Lloyds Banking : Modern Slavery and Human Trafficking Statement 2023

Modern

Slavery

Statement

Lloyds Banking Group

Modern slavery and human trafficking statement 2023

Inside this report

Overview			Managing our risk			Training
01-06			09-14			18-19
Inside this report	01	Our colleagues	09	Looking ahead and
Our 2023 statement	03	Investments and pensions	11
Scope of this report	02	Our clients and customers	10
About Lloyds Banking Group	04	Our suppliers	11	next steps for 2024
Our commitment to human rights	05	Combating modern slavery and			20-21
Key initiatives 2023	06	human trafficking as a financial crime	14
Governance			Collaboration
07-08			and partnerships
			15-17
Our policies	08
Supporting survivors of modern slavery	16
			Overcoming the language barrier	16

	Overview
This is our eighth Modern Slavery
and Human Trafficking Statement.
It is published in accordance with
section 54 of the UK's Modern Slavery	Governance
Act 2015 and applies to Lloyds Banking
respective employees and officers
Group plc, its subsidiaries, and their
of the Group for the financial year
ending 31 December 2023.
	Managing our risk
	and
	Collaboration
	partnerships
	Training

Looking ahead and steps fornext2024

Lloyds Banking Group	01
Modern slavery and human trafficking statement 2023

Scope of this report

Our Purpose is Helping Britain Prosper. With 27 million customers and 2.3 million shareholders, our mission is to create

a more sustainable and inclusive future for people and businesses, shaping finance as a force for good.

The Group recognises the importance of addressing the risk of modern slavery throughout our operations, banking, investment, insurance and supply chain activities as an activity that is key in supporting our ability to deliver on our purpose of Helping Britain Prosper.

Our active supply base comprises of approximately 2,600 suppliers, the majority of which are in professional services sectors, such as management consultancy, legal, HR, IT, operations, marketing and communications. Our suppliers are located in the UK, other European countries, North America and Asia.

We are listed on the London Stock Exchange with

a secondary listing on the New York Stock Exchange.

Lloyds Banking Group had no reported incidents

of modern slavery in 2023, but we acknowledge that modern slavery is prevalent in modern society and can be difficult to detect. As such, we may be exposed to modern slavery risks through our relationships with our clients, suppliers and customers, as well as through our employment practices, and our investment portfolios. This Statement outlines the steps we have taken in 2023 to identify, assess, address and combat the risk of modern slavery and human trafficking taking place

in either our business or our supply chain, and our focus for the year ahead.

Lloyds Banking Group plc and its subsidiaries are required to report under the Modern Slavery Act 2015, including, but not limited to:

Bank of Scotland plc

Scottish Widows Unit Trust Managers Limited

Scottish Widows Limited

Lloyds Bank plc

HBOS plc

LBG Capital Holdings Limited

Lloyds Bank Corporate Markets plc

LBG Equity Investments Limited

For a full list of our subsidiaries which are covered by this statement see 344 page of the

annual report and accounts 2023.

OverviewGovernance

Managing our risk Collaboration and partnerships

Annual report and accounts 2023

Sustainability metrics basis of reporting

Sustainability metrics data sheet

Sustainability reporting framework index

Sustainable finance framework

Sustainable bond framework

See here for our full reporting network suite.

For the purposes of this Statement, Lloyds Banking Group plc and the above entities are collectively referred to as Lloyds Banking Group or the Group. This Statement was approved in April 2024 by the Board of Lloyds Banking Group plc on behalf of all the Group's subsidiaries, and by the Boards of its principal subsidiaries Lloyds Bank plc, Bank of Scotland plc and HBOS plc on behalf of the Ring-Fenced Bank sub-group. The Boards of Lloyds Bank Corporate Markets plc (LBCM), Lloyds Equity Investment Ltd (LEIL) and Scottish Widows Group Limited approved the Statement on behalf of the Non-Ring-Fenced Bank sub-group and the Insurance sub-group, respectively.

Training

Looking ahead and steps fornext2024

Lloyds Banking Group	02
Modern slavery and human trafficking statement 2023

Our 2023 statement

Chief Sustainability Officer statement

As a Group, we recognise the importance of addressing the risk of modern slavery throughout our operations, lending and investment activities, and supply chain, as part of our journey to becoming a more purpose-driven organisation that is Helping Britain Prosper.

Andrew Walton

Chief Sustainability Officer

Due to the significant impact of the issue on the communities and society in which we operate, we are keen to take action where we are best placed to support through our role as a UK-focused financial services provider.

Over the course of the year, we have seen how the current global socioeconomic challenges and uncertainty have led to people being even more vulnerable to exploitation than ever and we anticipate that in the coming years, with the expected physical impacts of climate change globally, this vulnerability in society will only grow.

The increase in the rates of modern slavery and human trafficking, both in the UK and globally, reflect these issues. Unseen UK run the Modern Slavery & Exploitation Helpline and reported that 2022 was their busiest year on record since the inception of the hotline in 2016, identifying 6,516 potential modern slavery victims in the UK from 99 different nationalities. In 2023, Unseen recorded their highest number of potential victims for a quarter, with 1,581 potential victims being identified in the first three months of the year.1

During 2023, the Group has continued to make progress in understanding and prioritising key actions to take in our approach to the issue of modern slavery. We have continued to work in collaboration with key stakeholders on this issue through our membership of Unseen UK's Business Hub, the UNGC and the UNEP FI Human Rights Community of Practice to better understand and mitigate modern slavery risks across our business and work with like-minded businesses and stakeholders to make progress on the issue.

We have made good progress in 2023, and we will continue this into 2024 as we continually review and improve our approach to addressing modern slavery and human trafficking, prioritising those actions where we are best placed to make a significant positive change.

Andrew Walton

Chief Sustainability Officer

In 2023, 17,004	Overview
potential victims of
modern slavery were
referred to the Home
Office, the highest	Governance
annual number since
the NRM began in
20092
	Managing our risk
	and
	Collaboration
	partnerships
	Training

stepsnextforLooking 2024 aheadand 1 Unseen Annual Assessment 2022.

• Modern Slavery: National Referral Mechanism and Duty to Notify statistics UK, end of year summary 2023.

Lloyds Banking Group	03
Modern slavery and human trafficking statement 2023

About Lloyds Banking Group

Overview

Our purpose

Helping Britain Prosper

We do this by creating a more sustainable and inclusive future for people and businesses, shaping finance as a force for good.

Our vision

Our vision is to be the UK customer- focused digital leader and integrated financial services provider, capitalising on new opportunities, at scale.

Our strategy

We will achieve our vision through our strategic priorities: Grow, Focus and Change. Our strategy has been designed to transform the business and create higher, more sustainable growth and returns.

Our trusted brands
Our products and services are
made available to our customers
through our trusted brands, which
enables us to address the needs	Governance
of different customer segments
more effectively.

Our values

Our values guide how we work together and how we make decisions, so that we're always Helping Britain Prosper and that we're meeting

the needs of customers, colleagues, and communities - today, and for generations to come. We are aiming to embed these values into every decision-making moment across the business, from big strategic decisions to smaller everyday choices.

Our structure

We have three core divisions and, in line with our new strategy launched in 2022, we have restructured our business

to optimise synergies and efficiencies to best serve

People-first	Bold	Inclusive	Sustainable	Trust
We listen and	We innovate	We learn	We take	We give
care for people	and do things	about and	responsibility	each other
as individuals.	differently	embrace our	for the impact	the space
	to better serve	differences,	of our actions	and support
	our customers	and seek	on nature	to take things
	and grow with	out diverse	and Britain's	on and see
	purpose.	perspectives.	transition	them through.
			to net zero.

	Consumer lending	Consumer
	•	Mortgages	relationships
Retail	•	Credit cards	•	Current accounts
•	Personal loans	•	Savings accounts
	•	Motor finance	•	Mass affluent

Read more									Managing ourrisk
about each
unique brand.
									and
We've built our business and	We regularly review the associated opportunity and risk implications to ensure the	Collaboration
strategy to manage the fluctuations	right choices are being made for customers, colleagues and the Group. As a large,	partnerships
Our external drivers, opportunities and risks
in our external environment	UK-focused financial services provider our business model is influenced by a number
and to adapt to ever-changing	of external factors:
stakeholder needs.

our customers' needs.

proposition

Insurance, pensions and investments

• Home, motor and protection insurance

Lloyds	Insurance,	•	Pensions
Banking	Pensions and	•	Investments
Group plc	Investments
		Small and medium	Corporate and
		businesses	institutional banking
	Commercial	•	Business loans	•	Lending
	•	Transactional	•	Risk management
	Banking
		banking	•	Liquidity
		•
		Working capital	•	Debt capital
					markets

This helps ensure the Group remains sustainable over the longer term and can manage opportunities and risks as they emerge.

Read more on our effective risk management on pages 39 to 44 of our annual report and accounts 2023.

Read more about our external environment on pages 14 to 17 of our

annual report and accounts 2023.

Economy	Customers	Society and
		environment

Technology	Competitors	Regulation
and data

Training

Looking ahead and steps fornext2024

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Modern slavery and human trafficking statement 2023

Our commitment to human rights

OverviewGovernance

We do not tolerate modern slavery, human trafficking or forced labour in any part

of our business or supply chain. This is reflected in how we are embedding human rights considerations across our business and operations.

Through our Group strategy, we have set out to become a truly purpose-driven organisation, and we are taking steps to embed our purpose at the core of our business, decision- making, operations and culture. We aim to deliver long-term and profitable growth while making a meaningful and positive difference for all stakeholders, and our commitment to human rights is a fundamental foundation of this.

To help us achieve our ambition, we aligned our values to our purpose and these guide how we work together and how we make decisions.

Read ourhuman rights policy statement.

We are either a signatory to, or abide by, the principles of a number of international and national initiatives and standards relating to sustainable business practices through which we work with other members and peers to gain insights, develop our knowledge, collaborate

on topics and participate in knowledge sharing. These initiatives, memberships and standards support our approach to human rights and modern slavery.

These include:

• The Equator Principles
• The UN Principles for Responsible Investment (UNPRI)
• The UN Global Compact (UNGC)
• The UN Universal Declaration of Human Rights
• The International Labour Organization's Labour Standards
• The UN Environment Programme Finance Initiative (UNEP FI) Principles for Responsible Banking and the Principles for Sustainable Insurance
• The Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises
• The UN Guiding Principles on Business and Human Rights (UNGPs)

As members of the UNGC, we participate in the UNGC Modern Slavery Working Group, allowing us to learn from our peers and from experts in the field of modern slavery and labour exploitation, as well as participating in peer-to-peer reviews of working group members' modern slavery statements to exchange best practice.

As part of our membership of UNEP FI, we have joined the Human Rights Community of Practice which enables us to contribute to the development of the UNEP FI Basic Guide on Human Rights and Environmental Due Diligence.

Salient human rights risks

The UN Guiding Principles Reporting Framework asks companies to focus their human rights reporting on their salient human rights issues. A company's salient human rights issues are those human rights that stand out because they are at risk of the most severe negative impact through the company's activities or business relationships.

During 2023, we have worked with an external party to identify and prioritise the inherent salient human rights risks that can be connected to the Group's operations and value chain. The aim of the activity was to have an external and independent review of potential human rights risk for the Group without taking into consideration any of our current programmes, policies, or initiatives, primarily for the Group to ensure that we aren't missing any key aspects of human rights risk related to our activities. The scope of this work covered all of the Group's subsidiaries, and aimed to identify where

the Group could cause, contribute, or be connected to human rights issues across our value chain.

Affected parties considered included:

• Colleagues and contractors
• Customers and clients
• Workers and communities affected by financing that the Group has provided through our commercial banking, insurance clients and investee companies.
• Workers and communities affected by the Group's supply chain and procurement activities.

Modern slavery was identified as a material potential human rights risk across the Group's activities due to some of the sectors and activities which the Group lends to, invests in and procures from.

Having identified the inherent salient human rights risks, the next step will be for the Group to review our current business processes, some of which already consider human rights risks, identify any gaps and implement measures to prevent or mitigate these potential risks thereby embedding respect for human rights into the Group's core business where it is relevant.

Read about our approach to human rights on page 81 of thesustainability report 2023.

Managing our risk CollaborationTraining and partnerships

Looking ahead and steps fornext2024

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Modern slavery and human trafficking statement 2023

Key initiatives 2023

We have continued our membership of the Unseen UK's Business Hub and participated in Unseen's Financial Hub Group.

We worked with Unseen UK to conduct deep dive risk assessments on a number of suppliers who we identified as having higher risk potential.

We have joined and participated in the UNEP FI Human Rights Community of Practice.

To mark International Human Rights Day and celebrate the 75th anniversary of the Universal Declaration of Human Rights, we hosted a lunch and learn

for colleagues across the Group with Unseen UK to learn more about modern slavery and human trafficking.

We have reviewed the Group's salient human rights risks which identified modern slavery as a salient risk for our commercial lending, investments and supply chain activities.

Scottish Widows voting action

In addition to engaging with our asset managers on their voting practices, during the 2023 AGM season, Scottish Widows took an active role in voting at certain company AGMs on different human rights issues. For example, Scottish Widows directed votes pertaining to human rights (impact, policies and practices, assessment and due diligence) for Alphabet, Meta Platforms Inc and Walmart.

Scottish Widows human rights	Overview
engagement with asset managers
All of our appointed investment
managers consider human rights
and focus on different human rights
themes. During 2023 we focussed	Governance
engagement activity with companies.
on our asset managers' research
approach and covered some of their
We continuously monitor how our
managers are prioritising human
rights engagement with companies.	Managing our risk
Scottish Widows human rights
direct engagement activity	and
research on each company, we wrote
Collaboration
with companies	partnerships
to 25 shortlisted companies in July
After undertaking in-depth qualitative
and August 2023 with tailored requests
on human rights related issues such
as freedom of association, supply	Training
chain and working conditions. We
have had detailed responses from
several companies expressing their
interest in engagement and are
currently in the process of having	stepsfornext
with a selected list of companies.
follow up deep dive conversations	Looking
For further information and updated reporting please	2024
aheadand
visit Scottish Widows Responsible Investment.
Lloyds Banking Group	06
Modern slavery and human trafficking statement 2023

Governance

The Group's approach to human rights is governed by the Responsible Business Committee (RBC),

a sub-committee of the Board of Lloyds Banking Group plc.

Given the strategic importance of our sustainable business ambitions and commitment in managing the impacts arising from human rights risks and broader social issues, our governance structure provides clear oversight and ownership of the Group's identified salient human rights issues.

Board oversight

The Committee's role is to support the Board in overseeing the Company's policies, performance and priorities as

a responsible business and to oversee the Company's activities of all stakeholders including customers, shareholders, colleagues, suppliers, the wider community and the environment.

More information about RBC can be found in the Directors' Report of theannual report and accounts 2023 .

Senior executive accountability

The accountable executive for the Group's human rights and modern slavery approach is Andrew Walton, Chief Sustainability Officer. As part of his role on the Group Executive Committee, he is responsible for championing our Group approach to human rights as well as the publication of our Modern Slavery and Human Rights Policy Statements.

Cross-divisional management

The Group's day-to-day management of modern slavery and human rights is coordinated and driven by the Human Rights Manager who is part of Group Sustainable Business and is guided by a cross-divisional working group, the Modern Slavery and Human Rights Working Group.

This working group has input from functions across the Group, including our People and Places team, Group Sourcing, Retail and Commercial Banking divisions, Group Economic Crime Prevention, as well as external human rights experts.

The internal working group convenes bi-monthly and is an opportunity for key colleagues to discuss how to apply best practice to tackling modern slavery across financial services, support awareness raising activities and explore how to support colleagues with additional resources and training opportunities on this issue, as well as hear from experts in the field of modern slavery.

The working group has shared case studies and experiences on the practicalities of managing modern slavery risks in their respective business areas. The working group also acts as a forum to share and discuss key findings from relevant reports and benchmarks that have been published, as well as emerging trends and risks to be aware of and address going forward.

Other relevant committees that play a role in the oversight of modern slavery issues and initiatives include:

• The People and Places Executive Committee which is responsible for governance of the Group's people and colleague policies, covering conduct, values and behaviours that can relate to human rights concerns, as well as related areas, including remuneration, and reports directly to the Chief Executive, by way of the Group Executive Committee.
• The Group Supply Chain Committee which has business unit representation and is responsible for overseeing supply chain management practices and effectiveness across the ring-fenced bank. The Committee shares insights with non-ring-fenced entities, informing their view of supply chain management.

OverviewGovernanceManaging our risk CollaborationTraining and partnerships

Looking ahead and steps fornext2024

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Modern slavery and human trafficking statement 2023

Governance continued

Our policies

We have a number of internal Group policies and procedures in place that seek to implement our commitment to operating responsibly and ethically as a business and set out our expectations for employees.

These policies and procedures help us to embed human rights considerations into our operations and cover a number of critical areas.

Code of ethics and responsibility

The Code of Ethics and Responsibility (the Code) explains how we can each work responsibly, living up to our purpose and values and doing the right thing when we make decisions.

It applies to all Lloyds Banking Group employees, contractors and agency employees, whether or not they are working with customers directly. We promote high ethical standards and do not tolerate any circumvention of our economic crime prevention policies. We are a member of Transparency International UK's Business Integrity Forum - a network

of major international companies committed to anti- corruption and high ethical standards in business practices.

Read our Code here .

Code of supplier responsibility

The Code of Supplier Responsibility defines our expectations in terms of key social, ethical and environmental values, including human rights and labour issues in the countries and communities in which our suppliers operate. Read more about our expectations on our suppliers in terms of responsible business, sustainability practice and behaviour.

Read our Code of supplier responsibility here .

Human rights policy statement

Our Human Rights Policy Statement provides an overview of the work we do to uphold our respect for human rights within our business and communities. The Statement

is guided by the UNGPs on Business and Human Rights.

Read our statement here .

Speak Up

We value 'speaking up' as a key part of our ethical business culture. We encourage anyone who has a concern about our ethics, conduct or our relationships with third parties to report it without delay.

Our Speak Up reporting service is managed independently by a third party. It allows individuals raising a concern

to report confidentially or anonymously (where permitted by local law) if they are uncomfortable reporting concerns openly. Interpreters are available for most languages.

We also encourage people to report their concerns to a manager, or to Group Conduct Investigations directly.

All concerns are taken seriously and will be dealt with sensitively and confidentially. The identity of anyone who raises a concern will not be shared (unless required to by law) beyond our investigation team. Anyone considering raising a concern can read our Speak Up guidance before making contact.

All colleagues complete annual mandatory training on how to raise their concerns, and this includes details of the support available to them throughout the process and all of our third-party employees working for, or on behalf of, the Group, are also briefed on how to report their concerns via our Speak Up service. We investigate all cases of modern slavery, or any other human rights concerns reported to us, through our Speak Up service.

Our Third-Party Policy Summary sets out the expectations on suppliers, which includes an annual communication or refresher training on how to Speak Up - which includes

Banking Group has identified sectors and defined specific risk appetites related to our financing activities within sectors that have the potential to negatively impact the environment and society, including human rights abuses such as modern slavery and labour exploitation. With specific reference to human rights, we expect our existing customers to respect and protect human rights, both of their own workforce but also those in their supply chain and comply with all applicable legislation, regulations and directives in the countries and communities in which they operate.

Read our Sector Statements here .

Scottish Widows stewardship policy

Where our insurance business invests its own funds or customer funds in assets traded in the public markets, we use professional third-party asset managers that are required to follow the Scottish Widows Exclusions Policy and the Scottish Widows Stewardship Policy as applicable.

As a long-standing signatory of the UNPRI, we are committed to being responsible investors and stewards of the assets we oversee on behalf of our pension customers through Scottish Widows. Our identified core managers are required to be signatories to the UK Stewardship Code and UNPRI, and we hold regular oversight meetings, where they evidence stewardship activities around our priority engagement themes, which includes human rights.

Read more about our Stewardship policy on page 11 and here .

Economic crime prevention

OverviewGovernanceManaging our risk Collaboration and partnerships

With specific reference to human rights, we expect our existing customers to respect and protect human rights.

communicating the Group's reporting channels to those employees who are working on a Group contract. There were no modern slavery concerns reported through Speak Up in 2023.

External sector statements

The Group has published External Sector Statements which apply to the Group's customers that have a direct lending relationship with the Group, including direct loans within Scottish Widows.

The External Sector Statements set out our approach and appetite to lending as they relate to high-risk sectors, whether this risk derives directly from environmental, social or reputational risk. These External Sector Statements outline what types of activities we will and will not support. Lloyds

Our Economic Crime Prevention Policy, including our procedures and Anti-Bribery Policy Statement, contribute to our ability to identify and manage the risk of modern slavery and human trafficking as predicate crimes to money laundering, fraud, bribery, corruption and other financial crimes.

Each business area within the Group is required to set its strategy in line with the Group risk appetite and policy requirements. These Group policies, associated procedures and mandatory training are reviewed annually as part of the governance of the Group's Policy and Risk Management Frameworks. This annual review reflects our efforts to improve our responsible business governance approach on a continual basis, and to embed human rights into our business further.

Training

Looking ahead and steps fornext2024

Lloyds Banking Group	08
Modern slavery and human trafficking statement 2023

Managing our risk

As one of the UK's largest financial services providers, we have an important role to play in combating modern slavery throughout the Group. This starts with identifying

risks across our operations, supply chain, banking, investment and insurance activities, and implementing measures, procedures and processes to mitigates these risks.

The UK's Living Wage Foundation has accredited the Group as a Living Wage Employer.

Our colleagues

At the end of 2023, we employed 62,569 permanent employees globally. In addition, the average number of contractors and temporary colleagues employed during 2023 was 3,5001.

Colleague screening standards

Our Colleague Screening Standards apply to all permanent employees and non-permanent workers that we recruit, including temporary workers and contractors. These standards and processes upholds our respect for labour rights and, for our UK employees, includes the review of individuals' proof of identity, address, and right to work

in the UK.

The Group has long-standing relationships with two trusted and pre-approved managed service providers (MSP's) to fill temporary worker and contractor roles. These two MSPs are bound by contracts which require compliance with our Colleague Screening Standards and the Code of Supplier Responsibility, and which include specific Modern Slavery and Anti-Bribery clauses. Both MSP's also attest compliance annually via the Financial Services Supplier Qualification System (FSQS).

Freedom of association and collective bargaining

We support our colleagues' rights to exercise freedom of association and have extensive consultation and collective bargaining processes in place. We have a recognition agreement with two trade unions who collectively consult and negotiate on behalf of our UK workforce2, who represent 98 per cent of the colleagues worldwide, and have engagement with the Chief Executive Officer (CEO)

and Group Executives.

• This number does not include outsourced workers and consultants.
  2 Union recognition of the UK workforce does not include executive grades.

Supporting a living wage

The UK's Living Wage Foundation has accredited the Group as a Living Wage Employer, and we review our pay rates annually to ensure minimum rates are above the statutory minimum and living wage requirements that are applicable within the countries where we operate. Our Group Places team ensure suppliers who work on our office sites meet the Living Wage rates. Each year, the Places Team review the hourly rate of employees employed by our Facilities Management provider to ensure it is paying employees

a National Living Wage rate as set by the UK government. If the Real Living Wage, which is set by the Living Wage Foundation is not paid, then the Group pay the difference.

We have worked, and continue to work, with third-party contractors to ensure that they operate in line with our commitments, and we expect them to ensure that the wages they pay meet legally mandated minimum wage requirements without unauthorised deductions or financial burdens.

Our Group Places Team understand that supply chain decisions could increase modern slavery risks, including short or unrealistic lead times to complete projects. As we have a framework of suppliers that undertake all our investment activity, we partner with them to give them maximum forward visibility of potential allocation, including a five-year rolling forecast of demand (Medium Term Plan).

This enables our suppliers to establish a resource plan in

a controlled manner taking on board the Group's workload, as well as any other commitments they have with other clients. This de-risks spikes in demand and ensures that all our projects and programmes are resourced effectively. Our projects and programmes are also planned well in advance with timelines benchmarked with industry standards to ensure that there is adequate time to undertake all the activity. There is also a legal requirement under the Construction, Design and Management Regulations 2015 that helps protect employee health during all construction projects. Part of this requires a programme to be provided to undertake the works safely in accordance with our core values.

OverviewGovernanceManaging our risk CollaborationTraining and partnerships

Looking ahead and steps fornext2024

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Modern slavery and human trafficking statement 2023