Strategic Shareholder Climate and Risk Financial Financial Barclays PLC 377 report information sustainability report Governance review review statements Annual Report 2022 Supervision and regulation (continued) commence on a phased basis from the In March 2022, the SEC proposed climate The Sanctions and Anti-Money Laundering financial year 2024. Draft sustainability related-disclosure requirements for US- Act (the Sanctions Act) became law in the UK in 2018. The Sanctions Act allows for reporting standards are being developed listed companies (which would include by the European Financial Reporting Barclays PLC and Barclays Bank PLC) that the adoption of an autonomous UK Advisory Group. would, among other things, require sanctions regime, as well as a more flexible disclosure of direct and indirect licensing regime post-Brexit. On 6 July From June 2022, the EU’s Capital greenhouse gas emissions, with certain 2020, the UK Government announced the Requirements Regulation requires certain first sanctions that have been emissions disclosures subject to third- large financial institutions to disclose party attestation requirements; climate- implemented independently by the UK information on environmental, social and related scenario analysis (if the issuer outside the auspices of the UN and EU. governance risks, including physical risks conducts scenario analysis), together with The autonomous UK sanctions regime and transition risks. qualitative and quantitative information came into force on 1 January 2021. The The EU has also proposed a Directive on sanctions apply within the UK and in about the hypothetical future climate Corporate Sustainability Due Diligence scenarios used in its analysis; climate relation to the conduct of all UK persons which, if adopted, would require EU firms, transition plans or climate-related targets wherever they are in the world; they also including financial institutions, to carry out or goals, along with disclosure of progress apply to overseas branches of UK due diligence on companies in their value against any such plans, targets or goals; companies (including the Barclays Bank chain and identify and prevent, bring to an PLC New York branch). climate-related risks over the short-, end or mitigate the impact of their medium- and long-term; qualitative and In the US, the Bank Secrecy Act, the USA activities on human rights and the quantitative information regarding PATRIOT Act 2001, the Anti-Money environment. climate-related risks and historical impacts Laundering Act of 2020 and regulations In the UK, the UK Government has in audited financial statements; corporate thereunder contain numerous anti-money confirmed its intention to develop a UK governance of climate-related risks; and laundering and anti-terrorist financing Green Taxonomy, and the Green climate-related risk-management requirements for financial institutions. In Technical Advisory Group has published processes. addition, the Group is subject to the US advice on development of a Green Sanctions and financial crime Foreign Corrupt Practices Act, which Taxonomy with further advice expected to prohibits, among other things, corrupt The UK Bribery Act 2010 introduced a new follow. Reporting against the Taxonomy payments to foreign government officials. form of corporate criminal liability focused will form part of the UK’s new Sustainability It is also subject to various economic broadly on a company’s failure to prevent Disclosure Requirements (SDR). Certain sanctions laws, regulations and executive bribery on its behalf. The Criminal Finances companies will be required to disclose orders administered by the US Act 2017 introduced new corporate which portion of their activities are government, which prohibit or restrict criminal offences of failing to prevent the Taxonomy-aligned. The structure of the some or all business activities and other facilitation of UK and overseas tax evasion. Taxonomy draws on the EU approach and dealings with or involving certain Both pieces of legislation have broad has six environmental objectives (climate individuals, entities, groups, countries and application and in certain circumstances change mitigation, climate change territories. may have extraterritorial impact on adaptation, sustainable use and protection entities, persons or activities located In some cases, US state and federal of water and marine resources, transition outside the UK, including Barclays PLC’s regulations addressing sanctions, money to a circular economy, pollution prevention subsidiaries outside the UK. The UK Bribery laundering and other financial crimes may and control and protection and restoration Act requires the Group to have adequate impact entities, persons or activities of biodiversity). The UK regulators are also procedures to prevent bribery which, due located or undertaken outside the US, consulting on a new SDR Framework for to the extraterritorial nature of the Act, including Barclays PLC and its subsidiaries. firms as well as investment product makes this both complex and costly. US government authorities have disclosures, including a new sustainable Additionally, the Criminal Finances Act aggressively enforced these laws against investment labelling regime. Additionally, requires the Group to have reasonable financial institutions in recent years. TCFD-aligned reporting requirements now prevention procedures in place to prevent apply to UK publicly quoted companies, As a result of the conflict in Ukraine, there the criminal facilitation of tax evasion by large private companies and LLPs with has been an increased regulatory focus on persons acting for, or on behalf of, the sanctions compliance in various financial years starting on or after 6 April Group. 2022 (in addition to existing TCFD-related jurisdictions, including in the US, UK and reporting requirements under the Listing EU. Rules). Failure of a financial institution to ensure compliance with such laws could have serious legal, financial and reputational consequences for the institution.