KPI

KPI Description

Scope / Exclusions

Unit of reporting

Method

Data quality

Reporting frequency

Percentage change in CEO pay (salary, benefits, bonus) in comparison to percentage change in average employee pay (salary, benefits, bonus)

Salary means: This is the core element of pay that reflects an individual's role and position at RBS and is paid for doing the expected day-to-day job or performing specific job responsibilities. Salary is a fixed amount, paid monthly. Salary is taken as at 31 December 2014 (rather than average across year) and is the total annual salary. Benefits means: Benefits can be the provision of nonmonetary items, or the funding with which to purchase benefits such as private medical or life insurance. Employees in the UK are provided with a benefit allowance from which they can select various employee benefits under a flexible benefits arrangement. Annual bonus means: A discretionary award reflecting individual performance, over and above that required to fulfil the day to day role requirements. Allocation of any discretionary award will depend on individual performance and

The percentage change comparison is between 2014 and 2013 data. Data is for the UK and ROI population of RBS employees. Only permanent and fixed term contract employees of the RBS Group are included; contingent workers (temps) who are not employed by RBS are excluded. Data includes active and inactive employees. (Inactive employees are those on long term absence such as maternity leave.) The benefits for the CEO excludes the relocation expenses provided to Ross McEwan as part of his recruitment as CEO UK Retail in 2012. Executive directors, including the CEO, are not eligible for an annual bonus and standard benefit funding for Executive Directors remained unchanged between 2013 and 2014.

Percentage. Calculation of average employee pay is total salary spend across the UK divided by the headcount population as at 31 December 2014. Calculation for bonus is average across calendar year, only taking into consideration those employees eligible for a bonus. Percentage change is the difference between 2014 and 2013 figures, divided by the 2013 figure.

All data is extracted from our HR systems. For the average remuneration of RBS employees: Individual salary costs are compared for like for like populations (taking into account structure changes in the organisation) across 2013 and 2014 and then averaged across this population (excluding transfers and promotions). Total benefit costs are compared for like for like populations and then averaged across this population.

Checks are built into the process to ensure data quality as per the assurance requirement of the Reward policy standard. Third party data verification has been carried out by Deloitte.

Data is extracted annually from HR systems for inclusion in the RBS Annual Report & Accounts. This is the first year this KPI has been included in the annual Sustainability Report.

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on each employee’s performance rating. Ratings are based on an assessment of performance in the round, against a full range of measures including both financial and non-financial measures which take risk into account.

Number of absences in 2014 due to stress (UK & Ireland)

Data is based on number of days of absence due to stress. Reasons for absences due to stress include: - depression - stress due to work - stress, anxiety, nervous debility

Total bonus spend is divided by the total number of “Bonus eligible” UK based employees Average remuneration figures for 2014 are then compared to 2013 figures to determine the percentage change. Data is as between 1 January 2014 and 31 December 2014. Data is for the UK and ROI population of RBS employees. Only permanent and fixed term contract employees of the RBS Group are included; contingent workers (temps) who are not employed by RBS are excluded. Data includes active employees only. Inactive employees are excluded. Inactive employees are those on long term absence such as maternity leave.

Percentage. Number of days’ absence due to stress, split by the stress absence reasons: "Depression", "Stress due to work" and "Stress, anxiety, nervous debility” divided by total number of days’ absence for all reasons.

All data is extracted from our HR systems. Absence data is input to the HR systems by employees’ line managers.

Checks are built into the system reporting parameters to ensure data quality. Third party data verification has been carried out by Deloitte.

Data is extracted annually for inclusion in the RBS Sustainability Report.

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As HR systems are updated on an individual’s return to work, those employees who are absent due to stress but have not yet returned to work in 2013 are excluded from the reported totals. Post traumatic stress disorder (PTSD) is included in the overall absence figures but not in the stress absence figures. Number of voluntary and compulsory redundancies and early retirements (Global)

Data is based on numbers of leavers. Voluntary redundancy (VR) is where employees potentially affected by a redundancy situation are given the opportunity to apply for redundancy before any selection process or Compulsory redundancies are carried out. Early Retirement (ER) is where the same opportunity as voluntary redundancy is given to employees who are nearing retirement age. Early retirement is not an automatic entitlement and eligibility will depend on a number of factors. Compulsory redundancy (CR) is where all voluntary measures and other alternatives have

Data is as between 1 January 2013 and 31 December 2014. Data is global across the whole of the RBS Group. Only permanent employees of the RBS Group are included; fixed term contract RBS employees and contingent workers (temps) who are not employed by RBS are excluded. Data includes active and inactive employees. Inactive employees are those on long term absence such as maternity leave.

Headcount. Number of leavers due to voluntary and compulsory redundancies and early retirement split by geography (UK; Americas; India; EMEA; APAC).

Data is extracted from our HR systems and from our HR data warehouse. Redundancy information is entered on to HR systems by the HR People Services team.

Third party data verification has been carried out by Deloitte.

Data is extracted annually for inclusion in the RBS Sustainability Report.

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been considered and as a last resort employees are made redundant on a compulsory basis. Employee diversity gender, age and ethnic profile (Global for gender and age; UK only for ethnic profile)

Gender groups are: • Male • Female Age groups are: • Under 30 • 30-39 • 40-49 • 50-59 • Over 60 Ethnic profiles are: • White • BME (Black and ethnic) • Unspecified* *Employees provide ethnic profile information on a voluntary basis, it is not compulsory to report this

Data is as of 31 December 2014. Data is global across the whole of the RBS Group (except ethnic profile, which is for the UK only). Only permanent and fixed term contract employees of the RBS Group are included; contingent workers (temps) who are not employed by RBS are excluded. Data includes active and inactive employees. Inactive employees are those on long term absence such as maternity leave.

Percentage. Number of employees split by gender (Male; Female); age, (Under 30; 30-39; 40-49; 5059; Over 60); ethnic profile (White, BME, Unspecified) and grade divided by the total headcount number of employees.

All data is extracted from our HR systems. Data is captured on employees joining the company and input by HR. Employees can update details online at any time by going on to the HR portal.

Third party data verification has been carried out by Deloitte.

Data is extracted annually for inclusion in the RBS Sustainability Report.

Percentage satisfaction with complaint resolution for Branches and Direct Bank (UK).

Customer Satisfaction survey of Customers who made a complaint either in Branch or via Direct Bank that was then resolved by the bank.

The volume of surveys done on a monthly basis was 300 for Branch and 250 for Direct Bank.

%

Monthly surveys are completed based on resolved complaints data for the previous month. This data is then “rolled up” over 3 months and presented as

Data is extracted from internal complaints managing databases, put through hygiene’s (to remove customer’s that

Reporting in the annual Sustainability Report.

Question asked to customers is “thinking about the resolution of your complaint, how satisfied or

Only Personal customer complaints within Personal & Business Banking (PBB) were included. Business banking customer complaints

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dissatisfied were you with the outcome of your complaint?” Customers can then answer:Extremely satisfied Very satisfied Fairly satisfied Neither satisfied nor dissatisfied Fairly dissatisfied Very dissatisfied Extremely dissatisfied Don’t know Not resolved

Net Lending to SMEs (£m)

Measure of Net Lending (= Gross New Lending less Run offs) to SMEs

were excluded.

a “3 month rolled total” eg Oct / Nov / Dec surveys are rolled up and reported end of Dec.

The sample excludes certain groups of customers for reasons including customers that became deceased, were considered to be vulnerable, or have asked not to be called for any customer research purposes for example.

Calculation is based on % of “all satisfied”= fairly / very extremely responses as % of the total responses (excluding “don’t know” OR “not resolved” responses)

Please note exclusion of “don’t know responses’ and those complaints which customers feel were not resolved.

Data is at between 1 January and 31 December 2014. This includes business areas of Business & Commercial Banking with the exception of Corporate Cards, Non Core and RCR managed assets

Value in £STG of amount lent to SMEs

SMEs identified by legacy Cost Centre hierarchy (Business and Commercial Banking)

should not be called) and then sent rd securely to 3 party agency to make telephony based research calls. Please then note that satisfaction scores are calculated by the agency using survey results and then passed back to RBS to use internally. Checks are built into the system reporting parameters to ensure data quality. Third party data verification has been carried out by Deloitte

Data is extracted annually for inclusion in the RBS Sustainability Report

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.

RBSG Environmental Basis of Reporting 2014

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1. Introduction The purpose of these pages is to set out the reporting approach, reporting principles and criteria defined to support RBS’s environmental data reporting. The RBS group provides environmental data reporting from its operational footprint around six main impact areas – Energy, Waste, Water, Travel, Paper and the resultant CO2e emissions. These impact areas will be reviewed regularly to ensure that they continually align to business strategy. This reporting is prepared in accordance with consistent reporting standards based upon the principles of the ISO 14064 Standard, following the Department of Energy and Climate Change’s (DECC) reporting guidance, GHG Protocols and the Environmental Protection Agency (EPA) where appropriate. RBS utilises a third party software system, Credit360 (also referred to as CR360), to improve the capture and recording of the Group’s environmental impact and ensure our audit requirements are met.

2. General Reporting Principles The principles of global environmental performance reporting are as follows: • • • • •

Consistent; reporting standards based upon the principles of the ISO 14064 Corporate Standard Significant; material and mutually important for both Royal Bank of Scotland and the different stakeholders Robust and accurate. Where available, use of local environmental knowledge and convention utilising the GHG reporting principles and environmental reporting has been made as appropriate Relevant; Seek to include all environmental data from the Group’s active operational footprint. Transparent; year on year comparable data with relevant explanations

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3. Scope of Reporting and Normalisation 3.1. Baseline year and reporting period In 2011, 3-year reduction targets were set against some Key Performance Indicators. Therefore current reporting year, 2014, is the end of this 3-year period and performance will be evaluated against targets. 2014 will be the new baseline year and new targets will be set against it. In order to allow sufficient time to reconcile the data in the event that errors are identified, and ensure that the final dataset is available when the verifiers look at the data and supporting evidence, data will be reported with a quarter delay. This means that for 2014, the reported data covers from October 2013 to September 2014. This will increase the accuracy and robustness of the dataset published. 3.2. Reporting Boundary Active operational footprint is defined as those buildings used to add value to the group through direct contact with customers, back office process and data centres. This excludes any residential properties directly owned/leased by the Group or any properties contained within the RBS lending portfolio. RBS is a UK-based banking and financial services company. Headquartered in Edinburgh, RBS operates in the United Kingdom, Europe, the Middle East, the Americas and Asia, serving over 24 million customers worldwide. Buildings in scope are grouped into regions, depending on geographic location. Region Americas Asia Pacific EMEA India UK & Ireland

Number of countries 4 10 26 1 2

Significant countries United States China, Singapore, Hong Kong Netherlands, Russia, UAE India United Kingdom & Ireland

Number of locations 1,528 48 121 61 3,153

Sites are also allocated to a business product, depending on the building type. These are Cash & Coin Centres, Multi-occupied offices, Retail and Others.

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Region Americas Asia Pacific EMEA India UK & Ireland

Cash&Coin Centres

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Multi-Occupied Offices 1,528 45 60 40 440

Retail

Others

3 51 14 2,525

10 7 180

3.3. Normalisation of data Normalisation of environmental performance data is generally made against floor area and/or Full Time Employees (FTEs). The FTE number used was FTE’s as of 31st December 2014, in order to be consistent with the wider RBS annual reporting methodology. Floor area data is provided quarterly by EMEA, APAC, US and UK regional managers with the exception of India which provides floor area data half yearly. Data is provided at a site level. FTE numbers are also provided quarterly by RBS Group HR at the country level.

4. RBS Environmental Reporting System Performance data is collected and collated from sites across the globe via a web-based reporting system, powered by CRedit360. 4.1. CR360 System On a site level basis, data providers collect consumption data for all relevant environmental activities. Environmental data is entered into Credit360 by the relevant person appointed by RBS. In most cases this will be a supplier or member of the RBS property team, who is responsible for entering the data and ensuring that there is supporting evidence. Subsequently data is validated on the system by data approvers, generally senior managers, who take full responsibility of timeliness and accuracy of the data. Finally, the Environmental Reporting Manager, supported by Carbon Clear, monitors the reporting performance on an ongoing basis.

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The system calculates Key Performance Indicators (KPIs) from the data entered and can generate reports at any level of the organisation, i.e. supplier, site, city, country, RBS – Global Level. All data (actual and estimated) is aggregated at a regional level to reflect the total regional consumption. The regional consumption results will be collated to reflect the total RBS Group footprint. CO2e values are attributed to these sources via an automatic conversion module in the CR360 system. The register of emission factors is maintained by Credit360 and updated annually from key sources (e.g. DEFRA, EPA, IEA, GHG Protocol, eGrid). 4.2. C360 System Updates A large step has been taken towards improved environmental reporting through the engagement of independent consultant Carbon Clear to manage and improve the reporting system. Some of the improvement areas focused on were accuracy and timeliness of reporting, the alignment of processes in the different regions as well as an improved auditability and traceability of data and documentation. As a result, the coverage of environmental data reported has been continually extended, improving completeness in areas such as shuttle buses, taxi travel, paper and waste. Engagement with activity data providers has ensured that data is delivered in a standardised format and consistent methodologies have been implemented for inputting data into the C360 system and for performing calculations and extrapolations. For further information on all changes and recalculations, please refer to ISO 14064 Governance Document.

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5. Specific Reporting Guidelines for the six main impact areas This section details the indicators reported and methodology followed for calculating all the indicators publicly disclosed in the Sustainability Report. 5.1. Energy Energy Data KPIs published

Indicators Reported

Unit

Compilation of Data

Total Energy Consumption (in GWh) Total Energy Consumption (in kWh)/FTE Percentage of Electricity Consumed from Renewable Sources (%) • Scope 1 Activity Data* - Diesel Combustion - Mains Gas Combustion - Bottled Gas Combustion • Scope 2 Activity Data * - Renewable Electricity - Non Renewable Electricity - Other Imported Energy District Heating District Cooling Steam Energy consumed in kWh Amount of oil consumed in litres Energy data is sourced from: Utility Bureau (UK, Ireland, and USA); energy and/or financial data collected directly from various energy suppliers and landlords (EMEA, India and Asia) and is based on: • Actual meter readings, where available • Billed consumption, where available

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• • •

•

•

Data collection and entry method Main Assumptions

Occupancy invoices where a landlord pays for consumption, if available. If only utility cost is available, the average cost per unit of energy for that reporting period is used to estimate utility consumption. If no actual data is available for the current period, data from the same period in the previous year will be used i.e. rolled forward. If actual data is available, it will always be prioritised. It is necessary to completely estimate energy use in some regions due to a lack of robust supplier data. Extrapolations within the system use an intensity based on the average regional energy use per m2 to estimate energy consumption on a floor area basis. All calculations are carried out within the C360 system. If no estimated data is available in the current period, estimated data from the same period in the previous year is rolled forward and used.

The energy indicators are collected at property level (where available) and entered into our reporting system through the upload of spreadsheets and/or data forms It is assumed that electricity and water are used at all properties

5.2. Travel Travel Data KPIs published

Indicators Reported

Total emissions from business travel (tCO2e) Total emissions from air travel (tCO2e) Total emissions from rail travel (tCO2e) Total emissions from road travel (tCO2e) • Scope 1 Activity Data* - Private Jet Air Travel - Road Travel : Mobile Banks

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Job Need Cars Scope 3 Activity Data * - Air Travel Long Haul Journeys Medium Haul Journeys Short Haul Journeys - Rail Travel National Rail Travel International Rail Travel - Road Travel 3rd Party Chauffeur Cars Employee Reimbursement Rental Cars Shuttle Buses Taxis Distance travelled (km) and/or amount expensed (£) • Air and Rail travel is booked through the Group’s designated travel supplier – Carlson Wagonlit Travel (All regions) • Travel estimated from expense claims – employee car mileage (UK, Ireland and USA), and non-contract taxis (UK & Ireland) • Actual travel distances supplied by data providers – Private Jet (USA), Contract Taxi (UK & Ireland) and Hire Cars (UK, Ireland and USA) • Actual fuel consumption for some modes of travel where available - RBSowned Mobile banks (UK & Ireland), JobNeed Cars (UK & Ireland), Outsourced shuttle buses (US) • If no actual travel data is available, then data from the same period in the previous year is rolled forward and used. Air and rail travel data is collected at a journey level and rolled up to the country of origin of the journey. The source of this data is a monthly CWT report of mileage data. Data is provided by CWT personnel and collected via logging forms •

Unit

Compilation of Data

Data collection and entry method

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Main Assumptions

For other travel data, data is collected at the relevant level and entered into our reporting system through data forms Other third party business-related travel is deemed out-of-scope (e.g. mail and package courier services)

5.3. Paper Paper Data KPIs published

Indicators Reported

Total paper used (tonnes) Paper from 85% + recycled content (%) Paper consumption/FTE (kg/FTE) • Total paper used (kilo-tonnes) o Paper Source Categories: 100% Virgin – Accredited 100% Virgin – Not Accredited > 85% Recycled Content – Accredited > 85% Recycled Content – Not Accredited < 85% Recycled Content – Accredited < 85% Recycled Content – Not Accredited 100% Recycled Content o Paper Types ATM Receipt Paper Business Cards Cheque and Credit Books Envelopes Forms Industrial Paper / Continuous Stationary Letter Head / Stationary Marketing Paper Office Paper

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Unit

Compilation of Data

Data collection and entry method Main Assumptions

Total paper consumed (kg) by type and source • RBS’s third party suppliers in UK, Ireland and the USA provide paper data to RBS on a quarterly basis. • If no actual data is available for the current period, data from the same period in the previous year will be used. If actual data is available, it will always be prioritised. • It is necessary to completely estimate paper use in some regions due to lack of robust supplier data. Extrapolations within the system use an intensity based on average office paper used per FTE to estimate other regions paper consumption on a per FTE basis. Only office paper is estimated in these regions as it is assumed that the business operations located there do not use other paper types (e.g. statement, marketing etc.) in their business as usual activities. • If no estimated data is available in the current period, estimated data from the same period in the previous year is rolled forward and used Paper indicators are collected at a supplier level (for UK, Ireland and US only) and entered into our reporting system via data forms Paper from ATM receipts had previously been excluded from reporting but this year it has been included to increase accuracy and coverage of data

5.4. Waste Waste Data

KPIs published

Indicators

Total waste generated (tonnes) Total tonnes of waste generated per FTE (tonnes/FTE) Total Waste to landfill (tonnes) Total tonnes of waste landfilled / FTE (tonnes/FTE) Percentage of waste recycled (%) • Total waste generated (in tonnes)

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Reported

•

• •

• Compilation of Data

•

•

- Paper Waste - Cardboard Waste - Unspecified General Waste - Waste Glass Metal Plastic Waste Total waste by destination - Total waste to landfill (in tonnes) - Total waste recycled (in tonnes) - Total waste incinerated (in tonnes) - Total waste composted (in tonnes) RBS’s third party suppliers in UK, Ireland and the USA provide waste data to RBS on a quarterly basis. Due to the lack of actual weighed waste data, it has been necessary to use some estimation. For UK, Ireland and USA, waste data is based on assumptions agreed with the key waste-related suppliers (e.g. average bag or bin weights used instead of actual weighed data for UK general waste). For the USA, general waste data is provided to RBS by an overall waste vendor management company on a location by location basis. They provide data based on actual weights measured (where possible) and sub-contractors calculations of weight; these are based on the density of waste, the number of bins, their size and the pickup schedule. For US sites where no general waste is provided, data is estimated based on average general waste per m2. If no actual data is available for the current period, data from the same period in the previous year will be used. If actual data is available, it will always be prioritised. It is necessary to completely estimate waste use in the some regions due to a lack of robust supplier data. Extrapolations within the system use an

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•

Data collection and entry method Main Assumptions

intensity based on average general waste per FTE to estimate the other regions waste on a per FTE basis. All estimated waste assumed to be landfilled rather than recycled/re-used. If no estimated data is available in the current period, estimated data from the same period in the previous year is rolled forward and used.

Waste indicators are collected at a supplier level (for UK and US only) and entered into our reporting system through the upload of spreadsheets and/or data forms Reported Waste covers general waste and confidential paper waste. The following waste streams are out of scope for this reporting process: IT/Computing waste; Secure media and uniform waste; Hazardous waste; Construction waste

5.5. Water Water Data KPIs published Indicators Reported

Compilation of Data

Total Water Consumption (m3) Water consumption per FTE (m3/FTE) •

Total Water consumption (m3)

Water Data is sourced from Utility bureau (UK, Ireland, and USA) and is based on: • Actual meter readings, where available • Billed consumption, where available • Occupancy invoices where a landlord pays for consumption, if available • If only utility cost is available, the average cost per unit of water for that reporting period is used to estimate utility consumption • If no actual data is available for the current period, data from the same

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•

• Data collection and entry method Main Assumptions

period in the previous year will be used. If actual data is available, it will always be prioritised. It is necessary to completely estimate water consumption in the some regions due to lack of robust supplier data. Extrapolations within the system use an intensity based on average water consumption for a certain amount of space i.e. floor area, to estimate the other regions water use on a floor area basis. If no estimated data is available in the current period, estimated data from the same period in the previous year is rolled forward and used

Water data is collected at property level (where available) and entered into our reporting system through the upload of spreadsheets and/or data forms It is assumed that electricity and water are used at all properties

5.6. Emissions from Refrigerants (HFCs) Refrigerants Data KPIs published

Indicators Reported

Compilation of Data

Emissions of refrigerant gases (tCO2e) Refrigerants consumption (weight charged) - R12 (kg charged) - R22 (kg charged) - R134a (kg charged) - R407c (kg charged) - R408a (kg charged) - R410a (kg charged) - R422d (kg charged) - R600 (kg charged) Refrigerant emissions are calculated by aggregating the emissions from fluorinated gases that have emanated from our property portfolio.

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RBS’s third party suppliers in UK and Ireland provide fluorinated gas data on a quarterly basis. • If no actual data (kg of refrigerant) is available for the current period, data from the same period in the previous year will be used. If actual data is available, it will always be prioritised. It is necessary to completely estimate fluorinated gas emissions in the remaining regions due to lack of robust supplier data. On a quarterly basis the following steps are performed: • Total Fluorinated Gas emissions for UK & Ireland are divided by the total reported floor –area (m2) to calculate an average CO2e per m2 for each quarter. • The quarterly average per m2 calculated is multiplied by the reported m2 for each of the remaining regions/countries to estimate a regional consumption. • Each quarter is collated together to arrive at a full year estimated Fluorinated Gas emission for each region. • If no estimated data is available in the current period, estimated data from the same period in the previous year is rolled forward and used •

Data collection and entry method Main Assumptions

Refrigerant data is collected at a supplier level (for UK, Ireland and US only) and entered into our reporting system via data forms It is assumed that all countries use refrigerants for cooling

5.7. CO2e emissions CO2e emissions reported KPIs published

Scope 1 CO2e emissions (tCO2e) * Scope 1 emissions are calculated by aggregating the emissions for the following

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indicators: • Emissions from Natural Gas Consumption(tCO2e) • Emissions from Liquid Fossil Fuels (tCO2e) • Emissions from HFCs (tCO2e) • Emissions from Owned/Leased vehicles (tCO2e) • Emissions from Owned/Leased air transport (tCO2e) Scope 2 CO2e emissions (tCO2e) * Scope 2 emissions are calculated by aggregating the emissions for the following indicators: • Emissions from Electricity Consumption (tCO2e) • Emissions from Other Imported Energy (tCO2e) Scope 3 CO2e emissions (tCO2e) * Scope 3 emissions are calculated by aggregating the emissions for the following indicators: • Emissions from Air Travel (tCO2e) • Emissions from Hired vehicles and taxis(tCO2e) • Emissions from Rail Travel (tCO2e)

5.8. Assurance Royal Bank of Scotland commissions external service providers to assure the Sustainability public reporting. The approach includes assurance of selected environmental indicators – indicated in the tables above using an asterisk ‘*’ next to the metrics which have been assured. The assurance provided is limited assurance to ISAE3000 standard.

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