — — — — — — — 8 2022 £000 807 260 213 392 155 200 170 490 241 388 135 Total 2021 £000 808 265 — 483 150 170 162 502 234 374 90 3,451 3,238 Notes a The annual fees received in 2022 by each Non-Executive Director include fees for Board Committee memberships and/or subsidiary Board positions. Fees shown in the table above are pro-rated (where appropriate) for periods of service. Key changes in appointments during 2022 are identified in notes c to f below. b Nigel Higgins does not receive a fee in respect of his role as Chairman of Barclays Bank PLC. c Robert Berry was appointed to the Board with effect from 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. The 2022 figure includes £90,000, £80,000 and £20,000 respectively, for these appointments (pro-rated for service in 2022). d Tim Breedon retired as Chair of the Board Risk Committee of Barclays PLC and Barclays Bank PLC, and as a member of the Barclays Bank PLC Board, with effect from 28 February 2022, but remains a member of the Board and Chair of Barclays Bank Ireland PLC. e Dawn Fitzpatrick joined the Board Remuneration Committee with effect from 1 July 2021 and the BCSL Board with effect from 27 September 2021 and received pro-rated fees for that year. For 2022, the full year fees of £30,000 and £20,000 respectively were paid, therefore increasing the fees paid from 2021 to 2022. f Julia Wilson was appointed as a member of the Board Risk Committee and the Board Nominations Committee with effect from 1 September 2022. The 2022 figure includes £30,000 and £15,000 respectively for these appointments (pro-rated for service in 2022). Chairman and Non-Executive Directors: Statement of implementation of remuneration policy in 2023 The fees for the Chairman and Non-Executive Directors were reviewed in December 2022 and early 2023. With effect from 1 January 2023, the fee for the Chairman was increased by 5% from £800,000 to £840,000 and the fees for Non-Executive Directors for all other roles on the Board and Board Committees of Barclays PLC were increased by 5%. Fees for the Chairman and Non-Executive Directors are shown below, before those increases in the column headed 1 January 2022 and after the increases in the column headed 1 January 2023. Chairmana Board member Additional responsibilities Senior Independent Director Chair of Board Audit or Risk Committee Chair of the Board Remuneration Committee Membership of Board Audit, Remuneration or Risk Committee Membership of Board Nominations Committee Note a The Chairman does not receive any fees in addition to the Chairman fees. 1 January 2023 1 January 2022 £ 840,000 94,500 £ 800,000 90,000 37,800 84,000 73,500 31,500 15,750 36,000 80,000 70,000 30,000 15,000 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 241 Remuneration report (continued) Directors’ shareholdings and share interests Interests in Barclays PLC shares (audited) The table below shows the number of shares owned beneficially by each person who served as a Director during 2022 (including any shares owned beneficially by their connected persons). For the Executive Directors, it shows the number of shares over which each holds awards that are subject to either deferral terms or to deferral terms plus performance measures, and the number of shares owned outright includes shares purchased by the Director as well as shares received in relation to remuneration. The numbers shown for shares that are subject to performance measures represent the maximum number of shares that may be released if those performance measures were to be satisfied in full. The total share interests at 13 February 2023 were the same as shown below for all Directors in service as at 31 December 2022. Interests in Barclays PLC shares as at 31 December (or date of retirement from the Board, if earlier) Owned outright Unvested deferred awards Subject to performance measures Not subject to performance measures Total Executive Directors C.S. Venkatakrishnan Anna Crossa Chairman Nigel Higgins Non-Executive Directors Mike Ashley Robert Berryb Tim Breedon Mohamed A. El-Erian Dawn Fitzpatrick Mary Francis Crawford Gillies Brian Gilvary Diane Schueneman Julia Wilson Former Directors Tushar Morzariac 2,019,218 3,025,210 3,223,154 8,267,582 400,910 774,557 1,175,467 1,614,611 1,614,611 382,362 4,786 202,399 141,014 944,925 67,944 221,016 212,200 106,844 21,263 382,362 4,786 202,399 141,014 944,925 67,944 221,016 212,200 106,844 21,263 5,263,505 4,310,037 2,362,888 11,936,430 Notes a Anna Cross was appointed to the Board with effect from 23 April 2022. b Robert Berry was appointed to the Board with effect from 8 February 2022. c Tushar Morzaria stepped down as an Executive Director with effect from 22 April 2022 and as a result his shareholdings are shown as at that date. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 242 Remuneration report (continued) Executive Directors’ shareholdings and share interests (audited) The charts below show the value of Barclays shares held as at 31 December 2022 by C.S. Venkatakrishnan and Anna Cross, or as at 22 April 2022 for Tushar Morzaria, being his last day of active service as an Executive Director, in each case using the Q4 2022 average Barclays ordinary share price of £1.5315. The values of unvested shares are shown after deduction of estimated income tax and social security withholdings. For the unvested shares subject to performance conditions, the proportion that is ultimately released may range from 0% to 100%, depending on the achievement of the performance measures for each award, and on continued employment in accordance with the plan rules and the DRP. For C.S. Venkatakrishnan, the shareholding requirement is 233% of year-end Fixed Pay and for Anna Cross it is 224% of year-end Fixed Pay. C.S. Venkatakrishnan and Anna Cross have five years from their respective dates of appointment as Executive Directors to meet this requirement. Barclays shares held beneficially by each Executive Director count towards the shareholding requirement under the existing DRP, which was in operation during 2022. Under the proposed new DRP, which aligns the shareholding and post-employment shareholding requirements with market practice (as described earlier in the Remuneration report), unvested shares that are not subject to performance conditions will also count toward the shareholding requirement (net of estimated tax and social security). Tushar Morzaria is subject to a two year post-employment shareholding requirement of 224% of his Fixed Pay as at his last day of active service as an Executive Director. Shares that count towards the requirement are beneficially owned shares, plus unvested shares not subject to performance conditions (net of estimated tax and social security). Unvested shares that are still subject to performance conditions do not count towards the shareholding requirements, but contribute to aligning the Executive Directors' interests with shareholder experience through share price exposure. C.S. Venkatakrishnan £000 Anna Cross £000 C.S. Venkatakrishnan has until 1 November 2026, being five years from the date of his appointment as an Executive Director, to meet this shareholding requirement. Anna Cross has until 23 April 2027, being five years from the date of her appointment as an Executive Director, to meet this shareholding requirement. Tushar Morzaria £000 Having stepped down as an Executive Director on 22 April 2022, Tushar Morzaria has a contractual obligation to maintain his shareholding requirement (as detailed above) for two years following his last day of active service as an Executive Director. n Vested shares n Unvested shares not subject to performance conditions n Unvested shares subject to performance conditions 6,477Requirement3,0922,3642,219Actual 3,864614629RequirementActual3,8648,0611,9183,498RequirementActual Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 243 Remuneration report (continued) Service contracts and letters of appointment Each Executive Director has a service contract, whereas the Chairman and Non-Executive Directors each have a letter of appointment. Copies of the service contracts and letters of appointment are available for inspection at the Company’s registered office. The effective dates of the current Directors’ appointments disclosed in their service contracts or letters of appointment are shown in the table below. As stated in the letters of appointment, the Chairman and Non-Executive Directors are appointed for an initial term of three years and are subject to annual re-election by shareholders. On expiry of the initial term and subject to the needs of the Board, Non-Executive Directors may be invited to serve a further three years. Non-Executive Directors appointed beyond six years will be at the discretion of the Board Nominations Committee. Chairman Nigel Higgins Executive Directors C.S. Venkatakrishnan Anna Cross Non-Executive Directors Mike Ashley Robert Berry Tim Breedon Mohamed A. El-Erian Dawn Fitzpatrick Mary Francis Crawford Gillies Brian Gilvary Marc Moses Diane Schueneman Julia Wilson Effective date of appointment 1 March 2019 (as a Non-Executive Director) 2 May 2019 (as Chairman) 1 November 2021 23 April 2022 18 September 2013 8 February 2022 1 November 2012 1 January 2020 25 September 2019 1 October 2016 1 May 2014 1 February 2020 23 January 2023 25 June 2015 1 April 2021 Payments to former Directors (audited) Former Group Chief Executive: Jes Staley On stepping down from his role as Group Chief Executive and as an Executive Director of Barclays PLC, on 31 October 2021, Mr Staley was entitled to 12 months' notice from Barclays, under his contract of employment. During his notice period, he continued to receive his Fixed Pay (£2,400,000 per annum delivered half in cash, paid monthly, and half in Barclays shares, awarded each quarter), pension allowance (£120,000 per annum, paid monthly) and other benefits, in line with the DRP. The amounts that he received during 2022, up to the end of his notice period on 31 October, amounted to Fixed Pay in cash of £1,000,000, Fixed Pay in shares of £1,000,000, pension allowance of £100,000 and other benefits with a value of approximately £46,600. He was also contractually entitled to receive reimbursement of repatriation costs to the US, in line with the DRP, and these amounted to £107,000. Mr Staley will continue to be entitled to annual advice on UK and US tax compliance in respect of Barclays employment income. Pending further developments in respect of the regulatory and legal proceedings related to the ongoing FCA and PRA investigation regarding Mr Staley, no further remuneration decisions have been made with regards to his deferred share and LTIP awards which remain suspended. Former Group Finance Director: Tushar Morzaria On stepping down from his role as Group Finance Director and as an Executive Director of Barclays PLC, on 23 April 2022, Mr Morzaria commenced a new role within Barclays as Chairman of Global Financial Institutions Group and Adviser to the Group Chief Executive. He will continue to be entitled to annual advice on UK and US tax compliance until such time as he ceases receiving deferred income related to his period serving as an Executive Director, the total cost of which was c.£15,000 in 2022. Mr Morzaria continues to work within Barclays in other roles and so is not treated as a leaver in respect of any deferred bonus or LTIP awards, which will continue to vest in accordance with the relevant plan rules. Former Group Finance Director: Chris Lucas In 2022, Chris Lucas continued to be eligible to receive life assurance cover, private medical cover and payments under the Executive Income Protection Plan (EIPP). Full details of his eligibility under the EIPP were disclosed in the 2013 Remuneration report (page 115 of the 2013 Annual Report). He did not receive any other payment or benefit in 2022. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 244 Remuneration report (continued) Previous AGM voting outcomes The table below shows the shareholder voting result in respect of our 2021 Remuneration report (approved by shareholders at the AGM held on 4 May 2022) and Directors’ remuneration policy (approved by shareholders at the AGM held on 7 May 2020). Vote on the 2021 Remuneration Report at the 2022 AGM 89.03% 10.97% 10,193,013,827 1,255,388,727 15,189,796 Vote on the Directors’ remuneration policy at the 2020 AGM 96.29% 3.71% 11,308,670,932 436,091,600 201,020,969 For % of votes cast Number Against % of votes cast Number Withheld Number At the AGM held on 24 April 2014, 96.02% (10,364,453,159 votes) of shareholders of Barclays PLC voted for the resolution in respect of a fixed to variable remuneration ratio of 1:2 for ‘Remuneration Code Staff ’ (now known as MRTs). On 14 December 2017, the Board of Barclays PLC as shareholder of Barclays Bank PLC approved the resolution that Barclays Bank PLC and any of its current and future subsidiaries be authorised to apply a ratio of the fixed to variable components of total remuneration of their MRTs that exceeds 1:1, provided the ratio does not exceed 1:2. On 15 November 2018, the Board of Barclays PLC as shareholder of Barclays Bank UK PLC approved an equivalent resolution in relation to MRTs within Barclays Bank UK PLC and any of its subsidiaries. Barclays Board Remuneration Committee The Committee is responsible for overseeing Barclays’ remuneration as described in more detail below. Terms of Reference The role of the Committee is to: • set the overarching principles and parameters of remuneration policy across the Group; • consider and approve the remuneration arrangements of (i) the Chair, (ii) the Executive Directors, (iii) members of the Barclays Group Executive Committee and any other senior executives specified by the Committee from time to time, and (iv) all other Group employees whose total annual compensation exceeds an amount determined by the Committee from time to time; and • exercise oversight over remuneration issues. The Committee considers the overarching objectives, principles and parameters of remuneration policy across the Group, ensuring that it is adopting a coherent approach in respect of all employees. In discharging this responsibility, the Committee seeks to ensure that the policy is fair and transparent, avoids complexity and assesses, among other things, the impact of pay arrangements in supporting the Group’s culture, Values and strategy and on all elements of risk management. The Committee also approves incentive pools for each of the Group, Barclays Bank PLC, Barclays Bank UK PLC and BX, periodically reviews (at least annually) all material matters of retirement benefit design and governance, and exercises judgement in the application of remuneration policies to promote the long-term success of the Group for the benefit of shareholders. The Committee and its members work as necessary with other Board Committees, and the Committee is authorised to select and appoint its own advisers as required. + The Committee’s terms of reference are available at home.barclays/who-we-are/our-governance/board-committees Advisers to the Committee The Committee appointed PricewaterhouseCoopers (PwC) as its independent adviser in October 2017. The Committee considered the advice provided by PwC to the Committee during the year and was satisfied that the advice is independent and objective. PwC is a signatory to the voluntary code of conduct in relation to executive remuneration consulting in the UK. PwC was paid £173,000 (excluding VAT) in fees for their advice to the Committee in 2022 relating to the remuneration of the Directors (either exclusively or along with other employees within the Committee’s Terms of Reference). In addition to advising the Committee, PwC provided unrelated consulting advice to the Group in respect of strategic advice on business, regulation, operational models and cost, corporate taxation, technology, pensions and HR issues. Throughout 2022, Willis Towers Watson (WTW) provided the Committee with market data on compensation, as context when considering incentive levels and remuneration packages. WTW were paid £82,000 (excluding VAT) in fees for these services. In addition to the services provided to the Committee, WTW also provides market data on compensation for other roles below Board level, pensions and benefits advice and insurance brokerage services to the Barclays Group, and pensions advice and administration services to a number of the Group's pension funds. In the course of its deliberations, the Committee also considered the views of the Group Chairman, the Group Chief Executive, the Group Human Resources Director and the Group Reward and Performance Director. The Group Finance Director and the Group Chief Risk Officer provided regular updates on Group and business financial performance and risk profiles, respectively. The Head of Corporate Communications attended when requested to advise on reward communications and disclosures. The Group General Counsel and Company Secretary advised on legal and governance-related matters. No Barclays employee or Director participates in discussions with, or decisions of, the Committee relating to his or her own remuneration. No other advisers provided services to the Committee in the year. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 245 Remuneration report (continued) Committee effectiveness in 2022 The 2022 Committee effectiveness review was facilitated internally in accordance with the Code. This internal review involved completion of a tailored questionnaire by Committee members and standing attendees, in line with the approach adopted for all Board Committees in 2022. The review is an important part of the way Barclays monitors and improves Committee performance and effectiveness, maximising strengths and highlighting areas for further development. The results of the review confirm the Committee is operating effectively. It is considered to be well constituted, providing an effective and appropriate level of challenge and oversight of the areas within its remit, including in respect of complex judgements. The review noted that the Committee allocates time appropriately to cover its remit effectively in meetings, with sufficient time for discussion and challenge. The review acknowledged that Committee meetings are chaired effectively, with the Chair encouraging debate through an inclusive approach. In light of Crawford Gillies having stepped down as Committee Chair in February 2021, and the role of Chair having been assumed by an existing Committee member, consideration will be given to adding an additional member of the Committee in due course. The Committee’s interaction with the Board, Board Committees and senior management is considered effective, with the review noting the strong level of support provided to the Committee by senior management. Following the consolidation of the membership of the Committee with the BBPLC Board Remuneration Committee in September 2019 (with the exception of the Committee Chair, who attends as an observer only for matters relating to BBPLC), coverage of BBPLC matters within aligned meetings is considered adequate. The Committee’s interaction with the BBPLC and BBUKPLC Board Remuneration Committees was also considered effective, and operates in line with regulatory requirements. Committee activity in 2022 The following table summarises the Committee’s activity during 2022, and at the January and February 2023 meetings at which 2022 remuneration decisions were finalised. The Committee is also provided with updates at each scheduled meeting on: the operation of the Committee’s Control Framework on hiring, retention and termination; headcount and employee attrition; and extant LTIP performance. January 2022 February 2022 June 2022 October 2022 December 2022 January 2023 February 2023 Overall remuneration Finance and Risk updates Incentive funding proposals including risk and control adjustments 2021 Remuneration Report Group Fixed Pay budgets Wider workforce considerations Incentive funding approach Barclays’ Fair Pay Agenda and Report Directors' Remuneration Policy 2022 Remuneration Report Executive Directors’ and senior executives’ bonus outcomes Annual bonus and LTIP performance measures and target calibration Executive Directors’ and senior executives’ remuneration Governance Regulatory and stakeholder matters Discussion with independent adviser Remuneration Review Panel update Review of Committee effectiveness ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ There were two additional Committee meetings, one each in February 2022 and November 2022, the first to consider the remuneration aspects related to Group Finance Director succession and the second to consider remuneration for a number of senior positions. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 246 Other Governance This section aims to provide an overview of certain governance matters of particular relevance to ESG ratings agencies and investors across a range of ESG matters. It covers topics such as our Code of Conduct, Whistleblowing, Tax, Financial crime, Health and Safety and how we manage our Data privacy and Security as well as Resilience. This section also includes our approach to managing social and environmental impacts as well as our Governance disclosures as part of the TCFD recommendations. This section does not discuss general corporate governance matters. Refer to the Board Governance report from page 142 in the Annual Report for information relating to the Board, ExCo and Board Committees, our Board governance framework and how we complied with the requirements of the 2018 UK Corporate Governance Code during 2022. Climate and sustainability governance Managing impacts in lending and financing The Barclays Way Whistleblowing Tax Financial crime Health and safety Managing data privacy, security and resilience 247 253 256 257 258 260 261 262 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 247 ESG: Governance Climate and sustainability governance Oversight and management of climate-related issues are embedded within our governance structure. Barclays’ governance structure consists of the Barclays PLC Board (Board) and its Committees along with Executive and Management Committees which span across both business and legal entity lines. The Board sets the Group’s climate-related strategy and oversees its implementation by senior management. Governance structure Barclays PLC Board The Barclays PLC Board sets the strategy for the group Board Risk Committee Board Audit Committee Board Remuneration Committee Group Executive Committee (Group ExCo) Group Reputation Risk Committee (GRRC) Group Risk Committee (GRC) Accountable Function’s COO Executive Committee Climate Transaction Review Committee (CTRC) Climate Risk & Controls Forum (CFRF) Climate Risk Committee (CRC) Operational Sustainability Steering Committee Climate Portfolio Governance Board Disclosure Committee Legal & Technical Committee Group Chief Compliance Officer Group Chief Risk Officer Group Chief Operating Officer Group Head of Climate Risk BX Risk and Finance Chief Operating Officer CEOs - Corporate & Investment Bank and Barclays UK Heads of Sustainable Finance - Corporate & Investment Bank and Barclays UK Group Head of PPCR Group Finance Director Group Head of Sustainability Group Head of Finance - Sustainability and ESG Business / Legal Entity Committees and Forums Climate and Sustainable Finance Council Principal Investments Equity Committee Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 248 ESG: Governance (continued) Roles and Responsibilities of Board and Board Committees with respect to Climate matters Board / Board Committee Board Roles and Responsibilities Responsible for the overall leadership of the Group (with direct oversight of matters relating to strategy, reputation and culture). The Board sets the Group’s strategy and has responsibility for overseeing Reputation risk, in respect of which climate matters are a relevant consideration. Board Audit Committee Board Risk Committee Responsible for overseeing the integrity of the Group's financial disclosures, the effectiveness of the internal control environment and consideration of non-financial reporting. The Committee oversees financial and narrative reporting which encompasses ESG and climate disclosures within the Annual Report. Responsible for monitoring Principal Risks (including Climate risk), considering the Group’s risk appetite and tolerances, along with reviewing the Group’s risk profile and commissioning, receiving and considering reports on key risk issues. The Committee has responsibility for reviewing the impact of Climate risk on financial and operating risk arising from climate change through physical risks, risks associated with transitioning towards a lower-carbon economy and connected risk (excluding Reputation risk). Board Remuneration Committee Responsible for setting the overarching principles and parameters of remuneration policy across the Group. The Committee has responsibility for aligning Executive Director remuneration with strategic priorities, including in relation to climate and sustainability matters. Climate and sustainability governance Board and Board Committee oversight of climate-related risks and opportunities Barclays PLC Board The Board is responsible for the overall leadership of Barclays PLC, including establishing its purpose, values and strategy and assessing and monitoring that these and its culture are aligned. As part of this, the Board and, as appropriate, its Committees are responsible for the oversight of social and environmental matters, including climate-related risks and opportunities. The Board is supported in its work by its Committees (including in respect of climate-related matters), each of which has its own Committee Terms of Reference clearly setting out its remit and decision-making powers. The Chairs of each of the Board Committees provide a report on the work of the Committee at every Board meeting. Board Risk Committee (BRC) The BRC monitors and recommends the risk appetite for the Group's Principal Risks, including risks associated with climate change. It considers and reports on key financial and non-financial risk issues, and oversees conduct and compliance. It also monitors the Group’s Financial, Operational, Conduct and Legal risk profile. During 2022, the Board received five climate-related updates from the Group Head of Public Policy and Corporate Responsibility (PPCR) and the Group Head of Sustainability. These covered matters such as progress on our climate strategy, policy updates, industry trends, stakeholder engagement and target- setting. In addition to these Board briefings, the Group Head of PPCR engaged with Board members on matters relating to the Group’s climate strategy. The Board also received updates from the businesses (including Barclays UK and Barclays International), either directly or through the reports of the Board Risk Committee, regarding their climate strategy. See the ‘Climate spotlight’ on the next page for details of key Board activities and decisions in 2022 in relation to climate- related matters. As reported in our 2021 Annual Report, Climate risk was elevated to a Principal Risk within our Enterprise Risk Management Framework (ERMF) from 1 January 2022. Following a detailed training session on the financial and operational risks of climate change delivered to the BRC at the beginning of 2022, the BRC received quarterly Climate risk updates from the Head of Climate Risk and also received reports from the businesses on their climate strategy, with a focus on ensuring Climate risk is adequately considered as part of business-planning activities across the Group. As part of the updates provided by the Head of Climate Risk, the BRC received and considered updates in relation to: • areas of elevated climate risk and progress against sector targets, received in the form of a Climate Risk Dashboard • stakeholder views on climate risk • the impact of the war in Ukraine on the transition towards a low-carbon economy • the SEC’s consultation on climate- related financial reporting • the PRA’s focus on nature-related financial reporting • heightened regulatory focus on ‘greenwashing’ activities in the financial services sector • physical risks associated with climate, including the impact of heatwaves and droughts. Following on from the Bank of England’s 2021 Climate Biennial Exploratory Scenario (CBES), the BRC received and discussed the conclusions of Round 2 of the CBES in 2022 and subsequently approved the results and conclusions for submission to the PRA. These exercises assist the continued deepening of Barclays’ understanding of climate risks. As part of the Group’s strategic planning process, the BRC recommended to the Board for approval the Barclays Risk Appetite Statement, which covers all Principal Risks, including Climate risk. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 249 ESG: Governance (continued) Board Remuneration Committee (RemCo) The RemCo is responsible for setting the overarching principles and parameters of remuneration policy across the Group. The RemCo has responsibility for aligning Executive Director remuneration with strategic priorities, including in relation to climate and sustainability matters. The performance measures for the 2023 annual bonus and 2023-2025 Long Term Incentive Plan (LTIP) for the Executive Directors both include a 'Climate and sustainability' category, focusing on climate-related measures including progress towards our new Sustainable and Transition Financing target, reducing GHG emissions associated with our operations and supply chain, as well as delivering the ambition to be a net zero bank by 2050. The BRC also reviewed the ERMF and recommended the same to the Board for its approval, and reviewed each of the Principal Risk frameworks, including the Climate Risk Framework. Board Audit Committee (BAC) The BAC assesses the integrity of the Group’s financial statements and evaluates the effectiveness of the Group’s internal controls. The BAC provides oversight of the Group’s climate and sustainability disclosures, and supported the integration of the 2022 TCFD disclosures into the 2022 Annual Report. The impact of climate change on the Group’s financial statements continues to not be material at this time, but this is an area that the BAC will continue to monitor. Spotlight Climate Barclays’ climate strategy and ambition is set by the Board which oversees its implementation by management. The Board remained focused on climate in 2022, and key activities of the Board in relation to climate included: • considering updates on Climate risk through the reports of the Chair of the BRC • reviewing updates on amendments to climate policies and targets, including our oil sands and thermal coal policies • delivering on Barclays' commitment • considering climate-related data to offer shareholders a ‘Say on Climate’ advisory vote at the 2022 AGM • engaging with our private shareholder base at the 2022 AGM on Barclays’ climate strategy and targets, and considering feedback received following the 'Say on Climate' advisory vote passed at the AGM • ongoing engagement with institutional investors and shareholder representative groups regarding Barclays’ climate strategy and targets and reporting, and discussing areas in which the Group could make further progress in its strategic climate leadership ambition. Key decisions: ü reaffirmed Barclays’ desire to maintain a leading position on the climate agenda and supported broader engagement with shareholders on climate matters ü approved the Group’s Task Force on Climate-related Financial Disclosures Report for 2021 ü approved the form of resolution to be put to shareholders at the 2022 AGM seeking endorsement of Barclays’ climate strategy, targets and progress ü endorsed management’s proposal for new or updated climate policies and targets. + You can read more about our 'Say on Climate' advisory vote in our Section 172 statement in the Strategic Report on page 19. Your can read more about Barclays’ updated policies and targets in the Climate and Sustainability report. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 250 ESG: Governance (continued) Management's role in assessing and managing climate-related risks and opportunities Oversight and management of climate strategy is increasingly embedded in business-as-usual management structures, including a number of executive committees. These committees are mandated and form part of Barclays’ formal governance architecture. They are convened to oversee a specific attribute of the Barclays control framework. Each committee is itself governed by Terms of Reference that lay out the duties, decision-making authority and escalation route of any material issues. The executive management committees receive regular briefings on matters including climate change. Both risks and opportunities are considered by management. Climate-related risks are assessed and escalated as appropriate through the various risk forums, and in 2022 the Barclays Climate and Sustainable Finance Council was established as a dedicated forum to identify and discuss climate-related opportunities across the Group. Group Executive Committee (Group ExCo) Throughout 2022 Group ExCo has been provided with regular updates on our climate strategy, including progress on our commitments, stakeholder engagement and expectations, and target-setting. The Group Head of PPCR is a member of Group ExCo and is accountable for ensuring the Group’s societal purpose is present in strategic decision-making at the highest levels in the organisation. The Group Head of PPCR, and their team, regularly updates Group ExCo on a range of Public Policy and Corporate Responsibility matters, covering key government and regulatory policy, regulator engagement and ESG matters, including climate. These updates include information about key industry trends and events, such as Barclays' involvement in the Net Zero Delivery Summit and the Sustainable Markets Initiative as well as the evolving regulatory focus on climate change across different jurisdictions. The Chief Risk Officer is a member of Group ExCo and is accountable for the approach to managing climate-related financial and operational risks to Barclays; this is implemented within the Group's Enterprise Risk Management Framework (ERMF). Group ExCo was regularly updated on the scope, approach and engagement relating to the 'Say on Climate' advisory resolution that was put to our shareholders at the AGM in May 2022. Capturing the opportunity as we transition towards a low-carbon economy was identified as a key strategic growth pillar for Barclays in 2022. As a result, Group ExCo was provided with updates on the global market opportunity for sustainable financing with a focus on the next 10 years. This work informed the setting of a $1tn Sustainable and Transition Financing target by the end of 2030, an increase of our Sustainable Impact Capital target to £500m by the end of 2027, and the appointment of new Heads of Sustainable Finance in both the Corporate and Investment Bank and Barclays UK. All submissions to the Barclays Group Board on Climate Strategy and climate- related matters are reviewed either by Group ExCo or the relevant Group ExCo member in advance. The Group Head of Sustainability also served as an ex-officio member of Group ExCo for Q1 of this year, recognising the importance of climate and sustainability to the group. Executive Director annual bonus and Long Term Incentive Plan (LTIP) outcomes are assessed against a framework of measures set by the Remuneration Committee at the start of the performance period for each award. A proportion of both bonus and LTIP is driven by non-financial performance measures, including measures relating to climate and sustainability. For the annual 2023 bonus and 2023-2025 LTIP awards, 10% of the overall outcome for each will be determined by performance against climate and sustainability measures, reflecting our ambition to be a net zero bank by 2050, including our commitment to align our financing with the goals and timelines of the Paris Climate Agreement. + Further details can be found in our Remuneration report from page 197 Group Risk Committee (GRC) The GRC is the designated forum to review and recommend, where necessary, submissions to the BRC. The GRC is the most senior risk executive body, and it monitors Principal Risks and key topics of material nature to Barclays, such as climate change. In 2022, the GRC reviewed: • key regulatory, global policy and geopolitical themes and management action proposed and taken • physical and transition risk metrics, including portfolio alignment progress against net zero sector targets • an overview of credible potential third- party scenarios in addition to Network for Greening the Financial System (NGFS) • the Climate Risk Framework and Climate Risk Appetite constraint. In relation to Principal Risks, the Group Risk Committee undertakes the following: • review and monitor the risk profile of material nature for each Principal Risk • approve for consideration by Barclays PLC Board and BBPLC Board Risk Committee the Risk Appetite Statement for each Principal Risk • annually review and approve the Principal Risk Framework for consideration by the Barclays PLC Board and BBPLC Board Risk Committee. The Group Risk Committee receives escalations from the Climate Risk Committee, noting none were received in 2022. Climate Risk Committee (CRC) To support the oversight of Barclays Group climate risk profile, a Climate Risk Committee (CRC) has been established, as a sub-committee of the GRC. The authority of the CRC is delegated by the GRC. The CRC is chaired by the Head of Climate Risk. CRC has reviewed and approved a range of updates including a refreshed Climate Risk Vision, updates from each of the financial and operational risks and from the material legal entities of the firm, along with key regulatory, policy and legal themes, the risk register and appetite statement, and reviewed the control environment. Climate Risk Control Forum (CRCF) The CRCF was established in July 2022 and escalates to the GRC via the Group Controls Committee. The purpose of the CRCF is to oversee the consistent and effective implementation and operation of the Barclays Controls Framework in relation to Climate Risk. It reviews the control environment, including risk events, policy and issues management. Climate Transaction Review Committee (CTRC) The CTRC is composed of members of Group ExCo and escalates directly to the Group CEO. The key function of the CTRC is to consider the reputation risks associated with certain transactions and clients with reference to our stated position on climate that could prevent Barclays from progressing its commitment Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 251 ESG: Governance (continued) to align our financing portfolio with the goals and timelines of the Paris Agreement and/or present significant reputation risk. Operational Sustainability Steering Committee Barclays’ Operational Sustainability Steering Committee (OSSCo) is responsible for the development and implementation of the Bank’s operational sustainability strategy, including its carbon reduction plan and pillar one of the net zero bank ambition. OSSCo is chaired by BX Risk & Finance COO and comprises leadership from Corporate Real Estate Solutions (CRES) and Location Strategy, Barclays UK COO, CIB and BBPLC COO, Group HR, Procurement and Sourcing, Group CIO/ GTIS, Corporate Communications, Climate risk, Sustainability & ESG, CFO BX, ESG Legal Counsel. OSSCo reviews and approves environmental operational targets, shares and reviews operational sustainability programmes and third-party solutions and identifies and mitigates risks to the delivery of the operational climate strategy, among other activities that ensure coordination and alignment across the strategic groups responsible for implementing the operational net zero strategy. OSSCo provides updates to Barclays PLC Board twice a year and provides quarterly performance updates to the group change programme on climate. Also, key material projects that entail Board approval are first approved by OSSCo and then presented to the Board by the accountable Function’s COO Executive Committee. For example, net zero operations real estate related projects will be presented by the Group Real Estate SteerCo (GRESCo). Additionally, reports on progress are submitted to GRESCo monthly and COO Executive Committee biannually. Disclosure Committee (DisCom) The DisCom, which is chaired by the Group Finance Director, has been set up as a sub- committee of the Group ExCo. DisCom is convened to review and monitor the integrity of the Group’s financial and narrative statements and other information provided to stakeholders, whether by means of announcement or otherwise. In addition to reporting to the Executive Committee, DisCom also reports to the Barclays PLC Board Audit Committee. DisCom is convened to undertake a number of specific duties, including: • financial reporting: to review and monitor the integrity of the Group’s financial statements, interim management statements, preliminary announcements (if prepared), and any other formal announcements relating to the Group’s financial performance. • narrative reporting: to review and monitor the integrity of the Group’s narrative statements, including but not limited to the Country Snapshot, ESG disclosures, the TCFD disclosures and the Modern Slavery Statement. Legal & Technical Committee The Legal & Technical Review Committee (L&T) is an accounting, legal and regulatory compliance committee. L&T submits its findings and recommendations concerning the legal and technical status of the documents to DisCom. L&T’s activities cover: • review of compliance with UK and relevant non-UK legislation, accounting and regulatory rules, guidance and best practice • review of the external financial reporting documents as relevant to satisfy itself that disclosures are materially fair and not misleading • identification of potential areas of challenge for divisional CFOs and points for consideration for the members of the DisCom. As the Chairman of the Disclosure Committee, the Barclays Finance Director would also be appraised of these matters • liaison with the Group’s Auditors and external legal advisers to monitor compliance with IFRS and SEC reporting requirements. Reputation Risk Committee The Reputation Risk Committee is a sub- committee of the Group ExCo which manages material reputation risks and issues as they are brought to the attention of the Committee via relevant reputation risk assessment and escalation processes. Group Change Programme on Climate The group change programme on climate (“the programme”) is focused on driving the execution of one of the three pillars of our Group Climate Strategy, ‘Reducing our Financed Emissions’, within which Barclays is committed to aligning its financing with the goals and timelines of the Paris Agreement, consistent with scenarios limiting the increase in global temperatures to 1.5°C. The programme is set up in line with the Barclays Change Delivery Management standard, with established governance and regular reporting and oversight at the Group’s Mission Critical Forum. The overall Accountable Executive of the programme is the Group Head of Sustainability, also the chair of its governance body (Climate Portfolio Governance Board), represented by key businesses and functions across the Group, such as Sustainability & ESG, Risk, Business (Corporate and Investment Bank and Barclays UK), Finance and Technology. Key focus areas of the programme since its inception include setting targets for some of our highest emitting sectors, establishing Climate risk as a new Principal Risk (as part of the Enterprise Risk Management Framework), embedding required processes and frameworks within the business to implement and manage sector targets, evaluating absolute emissions across the in scope balance sheet, and delivering to a technology roadmap to meet climate data requirements. Group Chief Executive Officer (Group CEO) The Group CEO is responsible for driving Barclays’ focus on external societal and environmental stewardship, and overseeing progress towards Barclays’ ambition to be a net zero bank by 2050. The Group CEO is Chair of Group ExCo. The Group CEO is closely involved in identifying, accelerating and promoting the development of Barclays’ climate and sustainable finance growth opportunities as we transition towards a low-carbon economy. In January 2022 the Group CEO established Barclays’ Climate and Sustainable Finance Council to catalyse sustainable finance developments for our customers and clients across all our businesses, products and services. During 2022, the Group CEO joined a number of global initiatives advocating for a just transition towards a low-carbon economy. The Group CEO is an active member of the Sustainable Markets Initiative (SMI), and attended the SMI CEO Summit in October 2022. Barclays is a member of the United Nations Environment Programme Finance Initiative (UNEP FI), where the Group CEO has recently joined the UNEP FI Leadership Council (November 2022). Chief Risk Officer (CRO) The Group CRO is accountable for the approach to managing climate-related financial and operational risks to Barclays. This encompasses the measurement, monitoring and limit setting for Climate risk and the supporting governance. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 252 ESG: Governance (continued) entity. Other governance bodies/ forums typically operate across the Group and oversee climate-related issues, risks and opportunities within their remit and escalate material issues as appropriate. These committees and forums follow the established escalation process for climate-related items, bringing updates first to the relevant Group ExCo member, then the Group ExCo, and ultimately to the Board. Implementation - business working level committees, forums and reports Principal Investments Equity Committee The Principal Investments Equity Committee (the “Committee”) undertakes the senior approval responsibilities relating to the execution and management of all principal strategic equity and workout equity transactions managed on behalf of Barclays PLC and all other Barclays Group entities. The formation and authority of this Committee comes from the Group CEO, acting through the Group Executive Committee. The Committee consists of senior stakeholders that meet on a regular basis which, when considering the ‘Sustainable Impact Capital’ portfolio, includes the Global Head of Sustainable Finance and Group Head of Sustainability for CIB. Climate and Sustainable Finance Council The Climate and Sustainable Finance Council (C&SFC), created by the Group CEO in 2022, is a forum of senior stakeholders that meet monthly. The C&SFC aims to identify, accelerate and promote the development of Barclays’ climate and sustainable finance growth opportunities for the benefit of our customers and clients across all our businesses, products and services. The C&SFC is not a decision-making body and sits outside of the formal executive governance structure; it does, however, provide guidance, encouragement and challenge to internal stakeholders on climate and sustainable financing solutions and related activities across the Group. Group Head of PPCR The Group Head of PPCR leads the bank’s overall sustainability and citizenship agendas. Specifically, the role is responsible for leading Barclays’ efforts in tackling climate change, and for integrating our ambition and commitments to help embed the transition towards a low- carbon economy into the business. Group Head of Sustainability The Group Head of Sustainability leads the Sustainability and ESG team, and the strategic direction and execution of Barclays’ policies and practices across a broad range of sustainability and ESG matters, including climate change. The role also oversees the development of standards and metrics to advance green and sustainable finance and to steward early innovation in sustainable product and service development. This role is responsible for Reputation risk issues arising from climate change, although the Board has overall responsibility for reputation matters generally. The Group Head of Sustainability reports directly to the Group Head of PPCR. Group Head of Climate Risk The Head of Climate Risk was appointed in July 2020 and is the Principal Risk Lead for Climate Risk. Being the Head of the Climate risk team, the role encompasses the development of Climate risk governance, including ownership of the Group’s Climate Risk Framework, and making recommendations on risk appetite, constraints and exclusions to BRC, informed by Barclays’ net zero ambition. Further responsibilities include leading the development of Climate risk methodologies and our approach to carbon modelling, including the BlueTrack™ model. The Head of Climate Risk reports directly to the Group CRO, and is the Chair of CRC. Group Head of Finance - Sustainability and ESG The Group Head of Finance - Sustainability and ESG was appointed in January 2022. The role encompasses leading Barclays global external, internal and regulatory reporting capabilities relating to sustainability and ESG, and tracking progress made across our businesses to meet our climate targets, which is fundamental to support our ambitions. This includes embedding climate-related disclosures such as the TCFD into our framework of disclosure procedures, governance and controls supporting the approval of the Group’s financial statements. Further responsibilities include embedding climate-related risks and opportunities into financial planning. Global Head of Sustainable Finance - Corporate & Investment Bank The Global Head of Sustainable Finance for the Corporate and Investment Bank (CIB) is a member of the CIB Management Team, reporting to the Global Head of the Corporate and Investment Bank and the Group Head of Public Policy and Corporate Responsibility. The role was created in 2022 to develop a centre of excellence for sustainable finance to support Barclays’ clients navigate the opportunities and challenges of transitioning towards a low- carbon economy. Barclays has a target to facilitate $1tn of Sustainable and Transition Financing by the end of 2030. The Group Head of Sustainable Finance for CIB is also a member of the Barclays Sustainable Impact Capital portfolio Investment Committee, which is investing up to £500m in sustainability-focused start-ups by 2027. The role partners closely with Barclays’ Sustainability and ESG teams on our Net Zero targets and environmental and social risk management and with the Head of Sustainable Finance in Barclays UK to deliver change across the firm. Head of Sustainable Finance - Barclays UK The role of Barclays UK Head of Sustainable Finance was created in 2022 with responsibility for the strategic direction and execution of the Barclays UK sustainability strategy. The role oversees the development and delivery of Barclays UK products and propositions to enable our retail and small business customers to adopt more sustainable practices – covering finance, tools, education and partnerships. The role also partners closely with the Barclays UK Government Relations team to develop advocacy positions, as well as Legal, Risk and Compliance functions to embed sustainability into processes and frameworks. The Head of Sustainable Finance is a member of the Barclays UK ExCo. Business / Legal Entity committees / forums Oversight and management of climate- related risks and opportunities occur at a number of levels in the organisation and across business lines and legal entities. Barclays operates through a combination of formal mandated committees and governance bodies/forums. The mandated committee structure operates on a legal entity basis and will oversee climate-related issues relevant to that Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 253 ESG: Governance (continued) Managing impacts in lending and financing Appropriate management of environmental and social impacts helps to ensure the longevity of our business and our ability to serve our clients. Enhanced Due Diligence Our standards include an enhanced due diligence approach for certain clients operating in energy sub-sectors covered by our Climate Change Statement (thermal coal mining, coal-fired power generation, mountain-top coal removal, oil sands, Arctic oil and gas projects and hydraulic fracturing ('fracking')) and clients in-scope of our Forestry and Agricultural Commodities, World Heritage and Ramsar Wetlands and Defence and Security standards where a similar approach is taken. All in-scope clients in these sub-sectors must be assessed annually via a detailed due diligence questionnaire, which is used to evaluate their performance on a range of environmental and social issues, and may be supplemented by a review of client policies / procedures, further client engagement and adverse media checks as appropriate. This annual review either generates an Environmental and Social Impact (ESI) risk rating (low, medium, high), or in the case of Defence and Security an assessment against risk appetite, which in turn determines whether further review and client engagement may be required throughout the year. Typically, high and certain medium ESI rated clients require further risk assessment prior to execution of transactions with those clients. We undertook 869 reviews in 2022, being a combination of annual due diligence reviews and individual transaction reviews, slightly fewer than the 903 we undertook in 2021. The number of reviews for 2022 reflects the maturity of the due diligence process and a reduction of out of scope referrals. At Barclays, we recognise the importance of risk identification and management in the provision of financial services to our customers and clients. Our assessment of environmental and social risks informs our wholesale credit risk management and helps safeguard our reputation. This supports the longevity of our business and also enhances our ability to serve our clients and support them in improving their own sustainability practices and disclosures. Managing environmental and social risks Environmental and social risks are governed and managed through our Enterprise Risk Management Framework (ERMF), setting our strategic approach for risk management by defining standards, objectives and responsibilities for all areas of Barclays. The ERMF is complemented by a number of other frameworks, policies and standards, all of which are aligned to individual Principal Risks. Our Climate Change Statement sets out our approach in relation to our climate change ambition and to managing the impact of our climate-related activities, including setting restrictive policies in respect of certain sensitive energy sub- sectors (thermal coal mining, coal-fired power generation, mountain-top coal removal, oil sands, Arctic oil and gas and hydraulic fracturing ('fracking'). We have also established positions on Forestry and Agricultural Commodities, World Heritage and Ramsar Wetlands and in the Defence and Security sector. In addition, we have developed internal standards for each of these which reflects these positions in more detail. These standards, which sit under the management of Reputation risk in the ERMF, determine our approach to climate change and relevant sensitive sectors and are considered as part of our existing transaction origination, review and approval process. Escalation and decision Where client relationships or transactions are assessed as higher-risk (high or medium ESI risk rating) or outside appetite (in the case of Defence and Security) following an enhanced due diligence review, they are then considered for escalation to the appropriate business unit review committee (e.g. Transaction Review Committee) or for clients in scope of our Climate Change standard, the Climate Transaction Review Committee (CTRC) for consideration and a decision on whether to proceed if transaction related. Business unit review committees comprise Business management and representatives from the control functions, including Reputation risk, whereas the CTRC includes representation from the Group Executive Committee. Should the front office business team, the Sustainability and ESG team and / or Climate risk team believe the issues are sufficiently material, these clients/ relationships would be escalated to the Group Reputation Risk Committee for more senior consideration and decision. GRRC also includes representation from the Group Executive Committee. These Committees may make the following determinations: • approve the transaction or relationship • reject the transaction or relationship • approve the transaction or relationship, subject to prescribed modifications • escalate the review of the transaction or relationship to the Barclays Group CEO. Monitoring As part of our management of environmental and social risks, we may require further client engagement in relation to the specific environmental and social risks that we have identified as part of our enhanced due diligence process. We have used this engagement as an opportunity to gain a more detailed understanding of the risks and challenges that the client is facing and to better understand any climate transition plan that they may have. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 254 ESG: Governance (continued) Environmental risk identification in Barclays UK Our property and land valuers can use our environmental screening product, Barclays SiteGuard, to assess the history of a piece of land and the operational implications of a site’s current or intended commercial use. In 2022, 386 (2021: 891) commercial properties were screened using a Barclays SiteGuard Report, with 155 cases in the waste sector referred (2021: 256 cases). The difference in the number of referrals made in 2022 reflect enhancements made to our assessment process. + Further details can be found in our Environmental risk in lending statement at: home.barclays/citizenship/ the-way-we-do-business/environmental-risks-in- lending/ Training To support Climate risk becoming a Principal risk from January 2022, mandatory training was completed by over 14,600 colleagues in selected teams across Risk, Compliance, Internal Audit, Markets Post Trade and the Business Bank. The training provided an overview of physical and transition risks to enable colleagues to identify, assess and manage Climate risk. Sustainability and ESG training with detail on our policies and approach to certain sensitive sub-sectors was delivered to 12,200 colleagues in selected teams across the Corporate and Investment Bank, Trade and Working Capital, Wholesale Onboarding and Group FCO, Finance and Public Policy and Corporate Responsibility. + Further details can be found on page 118 Environmental credit risks Environmental risk is regarded as a credit risk driver, and is considered within our credit risk assessment process. The Environmental Risk team is responsible for advising on the environmental and climate-related credit risks to Barclays associated with particular transactions. Environmental risks in credit are governed under the Client Assessment and Aggregation, Environmental Risk and Nuclear Industry Risk standards. These standards are part of the overall ERMF. In 2022, 361 (2021: 417) Environmental risk reviews were referred to the Environmental risk team across transaction originations and annual review cycles. The lower number of transaction reviews compared with last years's reflects increased awareness of environmental risks across the Credit risk function. Transactions and client relationships subject to social and environmental risk review 14 11 n Agriculture n Business and professional services n Chemicals n Commodity traders n Construction and engineering n Defence, aerospace and security n Infrastructure and transportation n Manufacturing n Metals and mining n Oil and gas n Paper and forestry n Power and utilities n Waste n Other 6 13 14 4 12 14 2022 2021 Total 869 Total 903 Equator Principles For project-related finance, we apply our Environmental Risk standard, which implements the Equator Principles and relevant International Finance Corporation (IFC) Performance Standards. Barclays was one of the four banks which collaborated in developing the Principles, ahead of their launch in 2003. During 2022, 1 of the 869 (2021: 3 of 903) transactions reviewed for social and environmental risks was captured in the scope of the Equator Principles. Our Environmental risk standard is supported by a toolkit for employees comprising a range of practical guidance documents. + Further details can be found at: equator-principles.com/ Equator Principles transactions 2022 Sector Mining Infrastructure Oil & Gas Power Others Region Americas EMEA APAC Country designation Designated Non-designated Independent review Yes No Finance type Project finance Category A B C 1 B 1 B 1 B 1 B 1 C C C C A A A A Category A: Projects with potentially significant adverse social or environmental impacts that are diverse, irreversible or unprecedented. Category B: Projects with potentially limited adverse social and environmental impacts that are few in number, generally site- specific, largely reversible and readily addressed through mitigation measures. Category C: Projects with minimal or no social or environmental impacts. Country Designation is based on the World Bank's income criteria. Projects in designated countries (High Income OECD members) are assessed only according to local laws. Projects in 'non-designated' countries are assessed according to local laws and the IFC's standards. 261673117053223128735252022423670243021536Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 255 ESG: Governance (continued) Deforestation and agricultural commodities Barclays recognises that deforestation is a key driver of climate change and biodiversity loss and is frequently linked with significant adverse human rights impacts. We are a signatory to the New York Declaration on Forests and its objectives of ending deforestation by 2030. We seek to support clients that promote sustainable land management practices while respecting the rights of workers and local communities. A major cause of deforestation is the production of agricultural commodities such as timber products, palm oil and soy, for which we have established a position statement and due diligence approach that applies to clients involved in these activities. Our approach is outlined in our Forestry and Agricultural Commodities Statement and includes specific requirements for clients in these sectors, such as requiring that they: • prohibit the conversion or degradation of primary forests, High Conservation Value (HCV) and High Carbon Stock (HCS) areas and peatlands • adhere to recognised certification schemes, such as the Forest Stewardship Council (FSC), Roundtable on Sustainable Palm Oil (RSPO) or Round Table on Responsible Soy Association (RTRS) • work to obtain the consent of indigenous and local communities affected by their operations through a credible, 'free, prior and informed consent' process. We have established a detailed due diligence questionnaire which we require these clients to complete on an annual basis to assess their alignment with the requirements of the Forestry and Agricultural Commodities Statement and other environmental and social criteria and seek to evaluate whether they are appropriately managing their material environmental and social impacts. We intend to update the Forestry and Agricultural Commodities Statement and client due diligence questionnaire in Q2 2023. Human rights Barclays is committed to operating in accordance with the International Bill of Human Rights and takes account of other internationally accepted human rights standards and frameworks, including the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises (OECD Guidelines). We take steps to ensure we are respecting human rights in our own operations through our employment policies, in our screening and engagement within our supply chain and through the responsible provision of our products and services. We have continued to progress our efforts to identify salient human rights risks associated with our client financing portfolio and on our plan to review our approach to managing these risks. We seek to proactively monitor issues and developments globally that may present new or elevated human rights risks and work to investigate our potential exposure to these and consider our responsibilities to seek to mitigate these risks. Our position statements and related due diligence approach for clients operating in certain sectors with elevated environmental and social impacts, seek to include consideration of human rights impacts. For example, we include specific due diligence questions around respect for Indigenous Peoples’ rights, health and safety and provision of security in our due diligence questionnaires for clients in energy sub-sectors such as fracking and oil sands which are covered under our Climate Change Statement. Modern slavery in our supply chain We recognise that the nature of our business means we may be exposed to modern slavery risks across our operations, supply chain, and customer and client relationships. We are conscious of the links between human rights abuse, labour exploitation, human trafficking and environmentally destructive practices. Therefore, we are focusing our efforts on the delivery of actions specifically designed to seek to identify and try to address modern slavery and other exploitative practices in our supply chain, in collaboration with our environmental experts. Regardless of the industry or geography in which our suppliers operate, we require of them to comply with applicable laws and regulations. Barclays' standard approach to new supplier onboarding and renewal begins by assessing the services that are being provided and ascertaining the level of risk. Suppliers that are assessed as being at a heightened risk of exposure from a business risk perspective are subject to Barclays' Supplier Control Obligations. Assessment of suppliers against these controls may include, but is not limited to, reviewing copies of employment and health and safety policies and requesting suppliers to attest to supporting our expectations defined in the Third Party Code of Conducta (TPCoC). + Further details on Barclays Supplier Control Obligations can be found at: home.barclays/who-we- are/our-suppliers/our-requirements-of-external- suppliers/external-supplier-control-obligations/ The TPCoC makes specific reference to the International Labour Orgnization (ILO) Core Conventions and the UK Modern Slavery Act 2015 and is owned by Barclays’ Chief Procurement Officer. It outlines the behaviours we encourage in our supply chain and seeks to align the practices of our suppliers with our own policies. This includes on issues such as freely chosen employment (work that is completed voluntarily and without slavery, servitude, forced or compulsory labour and human trafficking) and practices, the absence of which could lead to exploitation in any complex global supply chain, such as lack of access to an independent whistleblowing process and grievance mechanism. In 2022, we incorporated new contract clauses focusing on modern slavery into our standard supplier terms and conditions, which will apply to new contracts and contract renewals moving forward. Specifically, these clauses prohibit suppliers from using forced, bonded or involuntary prison labour, human trafficking, child labour or modern slavery practices, which include practices such as the retention of personal identification or immigration documentation and denying individuals the freedom to leave their employment. Our contract negotiators are being supported by a dedicated in-house expert advisor during implementation of these new terms. We continue to include modern slavery and sustainability-related considerations during the sourcing processes for key products or services in categories identified as presenting with an elevated inherent risk of modern slavery, such as the renewal of our major IT services contract, purchase of large IT hardware and printing solutions. We aim to work with the service providers that make up 70% of our Addressable Spendb to encourage them to have a Modern Slavery policy or standard in place by 2025. We continue to track our progress in line with this target. + Further details on our Forestry and Agricultural Commodities Statement and Barclays Group Statement on Modern Slavery can be found at: home.barclays/sustainability/esg-resource-hub/ reporting-and-disclosures/ Notes a We do have relationships with financial institutions and market counterparties which, because of the nature of the services being provided (such as international account holding services), are not subject to our usual supplier on-boarding procedures and which are therefore not subject to the TPCoC. Addressable Spend is defined as external costs incurred by Barclays in the normal course of business where Barclays has influence over where the spend is placed. It excludes costs such as regulatory fines or charges, exchange fees, taxation, employee expenses or litigation costs. b Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 256 ESG: Governance (continued) The Barclays Way The Barclays Way is our Code of Conduct. Together with more formal policies and practices, this provides a clear path towards achieving a positive and dynamic culture within the Group. The Barclays Way was launched in 2013, replacing a number of existing codes of conduct with a single document. Endorsed by our Chairman, it governs our way of working across our business globally and constitutes a reference point covering all aspects of colleagues’ working relationships, specifically but not exclusively with other Barclays employees, customers and clients, governments, regulators, business partners, suppliers, competitors and the broader community. It is aligned to the Code of Professional Conduct, published by the Chartered Banker Professional Standards Board, which sets out the ethical and professional attitudes and behaviours expected of bankers. Barclays subscribes to this code and is committed to embedding its broad principles into our business. The Barclays Way includes information and guidance on how employees are expected to behave and take personal accountability for making decisions. We apply a range of criteria, over and above financial considerations, aimed at building a sustainable, strong and profitable business for the long term and adding value to our business relationships and the broader communities in which we live and work. We provide guidance across all key stakeholder groups, including servicing our customers and clients, promoting respect, diversity and performance in the workplace and maintaining strong governance, robust controls and strict ethical standards. The Barclays Way also includes advice and guidance on speaking up and raising concerns. It is important for the success of Barclays, and for the safety and wellbeing of our customers, clients and colleagues, that we encourage a culture that supports speaking up when things aren’t as they should be. All colleagues are required to undertake training on The Barclays Way. We know that our success over the long term is based not just on how well we run the organisation commercially, but also on how well we manage it to protect the environment, support positive social progress and make responsible, well- governed decisions. We are focused on the areas where we can have the greatest long-term impact: making growth ‘green’, sustainable and inclusive; managing the environmental and social impacts of our business; running a responsible business; and investing in our communities. Employee survey results % "I believe that my team and I do a good job of role modelling the Values every day" 2022 2021 % of colleagues completing mandatory training on The Barclays Way 99% + The Barclays Way Code of Conduct is available at: home.barclays/citizenship/the-way-we-do-business/ code-of-conduct/ Our commitment to being a responsible business includes seeking to ensure that: • we conduct ourselves in line with The Barclays Way, our Code of Conduct, to create the best possible working environment for our colleagues • we treat our customers fairly and the products and services we deliver are transparent and responsible • we operate in line with relevant laws and regulations including those applicable to financial crime • we safeguard the data that has been entrusted to us. Our Code of Conduct reflects the trust that millions of people place in us every day. We know that trust is earned by repeatedly doing the right thing. We believe the best way to build that trust is to invest in our culture and support our people in the choices they make every day, with guidance and policies that help them do this. That starts with our Purpose, Values and Mindset, and is locked into our organisation through The Barclays Way, the touchstone for everyone in Barclays on the standard of conduct we expect, setting an unequivocal tone from the top about who we are and what we stand for. In challenging times such as these, it is more important than ever that we conduct ourselves in the right way. The Barclays Way sets out the standards of behaviour we should all aspire to in our professional lives. It is a guiding light for everyone in Barclays, helping us to make the right decisions every day. 9292Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 257 ESG: Governance (continued) Whistleblowing We want to continue to foster a culture where our colleagues feel safe to speak up. Barclays is committed to providing a respectful and inclusive environment to work in and colleagues are encouraged to speak up about actions and behaviours that have no place in the organisation. Individuals are encouraged to speak up directly to their management, Compliance, HR or Legal. However, where they do not feel comfortable using these avenues, the Raising Concerns process is in place. 83% of global respondents of the 2022 Your View survey said it was 'safe to speak up'. The Raising Concerns team will carefully assess the concerns raised and refer them to the most appropriate team for review and, where appropriate, investigation. All concerns are taken seriously and managed sensitively and confidentially. Details about the Raising Concerns reporting channels are available both internally and externally. Whistleblowing is a core element of Raising Concerns at Barclays and any concerns assessed as whistleblowing will be directed to a dedicated team within Compliance. Whistleblowing relates to concerns which fall within the wider public interest, such as a breach of our policies and procedures; breaches of law and regulation; and behaviour that harms or is likely to harm the reputation or financial wellbeing of the Group. All whistleblowing reports are taken seriously, and controls are in place to protect whistleblowers’ identities and confidentiality. Barclays has a zero-tolerance approach to retaliation against any whistleblower or any individual who has provided information as part of an investigation. Any confirmed instances of retaliation will be dealt with extremely seriously and may result in disciplinary action, including dismissal. Annual mandatory training is delivered to colleagues regarding the whistleblowing programme. In 2022, the whistleblowing team opened a total of 52 whistleblowing concerns, down 61% from the year before (2021: 134), including 13 retaliation concerns. The fall in concerns is attributed to a number of factors, including the impact of the pandemic. 72 whistleblowing matters were closed in 2022, of which 15% were found to have some level of substantiation. None of the retaliation concerns closed in 2022 were substantiated. Other issues were identified in a further 25% of whistleblowing concerns. 66 actions were defined to address issues identified during the course of whistleblowing investigations. These primarily included recommendations to enhance processes and procedures. The Chair of the Group Board Audit Committee is the Group Whistleblowers’ Champion and the Chair of the Barclays Bank UK PLC (BBUKPLC) Board Audit Committee is the BBUKPLC Whistleblowers’ Champion. They have responsibility for ensuring and overseeing the integrity, independence and effectiveness of Barclays’ whistleblowing programme across their respective entities. Their oversight is supported by periodic impartial reviews of the end-to-end whistleblowing process. Barclays also works with Protect, the UK Whistleblowing Charity. Whistleblowing cases closed by region 72 Cases closed in 2022 Whistleblowing cases opened by (top 4) categories 1. Breach of controls, process or other 6 4 C a s e s o p e n e d i n 2 0 2 2 2. Retaliation 3. Breach of policy 15 13 11 4. Financial crime 5 5. Other 8 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 258 ESG: Governance (continued) Tax Barclays supports a fair and transparent tax system. Barclays was ranked as the fifth-largest UK taxpayer; in terms of taxes paid, in the December 2022 PwC Total Tax Contribution survey of the One Hundred Group. Barclays has a responsible approach to tax, strong governance and risk management over tax risk and is committed to transparency around tax. + For further details, see our Country Snapshot Report at: home.barclays/annualreport Taxes paid globally £2,255m Taxes paid globally £m n Corporation tax and withholding taxes n Employer payroll taxes n Irrecoverable VAT n Bank levy n Other taxes including business rates 2021 taxes paid globally £2,781m Tax contribution We continue to make substantial tax contributions across the jurisdictions in which we operate, both in terms of taxes paid and taxes collected. Our total tax contribution for 2022 was £5,572m. This includes taxes paid of £2,255m which represent a cost to us, and taxes collected on behalf of governments of £3,317m. Barclays was ranked as the fifth-largest UK taxpayer, in terms of taxes paid, in the most recent PwC Total Tax Contribution survey of the One Hundred Group (‘100 Group’). The 100 Group represents members of the FTSE 100 along with several large UK private companies. Over the last decade, we have consistently been ranked as one of the top five largest UK taxpayers, paying over £14bn of taxes in the UK alone. Approach to tax Barclays’ Purpose is 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. Our approach to taxation, also known as our tax strategy, is aligned with this Purpose as well as our Values of Respect, Integrity, Service, Excellence and Stewardship. Our approach to tax has three core objectives: • responsible approach to tax, • effective interaction with tax authorities and • transparency in relation to our tax affairs. We manage our tax affairs in accordance with our Tax Principles, Tax Code of Conduct and HMRC’s Code of Practice on Taxation for Banks and aim to file our returns on time and pay the correct amount of tax. We are committed to only dealing with customer or client assets that have been appropriately declared to the relevant tax authority. We are committed to being a leader in tax transparency. We have published details of the taxes we pay by country and our approach to tax since 2013, and have chosen to expand external publications such as the Country Snapshot. We make clear disclosures to tax authorities. Our Country Snapshot is publicly available and sets out our approach to tax in detail, including our Tax Principles. Our Country Snapshot, including our UK tax strategy is reviewed and approved annually by the Barclays PLC Board Audit Committee. Key highlights on our approach to tax include: • we follow clear Tax Principles that we have published. These allow us to balance the needs of all our stakeholders and make clear that tax planning must support genuine commercial activity, • as a result of this approach, transactions which artificially transfer profits into a low tax jurisdiction would not be consistent with our Tax Principles, • we seek to comply with the spirit as well as the letter of the law and we take account of established practice in the territories in which we operate. We are transparent in both the disclosure of our tax affairs to tax authorities as well as our tax reporting to other stakeholders; and • we aim to comply with all of our tax obligations in the territories in which we operate and where there is uncertainty we may seek external tax advice in order to help ensure our tax filings are appropriate. 68870159020274Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 259 ESG: Governance (continued) Tax governance, control and risk management As a Globally Systemically Important Bank, our Group-wide risk and governance procedures are subject to continuous review and scrutiny. More details on our approach to tax governance, control and risk management can be found in our Country Snapshot, the key highlights of which include: • our Board has ultimate responsibility for tax matters and the Board Audit Committee oversees our approach to tax, • at Barclays, risks are identified and managed through our ERMF, which supports the business in its aim to embed effective risk management and a strong risk management culture. Under the ERMF risk, including tax risk is managed in accordance with a ‘three lines of defence’ model, • as part of the ‘first line of defence’ the tax department identifies and manages tax risk by developing appropriate policies, standards and controls to apply across our organisation. Risk and Compliance comprise the ‘second line of defence’, and Barclays Internal Audit are the ‘third line of defence’, and these functions review, challenge and provide assurance to the Board in relation to the effectiveness of governance, risk management and controls including those relating to tax risk, • we are subject to the Sarbanes-Oxley Act control requirements in relation to financial statements disclosures including those related to tax, • our tax department comprises appropriately qualified in-house professionals who are subject to clear standards including that they uphold our Tax Principles and follow our tax code of conduct, which is an integral part of how we operate, • our governance requires that suitably qualified people are involved in decisions related to tax, tax is fully taken into account when making business decisions and tax risk is identified, assessed and kept under review, and • we have no tolerance for tax evasion and have well-established mechanisms for raising concerns about unethical or unlawful behaviour through our ‘Whistleblowing’ policy, which applies equally to tax matters. Stakeholder engagement and management of concerns related to tax: Our reputation is very important to us and we take our external stakeholders’ expectations into account when we make decisions in relation to our tax affairs. More details on our approach to stakeholder engagement and managing stakeholder concerns related to tax can be found in our Country Snapshot, and key highlights include: • we believe that it is important to be transparent in the disclosure of our tax affairs both to tax authorities and stakeholders more broadly, • our dealings with tax authorities are handled proactively, constructively and transparently, in real-time where possible, • we recognise that early resolution of our tax affairs is in everyone’s interest. We have ongoing engagement with tax authorities to discuss their inquiries and material issues in relation to our tax affairs, and we respond to feedback from tax authorities, • where we face significant uncertainty in relation to the application of tax law, we may seek to agree with the tax authority how the tax law should apply, • where relevant we seek to reach agreement with tax authorities using mechanisms available to all taxpayers including Advance Pricing Agreements and Mutual Agreement Procedures to clearly establish in which territories our profits should be taxed, • we engage with governments, tax authorities and NGOs through public consultations and other discussions to assist with the development of tax policy and the improvement of tax systems, and maintain our transparency with these stakeholders; and • we cooperate with tax authorities globally to reduce the scope for individuals and companies to evade tax, and have met all of our 2022 information reporting obligations under the Common Reporting Standard and Foreign Account Tax Compliance Act. + The BPLC Board Audit Committee is responsible for considering the Group's tax strategy and overseeing compliance with the Group's Tax Principles. Please refer to page 174 for details of BPLC Board Audit Committee oversight of tax related matters Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 260 ESG: Governance (continued) Financial crime Barclays recognises that economic crimes have an adverse effect on individuals and communities wherever they occur. Endemic economic crime can threaten laws, democratic processes and basic human freedoms, impoverishing states and distorting free trade and competition. Barclays recognises that financial crimes have an adverse effect on individuals and communities wherever they occur. Endemic financial crime (particularly when associated with organised crime and terrorist financing) can threaten laws, democratic processes and basic human freedoms, impoverishing states and distorting free trade and competition. Barclays is committed to conducting its global activities with integrity and respecting its regulatory, ethical and social responsibilities to: a. protect employees, customers, and others with whom we do business b. support governments, regulators and law enforcement in wider financial crime prevention. We will not tolerate any deliberate breach of financial crime laws and regulations that apply to our business and the transactions we undertake. Barclays has adopted a holistic approach to financial crime and has one Group-wide Financial Crime Policy that sets the control requirements in four key risk areas. The Financial Crime Policy applies to all our businesses, legal entities and employees. Employees receive training on financial crime risk management and are made aware that failure to comply with the Financial Crime Policy may give rise to disciplinary action, up to and including dismissal. Anti-Bribery & Corruption Bribery and corruption constitutes of: a. improperly obtaining or retaining business; and/or b. improperly securing a business or personal advantage; and/or c. inducing another person to perform their role in breach of an expectation of good faith, impartiality or trust. Barclays and its employees are prohibited from engaging in or facilitating any form of bribery and corruption (giving and receiving, directly or indirectly). The Financial Crime Policy contains the minimum risk-based control requirements that all our businesses, legal entities and employees must follow. The Financial Crime Policy is designed to ensure that Barclays’ employees know how to identify and manage the legal, regulatory and reputational risks associated with all forms of bribery and corruption. Anti-Money Laundering Money laundering (including terrorist financing and the proliferation of nuclear, chemical or biological weapons) has been identified as a major threat to the international financial services community and therefore to Barclays. The Financial Crime Policy is designed to ensure that all our businesses and legal entities have adequate systems and controls in place to mitigate the risk of the firm being used to facilitate money laundering. As a transatlantic bank, the Financial Crime Policy takes into account EU and US anti- money laundering requirements, as well as guidance issued by bodies such as the Wolfsberg Group and the European Banking Authority. Anti-Tax Evasion Facilitation Tax evasion is a financial crime and a predicate offence to money laundering in the UK and many other countries in which we operate. Barclays takes a zero- tolerance approach to deliberate facilitation of tax evasion in any country and has procedures in place to prevent it. We also expect the same from our employees and third parties providing services for or on our behalf. Barclays is committed to: a. dealing only with customers who have appropriately declared their assets to the relevant tax authorities; and b. preventing tax evasion facilitation by our employees or third parties acting for or on our behalf. Sanctions Sanctions are restrictions on activity with targeted countries, regions, governments, entities, individuals and industries that are imposed by bodies such as the European Union, the United Nations, groups of countries, or individual countries, such as the United Kingdom and the United States. In order to protect its reputation and other legitimate business interests, in certain circumstances, Barclays' risk appetite for sanctions may be stricter than its legal obligations. The Financial Crime Policy is designed to ensure that all our businesses, legal entities and employees know how to identify and manage the risks associated with sanctions, including the risk that activity is undertaken through Barclays in breach of sanctions regulations. + For further details of the Barclays approach to Financial Crime compliance and prevention, please see our Financial Crime Compliance Statement in the ESG Resource Hub at home.barclays/esg-resource- hub/reporting-and-disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 261 ESG: Governance (continued) Health and Safety Barclays has a comprehensive Health and Safety Management System (HSMS) operating globally, which is independently certified to the international standard ISO45001 in the USA, UK, India and Asia PAC. Barclays has a suite of Health and Safety (H&S) Policies and Standards that combine together under a single high-level statement of commitment endorsed by the Group ExCo. H&S policies are owned by three risk horizontals – Premises, People and Physical Security. Each Horizontal manages specific hazards through the Group Policies and Standards. Barclays has global risk assessments, which identify the hazards and controls needed to reduce risks to as low as reasonably practicable.These are underpinned by local regulatory requirements and procedures. The Barclays H&S Hazard Register is published on the Barclays H&S Service intranet and all required changes to controls and policy content are tracked through to completion within the annual policy standard refresh. Where applicable, our suppliers are subjected to obligations to adhere to our minimum H&S requirements and vetted during the onboarding process and through annual reviews by conducting an assessment of their activities to identify applicable controls (including Health and Safety). Barclays is supported by a Health and Safety Team, operating globally, who provide support, competent advice and assurance where required. Measure Number of High or Exceptional Accidents Lost Time Incidents (per 100 employees) % Completion Mandatory Training Q1 2022 Q2 2022 Q3 2022 Q4 2022 0 0.0074 99% 0 0.012 99% 0 0.019a 99.6%b 0 0.023a 99.9%b Notes: a. b. Increase to LTIR is due to increased activities on site following Covid restrictions being lifted Reason for change from Q1&Q2, is due to new H&S Mandatory training launched at end of Q2 Information and knowledge is available through our intranet global safety hub, which provides key information on minimal H&S requirements, hazard register, risk assessments, training and templates (for fire evacuation personal plans, Display Screen Equipment (DSE), stress, lone working etc). This year, we have taken learnings from the coronavirus pandemic and maintained a number of enhanced procedures put into place during that time such as enhanced hygiene and cleaning which kept our colleagues and customers safe and included within a refresh of our mandatory training for H&S achieved 99.8% completion. We have also introduced additional health, safety and wellbeing training for working at home. There is a programme of technical and site risk assessments to ensure the hazards and risk controls remain relevant and to identify emerging themes and trends. On-site monitoring is undertaken across our portfolio by the Barclays H&S team through our building facilities management partners for corporate sites, and Customer Care Leads for our retail network. Working with the Chief Security Office (CSO), there are processes and procedures in place to cover terrorism, disasters, fire and other emergency evacuations. These are tested on a programme schedule as required by our minimum requirements or (if more stringent) local regulatory requirements. Incident reporting systems exist to ensure incidents are captured and investigated enabling a review to take place of the hazard profile of the organisation. Review of incident data is completed by each region, reviewed at the Group H&S Forum and lessons learned shared. Incidents are reported and escalated as required by local regulatory statute, along with the principle of Barclays’ risk framework for risk issues and events. The Health and Safety Risk Management Framework over view is as follows: Leadership H&S Data Health and Safety Forum Statement of Commitment for Health and Safety Data: Performance against commitment Horizontal Premises People Physical Security Risks Harm to people through physical injury (excluding injuries caused by Physical Security related incidents) Harm to people related to mental health or mismanagement of employees impacting personal welfare L.3 Physical security incidents resulting in harm to staff or external parties L3 Policies Health and Safety (Premises & Infrastructure) Policy People Risk Health & Wellbeing Policy Group Physical Security Policy Standards Health and Safety (Premises & Infrastructure) Standard People Risk Health & Wellbeing Standard Group Physical Security Standard Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 262 ESG: Governance (continued) Managing data privacy, security and resilience We have strict policies to protect privacy and keep data secure. Barclays provides a public mailbox and secure channels via its website to enable individuals to make their privacy requests and receive responses from a dedicated team. Barclays requires its suppliers to comply with data protection and privacy laws, regulations and standards relevant to the jurisdictions in which they operate and relevant to any transferred personal data. Our requirements are set out and managed through the Barclays Supplier Control Obligations, available online, which look to provide assurance that all new and existing suppliers commit to ensuring personal data shared with them is safeguarded and respected throughout the supply chain. Data security In 2022, we continued to strengthen our data security policies and controls to protect Barclays' sensitive information and the data that has been entrusted to us by customers and clients. Barclays assesses its cybersecurity programme against the industry- recognised National Institute of Standards and Technology (NIST) Cyber security Framework, and we have adopted the extended Financial Services Sector Profile. During 2022, we have continued to deploy automated controls which work to discover data that is highly sensitive that needs to be protected in line with our standards. As Barclays accelerates the migration of digital services to the cloud, we apply the same design principles that underpin our existing control environment. We have strong controls and monitoring in place designed to secure cloud-hosted data and maintain its integrity. Barclays has continued to take steps in 2022 to address the security of data we share with third parties, including conducting remote and on-site inspections with certain suppliers to review their controls against contractual obligations and industry standards. A Third Party Service Provider Framework is in place which sets out control requirements for business units to manage the operational, reputational, conduct and legal risks to Barclays through its supply chain. As we have transitioned to a more hybrid working model, we have augmented the education we provide to colleagues and strengthened the monitoring of how customer and client data is accessed and used to help minimise the risk of exploitation or leakage. Data resilience The Barclays CSO has a set of preventative key controls that mitigate cyber-related risks. These focus on understanding internal and external threats and delivering our capability to counteract them. Large-scale data corruption is one cyber threat on which we are focused. Major risk events have been seen in other organisations and Barclays is focused on continuously reviewing and improving our response and recovery plans in preparation for these evolving threats. Our teams use intelligence to create plausible cybersecurity and data compromise scenarios which we simulate to help us focus on continuous improvement. Data privacy Most of the jurisdictions in which Barclays operates have privacy and data protection laws in effect. While these may vary in detail, generally they reflect internationally recognised privacy principles found in the UN’s Universal Declaration of Human Rights, the European Convention on Human Rights and the European Union’s Charter of Fundamental Rights. We strive to operate in accordance with these standards and recognise that respect for privacy rights is a key element of good corporate governance and social responsibility. We strive to be transparent about our use of personal information when delivering our products and services and acknowledge the responsibility we have for safeguarding privacy. As Barclays increasingly adopts digital solutions to deliver next-generation consumer financial services, we appreciate our clients, customers and others may have concerns about the use of their personal information. A globally applicable Barclays Data Privacy Standard sets out what is expected of all Barclays businesses and functions when collecting, using and sharing personal information. To promote clear accountability, the Standard includes the requirement for each business to appoint an accountable executive who has ultimate responsibility for the processing of personal data within that business. An agreed assurance programme measures compliance with the Data Privacy Standard. Barclays colleagues must complete annual privacy training which is reviewed and refreshed each year, with additional tailored training provided as necessary. The Group Data Protection Officer (DPO) reports on data privacy issues to the highest level of management. Through customer and employee privacy notices, we endeavour to explain clearly and openly how and why we use personal information and the legal grounds we rely on. When we receive complaints we seek to address them fairly. Several jurisdictions also provide individuals with specific rights, such as the right to have access to or request deletion of their personal information. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 263 ESG: Governance (continued) Operational resilience Customers and clients have increased expectations for us to be ‘Always On’ and the interconnectivity of the financial sector means the stability and resilience of our systems, workforce and continued provision of third-party services all have a direct impact on the quality of our service. Barclays continues to invest in a multi-year resilience programme which is focused on our ability to recover from ‘severe but plausible’ scenarios which could cause detriment to our customers and clients and the broader financial market. To enable this, we define Group-wide business services and their interdependencies across the Group, including technology, third-party services and our workforce and develop the recovery plans and business response plans required should a disruption event occur. We work to review and validate these mechanisms on an ongoing basis through regular testing, with the aim of reducing the volume and impact of operational incidents year on year. We also conduct regular assurance on third parties to assess their capability. Resilience and security is set as a priority from the Barclays PLC Board and is the responsibility of everyone within the Group. Every colleague must complete mandatory training at regular intervals across the year. Please refer to pages 184 for details of Barclays PLC Board Risk Committee oversight relating to operational resilience. Please refer to the 'Material existing and emerging risks' section in our Risk review on pages 269 to 281 for further details on cyber-attacks, data management and information protection. Please refer to the 'Supervision and regulation' section in our Risk review on pages 370 to 377 for further details on our regulatory approach to managing such risks. Chief Security Office The Chief Security Officer for the Group heads the Chief Security Office and reports directly to the Chief Operating Officer, who sits on the Group Executive Committee. The Global Chief Information Security Officer (CISO) for the Group reports directly to the Chief Security Officer and is supported by a team of CISOs for individual business units and jurisdictions. CSO leadership manages Barclays’ cybersecurity programme and is accountable for the day-to-day monitoring of residual risk, identification of gaps, oversight of remedial actions and implementation of strategy. The Group has an Information and Cyber Security Policy supported by 10 Standards which define the minimum requirements for cyber security matters across the entire Barclays Group. These Standards cover topics such as Vulnerability Management, Cryptography, Network and Data Security, Access Management, Insider Threat and Incident Response. An important part of Barclays’ cybersecurity programme is its Joint Operations Centres (JOCs), which operate 24x7x365 from three globally strategic locations, linking CSO’s security professionals and incident response managers with control functions and business unit representatives. Within CSO, Barclays has a dedicated External Cybersecurity Assurance & Monitoring (ECAM) team that uses a risk- based approach to assess, monitor and respond to threats relating to third-party service providers. Certifications Barclays holds three ISO27001 certifications (being the international standard on how to manage information security) and successfully renewed the Triennial Recertification for Barclays Corporate Banking (Government Banking Service). Barclays also has a UK certification for Digital Banking. Reporting phishing The CSO performs a number of key activities related to identifying, investigating, responding to and containing phishing / malicious email incidents. The CSO has embedded an operational process that provides education and awareness content via email to colleagues who clicked a malicious link or attachment in a phishing email, with escalating training exercises and management interventions for repeated instances. All colleagues have a reporting tool integrated into their email account, enabling them to report suspected phishing mails to Barclays JOC for further investigation and receive feedback on whether the reported mail was suspect, genuine or part of an educational campaign. Training Barclays has adopted a 65-day window for mandatory training completion to allow colleagues sufficient time to complete training. The consequence of non- completion is a breach which can lead to disciplinary action and impact compensation. The 65-day window covers many different colleague situations, including new joiners, returners from sick leave or parental leave and internal movers. Some of these situations are required by law to have a reasonable adjustment time to enable the successful completion of training. This process is managed by Barclays HR and Compliance. Risk review The management of risk is a critical underpinning to the execution of Barclays’ strategy. The material risks and uncertainties the Group faces across its business and portfolios are key areas of management focus. Risk management strategy Overview of Barclays’ approach to risk management. A detailed overview together with more specific information on policies that the Group determines to be of particular significance in the current operating environment can be found in the Barclays PLC Pillar 3 Report 2022 or at barclays.com Material existing and emerging risks Insight into the level of risk across our business and portfolios, the material existing and emerging risks and uncertainties we face and the key areas of management focus. Enterprise Risk Management Segregation of duties – the ‘Three Lines of Defence’ model Principal risks Credit risk Market risk Treasury and Capital risk Liquidity risk Capital risk IRRBB Operational risk Tax risk Model risk Conduct risk Reputation risk Legal risk Page 266 266 268 268 268 268 269 273 274 275 275 275 276 276 276 279 279 279 280 280 Pillar 3 Report 93 93 93 94 95 97 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Principal risk management Barclays’ approach to risk management for each principal risk with focus on organisation and structure and roles and responsibilities. Climate risk management Credit risk management (audited) Market risk management (audited) Treasury and capital risk management Model risk management Operational risk management Conduct risk management Reputation risk management Legal risk management Climate risk performance Carbon-related assets Risk performance Credit risk performance Elevated risk sectors Financing (capital markets) Risk performance Maximum exposure and effects of netting, collateral and risk transfer Expected Credit Losses Movement in gross exposures and impairment allowance including provisions for loan commitments and financial guarantees Management adjustments to models for impairment (audited) Measurement uncertainty and sensitivity analysis Analysis of the concentration of credit risk The approach to management and representation of credit quality Analysis of specific portfolios and asset types Credit cards, unsecured loans and other retail lending 335 Market risk performance Market risk overview and summary of performance Treasury and capital risk performance Treasury and Capital risk Forbearance Operational risk performance Capital risk overview and summary of performance Interest rate risk in the banking book Operational risk overview and summary of performance Operational risk profile Model risk performance Model risk overview Conduct risk performance Conduct risk overview Reputation risk performance Reputation risk overview Legal risk performance Legal risk overview Supervision and regulation 337 341 343 355 364 366 366 368 368 368 369 370 Page 282 289 291 291 293 293 294 295 295 296 296 298 300 302 304 Pillar 3 Report 104 107 139 154 168 164 171 173 175 N/A N/A N/A N/A N/A N/A 308 N/A 315 317 326 328 333 N/A N/A N/A N/A N/A N/A N/A 79 N/A N/A N/A 89 91 N/A N/A N/A N/A N/A Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 266 Risk management Barclays’ risk management strategy This section introduces the Group’s approach to managing and identifying risks, and for fostering a sound risk culture. Enterprise Risk Management Framework (ERMF) The ERMF outlines the highest level principles for risk management by setting out standards, objectives and key responsibilities of different groups of employees of the Group. It is approved by the Barclays PLC Board on recommendation of the Group Board Risk Committee and the Group Chief Risk Officer. The ERMF sets out: ▪ principal risks faced by the Group, which guide the organisation of risk management processes ▪ ▪ ▪ risk appetite requirements. This helps define the level of risk we are willing to undertake in our business risk management and segregation of duties: The ERMF defines a Three Lines of Defence model roles and responsibilities for key risk management and governance: The accountabilities of the Group CEO, Group CRO and other senior managers, as well as an overview of Barclays PLC committees. The ERMF is complemented by frameworks, policies and standards which are mainly aligned to individual principal risks: ▪ frameworks cover high level principles guiding the management of principal risks, and set out details of which policies are needed, and high level governance arrangements ▪ policies set out the control objectives and high level requirements to address the key principles articulated in their associated frameworks. Policies state ‘what’ those within scope are required to do ▪ standards set out the detail of the control requirements to ensure the control objectives set by the policies are met. Segregation of duties – the ‘Three Lines of Defence’ model The ERMF sets out a clear lines of defence model. All colleagues are responsible for understanding and managing risks within the context of their individual roles and responsibilities, as set out below. ▪ The First line comprises all employees engaged in the revenue-generating and client-facing areas of the Group and all associated support functions, including Finance, Operations, Treasury, and Human Resources. The first line is responsible for identifying and managing the risks in which they are engaged, operating within applicable limits, and escalating risk events or issues as appropriate. Employees in the first line have primary responsibility for their risks and their activities are subject to oversight from the relevant parts of the second and third lines. ▪ The Second line is comprised of the Risk and Compliance functions. The role of the second line is to establish the limits, rules and constraints, and the frameworks, policies and standards under which all activities shall be performed, consistent with the risk appetite of the Group, and to oversee the performance of the firm against these limits, rules and constraints . Controls for first line activities will ordinarily be established by the control officers operating within the control framework of the firm. These will remain subject to oversight by the second line. ▪ The Third line of defence is Internal Audit, who are responsible for providing independent assurance over the effectiveness of governance, risk management and controls over current, systemic and evolving risks. ▪ The Legal function provides support to all areas of the bank and is not formally part of any of the three lines of defence, The Legal function is responsible for the identification of all Legal and Regulatory Risks. Except in relation to the legal advice it provides or procures, it is subject to second line oversight with respect to its own operational and conduct risks, as well as with respect to the Legal and Regulatory Risks to which the bank is exposed. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 267 Risk management (continued) Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 268 Risk management (continued) Principal risks The ERMF identifies nine principal risks namely: credit risk, market risk, treasury and capital risk, climate risk, operational risk, model risk, conduct risk, reputation risk and legal risk. Note that climate risk was added in January 2022; see page 273 for more information. Each of the principal risks is overseen by an accountable executive within the Group who is responsible for overseeing and/or assigning responsibilities for the framework, policies and standards that set out associated responsibilities and expectations and detail the related requirements around risk management. In addition, certain risks span across more than one principal risk. Risk appetite Risk appetite is defined as the level of risk which the Group is prepared to accept in carrying out its activities. It provides a basis for ongoing dialogue between management and Board with respect to the Group’s current and evolving risk profile, allowing strategic and financial decisions to be made on an informed basis. Risk appetite is approved by the Barclays PLC Board in aggregate and disseminated across legal entities and businesses, supported by limits to enable and control specific exposures and activities that have material concentration risk implications. Risk committees Barclays various risk committees consider risk matters relevant to their business, and escalate as required to the Group Risk Committee (GRC), whose Chair, in turn, escalates to the Barclays PLC Board Committees and the Barclays PLC Board. In addition to setting the risk appetite of the Group, the Board is responsible for approving the ERMF, and reviewing reputation risk matters. It receives regular information on the risk profile of the Group, and has ultimate responsibility for risk appetite and capital plans. Further, there are two Board-level committees which oversee the application of the ERMF and implementation of key aspects, the Barclays PLC Board Risk Committee (BRC) and the Barclays PLC Board Audit Committee (BAC). Additionally, the Barclays PLC Board Remuneration Committee oversee pay practices focusing on aligning pay to sustainable performance. • The Barclays PLC Board Risk Committee (BRC): the BRC monitors the Group’s risk profile against the agreed appetite. Where actual performance differs from expectations, the actions taken by management are reviewed to ascertain that the BRC is comfortable with them. The BRC also reviews certain key risk methodologies, the effectiveness of risk management, and the Group’s risk profile, including the material issues affecting each business portfolio and forward risk trends. The committee also commissions in-depth analysis of significant risk topics, which are presented by the Group CRO or senior risk managers. • The Barclays PLC Board Audit Committee (BAC): the BAC receives regular reports on the effectiveness of internal control systems, quarterly reports on material control issues of significance, quarterly papers on accounting judgements (including impairment), and a quarterly review of the adequacy of impairment allowances, relative to the risk inherent in the portfolios, the business environment, and Barclays policies and methodologies. • The Barclays PLC Board Remuneration Committee (RemCo): the RemCo receives proposals on ex-ante and ex- post risk adjustments to variable remuneration based on risk management performance including events, issues and the wider risk profile. These inputs are considered in the setting of performance incentives. The terms of reference and additional details on membership and activities for each of the principal Board committees are available from the corporate governance section of the Barclays website at: home.barclays/who-we-are/ our-governance/board-committees/ The GRC is the most senior executive body responsible for reviewing and monitoring the risk profile of the Group. This includes coverage of all principal risks, and any other material risks, to which the Group is exposed. The GRC reviews and recommends the proposed risk appetite and relative limits to the BRC. The committee covers all business units and legal entities of the Group and incorporates specific coverage of Barclays Bank Group. Barclays’ risk culture Risk culture can be defined as the norms, attitudes and behaviours related to risk awareness, risk taking and risk management. This is reflected in how the Group identifies, escalates and manages risk matters. Barclays is committed to maintaining a robust risk culture in which: • management expect, model and reward the right behaviours from a risk and control perspective • colleagues identify, manage and escalate risk and control matters, and meet their responsibilities around risk management. The Group CEO works with the Executive Management to embed a strong risk culture within the firm, with particular regard to the identification, escalation and management of risk matters, in accordance with the ERMF. Specifically, all employees regardless of their positions, functions or locations must play their part in the Group’s risk management. Employees are required to be familiar with risk management policies which are relevant to their responsibilities, know how to escalate actual or potential risk issues, and have a role-appropriate level of awareness of the risk management process as defined by the ERMF. Our Code of Conduct – the Barclays Way Globally, all colleagues must attest to the ‘Barclays Way’, our Code of Conduct, and comply with all frameworks, policies and standards applicable to their roles. The Code of Conduct outlines the Purpose, Values and Mindset which govern our ‘Barclays Way’ of working across our business globally. It constitutes a reference point covering all aspects of colleagues’ working relationships, and provides guidance on working with other Barclays employees, customers and clients, governments and regulators, business partners, suppliers, competitors and the broader community. See home.barclays/sustainability/esg- resource-hub/statements-and-policy- positions/ for more details. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 269 Material existing and emerging risks Material existing and emerging risks to the Group’s future performance The Group has identified a broad range of risks to which its businesses are exposed. Material risks are those to which senior management pay particular attention and which could cause the delivery of the Group’s strategy, results of operations, financial condition and/or prospects to differ materially from expectations. Emerging risks are those which have unknown components, the impact of which could crystallise over a longer time period. In addition, certain other factors beyond the Group’s control, including escalation of global conflicts, acts of terrorism, natural disasters, pandemics and similar events, although not detailed below, could have a similar impact on the Group. Material existing and emerging risks potentially impacting more than one principal risk i) Business conditions, general economy and geopolitical issues The Group’s operations are subject to changes in global and local economic and market conditions, as well as geopolitical developments, which may have a material impact on the Group’s business, results of operations, financial condition and prospects. A deterioration in global or local economic and market conditions may result in (among other things): (i) deteriorating business, consumer or investor confidence and lower levels of investment and productivity growth, which in turn may lead to lower customer and client activity, including lower demand for borrowing; (ii) higher default rates, delinquencies, write- offs and impairment charges as borrowers struggle with their debt commitments; (iii) subdued asset prices, which may impact the value of any collateral held by the Group and require the Group and its customers to post additional collateral in order to satisfy margin calls; (iv) mark-to- market losses in trading portfolios resulting from changes in factors such as credit ratings, share prices and solvency of counterparties; and (v) revisions to calculated ECLs leading to increases in impairment allowances. In addition, the Group’s ability to borrow from other financial institutions or raise funding from external investors may be affected by deteriorating economic conditions and market disruption. Geopolitical events can also cause financial instability and affect economic growth. In particular: • Global GDP growth in 2022 was severely hampered by inflationary pressures resulting from; (a) the disruptive legacy of the COVID-19 pandemic on supply chains; (b) restricted labour markets and upward pressure on employment costs; and (c) escalating energy and food prices intensified by the conflict in Ukraine. These pressures have led to the on-going 'cost of living' pressures in much of the world, but particularly in the UK and Europe. • In response to persistent inflationary pressures, throughout 2022, central banks pursued policies of raising interest rates while also curtailing quantitative easing and in some cases commencing quantitative tightening. • Both the elevated inflationary environment and higher interest rates are likely to adversely affect economic growth globally in 2023, particularly in developed markets, with the possibility of elevated unemployment as a result, with potentially negative implications for the Group's performance, including through increased impairment allowances. It remains possible that a resurgence in COVID-19 and/or restrictions on movement imposed locally to combat outbreaks or new strains, could exacerbate the expected slowdown in global economic performance. • In the UK and Europe, governments responded to escalating energy prices via short term subsidies for consumers and industry, in part funded by windfall taxes on targeted sectors. Revisions to these schemes during 2023 may cause upward pressure on household and corporate finances, which could result in higher impairment charges. • Trading arrangements between the UK and the European Union (EU), following the UK's exit from the EU, may: (i) raise costs for UK customers trading with the EU, and/or otherwise adversely affect their business; and (ii) impact the Group's EU operations. • Further, any trading disruption between the EU and the UK may have a significant impact on economic activity in the EU and the UK which, in turn, could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. Unstable economic conditions could result in (among other things): – a deeper recession in the UK and/or one or more member states of the EU in which it operates, with lower growth, higher unemployment and falling property prices, which could lead to increased impairments in relation to a number of the Group’s portfolios (including, but not limited to, the UK mortgage portfolio, unsecured lending portfolio (including credit cards) and commercial real estate exposures. – increased market volatility (in particular in currencies and interest rates), which could impact the Group’s trading book positions and affect the underlying value of assets in the banking book and securities held by the Group for liquidity purposes – a credit rating downgrade for one or more members of the Group (either directly or indirectly as a result of a downgrade in the UK sovereign credit ratings), which could significantly increase the Group’s cost of funding and/or reduce its access to funding, widen credit spreads and materially adversely affect the Group’s interest margins and liquidity position and/or – a widening of credit spreads more generally or reduced investor appetite for the Group’s debt securities, which could negatively impact the Group’s cost of and/or access to funding • A significant proportion of the Group's portfolio is located in the US, including a major credit card portfolio and a range of corporate and investment banking exposures. The possibility of significant changes in US policy in certain sectors (including trade, healthcare and commodities) may have an impact on the Group’s associated portfolios. Stress in the US economy, weakening GDP and the associated exchange rate fluctuations, heightened trade tensions (such as between the US and China), and increased interest rates (particularly if accompanied by rise in unemployment) could lead to increased levels of impairment, which may have a material adverse effect on the Group's results of operations and profitability. • An escalation in geopolitical tensions or increased use of protectionist measures (such as the US and China implementing reciprocal trade tariffs) may have a material adverse effect on the Group’s business in the affected regions. • In China the level of debt, particularly in the property sector, remains a concern, given the high level of leverage and despite government and regulatory action. The rapid unwinding of “zero COVID-19” policies may initially result in economic slowdown should large Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 270 Material existing and emerging risks (continued) numbers of the population catch COVID-19. Longer term, the shift away from market-based reforms towards state led initiatives to increase self- sufficiency and economic security, with potentially negative implications for world trade. • Higher US interest rates and slowing demand for natural resources could cause economic deterioration in emerging markets, with a material adverse effect on the Group's results from operations if these stresses lead to higher impairment charges from a deterioration in sovereign or corporate creditworthiness. ii) Risks relating to the impact of COVID-19 The COVID-19 pandemic has had a material adverse impact on businesses around the world and the economic and social environments in which they operate. Consequently there are a number of factors associated with the COVID-19 pandemic and its impact on global economies that have had and could continue to have a material adverse effect on the profitability, capital and liquidity of the Group. The COVID-19 pandemic caused disruption to the Group’s customers, suppliers and staff globally. Most jurisdictions in which the Group operates implemented severe restrictions on the movement of their respective populations, with a resultant significant impact on economic activity. It remains unclear how the COVID-19 pandemic will evolve through 2023 and the risks from further waves, new strains and/or vaccines proving ineffective, cannot be ruled out and could result in the reintroduction of, or additional, restrictions placed on local populations . The Group continues to monitor the situation. Macroeconomic expectations are that the effects of the COVID-19 pandemic will be long lasting with the level and speed of economic recovery still uncertain. To the extent that the residual impacts of the COVID-19 pandemic continue to adversely affect the global economy and/ or the Group, it may also have the effect of increasing the likelihood and/or magnitude of other risks described herein or may pose other risks which are not presently known to the Group or not currently expected to be significant to the Group’s profitability, capital and liquidity. Further waves or new strains of COVID-19 could impact the Group's ability to conduct business in the jurisdictions in which it operates through disruptions to infrastructure and supply chains, business processes and technology services provided by third parties, and unavailability of staff due to illness. These interruptions to business may be detrimental to customers (who may seek reimbursement from the Group for costs and losses incurred as a result of such interruptions), and result in potential litigation costs (including regulatory fines, penalties and other sanctions), as well as reputational damage. Changes in macroeconomic variables such as gross domestic product (GDP) and unemployment have a significant impact on the modelling of expected credit losses (ECLs) by the Group. The economic environment remains uncertain and future impairment charges may be subject to additional volatility (including from changes to macroeconomic variable forecasts) caused by further waves or new strains of the COVID-19 pandemic and related containment measures and the continued efficacy of vaccines and/or boosters, as well as the longer- term effectiveness of central bank, government and other support measures. For further details on macroeconomic variables used in the calculation of ECLs, refer to the credit risk performance section. Any and all such events mentioned above could have a material adverse effect on the Group’s business, results of operations, financial condition, prospects, liquidity, capital position and credit ratings (including potential credit rating agency changes of outlooks or ratings), as well as on the Group’s customers, employees and suppliers. iii) The impact of interest rate changes on the Group’s profitability Changes to interest rates are significant for the Group, especially given the uncertainty as to the size and frequency of such changes, particularly in the Group’s main markets of the UK, the US and the EU. Interest rate rises result in higher funding costs but could positively impact the Group’s profitability as retail and corporate business net interest income increases due to margin decompression, as observed for the interest rate rises in 2022. However, increases in interest rates, if larger or more frequent than expected, could lead to generally weaker than expected growth, reduced business confidence and higher unemployment. This, combined with the impact interest rate rises may have on the affordability of loan arrangements for borrowers (especially when combined with inflationary pressures), could cause stress in the lending portfolio and underwriting activity of the Group with resultant higher credit losses driving an increased impairment charge which would most notably impact retail unsecured portfolios and wholesale non-investment grade lending and could have a material effect on the Group’s business, results of operations, financial condition and prospects. Interest rate cuts may affect, and put pressure on, the Group’s net interest margins (the difference between its lending income and borrowing costs) and could adversely affect the profitability and prospects of the Group. In addition, changes in interest rates could have an adverse impact on the value of the securities held in the Group’s liquid asset portfolio. Consequently, this could create more volatility than expected through the Group’s Fair Value through Other Comprehensive Income (FVOCI) reserve and could adversely affect the profitability and prospects of the Group. iv) Competition in the banking and financial services industry The Group operates in a highly competitive environment in which it must evolve and adapt to significant changes as a result of regulatory reform, technological advances, increased public scrutiny and prevailing economic conditions. The Group expects that competition in the financial services industry will continue to be intense and may have a material adverse effect on the Group’s future business, results of operations, financial condition and prospects. New competitors in the financial services industry continue to emerge. Technological advances and the growth of e-commerce have made it possible for non- banks to offer products and services that traditionally were banking products such as electronic securities trading, payments processing and online automated algorithmic-based investment advice. Furthermore, payments processing and other services could be significantly disrupted by technologies, such as blockchain (used in cryptocurrency systems) and 'buy now pay later' lending, both of which are currently subject to lower levels of regulatory oversight. Furthermore, the introduction of Central Bank Digital Currencies could potentially have significant impact on the banking system and the role of commercial banks within it by disrupting the current provision of banking products and services. This disruption could allow new competitors, Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 271 Material existing and emerging risks (continued) some previously hindered by banking regulation (such as FinTechs), to provide customers with access to banking facilities and increase disintermediation of banking services. New technologies and changing consumer behaviour have required and could require the Group to incur additional cost to modify or adapt its products or make additional capital investments in its businesses to attract and retain clients and customers or to match products and services offered by its competitors, including technology companies. Ongoing or increased competition and/or disintermediation of banking services may put pressure on the pricing of the Group’s products and services, which could reduce the Group’s revenues and profitability, or may cause the Group to lose market share, particularly with respect to traditional banking products such as deposits, bank accounts and mortgage lending. This competition may be on the basis of quality and variety of products and services offered, transaction execution, innovation, reputation and/or price. These factors may be exacerbated by further industry wide initiatives to address access to banking. The failure of any of the Group’s businesses to meet the expectations of clients and customers, whether due to general market conditions, underperformance, a decision not to offer a particular product or service, branch closures, changes in client and customer expectations or other factors, could affect the Group’s ability to attract or retain clients and customers. Any such impact could, in turn, reduce the Group’s revenues. v) Regulatory change agenda and impact on business model The Group’s businesses are subject to ongoing regulation and associated regulatory risks, including the effects of changes in the laws, regulations, policies, voluntary codes of practice and interpretations in the UK, the US, the EU and the other markets in which it operates. Many regulatory changes relevant to the Group’s business may have an effect beyond the country in which they are enacted, either because the Group’s regulators deliberately enact regulation with extra-territorial impact or its global operations mean that the Group is obliged to give effect to local laws and regulations on a wider basis. In recent years, regulators and governments have focused on reforming both the prudential regulation of the financial services industry and the ways in which the business of financial services is conducted. Measures taken include enhanced capital, liquidity and funding requirements, the separation or prohibition of certain activities by banks, changes in the operation of capital markets activities, the introduction of tax levies and transaction taxes, changes in compensation practices and more detailed requirements on how business is conducted. The governments and regulators in the UK, the US, the EU or elsewhere may intervene further in relation to areas of industry risk already identified, or in new areas, which could adversely affect the Group. Current and anticipated areas of particular focus for the Group’s regulators, where regulatory changes could have a material effect on the Group’s business, financial condition, results of operations, prospects, capital position, and reputation, include, but are not limited to: • the increasing focus by regulators, international bodies, organisations and unions on how institutions conduct business, particularly with regard to the delivery of fair outcomes for customers, promoting effective competition in the interests of consumers and ensuring the orderly and transparent operation of global financial markets, including the proposed introduction in the UK of a new consumer duty and measures resulting from ongoing thematic reviews into the workings of the retail, small- and medium-sized enterprise and wholesale banking sectors and the provision of financial advice to consumers; • the implementation of any conduct measures as a result of regulators’ focus on organisational culture, employee behaviour and whistleblowing; • the demise of certain benchmark interest rates and the transition to new risk-free reference rates (as discussed further under ‘vi) Impact of benchmark interest rate reforms on the Group’ below); • reviews of regulatory frameworks applicable to the wholesale financial markets, including reforms and other changes to conduct of business, listing, securitisation and derivatives related requirements; • the focus globally on technology adoption and digital delivery, underpinned by customer protection, including the use of artificial intelligence and digital assets (data, identity and disclosures), financial technology risks, payments and related infrastructure, operational resilience, virtual currencies (including central bank digital currencies and global stable coins) and cybersecurity. This also includes the introduction of new and/or enhanced regulatory standards in these areas; • increasing regulatory expectations of firms around governance and risk management frameworks, particularly for management of climate change, diversity and inclusion and other ESG risks and enhanced ESG disclosure and reporting obligations; • the continued evolution of the UK’s regulatory framework following the UK's withdrawal from the EU, including in light of the UK financial services regulatory reform agenda announced in December 2022 and the proposals in the Financial Services and Markets Bill, and similarly regarding the access of UK and other non-EU financial institutions to EU markets; • the implementation of the reforms to the Basel III package, which includes changes to the RWA approaches to credit risk, market risk, counterparty risk, operational risk, and credit valuation adjustments and the application of RWA floors and the leverage ratio; • the implementation of more stringent capital, liquidity and funding requirements; • the ongoing regulatory response to the COVID-19 pandemic and its implications for banks’ credit risk management and provisioning processes, capital adequacy and liquidity, and a renewed focus on vulnerable customers including the treatment of customers and consideration of longer-term initiatives to support borrowers in financial difficulty and measures designed to maximise access to cash for consumers; • the incorporation of climate change within the global prudential framework, including the transition risks resulting from a shift to a low carbon economy and its financial effects; • increasing requirements to detail management accountability within the Group (for example, the requirements of the Senior Managers and Certification Regime in the UK and similar regimes elsewhere that are either in effect or under consideration/implementation), as well as requirements relating to executive remuneration; • changes in national or supra-national requirements regarding the ability to offshore or outsource the provision of services and resources or transfer Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 272 Material existing and emerging risks (continued) material risk to financial services companies located in other countries, which impact the Group’s ability to implement globally consistent and efficient operating models; • financial crime, fraud and market abuse standards and increasing expectations for related control frameworks, to ensure firms are adapting to new threats such as those arising from the COVID-19 pandemic, and are protecting customers from cyber- enabled crime; • the application and enforcement of economic sanctions including those with extra-territorial effect and those arising from geopolitical tensions; • requirements flowing from arrangements for the resolution strategy of the Group and its individual operating entities that may have different effects in different countries; • the increasing regulatory expectations and requirements relating to various aspects of operational resilience, including an increasing focus on the response of institutions to operational disruptions; • continuing regulatory focus on data privacy, including the collection and use of personal data, and protection against loss and unauthorised or improper access; • the regulatory focus on policies and procedures for identifying and managing cybersecurity risks, cybersecurity governance and the corresponding disclosure and reporting obligations; and • continuing regulatory focus on the effectiveness of internal controls and risk management frameworks, as evidenced in regulatory fines and other measures imposed against the Group and other financial institutions. + For further details on the regulatory supervision of, and regulations applicable to, the Group, refer to the Supervision and regulation section on page 370. vi) Impact of benchmark interest rate reforms on the Group Global regulators and central banks in the UK, the US and the EU have driven international efforts to reform key benchmark interest rates and indices, such as the London Interbank Offered Rate (LIBOR), used to determine the amounts payable under a wide range of transactions and make them more reliable and robust. These benchmark reforms have resulted in significant changes to the methodology and operation of certain benchmarks and indices, the adoption of alternative risk- free reference rates (RFRs), the discontinuation of certain reference rates (including LIBOR), and the introduction of implementing legislation and regulations. Specifically, certain LIBOR tenors either ceased at the end of 2021 or became permanently unrepresentative. Furthermore, certain US dollar LIBOR tenors are to cease by the end of June 2023, and restrictions have been imposed on new use of US dollar LIBOR. Notwithstanding these developments, given the unpredictable consequences of benchmark reform, any of these developments could have an adverse impact on market participants, including the Group, in respect of any financial instruments linked to, or referencing, any of these benchmark interest rates. Uncertainty associated with such potential changes, including the availability and/or suitability of alternative RFRs, the participation of customers and third party market participants in the transition process, challenges with respect to required documentation changes, and impact of legislation to deal with certain legacy contracts that cannot convert into or add fall-back RFRs before cessation of the benchmark they reference, may adversely affect a broad range of transactions (including any securities, loans and derivatives which use LIBOR or any other affected benchmark to determine the interest payable which are included in the Group’s financial assets and liabilities) that use these reference rates and indices, and present a number of risks for the Group, including but not limited to: • Conduct risk: in undertaking actions to transition away from using certain reference rates (such as LIBOR) to new alternative RFRs, the Group faces conduct risks. These may lead to customer complaints, regulatory sanctions or reputational impact if the Group is considered to be (among other things): (i) undertaking market activities that are manipulative or create a false or misleading impression; (ii) misusing sensitive information or not identifying or appropriately managing or mitigating conflicts of interest; (iii) providing customers with inadequate advice, misleading information, unsuitable products or unacceptable service; (iv) not taking a consistent approach to remediation for customers in similar circumstances; (v) unduly delaying the communication and migration activities in relation to client exposure, leaving them insufficient time to prepare; or (vi) colluding or inappropriately sharing information with competitors. • Litigation risk: members of the Group may face legal proceedings, regulatory investigations and/or other actions or proceedings regarding (among other things): (i) the conduct risks identified above, (ii) the interpretation and enforceability of provisions in LIBOR- based contracts and securities, and (iii) the Group’s preparation and readiness for the replacement of LIBOR with alternative RFRs. • Financial risk: the valuation of certain of the Group’s financial assets and liabilities may change. Moreover, transitioning to alternative RFRs may impact the ability of members of the Group to calculate and model amounts receivable by them on certain financial assets and determine the amounts payable on certain financial liabilities (such as debt securities issued by them) because certain alternative RFRs (such as the Sterling Overnight Index Average (SONIA) and the Secured Overnight Financing Rate (SOFR)) are look-back rates whereas term rates (such as LIBOR) allow borrowers to calculate at the start of any interest period exactly how much is payable at the end of such interest period. This may have a material adverse effect on the Group’s cash flows. • Pricing risk: changes to existing reference rates and indices, discontinuation of any reference rate or indices and transition to alternative RFRs may impact the pricing mechanisms used by the Group on certain transactions. • Operational risk: changes to existing reference rates and indices, discontinuation of any reference rate or index and transition to alternative RFRs may require changes to the Group’s IT systems, trade reporting infrastructure, operational processes, and controls. In addition, if any reference rate or index (such as LIBOR) is no longer available to calculate amounts payable, the Group may incur additional expenses in amending documentation for new and existing transactions and/or effecting the transition from the original reference rate or index to a new reference rate or index. • Accounting risk: an inability to apply hedge accounting in accordance with IAS 39 could lead to increased volatility in the Group’s financial results and performance. Any of these factors may have a material adverse effect on the Group’s business, results of operations, financial condition, prospects and reputation. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 273 Material existing and emerging risks (continued) + For further details on the impacts of benchmark interest rate reforms on the Group, refer to Note 41. vii) Change delivery and execution risks The Group will need to adapt and/or transform the way it conducts business in response to changing customer behaviour and needs, technological developments, regulatory expectations, increased competition and cost management initiatives. Accordingly, effective management of transformation projects is required to successfully deliver the Group's strategic priorities, involving delivering both on externally driven programmes, as well as key business initiatives to deliver revenue growth, product enhancement and operational efficiency outcomes. The magnitude, complexity and, at times, concurrent demands of the projects required to meet these priorities can result in heightened execution risk. The ability to execute the Group’s strategy may be limited by operational capacity and the increasing complexity of the regulatory environment in which the Group operates. In addition, whilst the Group continues to pursue cost management initiatives, they may not be as effective as expected and cost saving targets may not be met. The failure to successfully deliver or achieve any of the expected benefits of these strategic initiatives and/or the failure to meet customer and stakeholder expectations could have a material adverse effect on the Group’s business, results of operations, financial condition, customer outcomes, prospects and reputation. viii) Holding company structure of Barclays PLC and its dependency on distributions from its subsidiaries Barclays PLC is a holding company and its principal sources of income are, and are expected to continue to be, distributions (in the form of dividends and interest payments) from operating subsidiaries which also hold the principal assets of the Group. As a separate legal entity, Barclays PLC relies on such distributions in order to be able to meet its obligations as they fall due (including its payment obligations with respect to its debt securities) and to create distributable reserves for capital distributions (such as dividends to ordinary shareholders and share buybacks). The ability of Barclays PLC’s subsidiaries to pay dividends and interest and Barclays PLC’s ability to receive such distributions from its investments in its subsidiaries and other entities will be subject not only to the financial performance of such subsidiaries and entities and prevailing macroeconomic conditions but also to applicable local laws, capital regulations (including internal MREL requirements) and other restrictions (including restrictions imposed by governments and/or regulators, which limit management’s flexibility in managing the business and taking action in relation to capital distributions and capital allocation). These laws and restrictions could limit the payment of dividends and distributions to Barclays PLC by its subsidiaries and any other entities in which it holds an investment from time to time, which could restrict Barclays PLC’s ability to meet its obligations and/or to make capital distributions (such as dividends to ordinary shareholders and share buybacks). ix) Application of resolution measures and stabilisation powers under the Banking Act Under the Banking Act 2009, as amended (Banking Act), substantial powers are granted to the Bank of England (or, in certain circumstances, HM Treasury), in consultation with the PRA, the FCA and HM Treasury, as appropriate, as part of a special resolution regime (SRR). These powers enable the relevant UK resolution authority to implement resolution measures and stabilisation options with respect to a UK bank or investment firm and certain of its affiliates (currently including Barclays PLC) (each, a relevant entity) in circumstances in which the relevant UK resolution authority is satisfied that the resolution conditions are met. The SRR consists of five stabilisation options: (i) private sector transfer of all or part of the business or shares of the relevant entity; (ii) transfer of all or part of the business of the relevant entity to a ‘bridge bank’ established by the Bank of England; (iii) transfer to an asset management vehicle wholly or partly owned by HM Treasury or the Bank of England; (iv) the cancellation, transfer or dilution of the relevant entities’ equity (including Barclays PLC’s ordinary share capital) and write-down or conversion of the relevant entity’s capital instruments and liabilities (the bail-in tool); and (v) temporary public ownership (i.e. nationalisation). In addition, the relevant UK resolution authority may, in certain circumstances, in accordance with the Banking Act require the permanent write-down or conversion into equity of any outstanding Tier 1 capital instruments, Tier 2 capital instruments and internal MREL prior to, or together with, the exercise of any stabilisation option. Any such action could result in the dilution of Barclays PLC’s ordinary share capital, restrict Barclays PLC’s ability to meet its obligations and/or to pay dividends to ordinary shareholders. Shareholders should assume that, in a resolution situation, public financial support will only be available to a relevant entity as a last resort after the relevant UK resolution authorities have assessed and used, to the maximum extent practicable, the resolution tools, including the bail-in tool (the Bank of England’s preferred approach for the resolution of the Group is a bail-in strategy with a single point of entry at Barclays PLC). The exercise of any of such powers under the Banking Act or any suggestion of any such exercise could materially adversely affect the value of Barclays PLC ordinary shares and could lead to shareholders losing some or all of their investment. In addition, any safeguards within the Banking Act (such as the ‘no creditor worse off’ principle) may not result in compensation to shareholders that is equivalent to the full losses incurred by them in the resolution and there can be no assurance that shareholders would recover such compensation promptly. Material existing and emerging risks impacting individual principal risks i) Climate risk The risks associated with climate change are subject to rapidly increasing societal, regulatory and political focus, both in the UK and internationally. In line with regulatory expectations and requirements, the Group has embedded climate risk within the Enterprise Risk Management Framework (ERMF), to address the financial and operational risks resulting from: (i) the physical risk of climate change; and (ii) the risk from the transition to a low- carbon economy. Climate risk is considered to be a driver of financial and operational risks. Physical risks from climate change arise from a number of factors and relate to specific weather events (acute) and longer-term shifts in the climate (chronic). The nature and timing of extreme weather events are uncertain, but they are increasing in frequency and in the potential severity of economic impact. 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 and significant changes in asset prices and profitability of industries. Damage to the properties and operations of borrowers could decrease Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 274 Material existing and emerging risks (continued) 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, the Group’s premises and resilience may also suffer physical damage due to weather events leading to increased costs for the Group. As the economy transitions to a low- carbon economy, financial institutions such as the Group face significant and rapid developments in stakeholder expectations, policy, law and regulation which could impact the lending activities the Group undertakes, as well as the risks associated with its lending portfolios, and the value of the Group’s 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 of 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, the Group may face greater scrutiny of the type of business it conducts, adverse media coverage and reputational damage, which may in turn impact customer demand for the Group's products, returns on certain business activities and the value of certain assets and trading positions resulting in impairment charges. Furthermore, the impacts of physical and transition climate risks can lead to second order connected risks, which have the potential to affect the Group’s 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 the Group’s clients, higher expected credit losses (ECLs), and increased charge-offs and defaults among retail customers. From January 2022, climate risk became one of the principal risks within the Group’s ERMF. Failure to adequately embed the financial and operational risks associated with climate change into its risk framework to appropriately measure, manage and disclose the various financial and operational risks it faces as a result of climate change or failure to adapt the Group's strategy and business model to the changing regulatory requirements and market expectations on a timely basis, may have a material and adverse impact on the Group’s level of business growth, competitiveness, profitability, capital requirements, cost of funding, and financial condition. occur on a timely basis, the Group may fail to achieve its climate-related ambitions and targets and this could have a material adverse effect on the Group’s business, results of operations, financial condition, prospects and reputation. In March 2020, the Group announced its ambition to become a net zero bank by 2050 and its commitment to align all of its financing activities with the goals and timelines of the Paris Agreement. In order to reach these ambitions and targets or any other climate-related ambitions or targets the Group may commit to in future, the Group will need to continue to incorporate climate considerations into its strategy, business model, the products and services it provides to customers and its financial and non-financial risk management processes (including processes to measure and manage the various financial and non-financial risks the Group faces as a result of climate change). The Group also needs to ensure that its strategy and business model adapt to changing, and sometimes conflicting, national and international standards, industry and scientific practices, regulatory requirements and market expectations regarding climate change, which remain under continuous development and vary between regions, sometimes to a significant extent. There can be no assurance that these standards, practices, requirements and expectations will not change in a manner that substantially increases the cost or effort for the Group to achieve such ambitions and targets. In addition, the Group’s ambitions and targets may prove more challenging to achieve due to changing circumstances and potentially volatile external factors which are beyond our control, including geopolitical issues, energy security, energy poverty and other considerations such as just transition to a low carbon economy. This may be exacerbated if the Group chooses or is required to accelerate its climate-related ambitions or targets as a result of UK or international regulatory developments or stakeholder expectations. Achieving the Group’s climate-related ambitions and targets will also depend on a number of factors outside the Group’s control, including reliable forecast of hazards from the physical climate models, availability of data and models to measure and assess the climate impact of the Group’s customers, advancements of low- carbon technologies and supportive public policies in the markets where the Group operates. If these external factors and other changes do not occur, or do not For further details on the Group’s approach to climate change, refer to the climate risk management section. ii) Credit risk Credit risk is the risk of loss to the Group from the failure of clients, customers or counterparties, including sovereigns, to fully honour their obligations to members of the Group, including the whole and timely payment of principal, interest, collateral and other receivables. Credit risk is impacted by a number of factors outside the Group’s control, including wider economic conditions. a) Impairment Impairment is calculated in line with the requirements of IFRS9 which results in recognition of loss allowances, based on ECLs, on a forward-looking basis using a broad scope of financial metrics. Measurement involves complex judgement and impairment charges are potentially volatile and may not successfully predict actual credit losses, particularly under stressed conditions. Any failure by the Group to accurately estimate credit losses through ECLs could have a material adverse effect on the Group's business, results of operations, financial condition and prospects. + For further details, refer to Note 8. b) Specific portfolios, sectors and concentrations The Group is subject to risks arising from changes in credit quality and recovery rates for loans and advances due from borrowers and counterparties and is subject to a concentration of those risks where the Group has significant exposures to borrowers and counterparties in specific sectors, or to particular types of borrowers and counterparties. Any deterioration in the credit quality of such borrowers and counterparties could lead to lower recoverability from loans and advances and higher impairment charges. Accordingly, any of the following areas of uncertainty could have a material adverse impact on the Group's business, results of operations, financial condition and prospects: • Consumer affordability: remains a key area of focus, particularly in unsecured lending, as the 'cost of living' pressures grow. Macroeconomic factors, such as unemployment, higher interest rates or broader inflationary pressures, that Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 275 Material existing and emerging risks (continued) impact a customer’s ability to service debt payments could lead to increased arrears in both unsecured and secured products. • UK retail, hospitality and leisure: falling demand, rising costs and, for UK retail, a structural shift to online shopping, continue to pressurise sectors heavily reliant on consumer discretionary spending. Such sectors may also be adversely impacted by cost of living pressures and other macroeconomic factors which affect consumers This represents a potential risk in the Group’s UK corporate portfolio as a higher probability of default exists for retailers, hospitality providers and their landlords while these pressures remain. • UK real estate: UK property represents a significant portion of the Group's overall retail and corporate credit exposure and the Group remains at risk of increased impairment from a material fall in property prices. During 2021 and continuing through the first half of 2022, property prices rose, particularly in the residential property market where customers sought more space as home working became more prevalent. However, rising mortgage interest rates and increasing economic concerns have reduced demand and borrowing capacity which resulted in small house price decreases in Q4 2022. This is likely to continue in 2023, especially in London and the South East of the UK where the Group has a high exposure. Additionally, as mortgages roll off existing rates and onto new rates at higher levels, there is a risk of increasing borrower defaults which could then put further downward pressure on property prices and in turn impact the Group’s impairment and capital position. Furthermore, small segments of the housing market could be subject to specific valuation impacts (for example, certain properties within the Group's residential loan portfolio may be subject to remediation activities relating to fire safety standards). The Group’s corporate exposure is vulnerable to a deteriorating economic environment and (for offices in particular) post COVID-19 pandemic structural shifts, such as the normalisation of remote working. Landlords serving discretionary consumer spending sector tenants are also at risk from reduced rent collection. • Leveraged finance underwriting: the Group takes on non-investment grade underwriting exposure, including single name risk, particularly in the US and the UK. The Group is exposed to credit events and market volatility during the underwriting period, which may result in losses for the Group, or increased capital requirements should there be a need to hold the exposure for an extended period. • Oil & Gas sector: High market energy prices during 2022 have helped restore balance sheet strength to companies operating in this sector. However, in the longer term, costs associated with the transition towards renewable sources of energy may place greater financial demands on oil and gas companies. • Air travel: the sector struggled to resource for the recovery in lower margin (tourist) demand for air travel evidenced in 2022 (after the drop in demand during the pandemic), and to adjust to the structural decline in higher margin business travel. While this transition plays out, there remains a heightened risk to the revenue streams of the Group’s clients and, consequentially, their ability to service debt obligations. Increasing concerns about the impact of air travel on climate change will also influence consumer behaviour, representing additional risks for the sector. The Group also has large individual exposures to single name counterparties, (such as brokers, central clearing houses, dealers, banks, mutual and hedge funds and other institutional clients) both in its lending and trading activities, including derivative trades. The default of one such counterparty could cause contagion across clients involved in similar activities and/or adversely impact asset values should margin calls necessitate rapid asset disposals by that counterparty to raise liquidity. In addition, where such counterparty risk has been mitigated by taking collateral, credit risk may remain high if the collateral held cannot be monetised, or has to be liquidated at prices which are insufficient to recover the full amount of the loan or derivative exposure. Any such defaults could have a material adverse effect on the Group’s results due to, for example, increased credit losses and higher impairment charges. + For further details on the Group’s approach to credit risk, refer to the credit risk management and credit risk performance sections. iii) Market risk Market risk is the risk of loss arising from potential adverse changes in the value of the Group’s assets and liabilities from fluctuation in market variables including, but not limited to, interest rates, foreign exchange, equity prices, commodity prices, credit spreads, implied volatilities and asset correlations. Economic and financial market uncertainties remain elevated, driven by elevated inflation and tightening monetary policy, both of which are exacerbated by the conflict in Ukraine and supply-chain disruptions caused by the COVID-19 pandemic. A disruptive adjustment to higher interest rate levels and deteriorating trade and geopolitical tensions could heighten market risks for the Group’s portfolios. In addition, the Group’s trading business is generally exposed to a prolonged period of elevated asset price volatility, particularly if it adversely affects market liquidity. Such a scenario could impact the Group’s ability to execute client trades and may also result in lower client flow-driven income and/or market-based losses on its existing portfolio of market risks. These can include higher hedging costs from rebalancing risks that need to be managed dynamically as market levels and their associated volatilities change. Changes in market conditions could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. + For further details on the Group’s approach to market risk, refer to the market risk management and market risk performance sections. iv) Treasury and capital risk There are three primary types of treasury and capital risk faced by the Group: a) Liquidity risk Liquidity risk is the risk that the Group is unable to meet its contractual or contingent obligations or that it does not have the appropriate amount, tenor and composition of funding and liquidity to support its assets. This could cause the Group to fail to meet regulatory and/or internal liquidity requirements, make repayments of principal or interest as they fall due or to support day-to-day business activities. Key liquidity risks that the Group faces include: • Stability of the Group’s deposit funding profile: deposits which are payable on demand or at short notice could be adversely affected by the Group failing to preserve the current level of customer and investor confidence or as Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 276 Material existing and emerging risks (continued) a result of competition in the banking industry. • Ongoing access to wholesale funding: the Group regularly accesses the money and capital markets to provide short- term and long-term unsecured and secured funding to support its operations. A loss of counterparty confidence, or adverse market conditions (such as the recent rises in interest rates) could lead to a reduction in the tenor, or an increase in the costs, of the Group’s unsecured and secured wholesale funding or affect the Group’s access to such funding. • Impacts of market volatility: adverse market conditions, with increased volatility in asset prices could: (i) negatively impact the Group’s liquidity position through increased derivative margin requirements and/or wider haircuts when monetising liquidity pool securities; and (ii) make it more difficult for the Group to execute secured financing transactions. • Intraday liquidity usage: increased collateral requirements for payments and securities settlement systems could negatively impact the Group’s liquidity position, as cash and liquid assets required for intraday purposes are unavailable to meet other outflows. • Off-balance sheet commitments: deterioration in economic and market conditions could cause customers to draw on off-balance sheet commitments provided to them, for example revolving credit facilities, negatively affecting the Group’s liquidity position. • Credit rating changes and impact on funding costs: any reductions in a credit rating (in particular, any downgrade below investment grade) may affect the Group’s access to the money or capital markets and/or terms on which the Group is able to obtain market funding (for example, this could lead to increased costs of funding and wider credit spreads, the triggering of additional collateral or other requirements in derivative contracts and other secured funding arrangements, or limits on the range of counterparties who are willing to enter into transactions with the Group). b) Capital risk Capital risk is the risk that the Group has an insufficient level or composition of capital to support its normal business activities and to meet its regulatory capital requirements under normal operating environments and stressed conditions (both actual and as defined for internal planning or regulatory stress testing purposes). This also includes the risk from the Group’s pension plans. Key capital risks that the Group faces include: • Failure to meet prudential capital requirements: this could lead to the Group being unable to support some or all of its business activities, a failure to pass regulatory stress tests, increased cost of funding due to deterioration in investor appetite or credit ratings, restrictions on distributions (including in respect of its shares and/or additional tier 1 instruments), leading to the inability to comply with the Group's dividend policy and/or the need to take additional measures to strengthen the Group’s capital or leverage position. • Adverse changes in FX rates impacting capital ratios: the Group has capital resources, risk weighted assets and leverage exposures denominated in foreign currencies. Changes in foreign currency exchange rates may adversely impact the sterling equivalent value of these items. As a result, the Group’s regulatory capital ratios are sensitive to foreign currency movements. Failure to appropriately manage the Group’s balance sheet to take account of foreign currency movements could result in an adverse impact on the Group’s regulatory capital and leverage ratios. • Adverse movements in the pension fund: adverse movements in pension assets and liabilities for defined benefit pension schemes could result in deficits on a technical provision and/or IAS 19 accounting basis. This could lead to the Group making substantial additional contributions to its pension plans and/or a deterioration in its capital position. The market value of pension fund assets might decline; or investment returns might reduce. Under IAS 19, the liabilities discount rate is derived from the yields of high-quality corporate bonds. Therefore, the valuation of the Group’s defined benefits schemes would be adversely affected by a prolonged fall in the discount rate due to a persistent low interest rate and/or credit spread environment. Inflation is another significant risk driver to the pension fund as the liabilities are adversely impacted by an increase in long-term inflation expectations. c) Interest rate risk in the banking book Interest rate risk in the banking book is the risk that the Group is exposed to capital or income volatility because of a mismatch between the interest rate exposures of its (non-traded) assets and liabilities. The Group’s hedging programmes for interest rate risk in the banking book rely on behavioural assumptions and, as a result, the effectiveness of the hedging strategy cannot be guaranteed. A potential mismatch in the balance or duration of the hedging assumptions could lead to earnings deterioration if there are interest rate movements which are not adequately hedged. A decline in interest rates may also compress net interest margin on retail and corporate portfolios. In addition, the Group’s liquid asset portfolio is exposed to potential capital and/or income volatility due to movements in market rates and prices which may have a material adverse effect on the capital position of the Group. + For further details on the Group’s approach to treasury and capital risk, refer to the treasury and capital risk management and treasury and capital risk performance sections. v) Operational risk Operational risk is the risk of loss to the Group from inadequate or failed processes or systems, human factors or due to external events where the root cause is not due to credit or market risks. Examples include: a) Operational resilience The Group functions in a highly competitive market, with customers and clients that expect consistent and smooth business processes. The loss of or disruption to business processing is a material inherent risk within the Group and across the financial services industry, whether arising through failures in the Group’s technology systems, closure of the Group's real estate services including its retail branch network, or availability of personnel or services supplied by third parties. Failure to build resilience and recovery capabilities into business processes or into the services on which the Group’s business processes depend, may result in significant customer detriment, costs to reimburse losses incurred by the Group’s customers, and reputational damage. b) Cyberattacks Cyberattacks continue to be a global threat that is inherent across all industries, with the number and severity of attacks continuing to rise. The financial sector remains a primary target for cybercriminals, hostile nation states, opportunists and hacktivists. The Group, like other financial institutions, experiences numerous attempts to compromise its cybersecurity protections. The Group dedicates significant resources to reducing cybersecurity risks, but it Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 277 Material existing and emerging risks (continued) cannot provide absolute security against cyberattacks. Malicious actors are increasingly sophisticated in their methods, tactics, techniques and procedures, seeking to steal money, gain unauthorised access to, destroy or manipulate data, and disrupt operations, and some of their attacks may not be recognised or discovered until launched or after initial entry into the environment, such as novel or zero-day attacks that are launched before patches are available and defences can be readied. Malicious actors are also increasingly developing methods to avoid prevention, detection and alerting capabilities, including employing counter- forensic tactics making response activities more difficult. Cyberattacks can originate from a wide variety of sources and target the Group in numerous ways, including attacks on networks, systems, applications or devices used by the Group or parties such as service providers and other suppliers, counterparties, employees, contractors, customers or clients, presenting the Group with a vast and complex defence perimeter. Moreover, the Group does not have direct control over the cybersecurity of the systems of its clients, customers, counterparties and third-party service providers and suppliers, limiting the Group’s ability to effectively protect and defend against certain threats. Some of the Group’s third-party service providers and suppliers have experienced successful attempts to compromise their cybersecurity. These included ransomware attacks that disrupted the service providers’ or suppliers’ operations and, in some cases, had an impact on the Group's operations. Such cyberattacks are likely to continue. A failure in the Group’s adherence to its cybersecurity policies, procedures or controls, employee malfeasance, and human, governance or technological error could also compromise the Group’s ability to successfully prevent and defend against cyberattacks. Furthermore, certain legacy technologies that are at or approaching end-of-life may not be able to maintain acceptable levels of security. The Group has experienced cybersecurity incidents and near-misses in the past, and it is inevitable that additional incidents will occur in the future. Cybersecurity risks are expected to increase, due to factors such as the increasing demand across the industry and customer expectations for continued expansion of services delivered over the Internet; increasing reliance on Internet-based products, applications and data storage; and changes in ways of working by the Group’s employees, contractors, and third party service providers and suppliers and their subcontractors as a long-term consequence of the COVID-19 pandemic. Bad actors have taken advantage of remote working practices and modified customer behaviours, exploiting the situation in novel ways that may elude defences. Additionally, geopolitical turmoil may serve to increase the risk of a cyberattack that could impact Barclays directly, or indirectly through its critical suppliers or national infrastructure. In 2022, the Group faced a heightened risk of cyberattack as a result of the conflict in Ukraine. Common types of cyberattacks include deployment of malware to obtain covert access to systems and data; ransomware attacks that render systems and data unavailable through encryption and attempts to leverage business interruption or stolen data for extortion; novel or zero- day exploits; denial of service and distributed denial of service (DDoS) attacks; infiltration via business email compromise; social engineering, including phishing, vishing and smishing; automated attacks using botnets; third-party customer, vendor, service provider and supplier account take-over; malicious activity facilitated by an insider; and credential validation or stuffing attacks using login and password pairs from unrelated breaches. A successful cyberattack of any type has the potential to cause serious harm to the Group or its clients and customers, including exposure to potential contractual liability, claims, litigation, regulatory or other government action, loss of existing or potential customers, damage to the Group’s brand and reputation, and other financial loss. The impact of a successful cyberattack also is likely to include operational consequences (such as unavailability of services, networks, systems, devices or data) remediation of which could come at significant cost. Regulators worldwide continue to recognise cybersecurity as an increasing systemic risk to the financial sector and have highlighted the need for financial institutions to improve their monitoring and control of, and resilience to cyberattacks. A successful cyberattack may, therefore, result in significant regulatory fines on the Group. In addition, any new regulatory measures introduced to mitigate these risks are likely to result in increased technology and compliance costs for the Group. + For further details on the Group’s approach to cyberattacks, see the operational risk performance section. For further details on cybersecurity regulation applicable to the Group, refer to the Supervision and regulation section. c) New and emergent technology Technology is fundamental to the Group’s business and the financial services industry. Technological advancements present opportunities to develop new and innovative ways of doing business across the Group, with new solutions being developed both in-house and in association with third party companies. For example, payment services and securities, futures and options trading are increasingly occurring electronically, both on the Group’s own systems and through other alternative systems, and becoming automated. Whilst increased use of electronic payment and trading systems and direct electronic access to trading markets could significantly reduce the Group’s cost base, it may, conversely, reduce the commissions, fees and margins made by the Group on these transactions which could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. Introducing new forms of technology, however, has the potential to increase inherent risk. Failure to evaluate, actively manage and closely monitor risk during all phases of business development and implementation could introduce new vulnerabilities and security flaws and have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. d) External fraud The nature of fraud is wide-ranging and continues to evolve, as criminals seek opportunities to target the Group’s business activities and exploit changes in customer behaviour and product and channel use (such as the increased use of digital products and enhanced online services) or exploit new products. Fraud attacks can be very sophisticated and are often orchestrated by organised crime groups who use various techniques to target customers and clients directly to obtain confidential or personal information that can be used to commit fraud. The UK market has also seen significant growth in ‘scams’ where the Group takes increased levels of liability as part of a voluntary code to provide additional safeguards to customers and clients who are tricked into making payments to fraudsters. The impact from fraud can lead to customer detriment, financial losses (including the reimbursement of losses incurred by Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 278 Material existing and emerging risks (continued) to clients and counterparties in a timely manner; (ii) failing to settle and/or confirm transactions; (iii) causing funds transfers, capital markets trades and/or other transactions to be executed erroneously, illegally or with unintended consequences; and (iv) adversely affecting financial, trading or currency markets. Any of these events could materially disadvantage the Group’s customers, clients and counterparties (including them suffering financial loss) and/or result in a loss of confidence in the Group which, in turn, could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. h) Supplier exposure The Group depends on suppliers for the provision of many of its services and the development of technology. Whilst the Group depends on suppliers, it remains fully accountable to its customers and clients for risks arising from the actions of suppliers and may not be able to recover from its suppliers any amounts paid to customers and clients for losses suffered by them. The dependency on suppliers and sub-contracting of outsourced services introduces concentration risk where the failure of specific suppliers could have an impact on the Group’s ability to continue to provide material services to its customers. Failure to adequately manage supplier risk could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. customers), loss of business, missed business opportunities and reputational damage, all of which could have a material adverse impact on the Group’s business, results of operations, financial condition and prospects. e) Data management and information protection The Group holds and processes large volumes of data, including personal information, financial data and other confidential information, and the Group’s businesses are subject to complex and evolving laws and regulations governing the privacy and protection of data, including Regulation (EU) 2016/679 (General Data Protection Regulation as it applies in the EU and the UK). This data could relate to: (i) the Group’s clients, customers, prospective clients and customers and their employees; (ii) clients and customers of the Group’s clients and customers and their employees;(iii) the Group’s suppliers, counterparties and other external parties, and their employees; and (iv) the Group’s employees and prospective employees. The international nature of both the Group’s business and its IT infrastructure also means that data and personal information may be available in countries other than those from where the information originated. Accordingly, the Group must ensure that its collection, use, transfer and storage of data, including personal information, complies with all applicable laws and regulations in all relevant jurisdictions, which could: (i) increase the Group’s compliance and operating costs; (ii) impact the development of new products or services or the offering of existing products or services; (iii) affect how products and services are offered to clients and customers; (iv) demand significant oversight by the Group’s management; and (v) require the Group to review some elements of the structure of its businesses, operations and systems in less efficient ways. Concerns regarding the effectiveness of the Group’s measures to safeguard data, including personal information, or even the perception that those measures are inadequate, could expose the Group to the risk of loss or unavailability of data or data integrity issues and/or cause the Group to lose existing or potential clients and customers, and thereby reduce the Group’s revenues. Furthermore, any failure or perceived failure by the Group to comply with applicable privacy or data protection laws and regulations may subject it to potential contractual liability, claims, litigation, regulatory or other government action (including significant regulatory fines) and require changes to certain operations or practices which could also inhibit the Group’s development or marketing of certain products or services, or increase the costs of offering them to customers. Any of these events could damage the Group’s reputation, subject the Group to material fines or other monetary penalties, make the Group liable to the payment of compensatory damages, divert management's time and attention, lead to enhanced regulatory oversight and otherwise materially adversely affect its business, results of operations, financial condition and prospects. + For further details on data protection regulation applicable to the Group, refer to the supervision and regulation section. f) Algorithmic trading In some areas of the investment banking business, trading algorithms are used to price and risk manage client and principal transactions. An algorithmic error could result in erroneous or duplicated transactions, a system outage, or impact the Group’s pricing abilities, which could have a material adverse effect on the Group’s business, results of operations, financial condition, prospects and reputation. g) Processing errors The Group’s businesses are highly dependent on its ability to process and monitor, on a daily basis, a very large number of transactions, many of which are highly complex and occur at high volumes and frequencies, across numerous and diverse markets in many currencies. As the Group’s customer base and geographical reach expand and the volume, speed, frequency and complexity of transactions, especially electronic transactions (as well as the requirements to report such transactions on a real-time basis to clients, regulators and exchanges) increase, developing, maintaining and upgrading operational systems and infrastructure becomes more challenging, and the risk of systems or human error in connection with such transactions increases, as well as the potential consequences of such errors due to the speed and volume of transactions involved and the potential difficulty associated with discovering errors quickly enough to limit the resulting consequences. Furthermore, events that are wholly or partially beyond the Group’s control, such as a spike in transaction volume, could adversely affect the Group’s ability to process transactions or provide banking and payment services. Processing errors could result in the Group, among other things: (i) failing to provide information, services and liquidity Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 279 Material existing and emerging risks (continued) i) Estimates and judgements relating to critical accounting policies and regulatory disclosures The preparation of financial statements requires the application of accounting policies and judgements to be made in accordance with IFRS. Regulatory returns and capital disclosures are prepared in accordance with the relevant capital reporting requirements and also require assumptions and estimates to be made. The key areas involving a higher degree of judgement or complexity, or areas where assumptions are significant to the consolidated and individual financial statements, include credit impairment provisions, taxes, fair value of financial instruments, goodwill and intangible assets, pensions and post-retirement benefits, and provisions including conduct and legal, competition and regulatory matters (refer to the notes to the audited financial statements for further details). There is a risk that if the judgement exercised, or the estimates or assumptions used, subsequently turn out to be incorrect, this could result in material losses to the Group, beyond what was anticipated or provided for. Further development of accounting standards and regulatory interpretations could also materially impact the Group’s results of operations, financial condition and prospects. j) Tax risk The Group is required to comply with the domestic and international tax laws and practice of all countries in which it has business operations. There is a risk that the Group could suffer losses due to additional tax charges, other financial costs or reputational damage as a result of failing to comply with such laws and practice (including where the Group’s interpretation of such laws differs from the interpretation of tax authorities), or by failing to manage its tax affairs in an appropriate manner, with much of this risk attributable to the international structure of the Group. In addition, the introduction of new international tax regimes, increasing tax authority focus on reporting and disclosure requirements around the world as well as the digitisation of the administration of tax have the potential to increase the Group’s tax compliance obligations further. The OECD and G20 Inclusive Framework on Base Erosion and Profit Shifting has announced plans to introduce a global minimum tax from 2023. UK legislation to implement these rules is expected to apply from 1 January 2024 which will increase the Group's tax compliance obligations. In addition, the US enacted the Inflation Reduction Act in August 2022 which introduced a corporate alternative minimum tax on adjusted financial statement income effective from 1 January 2023. These new tax regimes may require systems and process changes. Any systems and process changes introduce additional operational risk. k) Ability to hire and retain appropriately qualified employees As a regulated financial institution, the Group requires diversified and specialist skilled colleagues. The Group’s ability to attract, develop and retain a diverse mix of talent is key to the delivery of its core business activity and strategy. This is impacted by a range of external and internal factors, such as macroeconomic factors, labour and immigration policy in the jurisdictions in which the Group operates, industry-wide headcount reductions in particular sectors, regulatory limits on compensation for senior executives and the potential effects on employee engagement and wellbeing from long-term periods of working remotely. Failure to attract or prevent the departure of appropriately qualified and skilled employees could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. Additionally, this may result in disruption to service which could in turn lead to customer detriment and reputational damage. + For further details on the Group’s approach to operational risk, refer to the operational risk management and operational risk performance sections. vi) Model risk Model risk is the potential for adverse consequences from decisions based on incorrect or misused model outputs and reports. The Group relies on models to support a broad range of business and risk management activities, including informing business decisions and strategies, measuring and limiting risk, valuing exposures (including the calculation of impairment), conducting stress testing, calculating RWAs and assessing capital adequacy, supporting new business acceptance, risk and reward evaluation, managing client assets, and meeting reporting requirements. Models are, by their nature, imperfect representations of reality and have some degree of uncertainty because they rely on assumptions and inputs, and so are subject to intrinsic uncertainty, errors and inappropriate use affecting the accuracy of their outputs. This may be exacerbated when dealing with unprecedented scenarios, as was the case during the COVID-19 pandemic, due to the lack of reliable historical reference points and data. For instance, the quality of the data used in models across the Group has a material impact on the accuracy and completeness of its risk and financial metrics. Model uncertainty, errors and inappropriate use may result in (among other things) the Group making inappropriate business decisions and/or inaccuracies or errors in the Group’s risk management and regulatory reporting processes. This could result in significant financial loss, imposition of additional capital requirements, enhanced regulatory supervision and reputational damage, all of which could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. + For further details on the Group’s approach to model risk, refer to the model risk management and model risk performance sections. vii) Conduct risk Conduct risk is the risk of poor outcomes for, or harm to, customers, clients and markets, arising from the delivery of the Group's products and services. This risk could manifest itself in a variety of ways, including: a) Market conduct The Group’s businesses are exposed to risk from potential non-compliance with its policies and standards and instances of wilful and negligent misconduct by employees, all of which could result in potential customer and client detriment, enforcement action (including regulatory fines and/or sanctions), increased operation and compliance costs, redress or remediation or reputational damage which in turn could have a material adverse effect on the Group’s business, financial condition and prospects. Examples of employee misconduct which could have a material adverse effect on the Group’s business include: (i) improperly selling or marketing the Group’s products and services; (ii) engaging in insider trading, market manipulation or unauthorised trading; or (iii) misappropriating confidential or proprietary information belonging to the Group, its customers or third parties. These risks may be exacerbated in circumstances where the Group is unable to rely on physical oversight and supervision of employees, noting the move to a hybrid working model for many colleagues. b) Customer protection The Group must ensure that its customers, particularly those that are vulnerable, are able to make well-informed decisions on how best to use the Group’s Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 280 Material existing and emerging risks (continued) financial services and understand the protection available to them if something goes wrong. Poor customer outcomes can result from the failure to: (i) communicate fairly and clearly with customers; (ii) provide services in a timely and fair manner; (iii) handle and protect customer data appropriately; and (iv) undertake appropriate activity to address customer detriment, including the adherence to regulatory and legal requirements on complaint handling. The Group is at risk of financial loss and reputational damage as a result. A key area of focus is the implementation and embedment of the FCA’s new Consumer Duty, with rules for open products and services due to take effect at the end July 2023. This will impact areas including governance and accountability, MI and reporting, communications, product design and end-to-end customer journeys. The Group may be required to incur significant additional expense in connection with this regulatory change. c) Product design and review risk Products and services must meet the needs of clients, customers, markets and the Group throughout their life cycle, However, there is a risk that the design and review of the Group’s products and services fail to reasonably consider and address potential or actual negative outcomes for customers, which may result in customer detriment, enforcement action (including regulatory fines and/or sanctions), redress and remediation and reputational damage. Both the design and review of products and services are a key area of focus for regulators and the Group. d) Financial crime The Group may be adversely affected if it fails to effectively mitigate the risk that third parties or its employees facilitate, or that its products and services are used to facilitate, financial crime (money laundering, terrorist financing, breaches of economic and financial sanctions, bribery and corruption, and the facilitation of tax evasion). UK and US regulations covering financial institutions continue to focus on combating financial crime. Failure to comply may lead to enforcement action by the Group’s regulators, including severe penalties, which may have a material adverse effect on the Group’s business, financial condition, prospects and reputation. e) Conflicts of interest Identifying and managing Conflicts of Interest is fundamental to the conduct of the Group's business, relationships with Customers, and the markets in which the Group operates. Understanding the Conflicts of Interest that impact or potentially impact the Group enables them to be handled appropriately. Even if there is no evidence of improper actions, a Conflict of Interest can create an appearance of impropriety that undermines confidence in the Group and its Employees. If the Group does not identify and manage Conflicts of Interest (business or personal) appropriately, it could have an adverse effect on the Group’s business, customers and the markets within which it operates. f) Regulatory focus on culture and accountability Regulators around the world continue to emphasise the importance of culture and personal accountability and enforce the adoption of adequate internal reporting and whistleblowing procedures to help to promote appropriate conduct and drive positive outcomes for customers, colleagues, clients and markets. The requirements and expectations of the UK Senior Managers Regime, Certification Regime and Conduct Rules reinforce additional accountabilities for individuals across the Group, with an increased focus on governance and rigour, with similar requirements also introduced in other jurisdictions globally. Failure to meet these requirements and expectations may lead to regulatory sanctions, both for the individuals and the Group. + For further details on the Group’s approach to conduct risk, refer to the conduct risk management and conduct risk performance sections. viii) Reputation risk Reputation risk is the risk that an action, transaction, investment, event, decision or business relationship will reduce trust in the Group’s integrity and/or competence. Any material lapse in standards of integrity, compliance, customer service or operating efficiency may represent a potential reputation risk. Stakeholder expectations constantly evolve, and so reputation risk is dynamic and varies between geographical regions, groups and individuals. A risk arising in one business area can have an adverse effect upon the Group’s overall reputation and any one transaction, investment or event (in the perception of key stakeholders) can reduce trust in the Group’s integrity and competence. The Group’s association with sensitive topics and sectors has been, and in some instances continues to be, an area of concern for stakeholders, including: (i) the financing of, and investments in, businesses which operate in sectors that are sensitive because of their relative carbon intensity or local environmental impact; (ii) potential association with human rights violations (including combating modern slavery) in the Group’s operations or supply chain and by clients and customers; and (iii) the financing of businesses which manufacture and export military and riot control goods and services. Reputation risk could also arise from negative public opinion about the actual, or perceived, manner in which the Group (including its employees, clients and other associations) conducts its business activities, or the Group’s financial performance, as well as actual or perceived practices in banking and the financial services industry generally. Modern technologies, in particular, online social media channels and other broadcast tools that facilitate communication with large audiences in short time frames and with minimal costs, may significantly enhance and accelerate the distribution and effect of damaging information and allegations. Negative public opinion may adversely affect the Group’s ability to retain and attract customers, in particular, corporate and retail depositors, and to retain and motivate staff, and could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. In addition to the above, reputation risk has the potential to arise from operational issues or conduct matters which cause detriment to customers, clients, market integrity, effective competition or the Group (refer to ‘v) Operational risk’ above). + For further details on the Group’s approach to reputation risk, refer to the reputation risk management and reputation risk performance sections. ix) Legal risk and legal, competition and regulatory matters The Group conducts activities in a highly regulated global market which exposes it and its employees to legal risk arising from: (i) the multitude of laws and regulations that apply to the businesses it operates, which are highly dynamic, may vary between jurisdictions and/or conflict, and may be unclear in their application to particular circumstances especially in new and emerging areas; and (ii) the diversified and evolving nature of the Group’s businesses and business practices. In each case, this exposes the Group and its employees to the risk of loss or the imposition of penalties, damages or fines from the failure of members of the Group to meet their respective obligations, including legal, regulatory or contractual requirements. Legal risk may arise in Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 281 Material existing and emerging risks (continued) relation to any number of the material existing and emerging risks identified above. against the Group for financing or contributing to climate change and environmental degradation. The outcome of legal, competition and regulatory matters, both those to which the Group is currently exposed and any others which may arise in the future, is difficult to predict (and any provision made in the Group’s financial statements relating to those matters may not be sufficient to cover actual losses). In connection with such matters, the Group may incur significant expense, regardless of the ultimate outcome, and any such matters could expose the Group to any of the following outcomes: substantial monetary damages, settlements and/or fines; remediation of affected customers and clients; other penalties and injunctive relief; additional litigation; criminal prosecution; the loss of any existing agreed protection from prosecution; regulatory restrictions on the Group’s business operations including the withdrawal of authorisations; increased regulatory compliance requirements or changes to laws or regulations; suspension of operations; public reprimands or censure; loss of significant assets or business; a negative effect on the Group’s reputation; loss of confidence by investors, counterparties, clients and/or customers; risk of credit rating agency downgrades; potential negative impact on the availability and/or cost of funding and liquidity; and/or dismissal or resignation of key individuals. In light of the uncertainties involved in legal, competition and regulatory matters, there can be no assurance that the outcome of a particular matter or matters (including formerly active matters or those arising after the date of this Annual Report) will not have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. A breach of applicable legislation and/or regulations by the Group or its employees could result in criminal prosecution, regulatory censure, potentially significant fines and other sanctions in the jurisdictions in which the Group operates. Where clients, customers or other third parties are harmed by the Group’s conduct, this may also give rise to civil legal proceedings, including class actions. Other legal disputes may also arise between the Group and third parties relating to matters such as breaches or enforcement of legal rights or obligations arising under contracts, statutes or common law. Adverse findings in any such matters may result in the Group being liable to third parties or may result in the Group’s rights not being enforced or not being enforced in the manner intended or desired by the Group. Details of legal, competition and regulatory matters to which the Group is currently exposed are set out in Note 26. In addition to matters specifically described in Note 26, the Group is engaged in various other legal proceedings which arise in the ordinary course of business. The Group is also subject to requests for information, investigations and other reviews by regulators, governmental and other public bodies in connection with business activities in which the Group is, or has been, engaged and may (from time to time) be subject to legal proceedings and other investigations relating to financial and non-financial disclosures made by members of the Group (including, but not limited to, in relation to ESG disclosures). Additionally, due to the increasing number of new climate and sustainability-related laws and regulations (or laws and regulatory processes and policies (including approach to fiduciary duties) seeking to protect the energy and other high carbon sectors from any risks of divestment or challenges in accessing finance), growing demand from investors and customers for environmentally sustainable products and services, and regulatory scrutiny, financial institutions, including the Group, may through their business activities face increasing litigation, conduct, enforcement and contract liability risks related to climate change, environmental degradation and other social, governance and sustainability-related issues. Furthermore, there is a risk that shareholders, campaign groups, customers and other interest groups could seek to take legal action Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 282 Principal risk management Climate risk management The impact on Financial and Operational Risks arising from climate change through physical risks, risks associated with transitioning to a lower carbon economy and connected risks arising as a result of second order impacts of these two drivers on portfolios. Overview Given the risks associated with climate change, and to support the Group’s ambition to be a net zero bank by 2050, climate risk became a Principal Risk in January 2022. To support the embedment of the Principal Risk, in 2022 the Group delivered a Climate Risk Plan with three overarching objectives: 1. Governance Framework: Establish a Climate Risk Committee, a Climate Risk Controls Forum, and refresh the Board Risk Committee reporting 2. Scenario Analysis: Build out the vision and plan for undertaking scenario analysis exercises. This involved developing a climate scenario analysis framework 3. Carbon Modelling: Expand the BlueTrackTM model for measuring and tracking financed emissions to cover our automobiles and residential real estate portfolios, in addition to energy, power, cement and steel. Organisation, roles and responsibilities On behalf of the Board, the Board Risk Committee (BRC) reviews and approves the Group’s approach to managing the financial and operational risks associated with climate change. Reputation risk is the responsibility of the Board, which directly handles the most material issues facing the Group. Broader sustainability matters and other reputation risk issues associated with climate change are coordinated by the Sustainability Team. The Head of Climate Risk reports directly to the Group Chief Risk Officer. The Group Risk Committee (GRC) is the most senior executive body responsible for review and challenge of risk practices and risk profile, for climate risk and other principal risk types. To support the oversight of Barclays’ climate risk profile, a Climate Risk Committee (CRC) has been established as a sub-committee of the GRC. Authority of the CRC is delegated by the GRC. CRC is chaired by Head of Climate Risk. CRC has reviewed and approved a range of updates including a refreshed Climate Risk Vision, updates from each of the financial and operational risks and from the material legal entities of the firm, along with key regulatory, policy and legal themes, the risk register and appetite statement and constraint, and reviewed the control environment. The Climate Risk Control Forum (CRCF) was established in July 2022 and escalates to GRC via the Group Controls Committee. The purpose of the CRCF is to oversee the consistent and effective implementation and operation of the Barclays Controls Framework as relating to Climate risk. It reviews the control environment relating to Climate risk, including risk events, policy and issues management. Climate risk assurance groups have been established and are responsible for performing Climate risk specific reviews to ensure we are continually improving and addressing identified issues in our risk practices. Barclays entities, namely Barclays Bank UK, Barclays International, Barclays Bank Ireland and the US Intermediate Holding Company, also continued to implement Climate risk within their frameworks, where Heads of Climate Risk have been appointed. The elevation of climate risk to Principal Risk included establishment of governance elements, including: • a Climate Risk Framework that defines climate risk and summarises the approach to identification, measurement, monitoring and reporting of climate risk • Climate Risk Appetite and constraint at Group level established in line with the Group’s risk appetite approach and informed by scenario analysis • Climate Risk Register is used to inform risk appetite. This includes a breakdown of key risk drivers for physical and transition risks, and materiality ratings which are inferred from the results of the 2020 climate Internal Stress Test and 2021 Bank of England’s Climate Biennial Exploratory Scenario (CBES). The Climate Risk Register continues to align with the Group’s Risk Register Taxonomy. + Further details on our Scenario Analysis can be found from page 128 Climate risk across Financial and Operational Risks is managed via a Climate Change Financial Risk and Operational Risk Policy (CCFOR), which is embedded in each of the Financial and Operational Principal Risk Frameworks. Climate risk across Model, Conduct, Reputation and Legal Principal Risks are out of the scope of the Climate Risk Framework and continue to be managed under their respective Principal Risk Frameworks. Enterprise Risk Framework (ERMF) Governance Climate Risk Framework (CRF) Reputation Risk Management Framework (RRMF) Board Risk Committee (BRC) Board Risk Credit, market, treasury & capital and operational risks Sustainability matters and reputation risk associated with climate change Group Risk Committee (GRC) Global Head of Public Policy and Corporate Responsibility Ownership Climate Risk Committee (CRC) Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 283 Principal risk management (continued) Risk appetite In 2022, as part of establishing Climate risk as a principal risk, Barclays defined a risk appetite statement and constraint for climate risk. The statement outlines that Barclays views climate change as a driver of financial and operational risk. Barclays has appetite to manage climate risk in line with its climate ambition and to reduce financed emissions in line with disclosed targets. Targets to 2025 are set for Energy and Power. Targets to 2030 are set for Energy, Power, Cement, Steel and Automotive Manufacturing. An assessment of progress to reduce financed emissions against the disclosed targets was made. It noted that reaching even the lower emissions reduction in the disclosed ranges may prove challenging and that a clearer forward plan be defined to set out the range of management actions that could be taken to meet the disclosed target ranges, including a more detailed understanding of client transition expectations and the external dependencies and variables beyond Barclays' control that may determine the pace of transition. Work has commenced on a Client Transition Framework which will support our evaluation of our corporate clients' current and expected future progress as they transition to a low-carbon business model and 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. + Further details on Barclays' disclosed targets can be found in the Climate and Sustainability report The table below sets out how climate risk is integrated across Barclays using the ERMF aligned Climate Risk Framework, CCFOR and the Climate Change Standard. Enterprise Risk Management Framework (ERMF) Climate Risk Framework Responsibilities Climate Risk Credit Risk Market Risk Treasury and Capital Risk Operational Risk Reputation Risk Climate Change Financial Risk and Operational Risk Policy Climate Change Standard • Identify and Assess climate- related risk factors • Apply stress scenarios, assess stress losses and set risk limits • Oversight by Market Risk Committee and Board Risk Committee • Identify exposure to climate risk • Consider key risk indicators and limits to support risk management • Include in ICAAP and ILAAP • Oversight by Treasury & Capital Risk Committee and Board Risk Committee • • Integrate climate change across different risk categories, e.g. Operational Recovery Planning and Premises Include climate change within risk assessment processes including Strategic Risk Assessment • Outline minimum requirements and controls for Reputation Risk management relating to client relationships or transactions • Outline the expected business behaviours in relation to these issues • Outline the approach to enhanced due diligence. • Monitor portfolio level exposure to the physical and transition risks of climate change • Review individual obligors’ exposure to climate risk via the Climate Lens questionnaire • Assess climate risk within Sovereign Credit Risk reviews • Include material exposures to climate risk within the Internal Capital Adequacy Assessment Process (ICAAP) • Oversight by Legal Entity Climate Risk Forums and relevant Risk Management Committees as appropriate, including regular climate risk reporting up to Board Risk Committee level • Provide climate horizon scanning information and emerging trends to BRC and Principal Risk Leads • Recommend risk appetite statement, constraints and exclusions to BRC • Define areas of concern and recommend scenario analysis priorities • Lead the development of climate-specific risk methodologies Interpret stress test results for relevance as drivers of risk • • Review and challenge risk type approaches and support consistency across risk types • Aggregate and monitor a central climate risk view across in scope risk types Ownership Climate Risk Accountable Officer Credit Risk Accountable Officer Market Risk Accountable Officer Treasury & Capital Risk Accountable Officer Operational Risk Accountable Officer Group Head of Sustainability + Read more on pages 285-286 + Read more on pages 286-287 + Read more on pages 287-288 + Read more on pages 288-289 + Read more on page 289 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 284 Principal risk management (continued) Climate-related Risk Management Processes Frequency of assessment Risk identification Risk assessment Credit Risk Annually Market Risk Quarterly Treasury and Capital Risk Operational Risk Various (quarterly for pensions, IRRBB and liquidity risk; annually for capital risk) Annually Identified by assessing climate-related risk factors across asset classes, sectors and geographies, and aggregating market risk exposures from climate- related risks. Identified through risk assessment activity across certain industries and asset classes to analyse and assess exposures which may be impacted by climate- related risks. Confirmed operational risks associated with climate change are included in the Bank’s Operational Risk Taxonomy. Climate risks are included within the Strategic Risk Assessment process. Measured by using adverse multi-asset stress scenarios applied to individual risk factors reflecting climate risks across sectors, countries and regions. Measured as part of stress testing and key risk indicator monitoring. Established reporting on internal and external climate-related risk events to the Climate Risk Control Forum. Risk tolerances for premises and resilience risks are reviewed so these adequately capture climate- related risk drivers. Exposure in mortgage portfolio identified through a concentration risk framework. Exposure in BBPLC Identified as part of sovereign, portfolio and obligor credit annual reviews. Portfolios are monitored through regular reporting of climate metrics and are assessed against mandates and limits where appropriate Clients in elevated risk sectors above a threshold exposure will have their credit risk exposure to Climate risk qualitatively assessed through the Credit Climate Lens questionnaire. Future exposure to Climate risk as a driver to Credit risk is quantified through scenario analysis and stress testing exercises. In addition to the Credit Climate Lens questionnaire, Sovereign Credit Reviews are also carried out for Sovereigns above a threshold exposure to assess their susceptibility to Climate risks. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 285 Principal risk management (continued) TCFD Climate risk management Credit Risk Definition The risk of loss to the Group from the failure of clients, customers or counterparties, including sovereigns, to fully honour their financial obligations to the Group, including the whole and timely payment of principal, interest, collateral and other receivables. Climate Risk Identification Risk identification is driven by assessing portfolios’ sensitivity and susceptibility to the financial and operational risks of climate change. Sectors are categorised into elevated and non-elevated risk. These sectors have been identified through the analysis of Barclays Industrial Classifications by portfolio, informed by results of scenario analysis exercises. Across corporate and industrial sectors, elevated risk sectors are those with high exposure to both physical and transition risks of climate change. These are defined in the Climate Change Financial Risk and Operational Risk (CCFOR) Policy and apply across the Group. This assessment is updated on an annual basis. The list of Elevated Sectors is revisited on an annual basis to ensure that the risks identified as impacting the sector are still accurately articulated and assessed, and that emerging risks are being captured within the assessment. Each sector is assessed by climate risk drivers and impacts. Physical and transition risk drivers and impacts were designed internally and are based on rating agencies’ climate change assessments, recommendations of the TCFD and our involvement in UNEP FI’s TCFD Banking Pilot Project Phase II. To assist in determining the level of potential credit risk arising from climate change for Sovereigns with material exposure, risks are reviewed annually at a minimum. Climate Risk Assessment Corporate Risk Assessment In 2019,the Credit Climate Lens was developed to identify and assess how Climate Change may impact the Group’s wholesale credit risk exposures, against physical and transition risks. The Credit Climate Lens review is completed for wholesale clients operating in elevated risk sectors with material exposure of more than £10m (£5m for BUK clients). It is completed by either Banking or Credit Risk teams across all Barclays entities. Risk Type Focus area Sample question Physical Acute: Frequency and intensity of extreme weather events Reducing availability of financial protection/insurance What is the exposure of operations and supporting assets to direct damage from extreme weather events? What is the severity of the potential lack of insurance covering business interruptions caused by extreme weather events? Transition Regulatory, policy and supervisory change Does the company have an adaptation plan in place? Technology change Each lens question has a threshold assigned to it that corresponds to a rating of Low, Moderate or High risk. These are aggregated to provide an overall rating for the client with rationale for the assigned rating, and comments on both physical and transition risks. In 2022, a Climate Lens review was carried out on annual review, origination or other purpose facility review of 382 transactions in Barclays International. In Barclays UK, 181 clients have been assessed by Relationship Teams using the Credit Climate Lens. As part of Barclays ongoing focus to review implementation and adherence to principal risk frameworks, and our drive to develop our capabilities in this area, the climate lens will be evolved to further improve implementation and to become more quantitative. Non-Corporate Risk Assessment To support our scenario analysis modelling, in 2021 we developed risk factor assessments for Municipalities, Financial Institutions and Non-Bank Financial Institutions, building on initial work to develop our Sovereign approach. Each of these portfolios uses a risk matrix approach across tailored physical, transition and connected risk factors. These factors include, for example, the proportion of institution’s exposure to sectors exposed to climate risk, reputation risk scores from climate-related issues. In addition to the risk assessment completed for these areas, scenario analysis and stress testing are used as primary tools to support climate risk assessment and the overall resilience of Barclays’ strategy. What is the likelihood of accelerating contingent liabilities, with alternative technologies displacing existing operations and supporting assets? Sovereign Risk Assessment Our assessment of climate risk for sovereigns includes a risk factors matrix incorporating physical, transition and connected risk factors and is part of our ongoing risk identification as part of the CCFOR Policy challenges, including seven Transition Risk factors, three Physical Risk factors and three Economic & Fiscal Strength factors. A number of external metrics have also been utilised, including the University of Notre Dame’s Global Adaptation Index and Climate Change Performance Index – Climate Policy. These factors are then applied to all countries Barclays has exposure to. Sovereigns that are most impacted to these factors are monitored on an ongoing basis. Climate Risk Management On an annual basis, where an overall Credit Climate Lens rating for a client is assessed as Medium or High, clients are referred to the Climate Risk team. Following their analysis, the Climate Risk team provides recommendations and guidance on how to proceed, addressing any issues identified during the EDD process and the results of EDD are factored into credit decisions. Information and insights gained from the EDD and Credit Climate Lens rating process also inform portfolio review meetings, which itself forms part of the overall risk appetite control framework. Climate Risk Reporting A Group-level Climate Risk Dashboard is presented to the Climate Risk Committee and Board Risk Committee on a quarterly basis, informing senior management and the Board of current climate risk exposures, concentrations and to monitor trends across both sectors, portfolios and regions. The dashboard was updated in 2022 to incorporate learnings from the Bank of England's Climate Biannual Exploratory Scenario (CBES). It includes exposure to portfolios with elevated transition or physical risk and progress against sector emissions targets. Climate Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 286 Principal risk management (continued) risk dashboards were also developed for material legal entities in 2022. Portfolio Reviews and Mandate & Scale Mandate & Scale Exposure Controls are a portfolio risk management tool and form part of the overall risk appetite control framework to review and control business activities. Mandates and scales are introduced to avoid the build-up of adverse exposure concentrations within portfolios through ensuring exposure is within Barclays’ mandate (i.e. aligned with expectations), and of an appropriate scale (relative to the risk and reward of the underlying activities). Limits and triggers are put in place to avoid concentrations that may lead to unexpected losses detrimental to the stability of the relevant business or the Group. They take the broader economic outlook, wider Group strategy, and risk/ return considerations into account and are set for a number of sectors and products. Climate risks have been integrated into Mandate & Scale annual credit portfolio reviews for elevated risk sectors since 2020. In 2021 Barclays Bank UK introduced a flood risk mandate within the UK Mortgage portfolio to monitor the percentage of properties (stock) in high flood risk areas. This mandate was enhanced in 2022, and a high subsidence risk mandate has also been introduced to the UK Mortgage portfolio. As a part of the bank’s general approach to portfolio management, Barclays considers macroeconomic and other drivers and events which may impact on certain sectors or geographies. This includes impacts on the identified climate elevated risk sectors and may lead to action for specific sectors or geographies. For example, in the oil & gas sector, we have considered longer-term impacts from climate transition and physical risks into our assessments and approach to the sector. In keeping with our overall aim to maintain a portfolio with a high credit quality, we take a number of considerations into account for our oil & gas portfolio – including location of assets, the economic profile (profitability) of assets, geopolitical risks, size and resilience of counterparties, and liquidity considerations. Physical, transition and connected risks arising from climate change are considered as part of the wider risk management decision process to account for the potential credit risk consequences of climate change on affected portfolios. In 2022, portfolio deep dives were conducted to supplement the existing analysis provided in the existing Mandate & Scale reviews. This included identifying and evaluating the credit risk implications of Climate risk on elevated sectors within the portfolio. Market Risk Definition The risk of loss arising from potential adverse changes in the value of the Group’s assets and liabilities from fluctuation in market variables including, but not limited to, interest rates, foreign exchange, equity prices, commodity prices, credit spreads, implied volatilities and asset correlations. Climate Risk Identification Climate change may lead to Market risk through a disorderly transition to a low- carbon economy or via physical climate events and shifts in supply and demand for financial instruments, which may then impact market prices for susceptible sectors or countries. Climate-related risks are determined at a Group level and used in the Market risk identification process. The table below outlines the climate-related risks, transition and physical, considered for all market risks under each asset class Asset Class Traded credit Securitised products Equities Macro (FX, rates, commodities) Physical Risk Transition Risk Country impact Sector impact Sector impact Countries most susceptible to climate change • Sectors reliant on stable weather conditions and power/water supply (e.g. agriculture, soft commodities, tourism, mining, manufacturing, transportation) • Financial protection – insurance against weather events • Carbon intensive sectors: – Primary producers (e.g. coal miner, oil and gas) – Consumers (e.g. petrochemicals, transport) – Supply chain (e.g. auto, retailer) • Additional cost to meet new regulatory requirements, financial penalties, carbon taxes, green energy subsidies • • Increased capex/cost for primary producers and consumers due to: – Technological/regulatory-driven shifts in consumer demand – Tightening efficiency/emissions Increases in cost, impaired quality of goods and speed of delivery due to weaknesses within the supply chain, need for alternative suppliers/products Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 287 Principal risk management (continued) Climate Risk Assessment Market risk arising from climate change is measured by applying a range of stress scenarios, that stress the core risks susceptible to climate change over long and short-term horizons to individual risk factors. Initially a Climate Internal Stress Test (Climate-IST) was run in 2020 to further inform understanding of climate risks. Market Risk performed an assessment of the impact of a disorderly transition to a low-carbon economy on the market risk portfolios across Barclays Group. In addition to the main Markets portfolios, Cross Markets and Commodities portfolios were also included. This risk assessment was enabled by enhancements in system technology allowing the exploration of climate change impact on less-climate risk exposed sectors. Market Risk continues to run such Climate-IST scenarios every quarter, and has further refined the existing sector/ country taxonomy to reflect the climate risk sensitivity. Although Market Risk was out of scope of the 2021 Bank of England Climate Biennial Exploratory Scenario (CBES), the existing Market Risk scenario analysis has been more closely aligned to the CBES scenarios. Market Risk Climate Scenario Narrative The scenario is designed to explore a disorderly transition to a low-carbon economy until 2050, assuming insufficient progress in climate policy changes until 2030. In 2030, the climate policy changes are put in place at speed in order to meet the global climate targets by 2050 which causes global macroeconomic shock and adverse market reaction in 2030, followed by markets recovery in 2031 (no other risk- off episodes until 2050): • severe and prolonged global recession, elevated risk premium, rise in unemployment and borrowing cost, sharp drop in global demand and in economic activity, housing market slump • supply disruptions alongside currency weakness and trade war causes sharp increase in inflation. Central Banks attempt to contain rising prices by hiking the Bank Rate by several percentage points. This causes the usual “safe- havens” such as Treasuries, Gilts or Bonds to sell off along with Equity and Credit markets • the scenario is meant to test the bank’s ability to absorb a large shock by combining Transition and Physical risks. Stress losses arising from this scenario measure and aggregate climate-related risks, and are calculated quarterly. Climate Risk Management The pattern of stress losses arising from the stress scenario is used to estimate and set ongoing limits, consistent with the Board-approved maximum stress loss capacity for Market risk, under which Barclays monitors and controls Market risk arising from climate change. These limits are reviewed on an annual basis and must include consideration of potential portfolio impacts arising from climate-related risks. Furthermore, climate-related Market risk is managed through ongoing monitoring that is reported through the existing risk committee structures so that key risk indicators are monitored and escalated as required. Treasury and Capital Risk Definition Capital Risk The risk that the Group has an insufficient level or composition of capital to support its normal business activities and to meet its regulatory capital requirements under normal operating environments or stressed conditions (both actual and as defined for internal planning or regulatory testing purposes). Pension Risk The risk that the Group's capital and/or distributable earnings are reduced due to changes in the value of the Group's defined benefit obligations or the assets funding these defined benefit obligations. Liquidity Risk The risk that the Group is unable to meet its contractual or contingent obligations or that it does not have the appropriate amount, tenor and composition of funding and liquidity to support its assets. Interest Rate Risk in the Banking Book (IRRBB) The risk that the Group is exposed to capital or income volatility because of a mismatch between the interest rate exposures of its (non-traded) assets and liabilities. Climate Risk Identification Climate change may lead to additional levels of risk within Treasury & Capital Risk through physical, transition or connected climate risks. Climate related risks within Treasury & Capital Risk are identified as part of the climate risk register preparation. The climate related risks are identified using severe yet plausible climate related scenarios to provide qualitative and/or quantitative impacts on, or in addition to financial risk drivers. Climate Risk Assessment Treasury & Capital Risk have focused on building awareness of how the areas within our risk oversight may be impacted by physical, transition and connected risks, and calibration of key indicators for regular reporting and monitoring. The function has continued to build upon our understanding of climate risks, including through Barclays’ participation in CBES and the addition of climate risk elements to internal stress tests. Capital Risk Barclays’ capital position is indirectly subject to climate risk through Group-wide exposures across all risk types. Treasury & Capital Risk oversees the bank’s capital management and planning activities and use the output of Group-wide climate stress tests to inform our understanding of how capital management may be impacted. Further consideration to climate risk has also been incorporated into the Group’s ICAAP narrative. Pension Risk Pension exposures are subject to climate stresses impacting market conditions. Pension holdings are primarily affected by interest rates, inflation and credit spreads which may be impacted by longer term climate change effects. To identify key areas of focus pension scheme assets have been categorised based on their country and industry risk through the lens of climate change. Liquidity Risk Barclays proactively reviews its approach to managing funding and liquidity risks that may arise from certain physical risks such as extreme weather events, or transition risks such as a move to a low-carbon economy. An enhanced risk assessment has been performed during 2022 to explore the potential vulnerabilities to certain industries and asset classes that may be subject to a lack of available liquidity under a climate stress scenario. Additional scenario analysis has been carried out during 2022 to further explore specific climate related liquidity risks. Further consideration to climate risk has also been incorporated into the Group’s ILAAP. Interest Rate Risk in the Banking Book (IRRBB) Fair value positions such as those within the Liquid Asset Buffer are exposed to Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 288 Principal risk management (continued) general market conditions which could deteriorate under longer term climate stress. Physical or transition risks may lead to government fiscal responses that would impact market volatility. Building on analysis from 2021 exercises, updates have been made to climate related categorisation of investments and subsequent stress methodologies specific to climate risk reporting. Fair value private equity positions managed by the Principal Investments team are most likely to be impacted by stresses to energy markets and carbon transition changes. The future investment strategy of the team and long-term revenue of these investments may be influenced by changing climate and legislative conditions. In line with Barclays’ strategy, the team has continued to increase exposure to new initiatives through the Sustainable Impact Capital programme. At the same time the divestment of legacy natural resource investments has accelerated and total exposure to the Oil & Gas sector has significantly decreased. Accrual Banking Book Net Interest Income may be moderately impacted by climate change through both physical and transition risks. Such risks could materialise through impact on deposit levels and lead to potential changes in composition and performance of asset portfolios, pricing and changes to longer term interest rate risk management strategies. In 2021, an assessment was completed focusing on the economic impact of potential forced unwind of structural hedges on the deposit base as a result of significant outflows triggered by concerns about Barclays’ climate change credentials. Climate Risk Management Insights on climate-related risks and potential impacts are incorporated as appropriate to inform the setting of relevant key indicators and risk limits, which are overseen by the Treasury and Capital Risk Committee on a quarterly basis. Barclays’ assessment of capital and liquidity requirements factors in climate considerations as part of Barclays annual ICAAP and ILAAP submissions. Operational Risk Definition The risk of loss to the Group from inadequate or failed processes, systems, human factors or due to external events (for example, extreme weather events) where the root cause is not due to credit or market risks. Climate Risk Identification From a climate risk perspective, Barclays is exposed to climate change risks in its operations, either directly or via the operations of its suppliers. This exposure is predominantly related to physical risks such as extreme weather events (e.g. cyclones, hurricanes and floods), along with longer-term changes in weather patterns (e.g. increased mean temperatures, sea levels, changing rain patterns, water stress/scarcity or drought conditions). The Operational Risk Framework includes risks that are associated with climate change as well as the activities required to identify, measure and manage these risks as part of the operational risk profile. Operational Risk maintains a taxonomy of operational risks on behalf of the Group, which includes the operational risks across Principal Risks (e.g. Conduct risk, Legal risk, Model risk) as well as operational failures associated with the financial Principal Risks (Credit, Market, Treasury and Capital). The Operational Risk Taxonomy forms part of the Operational Risk Framework. This framework is reviewed and updated, where appropriate, on an annual basis. As physical risk events related to extreme weather events could impact Barclays’ operational capabilities, climate change is already integrated into the Operational Risk Framework. The risks categories most likely to be impacted by physical risks are Premises Risk and Operational Recovery Planning. Premises Risk Ensures that operational risk requirements are understood, monitored and mitigated appropriately, and are managed to ensure compliance with relevant legal and regulatory requirements, including any required authorisations, permissions and licenses. Premises risk is managed under the Group Property Policy and Standards, which outline Barclays’ approach to addressing environmental risks with respect to the availability of operational premises. This Policy defines a low tolerance threshold for premises unavailability which covers the risk of the physical impacts of climate change, and aims to ensure that Barclays’ premises do not become unavailable and/or do not affect at least one Barclays product/ service for a sustained period of time. Additionally, any potential strategic site’s exposure to extreme weather events is considered. Similarly, this Policy defines no tolerance for failures in Barclays Premises that result, or are likely to result, in harm to the environment. Operational Recovery Planning An integral part of the firm’s approach to Operational Resilience. The purpose is to enable Barclays to minimise the impact of disruption when it occurs, which could be caused by climate related events. Barclays maintains and annually reviews recovery plans and capabilities. Climate Risk Assessment Operational Risk continues to identify, manage and measure climate risk as part of the existing operational risk profile through its business as usual activities. These activities include working with Premises and Operational Recovery Planning Horizontal Owners to identify and respond to any new emerging climate risk related impacts or regulatory requirements, and consideration of changes to approach or taxonomy in line with regulatory requirements. We continue to explore different approaches to provide a quantification assessment, albeit challenges for quantification relating to the lack of appropriately granular, business- relevant data and tools remain. Quantifying operational risk through existing structured scenarios would allow us to better examine and size the potential incremental impact arising from climate risks. However, the challenge of determining scenarios that are business orientated, sourcing available and relevant information to support the effort, and connecting the given scenario to the idiosyncrasies of operational risk, remains a factor under consideration. In 2022, a third party organisation conducted a climate risk assessment on our mission critical buildings and data centres. The results of the analysis identified risks and opportunities. These included physical and transition risks such as flooding and market risks and opportunities such as embedding energy and material efficiency and installing low carbon heating and cooling technologies. Furthermore, the assessment identified the potential average annual loss (AAL) to our operational portfolio following different climate scenarios. In a low emissions scenario, it was estimated we have an AAL of £40 million and in a high emissions scenario it was estimated we could experience an AAL of £60 million. These findings will inform our risk management and decision-making process. Additionally, Barclays has a portfolio of structured scenarios that are assessed for Group and certain Legal Entities, for which Operational Risk coordinates the process. These scenarios map to the risk taxonomy and cover a range of risks where climate Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 289 Principal risk management (continued) operational risk profile through business as usual activities. This includes working with Premises and Operational Recovery Planning Horizontal Owners to identify and respond to any new emerging climate change related impacts or regulatory requirements, and consideration of changes to approach or taxonomy in line with regulatory requirements. Reputation Risk Definition Reputation risk is the risk that an action, transaction, investment, event, decision or business relationship will reduce trust in the Group’s integrity and/or competence. Barclays is linked to clients across a wide range of sectors and geographies, including those that have the potential to cause or contribute to significant adverse impacts on the climate. Climate Risk Management Environmental and social risks are governed and managed through our ERMF, setting our strategic approach for risk management by defining standards, objectives and responsibilities for all areas of Barclays. The ERMF is complemented by a number of other frameworks, policies and standards, all of which are aligned to individual Principal Risks. Our assessment of environmental and social risks not only helps safeguard our reputation, which supports longevity of the business but also enhances our ability to serve our clients and support them in improving their own sustainability practices and disclosures. Our approach to identification, assessment/escalation and monitoring can be located within the Managing Impact section of this report (from page 253) while the oversight and management of climate-related issues are embedded with the Barclays governance framework (from page 141). Credit risk management (audited) The risk of loss to the Group from the failure of clients, customers or counterparties, including sovereigns, to fully honour their obligations to the Group, including the whole and timely payment of principal, interest, collateral and other receivables. implications could be an incremental factor. The potential effect of climate change has been considered qualitatively in the latest scenario assessment cycle, where climate has been found not to be an immediate factor impacting most scenarios, although greenwashing at product level, and disclosures about our green credentials, are two topical areas subject to further analysis. Climate Risk Management The Group Property Standard outlines Barclays’ approach to addressing climate risks with respect to the availability of operational premises. Additionally, exposure to extreme weather events is considered during the design or refurbishment of new and existing strategic sites. The Operational Recovery Planning standards outline Barclays’ requirements to anticipate, prevent, adapt, respond to, recover and learn from internal or external disruption. Our focus is on continuing to deliver Important Business Services to customers and clients, and minimise any impact on the wider financial system, in the event of operational disruption. The Operational Recovery Planning risk from climate change is expected to manifest through premises and supplier risk in the first instance, and if this leads to operational disruption, our operational recovery planning framework would help mitigate the impacts through invocation of crisis management, and response and recovery plans. Our approach to Operational Recovery Planning evolves in response to the changing threat landscape, and this will include consideration of climate change and its associated impacts. Barclays deploys and validates appropriate recovery strategies for its critical processes, including the ability to transfer processing to alternative locations or premises. In addition to maintaining response plans in the event of a third party disruption, for our third party service providers Operational Recovery Planning requirements are articulated through our Supplier Control Obligations (SCOs). Each third party service provider is required to attest to their compliance with the SCOs on an annual basis and further assurance is undertaken on a risk-based approach. Management, reporting and oversight is in place to monitor internal and external risk events that may be attributable to climate change. Operational Risk continues to identify, manage and measure climate change risks as part of the existing Overview The credit risk that the Group faces arises from wholesale and retail loans and advances together with the counterparty credit risk arising from derivative contracts with clients; trading activities, including: debt securities, settlement balances with market counterparties, fair value through other comprehensive income (FVOCI) assets and reverse repurchase loans. Credit risk management objectives are to: • maintain a framework of controls to oversee credit risk • identify, assess and measure credit risk clearly and accurately across the Group and within each separate business, from the level of individual facilities up to the total portfolio • control and plan credit risk taking in line with external stakeholder expectations and avoiding undesirable concentrations • monitor credit risk and adherence to agreed controls. Organisation, roles and responsibilities The first line of defence has primary responsibility for managing credit risk within the risk appetite and limits set by the Risk function, supported by a defined set of policies, standards and controls. In the entities, business risk committees (attended by the first line) monitor and review the credit risk profile of each business unit where the most material issues are escalated to the Retail Credit Risk Management Committee, Wholesale Credit Risk Management Committee and Group Risk Committee. Wholesale and retail portfolios are managed separately to reflect the differing nature of the assets; wholesale balances tend to be larger and are managed on an individual basis, while retail balances are greater in number but lesser in value and are, therefore, managed in aggregated segments. The responsibilities of the credit risk management teams in the businesses, the sanctioning team and other shared services include: sanctioning new credit agreements (principally wholesale); setting strategies for approval of transactions (principally retail); setting risk appetite; monitoring risk against limits and other parameters; maintaining robust processes, data gathering, quality, storage and reporting methods for effective credit risk management; performing effective turnaround and workout scenarios for wholesale portfolios via dedicated restructuring and recoveries teams; maintaining robust collections and recovery processes/units for retail portfolios; and review and validation of Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 290 Principal risk management (continued) credit risk measurement models. The credit risk management teams in each legal entity are accountable to the relevant Legal Entity CRO, who reports to the Group CRO. For wholesale portfolios, credit risk managers are organised in sanctioning teams by geography, industry and/or product. In wholesale portfolios, credit risk approval is undertaken by experienced credit risk professionals operating within a clearly defined delegated authority framework, with only the most senior credit officers assigned the higher levels of delegated authority. The largest credit exposures, which are outside the Risk Sanctioning Unit or Risk Distribution Committee authority, require the support of a legal entity Senior Credit Officer. For exposures in excess of the legal entity Senior Credit Officer’s authority, approval by Group Senior Credit Officer/Board Risk Committee is also required. The Group Credit Risk Committee, attended by legal entity Senior Credit Officers, provides a formal mechanism for the Group Senior Credit Officer to exercise the highest level of credit authority over the most material Group single name exposures. Credit risk mitigation The Group employs a range of techniques and strategies to actively mitigate credit risks. These can broadly be divided into three types: • netting and set-off • collateral • risk transfer. Netting and set-off Credit risk exposures can be reduced by applying netting and set-off. For derivative transactions, the Group’s normal practice is, on a legal entity basis, to enter into standard master agreements with counterparties (e.g. ISDAs). These master agreements typically allow for netting of credit risk exposure to a counterparty resulting from derivative transactions against the obligations to the counterparty in the event of default, and so produce a lower net credit exposure. These agreements may also reduce settlement exposure (e.g. for foreign exchange transactions) by allowing payments on the same day in the same currency to be set- off against one another. Collateral The Group has the ability to call on collateral in the event of default of the counterparty, comprising: • home loans: a fixed charge over residential property in the form of houses, flats and other dwellings • wholesale lending: a fixed charge over commercial property and other physical assets, in various forms • other retail lending: includes charges over motor vehicles and other physical assets; second lien charges over residential property; and finance lease receivables • derivatives: the Group also often seeks to enter into a margin agreement (e.g. Credit Support Annex) with counterparties with which the Group has master netting agreements in place. These annexes to master agreements provide a mechanism for further reducing credit risk, whereby collateral (margin) is posted on a regular basis (typically daily) to collateralise the mark to market exposure of a derivative portfolio measured on a net basis • reverse repurchase agreements: collateral typically comprises highly liquid securities which have been legally transferred to the Group subject to an agreement to return them for a fixed price • financial guarantees and similar off- balance sheet commitments: cash collateral may be held against these arrangements. Risk transfer A range of instruments including guarantees, credit insurance, credit derivatives and securitisation can be used to transfer credit risk from one counterparty to another. These mitigate credit risk in two main ways: • if the risk is transferred to a counterparty which is more creditworthy than the original counterparty, then overall credit risk is reduced • where recourse to the first counterparty remains, both counterparties must default before a loss materialises. This is less likely than the default of either counterparty individually so credit risk is reduced. + Detailed policies are in place to appropriately recognise and record credit risk mitigation. For more information, refer to pages 118 to 120 of the Barclays PLC Pillar 3 Report 2022 (unaudited). Governance and oversight of ECLs under IFRS 9 The Group’s organisational structure and internal governance processes oversee the estimation of ECL across several areas, including: i) setting requirements in policy, including key assumptions and the application of key judgements; ii) the design and execution of models; and iii) review of ECL results. i) Impairment policy requirements are set and reviewed regularly, at a minimum annually, to maintain adherence to accounting standards. Key judgements inherent in policy, including the estimated life of revolving credit facilities and the quantitative criteria for assessing the significant increase in credit risk (SICR), are separately supported by analytical study. In particular, the quantitative thresholds used for assessing SICR are subject to a number of internal validation criteria, particularly in retail portfolios where thresholds decrease as the origination Probability of Default (PD) of each facility increases. Key policy requirements are also typically aligned to the Group’s credit risk management strategy and practices, for example, wholesale customers that are risk managed on an individual basis are assessed for ECL on an individual basis upon entering Stage 3; furthermore, key internal risk management indicators of high risk are used to set SICR policy, for example, retail customers identified as high risk account management are automatically deemed to have met the SICR criteria. ii) ECL is estimated in line with internal policy requirements using models which are validated by a qualified independent party to the model development area, the Independent Validation Unit (IVU), before first use and on a regular basis, at a minimum every three years. Each model is designated an owner who is responsible for: • model maintenance: monitoring of model performance including backtesting by comparing predicted ECL versus flow into stage 3 and coverage ratios; proposing material changes for independent IVU approval; and recalibrating model parameters on more timely data • proposing post-model adjustments (PMA) to address model weaknesses or to account for situations where known or expected risk factors and information have not been considered in the modelling process. All PMAs relating to model deficiencies, regardless of value are approved by IVU for a set time period. PMAs representing Expert Judgement are validated by Risk, as the second line of defence and approved for a set time period. The most material PMAs are also approved by the CRO. Models must also assess ECL across a range of future economic conditions. These economic scenarios are generated via an independent model and ultimately set by the Senior Scenario Review Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 291 Principal risk management (continued) Committee. Economic scenarios are regenerated at a minimum twice annually but more frequently if deemed appropriate, and also to align with the Group’s medium term planning exercise. Each model used in the estimation of ECL, including key inputs, are governed by a series of internal controls, which include the validation of completeness and accuracy of data in golden source systems, documented data transformations and documented lineage of data transfers between systems. i) The Group Impairment Committee, formed of members from both Finance and Risk and attended by both the Group Finance Director and the Group CRO, is responsible for overseeing impairment policy and practice across the Group and will approve impairment results. Reported results and key messages are communicated to the BAC, which has an oversight role and provides challenge of key assumptions, including the basis of the scenarios adopted. Impairment results are then factored into management decision making, including but not limited to, business planning, risk appetite setting and portfolio management. Market risk management (audited) The risk of loss arising from potential adverse changes in the value of the Group’s assets and liabilities from fluctuation in market variables including, but not limited to, interest rates, foreign exchange, equity prices, commodity prices, credit spreads, implied volatilities and asset correlations. Overview Market risk arises primarily as a result of client facilitation in wholesale markets, involving market-making activities, risk management solutions and execution of syndications. Upon execution of a trade with a client, the Group will look to hedge against the risk of the trade moving in an adverse direction. Mismatches between client transactions and hedges result in market risk due to changes in asset prices, volatility or correlations. Organisation, roles and responsibilities Market risk in the businesses resides primarily in Barclays International and Treasury. These businesses have the mandate to assume market risk. The front office and Treasury trading desks are responsible for managing market risk on a day-to-day basis, where they are required to understand and adhere to all limits applicable to their businesses. The Market Risk team supports the trading desks with the day-to-day limit management of market risk exposures through governance processes which are outlined in supporting market risk policies and standards. Market risk oversight and challenge is provided by business committees and Group committees, including the Market Risk Committee (MRC). The objectives of market risk management are to: • identify, understand and control market risk by robust measurement, limit setting, reporting and oversight • facilitate business growth within a controlled and transparent risk management framework • control market risk in the businesses according to the allocated appetite. To meet the above objectives, a governance structure is in place to manage these risks consistent with the ERMF. The BRC recommends market risk appetite to the Board for their approval. The Market Risk Principal Risk Lead (PR Lead) is responsible for the Market Risk Control Framework and, under delegated authority from the Group CRO, agrees with the business CROs a limit framework within the context of the approved market risk appetite. The Market Risk Committee (MRC) reviews and makes recommendations concerning the group-wide market risk profile. This includes overseeing the operation of the Market Risk Framework and associated policies and standards, monitoring market and regulatory changes, and reviewing limit utilisation levels. The committee is chaired by the PR Lead and attendees include the business heads of market risk and business aligned market risk managers. In addition to MRC, the Corporate and Investment Bank Risk Committee (‘CIBRC’) is the main forum in which market risk exposures are discussed and reviewed with senior business heads. The Committee is chaired by the CRO of Barclays International and meets weekly, covering current market events, notable market risk exposures, and key risk topics. New business initiatives are generally socialised at CIBRC before any changes to risk appetite or associated limits are considered in other governance committees. The head of each business is accountable for all market risks associated with its activities, while the head of the market risk team covering each business is responsible for implementing the risk control framework for market risk. For more information on market risk management, refer to the Barclays PLC Pillar 3 Report 2022 (unaudited). Management value at risk (VaR) VaR is an estimate of the potential loss arising from unfavourable market movements if the current positions were to be held unchanged for one business day. For internal market risk management purposes, a historical simulation methodology with a one-year equally weighted historical period, at the 95% confidence level is used for all trading books and some banking books. Limits are applied at the total level as well as by risk factor type, which are then cascaded down to particular trading desks and businesses by the market risk management function. + See the market risk performance section for a review of management VaR. Treasury and capital risk management This comprises: Liquidity risk: The risk that the Group is unable to meet its contractual or contingent obligations or that it does not have the appropriate amount, tenor and composition of funding and liquidity to support its assets. Capital risk: The risk that the Group has an insufficient level or composition of capital to support its normal business activities and to meet its regulatory capital requirements under normal operating environments and stressed conditions (both actual and as defined for internal planning or regulatory testing purposes). This also includes the risk from the Group’s pension plans. Interest rate risk in the banking book: The risk that the Group is exposed to capital or income volatility because of a mismatch between the interest rate exposures of its (non-traded) assets and liabilities. The Treasury function manages treasury and capital risk exposure on a day-to-day basis with the Group Treasury Committee acting as the principal management body. The Treasury and Capital Risk function is responsible for oversight and provides insight into key capital, liquidity, interest rate risk in the banking book (IRRBB) and pension risk management activities. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 292 Principal risk management (continued) Liquidity risk management (audited) Overview The efficient management of liquidity is essential to the Group in order to retain the confidence of the financial markets and maintain the sustainability of the business. Treasury and Capital Risk have created a framework to manage all liquidity risk exposures under both normal and stressed conditions. The framework is designed to maintain liquidity resources that are sufficient in amount, quality and funding tenor profile to remain within the liquidity risk appetite as expressed by the Barclays PLC Board. The liquidity risk appetite is monitored against both internal and regulatory liquidity metrics. Organisation, roles and responsibilities Treasury has the primary responsibility for managing liquidity risk within the set risk appetite. Both Risk and Treasury contribute to the production of the Internal Liquidity Adequacy Assessment Process (ILAAP). The Treasury and Capital Risk function is responsible for the management and governance of the liquidity risk mandate, as defined by the Board. The framework established by Treasury and Capital Risk is designed to deliver the appropriate term and structure of funding, consistent with the liquidity risk appetite set by the Board. The framework incorporates a range of ongoing business management tools to monitor, limit and stress test the Group’s balance sheet, contingent liabilities and the recovery plan. Limit setting and transfer pricing are tools designed to control the level of liquidity risk taken and drive the appropriate mix of funds. Adherence to limits reduces the likelihood that a liquidity stress event could lead to an inability to meet Group’s obligations as they fall due. The Board approves the Group funding plan, internal stress tests, regulatory stress test results, recovery plan and liquidity risk appetite. The Group Treasury Committee is responsible for monitoring and managing liquidity risk in line with the Group’s funding management objectives, funding plan and risk appetite. The Treasury and Capital Risk Committee monitors and reviews the liquidity risk profile and control environment, providing second line oversight of the management of liquidity risk. The BRC reviews the risk profile, and reviews liquidity risk appetite at least annually and the impact of stress scenarios on the Group funding plan/ forecast in order to agree the Group’s projected funding abilities. Capital risk management (audited) Overview Capital risk is managed through ongoing monitoring and management of the capital position, regular stress testing and a robust capital governance framework. The objectives of the framework are to maintain adequate capital for the Group and legal entities to withstand the impact of the risks that may arise under normal and stressed conditions, and maintain adequate capital to cover current and forecast business needs and associated risks to provide a viable and sustainable business offering. Organisation, roles and responsibilities Treasury has the primary responsibility for managing and monitoring capital adequacy. The Treasury and Capital Risk function provides oversight of capital risk. Production of the Barclays PLC Internal Capital Adequacy Assessment Process (ICAAP) is the responsibility of Treasury. Capital risk management is underpinned by a control framework and policy. The capital management strategy, outlined in the Group and legal entity capital plans, is developed in alignment with the control framework and policy for capital risk, and is implemented consistently in order to deliver on the Group’s objectives. The Board approves the Group capital plan, internal stress tests and results of regulatory stress tests, and the Group recovery plan. The Group Treasury Committee is responsible for monitoring and managing capital risk in line with the Group’s capital management objectives, capital plan and risk frameworks. The Treasury and Capital Risk Committee monitors and reviews the capital risk profile and control environment, providing second line oversight of the management of capital risk. The BRC reviews the risk profile, and reviews risk appetite at least annually and the impact of stress scenarios on the Group capital plan/forecast in order to agree the Group’s projected capital adequacy. Local management assures compliance with an entity’s minimum regulatory capital requirements by reporting to local Asset and Liability Committees (ALCOs) with oversight by the Group Treasury Committee, as required. In 2022, Barclays complied with all regulatory minimum capital requirements. Pension risk The Group maintains a number of defined benefit pension schemes for past and current employees. The ability of schemes to meet pension payments is achieved with investments and contributions. Pension risk arises because the market value of pension fund assets might decline; investment returns might reduce; or the estimated value of pension liabilities might increase. The Group monitors the pension risks arising from its defined benefit pension schemes and works with the relevant pension fund’s trustees to address shortfalls. In these circumstances, the Group could be required or might choose to make extra contributions to the pension fund. The Group’s main defined benefit scheme was closed to new entrants in 2012. Interest rate risk in the banking book management (IRRBB) Overview Interest rate risk in the banking book is driven by customer deposit taking and lending activities, investments in the liquid asset portfolio and funding activities. As per the Group’s policy to remain within the defined risk appetite, hedging strategies are executed to mitigate the various IRRBB risks that result from these activities. However, the Group remains susceptible to interest rate risk and other non-traded market risks from the following key sources: • Interest rate and repricing risk: the risk that net interest income could be adversely impacted by a change in interest rates, differences in the timing of interest rate changes between assets and liabilities, and other constraints on interest rate changes as per product terms and conditions. • Customer behavioural risk: the risk that net interest income could be adversely impacted by the discretion that customers and counterparties may have in respect of being able to vary from their contractual obligations with Barclays. This risk is often referred to by industry regulators as ‘embedded option risk’. • Investment risks in the liquid asset portfolio: the risk that the fair value of assets held in the liquid asset portfolio and associated risk management portfolios could be adversely impacted by market volatility, creating volatility in capital directly. Organisation, roles and responsibilities The entity ALCOs and/or treasury committees, together with the Group Treasury Committee, are responsible for monitoring and managing IRRBB risk in line with the Group’s management objectives and risk frameworks. The GRC and Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 293 Principal risk management (continued) Treasury and Capital Risk Committee monitors and reviews the IRRBB risk profile and control environment, providing second line oversight of the management of IRRBB. The BRC reviews the interest rate risk profile, including review of the risk appetite at least annually and the impact of stress scenarios on the interest rate risk of the Group’s banking books. In addition, the Group’s IRRBB policy sets out the processes and key controls required to identify all IRRBB risks arising from banking book operations, to monitor the risk exposures via a set of metrics with a frequency in line with the risk management horizon, and to manage these risks within agreed risk appetite and limits. Model risk management The potential for adverse consequences from decisions based on incorrect or misused model outputs and reports. Overview The Group uses models to support a broad range of activities, including informing business decisions and strategies, measuring and limiting risk, valuing exposures, conducting stress testing, assessing capital adequacy, managing client assets, and meeting reporting requirements. Organisation, roles and responsibilities The Group has a dedicated Model Risk Management (MRM) function that consists of five teams: (i) Independent Validation Unit (IVU), responsible for model validation and approval; (ii) Group Model Risk Governance , responsible for model risk governance, controls and reporting, as well as providing oversight for compliance of the Model Owner community with the Model Risk Framework; (iii) Framework team, responsible for the Model Risk Policy and associated standards; (iv) Strategy and Transformation, responsible for inventory, strategy, communications and business management; and v) Model Risk Measurement and Quantification (MRMQ), responsible for the design of the framework and methodology to measure and, where possible, quantify model risk. It is also responsible for the strategic Validation Centre of Excellence (VCoE), which is an independent quality assurance function within MRM with the mandate to review and challenge validation outcomes. The Model Risk Framework consists of the Model Risk Policy and standards. The policy prescribes Group-wide, end-to-end requirements for the identification, measurement and management of model risk, covering model documentation, development, monitoring, annual review, independent validation and approval, change and reporting processes. The policy is supported by global standards covering model inventory, documentation, validation, testing and monitoring, overlays, risk appetite, and stress testing challenger models. The function reports to the Group CRO and operates a global framework. Implementation of best practice standards is a central objective of the Group. The key model risk management activities include: • Correctly identifying models across all relevant areas of the Group, and recording models in the Group Models Database (GMD), the Group-wide model inventory. • Enforcing that every model has a model owner who is accountable for the model. The model owner must sign off models prior to submission to IVU for validation and maintain that the model presented to IVU is and remains fit for purpose. • Overseeing that every model is subject to validation and approval by IVU, prior to being used and on a continual basis. • Defining model risk appetite in terms of risk tolerance, and qualitative metrics which are used to track and report model risk. Operational risk management The risk of loss to the Group from inadequate or failed processes or systems, human factors or due to external events (for example, fraud) where the root cause is not due to credit or market risks. Overview The management of operational risk has three key objectives: • deliver an operational risk capability owned and used by business leaders to enable sound risk decisions over the long term • provide the frameworks, policies and standards to enable management to meet their risk management responsibilities while the second line of defence provides robust, independent, and effective oversight and challenge • deliver a consistent and aggregated measurement of operational risk that will provide clear and relevant insights, so that the right management actions can be taken to keep the operational risk profile consistent with the Group’s strategy, the stated risk appetite and stakeholder needs. The Group operates within a system of internal controls that enables business to be transacted and risk taken without exposing it to unacceptable potential losses or reputational damages. Organisation, roles and responsibilities The prime responsibility for the management of operational risk and the compliance with control requirements rests within the business and functional units where the risk arises. The operational risk profile and control environment is reviewed by management through business risk committees and control committees. Operational risk issues escalated from these meetings are considered through the second line of defence review meetings. Depending on their nature, the outputs of these meetings are presented to the Operational Risk Profile Forum, the Operational Risk Committee, the BRC or the BAC. In addition, specific reports are prepared by Operational Risk on a regular basis for the GRC and the BRC. Legal entities, businesses and functions are required to report their operational risks on both a regular and an event-driven basis. The reports include a profile of the material risks that may threaten the achievement of their objectives and the effectiveness of key controls, operational risk events and a review of scenarios. The Group Head of Operational Risk is responsible for establishing, owning and maintaining an appropriate group-wide Operational Risk Framework and for overseeing the portfolio of operational risk across the Group. The Operational Risk function acts in a second line of defence capacity, and is responsible for defining and overseeing the implementation of the framework and monitoring the Group’s operational risk profile. The Operational Risk function alerts management when risk levels exceed acceptable tolerance in order to drive timely decision- making and actions by the first line of defence. Operational risk categories Operational risks are grouped into risk categories to support effective risk management, measurement and reporting. These comprise: Data Management Risk; Financial Reporting Risk; Fraud Risk; Information Security Risk; Operational Recovery Planning Risk; Payments Process Risk; People Risk; Premises Risk; Physical Security Risk; Change Delivery Management Risk; Supplier Risk; Tax Risk; Technology Risk; and Transaction Operations Risk. In addition to the above, operational risk encompasses risks associated with Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 294 Principal risk management (continued) compliance with Group Resolution Planning Prudential regulatory requirements. Connected risks Barclays also recognises that there are certain threats/risk drivers which are interconnected and have the potential to impact the Group’s strategic objectives. These are referred to as Connected Risks and require an overarching and integrated risk management and/or reporting approach. The Group’s Connected Risks include Cyber, Data, Resilience and Third- Party Service Providers. + For definitions of the Group’s Operational Risk Categories and connected risks, refer to the management of operational risk section in the Barclays PLC Pillar 3 Report 2022. Conduct Risk management The risk of poor outcomes for, or harm to, customers, clients and markets, arising from the delivery of the Group’s products and services. Overview The Group defines, manages and mitigates conduct risk with the objective of providing good customer and client outcomes and protecting market integrity. Conduct risk incorporates market integrity, customer protection, financial crime and product design and review risks. Organisation, roles and responsibilities The Conduct Risk Management Framework (CRMF) outlines how the Group manages and measures its conduct risk profile. The Group Chief Compliance Officer is accountable for developing, maintaining and overseeing the CRMF. This includes defining and owning the relevant conduct risk policies which detail the control objectives, principles and other core requirements for the activities of the Group. It is the responsibility of the first line of defence to establish controls to manage its performance and assess conformance to these policies and controls. Senior managers are accountable within their areas of responsibility for owning and managing conduct risk in accordance with the CRMF, as defined within their regulatory Statement of Responsibilities. Compliance as an independent second line function oversees that conduct risks are effectively identified, managed, monitored and escalated, and has a key role in helping Barclays achieve the right conduct outcomes and evolve a conduct-focused culture. The governance of conduct risk within the Group is fulfilled through management committees and forums operated by the first and second lines of defence with clear escalation and reporting lines to the Board. The Barclays Group and Barclays Bank Group Risk Committee and the Barclays Bank UK Group Risk Committee are the primary second line governance committees for the oversight of the Conduct Risk Profile. The risk committees’ responsibilities include the identification and discussion of any emerging conduct risks exposures in their respective entities. Conduct By effectively managing Conduct risks, we can continue to strengthen the culture of Barclays. Culture and conduct We believe the stronger our culture, the better the choices our people will make; and the stronger our business will be for all our stakeholders. While our culture helps us reduce the impact of poor conduct on our customers, we also do not intend to repeat the errors of the past. Our most senior leaders spend significant time setting the right tone at Barclays and our Purpose and Values are now deeply embedded in their messages. The Barclays Way sets out the standards and behaviour all employees must demonstrate and guides the execution of our business. We also strengthen our culture with clear and effective controls. We continue investing to enhance our controls to support our commitment to conducting all activities with integrity. + For details of the Board's role in embedding our Culture, Purpose, Values and Mindset, please refer to page 154 of the Directors' Report. The Barclays Mindset Our Mindset acts as an operating manual for how to get things done at Barclays. It focuses on three key elements that are core to our success – Empower, Challenge and Drive. Our research shows that when we demonstrate behaviours aligned to these three elements, outcomes are better, colleagues are more engaged and they are more likely to stay longer to build their career at Barclays. + For further details, see page 31 in the Strategic Report for more information on the Barclays Mindset. Managing Conduct risks See page 184 in the Directors' report in addition to pages , 279 and 368 in the risk review section for more information on how the Group defines, manages and mitigates Conduct risks. Product design and review risk It is important that the design of our products and services meets the needs of clients, customers, markets as well as being aligned with Barclays' policies. We do this by operating two processes, which together form our product design and review risk framework. We have a process that supports the Group in the approval and implementation of New and Amended Products and Approval process (known as the NAPA Process, set out in the Barclays NAPA Policy and Standards). This process outlines the requirements and risk assessment standards that must be met to help ensure that new and amended products and services are appropriately designed prior to their launch. In addition we have a complementary process that reviews the existing portfolio of products and services throughout their lifecycle (known as the Product Review Process, set out in the Barclays Product Review Policy and Standard). This process considers information about the performance and operation of the product or service through a conduct lens. Wherever a product or service is found to be outside appetite, the product or service owner must seek to ensure actions are taken to address it. These actions are validated by functional areas, including Legal and Compliance. Areas of Barclays that undertake Investment activity also operate additional product governance processes and controls, reflecting the higher risk of these more complex products and the importance of products and services meeting the needs of our Clients. + The BPLC, BBPLC and BBUKPLC Board Risk Committees review, on behalf of their respective Boards, the management of Conduct risk and the Conduct risk profile for their respective entities. Please refer to the report of the BPLC Board Risk Committee on pages 179 and 184 and the reports of the BBPLC and BBUKPLC Board Risk Committees within the BBPLC and BBUKPLC 2022 Annual Reports available at home.barclays/investor-relations/reports- and-events/annual-reports/ for more information. Customer communications It is important that our engagement with our customers is open and honest and that we treat them fairly to avoid foreseeable harm and to make sure they are not exploited or misled. Barclays continues to take steps to ensure that our customers’ needs and priorities are understood before making recommendations and that the communications we provide allow informed decisions to be made. We work to achieve this through a number of controls which focus on ensuring our customers receive clear information in order to understand the risks and benefits of the products we offer. For example: Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 295 Principal risk management (continued) identification of legal risks by legal professionals, engagement of legal professionals in situations that have the potential for legal risk, and escalation of legal risk as necessary. Notwithstanding these mitigating actions, the Group operates with a level of residual legal risk, for which the Group has limited tolerance. Organisation, roles and responsibilities The Group's businesses and functions have responsibility for identifying and escalating to the Legal Function legal risk in their area, as well as responsibility for adherence to control requirements. The Legal Function organisation and coverage model aligns legal expertise to businesses, functions, products, activities and geographic locations so that the Group receives legal advice and support from appropriate legal professionals, working in partnership proactively to identify, manage and escalate legal risks as necessary. The senior management of the Legal Function oversees, challenges and monitors the legal risk profile and effectiveness of the legal risk control environment across the Group. The Legal Function does not sit in any of the three lines of defence but supports them all. Except in relation to the legal advice it provides or procures, the Legal Function is subject to oversight from the second line of defence. The Group General Counsel is responsible for developing and maintaining a Group- wide legal risk management framework. This includes defining the relevant legal risk policies, developing Group-wide risk appetite for legal risk, and oversight of the implementation of controls to manage and escalate legal risk. The legal risk profile and control environment is reviewed by management through business risk committees and control committees. The Group Risk Committee is the most senior executive body responsible for reviewing and monitoring the effectiveness of risk management across the Group. Escalation paths from this committee exist to the Barclays PLC Board Risk Committee. • communications are sufficient, targeted and distributed to recipients whom Barclays knows or reasonably believes may stand to benefit from the communication, and are communicated in a manner and style that will be understood by the average recipient (or likely recipient), • communications are withdrawn from further circulation when they are no longer accurate or fit for purpose, and • customers do not receive inadequate advice, misleading information, unsuitable products or unacceptable service. Our processes include a review of relevant communications which are supported by the Compliance, Privacy and Legal functions to help ensure we meet both internal customer engagement standards and we are compliant with external regulations. Furthermore annual mandatory training is completed by marketing colleagues. The training covers key customer and brand standards along with the role and key policies set by external regulators e.g. regulatory requirements may require communications to be provided that are accessible to customers, or provide customers with the option to 'opt out'. Remediation and redress Barclays recognises that customer detriment may occur as a result of our error, actions or inactions, and that we must undertake appropriate activity designed to ensure our customers are put back in the position they would have been in had the issue not occurred. Remediation can be proactive, where we have identified the issue ourselves (for example through identifying a pattern in customer complaints), or reactive, where identified by a third party such as a regulator of Barclays. Where it is appropriate, Barclays works to ensure the operation of consistent principles for remediation which includes timely notification to the relevant regulatory bodies. Reputation Risk management The risk that an action, transaction, investment, event, decision, or business relationship will reduce trust in the Group’s integrity and/or competence. Overview A reduction of trust in the Group’s integrity and competence may reduce the attractiveness of the Group to stakeholders and could lead to negative publicity, loss of revenue, regulatory or legislative action, loss of existing and potential client business, reduced workforce morale and difficulties in recruiting talent. Ultimately it may destroy shareholder value. Organisation, roles and responsibilities Barclays PLC Board is the most senior body responsible for reviewing and monitoring the effectiveness of the Group’s management of reputation risk. The Group Chief Compliance Officer is accountable for developing a Reputation Risk Management Framework (RRMF), and the Group Head of Public Policy and Corporate Responsibility is responsible for developing a reputation risk policy and associated standards, including tolerances against which data is monitored, reported on and escalated, as required. The RRMF sets out what is required to manage reputation risk across the Group. The primary responsibility for identifying and managing reputation risk and adherence to the control requirements sits with the business and support functions where the risk arises. Barclays Bank Group and Barclays Bank UK Group are required to operate within established reputation risk appetite, and their component businesses prepare reports highlighting their most significant current and potential reputation risks and issues and how they are being managed. These reports are a key internal source of information for the quarterly reputation risk reports which are prepared for Barclays Group ExCo and reviewed by the Group Board twice-yearly. The Group Reputation Risk Committee is a sub-committee of the Group Executive Committee, authorised to manage material reputation risks and issues as they are brought to the attention of the committee via relevant reputation risk assessment and escalation processes. Legal Risk management The risk of loss or imposition of penalties, damages or fines from the failure of the Group to meet its legal obligations, including regulatory or contractual requirements. Overview The Group has no tolerance for wilful breaches of laws, regulations or other legal obligations. However, the multitude of laws and regulations across the globe are highly dynamic and their application to particular circumstances is often unclear. This results in a high level of inherent legal risk which the Group seeks to mitigate through the operation of a Group-wide legal risk management framework, which requires Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 296 Risk performance - Climate risk Climate risk performance The impact on Financial and Operational Risks arising from climate change through, physical risks, risks associated with transitioning to a lower carbon economy and connected risks arising as a result of second order impacts of these two drivers on portfolios. risks arising from the second order impacts of these two drivers on portfolios. As part of climate risk performance, we monitor carbon-related assets and elevated risk sectors, which are identified as portfolios with 'elevated' exposure to the physical and transition risks of climate change. Carbon-related assets We disclose concentrations of credit exposure to carbon-related assets. The TCFD recommends that carbon-related assets are those assets tied to the energy, transportation, materials and buildings and agriculture, food and forest products sectors. All of the sectors that the TCFD now considers to be carbon-related assets include the sectors that Barclays considers at elevated risk from the impacts of climate change. These can be found in the table on the following page. Elevated risk sectors Credit exposures Barclays is working to understand the risks associated with sectors sensitive to the impacts from climate change. Disclosing risk management metrics and quantitative credit exposures supports this approach and our ongoing alignment with the TCFD recommendations. The sectors highlighted blue in the table represent those that the Group considers at an elevated risk from the impacts of climate change. However, in each sector there will exist a range of vulnerabilities and as such these figures do not represent elevated carbon emission exposures and should not be interpreted as an indicator of relative carbon intensity. These sectors have been identified through an analysis of Barclays Industrial Classifications by portfolio and benchmarked against external sources, with additional input from subject matter experts. UK Retail Mortgages For 2022, UK Mortgage assets have been included in the table below. Mortgages do not meet the TCFD definition of a carbon-related asset. However, Mortgages are considered carbon-related, and have been covered as part of our work to assess the financed emissions across our portfolio and measure the baseline emissions that we finance across sectors. Elevated risk sector Drivers of risk Aviation Automotive Cement More stringent air emission and carbon regulations, requiring high levels of capital investment and Research & Development (R&D) expenditure. Policy pressure to cut emissions to meet emission requirements, requiring high levels of capital investment and R&D expenditure. Phase out of fossil fuel vehicles and introduction of low emission zones in city centres. Being one of the hard to abate sectors, policy pressure to cut emissions requires high levels of capital investment and R&D expenditure. Coal Mining and Coal Terminals Reduction in demand of thermal coal, as utilities transition away from fossil fuel. More stringent air emissions regulation, resulting in higher levels of capital investment. Chemicals Mining (including diversified miners) Oil and Gas Increasing environmental regulation, including carbon regulations. The increasing efforts to eliminate single-use plastics and improve recycling to prevent marine pollution could also impact demand for products used in plastic manufacture. Rising costs as a result of tighter environmental regulations and increasing water stress. Policy pressure to cut emissions, exposure to carbon taxes and overall increasing environmental regulation of operations and restrictions on access to new resources. Over time, falling demand for fossil fuels Power Utilities Policy pressure to cut emissions, leading to increased capital expenditure costs, plus potential exposure to carbon taxes. Agriculture Shipping Steel Evolving taxation on emissions may impact production methods, supply chain and farm viability. Reduced demand for meat and dairy as a consequence of shifts in consumer behaviour. Volatile weather conditions and extreme weather events may impact farm credit quality. Policy pressure to cut emissions, requiring higher levels of capital investment. Being an energy-intensive sector, the sector is exposed to the policy pressure to cut emissions and evolving air pollution regulation Road Haulage Policy pressure to cut emissions, requiring high levels of capital investment. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 297 Risk performance - Climate risk (continued) Carbon-related assets (Incl. sub-sector breakdown) 2022 £m Loans & advances Loan commitments Agriculture, Food and Forest Products Agriculture Food, Bev and Tobacco Paper and Forest Products Energy Coal Mining and Coal Terminals Oil and Gas Power Utilities Materials and Building Cement Chemicals Construction and Materials Homebuilding and Property Development Manufacturing Metals Mining (Incl. diversified miners) Packaging Manufacturers: Metal, Glass and Plastics Real Estate Management and Development Steel Transport Automotive Aviation Other Transport Services Ports Road Haulage Shipping 5,639 3,765 1,669 205 5,233 — 2,752 2,481 31,610 222 584 1,574 3,513 3,406 327 201 95 21,648 40 2,937 968 465 647 95 453 309 2021 £m Loans & advances Loan commitments Total % Change (1%) 9,489 1,111 7,497 881 15,207 5,192 8,925 1,090 24,352 27,910 14% 9,425 894 7,886 645 Total 15,064 4,659 9,555 850 26,578 31,811 — 12,608 13,970 36,295 160 4,377 2,128 2,121 — 15,360 16,451 67,905 382 4,961 3,702 5,634 13,110 16,516 656 2,262 314 983 2,463 409 5,718 4,081 1,428 209 3,558 — 2,365 1,193 29,945 37 498 1,416 4,014 3,326 247 152 85 10,983 32,631 20,135 184 224 10,123 13,060 5,493 2,221 1,170 87 429 723 6,461 2,686 1,817 182 882 1,032 35 3,211 879 553 622 99 671 387 45 12,477 11,830 33,336 353 4,227 1,989 2,066 45 14,842 13,023 63,281 390 4,725 3,405 6,080 12,141 15,467 553 1,769 288 9,723 227 9,129 5,133 1,663 1,181 115 419 618 800 1,921 373 29,858 262 12,340 6,012 2,216 1,803 214 1,090 1,005 7% 6% 3% 10% 5% 12% Carbon-related assets in UK Retail Mortgages Subtotal (Elevated risk sectors) Carbon-related Assets Grand Total 162,263 12,240 207,682 12,103 43,321 174,366 158,113 55,561 10,851 11,315 39,872 169,428 50,723 94,524 302,206 200,545 87,621 288,166 Total Loans & Advances & Loan Commitments 398,779 395,508 794,287 361,451 345,711 707,162 Carbon-related assets / Total Loans & Advances & Loan Commitments 52% 24% 38% 55% 25% 41% Notes: The scope has been widened to 1) include UK Retail Mortgages (£169bn increase in reported exposure) and 2) include all Barclays entities as opposed to just material entities (£15bn increase in reported exposure, predominantly driven by ESHLA loans in BBUKPLC) in 2021. The prior year comparatives have been represented, in line with the expanded scope. The carbon-related assets classification excluded £5.9bn of Fronting Stand By Letter of Credits (SBLCs) that are part of Total loans & advances commitments, since these amounts are counter- indemnified by other lenders. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 298 Risk performance - Climate risk (continued) Financing To facilitate greater understanding and transparency of our capital markets financing, we disclose the total capital raised for clients across all sectors using data sourced from Dealogic. We have provided the breakdown of our 2021 and 2022 financing below. Barclays discloses the total capital raised for clients across all sectors using data sourced from Dealogic. We then align each transaction by issuer to a sector according to the Barclays Industry Classification (BIC) we apply to that issuer. BIC is Barclays' internal sector classification system. The industry sector categories are designated by Dealogic General and Specific Industry Group classifications. Financing volumes are reported on a manager-proceeds basis including bonds, equities, loans and securitised bonds and no modifications have been made by Barclays. This data represents a third party view of our financing and is subject to Dealogic’s league table methodology, which pro-rates volume across lead-managers. We are presenting the data in this format to support transparency and comparability but it should be noted that this data is subject to further analysis and methodological enhancements, before it is included in BlueTrack™. Carbon-related sectors in wholesale credit (Dealogic Industry Classification) 31.12.2022 ($m) 31.12.2021 ($m) Agriculture, Food and Forest Products Agriculture Food, Bev and Tobacco Paper and Forest Products Energy Coal Mining and Coal Terminals Oil and Gas Power Utilities Materials and Building Cement Chemicals Construction and Materials Homebuilding and Property Development Manufacturing Metals Mining (Incl. diversified miners) Packaging Manufacturers: Metal, Glass and Plastics Real Estate Management and Development Steel Transport Automotive Aviation Other Transport Services Ports Road Haulage Shipping Carbon-related assets in UK Retail Mortgages Carbon-related Sectors Grand Total Capital Market Financing Total 9,486 - 8,609 877 43,042 - 9,747 33,295 33,750 200 2,800 3,006 760 14,062 744 436 33 11,271 438 9,904 3,865 2,132 2,648 - - 1,259 - 96,182 18,416 382 14,997 3,037 39,294 - 12,558 26,736 63,473 - 4,876 3,181 976 28,482 1,130 2,515 932 20,860 521 23,559 9,961 6,221 3,947 124 1,062 2,244 - 144,742 374,899 549,118 Financing to Carbon-related Sector over Total Capital Market Financing 26 % 26 % % Change (2022 vs. 2021) (48) % 10 % (47) % (58) % - (34) % (32) % Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 299 Risk performance - Climate risk (continued) Subsidence: Total Volume of stock (as % of total UK Mortgage book) per risk band Subsidence is driven by the interplay of precipitation, temperature and soil type factors, which result in volumetric changes to the soil. Increased volatility in weather conditions, as a result of climate change, contributes to the acceleration of subsidence impacts. Some areas, particularly those with high concentrations of clay soil (i.e. London), are more susceptible to subsidence. This shrink-swell impact can cause localised property level impacts, resulting in impacts to the valuation of a property, or impacts to affordability through remediation costs and high insurance premiums. In 2022 Barclays on-boarded a third party to support climate risk data enhancements within the UK Mortgages portfolio, which included the ability to map the UK Mortgage portfolio to subsidence risk bands based on the near surface subsidence hazard level. The scoring is based on soil properties, in particular the extent to which the soil will shrink under hot and dry weather conditions, as well as the predicted temperature and probability of extreme rainfall. These variables are combined with subsidence claims per postcode to generate a pseudo-quantitative score, where a property in class 10 is around ten times as likely as a property in class 1 to make a subsidence claim. Flood: Total Volume of stock (as % of total UK Mortgage book) per risk band Flooding in the UK is forecast to increase over time, with the potential for this increase to accelerate if greenhouse gas emissions are not reduced. The increased risk of flooding has the potential to impact the valuation of properties directly, as well as indirectly where a particular area becomes high risk and property demand falls. Remediation costs, high insurance premiums or potential lack of insurance coverage have the potential to impact affordability. In 2022, Barclays on-boarded a third party to support climate risk data enhancements within the UK Mortgages portfolio, this resulted in improvements in granularity, moving from postcode level to property level flood data. Flood Risk bands are based on average annual loss, generated using flood hazard frequency and flood depth from tidal, surface, pluvial and fluvial flooding and accounting for the mitigating impact of flood defences where these are present. Properties in the Moderate and High Risk bands are expected to face above average insurance costs given their elevated exposure to flood risk. Those within the Very High band are considered likely to cede to Flood Re. As at 30 September 2022 As at 30 September 2022 Risk Band 1 2 3 4 5 6 7 8 9 10 Missing Risk Band Negligible Very Low Volume % 9.5% Low Moderate High Very High Missing 35.3% 23.0% 4.6% 4.6% 3.3% 2.4% 0.0% 0.2% 9.9% 7.0% Volume % 78.8% 8.0% 2.0% 1.8% 2.8% 1.3% 5.4% Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 300 Risk performance - Credit risk Credit risk Credit risk: summary of contents Credit risk represents a significant risk and mainly arises from exposure to wholesale and retail loans and advances together with the counterparty credit risk arising from derivative contracts entered into with clients. This section outlines the expected credit loss allowances, the movements in allowances during the period, material management adjustments to model output and measurement uncertainty and sensitivity analysis. The Group reviews and monitors risk concentrations in a variety of ways. This section outlines performance against key concentration risks. Credit risk monitors exposure performance across a range of significant portfolios. The Group monitors exposures to assets where there is a heightened likelihood of default and assets where an actual default has occurred. From time to time, suspension of certain aspects of client credit agreements are agreed, generally during temporary periods of financial difficulties where the Group is confident that the client will be able to remedy the suspension. This section outlines the current exposure to assets with this treatment. Credit risk overview and summary of performance Maximum exposure and effects of netting, collateral and risk transfer Expected Credit Losses – Loans and advances at amortised cost by stage – Loans and advances at amortised cost by product – Movement in gross exposure and impairment allowance for loans and advances at amortised cost – Stage 2 decomposition – Stage 3 decomposition Management adjustments to models for impairment Measurement uncertainty and sensitivity analysis Analysis of the concentration of credit risk – Geographic concentrations – Industry concentrations Approach to management and representation of credit quality – Asset credit quality – Debt securities – Balance sheet credit quality – Credit exposures by internal PD grade Analysis of specific portfolios and asset types – Secured home loans – Credit cards, unsecured loans and other retail lending – Government supported loans Forbearance – Retail forbearance programmes – Wholesale forbearance programmes This section provides an analysis of credit risk on debt securities and derivatives. Analysis of debt securities Analysis of derivatives Page 301 302 304 304 306 308 313 314 315 317 326 326 326 328 328 328 329 331 333 333 335 336 337 338 339 339 340 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 301 Risk performance - Credit risk (continued) Charge Credit impairment charges were £1,220m (2021: £(653)m release). The charges reflect an updated macroeconomic scenario together with a partial return to more normalised levels of customer behaviour. Management Adjustments Macroeconomic uncertainty PMAs at 31 December 2022 amount to £317m (2021: £1,692m). The reduction is informed by the release of COVID-19 related adjustments as credit performance stabilises at or below pre-pandemic levels which is reflected in the models, and a rebuild of certain models to better capture the macroeconomic outlook. Refer to the Management adjustment to models for impairment section on page 315 for further details. + Refer to the Management adjustment to models for impairment section on page 315 for further details. Climate Whilst there have been no separately identifiable charges relating to climate risk in the 2022 reported ECL, it is acknowledged that impairment could increase over time as risks become more tangible and impact consumers and clients through physical risk or via impacts from the transition to a low carbon economy. + Further detail can be found in the Financial statements section in Note 8 Credit impairment charges/(releases). Description of terminology can be found in the glossary, available at home.barclays/ annualreport. + Refer to credit risk management section for the details of governance, policies and procedures. Credit risk All disclosures in this section are unaudited unless otherwise stated. Overview Credit risk represents a significant risk to the Group and mainly arises from exposure to wholesale and retail loans and advances together with the counterparty credit risk arising from derivative contracts entered with clients. Credit risk disclosures include many of the recommendations of the Taskforce on Disclosures about Expected Credit Losses (DECL) and it is expected that relevant disclosures will continue to be developed in future periods. Credit risk disclosures exclude other financial assets not subject to credit risk, mainly equity securities. For off-balance sheet exposures certain contingent liabilities not subject to credit risk such as performance guarantees are excluded. Summary of performance in the period Loans Gross loans and advances at amortised cost to customers and banks have increased by £37bn compared to £367bn in 2021. This includes £14bn increase in debt securities driven by Treasury investments. Of the remaining growth, £21bn is attributable to strong lending activity in investment banking and home loans. Further, £9bn in credit cards and unsecured lending is driven by increased customer spending and strategic acquisitions. Maximum exposure The Group’s net exposure to credit risk increased 13% to £1,033bn (2021: £912bn) which is mainly driven by increase in off- balance sheet loan commitments (£53bn), cash collateral and settlement balances (£20bn), cash held at central banks (£18bn) and debt securities issued by governments (£13bn), all of which are considered to be lower risk. Overall, the extent to which the Group held mitigation against its total exposure remained stable at 44% (2021: 44%). Credit quality A gradual increase in delinquencies has been observed driven by resumption of more regular spend activity in retail. A range of activities are in progress to protect our existing defensive positioning against the current macroeconomic headwinds. Gross exposures for government supported loan schemes stands at £8bn as at 2022 (2021: £11.4bn). In wholesale, loans to high-risk sectors as well as the broader portfolio benefited from high-quality exposure and credit protection. + Further analysis on the credit quality of assets is presented in the approach to management and representation of credit quality section. Stage Decomposition A net increase of £5.6bn is observed in Stage 2 gross exposures driven by a weaker macroeconomic forecast in wholesale lending (£4.5bn) and normalisation of PDs in retail lending (£1.1bn), predominantly credit cards. Stage 3 balances have decreased by £0.2bn to £7.1bn compared to 2021 primarily driven by write-offs partially offset by delinquencies in retail unsecured lending. + Refer to pages 313 to 314 for further details. Scenario During the year, the economic risk from the COVID-19 pandemic has receded; however, economic uncertainty linked to high inflation in major economies and heightened geopolitical tensions persists. For Q422, macroeconomic scenarios have been refreshed and are designed around a broad range of economic outcomes. The Downside 2 scenario has been updated with reference to the most recent BoE Annual Cyclical Scenarios (ACS) stress test. This has resulted in a movement in weights from the upside scenarios to the downside scenarios. ECL Impairment allowances on loans and advances at amortised cost including off- balance sheet has decreased to £6,175m (2021:£6,284m) primarily driven by write- offs. On-balance sheet coverage has reduced to 1.4% (2021: 1.6%) due to movement in portfolio mix towards lower ECL balances, revised recovery expectations and evolving macroeconomic scenarios. Coverage levels remain strong. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 302 Risk performance - Credit risk (continued) Maximum exposure and effects of netting, collateral and risk transfer The following tables present a reconciliation between the Group's maximum exposure and its net exposure to credit risk, reflecting the financial effects of risk mitigation reducing the Group's exposure. The Group mitigates the credit risk to which it is exposed through netting and set-off, collateral and risk transfer. Further detail on the Group’s policies to each of these forms of credit enhancement is presented on pages 118 to 120 of the Barclays PLC Pillar 3 Report 2022 (unaudited). Collateral obtained Where collateral has been obtained in the event of default, the Group does not, ordinarily, use such assets for its own operations and they are usually sold on a timely basis. The carrying value of assets held by the Group as at 31 December 2022, as a result of the enforcement of collateral, was £31m (2021: £22m). Maximum exposure and effects of netting, collateral and risk transfer (audited) As at 31 December 2022 On-balance sheet: Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost: Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total loans and advances at amortised cost Of which credit-impaired (Stage 3): Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total credit-impaired loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending Trading portfolio assets: Debt securities Traded loans Total trading portfolio assets Financial assets at fair value through the income statement: Loans and advances Debt securities Reverse repurchase agreements Other financial assets Maximum exposure Netting and set-off Cash collateral Non-cash collateral £m — — £m — — Risk transfer Net exposure £m £m — 256,351 — 112,597 £m 256,351 112,597 173,770 50,704 £m — — — — (328) (173,308) (98) 36 (1,220) (4,161) (243) 45,080 174,305 (4,442) (660) (61,335) (17,367) 90,501 398,779 (4,442) (2,208) (238,804) (17,708) 135,617 2,000 844 2,023 4,867 776 55,475 13,198 68,673 39,429 3,249 164,681 118 — — — — — — — — — — — — — (1) (1,996) (32) (6) (323) (742) (39) (3,061) — — — — (776) (530) (250) (780) — (3) (709) (712) — 3 486 566 1,055 — — 54,945 (48) 12,900 (48) 67,845 (17) (31,544) (9) — (321) (3,672) (160,347) — — — — — 7,859 2,928 662 118 (3,689) (192,212) (9) 11,567 Total financial assets at fair value through the income statement 207,477 Derivative financial instruments 302,380 (238,337) (34,547) (11,434) (7,275) 10,787 Financial assets at fair value through other comprehensive income Other assets Total on-balance sheet Off-balance sheet: Contingent liabilities Loan commitments Total off-balance sheet 65,054 1,656 — — — — (222) (711) 64,121 — — 1,656 1,413,743 (242,779) (40,444) (444,228) (25,751) 660,541 24,205 395,508 419,713 — — — (1,295) (1,596) (280) 21,034 (129) (41,917) (1,666) 351,796 (1,424) (43,513) (1,946) 372,830 Total 1,833,456 (242,779) (41,868) (487,741) (27,697) 1,033,371 Off-balance sheet exposures are shown gross of provisions of £583m (2021: £542m). See Note 25 for further details. In addition to the above, the Group holds forward starting reverse repos with notional contract amounts of £48.4bn (2021: £39.3bn). These balances are fully collateralised. Wholesale loans and advances at amortised cost include £8bn (2021: £11.4bn) of BBLS, CBILS and CLBILS supported by UK government guarantees of £7.6bn (2021: £11bn), which are included within the Risk transfer column in the table. For further information on credit risk mitigation techniques, refer to the Credit risk management section. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 303 Risk performance - Credit risk (continued) Maximum exposure and effects of netting, collateral and risk transfer (audited) Maximum exposure Netting and set-off Cash collateral Non-cash collateral As at 31 December 2021 On-balance sheet: Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost: Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total loans and advances at amortised cost Of which credit-impaired (Stage 3): Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total credit-impaired loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending Trading portfolio assets: Debt securities Traded loans Total trading portfolio assets Financial assets at fair value through the income statement: Loans and advances Debt securities Reverse repurchase agreements Other financial assets £m 238,574 92,542 169,205 41,793 150,453 361,451 1,725 828 2,161 4,714 3,227 50,864 12,525 63,389 38,667 2,305 145,014 111 Total financial assets at fair value through the income statement 186,097 £m — — — — £m — — £m — — Risk transfer Net exposure £m £m — 238,574 — 92,542 (339) (168,627) (1,050) (4,560) (146) (252) 93 35,931 (5,001) (128) (42,691) (23,104) 79,529 (5,001) (1,517) (215,878) (23,502) 115,553 — — — — — — — — — — — — — (11) (29) (1) (41) — — — — — — (1,714) (229) (717) (2,660) (3,227) (461) (268) (729) (31,263) (319) (1,428) (143,057) — — (1,428) (174,639) — (3) (765) (768) — — — — — — — — — — 567 678 1,245 — 50,403 12,257 62,660 7,404 1,986 529 111 10,030 Derivative financial instruments 262,572 (202,519) (34,598) (5,887) (5,738) 13,830 Financial assets at fair value through other comprehensive income Other assets Total on-balance sheet Off-balance sheet: Contingent liabilities Loan commitments Total off-balance sheet Total 60,851 1,212 — — — — (53) (1,164) 59,634 — — 1,212 1,269,915 (207,520) (37,543) (400,413) (30,404) 594,035 21,346 345,711 367,057 — — — (906) (1,367) (256) 18,817 (141) (44,777) (1,668) 299,125 (1,047) (46,144) (1,924) 317,942 1,636,972 (207,520) (38,590) (446,557) (32,328) 911,977 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 304 Risk performance - Credit risk (continued) Expected Credit Losses Loans and advances at amortised cost by stage The table below presents a stage allocation and business segment analysis of loans and advances at amortised cost by gross exposure, impairment allowance, impairment charge and coverage ratio as at 31 December 2022. Also included are stage allocation of off- balance sheet loan commitments and financial guarantee contracts by gross exposure, impairment allowance and coverage as at 31 December 2022. Impairment allowance under IFRS 9 considers both the drawn and the undrawn counterparty exposure. For retail portfolios, the total impairment allowance is allocated to gross loans and advances to the extent allowance does not exceed the drawn exposure and any excess is reported on the liabilities side of the balance sheet as a provision. For wholesale portfolios, impairment allowance on undrawn exposure is reported on the liability side of the balance sheet as a provision. Loans and advances at amortised cost by stage (audited) Gross exposure Impairment allowance As at 31 December 2022 Barclays UK Barclays International Head Office Stage 1 Stage 2 Stage 3 £m £m £m Total £m 160,424 24,837 2,711 187,972 33,735 3,644 4,399 252 1,793 39,927 661 4,557 Total Barclays Group retail 197,803 29,488 5,165 232,456 Barclays UK 34,858 2,954 805 38,617 Barclays International 117,692 14,298 1,098 133,088 192 — 18 210 152,742 17,252 1,921 171,915 Stage 1 Stage 2 Stage 3 Total Net exposure £m 232 392 3 627 129 301 — 430 £m 718 1,200 24 £m 485 949 359 £m £m 1,435 186,537 2,541 37,386 386 4,171 1,942 1,793 4,362 228,094 109 265 — 374 96 312 18 426 334 38,283 878 132,210 18 192 1,230 170,685 Head Office Total Barclays Group wholesalea Total loans and advances at amortised cost Off-balance sheet loan commitments and financial guarantee contractsb Totalc As at 31 December 2022 Barclays UK Barclays International Head Office Total Barclays Group retail Barclays UK Barclays International Head Office Total Barclays Group wholesalea Total loans and advances at amortised cost Off-balance sheet loan commitments and financial guarantee contractsb Other financial assets subject to impairmentc Totald 350,545 46,740 7,086 404,371 1,057 2,316 2,219 5,592 398,779 372,945 723,490 30,694 77,434 1,180 404,819 8,266 809,190 245 1,302 315 2,631 23 583 404,236 2,242 6,175 803,015 Coverage ratio Stage 1 Stage 2 Stage 3 Total Loan impairment charge and loan loss rate Loan impairment charge/ (release) Loan loss rate % 0.1 1.2 0.1 0.3 0.4 0.3 — 0.3 0.3 % 2.9 27.3 9.5 6.6 3.7 1.9 — 2.2 5.0 % 17.9 52.9 54.3 34.7 11.9 28.4 100 22.2 31.3 % 0.8 6.4 8.5 1.9 0.9 0.7 8.6 0.7 1.4 0.1 1.0 1.9 0.1 bps 9 191 40 27 10 14 29 £m 169 763 — 932 106 127 — 233 1,165 18 37 0.2 3.4 27.1 0.8 1,220 Notes a Includes Wealth and Private Banking exposures measured on an individual customer exposure basis, and excludes Business Banking exposures, including lending under the government backed Bounce Back Loan Scheme (BBLS) of £6.6bn that are managed on a collective basis and reported within BUK Retail. The net impact is a difference in total exposure of £3.8bn of balances reported as wholesale loans in the Loans and advances at amortised cost by product disclosure. b Excludes loan commitments and financial guarantees of £14.9bn carried at fair value. c Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and other assets. These have a total gross exposure of £180.1bn and impairment allowance of £163m. This comprises £10m ECL on £178.4bn Stage 1 assets, £9m on £1.5bn Stage 2 fair value through other comprehensive income assets, other assets, cash collateral and settlement assets and £144m on £149m Stage 3 other assets. d The loan loss rate is 30bps after applying the total impairment charge of £1,220m Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 305 Risk performance - Credit risk (continued) Loans and advances at amortised cost by stage (audited) Gross exposure Impairment allowance As at 31 December 2021 Barclays UK Barclays International Head Office Stage 1 Stage 2 Stage 3 £m £m £m Total £m 160,695 22,779 2,915 186,389 25,981 3,735 2,691 429 1,566 30,238 705 4,869 Total Barclays Group retail 190,411 25,899 5,186 221,496 35,571 92,341 542 1,917 13,275 969 38,457 1,059 106,675 2 21 565 128,454 15,194 2,049 145,697 Stage 1 Stage 2 Stage 3 Total Net exposure £m 261 603 2 866 153 187 — 340 £m 949 795 36 £m 728 858 347 £m £m 1,938 184,451 2,256 27,982 385 4,484 1,780 1,933 4,579 216,917 43 192 — 235 111 458 19 588 307 38,150 837 105,838 19 546 1,163 144,534 Barclays UK Barclays International Head Office Total Barclays Group wholesalea Total loans and advances at amortised cost Off-balance sheet loan commitments and financial guarantee contractsb Totalc As at 31 December 2021 Barclays UK Barclays International Head Office Total Barclays Group retail Barclays UK Barclays International Head Office Total Barclays Group wholesalea Total loans and advances at amortised cost Off-balance sheet loan commitments and financial guarantee contractsb Other financial assets subject to impairmentc Total 318,865 41,093 7,235 367,193 1,206 2,015 2,521 5,742 361,451 312,142 631,007 34,815 75,908 1,298 348,255 8,533 715,448 217 1,423 302 2,317 23 542 347,713 2,544 6,284 709,164 Coverage ratio Stage 1 Stage 2 Stage 3 Total % 0.2 2.3 0.1 0.5 0.4 0.2 — 0.3 0.4 % 4.2 29.5 8.4 6.9 2.2 1.4 — 1.5 4.9 % 25.0 54.8 49.2 37.3 11.5 43.2 90.5 28.7 34.8 % 1.0 7.5 7.9 2.1 0.8 0.8 3.4 0.8 1.6 Loan impairment charge and loan loss rate Loan impairment charge Loan loss rate £m (227) 181 — (46) 122 (197) — (75) (121) bps — 60 — — 32 — — — — 0.1 0.9 1.8 0.2 (514) 0.2 3.1 29.8 0.9 (18) (653) Notes a Included in the above analysis are Wealth and Private Banking exposures measured on an individual customer exposure basis, and excludes Business Banking exposures including BBLS of £9.4bn that are managed on a collective basis and reported within BUK Retail. The net impact is a difference in total exposure of £6.0bn of balances reported as wholesale loans in the Loans and advances at amortised cost by product disclosure. b Excludes loan commitments and financial guarantees of £18.8bn carried at fair value. c Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and other assets. These have a total gross exposure of £155.2bn and impairment allowance of £114m. This comprises £6m ECL on £154.9bn Stage 1 assets, £1m on £0.157bn Stage 2 fair value through other comprehensive income assets, cash collateral and settlement balances and £107m on £110m Stage 3 other assets. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 306 Risk performance - Credit risk (continued) Loans and advances at amortised cost by product (audited) The table below presents a breakdown of loans and advances at amortised cost and the impairment allowance with stage allocation by asset classification. Loans and advances at amortised cost by product (audited) As at 31 December 2022 Gross exposure Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total Impairment allowance Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total Net exposure Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total Coverage ratio Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total As at 31 December 2021 Gross exposure Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total Impairment allowance Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total Net exposure Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total Coverage ratio Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total Stage 1 Not past due Stage 2 <=30 days past due >30 days past due £m £m £m 153,672 15,990 1,684 44,175 152,698 350,545 7,126 20,194 43,310 397 150 2,231 1,199 29 582 446 1,057 53 1,483 403 1,939 11 129 6 146 153,643 15,937 1,673 43,593 152,252 349,488 5,643 19,791 41,371 % — 1.3 0.3 0.3 % 0.3 20.8 2.0 4.5 £m £m 148,058 17,133 37,840 132,967 318,865 5,102 15,246 37,481 268 144 2,085 % 0.7 32.5 4.0 6.5 £m 1,660 300 306 19 824 363 1,206 46 1,493 248 1,787 6 85 4 95 148,039 17,087 1,654 37,016 132,604 317,659 3,609 14,998 35,694 215 302 2,266 1,346 2,171 1,213 % — 2.2 0.3 0.4 % 0.3 29.3 1.6 4.8 % 0.4 28.3 1.3 4.2 % 1.0 49.6 0.8 9.9 £m 526 576 97 9 220 2 231 517 356 95 968 % 1.7 38.2 2.1 19.3 £m 707 248 391 7 123 3 133 700 125 388 Total Stage 3 Total £m £m £m 18,200 8,099 20,441 46,740 73 1,832 411 2,316 18,127 6,267 20,030 44,424 % 0.4 22.6 2.0 5.0 2,414 174,286 2,122 54,396 2,550 175,689 7,086 404,371 414 1,278 527 2,219 516 3,692 1,384 5,592 2,000 173,770 844 50,704 2,023 174,305 4,867 398,779 % 17.1 60.2 20.7 31.3 % 0.3 6.8 0.8 1.4 £m £m £m 19,500 5,650 15,943 41,093 59 1,701 255 2,015 19,441 3,949 15,688 39,078 % 0.3 30.1 1.6 4.9 2,122 169,680 2,332 45,822 2,781 151,691 7,235 367,193 397 1,504 620 2,521 475 4,029 1,238 5,742 1,725 169,205 828 41,793 2,161 150,453 4,714 361,451 % 18.7 64.5 22.3 34.8 % 0.3 8.8 0.8 1.6 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 307 Risk performance - Credit risk (continued) Loans and advances at amortised cost by selected sectors The table below presents a breakdown of drawn exposure and impairment allowance for loans and advances at amortised cost with stage allocation for selected industry sectors within the wholesale loans portfolio. As the nature of macroeconomic uncertainty has evolved from the COVID-19 pandemic towards high inflation, supply chain constraints and consumer demand headwinds, so has the selected population under management focus. The credit risk industry concentration disclosure in the analysis of the concentration of credit risk section represents all the industry categories and the below only covers a subset of that table. The gross loans and advances to selected sectors has declined during the year. The increased provisions is informed by the current macroeconomic outlook and underlying portfolio performance. The wholesale portfolio also benefits from a hedge protection programme that enables effective risk management against credit losses. An additional £115m (December 2021: £123m) impairment allowance has been applied to the undrawn exposures not included in the table below Loans and advances at amortised cost by selected sectors Gross exposure Impairment allowance Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Total As at 31 December 2022 Autos Consumer Manufacture Discretionary retail and wholesale Hospitality and leisure Passenger travel Real Estate Steel and Aluminium manufacturers Total Total of wholesale exposures (%) As at 31 December 2021 Autos Consumer Manufacture Discretionary retail and wholesale Hospitality and leisure Passenger travel Real Estate Steel and Aluminium manufacturers Total Total of wholesale exposures (%) £m 881 3,845 5,143 3,902 744 13,042 486 28,043 18 % £m 194 1,729 1,711 1,316 267 3,049 85 8,351 41 % Total £m 1,106 5,773 7,103 5,647 1,062 16,590 589 £m 31 199 249 429 51 499 18 £m 6 45 41 40 9 91 7 £m 5 41 37 31 7 66 1 1,476 37,870 58 % 22 % 239 54 % 188 46 % £m 6 46 51 70 13 123 8 317 60 % £m 17 132 129 141 29 280 16 744 54 % Gross exposure Impairment allowance Stage 1 Stage 2 Stage 3 £m 656 3,904 5,413 4,348 856 13,620 415 29,212 22 % £m 295 1,304 1,197 1,613 285 3,314 75 8,083 51 % £m 2 211 230 384 143 518 6 1,494 54 % Total £m 953 5,419 6,840 6,345 1,284 17,452 496 38,789 26 % Stage 1 Stage 2 Stage 3 Total £m 3 18 47 28 30 65 2 £m 3 22 20 33 8 53 3 £m 0 43 54 44 40 93 1 193 53 % 142 56 % 275 44 % £m 6 83 121 105 78 211 6 610 49 % Exposure to UK Commercial Real Estate (CRE) £9.7bn (2021: £10bna) remained stable and was predominantly in Stage1 81% (2021: 78%). The loan portfolio was well collateralised, hence a low coverage of 1.1% (ECL: £0.1bn). Exposure at Stage 3 was 2% (2021: 3%) with a coverage ratio of 12% (2021: 18%). However, UK CRE has been included within selected sector scoping as the broader real estate sector remains under pressure due to pricing and affordability concerns, as well as construction input costs and supply chain issues adding to the uncertainty, in particular across non-investment grade exposures. The coverage ratio for selected sectors has increased from 1.6% as at 31 December 2021 to 2.0% as at 31 December 2022. Non- default coverage ratio has increased from 0.9% as at 31 December 2021 to 1.2% as at 31 December 2022. Note a From 2022, Barclays has enhanced the process of identifying UK CRE exposures. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 308 Risk performance - Credit risk (continued) Movement in gross exposures and impairment allowance including provisions for loan commitments and financial guarantees The following tables present a reconciliation of the opening to the closing balance of the exposure and impairment allowance. An explanation of the methodology used to determine credit impairment provisions is included in Note 8. Transfers between stages in the tables have been reflected as if they had taken place at the beginning of the year. The movements are measured over a 12-month period. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 309 Risk performance - Credit risk (continued) Loans and advances at amortised cost (audited) Home loans As at 1 January 2022 Transfers from Stage 1 to Stage 2 Transfers from Stage 2 to Stage 1 Transfers to Stage 3 Transfers from Stage 3 Business activity in the yeara Refinements to models used for calculation Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changes Final repaymentsb Disposals Write-offsc As at 31 December 2022d Credit cards, unsecured loans and other retail lending As at 1 January 2022 Transfers from Stage 1 to Stage 2 Transfers from Stage 2 to Stage 1 Transfers to Stage 3 Transfers from Stage 3 Business activity in the yeara Refinements to models used for calculatione Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changes Final repaymentsb Disposalsf Write-offsc As at 31 December 2022d Wholesale loans As at 1 January 2022 Transfers from Stage 1 to Stage 2 Transfers from Stage 2 to Stage 1 Transfers to Stage 3 Transfers from Stage 3 Business activity in the yeara Refinements to models used for calculatione Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changesg Final repaymentsb Disposalsf Write-offsc As at 31 December 2022d Stage 1 Stage 2 Stage 3 Total Gross exposure £m ECL £m Gross exposure £m 148,058 (8,747) 7,489 (400) 32 30,028 — 19 (1) 24 — 1 10 — 19,500 8,747 (7,489) (725) 229 1,142 — ECL £m 59 1 (24) (6) 4 7 — Gross exposure £m ECL £m Gross exposure £m 2,122 — — 1,125 (261) 6 — 397 — — 6 (5) — — 169,680 — — — — 31,176 — ECL £m 475 — — — — 17 — (8,846) (22) (1,081) 36 (125) 52 (10,052) 66 (13,942) — — 153,672 37,840 (3,474) 1,941 (649) 87 11,339 — (2,123) (2) — — 29 — — 18,200 (4) — — 73 (426) — (27) 2,414 (9) — (27) 414 (16,491) — (27) 174,286 824 (80) 489 (20) 33 177 86 5,650 3,474 (1,941) (707) 25 769 — 1,701 80 (489) (307) 13 186 (45) 2,332 — — 1,356 (112) 157 — 1,504 — — 327 (46) 126 96 45,822 — — — — 12,265 — (15) — (27) 516 4,029 — — — — 489 137 1,246 (887) 1,199 736 179 787 2,624 636 (3,996) (159) — 44,175 132,967 (9,488) 5,258 (1,480) 204 40,490 — (36) (4) — 582 (341) (29) — 8,099 (32) (11) — 1,832 (228) (275) (1,287) 2,122 (60) (169) (1,287) 1,278 (4,565) (463) (1,287) 54,396 363 (67) 55 (6) 21 83 (64) 15,943 9,488 (5,258) (684) 339 4,104 — 255 67 (55) (11) 28 86 (66) 2,781 — — 2,164 (543) 239 — 620 — — 17 (49) 30 (374) 151,691 — — — — 44,833 — (128) (184) (1,287) 3,692 1,238 — — — — 199 (504) 12,799 103 352 154 (1,504) 693 11,647 950 (26,540) (1,512) — 152,698 (42) — — 446 (3,812) (31) — 20,441 (47) — — 411 (232) (49) (306) 2,550 (57) (47) (306) 527 (30,584) (1,592) (306) 175,689 (146) (47) (306) 1,384 Notes a Business activity in the year does not include additional drawdowns on the existing facility which are reported under 'Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changes'. Business activity reported within Credit cards, unsecured loans and other retail lending portfolio includes GAP portfolio acquisition in US cards of £2.7bn. b Final repayments include repayment from the facility closed during the year whereas partial repayments from existing facility are reported under 'Net drawdowns, repayments, net remeasurement and movements due to exposure and risk parameter changes'. c In 2022, gross write-offs amounted to £1,620m (2021: £1,836m). In Q422, £329m of balances with de minimis recovery expectations were written off in line with policy in UK Cards and Unsecured loans. Post write-off recoveries amounted to £64m (2021: £66m). Net write-offs represent gross write-offs less post write-off recoveries and amounted to £1,556m (2021: £1,770m). d Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and other assets. These have a total gross exposure of £180.1bn (December 2021: £155.2bn) and impairment allowance of £163m (December 2021: £114m). This comprises £10m ECL (December 2021: £6m) on £178.4bn Stage 1 assets (December 2021: £154.9bn), £9m (December 2021: £1m) on £1.5bn Stage 2 fair value through other comprehensive income assets, cash collateral and settlement assets (December 2021: £157m) and £144m (December 2021: £107m) on £149m Stage 3 other assets (December 2021: £110m) e Refinements to models used for calculation reported within Credit cards, unsecured loans and other retail lending portfolio include a £0.3bn movement in US Cards and £(0.2)bn in UK Cards. Wholesale loans include a £(0.5)bn movement in Business Banking. Refinement to models reflect model enhancements made during the year. Barclays continually review the output of models to determine accuracy of the ECL calculation including review of model monitoring, external benchmarking and experience of model operation over an extended period of time. This ensures that the models used continue to reflect the risks inherent across the businesses. f The £0.5bn disposals reported within Credit cards, unsecured loans and other retail lending portfolio includes £0.2bn sale of NFL portfolio within US Cards and £0.3bn of debt sales undertaken during g the year. The £1.6bn disposal reported within Wholesale loans includes sale of debt securities as part of Group Treasury Operations. 'Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changes' reported within Wholesale loans also include assets of £1.3bn de-recognised due to payment received on defaulted loans from government guarantees issued under government’s Bounce Back Loans Scheme. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 310 Risk performance - Credit risk (continued) Reconciliation of ECL movement to credit impairment charge/(release) for the period Home loans Credit cards, unsecured loans and other retail lending Wholesale loans ECL movement excluding assets derecognised due to disposals and write-offs ECL movement on loan commitments and other financial guarantees ECL movement on other financial assetsa Recoveries and reimbursementsb Total exchange and other adjustmentsc Total credit impairment charge for the year Stage 1 Stage 2 Stage 3 £m 10 (238) 83 (145) 28 4 £m 14 142 156 312 13 8 £m 44 1,230 260 1,534 — 37 (122) (63) (78) Total £m 68 1,134 499 1,701 41 49 (263) (308) 1,220 Notes a Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and other assets. These have a total gross exposure of £180.1bn (December 2021: £155.2bn) and impairment allowance of £163m (December 2021: £114m). This comprises £10m ECL (December 2021: £6m) on £178.4bn Stage 1 assets (December 2021: £154.9bn), £9m (December 2021: £1m) on £1.5bn Stage 2 fair value through other comprehensive income assets, cash collateral and settlement assets (December 2021: £157m) and £144m (December 2021: £107m) on £149m Stage 3 other assets (December 2021: £110m). b Recoveries and reimbursements includes £199m for reimbursements expected to be received under the arrangement where Group has entered into financial guarantee contracts which provide credit protection over certain assets with third parties and cash recoveries of previously written off amounts of £64m. Includes foreign exchange and interest and fees in suspense. c Loan commitments and financial guarantees (audited) Stage 1 Stage 2 Stage 3 Total Home loans As at 1 January 2022 Net transfers between stages Business activity in the year Net drawdowns, repayments, net re- measurement and movement due to exposure and risk parameter changes Limit management and final repayments As at 31 December 2022 Gross exposure £m 10,833 8 8,034 (6,793) (368) 11,714 Credit cards, unsecured loans and other retail lending As at 1 January 2022 Net transfers between stages Business activity in the year 122,819 (3,390) 38,204 ECL £m — — — — — — 50 47 25 Gross exposure £m 532 (17) — (21) (44) 450 5,718 3,050 451 Net drawdowns, repayments, net re- measurement and movement due to exposure and risk parameter changes Limit management and final repayments As at 31 December 2022 9,633 (54) (1,949) (8,212) 159,054 (7) 61 (503) 6,767 Wholesale loans As at 1 January 2022 Net transfers between stages Business activity in the year Net drawdowns, repayments, net re- measurement and movement due to exposure and risk parameter changes 178,490 167 28,565 5,826 43,683 60 28 (5,759) 4,233 28,353 (42) 5,953 ECL £m — — — — — — 61 (42) 27 67 (23) 90 241 (64) 54 59 Gross exposure £m 3 9 — (6) — 6 218 340 14 (151) (89) 332 ECL £m — — — — — — Gross exposure £m 11,368 — 8,034 (6,820) (412) 12,170 ECL £m — — — — — — 20 128,755 131 (5) — 2 5 38,669 7,533 — 54 18 (2) (8,804) 20 166,153 (32) 171 208,132 411 1,077 (67) 15 3 4 — — 47,931 138 (2) 34,444 — 82 15 (96) 412 Limit management and final repayments (54,175) (29) (9,515) (65) (321) (2) (64,011) As at 31 December 2022 202,177 184 23,477 225 842 3 226,496 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 311 Risk performance - Credit risk (continued) Loans and advances at amortised cost (audited) Home loans As at 1 January 2021 Transfers from Stage 1 to Stage 2 Transfers from Stage 2 to Stage 1 Transfers to Stage 3 Transfers from Stage 3 Business activity in the yeara Refinements to models used for calculationb Net drawdowns, repayments, net re- measurement and movements due to exposure and risk parameter changes Final repaymentsc Disposalsd Write-offse As at 31 December 2021f Credit cards, unsecured loans and other retail lending As at 1 January 2021 Transfers from Stage 1 to Stage 2 Transfers from Stage 2 to Stage 1 Transfers to Stage 3 Transfers from Stage 3 Business activity in the yeara Refinements to models used for calculationb Net drawdowns, repayments, net re- measurement and movements due to exposure and risk parameter changesg Final repaymentsc Disposalsd Write-offse As at 31 December 2021f Wholesale loans As at 1 January 2021 Transfers from Stage 1 to Stage 2 Transfers from Stage 2 to Stage 1 Transfers to Stage 3 Transfers from Stage 3 Business activity in the yeara Refinements to models used for calculationb Net drawdowns, repayments, net re- measurement and movements due to exposure and risk parameter changes Final repaymentsc Disposalsd Write-offse As at 31 December 2021f Stage 1 Stage 2 Stage 3 Total Gross exposure £m 138,639 (7,672) 5,336 (282) 35 32,744 — ECL £m 33 (2) 32 — 1 7 — Gross exposure £m 19,312 7,672 (5,336) (469) 203 1,243 — ECL £m 84 2 (32) (9) 5 5 (4) Gross exposure £m ECL £m Gross exposure £m 2,234 — — 751 (238) 4 — 421 — — 9 (6) — 38 160,185 — — — — 33,991 — ECL £m 538 — — — — 12 34 (8,131) (50) (1,090) 12 (216) (26) (9,437) (64) (12,039) (572) — 148,058 (2) — — 19 (2,009) (26) — 19,500 (4) — — 59 33,021 (1,894) 4,717 (529) 55 7,842 — 680 (78) 1,174 (22) 26 119 (5) 10,320 1,894 (4,717) (790) 32 257 — 2,769 78 (1,174) (370) 19 62 (33) (392) — (21) 2,122 3,172 — — 1,319 (87) 42 — (18) — (21) 397 (14,440) (598) (21) 169,680 2,251 — — 392 (45) 19 14 46,513 — — — — 8,141 — (24) — (21) 475 5,700 — — — — 200 (24) (2,793) (1,030) (848) 389 (165) 620 (3,806) (21) (2,579) — — 37,840 119,304 (6,115) 9,137 (804) 580 34,804 — (40) — — 824 320 (19) 257 (4) 23 95 8 (498) — — 5,650 21,374 6,115 (9,137) (377) 410 1,774 — (39) — — 1,701 (212) (287) (1,450) 2,332 (92) (205) (1,450) 1,504 (3,289) (287) (1,450) 45,822 (171) (205) (1,450) 4,029 711 19 (257) (21) 22 18 11 3,591 — — 1,181 (990) 283 — 1,066 — — 25 (45) 50 — 144,269 — — — — 36,861 — 2,097 — — — — 163 19 (417) (268) 721 (68) (211) 67 93 (269) (22,219) (1,303) — 132,967 (34) (15) — 363 (4,734) (203) — 15,943 (174) (6) — 255 (545) (163) (365) 2,781 (131) (47) (365) 620 (27,498) (1,669) (365) 151,691 (339) (68) (365) 1,238 Notes a Business activity in the year does not include additional drawdowns on the existing facility which are reported under 'Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changes'. b Refinements to models used for calculation include a £34m movement in Home loans, £(24)m in Credit cards, unsecured loans and other retail lending and £19m in Wholesale loans. These reflect methodology changes made during the year. Barclays continually review the output of models to determine accuracy of the ECL calculation including review of model monitoring, external benchmarking and experience of model operation over an extended period of time. This ensures that the models used continue to reflect the risks inherent across the businesses. Final repayments include repayment from the facility closed during the year whereas partial repayments from existing facility are reported under 'Net drawdowns, repayments, net remeasurement and movements due to exposure and risk parameter changes'. c d The £598m disposals reported within Home loans relate to transfer of facilities to a non-consolidated special purpose vehicle for the purpose of securitisation. The £287m disposals reported within Credit cards, unsecured loans and other retail lending portfolio relate to debt sales undertaken during the year. The £1.7bn disposal reported within Wholesale loans include a £1.0bn sale of Barclays Asset Finance and a £0.7bn of debt sales. In 2021, gross write-offs amounted to £1,836m (2020: £1,964m) and post write-off recoveries amounted to £66m (2020: £35m). Net write-offs represent gross write-offs less post write-off recoveries and amounted to £1,770m (2020: £1,929m). e f Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and other assets. These have a total gross exposure of £155.2bn (December 2020: £180.3bn) and impairment allowance of £114m (December 2020: £165m). This comprises £6m ECL (December 2020: £11m) on £154.9bn Stage 1 assets (December 2020: £175.7bn), £1m (December 2020: £9m) on £157m Stage 2 fair value through other comprehensive income assets, cash collateral and settlement assets (December 2020: £4.4bn) and £107m (December 2020: £145m) on £110m Stage 3 other assets (December 2020: £154m). g Transfers and risk parameters change include a £0.3bn (2020: £0.6bn) net release in ECL arising from reclassification of £1.9bn (2020: £2.0bn) gross loans and advances from Stage 2 to Stage 1 in Credit cards, unsecured loans and other retail lending. The reclassification followed a review of back-testing of results which indicated that accuracy of origination probability of default characteristics require management adjustments to correct and was first established in Q220. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 312 Risk performance - Credit risk (continued) Reconciliation of ECL movement to credit impairment charge/(release) for the period Stage 1 Stage 2 Stage 3 Total Home loans Credit cards, unsecured loans and other retail lending Wholesale loans ECL movement excluding assets derecognised due to disposals and write-offs ECL movement on loan commitments and financial guarantees ECL movement on other financial assetsa Recoveries and reimbursementsb Total exchange and other adjustmentsc Total credit impairment release for the year £m (14) 144 58 188 (39) (5) 59 £m (25) (1,068) (450) (1,543) (456) (8) 224 £m (3) 908 (34) 871 (27) (2) (43) £m (42) (16) (426) (484) (522) (15) 240 128 (653) Notes a Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and other assets. These have a total gross exposure of £155.2bn (December 2020: £180.3bn) and impairment allowance of £114m (December 2020: £165m). This comprises £6m ECL (December 2020: £11m) on £154.9bn Stage 1 assets (December 2020: £175.7bn), £1m (December 2020: £9m) on £157mn Stage 2 fair value through other comprehensive income assets, cash collateral and settlement assets (December 2020: £4.4bn) and £107m (December 2020: £145m) on £110m Stage 3 other assets (December 2020: £154m). b Recoveries and reimbursements includes a net reduction in amounts recoverable from financial guarantee contracts held with third parties of £306m and cash recoveries of previously written off amounts of £66m. Includes foreign exchange and interest and fees in suspense. c Loan commitments and financial guarantees (audited) Stage 1 Stage 2 Stage 3 Total Gross exposure £m 11,861 (131) 7,034 (7,556) (375) 10,833 ECL £m — — — — — — Gross exposure £m 516 124 — (64) (44) 532 ECL £m — — — — — — Gross exposure £m 5 7 — (4) (5) 3 ECL £m — — — — — — Gross exposure £m 12,382 — 7,034 (7,624) (424) 11,368 Home loans As at 1 January 2021 Net transfers between stages Business activity in the year Net drawdowns, repayments, net re- measurement and movement due to exposure and risk parameter changes Limit management and final repayments As at 31 December 2021 Credit cards, unsecured loans and other retail lending As at 1 January 2021 Net transfers between stages Business activity in the year 114,371 5,769 11,206 55 206 — 12,117 (6,379) 430 305 (213) — 229 610 2 23 126,717 7 — — 11,638 Net drawdowns, repayments, net re- measurement and movement due to exposure and risk parameter changes Limit management and final repayments As at 31 December 2021 Wholesale loans As at 1 January 2021 Net transfers between stages Business activity in the year (742) (207) 217 (7,785) 122,819 (4) 50 (667) 5,718 (24) (7) 61 (526) (97) 218 (10) (1,051) 0 20 (8,549) 128,755 163,707 8,227 44,085 201 221 14 40,258 453 2,096 (7,174) (215) (1,053) 4,658 102 10 27 206,061 (6) — — 48,753 Net drawdowns, repayments, net re- measurement and movement due to exposure and risk parameter changes 8,819 (229) (151) Limit management and final repayments (46,348) (40) (9,026) As at 31 December 2021 178,490 167 28,565 7 (106) 241 515 (491) 1,077 (11) 9,183 (7) (55,865) 3 208,132 ECL £m — — — — — — 383 — — (241) (11) 131 681 — 116 (233) (153) 411 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 313 Risk performance - Credit risk (continued) Stage 2 decomposition Loans and advances at amortised costa Gross Exposure Impairment Allowance Quantitative test Qualitative test 30 days past due backstop Total Stage 2 Quantitative test Qualitative test 30 days past due backstop Total Stage 2 As at 31 December 2022 Home Loans Credit cards, unsecured loans and other retail lending Wholesale loans Total Stage 2 £m 9,467 6,009 17,274 32,750 £m 8,232 1,986 3,024 13,242 Loans and advances at amortised costa £m 501 104 143 748 £m 18,200 8,099 20,441 46,740 £m 47 1,379 324 1,750 £m 19 428 82 529 £m 7 25 5 37 £m 73 1,832 411 2,316 Gross Exposure Impairment Allowance As at 31 December 2021 Home Loans Credit cards, unsecured loans and other retail lending Wholesale loans Total Stage 2 Quantitative test Qualitative test 30 days past due backstop £m 11,997 4,045 13,054 29,096 £m 6,900 1,503 2,488 10,891 £m 603 102 401 1,106 Total Stage 2 £m 19,500 5,650 15,943 41,093 Quantitative test Qualitative test 30 days past due backstop £m 38 1,368 206 1,612 £m 10 318 44 372 £m 11 15 5 31 Total Stage 2 £m 59 1,701 255 2,015 Note a Where balances satisfy more than one of the above three criteria for determining a significant increase in credit risk, the corresponding gross exposure and ECL has been assigned in order of categories presented. Stage 2 exposures are predominantly identified using quantitative tests where the lifetime PD has deteriorated more than a pre- determined amount since origination during the year. This is augmented by inclusion of accounts meeting the designated high risk criteria (including watchlist) for the portfolio under the qualitative test. Qualitative tests predominantly include £9.8bn (2021: £8.3bn) in Barclays UK of which £8.2bn (2021: £6.8bn) relates to UK Home Finance, £0.8bn (2021: £1.0bn) relates to Business Banking and £0.5bn (2021: £0.2bn) relates to Barclaycard UK. A further £3.4bn (2021: £2.6bn) relates to Barclays International of which £2.1bn (2021: £1.4bn) relates to Corporate and Investment Bank and £1.2bn (2021: £1.1bn) relates to Consumer, Cards and Payments. A small number of other accounts (2% of impairment allowances and 2% of gross exposure) are included in Stage 2. These accounts are not otherwise identified by the quantitative or qualitative tests but are more than 30 days past due. The percentage triggered by these backstop criteria is a measure of the effectiveness of the Stage 2 criteria in identifying deterioration prior to delinquency. These balances include items in the Corporate and Investment Bank for reasons such as outstanding interest and fees rather than principal balances. + For further detail on the three criteria for determining a significant increase in credit risk required for Stage 2 classification, refer to Note 8. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 314 Risk performance - Credit risk (continued) Stage 3 decomposition Loans and advances at amortised cost As at 31 December 2022 Home Loans Credit cards, unsecured loans and other retail lending Wholesale loans Total Stage 3 Loans and advances at amortised cost As at 31 December 2021 Home Loans Credit cards, unsecured loans and other retail lending Wholesale loans Total Stage 3 Gross Exposure Impairment Allowance Exposures not charged-off including within cure perioda Exposures individually assessed or in recovery book Total Stage 3 Exposures not charged-off including within cure perioda Exposures individually assessed or in recovery book £m 1,481 1,056 1,525 4,062 £m 933 1,066 1,025 3,024 £m 2,414 2,122 2,550 7,086 £m 75 609 110 794 £m 339 669 417 1,425 Exposures not charged-off including within cure perioda Gross Exposure Exposures individually assessed or in recovery book £m 1,159 929 1,806 3,894 £m 963 1,403 975 3,341 Impairment Allowance Exposures not charged-off including within cure perioda Exposures individually assessed or in recovery book £m 65 477 115 657 £m 332 1,027 505 1,864 Total Stage 3 £m 2,122 2,332 2,781 7,235 Total Stage 3 £m 414 1,278 527 2,219 Total Stage 3 £m 397 1,504 620 2,521 Note a Includes £2.2bn (2021: £2.9bn) of gross exposure in a cure period that must remain in Stage 3 for a minimum of 12 months before moving to Stage 2. Stage 3 is comprised of exposures that are considered to be credit impaired. An asset is considered credit impaired when one or more events occur that have a detrimental impact on the estimated future cash flows of the financial asset. This comprises assets defined as defaulted and other individually assessed exposures where imminent default or actual loss is identified. Stage 3 exposures have reduced compared to 2021 driven by de-recognition of defaulted Wholesale Bounce Back Loans and Cards and Unsecured balances with de minimis recovery expectations, offset by on-going flows into default. In Home Loans, the increase is driven by adoption of the new definition of default under the Capital Requirements Regulation. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 315 Risk performance - Credit risk (continued) Management adjustments to models for impairment (audited) Management adjustments to impairment models are applied in order to factor in certain conditions or changes in policy that are not fully incorporated into the impairment models, or to reflect additional facts and circumstances at the period end. Management adjustments are reviewed and incorporated into future model development where applicable. Management adjustments are captured through “Economic uncertainty” and “Other” adjustments presented by product below: Management adjustments to models for impairment allowance presented by product (audited)a Impairment allowance pre management adjustmentsb Economic uncertainty adjustments (a) Other adjustments (b) Management adjustments (a+b) Total impairment allowanceC Proportion of Management adjustments to total impairment allowance As at 31 December 2022 Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total As at 31 December 2021 Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total Economic uncertainty adjustments presented by stage (audited) As at 31 December 2022 Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total As at 31 December 2021 Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total £m 427 3,543 1,680 5,650 £m 372 2,798 1,628 4,798 £m 4 118 195 317 £m 72 1,217 403 1,692 £m 85 202 (79) 208 £m 31 145 (382) (206) £m 89 320 116 525 £m 103 1,362 21 1,486 £m 516 3,863 1,796 6,175 £m 475 4,160 1,649 6,284 Stage 1 Stage 2 Stage 3 £m 1 24 181 206 £m 3 93 14 110 £m — 1 — 1 Stage 1 Stage 2 Stage 3 £m 5 403 333 741 £m 35 803 70 908 £m 32 11 — 43 % 17.2 8.3 6.5 8.5 % 21.7 32.7 1.3 23.6 Total £m 4 118 195 317 Total £m 72 1,217 403 1,692 Notes a Positive values reflect an increase in impairment allowance and negative values reflect a reduction in the impairment allowance. b Includes £4.8bn (December 2021: £4.2bn) of modelled ECL, £0.4bn (December 2021: £0.5bn) of individually assessed impairments and £0.5bn (December 2021: £0.1bn) ECL from non-modelled exposures. c Total impairment allowance consists of ECL stock on drawn and undrawn exposure. Economic uncertainty adjustments Models have been developed with data from non-inflationary periods establishing a relationship between input variables and customer delinquency based on past behaviour. Additionally, models are trying to interpret significant rates of change in macroeconomic variables and applying these to stable probability of default (PD) levels. As such there is a risk that the modelled output fails to capture the appropriate response to changes in macroeconomic variables and rising costs with modelled impairment provisions impacted by uncertainty. This uncertainty continues to be captured in two ways. Firstly, customer uncertainty: the identification of customers and clients who may be more vulnerable to economic instability; and secondly, model uncertainty: to capture the impact from model limitations and sensitivities to specific macroeconomic parameters which are applied at a portfolio level. In 2022, previously established economic uncertainty adjustments have been partially released, informed by some normalisation of customer behaviour, refreshed scenarios and a rebuild of certain models to better capture the macroeconomic outlook. The balance as at 31 December 2022 is £317m (December 2021: £1,692m) and includes: Customer and client uncertainty provisions of £423m (December 2021: £1,508m) includes: Credit cards, unsecured loans and other retail lending includes an adjustment of £118m (December 2021: £1,203m) which has been applied to customers and clients considered most vulnerable to affordability pressures. This adjustment is predominantly held in Stage 2 in line with customer risk profiles. The reduction is informed by the release of COVID-19 related adjustments as credit performance stabilises at or below pre-pandemic levels which is reflected in the models, and a rebuild of certain models to better capture the macroeconomic outlook. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 316 Risk performance - Credit risk (continued) Wholesale loans: £301m (December 2021: £305m) includes an adjustment of £205m for exposures considered most at risk from inflationary concerns, supply chain constraints and consumer demand headwinds. The adjustment involves applying stage 2 coverage rates to stage 1 exposures assessed as most vulnerable. Sectors in scope are presented in the selected sectors disclosure on page 307. The remaining adjustment includes £92m to reflect possible cross default risk on Barclays’ lending in respect of clients who have taken bounce back loans. Model uncertainty provisions of £(106)m (December 2021: £184m) includes: Wholesale loans: £(106)m (December 2021: £98m) includes an adjustment to correct for the deterioration in wholesale PDs impacted by model over-sensitivity to certain macroeconomic variables. In 2021, this adjustment was held at £98m driven by an unintuitive model output from certain Q421 macroeconomic variables. Management adjustments of £72m within home loans in 2021 primarily comprised of a now retired adjustment, reflecting the non- linearity of the UK mortgages portfolio in order to generate a more appropriate level of predicted results. Other adjustments Other adjustments are operational in nature and are expected to remain in place until they can be reflected in the underlying models. These adjustments result from data limitations and model performance related issues identified through model monitoring and other established governance processes. Other adjustments of £208m (December 2021: £(206)m) includes: Home loans: £85m (December 2021: £31m) primarily includes adjustments for model performance informed by model monitoring and an adjustment for the adoption of the new definition of default under the Capital Requirements Regulation. Credit cards, unsecured loans and other retail lending: £202m (December 2021: £145m) primarily includes an adjustment for adoption of the new definition of default under the Capital Requirements Regulation and an adjustment to the qualitative measures used in identification of high-risk account management (HRAM) accounts for US cards, partially offset by a recalibration of Loss Given Default (LGD) to reflect revised recovery expectations. The £145m adjustments held in December 2021 primarily included adjustments for model performance informed by model monitoring, partially offset by an adjustment for reclassification of loans and advances from Stage 2 to Stage 1 in credit cards. The reclassification followed a review of back-testing results which indicated that accuracy of origination probability of default characteristics require management adjustment. These adjustments are no longer required due to model enhancements made during the year. Wholesale loans: £(79)m (December 2021: £(382)m) includes adjustments for model performance informed by model monitoring. Management adjustments of £(382)m within wholesale loans in 2021 consisted of an adjustment of £(380)m applied on bounce back loans to reverse out the modelled charge which did not consider the government guarantee. This adjustment is no longer needed due to model enhancements made during the year. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 317 Risk performance - Credit risk (continued) Measurement uncertainty and sensitivity analysis The measurement of modelled ECL involves complexity and judgement, including estimation of probabilities of default (PD), loss given default (LGD), a range of unbiased future economic scenarios, estimation of expected lives, estimation of exposures at default (EAD) and assessing significant increases in credit risk. The Group uses a five-scenario model to calculate ECL. An external consensus forecast is assembled from key sources, including HM Treasury (short and medium term forecasts) and Bloomberg (based on median of economic forecasts) which forms the Baseline scenario. In addition, two adverse scenarios (Downside 1 and Downside 2) and two favourable scenarios (Upside 1 and Upside 2) are derived, with associated probability weightings. The adverse scenarios are calibrated to a broadly similar severity to the Group's internal stress tests and stress scenarios provided by regulators whilst also considering IFRS 9 specific sensitivities and non-linearity. The favourable scenarios are designed to reflect plausible upside risks to the Baseline scenario which are broadly consistent with the economic narrative approved by the Senior Scenario Review Committee. All scenarios are regenerated at a minimum semi-annually. The scenarios include key economic variables, (including GDP, unemployment, House Price Index (HPI) and base rates in both the UK and US markets), and expanded variables using statistical models based on historical correlations. The upside and downside shocks are designed to evolve over a five-year stress horizon, with all five scenarios converging to a steady state after approximately seven years. Scenarios used to calculate the Group’s ECL charge were refreshed in Q422 with the Baseline scenario reflecting the latest consensus macroeconomic forecasts available at the time of the scenario refresh. In the Baseline scenario, further deterioration in major economies, as inflation pressures continue to squeeze household income, along with significant monetary policy tightening, contribute to lower growth prospects. UK GDP is expected to continue falling into 2023 and the US economy dips into mild recession in 2023. Slight increases in the UK and US unemployment rates are expected, peaking at 4.9% in Q423 and 4.7% in Q124 respectively. Central banks continue raising interest rates, peaking during 2023, and consumer price inflation eases over 2023. In the Downside 2 scenario, inflation continues to accelerate amid increasing gas and oil prices and persistent supply-chain pressures as a result of the conflict in Ukraine. Central banks are forced to raise interest rates sharply with the UK bank rate reaching 8.0% and the US federal funds rate peaking at 7.0%. Unemployment peaks at 8.5% in the UK and 8.6% in the US. Given already stretched valuations, the sharp increase in borrowing costs sees house prices decrease significantly. In the Upside 2 scenario, lower energy prices add downward pressure on prices globally, while recovering labour force participation limits wage growth. Asa result of easing inflation, central banks lower interest rates to support the economic recovery. The methodology for estimating scenario probability weights involves simulating a range of future paths for UK and US GDP using historical data with the five scenarios mapped against the distribution of these future paths. The median is centred around the Baseline with scenarios further from the Baseline attracting a lower weighting before the five weights are normalised to total 100%. The same scenarios used in the estimation of expected credit losses are also used to inform Barclays' internal planning. The impacts across the portfolios are different because of the sensitivities of each of the portfolios to specific macroeconomic variables, for example, mortgages are highly sensitive to house prices, credit cards and unsecured consumer loans are highly sensitive to unemployment. The increase in the Downside weightings and the decrease in the Upside weightings reflected the deteriorating economic outlook which moved the Baseline UK/US GDP paths closer to the Downside scenarios For further details see page 320. The economic uncertainty adjustments of £0.3bn (2021: £1.7bn) have been applied as overlays to the modelled ECL output. These adjustments consist of a customer and client uncertainty provision of £0.4bn (2021: £1.5bn) which has been applied to customers and clients considered most vulnerable to affordability pressures, and a model uncertainty adjustment of £(0.1)bn (2021: £0.2bn). For further details see pages 315 to 316. The tables below show the key macroeconomic variables used in the five scenarios (5 year annual paths), the probability weights applied to each scenario and the macroeconomic variables by scenario using ‘specific bases’ i.e. the most extreme position of each variable in the context of the scenario, for example, the highest unemployment for downside scenarios and the lowest unemployment for upside scenarios. 5-year average tables and movement over time graphs provide additional transparency. Annual paths show quarterly averages for the year (unemployment and base rate) or change in the year (GDP and HPI). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 318 Risk performance - Credit risk (continued) Baseline average macroeconomic variables used in the calculation of ECL As at 31 December 2022 UK GDPa UK unemploymentb UK HPIc UK bank rate US GDPa US unemploymentd US HPIe US federal funds rate As at 31 December 2021 UK GDPa UK unemploymentb UK HPIc UK bank rate US GDPa US unemploymentd US HPIe US federal funds rate 2022 % 3.3 3.7 8.4 1.8 1.8 3.7 11.2 2.1 2021 % 6.2 4.8 4.7 0.1 5.5 5.5 11.8 0.2 Downside 2 average macroeconomic variables used in the calculation of ECL As at 31 December 2022 UK GDPa UK unemploymentb UK HPIc UK bank rate US GDPa US unemploymentd US HPIe US federal funds rate As at 31 December 2021 UK GDPa UK unemploymentb UK HPIc UK bank rate US GDPa US unemploymentd US HPIe US federal funds rate Notes a Average Real GDP seasonally adjusted change in year. b Average UK unemployment rate 16-year+. c Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to prior year end. d Average US civilian unemployment rate 16-year+. e Change in year end US HPI = FHFA house price index, relative to prior year end. 2022 % 3.3 3.7 8.4 1.8 1.8 3.7 11.2 2.1 2021 % 6.2 4.8 4.7 0.1 5.5 5.5 11.8 0.2 2023 % (0.8) 4.5 (4.7) 4.4 0.5 4.3 1.8 4.8 2024 % 0.9 4.4 (1.7) 4.1 1.2 4.7 1.5 3.6 2022 2023 % 4.9 4.7 1.0 0.8 3.9 4.2 4.5 0.3 2023 % (3.4) 6.0 (18.3) 7.3 (2.7) 6.0 (3.1) 6.6 2022 % 0.2 7.2 (14.3) 2.2 (0.8) 6.4 (6.6) 2.1 % 2.3 4.5 1.9 1.0 2.6 3.6 5.2 0.9 2024 % (3.8) 8.4 (18.8) 7.9 (3.4) 8.5 (4.0) 6.9 2023 % (4.0) 9.0 (21.8) 3.9 (3.5) 9.1 (9.0) 3.4 2025 % 1.8 4.1 2.2 3.8 1.5 4.7 2.3 3.1 2024 % 1.9 4.3 1.9 1.0 2.4 3.6 4.9 1.2 2025 % 2.0 8.0 (7.7) 6.6 2.0 8.1 (1.9) 5.8 2024 % 2.8 7.6 11.9 3.1 2.5 8.1 5.9 2.6 2026 % 1.9 4.2 2.2 3.4 1.5 4.7 2.4 3.0 2025 % 1.7 4.2 2.3 0.8 2.4 3.6 5.0 1.3 2026 % 2.3 7.4 8.2 5.5 2.6 7.1 4.8 4.6 2025 % 4.3 6.3 15.2 2.2 3.2 6.4 6.7 2.0 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 319 Risk performance - Credit risk (continued) Downside 1 average macroeconomic variables used in the calculation of ECL As at 31 December 2022 UK GDPa UK unemploymentb UK HPIc UK bank rate US GDPa US unemploymentd US HPIe US federal funds rate As at 31 December 2021 UK GDPa UK unemploymentb UK HPIc UK bank rate US GDPa US unemploymentd US HPIe US federal funds rate Upside 2 average macroeconomic variables used in the calculation of ECL As at 31 December 2022 UK GDPa UK unemploymentb UK HPIc UK bank rate US GDPa US unemploymentd US HPIe US federal funds rate As at 31 December 2021 UK GDPa UK unemploymentb UK HPIc UK bank rate US GDPa US unemploymentd US HPIe US federal funds rate Notes a Average Real GDP seasonally adjusted change in year. b Average UK unemployment rate 16-year+. c Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to prior year end. d Average US civilian unemployment rate 16-year+. e Change in year end US HPI = FHFA house price index, relative to prior year end. 2022 % 3.3 3.7 8.4 1.8 1.8 3.7 11.2 2.1 2021 % 6.2 4.8 4.7 0.1 5.5 5.5 11.8 0.2 2022 % 3.3 3.7 8.4 1.8 1.8 3.7 11.2 2.1 2023 % (2.1) 5.2 (11.7) 5.9 (1.1) 5.1 (0.7) 5.8 2022 % 2.8 6.2 (6.8) 1.6 1.6 5.4 (1.2) 1.3 2024 % (1.5) 6.4 (10.6) 6.1 (1.1) 6.6 (1.3) 5.4 2023 % (0.7) 6.8 (10.5) 2.7 (0.4) 6.6 (2.1) 2.3 2025 % 1.9 6.0 (2.8) 5.3 1.7 6.4 0.2 4.4 2024 % 2.3 6.0 6.9 2.3 2.4 6.1 4.8 2.1 2026 % 2.1 5.8 5.2 4.6 2.1 5.9 3.6 3.9 2025 % 2.9 5.3 8.6 1.6 2.7 5.2 5.2 1.8 2023 2024 2025 2026 % 2.8 3.5 8.7 3.1 3.3 3.3 5.8 3.6 % 3.7 3.4 7.5 2.6 3.5 3.3 5.1 2.9 % 2.9 3.4 4.4 2.5 2.8 3.3 4.5 2.8 % 2.4 3.4 4.2 2.5 2.8 3.3 4.5 2.8 2021 2022 2023 2024 2025 % 6.2 4.8 4.7 0.1 5.5 5.5 11.8 0.2 % 7.2 4.5 8.5 0.2 5.3 3.9 10.6 0.3 % 4.0 4.1 9.0 0.5 4.1 3.4 8.5 0.4 % 2.7 4.0 5.2 0.5 3.5 3.3 7.2 0.7 % 2.1 4.0 4.2 0.3 3.4 3.3 6.6 1.0 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 320 Risk performance - Credit risk (continued) Upside 1 average macroeconomic variables used in the calculation of ECL As at 31 December 2022 UK GDPa UK unemploymentb UK HPIc UK bank rate US GDPa US unemploymentd US HPIe US federal funds rate As at 31 December 2021 UK GDPa UK unemploymentb UK HPIc UK bank rate US GDPa US unemploymentd US HPIe US federal funds rate Notes a Average Real GDP seasonally adjusted change in year. b Average UK unemployment rate 16-year+. c Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to prior year end. d Average US civilian unemployment rate 16-year+. e Change in year end US HPI = FHFA house price index, relative to prior year end. Scenario probability weighting (audited)a As at 31 December 2022 Scenario probability weighting As at 31 December 2021 Scenario probability weighting Note a For further details on changes to scenario weights see page 317. 2022 % 3.3 3.7 8.4 1.8 1.8 3.7 11.2 2.1 2021 % 6.2 4.8 4.7 0.1 5.5 5.5 11.8 0.2 2023 % 1.0 4.0 1.8 3.5 1.9 3.8 3.8 3.9 2022 % 6.0 4.6 5.0 0.6 4.6 4.0 8.3 0.3 2024 % 2.3 3.9 2.9 3.3 2.3 4.0 3.3 3.4 2023 % 3.1 4.3 5.0 0.8 3.4 3.5 7.0 0.6 2025 % 2.4 3.8 3.3 3.0 2.2 4.0 3.4 3.0 2024 % 2.3 4.2 3.9 0.8 2.9 3.5 6.0 1.0 2026 % 2.1 3.8 3.2 2.8 2.2 4.0 3.4 3.0 2025 % 1.9 4.1 3.3 0.5 2.9 3.5 5.7 1.1 Upside 2 Upside 1 Baseline Downside 1 Downside 2 % % % % 10.9 20.9 23.1 27.2 39.4 30.1 17.6 14.8 % 9.0 7.0 Specific bases shows the most extreme position of each variable in the context of the downside/upside scenarios, for example, the highest unemployment for downside scenarios, average unemployment for baseline scenarios and lowest unemployment for upside scenarios. GDP and HPI downside and upside scenario data represents the lowest and highest cumulative position relative to the start point, in the 20 quarter period. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 321 Risk performance - Credit risk (continued) Macroeconomic variables (specific bases) (audited)a Upside 2 Upside 1 Baseline Downside 1 Downside 2 As at 31 December 2022 UK GDPb UK unemploymentc UK HPId UK bank rate US GDPb US unemploymentc US HPId US federal funds rate As at 31 December 2021 UK GDPb UK unemploymentc UK HPId UK bank rate US GDPb US unemploymentc US HPId US federal funds rate % 13.9 3.4 37.8 0.5 14.1 3.3 35.0 0.1 21.4 4.0 35.7 0.1 22.8 3.3 53.3 0.1 % 9.4 3.6 21.0 0.5 9.6 3.6 27.5 0.1 18.3 4.1 23.8 0.1 19.6 3.5 45.2 0.1 % 1.4 4.2 1.2 3.5 1.3 4.4 3.8 3.3 3.4 4.5 2.4 0.7 3.4 4.1 6.2 0.8 % (3.2) 6.6 (17.9) 6.3 (2.5) 6.7 3.7 6.0 (1.6) 7.0 (12.7) 2.8 1.5 6.8 2.2 2.3 % (6.8) 8.5 (35.0) 8.0 (6.3) 8.6 0.2 7.0 (1.6) 9.2 (29.9) 4.0 (1.3) 9.5 (5.0) 3.5 Average basis represents the average quarterly value of variables in the 20 quarter period with GDP and HPI based on yearly average and quarterly CAGRs respectively. Macroeconomic variables (5 year averages) (audited)a Upside 2 Upside 1 Baseline Downside 1 Downside 2 As at 31 December 2022 UK GDPe UK unemploymentf UK HPIg UK bank rate US GDPe US unemploymentf US HPIg US federal funds rate As at 31 December 2021 UK GDPe UK unemploymentf UK HPIg UK bank rate US GDPe US unemploymentf US HPIg US federal funds rate % 3.0 3.5 6.6 2.5 2.9 3.4 6.2 2.8 4.4 4.3 6.3 0.3 4.4 3.9 8.9 0.5 % 2.2 3.8 3.9 2.9 2.1 3.9 5.0 3.1 3.9 4.4 4.4 0.5 3.9 4.0 7.7 0.6 % 1.4 4.2 1.2 3.5 1.3 4.4 3.8 3.3 3.4 4.5 2.4 0.7 3.4 4.1 6.2 0.8 % 0.7 5.4 (2.6) 4.7 0.7 5.5 2.5 4.3 2.7 5.8 0.3 1.7 2.4 5.7 3.6 1.5 % 0.0 6.7 (6.4) 5.8 0.0 6.7 1.2 5.2 1.8 7.0 (2.0) 2.3 1.3 7.1 1.4 2.1 Notes a UK GDP = Real GDP growth seasonally adjusted; UK unemployment = UK unemployment rate 16-year+; UK HPI = Halifax All Houses, All Buyers Index; US GDP = Real GDP growth seasonally adjusted; US unemployment = US civilian unemployment rate 16-year+; US HPI = FHFA house price index. 20 quarter period starts from Q121 (2020: Q120). b Maximum growth relative to Q420 (2021: Q419), based on 20 quarter period in Upside scenarios; 5-year yearly average CAGR in Baseline; minimum growth relative to Q420 (2021: Q419), based on 20 quarter period in Downside scenarios. c Lowest quarter in Upside scenarios; 5-year average in Baseline; highest quarter in Downside scenarios. Period based on 20 quarters from Q121 (2021: Q120). d Maximum growth relative to Q420 (2021: Q419), based on 20 quarter period in Upside scenarios; 5-year quarter end CAGR in Baseline; minimum growth relative to Q420 (2021: Q419), based on 20 quarter period in Downside scenarios. e 5-year yearly average CAGR, starting 2021 (2021: 2020). f 5-year average, Period based on 20 quarters from Q121 (2021: Q120). g 5-year quarter end CAGR, starting Q420 (2021: Q419). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 322 Risk performance - Credit risk (continued) The graphs below plot the historical data for GDP growth rate and unemployment rate in the UK and US as well as the forecasted data under each of the five scenarios. UK GDP (%) UK unemployment (%) US GDP (%) US unemployment (%) GDP growth based on year on year growth each quarter (Q/(Q-4)). ECL under 100% weighted scenarios for modelled portfolios (audited) The table below shows the modelled ECL assuming each of the five modelled scenarios are 100% weighted with the dispersion of results around the Baseline, highlighting the impact on exposure and ECL across the scenarios. Model exposure uses exposure at default (EAD) values and is not directly comparable to gross exposure used in prior disclosures. U2U1BLD1D22020202220242026202820302032-30-20-100102030U2U1BLD1D22020202220242026202820302032-15-10-5051015U2U1BLD1D22020202220242026202820302032012345678910U2U1BLD1D2202020222024202620282030203202468101214Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 323 Risk performance - Credit risk (continued) As at 31 December 2022 Stage 1 Model exposure (£m) Home loans Credit cards, unsecured loans and other retail lendingb, c Wholesale loans Stage 1 Model ECL (£m) Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Stage 1 Coverage (%) Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Stage 2 Model exposure (£m) Home loans Credit cards, unsecured loans and other retail lendingb, c Wholesale loans Stage 2 Model ECL (£m) Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Stage 2 Coverage (%) Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Stage 3 Model exposure (£m)d Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Stage 3 Model ECL (£m) Home loans Credit cards, unsecured loans and other retail lending Wholesale loanse Stage 3 Coverage (%) Home loans Credit cards, unsecured loans and other retail lending Wholesale loanse Total Model ECL (£m) Home loans Credit cards, unsecured loans and other retail lending Wholesale loanse Total ECL Reconciliation to total ECL Total weighted model ECL ECL from individually assessed impairmentse ECL from non-modelled exposures and others ECL from post model management adjustments Of which: ECL from economic uncertainty adjustments Total ECL Weighteda Upside 2 Upside 1 Baseline Downside 1 Downside 2 Scenarios 144,701 147,754 146,873 145,322 142,599 138,619 81,329 81,772 81,457 81,171 80,921 80,529 186,838 194,970 192,218 188,746 181,247 167,848 7 592 325 — 0.7 0.2 3 562 245 — 0.7 0.1 3 579 274 — 0.7 0.1 4 594 308 — 0.7 0.2 9 604 382 — 0.7 0.2 30 610 431 — 0.8 0.3 18,723 15,670 16,551 18,102 9,414 8,131 8,817 9,535 25,634 17,503 20,255 23,726 20,825 10,377 31,226 24,805 11,456 44,624 33 1,786 603 0.2 19.0 2.4 1,553 1,606 2,855 332 1,033 49 21.4 64.3 1.7 372 3,411 977 4,760 15 1,487 392 0.1 18.3 2.2 1,553 1,606 2,855 311 1,011 45 20 63 1.6 329 3,060 682 4,071 18 1,629 463 0.1 18.5 2.3 1,553 1,606 2,855 317 1,023 47 20.4 63.7 1.6 338 3,231 784 4,353 23 1,785 562 0.1 18.7 2.4 1,553 1,606 2,855 323 1,034 49 20.8 64.4 1.7 350 3,413 919 4,682 45 2,004 809 0.2 19.3 2.6 1,553 1,606 2,855 347 1,048 57 22.3 65.3 2 401 3,656 1,248 5,305 151 2,274 1,288 0.6 19.8 2.9 1,553 1,606 2,855 405 1,059 64 26.1 65.9 2.2 586 3,943 1,783 6,312 £m 4,760 434 456 525 317 6,175 Notes a Model exposures are allocated to a stage based on an individual scenario rather than a probability-weighted approach, as required for Barclays reported impairment allowances. As a result, it is not possible to back solve the final reported weighted ECL from individual scenarios given balances may be assigned to a different stage dependent on the scenario. b For Credit cards, unsecured loans and other retail lending, the model exposure movement between stages 1 and 2 across scenarios differs due to additional impacts from the undrawn exposure. c For Credit cards, unsecured loans and other retail lending, the dispersion of results around Baseline has narrowed following model enhancements made during the year. d Model exposures allocated to Stage 3 does not change in any of the scenarios as the transition criteria relies only on an observable evidence of default as at 31 December 2022 and not on macroeconomic scenario. e Material wholesale loan defaults are individually assessed across different recovery strategies. As a result, ECL of £434m is reported as an individually assessed impairment in the reconciliation table. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 324 Risk performance - Credit risk (continued) The use of five scenarios with associated weighting results in a total weighted ECL uplift from the Baseline ECL of 1.7% Home loans: Total weighted ECL of £372m represents a 6.3% increase over the Baseline ECL (£350m), with coverage ratios remaining steady across the Upside scenarios, Baseline and Downside 1 scenario. Under the Downside 2 scenarios, total ECL increases to £586m, driven by a significant fall in UK HPI (18.3)% in 2023 reflecting the non-linearity of the UK portfolio. Credit cards, unsecured loans and other retail lending: Total weighted ECL of £3,411m is aligned to the Baseline ECL (£3,413m). The impact of the deteriorated Baseline scenario relative to the severity of the downside scenarios is greater than the impact of the higher weights applied to the Downside scenarios when compared to 2021. This results in a convergence between Baseline and Weighted ECL in 2022. Total ECL increases to £3,943m under the Downside 2 scenario, mainly driven by significant increase in UK unemployment rate to 6% and US unemployment rate to 6% in 2023 Wholesale loans: Total weighted ECL of £977m represents a 6.3% increase over the Baseline ECL (£919m). Total ECL increases to £1,783m under Downside 2 scenario, driven by a significant decrease in UK GDP to (3.4)% and US GDP to (2.7)% in 2023 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 325 Risk performance - Credit risk (continued) As at 31 December 2021 Stage 1 Model exposure (£m) Weighteda Upside 2 Upside 1 Baseline Downside 1 Downside 2 Scenarios Home loans Credit cards, unsecured loans and other retail lendingb, c Wholesale loans 137,279 139,117 138,424 137,563 135,544 133,042 56,783 54,758 55,771 56,821 57,698 55,315 174,249 177,453 176,774 175,451 169,814 161,998 Stage 1 Model ECL (£m) Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Stage 1 Coverage (%) Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Stage 2 Model exposure (£m) Home loans Credit cards, unsecured loans and other retail lendingb, c Wholesale loans Stage 2 Model ECL (£m) Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Stage 2 Coverage (%) Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Stage 3 Model exposure (£m)d Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Stage 3 Model ECL (£m) Home loans Credit cards, unsecured loans and other retail lending Wholesale loanse Stage 3 Coverage (%) Home loans Credit cards, unsecured loans and other retail lending Wholesale loanse Total Model ECL (£m) Home loans Credit cards, unsecured loans and other retail lending Wholesale loanse Total ECL Reconciliation to total ECL Total weighted model ECL ECL from individually assessed impairmentse ECL from non-modelled exposures and others ECL from post model management adjustmentsf Of which: ECL from economic uncertainity adjustments Total ECL 4 324 290 — 0.6 0.2 2 266 240 — 0.5 0.1 2 272 262 — 0.5 0.1 3 279 286 — 0.5 0.1 6 350 327 — 0.6 0.2 14 418 350 — 0.8 0.2 22,915 7,500 32,256 21,076 6,447 29,052 21,769 6,757 29,732 22,631 7,084 31,054 24,649 10,689 36,692 27,151 18,452 44,507 15 1,114 572 0.1 14.9 1.8 1,724 1,922 1,811 303 1,255 323 17.6 65.3 17.8 322 2,693 1,185 4,200 10 925 431 — 14.3 1.5 1,724 1,922 1,811 292 1,236 321 16.9 64.3 17.7 304 2,427 992 3,723 11 988 467 0.1 14.6 1.6 1,724 1,922 1,811 295 1,245 322 17.1 64.8 17.8 308 2,505 1,051 3,864 12 1,058 528 0.1 14.9 1.7 1,724 1,922 1,811 299 1,255 323 17.3 65.3 17.8 314 2,592 1,137 4,043 22 1,497 851 0.1 14.0 2.3 1,724 1,922 1,811 320 1,277 326 18.6 66.4 18.0 348 3,124 1,504 4,976 47 3,295 1,510 0.2 17.9 3.4 1,724 1,922 1,811 346 1,297 332 20.1 67.5 18.3 407 5,010 2,192 7,609 £m 4,200 524 74 1,486 1,692 6,284 Notes a Model exposures are allocated to a stage based on an individual scenario rather than a probability-weighted approach, as required for Barclays reported impairment allowances. As a result, it is not possible to back solve the final reported weighted ECL from individual scenarios given balances may be assigned to a different stage dependent on the scenario. b For Credit cards, unsecured loans and other retail lending, the model exposure movement between stages 1 and 2 across scenarios differs due to additional impacts from the undrawn exposure. c In 2021, Loans & Advances at Amortised Cost were used as Modelled Exposure for the International Consumer Bank within this disclosure. The process was revised in 2022 to incorporate Exposure at Default (EAD) with no impact to ECL. This has been represented in Prior Year comparatives. d Model exposures allocated to Stage 3 does not change in any of the scenarios as the transition criteria relies only on an observable evidence of default as at 31 December 2021 and not on macroeconomic scenario. e Material wholesale loan defaults are individually assessed across different recovery strategies. As a result, ECL of £524m is reported as an individually assessed impairment in the reconciliation table. f Post Model Adjustments include negative adjustments reflecting operational post model adjustments. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 326 Risk performance - Credit risk (continued) Analysis of the concentration of credit risk A concentration of credit risk exists when a number of counterparties are located in a common geographical region or are engaged in similar activities and have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. The Group implements limits on concentrations in order to mitigate the risk. The analysis of credit risk concentrations presented below are based on the location of the counterparty or customer or the industry in which they are engaged. Further detail on the Group policies with regard to managing concentration risk is presented in the Barclays PLC Pillar 3 Report 2022 (unaudited). Geographic concentrations As at 31 December 2022, the geographic concentration of the Group’s assets remained broadly consistent with 2021. Exposure concentrated in the UK was 38% (2021: 40%), in the Americas 37% (2021: 35%) and in Europe 18% (2021: 19%). Credit risk concentrations by geography (audited) As at 31 December 2022 On-balance sheet: Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending Trading portfolio assets Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Other assets Total on-balance sheet Off-balance sheet: Contingent liabilities Loan commitments Total off-balance sheet Total As at 31 December 2021 On-balance sheet: Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending Trading portfolio assets Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Other assets Total on-balance sheet Off-balance sheet: Contingent liabilities Loan commitments Total off-balance sheet Total United Kingdom £m 129,000 42,442 270,554 — 9,333 30,024 99,053 7,692 1,473 589,571 6,485 103,575 110,060 699,631 114,959 34,249 270,261 9 12,926 28,737 78,710 7,661 949 548,461 5,527 105,844 111,371 659,832 Americas £m Europe £m Asia £m Africa and Middle East £m 49,830 36,572 74,851 127 35,490 106,741 101,407 25,666 115 430,799 11,297 240,356 251,653 682,452 38,735 28,469 51,599 123 29,539 95,478 92,010 27,391 223 363,567 10,328 192,303 202,631 566,198 73,677 22,058 32,484 380 16,970 41,355 77,146 18,842 61 282,973 4,811 44,479 49,290 332,263 76,846 21,822 24,352 401 15,092 30,083 75,247 19,235 39 263,117 3,957 40,523 44,480 307,597 3,553 10,467 15,504 262 5,299 20,538 22,299 12,562 4 90,488 1,210 4,334 5,544 96,032 7,789 7,260 11,039 2,508 4,943 21,800 14,709 6,164 1 76,213 1,131 5,104 6,235 82,448 291 1,058 5,386 7 1,581 8,819 2,475 292 3 19,912 402 2,764 3,166 23,078 245 742 4,200 186 889 9,999 1,896 400 — 18,557 403 1,937 2,340 20,897 Total £m 256,351 112,597 398,779 776 68,673 207,477 302,380 65,054 1,656 1,413,743 24,205 395,508 419,713 1,833,456 238,574 92,542 361,451 3,227 63,389 186,097 262,572 60,851 1,212 1,269,915 21,346 345,711 367,057 1,636,972 Industry concentrations The concentration of the Group’s assets by industry remained broadly consistent year on year. As at 31 December 2022, total assets concentrated in banks and other financial institutions was 39% (2021: 38%), predominantly within derivative financial instruments. The proportion of the overall balance concentrated in governments and central banks was 22% (2021: 23%), cards, unsecured loans and other personal lending was 11% (2021: 10%) and in home loans remained stable at 10% (2021: 11%). Further details on material and emerging risks can be found on pages 269 to 281 . Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 327 Risk performance - Credit risk (continued) Credit risk concentrations by industry (audited) Other financial insti- tutions Manu- facturing Const- ruction and property Govern- ment and central bank Energy and water Whole- sale and retail distri- bution and leisure Business and other services £m £m £m £m £m £m £m Banks £m Cards, unsecured loans and other personal lending £m Home loans £m Other £m Total £m As at 31 December 2022 On-balance sheet: Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost agreements and other similar secured lending Trading portfolio assets through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Other assets 731 63 — — 255,557 — — — 15,083 78,740 229 67 17,265 269 136 167 — — — 55 — 256,351 586 112,597 9,726 49,181 8,025 26,029 33,989 5,626 11,362 19,020 173,815 50,913 11,093 398,779 634 92 — — 50 — — — 4,663 9,314 5,007 1,405 36,355 2,330 789 2,782 — — — — 776 — 6,028 68,673 30,838 149,328 712 3,524 16,609 197 479 4,053 1,255 — 482 207,477 127,391 153,013 4,095 597 3,027 4,778 1,541 3,175 — — 4,763 302,380 14,205 3,918 494 975 — 9 758 45,682 3 1 — 1 — 1 112 118 — 17 — 28 379 9 65,054 1,656 Total on-balance sheet 203,765 444,624 18,077 32,383 408,535 13,201 14,308 29,427 175,087 50,996 23,340 1,413,743 Off-balance sheet: Contingent liabilities Loan commitments 1,108 6,193 3,695 1,430 1,818 3,891 1,165 2,627 — 143 2,135 24,205 1,840 65,671 44,951 12,599 1,501 29,607 16,759 25,137 12,223 158,599 26,621 395,508 Total off-balance sheet 2,948 71,864 48,646 14,029 3,319 33,498 17,924 27,764 12,223 158,742 28,756 419,713 Total 206,713 516,488 66,723 46,412 411,854 46,699 32,232 57,191 187,310 209,738 52,096 1,833,456 As at 31 December 2021 On-balance sheet: Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending 52 74 — — 238,448 — 14,811 61,581 320 79 14,526 390 — 60 — 366 — — — 68 — 238,574 341 92,542 8,519 32,332 6,701 25,722 30,827 4,345 11,455 19,113 169,205 42,198 11,034 361,451 Trading portfolio assets 2,586 8,817 4,881 1,097 32,574 4,043 1,734 4,716 645 2,049 — — 533 — — — — — — — 3,227 — 2,941 63,389 Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Other assets 26,074 131,264 771 7,999 13,945 87 181 3,753 1,595 — 428 186,097 120,666 117,400 4,169 1,898 7,233 3,544 1,172 2,696 — — 3,794 262,572 14,441 4,274 618 450 — 1 662 40,872 3 8 — — — 2 455 104 — — — 21 147 60,851 5 1,212 Total on-balance sheet 188,412 358,241 16,843 37,460 378,966 12,409 14,604 31,203 170,800 42,287 18,690 1,269,915 Off-balance sheet: Contingent liabilities 1,006 5,356 3,080 1,341 1,682 3,284 1,209 2,518 — 73 1,797 21,346 Loan commitments 1,395 55,071 42,587 16,673 1,362 26,461 16,299 25,682 11,656 121,680 26,845 345,711 Total off-balance sheet 2,401 60,427 45,667 18,014 3,044 29,745 17,508 28,200 11,656 121,753 28,642 367,057 Total 190,813 418,668 62,510 55,474 382,010 42,154 32,112 59,403 182,456 164,040 47,332 1,636,972 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 328 Risk performance - Credit risk (continued) The approach to management and representation of credit quality Asset credit quality The credit quality distribution is based on the IFRS 9 12-month probability of default (PD) at the reporting date to ensure comparability with other ECL disclosures in the Expected Credit Losses section. The following internal measures are used to determine credit quality for loans: PD Range % Internal Default Grade Band 0.00 to < 0.15 0.15 to < 0.25 0.25 to < 0.50 0.50 to < 0.75 0.75 to < 2.50 2.50 to < 10.00 10.00 to < 100.00 100.00 (Default) 1 2 3 4 5 6 7 8 9 10 11 12 12 13 14 15 15 16 17 18 19 19 20 21 22 Default Probability Mid 0.01% 0.03% 0.04% 0.08% 0.13% 0.18% 0.23% 0.28% 0.35% 0.45% 0.55% 0.68% 0.98% 1.38% 1.85% 2.33% 2.78% 3.75% 5.40% 7.50% 9.35% 10.68% 15.00% 30.00% <=Max 0.02% 0.03% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.40% 0.50% 0.60% 0.75% 1.20% 1.55% 2.15% 2.50% 3.05% 4.45% 6.35% 8.65% 10.00% 11.35% 18.65% 99.99% >Min 0.00% 0.02% 0.03% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.40% 0.50% 0.60% 0.75% 1.20% 1.55% 2.15% 2.50% 3.05% 4.45% 6.35% 8.65% 10.00% 11.35% 18.65% 100% Credit Quality description Moody’s Standard and Poor’s Aaa, Aa1, Aa2 AAA, AA+, AA Strong Strong Strong Strong Aa3 A1, A2, A3 A1, A2, A3 Baa1 Baa2 Baa3 Baa3 Baa3 Ba1 Ba1 Satisfactory Ba2, Ba3 Ba2, Ba3 Satisfactory Ba3 Ba3 B1 B1 B2 Satisfactory B3, Caa1 B3, Caa1 B3, Caa1 B3, Caa1 Caa2 Caa3, Ca, C D D Higher risk Credit Impaired AA- A+ A, A- BBB+ BBB BBB BBB- BBB- BB+ BB+ BB, BB- BB, BB- BB- B+ B+ B+ B+ B B- CCC+ CCC+ CCC CCC-, CC+ ,CC, C For retail clients, a range of analytical tools is used to derive the probability of default of clients at inception and on an ongoing basis. For loans that are not past due, these descriptions can be summarised as follows: Strong: there is a very high likelihood of the asset being recovered in full. Satisfactory: while there is a high likelihood that the asset will be recovered and therefore, of no cause for concern to the Group, the asset may not be collateralised, or may relate to unsecured retail facilities. At the lower end of this grade there are customers that are being more carefully monitored, for example, corporate customers which are indicating some evidence of deterioration, home loans with a high loan to value, and unsecured retail loans operating outside normal product guidelines. Higher risk: there is concern over the obligor’s ability to make payments when due. However, these have not yet converted to actual delinquency. There may also be doubts over the value of collateral or security provided. However, the borrower or counterparty is continuing to make payments when due and is expected to settle all outstanding amounts of principal and interest. Loans that are past due are monitored closely, with impairment allowances raised as appropriate and in line with the Group’s impairment policies. Debt securities For assets held at fair value, the carrying value on the balance sheet will include, among other things, the credit risk of the issuer. Most listed and some unlisted securities are rated by external rating agencies. The Group mainly uses external credit ratings provided by Standard & Poor’s, Fitch or Moody’s. Where such ratings are not available or are not current, the Group will use its own internal ratings for the securities. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 329 Risk performance - Credit risk (continued) Balance sheet credit quality The following tables present the credit quality of the Group’s assets exposed to credit risk. Overview As at 31 December 2022, the ratio of the Group’s on-balance sheet assets classified as strong (0.0 to <0.60%) remained stable at 87% (2021: 87%) of total assets exposed to credit risk. Further analysis of debt securities by issuer and issuer type and netting and collateral arrangements on derivative financial instruments is presented in the Analysis of debt securities section and Analysis of derivatives section. Balance sheet credit quality (audited) PD range PD range 0.0 to <0.60% 0.60 to <11.35% 11.35 to 100% Total 0.0 to <0.60% 0.60 to <11.35% 11.35 to 100% As at 31 December 2022 Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost: Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending Trading portfolio assets: Debt securities Traded loans Total trading portfolio assets Financial assets at fair value through the income statement: Loans and advances Debt securities Other financial assets Total financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Other assets Total on-balance sheet £m £m £m £m % 256,351 101,365 — 10,944 — 288 256,351 112,597 167,368 3,866 2,536 173,770 22,364 128,881 318,613 26,107 40,327 70,300 2,233 5,097 9,866 50,704 174,305 398,779 100 90 97 45 74 80 776 — — 776 100 50,253 3,214 4,891 8,273 53,467 13,164 331 1,711 2,042 55,475 13,198 68,673 14,684 24,630 2,122 1,062 115 65 39,429 3,249 98 20 — 118 141,698 284,491 64,051 17,606 1,728 207,477 283 302,380 90 24 78 38 65 76 83 68 94 65,051 1,599 1,223,411 3 57 176,125 65,054 1,656 1,413,743 14,207 100 97 87 Reverse repurchase agreements 124,794 38,339 1,548 164,681 % — 10 2 51 23 18 — 9 63 19 62 33 23 17 31 6 — 3 12 % — — 1 4 3 2 — 1 13 3 — 2 1 — 1 — — — 1 Total % 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 330 Risk performance - Credit risk (continued) Balance sheet credit quality (audited) PD range PD range 0.0 to <0.60% 0.60 to <11.35% 11.35 to 100% Total 0.0 to <0.60% 0.60 to <11.35% 11.35 to 100% As at 31 December 2021 Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost: Home loans Credit cards, unsecured loans and other retail lending Wholesale loans Total loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending Trading portfolio assets: Debt securities Traded loans Total trading portfolio assets Financial assets at fair value through the income statement: Loans and advances Debt securities Reverse repurchase agreements Other financial assets Total financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Other assets Total on-balance sheet £m £m £m £m % 238,574 83,257 — 9,275 — 10 238,574 92,542 100 90 161,314 5,547 2,344 169,205 25,664 104,823 291,801 14,293 40,437 60,277 1,836 5,193 9,373 41,793 150,453 361,451 3,141 86 — 3,227 44,652 2,172 46,824 5,735 10,144 15,879 477 209 686 50,864 12,525 63,389 19,642 1,389 108,437 93 129,561 246,628 60,845 1,155 18,979 864 36,047 18 55,908 15,678 6 55 46 52 530 — 38,667 2,305 145,014 111 628 266 186,097 262,572 — 2 60,851 1,212 1,101,786 157,164 10,965 1,269,915 96 62 70 80 97 88 17 74 51 61 75 84 70 94 100 95 87 % — 10 3 34 27 17 3 11 81 25 49 37 25 16 30 6 — 5 12 % — — 1 4 3 3 — 1 2 1 — 2 — — — — — — 1 Total % 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 331 Risk performance - Credit risk (continued) Credit exposures by internal PD grade The below tables represent credit risk profile by PD grade for loans and advances at amortised cost, contingent liabilities and loan commitments. Stage 1 higher risk assets, presented gross of associated collateral held, are of weaker credit quality but have not significantly deteriorated since origination. IFRS 9 Stage 1 and Stage 2 classification is not dependent solely on the absolute probability of default but on elements that determine a Significant Increase in Credit Risk (see Note 8), including relative movement in probability of default since initial recognition. There is therefore no direct relationship between credit quality and IFRS 9 stage classification. Credit risk profile by internal PD grade for loans and advances at amortised cost (audited) PD range Grading % As at 31 December 2022 Gross carrying amount Allowance for ECL Credit quality description Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 £m £m £m £m £m £m £m Total £m Net exposure Coverage ratio £m % 1 - 3 4 - 5 6 - 8 9 - 11 12 - 14 15 - 19 19 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% Strong Strong Strong Strong 108,494 1,787 5 110,286 120,780 9,093 — 129,873 27,895 7,339 — 35,234 39,868 3,635 — 43,503 0.60 to <2.15% Satisfactory 27,855 6,856 — 34,711 2.15 to <10% Satisfactory 12,212 3,932 — 16,144 10 to <11.35% Satisfactory 12,320 9,189 — 21,509 20 - 21 11.35 to <100% Higher Risk 22 Total 100% Credit Impaired 1,121 — 4,909 — — 7,081 6,030 7,081 16 27 37 120 302 160 328 67 — 23 6 23 28 247 539 488 962 — 3 — — — — — — 42 110,244 33 129,840 60 35,174 148 43,355 549 34,162 699 15,445 816 20,693 — 2,216 1,029 2,216 5,001 4,865 350,545 46,740 7,086 404,371 1,057 2,316 2,219 5,592 398,779 As at 31 December 2021 1 - 3 4 - 5 6 - 8 9 - 11 12 - 14 15 - 19 19 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% Strong Strong Strong Strong 95,795 1,554 83,818 3,584 58,409 9,722 35,794 3,649 0.60 to <2.15% Satisfactory 30,654 7,090 2.15 to <10% Satisfactory 7,977 6,645 10 to <11.35% Satisfactory 5,572 4,364 — 97,349 — 87,402 — 68,131 — 39,443 — 37,744 — 14,622 — 9,936 20 - 21 11.35 to <100% Higher Risk 22 Total 100% Credit Impaired 846 — 4,485 — — 7,235 5,331 7,235 283 19 41 129 326 230 99 79 — 8 3 12 29 264 780 326 593 — — — — — — 291 97,058 22 87,380 53 68,078 158 39,285 590 37,154 — 1,010 13,612 — 425 9,511 — 2,521 672 2,521 4,659 4,714 318,865 41,093 7,235 367,193 1,206 2,015 2,521 5,742 361,451 — — 0.2 0.3 1.6 4.3 3.8 17.1 31.3 1.4 0.3 — 0.1 0.4 1.6 6.9 4.3 12.6 34.8 1.6 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 332 Risk performance - Credit risk (continued) Credit risk profile by internal PD grade for contingent liabilities (audited)a PD range Grading % As at 31 December 2022 Credit quality description Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 £m £m £m £m £m £m £m Total £m Net exposure Coverage ratio £m % Gross carrying amount Allowance for ECL 1 - 3 4 - 5 6 - 8 9 - 11 12 - 14 15 - 19 19 20 - 21 22 Total 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% Strong Strong Strong Strong 0.60 to <2.15% Satisfactory 2.15 to <10% Satisfactory 10 to <11.35% Satisfactory 11.35 to <100% Higher Risk 100% Credit Impaired 5,695 4,210 2,733 3,161 1,989 910 716 58 — 149 348 180 214 751 496 190 440 — — 5,844 — 4,558 — 2,913 — 3,375 — 2,740 — 1,406 — — 542 906 498 542 19,472 2,768 542 22,782 As at 31 December 2021 1 - 3 4 - 5 6 - 8 9 - 11 12 - 14 15 - 19 19 20 - 21 22 Total Strong 0.0 to <0.05% Strong 0.05 to <0.15% Strong 0.15 to <0.30% Strong 0.30 to <0.60% Satisfactory 0.60 to <2.15% Satisfactory 2.15 to <10% 10 to <11.35% Satisfactory 11.35 to <100% Higher Risk 100% Credit Impaired 6,389 2,929 1,996 2,794 1,990 817 607 141 — 17,663 172 503 199 216 287 479 254 1,162 — 3,272 — — — — — — — — 180 180 6,561 3,432 2,195 3,010 2,277 1,296 861 1,303 180 21,115 Credit risk profile by internal PD grade for loan commitments (audited)a 7 2 3 8 21 8 41 2 — 92 8 2 2 4 19 5 21 3 — 64 1 1 3 1 6 17 18 64 — 111 1 2 2 1 8 10 42 77 — 143 — — — — — — — — 3 3 — — — — — — — — 2 2 8 3 6 9 5,836 4,555 2,907 3,366 27 2,713 25 1,381 59 66 3 206 847 432 539 22,576 9 4 4 5 27 15 63 80 2 209 6,552 3,428 2,191 3,005 2,250 1,281 798 1,223 178 20,906 0.1 0.2 0.2 0.3 1.0 1.8 6.5 13.3 0.6 0.9 0.1 0.1 0.2 0.2 1.2 1.2 7.3 6.1 1.1 1.0 PD range Grading % As at 31 December 2022 Gross carrying amount Allowance for ECL Credit quality description Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 £m £m £m £m £m £m £m Total £m Net exposure Coverage ratio £m % 1 - 3 4 - 5 6 - 8 9 - 11 12 - 14 15 - 19 19 20 - 21 22 Total 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% Strong Strong Strong Strong 78,077 752 — 78,829 85,917 4,004 — 89,921 67,381 2,349 — 69,730 57,553 2,081 — 59,634 0.60 to <2.15% Satisfactory 33,465 6,681 — 40,146 2.15 to <10% Satisfactory 19,398 4,010 — 23,408 Satisfactory 10 to <11.35% 11.35 to <100% Higher Risk 10,976 4,058 706 3,991 — 15,034 — 4,697 100% Credit Impaired — — 638 638 3 7 13 15 50 32 30 3 — 1 1 2 4 28 38 48 82 — 353,473 27,926 638 382,037 153 204 As at 31 December 2021 1 - 3 4 - 5 6 - 8 9 - 11 12 - 14 15 - 19 19 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% 0.60 to <2.15% 2.15 to <10% Strong Strong Strong Strong Satisfactory Satisfactory 104,204 3,034 68,986 5,524 30,968 2,387 40,539 2,524 30,065 7,091 4,713 3,516 10 to <11.35% Satisfactory 10,407 3,091 — 107,238 — 74,510 — 33,355 — 43,063 — — 34,778 10,607 — 13,498 20 - 21 11.35 to <100% Higher Risk 22 Total 100% Credit Impaired 2,219 — 6,754 — — 1,118 8,973 1,118 294,479 31,543 1,118 327,140 153 159 Note a Excludes loan commitments and financial guarantees of £14.9bn (2021: £18.8bn) carried at fair value. 6 10 8 8 81 21 8 11 — 4 5 6 6 30 37 13 58 — — — — — — — — — 20 20 — — — — — — — — 21 21 4 8 78,825 89,913 15 69,715 19 59,615 78 40,068 70 23,338 78 14,956 85 4,612 20 618 377 381,660 10 107,228 15 74,495 14 33,341 14 43,049 111 58 34,667 10,549 21 13,477 69 21 8,904 1,097 333 326,807 — — — — 0.2 0.3 0.5 1.8 3.1 0.1 — — — — 0.3 0.5 0.2 0.8 1.9 0.1 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 333 Risk performance - Credit risk (continued) Analysis of specific portfolios and asset types This section provides an analysis of principal portfolios and businesses, in particular, home loans, credit cards, unsecured loans and other retail lending and a summary of government supported loans. Secured home loans The UK home loans portfolio comprises first lien home loans and accounts for 93% (2021: 93%) of the Group’s total home loan balances. Home loans principal portfolios As at 31 December Gross loans and advances (£m) >90 day arrears, excluding recovery book (%) Annualised gross charge-off rates (%) Recovery book proportion of outstanding balances (%) Recovery book impairment coverage ratio (%) Within the UK home loans portfolio: Barclays UK 2022 162,380 2021 158,192 0.1 0.5 0.5 5.2 0.1 0.5 0.6 4.2 • gross loans and advances increased by £4.2bn (2.7%) following an increase in Residential (3.2%), while Buy to Let (BTL) remained broadly stable. • owner-occupied interest-only home loans comprised 17% (2021: 19%) of total balances. The average balance weighted LTV on owner occupied loans remained stable at 50.0% (2021: 50.3%). • BTL home loans comprised 12.7% (2021: 13.1%) of total balances. In BTL, the average balance weighted LTV remained stable at 53.2% (2021: 53.4%). Home loans principal portfolios - distribution of balances by LTVa Barclays UK As at 31 December 2022 <=75% >75% and <=90% >90% and <=100% >100% As at 31 December 2021 <=75% >75% and <=90% >90% and <=100% >100% Distribution of Balances Distribution of impairment allowance Coverage ratio Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total % % % % % % % % % % % % 78.8 8.8 0.6 — 77.2 9.3 0.9 0.0 10.5 0.5 — — 11.3 0.6 — — 0.8 — — — 0.7 — — — 90.1 9.3 0.6 — 89.2 9.9 0.9 0.0 10.2 3.9 0.3 0.1 8.3 4.8 0.9 0.2 30.8 9.7 0.3 0.6 17.7 10.7 1.0 1.0 33.2 5.2 2.4 3.3 31.9 11.7 2.9 8.9 74.2 18.8 3.0 4.0 57.9 27.2 4.8 10.1 — — — 0.4 — 0.0 0.1 0.4 0.2 1.4 1.5 21.4 0.1 1.0 1.9 6.4 2.9 30.8 85.0 64.9 2.4 22.6 87.5 100.0 0.1 0.1 0.4 13.1 — 0.1 0.3 14.1 Note a Portfolio marked to market based on the most updated valuation including recovery book balances. Updated valuations reflect the application of the latest HPI available as at 31 December 2022. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 334 Risk performance - Credit risk (continued) Home loans principal portfolios – average LTV As at 31 December Overall portfolio LTV (%): Balance weighted % Valuation weighted % For >100% LTVs: Balances £m Marked to market collateral £m Average LTV: Balance weighted % Average LTV: Valuation weighted % % of Balances in Recoveries Home loans principal portfolios - new lending As at 31 December 2022 New Home loan bookings (£m) New home loan proportion above 90% LTV (%) Average LTV on new home loan: balance weighted (%) Average LTV on new home loan: valuation weighted (%) Barclays UK 2022 50.4 37.3 34 26 210.6 145.5 18.9 2021 50.7 37.5 58 47 160.9 129.1 14.5 Barclays UK 2022 30,307 2.8 68.1 59.6 2021 33,945 1.9 69.5 61.9 New bookings: New lending in 2022 was £30.3bn, a reduction of 11% on 2021. This was mainly driven by economic conditions that resulted in general mortgage market suppression, including higher mortgage payments as rates continued to rise and increased cost of living factors in line with inflation. Head Office: Italian home loans and advances at amortised cost reduced to £4.5bn (2021: £4.7bn) and continue to run-off since new bookings ceased in 2016. The portfolio is secured on residential property with an average balance weighted mark to market LTV of 58.8% (2021: 60.4%). 90-day arrears decreased to 1.2% (2021: 1.3%), gross charge-off rate increased to 0.6% (2021: 0.3%) due to a combination of affordability stress related to rising inflation and interest rates, and the particularly low rate observed in 2021 due to the COVID portfolio improvements. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 335 Risk performance - Credit risk (continued) Credit cards, unsecured loans and other retail lending The principal portfolios listed below accounted for 85% (2021: 82%) of the Group’s total credit cards, unsecured loans and other retail lending. Credit cards and unsecured loans principal portfolios Gross exposure 30 day arrears rate, excluding recoveries book 90 day arrears rate, excluding recoveries book Annualised gross write-off rates Annualised net write-off rates £m % % % % As at 31 December 2022 Barclays UK UK cards UK personal loans Barclays Partner Finance Barclays International US cards Germany consumer lending As at 31 December 2021 Barclays UK UK cards UK personal loans Barclays Partner Finance Barclays International US cards Germany consumer lending 9,939 4,023 2,612 25,554 4,269 9,933 4,011 2,471 17,779 3,559 0.9 1.4 0.5 2.2 1.7 1.0 1.5 0.4 1.6 1.5 0.2 0.6 0.2 1.2 0.7 0.2 0.7 0.2 0.8 0.7 3.7 4.1 0.7 2.4 0.7 4.1 3.5 1.4 4.3 0.9 3.6 3.8 0.7 2.3 0.6 4.0 3.2 1.4 4.2 0.8 UK cards: 30 day arrears rate reduced marginally to 0.9% (2021: 1.0%) and 90 day arrears rate remained stable at 0.2% (2021: 0.2%), whilst total exposure was stable at £9.9bn. Both the gross and net write off rates decreased by 0.4% due to reduced debt sales and monthly delinquency flows. UK personal loans: 30 and 90 day arrears rates have reduced marginally to 1.4% (2021: 1.5%) and 0.6% (2021: 0.7%) respectively, whilst total exposure was stable at £4.0bn. Both the annualised gross and net write off rates increased by 0.6% due to increased regular debt sales. Barclays Partner Finance: 30 day arrears rate increased slightly to 0.5% (2021: 0.4%) and 90 day arrears rate remained stable at 0.2% (2021: 0.2%), reflecting marginally higher entry rates with stable flows through the delinquency cycles. Total exposure grew by £0.1bn to £2.6bn (2021: £2.5bn) as a result of increased sales. Both the annualised gross and net write off rates decreased by 0.7% as a result of the reducing delinquent stock and subsequent flow into recoveries. US cards: Balances increased due to the acquisition of the Gap portfolio in June 2022, movement in the USD/GBP exchange rate and core portfolio growth. 30 and 90 day arrears rates increased to 2.2% (2021: 1.6%) and 1.2% (2021: 0.8%) due to the partial normalisation of customer behaviour and the acquisition of the Gap portfolio, though rates remain below pre-pandemic levels. Write- off rates decreased reflecting portfolio growth and the impact of lower charge offs in 2021 due to the benefit of government support schemes . Germany consumer lending: 30 day arrears rate increased to 1.7% (2021: 1.5%) due to increased macroeconomic uncertainty in Europe, though the rate was consistent with pre-pandemic levels. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 336 Risk performance - Credit risk (continued) Government supported loans Throughout the COVID-19 pandemic Barclays has supported its customers and clients by participating in the UK Government's Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) and Recovery Loan Scheme (RLS). Government supported loans Gross exposure Impairment allowance Impairment coverage As at 31 December 2022 Barclays UK BBLS CBILS RLS Barclays International CBILS CLBILS RLS Total As at 31 December 2021 Barclays UK BBLS CBILS RLS Barclays International CBILS CLBILS RLS Total Stage 1 Stage 2 Stage 3 £m £m £m 3,066 286 13 306 67 17 3,755 7,881 900 11 619 163 1 9,575 2,903 396 4 154 32 3 3,492 797 110 — 146 56 — 1,109 618 66 1 8 13 1 707 704 47 1 6 2 — 760 Total £m 6,587 748 18 468 112 21 7,954 9,382 1,057 12 771 221 1 11,444 Modelled impairment Management adjustment Impairment post management adjustment Pre management adjustment Post management adjustment £m £m £m % % 6 22 — 5 2 — 35 396 12 — 5 1 — 414 27 (9) — — — — 18 (380) (7) — — — — (387) 33 13 — 5 2 — 53 16 5 — 5 1 — 27 0.1 2.9 — 1.1 2.1 1.5 0.4 4.2 1.1 2.7 0.6 0.4 4.7 3.6 0.5 1.7 — 1.1 2.1 1.5 0.7 0.2 0.5 2.7 0.6 0.4 4.7 0.2 Government guaranteed exposure Total £m 6,554 598 14 375 89 16 7,646 9,366 845 10 617 177 1 11,016 The BBLS and CBILS schemes were launched to provide financial support to smaller and medium-sized businesses and CLBILS for larger businesses in the UK who may experience financial difficulties as a result of the COVID-19 outbreak. The RLS aims to help UK businesses access finance as they recover and grow following the COVID-19 pandemic. These loans are guaranteed by the government at 100% for BBLS and 80% for CBILS, CLBILS and RLS (70% for RLS issued post January 1, 2022) as at the balance sheet date. Management adjustment of £(380)m applied in December 2021 has been discontinued following an update in the underlying ECL model that now fully recognises the 100% government guarantee against BBLS exposure within BUK Business Banking. However, we continue to hold the £(9)m (December 2021: £(7)m) adjustment against CBILS as the 80% government guarantee is not fully recognised in the models. In instances where Barclays has assessed the BBLS exposure to have not met strict assessment criteria, no claim has been made against the government guarantee resulting in an impairment allowance against these loans of £33m (December 2021: £16m) as at the balance sheet date. Additionally, while the government supported loans are covered by guarantees, many BBLS customers have other financing arrangements with Barclays which are not covered by the government guarantee. Noting the elevated levels of delinquency across the BBLS population, Barclays has continued to apply management adjustment of £0.1bn to BBLS customers outside the scheme. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 337 Risk performance - Credit risk (continued) Forbearance Forbearance measures consist of concessions towards a debtor that is experiencing or about to experience difficulties in meeting their financial commitments ("financial difficulties"). Analysis of forbearance programmes Balances Impairment allowance As at 31 December 2022 Barclays UK Barclays International Head Office Total retail Barclays UK Barclays International Head Office Total wholesale Group total As at 31 December 2021 Barclays UK Barclays International Head Office Total retail Barclays UK Barclays International Head Office Total wholesale Group total Stage 1 Stage 2 Stage 3 £m £m £m 83 1 20 104 58 — — 58 162 140 1 — 141 59 — — 59 200 151 3 30 184 127 903 — 455 243 101 799 519 698 — 1,030 1,214 1,217 2,016 140 3 — 143 76 1,051 — 1,127 1,270 737 244 116 1,097 494 961 — 1,455 2,552 Total £m 689 247 151 1,087 704 1,601 — 2,305 3,392 1,017 248 116 1,381 629 2,012 — 2,641 4,022 Stage 1 Stage 2 Stage 3 £m 1 — — 1 1 — — 1 2 2 — — 2 — — — — 2 £m 26 — 2 28 4 21 — 25 53 46 1 — 47 2 38 — 40 87 £m 145 114 15 274 47 108 — 155 429 284 152 15 451 48 321 — 369 820 Total £m 172 114 17 303 52 129 — 181 484 332 153 15 500 50 359 — 409 909 Retail balances on forbearance decreased by 21%, reflecting a decrease in UK cards and UK personal loans, driven by lower entries into forbearance. Wholesale balances subject to forbearance decreased to £2.3bn (2021: £2.6bn) with reductions in exposure in Corporate Bank and Investment Bank of £204m and £127m respectively. Impairment allowances reduced to £181m (2021: £409m) following a range of notable write offs. Barclays International accounted for 69% of wholesale forbearance with corporate cases representing 84% of these balances. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 338 Risk performance - Credit risk (continued) Retail forbearance programmes Forbearance on the Group’s principal retail portfolios is presented below. The principal portfolios account for 99% (2021: 99%) of total retail forbearance balances. Analysis of Key Portfolios in Forbearance Programmes Balances on Forbearance Programmes Marked to market LTV of forbearance balances: balance weighted Marked to market LTV of forbearance balances: valuation weighted Impairment allowances marked against balances on forbearance programmes Total balances on forbearance programmes coverage ratio % of gross retail loans and advances As at 31 December 2022 Barclays UK UK Home Loans UK cards UK personal loans Barclays Partner Finance Barclays International US cards Germany consumer lending Head Office Italy Mortgages As at 31 December 2021 Barclays UK UK Home Loans UK cards UK personal loans Barclays Partner Finance Barclays International US cards Germany consumer lending Head Office Italy Mortgages Total £m 263 338 59 16 206 40 151 293 577 120 15 196 51 116 £m % % £m % 0.2 3.4 1.5 0.6 0.8 0.9 3.4 0.2 5.8 3.0 0.6 1.1 1.4 2.4 39.6 n/a n/a n/a n/a n/a 28.3 n/a n/a n/a n/a n/a 61.1 45.2 42.2 n/a n/a n/a n/a n/a 30.0 n/a n/a n/a n/a n/a 58.4 41.9 4 118 33 10 87 27 17 3 242 69 9 122 31 15 1.5 34.9 55.9 62.5 42.2 67.5 11.3 1.0 41.9 57.9 61.6 62.2 60.7 13.2 UK home loans: Forbearance balances decreased to £263m (2021: £293m) driven by a run down in repayment-to-interest-only switches that entered forbearance during the COVID-19 period. UK cards: Balances on forbearance decreased to £338m (2021: £577m), reflecting lower entries into forbearance and the impact of a year-end strategy change to align the point of charge off and write off. UK personal loans: Balances on forbearance programmes decreased to £59m (2021: £120m), reflecting lower entries into forbearance and the impact of a year-end strategy change to align the point of charge off and write off. Barclays Partner Finance: Balances on forbearance remain relatively stable and aligned to the total delinquent stock. US cards: Forbearance balances increased to £206m (2021: £196m) reflecting a small underlying decrease, more than offset by the movement in the USD/GBP exchange rate. Germany consumer lending: Forbearance balances decreased to £40m (2021: £51m) due to lower customer demand. Italian home loans: Forbearance balances increased to £151m (2021: £116m) due to a standardisation of the definition of forbearance to comply with EBA Reporting rules. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 339 Risk performance - Credit risk (continued) Wholesale forbearance programmes The table below details balance information for wholesale forbearance cases. Analysis of wholesale balances in forbearance programmes As at 31 December 2022 Barclays UK Barclays International Total As at 31 December 2021 Barclays UK Barclays International Total Balances on forbearance programmes Total balances £m 704 1,601 2,305 629 2,012 2,641 % of gross wholesale loans and advances % 1.8 1.2 1.3 1.6 1.9 1.8 Impairment allowances marked against balances on forbearance programmes Total balances on forbearance programmes coverage ratio £m 52 129 181 50 359 409 % 7.4 8.1 7.9 7.9 17.8 15.5 Analysis of debt securities Debt securities include government securities held as part of the Group’s treasury management portfolio for liquidity and regulatory purposes, and are for use on a continuing basis in the activities of the Group. The following tables provide an analysis of debt securities held by the Group for trading and investment purposes by issuer type, and where the Group held government securities exceeding 10% of shareholders’ equity. Further information on the credit quality of debt securities is presented in the Balance sheet credit quality section. Debt securities As at 31 December Of which issued by: Governments and other public bodies Corporate and other issuers US agency Mortgage and asset backed securities Total Government securities As at 31 December United States United Kingdom Japan Germany 2022 £m 106,676 41,794 6,399 14,174 169,043 % 63.1 24.7 3.8 8.4 2021 £m 94,730 36,916 4,364 9,788 100 145,798 Fair value 2022 £m 34,187 22,329 16,938 7,666 % 65.0 25.3 3.0 6.7 100 2021 £m 30,023 27,409 8,555 3,520 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 340 Risk performance - Credit risk (continued) Analysis of derivatives The tables below set out the fair values of the derivative assets together with the value of those assets subject to enforceable counterparty netting arrangements for which the Group holds offsetting liabilities and eligible collateral. Derivative assets (audited) As at 31 December Foreign exchange Interest rate Credit derivatives Equity and stock index Commodity derivatives Total derivative assets Cash collateral held Net exposure less collateral 2022 Balance sheet assets Counterparty netting £m 109,938 134,579 5,423 48,665 3,775 £m 88,096 101,646 4,356 41,200 3,039 302,380 238,337 2021 Balance sheet assets Counterparty netting £m 76,975 125,905 5,682 51,723 2,287 £m 60,525 92,669 4,525 43,084 1,717 262,572 202,520 Net exposure £m 21,842 32,933 1,067 7,465 736 64,043 34,547 29,496 Net exposure £m 16,450 33,236 1,157 8,639 570 60,052 34,598 25,454 Derivative asset exposures would be £273bn (2021: £237bn) lower than reported under IFRS if netting were permitted for assets and liabilities with the same counterparty or for which the Group holds cash collateral. Similarly, derivative liabilities would be £(264)bn (2021: £(235)bn) lower reflecting counterparty netting and collateral placed. In addition, non-cash collateral of £11bn (2021: £6bn) was held in respect of derivative assets. The Group received collateral from clients in support of over the counter derivative transactions. These transactions are generally undertaken under International Swaps and Derivative Association (ISDA) agreements governed by either UK or New York law. The table below sets out the fair value and notional amounts of OTC derivative instruments by type of collateral arrangement. Derivatives by collateral arrangement Unilateral in favour of Barclays Foreign exchange Interest rate Credit derivatives Equity and stock index Total unilateral in favour of Barclays Unilateral in favour of counterparty Foreign exchange Interest rate Credit derivatives Equity and stock index Total unilateral in favour of counterparty Bilateral arrangement Foreign exchange Interest rate Credit derivatives Equity and stock index Commodity derivatives Total bilateral arrangement Uncollateralised derivatives Foreign exchange Interest rate Credit derivatives Equity and stock index Commodity derivatives Total uncollateralised derivatives Notional contract amount £m 37,149 17,967 823 19 2022 Fair value Assets £m 1,130 151 26 3 55,958 1,310 22,673 61,158 144 492 638 2,270 — 96 Liabilities £m Notional contract amount £m (677) (57) (224) (2) (960) (637) (2,752) — (26) 26,905 6,790 1,200 245 35,140 22,987 36,230 152 507 84,467 3,004 (3,415) 59,876 2021 Fair value Assets £m 437 816 24 33 1,310 385 3,162 1 159 3,707 5,381,723 14,566,844 582,943 393,664 4,303 102,077 124,463 3,635 9,505 14 (95,377) 5,261,708 (107,895) 13,956,001 (3,790) (12,280) (50) 570,968 259,066 4,485 71,624 116,656 3,635 12,749 54 Liabilities £m (635) (6) (202) (4) (847) (883) (3,684) — (21) (4,588) (68,186) (108,723) (4,190) (15,965) (102) 20,929,477 239,694 (219,392) 20,052,228 204,718 (197,166) 349,569 287,026 35,933 16,101 108 688,737 5,638 3,119 601 3,075 — (6,979) (6,864) (717) (4,416) (1) 403,523 227,093 34,184 18,865 185 4,348 3,244 347 5,881 2 (4,526) (1,759) (360) (8,478) (5) 12,433 256,441 (18,977) 683,850 (242,744) 20,831,094 13,822 223,557 (15,128) (217,729) Total OTC derivative assets/(liabilities) 21,758,639 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 341 Risk performance - Market risk Market risk Summary of contents Outlines key measures used to summarise the market risk profile of the bank such as value at risk (VaR). The Group discloses details on management measures of market risk. Total management VaR includes all trading positions and is presented on a diversified basis by risk factor. This section also outlines the macroeconomic conditions modelled as part of the Group’s risk management framework. Market risk overview and summary of performance Traded market risk Review of management measures – The daily average, maximum and minimum values of management – Business scenario stresses VaR Page 341 341 341 342 342 Summary of performance in the period Average management VaR increased 89% to £36m (2021: £19m) driven by higher market volatility. The conflict in Ukraine and elevated inflation increased volatility across all asset classes as central banks increased base rates, equity markets declined, and credit spreads widened during this period. The Global Markets business maintained a generally short and defensive risk profile (i.e. positioned to gain as the market sells off) for most of 2022. VaR increased in Q4 2022 from an increase in funded, fair-value leverage loan exposure in Investment Banking. Risk taking remained within agreed risk appetite limits at all times in 2022. Traded market risk review Review of management measures The following disclosures provide details on management measures of market risk. Refer to the market risk management section of the Barclays PLC Pillar 3 Report 2022 (unaudited) for more detail on management measures and the differences when compared to regulatory measures. The table below shows the total management VaR on a diversified basis by risk factor. Total management VaR includes all trading positions in CIB and Treasury and it is calculated with a one-day holding period, measured to a confidence level of 95%. Limits are applied against each risk factor VaR as well as total management VaR, which are then cascaded further by risk managers to each business. Market risk All disclosures in this section are unaudited unless otherwise stated. Overview This section contains key statistics describing the market risk profile of the Group. The market risk management section provides a description of management VaR. Measures of market risk in the Group and accounting measures Traded market risk measures such as VaR and balance sheet exposure measures have fundamental differences: • balance sheet measures show accruals- based balances or marked to market values as at the reporting date; • VaR measures also take account of current marked to market values, but in addition hedging effects between positions are considered; • market risk measures are expressed in terms of changes in value or volatilities as opposed to static values. For these reasons, it is not possible to present direct reconciliations of traded market risk and accounting measures. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 342 Risk performance - Market risk (continued) The daily average, high and low values of management VaR Management VaR (95%, one day) (audited) For the year ended 31 December Credit risk Interest rate risk Equity risk Basis risk Spread risk Foreign exchange risk Commodity risk Inflation risk Diversification effecta Total management VaR 2022 Average Higha £m 25 13 10 12 7 8 — 6 (45) 36 £m 71 23 29 24 11 25 1 17 n/a 73 Lowa £m 8 4 4 4 3 2 — 3 n/a 13 2021 Average Higha £m 14 7 9 6 4 4 — 3 (28) 19 £m 30 15 29 10 6 16 1 5 n/a 36 Lowa £m 7 4 4 3 3 1 — 2 n/a 6 Note a Diversification effects recognise that forecast losses from different assets or businesses are unlikely to occur concurrently, hence the expected aggregate loss is lower than the sum of the expected losses from each area. Historical correlations between losses are taken into account in making these assessments. The high and low VaR figures reported for each category did not necessarily occur on the same day as the high and low VaR reported as a whole. Consequently, a diversification effect balance for the high and low VaR figures would not be meaningful and is therefore omitted from the above table. Group Management VaR (£m) Jan 2021 Jan 2022 Dec 2022 Business scenario stresses As part of the Group’s risk management framework, on a regular basis the performance of the trading business in hypothetical scenarios characterised by severe macroeconomic conditions is modelled. Up to seven global scenarios are modelled on a regular basis, for example, a sharp deterioration in liquidity, a slowdown in the global economy, global recession, and a sharp increase in economic growth. In 2022, the scenario analyses showed that the largest market risk related impacts would be due to a severe deterioration in financial liquidity and an associated global recession. 020406080 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 343 Risk performance - Treasury and Capital risk Treasury and Capital risk Treasury and Capital risk: summary of contents Liquidity risk performance The risk that the firm is unable to meet its contractual or contingent obligations or that it does not have the appropriate amount, tenor and composition of funding and liquidity to support its assets. This section provides an overview of the Group’s liquidity risk. Liquidity overview and summary of performance Liquidity risk stress testing – Liquidity risk appetite – Liquidity regulation – Liquidity coverage ratio – Net stable funding ratio The liquidity pool is held unencumbered and is intended to offset stress outflows. Liquidity pool The basis for sound liquidity risk management is a funding structure that reduces the probability of a liquidity stress leading to an inability to meet funding obligations as they fall due. Provides details on the contractual maturity of all financial instruments and other assets and liabilities. Capital risk performance Capital risk is the risk that the firm has an insufficient level or composition of capital to support its normal business activities and to meet its regulatory capital requirements under normal operating environments or stressed conditions (both actual and as defined for internal planning or regulatory testing purposes). This also includes the risk from the firm’s pension plans. This section details the Group’s capital position providing information on both capital resources and capital requirements. It also provides details of the leverage ratios and exposures. This section outlines the Group’s capital ratios, capital composition, and provides information on significant movements in CET1 capital during the year. – Composition of the liquidity pool – Liquidity pool by currency – Management of the liquidity pool – Contingent liquidity Funding structure and funding relationships – Deposit funding – Wholesale funding Contractual maturity of financial assets and liabilities Capital risk overview and summary of performance 355 Regulatory minimum capital, leverage and MREL requirements – Capital – Leverage Analysis of capital resources Capital ratios – Capital resources – Movement in CET1 capital This section outlines risk weighted assets by risk type, business and macro drivers. Analysis of risk weighted assets This section outlines the Group’s leverage ratios, leverage exposure composition, and provides information on significant movements in the IFRS and leverage balance sheet. – Risk weighted assets by risk type and business – Movement analysis of risk weighted assets Analysis of leverage ratios and exposures – Leverage ratios and exposures This section outlines the Group’s Minimum requirement for own funds and Eligible Liabilities (MREL) position and ratios. – Minimum requirement for own funds and eligible liabilities The Group discloses the two sources of foreign exchange risk that it is exposed to. Foreign exchange risk A review focusing on the UK retirement fund, which represents the majority of the Group’s total retirement benefit obligation. – Transactional foreign currency exposure – Translational foreign exchange exposure – Functional currency of operations Pension risk review – Assets and liabilities – IAS 19 position – Risk measurement Page 344 344 344 345 346 346 346 346 347 347 347 347 348 348 351 355 355 355 357 357 357 358 359 359 359 360 360 361 362 362 362 362 362 362 363 363 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 344 Risk performance - Treasury and Capital risk (continued) Interest rate risk in the banking book performance A description of the non-traded market risk framework is provided. The Group discloses a sensitivity analysis on pre-tax net interest income for non- trading financial assets and liabilities. The analysis is carried out by business unit and currency. The Group measures some non-traded market risks, in particular prepayment, recruitment, and residual risk using an economic capital methodology. The Group discloses the overall impact of a parallel shift in interest rates on other comprehensive income and cash flow hedges. The Group measures the volatility of the value of the FVOCI instruments in the liquidity pool through non-traded market risk VaR. Net interest income sensitivity – by business unit – by currency Analysis of equity sensitivity Volatility of the FVOCI portfolio in the liquidity pool Page 364 364 365 365 365 Liquidity risk All disclosures in this section are unaudited unless otherwise stated. Overview The Group Liquidity Risk is managed within Treasury and Capital Risk framework that meets the PRA standards and is designed to maintain liquidity resources that are sufficient in amount and quality, and a funding profile that is appropriate to meet the Group’s Liquidity Risk Appetite. The liquidity risk framework is delivered via a combination of policy formation, review and governance, analysis, stress testing, limit setting and monitoring. This section provides an analysis of the Group’s: (i) summary of performance, (ii) liquidity risk stress testing, iii) liquidity regulation, iv) liquidity pool, (v) funding structure and funding relationships, (vi) credit ratings, and (vii) contractual maturity of financial assets and liabilities. For further detail on liquidity risk governance and framework, refer to pages 156 to 163 of the Barclays PLC Pillar 3 Report 2022 (unaudited). Key metrics Liquidity Coverage Ratio 165% Net Stable Funding Ratioa 137% a Average represents the last four spot quarter end positions Summary of performance The liquidity pool at £318bn (December 2021: £291bn) reflects the Group’s prudent approach to liquidity management. The Liquidity Coverage Ratio (LCR) remained well above the 100% regulatory requirement at 165% (December 2021: 168%), equivalent to a surplus of £117bn (December 2021: £116bn). The increase in the liquidity pool over the year was driven by continued deposit growth and an increase in wholesale funding, partly offset by an increase in business funding consumption. An increase in net stress outflows and trapped liquidity within Barclays’ subsidiaries led to a modest reduction in the LCR ratio. The Net Stable Funding Ratio (average of last four quarter ends) was 137%, which represents £155bn surplus above 100% regulatory requirement. During the year, the Group issued £15bn of minimum requirement for own funds and eligible liabilities (MREL) instruments in a range of tenors and currencies. Barclays Bank PLC continued to issue in the shorter-term and medium-term markets and Barclays Bank UK PLC continued to issue in the shorter-term markets and maintain active secured funding programmes. This funding capacity enables the respective entities to maintain their stable and diversified funding bases. The Group’s reliance on short-term wholesale funding, as measured by the proportion of wholesale funding maturing in less than one year decreased year-on- year to 39% (December 2021: 40%). Liquidity Liquidity risk stress testing Barclays’ Liquidity Risk is managed within the Principal Risk: Treasury and Capital Risk Framework. Under this framework, the Group has established a liquidity risk appetite together with the appropriate limits for the management of the liquidity risk. This is the level of liquidity risk the Group chooses to take in pursuit of its business objectives and in meeting its regulatory obligations. The Group sets its internal liquidity risk appetite based on internal liquidity risk stress tests and, external regulatory requirements namely the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR). Liquidity risk appetite (LRA) The internal liquidity risk stress test measures the potential contractual and contingent stress outflows under a range of internally defined stress scenarios, which are then used to determine the size of the liquidity pool that is immediately available to meet anticipated outflows should a stress occur. As part of the LRA, the Group runs four liquidity stress scenarios, aligned to the PRA’s prescribed stresses: • 90 days market-wide stress event • 30 days Barclays-specific stress event • 30 days combined market-wide and Barclays-specific stress event • 12 months market wide stress Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 345 Risk performance - Treasury and Capital risk (continued) Key LRA assumptions For the year ended 31 December 2022 Drivers of Liquidity Risk LRA Combined stress – key assumptions Wholesale Secured and Unsecured Funding Risk Zero rollover of maturing wholesale unsecured funding Partial loss of repo capacity on non-extremely liquid repos at contractual maturity date Roll of repo for extremely liquid repo at wider haircut at contractual maturity date Withdrawal of contractual buyback obligations, excess client futures margin, Prime Brokerage (PB) client cash and overlifts Haircuts applied to the market value of marketable assets held in the liquidity buffer Retail and Corporate Funding Risk Retail and Corporate deposit outflows as counterparties seek to diversify their deposit balances Intraday Liquidity Risk Intra-Group Liquidity Risk Cross-Currency Liquidity Risk Liquidity held to meet increased intraday liquidity usage due to payment and receipts volatility, loss of unsecured credit lines and haircuts applied to collateral values used to back secured credit lines, in a stress Liquidity support for material subsidiaries. Surplus liquidity held within certain subsidiaries is not taken as a benefit to the wider Group Deterioration in FX market capacity that may result in restriction in net currency positions (managed as a separate framework) Off-Balance Sheet Liquidity Risk Drawdown on committed facilities based on facility and counterparty type Collateral outflows due to a two-notch credit rating downgrade Increase in the Group's initial margin requirement across all major exchanges Variation margin outflows from collateralised risk positions Outflow of collateral owing but not called Loss of internal sources of funding within the PB synthetics business Franchise-Viability Risk Liquidity held to enable the firm to meet select non-contractual obligations to ensure market confidence in the firm is maintained, including debt buy-backs, swap tear-ups and increased prime brokerage margin debits Funding Concentration Risk Funding from counterparties providing greater than 1% of total funding As at 31 December 2022, the Group held eligible liquid assets well in excess of 100% of net stress outflows of the 30 days combined scenario, which has the highest net outflows of the three short-term liquidity stress scenarios. The Group also runs a long term liquidity stress test, which measures the anticipated outflows over a 12 months market-wide scenario. As at 31 December 2022, the Group remained compliant with this internal metric. Liquidity regulation Certain Basel III standards including those relating to the introduction of the liquidity adequacy requirement measured through the LCR were implemented in EU law through CRR, as amended by CRRII, and the Capital Requirements Directive IV. These standards were retained in the UK regulatory framework via a series of onshoring instruments as part of the UK’s withdrawal from the EU. In October 2021, the PRA published the final policy statement setting out its planned implementation of supplementary Basel III standards, including the Net Stable Funding Ratio (NSFR). These came into effect in the UK on 1 January 2022 from which date the Group monitors its position against both the LCR and NSFR. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 346 Risk performance - Treasury and Capital risk (continued) Liquidity coverage ratio The external LCR requirement is designed to promote short-term resilience of a bank’s liquidity risk profile by holding sufficient High Quality Liquid Assets (HQLA) to survive an acute stress scenario lasting for 30 days. As at 31 December LCR Eligible High Quality Liquid Assets (HQLA) Net stress outflows Surplus Liquidity coverage ratio 2022 £bn 295 (178) 117 165 % 2021 £bn 285 (169) 116 168 % Net Stable Funding Ratio (NSFR) The external NSFR metric requires banks to maintain a stable funding profile taking into account both on and certain off balance sheet exposures over a medium to long term period. The ratio is defined as the Available Stable Funding (capital and certain liabilities which are defined as stable sources of funding) relative to the Required Stable Funding (assets on balance sheet and certain off balance sheet exposures). The NSFR was 137% at December 2022 (average of last four quarter ends) equivalent to a surplus of £155bn above the regulatory requirement and demonstrates Barclays’ stable funding profile in relation to our on- and certain off-balance sheet activities. Net Stable Funding Ratio (NSFR)a Total Available Stable Funding Total Required Stable Funding Surplus Net Stable Funding Ratio 2022 £bn 576 421 155 137 % Note a Average represents the last four spot quarter end positions As part of the liquidity risk appetite, Barclays establishes minimum LCR, NSFR and internal liquidity stress test limits. The Group plans to maintain its surplus to the internal and regulatory requirements at an efficient level. Risks to market funding conditions, the Group’s liquidity position and funding profile are assessed continuously, and actions are taken to manage the size of the liquidity pool and the funding profile as appropriate. Liquidity pool The Group liquidity pool as at 31 December 2022 was £318bn (2021: £291bn). During 2022, the month-end liquidity pool ranged from £309bn to £359bn (2021: £290bn to £337bn), and the month-end average balance was £331bn (2021: £303bn). The liquidity pool is held unencumbered and is intended to offset stress outflows. It comprises the following cash and unencumbered assets. Composition of the Group liquidity pool as at 31 December 2022 LCR eligible High Quality Liquid Assets (HQLA)a Liquidity pool Cash and deposits with central banksb Government bondsc AAA to AA- A+ to A- BBB+ to BBB- Total government bonds Other Government guaranteed issuers, PSEs and GSEs International organisations and MDBs Covered bonds Other Total other Total as at 31 December 2022 Total as at 31 December 2021 Cash £bn 248 — — — — — — — — — 248 243 Level 1 Level 2A Level 2B £bn £bn £bn 21 1 — 22 5 2 2 — 9 31 37 10 2 — 12 1 — 2 — 3 15 3 — — — — — — — 1 1 1 2 Total £bn 248 31 3 — 34 6 2 4 1 13 295 285 2022 £bn 263 39 3 — 42 6 2 5 — 13 318 2021 £bn 245 26 2 — 28 6 5 6 1 18 291 Notes a The LCR eligible HQLA is adjusted for operational restrictions upon consolidation under Article 8 of the Liquidity Coverage Ratio section of the PRA rulebook (CRR) such as trapped liquidity within b Barclays subsidiaries. It also reflects differences in eligibility of assets between the LCR and Barclays’ Liquidity Pool. Includes cash held at central banks and surplus cash at central banks related to payment schemes. Of which over 99% (2021: over 99%) was placed with the Bank of England, US Federal Reserve, European Central Bank, Bank of Japan and Swiss National Bank. c Of which over 79% (2021: over 82%) comprised UK, US, French, German, Japanese, Swiss and Dutch securities. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 347 Risk performance - Treasury and Capital risk (continued) The Group liquidity pool is well diversified by major currency and the Group monitors LRA stress scenarios for major currencies. Liquidity pool by currency Liquidity pool as at 31 December 2022 Liquidity pool as at 31 December 2021 USD £bn 72 59 EUR £bn 79 52 GBP £bn 142 132 Other £bn 25 48 Total £bn 318 291 Management of the liquidity pool The composition of the liquidity pool is subject to limits set by the Board and the independent liquidity risk, credit risk and market risk functions. In addition, the investment of the liquidity pool is monitored for concentration risk by issuer, currency and asset type. Given the returns generated by these highly liquid assets, the risk and reward profile is continuously managed. As at 31 December 2022, 60% (2021: 58%) of the liquidity pool was located in Barclays Bank PLC, 25% (2021: 30%) in Barclays Bank UK PLC and 9% (2021: 7%) in Barclays Bank Ireland PLC. The residual portion of the liquidity pool is held outside of these entities, predominantly in the US subsidiaries, to meet entity-specific stress outflows and local regulatory requirements. To the extent the use of this portion of the liquidity pool is restricted due to local regulatory requirements, it is assumed to be unavailable to the rest of the Group in calculating the LCR. Contingent liquidity In addition to the Group liquidity pool, the Group has access to other unencumbered assets which provide a source of contingent liquidity. While these are not relied on in the Group’s LRA, a portion of these assets may be monetised in a stress to generate liquidity through their use as collateral for secured funding or through outright sale. In a Barclays-specific, market-wide or combined liquidity stress, liquidity available via market sources could be severely disrupted. In circumstances where market liquidity is unavailable or available only at significantly elevated prices, the Group could generate liquidity via central bank facilities. To this end, as at 31 December 2022, the Group had £83.3bn (December 2021: £93.3bn) of assets positioned at various central banks. For more detail on the Group’s other unencumbered assets, see pages 180 to 182 of the Barclays PLC Pillar 3 Report 2022 (unaudited). Funding structure and funding relationships The basis for sound liquidity risk management is a funding structure that reduces the probability of a liquidity stress leading to an inability to meet funding obligations as they fall due. The Group’s overall funding strategy is to develop a diversified funding base (geographically, by type and by counterparty) and maintain access to a variety of alternative funding sources, to provide protection against unexpected fluctuations, while minimising the cost of funding. Within this, the Group aims to align the sources and uses of funding. As such, retail and corporate loans and advances are largely funded by deposits in the relevant entities, with the surplus primarily funding the liquidity pool. The majority of reverse repurchase agreements are matched by repurchase agreements. Derivative liabilities and assets are largely matched. A substantial proportion of balance sheet derivative positions qualify for counterparty netting and the remaining portions are largely offset when netted against cash collateral received and paid. Wholesale debt and equity is used to fund residual assets. These funding relationships are summarised below: Assets Loans and advances at amortised costa Group liquidity pool Reverse repurchase agreements, trading portfolio assets, cash collateral and settlement balances Derivative financial instruments Other assetsb 2022 £bn 385 318 412 302 97 2021 £bn 358 291 388 263 84 Liabilities Deposits at amortised cost <1 Year wholesale funding >1 Year wholesale funding Repurchase agreements, trading portfolio liabilities, cash collateral and settlement balances Derivative financial instruments Other liabilities Equity 2022 £bn 546 73 111 370 290 55 69 Restatedc 2021 £bn 519 67 101 330 257 40 70 Total assets 1,514 1,384 Total liabilities 1,514 1,384 Notes a Adjusted for liquidity pool debt securities reported at amortised costs of £14bn (December 2021: £3bn). b Other assets include fair value assets that are not part of reverse repurchase agreements or trading portfolio assets, and other asset categories. c 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Impact of the Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 348 Risk performance - Treasury and Capital risk (continued) Deposit funding Funding of loans and advances As at 31 December 2022 Barclays UK Barclays International Head Office Barclays Group 2022 2021 Loans and advances at amortised cost Deposits at amortised cost Loan: deposit ratioa Loan: deposit ratio £bn 225 170 4 399 £bn 258 288 — 546 % 87 % 59 % 73 % % 85 % 52 % 70 % Note a The loan: deposit ratio is calculated as loans and advances at amortised cost divided by deposits at amortised cost. As at 31 December 2022, £224bn (2021: £222bn) of total customer deposits were insured through the UK Financial Services Compensation Scheme (FSCS) and other similar schemes. In addition to these customer deposits £5.7bn (2021: £1.3bn) of other liabilities are insured by other governments. Contractually current accounts are repayable on demand and savings accounts at short notice. In practice, their observed maturity is typically longer than their contractual maturity. Similarly, repayment profiles of certain types of assets e.g. mortgages, overdrafts and credit card lending, differ from their contractual profiles. The Group therefore assesses the behavioural maturity of both customer assets and liabilities to identify structural balance sheet funding gaps. In doing so, it applies quantitative modelling and qualitative assessments which take into account historical experience, current customer composition, and macroeconomic projections. The Group’s broad base of customers, numerically and by depositor type, helps protect against unexpected fluctuations in balances and hence provides a stable funding base for the Group’s operations and liquidity needs. Wholesale funding Barclays Bank Group and Barclays Bank UK Group maintain access to a variety of sources of wholesale funds in major currencies, including those available from term investors across a variety of distribution channels and geographies, short-term funding markets and repo markets. Barclays Bank Group has direct access to US, European and Asian capital markets through its global investment banking operations and to long-term investors through its clients worldwide. Key sources of wholesale funding include money markets, certificates of deposit, commercial paper, medium term issuances (including structured notes) and securitisations. Key sources of wholesale funding for Barclays Bank UK Group include money markets, certificates of deposit, commercial paper, covered bonds and other securitisations. The Group expects to continue issuing public wholesale debt from Barclays PLC (the Parent company), in order to maintain compliance with indicative MREL requirements and maintain a stable and diverse funding base by type, currency and market. During the year, the Group issued £15.3bn of MREL instruments from Barclays PLC (the Parent company) in a range of different currencies and tenors. Barclays Bank PLC continued to issue in the shorter-term markets and maintain active medium-term notes programmes. Barclays Bank UK PLC continued to issue in the shorter-term markets and maintain active secured funding programmes. This funding capacity enables the respective entities to maintain their stable and diversified funding bases. As at 31 December 2022, the Group’s total wholesale funding outstanding (excluding repurchase agreements) was £184.0bn (2021: £167.5bn), of which £19.2bn (2021: £16.6bn) was secured funding and £164.8bn (2021: £150.9bn) unsecured funding. Unsecured funding includes £59.7bn (2021: £59.7bn) of privately placed senior unsecured notes issued through a variety of distribution channels including intermediaries and private banks. Wholesale funding of £72.5bn (2021: £66.7bnd) matures in less than one year, representing 39% (December 2021: 40%d) of total wholesale funding outstanding. This includes £15.0bn (2021: £24.9bnd) related to term fundingb. Although not a requirement, the liquidity pool exceeded the wholesale funding maturing in less than one year by £246bn (2021: £224bnd). Barclays Bank Group and Barclays Bank UK Group also support various central bank monetary initiatives, such as the Bank of England’s Term Funding Scheme with additional incentives for SMEs (TFSME), and the European Central Bank’s Targeted Long-Term Refinancing Operations (TLTRO). These are reported under ‘repurchase agreements and other similar secured borrowing’ on the balance sheet. In 2022, Barclays repaid £1.1bn of its TLTRO drawings reducing its outstanding balance to £1.4bn as at 31 December 2022. In addition, Barclays had £22.0bn TFSME balances outstanding at the year-end. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 349 Risk performance - Treasury and Capital risk (continued) Maturity profile of wholesale fundinga,b <1 month 1-3 months 3-6 months 6-12 months <1 year 1-2 years 2-3 years 3-4 years 4-5 years >5 years £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn Total £bn Barclays PLC (the Parent company) Senior unsecured (Public benchmark) Senior unsecured (Privately placed) Subordinated liabilities Barclays Bank PLC (including subsidiaries) Certificates of deposit and commercial paper Asset backed commercial paper Senior unsecured (Public benchmark) Senior unsecured (Privately placed)c Asset backed securities Subordinated liabilities Barclays Bank UK PLC (including subsidiaries) Certificates of deposit and commercial paper Senior unsecured (Public benchmark) Covered bonds Total as at 31 December 22 Of which secured Of which unsecured Total as at 31 December 21d Of which secured Of which unsecured — — — 0.3 3.6 — 1.2 — — 4.7 — 1.3 11.1 4.9 6.2 14.1 2.4 11.7 — — — 0.2 — — 1.7 0.2 — 1.9 0.2 — 5.8 0.1 1.0 1.5 — 1.0 41.8 11.0 — 10.5 11.0 0.3 0.3 1.8 0.2 4.7 — 1.8 72.5 13.1 59.4 66.7 9.9 56.8 — — — 22.4 1.8 20.6 15.4 1.9 13.5 5.6 — — 0.6 — — 9.9 0.7 0.1 — — — 16.9 0.7 16.2 15.1 2.0 13.1 8.3 — 1.6 0.1 — — 3.7 0.5 0.3 — — — 14.5 0.5 14.0 9.9 0.1 9.8 4.5 — — — — — 4.2 0.5 — — — 0.5 9.7 1.0 8.7 11.4 0.3 11.1 18.0 44.1 1.0 7.0 1.3 9.6 — — — 19.1 1.2 0.7 44.0 11.0 1.0 58.4 5.0 1.6 — 0.1 0.9 4.7 0.1 3.2 48.0 184.0 2.1 19.2 45.9 164.8 49.0 167.5 2.4 16.6 46.6 150.9 17.7 12.8 11.0 6.6 — 2.1 0.1 — — — — 26.5 6.7 19.8 21.7 6.4 15.3 0.8 — 2.1 — — — — 0.5 16.4 1.3 15.1 15.5 0.6 14.9 — — 5.1 0.2 0.3 — — — 18.5 0.2 18.3 15.4 0.5 14.9 Notes a The composition of wholesale funds comprises the balance sheet reported financial liabilities at fair value, debt securities in issue and subordinated liabilities. It does not include participation in the central bank facilities reported within repurchase agreements and other similar secured borrowing. b Term funding comprises public benchmark and privately placed senior unsecured notes, covered bonds, asset-backed securities and subordinated debt where the original maturity of the instrument was more than one year. Includes structured notes of £48.4bn, of which £9.4bn matures within one year. c d 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Impact of the Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. Currency composition of wholesale debt As at 31 December 2022, the proportion of wholesale funding by major currencies was as follows: Currency composition of wholesale funding Certificates of deposit and commercial paper Asset backed commercial paper Senior unsecured (Public benchmark) Senior unsecured (Privately placed) Covered bonds / Asset backed securities Subordinated liabilities Total as December 31, 2022 Total as December 31, 2021 USD % 64 84 60 54 61 61 61 59 EUR % 28 11 23 21 12 20 22 24 GBP Other % 7 5 9 14 27 16 11 11 % 1 — 8 11 — 3 6 6 To manage cross currency refinancing risk, the Group manages to currency mismatch limits, which limit risk at specific maturities. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 350 Risk performance - Treasury and Capital risk (continued) Credit ratings In addition to monitoring and managing key metrics related to the financial strength of the Group, Barclays also solicits independent credit ratings from Standard & Poor’s Global (S&P), Moody’s, Fitch, and Rating and Investment Information (R&I). These ratings assess the creditworthiness of the Group, its subsidiaries and its branches, and are based on reviews of a broad range of business and financial attributes including capital strength, profitability, funding, liquidity, asset quality, strategy and governance. Credit ratings As at 31 December 2022 Barclays Bank PLC Long term Short term Barclays Bank UK PLC Long term Short term Barclays PLC Long term Short term Standard & Poor's Moody's Fitch A/Positive A-1 A/Positive A-1 A1/Negative P-1 A1/Stable P-1 A+/Stable F1 A+/Stable F1 BBB/Positive Baa2/Review for upgrade A/Stable A-2 P-2 F1 In June 2022, S&P affirmed all ratings for Barclays PLC, Barclays Bank PLC and Barclays Bank UK PLC and maintained positive outlooks. In June 2021, S&P revised the outlooks of Barclays PLC, Barclays Bank PLC and Barclays Bank UK PLC to positive from stable reflecting the view that Barclays is delivering a stronger, more consistent business profile and financial performance. In October 2022, Moody’s revised the outlook of Barclays Bank PLC to negative from stable alongside other major UK bank operating subsidiaries, reflecting Moody’s view of the potentially weaker capacity of the UK Government to support the country's systemic banks. However, Moody’s also noted that the impact of a UK sovereign downgrade could be offset by an upgrade of Barclays PLC, because lower support from a weakening sovereign would be offset by higher support from a strengthening parent. In December 2022, Moody’s revised the outlook of Barclays PLC to review for upgrade from positive, whilst affirming all ratings. The revision reflects Moody’s view that the Group's earnings has improved, driven by repositioning and investments in the capital markets and US credit cards businesses, higher net interest income following rate hikes in the UK, US and EU, and low cost of risk. In September 2022, Fitch affirmed all ratings for Barclays PLC, Barclays Bank PLC and Barclays Bank UK PLC. Barclays also solicits issuer ratings from R&I and the ratings of A for Barclays PLC and A+ for Barclays Bank PLC were affirmed in November 2022 with stable outlooks. A credit rating downgrade could result in outflows to meet collateral requirements on existing contracts. Outflows related to credit rating downgrades are included in the LRA stress scenarios and a portion of the liquidity pool is held against this risk. Credit ratings downgrades could also result in reduced funding capacity and increased funding costs. The contractual collateral requirement following one- and two-notch long-term and associated short-term downgrades across all credit rating agencies, would result in outflows of £1bn and £3bn respectively, and are provided for in determining an appropriate liquidity pool size given the Group’s liquidity risk appetite. These numbers do not assume any management or restructuring actions that could be taken to reduce posting requirements. These outflows do not include the potential liquidity impact from loss of unsecured funding, such as from money market funds, or loss of secured funding capacity. However, unsecured and secured funding stresses are included in the LRA stress scenarios and a portion of the liquidity pool is held against these risks. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 351 Risk performance - Treasury and Capital risk (continued) Contractual maturity of financial assets and liabilities The table below provides detail on the contractual maturity of all financial instruments and other assets and liabilities. Derivatives (other than those designated in a hedging relationship) and trading portfolio assets and liabilities are included in the ‘on demand’ column at their fair value. Liquidity risk on these items is not managed on the basis of contractual maturity since they are not held for settlement according to such maturity and will frequently be settled before contractual maturity at fair value. Derivatives designated in a hedging relationship are included according to their contractual maturity. Contractual maturity of financial assets and liabilities (audited) On demand Not more than three months Over three months but not more than six months Over six months but not more than nine months Over nine months but not more than one year Over one year but not more than two years Over two years but not more than three years Over three years but not more than five years Over five years but not more than ten years Over ten years As at 31 December 2022 £m £m £m £m £m £m £m £m £m £m Total £m 256,097 254 2,977 109,620 — — — — — — — — — — — — — — — 256,351 — 112,597 17,764 12,719 9,716 8,275 11,942 34,790 29,325 56,519 40,539 177,190 398,779 Assets Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending Other assets Total assets Liabilities Deposits at amortised cost Cash collateral and settlement balances Repurchase agreements and other similar secured borrowing Financial liabilities designated at fair value Derivative financial instruments Trading portfolio assets 133,813 127 648 — — — — — — — — — — — — — — — 1 776 — 133,813 Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Other financial assets 32,071 147,644 6,771 4,718 2,047 6,491 4,922 3,292 2,292 3,320 213,568 301,647 54 66 70 — 110 352 44 21 16 302,380 8 433 6,433 1,177 4,535 1,687 1,395 9,206 7,560 16,418 10,385 7,435 65,062 — — 43 — — 1 — 2 1,656 Total financial assets 744,937 278,549 21,088 14,750 15,427 50,597 42,159 76,274 53,237 187,964 1,484,982 443,736 63,076 19,388 5,090 8,575 4,263 327 499 589 239 545,782 2,932 93,995 — — — — — — — — 96,927 28,717 1,513,699 256 9,562 — — 943 Debt securities in issue — 33,109 13,259 5,582 6,294 Subordinated liabilities — Trading portfolio liabilities 72,924 17 — — — 83 — 179 — 1,105 9,435 1,181 — 5,034 10,069 — 83 27,052 6,817 14,808 15,526 8,051 112,881 — — 1,987 6,493 1,483 — — — 11,423 72,924 10,844 186,733 14,352 5,292 3,812 14,000 10,548 8,528 6,708 10,820 271,637 Other financial liabilities 86 7,803 288,573 45 63 43 5 43 2 41 157 261 105 148 273 247 56 391 341 289,620 93 9,156 Total financial liabilities 819,351 394,340 47,105 16,095 19,846 30,402 22,979 36,411 29,763 21,110 1,437,402 Other liabilities Total liabilities 7,037 1,444,439 Cumulative liquidity gap (74,414) (190,205) (216,222) (217,567) (221,986) (201,791) (182,611) (142,748) (119,274) 47,580 69,260 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 352 Risk performance - Treasury and Capital risk (continued) Contractual maturity of financial assets and liabilities (audited)a On demand Not more than three months Over three months but not more than six months Over six months but not more than nine months Over nine months but not more than one year Over one year but not more than two years Over two years but not more than three years Over three years but not more than five years Over five years but not more than ten years Over ten years As at 31 December 2021 £m £m £m £m £m £m £m £m £m £m Total £m 238,369 205 2,807 89,735 — — — — — — — — — — — — — — — 238,574 — 92,542 19,749 8,670 8,879 5,291 10,192 23,716 26,037 47,614 39,822 171,481 361,451 Assets Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending Other assets Total assets Liabilities Deposits at amortised cost Cash collateral and settlement balances Repurchase agreements and other similar secured borrowing Financial liabilities designated at fair value Derivative financial instruments Trading portfolio assets 147,035 — 58 2,984 — — — — — — 184 — — — — — — — 1 3,227 — 147,035 Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Other financial assets 24,257 127,085 9,281 7,042 3,451 5,889 5,394 2,590 2,564 4,419 191,972 261,678 58 48 — — 82 145 537 15 9 262,572 — 707 4,280 1,488 1,245 1,419 3,834 8,205 13,188 18,226 9,868 61,753 474 26 2 — 1 — — 1 2 1,213 Total financial assets 694,660 233,491 19,722 13,580 15,062 33,706 39,781 63,929 60,628 185,780 1,360,339 454,961 40,755 13,524 2,994 3,724 2,025 433 241 545 231 519,433 2,983 76,388 — — — — — — — — 79,371 23,946 1,384,285 20 6,621 — — Debt securities in issue — 24,399 12,606 5,845 Subordinated liabilities — 1,007 Trading portfolio liabilities 54,169 — — — 74 — — 3,254 1,218 — 2,195 9,792 27 — 8,925 10,504 — 8,957 12,948 12,218 1,063 1,885 5,603 — — — 87 8,848 1,882 — 28,352 98,867 12,759 54,169 21,339 157,900 16,857 10,268 3,588 6,540 6,114 7,734 7,366 13,254 250,960 Other financial liabilities 184 4,331 255,747 4 22 43 18 42 5 40 124 691 177 145 302 266 122 420 362 256,883 139 6,301 Total financial liabilities 789,403 311,405 43,052 19,241 11,829 21,394 25,814 33,880 26,274 24,803 1,307,095 Other liabilities Total liabilities 7,149 1,314,244 Cumulative liquidity gap (94,743) (172,657) (195,987) (201,648) (198,415) (186,103) (172,136) (142,087) (107,733) 53,244 70,041 Note a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Impact of the Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. Expected maturity date may differ from the contractual dates, to account for: • trading portfolio assets and liabilities and derivative financial instruments, which may not be held to maturity as part of the Group’s trading strategies • corporate and retail deposits, reported under deposits at amortised cost, are repayable on demand or at short notice on a contractual basis. In practice, their behavioural maturity is typically longer than their contractual maturity, and therefore these deposits provide stable funding for the Group’s operations and liquidity needs because of the broad base of customers, both numerically and by depositor type • loans to corporate and retail customers, which are included within loans and advances at amortised cost and financial assets at fair value, may be repaid earlier in line with terms and conditions of the contract • debt securities in issue, subordinated liabilities, and financial liabilities designated at fair value, may include early redemption features. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 353 Risk performance - Treasury and Capital risk (continued) Contractual maturity of financial liabilities on an undiscounted basis The table below presents the cash flows payable by the Group under financial liabilities by remaining contractual maturities at the balance sheet date. The amounts disclosed in the table are the contractual undiscounted cash flows of all financial liabilities (i.e. nominal values). The balances in the below table do not agree directly to the balances in the consolidated balance sheet as the table incorporates all cash flows, on an undiscounted basis, related to both principal as well as those associated with all future coupon payments. Derivative financial instruments held for trading and trading portfolio liabilities are included in the on demand column at their fair value. Contractual maturity of financial liabilities - undiscounted (audited) On demand Not more than three months Over three months but not more than six months Over six months but not more than one year Over one year but not more than three years Over three years but not more than five years Over five years but not more than ten years Over ten years £m £m £m £m £m £m £m £m Total £m As at 31 December 2022 Deposits at amortised cost 443,736 63,235 19,393 13,798 4,606 499 706 376 546,349 Cash collateral and settlement balances Repurchase agreements and other similar secured borrowing Debt securities in issue Subordinated liabilities Trading portfolio liabilities 72,924 2,932 94,183 256 9,575 — — — — — 946 6,920 33,226 13,375 12,165 16,964 17 — — — 263 — 1,274 — 12,234 16,790 2,356 — — — — 97,115 252 30,183 19,207 14,871 126,598 7,902 2,429 — — 14,241 72,924 Financial liabilities designated at fair value 10,844 187,126 14,905 9,399 25,662 9,847 8,345 24,754 290,882 Derivative financial instruments 288,573 107 7,813 101 56 8 109 290 488 321 308 71 455 722 290,193 109 9,424 819,351 395,282 47,830 36,688 56,204 42,355 36,686 43,513 1,477,909 Other financial liabilities Total financial liabilities Restateda As at 31 December 2021 Cash collateral and settlement balances Repurchase agreements and other similar secured borrowing Debt securities in issue Subordinated liabilities Deposits at amortised cost 454,961 40,755 13,524 6,718 2,461 239 559 261 519,478 2,983 76,388 — — 6,621 24,450 12,625 1,063 — — — — — 9,075 1,379 — — — 11,356 19,225 1,213 — 10,885 14,060 2,316 — — — — 79,371 146 29,028 14,147 13,690 107,272 6,627 2,867 — — 15,465 54,169 Trading portfolio liabilities 54,169 Financial liabilities designated at fair value 21,339 158,070 16,887 13,946 12,944 8,086 7,544 21,638 260,454 Derivative financial instruments 255,747 5 Other financial liabilities 184 4,344 22 57 24 111 305 932 316 327 134 502 449 257,002 162 6,619 Total financial liabilities 789,403 311,696 43,115 31,253 48,436 36,229 29,513 39,213 1,328,858 Note a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Impact of the Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. — — 86 20 — — Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 354 Risk performance - Treasury and Capital risk (continued) Maturity of off-balance sheet commitments received and given The table below presents the maturity split of the Group’s off-balance sheet commitments received and given at the balance sheet date. The amounts disclosed in the table are the undiscounted cash flows (i.e. nominal values) on the basis of earliest opportunity at which they are available. Maturity analysis of off-balance sheet commitments received (audited) Over three months but not more than six months Over six months but not more than nine months Over nine months but not more than one year Over one year but not more than two years Over two years but not more than three years Over three years but not more than five years Over five years but not more than ten years Over ten years On demand Not more than three months £m £m £m £m £m £m £m £m £m £m Total £m As at 31 December 2022 Guarantees, letters of credit and credit insurance Other commitments received Total off-balance sheet commitments received As at 31 December 2021 Guarantees, letters of credit and credit insurance Other commitments received Total off-balance sheet commitments received 19,301 7,473 26,774 25,613 455 26,068 92 — 92 31 — 31 102 — 102 21 — 21 10 — 10 10 — 10 46 — 46 12 — 12 16 — 16 4 — 4 37 — 37 12 — 12 76 — 76 83 — 83 96 — 96 65 — 65 1 19,777 — 7,473 1 27,250 19 25,870 — 455 19 26,325 Maturity analysis of off-balance sheet commitments given (audited) Over three months but not more than six months Over six months but not more than nine months Over nine months but not more than one year Over one year but not more than two years Over two years but not more than three years Over three years but not more than five years Over five years but not more than ten years Over ten years On demand Not more than three months £m £m £m £m £m £m £m £m £m £m Total £m As at 31 December 2022 Contingent liabilities and financial guarantees Documentary credits and other short- term trade related transactions 24,103 1,740 Standby facilities, credit lines and other commitments 393,723 Total off-balance sheet commitments given 419,566 86 3 — 89 As at 31 December 2021 Contingent liabilities and financial guarantees 21,207 135 Documentary credits and other short- term trade related transactions 1,582 Standby facilities, credit lines and other commitments 344,055 2 — Total off-balance sheet commitments given 366,844 137 14 5 — 19 4 — — 4 1 — 1 — — — — 24,205 — 1 — — — — — — — — — — 37 38 — — 72 72 — — — — — — — — — — — — — — — — — — 1,748 — 393,760 — 419,713 — 21,346 — 1,584 — 344,127 — 367,057 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 355 Risk performance - Treasury and Capital risk (continued) Summary of performance in the period The Group continues to be in excess of overall capital, leverage and MREL regulatory requirements. The reported CET1 ratio decreased by c.120bps to 13.9% (December 2021: 15.1%) as RWAs increased by £22.4bn to £336.5bn and CET1 capital decreased by £0.4bn to £46.9bn ▪ c.150bps increase from 2022 attributable profit ▪ c.80bps returned to shareholders including the 2.25p half year dividend paid in September 2022, £1.5bn of share buybacks announced with FY21 and H122 results and a FY22 dividend accrual ▪ c.80bps reduction due to the impact of regulatory change on 1 January 2022 as CET1 capital decreased £1.7bn and RWAs increased £6.6bn ▪ c.70bps reduction from decreases in the fair value of the bond portfolio through other comprehensive income and other capital deductions ▪ c.40bps reduction due to pension contributions, including the accelerated cash settlement to the UK Retirement Fund (UKRF) of earlier deficit reduction contributions and deficit reduction payments made in 2022 ▪ A £14.1bn increase in RWAs as a result of foreign exchange movements was broadly offset by a £2bn increase in the currency translation reserve The UK leverage ratio increased to 5.3% (December 2021: 5.2%) primarily due to a decrease in the leverage exposure of £7.9bn to £1,130.0bn and an increase in Tier 1 Capital of £0.6bn to £60.1bn. Capital risk All disclosures in this section are unaudited unless otherwise stated. Overview The CET1 ratio, among other metrics, is a measure of the capital strength and resilience of Barclays. Maintenance of our capital resources is vital in order to meet the overall regulatory capital requirement, to withstand the impact of the risks that may arise under normal and stressed conditions, and maintain adequate capital to cover current and forecast business needs and associated risks to provide a viable and sustainable business offering. This section provides an overview of the Group’s: (i) CET1 capital, leverage and own funds and eligible liabilities requirements; (ii) capital resources; (iii) risk weighted assets (RWAs); (iv) leverage ratios and exposures; and (v) own funds and eligible liabilities. More details on monitoring and managing capital risk may be found in the risk management sections of the Barclays PLC Pillar 3 Report 2022 (unaudited). Key metrics Common Equity Tier 1 ratio 13.9% UK leverage ratio 5.3% Average UK leverage ratio 4.8% Own funds and eligible liabilities ratio as a percentage of RWAs 33.5% Minimum capital requirements The Group’s Overall Capital Requirement for CET1 is 11.3% comprising a 4.5% Pillar 1 minimum, a 2.5% Capital Conservation Buffer (CCB), a 1.5% Global Systemically Important Institution (G-SII) buffer, a 2.4% Pillar 2A requirement and a 0.4% Countercyclical Capital Buffer (CCyB). The Group’s CCyB is based on the buffer rate applicable for each jurisdiction in which the Group has exposures. On 13 December 2021, the Financial Policy Committee (FPC) announced the re- introduction of a CCyB rate of 1% for UK exposures with effect from 13 December 2022. The buffer rates set by other national authorities for non-UK exposures are not currently material. Overall, this results in a 0.4% CCyB for the Group. On 5 July 2022, the FPC announced that the UK CCyB rate will be increased from 1% to 2% with effect from 5 July 2023. The Group’s updated Pillar 2A requirement as per the PRA’s Individual Capital requirement is 4.3% of which at least 56.25% needs to be met with CET1 capital, equating to 2.4% of RWAs. The Pillar 2A requirement, based on a point in time assessment, has been set as a proportion of RWAs and is subject to at least annual review. The Group’s CET1 target ratio of 13-14% takes into account headroom above requirements which includes a confidential institution-specific PRA buffer. The Group remains above its minimum capital regulatory requirements including the PRA buffer. Minimum leverage requirements The Group is subject to a leverage ratio requirement of 4.0% as at 31 December 2022. This comprises the 3.25% minimum requirement, a G-SII additional leverage ratio buffer (G-SII ALRB) of 0.53% and a countercyclical leverage ratio buffer (CCLB) of 0.2%. Although the leverage ratio is expressed in terms of Tier 1 (T1) capital, 75% of the minimum requirement, equating to 2.4375%, needs to be met with CET1 capital. In addition, the G-SII ALRB and CCLB must be covered solely with CET1 capital. The CET1 capital held against the 0.53% G-SII ALRB was £5.9bn and against the 0.2% CCLB was £2.3bn. The Group is also required to disclose an average UK leverage ratio which is based on capital on the last day of each month in the quarter and an exposure measure for each day in the quarter. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 356 Risk performance - Treasury and Capital risk (continued) Minimum requirements for own funds and eligible liabilities The Group is required to meet the higher of: (i) two times the sum of 8% Pillar 1 and 4.3% Pillar 2A equating to 24.5% of RWAs; and (ii) 6.75% of leverage exposures. In addition, the higher of regulatory capital and leverage buffers apply. CET1 capital cannot be counted towards both MREL and the buffers, meaning that the buffers, including the above mentioned confidential institution-specific PRA buffer, will effectively be applied above MREL requirements. Significant regulatory updates in the period Capital and RWAs On 1 January 2022, the PRA’s implementation of Basel III standards took effect including the re-introduction of the 100% CET1 capital deduction for qualifying software intangible assets and the introduction of the Standardised Approach for Counterparty Credit Risk (SA-CCR) which replaces the Current Exposure Method for Standardised derivative exposures as a more risk sensitive approach. In addition, the PRA also implemented IRB roadmap changes which includes revisions to the criteria for definition of default, probability of default and loss given default estimation to ensure supervisory consistency and increase transparency of IRB models. On 30 November 2022, the PRA published its consultation paper 'Implementation of the Basel 3.1 standards', which covers the remaining parts of the Basel III standards to be implemented in the UK. Changes are expected to come in to force from 1 January 2025, other than those areas subject to transitional provisions. Barclays currently expects the impact on RWAs on 1 January 2025 to be at the lower end of the prior 5-10% RWA inflation guidance. The PRA is currently consulting on the rule changes, and there will be a review of the Pillar 2A framework in 2024 which may offset some of the impact. Leverage From 1 January 2022, UK banks became subject to a single UK leverage ratio requirement meaning that the CRR leverage ratio no longer applies. Under the revised UK leverage ratio framework, central bank claims have been excluded from the UK leverage exposure measure where they are matched by qualifying liabilities (rather than deposits). In the disclosures that follow, references to CRR, as amended by CRR II, mean the capital regulatory requirements, as they form part of domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended. Impact of Over-issuance of Securities in the US In March 2022, the Group became aware that Barclays Bank PLC had issued securities materially in excess of the amount it had registered with the SEC under Barclays Bank PLC’s 2019 F-3. Subsequently, the Group became aware that securities had also been issued in excess of the amount it had registered with the SEC under the Predecessor Shelf. The securities issued in excess of the registered amount included structured products and exchange traded notes. As these securities were not issued in compliance with the Securities Act, a right of rescission arose for certain purchasers of the securities. A portion of the costs associated with the right of rescission were attributable to the financial statements for the year ended 31 December 2021, resulting in the restatement of the 2021 figures in the disclosures below. Prior to the restatement, litigation and conduct charges in the income statement in relation to 2021 were underreported by £220m (pre-tax). This resulted in a CET1 capital decrease of £170m from £47,497m to £47,327m. Both the transitional and fully loaded CET1 ratios remained unchanged at 15.1% and 14.7% respectively. The T1 ratio moved from 19.2% to 19.1% and the total capital ratio moved from 22.3% to 22.2%. The leverage exposure increased £1.9bn to recognise on a regulatory basis, the potential commitment relating to the rescission offer. This resulted in the UK leverage ratio moving from 5.3% to 5.2% whilst the average UK leverage ratio remained unchanged at 4.9%. Total own funds and eligible liabilities decreased £0.2bn to £108bn, which was in excess of a restated requirement to hold £94bn of own funds and eligible liabilities. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 357 Risk performance - Treasury and Capital risk (continued) Capital resources Capital ratiosb,c As at 31 December CET1 Tier 1 (T1) Total regulatory capital Capital resources (audited) As at 31 December Total equity excluding non-controlling interests per the balance sheet Less: other equity instruments (recognised as AT1 capital) Adjustment to retained earnings for foreseeable ordinary share dividends Adjustment to retained earnings for foreseeable other equity coupons Other regulatory adjustments and deductions Additional value adjustments (PVA) Goodwill and intangible assets Deferred tax assets that rely on future profitability excluding temporary differences Fair value reserves related to gains or losses on cash flow hedges Excess of expected losses over impairment Gains or losses on liabilities at fair value resulting from own credit Defined benefit pension fund assets Direct and indirect holdings by an institution of own CET1 instruments Adjustment under IFRS 9 transitional arrangements Other regulatory adjustments CET1 capital AT1 capital Capital instruments and related share premium accounts Qualifying AT1 capital (including minority interests) issued by subsidiaries Other regulatory adjustments and deductions AT1 capital T1 capital T2 capital Capital instruments and related share premium accounts Qualifying T2 capital (including minority interests) issued by subsidiaries Credit risk adjustments (excess of impairment over expected losses) Other regulatory adjustments and deductions Total regulatory capital Total RWAs (Unaudited) 2022 13.9 % 17.9 % 20.8 % 2022 £m 68,292 (13,284) (787) (37) (1,726) (8,224) (1,500) 7,237 (119) (620) (3,430) (20) 700 396 46,878 Restateda 2021 15.1 % 19.1 % 22.2 % 2021 £m 69,052 (12,259) (666) (32) (1,585) (6,804) (1,028) 852 — 892 (2,619) (50) 1,229 345 47,327 13,284 12,259 — (60) 637 (80) 13,224 12,816 60,102 60,143 9,000 1,095 35 (160) 8,713 1,113 73 (160) 70,072 69,882 336,518 314,136 Notes a Capital and leverage metrics as at 31 December 2021 have been restated to reflect the impact of the Over-issuance of Securities.See Impact of Over-issuance of Securities on page 356 for further details. b CET1, T1 and T2 capital, and RWAs are calculated applying the transitional arrangements of the CRR as amended by CRR II. This includes IFRS 9 transitional arrangements and the grandfathering of CRR II non-compliant capital instruments. December 2021 comparatives include the grandfathering of CRR non-compliant capital instruments. c The fully loaded CET1 ratio, as is relevant for assessing against the conversion trigger in Barclays PLC AT1 securities, was 13.7%, with £46.2bn of CET1 capital and £336.3bn of RWAs calculated without applying the transitional arrangements of the CRR as amended by CRR II. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 358 Risk performance - Treasury and Capital risk (continued) Movement in CET1 capital Opening balance as at 1 January 2022a Profit for the period attributable to equity holders Own credit relating to derivative liabilities Ordinary share dividends paid and foreseen Purchased and foreseeable share repurchase Other equity coupons paid and foreseen Increase in retained regulatory capital generated from earnings Net impact of share schemes Fair value through other comprehensive income reserve Currency translation reserve Other reserves Increase in other qualifying reserves Pension remeasurements within reserves Defined benefit pension fund asset deduction Net impact of pensions Additional value adjustments (PVA) Goodwill and intangible assets Deferred tax assets that rely on future profitability excluding those arising from temporary differences Excess of expected loss over impairment Direct and indirect holdings by an institution of own CET1 instruments Adjustment under IFRS 9 transitional arrangements Other regulatory adjustments Decrease in regulatory capital due to adjustments and deductions Closing balance as at 31 December 2022 2022 £m 47,327 5,928 (85) (1,149) (1,500) (910) 2,284 108 (1,277) 2,032 138 1,001 (281) (811) (1,092) (141) (1,420) (472) (119) 30 (529) 9 (2,642) 46,878 Note a Opening balance as at 1January 2022 has been restated to reflect the impact of the Over-issuance of Securities.See Impact of Over-issuance of Securities on page 356 for further details. CET1 capital decreased £0.4bn to £46.9bn (December 2021: £47.3bn). CET1 capital decreased by £1.7bn as a result of regulatory changes that took effect from 1 January 2022 including the re-introduction of the 100% CET1 capital deduction for qualifying software intangible assets and a reduction in IFRS9 transitional relief due to the relief applied to the pre-2020 impairment charge reducing to 25% in 2022 from 50% in 2021 and the relief applied to the post-2020 impairment charge reducing to 75% in 2022 from 100% in 2021. £5.9bn of capital generated from profit, after absorbing the £0.6bn net of tax impact of the Over-issuance of Securities, was partially offset by distributions of £3.5bn comprising: • £1.5bn of total buybacks including the £1bn buyback announced with FY21 results and the £0.5bn buyback announced with H122 results • £1.1bn of ordinary share dividends paid and foreseen reflecting the £0.4bn half year 2022 dividend paid and a £0.8bn accrual towards a full year 2022 dividend • £0.9bn of equity coupons paid and foreseen Other significant movements in the period were: • £1.3bn reduction from decreases in the fair value of the bond portfolio through other comprehensive income • £2.0bn increase in the currency translation reserve driven by the appreciation of period end USD against GBP • £1.1bn decrease due to the net impact of pensions primarily as a result of the accelerated cash settlement to the UKRF of earlier deficit reduction contributions as well as deficit reduction payments made in 2022 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 359 Risk performance - Treasury and Capital risk (continued) Risk weighted assets Risk weighted assets (RWAs) by risk type and business As at 31 December 2022 Barclays UK Credit risk Counterparty credit risk Market risk Operation al risk Total RWAs Std £m IRB £m 6,836 54,752 Std £m 167 Settlemen t risk £m — IRB £m — CVA £m 72 Std £m 233 IMA £m — £m £m 11,023 73,083 Corporate and Investment Bank 35,738 75,413 16,814 21,449 80 3,093 13,716 22,497 27,064 215,864 Consumer, Cards and Payments 27,882 3,773 214 46 — 61 — 388 6,559 38,923 Barclays International 63,620 79,186 17,028 21,495 80 3,154 13,716 22,885 33,623 254,787 Head Office Barclays Group 2,636 6,843 — — — — — — (831) 8,648 73,092 140,781 17,195 21,495 80 3,226 13,949 22,885 43,815 336,518 As at 31 December 2021 Barclays UK 7,195 53,408 426 — — 138 100 — 11,022 72,289 Corporate and Investment Bank 29,420 64,416 15,223 19,238 105 2,289 17,306 27,308 25,359 200,664 Consumer, Cards and Payments Barclays International 20,770 50,190 2,749 67,165 215 15,438 18 19,256 — 105 21 2,310 — 17,306 57 27,365 6,391 31,750 30,221 230,885 Head Office Barclays Group 4,733 7,254 — — — — — — (1,025) 10,962 62,118 127,827 15,864 19,256 105 2,448 17,406 27,365 41,747 314,136 Movement analysis of risk weighted assets Risk weighted assets As at 31 December 2021 Book size Acquisitions and disposals Book quality Model updates Methodology and policy Foreign exchange movement a Total RWA movements As at 31 December 2022 Credit risk £m 189,945 15,371 (1,187) (2,236) — 2,961 9,019 23,928 213,873 Counterparty credit risk Market risk Operational risk Total RWAs £m £m 37,673 (3,254) 44,771 (9,707) £m 41,747 2,068 — 1,320 — 2,952 3,305 4,323 41,996 — — — — 1,770 (7,937) 36,834 — — — — — 2,068 43,815 £m 314,136 4,478 (1,187) (916) — 5,913 14,094 22,382 336,518 Note a Foreign exchange movements does not include impact of foreign exchange for modelled market risk or operational risk. Overall RWAs increased £22.4bn to £336.5bn (December 2021: £314.1bn) Credit risk RWAs increased £23.9bn: • A £15.4bn increase in book size primarily driven by an increase in lending activities across CIB, CC&P and growth in mortgages within Barclays UK • A £1.2bn decrease in acquisitions and disposals primarily driven by the disposal of Barclays' equity stake in Absa, offset by Gap portfolio acquisition • A £2.2bn decrease in RWAs due to book quality primarily driven by the benefit in mortgages from an increase in the HPI, partially offset by movements in risk parameters primarily within Barclays UK • A £3.0bn increase in methodology and policy primarily as a result of regulatory changes relating to implementation of IRB roadmap changes, partially offset by the reversal of the software intangibles benefit • A £9.0bn increase in FX primarily due to appreciation of USD against GBP Counterparty Credit risk RWAs increased £4.3bn: • A £3.3bn decrease in book size primarily driven by derivative mark-to-market movements • A £1.3bn increase in RWAs due to book quality primarily driven by movements in risk parameters within CIB • A £3.0bn increase in methodology and policy as a result of regulatory changes relating to the introduction of SA-CCR • A £3.3bn increase in FX primarily due to appreciation of USD against GBP Market risk RWAs decreased £7.9bn: • A £9.7bn decrease in book size primarily driven by a £6.7bn in Stressed Value at Risk (SVaR) model adjustment as a result of changes in portfolio composition, a £2.3bn decrease due to client and trading activities and a £0.7bn reduction in Structural FX • A £1.8bn increase in FX primarily due to appreciation of USD against GBP Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 360 Risk performance - Treasury and Capital risk (continued) Operational risk RWAs increased £2.1bn: • A £2.1bn increase in book size primarily driven by the inclusion of higher 2022 CIB income compared to 2019 Leverage ratios and exposures The Group is required to disclose a UK leverage ratio based on capital and exposure on the last day of the quarter. The Group is also required to disclose an average UK leverage ratio which is based on capital on the last day of each month in the quarter and an exposure measure for each day in the quarter. Leverage ratiosb,c As at 31 December Average UK leverage ratio Average T1 capital Average UK leverage exposure UK leverage ratio CET1 capital AT1 capital T1 capital UK leverage exposure UK leverage exposure As at 31 December Accounting assets Derivative financial instruments Derivative cash collateral Securities financing transactions (SFTs) Loans and advances and other assets Total IFRS assets Regulatory consolidation adjustments Derivatives adjustments Derivatives netting Adjustments to collateral Net written credit protection Potential future exposure (PFE) on derivatives Total derivatives adjustments SFTs adjustments Regulatory deductions and other adjustments Weighted off-balance sheet commitments Qualifying central bank claims Settlement netting UK leverage exposure 2022 £m 4.8 % 60,865 1,280,972 Restateda 2021 £m 4.9 % 59,739 1,229,041 5.3 % 5.2 % 46,878 13,224 60,102 47,327 12,179 59,506 1,129,973 1,137,904 2022 £m 2021 £m 302,380 69,048 189,637 952,634 1,513,699 262,572 58,177 170,853 892,683 1,384,285 (8,278) (3,665) (256,309) (52,715) 16,190 84,168 (208,666) (236,881) (50,929) 15,509 137,291 (135,010) 24,203 24,544 (21,447) (20,219) 124,169 115,047 (272,321) (210,134) (21,386) (16,944) 1,129,973 1,137,904 Notes a Capital and leverage metrics as at 31 December 2021 have been restated to reflect the impact of the Over-issuance of Securities. See Impact of Over-issuance of Securities on page 356 for further details. b Fully loaded average UK leverage ratio was 4.7%, with £60.1bn of T1 capital and £1,280.2bn of leverage exposure. Fully loaded UK leverage ratio was 5.3%, with £59.4bn of T1 capital and £1,129.3bn of leverage exposure. Fully loaded UK leverage ratios are calculated without applying the transitional arrangements of the CRR as amended by CRR II. c Capital and leverage measures are calculated applying the transitional arrangements of the CRR as amended by CRR II. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 361 Risk performance - Treasury and Capital risk (continued) The UK leverage ratio increased to 5.3% (December 2021: 5.2%) primarily due to a £7.9bn decrease in the leverage exposure and a £0.6bn increase in Tier 1 capital. The UK leverage exposure decreased to £1,130.0bn (December 2021: £1,137.9bn) largely due to the following movements: • £53.1bn decrease in PFE on derivatives largely driven by increased netting eligibility due to the introduction of SA-CCR • £42.0bn decrease in cash at central banks net of the qualifying central bank claims exemption primarily due to the matching of allowable liabilities rather than deposits introduced under the UK leverage ratio framework and a decrease in Swiss Franc cash assets • £33.0bn increase in loans and advances and other assets (excluding cash and settlement balances which are subject to regulatory exemptions) primarily due to increased lending • £29.5bn increase in derivative financial instruments post additional regulatory netting and adjustments for cash collateral primarily driven by market volatility, increased activity in CIB and the application of a 1.4 multiplier introduced under SA-CCR • £18.4bn increase in SFTs primarily driven by increased reverse repurchase activity in CIB The average UK leverage ratio decreased to 4.8% (December 2021: 4.9%) due to a £51.9bn increase in average leverage exposure partially offset by a £1.1bn increase in average T1 capital. The average UK leverage exposure increased to £1,281.0bn (December 2021: £1,229.0bn) mainly driven by increased activity during the year that was partially offset by the impact of regulatory changes that came into effect from 1 January 2022 under the UK leverage ratio framework. Minimum requirement for own funds and eligible liabilities MREL requirements including buffersa,b,c,d Requirement (£m): Restateda Restateda Requirement (%): As at 31.12.2022 As at 31.12.2021 As at 31.12.2022 As at 31.12.2021 Requirement based on RWAs Requirement based on UK leverage exposured 97,387 91,213 77,302 93,975 28.9 % 8.1 % Own funds and eligible liabilitiesa,c CET1 capital AT1 capital instruments and related share premium accountse T2 capital instruments and related share premium accountse Eligible liabilities Total Barclays PLC (the Parent company) own funds and eligible liabilities Total RWAs Total UK leverage exposured £m 46,878 13,224 8,875 43,851 112,828 336,518 1,129,973 24.6 % 6.9 % Restateda £m 47,327 12,179 8,626 39,889 108,021 314,136 1,356,191 Restateda Own funds and eligible liabilities ratios as a percentage of:a Total RWAs Total UK leverage exposured As at 31.12.2022 As at 31.12.2021 33.5 % 10.0 % 34.4 % 8.0 % Notes a Opening balance as at 1 January 2022 has been restated to reflect the impact of the Over-issuance of Securities. See Impact of Over-issuance of Securities on page 356 for further details. b Minimum requirement excludes the confidential institution-specific PRA buffer. c CET1, T1 and T2 capital, and RWAs are calculated applying the transitional arrangements of the CRR as amended by CRR II including IFRS 9 transitional arrangements. d As at 31 December 2021, MREL requirements were on a CRR leverage basis which, from 1 January 2022, was no longer applicable for UK banks. e Includes other AT1 capital regulatory adjustments and deductions of £60m (December 2021: £80m), and other T2 credit risk adjustments and deductions of £125m (December 2021: £87m). As at 31 December 2022, Barclays PLC (the Parent company) held £112.8bn of own funds and eligible liabilities equating to 33.5% of RWAs. This was in excess of the Group's MREL requirement, excluding the PRA buffer, to hold £97.4bn of own funds and eligible liabilities equating to 28.9% of RWAs. The Group remains above its MREL regulatory requirement including the PRA buffer. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 362 Risk performance - Treasury and Capital risk (continued) Foreign exchange risk (audited) The Group is exposed to two sources of foreign exchange risk. a) Transactional foreign currency exposure Transactional foreign currency exposures represent exposure on banking assets and liabilities, denominated in currencies other than the functional currency of the transacting entity. The Group’s risk management policies are designed to prevent the holding of significant open positions in foreign currencies outside the trading portfolio managed by Barclays International which is monitored through VaR. Banking book transactional foreign exchange risk outside of Barclays International is monitored on a daily basis by the market risk function and minimised by the businesses. b) Translational foreign exchange exposure The Group’s investments in overseas subsidiaries and branches create capital resources denominated in foreign currencies, principally USD and EUR. Changes in the GBP value of the net investments due to foreign currency movements are captured in the currency translation reserve, resulting in a movement in CET1 capital. The Group’s strategy is to minimise the volatility of the capital ratios caused by foreign exchange movements, by matching the CET1 capital movements to the revaluation of the Group’s foreign currency RWA exposures. Functional currency of operations (audited) 31 December 2022 USD EUR JPY Other currencies Total 31 December 2021 USD EUR JPY Other currencies Total Foreign currency net investments Borrowings which hedge the net investments Derivatives which hedge the net investments Structural currency exposures pre- economic hedges Economic hedges Remaining structural currency exposures £m £m £m £m £m £m 27,441 9,776 689 3,330 (7,363) (5,461) — — 41,236 (12,824) (2,086) 17,992 (3) (197) (1,676) (3,962) 4,312 492 1,654 24,450 25,958 8,453 614 2,448 (7,707) (3,408) (97) — (2,356) 15,895 (3) — (64) 5,042 517 2,384 (8,688) (283) — (279) (9,250) (7,389) (268) — — 9,304 4,029 492 1,375 15,200 8,506 4,774 517 2,384 37,473 (11,212) (2,423) 23,838 (7,657) 16,181 Economic hedges relate to exposures arising on foreign currency denominated preference share and AT1 instruments. These are accounted for at historical cost under IFRS and do not qualify as hedges for accounting purposes. The gain or loss arising from changes in the GBP value of these instruments is recognised on redemption in retained earnings. During 2022, total structural currency exposure net of hedging instruments decreased by £1.0bn to £15.2bn (2021: £16.2bn). Foreign currency net investments increased by £3.7bn to £41.2bn (2021: £37.5bn) driven predominantly by a £1.5bn increase in USD, £1.3bn increase in EUR and £0.9bn increase in other currencies. The hedges associated with these investments increased by £3.2bn to £16.8bn (2021: £13.6bn). Pension risk review The UK Retirement Fund (UKRF) represents approximately 96% (2021: 97%) of the Group’s total retirement benefit obligations globally. As such this risk review section focuses exclusively on the UKRF. The UKRF is closed to new entrants and there is no new final salary benefit being accrued. Existing active members accrue a combination of a cash balance benefit and a defined contribution element. Pension risk arises as the market value of the pension fund assets may decline, investment returns may reduce or the estimated value of the pension liabilities may increase. Refer to the Management of pension risk section in the Barclays PLC Pillar 3 Report 2022 (unaudited) for more information on how pension risk is managed. Assets The Trustee Board of the UKRF defines its overall long-term investment strategy with investments across a broad range of asset classes. This results in an appropriate mix of return seeking assets as well as liability matching assets to better match future pension obligations. The two largest market risks within the asset portfolio are credit spread and growth assets. The split of scheme assets is shown within Note 33 to the financial statements. The fair value of the UKRF assets was £24.7bn as at 31 December 2022 (2021: £34.7bn). Liabilities The UKRF retirement benefit obligations are a series of future cash flows with relatively long duration. On an IAS 19 basis these cash flows are sensitive to changes in the expected long-term price inflation rate (RPI) and the discount rate (GBP AA corporate bond yield): • An increase in long-term expected inflation corresponds to an increase in liabilities; Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 363 Risk performance - Treasury and Capital risk (continued) • A decrease in the discount rate corresponds to an increase in liabilities. Pension risk is generated through the Group’s defined benefit schemes and this risk is set to reduce over time as the main defined benefit scheme is closed to new entrants. The chart below outlines the shape of the UKRF’s liability cash flow profile as at 31 December 2022 that takes account of the future inflation indexing of payments to beneficiaries. The majority of the cash flows (approximately 95%) fall between 0 and 40 years, peaking between 11 and 20 years and reducing thereafter. The shape may vary depending on changes to inflation and longevity expectations and any members who elect to transfer out. Transfers out will bring forward the liability cash flows. For more detail on the UKRF’s financial and demographic assumptions, see Note 33 to the financial statements. Proportion of liability cash flows (%) Net IAS 19 position (£bn) n 0-10 years n 11-20 years n 21-30 years n 31-40 years n 41-50 years n 51+ years 28.6 31.4 23.2 12.1 4.3 0.5 6 5 4 3 2 1 0 The graph above shows the evolution of the UKRF’s net IAS 19 position over the last two years. During 2022 the increase in the IAS 19 pension surplus was primarily driven by scheduled deficit reduction contributions, including payments made to unwind Heron transactions. The significant increase in interest rates over 2022 has had a broadly neutral impact on the net funding position. Benefit obligation reductions due to higher discount rates have been broadly offset by the changes in the fair value of scheme assets. Higher realised inflation over the year had a negative impact by increasing the projected liabilities, which was partially offset by updates to the demographic assumptions. Refer to Note 33 to the financial statements for the sensitivity of the UKRF to changes in key assumptions. Risk measurement In line with Barclays’ risk management framework the assets and liabilities of the UKRF are modelled within a VaR framework to show the volatility of the pension position at a total portfolio level. This enables the risks, diversification and liability matching characteristics of the UKRF obligations and investments to be adequately captured. VaR is measured and monitored on a monthly basis. Risks are reviewed and reported regularly at forums including the Board Risk Committee, the Group Risk Committee and the Pension Executive Board. The VaR model takes into account the valuation of the liabilities on an IAS 19 basis (see Note 33 to the financial statements). The Trustee receives quarterly VaR measures on a funding basis. The pension liability is also sensitive to post-retirement mortality assumptions which are reviewed regularly (See Note 33 to the financial statements). To mitigate part of this risk the UKRF has entered into longevity swaps hedging approximately three quarters of current pensioner liabilities. In addition, the impact of pension risk to the Group is taken into account as part of the stress testing process. Stress testing is performed internally on at least an annual basis. The UKRF exposure is also included as part of regulatory stress tests. Barclays defined benefit pension schemes affects capital in two ways: • An IAS 19 deficit is treated as a liability on the Group’s balance sheet. Movement in a deficit due to remeasurements, including actuarial losses, are recognised immediately through Other Comprehensive Income and as such reduces shareholders’ equity and CET1 capital. An IAS 19 surplus is treated as an asset on the balance sheet and increases shareholders’ equity; however, it is deducted for the purposes of determining CET1 capital. • In the Group’s statutory balance sheet an IAS 19 surplus or deficit is partially offset by a deferred tax liability or asset respectively. These may or may not be recognised for calculating CET1 capital depending on the overall deferred tax position of the Group at the particular time. Pension risk is taken into account in the Pillar 2A capital assessment undertaken by the PRA at least annually. The Pillar 2A requirement forms part of the Group’s Overall Capital Requirement for CET1 capital, Tier 1 capital and total capital. More detail on minimum regulatory requirements can be found in the Overall capital requirements section. 1.77bn3.82bn4.63bnDec 2020Dec 2021Dec 2022 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 364 Risk performance - Treasury and Capital risk (continued) Summary of performance in the period • NII sensitivity to a -25bp rates shock has decreased year on year due to the timing impact of customer rate changes following the rate shock, combined with changes in balance sheet composition. Net interest income sensitivity The table below shows a sensitivity analysis on pre-tax net interest income for non-traded financial assets and liabilities, including the effect of any hedging. This analysis is not a forward guidance on NII and is intended as a quantification of risk exposure utilising the Net Interest Income (NII) metric as described on page 162 of the Barclays PLC Pillar 3 Report 2022 (unaudited), which includes documentation of the main model assumptions. Interest rate risk in the banking book All disclosures in this section are unaudited unless otherwise stated. Overview The treasury and capital risk framework covers interest rate sensitive exposures held in the banking book, mostly relating to accrual accounted and FVOCI instruments. The potential volatility of net interest income is measured by an Annual Earnings at Risk (AEaR) metric which is monitored regularly and reported to senior management and the Barclays PLC Board Risk Committee as part of the limit monitoring framework. For further detail on the interest rate risk in the banking book governance and framework refer to pages 160 to 162 of the Barclays PLC Pillar 3 Report 2022 (unaudited). Key metrics AEaR -73m AEaR across the Group from a -25bps shock to forward interest rate curves. Net interest income sensitivity (AEaR) by business unit (audited) As at 31 December 2022 +25bps -25bps 2021 +25bps -25bps Notes Barclays UK Barclays International Head Office £m £m £m 15 (59) (2) (54) 25 (29) 68 (99) (15) 15 5 (5) Total £m 25 (73) 71 (158) The Group’s customer banking book hedging activity is risk reducing from an NII sensitivity perspective. The hedges in place remove interest rate risk and smooth income over the medium term. The NII sensitivity for the Group at 31 December 2022 without hedging in place for +/-25bp rate shocks would be £233m/£(281)m respectively. NII sensitivity asymmetry is due to the timing impact of customer rate changes following the rate shock and also due to changes in the balance sheet composition. Reduction in overall NII sensitivity in both shock scenarios is due to the current rate levels removing the impact of embedded floors on product margins. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 365 Risk performance - Treasury and Capital risk (continued) Net interest income sensitivity (AEaR) by currency (audited) As at 31 December GBP USD EUR Other currencies Total 2022 2021 +25 basis points -25 basis points +25 basis points -25 basis points £m (6) 43 3 (15) 25 £m (40) (45) (4) 16 (73) £m 14 58 5 (6) 71 £m (85) (62) (15) 4 (158) Analysis of equity sensitivity Equity sensitivity measures the overall impact of a +/-25bps movement in interest rates on retained earnings, FVOCI, cash flow hedge reserves and pensions. For non-NII items a DV01 metric is used, which is an indicator of the shift in value for a 1bp movement in the yield curve. Analysis of equity sensitivity (audited) As at 31 December Net interest income Taxation effects on the above Effect on profit for the year As percentage of net profit after tax Effect on profit for the year (per above) Fair value through other comprehensive income reserve Cash flow hedge reserve Taxation effects on the above Effect on equity As percentage of equity 2022 2021 +25 basis points -25 basis points +25 basis points £m 25 (5) 20 £m (73) 15 (58) £m 71 (15) 56 0.3% (1.0%) 0.8% 20 (291) (774) 288 (757) (1.1%) (58) 302 774 (291) 727 1.0% 56 (479) (859) 361 (921) (1.3%) -25 basis points £m (158) 33 (125) (1.7%) (125) 408 859 (342) 800 1.2% Movements in the FVOCI reserve impact CET1 capital. However, movements in the cash flow hedge reserve and pensions remeasurement reserve recognised in FVOCI do not affect CET1 capital. Volatility of the FVOCI portfolio in the liquidity pool Changes in value of FVOCI exposures flow directly through capital via the FVOCI reserve. The volatility of the value of the FVOCI investments in the liquidity pool is captured and managed through a value measure rather than an earning measure, i.e. non-traded market risk VaR. Although the underlying methodology to calculate the non-traded VaR is identical to the one used in traded management VaR, the two measures are not directly comparable. The non-traded VaR represents the volatility to capital driven by the FVOCI exposures. These exposures are in the banking book and do not meet the criteria for trading book treatment. Analysis of volatility of the FVOCI portfolio in the liquidity pool For the year ended 31 December Non-traded market value at risk (daily, 95%) Average £m 48 2022 High £m 62 Low £m 35 Average £m 51 2021 High £m 62 Low £m 34 Value at risk decreased in the first half of the year driven by a reduction in interest rate risk positioning. This was partially offset by an increase in H2 due to elevated market volatility. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 366 Risk performance - Operational risk Operational risk All disclosures in this section are unaudited unless otherwise stated. Key metrics 84% of the Group’s net reportable operational risk events had a loss value of £50,000 or less 86% of events by number are due to External Fraud 46% of losses are from events aligned to External Fraud 53% of losses are from events aligned to Execution, Delivery and Process Management Summary of performance in the period During 2022, total operational risk lossesa remained stable at £159m (2021: £163m) while the number of recorded events for 2022 (2,965) increased from the level for 2021 (2,724). The total operational risk losses for the year were mainly driven by events falling within the Execution, Delivery & Process Management and External Fraud BASEL Event Type categories, which tend to be high volume but low impact events. Operational risk profile Within operational risk, there are a large number of smaller value risk events. In 2022, 84% (2021: 84%) of the Group’s reportable operational risk events by volume had a value of less than £50,000 each. Cumulatively, events under this £50,000 threshold accounted for only 31% (2021: 28%) of the Group’s total net operational risk losses. A small proportion of operational risk events have a material impact on the financial results of the Group. Overview Operational risks are inherent in the Group’s business activities and it is not cost effective or possible to attempt to eliminate all operational risks. The Operational Risk Framework is therefore focused on identifying operational risks, assessing them and managing them within the Group’s approved risk appetite. The Operational Risk principal risk comprises the following risks: Change Delivery Management Risk; Data Management Risk; Financial Reporting Risk; Fraud Risk; Information Security Risk; Operational Recovery Planning Risk; Payments Process Risk; People Risk; Physical Security Risk; Premises Risk; Risk Reporting; Supplier Risk; Tax Risk; Technology Risk and Transaction Operations Risk. The operational risk profile is also informed by a number of connected risks: Cyber, Data, and Resilience. These represent threats to the Group that extend across multiple risk types, and therefore require an integrated risk management approach. For definitions of these risks refer to the Operational Risk section of the Barclays PLC Pillar 3 Report 2022. To provide complete coverage of the potential adverse impacts on the Group arising from operational risk, the operational risk taxonomy extends beyond the risks listed above to cover operational risks associated with other principal risks too. This section provides an analysis of the Group’s operational risk profile, including events above the Group’s reportable threshold, which have had a financial impact in 2022. The Group’s operational risk profile is informed by bottom-up risk assessments undertaken by each business unit and top-down qualitative review for each risk type. Fraud, Transaction Operations, Information Security and Technology continue to be highlighted as key operational risk exposures. For information on conduct risk events, see the conduct risk section. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 367 Risk performance - Operational risk (continued) The analysis below presents the Group’s operational risk events by Basel event category: Operational risk events by BASEL event categorya % of total risk events by count % of total risk events by value Internal fraud Internal fraud 2022 2021 2022 2021 External fraud External fraud 2022 2021 2022 2021 Execution delivery and process management Execution delivery and process management 2022 2021 2022 2021 Employment practices and workplace safety Employment practices and workplace safety 2022 2021 2022 2021 Damage to physical assets Damage to physical assets 2022 2021 2022 2021 Clients, products and business practices Clients, products and business practices 2022 2021 2022 2021 Business disruption and system failures Business disruption and system failures 2022 2021 2022 2021 Note a The data disclosed includes operational risk losses for reportable events impacting the Barclays Bank UK Group business areas, having impact of > £10,000 and excludes events that are conduct or legal risk, aggregate and boundary events. A boundary event is an operational risk event that results in a credit risk impact. Due to the nature of risk events that keep evolving, prior year losses are updated. • External Fraud remains the category with the highest frequency of events at 86% of total events in 2022 (2021: 84%). Impacts from events arising from External Fraud decreased in 2022 to £73m (2021: £82m) and accounted for 46% of total 2022 losses (2021: 51%). In this category, high volume, low value events are driven by transactional fraud often related to debit and credit card usage. • Execution, Delivery and Process Management impacts increased to £84m (2021: £77m) and accounted for 53% (2021: 47%) of total operational risk losses. The events in this category are typical of the banking industry as a whole where high volumes of transactions are processed on a daily basis, mapping mainly to Barclays Transaction Operations risk type. The overall frequency of events in this category remained stable at 14% of total events by volume (2021: 14%). Investment continues to be made in improving the control environment across the Group. Particular areas of focus include new and enhanced fraud prevention systems and tools to combat the increasing level of fraud attempts being made whilst minimising disruption to genuine transactions. Fraud remains an industry wide threat and the Group continues to work closely with external partners on various prevention initiatives. Operational Resilience remains a key area of focus for the Group, having been reinforced in recent years due to potential operational disruption from the COVID-19 pandemic. The Group continues to strengthen its resilience approach across its most important business services to improve recoverability and assurance thereof by reviewing scenarios based on current global climates. Operational risk associated with cybersecurity remains a top focus for the Group. The sophistication of threat actors continues to grow as noted by multiple external risk events observed throughout the year. Ransomware attacks across the global Barclays supplier base were observed and we worked closely with the affected suppliers to manage potential impacts to the Group and its clients and customers. The Group’s cybersecurity events were managed within its risk tolerances and there were no material loss events associated with cybersecurity recorded within the event categories above. For further information, refer to the operational risk management section. 0.2085.684.113.6140.30.30.1000.10.31.50.7045.950.652.747.20.30.10.200.10.20.21.9Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 368 Risk performance - Model risk, Conduct risk, Reputation risk and Legal risk Model risk, Conduct risk, Reputation risk and Legal risk All disclosures in this section are unaudited unless otherwise stated. Model risk Barclays is committed to continuously improving model risk management and made a number of enhancements in 2022, including: • Improved transparency and oversight of models risk through implementation of upgrades to model risk governance structure. • Upgraded model risk standards to improve readability, consistency and framework cohesiveness. • Refreshed the model risk controls suite, providing additional clarity on several controls and ensuring evidentiary requirements are aligned to MRM’s BAU processes. • Enhanced the Group Model Risk Appetite Statement, incorporating model quality and uncertainty around a model’s output. • Strengthened validation practices through expansion of model-level validation procedures, implementation of an on-going validation training program and embedment of a validation quality assurance process. • Executed on hiring strategy by expanding the model risk team to support a wider range of model validation demand and newly emerging model risks. • Progressed model inception validation by bringing more than 95% of model risk (by model output) into compliance with the model risk management framework. Conduct risk Barclays is committed to continuing to drive the right culture throughout all levels of the organisation. The Group will continue to enhance effective management of conduct risk and appropriately consider the relevant tools, governance and management information in decision-making processes. Focus on management of conduct risk is ongoing and, alongside other relevant business and control management information, the Trading Entity conduct risk dashboard is a key component of this. The Group continues to review the role and impact of conduct risk events and issues in remuneration decisions at both the individual and business level. In 2022, the Group maintained focus on new and heightened inherent conduct risks, including those relating to the cost of living crisis, and continues to monitor these on an ongoing basis. Businesses have continued to assess the potential customer, client and market impacts of strategic change. As part of the 2022 medium-term planning process, material conduct risks associated with strategic and financial plans were assessed. Throughout 2022, conduct risks were raised by each business area for consideration by relevant Board level committees. These committees reviewed the risks raised and whether management’s proposed actions were appropriate to mitigate the risks effectively. The Group continued to incur costs in relation to litigation and conduct matters, refer to Note 26 Legal, competition and regulatory matters and Note 24 Provisions for further details. Costs include customer redress and remediation, as well as fines and settlements. Resolution of these matters remains a necessary and important part of delivering the Group’s strategy and an ongoing commitment to improve oversight of culture and conduct. Trading Entity conduct risk dashboards, setting out key indicators in relation to conduct and risk, are provided to the respective Board Risk Committees and senior management. These continue to be evolved and enhanced to allow effective oversight and decision-making. Work is ongoing to enhance the Conduct Risk Control Environment in a timely and effective manner to ensure the Group operates within Risk Appetite. The tolerance adherence is assessed by the business areas through key indicators and reported to the relevant Trading Entity Board Committees as part of the conduct risk dashboard governance process. The Group remains focused on the continuous improvements being made to manage risk effectively with an emphasis on enhancing governance and management information to identify risk at earlier stages. Reputation risk Barclays is committed to identifying reputation risks and issues as early as possible and managing them appropriately. At a Group level throughout 2022, reputation risks and issues were overseen by the Board which reviews the processes and policies which Barclays identifies and manages reputation risk. Within the Barclays Bank UK Group and the Barclays Bank Group reputation risks and issues were overseen by the respective risk and Board risk committees. The top live and emerging reputation risks and issues within the Barclays Bank UK Group and the Barclays Bank Group are included within an over-arching quarterly report at the respective Board level. The Board reviewed risks escalated by the businesses and considered whether management’s proposed actions, for example attaching conditions to proposed client transactions or increased engagement with impacted stakeholders, were appropriate to mitigate the risks effectively. The Board also received regular updates with regard to key reputation risks and issues, including: Barclays' response to the conflict in Ukraine; Barclays’ association with sensitive sectors; access to banking; lending practices and the resilience of key Barclays systems and processes. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 369 Risk performance - Model risk, Conduct risk, Reputation risk and Legal risk (continued) The Group continued to incur costs in relation to litigation and conduct matters, refer to Note 26 Legal, competition and regulatory matters and Note 24 Provisions for further details. Costs include customer redress and remediation, as well as fines and settlements. Resolution of these matters remains an ongoing commitment to improve oversight of culture and conduct and management of reputation risks. As part of Barclays 2022 Medium Term Planning process, material reputation risks associated with strategic and financial plans were also assessed. Legal risk The Group remains committed to continuous improvements in managing legal risk effectively. At the end of 2022, enhancements were made to the Group- wide legal risk management framework primarily relating to the Legal Function's responsibility for the identification of legal risks and the escalation of legal risk as necessary. Other improvements during 2022 included a review and update of the supporting legal risk policies, standards and mandatory training, reinforced by ongoing engagement with and education of the Group’s businesses and functions by Legal Function colleagues. Legal risk tolerances and legal risk appetite have also been reviewed. Tolerances adherence is assessed through key indicators, which are also used to evaluate the legal risk profile and are reviewed, at least annually, through the relevant risk and control committees. Mandatory controls to manage legal risks are set out in the legal risk standards and are subject to ongoing monitoring. The changes to the legal risk management framework referred to above are intended to provide continuing improvements to the effectiveness of the legal risk control environment as they are implemented through 2023. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 370 Supervision and regulation Supervision of the Group The Group’s operations, including its overseas branches, subsidiaries and associates, are subject to a large number of rules and regulations applicable to the conduct of banking and financial services business in each of the jurisdictions in which the Group operates. These apply to business operations, impact financial returns and include capital, leverage and liquidity requirements, authorisation, registration and reporting requirements, restrictions on certain activities, conduct of business regulations and many others. Regulatory developments impact the Group globally. We focus particularly on UK, US and EU regulation due to the location of the Group’s principal areas of business. Regulations elsewhere may also have a significant impact on the Group due to the location of its branches, subsidiaries and, in some cases, clients. For more information on the risks related to the supervision and regulation of the Group, including regulatory change, see the material existing and emerging risk entitled ‘Regulatory Change agenda and impact on Business Model’ in the Material existing and emerging risks section. Supervision in the UK In the UK, day-to-day regulation and supervision of the Group is divided between the Prudential Regulation Authority (PRA) (a division of the Bank of England (BoE)) and the Financial Conduct Authority (FCA). In addition, the Financial Policy Committee (FPC) of the BoE has influence on the prudential requirements that may be imposed on the banking system through its powers of direction and recommendation. Certain members of the Group are also subject to regulatory initiatives undertaken by the UK Payment Systems Regulator (PSR), as a participant in payment systems regulated by the PSR. Barclays Bank PLC and Barclays Bank UK PLC are authorised with permission to accept deposits, amongst other things, and subject to prudential supervision by the PRA and subject to conduct regulation and supervision by the FCA. The Barclays Bank Group is subject to prudential supervision on a solo-consolidated basis and the Barclays Bank UK Group is subject to prudential supervision on a group consolidated basis and on an individual basis. The Group is also subject to prudential supervision by the PRA on a group consolidated basis. Barclays PLC has been approved by the PRA as a financial holding company. Barclays Capital Securities Limited is authorised and subject to prudential supervision by the PRA as a PRA- designated investment firm and subject to conduct regulation and supervision by the FCA. Barclays Execution Services Limited is an appointed representative of Barclays Bank PLC, Barclays Bank UK PLC and Clydesdale Financial Services Limited. The PRA’s supervision of the Group is conducted through a variety of regulatory tools, including the collection of information by way of prudential returns or cross-firm reviews, reports obtained from skilled persons, regular supervisory visits to firms and regular meetings with management and directors to discuss issues such as strategy, governance, financial resilience, operational resilience, risk management, and recovery and resolution. Further, the BoE, as the UK resolution authority, informs prudential requirements and sets requirements for the Group relating to resolution preparedness. The FCA’s supervision of the UK firms in the Group is carried out through a combination of proactive engagement, regular thematic work and project work based on the FCA’s sector assessments, which analyse the different areas of the market and the risks that may lie ahead. The FCA and the PRA also apply the Senior Managers and Certification Regime (the SMCR) which imposes a regulatory approval, individual accountability and fitness and propriety framework in respect of senior or key individuals within relevant firms. FCA supervision has focused on conduct risk and customer/client outcomes, including product design, customer behaviour, market operations, fair pricing, affordability, access to cash, and fair treatment of vulnerable customers. PRA supervision has focused on financial resilience, credit risk management, Board effectiveness, operational resilience, climate risk and resolvability, where resolvability is reviewed in conjunction with the Resolution Directorate (a separate division of the BoE). Both the PRA and the FCA apply standards that generally either anticipate or go beyond requirements established by global or EU standards, whether in relation to capital, leverage and liquidity, resolvability and resolution or matters of conduct. The UK is in the process of reviewing and revising the EU legislation that was onshored into English law following the UK's departure from the EU. This process is at a very early stage, but based on current indications, it is not expected to result in a materially different standard of regulation with respect to PRA and FCA standards. The medium term outlook for the costs and impact of operating under the post-Brexit UK regime remains unclear until details of any changes are confirmed. There is potential for an increase in regulatory implementation costs in the near term to adapt systems and controls. Both the PRA and the FCA have assessed the impact of COVID-19 and Brexit on UK financial markets and customers as well as the orderly transition away from LIBOR and have issued guidance for regulated entities accordingly. In each case, the guidance focussed on customer / client outcomes and conduct risk, as well as ensuring fair and orderly markets . Supervision in the EU The Group’s operations in Europe are authorised and regulated by a combination of its home regulators and host regulators in the European countries where the Group operates. Barclays Bank Ireland PLC is licensed as a credit institution by the Central Bank of Ireland (CBI) and is designated as a significant institution falling under direct supervision on a solo basis by the European Central Bank (ECB) for prudential purposes. Barclays Bank Ireland PLC’s EU branches are supervised by the ECB and are also subject to direct supervision for local conduct purposes by national supervisory authorities in the jurisdictions where they are established. Barclays Bank Ireland PLC is subject to the requirements set by the Single Resolution Board (SRB) as the host resolution authority of Barclays Bank Ireland PLC. Barclays Bank Ireland PLC is also subject to supervision by the CBI as home state or competent authority under various EU financial services directives and regulations. The Group provides the majority of its cross-border banking and investment services to EEA clients via Barclays Bank Ireland PLC. Additionally, in certain EEA Member States, Barclays Bank PLC and Barclays Capital Securities Limited (BCSL) have cross-border licences to enable them to continue to conduct a limited range of activities, including accessing EEA trading venues and interdealer trading. Barclays Bank PLC also has a Paris branch (to facilitate access to Target 2), which is regulated by the ACPR. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 371 Supervision and regulation (continued) Supervision in the US Barclays PLC, Barclays Bank PLC and its New York branch, and Barclays Bank PLC’s US subsidiaries are subject to a comprehensive regulatory framework involving numerous statutes, rules and regulations in the US. For example, the Group’s US activities and operations are subject to supervision and regulation by the Board of Governors of the Federal Reserve System (FRB), as well as additional supervision, requirements and restrictions imposed by other federal and state regulators and self-regulatory organisations (SROs). In some cases, US requirements may impose restrictions on the Group’s global activities, in addition to its activities in the US. Barclays PLC, Barclays Bank PLC, Barclays US Holdings Limited (BUSHL), Barclays US LLC (BUSL), and Barclays Group US Inc. (BGUS) are regulated as bank holding companies (BHCs) by the FRB. BUSL is the Group’s ultimate US holding company that holds substantially all of the Group’s US subsidiaries (including Barclays Capital Inc. (BCI) and Barclays Bank Delaware). BUSL is subject to requirements in respect of capital adequacy, capital planning and stress testing, risk management and governance, liquidity, leverage limits, large exposure limits, activities restrictions and financial regulatory reporting. Barclays Bank PLC’s New York branch is also subject to enhanced prudential standards relating to, among other things, liquidity and risk management. Barclays PLC, Barclays Bank PLC, BUSHL and BUSL have financial holding company (FHC) status under the Bank Holding Company Act of 1956. FHC status allows these entities to engage in a variety of financial and related activities, directly or through subsidiaries, including underwriting, dealing and market making in securities. Failure to maintain FHC status could result in increasingly stringent penalties and, ultimately, in the closure or cessation of certain operations in the US. In addition to oversight by the FRB, Barclays Bank PLC’s New York branch and many of the Group’s subsidiaries are regulated by additional US authorities based on the location or activities of those entities. The New York branch of Barclays Bank PLC is subject to supervision and regulation by the New York State Department of Financial Services (NYSDFS). Barclays Bank Delaware, a Delaware chartered bank, is subject to supervision and regulation by the Delaware Office of the State Bank Commissioner, the Federal Deposit Insurance Corporation (FDIC), the FRB and the Consumer Financial Protection Bureau (CFPB). The deposits of Barclays Bank Delaware are insured by the FDIC, up to applicable limits. Barclays PLC, Barclays Bank PLC, BUSHL, BUSL, and BGUS are required to act as a source of strength for Barclays Bank Delaware. This could, among other things, require these entities to provide capital support to Barclays Bank Delaware if it fails to meet applicable regulatory capital requirements. The Group’s US securities broker/dealer and investment banking operations are conducted primarily through BCI, and are also subject to ongoing supervision and regulation by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and other government agencies and SROs under US federal and state securities laws. BCI is also registered as a Futures Commission Merchant with the Commodity Futures Trading Commission (CFTC), through which the Group conducts its US futures and options on futures business, including client clearing operations, which are subject to ongoing supervision and regulation by the CFTC, the National Futures Association and other SROs. Under the US framework for regulating swaps and security-based swaps established under Title VII of the Dodd- Frank Act, the CFTC has regulatory authority over swaps, the SEC has regulatory authority over security-based swaps, and the CFTC and SEC jointly regulate mixed swaps (as such terms are defined in the relevant legislation). Accordingly, the Group’s activities related to US swaps and security-based swaps are principally conducted by Barclays Bank PLC and are subject to ongoing supervision and regulation by the CFTC and the SEC, respectively. Barclays Bank PLC is provisionally registered as a swap dealer with the CFTC and conditionally registered as a Security-based swap dealer with the SEC. Barclays Bank PLC is also subject to the FRB swaps rules with respect to margin and capital requirements. In addition, Barclays Bank Ireland PLC is provisionally registered as a swap dealer with the CFTC and is subject to the FRB swaps rules with respect to margin and capital. Supervision in Asia Pacific The Group’s operations in Asia Pacific are supervised and regulated by a broad range of national banking and financial services regulators. Prudential regulation Certain Basel III standards were implemented in EU law through the Capital Requirements Regulation (CRR) and the Capital Requirements Directive IV (CRD IV), as amended by CRR II and CRD V. These standards were retained in the UK regulatory framework via a series of onshoring instruments as part of the UK’s withdrawal from the European Union. Beyond the minimum standards required by CRR, the PRA has expected the Group, in common with other major UK banks and building societies, to meet a 7% Common Equity Tier 1 (CET1) ratio at the level of the consolidated group since 1 January 2016. The 7% CET1 ratio is made up of a Pillar 1 minimum capital requirement of 4.5% CET1 and a capital conservation buffer which must be met entirely with CET1 capital. Global systemically important banks (G- SIBs), such as the Barclays Group, are subject to a number of additional prudential requirements, including the requirement to hold additional loss- absorbing capacity and additional capital buffers above the level required by Basel III standards. The level of the G-SIB buffer is set by the Financial Stability Board (FSB) according to a bank’s systemic importance and can range from 1% to 3.5% of risk- weighted assets (RWAs). The G-SIB buffer must be met with CET1. In November 2022, the FSB published an update to its list of G-SIBs, maintaining the 1.5% G-SIB buffer that applies to the Group. The Group is also subject to a ‘combined buffer requirement’ consisting of (i) a capital conservation buffer of 2.5%, and (ii) a countercyclical capital buffer (CCyB). The CCyB is based on rates determined by the regulatory authorities in each jurisdiction in which the Group maintains exposures. In March 2020, the FPC cut the UK CCyB rate to 0% with immediate effect in order to support the supply of credit expected as a result of the COVID-19 pandemic. In December 2021, the FPC raised the UK CCyB to 1% with effect from 13 December 2022. In July 2022, the FPC announced that it would raise the UK CCyB rate to 2% with effect from 5 July 2023. The PRA requires UK firms to hold additional capital to cover risks which the PRA assesses are not fully captured by the Pillar 1 capital requirement. The PRA sets this additional capital requirement (Pillar 2A) at least annually, derived from each firm’s individual capital guidance. Under current PRA rules, the Pillar 2A must be met with at least 56.25% CET1 capital and no more than 25% tier 2 capital. In addition, Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 372 Supervision and regulation (continued) the capital that firms use to meet their minimum requirements (Pillar 1 and Pillar 2A) cannot be counted towards meeting the combined buffer requirement. The PRA may also impose a confidential 'PRA buffer' to cover risks over a forward looking planning horizon, including with regard to firm-specific stresses or management and governance weaknesses. If the PRA buffer is imposed on a specific firm, it must be met separately to the combined buffer requirement, and must be met fully with CET1 capital. As part of its approach to ring fencing, the FPC established a framework to apply a firm-specific systemic risk buffer (SRB) which could be set between 0% and 3% of RWAs and which had to be met solely with CET1 capital. The purpose of the SRB was to increase the capacity of ring-fenced bodies, such as Barclays Bank UK PLC, to absorb stress. The buffer rate applicable to the Group’s ring-fenced sub-group was set at 1% with effect from August 2019. With the implementation of CRD V, the Other Systemically Important Institutions Buffer (O-SII buffer) replaced the SRB. As part of the implementation of CRD V, the PRA and FPC confirmed that the Barclays Bank UK PLC O-SII buffer would be held at the historic SRB rate of 1% until reassessment in December 2021. On 8 October 2021, the PRA extended the O- SII buffer rate of 1% for a further year, with any future adjustment to the O-SII buffer applicable from January 2024. In addition, in May 2022, the FPC decided to change the metric used to determine O-SII buffer rates from total assets to the UK leverage exposure measure and to recalibrate the thresholds used to determine O-SII buffer rates to prevent an overall tightening or loosening of the framework relative to its pre-Covid level. The FPC determined that the average of firms’ quarter-end leverage exposure measure over the year will be used to determine O-SII buffer rates, rather than the year-end value and that this change will only take effect after the PRA’s December 2023 review. Thus, the December 2023 review will be based on end-2022 leverage exposure measure. Rates set in 2023 will apply from January 2025. In addition, Barclays Bank Ireland PLC is identified as a O-SII by the CBI, who have imposed an O-SII buffer on Barclays Bank Ireland PLC. In July 2021 and October 2021, the PRA, respectively, published a policy statement and confirmation, setting out its planned implementation of certain Basel III standards, including the net stable funding ratio (NSFR), the new counterparty credit risk standard (SA-CCR) and rules on large exposures. As part of this policy statement, the PRA also confirmed that it would maintain its approach of requiring the deduction of software assets from capital. On 30 November 2022, the PRA published consultation paper CP16/22 concerning the implementation of the remaining Basel III standards, which include a revised standardised approach for credit risk, the elimination of modelled approaches for certain credit risk exposure categories, a new standardised approach for operational risk, a new market risk approach and the implementation of an output floor requiring reported RWAs calculated under standardised and modelled approaches to be a minimum of 72.5% of fully standardised calculations. The EU has also launched its legislative process for implementing these remaining Basel III reforms. In October 2021, the FPC and PRA published a policy statement setting out changes to the leverage ratio framework, including applying the leverage ratio requirement on an individual basis and making sub-consolidation available as an alternative to individual application where a firm has subsidiaries that can be consolidated, which apply from 1 January 2023. In the US, in October 2019, the FRB and other US regulatory agencies released final rules to tailor the applicability of prudential requirements for large domestic US banking organisations, foreign banking organisations and their intermediate holding companies (IHCs), including BUSL. BUSL is a “Category III” IHC. BUSL (and Barclays Bank Delaware) is therefore subject to reduced (calibrated at 85%) standardised liquidity requirements, including the liquidity coverage ratio and NSFR. In June 2018 and October 2019, the FRB finalised rules regarding single counterparty credit limits (SCCL). The SCCL apply to the largest US BHCs and foreign banks’ (including the Group’s) US operations. The SCCL creates two separate limits for foreign banks, the first on combined US operations (CUSO) and the second on the US IHC (BUSL). The SCCL for US BHCs, including BUSL, requires that exposure to an unaffiliated counterparty of BUSL not exceed 25% of BUSL’s tier 1 capital. With respect to the CUSO, the SCCL rule allows certification to the FRB that a foreign bank complies with comparable home country regulation. Barclays Bank PLC was not required to comply with the CUSO requirement until 1 January 2022, with the first certification applicable for Q1 2022 results. Stress testing The Group and certain of its members are subject to supervisory stress testing exercises in a number of jurisdictions, designed to assess the resilience of banks to adverse economic or financial developments and ensure that they have robust, forward-looking capital planning processes that account for the risks associated with their business profile. Assessment by regulators is on both a quantitative and qualitative basis, the latter focusing on such elements as data provision, stress testing capability including model risk management and internal management processes and controls. Recovery and Resolution Stabilisation and resolution framework The UK framework for recovery and resolution was established by the Banking Act 2009, as amended. The EU framework was established by the 2014 Bank Recovery and Resolution Directive (BRRD), as amended by BRRD II. The BoE, as the UK resolution authority, has the power to resolve a UK financial institution that is failing or likely to fail by exercising certain stabilisation tools, including (i) bail-in: the cancellation, transfer or dilution of a relevant entities’ equity and write-down or conversion of the claims of a relevant entities' unsecured creditors (including holders of capital instruments) and conversion of those claims into equity as necessary to restore solvency; (ii) the transfer of all or part of a relevant entities' business to a private sector purchaser; and (iii) the transfer of all or part of a relevant entities' business to a “bridge bank” controlled by the BoE. When exercising any of its stabilisation powers, the BoE must generally provide that shareholders bear first losses, followed by creditors in accordance with the priority of their claims in insolvency. In order to enable the exercise of its stabilisation powers, the BoE may impose a temporary stay on the rights of creditors to terminate, accelerate or close out contracts, or override events of default or termination rights that might otherwise be invoked as a result of a resolution action and modify contractual arrangements in certain circumstances (including a variation of the terms of any securities). HM Treasury may also amend the law for the purpose of enabling it to use its powers under this regime effectively, potentially with retrospective effect. In addition, the BoE has the power, under the Banking Act, to permanently write- down or convert into equity tier 1 capital Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 373 Supervision and regulation (continued) instruments, tier 2 capital instruments and internal eligible liabilities at the point of non-viability of an institution. The BoE’s preferred approach for the resolution of the Group is a bail-in strategy with a single point of entry at Barclays PLC. Under such a strategy, Barclays PLC’s subsidiaries would remain operational while Barclays PLC’s capital instruments and eligible liabilities would be written down or converted to equity in order to recapitalise the Group and allow for the continued provision of services and operations throughout the resolution. The order in which the bail-in tool is applied reflects the hierarchy of capital instruments under UK CRD IV and otherwise respecting the hierarchy of claims in an ordinary insolvency. Accordingly, the more subordinated the claim, the more likely losses will be suffered by owners of the claim. The PRA has made rules that require authorised firms to draw up recovery plans and resolution packs, as required by the BRRD. Recovery plans are designed to outline credible actions that authorised firms could implement in the event of severe stress in order to restore their business to a stable and sustainable condition. Removal of potential impediments to an orderly resolution of a banking group or one or more of its subsidiaries is considered as part of the BoE’s and PRA’s supervisory strategy for each firm, and the PRA can require firms to make significant changes in order to enhance resolvability. The submission of resolution packs was suspended by the PRA in 2018 until further notice and replaced by annual EBA resolution reporting. The Group has provided the PRA with a recovery plan annually, however, the PRA notified in October 2022 that it has moved submission to a biennial submission cycle. The Barclays Group continues to maintain the recovery plan annually. Under the Resolvability Assessment Framework (RAF) firms are required to have in place capabilities covering three resolvability outcomes: (i) adequate financial resources; (ii) being able to continue to do business through resolution and restructuring; and (iii) being able to communicate and co-ordinate within the firm and with authorities. The first self-assessment report on these capabilities was submitted by the Group to the PRA/BoE in 2021 and public disclosures by both firms and the PRA/BoE were made in June 2022 (and are required every two years thereafter). The Bank of England’s assessment concluded that there are no shortcomings, deficiencies or substantive impediments identified in the Group’s resolution capabilities that could impede its ability to execute the preferred resolution strategy. In future, should any such issues be identified, the PRA/BoE could exercise its various powers to direct the Group to address the relevant issues. While regulators in many jurisdictions have indicated a preference for single point of entry resolution for the Group, additional resolution or bankruptcy provisions may apply to certain Group entities or branches. In the US, BUSL is subject to the Orderly Liquidation Authority established by Title II of the Dodd-Frank Act (DFA), a regime for the orderly liquidation of systemically important financial institutions by the FDIC, as an alternative to proceedings under the US Bankruptcy Code. In addition, the licensing authorities of Barclays Bank PLC New York branch and of Barclays Bank Delaware have the authority to take possession of the business and property of the applicable branch or entity they license and/or to revoke or suspend such licence. In the US, Title I of the DFA, as amended, and the implementing regulations issued by the FRB and the FDIC require each bank holding company with assets of $250bn or more, including those within the Group, to prepare and submit a plan for the orderly resolution of subsidiaries and operations in the event of future material financial distress or failure. The Group submitted a “targeted plan” in December 2021. The agencies did not identify any shortcomings or deficiencies with the Group’s 2021 US Resolution Plan. The Group’s next submission of the US Resolution Plan in respect of its US operations will be a “full plan” due in 2024. Barclays Bank Ireland PLC is required by the ECB to submit a standalone BRRD compliant recovery plan on an annual basis. As a Significant Institution under direct ECB supervision, Barclays Bank Ireland PLC falls within the remit of the EU Single Resolution Board (SRB), as the resolution authority for the Eurozone. Under the provisions of the BRRD and EU Single Resolution Mechanism Regulation (SRMR), the SRB is required to determine the optimal resolution strategy for Barclays Bank Ireland PLC and, also, to prepare a resolution plan for the bank. The SRB undertakes this work within the context of the BoE’s preferred resolution strategy of single point of entry with bail in at Barclays PLC. In order to carry out its mandate, the SRB collects detailed structural and other information from Barclays Bank Ireland PLC on a regular basis, as well as engaging with the bank to identify and address impediments to resolution. This work is done in coordination with the BoE, as the Group resolution authority. Barclays Bank Ireland PLC will need to meet the SRB’s requirements for resolution as set out in the SRB’s ‘Expectations for Banks’ document by 31 December 2023. TLAC and MREL The Group is under the supervision of the BoE, as the UK resolution authority, and is subject to a Minimum Requirement for own funds and Eligible Liabilities (MREL), which includes a component reflecting the FSB’s standards on total loss absorbency capacity (TLAC). The MREL requirements were fully implemented by 1 January 2022, from which time G-SIBs with resolution entities incorporated in the UK are required to meet an MREL equivalent to the higher of: (i) two times the sum of their Pillar 1 and Pillar 2A requirements; or (ii) the higher of two times their leverage ratio requirement or 6.75% of leverage exposures. Internal MREL for operating subsidiaries is subject to a scalar in the 75-90% range of the external requirement that would apply to the subsidiary if it were a resolution entity. The starting point for the scalar is 90% for ring-fenced bank sub-groups. Barclays Bank Ireland PLC is subject to the SRB’s MREL policy, as issued in June 2022, in respect of the internal MREL that it will be required to issue to the Group. The SRB’s current calibration of internal MREL for non-resolution entities is expressed as two ratios that have to be met in parallel: (a) two times the sum of: (i) the firm’s Pillar 1 requirement; and (ii) its Pillar 2 requirement; and (b) two times the leverage ratio requirement. The SRB’s policy does not apply any scalar in respect of the internal MREL requirement. Under the SRB MREL policy, a bank specific adjustment can be applied by the SRB to MREL requirements. In the US, the FRB’s TLAC rule includes provisions that require BUSL to have: (i) a specified outstanding amount of eligible long-term debt; (ii) a specified outstanding amount of TLAC (consisting of common and preferred equity regulatory capital plus eligible long-term debt); and (iii) a specified common equity buffer. In addition, the FRB’s TLAC rule prohibits BUSL, for so long as the Group’s overall resolution plan treats BUSL as a non-resolution entity, from issuing TLAC to entities other than those within the Group. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 374 Supervision and regulation (continued) Bank Levy and FSCS The BRRD established a requirement for EU member states to set up a pre-funded resolution financing arrangement with funding equal to 1% of covered deposits by 31 December 2024 to cover the costs of bank resolutions. The UK has implemented this requirement by way of a tax on the balance sheets of banks known as the ‘Bank Levy’. In addition, the UK has a statutory compensation fund called the Financial Services Compensation Scheme (FSCS), which is funded by way of annual levies on most authorised financial services firms. Structural reform In the UK, the Financial Services (Banking Reform) Act 2013 put in place a framework for ring-fencing certain operations of large banks. Ring-fencing requires, among other things, the separation of the retail and smaller deposit-taking business activities of UK banks into a legally distinct, operationally separate and economically independent entity, which is not permitted to undertake a range of activities. This regime was independently reviewed in 2021, with the final report published in March 2022. The review recommended that HM Treasury should review the practicalities of aligning the ring-fencing and resolution regimes, amongst other things, and the government has stated that it intends to issue a public call for evidence on this issue in the first quarter of 2023 and to consult on reforms to the ring-fencing regime in mid 2023 in line with the recommendations in the independent review. US regulation places further substantive limits on the activities that may be conducted by banks and holding companies, including foreign banking organisations such as the Group. The ‘Volcker Rule’, which was part of the DFA and which came into effect in the US in 2015, prohibits banking entities from undertaking certain proprietary trading activities and limits such entities’ ability to sponsor or invest in certain private equity funds and hedge funds (in each case broadly defined). As required by the rule, the Group has developed and implemented an extensive compliance and monitoring programme addressing proprietary trading and covered fund activities (both inside and outside of the US). Market infrastructure regulation In recent years, regulators as well as global-standard setting bodies such as the International Organisation of Securities Commissions (IOSCO) have focused on improving transparency and reducing risk in markets, particularly risks related to over-the-counter (OTC) derivative transactions. This focus has resulted in a variety of new regulations across the G20 countries and beyond that require or encourage on-venue trading, clearing, posting of margin and disclosure of pre- trade and post-trade information. In particular, the Markets in Financial Instruments Directive and Markets in Financial Instruments Regulation (collectively referred to as MiFID II) have affected many of the markets in which the Group operates, the instruments in which it trades and the way it transacts with market counterparties and other customers. MiFID II is currently undergoing a review process in both the EU and the UK, including as part of the EU’s ongoing focus on the development of a stronger Capital Markets Union and the UK’s Wholesale Markets Review. Regulation of benchmarks The EU and UK Benchmarks Regulation apply to the administration, contribution and use of benchmarks within the EU and the UK, respectively. Financial institutions within the EU or the UK, as applicable, are prohibited from using benchmarks unless their administrators are authorised, registered or otherwise recognised in the EU or the UK, respectively. The FCA has also been working to phase out use of LIBOR, with GBP LIBOR ceasing to be published in its original form from the end of 2021 and synthetic versions of GBP LIBOR being made available only for a limited period of time. Similarly, USD LIBOR will cease to be published in its current form in June 2023 and other LIBOR and IBOR rates are also being wound down. Global regulators in conjunction with the industry have developed and are continuing to develop alternative benchmarks and risk-free rate fallback arrangements, including updates to existing, as well as new, applicable legislation. Regulation of the derivatives market The European Market Infrastructure Regulation (EMIR) has introduced requirements designed to improve transparency and reduce the risks associated with the derivatives market. EMIR has operational and financial impacts on the Group, including by imposing new collateral requirements on a broader range of market participants with effect from 2022. Access to the clearing services of certain Central Clearing Counterparties (CCPs) used by Group entities is currently permitted under temporary equivalence and recognition regimes and decisions in the UK and EU. If not extended or made permanent, the EU’s equivalence decision for UK Central Clearing Counterparties (CCPs), and exemption for certain intragroup transactions from the EMIR derivatives clearing and margin obligations, both due to expire at the end of June 2025, could also have operational and financial impacts on the Group, as could the removal of temporary recognition of non- UK CCPs by the UK. EMIR is currently undergoing a review process in the EU which may result in changes to the intragroup transactions exemption, potentially making it easier to rely on. However, the review is in its very early stages so it is not yet certain what changes may result from it. US regulators have imposed similar rules as the EU with respect to the mandatory on-venue trading and clearing of certain derivatives, and post-trade transparency, as well as in relation to the margining of OTC derivatives. US regulators have finalised certain aspects of their rules with respect to their application on a cross- border basis, including with respect to their registration requirements in relation to non-US swap dealers and security-based swap dealers. The regulators may adopt further rules, or provide further guidance, regarding cross-border applicability. In December 2017, the CFTC and the European Commission recognised the trading venues of each other’s jurisdiction to allow market participants to comply with mandatory on-venue trading requirements while trading on certain venues recognised by the other jurisdiction. In December 2022, the CFTC extended temporary relief that would permit trading venues and market participants located in the UK to continue to rely on this mutual recognition framework following the withdrawal of the UK from the EU. Certain participants in US swap markets are required to register with the CFTC as ‘swap dealers’ or ‘major swap participants’ and/or, with the SEC as ‘security-based swap dealers’ or ‘major security-based swap participants’. Such registrants are subject to CFTC and/or SEC regulation and oversight. Entities required to register as swap dealers and/or security-based swap dealers are subject to business conduct, record-keeping and reporting requirements under either or both CFTC Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 375 Supervision and regulation (continued) and SEC rules. Barclays Bank PLC is also subject to regulation by the FRB, and is both provisionally registered with the CFTC as a swap dealer and conditionally registered with the SEC as a security- based swap dealer. In addition, Barclays Bank Ireland PLC is provisionally registered as a Swap Dealer with the CFTC. Accordingly, Barclays Bank PLC and Barclays Bank Ireland PLC are subject to CFTC rules on business conduct, record- keeping and reporting and to FRB rules on capital and margin. The CFTC has approved certain comparability determinations that permit substituted compliance with non-US regulatory regimes for certain swap regulations. Substituted compliance is a recognition program whereby compliance with a comparable regulatory requirement of a foreign jurisdiction is deemed to serve as a substitute for compliance with comparable requirements of the U.S. Commodity Exchange Act and the CFTC’s regulations. Substituted compliance has been granted only in respect of certain requirements promulgated by regulatory authorities in certain identified jurisdictions that the CFTC believes are sufficiently comparable to its own requirements. Substituted compliance was granted in respect of certain European Union requirements in December 2013. In December 2022, the CFTC extended temporary relief that would permit swap dealers located in the UK to continue to rely on existing CFTC substituted compliance determinations with respect to EU requirements in the event of a withdrawal of the UK from the EU. Barclays Bank PLC and Barclays Bank Ireland PLC rely upon the CFTC’s grant of substituted compliance as a means to comply with certain swap dealer requirements. Barclays Bank PLC conditionally registered as a security-based swap dealer with the SEC as of 1 November 2021. As a registered security-based swap dealer, Barclays Bank PLC is subject to SEC business conduct, recordkeeping and reporting rules similar to the CFTC rules noted above. Like the CFTC, the SEC approved certain comparability determinations that permit conditional substituted compliance with non-US regulatory regimes for certain security- based swap regulations. Due to the imposition by the SEC of more stringent requirements on which its grant of substituted compliance is conditioned, Barclays Bank PLC is relying on substituted compliance only with respect to a limited number of SEC security-based swap dealer rules. Many of the regulations under the CFTC and SEC regimes are similar in scope of application. The rules of both the SEC and the CFTC are roughly divided into “transaction-level rules” and “entity-level rules”. Transaction-level rules apply only in circumstances in which at least one of the parties to the swap or security-based swap transaction has sufficient nexus to the United States. Entity-level rules apply to swap dealers or security-based swap dealers across all their swap or security- based swaps without distinction as to the counterparty or location of the transaction. Unlike the CFTC, certain SEC rules apply to transactions entered into by non-US security-based swap dealers based on the location from which certain activities are undertaken. These SEC rules apply to security-based swap transactions facing non-US person counterparties that are “arranged, negotiated or executed” by US-based security-based swap dealer personnel. This distinction expands the scope and impact of the SEC regime to transactions with a greater number of non-US counterparties. As noted above, Barclays Bank PLC and Barclays Bank Ireland PLC are subject to FRB rules on capital and margin. In 2022, the SEC proposed Rule 10B-1 that would require any person with a security- based swap position (aggregated across all affiliated persons) that exceeds any of the thresholds specified by the SEC to promptly report certain information by the next business day, including the identity of the reporting person and the security- based swap position, as well as the ownership of securities positions related to the security-based swap position. Such reports would be available publicly. If adopted as proposed, this rule could increase the burden and cost to Barclays Bank PLC of utilising security-based swaps. Other regulatory developments in the US The SEC has also put forth a number of other recent proposals that, if adopted, could have a significant impact on the Group’s business and operations, including: (i) proposed amendments to Exchange Act Rule 15c6-1 that would shorten the standard settlement cycle for most broker-dealer transactions in securities from two business days after the trade (T+2) to one business day after the trade (T+1), which could require significant changes to BCI’s settlement procedures and practices, and new Exchange Act Rule 15c6-2 which would generally require market-wide improvements in the rate of same-day affirmations and on central matching service providers; (ii) a proposed rule that would mandate central clearing of many US Treasury securities transactions and would amend the broker-dealer customer protection rule as it applies to margin posted for transactions in US Treasury securities, which could impose additional costs on the Group’s Treasury securities trading activity; and (iii) a series of market structure proposals which would have a significant impact on securities trading activity by BCI and other Group entities, as the SEC proposals would (a) impose a new SEC best execution obligation on securities broker-dealers, including BCI, (b) require that certain individual investor orders be exposed to auctions before they could be executed internally by certain trading centres, and (c) amend certain rules under Regulation NMS (National Market System) to adopt variable minimum pricing increments, reduce access fee caps for protected quotations, require that the amount of exchange fees and rebates be determinable at the time of execution, and update and expand to certain broker-dealers the disclosures required for order executions in NMS stocks, among other changes. Other regulation Consumer protection, culture, and diversity and inclusion In May 2021, the FCA published a consultation paper proposing the imposition of a new consumer duty on firms. The duty looks to set higher expectations for the standard of care that firms provide to customers and will impact all aspects of Barclays' retail businesses, including every customer journey, product and service as well as our relationships with partners, suppliers and third parties. This will result in significant implementation costs and there will also be higher ongoing costs for the industry as a result of extensive monitoring and evidential requirements. Final rules were published in July 2022 and will come into force on 31 July 2023 for new and existing products or services that are open to sale or renewal, and on 31 July 2024 for closed products or services. Our regulators have enhanced their focus on the promotion of cultural values as a key area for banks, although they generally view the responsibility for reforming culture as primarily sitting with the industry. The UK regulators have also begun focusing on diversity and inclusion in financial services firms, with the Bank of England, PRA and FCA having published a joint discussion paper and the FCA having published a policy statement on this topic in April 2022. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 376 Supervision and regulation (continued) Data protection Most countries where the Group operates have comprehensive laws requiring openness and transparency about the collection and use of personal information, and protection against loss and unauthorised or improper access. Regulations regarding data protection are increasing in number, as well as levels of enforcement, as manifested in increased amounts of fines and the severity of other penalties. We expect that personal privacy and data protection will continue to receive attention and focus from regulators, as well as public scrutiny and attention. The EU’s General Data Protection Regulation (GDPR) created a broadly harmonised privacy regime across EU member states, introducing mandatory breach notification, enhanced individual rights, a need to openly demonstrate compliance, and significant penalties for breaches. The extraterritorial effect of the GDPR means entities established outside the EU may fall within the Regulation’s ambit when offering goods or services to European based customers or clients. Following the UK’s withdrawal from the EU, the UK continues to apply the GDPR framework (as onshored into UK law and hence now referred to as the ‘UK GDPR’ - this sits alongside an amended version of the UK Data Protection Act 2018). Following the invalidation by the European Court of Justice (CJEU) of the EU-US Privacy Shield as a mechanism for transferring EU personal data to the US, the European Commission published new standard contractual clauses (SCCs) in 2021 to meet the requirements of GDPR and the CJEU decision, known as Schrems II. In early 2022, the UK Information Commissioner set out its own international data transfer agreement, and the international data transfer addendum to the European Commission’s SCCs for international data transfers. Implementing the new EU SCCs and/or the UK addendum, which involve case-by-case transfer impact assessments and other safeguards, is likely to result in increased compliance costs for the Group. In 2021, China adopted its first comprehensive law in relation to personal information called the Personal Information Protection Law (PIPL). The PIPL applies to processing activities within mainland China, but similar to the GDPR, the PIPL has extraterritorial reach. As the global data protection regulatory landscape develops, noncompliance with any such requirements could lead to regulatory fines and other penalties. In the US, Barclays Bank Delaware is subject to the US Federal Gramm-Leach- Bliley Act (GLBA) and the California Privacy Rights Act of 2020, which amended the California Consumer Privacy Act of 2018 and came into effect on 1 January 2023 (CPRA). The GLBA limits the use and disclosure of non-public personal information to non-affiliated third parties, and requires financial institutions to provide written notice of their privacy policies and practices and implement certain information security policies and practices. Any violations of the GLBA could subject Barclays Bank Delaware to additional reporting requirements or regulatory investigation or audits by the financial regulators. More broadly, the Group's US operations are subject to the CPRA which applies to personal information that is not collected, processed, sold or disclosed subject to the GLBA. The CPRA requires applicable members of the Group to both provide California residents with additional disclosures regarding the collection, use and sharing of personal information and grant California residents access, deletion, correction and other rights, including the right to opt-out of certain sales or transfers of personal information and the right to limit the processing of sensitive personal information to certain purposes. Any violations of the CPRA may be subject to enforcement by the California Privacy Protection Agency and the California Attorney General and the imposition of monetary penalties, as well as potential lawsuits arising from the private right of action provided to California residents in the case of certain data breaches. Bills proposed in the United States Congress and in the legislatures of various US states, if enacted, may have further impact on the data privacy practices of Barclays’ US operations. In addition, all 50 states have laws including obligations to provide notification of security breaches of computer databases that contain personal information to affected individuals, state officers and others. Cybersecurity and operational resilience Regulators globally continue to focus on cybersecurity risk management, organisational operational resilience and overall soundness across all financial services firms, with customer and market expectations of uninterrupted access to financial services remaining at an all-time high. The regulatory focus has been further heightened by the increasing number of high-profile ransomware and other supply chain attacks seen across the industry in recent years and the growing reliance of financial services on Cloud and other third party service providers. This is evidenced by the continuing introduction of new laws and regulatory frameworks directed at enhancing resilience of both firms and their critical third party providers. A new UK framework introduced last year requires firms to be able to remain within impact tolerances set for their important business services by no later than 31 March 2025, with further legislation focusing on the resilience of critical third party providers now in the pipeline. The European Union’s Digital Operational Resilience Act (DORA) entered into force in January 2023 and will apply in early 2025 (after a two-year implementation period), introducing comprehensive and sector specific regulation on Information Communication Technologies( ICT) incident reporting, testing and third party risk management, and providing for direct oversight of critical third party providers servicing the EU financial services sector. The existing and anticipated requirements for increased controls will serve to improve industry standardisation and resilience capabilities, enhancing our ability to deliver services during periods of potential disruption. However, such measures are likely to result in increased technology and compliance costs for the Group. In 2022, the SEC published proposed disclosure rules and amendments regarding cybersecurity risk management, governance and incident reporting by US- listed companies, including foreign private issuers such as Barclays PLC and Barclays Bank PLC. Also in 2022, NYDFS both increased enforcement of and published proposed amendments to its main cybersecurity regulation applying to the New York Branch of Barclays Bank PLC. Final versions of the SEC proposed disclosure rules and NYDFS proposed amendments are expected in 2023. Regulatory initiatives on ESG disclosure The EU Regulation on Sustainability- Related Disclosures introduces disclosure obligations requiring financial institutions to explain how they integrate environmental, social and governance factors in their investment decisions for certain financial products. In addition, the EU Taxonomy Regulation provides for a general framework for the development of an EU-wide classification system for environmentally sustainable economic activities. The EU Corporate Sustainability Reporting Directive will introduce sustainability related reporting obligations for various entities including EU banks and certain listed companies, with reporting to Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 377 Supervision and regulation (continued) commence on a phased basis from the financial year 2024. Draft sustainability reporting standards are being developed by the European Financial Reporting Advisory Group. From June 2022, the EU’s Capital Requirements Regulation requires certain large financial institutions to disclose information on environmental, social and governance risks, including physical risks and transition risks. The EU has also proposed a Directive on Corporate Sustainability Due Diligence which, if adopted, would require EU firms, including financial institutions, to carry out due diligence on companies in their value chain and identify and prevent, bring to an end or mitigate the impact of their activities on human rights and the environment. In the UK, the UK Government has confirmed its intention to develop a UK Green Taxonomy, and the Green Technical Advisory Group has published advice on development of a Green Taxonomy with further advice expected to follow. Reporting against the Taxonomy will form part of the UK’s new Sustainability Disclosure Requirements (SDR). Certain companies will be required to disclose which portion of their activities are Taxonomy-aligned. The structure of the Taxonomy draws on the EU approach and has six environmental objectives (climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control and protection and restoration of biodiversity). The UK regulators are also consulting on a new SDR Framework for firms as well as investment product disclosures, including a new sustainable investment labelling regime. Additionally, TCFD-aligned reporting requirements now apply to UK publicly quoted companies, large private companies and LLPs with financial years starting on or after 6 April 2022 (in addition to existing TCFD-related reporting requirements under the Listing Rules). In March 2022, the SEC proposed climate related-disclosure requirements for US- listed companies (which would include Barclays PLC and Barclays Bank PLC) that would, among other things, require disclosure of direct and indirect greenhouse gas emissions, with certain emissions disclosures subject to third- party attestation requirements; climate- related scenario analysis (if the issuer conducts scenario analysis), together with qualitative and quantitative information about the hypothetical future climate scenarios used in its analysis; climate transition plans or climate-related targets or goals, along with disclosure of progress against any such plans, targets or goals; climate-related risks over the short-, medium- and long-term; qualitative and quantitative information regarding climate-related risks and historical impacts in audited financial statements; corporate governance of climate-related risks; and climate-related risk-management processes. Sanctions and financial crime The UK Bribery Act 2010 introduced a new form of corporate criminal liability focused broadly on a company’s failure to prevent bribery on its behalf. The Criminal Finances Act 2017 introduced new corporate criminal offences of failing to prevent the facilitation of UK and overseas tax evasion. Both pieces of legislation have broad application and in certain circumstances may have extraterritorial impact on entities, persons or activities located outside the UK, including Barclays PLC’s subsidiaries outside the UK. The UK Bribery Act requires the Group to have adequate procedures to prevent bribery which, due to the extraterritorial nature of the Act, makes this both complex and costly. Additionally, the Criminal Finances Act requires the Group to have reasonable prevention procedures in place to prevent the criminal facilitation of tax evasion by persons acting for, or on behalf of, the Group. The Sanctions and Anti-Money Laundering Act (the Sanctions Act) became law in the UK in 2018. The Sanctions Act allows for the adoption of an autonomous UK sanctions regime, as well as a more flexible licensing regime post-Brexit. On 6 July 2020, the UK Government announced the first sanctions that have been implemented independently by the UK outside the auspices of the UN and EU. The autonomous UK sanctions regime came into force on 1 January 2021. The sanctions apply within the UK and in relation to the conduct of all UK persons wherever they are in the world; they also apply to overseas branches of UK companies (including the Barclays Bank PLC New York branch). In the US, the Bank Secrecy Act, the USA PATRIOT Act 2001, the Anti-Money Laundering Act of 2020 and regulations thereunder contain numerous anti-money laundering and anti-terrorist financing requirements for financial institutions. In addition, the Group is subject to the US Foreign Corrupt Practices Act, which prohibits, among other things, corrupt payments to foreign government officials. It is also subject to various economic sanctions laws, regulations and executive orders administered by the US government, which prohibit or restrict some or all business activities and other dealings with or involving certain individuals, entities, groups, countries and territories. In some cases, US state and federal regulations addressing sanctions, money laundering and other financial crimes may impact entities, persons or activities located or undertaken outside the US, including Barclays PLC and its subsidiaries. US government authorities have aggressively enforced these laws against financial institutions in recent years. As a result of the conflict in Ukraine, there has been an increased regulatory focus on sanctions compliance in various jurisdictions, including in the US, UK and EU. Failure of a financial institution to ensure compliance with such laws could have serious legal, financial and reputational consequences for the institution. Financial review A review of the Group’s performance, including the key performance indicators, and the contribution of each of our businesses to the overall performance of the Group. Key performance indicators Consolidated summary income statement Income statement commentary Consolidated summary balance sheet Balance sheet commentary Analysis of results by business Non-IFRS performance measures 379 381 382 383 384 385 392 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 379 Key performance indicators In assessing the financial performance of the Group, management uses a range of KPIs which focus on the Group’s financial strength, the delivery of sustainable returns and cost management. Barclays continues to target return on tangible equity ( RoTE) of greater than 10% over the medium-term. Cost discipline remains a priority and management continues to target a cost: income ratio below 60%. Non-IFRS performance measures The Group’s 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 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 non-IFRS performance measures section for further information and calculations of non-IFRS performance measures included throughout this section and the most directly comparable IFRS measures. Definition Common Equity Tier 1 (CET1) ratio Capital requirements are part of the regulatory framework governing how banks and depository institutions are supervised. Capital ratios express a bank’s capital as a percentage of its Risk Weighted Assets (RWAs) as defined by the PRA. CET1 ratio is a measure of capital as defined within the Definition of Capital section of the PRA's Prudential and Resolution Policy - Banking Index. CET1 ratioa 13.9% 2021: 15.1% 2020: 15.1% Why is it important and how the Group performed The Group’s capital management objective is to maximise shareholder value by prudently managing the level and mix of its capital to: ensure the Group and all of its subsidiaries are appropriately capitalised relative to their regulatory minimum and stressed capital requirements, support the Group’s risk appetite, growth and strategic options, while seeking to maintain a robust credit proposition for the Group and its subsidiaries. The CET1 ratio decreased to 13.9% (2021: 15.1%) as £5.0bn of attributable profit was offset by returns to shareholders, impacts of regulatory change from 1 January 2022, pension deficit contribution payments and decreases in the fair value of the bond portfolio through other comprehensive income and other capital deductions. Increases in RWAs, largely as a result of foreign exchange movements, were broadly offset by an increase in the currency translation reserve within CET1. Group target: a CET1 ratio in the range of 13-14%. Return on average tangible shareholders’ equity RoTE is calculated as profit after tax attributable to ordinary shareholders, as a proportion of average shareholders’ equity excluding non-controlling interests and other equity instruments adjusted for the deduction of intangible assets and goodwill. This measure indicates the return generated by the management of the business based on ordinary shareholders’ tangible equity. Achieving a target RoTE demonstrates the organisation’s ability to execute its strategy and align management’s interests with the shareholders’. RoTE lies at the heart of the Group’s capital allocation and performance management process. RoTE was 10.4% (2021: 13.1%) from the normalisation of credit impairment charges and higher litigation and conduct costs, partially offset by income growth across all operating divisions. Group target: RoTE of greater than 10%. Group RoTEa 10.4% 2021: 13.1% 2020: 3.2% Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 380 Key performance indicators (continued) Definition Total operating expenses Why is it important and how the Group performed Barclays views total operating expenses as a key strategic area for banks; those who actively manage costs and control them effectively will gain a strong competitive advantage. Group operating expenses increased to £16.7bn (2021: £14.7bn) mainly due to higher litigation and conduct charges: Group operating expenses excluding litigation and conduct increased 6% to £15.1bn, reflecting the impact of inflation and the appreciation of average USD against GBP. Litigation and conduct charges were £1.6bn (2021: £0.4bn) including £1.0bn impact from the Over-issuance of Securities in the US (Over-issuance of Securities)b. Total operating expensesa £16.7bn 2021: £14.7bn 2020: £13.9bn Cost: income ratio Total operating expenses divided by total income. This is a measure management uses to assess the productivity of the business operations. Managing the cost base is a key execution priority for management and includes a review of all categories of discretionary spending and an analysis of how we can run the business to ensure that costs increase at a slower rate than income. Cost: income ratioa 67% 2021: 67% 2020: 64% The Group cost: income ratio was 67% (2021: 67%), as increased income was offset by higher litigation and conduct charges, primarily from the Over-issuance of Securities. Group target: a cost: income ratio below 60%. Notes a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. b Denotes the Over-issuance of Securities under Barclays Bank PLC’s (BBPLC) US shelf registration statements on Form F-3 filed with the SEC in 2018 and 2019. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 381 Consolidated summary income statement For the year ended 31 December Interest income Interest expense Net interest income Fee and commission income Fee and commission expense Net fee and commission income Other income Total income Operating costs UK bank levy GMP chargeb Litigation and conduct Total operating expenses Other net income Profit before impairment Credit impairment (charges)/releases Profit before tax Tax charge Profit after tax Non-controlling interests Other equity instrument holders Attributable profit Selected financial statistics Basic earnings per share Diluted earnings per share Return on average tangible shareholders’ equity Cost: income ratio 2022 £m 19,096 (8,524) 10,572 9,637 (3,038) 6,599 7,785 24,956 Restateda 2021 £m 11,240 (3,167) 8,073 9,880 (2,206) 7,674 6,193 21,940 2020 £m 11,892 (3,770) 8,122 8,641 (2,070) 6,571 7,073 21,766 2019 £m 15,456 (6,049) 9,407 9,122 (2,362) 6,760 5,465 21,632 2018 £m 14,541 (5,479) 9,062 8,893 (2,084) 6,809 5,265 21,136 (14,957) (14,092) (13,434) (13,359) (13,627) (176) — (1,597) (16,730) (170) — (397) (299) — (153) (14,659) (13,886) (226) — (1,849) (15,434) 6 8,232 (1,220) 7,012 (1,039) 5,973 (45) (905) 5,023 30.8p 29.8p 10.4% 67% 260 7,541 653 8,194 (1,138) 7,056 (47) (804) 6,205 36.5p 35.6p 13.1% 67% 23 7,903 (4,838) 3,065 (604) 2,461 (78) (857) 1,526 8.8p 8.6p 3.2% 64% 71 6,269 (1,912) 4,357 (1,003) 3,354 (80) (813) 2,461 14.3p 14.1p 5.3% 71% (269) (140) (2,207) (16,243) 69 4,962 (1,468) 3,494 (911) 2,583 (234) (752) 1,597 9.4p 9.2p 3.6% 77% Notes a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. b Guaranteed minimum pensions (GMP) The financial information above is extracted from the published accounts. This information should be read together with the information included in the accompanying consolidated financial statements. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 382 Income statement commentary 2022 compared to 2021a Barclays delivered a profit before tax of £7,012m (2021: £8,194m), RoTE of 10.4% (2021: 13.1%) and earnings per share (EPS) of 30.8p (2021: 36.5p). The Group has a diverse income profile across businesses and geographies including a significant presence in the US. The 10% appreciation of average USD against GBP positively impacted income and profits and adversely impacted credit impairment charges and total operating expenses. Group income increased to £24,956m (2021: £21,940m). Excluding the income benefit of £292m relating to hedging arrangements to manage the risks of the rescission offer in relation to the Over-issuance of Securities, total Group income was £24,664m, up 12% year- on-year. Group operating expenses increased to £16,730m (2021: £14,659m) mainly due to higher litigation and conduct charges: Group operating expenses excluding litigation and conduct charges increased 6% to £15,133m, reflecting the impact of inflation and the appreciation of average USD against GBP. Litigation and conduct charges were £1,597m (2021: £397m) including £966m from the Over-issuance of Securities. Credit impairment charges were £1,220m (2021: £653m net release). The increase in charges reflect macroeconomic deterioration and a gradual increase in delinquencies, partially offset by the utilisation of macroeconomic uncertainty post-model adjustments (PMAs) and the release of COVID-19 related adjustments informed by refreshed scenarios. Total coverage ratio decreased to 1.4% (December 2021: 1.6%) driven by changes in portfolio mix and write-offs. Coverage levels remain strong. The effective tax rate (ETR) was 14.8% (2021: 13.9%). The tax charge included a £346m re-measurement of the Group’s UK deferred tax assets (DTAs) due to the enactment of legislation to reduce the UK banking surcharge rate. Excluding this DTAs downward re- measurement, the ETR was 9.9%, reflecting tax benefits in the current year, primarily arising from tax relief related to government bonds linked to the high prevailing rate of inflation in 2022, as well as beneficial adjustments in respect of prior years. Attributable profit was £5,023m (2021: £6,205m). Note a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 383 Consolidated summary balance sheet As at 31 December Assets Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending Trading portfolio assets Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Other assets Total assets Liabilities Deposits at amortised cost Cash collateral and settlement balances Repurchase agreements and other similar secured borrowings Debt securities in issueb Subordinated liabilities Trading portfolio liabilities Financial liabilities designated at fair value Derivative financial instruments Other liabilities Total liabilities Equity Called up share capital and share premium Other equity instruments Other reserves Retained earnings Total equity excluding non-controlling interests Non-controlling interests Total equity Total liabilities and equity Net asset value per ordinary share Tangible net asset value per share 2022 £m 256,351 112,597 398,779 776 133,813 213,568 302,380 65,062 30,373 Restateda 2021 £m 238,574 92,542 361,451 3,227 147,035 191,972 262,572 61,753 25,159 2020 £m 2019 £m 2018 £m 191,127 101,367 342,632 9,031 127,950 175,151 302,446 78,688 21,122 150,258 83,256 339,115 3,379 114,195 133,086 229,236 65,750 21,954 177,069 77,222 326,406 2,308 104,187 149,648 222,538 52,816 21,089 1,513,699 1,384,285 1,349,514 1,140,229 1,133,283 545,782 519,433 481,036 415,787 394,838 96,927 27,052 112,881 11,423 72,924 271,637 289,620 16,193 79,371 28,352 98,867 12,759 54,169 250,960 256,883 13,450 85,423 14,174 75,796 16,341 47,405 249,765 300,775 11,917 67,341 14,517 76,369 18,156 36,916 204,326 229,204 11,953 67,522 18,578 82,286 20,559 37,882 216,834 219,643 11,362 1,444,439 1,314,244 1,282,632 1,074,569 1,069,504 4,373 13,284 (2,192) 52,827 68,292 968 69,260 4,536 12,259 1,770 50,487 69,052 989 70,041 4,637 11,172 4,461 45,527 65,797 1,085 66,882 4,594 10,871 4,760 44,204 64,429 1,231 65,660 4,311 9,632 5,153 43,460 62,556 1,223 63,779 1,513,699 1,384,285 1,349,514 1,140,229 1,133,283 347p 295p 339p 291p 315p 269p 309p 262p 309p 262p Number of ordinary shares of Barclays PLC (in millions) 15,871 16,752 17,359 17,322 17,133 Year-end USD exchange rate Year-end EUR exchange rate 1.20 1.13 1.35 1.19 1.37 1.11 1.32 1.18 1.28 1.12 Notes a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. b Debt securities in issue include covered bonds of £3.2bn (2021: £5.0bn). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 384 Balance sheet commentary Total assets Total assets increased £129bn to £1,514bn. Cash and balances at central banks increased by £18bn to £256bn, predominantly driven by strong growth in customer deposits. Financial assets at fair value through other comprehensive income increased £3bn to £65bn. Loans and advances at amortised cost increased £37bn to £399bn, which reflected increased lending to customers across Barclays International and Barclays UK, and increased investment in debt securities. Derivative financial instrument assets increased £40bn to £302bn, driven by market volatility and increased activity. Cash collateral and settlement balances increased by £20bn to £113bn. Trading portfolio assets decreased £13bn to £134bn due to reduction in equity securities as clients repositioned their demand, partially offset by increased trading activity in debt securities. Financial assets at fair value through the income statement increased £22bn to £214bn driven by increased reverse repurchase activity. Total liabilities Total liabilities increased £130bn to £1,444bn. Deposits at amortised cost increased £26bn to £546bn primarily due to an increase in short-term money market deposits and growth in Barclays International deposits. Derivative financial instrument liabilities increased £33bn to £290bn, driven by market volatility and increased activity. Cash collateral and settlement balances increased by £18bn to £97bn. Trading portfolio liabilities increased £19bn to £73bn due to increases in equity securities as clients repositioned their demand. Financial liabilities designated at fair value increased £21bn to £272bn due to increased prime brokerage deposits and repurchase agreements. Total shareholders’ equity Total shareholders’ equity decreased £0.7bn to £69.3bn. Other equity instruments increased £1.0bn to £13.3bn due to the issuance of three AT1 instruments (£1.25bn, $2.0bn and SGD450m), offset by two redemptions (£1.0bn and $1.5bn). AT1 securities are perpetual subordinated contingent convertible securities structured to qualify as AT1 instruments under prevailing capital rules applicable as at the relevant issue date. Other reserves decreased by £4.0bn, mainly due to a reduction in the cash flow hedging reserve of £6.4bn to £7.2bn debit, as a result of fair value movements on interest rate swaps held for hedging purposes due to an increase in major interest rate curves. This was partially offset by an increase in the currency translation reserve of £2.0bn to £4.8bn, driven by the depreciation of GBP against USD. Retained earnings increased £2.3bn to £52.8bn, mainly due to profits of £5.0bn, offset by share repurchases of £1.5bn and dividends of £1.0bn. Tangible net asset value per share increased to 295p (December 2021: 291p) with EPS of 30.8p and currency movements partially offset by net negative reserve movements due to higher interest rates, primarily in the cash flow hedging reserve. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 385 Analysis of results by business Barclays UK Income statement information Net interest income Net fee, commission and other income Total income Operating costs UK bank levy Litigation and conduct Total operating expenses Other net income Profit before impairment Credit impairment (charges)/releases Profit before tax Attributable profit Balance sheet information Loans and advances to customers at amortised cost Total assets Customer deposits at amortised cost Loan: deposit ratio Risk weighted assets Period end allocated tangible equity Key facts UK mortgage balances Mortgage gross lending flow Average LTV of mortgage portfolioa Average LTV of new mortgage lendinga Number of branches Mobile banking active customers 30 day arrears rate - Barclaycard Consumer UK Number of employees (full time equivalent) Performance measures Return on average allocated tangible equity Average allocated tangible equity Cost: income ratio Loan loss rate (bps) Net interest margin 2022 £m 5,893 1,366 7,259 2021 £m 5,202 1,334 6,536 2020 £m 5,234 1,113 6,347 (4,260) (4,357) (4,270) (26) (41) (36) (37) (4,327) (4,430) — 2,932 (286) 2,646 1,877 — 2,106 365 2,471 1,756 (50) (32) (4,352) 18 2,013 (1,467) 546 325 £205.1bn £313.2bn £258.0bn 87% £73.1bn £10.1bn £208.8bn £321.2bn £260.6bn 85% £72.3bn £10.0bn £205.4bn £289.1bn £240.5bn 89% £73.7bn £9.7bn £162.2bn £30.3bn £158.1bn £33.9bn £148.3bn £22.8bn 50% 68% 481 10.5m 0.9% 6,200 18.7% £10.0bn 60% 13 2.86% 51% 70% 666 9.7m 1.0% 7,100 17.6% £10.0bn 68% (16) 2.52% 51% 68% 859 9.2m 1.7% 21,300 3.2% £10.1bn 69% 68 2.61% Note a Average loan to value (LTV) of mortgages is balance weighted and reflects both residential and buy-to-let (BTL) mortgage portfolios within the Home Loans portfolio. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 386 Analysis of results by business (continued) Analysis of Barclays UK Analysis of total income Personal Banking Barclaycard Consumer UK Business Banking Total income Analysis of credit impairment (charges)/releases Personal Banking Barclaycard Consumer UK Business Banking Total credit impairment (charges)/releases Analysis of loans and advances to customers at amortised cost Personal Banking Barclaycard Consumer UK Business Banking Total loans and advances to customers at amortised cost Analysis of customer deposits at amortised cost Personal Banking Barclaycard Consumer UK Business Banking Total customer deposits at amortised cost 2022 £m 4,540 1,093 1,626 7,259 (167) 30 (149) (286) 2021 £m 3,883 1,250 1,403 6,536 28 404 (67) 365 2020 £m 3,522 1,519 1,306 6,347 (380) (881) (206) (1,467) £169.7bn £165.4bn £157.3bn £9.2bn £26.2bn £8.7bn £34.7bn £9.9bn £38.2bn £205.1bn £208.8bn £205.4bn £195.6bn £196.4bn £179.7bn — £62.4bn £258.0bn — £64.2bn £260.6bn £0.1bn £60.7bn £240.5bn 2022 compared to 2021 Profit before tax increased to £2,646m (2021: £2,471m), with benefits from the rising rate environment in the UK more than offsetting the non-recurrence of a prior year credit impairment release . Total income increased 11% to £7,259m. Net interest income increased 13% to £5,893m with a NIM of 2.86% (2021: 2.52%) primarily driven by the rising interest rate environment in the UK. Net fee, commission and other income increased 2% to £1,366m. Personal Banking income increased 17% to £4,540m, driven by rising interest rates, partially offset by mortgage margin compression. Barclaycard Consumer UK income decreased 13% to £1,093m as higher customer spend volumes were more than offset by lower interest earning lending (IEL) balances following repayments and ongoing prudent risk management. Business Banking income increased 16% to £1,626m driven by rising interest rates alongside improved transaction based revenues, partially offset by lower government scheme lending income as repayments continue. Total operating expenses decreased 2% to £4,327m driven by efficiency savings more than offsetting the impact of inflation. Credit impairment charges were £286m (2021: £365m net release). The charges reflect an updated macroeconomic scenario together with a partial return to more normalised levels of customer behaviour. This is partially offset from the release of COVID-19 related adjustments as performance stabilises at or below pre-pandemic levels. As at 31 December 2022, UK cards 30 and 90 day arrears remain at 0.9% (Q421: 1.0%) and 0.2% (Q421: 0.2%) respectivelya. The UK cards business is supported by a total coverage ratio of 7.6% (December 2021: 12.8%). The UK cards coverage reflects revised recovery expectations under the ongoing debt sale program and continued resilience in the underlying book. PMAs are in place for the anticipated stress arising from the cost-of-living crisis. Loans and advances to customers at amortised cost decreased 2% to £205.1bn as £4.1bn of mortgage growth was more than offset by a £8.5bn decrease in Business Banking balances due to the repayment of government scheme lending and the yield curve impact from rising interest rates on the Education, Social Housing and Local Authority portfolio carrying value. Customer deposits at amortised cost remained broadly stable at £258.0bn (December 2021: £260.6bn), maintaining a strong loan: deposit ratio of 87% (December 2021: 85%). RWAs remained broadly stable at £73.1bn (December 2021: £72.3bn). Note a As at 31 December 2019, UK Cards 30 and 90 day arrears were 1.7% and 0.8% respectively. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 387 Analysis of results by business (continued) Barclays International Income statement information Net interest income Net trading income Net fee, commission and other income Total income Operating costs UK bank levy Litigation and conduct Total operating expenses Other net income Profit before impairment Credit impairment (charges)/releases Profit before tax Attributable profit Balance sheet information Loans and advances to customers at amortised cost Loans and advances to banks at amortised cost Debt securities at amortised cost Loans and advances at amortised cost Trading portfolio assets Derivative financial instrument assets Financial assets at fair value through the income statement Cash collateral and settlement balances Other assets Total assets Deposits at amortised cost Derivative financial instrument liabilities Loan: deposit ratio Risk weighted assets Period end allocated tangible equity Key facts Number of employees (full time equivalent) Performance measures Return on average allocated tangible equity Average allocated tangible equity Cost: income ratio Loan loss rate (bps) Net interest margin 2022 £m 4,927 7,709 5,231 17,867 (10,361) (133) (1,503) (11,997) 28 5,898 (933) 4,965 3,844 Restateda 2021 £m 3,263 5,693 6,709 15,665 (9,076) (134) (345) (9,555) 40 6,150 288 6,438 4,647 2020 £m 3,282 6,920 5,719 15,921 (8,765) (240) (48) (9,053) 28 6,896 (3,280) 3,616 2,220 £133.7bn £106.4bn £100.1bn £8.7bn £27.2bn £169.6bn £133.8bn £301.7bn £210.5bn £107.7bn £258.0bn £8.4bn £19.0bn £133.8bn £146.9bn £261.5bn £188.2bn £88.1bn £225.6bn £8.0bn £14.7bn £122.7bn £127.7bn £301.8bn £170.7bn £97.5bn £221.4bn £1,181.3bn £1,044.1bn £1,041.8bn £287.6bn £288.9bn 59% £254.8bn £36.8bn £258.8bn £256.4bn 52% £230.9bn £33.2bn £240.5bn £300.4bn 51% £222.3bn £30.2bn 10,900 10,400 10,800 10.2% £37.6bn 67% 54 5.02% 14.4% £32.4bn 61% (21) 4.01% 7.1% £31.5bn 57% 257 3.64% Note a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 388 Analysis of results by business (continued) Analysis of Barclays International Corporate and Investment Bank Income statement information Net interest income Net trading income Net fee, commission and other income Total income Operating costs UK bank levy Litigation and conduct Total operating expenses Other net income Profit before impairment Credit impairment (charges)/releases Profit before tax Attributable profit Balance sheet information Loans and advances to customers at amortised cost Loans and advances to banks at amortised cost Debt securities at amortised cost Loans and advances at amortised cost Trading portfolio assets Derivative financial instrument assets Financial assets at fair value through the income statement Cash collateral and settlement balances Other assets Total assets Deposits at amortised cost Derivative financial instrument liabilities Risk weighted assets Performance measures Return on average allocated tangible equity Average allocated tangible equity Cost: income ratio Loan loss rate (bps) Analysis of total income FICC Equities Global Markets Advisory Equity capital markets Debt capital markets Investment Banking fees Corporate lending Transaction banking Corporate Total income 2022 £m 1,949 7,733 3,686 13,368 (7,630) (126) (1,189) (8,945) 2 4,425 (119) 4,306 3,364 £90.5bn £8.1bn £27.2bn £125.8bn £133.7bn £301.6bn £210.5bn £106.9bn £222.6bn £1,101.1bn £205.8bn £288.9bn £215.9bn 10.2% £32.8bn 67% 9 5,695 3,149 8,844 768 166 1,281 2,215 (231) 2,540 2,309 Restateda 2021 £m 1,351 5,652 5,331 12,334 (6,818) (128) (237) (7,183) 2 5,153 473 5,626 4,032 £73.4bn £7.6bn £19.0bn £100.0bn £146.7bn £261.5bn £188.1bn £87.2bn £195.8bn £979.3bn £189.4bn £256.4bn £200.7bn 14.3% £28.3bn 58% (47) 3,448 2,967 6,415 921 813 1,925 3,659 588 1,672 2,260 2020 £m 1,084 6,975 4,417 12,476 (6,689) (226) (4) (6,919) 6 5,563 (1,559) 4,004 2,554 £70.3bn £7.4bn £14.7bn £92.4bn £127.5bn £301.7bn £170.4bn £96.7bn £194.9bn £983.6bn £175.2bn £300.3bn £192.2bn 9.5% £27.0bn 55% 166 5,138 2,471 7,609 561 473 1,697 2,731 590 1,546 2,136 13,368 12,334 12,476 Note a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 389 Analysis of results by business (continued) Analysis of Barclays International continued Consumer, Cards and Payments Income statement information Net interest income Net fee, commission, trading and other income Total income Operating costs UK bank levy Litigation and conduct Total operating expenses Other net income Profit before impairment Credit impairment charges Profit/(loss) before tax Attributable profit/(loss) Balance sheet information Loans and advances to customers at amortised cost Total assets Deposits at amortised cost Risk weighted assets Key facts US cards 30 day arrears rate US cards customer FICO score distribution <660 >660 Total number of payments clients Value of payments processeda Performance measures Return on average allocated tangible equity Average allocated tangible equity Cost: income ratio Loan loss rate (bps) Analysis of total income International Cards and Consumer Bank Private Bank Payments Total income Note a Includes £296bn (2021: £270bn; 2020: £268bn) of merchant acquiring payments. 2022 £m 2,979 1,520 4,499 (2,731) (7) (314) (3,052) 26 1,473 (814) 659 480 2021 £m 1,912 1,419 3,331 (2,258) (6) (108) (2,372) 38 997 (185) 812 615 2020 £m 2,198 1,247 3,445 (2,076) (14) (44) (2,134) 22 1,333 (1,721) (388) (334) £43.2bn £80.2bn £81.8bn £38.9bn £33.0bn £64.8bn £69.4bn £30.2bn £29.7bn £58.2bn £65.3bn £30.1bn 2.2% 1.6% 2.5% 11% 89% 395k 10% 90% 380k 13% 87% 365k £307bn £277bn £274bn 10.0% £4.8bn 68% 175 2,913 1,014 572 4,499 15.0% £4.1bn 71% 51 2,092 781 458 3,331 (7.5%) £4.5bn 62% 517 2,433 707 305 3,445 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 390 Analysis of results by business (continued) 2022 compared to 2021a Profit before tax decreased 23% to £4,965m with a RoTE of 10.2% (2021: 14.4%), reflecting a RoTE of 10.2% (2021: 14.3%) in CIB and 10.0% (2021: 15.0%) in CC&P. Excluding the impact of the Over-issuance of Securities, CIB RoTE was 12.0%. Barclays International has a diverse income profile across businesses and geographies including a significant presence in the US. The 10% appreciation of average USD against GBP positively impacted income and profits and adversely impacted credit impairment charges, total operating expenses and RWAs. Total income increased to £17,867m (2021: £15,665m). CIB income increased 8% to £13,368m. Global Markets income increased 38% to £8,844m representing the best full year for both Global Markets and FICC on a comparable basisb. FICC income increased 65% to £5,695m, mainly in macro, reflecting higher levels of activity as we supported our clients through a period of market volatility. Equities income of £3,149m (2021: £2,967m) included £292m of income related to hedging arrangements to manage the risks of the rescission offer in relation to the Over-issuance of Securities. Investment Banking fees decreased 39% to £2,215m due to the reduced fee pool, particularly in Equity and Debt capital marketsc . Within Corporate, Transaction banking income increased 52% to £2,540m driven by improved margins and growth in deposits, and higher fee income. Corporate lending income reflected fair value losses on leverage finance lending of c.£335m net of mark to market gains on related hedges, of which c.£85m was recognised in Q422, and higher costs of hedging and credit protection. CC&P income increased 35% to £4,499m. International Cards and Consumer Bank income increased 39% to £2,913m reflecting higher cards balances, including the Gap portfolio acquisition, partially offset by higher customer acquisition costs. Private Bank income increased 30% to £1,014m, reflecting client balance growth and improved margins partially offset by the non- recurrence of a property sale gain in the prior year. Payments income increased 25% to £572m driven by turnover growth from the easing of lockdown restrictions. Total operating expenses increased 26% to £11,997m. CIB total operating expenses increased 25% to £8,945m. Operating expenses excluding litigation and conduct charges increased 12% to £7,756m driven by continued investment in talent and technology, and the impact of inflation. Litigation and conduct charges were £1,189m (2021: £237m) including £966m from the Over-issuance of Securities and £165m relating to the Devices Settlementsd. CC&P total operating expenses increased 29% to £3,052m. Operating expenses excluding litigation and conduct charges increased 21% to £2,738m, including higher investment spend reflecting an increase in marketing and partnership costs. Litigation and conduct charges were £314m (2021: £108m) mainly driven by customer remediation costs relating to legacy loan portfolios. Credit impairment charges were £933m (2021: £288m net release) driven by a deteriorating macroeconomic forecast. CIB credit impairment charges of £119m (2021: £473m net release) were driven by a net increase in modelled impairment and single name charges partially offset by the benefit of credit protection. CC&P credit impairment charges increased to £814m (2021: £185m), driven by higher balances in US cards, including the day one impact of acquiring the Gap portfolio, macroeconomic deterioration and a gradual increase in delinquencies, partially offset by the utilisation of economic uncertainty PMAs and the release of COVID-19 related adjustments informed by refreshed macroeconomic scenarios. As at 31 December 2022, US cards 30 and 90 day arrears remain below pre-pandemic levels at 2.2% (Q421: 1.6%) and 1.2% (Q421: 0.8%) respectivelye. The US cards business is supported by a total coverage ratio of 8.1% (December 2021: 10.6%). Loans and advances at amortised cost increased £35.8bn to £169.6bn due to increased lending to customers across CIB and CC&P, inclusive of the Gap portfolio acquisition and appreciation of USD against GBP, and increased investment in debt securities. Trading portfolio assets decreased £13.1bn to £133.8bn due to a reduction in equity securities as clients repositioned their demand, partially offset by increased trading activity in debt securities. Derivative assets and liabilities increased £40.2bn and £32.5bn respectively to £301.7bn and £288.9bn driven by market volatility and increased activity. Financial assets at fair value through the income statement increased £22.3bn to £210.5bn driven by increased reverse repurchase activity. Deposits at amortised cost increased £28.8bn to £287.6bn primarily due to growth in Corporate deposits and an increase in short-term money market deposits. RWAs increased to £254.8bn (December 2021: £230.9bn) mainly resulting from the impact of the appreciation of USD against GBP, regulatory changes and higher CC&P balances including the Gap portfolio. Notes a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. b Period covering 2014-2022. Pre 2014 data was not restated following re-segmentation in 2016. c Data source: Dealogic for the period covering 1 January to 31 December 2022. d Refers to the settlements with the SEC and CFTC in connection with their investigations of the use of unauthorised devices for business communications. e As at 31 December 2019, US cards 30 and 90 days arrears were 2.7% and 1.4% respectively. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 391 Analysis of results by business (continued) Head Office Income statement information Net interest income Net fee, commission and other income Total income Operating costs UK bank levy Litigation and conduct Total operating expenses Other net (expenses)/income Loss before impairment Credit impairment charges Loss before tax Attributable loss Balance sheet informationa Total assets Risk weighted assets Period end allocated tangible equity Key facts Number of employees (full time equivalent)b,c Performance measures Average allocated tangible equity 2022 £m (248) 78 (170) (336) (17) (53) (406) (22) (598) (1) (599) (698) Restated 2021 £m (392) 131 (261) (659) — (15) (674) 220 (715) — (715) (198) 2020 £m (393) (109) (502) (399) (9) (73) (481) (23) (1,006) (91) (1,097) (1,019) £19.2bn £8.6bn £(0.2)bn £19.0bn £11.0bn £5.5bn £18.6bn £10.2bn £6.8bn 70,300 64,100 50,900 £0.7bn £5.0bn £6.7bn Notes a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. b Head Office includes employees in Barclays Execution Services. c Barclays Execution Services Employees are reported within the Head Office Segment. Barclays UK transformed its business in 2021 and consolidated all Customer Care employees, who directly serve customers, into Barclays Execution Services to improve customer service and experience. Costs are recharged, while FTEs are reported within Head Office, as at 31 December 2021 10,700 FTEs were impacted by the move from Barclays UK to Head Office. The 2020 comparative figures have not been restated. 2022 compared to 2021 Loss before tax was £599m (2021: £715m). Total income was an expense of £170m (2021: £261m) primarily reflecting treasury items, funding costs on legacy capital instruments and mark-to-market losses on legacy investments, partially offset by hedge accounting gains. Additionally, there was a £74m loss on sale arising from disposals of Barclays’ equity stake in Absa, and a £72m interest expense that became payable to a US tax authority upon the resolution of historical tax issues. This was partially offset by a gain of £86m from the sale and leaseback of UK data centres and the receipt of £30m of dividends from Absa prior to disposal. Total operating expenses reduced to £406m (2021: £674m) reflecting the non-recurrence of the £266m structural cost action charge taken as part of the real estate review in June 2021. Other net income was an expense of £22m (2021: £220m income) driven by a fair value loss on investments held by the Business Growth Fund in which Barclays has an associate interest. RWAs reduced to £8.6bn (December 2021: £11.0bn) reflecting the disposals of Barclays' equity stake in Absa in April 2022 and September 2022. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 392 Non-IFRS performance measures The Group’s 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 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. Non-IFRS performance measures glossary Measure Loan: deposit ratio Period end allocated tangible equity Definition Loans and advances at amortised cost divided by deposits at amortised cost. The components of the calculation have been included on page 348. Allocated tangible equity is calculated as 13.5% (2021; 13.5% and 2020: 13.0%) 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. Average tangible shareholders’ equity 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. Average allocated tangible equity Return on average tangible shareholders’ equity Return on average allocated tangible equity Operating expenses excluding litigation and conduct Operating costs Cost: income ratio Loan loss rate 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. Statutory 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 components of the calculation have been included on pages 394. Statutory profit after tax attributable to ordinary equity holders of the parent, as a proportion of average allocated tangible equity. The components of the calculation have been included on page 395. A measure of total operating expenses excluding litigation and conduct charges. A measure of total operating expenses excluding litigation and conduct charges, UK bank levy and GMP. Total operating expenses divided by total income. 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 304. Net interest margin Net interest income divided by the sum of average customer assets. The components of the calculation have been included on page 393. Tangible net asset value per share 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. The components of the calculation have been included on page 396. Performance measures excluding the impact of the Over-issuance of Securities Profit before impairment Calculated by excluding the impact of the Over-issuance of Securities from performance measures. The components of the calculations have been included on page 395. Calculated by excluding credit impairment charges or releases from profit before tax. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 393 Non-IFRS performance measures (continued) Margins analysis For the year ended 31 December Barclays UK Corporate and Investment Banka Consumer, Cards and Payments Barclays Internationala Total Barclays UK and Barclays International Otherb Total Barclays Group 2022 2021 Net interest income Average customer assets Net interest margin Net interest income Average customer assets Net interest margin £m 5,893 1,796 2,979 4,775 £m 205,972 56,008 39,193 95,201 10,668 301,173 (96) 10,572 % 2.86 3.21 7.60 5.02 3.54 £m 5,202 1,238 1,911 3,149 8,351 (278) 8,073 £m 206,628 47,725 30,805 78,530 285,158 % 2.52 2.59 6.21 4.01 2.93 Notes a Corporate and Investment Bank and Barclays International margins include IEL balances within the corporate and investment banking business. b Other includes Head Office and non-lending related corporate and investment banking businesses not included in Barclays International margins. The Group NIM increased 61bps to 3.54%. Barclays UK NIM increased 34bps to 2.86%, reflecting the impact of higher UK interest rates. Barclays International NIM increased 101bps to 5.02%. CIB NIM increased 62bps to 3.21% and CC&P NIM increased 139bps to 7.60%, reflecting the impact of balance growth and higher interest rates. The Group’s combined product and equity structural hedge notional as at 31 December 2022 was £263bn (December 2021: £228bn), with an average duration of approximately 2.5 years (2021: close to 3 years). Group net interest income includes gross structural hedge contributions of £2,196m (2021: £1,415m) and net structural hedge contributions of £(1,544)m (2021: £1,187m). Gross structural hedge contributions represent the absolute interest income earned from the fixed receipts on the swaps in the structural hedge, while the net structural hedge contributions represent the net interest earned on the difference between the structural hedge rate and prevailing floating rates. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 394 Non-IFRS performance measures (continued) Returns Return on average tangible equity is calculated as profit for the period attributable to ordinary equity holders of the parent as a proportion of average tangible equity for the period, excluding non-controlling and other equity interests for businesses. Allocated tangible equity has been calculated as 13.5% (2021: 13.5%, 2020: 13.0%) 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 average allocated tangible equity represents the difference between the Group’s average tangible shareholders’ equity and the amounts allocated to businesses. For the year ended 31 December 2022 Barclays UK Corporate and Investment Bank Consumer, Cards and Payments Barclays International Head Office Barclays Group For the year ended 31 December 2021a Barclays UK Corporate and Investment Bank Consumer, Cards and Payments Barclays International Head Office Barclays Group For the year ended 31 December 2020 Barclays UK Corporate and Investment Bank Consumer, Cards and Payments Barclays International Head Office Barclays Group Profit/(loss) attributable to ordinary equity holders of the parent £m 1,877 3,364 480 3,844 (698) 5,023 1,756 4,032 615 4,647 (198) 6,205 325 2,554 (334) 2,220 (1,019) 1,526 Average tangible equity £bn 10.0 32.8 4.8 37.6 0.7 48.3 10.0 28.3 4.1 32.4 5.0 47.3 10.1 27.0 4.5 31.5 6.7 48.3 Return on average tangible equity % 18.7 10.2 10.0 10.2 n/m 10.4 17.6 14.3 15.0 14.4 n/m 13.1 3.2 9.5 (7.5) 7.1 n/m 3.2 Note a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. Performance measures Return on average tangible shareholders' equity Attributable profit/(loss) £m 1,877 £m 3,364 £m 480 £m 3,844 £m (698) £m 5,023 Barclays UK Corporate and Investment Bank Consumer, Cards and Payments Barclays International Head Office Barclays Group For the year ended 31 December 2022 Average shareholders' equity Average goodwill and intangibles Average tangible shareholders' equity £13.6bn (£3.6bn) £10.0bn £32.8bn — £32.8bn £5.7bn (£0.9bn) £4.8bn £38.5bn (£0.9bn) £37.6bn £4.3bn (£3.6bn) £0.7bn £56.4bn (£8.1bn) £48.3bn Return on average tangible shareholders' equity 18.7% 10.2% 10.0% 10.2% n/m 10.4% Barclays Group average tangible shareholders’ equity based on a CET1 ratio of 13.5% £47.7bn Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 395 Non-IFRS performance measures (continued) Return on average tangible shareholders' equity Attributable profit/(loss) Average shareholders' equity Average goodwill and intangibles Average tangible shareholders' equity For the year ended 31 December 2021a Barclays UK £m 1,756 £13.6bn (£3.6bn) £10.0bn Corporate and Investment Bank Consumer, Cards and Payments Barclays International Head Office Barclays Group £m 4,032 £28.3bn — £28.3bn £m 615 £4.8bn (£0.7bn) £4.1bn £m 4,647 £33.1bn (£0.7bn) £32.4bn £m (198) £8.7bn (£3.7bn) £5.0bn £m 6,205 £55.4bn (£8.1bn) £47.3bn Return on average tangible shareholders' equity 17.6% 14.3% 15.0% 14.4% n/m 13.1% Barclays Group average tangible shareholders’ equity based on a CET1 ratio of 13.5% £42.7bn Note a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. Return on average tangible shareholders' equity Attributable profit/(loss) Average shareholders' equity Average goodwill and intangibles Average tangible shareholders' equity For the year ended 31 December 2020 Barclays UK Corporate and Investment Bank Consumer, Cards and Payments Barclays International Head Office Barclays Group £m 325 £13.7bn (£3.6bn) £10.1bn £m 2,554 £27.0bn — £27.0bn £m (334) £5.1bn (£0.6bn) £4.5bn £m 2,220 £32.1bn (£0.6bn) £31.5bn £m (1,019) £10.6bn (£3.9bn) £6.7bn £m 1,526 £56.4bn (£8.1bn) £48.3bn Return on average tangible shareholders' equity 3.2% 9.5% (7.5%) 7.1% n/m 3.2% Barclays Group average tangible shareholders’ equity based on a CET1 ratio of 13.0% Performance measures excluding the impact of the Over-issuance of Securities Corporate and Investment Bank Attributable profit excluding the impact of the Over-issuance of Securities Attributable profit Post-tax impact of the Over-issuance of Securities Attributable profit excluding the impact of the Over-issuance of Securities Return on average allocated tangible equity Average allocated tangible equity The impact of the Over-issuance of Securities Average allocated tangible equity adjusted for the impact of the Over-issuance of Securities Return on average allocated tangible equity The impact of the Over-issuance of Securities Return on average allocated tangible equity excluding the impact of the Over-issuance of Securities £45.1bn For the year ended 31.12.22 £m 3,364 (552) 3,916 £32.8bn £0.3bn £32.5bn 10.2% (1.8)% 12.0% Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 396 Non-IFRS performance measures (continued) Tangible net asset value per share Total equity excluding non-controlling interests Other equity instruments Goodwill and intangibles Tangible shareholders’ equity attributable to ordinary shareholders of the parent 2022 £m 68,292 (13,284) (8,239) 46,769 2021a £m 69,052 (12,259) (8,061) 48,732 2020 £m 65,797 (11,172) (7,948) 46,677 Shares in issue 15,871m 16,752m 17,359m Tangible net asset value per share 295p 291p 269p Note a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details. Financial statements Detailed analysis of our statutory accounts, independently audited and providing in-depth disclosure on the financial performance of the Group. Barclays has adopted the British Bankers’ Association (BBA) Code for Financial Reporting Disclosure as adopted by UK Finance in 2017 and has prepared the 2022 Annual Report in compliance with the BBA Code. Barclays is committed to continuously reflect the objectives of reporting set out in the BBA Code. Consolidated financial statements Independent Auditor’s Report Consolidated income statement Consolidated statement of comprehensive income Consolidated balance sheet Consolidated statement of changes in equity Consolidated cash flow statement Parent company accounts Notes to the financial statements Significant accounting policies Financial performance and returns Segmental reporting Net interest income Net fee and commission income Net trading income Net investment income Operating expenses Credit impairment charges Tax Earnings per share Dividends on ordinary shares Assets and liabilities held at fair value Trading portfolio Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Financial liabilities designated at fair value Fair value of financial instruments Offsetting financial assets and financial liabilities Page Note 399 416 417 418 419 420 421 424 430 432 433 435 435 436 436 440 445 445 446 446 447 455 455 456 468 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Assets at amortised cost and other investments Loans and advances and deposits at amortised cost Property, plant and equipment Leases Goodwill and intangible assets Accruals, provisions, contingent liabilities and legal proceedings Other liabilities Provisions Capital instruments, equity and reserves Contingent liabilities and commitments Legal, competition and regulatory matters Subordinated liabilities Ordinary shares, share premium and other equity Reserves Non-controlling interests Employee benefits Staff costs Scope of consolidation Share-based payments Pensions and post-retirement benefits Principal subsidiaries Structured entities Investments in associates and joint ventures Securitisations Assets pledged, collateral received and assets transferred Other disclosure matters Related party transactions and Directors’ remuneration Auditor’s remuneration Interest rate benchmark reform Barclays PLC (the Parent company) Related undertakings Page Note 469 469 471 473 477 477 478 479 485 488 489 490 491 492 494 500 502 506 507 509 511 513 513 517 519 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 399 KPMG LLP’s independent auditor’s report to the members of Barclays PLC consistent with those discussed and included in our reporting to the Board Audit Committee (“BAC”). We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed public interest entities. 2. Overview of our audit Factors driving our view of risks Following our FY21 audit and considering developments affecting the Barclays PLC Group since then, we have updated our risk assessment. The macro-economic environment continues to drive our risk assessment as the uncertainty which arose during the COVID-19 pandemic has evolved into increasing affordability pressures associated with rising inflation and interest rates. The economic uncertainty and change has brought both pressures and opportunities. Fee income across the equity and debt capital markets is down versus the prior year but income in the markets business has risen versus 2021 due to a higher volume of trading activity linked to volatility across various asset classes. In addition, the increasing interest rate environment and changes in portfolio mix have led to an increase in the net interest margin. As part of our risk assessment, we have maintained our focus on future economic assumptions used by the Group in its key estimates both at the year end and, where relevant, on a forward-looking basis. Our risk assessment also considered instances of non-compliance with laws and regulations and enforcement actions against the Group during the year and specifically those that could reasonably be expected to have a material effect on the financial statements. We considered management’s assessment of how these occurred, their assessment of whether the risk could be more pervasive, and actions taken to remediate and prevent recurrences or similar issues. : 1. Our opinion is unmodified In our opinion: • the financial statements of Barclays PLC give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2022, and of the Group’s profit for the year then ended; • the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards; • the Parent Company financial statements have been properly prepared in accordance with UK- adopted international accounting standards as applied in accordance with the provisions of the Companies Act 2006; • the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. What our opinion covers We have audited the Group and Parent Company financial statements of Barclays PLC for the year ended 31 December 2022 (FY22) included in the Annual Report and Accounts, which comprise: Group (Barclays PLC and its subsidiaries) • Consolidated income statement • Consolidated statement of comprehensive income • Consolidated balance sheet • Consolidated statement of changes in equity • Consolidated cash flow statement • Notes 1 to 43 of the Consolidated Financial Statements, including the summary of significant accounting policies Parent Company (Barclays PLC) • Statement of comprehensive income • Balance sheet • Statement of changes in equity • Cash flow statement • Note 42 to the Financial Statements, including the summary of significant accounting policies Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion and matters included in this report are Key Audit Matters Item Impairment allowance on loans and advances at amortised cost Valuation of financial instruments held at fair value UK Pension scheme valuation User access management Recoverability of Parent Company’s investment in subsidiaries & 4.1 1 4.2 1 4.3 1 4.4 1 4.5 Similar risk to FY21 Increased risk since FY21 1 & Our use of specialists and innovation Using the work of specialists and specific team members with expertise in a specialised area of accounting or auditing: We used our specialists and specific team members with expertise in a specialised area of accounting or auditing to assist us in various aspects of our audit. This includes, for example: • Credit risk modellers for our testing of the ECL models • Economics specialists for our work related to the macro-economic variables and scenarios used in the determination of the ECL provisions • Valuation specialists for our independent repricing of samples of financial instruments • Corporate finance valuation specialists for our work over the methodology underpinning and certain of the assumptions used in the impairment assessment of goodwill and intangibles and the carrying value of subsidiaries • Actuarial pensions specialists for our work on the valuation of the defined benefit obligation • Tax specialists for our work over the tax charge, effective tax rate and uncertain tax positions. Incorporating unpredictability into our audit: A requirement of the auditing standards is that we undertake procedures which are deliberately unexpected and could not have reasonably been predicted by Barclays’ management. As an example, we update our criteria for selecting journals with a higher risk of management override for testing each year so that the selection criteria do not become predictable. This year we added additional key words we searched for in journal descriptions and also introduced new search criteria for journals posted and approved by the same individuals. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 400 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) Innovation in the audit: Our audit is committed to driving innovation and the increased use of technology. In 2022 we have continued to deploy a large number of data and analytics tools across our audit. We have also continued to innovate our audit of the estimation of expected credit losses through independently recalculating a selection of model assumptions using more recent data for certain portfolios. This is used to develop a range for ECL which we then compare to management’s own point estimate. Board Audit Committee (“BAC”) interaction During the year, the BAC met 14 times. KPMG are invited to attend all BAC meetings and are provided an opportunity to meet with the BAC in private sessions without the Executive Directors being present. For each Key Audit Matter, we have set out communications with the BAC in section 4, including matters that required particular judgement for each. In addition, our audit team includes a senior partner who has specific responsibility for ensuring audit quality (our “Audit Quality Partner”). The Board Audit Committee met with the Audit Quality Partner, without the audit team present, to receive a report on his assessment of audit quality. The matters included in the BAC Chair’s report on page 169 are materially consistent with our observations of those meetings. Our independence We have fulfilled our ethical responsibilities and remain independent of the Group in accordance with UK ethical requirements, including the FRC Ethical Standard as applied to listed public interest entities. Apart from the matter noted below, we have not performed any non-audit services during the year ended 31 December 2022 or subsequently which are prohibited by the FRC Ethical Standard. During 2023, we identified that a KPMG member firm had provided preparation of local GAAP financial statement services over the period 2019 to 2022 to entities not in scope for the group audit. The services involved administrative preparation of the local statutory financial statements and did not involve any management decision-making or bookkeeping. The work was undertaken after the group audit opinion was signed by KPMG LLP for each of the impacted financial years and had no direct or indirect effect on Barclays PLC’s consolidated financial statements. In our professional judgment, we confirm that based on our assessment of the breach, our integrity and objectivity as auditor has not been compromised and we believe that an objective, reasonable and informed third party would conclude that the provision of this service would not impair our integrity or objectivity for any of the impacted financial years. The audit committee have concurred with this view. We were first appointed as auditor by the shareholders for the year ended 31 December 2017. The period of total uninterrupted engagement is for the six financial years ended 31 December 2022. The Group lead engagement partner is required to rotate after five years. This is the first set of UK Financial Statements that Stuart Crisp has signed. The average tenure of key audit partners who are responsible for component audits, as set out in section 7 below, is three years, with the shortest being their first year of involvement and longest being five years. Total audit fee Other audit related fees Other services Date first appointed Uninterrupted audit tenure Next financial period which requires a tender Tenure of Group lead engagement partner Average tenure of key audit partners £58m £11m £2m 31 March 2017 6 years 31 December 2027 1 year 3 years Normalised profit before tax from continuing operations £7,012m (2021: normalised PBT:£6,071m) n Profit before tax from continuing operations n Group materiality £7,012 £275 A £275m Whole financial statements materiality (2021: £230m) B £170m Highest component materiality. Range of materiality for the five components (£100m-£170m) (2021: £75m-£170m) £13m Misstatements reported to the Board Audit Committee (2021: £11m) C In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in individual account balances add up to a material amount across the financial statements as a whole. Performance materiality was set at 65% (2021: 74%) of materiality for the financial statements as a whole, which equates to £179m (2021: £170m) for the group and £169m (2021: £169m) for the parent company. We applied this percentage in our determination of performance materiality based on the level of control deficiencies during the prior period. Materiality (Item 6 below) The scope of our work is influenced by our view of materiality and our assessed risk of material misstatement. We have determined overall materiality for the Barclays PLC Group to be £275m (FY21: £230m). A key judgement in determining materiality (and performance materiality) is the appropriate benchmark to select, based on our perception of the needs of shareholders. We considered which benchmarks and key performance indicators have the greatest bearing on shareholder decisions. We determined that profit before tax remains the key benchmark for the Barclays PLC Group. For FY21 we normalised profit before tax downward by £2.3bn to adjust for the fact that ECL charges were considered abnormally low as the economy recovered from the COVID-19 pandemic. For FY22 we did not normalise profit before tax. This is reflective of the impact of COVID-19 on ECL being less pronounced in the current period. This change is a driver of the increase in materiality in 2022. As such, for FY22 we based our materiality on profit before tax, of which it represents 3.9% (FY21: 3.8% of normalised PBT). We have determined overall materiality for the Parent Company to be £260m (FY21: £225m). Materiality for the Parent Company financial statements was determined with reference to a benchmark of net assets of which it represents 0.5% (FY21: 0.4%). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 401 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) Group scope (Item 7 below) We have performed top down risk assessment and planning to determine which of the Group’s components are likely to include risks of material misstatement to the Group financial statements, the type of procedures to be performed at these components and the extent of involvement required from component auditors around the world for the purpose of our opinion on the consolidated financial statements. We have also considered the extent to which the Group has established central hubs in shared service centre structures in India. The outputs from these hubs are included in the financial information of the reporting components and so the India operations are not considered to be a separate component. We have performed certain audit procedures centrally across the Group, set out in more detail in Section 7. In addition, we have performed Group level analysis on the remaining components to determine whether further risks of material misstatement exist in those components. We consider the scope of our audit, as communicated to the Board Audit Committee, to be an appropriate basis for our audit opinion. The components within the scope of our work accounted for the following percentages: Coverage of Group financial statements Group total income* Group total assets* Note * Percentage of Group total income/assets over which we performed full scope audit or audit of account balances The impact of climate change on our audit In planning our audit, we have considered the potential impact of risks arising from climate change on the Group’s business and its financial statements. The Group has set out its ambition under the Paris Accord to be a net zero bank by 2050. Further information is provided in the Group’s Environment, Social and Governance report which has been incorporated into the 2022 Annual Report. Climate change risks, opportunities and the Group’s own commitments and changing regulations could have a significant impact on the Group’s business and operations. There is the possibility that climate change risks, both physical and transitional, could affect financial statement balances, through estimates such as credit risk and market risk. There is enhanced narrative in the Annual Report on climate matters. As part of our audit we performed a risk assessment of the impact of climate change risk and the commitments made by the Group in respect of climate change on the financial statements and our audit approach. As a part of this we held discussions with our own climate change professionals to challenge our risk assessment. In doing this we performed the following: • Understanding management’s processes: we made enquiries to understand management’s assessment of the potential impact of climate change risk on the Group’s Annual Report and Accounts and the Group’s preparedness for this. As a part of this we made enquiries to understand management’s risk assessment process as it relates to possible effects of climate change on the Annual Report and Accounts including the way in which the accounting policies of the Group (including those relating to products with specific climate features) are updated to reflect climate change risks. • Retail credit risk: we assessed how the Group considers the impact of physical risks on the valuation of mortgage collateral. Specifically, we performed data and analytic driven risk assessment procedures to understand the potential impact of flooding and subsidence on the valuation of mortgage collateral and made enquiries of management to understand how this is considered within their own collateral valuation process. • Corporate credit risk: we assessed how the Group considers the impact of climate risk on corporate counterparties through our individual loan assessments where, for performing counterparties, we assessed how climate change risk impacts certain counterparties within the commercial bank, including the impact on their credit rating as applicable. The focus of our procedures was on certain counterparties who operate in industries with greater exposure to climate risk - the energy, transportation, materials and buildings, agriculture, food and forest product sectors. • Market risk: as part of our risk assessment, we incorporated a consideration of the climate change impact on unobservable inputs used in the valuation of certain financial instruments in elevated risk sectors including energy, metals and mining. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 402 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) • Annual report narrative: we made enquiries of management to understand the process by which climate related narrative is developed including the primary sources of data used and the governance process in place over the narrative. As a part of our risk assessment, we read the climate related information in the front half of the Annual Report and considered consistency with the financial statements and our audit knowledge. On the basis of the procedures performed above, we concluded that, while climate change posed a risk to the determination of asset values in the current year, the risk was not significant when we considered the nature of the assets and the relevant contractual terms. As a result, there was no material impact from climate change on our key audit matters. 3. Going concern, viability and principal risks and uncertainties The Directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Parent Company or the Group or to cease their operations, and they have concluded that the Parent Company’s and the Group’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”). Going concern We used our knowledge of the Group and Parent Company, the financial services industry, and the general economic environment to identify the inherent risks to the business model and analysed how those risks might affect the Group’s and Parent Company’s financial resources or ability to continue operations over the going concern period. The risks that management considered most likely to adversely affect the Group’s and Parent Company’s available financial resources over this period and which we challenged were: • the availability of funding and liquidity in the event of a market wide stress scenario; and • the impact on regulatory capital requirements in the event of an economic slowdown. We considered whether these risks could plausibly affect the availability of financial resources in the going concern period by comparing severe, but plausible downside scenarios that could arise from these risks individually and collectively against the level of available financial resources indicated by the Group’s financial forecasts. Our procedures also included an assessment of whether the going concern disclosure in note 1 to the financial statements gives a complete and accurate description of the Directors’ assessment of going concern. Accordingly, based on those procedures, we found the directors’ use of the going concern basis of preparation without any material uncertainty for the Group and Parent Company to be acceptable. However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Group or the Parent Company will continue in operation. Our conclusions • We consider that the directors’ use of the going concern basis of accounting in the preparation of the Group’s and Parent Company’s financial statements is appropriate; • We have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Group’s or Parent Company's ability to continue as a going concern for the going concern period; • We have nothing material to add or draw attention to in relation to the directors’ statement in Note 1 to the financial statements on the use of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Group and Parent Company’s use of that basis for the going concern period, and we found the going concern disclosure in note 1 to be acceptable; and • The related statement under the Listing Rules set out on page 65 is materially consistent with the financial statements and our audit knowledge. Disclosures of emerging and principal risks and longer-term viability Our responsibility We are required to perform procedures to identify whether there is a material inconsistency between the directors’ disclosures in respect of emerging and principal risks and the viability statement, and the financial statements and our audit knowledge. Based on those procedures, we have nothing further to add or draw attention to in relation to: • the directors’ confirmation within the viability statement that they have carried out a robust assessment of the emerging and principal risks facing the Group, including those that would threaten its business model, future performance, solvency and liquidity; • the Principal Risks and Uncertainties disclosures describing these risks and how emerging risks are identified and explaining how they are being managed and mitigated; and • the directors’ explanation in the viability statement of how they have assessed the prospects of the Group, over what period they have done so and why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions. We are also required to review the Viability Statement set out on page 58. Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial statements audit. As we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the absence of anything to report on these statements is not a guarantee as to the Group’s and Parent Company’s longer-term viability. Our reporting • We have nothing material to add or draw attention to in relation to these disclosures. • We have concluded that these disclosures are materially consistent with the financial statements and our audit knowledge. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 403 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) 4. Key audit matters What we mean Key Audit Matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect on: • the overall audit strategy; • the allocation of resources in the audit; • and directing the efforts of the engagement team. We include below the Key Audit Matters in decreasing order of audit significance together with our key audit procedures to address those matters and our results from those procedures. These matters were addressed, and our results are based on procedures undertaken for the purpose of our audit of the financial statements as a whole. We do not provide a separate opinion on these matters. 4.1 Impairment allowances on loans and advances at amortised cost, including off-balance sheet elements Financial Statement Elements Impairment allowances on loans and advances at amortised cost, including off-balance sheet elements FY22 FY21 £6.2bn £6.3bn Our assessment of risk vs FY21 & Our assessment is that the risk has increased since FY21. This is due to the increased macroeconomic uncertainty seen during the year considering rising interest rates and inflationary pressures. Our results FY22: Acceptable FY21: Acceptable Description of the Key Audit Matter Subjective estimate The estimation of expected credit losses (“ECL”) on financial instruments, involves significant judgement and estimates. The key areas where we identified greater levels of management judgement and therefore increased levels of audit focus in the Group’s estimation of ECLs are: • Model estimations – Inherently judgemental modelling and assumptions are used to estimate ECL which involves determining Probabilities of Default (“PD”), Loss Given Default (“LGD”), and Exposures at Default (“EAD”). ECLs may be inappropriate if certain models or underlying assumptions do not accurately predict defaults or recoveries over time, become out of line with wider industry experience, or fail to reflect the credit risk of financial assets. As a result, certain IFRS 9 models and model assumptions are the key drivers of complexity and uncertainty in the Group’s calculation of the ECL estimate. • Economic scenarios – IFRS 9 requires the Group to measure ECLs on an unbiased forward-looking basis reflecting a range of future economic conditions. Significant management judgement is applied in determining the forward-looking economic scenarios used as an input to calculate ECL, the probability weightings associated with the scenarios and the complexity of models used to derive the probability weightings. Our response to the risk Our procedures to address the risk included: Risk assessment: We performed granular and detailed risk assessment procedures over the entirety of the loan and advances at amortised cost including off-balance sheet elements within the Group’s financial statements. As part of these risk assessment procedures, we identified which portfolios are associated with a risk of material misstatement including those arising from significant judgements over the estimation of ECL either due to inputs, methods or assumptions. Controls testing: We performed end to end process walkthroughs to identify the key systems, applications and controls used in the ECL processes. We tested the relevant manual, general IT and application controls over key systems used in the ECL process. Key aspects of our controls testing involved evaluating the design and implementation and testing the operating effectiveness of the key controls over the: • completeness and accuracy of the key inputs into the IFRS 9 impairment models; • application of the staging criteria; • model validation, implementation and monitoring; • authorisation and calculation of post model adjustments and management overlays; • selection and implementation of economic variables and the controls over the economic scenario selection and probabilities; and • credit reviews that determine customer risk ratings used in the models for wholesale customers. Our credit risk modelling expertise: We involved our own credit risk modellers who assisted in the following: • evaluating the Group’s impairment methodologies for compliance with IFRS 9; • inspecting model code for the calculation of certain components of the ECL model to assess its consistency with the Group’s model methodology; • evaluating for a selection of models which were changed or updated during the year as to whether the changes (including the updated model code) were appropriate by assessing the updated model methodology against the applicable accounting standard; • reperforming the calculation of certain adjustments to assess consistency with the qualitative adjustment methodologies; • assessing and reperforming, for a selection of models, the reasonableness of the model predictions by comparing them against actual results and evaluating the resulting differences; • evaluating the model output for a selection of models by inspecting the corresponding model functionality and independently implementing the model by rebuilding the model code and comparing our independent output with management’s output; and • independently recalculating a selection of model assumptions using more recent data for certain portfolios. This is used to develop a range for ECL which is compared to management’s point estimate Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 404 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) Description of the Key Audit Matter Our response to the risk Our economics expertise: We involved our own economic specialists who assisted us in: • assessing the reasonableness of the Group’s methodology and models for determining the economic scenarios used and the probability weightings applied to them; • assessing key economic variables which included comparing samples of economic variables to external sources; • assessing the overall reasonableness of the economic forecasts by comparing the Group’s forecasts to our own modelled forecasts; and • assessing the reasonableness of the Group’s qualitative adjustments by challenging key economic assumptions applied in their calculation based on external sources. Other test of details: Key aspects of our testing in addition to those set out above involved: • sample testing over key inputs into the ECL calculations; • selecting a sample of post model adjustments, considering the size and complexity of management overlays, in order to assess the reasonableness of the adjustments by challenging key assumptions, inspecting the calculation methodology and tracing a sample of the data used back to source data; and • selecting a sample of credit reviews in order to assess the reasonableness of customer risk ratings by challenging key judgements and considering disconfirming or contradictory evidence. Assessing transparency: We assessed whether the disclosures appropriately disclose and address the uncertainty which exists when determining the ECL. In addition, we assessed whether the disclosure of the key judgements and assumptions was sufficiently clear. ▪ Qualitative adjustments – Adjustments to the model-driven ECL results are raised by management to address known impairment model limitations or emerging trends as well as risks not captured by models. They represent approximately 8.5% of the ECL. These adjustments are inherently uncertain and significant management judgement is involved in estimating certain post model adjustments (“PMA’s”) and management overlays. The effect of these matters is that, as part of our risk assessment, we determined that the impairment of loans and advances to customers including off balance sheet elements has a high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the financial statements as a whole, and possibly many times that amount. The credit risk sections of the financial statements (pages 301-340) disclose the sensitivities estimated by the Group. Disclosure quality The disclosures regarding the Group’s application of IFRS 9 are key to explaining the key judgements and material inputs to the IFRS 9 ECL results. Communications with the Barclays PLC Board Audit Committee Our discussions with and reporting to the Board Audit Committee included: • The effectiveness of the control environment operating over the calculation of the ECL provisions; • The determination and utilisation of judgemental post model adjustments recognised; • Model monitoring results and adjustments made; • Management’s economic forecast and associated scenario probability weights; and • The disclosures made to explain ECL, including explaining the resulting estimation uncertainty. Areas of particular auditor judgement We identified the following as the areas of particular auditor judgement: • The appropriateness of the model estimations and adjustments recorded to the model driven ECL calculations to reflect the current economic environment. Our results Based on the risk identified and our procedures performed we considered the impairment allowances on loans and advances at amortised cost, including off- balance sheet elements and the related disclosures to be acceptable (2021 result: acceptable). Further information in the Annual Report and Accounts: See the Board Audit Committee Report on page 173 for details on how the Board Audit Committee considered impairment as an area of focus, page 425 for the accounting policy on accounting for the impairment of financial assets under IFRS 9, pages 300-340 for the credit risk disclosures, and page 436 for the financial disclosure note 8; Credit Impairment charges/(releases). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 405 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) 4.2 Valuation of financial instruments held at fair value Financial Statement Elements FY22 FY21 Level 2 assets at fair value* (note 17) Level 2 liabilities at fair value* (note 17) Level 3 assets at fair value (note 17) Level 3 liabilities at fair value (note 17) £595bn £572bn £21bn £7.5bn £533bn £521bn £16bn £6.5bn Our assessment of risk vs FY21 1 Our assessment is that the risk is similar to FY21. Our results FY22: Acceptable FY21: Acceptable *The key audit matter identified relates to one derivatives portfolio within these balances, and xVA adjustments made to derivative valuations, both of which we considered to be harder-to-value. Our response to the risk Our procedures to address the risk included: Risk assessment: We performed granular and detailed risk assessment procedures throughout the audit period over the entirety of the balances within the Group’s financial statements (i.e. all of the fair value financial instruments held by the Group). As part of these risk assessment procedures, we identified which portfolios and the associated valuation inputs have a risk of material misstatement including those arising from significant judgements over valuation either due to unobservable inputs or complex models. Control testing: We attended management’s valuation committee throughout the year and observed discussion and challenge over valuation themes including items related to the valuation of certain difficult-to-value financial instruments recorded at fair value. We performed end to end process walkthroughs to identify the key systems, applications and controls used in the valuations processes. We tested the design and operating effectiveness of key controls relating specifically to these portfolios. Key aspects of our controls testing involved evaluating the design and implementation and testing the operating effectiveness of the key controls over: • independent price verification (IPV), performed by a control function, of key market pricing inputs, including completeness of positions and valuation inputs subject to the IPV process; • FVAs, including exit adjustments (to mark the portfolio to bid or offer prices), model shortcoming reserves to address model limitations and XVAs; • • the validation, completeness, implementation and usage of valuation models. This included controls over assessment of model limitations and assumptions; and the assessment of the observability of a product and their unobservable inputs. Our valuations expertise: We involved our own valuations specialists in the following: • independently re-pricing a selection of fair value financial instruments and challenging management on the valuations where they were outside our tolerance; and • challenging the appropriateness of significant models and methodologies used in calculating fair values, risk exposures and in calculating FVAs, including comparison to industry practice. Seeking contradictory evidence: For a selection of collateral disputes identified through management’s control we challenged management’s valuation where significant fair value differences were observable with the market participant on the other side of the trade. We also utilised collateral dispute data to identify fair value financial instruments with significant fair value differences against market counter parties and selected these to independently reprice. Inspection of movements: We inspected trading revenue arising on level 3 positions to assess whether material gains or losses generated were in line with the accounting standards. Historical comparison: We performed a retrospective review by inspecting significant gains and losses on a selection of new fair value financial instruments, position exits, novations and restructurings throughout the audit period and evaluated whether these data points indicated elements of fair value not incorporated in the current valuation methodologies. We also inspected movements in unobservable inputs throughout the period to challenge whether any gain or loss generated was appropriate. Assessing transparency: For the Level 3 portfolios, we assessed the adequacy of the Group’s financial statements disclosures in the context of the relevant accounting standards. Description of the Key Audit Matter Subjective valuation The fair value of the Group’s financial instruments is determined through the application of valuation techniques which can involve the exercise of significant judgement by the Group in relation to the choice of the valuation models, pricing inputs and post- model pricing adjustments, including fair value adjustments (FVAs) and credit and funding adjustments (together referred to as XVAs). Where significant pricing inputs are unobservable, management has limited reliable, relevant market data available in determining the fair value and hence estimation uncertainty can be high. These financial instruments are classified as Level 3, with management having controls in place over the boundary between Level 2 and 3 positions. Our significant audit risk is therefore primarily over significant Level 3 portfolios. In addition, there may also be valuation complexity associated with Level 2 portfolios, specifically where valuation modelling techniques result in significant limitations or where there is greater uncertainty around the choice of an appropriate pricing methodology, and consequently more than one valuation methodology could be used for that product across the market. We identified two areas of such complexity. The first a derivatives portfolio that we considered to be harder to value Level 2 due to an element of modelling complexity associated with the product, and the second the XVA adjustments made to uncollateralised and partially collateralised derivative valuations. The effect of these matters is that, as part of our risk assessment, we determined that the subjective estimates in fair value measurement of certain portfolios, and harder-to-value Level 2 portfolios have a high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the financial statements as a whole, and possibly many times that amount. The financial statements (note 17) disclose the sensitivity estimated by the Group. Disclosure quality For the Level 3 portfolios, the disclosures are key to explaining the valuation techniques, key judgements, assumptions and material inputs. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 406 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) Communications with the Barclays PLC Board Audit Committee Our discussions with and reporting to the Board Audit Committee included: • Our approach to the audit of the fair value of Level 3 and harder-to-value Level 2 financial instrument assets and liabilities. This included details of our risk assessment, controls and substantive procedures. • Our conclusions on the appropriateness of the Group’s fair value methodology, models, pricing inputs, and fair value adjustments. Areas of particular auditor judgement We identified the following as the areas of particular auditor judgement: • The appropriateness of the valuation of harder to value Level 2 and Level 3 financial instruments, and particularly the selection of market data inputs and valuation models. Our results Based on the risk identified and our procedures performed we consider the fair value of Level 3 and harder-to-value Level 2 financial instrument assets and liabilities recognised and the related disclosures to be acceptable (2021 result: acceptable). Further information in the Annual Report and Accounts: See the Board Audit Committee Report on page 173 for details on how the Board Audit Committee considered Valuations as an area of focus, page 425 for the accounting policy on financial assets and liabilities, and page 456 for the financial disclosure note 17; Fair value of financial instruments. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 407 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) 4.3 Valuation of the defined benefit pension obligation in respect of the UK Retirement Fund (‘UKRF’) Financial Statement Elements Defined benefit obligation related to UKRF (note 33) FY22 FY21 £20.0bn £30.9bn Our assessment of risk vs FY21 1 Our assessment is that the risk is similar to FY21. Our results FY22: Acceptable FY21: Acceptable Description of the Key Audit Matter Subjective valuation The valuation of the defined benefit obligation in respect of the UKRF is dependent on key actuarial assumptions, including the discount rates, retail price index (‘RPI’) and mortality assumptions. Small changes to these assumptions may still have a significant impact on the measurement of the defined benefit pension obligation. As part of our risk assessment, we determined that the defined benefit pension obligation has a high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the financial statements, and possibly many times that amount. At 31 December 2022, the Group reported a gross defined benefit pension obligation of £20.0bn relating to UKRF. Disclosure quality The disclosures regarding the Group’s application of IAS 19 (including risks, assumptions and sources of estimation uncertainty) are key to explaining the key judgements applied in the IAS 19 Defined Benefit Obligation calculation. Communications with the Barclays PLC Board Audit Committee Our discussions with and reporting to the Board Audit Committee included: • Our definition of the Key Audit Matter relating to the valuation of the defined benefit pension obligation including the rationale for not including the valuation of pension assets in the key audit matter. • We also discussed our audit response to the key audit matter which included the use of specialists to challenge key aspects of management’s actuarial valuation. Our response to the risk Our procedures to address the risk included: Control testing: We performed end to end process walkthroughs to identify the key systems, applications and controls used in the defined benefit obligation process. We tested the design and operating effectiveness of key controls relating to the process. These included: • controls over management’s review of IAS19 assumptions including the discount rate, RPI and mortality assumptions; • reconciliation controls of the IAS19 disclosures to underlying data. Evaluation of management’s expert: We evaluated the objectivity and competence of management’s actuarial expert involved in the valuation of the defined benefit pension obligation. Our actuarial expertise: we involved our own actuarial professionals in the following: • evaluating the judgements made and the appropriateness of methodologies used by management and management’s actuarial expert in determining the key actuarial assumptions; • comparing the assumptions used by Barclays PLC to our independently compiled expected ranges based on market observable indices and our market experience; • evaluating the output from the triennial funding valuation as at 30 September 2022 and the impact on demographic assumptions and future funding requirements. Assessing transparency: We assessed the adequacy of the Group’s financial statements disclosures in the context of the relevant accounting standards. Further information in the Annual Report and Accounts: See page 496 for the accounting policy on defined benefit schemes, and page 494 for the financial disclosure note 33; Pensions and post- retirement benefits. Areas of particular auditor judgement We identified the following as areas of particular auditor judgement: • Subjective and complex auditor judgement was required in evaluating the key actuarial assumptions used by the Group (including the discount rate, retail price index and mortality assumptions). Our results Based on the risk identified and our procedures performed we consider the valuation of the defined benefit pension obligation in respect of UKRF and the related disclosures to be acceptable (2021 result: acceptable). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 408 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) 4.4 User access management Financial Statement Elements User access management has a potential impact throughout the financial statements. Our assessment of risk vs FY21 1 Our assessment is the risk is similar to FY21 Our results FY22 and FY21: Our testing did not identify unauthorised user activities in the systems relevant to financial reporting which would have required us to significantly expand the extent of our planned detailed testing. Description of the Key Audit Matter Control Performance Operations across several countries support a wide range of products and services resulting in a large and complex IT infrastructure relevant to the financial reporting processes and related internal controls. Our response to the risk Our procedures to address the risk included: Control testing: We tested the design, implementation and operating effectiveness of automated controls that support material balances in the financial statements. We also tested the design and operating effectiveness of the relevant preventative and detective general IT controls over user access management including: User access management controls are an integral part of the IT environment to ensure both system access and changes made to systems and data are authorised and appropriate. Our audit approach relies on the effectiveness of IT access management controls. Our audit procedures identified deficiencies in certain IT access controls for systems relevant to financial reporting. More specifically, control deficiencies continue to be identified around monitoring of activities performed by privileged users on infrastructure components. Management has ongoing programmes to remediate the deficiencies. Since these deficiencies were open during the year, we performed additional procedures to respond to the risk of unauthorised changes to automated controls over financial reporting, such as an assessment of compensating controls implemented by management. • authorising access rights for new joiners • • timely removal of user access rights logging and monitoring of user activities • privileged user access management and monitoring • developer access to transaction and balance information • segregation of duties; and • re-certification of user access rights. We performed procedures to assess whether additional detective compensating controls operate at the same level of precision to support our assessed risk of unauthorised activities and we tested management’s detective compensating controls. Communications with the Barclays PLC Board Audit Committee Our discussions with and reporting to the Board Audit Committee included: • Our response to the Key Audit Matter. Areas of particular auditor judgement We identified the following as the areas of particular auditor judgement: • The Key Audit Matter relates to determining whether user access management controls were designed and implemented and operated effectively. Limited auditor judgement was required relative to the other Key Audit Matters which have been identified. Our results Based on the risk identified and our procedures performed, we did not identify unauthorised user activities in the systems relevant to financial reporting which would have required us to significantly expand the extent of our planned detailed testing. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 409 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) 4.5 Recoverability of parent company’s investment in subsidiaries Financial Statement Elements Investment in subsidiaries (Parent company accounts and note 42) FY22 FY21 £64.5bn £62.5bn Our assessment of risk vs FY21 1 Our assessment is the risk is similar to FY21 Impairment/ (Reversal of Impairment) of investment in BBUK PLC (note 42) £0bn (£2.6bn) Our results FY22: Acceptable FY21: Acceptable Description of the Key Audit Matter Subjective assessment The Parent Company’s investment in subsidiaries may be misstated if the carrying value of the investment in the balance sheet is not supported by the future cash flows of the underlying business (the value in use (“VIU”)). The calculation of VIU is dependent on certain key assumptions around the future cash flows which have been forecasted using the Group’s Medium-Term Plan (‘MTP’), the discount rates and the terminal growth rates. These assumptions, which are judgemental, are derived from a combination of management estimates, market data and other information obtained from external sources. These assumptions continued to be impacted by the economic uncertainty in the wider economic environment. This has contributed to the complexity and subjectivity in the impairment assessment process, in addition to the complexities of the valuation of a Bank. Due to the materiality of the investment in subsidiaries in the context of the Parent Company financial statements, this is the area that had the greatest impact on the overall Parent Company audit. Our work focused on the Parent Company’s investment in Barclays Bank UK PLC given the material size of the cost of investment, the impairment loss recognised in 2020 and reversal of impairment in 2021, as well as Barclays Bank PLC due to the material size of the cost of investment. Our response to the risk Our procedures to address the risk included: Control testing: We performed end to end process walkthroughs to identify the key systems, applications and controls used in the process. We tested the design and operating effectiveness of the key controls relating to the process. These included controls over the identification of indicators of impairment or reversal of impairment and review of the key assumptions in determining the value in use. Test of details: We compared the carrying amount of each subsidiary to its draft balance sheet to identify whether their net assets, being an approximation of their minimum recoverable amount, were in excess of their carrying amount we assessed for potential indicators that investments in subsidiaries might be impaired. Benchmarking assumptions: For the two largest subsidiaries (BB PLC and BBUK PLC) we compared key assumptions including those underlying certain estimated future cash flows, the discount rate and the terminal growth rate to externally derived data including analyst broker reports, peer bank data and projected economic growth. Our valuations expertise: We involved our own valuations specialists to assist us in the following: • evaluating the appropriateness of the discount rate used by independently developing discount rate ranges using external data sources and peer bank data; and • assessing whether the methodology over management’s calculation of the VIU is compliant with the requirements of the accounting standard. Our business understanding: We used our business understanding to evaluate the reasonableness of certain key assumptions and considerations made when developing the Group’s MTP estimated future cash flows. Historical comparison: We performed a retrospective review by comparing the MTP from previous years to actual results to assess the Group’s ability to accurately prepare cash flow forecasts at the individual subsidiary level. Communications with the Barclays Board Audit Committee Our discussions with and reporting to the Board Audit Committee included: • Our audit response to the Key Audit Matter which included the use of specialists to challenge key aspects of management’s impairment assessment and the range of reasonably possible alternatives for significant assumptions. Areas of particular auditor judgement We identified the following as the areas of particular judgement: • We identified the reasonableness of the assumptions underlying the estimated future cash flows and appropriateness of the discount rate, which was used in the impairment assessment, as the areas of particular judgement. Our results Based on our procedures performed, we consider the Parent Company’s investment in subsidiaries balance to be acceptable (2021 result: acceptable). Further information in the Annual Report and Accounts: See page 517 for the accounting policy on the recoverability of the investment in subsidiaries and page 517 for the financial disclosure note 42; Parent Company. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 410 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) journals posted and approved by the same individuals. Link to key audit matters Further details of the testing we perform over the identified fraud risks for ECL and fair value of financial instruments are included in the respective key audit matters sections 4.1 and 4.2 of this report, as the procedures relating to those estimates also address the risk of fraud. Laws and regulations - identifying and responding to risks of material misstatement due to non-compliance with laws and regulations Risk assessment We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements. For this risk assessment, matters considered include the following: • our general commercial and sector experience; • inquiries with the directors and other management (as required by auditing standards); • inspection of the Group’s key regulatory and legal correspondence; • inspection of the policies and procedures regarding compliance with laws and regulations; • relevant discussions with the Group’s external legal counsel; • relevant discussions with the Group’s key regulatory supervisors including the Prudential Regulation Authority, Financial Conduct Authority, Federal Reserve Board, Federal Deposit Insurance Corporation and the Joint Supervisory Team; and • the Group’s own assessment of the risks of non-compliance with laws and regulations, and the internal controls established to mitigate these. This assessment was considered and approved by the Board Audit Committee. 5. Our ability to detect irregularities, and our response Fraud - identifying and responding to risks of material misstatement due to fraud Fraud risk assessment To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. In this risk assessment we considered the following: • Our meetings throughout the year with the Group Head of Risk, Group Head of Compliance and Group Head of Legal and inspection of Barclays’ internal ethics and compliance reporting summaries, including those concerning investigations and regulatory correspondence; • Enquiries of operational managers, internal audit, and the Board Audit Committee and inspection of policy documentation as to the Group’s high- level policies and procedures relating to • detecting and responding to the risks of fraud as well as whether they have knowledge of any actual, suspected or alleged fraud; and • the internal controls established to mitigate risks related to fraud, including the appropriateness and impact of changes made to these controls to facilitate remote/hybrid working; • The Group’s remuneration policies and key drivers for remuneration and bonus levels; • Discussions among the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. The engagement team includes audit partners and staff who have extensive experience of working with banks, and this experience was relevant to the discussion about where fraud risks may arise. The discussions also involved our forensic specialists to assist us in identifying fraud risks based on discussions of the circumstances of the Group and Company, including consideration of fraudulent schemes that had arisen in similar sectors and industries. The forensic specialists participated in the initial fraud risk assessment discussions and were consulted as required where further guidance was deemed necessary. Fraud risk communication We communicated identified fraud risks throughout the audit team and we remained alert to any indications of fraud throughout the audit. This included communication from the Group to component audit teams of relevant fraud risks identified at the Group level. Fraud risks and our procedures to address them We identified five fraud risks which were communicated to component audit teams. The nature of these fraud risks is substantially unchanged from the prior year. The fraud risks we identified are set out below: 1. IFRS 9 ECL: Judgemental qualitative adjustments made to the ECL provision 2. Valuations - risk relating to unobservable pricing inputs used to price level 3 fair value instruments 3. Revenue recognition: Cut-off of the recognition of revenue from investment banking advisory fees 4. Existence and accuracy of unconfirmed over-the-counter bilateral derivatives 5. The risk of management override of controls, common with all audits under ISAs (UK). As required by auditing standards and taking into account our overall knowledge of the control environment, we performed procedures to address the above risks, the risk that Group and component management may be in a position to make inappropriate accounting entries and the risk of bias in accounting estimates and judgements. Our audit procedures included evaluating the design and implementation and operating effectiveness of relevant internal controls, assessing significant accounting estimates for bias, as well as substantive procedures to address the fraud risks. These procedures also included identifying journal entries to test based on risk criteria and comparing the identified entries to supporting documentation. Incorporating unpredictability into our audit: A requirement of the auditing standards is that we undertake procedures which are deliberately unexpected and could not have reasonably been predicted by Barclays’ management. As an example, we update our criteria for selecting journals with a higher risk of management override for testing each year so that the selection criteria do not become predictable. This year we added additional key words we searched for in journal descriptions and also introduced new search criteria for Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 411 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) Our risk assessment also considered instances of non-compliance with laws and regulations and enforcement actions against the Group during the year and specifically those that could reasonably be expected to have a material effect on the financial statements. We considered management’s assessment of how these occurred, their assessment of whether the risk could be more pervasive, and actions taken to remediate and prevent recurrences or similar issues. As the Group operates in a highly regulated environment, our assessment of risks of material misstatement also considered the control environment, including the Group’s higher-level procedures for complying with regulatory requirements. Our assessment included inspection of key frameworks, policies and standards in place, understanding and evaluating the role of the compliance function in establishing these and monitoring compliance and testing of related controls around whistleblowing and complaints. Risk communication Our identified laws and regulations risks was communicated throughout our team and we remained alert to any indications of non-compliance throughout the audit. This included communication from the Group to component audit teams of relevant laws and regulations identified at Group level. Direct laws context and link to audit The potential effect of these laws and regulations on the financial statements varies considerably. Firstly, the Group is subject to laws and regulations that directly impact the financial statements including: • financial reporting legislation (including related companies’ legislation); • distributable profits legislation; and • taxation legislation (direct and indirect). We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. statements, as disclosed by management in note 26, and which resulted in a restatement of the 2021 comparatives. Our audit approach in respect of the over- issuance included the following procedures and we reported the results of these to the Board Audit Committee • Performance of risk assessment procedures which included inspecting correspondence with regulators and making enquires of Barclays internal and external counsel. • Testing the design and operating effectiveness of the controls covering the calculation and utilisation of the recission right provision and the identification of debt-issuance programme issuance limits and the monitoring of the utilisation against these. • Performing substantive procedures over the determination and utilisation of the recission right provision. Context of the ability of the audit to detect fraud or breaches of law or regulation Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations. Most significant indirect law/ regulation areas Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines, remediation payments or litigation, or the loss of the Group’s permission to operate in countries where the non-adherence to laws could prevent trading in such countries. We identified the following areas as those most likely to have such an effect: • Specific aspects of regulatory capital and liquidity • Other banking laws and regulations, including securities issuance law • Customer conduct rules • Money laundering • Sanctions list and financial crime • Market abuse regulations • Certain aspects of company legislation recognising the financial and regulated nature of the Group’s activities. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. If a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach. Audit response In relation to the legal, competition and regulatory matters disclosed in note 26 we performed audit procedures which included making enquiries of Barclays internal counsel and inspection of minutes of meetings and of regulatory correspondence. For a subset of these matters which we deemed to be more significant we also made enquiries of external counsel and obtained legal confirmations from Barclays’ external counsel. In respect of regulatory matters relating to conduct risk as disclosed in note 41 our procedures included inspection of regulatory correspondence, independent enquiry of the Group’s main regulators and performing audit procedures to respond to risks of material misstatement identified in recognised conduct provisions. We also specifically considered the sale of securities in excess of the amount of securities registered with the SEC under Barclays Bank PLC’s shelf registration Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 412 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) 6. Our determination of materiality The scope of our audit was influenced by our application of materiality. We set quantitative thresholds and overlay qualitative considerations to help us determine the scope of our audit and the nature, timing and extent of our procedures, and in evaluating the effect of misstatements, both individually and in the aggregate, on the financial statements as a whole. Materiality for the financial statements as a whole 2022: £275m 2021: £230m What we mean A quantitative reference for the purpose of planning and performing our audit Basis for determining materiality and judgements applied We have determined overall materiality for the Barclays PLC Group to be £275m (FY21: £230m). A key judgement in determining materiality (and performance materiality) is the appropriate benchmark to select, based on our perception of the needs of shareholders. We considered which benchmarks and key performance indicators have the greatest bearing on shareholder decisions. We determined that profit before tax remains the key benchmark for the Barclays PLC Group. For FY21 we normalised profit before tax downward by £2.3bn to adjust for the fact that ECL charges were considered abnormally low as the economy recovered from the COVID-19 pandemic. For FY22 we did not normalise profit before tax. This is reflective of the impact of COVID-19 on ECL being less pronounced in the current period. We determined that no adjustments to profit before tax were required for FY22. This change is a driver of the increase in materiality in 2022. The overall materiality for the Group of £275m (2021: £230m) compares as follows to the other main financial statement elements amounts in the table below. Group Materiality as % of caption Audit misstatement posting threshold 2022: £13m 2021: £11m What we mean This is the amount below which identified misstatements are considered to be clearly trivial from a quantitative point of view. We may become aware of differences below this threshold which could alter the nature, timing and scope of our audit procedures, for example if we identify smaller differences which are indicators of fraud. This is also the amount above which all differences identified are communicated to Barclays PLC’s Board Audit Committee. Basis for determining the audit misstatement reporting threshold and judgements applied The audit misstatement posting threshold has been set at a level of 5% (2021:5%) of materiality for Barclays PLC’s Group financial statements. We consider this appropriate based on the number and nature of adjusted and unadjusted audit differences (certain of which were judgemental) identified during previous audits. We also report to the Audit Committee any other identified misstatements that warrant reporting on qualitative grounds. Our materiality of £275m (2021: £230m) was determined by applying a percentage to Profit Before Tax. When using a profit- related measure to determine overall materiality, KPMG’s approach is to apply a percentage between 3% and 5% to the pre-tax measure. In setting overall materiality, we applied a rate of 3.9% (2021: 3.8%) which is lower than the top end of the allowable percentage range. Materiality for the Parent Company financial statements was set at £260m (2021: £225m), determined with reference to a benchmark of Parent Company net assets (of which it represents 0.5% (2021: 0.4%)). Performance materiality 2022: £179m 2021: £170m What we mean Our procedures on individual account balances and disclosures were performed to a lower threshold, performance materiality, so as to reduce, to an acceptable level, the risk that individually immaterial misstatements in individual account balances add up to a material amount across the financial statements as a whole. Basis for determining performance materiality and judgements applied We have considered performance materiality at a level of 65% (2021: 74%) of materiality for Barclays PLC Group’s financial statements as a whole to be appropriate. We applied this percentage in our determination of performance materiality based on the level of control deficiencies during the prior period. The Group performance materiality was set at £179m (2021: £170m) and £169m (2021: £169m) for the parent company. Total Revenue Total Assets Net Assets 2022 2021 2022 2021 2022 2021 £24,956m £21,940m £1,513,699m £1,384,285m £69,260m £70,041m 0.33% 0.40% 1.05% 0.02% 1.10% 0.02% Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 413 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) 7. The scope of our audit Group scope What we mean How the Group audit team determined the procedures to be performed across the Group We have subjected four (2021: three) of the Group’s five components to full scope audits for Group purposes. Our approach to scoping the four components was as follows: for two components, Barclays Bank UK PLC and Barclays Execution Services Limited Solus, we directly instructed the component audit teams to conduct and report to us on full scope audits; the third full scope component, Barclays PLC Solus was subject to a full scope audit by us (2021: audit of account balance), and the fourth component, Barclays Bank PLC Group, was subject to a full scope audit by us and for which we specified seven (2021: seven) components within that group. We have subjected one (2021: two) of the Group’s components, Barclays PLC Subsidiaries, to audits of certain account balances carried out by us, this component represents less than 1% of total Barclays PLC Group assets. Within the Barclays Bank PLC Group we specified the components as follows; Barclays Bank Solus to be subject to a full scope audit carried out by us; Barclays Bank Delaware and Barclays Capital Inc to be subject to a full scope audit as instructed by us; and Barclays Bank Ireland PLC and Barclays Capital Securities Limited to be subject to an audit of certain account balances as instructed by us. We have subjected Barclays Bank Subsidiaries and Barclays Bank Intermediate Holding Companies (‘IHC’) Subsidiaries to an audit of certain account balances carried out by us, these components represent less than 2% of total Barclays Bank PLC Group assets. The components within the scope of our work accounted for the percentages illustrated in section 2 – Group scope. The materiality levels applied to the audits of the components of Barclays PLC are as follows: Barclays PLC has centralised certain Group-wide processes a shared service centre in India, the outputs of which are included in the financial information of the reporting components it services and therefore it is not a separate reporting component. This service centre is subject to specified audit procedures, predominantly the testing of transaction processing, reconciliations and review controls. Additional procedures are performed at certain reporting components to address the audit risks not covered by the work performed by the shared service centre. The Group audit team has also performed audit procedures on the following areas on behalf of the components: • Testing of IT systems and automated business controls; and • Operating expenses and Group recharges. The Group team communicated the results of these procedures to the component teams. In addition, we have performed Group level analysis on the remaining components to determine whether further risks of material misstatement exist in those components. We were able to rely upon the Group's internal control over financial reporting in all areas of our audit, and where our controls testing supported this approach, which enabled us to reduce the scope of our substantive audit work. Group audit team oversight What we mean The extent of the Group audit team’s involvement in component audits. A hybrid communication and oversight strategy was implemented between the Group audit team and the components during the year as opposed to virtual oversight during the COVID 19 pandemic. This included: • A virtual global planning conference led by the Group audit team to discuss key audit risks and obtain input from component teams and other participating locations; Scope Full scope audit Audit of account balance Number of components Range of materiality applied 4 1 £100m - £170m £100m • The components in scope for Group reporting purposes were either visited by the Group audit team to assess the audit risk and strategy, or such review occurred remotely to assess the audit risk and strategy. Conference meetings and calls were also held with these component auditors throughout the conduct of the audit. At these visits and meetings, we reviewed the components’ key working papers, the findings reported to the Group team were discussed in more detail, and any further work required by the Group team was then performed by the component auditors; • Instructions issued by the Group audit team to component auditors setting out the significant areas to be covered, including the relevant key audit matters identified above and the information to be reported back to the Group audit team. For example, minimum criteria for high-risk journals were set by the Group team and applied consistently across the audit; • Review and approval by the Group audit team of the component materiality for all components; • Risk assessment and challenge sessions with each component audit team were held in the planning, interim and final phases of the audit, led by the Group engagement partner and audit quality partner; • Fortnightly video conferences with the partners and directors of the Group and component audit teams along with regular ad-hoc contact in person and via video calls and email exchanges to challenge the component audit approach and findings; • Stuart Crisp, the Group Lead Engagement Partner (and Senior Statutory Auditor), attended each Board Audit Committee for Barclays Bank PLC and at least one Board Audit Committee for each of Barclays Bank UK, the IHC covering Barclays Capital Inc. and Barclays Bank Delaware, and Barclays Bank Europe; • Review of key working papers within component audit files (both in person and using remote technology capabilities) to understand and challenge the audit approach and audit findings of each component. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 414 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) Other matters on which we are required to report by exception Our responsibility Under the Companies Act 2006, we are required to report to you if, in our opinion: • adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or • the Parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records and returns; or • certain disclosures of directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit. Our reporting We have nothing to report in this respect. 8. Other information in the annual report The directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon. All other information Our responsibility Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Our reporting Based solely on that work we have not identified material misstatements or inconsistencies in the other information. Strategic report and Directors’ report Our responsibility and reporting Based solely on our work on the other information described above we report to you as follows: • we have not identified material misstatements in the strategic report and the Directors’ Report; • in our opinion the information given in those reports for the financial year is consistent with the financial statements; and Corporate governance disclosures Our responsibility We are required to perform procedures to identify whether there is a material inconsistency between the financial statements and our audit knowledge, and: • the directors’ statement that they consider that the annual report and financial statements taken as a whole is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Group’s position and performance, business model and strategy; • the section of the annual report describing the work of the Board Audit Committee, including the significant issues that the Board Audit Committee considered in relation to the financial statements, and how these issues were addressed; and • the section of the annual report that describes the review of the effectiveness of the Group’s risk management and internal control systems. Our reporting Based on those procedures, we have concluded that each of these disclosures is materially consistent with the financial statements and our audit knowledge. We are also required to review the part of Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code specified by the Listing Rules for our review. • in our opinion those reports have been We have nothing to report in this respect. prepared in accordance with the Companies Act 2006. Directors’ remuneration report Our responsibility We are required to form an opinion as to whether the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006. Our reporting In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 415 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) 10. The purpose of our audit work and to whom we owe our responsibilities This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and the terms of our engagement by the Company. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and the further matters we are required to state to them in accordance with the terms agreed with the Company, and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed. Stuart Crisp (Senior Statutory Auditor) for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants 15 Canada Square London E14 5GL 14 February 2023 9. Respective responsibilities Directors’ responsibilities As explained more fully in their statement set out on page 152, the Directors are responsible for: the preparation of the financial statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities. The Company is required to include these financial statements in an annual financial report prepared using the single electronic reporting format specified in the TD ESEF Regulation. The auditor’s report provides no assurance over whether the financial report has been prepared in accordance with that format. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 416 Consolidated financial statements Consolidated income statement For the year ended 31 December Interest and similar income Interest and similar expense Net interest income Fee and commission income Fee and commission expense Net fee and commission income Net trading income Net investment income Other income Total income Staff costs Infrastructure costs Administration and general expenses Litigation and conduct Operating expenses Share of post-tax results of associates and joint ventures Profit on disposal of subsidiaries, associates and joint ventures Profit before impairment Credit impairment (charges)/releases Profit before tax Taxation Profit after tax Attributable to: Equity holders of the parent Other equity instrument holders Total equity holders of the parent Non-controlling interests Profit after tax Earnings per share Basic earnings per ordinary share Diluted earnings per share Notes 3 3 4 4 5 6 31 7 7 7 7 8 9 30 10 10 2022 £m 19,096 (8,524) 10,572 9,637 (3,038) 6,599 8,049 (434) 170 24,956 (9,252) (3,435) (2,446) (1,597) (16,730) 6 — 8,232 (1,220) 7,012 (1,039) 5,973 5,023 905 5,928 45 5,973 p 30.8 29.8 Restateda 2021 £m 11,240 (3,167) 8,073 9,880 (2,206) 7,674 5,794 311 88 21,940 (8,511) (3,614) (2,137) (397) (14,659) 260 — 7,541 653 8,194 (1,138) 7,056 6,205 804 7,009 47 7,056 p 36.5 35.6 2020 £m 11,892 (3,770) 8,122 8,641 (2,070) 6,571 7,029 13 31 21,766 (8,097) (3,323) (2,313) (153) (13,886) 6 17 7,903 (4,838) 3,065 (604) 2,461 1,526 857 2,383 78 2,461 p 8.8 8.6 Note a 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 417 Consolidated financial statements (continued) Consolidated statement of comprehensive income For the year ended 31 December Profit after tax Other comprehensive income/(loss) that may be recycled to profit or loss: Currency translation reserve Currency translation differencesb Fair value through other comprehensive income reserve movements relating to debt securities Net (losses)/gains from changes in fair value Net losses/(gains) transferred to net profit on disposal Net losses/(gains) relating to (releases of) impairment Net gains/(losses) due to fair value hedging Tax Cash flow hedging reserve Net (losses)/gains from changes in fair value Net losses/(gains) transferred to net profit Tax Other Other comprehensive (loss)/income that may be recycled to profit or loss Other comprehensive income/(loss) not recycled to profit or loss: Retirement benefit remeasurements Fair value through other comprehensive income reserve movements relating to equity instruments Own credit Tax Other comprehensive income/(loss) not recycled to profit or loss 2022 £m 5,973 Restateda 2021 £m 7,056 2020 £m 2,461 2,032 (131) (473) (7,516) 111 9 5,452 523 (9,052) 339 2,331 — (5,771) (754) 228 2,092 (156) 1,410 (1,668) (305) (8) 1,354 198 (2,280) (1,173) 1,025 — (2,988) 1,298 141 (106) (563) 770 2,902 (295) 2 (2,000) (155) 1,299 (510) (216) 5 559 (80) (262) (810) 198 (954) Other comprehensive loss for the year (4,361) (2,218) (395) Total comprehensive income for the year 1,612 4,838 2,066 Attributable to: Equity holders of the parent Non-controlling interests Total comprehensive income for the year 1,567 45 1,612 4,791 47 4,838 1,988 78 2,066 Notes a 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details. b Includes £1m gain (2021: £26m loss; 2020: £17m gain ) on recycling of currency translation differences to net profit. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 418 Consolidated financial statements (continued) Consolidated balance sheet As at 31 December Assets Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending Trading portfolio assets Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Investments in associates and joint ventures Goodwill and intangible assets Property, plant and equipment Current tax assets Deferred tax assets Retirement benefit assets Other assets Total assets Liabilities Deposits at amortised cost Cash collateral and settlement balances Repurchase agreements and other similar secured borrowing Debt securities in issue Subordinated liabilities Trading portfolio liabilities Financial liabilities designated at fair value Derivative financial instruments Current tax liabilities Deferred tax liabilities Retirement benefit liabilities Other liabilities Provisions Total liabilities Equity Called up share capital and share premium Other equity instruments Other reserves Retained earnings Total equity excluding non-controlling interests Non-controlling interests Total equity Total liabilities and equity Notes 2022 £m 19 12 13 14 15 36 22 20 9 33 19 27 12 16 14 9 33 23 24 28 28 29 30 256,351 112,597 398,779 776 133,813 213,568 302,380 65,062 922 8,239 3,616 385 6,991 4,743 5,477 1,513,699 545,782 96,927 27,052 112,881 11,423 72,924 271,637 289,620 580 16 264 13,789 1,544 1,444,439 4,373 13,284 (2,192) 52,827 68,292 968 69,260 1,513,699 Restateda 2021 £m 238,574 92,542 361,451 3,227 147,035 191,972 262,572 61,753 999 8,061 3,555 261 4,619 3,879 3,785 1,384,285 519,433 79,371 28,352 98,867 12,759 54,169 250,960 256,883 689 37 311 10,505 1,908 1,314,244 4,536 12,259 1,770 50,487 69,052 989 70,041 1,384,285 Note a 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details. The Board of Directors approved the financial statements on pages 416 to 522 on 14 February 2023. Nigel Higgins Group Chairman C.S. Venkatakrishnan Group Chief Executive Anna Cross Group Finance Director Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 419 Consolidated financial statements (continued) Consolidated statement of changes in equity Restatedc Restatedc Restatedc Total equity excluding non- controlling interests Non-controlling interests Total equity Balance as at 1 January 2022 Profit after tax Currency translation movements Fair value through other comprehensive income reserve Cash flow hedges Retirement benefit remeasurements Own credit reserve Total comprehensive income for the year Employee share schemes and hedging thereof Issue and redemption of other equity instruments Other equity instruments coupons paid Disposal of Absa holding Increase in treasury shares Vesting of shares under employee share schemes Dividends paid Repurchase of shares Own credit realisation Other reserve movements Called up share capital and share premiuma £m 4,536 — — — — — — — 70 — — — — — — (233) — — Other equity instrumentsa Other reservesb £m 12,259 905 — — — — — £m 1,770 — 2,032 (1,193) (6,382) — 1,463 Retained earnings £m 50,487 5,023 — — — (281) — 905 (4,080) 4,742 £m 69,052 5,928 2,032 (1,193) (6,382) (281) 1,463 1,567 — 1,032 (905) — — — — — — (7) — — — (84) (248) 253 — 233 (36) — 476 546 28 — 84 — (485) (1,028) (1,508) 36 (5) 1,060 (905) — (248) (232) (1,028) (1,508) — (12) Balance as at 31 December 2022 4,373 13,284 (2,192) 52,827 68,292 Balance as at 1 January 2021 4,637 11,172 Profit after tax Currency translation movements Fair value through other comprehensive income reserve Cash flow hedges Retirement benefit remeasurements Own credit reserve Total comprehensive income for the year Employee share schemes and hedging thereof Issue and exchange of other equity instruments Other equity instruments coupons paid Increase in treasury shares Vesting of shares under employee share schemes Dividends paid Repurchase of shares Other reserve movements Balance as at 31 December 2021 — — — — — — — 60 — — — — — (161) — 4,536 804 — — — — — 4,461 — (131) (288) (2,428) — (14) 45,527 6,205 — — — 643 — 65,797 7,009 (131) (288) (2,428) 643 (14) 804 (2,861) 6,848 4,791 — 1,078 (804) — — — — 9 — — — (240) 241 — 161 8 235 295 6 — — (410) (512) 1,084 (804) (240) (169) (512) (1,200) (1,200) (7) 10 £m 989 45 — — — — — 45 — (20) — — — — (45) — — (1) 968 1,085 47 — — — — — 47 — £m 70,041 5,973 2,032 (1,193) (6,382) (281) 1,463 1,612 546 1,040 (905) — (248) (232) (1,073) (1,508) — (13) 69,260 66,882 7,056 (131) (288) (2,428) 643 (14) 4,838 295 (75) 1,009 — — — (44) — (24) (804) (240) (169) (556) (1,200) (14) Notes a For further details refer to Note 28. b For further details refer to Note 29. c 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details. 12,259 1,770 50,487 69,052 989 70,041 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 420 Consolidated financial statements (continued) Consolidated cash flow statement For the year ended 31 December Reconciliation of profit before tax to net cash flows from operating activities: Profit before tax Adjustment for non-cash items: Credit impairment (releases)/charges Depreciation, amortisation and impairment of property, plant, equipment and intangibles Other provisions, including pensions Net loss on disposal of investments and property, plant and equipment Other non-cash movements including exchange rate movements Changes in operating assets and liabilities Net (increase)/decrease in cash collateral and settlement balances Net increase in loans and advances at amortised cost Net decrease/(increase) in reverse repurchase agreements and other similar secured lending Net increase in deposits at amortised cost Net increase/(decrease) in debt securities in issue Net (decrease)/increase in repurchase agreements and other similar secured borrowing Net increase in derivative financial instruments Net decrease/(increase) in trading portfolio assets Net increase in trading portfolio liabilities Net (increase)/decrease in financial assets and liabilities at fair value through the income statement Net (increase)/decrease in other assets Net increase/(decrease) in other liabilities Corporate income tax paid Net cash from operating activities Purchase of debt securities at amortised cost Proceeds from redemption or sale of debt securities at amortised cost Purchase of financial assets at fair value through other comprehensive income Proceeds from sale or redemption of financial assets at fair value through other comprehensive income Purchase of property, plant and equipment and intangibles Disposal of subsidiaries and associates, net of cash disposed Other cash flows associated with investing activities Net cash from investing activities Dividends paid and other coupon payments on equity instruments Issuance of subordinated liabilities Redemption of subordinated liabilities Issue of shares and other equity instruments Repurchase of shares and other equity instruments Issuance of debt securitiesa Redemption of debt securitiesa Net purchase of treasury shares Net cash from financing activities Effect of exchange rates on cash and cash equivalents Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Cash and cash equivalents comprise: Cash and balances at central banks Loans and advances to banks with original maturity less than three months Cash collateral balances with central banks with original maturity less than three months Treasury and other eligible bills with original maturity less than three months Cash and cash equivalents at end of year Restatedb 2021 £m 2022 £m 2020 £m Notes 7,012 8,194 3,065 1,220 1,786 1,724 54 (13,298) (653) 2,076 468 39 3,093 4,838 1,734 1,365 47 (2,977) (881) (24,949) 2,451 26,349 9,210 (1,300) (7,071) 13,222 18,755 (919) (3,497) 1,051 (688) 30,231 (27,731) 14,277 (69,380) 62,821 (1,746) — 86 (21,673) (1,978) 1,477 (2,679) 3,205 (3,655) 11,139 (6,335) (478) 696 10,330 19,584 259,206 278,790 4,101 (10,728) 5,804 38,397 18,131 14,178 (4,018) (19,085) 6,764 (15,626) (2,133) 1,252 (1,335) 48,919 (12,500) 3,757 (75,673) 89,342 (1,720) 1,057 7 4,270 (1,360) 1,890 (4,807) 1,118 (1,275) 8,415 (3,475) (399) 107 (4,232) 49,064 210,142 259,206 4,321 (4,365) (5,652) 65,249 (6,309) (343) (1,845) (13,755) 10,489 3,374 452 (1,500) (683) 57,505 (14,671) 8,480 (91,744) 80,895 (1,324) — (12) (18,376) (936) 1,438 (3,258) 1,165 (1,056) 5,736 — (357) 2,732 1,668 43,529 166,613 210,142 27 27 256,351 6,431 15,150 858 278,790 238,574 6,488 13,532 612 259,206 191,127 5,955 12,204 856 210,142 Notes a Issuance of debt securities and Redemption of debt securities included in financing activities relate to instruments that qualify as eligible liabilities and satisfy regulatory requirements for MREL instruments which came into effect during 2019. Refer to Note 1, paragraph 4(vi), for further details. b 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details. Interest received was £40,975m (2021: £17,194m; 2020: £18,748m) and interest paid was £28,709m (2021: £8,063m; 2020: £9,577m). These amounts include interest paid and received arising from trading activities. Dividends received were £31m (2021: £20m; 2020: £37m). The Group is required to maintain balances with central banks and other regulatory authorities. These amounted to £3,457m (2021: £4,750m; 2020: £3,392m) and are included within the Cash and cash equivalents. For the purposes of the cash flow statement, cash comprises cash on hand and demand deposits and cash equivalents comprise highly liquid investments that are convertible into cash with an insignificant risk of changes in value with original maturities of three months or less. Repurchase and reverse repurchase agreements are not considered to be part of cash equivalents. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 421 Parent company accounts Statement of comprehensive income For the year ended 31 December Dividends received from subsidiary Net interest (expense) Other (expense)/ income Impairment reversal/(charge) of investment in subsidiary Operating expenses Profit/(loss) before tax Taxation Profit/(loss) after tax Other comprehensive income Total comprehensive income/(loss) Profit/(loss) after tax attributable to: Ordinary equity holders Other equity instrument holders Profit/(loss) after tax Total comprehensive income/(loss) attributable to: Ordinary equity holders Other equity instrument holders Total comprehensive income/(loss) Notes 42 42 42 2022 £m 2,797 (163) (654) — (257) 1,723 440 2,163 — 2,163 1,258 905 2,163 1,258 905 2,163 2021 £m 1,356 (161) 659 2,573 (160) 4,267 76 4,343 — 4,343 3,539 804 4,343 3,539 804 4,343 2020 £m 763 (175) 1,192 (2,573) (241) (1,034) 16 (1,018) — (1,018) (1,875) 857 (1,018) (1,875) 857 (1,018) For the year ended 31 December 2022, profit after tax was £2,163m (2021: £4,343m) and total comprehensive income was £2,163m (2021:£4,343m). The Company has 61 members of staff (2021: 65). Balance sheet As at 31 December Assets Investment in subsidiaries Loans and advances to subsidiaries Financial assets at fair value through the income statement Derivative financial instruments Other assets Total assets Liabilities Deposits at amortised cost Debt securities in issue Subordinated liabilities Financial liabilities designated at fair value Derivative financial instruments Other liabilities Total liabilities Equity Called up share capital Share premium account Other equity instruments Other reserves Retained earnings Total equity Total liabilities and equity Notes 42 42 42 42 42 42 42 28 28 28 2022 £m 64,544 23,628 28,930 31 402 117,535 544 24,086 11,230 22,971 906 131 59,868 3,968 405 13,250 788 39,256 57,667 117,535 2021 £m 62,528 22,072 25,091 4 68 109,763 488 25,658 9,301 16,319 43 117 51,926 4,188 348 12,241 555 40,505 57,837 109,763 The financial statements on pages 421 to 423 and the accompanying note on pages 517 to 518 were approved by the Board of Directors on 14 February 2023 and signed on its behalf by: Nigel Higgins Group Chairman C.S.Venkatakrishnan Group Chief Executive Anna Cross Group Finance Director Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 422 Parent company accounts (continued) Statement of changes in equity Balance as at 1 January 2022 Profit/(loss) after tax and other comprehensive income Issue of shares under employee share schemes Issue and exchange of other equity instruments Vesting of shares under employee share schemes Dividends paid Other equity instruments coupons paid Repurchase of shares Balance as at 31 December 2022 Balance as at 1 January 2021 Profit/(loss) after tax and other comprehensive income Issue of shares under employee share schemes Issue and exchange of other equity instruments Vesting of shares under employee share schemes Dividends paid Other equity instruments coupons paid Repurchase of shares Other movements Balance as at 31 December 2021 Notes 11 11 Called up share capital and share premium £m 4,536 — 70 — — — — (233) 4,373 4,637 — 60 — — — — (161) — 4,536 Other equity instruments £m 12,241 905 — 1,009 — — (905) — 13,250 11,169 804 — 1,072 — — (804) — — 12,241 Other reserves Retained earnings Total equity £m 555 — — — — — — 233 788 394 — — — — — — 161 — 555 £m 40,505 1,258 34 17 (22) (1,028) — (1,508) 39,256 38,672 3,539 29 — (18) (512) — (1,200) (5) 40,505 £m 57,837 2,163 104 1,026 (22) (1,028) (905) (1,508) 57,667 54,872 4,343 89 1,072 (18) (512) (804) (1,200) (5) 57,837 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 423 Parent company accounts (continued) Cash flow statement For the year ended 31 December Reconciliation of profit before tax to net cash flows from operating activities: Profit/(loss) before tax Adjustment for non-cash items: Impairment (reversal)/charge of investment in subsidiary Other non-cash items Changes in operating assets and liabilities Net cash generated from operating activities Net increase in loans and advances to subsidiaries of the parenta Capital contribution to and investment in subsidiary Net cash used in investing activities Issue of shares and other equity instruments Redemption of other equity instruments Net increase in debt securities in issueb Proceeds of borrowings and issuance of subordinated debt Repurchase of shares Dividends paid Coupons paid on other equity instruments Net cash generated from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Net cash generated from operating activities includes: Dividends received Net interest (paid)/received Notes a b Includes financial assets at fair value through the income statement. Includes financial liabilities designated at fair value. 2022 £m 2021 £m 2020 £m 1,723 4,267 (1,034) — 868 1,037 3,628 (5,087) (1,769) (6,856) 3,180 (2,097) 4,813 1,000 (1,508) (1,028) (905) 3,455 227 249 476 (2,573) 383 17 2,094 (6,118) (1,083) (7,201) 1,114 — 4,939 1,579 (1,200) (512) (804) 5,116 9 240 249 2,573 528 — 2,067 (4,732) (393) (5,125) 1,175 (898) 3,720 158 — — (857) 3,298 240 — 240 2,797 (163) 1,356 (161) 763 (175) The Parent company’s principal activity is to hold the investment in its wholly-owned subsidiaries, Barclays Bank PLC, Barclays Bank UK PLC, Barclays Execution Services Limited and Barclays Principal Investments Limited. Dividends received are treated as operating income. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 424 Notes to the financial statements For the year ended 31 December 2022 This section describes the Group’s significant policies and critical accounting estimates that relate to the financial statements and notes as a whole. If an accounting policy or a critical accounting estimate relates to a particular note, the accounting policy and/or critical accounting estimate is contained with the relevant note. 1 Significant accounting policies 1. Reporting entity Barclays PLC is a public company limited by shares registered in England under company number 48839, having its registered office at 1 Churchill Place, London, E14 5HP. These financial statements are prepared for Barclays PLC and its subsidiaries (the Group) under Section 399 of the Companies Act 2006. The Group is a major global financial services provider engaged in retail banking, credit cards, wholesale banking, investment banking, wealth management and investment management services. In addition, separate financial statements have been presented for the holding company. 2. Compliance with International Financial Reporting Standards The consolidated financial statements of the Group, and the separate financial statements of Barclays PLC, have been prepared in accordance with UK-adopted international accounting standards. The consolidated financial statements of the Group, and the separate financial statements of Barclays PLC, have also been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), including interpretations issued by the IFRS Interpretations Committee, as there are no applicable differences from IFRS as issued by the IASB for the periods presented. The principal accounting policies applied in the preparation of the consolidated and separate financial statements are set out below, and in the relevant notes to the financial statements. These policies have been consistently applied. 3. Basis of preparation The consolidated and separate financial statements have been prepared under the historical cost convention modified to include the fair valuation of investment property, and particular financial instruments, to the extent required or permitted under IFRS as set out in the relevant accounting policies. These financial statements are stated in millions of Pounds Sterling (£m), the functional currency of Barclays PLC. The financial statements have been prepared for Barclays PLC and its subsidiaries (the Group) under Section 399 of the Companies Act 2006 as applicable to companies using IFRS. The financial statements are prepared on a going concern basis, as the Board is satisfied that the Group and the parent company have the resources to continue in business for a period of at least 12 months from approval of the financial statements. In making this assessment, the Board has considered a wide range of information relating to present and future conditions and includes a review of a working capital report (WCR). The WCR is used by the Board to assess the future performance of the Group and that it has the resources in place that are required to meet its ongoing regulatory requirements. The assessment is based upon business plans which contain future projections of profitability taken from the Group’s medium-term plan as well as projections of regulatory capital requirements and business funding needs. The WCR also includes an assessment of the impact of internally generated stress testing scenarios on the liquidity and capital requirement forecasts. The stress tests used were based upon an assessment of reasonably possible downside economic scenarios that the Group could experience. Further details are set out in the Viability statement on page 58. The WCR showed that the Group had sufficient capital and liquidity in place to support its future business requirements and remained above its regulatory minimum requirements in the stress scenarios. Accordingly, the Directors concluded that there was a reasonable expectation that the Group and parent company has adequate resources to continue as a going concern for a period of at least 12 months from the date of approval of the financial statements. 4. Accounting policies The Group prepares financial statements in accordance with IFRS. The Group’s significant accounting policies relating to specific financial statement items, together with a description of the accounting estimates and judgements that were critical to preparing those items, are set out under the relevant notes. Accounting policies that affect the financial statements as a whole are set out below. (i) Consolidation The Group applies IFRS 10 Consolidated financial statements. The consolidated financial statements combine the financial statements of Barclays PLC and all its subsidiaries. Subsidiaries are entities over which Barclays PLC has control. The Group has control over another entity when the Group has all of the following: 1) power over the relevant activities of the investee, for example through voting or other rights 2) exposure to, or rights to, variable returns from its involvement with the investee, and 3) the ability to affect those returns through its power over the investee. The assessment of control is based on the consideration of all facts and circumstances. The Group reassesses whether it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Intra-group transactions and balances are eliminated on consolidation. Consistent accounting policies are used throughout the Group for the purposes of the consolidation. Changes in ownership interests in subsidiaries are accounted for as equity transactions if they occur after control has already been obtained and they do not result in loss of control. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 425 Notes to the financial statements (continued) For the year ended 31 December 2022 As the consolidated financial statements include partnerships where the Group member is a partner, advantage has been taken of the exemption under Regulation 7 of the Partnership (Accounts) Regulations 2008 with regard to preparing and filing of individual partnership financial statements. Details of the principal subsidiaries are given in Note 34. (ii) Foreign currency translation The Group applies IAS 21 The Effects of Changes in Foreign Exchange Rates. Transactions in foreign currencies are translated into Sterling at the rate ruling on the date of the transaction. Foreign currency monetary balances are translated into Sterling at the period end exchange rates. Exchange gains and losses on such balances are taken to the income statement.  Non-monetary foreign currency balances in relation to items measured in terms of historical cost are carried at historical transaction date exchange rates. Non- monetary foreign currency balances in relation to items measured at fair value are translated using the exchange rate at the date when the fair value was measured. The Group’s foreign operations (including subsidiaries, joint ventures, associates and branches) based mainly outside the UK may have different functional currencies. The functional currency of an operation is the currency of the main economy to which it is exposed. Prior to consolidation (or equity accounting) the assets and liabilities of non-Sterling operations are translated at the period end exchange rate and items of income, expense and other comprehensive income are translated into Sterling at the rate on the date of the transactions. Exchange differences arising on the translation of foreign operations are included in currency translation reserves within equity. These are transferred to the income statement when the Group disposes of the entire interest in a foreign operation, when partial disposal results in the loss of control of an interest in a subsidiary, when an investment previously accounted for using the equity method is accounted for as a financial asset, or on the disposal of a foreign operation within a branch. (iii) Financial assets and liabilities The Group applies IFRS 9 Financial Instruments to the recognition, classification and measurement, and derecognition of financial assets and financial liabilities and the impairment of financial assets. The Group applies the requirements of IAS 39 Financial Instruments: Recognition and Measurement for hedge accounting purposes. Recognition The Group recognises financial assets and liabilities when it becomes a party to the terms of the contract. Trade date or settlement date accounting is applied depending on the classification of the financial asset. Classification and measurement Financial assets are classified on the basis of two criteria: i) the business model within which financial assets are managed, and ii) their contractual cash flow characteristics (whether the cash flows represent ‘solely payments of principal and interest’ (SPPI)). The Group assesses the business model criteria at a portfolio level. Information that is considered in determining the applicable business model includes (i) policies and objectives for the relevant portfolio, (ii) how the performance and risks of the portfolio are managed, evaluated and reported to management, and (iii) the frequency, volume and timing of sales in prior periods, sales expectation for future periods, and the reasons for such sales. The contractual cash flow characteristics of financial assets are assessed with reference to whether the cash flows represent SPPI. In assessing whether contractual cash flows are SPPI compliant, interest is defined as consideration primarily for the time value of money and the credit risk of the principal outstanding. The time value of money is defined as the element of interest that provides consideration only for the passage of time and not consideration for other risks or costs associated with holding the financial asset. Terms that could change the contractual cash flows so that it would not meet the condition for SPPI are considered, including: (i) contingent and leverage features, (ii) non-recourse arrangements and (iii) features that could modify the time value of money. Financial assets are measured at amortised cost if they are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows, and their contractual cash flows represent SPPI. Financial assets are measured at fair value through other comprehensive income if they are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and their contractual cash flows represent SPPI. Other financial assets are measured at fair value through profit and loss. There is an option to make an irrevocable election on initial recognition for non-traded equity investments to be measured at fair value through other comprehensive income, in which case dividends are recognised in profit or loss, but gains or losses are not reclassified to profit or loss upon derecognition, and the impairment requirements of IFRS 9 do not apply. The accounting policy for each type of financial asset or liability is included within the relevant note for the item. The Group’s policies for determining the fair values of the assets and liabilities are set out in Note 17. Derecognition The Group derecognises a financial asset, or a portion of a financial asset, from its balance sheet where (i) the contractual rights to cash flows from the asset have expired, or (ii) the contractual rights to cash flows from the asset have been transferred (usually by sale) and with them either (a) substantially all the risks and rewards of the asset have been transferred, or (b) where neither substantially all the risks and reward have been transferred or retained, where control over the asset has been lost. Financial liabilities are derecognised when the liability has been settled, has expired or has been extinguished. An exchange of an existing financial liability for a new liability with the same lender on substantially different terms – generally a difference of 10% or more in the Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 426 Notes to the financial statements (continued) For the year ended 31 December 2022 present value of the cash flows or a substantive qualitative amendment – is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Transactions in which the Group transfers assets and liabilities, portions of them, or financial risks associated with them can be complex and it may not be obvious whether substantially all of the risks and rewards have been transferred. It is often necessary to perform a quantitative analysis. Such an analysis compares the Group’s exposure to variability in asset cash flows before the transfer with its retained exposure after the transfer. A cash flow analysis of this nature may require judgement. In particular, it is necessary to estimate the asset’s expected future cash flows as well as potential variability around this expectation. The method of estimating expected future cash flows depends on the nature of the asset, with market and market-implied data used to the greatest extent possible. The potential variability around this expectation is typically determined by stressing underlying parameters to create reasonable alternative upside and downside scenarios. Probabilities are then assigned to each scenario. Stressed parameters may include default rates, loss severity, or prepayment rates. Accounting for reverse repurchase and repurchase agreements including other similar lending and borrowing Reverse repurchase agreements (and stock borrowing or similar transactions) are a form of secured lending whereby the Group provides a loan or cash collateral in exchange for the transfer of collateral, generally in the form of marketable securities subject to an agreement to transfer the securities back at a fixed price in the future. Repurchase agreements are where the Group obtains such loans or cash collateral, in exchange for the transfer of collateral. The Group purchases (a reverse repurchase agreement) or borrows securities subject to a commitment to resell or return them. The securities are not included in the balance sheet as the Group does not acquire the risks and rewards of ownership. Consideration paid (or cash collateral provided) is accounted for as a loan asset at amortised cost, unless it is designated or mandatorily at fair value through profit and loss. The Group may also sell (a repurchase agreement) or lend securities subject to a commitment to repurchase or redeem them. The securities are retained on the balance sheet as the Group retains substantially all the risks and rewards of ownership. Consideration received (or cash collateral provided) is accounted for as a financial liability at amortised cost, unless it is designated at fair value through profit and loss. (iv) Issued debt and equity instruments The Group applies IAS 32, Financial Instruments: Presentation, to determine whether funding is either a financial liability (debt) or equity. Issued financial instruments or their components are classified as liabilities if the contractual arrangement results in the Group having an obligation to either deliver cash or another financial asset, or a variable number of equity shares, to the holder of the instrument. If this is not the case, the instrument is generally an equity instrument and the proceeds included in equity, net of transaction costs. Dividends and other returns to equity holders are recognised when paid or declared by the members at the Annual General Meeting and treated as a deduction from equity. Where issued financial instruments contain both liability and equity components, these are accounted for separately. The fair value of the debt is estimated first and the balance of the proceeds is included within equity. (v) Changes in the basis for determining contractual cash flows resulting from interest rate benchmark reform A change in the basis of determining the contractual cash flows of a financial instrument that is required by interest rate benchmark reform is accounted for by updating the effective interest rate, without the recognition of an immediate gain or loss. This practical expedient is only applied where (1) the change to the contractual cash flows is necessary as a direct consequence of the reform and (2) the new basis for determining the contractual cash flows is economically equivalent to the previous basis. For changes made in addition to those required by the interest rate benchmark reform, the practical expedient is applied first, after which the normal IFRS 9 requirements for modifications of financial instruments is applied. Refer to Note 14 for further details regarding hedge accounting policies in respect of interest rate benchmark reform. Refer to Note 41 for further disclosure related to interest rate benchmark reform. (vi) Cash flow statement Cash comprises cash on hand and balances at central banks. Cash equivalents comprise loans and advances to banks, cash collateral balances with central banks related to payment schemes and treasury and other eligible bills, all with original maturities of three months or less. Repurchase and reverse repurchase agreements are not considered to be part of cash equivalents. Investments in debt securities at amortised cost, presented within loans and advances on the balance sheet, are deemed to be investing activities for the purposes of the cash flow statement, except those instruments considered to be cash equivalents.  Debt securities issued and redeemed are considered to be operating activities, except qualifying eligible liabilities that satisfy regulatory requirements for MREL instruments (or have previously satisfied these requirements since 2019 when they came into effect), which are considered to be financing activities. 5. New and amended standards and interpretations The accounting policies adopted have been consistently applied. Future accounting developments The following accounting standards have been issued by the IASB but are not yet effective: Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 427 Notes to the financial statements (continued) For the year ended 31 December 2022 IFRS 17 – Insurance contracts In May 2017, the IASB issued IFRS 17 Insurance Contracts, a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure. IFRS 17 will replace IFRS 4 Insurance Contracts that was issued in 2005. In June 2020, the IASB published amendments to IFRS 17, to include scope exclusion for certain credit card contracts and similar contracts that provide insurance coverage, the optional scope exclusion for loan contracts that transfer significant insurance risk, and the clarification that only financial guarantees issued are in scope of IFRS 9. IFRS 17 applies to all types of insurance contracts (i.e. life, non-life, direct insurance and reinsurance), regardless of the type of entities that issue them, as well as to certain guarantees and financial instruments with discretionary participation features. A few scope exceptions will apply. IFRS 17 is effective for accounting periods beginning on or after 1 January 2023. The Group does not expect the impact of IFRS 17 to be material. Classification of Liabilities as Current or Non-current (Amendments to IAS 1) In January 2020 the IASB issued amendments to IAS 1 to clarify the presentation of liabilities in the balance sheet, with an effective date of 1 January 2024. The amendments clarify that a liability should be classified as non-current only if the entity has the right to defer settlement of the liability for at least 12 months after the reporting period, and that (i) the right to defer settlement must exist at the end of the reporting period and (ii) management’s intentions or expectations about whether it will exercise its right to defer settlement does not affect the classification. Further clarifications include how lending conditions affect classification and classification of liabilities the entity will or may settle by issuing its own equity instruments. In October 2022, the IASB also issued further amendments to IAS 1 to improve the information an entity provides when its right to defer settlement of a liability for at least twelve months is subject to compliance with covenants, and to respond to stakeholders’ concerns about the classification of such a liability as current or non-current. Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2 In February 2021 the IASB issued amendments to IAS 1 that require entities to disclose their material accounting policies rather than their significant accounting policies. The amendments to IFRS Practice Statement 2 provide guidance on the concept of materiality and its application to accounting policy information. Under the amendments, accounting policy information is material if, when considered together with other information included in an entity’s financial statements, it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments are effective for annual periods beginning on or after 1 January 2023, and will be applied from that date. Definition of Accounting Estimate - Amendments to IAS 8 In February 2021 the IASB issued amendments to IAS 8 that replace the definition of a change in accounting estimates with a definition of accounting estimates. Under the new definition, accounting estimates are clarified as monetary amounts in financial statements that are subject to measurement uncertainty. Where an entity's accounting policy requires an item to be measured at monetary amounts that cannot be observed directly, it should develop an accounting estimate to achieve this objective. The amendments are effective for annual periods beginning on or after 1 January 2023, and will be applied from that date. 6. Critical accounting estimates and judgements The preparation of financial statements in accordance with IFRS requires the use of estimates. It also requires management to exercise judgement in applying the accounting policies. The key areas involving a higher degree of judgement or complexity or areas where assumptions are significant to the consolidated and individual financial statements are highlighted under the relevant note. Critical accounting estimates and judgements are disclosed in: ▪ Credit impairment charges on page 436 ▪ Tax on page 441 ▪ Fair value of financial instruments on page 456 ▪ Goodwill and intangible assets on page 475 ▪ Pensions and post-retirement benefit obligations on page 496 ▪ Provisions including conduct and legal, competition and regulatory matters on page 477. 7. Other disclosures To improve transparency and ease of reference, by concentrating related information in one place, certain disclosures required under IFRS have been included within the Risk review section as follows: ▪ Credit risk on pages 289 to 291 and 300 to 340 ▪ Market risk on page 291 and 341 to 342 ▪ Treasury and Capital risk – liquidity on page 292 and 344 to 354 ▪ Treasury and Capital risk – capital on page 292 and 355 to 362. These disclosures are covered by the Audit opinion (included on pages 399 to 415) where referenced as audited. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 428 Notes to the financial statements (continued) For the year ended 31 December 2022 1a Restatement of financial statements The comparatives in these consolidated financial statements for the year ended 31 December 2022 (the financial statements) have been restated to reflect both a provision and contingent liability disclosure in respect of the impact of an over-issuance of securities (the Over-issuance of Securities) in excess of the maximum aggregate offering price registered under Barclays Bank PLC’s shelf registration statement on Form F-3, as declared effective by the SEC in August 2019 (2019 F-3) and Barclays Bank PLC’s prior shelf registration statement (Predecessor Shelf). The comparatives have been restated so as to align them to those reported in the restated 2021 financial statements included in the Company’s amended Annual Report on Form 20-F for the year ended 31 December 2021. Due to an SEC settlement order in 2017, at the time the 2019 F-3 was filed and the Predecessor Shelf was amended, Barclays Bank PLC had ceased to be a “well-known seasoned issuer” (or WKSI) and had become an “ineligible issuer”, as defined in Rule 405 under the Securities Act of 1933, as amended (Securities Act), thus being required to register upfront a fixed amount of securities with the SEC. In March 2022, Barclays Bank PLC became aware that it had issued securities in the US materially in excess of the amount it had registered with the SEC under the 2019 F-3. Subsequently, Barclays Bank PLC became aware that securities had also been issued in excess of the amount it had registered with the SEC under the Predecessor Shelf. The securities that were over-issued included structured notes and exchange traded notes (ETNs). Certain offers and sales of these securities were not made in compliance with the Securities Act, giving rise to rights of rescission for certain purchasers of the securities. Under Section 12(a)(1) of the Securities Act, certain purchasers of unregistered securities have a right to recover, upon the tender of such security, the consideration paid for such security with interest, less the amount of any income received, or damages if the purchaser sold the securities at a loss (the Rescission Price). As a result, Barclays Bank PLC made a rescission offer to eligible purchasers of the relevant affected securities at the Rescission Price (the Rescission Offer). A portion of the costs associated with the rights of rescission of certain investors was attributable to Barclays PLC’s financial statements for the year ended 31 December 2021. Accordingly, the comparatives in these financial statements have been restated. The restatement impacts the consolidated income statement, the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of changes in equity, and the consolidated cash flow statement for the year ended 31 December 2021. There was no material impact on Barclays PLC’s previously reported financial statements for the year ended 31 December 2020. The impact of the restatement is as follows: • Litigation and conduct charges in the income statement for the year ended 31 December 2021 were underreported by £220m, increasing total operating expenses from a reported £14,439m to £14,659m. • Provisions on the consolidated balance sheet have increased from a reported £1,688m to £1,908m. • The taxation charge in the income statement has reduced by £50m from a reported £1,188m to £1,138m with a corresponding decrease in current tax liabilities on the balance sheet from £739m to £689m. • The overall impact of the restatement has been to reduce reported profit after tax from £7,226m to £7,056m. • The consolidated financial statements have been restated for the increased provision of £220m and lower tax charge of £50m. • The contractual maturity profile of financial liabilities designated at fair value has been restated to reflect the impact of the Over- issuance of Securities. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 429 Notes to the financial statements (continued) For the year ended 31 December 2022 The table below reflects each of the consolidated financial statement line items that were affected by the restatement: For the year ended 31 December 2021 Impact on the consolidated income statement Litigation and conduct Operating expenses Profit before tax Taxation Profit after tax Impact on the consolidated statement of comprehensive income Profit after tax Total comprehensive income for the year Impact on the consolidated balance sheet Liabilities Current tax liabilities Provisions Total liabilities Equity Retained earnings Total equity Impact on the consolidated cash flow statement Profit before tax Adjustments for non-cash items: Other provisions, including pensions As reported Restatement As restated £m (177) (14,439) 8,414 (1,188) 7,226 7,226 5,008 (739) (1,688) (1,314,074) 50,657 70,211 8,414 248 £m (220) (220) (220) 50 (170) (170) (170) 50 (220) (170) (170) (170) (220) 220 £m (397) (14,659) 8,194 (1,138) 7,056 7,056 4,838 (689) (1,908) (1,314,244) 50,487 70,041 8,194 468 The financial impact of the restatement has been reflected in Notes 2, 7, 9, 10 and 24. Further, Note 26 (Legal, competition and regulatory matters) has also been amended to reflect the Over-issuance of Securities. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 430 Notes to the financial statements (continued) For the year ended 31 December 2022 Financial performance and returns The notes included in this section focus on the results and performance of the Group. Information on the income generated, expenditure incurred, segmental performance, tax, earnings per share and dividends are included here. For further detail on performance, see income statement commentary within Financial Review (unaudited). 2 Segmental reporting Presentation of segmental reporting The Group’s segmental reporting is in accordance with IFRS 8 Operating Segments. Operating segments are reported in a manner consistent with the internal reporting provided to the Executive Committee, which is responsible for allocating resources and assessing performance of the operating segments, and has been identified as the chief operating decision maker. All transactions between business segments are conducted on an arm’s-length basis, with intra-segment revenue and costs being eliminated in Head Office. Income and expenses directly associated with each segment are included in determining business segment performance. The Group is a British universal bank diversified by business, geography and income type, serving consumer and wholesale customers and clients globally and for segmental reporting purposes it defines its two operating divisions as Barclays UK and Barclays International. ▪ 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 Group. ▪ Barclays International consists of our Corporate and Investment Bank and Consumer, Cards and Payments businesses. These businesses are carried on by our non ring-fenced bank (Barclays Bank PLC) and its subsidiaries, and certain other entities within the Group. The below table also includes Head Office which comprises head office and legacy businesses, as well as the FTEs employed by Barclays Execution Services. Analysis of results by business For the year ended 31 December 2022 Total income Operating costs UK bank levy Litigation and conduct Total operating expenses Other net income/(expenses)a Profit/(loss) before impairment Credit impairment charges Profit/(loss) before tax Total assets (£bn) Number of employees (full time equivalent) Average number of employees (full time equivalent) Barclays UK Barclays International Head Office Group results £m £m £m £m 7,259 (4,260) (26) (41) (4,327) — 2,932 (286) 2,646 313.2 6,200 17,867 (10,361) (133) (1,503) (11,997) 28 5,898 (933) 4,965 1,181.3 10,900 (170) (336) (17) (53) (406) (22) (598) (1) (599) 19.2 70,300 24,956 (14,957) (176) (1,597) (16,730) 6 8,232 (1,220) 7,012 1,513.7 87,400 83,900 Note a Other net income/(expenses) represents the share of post-tax results of associates and joint ventures, profit on disposal of subsidiaries, associates and joint ventures, and gains on acquisitions. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 431 Notes to the financial statements (continued) For the year ended 31 December 2022 For the year ended 31 December 2021 Total income Operating costs UK bank levy Litigation and conduct Total operating expenses Other net incomeb Profit/(loss) before impairment Credit impairment releases Profit/(loss) before tax Total assets (£bn) Number of employees (full time equivalent)c Average number of employees (full time equivalent) Barclays UK Restateda Barclays International Restateda Head Office Group results £m £m £m £m 6,536 (4,357) (36) (37) (4,430) — 2,106 365 2,471 321.2 7,100 15,665 (9,076) (134) (345) (9,555) 40 6,150 288 6,438 1,044.1 10,400 (261) (659) — (15) (674) 220 (715) — (715) 19.0 64,100 21,940 (14,092) (170) (397) (14,659) 260 7,541 653 8,194 1,384.3 81,600 82,900 Notes a 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details. b Other net income represents the share of post-tax results of associates and joint ventures, profit on disposal of subsidiaries, associates and joint ventures, and gains on acquisitions. c Barclays Execution Services Employees are reported within the Head Office Segment. Barclays UK transformed its business in 2021 and consolidated all Customer Care employees, who directly serve customers, into Barclays Execution Services to improve customer service and experience. Costs are recharged, while FTEs are reported within Head Office, as at 31 December 2021 10,700 FTEs were impacted by the move from Barclays UK to Head Office. The 2020 comparative figures have not been restated. For the year ended 31 December 2020 Total income Operating costs UK bank levy Litigation and conduct Total operating expenses Other net income/(expenses)b Profit/(loss) before impairment Credit impairment charges Profit/(loss) before tax Total assets (£bn) Number of employees (full time equivalent) Average number of employees (full time equivalent) Barclays UKa Barclays Internationala £m £m 6,347 (4,270) (50) (32) (4,352) 18 2,013 (1,467) 546 289.1 21,300 15,921 (8,765) (240) (48) (9,053) 28 6,896 (3,280) 3,616 1,041.8 10,800 Head Office £m (502) (399) (9) (73) (481) (23) (1,006) (91) (1,097) 18.6 50,900 Group results £m 21,766 (13,434) (299) (153) (13,886) 23 7,903 (4,838) 3,065 1,349.5 83,000 81,800 Notes a On 1 April 2020, assets of £2.2bn relating to the Barclays Partner Finance business were moved from Barclays International to Barclays UK, with net operating income of £19m and loss before tax of £5m subsequently recognised in Barclays UK for the rest of 2020. b Other net income/(expenses) represents the share of post-tax results of associates and joint ventures, profit (or loss) on disposal of subsidiaries, associates and joint ventures, and gains on acquisitions. Income by geographic regiona For the year ended 31 December United Kingdom Europe Americas Africa and Middle East Asia Total .Income from individual countries which represent more than 5% of total incomea For the year ended 31 December United Kingdom United States Note a The geographical analysis is based on the location of the office where the transactions are recorded. 2022 £m 14,908 2,321 6,353 63 1,311 24,956 2022 £m 14,908 6,176 2021 £m 11,256 2,372 7,199 45 1,068 21,940 2021 £m 11,256 7,048 2020 £m 11,211 2,059 7,425 36 1,035 21,766 2020 £m 11,211 7,318 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 432 Notes to the financial statements (continued) For the year ended 31 December 2022 3 Net interest income Accounting for interest income and expenses Interest income on loans and advances at amortised cost and financial assets at fair value through other comprehensive income, and interest expense on financial liabilities held at amortised cost, are calculated using the effective interest method which allocates interest, and direct and incremental fees and costs, over the expected lives of the assets and liabilities. The effective interest method requires the Group to estimate future cash flows, in some cases based on its experience of customers’ behaviour, considering all contractual terms of the financial instrument, as well as the expected lives of the assets and liabilities. The Group incurs certain costs to originate credit card balances with the most significant being co-brand partner fees. To the extent these costs are attributed to customers that continuously carry an outstanding balance (revolvers) and incremental to the origination of credit card balances, they are capitalised and subsequently included within the calculation of the effective interest rate. They are amortised to interest income over the period of expected repayment of the originated balance. Costs attributed to customers that settle their outstanding balances each period (transactors) are deferred on the balance sheet as a cost of obtaining a contract and amortised to fee and commission expense over the life of the customer relationship (refer to Note 4). There are no other individual estimates involved in the calculation of effective interest rates that are material to the results or financial position. Cash and balances at central banks Loans and advances at amortised cost Fair value through other comprehensive income Negative interest on liabilities Other Interest and similar income Deposits at amortised cost Debt securities in issue Subordinated liabilities Negative interest on assets Other Interest and similar expense Net interest income 2022 £m 2,916 13,376 1,963 208 633 19,096 (3,573) (3,240) (530) (208) (973) (8,524) 10,572 2021 £m 184 2020 £m 275 9,540 10,180 550 248 718 11,240 (561) (1,340) (507) (374) (385) (3,167) 8,073 776 68 593 11,892 (1,030) (1,360) (670) (344) (366) (3,770) 8,122 Interest and similar income presented above represents interest revenue calculated using the effective interest method. Costs to originate credit card balances of £786m (2021: £652m; 2020: £698m) have been amortised to interest and similar income during the year. Interest and similar income includes £59m (2021: £37m; 2020: £40m) accrued on impaired loans. Other interest expense includes £56m (2021: £64m; 2020:£70m) relating to IFRS 16 lease interest expenses. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 433 Notes to the financial statements (continued) For the year ended 31 December 2022 4 Net fee and commission income Accounting for net fee and commission income The Group applies IFRS 15 Revenue from Contracts with Customers. IFRS 15 establishes a five-step model governing revenue recognition. The five-step model requires the Group to (i) identify the contract with the customer, (ii) identify each of the performance obligations included in the contract, (iii) determine the amount of consideration in the contract, (iv) allocate the consideration to each of the identified performance obligations and (v) recognise revenue as each performance obligation is satisfied. The Group recognises fee and commission income charged for services provided by the Group as and when performance obligations are satisfied, for example, on completion of the underlying transaction. Where the contractual arrangements also result in the Group recognising financial instruments in scope of IFRS 9, such financial instruments are initially recognised at fair value in accordance with IFRS 9 before applying the provisions of IFRS 15. Fee and commission income is disaggregated below by fee types that reflect the nature of the services offered across the Group and operating segments, in accordance with IFRS 15. The below table includes a total for fees in scope of IFRS 15. Refer to Note 2 for more detailed information about operating segments. Fee type Transactional Advisory Brokerage and execution Underwriting and syndication Other Total revenue from contracts with customers Other non-contract fee income Fee and commission income Fee and commission expense Net fee and commission income Fee type Transactional Advisory Brokerage and execution Underwriting and syndication Other Total revenue from contracts with customers Other non-contract fee income Fee and commission income Fee and commission expense Net fee and commission income Fee type Transactional Advisory Brokerage and execution Underwriting and syndication Other Total revenue from contracts with customers Other non-contract fee income Fee and commission income Fee and commission expense Net fee and commission income Barclays UK 2022 Barclays International Head Office £m £m 1,084 161 256 — 59 1,560 — 1,560 (319) 1,241 3,256 964 1,521 2,037 153 7,931 143 8,074 (2,713) 5,361 £m — — — — 3 3 — 3 (6) (3) Barclays UK 2021 Barclays International Head Office £m £m 871 172 228 — 74 1,345 — 1,345 (218) 1,127 2,572 1,096 1,135 3,425 182 8,410 121 8,531 (1,983) 6,548 £m — 1 — — 3 4 — 4 (5) (1) 2020 Barclays International Head Office Barclays UK £m £m 810 159 212 — 71 1,252 — 1,252 (308) 944 2,353 693 1,173 2,867 173 7,259 119 7,378 (1,754) 5,624 £m — 2 — — 9 11 — 11 (8) 3 Total £m 4,340 1,125 1,777 2,037 215 9,494 143 9,637 (3,038) 6,599 Total £m 3,443 1,269 1,363 3,425 259 9,759 121 9,880 (2,206) 7,674 Total £m 3,163 854 1,385 2,867 253 8,522 119 8,641 (2,070) 6,571 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 434 Notes to the financial statements (continued) For the year ended 31 December 2022 Fee types Transactional Transactional fees are service charges on deposit accounts, cash management services fees and transactional processing fees. These include interchange and merchant fee income generated from credit and bank card usage. Transaction and processing fees are recognised at the point in time the transaction occurs or service is performed. Interchange and merchant fees are recognised upon settlement of the card transaction payment. The Group incurs certain card-related costs including those related to cardholder reward programmes and payments to co-brand partners. Cardholder reward programme costs related to customers that settle their outstanding balance each period (transactors) are expensed when incurred and presented in fee and commission expense, while costs related to customers that continuously carry an outstanding balance (revolvers) are included in the effective interest rate of the receivable (refer to Note 3). Payments to partners for new cardholder account originations related to transactor accounts are deferred as costs to obtain a contract under IFRS 15, while costs related to revolver accounts are included in the effective interest rate of the receivable (refer to Note 3). Those costs deferred under IFRS 15 are capitalised and amortised over the estimated life of the customer relationship. Payments to co-brand partners based on revenue sharing to the extent the revenue share relates to "revolvers" are included in the effective interest rate of the receivable and to the extent revenue share relates to “transactors” it must be presented in fee and commission expense. Payments based on profitability are presented in fee and commission expense. Advisory Advisory fees are generated from wealth management services and investment banking advisory services related to mergers, acquisitions and financial restructurings. Wealth management advisory fees are earned over the period the services are provided and are generally recognised quarterly when the market value of client assets is determined. Investment banking advisory fees are recognised at the point in time when the services related to the transaction have been completed under the terms of the engagement. Investment banking advisory costs are recognised as incurred in fee and commission expense if direct and incremental to the advisory services or are otherwise recognised in operating expenses. Brokerage and execution Brokerage and execution fees are earned for executing client transactions with various exchanges and over-the-counter markets and assisting clients in clearing transactions and facilitating foreign exchange transactions for spot/forward contracts. Brokerage and execution fees are recognised at the point in time the associated service has been completed which is generally the trade date of the transaction. Underwriting and syndication Underwriting and syndication fees are earned for the distribution of client equity or debt securities and the arrangement and administration of a loan syndication. This includes commitment fees to provide loan financing. Underwriting fees are generally recognised on trade date if there is no remaining contingency, such as the transaction being conditional on the closing of an acquisition or another transaction. Underwriting costs are deferred and recognised in fee and commission expense when the associated underwriting fees are recorded. Syndication fees are earned for arranging and administering a loan syndication; however, the associated fee may be subject to variability until the loan has been syndicated to other syndicate members or until other contingencies have been resolved and therefore the fee revenue is deferred until the uncertainty is resolved. Included in the underwriting and syndication fees are loan commitment fees, when the drawdown is not probable, which are not presented as part of the carrying value of the loan in accordance with IFRS 9. Such commitment fees are recognised over time through to the contractual maturity of the commitment. Contract assets and contract liabilities The Group had no material contract assets or contract liabilities as at 31 December 2022 (2021: £nil; 2020: £nil). Impairment of fee receivables and contract assets During 2022, there have been no material impairments recognised in relation to fees receivable and contract assets (2021: £nil; 2020: £nil). Fees in relation to transactional business can be added to outstanding customer balances. These amounts may be subsequently impaired as part of the overall loans and advances balance. Remaining performance obligations The Group applies the practical expedient of IFRS 15 and does not disclose information about remaining performance obligations that have original expected durations of one year or less or because the Group has a right to consideration that corresponds directly with the value of the service provided to the client or customer. Costs incurred in obtaining or fulfilling a contract The Group expects that incremental costs of obtaining a contract such as success fee and commission fees paid are recoverable and therefore capitalise such contract costs. Capitalised contract costs net of amortisation as at 31 December 2022 are £198m (2021: £154m; 2020: £141m). Capitalised contract costs are amortised over the customer relationship period depending on the transfer of services to which the asset pertains. In 2022, the amount of amortisation was £47m (2021: £36m; 2020: £36m) and there was no impairment loss recognised in connection with the capitalised contract costs (2021: £nil; 2020: £nil). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 435 Notes to the financial statements (continued) For the year ended 31 December 2022 5 Net trading income Accounting for net trading income In accordance with IFRS 9, trading positions are held at fair value, and the resulting gains and losses are included in net trading income, together with interest and dividends arising from long and short positions and funding costs relating to trading activities. Income arises from both the sale and purchase of trading positions, margins which are achieved through market-making and customer business and from changes in fair value caused by movements in interest and exchange rates, equity prices and other market variables. Gains or losses on non-trading financial instruments designated or mandatorily at fair value with changes in fair value recognised in the income statement are included in net trading income where the business model is to manage assets and liabilities on a fair value basis which includes use of derivatives or where an instrument is designated at fair value to eliminate an accounting mismatch and the related instrument's gain and losses are reported in net trading income. Net gains on financial instruments held for trading Net gains on financial instruments designated at fair value Net gains on financial instruments mandatorily at fair value Net trading income 2022 £m 6,021 508 1,520 8,049 2021 £m 3,992 692 1,110 5,794 6 Net investment income Accounting for net investment income/(expense) Dividends are recognised when the right to receive the dividend has been established. Other accounting policies relating to net investment income are set out in Note 13 and Note 15. Net (losses)/gains from financial instruments mandatorily at fair value Net (losses)/gains from disposal of debt instruments at fair value through other comprehensive income Net (losses)/gains from disposal of financial assets and liabilities measured at amortised cost Dividend income Net losses on other investmentsa Net investment (expense)/income 2022 £m (51) (111) (18) 31 (285) (434) 2021 £m 73 305 114 20 (201) 311 Note a Included within the 2022 balance are losses of £74m on sale arising from disposal of Barclays’ equity stake in Absa Group Limited (Absa) in April 2022 and September 2022. 2020 £m 5,342 700 987 7,029 2020 £m (50) 295 (61) 37 (208) 13 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 436 Notes to the financial statements (continued) For the year ended 31 December 2022 7 Operating expenses Infrastructure costs Property and equipment Depreciation and amortisation Impairment of property, equipment and intangible assetsb Total infrastructure costs Administration and general expenses Consultancy, legal and professional fees Marketing and advertising UK bank levy Other administration and general expenses Total administration and general expenses Staff costs Litigation and conduct Operating expenses 2022 £m 1,649 1,723 63 3,435 669 500 176 1,101 2,446 9,252 1,597 16,730 Restateda 2021 £m 1,538 1,673 403 3,614 610 399 170 958 2,137 8,511 397 14,659 2020 £m 1,590 1,539 194 3,323 567 330 299 1,117 2,313 8,097 153 13,886 Notes a 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details. b In 2021, Impairment of property, equipment and intangible assets included £266m relating to structural cost actions taken as part of the real estate review. For further details on staff costs including accounting policies, refer to Note 31. 8 Credit impairment charges/(releases) Accounting for the impairment of financial assets Impairment In accordance with IFRS 9, the Group is required to recognise expected credit losses (ECLs) based on unbiased forward-looking information for all financial assets at amortised cost, lease receivables, debt financial assets at fair value through other comprehensive income, loan commitments and financial guarantee contracts. At the reporting date, an allowance (or provision for loan commitments and financial guarantees) is required for the 12 month (Stage 1) ECLs. If the credit risk has significantly increased since initial recognition (Stage 2), or if the financial instrument is credit impaired (Stage 3), an allowance (or provision) should be recognised for the lifetime ECLs. The measurement of ECL is calculated using three main components: (i) probability of default (PD) (ii) loss given default (LGD) and (iii) the exposure at default (EAD). The 12 month and lifetime ECLs are calculated by multiplying the respective PD, LGD and the EAD. The 12 month and lifetime PDs represent the PD occurring over the next 12 months and the remaining maturity of the instrument respectively. The EAD represents the expected balance at default, taking into account the repayment of principal and interest from the balance sheet date to the default event together with any expected drawdowns of committed facilities. The LGD represents expected losses on the EAD given the event of default, taking into account, among other attributes, the mitigating effect of collateral value at the time it is expected to be realised and the time value of money. Expected credit loss measurement is based on the ability of borrowers to make payments as they fall due. The Group also considers sector-specific risks and whether additional adjustments are required in the measurement of ECL. Credit risk may be impacted by climate considerations for certain sectors, such as oil and gas. Determining a significant increase in credit risk since initial recognition: The Group assesses when a significant increase in credit risk has occurred based on quantitative and qualitative assessments. The credit risk of an exposure is considered to have significantly increased when: i) Quantitative test The annualised lifetime PD has increased by more than an agreed threshold relative to the equivalent at origination. PD deterioration thresholds are defined as percentage increases, and are set at an origination score band and segment level to ensure the test appropriately captures significant increases in credit risk at all risk levels. Generally, thresholds are inversely correlated to the origination PD, i.e. as the origination PD increases, the threshold value reduces. The assessment of the point at which a PD increase is deemed ‘significant’, is based upon analysis of the portfolio’s risk profile against a common set of principles and performance metrics (consistent across both retail and wholesale businesses), incorporating expert credit judgement where appropriate. Application of quantitative PD floors does not represent the use of the low credit risk exemption as exposures can separately move into Stage 2 via the qualitative route described below. Wholesale assets apply a 100% increase in PD and 0.2% PD floor to determine a significant increase in credit risk. Retail assets apply bespoke relative increase and absolute PD thresholds based on product type and origination PD. Thresholds are subject to maximums defined by Group policy and typically apply minimum relative thresholds of 50-100% and a maximum relative threshold of 400%. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 437 Notes to the financial statements (continued) For the year ended 31 December 2022 For existing/historical exposures where origination point scores or data are no longer available or do not represent a comparable estimate of lifetime PD, a proxy origination score is defined, based upon: • back-population of the approved lifetime PD score either to origination date or, where this is not feasible, as far back as possible (subject to a data start point no later than 1 January 2015); or • use of available historical account performance data and other customer information, to derive a comparable ‘proxy’ estimation of origination PD. ii) Qualitative test This is relevant for accounts that meet the portfolio’s ‘high risk’ criteria and are subject to closer credit monitoring. High risk customers may not be in arrears but either through an event or an observed behaviour exhibit credit distress. The definition and assessment of high risk includes as wide a range of information as reasonably available, such as industry and Group-wide customer level data, including but not limited to bureau scores and high consumer indebtedness index, wherever possible or relevant. Whilst the high risk populations applied for IFRS 9 impairment purposes are aligned with risk management processes, they are also regularly reviewed and validated to ensure that they capture any incremental segments where there is evidence of credit deterioration. iii) Backstop criteria This is relevant for accounts that are more than 30 calendar days past due. The 30 days past due criteria is a backstop rather than a primary driver of moving exposures into Stage 2. The criteria for determining a significant increase in credit risk for assets with bullet repayments follows the same principle as all other assets, i.e. quantitative, qualitative and backstop tests are all applied. Exposures will move back to Stage 1 once they no longer meet the criteria for a significant increase in credit risk. This means that, at a minimum all payments must be up-to-date, the PD deterioration test is no longer met, the account is no longer classified as high risk, and the customer has evidenced an ability to maintain future payments. Exposures are only removed from Stage 3 and reassigned to Stage 2 once the original default trigger event no longer applies. Exposures being removed from Stage 3 must no longer qualify as credit impaired, and: a) the obligor will also have demonstrated consistently good payment behaviour over a 12-month period, by making all consecutive contractual payments due and, for forborne exposures, the relevant EBA defined probationary period has also been successfully completed or; b) (for non-forborne exposures) the performance conditions are defined and approved within an appropriately sanctioned restructure plan, including 12 months’ payment history have been met. Management overlays and other exceptions to model outputs are applied only if consistent with the objective of identifying significant increases in credit risk. Forward-looking information The measurement of ECL involves complexity and judgement, including estimation of PD, LGD, a range of unbiased future economic scenarios, estimation of expected lives (where contractual life is not appropriate), and estimation of EAD and assessing significant increases in credit risk. Credit losses are the expected cash shortfalls from what is contractually due over the expected life of the financial instrument, discounted at the original effective interest rate (EIR). ECLs are the unbiased probability-weighted credit losses determined by evaluating a range of possible outcomes and considering future economic conditions. The Group uses a five-scenario model to calculate ECL. An external consensus forecast is assembled from key sources, including HM Treasury (short and medium-term forecasts) and Bloomberg (based on median of economic forecasts), which forms the Baseline scenario. In addition, two adverse scenarios (Downside 1 and Downside 2) and two favourable scenarios (Upside 1 and Upside 2) are derived, with associated probability weightings. The adverse scenarios are calibrated to a broadly similar severity to the Group's internal stress tests and stress scenarios provided by regulators whilst also considering IFRS 9 specific sensitivities and non-linearity. The favourable scenarios are designed to reflect plausible upside risks to the Baseline scenario which are broadly consistent with the economic narrative approved by the Senior Scenario Review Committee. All scenarios are regenerated at a minimum semi-annually. The scenarios include key economic variables (including GDP, unemployment, House Price Index (HPI) and base rates in both the UK and US markets) and expanded variables using statistical models based on historical correlations. The upside and downside shocks are designed to evolve over a five-year stress horizon, with all five scenarios converging to a steady state after approximately seven years. The methodology for estimating probability weights for each of the scenarios involves a comparison of the distribution of key historical UK and US macroeconomic variables against the forecast paths of the five scenarios. The methodology works such that the baseline (reflecting current consensus outlook) has the highest weight and the weights of adverse and favourable scenarios depend on the deviation from the baseline; the further from the baseline, the smaller the weight. A single set of five scenarios is used across all portfolios and all five weights are normalised to equate to 100%. The same scenarios used in the estimation of expected credit losses are also used to inform Barclays' internal planning. The impacts across the portfolios are different because of the sensitivities of each of the portfolios to specific macroeconomic variables, for example, mortgages are highly sensitive to house prices, and credit cards and unsecured consumer loans are highly sensitive to unemployment. Definition of default, credit impaired assets, write-offs, and interest income recognition The definition of default for the purpose of determining ECLs, and for internal credit risk management purposes, has been aligned to the Regulatory Capital CRR Article 178 definition of default, to maintain a consistent approach with IFRS 9 and associated regulatory guidance. The Regulatory Capital CRR Article 178 definition of default considers indicators that the debtor is unlikely to pay, includes Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 438 Notes to the financial statements (continued) For the year ended 31 December 2022 exposures in forbearance and is no later than when the exposure is more than 90 days past due. When exposures are identified as credit impaired at the time when they are purchased or originated interest income is calculated on the carrying value net of the impairment allowance. An asset is considered credit impaired when one or more events occur that have a detrimental impact on the estimated future cash flows of the financial asset. This comprises assets defined as defaulted and other individually assessed exposures where imminent default or actual loss is identified. Uncollectable loans are written off against the related allowance for loan impairment on completion of the Group’s internal processes and when all reasonably expected recoverable amounts have been collected. Subsequent recoveries of amounts previously written off are credited to the income statement. The timing and extent of write-offs may involve some element of subjective judgement. Nevertheless, a write-off will often be prompted by a specific event, such as the inception of insolvency proceedings or other formal recovery action, which makes it possible to establish that some or the entire advance is beyond realistic prospect of recovery. Accounting for purchased financial guarantee contracts The Group may enter into a financial guarantee contract which requires the issuer of such contract to reimburse the Group for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. For these separate financial guarantee contracts, the Group recognises a reimbursement asset aligned with the recognition of the underlying ECLs, if it is considered virtually certain that a reimbursement would be received if the specified debtor fails to make payment when due in accordance with the terms of the debt instrument. Loan modifications and renegotiations that are not credit-impaired When modification of a loan agreement occurs as a result of commercial restructuring activity rather than due to the credit risk of the borrower, an assessment must be performed to determine whether the terms of the new agreement are substantially different from the terms of the existing agreement. This assessment considers both the change in cash flows arising from the modified terms as well as the change in overall instrument risk profile. In respect of payment holidays granted to borrowers which are not due to forbearance, if the revised cash flows on a present value basis (based on the original EIR) are not substantially different from the original cash flows, the loan is not considered to be substantially modified.  Where terms are substantially different, the existing loan will be derecognised and a new loan will be recognised at fair value, with any difference in valuation recognised immediately within the income statement, subject to observability criteria. Where terms are not substantially different, the loan carrying value will be adjusted to reflect the present value of modified cash flows discounted at the original EIR, with any resulting gain or loss recognised immediately within the income statement as a modification gain or loss. Note 1 sets out details for changes in the basis of determining the contractual cash flows of a financial instrument that are required by interest rate benchmark reform. Expected life Lifetime ECLs must be measured over the expected life. This is restricted to the maximum contractual life and takes into account expected prepayment, extension, call and similar options. The exceptions are certain revolving financial instruments, such as credit cards and bank overdrafts, that include both a drawn and an undrawn component where the entity’s contractual ability to demand repayment and cancel the undrawn commitment does not limit the entity’s exposure to credit losses to the contractual notice period. For revolving facilities, expected life is analytically derived to reflect the behavioural life of the asset, i.e. the full period over which the business expects to be exposed to credit risk. Behavioural life is typically based upon historical analysis of the average time to default, closure or withdrawal of facility. Where data is insufficient or analysis inconclusive, an additional ‘maturity factor’ may be incorporated to reflect the full estimated life of the exposures, based upon experienced judgement and/or peer analysis. Potential future modifications of contracts are not taken into account when determining the expected life or EAD until they occur. Discounting ECLs are discounted at the EIR at initial recognition or an approximation thereof and consistent with income recognition. For loan commitments the EIR is the rate that is expected to apply when the loan is drawn down and a financial asset is recognised. Issued financial guarantee contracts are discounted at the risk free rate. Lease receivables are discounted at the rate implicit in the lease. For variable/floating rate financial assets, the spot rate at the reporting date is used and projections of changes in the variable rate over the expected life are not made to estimate future interest cash flows or for discounting. Modelling techniques The regulatory Basel Committee of Banking Supervisors (BCBS) ECL calculations are leveraged for IFRS 9 modelling but adjusted for key differences which include: ▪ BCBS requires 12 month through the economic cycle losses whereas IFRS 9 requires 12 months or lifetime point in time losses based on conditions at the reporting date and multiple forecasts of the future economic conditions over the expected lives; ▪ IFRS 9 models do not include certain conservative BCBS model floors and downturn assessments and require discounting to the reporting date at the original EIR rather than using the cost of capital to the date of default; ▪ Management adjustments are made to modelled output to account for situations where known or expected risk factors and information have not been considered in the modelling process, for example forecast economic scenarios for uncertain political events; and ▪ ECL is measured at the individual financial instrument level, however a collective approach where financial instruments with similar risk characteristics are grouped together, with apportionment to individual financial instruments, is used where effects can only be seen at a collective level, for example for forward-looking information. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 439 Notes to the financial statements (continued) For the year ended 31 December 2022 For the IFRS 9 impairment assessment, the Group’s risk models are used to determine the PD, LGD and EAD. For Stage 2 and 3, the Group applies lifetime PDs but uses 12 month PDs for Stage 1. The ECL drivers of PD, EAD and LGD are modelled at an account level which considers vintage, among other credit factors. Also, the assessment of significant increase in credit risk is based on the initial lifetime PD curve, which accounts for the different credit risk underwritten over time. Forbearance A financial asset is subject to forbearance when it is modified due to the credit distress of the borrower. A modification made to the terms of an asset due to forbearance will typically be assessed as a non-substantial modification that does not result in derecognition of the original loan, except in circumstances where debt is exchanged for equity. Both performing and non-performing forbearance assets are classified as Stage 3 except where it is established that the concession granted has not resulted in diminished financial obligation and that no other regulatory definition of default criteria have been triggered, in which case the asset is classified as Stage 2. The minimum probationary period for non-performing forbearance is 12 months and for performing forbearance, 24 months. Hence, a minimum of 36 months is required for non-performing forbearance to move out of a forborne state. No financial instrument in forbearance can transfer back to Stage 1 until all of the Stage 2 thresholds are no longer met and can only move out of Stage 3 when no longer credit impaired. Critical accounting estimates and judgements IFRS 9 impairment involves several important areas of judgement, including estimating forward-looking modelled parameters (PD, LGD and EAD), developing a range of unbiased future economic scenarios, estimating expected lives and assessing significant increases in credit risk, based on the Group’s experience of managing credit risk. The determination of expected life is most material for Barclays' credit card portfolios which is obtained via behavioural life analysis to materially capture the risk of these facilities. Within the retail and small businesses portfolios, which comprise large numbers of small homogenous assets with similar risk characteristics where credit scoring techniques are generally used, the impairment allowance is calculated using forward-looking modelled parameters which are typically run at account level. There are many models in use, each tailored to a product, line of business or customer category. Judgement and knowledge is needed in selecting the statistical methods to use when the models are developed or revised. Management adjustments to impairment models, which contain an element of subjectivity, are applied in order to factor in certain conditions or changes in policy that are not fully incorporated into the impairment models, or to reflect additional facts and circumstances at the period end. Management adjustments are reviewed and incorporated into future model development where appropriate. The impairment charge reflected in the income statement for retail portfolios is £976m (2021: £289m release; 2020: £3,116m charge) of the total impairment charge on loans and advances and off-balance sheet loan commitments and financial guarantee contracts. For individually significant assets in Stage 3, impairment allowances are calculated on an individual basis and all relevant considerations that have a bearing on the expected future cash flows across a range of economic scenarios are taken into account. These considerations can be particularly subjective and can include the business prospects for the customer, the realisable value of collateral, the Group’s position relative to other claimants, the reliability of customer information and the likely cost and duration of the work-out process. The level of the impairment allowance is the difference between the value of the discounted expected future cash flows (discounted at the loan’s original effective interest rate), and its carrying amount. Furthermore, judgements change with time as new information becomes available or as work-out strategies evolve, resulting in frequent revisions to the impairment allowance as individual decisions are taken. Changes in these estimates would result in a change in the allowances and have a direct impact on the impairment charge. The impairment charge reflected in the financial statements in relation to wholesale portfolios is £207m (2021: £346m release; 2020: £1,569m charge) of the total impairment charge on loans and advances and off-balance sheet loan commitments and financial guarantee contracts. Further information on impairment allowances, impairment charges, management adjustments to models for impairment, measurement uncertainty, sensitivity analysis and related credit information is set out within the Credit risk performance section. Temporary adjustments to calculated IFRS9 impairment allowances may be applied in limited circumstances to account for situations where known or expected risk factors or information have not been considered in the ECL assessment or modelling process. For further information please see page 315 in the Credit risk performance section. Information about the potential impact of the physical and transition risks of climate change on borrowers is considered, taking into account reasonable and supportable information to make accounting judgements and estimates. Climate change is inherently of a long-term nature, with significant levels of uncertainty, and consequently requires judgement in determining the possible impact in the next financial year, if any. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 440 Notes to the financial statements (continued) For the year ended 31 December 2022 2022 Recoveries and reimburse- mentsa Impairment Charges/ (Releases) £m £m 2021 Recoveries and reimburse- ments Impairment Charges/ (Releases) £m £m Total £m 2020 Recoveries and reimburse- ments Impairment Charges/ (Releases) £m £m Total £m Total £m 1,428 (263) 1,165 (361) 240 (121) 4,308 (399) 3,909 18 1,446 — 18 (263) 1,183 (514) (875) — 240 (514) (635) 776 5,084 — 776 (399) 4,685 28 — 28 (4) — (4) 9 — 9 — (8) (6) — — — (8) (6) 149 2 2 — — — 2 2 149 Loans and advances at amortised cost Off-balance sheet loan commitments and financial guarantee contracts Total Cash collateral and settlement balances Financial instruments at fair value through other comprehensive income Other financial assets measured at cost Credit impairment charges/ (releases) 1,483 (263) 1,220 (893) 240 (653) 5,237 (399) 4,838 Note a Recoveries and reimbursements includes a net increase in amounts recoverable from financial guarantee contracts held with third parties of £199m (2021: £(306)m) and cash recoveries of previously written off amounts of £64m (2021: £66m). Write-offs that can be subjected to enforcement activity The contractual amount outstanding on financial assets that were written off during the year and that can still be subjected to enforcement activity is £949m (2021: £1,190m). This is lower than the write-offs presented in the movement in gross exposures and impairment allowance table due to assets sold during the year post write-offs and post write-off recoveries. Modification of financial assets Financial assets of £2,412m (2021: £3,446m), with a loss allowance measured at an amount equal to lifetime ECL, were subject to non- substantial modification during the year, with a resulting loss of £4m (2021: £11m). The gross carrying amount of financial assets subject to non-substantial modification for which the loss allowance has changed to a 12 month ECL during the year amounts to £1,077m (2021: £419m). 9 Tax Accounting for income taxes The Group applies IAS 12 Income Taxes in accounting for taxes on income. Income tax payable on taxable profits (current tax) is recognised as an expense in the periods in which the profits arise. Withholding taxes are also treated as income taxes. Income tax recoverable on tax allowable losses is recognised as a current tax asset only to the extent that it is regarded as recoverable by offsetting against taxable profits arising in the current or prior periods. Current tax is measured using tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised. Deferred tax liabilities are recognised for all taxable temporary differences except for the initial recognition of goodwill. Deferred tax is not recognised where the temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. Deferred tax is determined using tax rates and legislation enacted or substantively enacted by the balance sheet date which are expected to apply when the deferred tax asset is realised or the deferred tax liability is settled. Deferred tax assets and liabilities are only offset when there is both a legal right to set-off and an intention to settle on a net basis. The Group considers an uncertain tax position to exist when it considers that ultimately, in the future, the amount of profit subject to tax may be greater than the amount initially reflected in the Group’s tax returns. The Group accounts for provisions in respect of uncertain tax positions in two different ways. A current tax provision is recognised when it is considered probable that the outcome of a review by a tax authority of an uncertain tax position will alter the amount of cash tax due to, or from, a tax authority in the future. From recognition, the current tax provision is then measured at the amount the Group ultimately expects to pay the tax authority to resolve the position. The accrual of interest and penalty amounts in respect of uncertain income tax positions is recognised as an expense within profit before tax. Deferred tax provisions are adjustments made to the carrying value of deferred tax assets in respect of uncertain tax positions. A deferred tax provision is recognised when it is considered probable that the outcome of a review by a tax authority of an uncertain tax position will result in a reduction in the carrying value of the deferred tax asset. From recognition of a provision, measurement of the underlying deferred tax asset is adjusted to take into account the expected impact of resolving the uncertain tax position on the loss or temporary difference giving rise to the deferred tax asset. The approach taken to measurement takes account of whether the uncertain tax position is a discrete position that will be reviewed by the tax authority in isolation from any other position, or one of a number of issues which are expected to be reviewed together Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 441 Notes to the financial statements (continued) For the year ended 31 December 2022 concurrently and resolved simultaneously with a tax authority. The Group’s measurement of provisions is based upon its best estimate of the additional profit that will become subject to tax. For a discrete position, consideration is given only to the merits of that position. Where a number of issues are expected to be reviewed and resolved together, the Group will take into account not only the merits of its position in respect of each particular issue but also the overall level of provision relative to the aggregate of the uncertain tax positions across all the issues that are expected to be resolved at the same time. In addition, in assessing provision levels, it is assumed that tax authorities will review uncertain tax positions and that all facts will be fully and transparently disclosed. Critical accounting estimates and judgements There are two key areas of judgement that impact the reported tax position. Firstly, the level of provisioning for uncertain tax positions; and secondly, the recognition and measurement of deferred tax assets. The Group does not consider there to be a significant risk of a material adjustment to the carrying amount of current and deferred tax balances, including provisions for uncertain tax positions in the next financial year.  The provisions for uncertain tax positions cover a diverse range of issues and reflect advice from external counsel where relevant.  It should be noted that only a proportion of the total uncertain tax positions will be under audit at any point in time, and could therefore be subject to challenge by a tax authority over the next year. Deferred tax assets have been recognised based on business profit forecasts. Details on the recognition of deferred tax assets are provided in this note. Current tax charge/(credit) Current year Adjustments in respect of prior years Deferred tax charge/(credit) Current year Adjustments in respect of prior years 2022 £m 1,045 (444) 601 235 203 438 Restateda 2021 £m 1,417 317 1,734 (352) (244) (596) Tax charge 1,039 1,138 Note a 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details. 2020 £m 1,255 31 1,286 (830) 148 (682) 604 In 2022 the adjustments in respect of prior years are principally a result of various steps taken in the US and UK tax groups that have affected the timing of the tax deductibility of expenditure related to fixed assets. Across the Barclays Bank PLC’s US Branch Tax Group and US Intermediate Holding Company Tax Group ('IHC Tax Group'), elections have been made in 2022 to advance tax deductions in relation to fixed assets that would otherwise have arisen in later periods. Those elections resulted in a current tax credit in respect of prior years of £556m and a deferred tax charge in respect of prior years of a similar amount. In the UK Tax Group various tax claims and elections will have the effect of deferring the timing of deductions related to plant and machinery and this has resulted in a current tax charge in respect of prior years of £167m and a deferred tax credit in respect of prior years of 213m. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 442 Notes to the financial statements (continued) For the year ended 31 December 2022 The table below shows the reconciliation between the actual tax charge and the tax charge that would result from applying the standard UK corporation tax rate to the Group’s profit before tax. Profit before tax Tax charge based on the standard UK corporation tax rate of 19% (2021: 19%; 2020: 19% ) Impact of profits/losses earned in territories with different statutory rates to the UK (weighted average tax rate is 21.4% (2021: 22.4%; 2020: 25.1% )) Recurring items: Non-creditable taxes including withholding taxes Banking surchargeb and other items Non-deductible expenses Impact of UK bank levy being non-deductible Impact of Barclays Bank PLC's overseas branches being taxed both locally and in the UK Tax adjustments in respect of share-based payments Non-taxable gains and income Changes in recognition of deferred tax and effect of unrecognised tax losses Tax relief on payments made under AT1 instruments Adjustments in respect of prior years Tax relief on holdings of inflation-linked government bonds Non-recurring items: Remeasurement of UK deferred tax assets due to tax rate changes Non-deductible provisions for investigations and litigation Non-deductible provisions for UK customer redress Total tax charge Restateda Restateda 2022 £m 7,012 2022 % 2021 £m 8,194 2021 % 2020 £m 3,065 2020 % 1,332 19.0% 1,557 19.0% 582 19.0% 167 2.4% 277 3.4% 188 6.1% 126 101 51 33 17 13 1.8% 1.4% 0.7% 0.5% 0.2% 0.2% 134 83 80 32 25 (5) (135) (1.9%) (198) (146) (172) (241) (556) (2.1%) (2.4%) (3.4%) (7.9%) (140) (149) 73 (169) 1.6% 1.0% 1.0% 0.4% 0.3% (0.1%) (2.4%) (1.7%) (1.8%) 0.9% (2.1%) 109 6 48 57 25 26 3.5% 0.2% 1.6% 1.9% 0.8% 0.8% (185) (6.0%) (123) (165) 179 (23) (4.0%) (5.4%) 5.8% (0.8%) (3.8%) 0.2% (0.2%) 346 93 10 4.9% 1.3% 0.1% (462) (5.6%) (118) — — — — 5 (7) 1,039 14.8% 1,138 13.9% 604 19.7% Notes a 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details. b     Banking surcharge includes the impact of the 8% UK banking surcharge rate on profits/losses and tax adjustments relating to UK banking entities. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 443 Notes to the financial statements (continued) For the year ended 31 December 2022 Factors driving the effective tax rate The effective tax rate of 14.8% is lower than the UK corporation tax rate of 19% primarily due to tax relief on holdings of inflation-linked government bonds, beneficial prior year adjustments, tax relief on payments made under AT1 instruments and the utilisation of unrecognised tax losses in the period. These factors, which have each decreased the effective tax rate, are partially offset by adjustments for the remeasurement of UK deferred tax assets as a result of the enactment during 2022 of a reduction in the banking surcharge rate to 3% from 1 April 2023 and profits earned outside the UK being taxed at local statutory tax rates that are higher than the UK tax rate. The Group’s future tax charge will be sensitive to the geographic mix of profits earned, the tax rates in force and changes to the tax rules in the jurisdictions that the Group operates in. In its Autumn Statement held in November 2022, the UK Government confirmed that, as currently enacted, the banking surcharge rate will be reduced from 8% to 3% from 1 April 2023. UK deferred tax assets as at 31 December 2022 are measured at this rate, having been remeasured when the 3% rate was substantively enacted in 2022. The statutory tax rate applicable to banks' UK profits will therefore be 28% (comprising a rate of 25% for corporation tax and of 3% for banking surcharge) from 1 April 2023. The OECD and G20 Inclusive Framework on Base Erosion and Profit Shifting announced plans to introduce a global minimum tax rate of 15% and the OECD issued model rules in 2021. During 2022 further OECD guidance has been released and draft legislation to implement the global minimum tax regime has been published by the UK Government. The UK Government has stated that it intends to enact legislation in 2023 to apply for accounting periods beginning on or after 31 December 2023. The Group has reviewed the published OECD model rules and further guidance along with the draft UK legislation and has been assessing the expected impact ahead of the implementation of the new regime. The Group will review further guidance as well as new legislation expected to be released by governments implementing this new tax regime and continue to assess the potential impact. In the USA, the Inflation Reduction Act was enacted in August 2022. The Act does not include changes to the US corporate income tax rate or to US international tax provisions included in the previously proposed Build Back Better Act but does introduce a corporate alternative minimum tax on adjusted financial statements income, effective from 1 January 2023. Further regulations and guidance are expected to be published in 2023, however the Group’s preliminary view is that the alternative minimum tax is not expected to materially increase the Group’s effective tax rate. The Group will review future guidance when it is published and continue to monitor other legislative developments and assess the potential impact. Tax in the consolidated statement of comprehensive income The tax relating to each component of other comprehensive income can be found in the consolidated statement of comprehensive income . The total amount recognised in relation to the remeasurement of UK deferred tax through other comprehensive income was a £28m charge (2021: £111m). Tax included directly in equity Tax included directly in equity comprises a £1m credit (2021: £58m) relating to share-based payments and deductible costs on issuing other equity instruments. Deferred tax assets and liabilities The deferred tax amounts on the balance sheet were as follows: UK Tax Group IHC Tax Group Barclays Bank PLC's US Branch Tax Group Other (outside the UK and US tax groups) Deferred tax asset Deferred tax liability Net deferred tax 2022 £m 4,925 1,094 482 490 6,991 (16) 6,975 2021 £m 2,183 1,004 1,002 430 4,619 (37) 4,582 US deferred tax assets in the IHC and US Branch Tax Groups The deferred tax asset in the IHC Tax Group of £1,094m (2021: £1,004m) includes £21m (2021: £1m) relating to tax losses, with the balance relating to temporary differences. The deferred tax asset in Barclays Bank PLC’s US Branch Tax Group of £482m (2021: £1,002m) relates entirely to temporary differences. In relation to the IHC Tax Group, these temporary differences include £434m (2021: £301m) arising from New York State and City prior net operating loss conversion which can be carried forward and will expire in 2034. Business profit forecasts indicate these amounts will be fully recovered before expiry. UK Tax Group deferred tax asset The deferred tax asset in the UK Tax Group of £4,925m (2021: £2,183m) includes £1,535m (2021: £1,098m) relating to tax losses, with the balance relating to temporary differences. There is no time limit on utilisation of UK tax losses and business profit forecasts indicate that these losses will be fully recovered. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 444 Notes to the financial statements (continued) For the year ended 31 December 2022 Other deferred tax assets (outside the UK and US tax groups) The deferred tax asset of £490m (2021: £430m) in other entities within the Group includes £90m (2021: £121m) relating to tax losses. These deferred tax assets relate to a number of different territories and their recognition is based on profit forecasts or local country law which indicate that it is probable that those deferred tax assets will be fully recovered. Of the deferred tax asset of £490m (2021: £430m), an amount of £33m (2021: £9m) relates to entities which have suffered a loss in either the current or prior year and for which the utilisation of the deferred tax is dependent on future taxable profits. This has been taken into account in reaching the above conclusion that these deferred tax assets will be fully recovered in the future. The table below shows movements on deferred tax assets and liabilities during the year. The amounts are different from those disclosed on the balance sheet and in the preceding table as they are presented before offsetting asset and liability balances where there is a legal right to set-off and an intention to settle on a net basis. Fixed asset timing differences Fair value through other comprehensive income Cash flow hedges Retirement benefit obligations Loan impairment allowance Own credit Share-based payments and deferred compensation £m 1,647 (42) 1,605 (458) — 72 1,219 1,296 (77) £m 155 — 155 (6) 523 3 675 675 — £m 521 — 521 — 2,354 — 2,875 2,875 £m 40 (1,674) (1,634) £m 693 — 693 (3) (11) £m 426 — 426 — £m 414 — 414 14 357 5 (1,275) 40 — (1,315) — 20 702 702 — (616) (17) — (190) — (190) 22 433 433 — Other temporary differences Tax losses carried forward £m £m Total £m 1,248 1,220 6,364 (66) 1,182 (400) — 108 890 1,280 (390) — (1,782) 1,220 426 — — 1,646 1,646 4,582 (438) 2,601 230 6,975 8,947 — (1,972) 1,219 675 2,875 (1,275) 702 (190) 433 890 1,646 6,975 1,465 (41) 1,424 184 — (3) 1,605 1,647 (42) 1,605 — (38) (38) (6) 198 1 155 155 — 155 — (566) (566) — 43 (826) (783) 5 1,088 (855) 666 — 666 39 — 329 — 329 — 98 (1) (1) (12) (1) 521 521 — 521 (1,634) 40 (1,674) (1,634) 693 693 — 693 426 426 — 426 363 — 363 12 36 3 414 414 — 414 1,378 (79) 1,299 (123) (1) 7 735 — 735 485 — — 1,182 1,248 1,220 1,220 4,979 (1,550) 3,429 596 564 (7) 4,582 6,364 (66) — (1,782) 1,182 1,220 4,582 Assets Liabilities As at 1 January 2022 Income statement Other comprehensive income and reserves Other movements Assets Liabilities As at 31 December 2022 Assets Liabilities As at 1 January 2021 Income statement Other comprehensive income and reserves Other movements Assets Liabilities As at 31 December 2021 Other movements include the impact of changes in foreign exchange rates as well as deferred tax amounts relating to acquisitions and disposals. The amount of deferred tax assets expected to be recovered after more than 12 months is £8,155m (2021: £5,886m). The amount of deferred tax liability expected to be settled after more than 12 months is £1,864m (2021: £1,778m). These amounts are before offsetting asset and liability balances where there is a legal right to set-off and an intention to settle on a net basis. Unrecognised deferred tax Tax losses and temporary differences Deferred tax assets have not been recognised in respect of gross deductible temporary differences of £111m (2021: £110m), unused tax credits of £323m (2021: £283m), and gross tax losses of £22,537m (2021: £22,835m). The tax losses include capital losses of £3,935m (2021: £3,981m). Of these tax losses, £149m (2021: £63m) expire within five years, £401m (2021: £370m) expire within six to ten years, £10,393m (2021: £10,529m) expire within 11 to 20 years and £11,594m (2021: £11,873m) can be carried forward indefinitely. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profits and gains will be available against which they can be utilised. Group investments in subsidiaries, branches and associates Deferred tax is not recognised in respect of the value of the Group's investments in subsidiaries, branches and associates where the Group is able to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in the foreseeable future. The aggregate amount of these temporary differences for which deferred tax liabilities have not been recognised was £852m (2021: £858m). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 445 Notes to the financial statements (continued) For the year ended 31 December 2022 10 Earnings per share Profit attributable to ordinary equity holders of the parent Basic weighted average number of shares in issue Number of potential ordinary shares Diluted weighted average number of shares 2022 £m 5,023 2022 million 16,333 534 16,867 Restateda 2021 £m 6,205 2021 million 16,985 435 17,420 Earnings per ordinary share Basic earnings per share Diluted earnings per share 2022 p 30.8 Restateda 2021 p 36.5 2020 p 8.8 2022 p 29.8 Restateda 2021 p 35.6 2020 £m 1,526 2020 million 17,300 368 17,668 2020 p 8.6 Note a 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details. The calculation of basic earnings per share is based on the profit attributable to equity holders of the parent and the basic weighted average number of shares excluding treasury shares held in employee benefit trusts or held for trading. When calculating the diluted earnings per share, the weighted average number of shares in issue is adjusted for the effects of all expected dilutive potential ordinary shares held in respect of Barclays PLC, totalling 534m (2021: 435m) shares. The total number of share options outstanding, under schemes considered to be potentially dilutive, was 789m (2021: 688m). These options have strike prices ranging from £0.84 to £1.66. Of the total number of employee share options and share awards at 31 December 2022, 27m (2021: 5m) were anti-dilutive. The 652m decrease (2021: 315m decrease) in the basic weighted average number of shares is primarily due to the impact of the share buy-back programmes completed in the year. 11 Dividends on ordinary shares The Directors have approved a total dividend in respect of 2022 of 7.25p per ordinary share of 25p each. The full year dividend for 2022 of 5.00p per ordinary share will be paid on 31 March 2023 to shareholders on the Share Register on 24 February 2023. On 31 December 2022, there were 15,871m ordinary shares in issue. The financial statements for the year ended 31 December 2022 do not reflect this dividend, which will be accounted for in shareholders’ equity as an appropriation of retained profits in the year ending 31 December 2023. The Directors have confirmed their intention to initiate a share buyback of up to £500m after the balance sheet date. The proposed share buyback is expected to commence in the first quarter of 2023. The financial statements for the year ended 31 December 2022 do not reflect the impact of the proposed share buyback, which will be accounted for as and when shares are repurchased by the Company. The 2022 financial statements include the 2022 interim dividend of £364m (2021: £339m); a full year dividend declared in relation to 2021 of £664m (2020: £173m) and two share buyback programmes totalling £1,500m (2021: £1,200m). Dividends and share buybacks are funded out of distributable reserves. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 446 Notes to the financial statements (continued) Assets and liabilities held at fair value Assets and liabilities held at fair value The notes included in this section focus on assets and liabilities the Group holds and recognises at fair value. Fair value refers to the price that would be received to sell an asset or the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date, which may be an observable market price or, where there is no quoted price for the instrument, may be an estimate based on available market data. Detail regarding the Group’s approach to managing market risk can be found in the Market risk management section. 12 Trading portfolio Accounting for trading portfolio assets and liabilities In accordance with IFRS 9, all assets and liabilities held for trading purposes are held at fair value with gains and losses in the changes in fair value taken to the income statement in net trading income (Note 5). Debt securities and other eligible bills Equity securities Traded loans Commodities Trading portfolio assets Trading portfolio liabilities 2022 £m 55,475 65,031 13,198 109 2021 £m 50,864 83,113 12,525 533 2022 £m (39,531) (33,393) — — 2021 £m (34,957) (19,212) — — Trading portfolio assets/(liabilities) 133,813 147,035 (72,924) (54,169) 13 Financial assets at fair value through the income statement Accounting for financial assets mandatorily at fair value Financial assets that are held for trading are recognised at fair value through profit or loss. In addition, financial assets are held at fair value through profit or loss if they do not contain contractual terms that give rise on specified dates to cash flows that are SPPI, or if the financial asset is not held in a business model that is either (i) a business model to collect the contractual cash flows or (ii) a business model that is achieved by both collecting contractual cash flows and selling. Accounting for financial assets designated at fair value Financial assets, other than those held for trading, are classified in this category if they are so irrevocably designated at inception and the use of the designation removes or significantly reduces an accounting mismatch. Subsequent changes in fair value for these instruments are recognised in the income statement in net investment income, except if reporting it in trading income reduces an accounting mismatch. The details on how the fair value amounts are derived for financial assets at fair value are described in Note 17. Loans and advances Debt securities Equity securities Reverse repurchase agreements and other similar secured lending Other financial assets Financial assets at fair value through the income statement Designated at fair value Mandatorily at fair value Total 2022 £m 3,658 205 — — 1 2021 £m 5,579 319 — — — 2022 £m 35,771 3,044 6,091 2021 £m 33,088 1,986 5,875 2022 £m 39,429 3,249 6,091 2021 £m 38,667 2,305 5,875 164,681 145,014 164,681 145,014 117 111 118 111 3,864 5,898 209,704 186,074 213,568 191,972 Credit risk of financial assets designated at fair value and related credit derivatives The following table shows the maximum exposure to credit risk, the changes in fair value attributable to changes in credit risk, and the cumulative changes in fair value since initial recognition for loans and advances. The table does not include debt securities and reverse repurchase agreements and other similar secured lending designated at fair value as they have minimal exposure to credit risk. Reverse repurchase agreements are collateralised and debt securities are primarily relating to high quality sovereigns. Loans and advances designated at fair value, attributable to credit risk Value mitigated by related credit derivatives Maximum exposure as at 31 December Changes in fair value during the year ended Cumulative changes in fair value from inception 2022 £m 3,658 855 2021 £m 5,579 1,617 2022 £m 10 2021 £m 5 (1) (3) 2022 £m (9) (1) 2021 £m (19) (3) Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 447 Notes to the financial statements (continued) Assets and liabilities held at fair value 14 Derivative financial instruments Accounting for derivatives Derivative instruments are contracts whose value is derived from one or more underlying financial instruments or indices defined in the contract. They include swaps, forward-rate agreements, futures, options and combinations of these instruments and primarily affect the Group’s net interest income, net trading income and derivative assets and liabilities. Notional amounts of the contracts are not recorded on the balance sheet. Derivatives are used to hedge interest rate, credit risk, inflation risk, exchange rate, commodity equity exposures, and exposures to certain indices such as house price indices and retail price indices related to non-trading positions. All derivative instruments are held at fair value through profit or loss, except for derivatives that are in a designated cash flow or net investment hedge accounting relationship. Derivatives are classified as assets when their fair value is positive or as liabilities when their fair value is negative. This includes terms included in a contract or financial liability (the host), which, had it been a standalone contract, would have met the definition of a derivative. If these are separated from the host, i.e. when the economic characteristics of the embedded derivative are not closely related with those of the host contract and the combined instrument is not measured at fair value through profit or loss, then they are accounted for in the same way as derivatives. For financial assets, the requirements are whether the financial assets contain contractual terms that give rise on specified dates to cash flows that are SPPI, and consequently the requirements for accounting for embedded derivatives are not applicable to financial assets. Hedge accounting The Group applies the requirements of IAS 39 Financial Instruments: Recognition and Measurement for hedge accounting purposes. The Group applies hedge accounting to represent the economic effects of its interest rate, currency and contractually-linked inflation risk management strategies. Where derivatives are held for risk management purposes, and when transactions meet the required criteria for documentation and hedge effectiveness, the Group applies fair value hedge accounting, cash flow hedge accounting, or hedging of a net investment in a foreign operation, as appropriate to the risks being hedged. The Group applies the ‘Amendments to IFRS 9, IAS 39 and IFRS 7 Interest Rate Benchmark Reform’ issued in September 2019 (the Phase 1 amendments). The amendments provide temporary relief from applying specific hedge accounting requirements to hedging relationships directly affected by IBOR (‘Interbank Offered Rates’) reform. The reliefs have the effect that IBOR reform should not generally cause hedge accounting to terminate. However, any hedge ineffectiveness continues to be recorded in the income statement. Furthermore, the amendments set out triggers for when the reliefs will end, which include the uncertainty arising from interest rate benchmark reform no longer being present. In summary, the reliefs provided by the Phase 1 amendments are: ▪ When considering the ‘highly probable’ requirement, the Group has assumed that the IBOR interest rates upon which our hedged items are based do not change as a result of IBOR Reform. ▪ In assessing whether the hedge is expected to be highly effective on a forward-looking basis the Group has assumed that the IBOR interest rates upon which the cash flows of the hedged items and the interest rate swaps that hedge them are based are not altered by IBOR reform. ▪ The Group will not discontinue hedge accounting during the period of IBOR-related uncertainty solely because the retrospective effectiveness falls outside the required 80–125% range. ▪ The Group has not recycled the cash flow hedge reserve relating to the period after the reforms are expected to take effect. ▪ The Group has assessed whether the hedged IBOR risk component is a separately identifiable risk only when it first designates a hedged item in a fair value hedge and not on an ongoing basis. The Group also applies the ‘Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2’ issued in August 2020. The Phase 2 amendments provide relief when changes are made to hedge relationships as a result of the interest rate benchmark reform. In summary, the reliefs provided by the Phase 2 amendments are: ▪ Under a temporary exception, the Group has considered that changes to the hedge designation and hedge documentation due to the interest rate benchmark reform would not constitute the discontinuation of the hedge relationship nor the designation of a new hedging relationship. ▪ In respect of the retrospective hedge effectiveness assessment, the Group may elect, on a hedge-by-hedge basis, to reset the cumulative fair value changes to zero when the exception to the retrospective assessment ends (Phase 1 relief). Any hedge ineffectiveness will continue to be measured and recognised in full in profit or loss. ▪ The Group has deemed the amounts accumulated in the cash flow hedge reserve to be based on the alternative benchmark rate (on which the hedge future cash flows are determined) when there is a change in basis for determining the contractual cash flows. ▪ For hedges of groups of items (such as those forming part of a macro cash flow hedging strategy), the amendments provide relief for items within a designated group of items that are amended for changes directly required by the reform. ▪ In respect of whether a risk component of a hedged item is separately identifiable, the amendments provide temporary relief to entities to meet this requirement when an alternative risk free rate (RFR) financial instrument is designated as a risk component. These amendments allow the Group upon designation of the hedge to assume that the separately identifiable requirement is met if the Group reasonably expects the RFR risk will become separately identifiable within the next 24 months. The Group applies this relief to each RFR on a rate-by-rate basis and starts when the Group first designates the RFR as a non-contractually specified risk component. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 448 Notes to the financial statements (continued) Assets and liabilities held at fair value Fair value hedge accounting Changes in fair value of derivatives that qualify and are designated as fair value hedges are recorded in the income statement, together with changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The fair value changes adjust the carrying value of the hedged asset or liability held at amortised cost. If hedge relationships no longer meet the criteria for hedge accounting, hedge accounting is discontinued. For fair value hedges of interest rate risk, the fair value adjustment to the hedged item is amortised to the income statement over the period to maturity of the previously designated hedge relationship using the effective interest method. If the hedged item is sold or repaid, the unamortised fair value adjustment is recognised immediately in the income statement. For items classified as fair value through other comprehensive income, the hedge accounting adjustment is included in other comprehensive income. Cash flow hedge accounting For qualifying cash flow hedges, the fair value gain or loss associated with the effective portion of the cash flow hedge is recognised initially in other comprehensive income, and then recycled to the income statement in the periods when the hedged item will affect profit or loss. Any ineffective portion of the gain or loss on the hedging instrument is recognised in the income statement immediately. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the hedged item is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was recognised in equity is immediately transferred to the income statement. Hedges of net investments The Group’s net investments in foreign operations, including monetary items accounted for as part of the net investment, are hedged for foreign currency risks using both derivatives and foreign currency borrowings. Hedges of net investments are accounted for similarly to cash flow hedges; the effective portion of the gain or loss on the hedging instrument is being recognised directly in other comprehensive income and the ineffective portion being recognised immediately in the income statement. The cumulative gain or loss recognised in other comprehensive income is recognised in the income statement on the disposal or partial disposal of the foreign operation, or other reductions in the Group’s investment in the operation. Total derivatives Total derivative assets/(liabilities) held for trading Total derivative assets/(liabilities) held for risk management 2022 2021 Notional contract amount £m Fair value Assets £m Liabilities £m Notional contract amount £m Fair value Assets £m Liabilities £m 52,689,773 301,647 (288,573) 47,812,774 261,678 (255,747) 285,505 733 (1,047) 219,551 894 (1,136) Derivative assets/(liabilities) 52,975,278 302,380 (289,620) 48,032,325 262,572 (256,883) Further information on netting arrangements of derivative financial instruments can be found within Note 18. The fair values and notional amounts of derivative instruments held for trading and held for risk management are set out in the following table: Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 449 Notes to the financial statements (continued) Assets and liabilities held at fair value Derivatives held for trading and held for risk management Derivatives held for trading Foreign exchange derivatives OTC derivatives Derivatives cleared by central counterparty Exchange traded derivatives Foreign exchange derivatives Interest rate derivatives OTC derivatives Derivatives cleared by central counterparty Exchange traded derivatives Interest rate derivatives Credit derivatives OTC derivatives Derivatives cleared by central counterparty Credit derivatives Equity and stock index derivatives OTC derivatives Exchange traded derivatives Equity and stock index derivatives Commodity derivatives OTC derivatives Exchange traded derivatives Commodity derivatives Derivative assets/(liabilities) held for trading Total OTC derivatives 2022 2021 Notional contract amount £m Fair value Assets £m Liabilities £m Notional contract amount £m Fair value Assets £m Liabilities £m 5,775,206 108,833 (103,439) 5,705,108 75,959 (74,226) 113,455 19,426 440 15 (473) (6) 99,664 20,084 171 10 (208) (3) 5,908,087 109,288 (103,918) 5,824,856 76,140 (74,437) 14,924,915 21,927,570 5,654,126 129,920 (116,752) 14,216,846 123,819 (113,051) 2,319 2,257 (2,371) 19,398,748 (2,167) 5,200,838 1,122 905 (845) (907) 42,506,611 134,496 (121,290) 38,816,432 125,846 (114,803) 619,843 1,107,377 1,727,220 410,276 1,924,613 2,334,889 4,411 208,555 212,966 52,689,773 21,734,651 4,262 1,161 5,423 12,679 35,986 48,665 14 3,761 3,775 301,647 255,708 3,920 42,019 (4,731) (1,321) 606,504 665,600 (6,052) 1,272,104 (16,724) 278,683 (36,774) 1,469,078 (53,498) 1,747,761 (51) (3,764) (3,815) 4,670 146,951 151,621 (288,573) 47,812,774 (241,697) 20,811,811 (4,165) 20,164,012 (42,711) 6,836,951 4,007 1,675 5,682 18,822 32,901 51,723 56 2,231 2,287 261,678 222,663 2,968 36,047 (4,752) (1,809) (6,561) (24,468) (33,174) (57,642) (107) (2,197) (2,304) (255,747) (216,604) (2,862) (36,281) Total derivatives cleared by central counterparty 23,148,402 Total exchange traded derivatives 7,806,720 Derivative assets/(liabilities) held for trading 52,689,773 301,647 (288,573) 47,812,774 261,678 (255,747) Derivatives held for risk management Derivatives designated as cash flow hedges OTC foreign exchange derivatives OTC interest rate derivatives Interest rate derivatives cleared by central counterparty Derivatives designated as cash flow hedges Derivatives designated as fair value hedges OTC interest rate derivatives Interest rate derivatives cleared by central counterparty Derivatives designated as fair value hedges Derivatives designated as hedges of net investments OTC foreign exchange derivatives Derivatives designated as hedges of net investments Derivative assets/(liabilities) held for risk management Total OTC derivatives Total derivatives cleared by central counterparty Derivative assets/(liabilities) held for risk management 11,946 266 143,271 155,483 7,814 118,246 126,060 3,962 3,962 285,505 23,988 261,517 285,505 549 — — 549 83 — 83 101 101 733 733 — 733 (211) (1) — (212) 7,592 788 105,933 114,313 (815) 8,480 — 94,335 (815) 102,815 (20) 2,423 (20) 2,423 (1,047) (1,047) — 219,551 19,283 200,268 (1,047) 219,551 798 0 — 798 59 — 59 37 37 894 894 — 894 — (3) — (3) (1,118) (11) (1,129) (4) (4) (1,136) (1,125) (11) (1,136) Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 450 Notes to the financial statements (continued) Assets and liabilities held at fair value Hedge accounting Hedge accounting is applied predominantly for the following risks: ▪ Interest rate risk – arises due to a mismatch between fixed interest rates and floating interest rates. Interest rate risk also includes exposure to inflation risk for certain types of investments. ▪ Currency risk – arises due to assets or liabilities being denominated in different currencies than the functional currency of the relevant entity. At a consolidated level, currency risk also arises when the functional currency of subsidiaries are different from the parent. ▪ Contractually linked inflation risk – arises from financial instruments within contractually specified inflation risk. The Group does not hedge inflation risk that arises from other activities. In order to hedge these risks, the Group uses the following hedging instruments: Interest rate derivatives to swap interest rate exposures into either fixed or variable rates. ▪ ▪ Currency derivatives to swap foreign currency exposures into the entity’s functional currency, and net investment exposure to local currency. ▪ Inflation derivatives to swap inflation exposure into either fixed or variable interest rates. In some cases, certain items which are economically hedged may be ineligible hedged items for the purposes of IAS 39, such as core deposits and equity. In these instances, a proxy hedging solution can be utilised whereby portfolios of floating rate assets are designated as eligible hedged items in cash flow hedges. In some hedging relationships, the Group designates risk components of hedged items as follows: ▪ Benchmark interest rate risk as a component of interest rate risk, such as the LIBOR or Risk Free Rate (RFR) component. ▪ ▪ Spot exchange rate risk for foreign currency financial assets or financial liabilities. ▪ Components of cash flows of hedged items, for example certain interest payments for part of the life of an instrument. Inflation risk as a contractually specified component of a debt instrument. Using the benchmark interest rate risk results in other risks, such as credit risk and liquidity risk, being excluded from the hedge accounting relationship. Following market-wide interest rate benchmark reform, sensitivity to risk-free rates is considered to be the predominant interest rate risk and therefore the hedged items (which often reference risk-free or similar 'overnight' rates) change in fair value on a proportionate basis with reference to this risk. In respect of many of the Group’s hedge accounting relationships, the hedged item and hedging instrument change frequently due to the dynamic nature of the risk management and hedge accounting strategy. The Group applies hedge accounting to dynamic scenarios, predominantly in relation to interest rate risk, with a combination of hedged items in order for its financial statements to reflect as closely as possible the economic risk management undertaken. In some cases, if the hedge accounting objective changes, the relevant hedge accounting relationship is de-designated and is replaced with a different hedge accounting relationship. Changes in the GBP value of net investments due to foreign currency movements are captured in the currency translation reserve, resulting in a movement in CET1 capital. The Group mitigates this by matching the CET1 capital movements to the revaluation of the foreign currency RWA exposures. Net investment hedges are designated where necessary to reduce the exposure to movement in a particular exchange rate to within limits mandated by Risk. As far as possible, existing external currency liabilities are designated as the hedging instruments. The hedging instruments share the same risk exposures as the hedged items. Hedge effectiveness is determined with reference to quantitative tests, predominantly regression testing, but to the extent hedging instruments are exposed to different risks than the hedged items, this could result in hedge ineffectiveness or hedge accounting failures. Sources of ineffectiveness include the following: ▪ Mismatches between the contractual terms of the hedged item and hedging instrument, including basis differences. ▪ Changes in credit risk of the hedging instruments. ▪ If a hedging relationship becomes over-hedged, for example in hedges of net investments if the net asset value designated at the start of the period falls below the amount of the hedging instrument. ▪ Cash flow hedges using external swaps with non-zero fair values. ▪ The effects of the reforms to IBOR because these might take effect at a different time and have a different impact on hedged items and hedging instruments. The Group's risk exposure continues, in part, to be affected by interest rate benchmark reform. In most cases, hedged items and hedging instruments are expected to transition to relevant risk-free rates at the end of their current cash flow period. USD LIBOR, Canadian Dollar Offerred Rate (CDOR) and Singapore Swap Offered Rate (SOR) linked hedge accounting relationships are still exposed to uncertainty regarding the precise timing and effects of benchmark reform. USD LIBOR and SOR benchmarks will cease to be published after 30 June 2023, CDOR - after 28 June 2024, but certain hedged items and hedging instruments continue to contractually reference these benchmarks beyond the cessation date. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 451 Notes to the financial statements (continued) Assets and liabilities held at fair value The following table summarises the significant hedge accounting exposures impacted by the IBOR reform (see Note 41 for further updates) as at 31 December 2022: Current benchmark rate Expected convergence to RFR USD LIBOR Secured Overnight Financing Rate (SOFR) Singapore Swap Offered Rate (SOR) Singapore Overnight Rate Average (SORA) Canadian Dollar Offered Rate (CDOR) Overnight Repo Rate Average (CORRA) Total IBOR Notionals Nominal amount of hedged items directly impacted by IBOR reform Nominal amount of hedging instruments directly impacted by IBOR reform £m 26,448 124 1,306 27,878 £m 35,678 124 1,335 37,137 The hedged items and hedging instruments are expected to be transitioned to SOFR and SORA by 30 June 2023 and CORRA by 28 June 2024. Hedged items in fair value hedges Accumulated fair value adjustment included in carrying amount Hedged item statement of financial position classification and risk category Carrying amount £m Total £m Of which: Accumulated fair value adjustment on items no longer in a hedge relationship Change in fair value used as a basis to determine ineffectiveness Hedge ineffectiveness recognised in the income statementsa £m £m £m 2022 Assets Loans and advances at amortised cost - Interest rate risk - Inflation risk Debt securities classified at amortised cost - Interest rate risk - Inflation risk Financial assets at fair value through other comprehensive income - Interest rate risk - Inflation risk Total assets Liabilities Debt securities in issue - Interest rate risk Total liabilities Total hedged items 2021 Assets Loans and advances at amortised cost - Interest rate risk - Inflation risk Debt securities classified at amortised cost - Interest rate risk - Inflation risk Financial assets at fair value through other comprehensive income - Interest rate risk - Inflation risk Total assets Liabilities Debt securities in issue - Interest rate risk Total liabilities Total hedged items Note a Hedge ineffectiveness is recognised in net interest income. (3,474) (1,268) 243 — (4,405) (111) (133) (1,693) (11) (1) 4,906 445 159 4,858 33,583 8,514 52,465 (19) (1,304) (3,758) (261) (8,573) (232) 14 (4,799) (804) (1,498) (11,945) (51,893) (51,893) 4,825 4,825 527 527 5,946 5,946 572 (3,748) (971) (5,999) 8,512 556 1,378 4,087 31,485 9,066 55,084 (48,251) (48,251) 6,833 671 354 (39) 400 (258) 470 1,598 (1,084) (1,084) 514 (642) (1,643) — — — 9 (75) (16) 32 (32) (642) (1,436) 161 (3,000) 86 86 1,606 1,606 (556) (1,394) 44 2 (20) (16) 168 (9) 169 13 13 182 33 0 (18) (1) 39 13 66 (48) (48) 18 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 452 Notes to the financial statements (continued) Assets and liabilities held at fair value For items classified as fair value through other comprehensive income, the hedge accounting adjustment is not included in the carrying amount, but rather adjusts other comprehensive income. The following table shows the fair value hedging instruments which are carried on the Group’s balance sheet: Derivative assets Carrying value Derivative liabilities Loan liabilities Nominal amount Change in fair value used as a basis to determine ineffectiveness Nominal amount directly impacted by IBOR reform £m £m £m Hedge type Risk category As at 31 December 2022 Fair value Interest rate risk Inflation risk Total As at 31 December 2021 Fair value Interest rate risk Inflation risk Total £m — 83 83 54 5 59 £m — (815) (815) (11) (1,118) (1,129) £m — — — — — — 109,761 16,299 126,060 92,447 10,368 102,815 3,596 2,585 6,181 1,554 (142) 1,412 The following table profiles the expected notional values of current hedging instruments in future years: As at 31 December Fair value hedges of: 2022 £m 2023 £m 2024 £m 2025 £m 2026 £m 2027 £m Interest rate risk (outstanding notional amount) 109,761 104,565 Inflation risk (outstanding notional amount) 16,299 15,828 90,291 12,688 74,338 11,459 60,285 43,683 39,302 8,295 7,826 6,779 25,676 2,493 28,169 15,577 1,624 17,201 2028 and later £m Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 453 Notes to the financial statements (continued) Assets and liabilities held at fair value There are 1,796 (2021: 1,782) interest rate risk fair value hedges with an average fixed rate of 1.97% (2021: 1.88%) across the relationships and 94 (2021: 96) inflation risk fair value hedges with an average rate of 0.54% (2021: 0.51%) across the relationships. Hedged items in cash flow hedges and hedges of net investments in foreign operations Description of hedge relationship and hedged risk 2022 Cash flow hedge of: Interest rate risk Loans and advances at amortised cost Foreign exchange risk Loans and advances at amortised cost Debt securities classified at amortised cost Inflation risk Debt securities classified at amortised cost Total cash flow hedge Hedge of net investment in foreign operations USD foreign operations EUR foreign operations Other foreign operations Total foreign operations 2021 Cash flow hedge of: Interest rate risk Loans and advances at amortised cost Foreign exchange risk Loans and advances at amortised cost Debt securities classified at amortised cost Inflation risk Debt securities classified at amortised cost Total cash flow hedge Hedge of net investment in foreign operations USD foreign operations EUR foreign operations Other foreign operations Total foreign operations Change in value of hedged item used as the basis for recognising ineffectiveness Balance in cash flow hedging reserve for continuing hedges Balance in currency translation reserve for continuing hedges Balances remaining in cash flow hedging reserve for which hedge accounting is no longer applied Balances remaining in currency translation reserve for which hedge accounting is no longer applied Hedging gains or losses recognised in other comprehensive income Hedge ineffectiveness recognised in the income statementa £m £m £m £m £m £m £m 8,448 6,457 3 483 362 9,296 1,240 265 34 1,539 (13) 601 142 7,187 — — — — 2,465 1,536 (88) (16) (356) 123 252 2,273 204 1,847 — — — — — 1,886 141 242 2,269 — — — — — 138 (117) (3) 18 — — — — 943 100 44 1,087 2,858 — — 16 2,874 — — — — (492) — — (12) (504) — — — — — — — — — — — 23 23 — — — — — 8,448 (83) 3 483 98 9,032 1,240 265 34 1,539 2 — 33 (48) — — — — 2,465 (347) (88) (356) 1 1 252 2,273 (22) (367) — — 186 186 138 (117) (3) 18 — — — — Note a Hedge ineffectiveness is recognised in net interest income. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 454 Notes to the financial statements (continued) Assets and liabilities held at fair value The following table shows the cash flow and net investment hedging instruments which are carried on the Group’s balance sheet: Hedge type Risk category As at 31 December 2022 Cash flow Interest rate risk Foreign exchange risk Inflation risk Total Net investment Foreign exchange risk As at 31 December 2021 Cash flow Interest rate risk Foreign exchange risk Inflation risk Total Net investment Foreign exchange risk Carrying value Derivative liabilities £m (1) (211) — (212) (20) — — (3) (3) (4) Loan liabilities Nominal amount Change in fair value used as a basis to determine ineffectiveness Nominal amount directly impacted by IBOR reform £m — — — — (12,824) — — — — (11,212) £m £m £m 140,901 11,946 2,636 155,483 16,786 (8,531) 8,968 (484) (329) (9,344) (1,539) — — 8,968 102,629 (2,812) 8,397 7,592 4,092 114,313 13,635 446 (274) (2,640) (239) — — 8,397 — Derivative assets £m — 549 — 549 101 — 798 — 798 37 There are 58 (2021: 36) foreign exchange risk cash flow hedges with an average foreign exchange rate of 148.00 JPY:1 GBP (2021: 137.85 JPY:1 GBP) across the relationships. The effect on the income statement and other comprehensive income of recycling amounts in respect of cash flow hedges and net investment hedges of foreign operations is set out in the following table: 2022 2021 Amount recycled from other comprehensive income due to hedged item affecting income statement Amount recycled from other comprehensive income due to sale of investment, or cash flows no longer expected to occur Amount recycled from other comprehensive income due to hedged item affecting income statement Amount recycled from other comprehensive income due to sale of investment, or cash flows no longer expected to occur Description of hedge relationship and hedged risk £m £m £m Cash flow hedge of interest rate risk Recycled to net interest income Cash flow hedge of foreign exchange risk Recycled to other income Hedge of net investment in foreign operations Recycled to other income (320) (13) (6) — — (58) 541 630 — £m 2 — (26) A detailed reconciliation of the movements of the cash flow hedging reserve and the currency translation reserve is as follows: Balance on 1 January Currency translation movements Hedging gains/(losses) for the year Amounts reclassified in relation to cash flows affecting profit or loss Tax Balance on 31 December 2022 2021 Cash flow hedging reserve Currency translation reserve Cash flow hedging reserve Currency translation reserve £m (853) (20) £m 2,740 3,513 (9,032) (1,539) 339 2,331 58 — (7,235) 4,772 £m 1,575 (7) (2,273) (1,173) 1,025 (853) £m 2,871 (139) (18) 26 — 2,740 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 455 Notes to the financial statements (continued) Assets and liabilities held at fair value 15 Financial assets at fair value through other comprehensive income Accounting for financial assets at fair value through other comprehensive income (FVOCI) Financial assets that are debt instruments held in a business model that is achieved by both collecting contractual cash flows and selling and that contain contractual terms that give rise on specified dates to cash flows that are SPPI are measured at FVOCI. They are subsequently remeasured at fair value and changes therein (except for those relating to impairment, interest income and foreign currency exchange gains and losses) are recognised in other comprehensive income until the assets are sold. Interest (calculated using the effective interest method) is recognised in the income statement in net interest income (Note 3). Upon disposal, the cumulative gain or loss recognised in other comprehensive income is included in net investment income (Note 6). In determining whether the business model is achieved by both collecting contractual cash flows and selling financial assets, it is determined that both collecting contractual cash flows and selling financial assets are integral to achieving the objective of the business model. The Group will consider past sales and expectations about future sales to establish if the business model is achieved. For equity securities that are not held for trading, the Group may make an irrevocable election on initial recognition to present subsequent changes in the fair value of the instrument in other comprehensive income (except for dividend income which is recognised in profit or loss). Gains or losses on the derecognition of these equity securities are not transferred to profit or loss. These assets are also not subject to the impairment requirements and therefore no amounts are recycled to the income statement. Where the Group has not made the irrevocable election to present subsequent changes in the fair value of the instrument in other comprehensive income, equity securities are measured at fair value through profit or loss. Debt securities and other eligible bills Equity securitiesa Loans and advances Financial assets at fair value through other comprehensive income 2022 £m 2021 £m 64,832 60,798 8 222 902 53 65,062 61,753 Note a 2021 includes Barclays’ equity stake in Absa Group Limited (Absa) which was sold in April 2022 and September 2022. The fair value of the stake sold in April 2022 was £557m and in September 2022 was £566m. The cumulative gains on disposal of £48m and £36m respectively were recognised within Retained earnings. 16 Financial liabilities designated at fair value Accounting for liabilities designated at fair value through profit and loss In accordance with IFRS 9, financial liabilities may be designated at fair value, with gains and losses taken to the income statement within net trading income (Note 5) and net investment income (Note 6). Movements in own credit are reported through other comprehensive income, unless the effects of changes in the liability's credit risk would create or enlarge an accounting mismatch in P&L. In these scenarios, all gains and losses on that liability (including the effects of changes in the credit risk of the liability) are presented in P&L. On derecognition of the financial liability no amount relating to own credit risk is recycled to the income statement. The Group has the ability to make the fair value designation when holding the instruments at fair value reduces an accounting mismatch (caused by an offsetting liability or asset being held at fair value), or is managed by the Group on the basis of its fair value, or includes terms that have substantive derivative characteristics (Note 14). The details on how the fair value amounts are arrived at for financial liabilities designated at fair value are described in Note 17. Debt securities Deposits 2022 2021 Fair value £m 57,846 41,037 Contractual amount due on maturity £m 73,757 42,455 Fair value £m 53,647 29,246 Contractual amount due on maturity £m 61,946 29,673 Repurchase agreements and other similar secured borrowing 172,746 173,511 168,060 168,129 Other financial liabilities Financial liabilities designated at fair value 8 8 7 7 271,637 289,731 250,960 259,755 The cumulative own credit net gain recognised is £674m (2021: £960m loss). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 456 Notes to the financial statements (continued) Assets and liabilities held at fair value 17 Fair value of financial instruments Accounting for financial assets and liabilities – fair values Financial instruments that are held for trading are recognised at fair value through profit or loss. In addition, financial assets are held at fair value through profit or loss if they do not contain contractual terms that give rise on specified dates to cash flows that are SPPI, or if the financial asset is not held in a business model that is either (i) a business model to collect the contractual cash flows or (ii) a business model that is achieved by both collecting contractual cash flows and selling. Subsequent changes in fair value for these instruments are recognised in the income statement in net investment income, except if reporting it in trading income reduces an accounting mismatch. All financial instruments are initially recognised at fair value on the date of initial recognition (including transaction costs, other than financial instruments held at fair value through profit or loss) and depending on the subsequent classification of the financial asset or liability, may continue to be held at fair value either through profit or loss or other comprehensive income. The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Wherever possible, fair value is determined by reference to a quoted market price for that instrument. For many of the Group’s financial assets and liabilities, especially derivatives, quoted prices are not available and valuation models are used to estimate fair value. The models calculate the expected cash flows under the terms of each specific contract and then discount these values back to a present value. These models use as their basis independently sourced market inputs including, for example, interest rate yield curves, equities and commodities prices, option volatilities and currency rates. For financial liabilities measured at fair value, the carrying amount reflects the effect on fair value of changes in own credit spreads derived from observable market data such as in primary issuance and redemption activity for structured notes. On initial recognition, it is presumed that the transaction price is the fair value unless there is observable information available in an active market to the contrary. The best evidence of an instrument’s fair value on initial recognition is typically the transaction price. However, if fair value can be evidenced by comparison with other observable current market transactions in the same instrument, or is based on a valuation technique whose inputs include only data from observable markets, then the instrument should be recognised at the fair value derived from such observable market data. For valuations that have made use of unobservable inputs, the difference between the model valuation and the initial transaction price (Day one profit) is recognised in profit or loss either: on a straight-line basis over the term of the transaction; or over the period until all model inputs will become observable where appropriate; or released in full when previously unobservable inputs become observable. Various factors influence the availability of observable inputs and these may vary from product to product and change over time. Factors include the depth of activity in the relevant market, the type of product, whether the product is new and not widely traded in the marketplace, the maturity of market modelling and the nature of the transaction (bespoke or generic). To the extent that valuation is based on models or inputs that are not observable in the market, the determination of fair value can be more subjective, dependent on the significance of the unobservable input to the overall valuation. Unobservable inputs are determined based on the best information available, for example by reference to similar assets, similar maturities or other analytical techniques. The sensitivity of valuations used in the financial statements to possible changes in significant unobservable inputs is shown on page 465. Critical accounting estimates and judgements The valuation of financial instruments often involves a significant degree of judgement and complexity, in particular where valuation models make use of unobservable inputs (‘Level 3’ assets and liabilities). This note provides information on these instruments, including the related unrealised gains and losses recognised in the period, a description of significant valuation techniques and unobservable inputs, and a sensitivity analysis. Climate-related risks are assumed to be included in the fair values of assets and liabilities traded in active markets. Valuation IFRS 13 Fair value measurement requires an entity to classify its assets and liabilities according to a hierarchy that reflects the observability of significant market inputs. The three levels of the fair value hierarchy are defined below with judgement applied in determining the boundary between Level 2 and 3 classification. Quoted market prices – Level 1 Assets and liabilities are classified as Level 1 if their value is observable in an active market. Such instruments are valued by reference to unadjusted quoted prices for identical assets or liabilities in active markets where the quoted price is readily available, and the price represents actual and regularly occurring market transactions. An active market is one in which transactions occur with sufficient volume and frequency to provide pricing information on an ongoing basis. Valuation technique using observable inputs – Level 2 Assets and liabilities classified as Level 2 have been valued using models whose inputs are observable either directly or indirectly. Valuations based on observable inputs include assets and liabilities such as swaps and forwards which are valued using market standard pricing techniques, and options that are commonly traded in markets where all the inputs to the market standard pricing models are observable. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 457 Notes to the financial statements (continued) Assets and liabilities held at fair value Valuation technique using significant unobservable inputs – Level 3 Assets and liabilities are classified as Level 3 if their valuation incorporates significant inputs that are not based on observable market data (unobservable inputs). A valuation input is considered observable if it can be directly observed from transactions in an active market, or if there is compelling external evidence demonstrating an executable exit price. Unobservable input levels are generally determined via reference to observable inputs, historical observations or using other analytical techniques. The following table shows the Group’s assets and liabilities that are held at fair value disaggregated by valuation technique (fair value hierarchy) and balance sheet classification: Assets and liabilities held at fair value As at 31 December Trading portfolio assets Financial assets at fair value through the income statement 2022 2021 Valuation technique using Valuation technique using Level 1 Level 2 Level 3 £m £m £m Total £m Level 1 Level 2 Level 3 £m £m £m Total £m 62,478 64,855 6,480 133,813 80,926 63,828 2,281 147,035 5,720 198,723 9,125 213,568 5,093 177,167 9,712 191,972 Derivative financial assets 10,054 287,152 5,174 302,380 6,150 252,412 4,010 262,572 Financial assets at fair value through other comprehensive income Investment property Total assets 20,704 44,347 — — 11 5 65,062 22,009 39,706 5 — — 38 7 61,753 7 98,956 595,077 20,795 714,828 114,178 533,113 16,048 663,339 Trading portfolio liabilities (44,128) (28,740) (56) (72,924) (27,529) (26,613) (27) (54,169) Financial liabilities designated at fair value (133) (270,454) (1,050) (271,637) (174) (250,376) (410) (250,960) Derivative financial liabilities (10,823) (272,434) (6,363) (289,620) (6,571) (244,253) (6,059) (256,883) Total liabilities (55,084) (571,628) (7,469) (634,181) (34,274) (521,242) (6,496) (562,012) The following table shows the Group’s Level 3 assets and liabilities that are held at fair value disaggregated by product type: Level 3 assets and liabilities held at fair value by product type Interest rate derivatives Foreign exchange derivatives Credit derivatives Equity derivatives Corporate debt Reverse repurchase and repurchase agreements Non-asset backed loans Private equity investments Othera Total 2022 2021 Assets £m 2,362 1,513 290 1,009 1,677 37 9,949 1,291 2,667 20,795 Liabilities £m (2,858) (1,474) (603) (1,428) (49) (434) — (8) (615) (7,469) Assets £m 1,091 376 323 2,220 1,205 13 6,405 1,095 3,320 16,048 Liabilities £m (1,351) (374) (709) (3,625) (21) (172) — (6) (238) (6,496) Note a Other includes commercial real estate loans, asset backed loans, funds and fund-linked products, issued debt, Government and Government sponsored debt, asset backed securities, equity cash products and investment property. Valuation techniques and sensitivity analysis Sensitivity analysis is performed on products with significant unobservable inputs (Level 3) to generate a range of reasonably possible alternative valuations. The sensitivity methodologies applied take account of the nature of the valuation techniques used, as well as the availability and reliability of observable proxy and historical data and the impact of using alternative models. Sensitivities are dynamically calculated on a monthly basis. The calculation is based on range or spread data of a reliable reference source or a scenario based on relevant market analysis alongside the impact of using alternative models. Sensitivities are calculated without reflecting the impact of any diversification in the portfolio. The valuation techniques used, observability and sensitivity analysis for material products within Level 3, are described below. Interest rate derivatives Description: Derivatives linked to interest rates or inflation indices. The category includes futures, interest rate and inflation swaps, swaptions, caps, floors, inflation options, balance guaranteed swaps and other exotic interest rate derivatives. Valuation: Interest rate and inflation derivatives are generally valued using curves of forward rates constructed from market data to project and discount the expected future cash flows of trades. Instruments with optionality are valued using volatilities implied from market inputs, and use industry standard or bespoke models depending on the product type. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 458 Notes to the financial statements (continued) Assets and liabilities held at fair value Observability: In general, inputs are considered observable up to liquid maturities which are determined separately for each input and underlying. Unobservable inputs are generally set by referencing liquid market instruments and applying extrapolation techniques or inferred via another reasonable method. Foreign exchange derivatives Description: Derivatives linked to the foreign exchange (FX) market. The category includes FX forward contracts, FX swaps and FX options. The majority are traded as over the counter (OTC) derivatives. Valuation: FX derivatives are valued using industry standard and bespoke models depending on the product type. Valuation inputs include FX rates, interest rates, FX volatilities, interest rate volatilities, FX interest rate correlations and others as appropriate. Observability: FX correlations, forwards and volatilities are generally observable up to liquid maturities which are determined separately for each input and underlying. Unobservable inputs are set by referencing liquid market instruments and applying extrapolation techniques, or inferred via another reasonable method. Credit derivatives Description: Derivatives linked to the credit spread of a referenced entity, index or basket of referenced entities or a pool of referenced assets (e.g. a securitised product). The category includes single name and index credit default swaps (CDS) and total return swaps (TRS). Valuation: CDS are valued on industry standard models using curves of credit spreads as the principal input. Credit spreads are observed directly from broker data, third party vendors or priced to proxies. Observability: CDS contracts referencing entities that are actively traded are generally considered observable. Other valuation inputs are considered observable if products with significant sensitivity to the inputs are actively traded in a liquid market. Unobservable valuation inputs are generally determined with reference to recent transactions or inferred from observable trades of the same issuer or similar entities. Equity derivatives Description: Exchange traded or OTC derivatives linked to equity indices and single names. The category includes vanilla and exotic equity products. Valuation: Equity derivatives are valued using industry standard models. Valuation inputs include stock prices, dividends, volatilities, interest rates, equity repurchase curves and, for multi-asset products, correlations. Observability: In general, valuation inputs are observable up to liquid maturities which are determined separately for each input and underlying. Unobservable inputs are set by referencing liquid market instruments and applying extrapolation techniques, or inferred via another reasonable method. Corporate debt Description: Primarily corporate bonds. Valuation: Corporate bonds are valued using observable market prices sourced from broker quotes, inter-dealer prices or other reliable pricing sources. Observability: Prices for actively traded bonds are considered observable. Unobservable bonds prices are generally determined by reference to bond yields or CDS spreads for actively traded instruments issued by or referencing the same (or a similar) issuer. Reverse repurchase and repurchase agreements Description: Includes securities purchased under resale agreements, securities sold under repurchase agreements, and other similar secured lending agreements. The agreements are primarily short-term in nature. Valuation: Repurchase and reverse repurchase agreements are generally valued by discounting the expected future cash flows using industry standard models that incorporate market interest rates and repurchase rates, based on the specific details of the transaction. Observability: Inputs are deemed observable up to liquid maturities or for consensus pricing with low pricing-range and are determined based on the specific features of the transaction. Unobservable inputs are generally set by referencing liquid market instruments and applying extrapolation techniques, or inferred via another reasonable method. Non-asset backed loans Description: Largely made up of fixed rate loans. Valuation: Fixed rate loans are valued using models that discount expected future cash flows based on interest rates and loan spreads. Observability: Within this loan population, the loan spread is generally unobservable. Unobservable loan spreads are determined by incorporating funding costs, the level of comparable assets such as gilts, issuer credit quality and other factors. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 459 Notes to the financial statements (continued) Assets and liabilities held at fair value Private equity investments Description: Includes investments in equity holdings in operating companies not quoted on a public exchange. Valuation: Private equity investments are valued in accordance with the ‘International Private Equity and Venture Capital Valuation Guidelines’ which require the use of a number of individual pricing benchmarks such as the prices of recent transactions in the same or similar entities, discounted cash flow analysis and comparison with the earnings or revenue multiples of listed companies. While the valuation of unquoted equity instruments is subjective by nature, the relevant methodologies are commonly applied by other market participants and have been consistently applied over time. Observability: Inputs are considered observable if there is active trading in a liquid market of products with significant sensitivity to the inputs. Unobservable inputs include earnings or revenue estimates, multiples of comparative companies, marketability discounts and discount rates. Other Description: Other includes commercial real estate loans, asset backed loans, funds and fund-linked products, issued debt, government sponsored debt, asset backed securities, equity cash products and investment property. Assets and liabilities reclassified between Level 1 and Level 2 During the period, there were no material transfers between Level 1 and Level 2 (2021: there were no material transfers between Level 1 and Level 2). Level 3 movement analysis The following table summarises the movements in the Level 3 balances during the period. The table shows gains and losses and includes amounts for all financial assets and liabilities that are held at fair value transferred to and from Level 3 during the period. Transfers have been reflected as if they had taken place at the beginning of the year. Asset and liability transfers between Level 2 and Level 3 are primarily due to i) an increase or decrease in observable market activity related to an input or ii) a change in the significance of the unobservable input, with assets and liabilities classified as Level 3 if an unobservable input is deemed significant. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 460 Notes to the financial statements (continued) Assets and liabilities held at fair value Analysis of movements in Level 3 assets and liabilities Purchases Sales Issues Settlements Total gains and (losses) in the period recognised in the income statement Trading incomeb Other income Total gains or (losses) recognised in OCI Transfers In £m 87 10 275 372 49 56 17 As at 31 December 2022 £m 597 4,837 1,046 6,480 Out £m (34) (22) (275) (331) (84) — (18) 5,112 1,284 2,729 122 (102) 9,125 — — — — 7 4 11 5 Corporate debt As at 1 January 2022 £m 389 £m 394 £m (182) Non asset backed loans 758 7,009 (2,635) Other 1,134 665 (412) Trading portfolio assets 2,281 8,068 (3,229) Non asset backed loans 5,647 2,739 (1,019) Private equity investments 1,095 192 (64) Other 2,970 6,482 (6,540) Financial assets at fair value through the income statement 9,712 9,413 (7,623) £m (18) (19) £m (39) (264) (298) (43) (335) (346) £m — — — — (1,487) (733) — (24) (189) 95 4 (66) 3 (1,700) (634) (63) £m — — — — — — — — £m — — — — — — — — — — Private equity investments Other Assets at fair value through other comprehensive income Investment properties — 38 38 7 — — — — — — — (32) — — — — 1 (2) 6 — — — (32) — — (1) 6 (1) — — (1) — — — — Trading portfolio liabilities (27) (23) 8 — 9 — — (27) 4 (56) Financial liabilities designated at fair value (410) (286) — (98) 82 70 Interest rate derivatives Foreign exchange derivatives Credit derivatives Equity derivatives Net derivative financial instrumentsa (260) (216) 2 (386) — (4) (1,405) (213) — — (2) — (2,049) (433) (2) — — — — — 54 (467) (6) 57 333 27 23 306 438 (111) — — — — — — — (448) 40 (1,050) — — — — — 431 — 11 (38) (496) 16 (12) 39 (313) (419) (11) 571 431 537 (1,189) Total 9,552 16,739 (10,847) (98) (1,547) (1,012) (64) (1) 456 148 13,326 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 461 Notes to the financial statements (continued) Assets and liabilities held at fair value Analysis of movements in Level 3 assets and liabilities Purchases Sales Issues Settlements Total gains and (losses) in the period recognised in the income statement Trading incomeb Other income Total gains or (losses) recognised in OCI Corporate debt As at 1 January 2021 £m 151 £m 310 £m (123) Non-asset backed loans 709 1,580 (1,409) Other 1,003 371 (425) Trading portfolio assets 1,863 2,261 (1,957) Non-asset backed loans 5,580 1,380 (306) Private equity investments 874 166 (24) Other 2,052 11,256 (10,230) Financial assets at fair value through the income statement 8,506 12,802 (10,560) Non-asset backed loans Other Financial assets at fair value through other comprehensive income Investment property 106 47 153 10 — — — — £m — — — — — — — — — — Trading portfolio liabilities (28) (5) 23 — £m (12) (85) (57) (154) £m 38 (1) (49) (12) £m — — — — (748) (181) (174) (9) (185) — 2 163 27 (942) (179) 16 £m — — — — — — — — Transfers In £m 41 45 442 528 113 35 49 As at 31 December 2021 £m 389 758 1,134 2,281 5,647 1,095 2,970 Out £m (16) (81) (151) (248) (17) (110) (1) 197 (128) 9,712 — — — (7) — — — — — (2) — — (106) — — 38 — — (7) — — (2) — (106) 38 (2) — — — — (1) (6) — — — — — (12) 1 7 — (27) — Financial liabilities designated at fair value (355) (4) — (101) 66 21 (1) — (68) 32 (410) Interest rate derivatives Foreign exchange derivatives Credit derivatives Equity derivatives Net derivative financial instrumentsa (2) 1 20 — (155) (239) — — 9 (1,614) 90 (1) (1,770) (129) 8 — — — — — 105 40 (45) (15) (255) (2) 34 (4) 85 (227) Total 8,379 14,925 (12,488) (101) (952) (403) — — — — — 14 — — — — — 90 10 10 (218) (260) (47) — 2 (386) (3) 142 (1,405) 107 (123) (2,049) (2) 752 (572) 9,552 Notes a The derivative financial instruments are represented on a net basis. On a gross basis, derivative financial assets are £5,174m (2021: £4,010m) and derivative financial liabilities are £6,363m (2021: £6,059m). b Trading income represents gains and (losses) on level 3 financial instruments which in the majority are offset by losses and gains on financial instruments disclosed in level 2. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 462 Notes to the financial statements (continued) Assets and liabilities held at fair value Unrealised gains and losses on Level 3 financial assets and liabilities The following table discloses the unrealised gains and losses recognised in the year arising on Level 3 financial assets and liabilities held at year end. Unrealised gains and (losses) recognised during the period on Level 3 assets and liabilities held at year end 2022 2021 As at 31 December Trading portfolio assets Financial assets at fair value through the income statement Fair value through other comprehensive income Investment property Trading portfolio liabilities Financial liabilities designated at fair value Net derivative financial instruments Total Income statement Trading incomea Other income Other compre- hensive income £m (290) (551) — — 8 55 (80) £m — (66) — (1) — — — (858) (67) £m — — 1 — — — — 1 Income statement Trading incomea Other income Other compre- hensive income Total £m £m (290) (67) £m — (617) (176) 154 1 (1) 8 55 — — (5) 16 (80) (196) — — — (1) — (924) (428) 153 Total £m (67) (22) — — (5) 15 (196) (275) £m — — — — — — — — Note a Trading income represents gains and (losses) on level 3 financial instruments which in the majority are offset by losses and gains on financial instruments disclosed in level 2. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 463 Notes to the financial statements (continued) Assets and liabilities held at fair value Significant unobservable inputs The following table discloses the valuation techniques and significant unobservable inputs for material products recognised at fair value and classified as Level 3 along with the range of values used for those significant unobservable inputs: Valuation technique(s)a Significant unobservable inputs Min Max Min Max Unitsb 2022 Range 2021 Range Derivative financial instrumentsc Interest rate derivatives Discounted cash flows Inflation forwards Credit spread Yield Correlation model Inflation forwards Option model Inflation volatility Interest rate volatility Option volatility FX - IR correlation IR - IR correlation Credit derivatives Discounted cash flows Credit spread Comparable pricing Price Equity derivatives Option model Equity volatility Equity - equity correlation Foreign exchange derivatives Option model Option volatility Discounted cash flow Discounted margin Discounted Cash Flows Yield Non-derivative financial instruments Non-asset backed loans Discounted cash flows Loan spread Comparable pricing Credit spread Yield Price Private equity investments EBITDA multiple EBITDA multiple Earnings multiple Earnings multiple Discounted cash flow Credit spread Discount margin Corporate debt Comparable pricing Price Commercial Real Estate loans Reverse repurchase and repurchase agreements Discounted cash flows Loan spread Discounted cash flows Credit spread Discounted cash flows Repo spread Issued debt Discounted cash flows Credit spread Option model Equity volatility Interest rate volatility 3 17 (3) (20) 49 36 57 (20) 12 3 79 3 40 (205) 0 (3) 50 200 5 0 11 4 496 8 0 229 267 321 73 3 42 5 2,159 56 (13) 315 430 60 78 99 2,943 92 140 100 634 100 4 801 300 34 101 15 23 559 10 232 834 426 502 548 111 261 0 9 — (20) 31 5 — (20) (100) 2 — 2 10 (129) 0 — 31 200 3 0 16 5 3 1,848 — (13) 130 600 — 78 99 2,925 — 108 100 93 100 — 1,552 300 10 145 20 28 725 1,916 8 0 229 68 — — — — 10 284 854 543 — — — — % bps % % bps vol bps vol £m % % bps points % % bps points % bps bps % points Multiple Multiple bps % points bps bps bps bps % bps vol Notes a A range has not been provided for Net Asset Value as there would be a wide range reflecting the diverse nature of the positions. b The units used to disclose ranges for significant unobservable inputs are percentages, points and basis points. Points are a percentage of par; for example, 100 points equals 100% of par. A basis point equals 1/100th of 1%; for example, 150 basis points equals 1.5%. c Certain derivative instruments are classified as Level 3 due to a significant unobservable credit spread input into the calculation of the Credit Valuation Adjustment for the instruments. The range of significant unobservable credit spreads is between 17-2159bps (2021: 32-1,848bps). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 464 Notes to the financial statements (continued) Assets and liabilities held at fair value The following section describes the significant unobservable inputs identified in the table above, and the sensitivity of fair value measurement of the instruments categorised as Level 3 assets or liabilities to increases in significant unobservable inputs. Where sensitivities are described, the inverse relationship will also generally apply. Where reliable interrelationships can be identified between significant unobservable inputs used in fair value measurement, a description of those interrelationships is included below. Forwards A price or rate that is applicable to a financial transaction that will take place in the future. In general, a significant increase in a forward in isolation will result in a fair value increase for the contracted receiver of the underlying (currency, bond, commodity, etc.), but the sensitivity is dependent on the specific terms of the instrument. Credit spread Credit spreads typically represent the difference in yield between an instrument and a benchmark security or reference rate. Credit spreads reflect the additional yield that a market participant demands for taking on exposure to the credit risk of an instrument and form part of the yield used in a discounted cash flow calculation. In general, a significant increase in credit spread in isolation will result in a movement in a fair value decrease for a cash asset. For a derivative instrument, a significant increase in credit spread in isolation can result in a fair value increase or decrease depending on the specific terms of the instrument. Volatility Volatility is a measure of the variability or uncertainty in return for a given derivative underlying. It is an estimate of how much a particular underlying instrument input or index will change in value over time. In general, volatilities are implied from observed option prices. For unobservable options the implied volatility may reflect additional assumptions about the nature of the underlying risk, and the strike/ maturity profile of a specific contract. In general a significant increase in volatility in isolation will result in a fair value increase for the holder of a simple option, but the sensitivity is dependent on the specific terms of the instrument. There may be interrelationships between unobservable volatilities and other unobservable inputs (e.g. when equity prices fall, implied equity volatilities generally rise) but these are generally specific to individual markets and may vary over time. Correlation Correlation is a measure of the relationship between the movements of two variables. Correlation can be a significant input into valuation of derivative contracts with more than one underlying instrument. Credit correlation generally refers to the correlation between default processes for the separate names that make up the reference pool of a CDO structure. A significant increase in correlation in isolation can result in a fair value increase or decrease depending on the specific terms of the instrument. Comparable price Comparable instrument prices are used in valuation by calculating an implied yield (or spread over a liquid benchmark) from the price of a comparable observable instrument, then adjusting that yield (or spread) to account for relevant differences such as maturity or credit quality. Alternatively, a price-to-price basis can be assumed between the comparable and unobservable instruments in order to establish a value. Non-asset backed loans includes a portfolio of loans extended to clients within the Group’s leveraged finance business. Leveraged finance loans are originated where Barclays provide financing commitments to clients to facilitate strategic transactions such as leverage buyouts and acquisitions. The sensitivity of the portfolio to unobservable inputs is judgmental reflecting their illiquid nature and the significance of unobservable price inputs to the valuation. In general, a significant increase in comparable price in isolation will result in an increase in the price of the unobservable instrument. For derivatives, a change in the comparable price in isolation can result in a fair value increase or decrease depending on the specific terms of the instrument. Loan spread Loan spreads typically represent the difference in yield between an instrument and a benchmark security or reference rate. Loan spreads typically reflect credit quality, the level of comparable assets such as gilts and other factors, and form part of the yield used in a discounted cash flow calculation. Non-asset backed loans contains a portfolio primarily consisting of long-dated fixed rate loans extended to counterparties in the UK Education, Social Housing and Local Authority sectors (ESHLA). The loans are categorised as Level 3 in the fair value hierarchy due to their illiquid nature and the significance of unobservable loan spreads to the valuation. Valuation uncertainty arises from the long-dated nature of the portfolio, the lack of secondary market in the loans and the lack of observable loan spreads. The majority of ESHLA loans are to borrowers in heavily regulated sectors that are considered extremely low credit risk, and have a history of near zero defaults since inception. While the overall loan spread range is from 50bps to 589bps (2021: 31bps to 1,552bps), the vast majority of spreads are concentrated towards the bottom end of this range, with 88% of the loan notional being valued with spreads less than 200bps consistently for both years. In general, a significant increase in loan spreads in isolation will result in a fair value decrease for a loan. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 465 Notes to the financial statements (continued) Assets and liabilities held at fair value EBITDA multiple EBITDA multiple is the ratio of the valuation of the investment to the earnings before interest, taxes, depreciation and amortisation. In general, a significant increase in the multiple will result in a fair value increase for an investment. Earnings multiple Earnings or Revenue multiple is the ratio of the valuation of the investment to the earnings or revenue. In general, a significant increase in the multiple will result in a fair value increase for an investment. Sensitivity analysis of valuations using unobservable inputs Interest rate derivatives Foreign exchange derivatives Credit derivatives Equity derivatives Corporate debt Non-asset backed loans Private equity investments Othera Total 2022 2021 Favourable changes Unfavourable changes Favourable changes Unfavourable changes Income statement Equity Income statement Equity Income statement Equity Income statement Equity £m 119 16 79 161 45 316 268 71 1,075 £m — — — — — — 1 — 1 £m (155) (22) (71) (168) (27) (521) (281) (82) (1,327) £m — — — — — — (1) — (1) £m 51 20 111 187 38 165 246 62 880 £m — — — — — — — — — £m (79) (28) (103) (195) (28) (256) (236) (80) (1,005) £m — — — — — — — — — Note a Other includes asset backed loans, equity cash products and funds and fund-linked products The effect of stressing unobservable inputs to a range of reasonably possible alternatives, alongside considering the impact of using alternative models, would be to increase fair values by up to £1,076m (2021: £880m) or to decrease fair values by up to £1,328m (2021: £1,005m) with substantially all the potential effect impacting profit and loss rather than reserves. Fair value adjustments Key balance sheet valuation adjustments are quantified below: Exit price adjustments derived from market bid-offer spreads Uncollateralised derivative funding Derivative credit valuation adjustments Derivative debit valuation adjustments 2022 £m (577) (11) (319) 208 2021 £m (506) (127) (212) 91 Exit price adjustments derived from market bid-offer spreads The Group uses mid-market pricing where it is a market maker and has the ability to transact at, or better than, mid price (which is the case for certain equity, bond and vanilla derivative markets). For other financial assets and liabilities, bid-offer adjustments are recorded to reflect the exit level for the expected close out strategy. The methodology for determining the bid-offer adjustment for a derivative portfolio involves calculating the net risk exposure by offsetting long and short positions by strike and term in accordance with the risk management and hedging strategy. Bid-offer levels are generally derived from market quotes such as broker data. Less liquid instruments may not have a directly observable bid-offer level. In such instances, an exit price adjustment may be derived from an observable bid-offer level for a comparable liquid instrument, or determined by calibrating to derivative prices, or by scenario or historical analysis. Exit price adjustments derived from market bid-offer spreads have increased by £71m to £(577)m. Discounting approaches for derivative instruments Collateralised In line with market practice, the methodology for discounting collateralised derivatives takes into account the nature and currency of the collateral that can be posted within the relevant credit support annex (CSA). The CSA aware discounting approach recognises the ‘cheapest to deliver’ option that reflects the ability of the party posting collateral to change the currency of the collateral. Uncollateralised A fair value adjustment of £(11)m is applied to account for the impact of incorporating the cost of funding into the valuation of uncollateralised and partially collateralised derivative portfolios and collateralised derivatives where the terms of the agreement do not allow the rehypothecation of collateral received. This adjustment is referred to as the Uncollateralised derivative funding. Uncollateralised derivative funding has decreased by £116m to £(11)m as a result of underlying moves in the exposure profile of the derivative portfolio in scope. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 466 Notes to the financial statements (continued) Assets and liabilities held at fair value Derivative credit and debit valuation adjustments Derivative credit valuation adjustments and Derivative debit valuation adjustments are incorporated into derivative valuations to reflect the impact on fair value of counterparty credit risk and Barclays’ own credit quality respectively. These adjustments are calculated for uncollateralised and partially collateralised derivatives across all asset classes. Derivative credit valuation adjustments and Derivative debit valuation adjustments are calculated using estimates of exposure at default, probability of default and recovery rates, at a counterparty level. Counterparties include (but are not limited to) corporates, sovereigns and sovereign agencies and supranationals. Exposure at default is generally estimated through the simulation of underlying risk factors through approximating with a more vanilla structure, or by using current or scenario-based mark to market as an estimate of future exposure. Probability of default and recovery rate information is generally sourced from the CDS markets. Where this information is not available, or considered unreliable, alternative approaches are taken based on mapping internal counterparty ratings onto historical or market- based default and recovery information. Derivative credit valuation adjustments increased by £107m to £(319)m as a result of widening input counterparty credit spreads. Derivative debit valuation adjustments increased by £117m to £208m as a result of widening input own credit spreads. Correlation between counterparty credit and underlying derivative risk factors, termed ‘wrong-way,’ or ‘right-way’ risk, is not systematically incorporated into the derivative credit valuation adjustments calculation but is adjusted where the underlying exposure is directly related to the counterparty. Barclays continues to monitor market practices and activity to ensure the approach to uncollateralised derivative valuation remains appropriate. Portfolio exemptions The Group uses the portfolio exemption in IFRS 13 Fair Value Measurement to measure the fair value of groups of financial assets and liabilities. Instruments are measured using the price that would be received to sell a net long position (i.e. an asset) for a particular risk exposure or to transfer a net short position (i.e. a liability) for a particular risk exposure in an orderly transaction between market participants at the balance sheet date under current market conditions. Accordingly, the Group measures the fair value of the group of financial assets and liabilities consistently with how market participants would price the net risk exposure at the measurement date. Unrecognised gains as a result of the use of valuation models using unobservable inputs The amount that has yet to be recognised in income that relates to the difference between the transaction price (the fair value at initial recognition) and the amount that would have arisen had valuation models using unobservable inputs been used on initial recognition, less amounts subsequently recognised, is £126m (2021: £133m) for financial instruments measured at fair value and £216m (2021: £230m) for financial instruments carried at amortised cost. There are additions and FX gains of £59m (2021: £59m), and amortisation and releases of £66m (2021: £42m) for financial instruments measured at fair value and additions of £0m (2021: £0m) and amortisation and releases of £14m (2021: £17m) for financial instruments measured at amortised cost. Third-party credit enhancements Structured and brokered certificates of deposit issued by Barclays are insured up to $250,000 per depositor by the Federal Deposit Insurance Corporation (FDIC) in the US. The FDIC is funded by premiums that Barclays and other banks pay for deposit insurance coverage. The carrying value of these issued certificates of deposit that are designated under the IFRS 9 fair value option includes this third party credit enhancement. The on-balance sheet value of these brokered certificates of deposit amounted to £5,197m (2021: £790m). Comparison of carrying amounts and fair values for assets and liabilities not held at fair value The following table summarises the fair value of financial assets and liabilities measured at amortised cost on the Group’s balance sheet: As at 31 December Financial assets Loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending Financial liabilities Deposits at amortised cost Repurchase agreements and other similar secured borrowing Debt securities in issue Subordinated liabilities 2022 2021 Carrying amount Fair value Level 1 Level 2 Level 3 Carrying amount Fair value Level 1 Level 2 Level 3 £m £m £m £m £m £m £m £m £m £m 398,779 391,661 15,117 113,153 263,391 361,451 362,424 17,381 83,191 261,852 776 776 — 776 — 3,227 3,227 — 3,227 — (545,782) (545,738) (426,016) (116,157) (3,565) (519,433) (519,436) (434,431) (83,501) (1,504) (27,052) (27,054) — (27,054) — (28,352) (28,358) — (28,358) — (112,881) (113,276) — (110,151) (3,125) (98,867) (100,657) — (98,364) (2,293) (11,423) (11,474) — (11,254) (220) (12,759) (13,334) — (13,267) (67) The fair value is an estimate of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As a wide range of valuation techniques are available, it may not be appropriate to directly compare this fair value information to independent market sources or other financial institutions. Different valuation methodologies and assumptions can have a significant impact on fair values which are based on unobservable inputs. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 467 Notes to the financial statements (continued) Assets and liabilities held at fair value Financial assets The carrying value of financial assets held at amortised cost is determined in accordance with the relevant accounting policy in Note 19. Loans and advances at amortised cost The fair value of loans and advances, for the purpose of this disclosure, is derived from discounting expected cash flows in a way that reflects the current market price for lending to issuers of similar credit quality. Where market data or credit information on the underlying borrowers is unavailable, a number of proxy/extrapolation techniques are employed to determine the appropriate discount rates. For 2022, the fair value is lower than carrying value mainly on fixed rate products driven by rising interest rates. The majority will be part of a wider portfolio which includes fair valued instruments that are not presented in this table. Reverse repurchase agreements and other similar secured borrowing The fair value of reverse repurchase agreements approximates carrying amount as these balances are generally short dated and fully collateralised. Financial liabilities The carrying value of financial liabilities held at amortised cost is determined in accordance with the accounting policy in Note 1. Deposits at amortised cost In many cases, the fair value disclosed approximates carrying value because the instruments are short term in nature or have interest rates that reprice frequently, such as customer accounts and other deposits and short-term debt securities. The fair value for deposits with longer-term maturities, mainly time deposits, are estimated using discounted cash flows applying either market rates or current rates for deposits of similar remaining maturities. Consequently, the fair value discount is minimal. Repurchase agreements and other similar secured borrowing The fair value of repurchase agreements approximates carrying amounts as these balances are generally short dated. Debt securities in issue Fair values of other debt securities in issue are based on quoted prices where available, or where the instruments are short dated, carrying amount approximates fair value. Subordinated liabilities Fair values for dated and undated convertible and non-convertible loan capital are based on quoted market rates for the issuer concerned or issuers with similar terms and conditions. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 468 Notes to the financial statements (continued) Assets and liabilities held at fair value 18 Offsetting financial assets and financial liabilities In accordance with IAS 32 Financial Instruments: Presentation, the Group reports financial assets and financial liabilities on a net basis on the balance sheet only if there is a legally enforceable right to set-off the recognised amounts and there is intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. The following table shows the impact of netting arrangements on: ▪ all financial assets and liabilities that are reported net on the balance sheet ▪ all derivative financial instruments and reverse repurchase and repurchase agreements and other similar secured lending and borrowing agreements that are subject to enforceable master netting arrangements or similar agreements, but do not qualify for balance sheet netting. The ‘Net amounts’ presented are not intended to represent the Group’s actual exposure to credit risk, as a variety of credit mitigation strategies are employed in addition to netting and collateral arrangements. Amounts subject to enforceable netting arrangements Effects of offsetting on-balance sheet Related amounts not offset Gross amounts Amounts offseta Net amounts reported on the balance sheet Financial instruments Financial collateralb Net amount Amounts not subject to enforceable netting arrangementsc Balance sheet totald £m £m £m £m £m £m £m £m As at 31 December 2022 Derivative financial assets Reverse repurchase agreements and other similar secured lendinge Total assets 374,253 (76,429) 297,824 (238,337) (45,981) 13,506 4,556 302,380 558,977 (396,323) 162,654 — (162,024) 630 933,230 (472,752) 460,478 (238,337) (208,005) 14,136 2,803 7,359 165,457 467,837 Derivative financial liabilities (360,630) 76,530 (284,100) 238,337 26,639 (19,124) (5,520) (289,620) Repurchase agreements and other similar secured borrowinge Total liabilities As at 31 December 2021 Derivative financial assets Reverse repurchase agreements and other similar secured lendinge Total assets (571,774) 396,323 (175,451) — (932,404) 472,853 (459,551) 238,337 175,451 202,090 — (24,347) (199,798) (19,124) (29,867) (489,418) 279,568 (24,137) 255,431 (202,519) (40,485) 12,427 7,141 262,572 514,360 (370,003) 144,357 — (143,854) 503 793,928 (394,140) 399,788 (202,519) (184,339) 12,930 3,884 11,025 148,241 410,813 Derivative financial liabilities (274,356) 23,606 (250,750) 202,519 34,321 (13,910) (6,133) (256,883) Repurchase agreements and other similar secured borrowinge Total liabilities (535,653) 370,003 (165,650) — (810,009) 393,609 (416,400) 202,519 165,650 199,971 — (30,762) (196,412) (13,910) (36,895) (453,295) Notes a Amounts offset for derivative financial assets additionally includes cash collateral netted of £15,199m (2021: £3,815m). Amounts offset for derivative financial liabilities additionally includes cash collateral netted of £15,098m (2021: £4,346m). Settlements assets and liabilities have been offset amounting to £24,250m (2021: £22,837m). b Financial collateral of £45,981m (2021: £40,485m) was received in respect of derivative assets, including £34,547m (2021: £34,598m) of cash collateral and £11,434m (2021: £5,887m) of non-cash collateral. Financial collateral of £26,639m (2021: £34,321m) was placed in respect of derivative liabilities, including £25,222m (2021: £32,031m) of cash collateral and £1,417m (2021: £2,290m) of non- cash collateral. The collateral amounts are limited to net balance sheet exposure so as to not include overcollateralisation. c This column includes contractual rights of set-off that are subject to uncertainty under the laws of the relevant jurisdiction. d The balance sheet total is the sum of ‘Net amounts reported on the balance sheet’ that are subject to enforceable netting arrangements and ‘Amounts not subject to enforceable netting arrangements’. e Reverse repurchase agreements and other similar secured lending of £165,457m (2021: £148,241m) is split by fair value £164,681m (2021: £145,014m) and amortised cost £776m (2021: £3,227m). Repurchase agreements and other similar secured borrowing of £199,798m (2021: £196,412m) is split by fair value £172,746m (2021: £168,060m) and amortised cost £27,052m (2021: £28,352m). Derivative assets and liabilities The ‘Financial instruments’ column identifies financial assets and liabilities that are subject to set-off under netting agreements, such as the ISDA Master Agreement or derivative exchange or clearing counterparty agreements, whereby all outstanding transactions with the same counterparty can be offset and close-out netting applied across all outstanding transactions covered by the agreements if an event of default or other predetermined events occur. Financial collateral refers to cash and non-cash collateral obtained, typically daily or weekly, to cover the net exposure between counterparties by enabling the collateral to be realised in an event of default or if other predetermined events occur. Repurchase and reverse repurchase agreements and other similar secured lending and borrowing The ‘Financial instruments’ column identifies financial assets and liabilities that are subject to set-off under netting agreements, such as Global Master Repurchase Agreements and Global Master Securities Lending Agreements, whereby all outstanding transactions with the same counterparty can be offset and close-out netting applied across all outstanding transactions covered by the agreements if an event of default or other predetermined events occur. Financial collateral typically comprises highly liquid securities which are legally transferred and can be liquidated in the event of counterparty default. These offsetting and collateral arrangements and other credit risk mitigation strategies used by the Group are further explained in the Credit risk management section. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 469 Notes to the financial statements (continued) Assets at amortised cost and other investments Assets at amortised cost and other investments The notes included in this section focus on the Group’s loans and advances and deposits at amortised cost, leases, property, plant and equipment and goodwill and intangible assets. Details regarding the Group’s liquidity and capital position can be found in the Treasury and Capital risk section. 19 Loans and advances and deposits at amortised cost Accounting for loans and advances and deposits held at amortised cost Loans and advances to customers and banks, customer accounts, debt securities and most financial liabilities, are held at amortised cost. That is, the initial fair value (which is normally the amount advanced or borrowed) is adjusted for repayments and the amortisation of coupon, fees and expenses to represent the effective interest rate of the asset or liability. Balances deferred on-balance sheet as effective interest rate adjustments are amortised to interest income over the life of the financial instrument to which they relate. Financial assets that are held in a business model to collect the contractual cash flows and that contain contractual terms that give rise on specified dates to cash flows that are SPPI, are measured at amortised cost. The carrying value of these financial assets at initial recognition includes any directly attributable transaction costs. Refer to Note 1 for details on ‘solely payments of principal and interest’. In determining whether the business model is a ‘hold to collect’ model, the objective of the business model must be to hold the financial asset to collect contractual cash flows rather than holding the financial asset for trading or short-term profit taking purposes. While the objective of the business model must be to hold the financial asset to collect contractual cash flows this does not mean the Group is required to hold the financial assets until maturity. When determining if the business model objective is to collect contractual cash flows the Group will consider past sales and expectations about future sales. Loans and advances and deposits at amortised cost As at 31 December Loans and advances at amortised cost to banks Loans and advances at amortised cost to customers Debt securities at amortised cost Total loans and advances at amortised cost Deposits at amortised cost from banks Deposits at amortised cost from customers Total deposits at amortised cost 2022 £m 10,015 343,277 45,487 398,779 19,979 525,803 545,782 2021 £m 9,698 319,922 31,831 361,451 17,819 501,614 519,433 20 Property, plant and equipment Accounting for property, plant and equipment The Group applies IAS 16 Property Plant and Equipment and IAS 40 Investment Properties. Property, plant and equipment is stated at cost, which includes direct and incremental acquisition costs less accumulated depreciation and provisions for impairment, if required. Subsequent costs are capitalised if these result in enhancement of the asset. Depreciation is provided on the depreciable amount of items of property, plant and equipment on a straight-line basis over their estimated useful economic lives. Depreciation rates, methods and the residual values underlying the calculation of depreciation of items of property, plant and equipment are kept under review to take account of any change in circumstances. The Group uses the following annual rates in calculating depreciation: Annual rates in calculating depreciation Freehold land Freehold buildings and long-leasehold property (more than 50 years to run) Depreciation rate  Not depreciated 2-3.3% Leasehold property over the remaining life of the lease (less than 50 years to run) Over the remaining life of the lease Costs of adaptation of freehold and leasehold property Equipment installed in freehold and leasehold property Computers and similar equipment Fixtures and fittings and other equipment 6-10% 6-10% 17-33% 9-20% Costs of adaptation and installed equipment are depreciated over the shorter of the life of the lease or the depreciation rates noted in the table above. Investment property The Group initially recognises investment property at cost, and subsequently at fair value at each balance sheet date, reflecting market conditions at the reporting date. Gains and losses on remeasurement are included in the income statement. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 470 Notes to the financial statements (continued) Assets at amortised cost and other investments Cost As at 1 January 2022 Additions Disposalsb Exchange and other movements As at 31 December 2022 Accumulated depreciation and impairment As at 1 January 2022 Depreciation charge Impairment Disposalsb Exchange and other movements As at 31 December 2022 Net book value Cost As at 1 January 2021 Additions Disposals Exchange and other movements As at 31 December 2021 Accumulated depreciation and impairment As at 1 January 2021 Depreciation charge Impairment Disposals Exchange and other movements As at 31 December 2021 Net book value £m 7 — (1) (1) 5 — — — — — — 5 10 — (2) (1) 7 — — — — — — 7 Investment property Property Equipment Right of use assetsa £m £m £m 4,131 273 3,210 313 (923) (641) 104 3,585 136 3,018 1,920 37 (68) 61 1,950 (872) (206) (22) 65 (21) (2,586) (227) — 630 (61) (2,244) (1,056) 774 894 3,091 189 (74) 4 3,210 (2,421) (222) — 66 (9) (2,586) 624 1,934 32 (114) 68 1,920 (567) (204) (170) 60 9 (872) 1,048 (2,255) (181) (23) 882 (65) (1,642) 1,943 4,002 274 (160) 15 4,131 (2,013) (249) (106) 136 (23) (2,255) 1,876 Total £m 9,268 623 (1,633) 300 8,558 (5,713) (614) (45) 1,577 (147) (4,942) 3,616 9,037 495 (350) 86 9,268 (5,001) (675) (276) 262 (23) (5,713) 3,555 Notes a Right of use (ROU) asset balances relate to property leases under IFRS 16. Refer to Note 21 for further details. b Disposals primarily pertain to fully depreciated assets which are not in use. Property rentals of £10m (2021: £16m) have been included in other income. The fair value of investment property is determined by reference to current market prices for similar properties, adjusted as necessary for condition and location, or by reference to recent transactions updated to reflect current economic conditions. Discounted cash flow techniques may be employed to calculate fair value where there have been no recent transactions, using current external market inputs such as market rents and interest rates. Valuations are carried out by management with the support of appropriately qualified independent valuers. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 471 Notes to the financial statements (continued) Assets at amortised cost and other investments 21 Leases Accounting for leases IFRS 16 applies to all leases with the exception of licences of intellectual property, rights held by licensing agreements within the scope of IAS 38 Intangible Assets, service concession arrangements, leases of biological assets within the scope of IAS 41 Agriculture and leases of minerals, oil, natural gas and similar non-regenerative resources. IFRS 16 includes an accounting policy choice for a lessee to elect not to apply IFRS 16 to remaining assets within the scope of IAS 38 Intangible Assets which the Group has decided to apply. When the Group is the lessee, it is required to recognise both: ▪ A lease liability, measured at the present value of remaining cash flows on the lease, and ▪ A right of use (ROU) asset, measured at the amount of the initial measurement of the lease liability, plus any lease payments made prior to commencement date, initial direct costs, and estimated costs of restoring the underlying asset to the condition required by the lease, less any lease incentives received. Subsequently the lease liability will increase for the accrual of interest, resulting in a constant rate of return throughout the life of the lease, and reduce when payments are made. The right of use asset will amortise to the income statement over the life of the lease. The lease liability is remeasured when there is a change in one of the following: ▪ Future lease payments arising from a change in an index or rate; ▪ The Group’s estimate of the amount expected to be payable under a residual value guarantee; or ▪ The Group’s assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the ROU asset, or is recorded in the income statement if the carrying amount of the ROU asset has been reduced to nil. On the balance sheet, the ROU assets are included within property, plant and equipment and the lease liabilities are included within other liabilities. The Group applies the recognition exemption in IFRS 16 for leases with a term not exceeding 12 months. For these leases the lease payments are recognised as an expense on a straight line basis over the lease term unless another systematic basis is more appropriate. When the Group is the lessor, the lease must be classified as either a finance lease or an operating lease. A finance lease is a lease which confers substantially all the risks and rewards of the leased assets on the lessee. An operating lease is a lease where substantially all of the risks and rewards of the leased asset remain with the lessor. When the lease is deemed a finance lease, the leased asset is not held on the balance sheet; instead a finance lease receivable is recognised representing the minimum lease payments receivable under the terms of the lease, discounted at the rate of interest implicit in the lease. When the lease is deemed an operating lease, the lease income is recognised on a straight-line basis over the period of the lease unless another systematic basis is more appropriate. The Group holds the leased assets on balance sheet within property, plant and equipment. As a Lessor Finance lease receivables are included within loans and advances at amortised cost. The following table sets out a maturity analysis of lease receivables, showing the lease payments to be received after the reporting date. 2022 2021 Gross investment in finance lease receivables Future finance income Present value of minimum lease payments receivable Unguaranteed residual values Gross investment in finance lease receivables Future finance income Present value of minimum lease payments receivable Unguaranteed residual values £m 14 9 2 1 1 1 £m (1) (1) — — — — £m 13 8 2 1 1 1 28 (2) 26 £m — — — — — — — £m 29 19 6 2 1 1 58 £m (3) (2) — — — — £m 26 17 6 2 1 1 (5) 53 £m — — — — — — — Not more than one year One to two years Two to three years Three to four years Four to five years Over five years Total Barclays Asset Finance provided leasing and other asset finance facilities across a broad range of asset types to business and individual customers.There is no impairment allowance for finance lease receivables in current and previous year. The Group does not have any material operating leases as a lessor. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 472 Notes to the financial statements (continued) Assets at amortised cost and other investments Finance lease income Finance lease income is included within interest income. The following table shows amounts recognised in the income statement during the year. Finance income from net investment in lease Profit on sales 2022 £m 2 — 2021 £m 21 1 As a Lessee The Group leases various offices, branches and other premises under non-cancellable lease arrangements to meet its operational business requirements. In some instances, Barclays will sublease property to third parties when it is no longer needed to meet business requirements. Currently, Barclays does not have any material subleasing arrangements. ROU asset balances relate to property leases only. Refer to Note 20 for the carrying amount of ROU assets. The total expenses recognised during the year for short term leases were £1m (2021: £3m). The portfolio of short term leases to which Barclays is exposed at the end of the year is not dissimilar to the expenses recognised in the year. Lease liabilities As at 1 January Interest expense New leases Disposals Cash payments Exchange and other movements As at 31 December (see Note 23) 2022 £m 1,317 56 42 (13) (239) 53 1,216 The below table sets out a maturity analysis of undiscounted lease liabilities, showing the lease payments after the reporting date. Undiscounted lease liabilities maturity analysis Not more than one year One to two years Two to three years Three to four years Four to five years Five to ten years Greater than ten years 2022 £m 229 216 193 160 140 457 105 2021 £m 1,444 64 43 (54) (258) 78 1,317 2021 £m 230 215 197 182 149 503 163 Total undiscounted lease liabilities as at 31 December 1,500 1,639 In addition to the cash flows identified above, Barclays is exposed to: ▪ Variable lease payments: This variability will typically arise from either inflation index instruments or market-based pricing adjustments. Currently, Barclays has 401 (2021: 609) leases out of the total 896 (2021: 1,111) leases which have variable lease payment terms based on market-based pricing adjustments. Of the gross cash flows identified above, £1,087m (2021: £1,196m) is attributable to leases with some degree of variability predominately linked to market-based pricing adjustments. ▪ Extension and termination options: The table above represents Barclays' best estimate of future cash outflows for leases, including assumptions regarding the exercising of contractual extension and termination options. The above gross cash flows have been reduced by £516m (2021: £434m) for leases where Barclays is highly expected to exercise an early termination option. However, there is no significant impact where Barclays is expected to exercise an extension option. In 2022, the Group recorded a one-off gain of £88m from sale and leaseback (2021: £33m). The Group does not have any restrictions or covenants imposed by the lessor on its property leases which restrict its businesses. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 473 Notes to the financial statements (continued) Assets at amortised cost and other investments 22 Goodwill and intangible assets Accounting for goodwill and intangible assets Goodwill The carrying value of goodwill is determined in accordance with IFRS 3 Business Combinations and IAS 36 Impairment of Assets. Goodwill arising on the acquisition of subsidiaries represents the excess of the fair value of the purchase consideration over the fair value of the Group’s share of the assets acquired and the liabilities and contingent liabilities assumed on the date of the acquisition. Goodwill is reviewed annually for impairment, or more frequently when there are indications that impairment may have occurred. The test involves comparing the carrying value of a cash generating unit (CGU) including goodwill with the present value of the pre-tax cash flows, discounted at a rate of interest that reflects the inherent risks, of the CGU to which the goodwill relates, or the CGU's fair value if this is higher. Intangible assets Intangible assets other than goodwill are accounted for in accordance with IAS 38 Intangible Assets. Intangible assets are initially recognised when they are separable or arise from contractual or other legal rights, the cost can be measured reliably and, in the case of intangible assets not acquired in a business combination, where it is probable that future economic benefits attributable to the assets will flow from their use. For internally generated intangible assets, only costs incurred during the development phase are capitalised. Expenditure in the research phase is expensed when it is incurred. Intangible assets are stated at cost (which is, in the case of assets acquired in a business combination, the acquisition date fair value) less accumulated amortisation and impairment, if any, and are amortised over their useful lives in a manner that reflects the pattern to which they contribute to future cash flows, generally using the amortisation periods set out below: Annual rates in calculating amortisation Goodwill Internally generated softwarea Other software Customer lists Licences and other Amortisation period Not amortised 12 months to 6 years 12 months to 6 years 12 months to 25 years 12 months to 25 years Note a Exceptions to the above rate relate to useful lives of certain core banking platforms that are assessed individually and, if appropriate, amortised over longer periods ranging from 10 to 15 years. Intangible assets are reviewed for impairment when there are indications that impairment may have occurred. Intangible assets not yet available for use are reviewed annually for impairment. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 474 Notes to the financial statements (continued) Assets at amortised cost and other investments 2022 Cost As at 1 January 2022 Additions Disposalsa Exchange and other movements As at 31 December 2022 Accumulated amortisation and impairment As at 1 January 2022 Disposalsa Amortisation charge Impairment charge Exchange and other movements As at 31 December 2022 Net book value 2021 Cost As at 1 January 2021 Additions Disposalsa Exchange and other movements As at 31 December 2021 Accumulated amortisation and impairment As at 1 January 2021 Disposalsa Amortisation charge Impairment charge Exchange and other movements As at 31 December 2021 Net book value Note a Disposals pertain to fully amortised assets which are not in use. Total £m 14,863 1,160 (861) 460 15,622 (6,802) 861 (1,109) (18) (315) (7,383) 8,239 14,511 1,255 (917) 14 14,863 908 19 (39) 96 984 (429) 39 (69) — (44) (503) 481 490 407 (3) 14 908 Goodwill £m 4,718 — — 19 4,737 Internally generated software £m 7,180 1,047 (774) 174 7,627 Intangible assets Other software £m Customer lists £m Licences and other £m 626 18 (36) 12 620 1,431 76 (12) 159 1,654 (825) (3,884) (364) (1,300) 12 (44) — (143) (1,475) 179 1,419 — (5) 17 1,431 — — — — (825) 3,912 4,716 — — 2 4,718 774 (946) (18) (121) (4,195) 3,432 7,247 842 (894) (15) 7,180 (825) (3,779) — — — — (825) 3,893 894 (867) (127) (5) (3,884) 3,296 36 (50) — (7) (385) 235 639 6 (15) (4) 626 (328) 15 (51) — — (364) 262 (1,252) (379) (6,563) 5 (36) — (17) (1,300) 131 3 (44) — (9) (429) 479 917 (998) (127) (31) (6,802) 8,061 Goodwill Goodwill and Intangible assets are allocated to business operations according to business segments as follows: Barclays UK Barclays International Head Office Total 2022 Goodwill Intangibles £m 3,560 310 42 3,912 £m 1,263 3,062 2 4,327 Total £m 4,823 3,372 44 8,239 2021 Goodwill Intangibles £m 3,560 291 42 3,893 £m 1,233 2,930 5 4,168 Total £m 4,793 3,221 47 8,061 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 475 Notes to the financial statements (continued) Assets at amortised cost and other investments Critical accounting estimates and judgements Goodwill Testing goodwill for impairment involves a significant amount of judgement. Goodwill is allocated to CGUs for the purpose of impairment testing. The review of goodwill for impairment involves calculating a value in use (VIU) valuation which is compared to the carrying value of a CGU associated with the goodwill to determine whether any impairment has occurred. This includes the identification of independent CGUs across the organisation and the allocation of goodwill to those CGUs. The calculation of a value in use contains a high degree of uncertainty in estimating the future cash flows and the rates used to discount them. Key judgements include determining the carrying value of the CGU, the cash flows and discount rates used in the calculation. ▪ The cash flow forecasts used by management involve judgement and are based upon a view of the future prospects of the business and market conditions at the point in time the assessment is prepared. The estimation of cash flows is sensitive to the periods for which detailed forecasts are available and to assumptions regarding long-term sustainable cash flows. ▪ The discount rates applied to the future cash flows also involve judgement as they can have a significant impact on the valuation. The discount rates used are compared to market participants to ensure that they are appropriate and based on an estimated cost of equity for each CGU. ▪ The choice of a terminal growth rate used to determine the present value of the future cash flows of the CGUs is also a judgement that can impact the outcome of the assessment. The terminal growth rate and discount rates used may vary due to external market rates and economic conditions that are beyond management’s control, including the potential effect of climate change. Further details of some of the key judgements are set out below. 2022 impairment review The 2022 impairment review was performed during Q4 2022. In comparison to the prior year, there is an expectation of an increasing interest rate environment which would impact favourably on the Barclays UK CGUs. A detailed assessment has been performed, with the approach and results of this analysis set out below. Determining the carrying value of CGUs The carrying value for each CGU is the sum of the tangible equity, goodwill and intangible asset balances associated with that CGU. The Group manages the assets and liabilities of its CGUs with reference to the tangible equity of the respective businesses. That tangible equity is derived from the level of risk weighted assets (RWAs) and capital required to be deployed in the CGU and therefore reflects its relative risk, as well as the level of capital that management consider a market participant would be required to hold and retain to support business growth. The goodwill held across the Group has been allocated to the CGU where it originated, based upon historical records. The intangible asset balances are allocated to the CGUs based upon their expected usage of these assets. Cash flows The five-year cash flows used in the calculation are based on the formally agreed medium-term plans approved by the Board. These are prepared using macroeconomic assumptions which management consider reasonable and supportable, and reflect business agreed initiatives for the forecast period. The macroeconomic assumptions underpinning the medium term plan were determined in August 2022 and management has considered whether there are subsequent significant changes in those assumptions which would adversely impact the results of the impairment review. As required by IAS 36, all estimates of future cash flows exclude cash inflows or outflows that are expected to arise from restructuring initiatives where a constructive obligation to carry out the plan does not yet exist. In line with prior year treatment, the Education, Social Housing and Local Authority (ESHLA) portfolio has been excluded from the Business Banking CGU cash flows. This is a legacy loan portfolio which was previously within the Non-Core bank and was not part of the business to which the goodwill relates. As such, the cash flows relating to this portfolio have been excluded from the Business Banking VIU calculation. Discount rates IAS 36 requires that the discount rate used in a value in use calculation reflects the pre-tax rate an investor would require if they were to choose an investment that would generate similar cash flows to those that the entity expects to generate from the asset. In determining the discount rate, management have in previous years identified the cost of equity associated with market participants that closely resemble the Group's CGUs and adjusted them for tax to arrive at the pre-tax equivalent rate. This method assumed a static rate of tax that was applicable to the pre-tax cash flows of the CGU. The cost of equity without adjusting for the tax rate has been used as the discount rate in the 2022 impairment assessment and applied to the post tax cash flows of the CGU. This post-tax method incorporates the impact of changing tax rates on the cash flows and is expected to produce the same VIU result as the pre-tax method adjusted for varying tax rates. Using the resultant VIU the equivalent pre-tax discount rate has been calculated. The range of equivalent pre-tax discount rates applicable across the CGUs range from 14.1% to 16.5% (2021: 12.5% to 15.1%). Terminal growth rate The terminal growth rate is used to estimate the effect of projecting cash flows to the end of an asset’s useful economic life. It is management’s judgement that the cash flows associated with the CGUs will grow in line with the major economies in which the Group operates. Inflation rates are used as an approximation of future growth rates and form the basis of the terminal growth rates applied. The terminal growth rate used is 2.0% (2021: 2.0%). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 476 Notes to the financial statements (continued) Assets at amortised cost and other investments Outcome of goodwill and intangibles review The Personal Banking and Business Banking CGUs carry the majority of the Group’s goodwill balance, predominantly as a consequence of the Woolwich acquisition. The goodwill within Personal Banking was £2,752m (2021: £2,752m), of which £2,501m (2021: £2,501m) was attributable to Woolwich, and within Business Banking was £629m (2021: £629m), fully attributable to Woolwich. The recoverable amount for both Personal Banking and Business Banking have increased in comparison to the 2021 impairment review, reflective of improvements in the interest rate and macroeconomic outlook. The largest portion of the Group’s intangible assets sit within the Cards and Payments CGU, part of Barclays International with an allocation of £1,531m (2021: £1,351m). Based on management’s plans and assumptions the value in use exceeds the carrying value of the CGUs and no impairment has been indicated. The outcome of the impairment review for Personal Banking, Business Banking and Cards and Payments are set out below: Cash generating unit Tangible equity Goodwill Intangibles Carrying value Value in use Value in use exceeding carrying value Value in use exceeding carrying value 2021 Personal Banking Business Banking Cards and Payments Total £m 5,091 1,549 3,780 10,420 £m 2,752 629 229 3,610 £m 928 216 1,531 2,675 £m 8,771 2,394 5,540 16,705 £m 13,438 9,017 7,138 29,593 £m 4,667 6,623 1,598 12,888 £m 1,489 3,623 1,025 6,137 Sensitivity of key judgements The CGUs are sensitive to possible adverse changes in the key assumptions that support the recoverable amount: Cash flows: The medium-term plans used to determine the cash flows used in the VIU calculation rely on macroeconomic forecasts, including interest rates, GDP and unemployment, and forecast levels of market and client activity. Interest rate assumptions impact planned cash flows from both customer income and structural hedge contributions and therefore cash flow expectations are highly sensitive to movements in the yield curve. The cash flows also contain assumptions with regard to the prudential and financial conduct regulatory environment which may be subject to change. Given the current level of economic uncertainty, a 10% reduction in cash flows has been provided to show the sensitivity of the outcome to a change in these key assumptions. Discount rate: The discount rate should reflect the market risk-free rate adjusted for the inherent risks of the business it is applied to. Management have identified discount rates for comparable businesses and consider these to be a reasonable estimate of a suitable market rate for the profile of the business unit being tested. The risk that these discount rates may not be appropriate is quantified below and shows the impact of a 100 bps change in the discount rate. Terminal growth rate: The terminal growth rate is used to estimate the cash flows into perpetuity based on the expected longevity of the CGUs' businesses. The terminal growth rate is sensitive to uncertainties in the macroeconomic environment. The risk that using inflation data may not be appropriate for its determination is quantified below and shows the impact of 100 bps change in the terminal growth rate. Allocated capital rate: Tangible equity is allocated based on the level of risk weighted assets (RWAs) and capital required to be deployed in the CGU which is dependent on the relative risk of businesses. The capital ratio used in determining the level of tangible equity allocated to the CGU and its capital cash flows could move over time. The impact of a 50bps increase in capital ratio is quantified below. The sensitivity of the value in use to key judgements in the calculations is set out below: Reduction in headroom Change required to reduce headroom to zero Cash generating unit Carrying value Value in use Value in use exceeding carrying value Discount rate Terminal growth rate 100 bps increase in the discount rate 100 bps decrease in terminal growth rate 50 bps increase to allocated capital rate 10% reduction in forecasted cash flows Discount rate Terminal growth rate Allocated capital rate £m £m £m Personal Banking 8,771 13,438 4,667 Cards and Payments 5,540 7,138 1,598 Total 14,311 20,576 6,265 % 16.5 15.9 % 2.0 2.0 £m £m £m £m (944) (596) (279) (1,493) (724) (515) (287) (1,005) % 6.9 2.5 % (14.8) (3.7) % 8.4 2.8 Cash flows % (31.3) (15.9) Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 477 Notes to the financial statements (continued) Accruals, provisions, contingent liabilities and legal proceedings Accruals, provisions, contingent liabilities and legal proceedings The notes included in this section focus on the Group’s accruals, provisions and contingent liabilities. Provisions are recognised for present obligations arising as consequences of past events where it is probable that a transfer of economic benefit will be necessary to settle the obligation, and it can be reliably estimated. Contingent liabilities reflect potential liabilities that are not recognised on the balance sheet. 23 Other liabilities Accruals and deferred income Other creditors Items in the course of collection due to other banks Lease liabilities (refer to Note 21) Liabilities included in disposal groups classified as held for sale Other liabilities 2022 £m 4,618 7,870 85 1,216 — 2021 £m 4,173 4,793 202 1,317 20 13,789 10,505 24 Provisions Accounting for provisions The Group applies IAS 37 Provisions, Contingent Liabilities and Contingent Assets in accounting for non-financial liabilities. Provisions are recognised for present obligations arising as consequences of past events where it is more likely than not that a transfer of economic benefit will be necessary to settle the obligation, which can be reliably estimated. Provision is made for the anticipated cost of restructuring, including redundancy costs, when an obligation exists; for example, when the Group has a detailed formal plan for restructuring a business and has raised valid expectations in those affected by the restructuring by announcing its main features or starting to implement the plan. Critical accounting estimates and judgements The financial reporting of provisions involves a significant degree of judgement and is complex. Identifying whether a present obligation exists and estimating the probability, timing, nature and quantum of the outflows that may arise from past events requires judgements to be made based on the specific facts and circumstances relating to individual events and often requires specialist professional advice. When matters are at an early stage, accounting judgements and estimates can be difficult because of the high degree of uncertainty involved. Management continues to monitor matters as they develop to re-evaluate on an ongoing basis whether provisions should be recognised, however there can remain a wide range of possible outcomes and uncertainties, particularly in relation to legal, competition and regulatory matters, and as a result it is often not practicable to make meaningful estimates even when matters are at a more advanced stage. The complexity of such matters often requires the input of specialist professional advice in making assessments to produce estimates. Customer redress and legal, competition and regulatory matters are areas where a higher degree of professional judgement is required. The amount that is recognised as a provision can also be very sensitive to the assumptions made in calculating it. This gives rise to a large range of potential outcomes which require judgement in determining an appropriate provision level. See Note 26 for more detail of legal, competition and regulatory matters. As at 1 January 2022 Additions Amounts utilised Unused amounts reversed Exchange and other movements As at 31 December 2022 Restatedb Restatedb Onerous contracts Redundancy and restructuring £m 5 — (2) (3) — — £m 326 77 (186) (88) 7 136 Undrawn contractually committed facilities and guaranteesa £m 542 145 — Customer redress £m 530 1,184 (1,393) (128) (94) 24 583 151 378 Legal, competition and regulatory matters Sundry provisions £m 226 462 (557) (15) 43 159 £m 279 120 (60) (64) 13 288 Total £m 1,908 1,988 (2,198) (392) 238 1,544 Notes a Undrawn contractually committed facilities and guarantees provisions are accounted for under IFRS 9. b 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details. Provisions expected to be recovered or settled within no more than 12 months after 31 December 2022 were £1,348m (2021: £1,754m). Onerous contracts Onerous contract provisions comprise an estimate of unavoidable costs involved with fulfilling the terms and conditions of contracts net of any expected benefits to be received. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 478 Notes to the financial statements (continued) Accruals, provisions, contingent liabilities and legal proceedings Redundancy and restructuring These provisions comprise the estimated cost of restructuring, including redundancy costs where an obligation exists. Additions made during the year relate to formal restructuring plans and have either been utilised, or reversed where total costs are now expected to be lower than the original provision amount. Undrawn contractually committed facilities and guarantees Impairment allowance under IFRS 9 considers both the drawn and the undrawn counterparty exposure. For retail portfolios, the total impairment allowance is allocated to the drawn exposure to the extent that the allowance does not exceed the exposure as ECL is not reported separately. Any excess is reported on the liability side of the balance sheet as a provision. For wholesale portfolios, the impairment allowance on the undrawn exposure is reported on the liability side of the balance sheet as a provision. For further information, refer to the Credit risk section for loan commitments and financial guarantees on page 308. Customer redress Customer redress provisions comprise the estimated cost of making redress payments to customers, clients and counterparties for losses or damages associated with inappropriate judgement in the execution of the Group’s business activities. Legal, competition and regulatory matters The Group is engaged in various legal proceedings, both in the UK and a number of other overseas jurisdictions, including the US. For further information in relation to legal proceedings and discussion of the associated uncertainties, refer to Note 26. Sundry provisions This category includes provisions that do not fit into any of the other categories, such as fraud losses and dilapidation provisions. 25 Contingent liabilities and commitments Accounting for contingent liabilities Contingent liabilities are possible obligations whose existence will be confirmed only by uncertain future events and present obligations where the transfer of economic resources is uncertain or cannot be reliably measured. Contingent liabilities are not recognised on the balance sheet but are disclosed unless the likelihood of an outflow of economic resources is remote. The following table summarises the nominal principal amount of contingent liabilities and commitments which are not recorded on- balance sheet: Guarantees and letters of credit pledged as collateral security Performance guarantees, acceptances and endorsements Total contingent liabilities and financial guarantees Of which: Financial guarantees carried at fair value Documentary credits and other short-term trade related transactions Standby facilities, credit lines and other commitments Total commitments Of which: Loan commitments carried at fair value 2022 £m 17,760 6,445 24,205 1,423 1,748 393,760 395,508 13,471 2021 £m 15,549 5,797 21,346 231 1,584 344,127 345,711 18,571 Provisions for expected credit losses held against contingent liabilities and commitments equal £583m (2021: £542m) and are reported in Note 24. Further details on contingent liabilities relating to legal and competition and regulatory matters can be found in Note 26. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 479 Notes to the financial statements (continued) Accruals, provisions, contingent liabilities and legal proceedings 26 Legal, competition and regulatory matters The Group faces legal, competition and regulatory challenges, many of which are beyond our control. The extent of the impact of these matters cannot always be predicted but may materially impact our operations, financial results, condition and prospects. Matters arising from a set of similar circumstances can give rise to either a contingent liability or a provision, or both, depending on the relevant facts and circumstances. The recognition of provisions in relation to such matters involves critical accounting estimates and judgments in accordance with the relevant accounting policies applicable to Note 24, Provisions. We have not disclosed an estimate of the potential financial impact or effect on the Group of contingent liabilities where it is not currently practicable to do so. Various matters detailed in this note seek damages of an unspecified amount. While certain matters specify the damages claimed, such claimed amounts do not necessarily reflect the Group’s potential financial exposure in respect of those matters. Matters are ordered under headings corresponding to the financial statements in which they are disclosed. 1. Barclays PLC and Barclays Bank PLC Investigations into certain advisory services agreements FCA proceedings In 2008, Barclays Bank PLC and Qatar Holdings LLC entered into two advisory service agreements (the Agreements). The Financial Conduct Authority (FCA) conducted an investigation into whether the Agreements may have related to Barclays PLC’s capital raisings in June and November 2008 (the Capital Raisings) and therefore should have been disclosed in the announcements or public documents relating to the Capital Raisings. In 2013, the FCA issued warning notices (the Warning Notices) finding that Barclays PLC and Barclays Bank PLC acted recklessly and in breach of certain disclosure-related listing rules, and that Barclays PLC was also in breach of Listing Principle 3. The financial penalty provided in the Warning Notices was £50m. Barclays PLC and Barclays Bank PLC contested the findings. In September 2022, the FCA’s Regulatory Decisions Committee (RDC) issued Decision Notices finding that Barclays PLC and Barclays Bank PLC breached certain disclosure-related listing rules. The RDC also found that in relation to the disclosures made in the Capital Raising of November 2008, Barclays PLC and Barclays Bank PLC acted recklessly, and that Barclays PLC breached Listing Principle 3. The RDC upheld the combined penalty of £50m on Barclays PLC and Barclays Bank PLC, the same penalty as in the Warning Notices. Barclays PLC and Barclays Bank PLC have referred the RDC’s findings to the Upper Tribunal for reconsideration. Investigations into LIBOR and other benchmarks and related civil actions Regulators and law enforcement agencies, including certain competition authorities, from a number of governments have conducted investigations relating to Barclays Bank PLC’s involvement in allegedly manipulating certain financial benchmarks, such as LIBOR. Various individuals and corporates in a range of jurisdictions have threatened or brought civil actions against the Group and other banks in relation to the alleged manipulation of LIBOR and/or other benchmarks. USD LIBOR civil actions The majority of the USD LIBOR cases, which have been filed in various US jurisdictions, have been consolidated for pre-trial purposes in the US District Court in the Southern District of New York (SDNY). The complaints are substantially similar and allege, among other things, that Barclays PLC, Barclays Bank PLC, Barclays Capital Inc. (BCI) and other financial institutions individually and collectively violated provisions of the US Sherman Antitrust Act (Antitrust Act), the US Commodity Exchange Act (CEA), the US Racketeer Influenced and Corrupt Organizations Act (RICO), the US Securities Exchange Act of 1934 and various state laws by manipulating USD LIBOR rates. Putative class actions and individual actions seek unspecified damages with the exception of one lawsuit, in which the plaintiffs are seeking no less than $100m in actual damages and additional punitive damages against all defendants, including Barclays Bank PLC. Some of the lawsuits also seek trebling of damages under the Antitrust Act and RICO. Barclays Bank PLC has previously settled certain claims. In 2022, Barclays Bank PLC also settled one further matter. The financial impact of the settlement is not material to the Group’s operating results, cash flows or financial position. Sterling LIBOR civil actions In 2016, two putative class actions filed in the SDNY against Barclays Bank PLC, BCI and other Sterling LIBOR panel banks alleging, among other things, that the defendants manipulated the Sterling LIBOR rate in violation of the Antitrust Act, CEA and RICO, were consolidated. The defendants’ motion to dismiss the claims was granted in 2018. The plaintiffs have appealed the dismissal. Japanese Yen LIBOR civil actions In 2012, a putative class action was filed in the SDNY against Barclays Bank PLC and other Japanese Yen LIBOR panel banks by a lead plaintiff involved in exchange-traded derivatives and members of the Japanese Bankers Association’s Euroyen Tokyo Interbank Offered Rate (Euroyen TIBOR) panel. The complaint alleges, among other things, manipulation of the Euroyen TIBOR and Yen LIBOR rates and breaches of the CEA and the Antitrust Act. In 2014, the court dismissed the plaintiff’s antitrust claims, and in 2020, the court dismissed the plaintiff’s remaining CEA claims. In 2015, a second putative class action, making similar allegations to the above class action, was filed in the SDNY against Barclays PLC, Barclays Bank PLC and BCI. Barclays and the plaintiffs have reached a settlement of $17.75m for both actions. A final court approval hearing has been scheduled for March 2023. SIBOR/SOR civil action In 2016, a putative class action was filed in the SDNY against Barclays PLC, Barclays Bank PLC, BCI and other defendants, alleging manipulation of the Singapore Interbank Offered Rate (SIBOR) and Singapore Swap Offer Rate (SOR). The plaintiffs and remaining defendants (which includes Barclays Bank PLC) reached a joint settlement to resolve this matter for $91m, which received final court Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 480 Notes to the financial statements (continued) Accruals, provisions, contingent liabilities and legal proceedings approval in November 2022. This matter is now concluded. The financial impact of Barclays’ share of the joint settlement is not material to the Group’s operating results, cash flows or financial position. ICE LIBOR civil actions In 2019, several putative class actions were filed in the SDNY against a panel of banks, including Barclays PLC, Barclays Bank PLC, BCI, other financial institution defendants and Intercontinental Exchange Inc. and certain of its affiliates (ICE), asserting antitrust claims that the defendants manipulated USD LIBOR through the defendants’ submissions to ICE. These actions have been consolidated. The defendants’ motion to dismiss was granted in 2020 and the plaintiffs appealed. In February 2022, the dismissal was affirmed on appeal. The plaintiffs did not seek US Supreme Court review. This matter is now concluded. In August 2020, an ICE LIBOR-related action was filed by a group of individual plaintiffs in the US District Court for the Northern District of California on behalf of individual borrowers and consumers of loans and credit cards with variable interest rates linked to USD ICE LIBOR. The plaintiffs’ motion seeking, among other things, preliminary and permanent injunctions to enjoin the defendants from continuing to set LIBOR or enforce any financial instrument that relies in whole or in part on USD LIBOR was denied. The defendants’ motion to dismiss the case was granted in September 2022. The plaintiffs have filed an amended complaint, which the defendants have moved to dismiss. Non-US benchmarks civil actions There remains one claim, issued in 2017, against Barclays Bank PLC and other banks in the UK in connection with alleged manipulation of LIBOR. Proceedings have also been brought in a number of other jurisdictions in Europe, Argentina and Israel relating to alleged manipulation of LIBOR and EURIBOR. Additional proceedings in other jurisdictions may be brought in the future. Credit Default Swap civil action A putative antitrust class action is pending in New Mexico federal court against Barclays Bank PLC, BCI and various other financial institutions. The plaintiffs, the New Mexico State Investment Council and certain New Mexico pension funds, allege that the defendants conspired to manipulate the benchmark price used to value Credit Default Swap (CDS) contracts at settlement (i.e. the CDS final auction price). The plaintiffs allege violations of US antitrust laws and the CEA, and unjust enrichment under state law. The defendants have moved to dismiss the case. Foreign Exchange investigations and related civil actions The Group has been the subject of investigations in various jurisdictions in relation to certain sales and trading practices in the Foreign Exchange market. Settlements were reached in various jurisdictions in connection with these investigations, including the EU and US. The financial impact of any remaining ongoing investigations is not expected to be material to the Group’s operating results, cash flows or financial position. Various individuals and corporates in a range of jurisdictions have threatened or brought civil actions against the Group and other banks in relation to alleged manipulation of Foreign Exchange markets. US FX opt out civil action In 2018, Barclays Bank PLC and BCI settled a consolidated action filed in the SDNY, alleging manipulation of Foreign Exchange markets (Consolidated FX Action), for a total amount of $384m. Also in 2018, a group of plaintiffs, who opted out of the Consolidated FX Action, filed a complaint in the SDNY against Barclays PLC, Barclays Bank PLC, BCI and other defendants. Some of the plaintiffs’ claims were dismissed in 2020. Barclays PLC, Barclays Bank PLC, and BCI have reached a settlement in principle of all claims against them in the matter. The financial impact of this settlement is not material to the Group’s operating results, cash flows or financial position. US retail basis civil action In 2015, a putative class action was filed against several international banks, including Barclays PLC and BCI, on behalf of a proposed class of individuals who exchanged currencies on a retail basis at bank branches (Retail Basis Claims). The SDNY has ruled that the Retail Basis Claims are not covered by the settlement agreement in the Consolidated FX Action. The Court subsequently dismissed all Retail Basis Claims against the Group and all other defendants. The plaintiffs have filed an amended complaint. Non-US FX civil actions Legal proceedings have been brought or are threatened against Barclays PLC, Barclays Bank PLC, BCI and Barclays Execution Services Limited (BX) in connection with alleged manipulation of Foreign Exchange in the UK, a number of other jurisdictions in Europe, Israel, Brazil and Australia. Additional proceedings may be brought in the future. The above-mentioned proceedings include two purported class actions filed against Barclays PLC, Barclays Bank PLC, BX, BCI and other financial institutions in the UK Competition Appeal Tribunal (CAT) in 2019. The CAT refused to certify these claims in the first quarter of 2022 although the claimants have obtained permission to appeal and judicially review the CAT’s decisions. Also in 2019, a separate claim was filed in the UK in the High Court of Justice (High Court), and subsequently transferred to the CAT, by various banks and asset management firms against Barclays Bank PLC and other financial institutions alleging breaches of European and UK competition laws related to FX trading. This claim has been settled as part of the settlement in principle referred to under the US FX opt out civil action above. Metals-related civil actions A number of US civil complaints, each on behalf of a proposed class of plaintiffs, have been consolidated and transferred to the SDNY. The complaints allege that Barclays Bank PLC and other members of The London Gold Market Fixing Ltd. manipulated the prices of gold and gold derivative contracts in violation of the Antitrust Act and other federal laws. The parties reached a joint settlement to resolve this matter for $50m. The settlement received final court approval in August 2022. This matter is now concluded. The financial impact of Barclays’ share of the joint settlement is not material to the Group’s operating results, cash flows or financial position. A separate US civil complaint by a proposed class of plaintiffs against a number of banks, including Barclays Bank PLC, BCI and BX, alleging Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 481 Notes to the financial statements (continued) Accruals, provisions, contingent liabilities and legal proceedings manipulation of the price of silver in violation of the CEA, the Antitrust Act and state antitrust and consumer protection laws, has been dismissed as against the Barclays entities. The plaintiffs have the option to seek the court’s permission to appeal. Civil actions have also been filed in Canadian courts against Barclays PLC, Barclays Bank PLC, Barclays Capital Canada Inc. and BCI on behalf of proposed classes of plaintiffs alleging manipulation of gold and silver prices. US residential mortgage related civil actions There are two pending US Residential Mortgage-Backed Securities (RMBS) related civil actions arising from unresolved repurchase requests submitted by Trustees for certain RMBS, alleging breaches of various loan-level representations and warranties (R&Ws) made by Barclays Bank PLC and/or a subsidiary acquired in 2007. In one action, the Barclays defendants’ motion for summary judgment was granted in June 2022 and the plaintiffs’ R&W breach claim was dismissed. The plaintiffs are appealing the decision. The other repurchase action is pending. Barclays Bank PLC reached settlements to resolve two other repurchase actions, which have received final court approval. Payment of the settlement amounts was completed in July 2022. These matters are now concluded. The financial impact of the settlements is not material to the Group’s operating results, cash flows or financial position. In 2020, a civil litigation claim was filed in the New Mexico First Judicial District Court by the State of New Mexico against six banks, including BCI, on behalf of two New Mexico state pension funds and the New Mexico State Investment Council relating to legacy RMBS purchases. As to BCI, the complaint alleges that the funds purchased approximately $22m in RMBS underwritten by BCI. The parties have reached a joint settlement to resolve this matter for $32.5m. The settlement was paid in April 2022. The financial impact of BCI’s share of the joint settlement is not material to the Group’s operating results, cash flows or financial position. Government and agency securities civil actions Treasury auction securities civil actions Consolidated putative class action complaints filed in US federal court against Barclays Bank PLC, BCI and other financial institutions under the Antitrust Act and state common law allege that the defendants (i) conspired to manipulate the US Treasury securities market and/or (ii) conspired to prevent the creation of certain platforms by boycotting or threatening to boycott such trading platforms. The court dismissed the consolidated action in March 2021. The plaintiffs filed an amended complaint. The defendants’ motion to dismiss the amended complaint was granted in March 2022. The plaintiffs are appealing this decision. In addition, certain plaintiffs have filed a related, direct action against BCI and certain other financial institutions, alleging that defendants conspired to fix and manipulate the US Treasury securities market in violation of the Antitrust Act, the CEA and state common law. Supranational, Sovereign and Agency bonds civil actions Civil antitrust actions have been filed in the SDNY and Federal Court of Canada in Toronto against Barclays Bank PLC, BCI, BX, Barclays Capital Securities Limited and, with respect to the civil action filed in Canada only, Barclays Capital Canada, Inc. and other financial institutions alleging that the defendants conspired to fix prices and restrain competition in the market for US dollar-denominated Supranational, Sovereign and Agency bonds. In one of the actions filed in the SDNY, the court granted the defendants’ motion to dismiss the plaintiffs’ complaint. The dismissal was affirmed on appeal; however, the district court subsequently informed the parties of a potential conflict. The matter was assigned to a new district court judge and the plaintiffs moved to vacate the dismissal order, which was denied. The plaintiffs’ time to appeal has expired and this matter is now concluded. The plaintiffs have voluntarily dismissed the other SDNY action. In the Federal Court of Canada action, the parties have reached a settlement in principle, which will require court approval. The financial impact of the settlement is not expected to be material to the Group’s operating results, cash flows or financial position. Variable Rate Demand Obligations civil actions Civil actions have been filed against Barclays Bank PLC and BCI and other financial institutions alleging the defendants conspired or colluded to artificially inflate interest rates set for Variable Rate Demand Obligations (VRDOs). VRDOs are municipal bonds with interest rates that reset on a periodic basis, most commonly weekly. Two actions in state court have been filed by private plaintiffs on behalf of the states of Illinois and California. Three putative class action complaints have been consolidated in the SDNY. In the consolidated SDNY class action, certain of the plaintiffs' claims were dismissed in November 2020 and June 2022. In the California action, the plaintiffs’ claims were dismissed in June 2021. The plaintiffs have appealed the dismissal. In the Illinois action, trial has been scheduled for August 2023. Odd-lot corporate bonds antitrust class action In 2020, BCI, together with other financial institutions, were named as defendants in a putative class action. The complaint alleges a conspiracy to boycott developing electronic trading platforms for odd-lots and price fixing. The plaintiffs demand unspecified money damages. The defendants’ motion to dismiss was granted in 2021 and the plaintiffs have appealed the dismissal. Interest rate swap and credit default swap US civil actions Barclays PLC, Barclays Bank PLC and BCI, together with other financial institutions that act as market makers for interest rate swaps (IRS), are named as defendants in several antitrust class actions which were consolidated in the SDNY in 2016. The complaints allege the defendants conspired to prevent the development of exchanges for IRS and demand unspecified money damages. In 2018, trueEX LLC filed an antitrust class action in the SDNY against a number of financial institutions including Barclays PLC, Barclays Bank PLC and BCI based on similar allegations with respect to trueEX LLC’s development of an IRS platform. In 2017, Tera Group Inc. filed a separate civil antitrust action in the SDNY claiming that certain conduct alleged in the IRS cases also caused the plaintiff to suffer harm with respect to the Credit Default Swaps market. In 2018 and 2019, respectively, the court dismissed certain claims in both cases for unjust enrichment and tortious interference but denied motions to dismiss the federal and state antitrust claims, which remain pending. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 482 Notes to the financial statements (continued) Accruals, provisions, contingent liabilities and legal proceedings BDC Finance L.L.C. In 2008, BDC Finance L.L.C. (BDC) filed a complaint in the Supreme Court of the State of New York (NY Supreme Court), demanding damages of $298m, alleging that Barclays Bank PLC had breached a contract in connection with a portfolio of total return swaps governed by an ISDA Master Agreement (the Master Agreement). Following a trial, the court ruled in 2018 that Barclays Bank PLC was not a defaulting party, which was affirmed on appeal. In April 2021, the trial court entered judgement in favour of Barclays Bank PLC for $3.3m and as yet to be determined legal fees and costs. BDC appealed. In January 2022, the appellate court reversed the trial court’s summary judgment decision in favour of Barclays Bank PLC and remanded the case to the lower court for further proceedings. The parties have filed cross-motions on the scope of trial. The trial has been adjourned pending a decision on the motions and any subsequent appeal. In 2011, BDC’s investment advisor, BDCM Fund Adviser, LLC and its parent company, Black Diamond Capital Holdings, LLC, also sued Barclays Bank PLC and BCI in Connecticut State Court for unspecified damages allegedly resulting from Barclays Bank PLC’s conduct relating to the Master Agreement, asserting claims for violation of the Connecticut Unfair Trade Practices Act and tortious interference with business and prospective business relations. This case is currently stayed. Civil actions in respect of the US Anti-Terrorism Act There are a number of civil actions, on behalf of more than 4,000 plaintiffs, filed in US federal courts in the US District Court in the Eastern District of New York (EDNY) and SDNY against Barclays Bank PLC and a number of other banks. The complaints generally allege that Barclays Bank PLC and those banks engaged in a conspiracy to facilitate US dollar-denominated transactions for the Iranian Government and various Iranian banks, which in turn funded acts of terrorism that injured or killed the plaintiffs or the plaintiffs’ family members. The plaintiffs seek to recover damages for pain, suffering and mental anguish under the provisions of the US Anti-Terrorism Act, which allow for the trebling of any proven damages. The court granted the defendants’ motions to dismiss three out of the six actions in the EDNY. The plaintiffs appealed in one action and the dismissal was affirmed in January 2023. The remaining EDNY actions are stayed. Out of the two actions in the SDNY, the court granted the defendants’ motion to dismiss the first action. That action is stayed, and the second SDNY action is stayed pending any appeal on the dismissal of the first. Shareholder derivative action In November 2020, a purported Barclays shareholder filed a putative derivative action in New York state court against BCI and a number of current and former members of the Board of Directors of Barclays PLC and senior executives or employees of the Group. The shareholder filed the claim on behalf of nominal defendant Barclays PLC, alleging that the individual defendants harmed the company through breaches of their duties, including under the Companies Act 2006. The plaintiff seeks damages on behalf of Barclays PLC for the losses that Barclays PLC allegedly suffered as a result of these alleged breaches. An amended complaint was filed in April 2021, which BCI and certain other defendants moved to dismiss. The motion to dismiss was granted in April 2022. The plaintiff is appealing the decision. Derivative transactions civil action In 2021, Vestia, a Dutch housing association, brought a claim against Barclays Bank PLC in the UK in the High Court in relation to a series of derivative transactions entered into with Barclays Bank PLC between 2008 and 2011, seeking damages of £329m. Barclays Bank PLC is defending the claim and has made a counterclaim. Timeshare loans, skilled person review, and associated matters In August 2020, the FCA granted an application by Clydesdale Financial Services Limited (CFS), which trades as Barclays Partner Finance and houses Barclays’ point-of-sale finance business, for a validation order with respect to certain loans to customers brokered between April 2014 and April 2016 by Azure Services Limited (ASL), a timeshare operator, which did not, at the point of sale, hold the necessary broker licence. As a condition to the validation order, the FCA required CFS to undertake a skilled person review of the assessment of affordability processes for the loans brokered by ASL (ASL Loans) as well as CFS’ policies and procedures for assessing affordability and oversight of brokers more generally, and dictated a remediation methodology in the event that ASL Loans did not pass the affordability test. The skilled person made a number of observations, some of which were adverse, about both current and historic affordability practices as well as current oversight practices. CFS is not required to conduct a full back book review but, following a review of certain cohorts of loans to determine historic affordability and/or broker oversight practices that may have caused customer harm, where harm is identified, CFS’ intention is to remediate. To date, CFS has identified a number of areas for remediation, but the scoping exercise is ongoing and remediation will only begin once the scoping exercise is complete. As at 31 December 2022, CFS booked a provision in respect of the expected remediation for these matters of £10.4m. Separately, and notwithstanding this, CFS decided in March 2022 to extend the proactive remediation of ASL Loans beyond those brokered between April 2014 and April 2016 to include the full portfolio of ASL Loans brokered between 2006 and 2018. In the first quarter of 2022, an additional customer remediation provision was recognised in relation to the remediation of the ASL Loans originated outside the April 2014 to April 2016 period. As at 31 December 2022, the provision recognised in relation to this matter by CFS is £183m. Remediation of the full portfolio of ASL Loans started in October 2022 and is expected to be completed in 2023. In addition, CFS completed a review of all other legacy timeshare retailers during 2022. No concerns were identified in relation to the majority of those retailers, but where concerns were identified, CFS’ intention is to remediate. As at 31 December 2022, the provision recognised in relation to this matter by CFS is £96m. Over-issuance of Securities in the US Barclays Bank PLC maintains a US shelf registration statement with the US Securities and Exchange Commission (SEC) in order to issue securities to US investors. In May 2017, Barclays Bank PLC lost its status as a “well-known seasoned issuer” (or WKSI) as a result of an SEC settlement order involving BCI. Due to its loss of WKSI status, Barclays Bank PLC was required to register a specified amount of Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 483 Notes to the financial statements (continued) Accruals, provisions, contingent liabilities and legal proceedings securities to be issued under certain US shelf registration statements filed with the SEC. In March 2022, executive management became aware that Barclays Bank PLC had issued securities materially in excess of the set amount under its 2019 US shelf registration statement and subsequently became aware that securities had also been issued in excess of the set amount under the predecessor US shelf registration statement. The securities that were over-issued included structured notes and exchange traded notes (ETNs). Securities issued in excess of the amount registered were considered to be “unregistered securities” for the purposes of US securities laws, with certain purchasers of those securities having a right to recover, upon the tender of such security to Barclays Bank PLC, the consideration paid for such security with interest, less the amount of any income received, or to recover damages from Barclays Bank PLC if the purchaser sold the security at a loss (the Rescission Price). Barclays Bank PLC commenced its rescission offer on 1 August 2022, by which Barclays Bank PLC offered to repurchase the relevant affected securities for the Rescission Price (the Rescission Offer). The Rescission Offer expired on 12 September 2022. In September 2022, the SEC announced the resolution of its investigation of Barclays PLC and Barclays Bank PLC relating to the over- issuance of securities by Barclays Bank PLC under certain of its US shelf registration statements. Pursuant to the terms of the resolution, Barclays PLC and Barclays Bank PLC paid in the fourth quarter of 2022 a combined penalty of $200m (£165ma), without admitting or denying the SEC’s findings. The SEC found that the independent Rescission Offer made by Barclays Bank PLC to holders of the relevant over-issued securities satisfied its requirements for disgorgement and related prejudgment interest. The Group is engaged with, and responding to inquiries and requests for information from, various other regulators who may seek to impose fines, penalties and/or other sanctions as a result of this matter. Furthermore, Barclays Bank PLC and/or its affiliates may incur costs and liabilities in relation to private civil claims which have been filed and may face other potential private civil claims, class actions or other enforcement actions in relation to this matter. By way of example, in September 2022, a purported class action claim was filed in the US District Court in Manhattan seeking to hold Barclays PLC and former and current executives responsible for declines in the prices of its American depositary receipts, which the plaintiffs claim occurred as a result of alleged misstatements and omissions in its public disclosures; and in February 2023, a claim was brought in a New York federal court by holders of a series of ETNs alleging that Barclays' failure to disclose that these ETNs were unregistered securities misled investors and that, as a result, Barclays is liable for the holders' alleged losses following the suspension of further sales and issuances of such series of ETNs. Following completion of the rescission offer on 12 September 2022, Barclays utilised a provision of £1,008m in settlement of valid structured note claims and paid a monetary penalty of $200m (£165m1) to the SEC. A contingent liability exists in relation to civil claims or any further enforcement actions taken against Barclays Bank PLC and/or its affiliates, but Barclays Bank PLC is unable to assess the likelihood of liabilities that may arise out of such claims or actions. Any liabilities, claims or actions in connection with the over-issuance of securities under Barclays Bank PLC’s US shelf registration statements could have an adverse effect on the Group’s business, financial condition, results of operations and reputation as a frequent issuer in the securities markets. Exchange rate USD/GBP 1.22 as at 30 June 2022. Note a Investigation into the use of unapproved communications platforms In September 2022, the SEC and the Commodity Futures Trading Commission (CFTC) announced settlements with a number of financial institutions, including Barclays Bank PLC and BCI, of financial industry-wide investigations regarding compliance with record- keeping obligations in connection with business-related communications sent over unapproved electronic messaging platforms. The SEC and the CFTC found that Barclays Bank PLC and BCI failed to comply with their respective record-keeping rules, where such communications were sent or received by employees over electronic messaging platforms that had not been approved by the bank for business use by employees. As part of the settlement, in the third quarter of 2022, Barclays Bank PLC and BCI paid a combined $125m civil monetary penalty to the SEC and a $75m civil monetary penalty to the CFTC. There are also non-financial components to the settlements, including the retention of an independent compliance consultant and certain ongoing undertakings. This matter is now concluded. 2. Barclays PLC, Barclays Bank PLC and Barclays Bank UK PLC HM Revenue & Customs (HMRC) assessments concerning UK Value Added Tax In 2018, HMRC issued notices that have the effect of removing certain overseas subsidiaries that have operations in the UK from Barclays’ UK VAT group, in which group supplies between members are generally free from VAT. The notices have retrospective effect and correspond to assessments of £181m (inclusive of interest), of which Barclays would expect to attribute an amount of approximately £128m to Barclays Bank UK PLC and £53m to Barclays Bank PLC. HMRC’s decision has been appealed to the First Tier Tribunal (Tax Chamber). Local authority civil actions concerning LIBOR Following settlement by Barclays Bank PLC of various governmental investigations concerning certain benchmark interest rate submissions referred to above in ‘Investigations into LIBOR and other benchmarks and related civil actions’, in the UK, certain local authorities brought claims in 2018 against Barclays Bank PLC and Barclays Bank UK PLC asserting that they entered into loans between 2006 and 2008 in reliance on misrepresentations made by Barclays Bank PLC in respect of its conduct in relation to LIBOR. Barclays Bank PLC and Barclays Bank UK PLC were successful in their applications to strike out the claims. The claims have been settled on terms such that the parties have agreed not to pursue these claims further and to bear their own costs. The financial impact of the settlements is not material to the Group's operating results, cash flows or financial position. FCA investigation into transaction monitoring The FCA has been investigating Barclays’ compliance with UK money laundering regulations and the FCA’s rules and Principles for Businesses in an investigation which is focussed on aspects of Barclays’ transaction monitoring in relation to certain business lines now in Barclays Bank UK PLC. Barclays has been co-operating with the investigation and responding to information requests. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 484 Notes to the financial statements (continued) Accruals, provisions, contingent liabilities and legal proceedings 3. Barclays PLC Alternative trading systems In 2020, a claim was brought against Barclays PLC in the UK in the High Court by various shareholders regarding Barclays PLC’s share price based on the allegations contained within a complaint by the New York State Attorney General (NYAG) in 2014. Such claim was settled in 2016, as previously disclosed. The more recent claim seeks unquantified damages and Barclays is defending the claim. The NYAG complaint was filed against Barclays PLC and BCI in the NY Supreme Court alleging, among other things, that Barclays PLC and BCI engaged in fraud and deceptive practices in connection with LX, BCI’s SEC-registered alternative trading system. General The Group is engaged in various other legal, competition and regulatory matters in the UK, the US and a number of other overseas jurisdictions. It is subject to legal proceedings brought by and against the Group which arise in the ordinary course of business from time to time, including (but not limited to) disputes in relation to contracts, securities, debt collection, consumer credit, fraud, trusts, client assets, competition, data management and protection, intellectual property, money laundering, financial crime, employment, environmental and other statutory and common law issues. The Group is also subject to enquiries and examinations, requests for information, audits, investigations and legal and other proceedings by regulators, governmental and other public bodies in connection with (but not limited to) consumer protection measures, compliance with legislation and regulation, wholesale trading activity and other areas of banking and business activities in which the Group is or has been engaged. The Group is cooperating with the relevant authorities and keeping all relevant agencies briefed as appropriate in relation to these matters and others described in this note on an ongoing basis. At the present time, Barclays PLC does not expect the ultimate resolution of any of these other matters to have a material adverse effect on the Group’s financial position. However, in light of the uncertainties involved in such matters and the matters specifically described in this note, there can be no assurance that the outcome of a particular matter or matters (including formerly active matters or those matters arising after the date of this note) will not be material to Barclays PLC’s results, operations or cash flows for a particular period, depending on, among other things, the amount of the loss resulting from the matter(s) and the amount of profit otherwise reported for the reporting period. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 485 Notes to the financial statements (continued) Capital instruments, equity and reserves Capital instruments, equity and reserves The notes included in this section focus on the Group’s loan capital and shareholders’ equity including issued share capital, retained earnings, other equity balances and interests of minority shareholders in our subsidiary entities (non-controlling interests). For more information on capital management and how the Group maintains sufficient capital to meet our regulatory requirements refer to the Capital risk management section. 27 Subordinated liabilities Accounting for subordinated liabilities Subordinated liabilities are measured at amortised cost using the effective interest method under IFRS 9. As at 1 January Issuances Redemptions Other As at 31 December 2022 £m 12,759 1,477 (2,679) (134) 11,423 2021 £m 16,341 1,890 (4,807) (665) 12,759 Issuances of £1,477m comprise £1,000m GBP 8.407% Fixed Rate Resetting Subordinated Callable Notes, issued externally by Barclays PLC and £317m USD Floating Rate Notes, £89m ZAR Floating Rate Notes,£42m EUR Floating Rate Notes and £29m JPY Floating Rate Notes issued externally by Barclays subsidiaries. Redemptions of £2,679m comprise £2,349m notes issued externally by Barclays Bank PLC, £175m USD Floating Rate Notes, £88m USD Fixed Rate Notes issued externally by Barclays subsidiaries and £67m GBP Undated Subordinated Loan Notes (secured) issued externally by a Barclays securitisation special purpose vehicle (SPV). £2,349m notes issued externally by Barclays Bank PLC comprise £1,275m USD 7.625% Fixed Rate Contingent Capital Notes, £838m EUR 6.625% Fixed Rate Subordinated Notes, £147m USD 6.86% Callable Perpetual Core Tier One Notes, £42m EUR Subordinated Floating Rate Notes, £35m GBP 5.3304% Step-up Callable Perpetual Reserve Capital Instruments and £12m GBP 6% Callable Perpetual Core Tier One Notes. Other movements predominantly comprise foreign exchange movements and fair value hedge adjustments. Subordinated liabilities include accrued interest and comprise undated and dated subordinated liabilities as follows: Undated subordinated liabilities Dated subordinated liabilities Total subordinated liabilities None of the Group’s subordinated liabilities are secured. Undated subordinated liabilitiesa Barclays Bank PLC issued Tier One Notes (TONs) 6% Callable Perpetual Core Tier One Notes b 6.86% Callable Perpetual Core Tier One Notes (USD 179m) b Reserve Capital Instruments (RCIs) 5.3304% Step-up Callable Perpetual Reserve Capital Instruments b Undated Notes Junior Undated Floating Rate Notes (USD 38m) Barclays securitisation SPV issued Undated Subordinated Loan Notes (secured) Initial call date 2032 2032 2036 Any interest payment date Undated Subordinated Loan Notes (secured) (GBP 67m) At any time Total undated subordinated liabilities 2022 £m 28 11,395 11,423 2021 £m 355 12,404 12,759 2022 £m — — — 28 — 28 2021 £m 15 194 51 28 67 355 Notes a b The GBP 6% Callable Perpetual Core Tier One Notes, USD 6.86% Callable Perpetual Core Tier One Notes and GBP 5.3304% Step-up Callable Perpetual Reserve Capital Instruments were redeemed Instrument values are disclosed to the nearest million. by exercising a regulatory call option in 2022. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 486 Notes to the financial statements (continued) Capital instruments, equity and reserves Undated subordinated liabilities The undated subordinated liabilities that are issued by Barclays Bank PLC and its subsidiaries are for the development and expansion of the businesses and to strengthen the capital bases. The principal terms of such undated subordinated liabilities are described below: Junior Undated Floating Rate Notes The Junior Undated Floating Rate Notes rank behind the claims against Barclays Bank PLC of depositors and other unsecured unsubordinated creditors and holders of dated subordinated liabilities. The Junior Undated Floating Rate Notes are floating rate notes where rates are fixed periodically in advance based on the related market rate. The Junior Undated Floating Rate Notes are repayable at the option of Barclays Bank PLC, in whole, on any interest payment date. In addition, the Junior Undated Floating Rate Notes are repayable, at the option of Barclays Bank PLC in whole for certain tax reasons, on an interest payment date. There are no events of default except non-payment of principal or mandatory interest. Any repayments require the prior consent of the PRA. The Junior Undated Floating Rate Notes are non-convertible. Dated subordinated liabilities Barclays PLC issued 2% Fixed Rate Subordinated Callable Notes (EUR 1,500m) 4.375% Fixed Rate Subordinated Notes (USD 1,250m) 3.75% Fixed Rate Resetting Subordinated Callable Notes (GBP 500m) 3.75% Fixed Rate Resetting Subordinated Callable Notes (SGD 200m) 5.20% Fixed Rate Subordinated Notes (USD 2,050m) 1.125% Fixed Rate Resetting Subordinated Callable Notes (EUR 1,000m) 4.836% Fixed Rate Subordinated Callable Notes (USD 2,000m) 8.407% Fixed Rate Resetting Subordinated Callable Notes (GBP 1,000m) 5.088% Fixed-to-Floating Rate Subordinated Callable Notes (USD 1,500m) 3.564% Fixed Rate Resetting Subordinated Callable Notes (USD 1,000m) 3.811% Fixed Rate Resetting Subordinated Callable Notes (USD 1,000m) Barclays Bank PLC issued Subordinated Floating Rate Notes (EUR 50m) 6.625% Fixed Rate Subordinated Notes (EUR 1,000m) 7.625% Contingent Capital Notes (USD 3,000m) Subordinated Floating Rate Notes (EUR 50m) 5.75% Fixed Rate Subordinated Notes 5.4% Reverse Dual Currency Subordinated Loan (JPY 15,000m) 6.33% Subordinated Notes Subordinated Floating Rate Notes (EUR 68m) External issuances by other subsidiaries Total dated subordinated liabilities Initial call date Maturity date 2023 2025 2025 2026 2027 2027 2029 2030 2041 2028 2024 2030 2030 2026 2031 2028 2032 2030 2035 2042 2022 2022 2022 2023 2026 2027 2032 2040 2032 2022 £m 1,345 1,013 445 120 1,588 795 1,554 1,013 1,117 664 646 — — — 44 280 93 46 60 572 2021 £m 1,283 974 483 113 1,564 833 1,564 — 1,162 696 782 42 889 1,133 42 322 97 59 57 309 11,395 12,404 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 487 Notes to the financial statements (continued) Capital instruments, equity and reserves Dated subordinated liabilities Dated subordinated liabilities are issued by Barclays PLC, Barclays Bank PLC and its subsidiaries for the development and expansion of their businesses and to strengthen their respective capital bases. The principal terms of the dated subordinated liabilities are described below: Subordination Dated subordinated liabilities issued by Barclays PLC ranks behind the claims against Barclays PLC of unsecured unsubordinated creditors but before the claims of the holders of its equity. All dated subordinated liabilities externally issued by Barclays Bank PLC rank behind the claims against Barclays Bank PLC of depositors and other unsecured unsubordinated creditors but before the claims of the undated subordinated liabilities and the holders of its equity. The dated subordinated liabilities externally issued by other subsidiaries are similarly subordinated as the external subordinated liabilities issued by Barclays Bank PLC. Interest Interest on the Floating Rate Notes is fixed periodically in advance, based on the related market rates. Interest on Fixed Rate Notes is set by reference to market rates at the time of issuance and fixed until maturity. Interest on the 4.836% Fixed Rate Subordinated Callable Notes, 2% Fixed Rate Subordinated Callable Notes, 3.75% SGD Fixed Rate Resetting Subordinated Callable Notes, 3.75% GBP Fixed Rate Resetting Subordinated Callable Notes, 3.811% Fixed Rate Resetting Subordinated Callable notes, 1.125% Fixed Rate Resetting Subordinated Callable Notes, 3.564% Fixed Rate Resetting Subordinated Callable Notes, and the 8.407% Fixed Rate Resetting Subordinated Callable Notes are fixed until the call date. After the respective call dates, in the event that they are not redeemed, the interest rates will be reset and fixed until maturity based on a market rate. Interest on the 5.088% Fixed-to-Floating Rate Subordinated Callable Notes is fixed until the call date. After the call date, in the event that they are not redeemed, the interest rate will reset periodically in advance based on market rates. Repayment Those subordinated liabilities with a call date are repayable at the option of the issuer on such call date in accordance with the conditions governing the respective debt obligations, some in whole or in part, and some only in whole. The remaining dated subordinated liabilities outstanding at 31 December 2022 are redeemable only on maturity, subject in particular cases to provisions allowing an early redemption in the event of certain changes in tax law, or to certain changes in legislation or regulations. Any repayments prior to maturity require, in the case of Barclays PLC and Barclays Bank PLC, the prior consent of the PRA, or in the case of the overseas issues, the approval of the local regulator for that jurisdiction and of the PRA in certain circumstances. There are no committed facilities in existence at the balance sheet date which permit the refinancing of debt beyond the date of maturity. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 488 Notes to the financial statements (continued) Capital instruments, equity and reserves 28 Ordinary shares, share premium, and other equity Called up share capital, allotted and fully paid As at 1 January 2022 Issued to staff under share incentive plans AT1 securities issuance AT1 securities redemption Repurchase of shares Other movements As at 31 December 2022 As at 1 January 2021 Issued to staff under share incentive plans AT1 securities issuance AT1 securities redemption Repurchase of shares Other movements As at 31 December 2021 Number of shares Ordinary share capital Ordinary share premium Total share capital and share premium Other equity instruments m 16,752 50 — — (931) — 15,871 17,359 37 — — (644) — 16,752 £m 4,188 13 — — (233) — 3,968 4,340 9 — — (161) — 4,188 £m 348 57 — — — — 405 297 51 — — — — 348 £m 4,536 70 — — (233) — 4,373 4,637 60 — — (161) — 4,536 £m 12,259 — 3,158 (2,126) — (7) 13,284 11,172 — 1,078 — — 9 12,259 Called up share capital Called up share capital comprises 15,871m (2021: 16,752m) ordinary shares of 25p each. Share repurchase At the 2022 AGM on 4 May 2022, Barclays PLC was authorised to repurchase up to an aggregate of 1,676m of its ordinary shares of 25p. The authorisation is effective until the AGM in 2023 or the close of business on 30 June 2023, whichever is the earlier. During 2022, 931m shares were repurchased with a total nominal value of £233m (2021: 644m shares with a nominal value of £161m). Other equity instruments Other equity instruments of £13,284m (2021: £12,259m) include AT1 securities issued by Barclays PLC. The AT1 securities are perpetual securities with no fixed maturity and are structured to qualify as AT1 instruments under prevailing capital rules applicable as at the relevant issue date. In 2022, there were three issuances of AT1 instruments, in the form of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities, for £3,158m (2021: one issuance for £1,078m) which includes issuance costs of £9m (2021: £4m). There were two redemptions in 2022 totalling £2,126m (2021: no redemptions). AT1 equity instruments AT1 equity instruments - Barclays PLC 7.875% Perpetual Subordinated Contingent Convertible Securities 7.875% Perpetual Subordinated Contingent Convertible Securities (USD 1,500m) 7.25% Perpetual Subordinated Contingent Convertible Securitiesa 7.75% Perpetual Subordinated Contingent Convertible Securities (USD 2,500m)a 5.875% Perpetual Subordinated Contingent Convertible Securities 8% Perpetual Subordinated Contingent Convertible Securities (USD 2,000m) 7.125% Perpetual Subordinated Contingent Convertible Securitiesa 6.375% Perpetual Subordinated Contingent Convertible Securities 6.125% Perpetual Subordinated Contingent Convertible Securities (USD 1,500m)a 4.375% Perpetual Subordinated Contingent Convertible Securities (USD 1,500m) 8.300% Perpetual Subordinated Contingent Convertible Securities (SGD 450m) 8.875% Perpetual Subordinated Contingent Convertible Securities 8.000% Perpetual Subordinated Contingent Convertible Securities (USD 2,000m)a Total AT1 equity instruments Note a Reported net of securities held by the Group. Initial call date 2022 2022 2023 2023 2024 2024 2025 2025 2025 2028 2027 2027 2029 2022 £m — — 1,243 1,925 1,244 1,509 993 996 1,142 1,078 264 1,247 1,643 2021 £m 995 1,131 1,245 1,924 1,244 1,509 996 996 1,141 1,078 — — — 13,284 12,259 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 489 Notes to the financial statements (continued) Capital instruments, equity and reserves The principal terms of the AT1 securities are described below: ▪ AT1 securities rank behind the claims against Barclays PLC of i) unsubordinated creditors; ii) claims which are expressed to be subordinated to the claims of unsubordinated creditors of Barclays PLC but not further or otherwise; or iii) claims which are, or are expressed to be, junior to the claims of other creditors of Barclays PLC, whether subordinated or unsubordinated, other than claims which rank, or are expressed to rank, pari passu with, or junior to, the claims of holders of the AT1 securities. ▪ AT1 securities are undated and are redeemable, at the option of Barclays PLC, in whole on (i) the initial reset date, or on any fifth anniversary after the initial reset date or (ii) any day falling in a named period ending on the initial reset date, or on any fifth anniversary after the initial reset date. In addition, the AT1 securities are redeemable, at the option of Barclays PLC, in whole in the event of certain changes in the tax or regulatory treatment of the securities. Any redemptions require the prior consent of the PRA. ▪ Interest on the AT1 securities will be due and payable only at the sole discretion of Barclays PLC, and Barclays PLC has sole and absolute discretion at all times and for any reason to cancel (in whole or in part) any interest payment that would otherwise be payable on any interest payment date. . 29 Reserves Currency translation reserve The currency translation reserve represents the cumulative gains and losses on the retranslation of the Group’s net investment in foreign operations, net of the effects of hedging. Fair value through other comprehensive income reserve The fair value through other comprehensive income reserve represents the changes in the fair value of financial instruments accounted for at fair value through other comprehensive income investments since initial recognition. Cash flow hedging reserve The cash flow hedging reserve represents the cumulative gains and losses on effective cash flow hedging instruments that will be recycled to profit or loss when the hedged transactions affect profit or loss. Own credit reserve The own credit reserve reflects the cumulative own credit gains and losses on financial liabilities at fair value. Amounts in the own credit reserve are not recycled to profit or loss in future periods. Other reserves and treasury shares Other reserves relate to redeemed ordinary and preference shares issued by the Group. Treasury shares relate to Barclays PLC shares held in relation to the Group’s various share schemes. These schemes are described in Note 32. Treasury shares are deducted from shareholders’ equity within other reserves. A transfer is made to retained earnings in line with the vesting of treasury shares held for the purposes of share-based payments. Currency translation reserve Fair value through other comprehensive income reserve Cash flow hedging reserve Own credit reserve Other reserves and treasury shares Total 2022 £m 4,772 (1,560) (7,235) 467 1,364 (2,192) 2021 £m 2,740 (283) (853) (960) 1,126 1,770 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 490 Notes to the financial statements (continued) Capital instruments, equity and reserves 30 Non-controlling interests Barclays Bank PLC issued: – Preference shares – Upper Tier 2 instruments Other non-controlling interests Total Profit attributable to non-controlling interest Equity attributable to non-controlling interest Dividends paid to non-controlling interest 2022 £m 31 14 — 45 2021 £m 27 17 3 47 2022 £m 529 438 1 968 2021 £m 529 458 2 989 2022 £m 31 14 — 45 2021 £m 27 17 — 44 In 2022, there were no issuances (2021: none) and one redemption of £20m (2021: £75m) relating to the Undated Floating Rate Primary Capital Notes Series 3. Barclays Bank PLC and protective rights of non-controlling interests Barclays PLC holds 100% of the voting rights of Barclays Bank PLC. As at 31 December 2022, Barclays Bank PLC has in issue preference shares and Upper Tier 2 instruments. These are non-controlling interests to the Group. A fixed coupon rate is attached to all Upper Tier 2 instruments until the initial call date, with the exception of the 9% Bonds, which are fixed for the life of the issue and the Series 1 and Series 2 Undated Notes, which are floating rate at rates fixed periodically in advance based on market rates. After the initial call date, in the event they are not redeemed, coupon payments in relation to the 6.125% Undated Notes are fixed periodically in advance for five-year periods based on market rates. Coupon payments for all other Upper Tier 2 instruments are at rates fixed periodically in advance based on market rates. The payment of preference share dividends and Upper Tier 2 coupons are typically at the discretion of Barclays Bank PLC, except for coupon payments that become compulsory where Barclays PLC has declared or paid a dividend on ordinary shares, or in certain cases, any class of preference shares, in the preceding six-month period. Coupons not paid become payable in each case if such a dividend is subsequently paid or in certain other circumstances. No dividend or coupon payments may be made unless Barclays Bank PLC satisfies a specified solvency test. Under the terms of these instruments, Barclays PLC may not pay dividends on ordinary shares until a dividend or coupon is next paid on these instruments or the instruments are redeemed or purchased by Barclays Bank PLC. There are no restrictions on Barclays Bank PLC’s ability to remit capital to the Parent as a result of these issued instruments. Preference share redemptions are typically at the discretion of Barclays Bank PLC. Upper Tier 2 instruments are repayable, at the option of Barclays Bank PLC generally in whole at the initial call date and on any subsequent coupon payment date or, in the case of the 6.125% Undated Notes on any fifth anniversary after the initial call date. In addition, each issue of Upper Tier 2 instruments is repayable, at the option of Barclays Bank PLC, in whole for certain tax reasons, either at any time, or on an interest payment date. There are no events of default except non-payment of principal or mandatory interest. Any repayments or redemptions require the prior consent of the PRA, and in respect of the preference shares, any such redemption will be subject to the Companies Act 2006 and the Articles of Barclays Bank PLC. Instrument Preference Shares: US Dollar Preference Shares Euro Preference Shares Total Barclays Bank PLC Preference Shares Upper Tier 2 Instruments: Undated Floating Rate Primary Capital Notes Series 1 Undated Floating Rate Primary Capital Notes Series 2 5.03% Undated Reverse Dual Currency Subordinated Loan (JPY8bn) 5.0% Reverse Dual Currency Undated Subordinated Loan (JPY12bn) Undated Floating Rate Primary Capital Notes Series 3 (£145m) 9% Permanent Interest Bearing Capital Bonds (£100m) 6.125% Undated Subordinated Notes (£550m) Total Upper Tier 2 Instruments 2022 £m 318 211 529 93 179 39 53 — 40 34 438 2021 £m 318 211 529 93 179 39 53 20 40 34 458 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 491 Notes to the financial statements (continued) Employee benefits Employee benefits The notes included in this section focus on the costs and commitments associated with employing our staff. 31 Staff costs Accounting for staff costs The Group applies IAS 19 Employee benefits in its accounting for most of the components of staff costs. Short-term employee benefits – salaries, accrued performance costs and social security are recognised over the period in which the employees provide the services to which the payments relate. Performance costs – recognised to the extent that the Group has a present obligation to its employees that can be measured reliably and are recognised over the period of service that employees are required to work to qualify for the payments. Deferred cash and share awards are made to employees to incentivise performance over the period employees provide services. To receive payment under an award, employees must provide service over the vesting period. The period over which the expense for deferred cash and share awards is recognised is based upon the period employees consider their services contribute to the awards. For past awards, the Group considers that it is appropriate to recognise the awards over the period from the date of grant to the date that the awards vest. In relation to awards granted from 2017, the Group, taking into account the changing employee understanding surrounding those awards, considered it appropriate for expense to be recognised over the vesting period including the financial year prior to the grant date. The accounting policies for share-based payments, and pensions and other post-retirement benefits are included in Note 32 and Note 33 respectively. Incentive awards granted: Current year bonus Deferred bonus Total incentive awards granted Reconciliation of incentive awards granted to income statement charge: Less: deferred bonuses granted but not charged in current year Add: current year charges for deferred bonuses from previous years Other differences between incentive awards granted and income statement charge Income statement charge for performance costs Other income statement charges: Salaries Social security costs Post-retirement benefitsa Other compensation costs Total compensation costsb Other resourcing costs: Outsourcing Redundancy and restructuring Temporary staff costs Other Total other resourcing costs Total staff costs 2022 £m 1,241 549 1,790 (388) 399 35 1,836 2021 £m 1,278 667 1,945 (457) 280 (23) 1,745 2020 £m 1,090 490 1,580 (335) 293 (34) 1,504 4,732 4,290 4,322 714 563 504 619 539 431 613 519 479 8,349 7,624 7,437 607 (7) 113 190 903 357 296 109 125 887 342 102 102 114 660 9,252 8,511 8,097 Notes a Post-retirement benefits charge includes £313m (2021: £289m; 2020: £279m) in respect of defined contribution schemes and £250m (2021: £250m; 2020: £240m) in respect of defined benefit schemes. b £604m (2021: £484m; 2020: £451m) of Group compensation was capitalised as internally generated software and excluded from the Staff cost disclosed above . Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 492 Notes to the financial statements (continued) Employee benefits 32 Share-based payments Accounting for share-based payments The Group applies IFRS 2 Share-based Payments in accounting for employee remuneration in the form of shares. Employee incentives include awards in the form of shares and share options, as well as offering employees the opportunity to purchase shares on favourable terms. The cost of the employee services received in respect of the shares or share options granted is recognised in the income statement over the period that employees provide services. The overall cost of the award is calculated using the number of shares and options expected to vest and the fair value of the shares or options at the date of grant. The number of shares and options expected to vest takes into account the likelihood that performance and service conditions included in the terms of the awards will be met. Failure to meet the non-vesting condition is treated as a cancellation, resulting in an acceleration of recognition of the cost of the employee services. The fair value of shares is the market price ruling on the grant date, in some cases adjusted to reflect restrictions on transferability. The fair value of options granted is determined using the Black Scholes model to estimate the numbers of shares likely to vest. The model takes into account the exercise price of the option, the current share price, the risk-free interest rate, the expected volatility of the share price over the life of the option and other relevant factors. Market conditions that must be met in order for the award to vest are also reflected in the fair value of the award, as are any other non-vesting conditions – such as continuing to make payments into a share-based savings scheme. The charge for the year arising from share-based payment schemes was as follows: Deferred Share Value Plan and Share Value Plan Others Total equity settled Cash settled Total share-based payments The terms of the main current plans are as follows: Charge for the year 2022 £m 295 214 509 4 513 2021 £m 256 216 472 5 477 2020 £m 245 184 429 2 431 Share Value Plan (SVP) The SVP was introduced in Barclays PLC Group in March 2010. SVP awards have been granted to participants in the form of a conditional right to receive Barclays PLC shares or provisional allocations of Barclays PLC shares which vest or are considered for release over a period of three, four, five or seven years. Participants do not pay to receive an award or to receive a release of shares. For awards granted before December 2017, the grantor may also make a dividend equivalent payment to participants on release of a SVP award. SVP awards are also made to eligible employees for recruitment purposes. All awards are subject to potential forfeiture in certain leaver scenarios. Deferred Share Value Plan (DSVP) The DSVP was introduced in February 2017. The terms of the DSVP are materially the same as the terms of the SVP as described above, save that Executive Directors are not eligible to participate in the DSVP and the DSVP operates over market purchase shares only. Other schemes In addition to the SVP and DSVP, the Barclays PLC Group operates a number of other schemes settled in Barclays PLC Shares including Sharesave (both UK and Ireland), Sharepurchase (both UK and overseas), and the Barclays PLC Group Long Term Incentive Plan. A delivery of upfront shares to ‘Material Risk Takers’ can be made as a Share Incentive Award (Holding Period) under the SVP. Share option and award plans The weighted average fair value per award granted, weighted average share price at the date of exercise/release of shares during the year, weighted average contractual remaining life and number of options and awards outstanding (including those exercisable) at the balance sheet date were as follows: 2022 2021 Weighted average fair value per award granted in year Weighted average share price at exercise/ release during year Weighted average remaining contractual life Number of options/ awards outstanding Weighted average fair value per award granted in year Weighted average share price at exercise/ release during year Weighted average remaining contractual life Number of options/ awards outstanding £ 1.43 £ in years (000s) 1.61 1 501,454 £ 1.62 £ in years (000s) 1.76 1 413,859 0.38-1.64 1.59-1.66 0-3 316,534 0.64-1.8 1.75-1.92 0-3 335,976 DSVP and SVPa,b Othersa Notes a Options/award granted over Barclays PLC shares. b Weighted average exercise price is not applicable for SVP and DSVP awards as these are not share option schemes. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 493 Notes to the financial statements (continued) Employee benefits SVP and DSVP are nil cost awards on which the performance conditions are substantially completed at the date of grant. Consequently, the fair value of these awards is based on the market value at that date. Sharesave has a contractual life of 3 years and 5 years,the expected volatility is 31.10% for 3 years and 30.56% for 5 years. The risk free interest rates used for valuations are 4.28% and 4.05% for 3 years and 5 years respectively. The pure dividend yield rates used for valuations are 4.01% and 3.93% for 3 years and 5 years respectively. The repo rates used for valuations are (0.47)% and (0.63)% for 3 years and 5 years respectively. The inputs into the model such as risk free interest rate, expected volatility, pure dividend yield rates and repo rates are derived from the market data. Movements in options and awards The movement in the number of options and awards for the major schemes and the weighted average exercise price of options was: Outstanding at beginning of year/acquisition date Granted in the year Exercised/released in the year Less: forfeited in the year Less: expired in the year Outstanding at end of year Of which exercisable: DSVP and SVPa,b Number (000s) Othersa,c Number (000s) Weighted average ex. price (£) 2022 413,859 291,876 2021 416,941 187,667 2022 335,976 146,203 2021 356,033 120,385 (178,634) (160,460) (133,682) (107,688) (25,647) (30,289) (28,789) (24,489) — — (3,174) (8,265) 501,454 413,859 — — 316,534 34,247 335,976 28,609 2022 0.95 1.33 1.15 1.01 1.23 0.97 1.19 2021 0.96 1.43 1.38 0.95 1.67 0.95 1.23 Notes a Options/award granted over Barclays PLC shares. b Weighted average exercise price is not applicable for SVP and DSVP awards as these are not share option schemes. c The number of awards within Others at the end of the year principally relates to Sharesave (number of awards exercisable at end of year was 13,954,749). The weighted average exercise price relates to Sharesave. Awards and options granted under the Group’s share plans may be satisfied using new issue shares, treasury shares and market purchase shares. Awards granted under the DSVP may be satisfied using market purchase shares only. There were no significant modifications to the share-based payments arrangements in 2022 and 2021. As at 31 December 2022, the total liability arising from cash-settled share-based payments transactions was £5m (2021: £5m). Holdings of Barclays PLC shares and hedges Various employee benefit trusts established by the Group hold shares in Barclays PLC to meet obligations under the Barclays share- based payment schemes. The total number of Barclays shares held in these employee benefit trusts at 31 December 2022 was 14m (2021: 12.9m). Dividend rights have been waived on all these shares. The total market value of the shares held in trust based on the year end share price of £1.59 (2021: £1.87) was £22m (2021: £24m). For accounting of treasury shares, see Note 29. The Group has entered into physically settled forward contracts to hedge the settlement of certain share-based payment schemes. The fixed forward price to be paid under these contracts is £469m and has been recorded in retained earnings. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 494 Notes to the financial statements (continued) Employee benefits 33 Pensions and post-retirement benefits Accounting for pensions and post-retirement benefits The Group operates a number of pension schemes and post-employment benefit schemes. Defined contribution schemes – the Group recognises contributions due in respect of the accounting period in the income statement. Any contributions unpaid at the balance sheet date are included as a liability. Defined benefit schemes – the Group recognises its obligations to members of each scheme at the period end, less the fair value of the scheme assets after applying the asset ceiling test. Each scheme’s obligations are calculated using the projected unit credit method. Scheme assets are stated at fair value as at the period end. Changes in pension scheme liabilities or assets (remeasurements) that do not arise from regular pension cost, net interest on net defined benefit liabilities or assets, past service costs, settlements or contributions to the scheme, are recognised in other comprehensive income. Remeasurements comprise experience adjustments (differences between previous actuarial assumptions and what has actually occurred), the effects of changes in actuarial assumptions, return on scheme assets (excluding amounts included in the interest on the assets) and any changes in the effect of the asset ceiling restriction (excluding amounts included in the interest on the restriction). Post-employment benefit schemes – the cost of providing healthcare benefits to retired employees is accrued as a liability in the financial statements over the period that the employees provide services to the Group, using a methodology similar to that for defined benefit pension schemes. Pension schemes UK Retirement Fund (UKRF) The UKRF is the Group’s main scheme, representing 96% (2021: 97%) of the Group’s total retirement benefit obligations. Barclays Bank PLC is the principal employer of the UKRF. The UKRF was closed to new entrants on 1 October 2012, and comprises 10 sections, the two most significant of which are: ▪ Afterwork, which comprises a contributory cash balance defined benefit element, and a voluntary defined contribution element. The cash balance element is accrued each year and revalued until Normal Retirement Age in line with the increase in Retail Price Index (RPI) (up to a maximum of 5% p.a.). The main risks that Barclays runs in relation to Afterwork are limited although additional contributions are required if pre-retirement investment returns are not sufficient to provide for the benefits. ▪ The 1964 Pension Scheme. Most employees recruited before July 1997 built up benefits in this non-contributory defined benefit scheme in respect of service up to 31 March 2010. Pensions were calculated by reference to service and pensionable salary. From 1 April 2010, members became eligible to accrue future service benefits in either Afterwork or the Pension Investment Plan, a historic defined contribution section which is now closed to future contributions. The risks that Barclays runs in relation to the 1964 section are typical of final salary pension schemes, principally that investment returns fall short of expectations, that inflation exceeds expectations, and that retirees live longer than expected. Barclays Pension Savings Plan (BPSP) The BPSP is a defined contribution scheme providing benefits for all new UK hires from 1 October 2012. BPSP is not subject to the same investment return, inflation or life expectancy risks for Barclays that defined benefit schemes are. Members’ benefits reflect contributions paid and the level of investment returns achieved. Other Apart from the UKRF and the BPSP, Barclays operates a number of smaller pension and long-term employee benefits and post- retirement healthcare plans globally, the largest of which are the US defined benefit and defined contribution schemes. Many of the schemes are funded, with assets backing the obligations held in separate legal vehicles such as trusts. Others are operated on an unfunded basis. The benefits provided, the approach to funding, and the legal basis of the schemes, reflect local environments. Governance The UKRF operates under trust law and is managed and administered on behalf of the members in accordance with the terms of the Trust Deed and Rules and all relevant legislation. The Corporate Trustee is Barclays Pension Funds Trustees Limited, a private limited company and a wholly owned subsidiary of Barclays Bank PLC. The Trustee is the legal owner of the assets of the UKRF which are held separately from the assets of the Group. The Trustee Board comprises six Management Directors selected by Barclays, of whom three are independent Directors with no relationship with Barclays (and who are not members of the UKRF), plus three Member Nominated Directors selected from eligible active members of the UKRF, deferred and pensioner members who apply for the role. The BPSP is a Group Personal Pension arrangement which operates as a collection of personal pension plans. Each personal pension plan is a direct contract between the employee and the BPSP provider (Legal & General Assurance Society Limited), and is regulated by the FCA. Similar principles of pension governance apply to the Group’s other pension schemes, depending on local legislation. Amounts recognised The following tables include amounts recognised in the income statement and an analysis of benefit obligations and scheme assets for all Group defined benefit schemes. The net position is reconciled to the assets and liabilities recognised on the balance sheet. The Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 495 Notes to the financial statements (continued) Employee benefits tables include funded and unfunded post-retirement benefits. The income statement charge with respect to Defined contribution schemes is disclosed as part of footnotes to Note 31 Staff costs. Income statement (credit)/charge Current service cost Net finance (income)/cost Past service cost Other movements Total Balance sheet reconciliation Benefit obligation at beginning of the year Current service cost Interest costs on scheme liabilities Past service cost Remeasurement (loss)/gain – financial Remeasurement (loss)/gain – demographic Remeasurement (loss)/gain – experience Employee contributions Benefits paid Exchange and other movements Benefit obligation at end of the year Fair value of scheme assets at beginning of the year Interest income on scheme assets Employer contribution 2022 £m 227 (122) 20 3 128 2021 £m 247 (26) — 3 224 2020 £m 243 (40) (4) 1 200 2022 2021 Of which relates to UKRF £m Total £m Of which relates to UKRF £m Total £m (31,899) (30,859) (33,190) (32,108) (227) (724) (20) (197) (707) (20) 10,995 10,734 268 (521) (4) 1,339 (88) 270 (510) — 1,299 — (247) (422) — 848 53 (249) (4) 1,309 3 (20,881) (19,990) (31,899) 35,467 846 1,808 34,678 829 1,785 (225) (405) — 820 50 (259) — 1,268 — (30,859) 33,915 434 955 642 — (1,268) — 34,678 3,819 3,819 — 3,819 34,713 448 971 653 4 (1,309) (13) 35,467 3,568 3,879 (311) 3,568 Remeasurement – return on scheme assets (less)/greater than discount rate (11,510) (11,313) Employee contributions Benefits paid Exchange and other movements Fair value of scheme assets at end of the year Net surplus Retirement benefit assets Retirement benefit liabilities Net retirement benefit assets 4 — (1,339) (1,299) 84 25,360 4,479 4,743 (264) 4,479 — 24,680 4,690 4,690 — 4,690 Included within the benefit obligation is £690m (2021: £821m) relating to overseas pensions and £201m (2021: £219m) relating to other post-employment benefits. As at 31 December 2022, the UKRF’s scheme assets were in surplus versus IAS 19 obligations by £4,690m (2021: £3,819m). The increase in the UKRF surplus during the year was driven by £294m of deficit reduction contributions and the unwind of the Senior Notes (see later in note), partially offset by higher than expected inflation experienced during the year. The UKRF assets and benefit obligation have reduced by c£10bn and c£11bn respectively over the year, primarily due to higher gilt and bond yields. This is as expected from the investment strategy which aims to invest in assets that move in value in line with changes in liability values. The weighted average duration of the benefit payments reflected in the defined benefit obligation for the UKRF is 13 years (2021: 16 years) . The decrease in duration is primarily due to the increase in discount rate, driven by higher corporate bond yields. The UKRF expected benefits are projected to be paid out for in excess of 50 years, although 30% of the total benefits are expected to be paid in the next 10 years; 30% in years 11 to 20 and 25% in years 21 to 30. The remainder of the benefits are expected to be paid beyond 30 years. Of the £1,299m (2021: £1,268m) UKRF benefits paid out, £390m (2021: £419m) related to transfers out of the fund. Where a scheme’s assets exceed its obligation, an asset is recognised to the extent that it does not exceed the present value of future contribution holidays or refunds of contributions (the asset ceiling). In the case of the UKRF the asset ceiling is not applied as, in certain specified circumstances such as wind-up, the Group expects to be able to recover any surplus. Similarly, a liability in respect of future minimum funding requirements is not recognised. The Trustee does not have a substantive right to augment benefits, nor do they have the right to wind up the plan except in the dissolution of the Group or termination of contributions by the Group. The application of the Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 496 Notes to the financial statements (continued) Employee benefits asset ceiling to other plans and recognition of additional liabilities in respect of future minimum funding requirements are considered on an individual plan basis. Critical accounting estimates and judgements Actuarial valuation of the scheme's obligation is dependent upon a series of assumptions. Below is a summary of the main financial and demographic assumptions adopted for the UKRF. Key UKRF financial assumptions Discount rate Inflation rate (RPI) 2022 % p.a. 4.80 3.21 2021 % p.a. 1.84 3.56 The UKRF discount rate assumption for 2022 was based on a standard WTW RATE Link model. The RPI inflation assumption for 2022 was set by reference to the Bank of England’s implied inflation curve. The inflation assumption incorporates a deduction of 20 basis points as an allowance for an inflation risk premium. The methodology used to derive the discount rate and inflation assumptions is consistent with that used at the prior year end. The UKRF’s post-retirement mortality assumptions are based on an updated best estimate assumption derived from an analysis in 2022 of the UKRF’s own post-retirement mortality experience and taking account of recent evidence from published mortality surveys. An allowance has been made for future mortality improvements based on the 2021 core projection model published by the Continuous Mortality Investigation Bureau subject to a long-term trend of 1.25% per annum in future improvements (2021: 1.5% per annum). An additional allowance has been made within the mortality assumptions to reflect the uncertain impact of COVID-19 in the long term. The table below shows how the assumed life expectancy at 60, for members of the UKRF, has varied over the past three years: Assumed life expectancy Life expectancy at 60 for current pensioners (years) – Males – Females Life expectancy at 60 for future pensioners currently aged 40 (years) – Males – Females 2022 2021 2020 26.8 29.5 28.3 31.0 27.3 29.6 29.1 31.4 27.2 29.4 29.0 31.2 The UKRF entered into a longevity reinsurance contract in 2022 covering £7bn of the pensioner liabilities. This is in addition to a £5bn transaction executed in 2020. In total, over three-quarters of the longevity risk for current pensioners has been reinsured, and the transactions will provide income to the UKRF in the event that pensions are paid out for longer than expected. The contracts form part of the UKRF’s investment portfolio. At 31 December 2022, the contracts are valued at £(123)m (2021: nil). The negative value placed on the longevity reinsurance contracts at 31 December 2022 reflects the estimated impact of changes in the reinsurance market, demographic assumptions and risk premia since the 2020 transaction was entered into by the UKRF. The 2022 transaction is valued at nil as it is assessed to have been transacted recently at fair value. Sensitivity analysis on actuarial assumptions The sensitivity analysis has been calculated by valuing the UKRF liabilities using the amended assumptions shown in the table below and keeping the remaining assumptions the same as disclosed in the table above, except in the case of the inflation sensitivity where other assumptions that depend on assumed inflation have also been amended correspondingly. The difference between the recalculated liability figure and that stated in the balance sheet reconciliation table above is the figure shown. The selection of these movements to illustrate the sensitivity of the defined benefit obligation to key assumptions should not be interpreted as Barclays expressing any specific view of the probability of such movements happening. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 497 Notes to the financial statements (continued) Employee benefits Change in key assumptions Discount rate 0.5% p.a. increase 0.25% p.a. increase 0.25% p.a. decrease 0.5% p.a. decrease Assumed RPI 0.5% p.a. increase 0.25% p.a. increase 0.25% p.a. decrease 0.5% p.a. decrease Life expectancy at 60 One year increase One year decrease 2022 2021 (Decrease)/ Increase in UKRF defined benefit obligation (Decrease)/ Increase in UKRF defined benefit obligation £bn £bn (1.1) (0.6) 0.6 1.2 0.8 0.4 (0.4) (0.8) 0.6 (0.5) (2.3) (1.2) 1.3 2.6 1.6 0.8 (0.8) (1.6) 1.2 (1.2) Assets A long-term investment strategy has been set for the UKRF, with its asset allocation comprising a mixture of equities, bonds, property and other appropriate assets. This recognises that different asset classes are likely to produce different long-term returns and some asset classes may be more volatile than others. The long-term investment strategy ensures, among other aims, that investments are adequately diversified. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 498 Notes to the financial statements (continued) Employee benefits The value of the assets of the schemes and their percentage in relation to total scheme assets were as follows: Analysis of scheme assets As at 31 December 2022 Equities Private equities Bonds - fixed government Bonds - index-linked government Bonds - corporate and other Property Infrastructure Hedge funds Derivatives Longevity reinsurance contracts Cash and liquid assetsb Mixed investment funds Other Total Of which relates to UKRF % of total fair value of scheme assets % Quoted £m Unquoteda £m Value £m % of total fair value of scheme assets % Quoted £m Unquoteda £m Value £m 113 — 1,353 9,847 5,884 13 793 11 — 2,734 — — 1,551 1,310 790 1,362 113 2,734 1,353 9,847 7,435 1,323 1,583 1,373 0.5 10.8 5.3 38.9 29.3 5.2 6.2 5.4 — — 1,098 9,829 5,690 — 793 — — 2,734 — — 1,551 1,310 790 1,362 — 2,734 1,098 9,829 7,241 1,310 1,583 1,362 (20) (1,837) (1,857) — (123) (123) (7.3) (0.5) (20) (1,837) (1,857) — (123) (123) (1,776) 3,286 1,510 6.0 (1,789) 3,286 1,497 11 7 — 51 11 58 — 0.2 — — — 6 — 6 — 11.1 4.4 39.9 29.3 5.3 6.4 5.5 (7.5) (0.5) 6.1 — — Fair value of scheme assets 16,236 9,124 25,360 100.0 15,601 9,079 24,680 100.0 As at 31 December 2021 Equities Private equities Bonds - fixed government Bonds - index-linked government Bonds - corporate and other Property Infrastructure Hedge funds Derivatives Longevity reinsurance contract Cash and liquid assetsb Mixed investment funds Other Fair value of scheme assetsc 294 — 2,384 15,375 7,451 14 — — 1 — — 3,113 161 — 1,498 1,490 1,815 1,365 10 — (1,865) 2,275 9 20 — 57 294 3,113 2,545 15,375 8,949 1,504 1,815 1,365 11 — 410 9 77 0.8 8.8 7.2 43.5 25.2 4.2 5.1 3.8 — — 1.2 — 0.2 167 — 2,080 15,352 7,214 — — — 1 — — 3,113 161 — 1,498 1,490 1,815 1,365 10 — (1,878) 2,275 — — — 15 167 3,113 2,241 15,352 8,712 1,490 1,815 1,365 11 — 397 — 15 0.5 9.0 6.5 44.4 25.1 4.3 5.2 3.9 — — 1.1 — — 23,683 11,784 35,467 100.0 22,936 11,742 34,678 100.0 Notes a Valuation of unquoted assets is provided by the underlying managers or qualified independent valuers. Valuations of complex instruments are based on UKRF custodian valuations. The valuation for some of the unquoted assets, in particular Private equities, is based on valuations as at 30 September 2022 adjusted by cash flows, these being the latest available valuations as at the point of publication. All valuations are determined in accordance with relevant industry guidance. b Cash and liquid assets for the UKRF consists of £521m (2021: £488m) Cash, £80m (2021: £93m) Receivables/payables, £3,286m (2021:£2,275m) Pooled cash funds and £(2,390)m (2021: £(2,459)m) Repurchase agreements. c The asset allocation for 2021 has been re-presented to reflect the re-interpretation of the asset classifications as well as a reclassification of £1.2bn between unquoted/quoted bonds, in a manner that management believes better represents the underlying nature of the assets. Included within the fair value of UKRF scheme assets was nil (2021: nil) relating to shares in Barclays PLC and nil (2021: nil) relating to bonds issued by Barclays PLC. The UKRF also invests in pooled investment vehicles which may hold shares or debt issued by Barclays PLC. There has been no significant change in the UKRF investment strategy over the year, however, given the movement in the gilt and bond yields over the year, the relative weights of assets classes have changed. No additional support from the Group was required in response to the market volatility experienced over the year. The UKRF assets as at 31 December 2021 do not include the Senior Notes referred to in the section below on Triennial Valuation, as these were non-transferable instruments and not recognised under IAS 19. The Senior Notes were redeemed in December 2022, and the redemption proceeds are now included in Cash and Liquid Assets as at 31 December 2022. Approximately 34% of the UKRF assets are invested in liability-driven investment strategies; primarily UK gilts as well as interest rate and inflation swaps. These swaps are used to better match the assets to its liabilities. The swaps are used to reduce the scheme’s inflation and duration risks against its liabilities. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 499 Notes to the financial statements (continued) Employee benefits The UKRF employs derivative instruments, where appropriate, to match assets more closely to liabilities, or to achieve a desired exposure or return. The value of assets shown reflects the assets held by the UKRF, with any derivative holdings reflected on a fair value basis. The UKRF uses repurchase agreements and reverse repurchase agreements to achieve the Trustee’s liability hedging objective. Investment managers are allowed to undertake repo transactions on the UKRF’s existing gilt holdings to raise cash with which to buy additional gilts for efficient portfolio management; and reverse repo transactions to receive gilts and be paid a fee for providing cash. For information on the UKRF Trustee’s approach to Responsible Investment and Climate Risk, in the context of managing the UKRF, please refer to the UKRF Trustee website at https://epa.towerswatson.com/accounts/barclays/public/barclays-bank-responsible- investment-policy/. Triennial valuation The latest triennial actuarial valuation of the UKRF showed a funding surplus of £2.0bn at 30 September 2022 (2021 update: £0.6bn surplus). The improvement was mainly due to £294m of deficit reduction contributions, changes to views on life expectancy and inflationary returns on assets relative to liabilities being better than expected. The main differences between the funding and accounting assumptions are a different approach to setting the discount rate and a more conservative longevity assumption for funding. As the UKRF has a funding surplus, the 2023 deficit reduction contribution (£286m), agreed as part of the 2019 triennial actuarial valuation, is no longer required, and a new recovery plan was not required. As part of the 2022 triennial valuation, the Trustee and Barclays Bank PLC agreed an annual adequacy test on a basis more prudent than the IAS 19 or funding bases. Should the UKRF be sufficiently funded on this basis, the regular employer contributions to the UKRF to fund future Afterwork accrual will not be required in the following calendar year. The test will be reviewed at the 2025 triennial valuation. The next funding valuation of the UKRF is due to be completed in 2026 with an effective date of 30 September 2025. Subscription for Fixed rate notes During 2019 and 2020 the UKRF subscribed for non-transferable listed senior fixed rate notes for £1,250m, backed by UK gilts (the Senior Notes). These investments were partially financed by £1,000m deficit reduction contributions. The Senior Notes were issued by two entities consolidated in the Barclays Bank Group under IFRS 10: Heron Issuer Limited (Heron) for £500m and Heron Issuer Number 2 Limited (Heron 2) for £750m. The Senior Notes entitled the UKRF to semi-annual coupon payments for five years, and full repayment in cash in three tranches: £250m in 2023, £750m in 2024 and £250m at final maturity in 2025. Heron and Heron 2 acquired a total of £1,500m of gilts from Barclays Bank PLC for cash to support payments on the Senior Notes. Barclays Bank PLC subscribed for the junior notes issued by Heron and Heron 2 for £250m. The regulatory capital impact, which otherwise would have occurred in 2019 and 2020 from the regular deficit reduction contributions, would have been deferred until 2023, 2024 and 2025 upon maturity of the Senior Notes. As part of the planned early unwind of these transactions disclosed in Barclays PLC’s Q1 2022 Results Announcement, Barclays Bank PLC purchased the Senior Notes at fair value from the UKRF for cash in December 2022. The UKRF’s investment in the Senior Notes did not qualify as a plan asset under IAS 19; so the purchase of the Senior Notes for cash increased IAS 19 plan assets by £1,250m and thereby accelerated the regulatory capital impact of the deficit reduction contributions to 2022 from 2023, 2024 and 2025. Barclays Bank PLC subsequently reacquired the gilts held by Heron and Heron 2 in exchange for the redemption of all the fixed rate notes. The gilts were disposed of by Barclays Bank PLC prior to year end. Other support measures agreed which remain in place Collateral – Barclays Bank PLC has entered into an agreement with the UKRF Trustee to provide collateral to cover at least 100% of any funding deficit with an overall cap of £9bn, to provide security for the UKRF funding deficit as it increases or decreases over time. The collateral pool is currently zero, reflecting the surplus funding position. The arrangement provides the UKRF Trustee with dedicated access to the pool of assets in the event of Barclays Bank PLC not paying a deficit reduction contribution to the UKRF or in the event of Barclays Bank PLC’s insolvency. Participation – As permitted under the Financial Services and Markets Act 2000 (Banking Reform) (Pensions) Regulations 2016, Barclays Bank UK PLC is a participating employer in the UKRF and will remain so during a transitional phase until September 2025 as set out in a deed of participation. Barclays Bank UK PLC will make contributions for the future service of its employees who are currently Afterwork members and, in the event of Barclays Bank PLC’s insolvency during this period provision has been made to require Barclays Bank UK PLC to become the principal employer of the UKRF. Barclays Bank PLC’s Section 75 debt would be triggered by the insolvency (the debt would be calculated after allowing for the payment to the UKRF of the collateral above). Defined benefit contributions paid with respect to the UKRF were as follows: Contributions paid 2022 2021 2020 £m 1,785 955 748 There were nil (2021: nil) Section 75 contributions included within the Group’s contributions paid as no participating employers left the UKRF in 2022. The Group’s expected contribution to the UKRF in respect of defined benefits in 2023 is £38m (2022: £546m). In addition, the expected contributions to UK defined contribution schemes in 2023 is £32m (2022: £33m) to the UKRF and £243m (2022: £221m) to the BPSP. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 500 Notes to the financial statements (continued) Scope of consolidation Scope of consolidation The notes included in this section present information on the Group’s investments in subsidiaries, joint ventures and associates and its interests in structured entities. Detail is also given on securitisation transactions the Group has entered into and arrangements that are held off-balance sheet. 34 Principal subsidiaries The Group applies IFRS 10 Consolidated Financial Statements. The consolidated financial statements combine the financial statements of the Group and all its subsidiaries. Subsidiaries are entities over which the Group has control. Under IFRS 10, this is when the Group is exposed or has rights to variable returns from its involvement in the entity and has the ability to affect those returns through its power over the entity. The Group reassesses whether it controls an entity if facts and circumstances indicate that there have been changes to its power, its rights to variable returns or its ability to use its power to affect the amount of its returns. Intra-group transactions and balances are eliminated on consolidation and consistent accounting policies are used throughout the Group for the purposes of the consolidation. Changes in ownership interests in subsidiaries are accounted for as equity transactions if they occur after control has been obtained and they do not result in loss of control. The significant judgements used in applying this policy are set out below. Accounting for investment in subsidiaries In the individual financial statements of Barclays PLC, investments in subsidiaries are stated at cost less impairment. Principal subsidiaries for the Group are set out below. This includes those subsidiaries that are most significant in the context of the Group’s business, results or financial position. Company name Barclays Bank PLC Barclays Bank UK PLC Principal place of business or incorporation United Kingdom United Kingdom Nature of business Banking, holding company Banking, holding company Barclays Bank Ireland PLC Ireland Banking Barclays Execution Services Limited Barclays Capital Inc. Barclays Capital Securities Limited Barclays Securities Japan Limited Barclays US LLC Barclays Bank Delaware United Kingdom United States Service company Securities dealing United Kingdom Securities dealing Japan United States United States Securities dealing Holding company Credit card issuer Non-controlling interests - proportion of ownership interests Non-controlling interests - proportion of voting interests Percentage of voting rights held % 100 100 100 100 100 100 100 100 100 % 2 — — — — — — — — % — — — — — — — — — The country of registration or incorporation is also the principal area of operation of each of the above subsidiaries. Ownership interests are in some cases different to voting interests due to the existence of non-voting equity interests, such as preference shares. Refer to Note 30 for more information. Determining whether the Group has control of an entity is generally straightforward based on ownership of the majority of the voting capital. However, in certain instances, this determination will involve judgement, particularly in the case of structured entities where voting rights are often not the determining factor in decisions over the relevant activities. This judgement will involve assessing the purpose and design of the entity. It will also often be necessary to consider whether the Group, or another involved party with power over the relevant activities, is acting as a principal in its own right or as an agent on behalf of others.  There is also often considerable judgement involved in the ongoing assessment of control over structured entities. In this regard, where market conditions have deteriorated such that the other investors’ exposures to the structure’s variable returns have been substantively eliminated, the Group may conclude that the managers of the structured entity are acting as its agent and therefore will consolidate the structured entity. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 501 Notes to the financial statements (continued) Scope of consolidation An interest in equity voting rights exceeding 50% would typically indicate that the Group has control of an entity. However, the entity set out below is excluded from consolidation because the Group does not have exposure to its variable returns. Company name Palomino Limited Country of registration or incorporation Cayman Islands Percentage of voting rights held Equity shareholders' funds Retained profit for the year % 100 £m — £m — This entity is managed by an external counterparty and consequently is not controlled by the Group. Interests relating to this entity are included in Note 35. Significant restrictions As is typical for a group of its size and international scope, there are restrictions on the ability of Barclays PLC to obtain distributions of capital, access the assets or repay the liabilities of members of its Group due to the statutory, regulatory and contractual requirements of its subsidiaries and due to the protective rights of non-controlling interests. These are considered below. Regulatory requirements Barclays’ principal subsidiary companies have assets and liabilities before intercompany eliminations of £1,962bn (2021: £1,833bn) and £1,869bn (2021: £1,737bn) respectively. Certain of these assets and liabilities are subject to prudential regulation and regulatory capital requirements in the countries in which they are regulated. These require entities to maintain minimum capital levels which cannot be returned to the parent company, Barclays PLC, on a going concern basis. In order to meet capital requirements, subsidiaries may issue certain equity-accounted and debt-accounted financial instruments and non-equity instruments such as Tier 1 and Tier 2 capital instruments and other forms of subordinated liabilities. Refer to Note 27 and Note 28 for particulars of these instruments. These instruments may be subject to cancellation clauses or preference share restrictions that would limit the ability of the entity to repatriate the capital on a timely basis. Liquidity requirements Regulated subsidiaries of the Group are required to meet applicable PRA or local regulatory requirements pertaining to liquidity. Some of the regulated subsidiaries include Barclays Bank PLC and Barclays Capital Securities Limited (which are regulated on a combined basis under a Domestic Liquidity Sub-Group (DoLSub) arrangement), Barclays Bank UK PLC, Barclays Bank Ireland PLC, Barclays Capital Inc. and Barclays Bank Delaware. Refer to the Liquidity risk section for further details of liquidity requirements, including those of the Group’s significant subsidiaries. Statutory requirements The Group’s subsidiaries are subject to statutory requirements not to make distributions of capital and unrealised profits and generally to maintain solvency. These requirements restrict the ability of subsidiaries to make remittances of dividends to Barclays PLC, the ultimate parent, except in the event of a legal capital reduction or liquidation. In most cases, the regulatory restrictions referred to above exceed the statutory restrictions. Asset encumbrance The Group uses its financial assets to raise finance in the form of securitisations and through the liquidity schemes of central banks, as well as to provide security to the UK Retirement Fund. Once encumbered, the assets are not available for transfer around the Group. The assets typically affected are disclosed in Note 38. Other restrictions The Group is required to maintain balances with central banks and other regulatory authorities, and these amounted to £3,457m (2021: £4,750m). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 502 Notes to the financial statements (continued) Scope of consolidation 35 Structured entities A structured entity is an entity in which voting or similar rights are not the dominant factor in deciding who controls the entity. Voting rights may relate to administrative tasks only, with the relevant activities of the entity being directed by means of contractual arrangements. Structured entities are generally created to achieve a narrow and well-defined objective with restrictions around their ongoing activities. Depending on the Group’s power over the activities of the entity and its exposure to and ability to influence its own returns, it may consolidate the entity. In other cases, it may sponsor or have exposure to such an entity but not consolidate it. Consolidated structured entities The Group has contractual arrangements which may require it to provide financial support to the following types of consolidated structured entities: • Securitisation vehicles: The Group uses securitisation as a source of financing and a means of risk transfer. Where entities are controlled by the Group, they are consolidated. Refer to Note 37 for further detail. ▪ Commercial Paper (CP) conduits: These entities issue CP and use the proceeds to lend to clients as part of the Group's multi-seller conduit programme. The Group has provided £20.8bn (2021: £17.2bn) in contractual liquidity facilities to the CP conduits that the Group consolidates. These amounts represent the maximum the conduits can lend externally. The amounts of CP conduit lending (drawn and undrawn) to unconsolidated structured entities can be seen in Other interests in unconsolidated structured entities under multi-seller conduit programme in the Nature of interest table. ▪ Employee benefit trusts: The Group provides capital contributions to employee benefit trusts to enable them to meet obligations to employees in relation to share-based remuneration arrangements. ▪ Tender Option Bond (TOB) trusts: During 2022, the Group provided undrawn liquidity facilities of £3.8bn (2021: £3.3bn) to consolidated TOB trusts. These trusts invest in fixed income instruments issued by state, local or other municipalities in the United States, funded by long-term senior floating-rate notes and junior residual securities. Unconsolidated structured entities The term ‘unconsolidated structured entities’ refers to structured entities not controlled by Barclays, and are established either by Barclays or a third party. An interest in a structured entity is any form of contractual or non-contractual involvement which creates variability in returns arising from the performance of the entity for the Group. Such interests include holdings of debt or equity securities, derivatives that transfer financial risks from the entity to the Group, lending, loan commitments, financial guarantees and investment management agreements. The Group enters into transactions with unconsolidated structured entities in the normal course of business to facilitate customer transactions, to provide risk management services and for specific investment opportunities. This is predominantly within the CIB business. Structured entities may take the form of funds, trusts, securitisation vehicles, and private investment companies. The largest transactions for Barclays include loans and derivatives with hedge fund structures and special purpose entities, multi-seller conduit lending, holding notes issued by securitisation vehicles, and facilitating customer requirements through funds. The nature and extent of the Group’s interests in structured entities is summarised below: Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 503 Notes to the financial statements (continued) Scope of consolidation Summary of interests in unconsolidated structured entities As at 31 December 2022 Assets Trading portfolio assets Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending Other assets Total assets Liabilities As at 31 December 2021 Assets Trading portfolio assets Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending Other assets Total assets Liabilities Secured financing interests Traded derivatives Other interests Short-term traded £m £m — 75,166 — — — 117 — 8,632 — — — — — — £m — — 4,555 — — — — £m — 2,459 — 423 44,292 — 69 Total £m 8,632 77,625 4,555 423 44,292 117 69 75,283 8,632 4,555 47,243 135,713 — 61,816 — — — 104 — 7,170 — — — — — — — — 5,160 — — — — — 3,490 — 91 28,227 — 17 61,920 7,170 5,160 31,825 106,075 — 8,460 7,170 65,306 5,160 91 28,227 104 17 Derivative financial instruments — — 8,460 — Derivative financial instruments — — 9,543 — 9,543 Secured financing arrangements, short-term traded interests and traded derivatives are typically managed under Market risk management policies described in the Market risk management section which includes an indication of the change of risk measures compared to last year. For this reason, the total assets of these entities are not considered meaningful for the purposes of understanding the related risks and so have not been presented. Other interests include conduits and lending where the interest is driven by normal customer demand. As at 31 December 2022, there were 6,267 (2021: 5,891) structured entities that Barclays entered into transactions with. Secured financing The Group routinely enters into reverse repurchase contracts, margin lending, stock borrowing and similar arrangements on normal commercial terms where the counterparty to the arrangement is a structured entity. Due to the nature of these arrangements, especially the transfer of collateral and ongoing margining, the Group is able to manage its variable exposure to the performance of the structured entity counterparty. The counterparties included in secured financing mainly include hedge fund limited structures, investment companies and special purpose entities. Short-term traded interests As part of its market making activities, the Group buys and sells interests in structured vehicles, which are predominantly debt securities issued by asset securitisation vehicles. Such interests are typically held individually or as part of a larger portfolio for no more than 90 days. In such cases, the Group typically has no other involvement with the structured entity other than the securities it holds as part of trading activities and its maximum exposure to loss is restricted to the carrying value of the asset. Traded derivatives The Group enters into a variety of derivative contracts with structured entities which reference market risk variables such as interest rates, equities, foreign exchange rates and credit indices among other things. The main derivative types which are considered interests in structured entities include equity options, index-based and entity-specific credit default swaps, and total return swaps. Interest rate swaps and foreign exchange derivatives that are not complex and which expose the Group to insignificant credit risk by being senior in the payment waterfall of a securitisation and derivatives that are determined to introduce risk or variability to a structured entity are not considered to be an interest in an entity and have been excluded from the disclosures. A description of the types of derivatives and the risk management practices are detailed in Note 14. The risk of loss may be mitigated through ongoing margining requirements as well as a right to cash flows from the structured entity which are senior in the payment Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 504 Notes to the financial statements (continued) Scope of consolidation waterfall. Such margining requirements are consistent with market practice for many derivative arrangements and in line with the Group’s normal credit policies. Derivative transactions require the counterparty to provide cash or other collateral under margining agreements to mitigate counterparty credit risk. The Group is mainly exposed to settlement risk on these derivatives which is mitigated through daily margining. Total notional contract amounts were £244,780m (2021: £217,055m). Except for credit default swaps where the maximum exposure to loss is the swap notional amount, it is not possible to estimate the maximum exposure to loss in respect of derivative positions as the fair value of derivatives is subject to changes in market rates of interest, exchange rates and credit indices which by their nature are uncertain. In addition, the Group’s losses would be subject to mitigating action under its traded market risk and credit risk policies that require the counterparty to provide collateral in cash or other assets in most cases. Other interests in unconsolidated structured entities The Group’s interests in structured entities not held for the purposes of short-term trading activities are set out below, summarised by the nature of the interest and limited to significant categories, based on maximum exposure to loss. Nature of interest As at 31 December 2022 Financial assets at fair value through the income statement Financial assets at fair value through other comprehensive income Loans and advances at amortised cost Other assets Total on-balance sheet exposures Total off-balance sheet notional amounts Maximum exposure to loss Total assets of the entity As at 31 December 2021 Financial assets at fair value through the income statement Financial assets at fair value through other comprehensive income Loans and advances at amortised cost Other assets Total on-balance sheet exposures Total off-balance sheet notional amounts Maximum exposure to loss Total assets of the entity Multi-seller conduit programme £m — — 8,681 32 8,713 10,552 19,265 66,504 — — 5,184 8 5,192 11,015 16,207 65,441 Lending £m 59 220 22,069 33 22,381 10,926 33,307 160,002 70 53 14,538 4 14,665 9,426 24,091 166,238 Of which: Barclays owned, not consolidated entitiesa £m Total £m Other £m 2,400 2,459 2,284 203 13,542 4 16,149 — 16,149 88,779 423 44,292 69 47,243 21,478 68,721 315,285 — — — 2,284 — 2,284 8,690 3,420 3,490 3,335 38 8,505 5 11,968 — 11,968 52,873 91 28,227 17 31,825 20,441 52,266 284,552 — — — 3,335 — 3,335 11,513 Note a Comprises of Barclays owned, not consolidated structured entities per IFRS 10 Consolidated Financial Statements, and Barclays sponsored entities, Refer to Note 34 Principal subsidiaries for more details on consolidation. Maximum exposure to loss Unless specified otherwise below, the Group’s maximum exposure to loss is the total of its on-balance sheet positions and its off- balance sheet arrangements, being loan commitments and financial guarantees. Exposure to loss is mitigated through collateral, financial guarantees, the availability of netting and credit protection held. Multi-seller conduit programme Barclays' multi-seller conduit programme engages in providing financing to various clients and holds whole or partial interests in pools of receivables or similar obligations. These instruments are protected from loss through over-collateralisation, seller guarantees, or other credit enhancements provided to the conduit entities. The Group’s off-balance sheet exposure included in the table above represents liquidity facilities that are provided to the conduit for the benefit of the holders of the commercial paper issued by the conduit and will only be drawn where the conduit is unable to access the commercial paper market. If these liquidity facilities are drawn, the Group is protected from loss through over-collateralisation, seller guarantees, or other credit enhancements provided to the conduit. Lending The portfolio includes lending provided by the Group to unconsolidated structured entities in the normal course of its lending business to earn income in the form of interest and lending fees and includes loans to structured entities that are generally collateralised by property, equipment or other assets. All loans are subject to the Group’s credit sanctioning process. Collateral arrangements are Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 505 Notes to the financial statements (continued) Scope of consolidation specific to the circumstances of each loan with additional guarantees and collateral sought from the sponsor of the structured entity for certain arrangements. During the period the Group incurred an impairment of £32m (2021: £28m) against such facilities. Other This includes fair value loans with structured entities where the market risk is materially hedged with corresponding derivative contracts, interests in debt securities issued by securitisation vehicles and drawn and undrawn loan facilities to these entities. In addition, other includes investment funds with interests restricted to management fees based on performance of the fund and trusts held on behalf of beneficiaries with interests restricted to unpaid fees. Assets transferred to sponsored unconsolidated structured entities Barclays is considered to sponsor another entity if: it had a key role in establishing that entity, it transferred assets to the entity, the Barclays name appears in the name of the entity or it provides guarantees on the entity’s performance. As at 31 December 2022, assets transferred to sponsored unconsolidated structured entities were £1,665m (2021: £1,662m). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 506 Notes to the financial statements (continued) Scope of consolidation 36 Investments in associates and joint ventures Accounting for associates and joint ventures The Group applies IAS 28 Investments in Associates and IFRS 11 Joint Arrangements. Associates are entities in which the Group has significant influence, but not control, over the operating and financial policies. Generally the Group holds more than 20% but less than 50% of their voting shares. Joint ventures are arrangements where the Group has joint control and rights to the net assets of the entity. The Group’s investments in associates and joint ventures are initially recorded at cost and increased (or decreased) each year by the Group’s share of the post acquisition profit/(loss). The Group ceases to recognise its share of the losses of equity accounted associates when its share of the net assets and amounts due from the entity have been written off in full, unless it has a contractual or constructive obligation to make good its share of the losses. In some cases, investments in these entities may be held at fair value through profit or loss, for example, those held by private equity businesses. The equity accounted associates include the Group's investment in the Business Growth Fund £669m (2021: £699m) which has increased due to a fair value gain in its investments by £(21)m (2021: £220m). Equity accounted Held at fair value through profit or loss Total 2022 Associates Joint ventures £m 695 — 695 £m 227 435 662 Total £m 922 435 1,357 2021 Associates Joint ventures £m 722 — 722 £m 277 444 721 Total £m 999 444 1,443 Summarised financial information for the Group’s equity accounted associates and joint ventures is set out below. The amounts shown are the Group’s share of the net income of the investees for the year ended 31 December 2021, with the exception of certain undertakings for which the amounts are based on accounts made up to dates not earlier than three months before the balance sheet date. Profit/(loss) from continuing operations Other comprehensive income/(loss) Total comprehensive income/(loss) from continuing operations Associates Joint ventures 2022 £m (21) — (21) 2021 £m 219 1 220 2022 2021 £m 26 1 27 £m 35 5 40 Unrecognised shares of the losses of individually immaterial associates and joint ventures were £nil (2021: £nil). The Group has provided £nil (2021: £nil) to its joint ventures and associates. The Barclays drawn commitments to finance or otherwise provide resources to its joint ventures and associates are £474m (2021: £482m) The Barclays share of the associates and joint ventures unutilised credit facilities commitments amounted to £1,796m (2021: £1,760m). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 507 Notes to the financial statements (continued) Scope of consolidation 37 Securitisations Accounting for securitisations The Group uses securitisations as a source of finance and a means of risk transfer. Such transactions generally result in the transfer of contractual cash flows from portfolios of financial assets to holders of issued debt securities. Securitisations may, depending on the individual arrangement, result in continued recognition of the securitised assets and the recognition of the debt securities issued in the transaction; lead to partial continued recognition of the assets to the extent of the Group’s continuing involvement in those assets or lead to derecognition of the assets and the separate recognition, as assets or liabilities, of any rights and obligations created or retained in the transfer. Full derecognition only occurs when the Group transfers both its contractual right to receive cash flows from the financial assets, or retains the contractual rights to receive the cash flows, but assumes a contractual obligation to pay the cash flows to another party without material delay or reinvestment, and also transfers substantially all the risks and rewards of ownership, including credit risk, prepayment risk and interest rate risk. In the course of its normal banking activities, the Group makes transfers of financial assets, either where legal rights to the cash flows from the asset are passed to the counterparty or beneficially, where the Group retains the rights to the cash flows but assumes a responsibility to transfer them to the counterparty. Depending on the nature of the transaction, this may result in derecognition of the assets in their entirety, partial derecognition or no derecognition of the assets subject to the transfer. A summary of the main transactions, and the assets and liabilities and the financial risks arising from these transactions, is set out below: Transfers of financial assets that do not result in derecognition Securitisations The Group was party to securitisation transactions involving its credit card balances and other personal lending. In these transactions, the assets, interests in the assets, or beneficial interests in the cash flows arising from the assets, are transferred to a special purpose entity, which then issues interest bearing debt securities to third party investors. Securitisations may, depending on the individual arrangement, result in continued recognition of the securitised assets and the recognition of the debt securities issued in the transaction. Partial continued recognition of the assets to the extent of the Group’s continuing involvement in those assets can also occur or derecognition of the assets and the separate recognition, as assets or liabilities, of any rights and obligations created or retained in the transfer. The following table shows the carrying amount of securitised assets that have not resulted in full derecognition, together with the associated liabilities, for each category of asset on the balance sheet: Loans and advances at amortised cost Credit cards, unsecured and other retail lending Mortgage Loans Financial assets at FVTPL Mortgage Loans Total 2022 2021 Assets Liabilities Assets Liabilities Carrying amount Fair value Carrying amount Fair value Carrying amount Fair value Carrying amount Fair value £m £m £m £m £m £m £m £m 5,324 496 330 6,150 5,761 (1,537) (1,460) 1,262 1,382 (1,225) (1,219) 439 (20) (20) 330 0 0 0 41 0 41 0 0 0 0 6,530 (1,557) (1,480) 1,303 1,423 (1,225) (1,219) Balances included within loans and advances at amortised cost represent securitisations where substantially all the risks and rewards of the asset have been retained by the Group and balances included within Financial assets at FVTPL represent securitisations where the risks and rewards are neither substantially transferred nor retained. The relationship between the transferred assets and the associated liabilities is that holders of notes may only look to cash flows from the securitised assets for payments of principal and interest due to them under the terms of their notes, although the contractual terms of their notes may be different to the maturity and interest of the transferred assets. If Barclays transfers a financial asset but does not transfer or retain substantially all the risk and rewards of the asset and retains control over it, the transferred assets is recognised to the extent of Barclays’ continuing involvement. In 2022, financial assets of £828m (2021: £249m) were transferred in this manner and the carrying value of the asset representing continued involvement is included in the table above. For transfers of assets in relation to repurchase agreements, refer to Note 38. Continuing involvement in financial assets that have been derecognised In some cases, the Group may have transferred a financial asset in its entirety but may have continuing involvement in it. This arises in asset securitisations where loans and asset backed securities were derecognised as a result of the Group’s involvement with asset backed securities, residential mortgage backed securities and commercial mortgage backed securities. Continuing involvement largely arises from providing financing into these structures in the form of retained notes, which do not bear first losses. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 508 Notes to the financial statements (continued) Scope of consolidation The table below shows the potential financial implications of such continuing involvement: Type of transfer 2022 Asset backed securities Residential mortgage backed securities Commercial mortgage backed securities Total 2021 Asset backed securities Residential mortgage backed securities Commercial mortgage backed securities Total Continuing involvementa Gain from continuing involvement Carrying amount Fair value Maximum exposure to loss For the year ended Cumulative to 31 December £m £m £m 8 913 412 8 907 357 8 913 412 1,333 1,272 1,333 25 574 311 910 25 574 307 906 25 574 311 910 £m 1 18 5 24 1 3 5 9 £m 3 22 16 41 2 4 11 17 Note a Assets which represent the Group’s continuing involvement in derecognised assets are recorded in Loans and advances at amortised cost and Debt securities at FVTPL. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 509 Notes to the financial statements (continued) Scope of consolidation 38 Assets pledged, collateral received and assets transferred Assets are pledged or transferred as collateral to secure liabilities under repurchase agreements, securitisations and stock lending agreements or as security deposits relating to derivatives. Assets transferred are non-cash assets transferred to a third party that do not qualify for derecognition from the Group balance sheet, for example because Barclays retains substantially all the exposure to those assets under an agreement to repurchase them in the future for a fixed price. Assets pledged or transferred as collateral include all assets categorised as encumbered in the disclosure on pages 180 to 182 of the Barclays PLC Pillar 3 Report 2022 (unaudited), other than those held in commercial paper conduits. In these transactions, the Group will be required to step in to provide financing itself under a liquidity facility if the vehicle cannot access the commercial paper market. Where non-cash assets are pledged or transferred as collateral for cash received, the asset continues to be recognised in full, and a related liability is also recognised on the balance sheet. Where non-cash assets are pledged or transferred as collateral in an exchange for non-cash assets, the transferred asset continues to be recognised in full, and there is no associated liability as the non-cash collateral received is not recognised on the balance sheet. The Group is unable to use, sell or pledge the transferred assets for the duration of the transaction and remains exposed to interest rate risk and credit risk on these pledged assets. Unless stated, the counterparty's recourse is not limited to the transferred assets. The following table summarises the nature and carrying amount of the assets pledged as security against these liabilities: Cash collateral and settlements Loans and advances at amortised cost Trading portfolio assets Financial assets at fair value through the income statement Financial assets at fair value through other comprehensive income Assets pledged 2022 £m 78,996 64,772 63,969 8,220 18,210 2021 £m 66,138 65,216 71,518 5,595 13,748 234,167 222,215 The following table summarises the transferred financial assets and the associated liabilities. The transferred assets represent the gross carrying value of the assets pledged and the associated liabilities represent the IFRS balance sheet value of the related liability recorded on the balance sheet: At 31 December 2022 Derivatives Repurchase agreements Securities lending arrangements Other At 31 December 2021 Derivatives Repurchase agreements Securities lending arrangements Other Transferred assets Associated liabilities £m £m 79,474 74,291 67,554 12,848 (79,474) (46,617) — (11,055) 234,167 (137,146) 66,744 71,820 69,316 14,335 222,215 (66,744) (49,543) — (12,121) (128,408) For repurchase agreements the difference between transferred assets and the associated liabilities is predominantly due to IFRS netting. Included within Other are agreements where a counterparty's recourse is limited to the transferred assets. The relationship between the gross transferred assets and the associated liabilities is that holders of notes may only look to cash flows from the securitised assets for payments of principal and interest due to them under the terms of their notes. Carrying value Associated Transferred assets liabilities Transferred assets Fair value Associated liabilities Net position £m £m £m £m £m 2022 Recourse to transferred assets only 6,150 (1,557) 6,530 (1,480) 5,050 2021 Recourse to transferred assets only 1,303 (1,225) 1,423 (1,219) 204 The Group has an additional £5.3bn (2021: £5.8bn) of loans and advances within its asset backed funding programmes that can readily be used to raise additional secured funding and are available to support future issuances. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 510 Notes to the financial statements (continued) Scope of consolidation Collateral held as security for assets Under certain transactions, including reverse repurchase agreements and stock borrowing transactions, the Group is allowed to resell or re-pledge the collateral held. The fair value at the balance sheet date of collateral accepted and re-pledged or transferred to others was as follows: Fair value of securities accepted as collateral Of which fair value of securities re-pledged/transferred to others 2022 £m 988,340 892,026 2021 £m 928,999 814,448 Additional disclosure has been included in collateral and other credit enhancements in the Risk review section. Assets pledged as collateral include all assets categorised as encumbered in the disclosure on pages 180 to 182 of the Barclays PLC Pillar 3 Report 2022 (unaudited). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 511 Notes to the financial statements (continued) Other disclosure matters Other disclosure matters The notes included in this section focus on related party transactions, Auditor's remuneration and Directors’ remuneration. Related parties include any subsidiaries, associates, joint ventures and Key Management Personnel. 39 Related party transactions and Directors’ remuneration Related party transactions Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions, or one other party controls both. Subsidiaries Transactions between Barclays PLC and its subsidiaries meet the definition of related party transactions. Where these are eliminated on consolidation, they are not disclosed in the Group’s financial statements. Transactions between Barclays PLC and its subsidiaries are fully disclosed in Barclays PLC’s financial statements. A list of the Group’s principal subsidiaries is shown in Note 34. Associates, joint ventures and other entities The Group provides banking services to its associates, joint ventures and the Group pension funds (principally the UK Retirement Fund), providing loans, overdrafts, interest and non-interest bearing deposits and current accounts to these entities as well as other services. Group companies also provide investment management and custodian services to the Group pension schemes. All of these transactions are conducted on the same terms as third party transactions. Summarised financial information for the Group’s investments in associates and joint ventures is set out in Note 36. Amounts included in the Group’s financial statements, in aggregate, by category of related party entity are as follows: For the year ended and as at 31 December 2022 Total income Credit impairment charges Operating expenses Total assets Total liabilities For the year ended and as at 31 December 2021 Total income Credit impairment charges Operating expenses Total assets Total liabilities Associates Joint ventures Pension funds £m (2) — (15) — 408 — — (20) — 177 £m 91 — — 1,336 — 50 — — 1,278 — £m 5 — (1) 3 166 5 — (1) 3 81 Total liabilities includes derivatives transacted on behalf of the pension funds of £110m (2021: £18m). Key Management Personnel Key Management Personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities of Barclays PLC (directly or indirectly) and comprise the Directors and Officers of Barclays PLC, certain direct reports of the Group Chief Executive and the heads of major business units and functions. The Group provides banking services to Key Management Personnel and persons connected to them. Transactions during the year and the balances outstanding were as follows: Loans outstanding As at 1 January Loans issued during the yeara Loan repayments during the yearb As at 31 December Notes a b Includes loans issued to existing Key Management Personnel and new or existing loans issued to newly appointed Key Management Personnel. Includes loan repayments by existing Key Management Personnel and loans to former Key Management Personnel. 2022 £m 7.8 1.4 (1.7) 7.5 2021 £m 9.2 0.4 (1.8) 7.8 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 512 Notes to the financial statements (continued) Other disclosure matters No allowances for impairment were recognised in respect of loans to Key Management Personnel (or any connected person). Deposits outstanding As at 1 January Deposits received during the yeara Deposits repaid during the yearb As at 31 December 2022 £m 9.1 47.9 (41.8) 15.2 2021 £m 10.4 37.6 (38.9) 9.1 Notes a b Includes deposits received from existing Key Management Personnel and new or existing deposits received from newly appointed Key Management Personnel. Includes deposits repaid by existing Key Management Personnel and deposits of former Key Management Personnel. Total commitments outstanding Total commitments outstanding refers to the total of any undrawn amounts on credit cards and/or overdraft facilities provided to Key Management Personnel. Total commitments outstanding as at 31 December 2022 were £0.5m (2021: £0.6m). All loans to Key Management Personnel (and persons connected to them) were made in the ordinary course of business; were made on substantially the same terms, including interest rates and collateral, as those prevailing at the same time for comparable transactions with other persons; and did not involve more than a normal risk of collectability or present other unfavourable features. Remuneration of Key Management Personnel Total remuneration awarded to Key Management Personnel below represents salaries, short term benefits and pensions contributions received during the year and awards made as part of the latest remuneration decisions in relation to the year. Costs recognised in the income statement reflect the accounting charge for the year included within operating expenses. The difference between the values awarded and the recognised income statement charge principally relates to the recognition of costs for deferred awards. Figures are provided for the period that individuals met the definition of Key Management Personnel. Salaries and other short-term benefits Pension costs Other long-term benefits Share-based payments Employer social security charges on emoluments Costs recognised for accounting purposes Employer social security charges on emoluments Other long-term benefits – difference between awards granted and costs recognised Share-based payments – difference between awards granted and costs recognised Total remuneration awarded 2022 £m 32.4 — 7.8 9.8 6.7 56.7 (6.7) — 6.5 56.5 2021 £m 37.8 — 8.5 12.2 7.2 65.7 (7.2) 3.1 6.9 68.5 Disclosure required by the Companies Act 2006 The following information regarding the Barclays PLC Board of Directors is presented in accordance with the Companies Act 2006: Aggregate emolumentsa Amounts paid under LTIPsb 2022 £m 9.3 0.4 9.7 2021 £m 8.2 1.2 9.4 Notes a The aggregate emoluments include amounts paid for the 2022 year. In addition, deferred share awards for 2022 with a total value at grant of £2.3m (2021: £1.4m) will be made to C.S. Venkatakrishnan, Anna Cross and Tushar Morzaria which will only vest subject to meeting certain conditions. b The figure above for "Amounts paid under LTIPs" in 2022 relates to LTIP awards that were released to Tushar Morzaria in 2022. Dividend shares released are excluded. The LTIP figure in the single total figure table for Executive Directors' 2022 remuneration in the Directors' Remuneration report relates to the award that is scheduled to be released in 2023 in respect of the 2020-2022 LTIP cycle. There were no pension contributions paid to defined contribution schemes on behalf of Directors (2021: £nil). There were no notional pension contributions to defined contribution schemes. As at 31 December 2022, there were no Directors accruing benefits under a defined benefit scheme (2021: nil). Directors’ and Officers’ shareholdings and options The beneficial ownership of ordinary share capital of Barclays PLC by all Directors and Officers of Barclays PLC (involving 23 persons) at 31 December 2022 amounted to 15,944,986 (2021: 17,876,352) ordinary shares of 25p each (0.11% of the ordinary share capital outstanding). As at 31 December 2022, Executive Directors and Officers of Barclays PLC (involving 11 persons) held options to purchase a total of 62,268 (2021: 62,268) Barclays PLC ordinary shares of 25p each at a weighted average price of 93p under Sharesave. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 513 Notes to the financial statements (continued) Other disclosure matters Advances and credit to Directors and guarantees on behalf of Directors In accordance with Section 413 of the Companies Act 2006, the total amount of advances and credits made available in 2022 to persons who served as Directors during the year was £0.2m (2021: £0.2m). The total value of guarantees entered into on behalf of Directors during 2022 was £nil (2021: £nil). 40 Auditor’s remuneration Auditor’s remuneration is included within consultancy, legal and professional fees in administration and general expenses and comprises: Audit of the Barclays Group's annual accounts Other services: Audit of the Company's subsidiariesa Other audit related feesb Other services Total Auditor's remuneration 2022 £m 10 48 11 2 71 2021 £m 9 41 10 2 62 2020 £m 9 38 10 2 59 Notes a Comprises the fees for the statutory audit of subsidiaries both inside and outside the UK and fees for work performed by associates of KPMG in respect of the consolidated financial statements of the Company. b Comprises services in relation to statutory and regulatory filings. These include audit services for the review of the interim financial information under the Listing Rules of the UK listing authority. Audit scope changes are finalised following the completion of the audit and recognised when agreed. The 2022 audit fee includes £2m (2021: £3m) relating to the previous year’s audit. 41 Interest rate benchmark reform Following the financial crisis, the reform and replacement of benchmark interest rates such as LIBOR has been a priority for global regulators. As a result, the UK’s Financial Conduct Authority (FCA) and other global regulators instructed market participants to prepare for the cessation of most LIBOR rates after the end of 2021, and to adopt “Risk-Free Rates” (RFRs). Pursuant to FCA announcements during 2021, panel bank submissions for all GBP, JPY, EUR and CHF LIBOR tenors ceased after 31 December 2021. For USD, certain actively used tenors will continue to be provided until end June 2023 in their current form, however in line with the US banking regulators’ joint statement, Barclays ceased issuing or entering into new contracts that use USD LIBOR as a reference rate from 31 December 2021, other than in relation to those allowable use cases set out under the FCA's prohibition notice (ref 21A). These include, amongst others, market making in support of client activity; or transactions that reduce or hedge Barclays' or any client of Barclays' USD LIBOR exposure on contracts entered into before 1 January 2022. The Group’s exposure to rates subject to benchmark interest rate reform has been predominantly to GBP, USD, JPY and CHF LIBOR and Euro Overnight Index Average (EONIA) in addition to GBP LIBOR ICE Swap Rate, JPY LIBOR Tokyo Swap Rate and USD LIBOR ICE Swap Rate, with the vast majority concentrated in derivatives within the Investment Bank. Some additional exposure exists on floating rate loans and advances, repurchase and securities lending agreements and debt securities held and issued within the Corporate and Investment Bank. Following transition activity in late 2021 and early 2022, almost all GBP LIBOR, GBP LIBOR ICE Swap Rate, JPY LIBOR and JPY LIBOR Tokyo Swap Rate and CHF LIBOR and EONIA positions (“2021 scope”) have transitioned onto RFRs and while there are a number of benchmarks yet to cease, the Group’s risk exposure is now mainly to USD LIBOR and the USD LIBOR ICE Swap Rate. There are key differences between IBORs and RFRs. IBORs are ‘term rates’, which means that they are published for a borrowing period (for example three months) and they are ‘forward-looking’, because they are published at the beginning of a borrowing period, based upon an estimated inter-bank borrowing cost for the period. RFRs are based upon overnight rates from actual transactions and are therefore published after the end of the overnight borrowing period. Furthermore, IBORs include term and credit risk premiums. Therefore, to transition existing contracts and agreements to RFRs, adjustments for term and credit differences may need to be applied to RFR-linked rates. The methodologies for these adjustments have been determined through in-depth consultations by industry working groups, on behalf of the respective global regulators and related market participants. How the Group is managing the transition to alternative benchmark rates Barclays has established a Group-wide LIBOR Transition Programme. The Transition Programme spans all business lines and has cross-functional governance which includes Legal, Compliance, Conduct Risk, Risk and Finance. The Transition Programme aims to drive strategic execution and identify, manage and resolve key risks and issues as they arise. Barclays continues to provide quarterly updates on progress and exposures to the PRA/FCA and other regulators as required. The Transition Programme follows a risk-based approach, using recognised ‘change delivery’ control standards. Accountable Executives are in place within key working groups and workstreams, with overall Board oversight delegated to the Board Risk Committee. Approaches to USD LIBOR and USD LIBOR ICE Swap Rate exposure transition vary by product and nature of counterparty. The Group has engaged with counterparties to transition or include robust fallback provisions where not already agreed in contracts with maturities after June 2023, when USD LIBOR and the USD LIBOR ICE Swap Rate will either cease to be published or cease to be published, in its current form. Any fallback provision will provide the relevant replacement rate, in the case of the ISDA 2020 IBOR Fallbacks Protocol this is the RFR plus a credit adjustment spread. For bilateral derivative exposure, adherence to the relevant ISDA Fallback Protocols have provided Barclays with an efficient mechanism to amend outstanding trades to incorporate fallbacks. Beyond the ISDA 2020 IBOR Fallbacks Protocol and the ISDA 2021 Fallbacks Protocol, another option has been to bilaterally amend terms with Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 514 Notes to the financial statements (continued) Other disclosure matters counterparties. Derivative contracts facing central clearing counterparties (CCP) will follow a market-wide, standardised approach to reform through a series of CCP-led conversions, similar to those used for GBP, JPY and CHF LIBOR and EONIA. GBP and JPY LIBOR ceased to be published in their original form from the end of 2021 and synthetic versions of GBP and JPY LIBOR have been made available for a limited period of time. This was to help mitigate the risk of widespread disruption to legacy LIBOR contracts which had not transitioned by end 2021, when the GBP and JPY panel bank submissions ended. The FCA has reiterated that any synthetic LIBOR tenors are only a bridge to give time to transition to appropriate alternative RFRs and not a permanent solution. Barclays continues to monitor, assess and limit the reliance on synthetic LIBOR. On 29th September 2022 the FCA announced that the 1- and 6- month synthetic GBP LIBOR tenors would cease immediately after 31st March 2023 and confirmed that the synthetic JPY LIBOR tenors would cease permanently at end 2022. On 23rd November 2022 the FCA announced that the 3-month synthetic GBP LIBOR tenor will cease at end March 2024 and that the overnight and 12-month USD LIBOR tenors will cease at end June 2023. The FCA also proposed that the 1-, 3- and 6-month USD LIBOR tenors should be published under a synthetic methodology for a temporary period until end September 2024. A final decision from the FCA is expected by early in the second quarter of 2023. US Federal legislation (the Adjustable Interest Rate (LIBOR) Act) has been enacted which provides a solution for contracts governed under US law which reference USD LIBOR but do not have adequate fallbacks. The effect of this legislation on in scope agreements will be to deem all references to USD LIBOR to the replacement Secured Overnight Financing Rate (SOFR) with the additional benefit of statutory contract continuity and safe harbour protection. This contrasts with the legislation implemented in the UK which provides for statutory contract continuity with safe harbour protection only for the administrator and could expose market participants to additional litigation risk. Progress made during 2022 During 2022, Barclays delivered technology and business process changes required to ensure operational readiness in preparation for transitions to RFRs for those benchmark rates ceasing June 2023, this included new RFR product capabilities and alternatives to LIBOR across loans, bonds, repurchase and securities lending transactions and derivatives. Barclays continued to monitor and address its unremediated exposure to 2021 scope; noting that this exposure, excluding secondary traded loans and bonds, was reduced to £2bn gross notional as at 31 December 2022, which accounts for less than 0.2% of baseline exposure for 2021 scope. Of this, £1.2bn relates to undrawn lending facilities with £1.1bn of this made up of syndicated loans where transition is led by a third-party agent. The remaining £0.8bn is predominantly made up of bilateral derivatives without appropriate fallbacks. Work is ongoing with clients and agents, as appropriate, to address the outstanding unremediated exposures. Barclays is now focused on transition of legacy positions related to USD LIBOR and USD LIBOR ICE Swap Rate (and other in-scope IBORs) and remains on track to meet the associated industry deadlines. In the first half of 2022, Barclays successfully transitioned all uncommitted lending exposures. Risks to which the Group is exposed as a result of the transition Global regulators and central banks in the UK, US, EU and APAC have been driving international efforts to reform key benchmark interest rates and indices, such as LIBOR, which are used to determine the amounts payable under a wide range of transactions and make them more reliable and robust. These benchmark reforms have resulted in significant changes to the methodology and operation of certain benchmarks and indices, the adoption of RFRs, the discontinuation of certain reference rates (including LIBOR), and the introduction of implementing legislation and regulations. Notwithstanding these developments, given the unpredictable consequences of benchmark reform, any of these developments could have an adverse impact on market participants, including the Group, in respect of any financial instruments linked to, or referencing, any of these benchmark interest rates. Uncertainty associated with such potential changes include: • the availability and/or suitability of alternative RFRs, • the participation of customers and third-party market participants in the transition process • challenges with respect to required documentation changes; and • impact of legislation to deal with ‘certain legacy’ contracts that cannot convert into RFRs or add RFR fallbacks before cessation of the benchmark they reference. This uncertainty may adversely affect a broad range of transactions (including any securities, loans, repurchase and securities lending transactions and derivatives which use LIBOR or any other affected benchmark to determine the amount of interest payable that are included in the Group’s financial assets and liabilities) that use these reference rates and indices, and present a number of risks for the Group, including, but not limited to: ▪ Conduct risk: in undertaking actions to transition away from using certain reference rates (such as LIBOR) to new alternative RFRs, the Group faces conduct risks. These may lead to customer complaints, regulatory sanctions or reputational impact if the Group is considered to be (among other things): (i) undertaking market activities that are manipulative or create a false or misleading impression, (ii) misusing sensitive information or not identifying or appropriately managing or mitigating conflicts of interest, (iii) providing customers with inadequate advice, misleading information, unsuitable products or unacceptable service, (iv) not taking a consistent approach to remediation for customers in similar circumstances, (v) unduly delaying the communication and migration activities in relation to client exposure, leaving them insufficient time to prepare, or (vi) colluding or inappropriately sharing information with competitors. ▪ Litigation risk: members of the Group may face legal proceedings, regulatory investigations and/or other actions or proceedings regarding (among other things): (i) the conduct risks identified above, (ii) the interpretation and enforceability of provisions in LIBOR- based contracts, and (iii) the Group’s preparation and readiness for the replacement of LIBOR with alternative RFRs. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 515 Notes to the financial statements (continued) Other disclosure matters ▪ Financial risk: the valuation of certain of the Group’s financial assets and liabilities may change. Moreover, transitioning to alternative RFRs may impact the ability of members of the Group to calculate and model amounts receivable by them on certain financial assets and determine the amounts payable on certain financial liabilities (such as debt securities issued by them) because certain alternative RFRs (such as SONIA and the SOFR) are look-back rates whereas term rates (such as LIBOR) allow borrowers to calculate at the start of any interest period exactly how much is payable at the end of such interest period. This may have a material adverse effect on the Group’s cash flows. ▪ Pricing risk: changes to existing reference rates and indices, discontinuation of any reference rate or indices and transition to alternative RFRs may impact the pricing mechanisms used by the Group on certain transactions. ▪ Operational risk: changes to existing reference rates and indices, discontinuation of any reference rate or index and transition to alternative RFRs may require changes to the Group’s IT systems, trade reporting infrastructure, operational processes, and controls. In addition, if any reference rate or index (such as LIBOR) is no longer available to calculate amounts payable, the Group may incur additional expenses in amending documentation for new and existing transactions and/or effecting the transition from the original reference rate or index to a new reference rate or index. ▪ Accounting risk: an inability to apply hedge accounting in accordance with IAS 39 could lead to increased volatility in the Group’s financial results and performance. Any of these factors may have a material adverse effect on the Group’s business, results of operations, financial condition, prospects, and reputation. While a number of the above risks in relation to transition of legacy 2021 scope onto RFRs have been substantially mitigated, they remain relevant in relation to USD LIBOR transitions. The Group does not expect material changes to its risk management approach and strategy as a result of interest rate benchmark reform. The following tables summarise USD LIBOR and USD LIBOR ICE Swap Rate non-derivatives exposures due to mature post 30 June 2023, when USD LIBOR and the USD LIBOR ICE Swap Rate will either cease to be published or cease to be published, in its current form: USD LIBOR As at 31 December Non-derivative financial assets Loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending Financial assets at fair value through the income statement Financial assets at fair value through other comprehensive income Non-derivative financial assets Non-derivative financial liabilities Debt securities in issue Subordinated liabilities Financial liabilities designated at fair value Non-derivative financial liabilities Equity Other equity instruments Standby facilities, credit lines and other commitmentsa 2022 £m 8,659 — 4,282 — 2021 £m 15,812 186 8,538 — 12,941 24,536 (9,062) (1,132) (1,740) (11,934) (6,137) (1,088) (212) (7,437) (1,786) 68,118 (3,374) 42,767 Note a For year ended 2021, multi currency loan facilities are reported in the currency which needs to be remediated first, which were mainly non-USD. As the non-USD rates transitioned, this has resulted in a corresponding increase in USD LIBOR exposure for year ended 2022 as USD LIBOR exposure is yet to transition. Balances reported at amortised cost are disclosed at their gross carrying value and do not include any expected credit losses that may be held against them. The following tables summarise USD LIBOR and USD LIBOR ICE Swap Rate derivative exposures due to mature post 30 June 2023: USD LIBOR Derivative notional contract amount OTC interest rate derivatives OTC interest rate derivatives - cleared by central counterparty Exchange traded interest rate derivatives OTC foreign exchange derivatives OTC equity and stock index derivatives Derivative notional contract amount Derivatives are reported using the notional contract amount 2022 £m 2021 £m 2,594,268 2,137,245 337,535 84 1,261 2,283,236 2,228,399 466,339 461,680 9,949 5,070,393 5,449,603 As at 31 December 2022 the Group also had £9bn (2021: £9bn) of Barclays issued debt retained by the group, impacted by the interest rate benchmark reform, in USD LIBOR. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 516 Notes to the financial statements (continued) Other disclosure matters Fallback clauses The USD LIBOR and USD LIBOR ICE Swap Rate as at 31 December 2022 exposure has been broken up into those with robust fallbacks and those without. Fallbacks here are defined as any mechanism involving a ‘switch’ or ‘hardwire’ or a contractual agreement to automatically transition to an agreed rate. One of the most commonly used market solutions to incorporate fallback provisions into certain legacy non-cleared derivative agreements are the ISDA Fallbacks Protocols, namely the ISDA 2020 IBOR Fallbacks Protocol and the ISDA 2021 Fallbacks Protocol published in October 2020. Market participants who have adhered to the relevant ISDA Fallbacks Protocol agree, between adhering parties, that their legacy non-cleared contracts will be amended to include the relevant fallback provisions. The following table presents a breakdown of USD LIBOR and USD LIBOR ICE Swap Rate non-derivative exposures with robust fallbacks in place and those without as at 31 December 2022: USD LIBOR As at 31 December 2022 Non-derivative financial assets Loans and advances at amortised cost Financial assets at fair value through the income statement Non-derivative financial assets Non-derivative financial liabilities Debt securities in issue Subordinated liabilities Financial liabilities designated at fair value Non-derivative financial liabilities Equity Other equity instruments Standby facilities, credit lines and other commitments With robust fallback clause Without robust fallback clause £m 7,770 4,282 12,052 (9,062) (1,132) (1,740) (11,934) (1,786) 64,632 £m 889 — 889 — — — — — 3,486 The following table presents a breakdown of USD LIBOR and USD LIBOR ICE Swap Rate derivative exposures with robust fallbacks in place and those without as at 31 December 2022: USD LIBOR As at 31 December 2022 Derivative notional contract amount OTC interest rate derivatives OTC interest rate derivatives - cleared by central counterparty Exchange traded interest rate derivatives OTC foreign exchange derivatives OTC equity and stock index derivatives Derivative notional contract amount With robust fallback clause Without robust fallback clause £m £m 2,538,218 2,137,245 337,535 84 770 5,013,852 56,050 — — — 491 56,541 The majority of USD LIBOR and USD LIBOR ICE Swap Rate exposures are already covered by fallbacks as a result of the 2020 ISDA IBOR Fallbacks Protocol and the June 2022 Benchmark Module of the ISDA 2021 Fallbacks Protocol which relevant Barclays entities have adhered to. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 517 Notes to the financial statements (continued) Other disclosure matters 42 Barclays PLC (the Parent company) Total income Dividends received from subsidiaries Dividends received from subsidiaries of £2,797m (2021: £1,356m, 2020: £763m) relates to dividends received from Barclays Execution Services Limited £1,080m, Barclays Bank UK PLC £1,010m, Barclays Principal Investments Limited £507m and Barclays Bank PLC £200m. The dividends received in 2020 from its banking subsidiaries were paid up to Barclays PLC prior to the announcement made by the PRA on 31 March 2020 that capital be preserved for use in serving Barclays customers and clients through the extraordinary challenges presented by the COVID-19 pandemic. As part of a response to this announcement, Barclays PLC took steps to provide additional capital to its banking subsidiaries. Other expenses Other expenses of £654m (2021: £659m income, 2020: £1,192m income) includes fair value and foreign exchange losses of £1,673m (2021: £250m, 2020: £248m) on positions with subsidiaries partially offset by £905m (2021: £804m, 2020: £857m) of income received from gross coupon payments on Barclays Bank PLC and Barclays Bank UK PLC-issued AT1 securities. Total assets and liabilities Investment in subsidiaries The investment in subsidiaries of £64,544m (2021: £62,528m) predominantly relates to investments in the ordinary shares of Barclays Bank PLC of £36,340m (2021: £35,590m) and their AT1 securities of £10,760m (2021: £9,493m), as well as investments in the ordinary shares of Barclays Bank UK PLC of £14,245m (2021: 14,245m) and their AT1 securities of £2,570m (2021: £2,570m). The increase of £2,016m during the year was driven by a capital injection of £750m and an increase in the AT1 holdings and associated fair value which totalled £998m. Impairment in subsidiaries At the end of each reporting period an impairment review is undertaken in respect of investment in the ordinary shares of subsidiaries. Where impairment may be indicated a test of the carrying value against the recoverable value is performed; impairment being indicated where the investment exceeds the recoverable amount. The recoverable amount is calculated as a value in use (VIU) which is derived from the present value of future cash flows expected to be received from the investment. The VIU calculations use forecast attributable profit based on financial budgets approved by management, covering a five year period as an approximation of future cash flows discounted using a pre-tax discount rate appropriate to the subsidiary being tested. A terminal growth rate has then been applied to the cash flows thereafter which is based upon expectations of future inflation rates. The 2022 review identified the value in use calculated was higher than the carrying value for all subsidiaries. Due to the improved market conditions and interest rate environment for the Group’s UK banking business in December 2021 compared to December 2020, the review further identified that the accumulated impairment for the investment in Barclays Bank UK PLC of £2,573m no longer existed. The VIU of Barclays Bank UK PLC was found to be significantly higher than both the carrying amount of the investment and the gross cost of the investment and hence all accumulated impairment was reversed in December 2021. For Barclays Bank UK PLC, a discount rate of 14.5% was applied to the cash flow forecast in December 2021 (2020: 13.8%). In determining the discount rate, management identified a cost of equity associated with market participants that closely resemble the subsidiary and adjusted for tax to arrive at the pre-tax equivalent rate. A terminal growth rate of 2.0% was used to calculate a terminal value for the investment based on inflation rates to approximate future long term growth in December 2021 (2020:2.0%). Loans and advances in subsidiaries During the year loans and advances to subsidiaries increased by £1,556m to £23,628m (2021: £22,072m). The increase was largely driven by £4,487m new intra-group loans to Barclays PLC subsidiaries and foreign exchange impact of £1,663m due to the depreciation of GBP largely against USD. This was partially offset by the maturity of intra-group loans to Barclays PLC subsidiaries of £4,765m. Subordinated liabilities and debt securities in issue During the year, Barclays PLC issued £1,000m of Fixed Rate Resetting Subordinated Callable Notes, which are included within the subordinated liabilities balance of £11,230m (2021: £9,301m). Debt securities in issue of £24,086m (2021: £25,658m) have reduced during the year primarily due to net maturities of £2,969m senior issuances partially offset by foreign exchange impact of £1,404m due to the depreciation of GBP largely against USD. Management of internal investments Barclays PLC retains the discretion to manage the nature of its internal investments in subsidiaries according to their regulatory and business needs. Barclays PLC may invest capital and funding into Barclays Bank PLC, Barclays Bank UK PLC and other Group subsidiaries such as Barclays Execution Services Limited and the US Intermediate Holding Company (IHC). Financial assets and liabilities designated at fair value Financial liabilities designated at fair value of £22,971m (2021: £16,319m) primarily included new issuances during the year of USD 7,250m, EUR 2,250m Fixed Rate Resetting Senior Callable Notes and USD 400m Zero Coupon Callable Notes. The proceeds raised through these transactions were used to invest in subsidiaries of Barclays PLC and are included within the financial assets designated at fair value through the income statement balance of £28,930m (2021: £25,091m). The effect of changes in the liabilities’ fair value, including those due to credit risk, is expected to offset the changes in the fair value of the related financial asset in the income statement The difference between the financial liabilities’ carrying amount and the contractual amount on maturity is £2,100m (2021: £271m). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 518 Notes to the financial statements (continued) Other disclosure matters Derivative financial instruments During the year derivative financial liabilities increased by £863m to £906m (2021: £43m). The increase in the year is primarily driven by the rising rate environment. Total equity Called up share capital and share premium Called up share capital and share premium of Barclays PLC is £4,373m (2021: £4,536m). The decrease in the year is primarily due to 931m shares repurchased with a total nominal value of £233m. This decrease was offset by shares issued under employee share schemes. Other equity instruments Other equity instruments of £13,250m (2021: £12,241m) comprises AT1 securities issued by Barclays PLC. The AT1 securities are perpetual securities with no fixed maturity and are structured to qualify as AT1 instruments under prevailing capital rules applicable as at the relevant issue date. During the year there were three issuances with principal amounts totalling £1,250m, $2,000m, SGD450m and redemptions with principal amounts totalling £1,000m and $1,500m. For further details, please refer to Note 28. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 519 Notes to the financial statements (continued) Other disclosure matters 43 Related undertakings The Group’s corporate structure consists of a number of related undertakings, comprising subsidiary undertakings, joint ventures, associated undertakings and significant holdings. A full list of these related undertakings is set out below, together with the country of incorporation, registered office (or principal place of business) and the identity and percentage of each share class held by the Group. The information is provided as at 31 December 2022. The entities are grouped by the countries in which they are incorporated. The profits earned by the activities of these entities are in some cases taxed in countries other than the country of incorporation, for example where the entity carries on business through a branch in a territory outside of its country of incorporation . Barclays’ PLC Country Snapshot provides details of where the Group carries on its business, where its profits are subject to tax and the taxes it pays in each country it operates in. Wholly owned subsidiaries Unless otherwise stated the undertakings below are wholly owned and included in the consolidation and the share capital held by the Group comprises ordinary and/or common shares, which are held by subsidiaries of Barclays PLC. Unless otherwise stated, the Group holds 100% of the nominal value of each share class. Notes A B C D E F G H I J K L M N O P Q Directly held by Barclays PLC Partnership Interest Membership Interest Guarantor Preference Shares A Preference Shares B Preference Shares Ordinary/Common Shares in addition to other shares A Ordinary Shares B Ordinary Shares C Ordinary Shares F Ordinary Shares First Preference Shares, Second Preference shares Registered Address not in country of incorporation Core Shares, Insurance (Classified) Shares Class B, C, D (100%), E, F, G, H, I (94.36%), J (95.32%) and K (100%) Notes R S T U V W X Y Z AA BB CC Class A, B, C, D & E Shares Class A and Class B Shares PEF Carry Shares Not Consolidated (see Note 35 IFRS12 Structured entities) USD Linked Ordinary Shares Redeemable Class B Shares Capital Contribution Shares Class A Redeemable Preference Shares Class B Redeemable Preference Shares First Class Common Shares, Second Class Common Shares Tracker 1 GBP, USD, Euro Shares; Tracker 2 USD Shares, Tracker 3 USD Shares Non-Voting Redeemable Preference Shares Wholly owned subsidiaries United Kingdom 1 Churchill Place, London, E14 5HP Aequor Investments Limited Ardencroft Investments Limited B D & B Investments Limited B.P.B. (Holdings) Limited Barclay Leasing Limited Barclays Aldersgate Investments Limited Barclays Asset Management Limited Barclays Bank PLC Barclays Bank UK PLC Barclays Capital Asia Holdings Limited Barclays Capital Finance Limited Barclays Capital Nominees (No.2) Limited Barclays Capital Nominees (No.3) Limited Barclays Capital Nominees Limited Barclays Capital Securities Client Nominee Limited Barclays Capital Securities Limited Barclays CCP Funding LLP Barclays Converted Investments (No.2) Limited Barclays Direct Investing Nominees Limited Barclays Directors Limited Barclays Equity Holdings Limited Barclays Execution Services Limited A Barclays Executive Schemes Trustees Limited Barclays Financial Planning Nominee Company Limited Barclays Funds Investments Limited Barclays Global Shareplans Nominee Limited Barclays Group Holdings Limited Barclays Industrial Development Limited Barclays Industrial Investments Limited Barclays Insurance Services Company Limited Barclays International Holdings Limited Barclays Investment Management Limited Barclays Investment Solutions Limited Barclays Leasing (No.9) Limited Barclays Long Island Limited Barclays Nominees (George Yard) Limited A A E, H B Z N Barclays Principal Investments Limited A, I, J Barclays Private Bank Barclays SAMS Limited Barclays Security Trustee Limited Wholly owned subsidiaries Note Barclays Services (Japan) Limited Barclays Shea Limited Barclays Singapore Global Shareplans Nominee Limited Barclays Term Funding Limited Liability Partnership B Barclays UK Investments Limited Barclays Unquoted Investments Limited Barclays Unquoted Property Investments Limited Barclays Wealth Nominees Limited Barclayshare Nominees Limited Barcosec Limited Barsec Nominees Limited BB Client Nominees Limited BMI (No.9) Limited BNRI ENG 2014 Limited Partnership Note BNRI ENG GP LLP BNRI England 2010 Limited Partnership BNRI England 2011 Limited Partnership BNRI England 2012 Limited Partnership Carnegie Holdings Limited Chapelcrest Investments Limited Clydesdale Financial Services Limited Cornwall Home Loans Limited CPIA England 2009 Limited Partnership CPIA England No.2 Limited Partnership DMW Realty Limited Dorset Home Loans Limited Durlacher Nominees Limited Eagle Financial and Leasing Services (UK) Limited Finpart Nominees Limited FIRSTPLUS Financial Group Limited Foltus Investments Limited B B B B B H,I, J B B Global Dynasty Natural Resource Private B Equity Limited Partnership Globe Nominees Limited Hawkins Funding Limited Heraldglen Limited Isle of Wight Home Loans Limited J.V. Estates Limited Kirsche Investments Limited Long Island Assets Limited Maloney Investments Limited Menlo Investments Limited Mercantile Credit Company Limited Mercantile Leasing Company (No.132) Limited MK Opportunities LP Naxos Investments Limited North Colonnade Investments Limited Northwharf Investments Limited Northwharf Nominees Limited Radbroke Mortgages UK Limited B H,T Real Estate Participation Management Limited Real Estate Participation Services Limited Relative Value Investments UK Limited Liability Partnership B Relative Value Trading Limited Roder Investments No. 1 Limited Roder Investments No. 2 Limited RVT CLO Investments LLP Solution Personal Finance Limited Surety Trust Limited H, BB H, BB B Non-Redeemable Ordinary Shares Barclays OCIO Services Limited Barclays Pension Funds Trustees Limited Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 520 Notes to the financial statements (continued) Other disclosure matters Wholly owned subsidiaries Note Wholly owned subsidiaries Note Wholly owned subsidiaries Note Cayman Islands PO Box 309, Ugland House, George Town, Grand Cayman, KY1-1104 Alymere Investments Limited F, G, H 5th to 12th Floor (Part), Building G2, Gera Commerzone SEZ, Survey No.65, Kharadi, Pune, 411014 Barclays Global Service Centre Private Limited Nirlon Knowledge Park, Level 9, Block B-6, Off Western Express Highway, Goregaon (East), Mumbai, 400063 Barclays Investments & Loans (India) Private Limited E, H Ireland One Molesworth Street, Dublin 2, D02RF29 Barclaycard International Payments Limited H, Y, Z Barclays Bank Ireland Public Limited Company Sustainable Impact Capital Limited Swan Lane Investments Limited US Real Estate Holdings No.1 Limited US Real Estate Holdings No.2 Limited US Real Estate Holdings No.3 Limited US Real Estate Holdings No.4 Limited US Real Estate Holdings No.5 Limited US Real Estate Holdings No.6 Limited Wedd Jefferson (Nominees) Limited Westferry Investments Limited Woolwich Homes Limited Woolwich Qualifying Employee Share Ownership Trustee Limited Zeban Nominees Limited Barclays Capital Japan Securities Holdings Limited (In liquidation) Barclays Marlist Limited (In liquidation) Cobalt Investments Limited (In liquidation) Leonis Investments LLP B 1-4, Clyde Place Lane, Glasgow, G5 8DP R.C. Greig Nominees Limited 50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ BNRI PIA Scot GP Limited BNRI Scots GP, LLP Pecan Aggregator LP Logic House, Waterfront Business Park, Park, Fleet Road, Fleet, GU51 3SB The Logic Group Enterprises Limited The Logic Group Holdings Limited 9, allée Scheffer, L-2520, Luxembourg Barclays Claudas Investments Partnership Barclays Pelleas Investments Limited Partnership Barclays Blossom Finance Limited Partnership 1 Churchill Place, London, E14 5HP Alynore Investments Limited Partnership B B, U I B, N B, N B,N B,N Argentina 855 Leandro N.Alem Avenue, 8th Floor, Buenos Aires Compañía Sudamerica S.A. Marval, O’Farrell & Mairal, Av. Leandro N. Alem 882, Buenos Aires, C1001AAQ Compañia Regional del Sur S.A. Brazil Av. Brigadeiro Faria Lima, No.4.440, 12th Floor, Bairro Itaim Bibi, Sao Paulo, CEP, 04538-132 Barclays Brasil Assessoria Financeira Ltda BNC Brazil Consultoria Empresarial Ltda Canada 333 Bay Street, Suite 4910, Toronto ON M5H 2R2 Barclays Capital Canada Inc. Stikeman Elliot LLP, 199 Bay Street, 5300 Commerce Court West, Toronto ON M5L 1B9 Barclays Corporation Limited 1 Churchill Place, London, E14 5HP CPIA Canada Holdings B, N Analytical Trade UK Limited Barclays Capital (Cayman) Limited Barclays Securities Financing Limited Barclays US Holdings Limited Braven Investments No.1 Limited Calthorpe Investments Limited Capton Investments Limited Claudas Investments Limited Claudas Investments Two Limited CPIA Investments No.2 Limited Gallen Investments Limited Hurley Investments No.1 Limited JV Assets Limited (In liquidation) Mintaka Investments No. 4 Limited OGP Leasing Limited (In liquidation) Palomino Limited Pelleas Investments Limited Pippin Island Investments Limited Razzoli Investments Limited RVH Limited Wessex Investments Limited F, G ,H E, I K U E, H E, H Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, George Town, KY1- 9008 Long Island Holding B Limited Germany TaunusTurm, Taunustor 1, 60310, Frankfurt Barclays Capital Effekten GmbH (In liquidation) Stuttgarter Straße 55-57, 73033 Göppingen Holding Stuttgarter Straße GmbH (In liquidation) Guernsey P.O. Box 33, Dorey Court, Admiral Park, St. Peter Port, GY1 4AT Barclays Insurance Guernsey PCC Limited O Hong Kong 42nd floor Citibank Tower, Citibank Plaza, 3 Garden Road Barclays Bank (Hong Kong Nominees) Limited (In liquidation) Barclays Capital Asia Nominees Limited (In liquidation) Level 41,Cheung Kong Center, 2 Queen's Road, Central Barclays Capital Asia Limited India 208 Ceejay House, Shivsagar Estate, Dr A Beasant Road, Worli, Mumbai, 400 018 Barclays Securities (India) Private Limited Barclays Wealth Trustees (India) Private Limited Barclays Europe Client Nominees Designated Activity Company Barclays Europe Firm Nominees Designated Activity Company Barclays Europe Nominees Designated Activity Company 25-28 North Wall Quay, Dublin1, D01H104 U U U Erimon Home Loans Ireland Limited 70 Sir John Rogerson’s Quay, Dublin 2 Barclays Finance Ireland Limited Isle of Man PO Box 9, Victoria Street, Douglas, IM99 1AJ Barclays Nominees (Manx) Limited Barclays Private Clients International Limited I, J 2nd Floor, St Georges Court, Upper Church Street, Douglas, IM1 1EE Barclays Holdings (Isle of Man) Limited (In Liquidation) Japan 10-1, Roppongi 6-chome, Minato-ku, Tokyo Barclays Funds and Advisory Japan Limited Barclays Securities Japan Limited F, H Barclays Wealth Services Limited Jersey Gaspé House, 66-72 Esplanade, St. Helier, JE1 1GH Barclays Services Jersey Limited 5 Espalanade, St Helier, JE2 3QA Barclays Wealth Management Jersey Limited BIFML PTC Limited (In liquidation) 13 Library Place, St Helier, JE4 8NE Barclays Nominees (Jersey) Limited Barclaytrust Channel Islands Limited Esplanade, St Helier, JE1 1EE MK Opportunities GP Ltd Luxembourg 9, allée Scheffer, L-2520 Barclays Alzin Investments S.à r.l. Barclays Bedivere Investments S.à r.l. Barclays Bordang Investments S.à r.l. Barclays BR Investments S.à r.l. Barclays Cantal Investments S.à r.l. Barclays Capital Luxembourg S.à r.l. Barclays Capital Trading Luxembourg S.à r.l. Barclays Claudas Investments S.à r.l. Barclays Equity Index Investments S.à r.l. U U A R S S Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 521 Notes to the financial statements (continued) Other disclosure matters Wholly owned subsidiaries Note Wholly owned subsidiaries Note Taiwan (Province of China) 19F-1, No. 7, Xinyi Road, Sec. 5, Taipei,A322, Taiwan Barclays Securities Taiwan Limited United States Corporation Service Company, 251 Little Falls Drive, Wilmington, DE 19808 Analytical Trade Holdings LLC Analytical Trade Investments LLC Barclays Bank Delaware Barclays Capital Derivatives Funding LLC Barclays Capital Energy Inc. Barclays Capital Equities Trading GP W C B Barclays Capital Holdings Inc. F, G, H C C C C C C C B C I C C C CC W Barclays Capital Real Estate Finance Inc. Barclays Capital Real Estate Holdings Inc. Barclays Capital Real Estate Inc. Barclays Commercial Mortgage Securities LLC Barclays Dryrock Funding LLC Barclays Financial LLC Barclays Group US Inc. Barclays Oversight Management Inc. Barclays Receivables LLC Barclays Services Corporation Barclays Services LLC Barclays US CCP Funding LLC Barclays US Investments Inc. Barclays US LLC BCAP LLC Curve Investments GP Gracechurch Services Corporation Lagalla Investments LLC Long Island Holding A LLC Marbury Holdings LLC Preferred Liquidity, LLC Procella Investments No.2 LLC Procella Investments No.3 LLC Relative Value Holdings, LLC Surrey Funding Corporation Sussex Purchasing Corporation Sutton Funding LLC US Secured Investments LLC Verain Investments LLC Wilmington Riverfront LLC Aon Insurance Managers, 76 Paul Street Suite, 500, Burlington VT 05401 Barclays Insurance U.S. Inc. Corporation Service Company, 80 State Street, Albany, NY, 12207-2543 Barclays Equity Holdings Inc. Corporation Service Company, 100 Pearl Street, 17th Floor, MC-CSC1, Hartford, CT 06103 Barclays Capital Inc. Other Related Undertakings Unless otherwise stated, the undertakings below are included in the consolidation and the share capital held by the Group comprises ordinary and/or common shares, which are held by subsidiaries of Barclays PLC. The percentage of the nominal value of each share class held by the Group is provided below. Other Related Undertakings % Note United Kingdom 1 Churchill Place, London, E14 5HP Barclaycard Funding PLC PSA Credit Company Limited (In liquidation) Barclays Covered Bonds Limited Liability Partnership St Helen’s, 1 Undershaft, London, EC3P 3DQ 100.00 100.00 100.00 100.00 50.00 I J I K B Igloo Regeneration (General Partner) Limited 100.00 K, U 3-5 London Road, Rainham, Kent, ME8 7RG Trade Ideas Limited 20.00 U 50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ Equistone Founder Partner II L.P. Equistone Founder Partner III L.P. 20.00 35.00 B, U B, U Enigma, Wavendon Business Park Milton Keynes, MK178LX Intelligent Processing Solutions Limited 19.50 U c/o BDP LLP, Two Snow Hill, Queensway, Birmingham, B4 6GA GW City Ventures Limited (In liquidation) 100.00 J,U GN Tower Limited (In liquidation) 100.00 U Haberfield Old Moor Road, Wennington, Lancaster, LA2 8PD Full House Holdings Limited 67.42 U 13-15 York Buildings, London, WC2N 6JU BGF Group PLC 24.62 U Unit 9 Westbrook Court, Sharrowvale Road, Sheffield, United Kingdom, S11 8YZ Palms Row Healthcare Holdings Limited 99.99 U, CC 5th Floor, 44 Great Marlborough Street, London, W1F 7JL AVFI TIDE I LP 37.60 B, U 41 Luke Street, London, EC2A 4DP Fintech for International Development Limited 26.37 100.00 I J U 1 America Square, Crosswall, London, EC3N 2SG BMC (UK) Ltd 44.90 E, I, U 3rd Floor, 25 Soho Square, London, W1D 3QR Glenwood Ave, Suite 550, Raleigh, NC, 27608 Female Innovators Lab LP 73.17 B, U Barclays US GPF Inc. Equifirst Corporation (In liquidation) Aurora House, 120 Bothwell Street, Glasgow, G2 7JT Buchanan Wharf (Glasgow) Management Limited 78.00 E Barclays International Luxembourg Dollar Holdings S.à r.l. Barclays Lamorak Investments S.à r.l. Barclays Leto Investments S.à r.l. Barclays Luxembourg EUR Holdings S.à r.l Barclays Luxembourg Finance S.à r.l. Barclays Luxembourg GBP Holdings S.à r.l. Barclays Luxembourg Global Funding S.à r.l. Barclays Luxembourg Holdings S.à r.l. Barclays Luxembourg Holdings SSC 68-70 Boulevard de la Petrusse, L-2320 Adler Toy Holding Sarl 10 rue du Cha'teau d'Eau, Leudelange, L-3364 BPM Management GP SARL E, Q U Q T H, V B Mauritius C/O Rogers Capital Corporate Services Limited, 3rd Floor, Rogers House, No.5 President John Kennedy Street, Port Louis Barclays Capital Mauritius Limited (In liquidation) Barclays Capital Securities Mauritius Limited Fifth Floor, Ebene Esplanade, 24 Cybercity, Ebene Barclays Mauritius Overseas Holdings Limited Mexico Paseo de la Reforma 505, 41 Floor, Torre Mayor, Col. Cuauhtemoc, CP 06500 Barclays Bank Mexico, S.A. Barclays Capital Casa de Bolsa, S.A. de C.V. Grupo Financiero Barclays Mexico, S.A. de C.V. Servicios Barclays, S.A. de C.V. J, L J, L J, L Monaco 31 Avenue de la Costa, Monte Carlo BP 339 Barclays Private Asset Management (Monaco) S.A.M Saudi Arabia 3rd Floor Al Dahna Center, 114 Al-Ahsa Street, PO Box 1454, Riyadh 11431 Barclays Saudi Arabia (In liquidation) Singapore 10 Marina Boulevard, #25-01 Marina Bay Financial Centre, Tower 2, 018983 Barclays Capital Futures (Singapore) Private Limited (In liquidation) Barclays Capital Holdings (Singapore) Private Limited (In liquidation) Barclays Merchant Bank (Singapore) Ltd. Spain Calle Jose, Abascal 51, 28003, Madrid Barclays Tenedora De Inmuebles SL. BVP Galvani Global, S.A.U. Switzerland Chemin de Grange Canal 18-20, PO Box 3941, 1211, Geneva Barclays Bank (Suisse) SA Barclays Switzerland Services SA BPB Holdings SA Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 522 Notes to the financial statements (continued) Other disclosure matters Joint Ventures The related undertaking below is dealt with as a Joint Venture in accordance with s. 18, Schedule 4, The Large and Medium- sized Companies and Groups (Accounts and Reports) Regulations 2008 and is proportionally consolidated. The proportion of the capital of the related undertaking held by the Group is stated below. Joint Venture % Note United Kingdom All Saints Triangle, Caledonian Road, London, N1 9UT Vaultex UK Limited 50.00 Joint management factors The Board of Directors of the above Joint Venture comprises two Barclays representative Directors, two JV partner Directors and three non-JV partner Directors. The Board of Directors are responsible for setting the Company strategy and budgets. The last financial year of the above JV ended on 6 October 2022. Other Related Undertakings % Note Aviation House, 125 Kingsway, London, WC2B 6NH Huntress Group Limited 25.00 I, U Belgium Postbus 751, Neiuwegein, Utrecht, 3430 AT Subsidiaries by virtue of control The related undertakings below are subsidiary undertakings in accordance with s.1162 Companies Act 2006 by virtue of the fact that the Group can exercise dominant influence or control over them. Subsidiaries by virtue of dominant influence or control % Note Euphony Benelux NV (In liquidation) 20.00 U United Kingdom Cayman Islands PO Box 309, Ugland House, Grand Cayman KY1-1104 Cupric Canyon Capital GP Limited Cupric Canyon Capital LP Southern Peaks Mining LP SPM GP Limited 1 Churchill Place, London, E14 5HP Oak Pension Asset Management Limited Water Street Investments Limited 0.00 0.00 U U 50.00 42.2 54.4 U I, U B, U 90.00 U Cayman Islands PO Box 309GT, Ugland House, South Church Street, Grand Cayman, KY1-1104 Hornbeam Limited 0.00 U Guernsey P.O. Box 33, Dorey Court, Admiral Park, St. Peter Port, GY1 4AT Barclays UKRF No.1 IC Limited Barclays UKRF ICC Limited Barclays UKRF No.2 IC Ltd 0.00 0.00 0.00 U U U Korea, Republic of 18th Floor, Daishin Finance Centre, 343, Samil-daero, Jung-go, Seoul Woori BC Pegasus Securitization Specialty Co. Ltd 70.00 AA Luxembourg 9, allee Scheffer, L-2520 BNRI Limehouse No.1 S.à r.l. Preferred Funding S.à r.l. 96.30 P 100.00 W Preferred Investments S.à r.l. 100.00 H, W Malta RS2 Buildings, Fort Road, Mosta MST 1859 RS2 Software PLC 18.25 U Netherlands Alexanderstraat 18, The Hague, 2514 JM, Zuid-Holland Tulip Oil Holding BV 34.90 23.20 I K U Sweden c/o ForeningsSparbanken AB 105 34 Stockholm EnterCard Group AB 100 I United States Corporation Services Company, 251 Little Falls, Drive Wilmington, DE 19808 DG Solar Lessee, LLC 75.00 C, U Corporation Trust Company, Corporation Trust Centre, 1209 Orange Street, Wilmington DE 19801 DG Solar Lessee II, LLC VS BC Solar Lessee I LLC 75.00 50 C, U C, U 1415 Louisiana Street, Suite 1600, TX 77002-0000 Sabine Oil & Gas Holdings, Inc. 22.12 U Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2022 523 Notes to the financial statements (continued) Other disclosure matters 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 historical financial information used for the purposes of such analysis has been restated..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. These results will be filed on a Form 20-F with the US Securities and Exchange Commission (SEC) as soon as practicable following their publication. Once filed with the SEC, a copy of the Form 20-F will be available from the Barclays Investor Relations website at home.barclays/annualreport and from the SEC’s website at www.sec.gov. 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 pages 392 to 396 for further information and calculations of non-IFRS performance measures included throughout this document, and the most directly comparable IFRS measures. 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 conflict in Ukraine 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 the description of material existing and emerging risks on pages 269 to 281 of this Annual Report. 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. This document is printed on Revive 100 Offset, made from 100% FSC® Recycled certified fibre sourced from de-inked post-consumer waste. The printer and the manufacturing mill are both credited with ISO 14001 Environmental Management Systems Standard and both are FSC® certified. The mill also holds EMAS, the EU Eco-label. Revive 100 Offset is a Carbon balanced paper which means that the carbon emissions associated with its manufacture have been measured and offset using the World Land Trust’s Carbon Balanced scheme. Our 2022 suite of Reports Barclays PLC Annual Report 2022 A detailed review of Barclays’ 2022 performance with disclosures that provide useful insight and go beyond reporting requirements. The 2022 report integrates our ESG (Environmental, Social and Governance), and DEI (Diversity, Equity and Inclusion) reporting, and incorporates our Task Force on Climate-related Financial Disclosures (TCFD) recommendations in this, the sixth year of disclosure. Barclays PLC Pillar 3 Report 2022 A summary of our risk profile, its interaction with the Group’s risk appetite, and risk management. Barclays PLC Fair Pay Report 2022 An overview of our approach to pay, including the principles and policies of our Fair Pay agenda. Barclays PLC Country Snapshot 2022 An overview of our global tax contribution as well as our approach to tax, including our UK tax strategy, together with our country-by-country data. © Barclays PLC 2023 Registered office: 1 Churchill Place, London E14 5HP Registered in England. Registered No: 48839 

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