We expect all our colleagues to comply with our Guide to Business Conduct which details how we must put customers first, support each other to act ethically, respect our local environments and communities, keep regulators updated and deliver a sustainable, profitable performance to our shareholders.
Anti-bribery and corruption
At RSA, we take our commitments to preventing bribery and corruption very seriously. Bribery and corruption are not tolerated anywhere in our business and this approach, led by our Board and Group Executive, applies globally.
Our Anti-Corruption, Conflicts of Interest, Gifts and Hospitality Policies apply Group-wide and are supported by extensive resources and guidance, including our anti-bribery toolkit, which is available to all our businesses. Our on-line training materials equip our staff to identify and escalate issues and behaviours which may constitute corruption or otherwise be illegal. Our mandatory Group-wide training, which covers recognising and combating corrupt behaviour and what constitutes appropriate corporate hospitality, was completely refreshed in 2016. It is supplemented by targeted training for staff in higher risk roles. Additionally, all our staff are required to complete whistleblowing training.
All operating countries must complete regular anti-corruption risk assessments covering all aspects of their businesses, including procedures and HR matters and the high expectations we have of our partners. Our operating countries are all given guidance to further enhance their anti-corruption controls.
Staff are regularly reminded of our anti-corruption expectations, whether face-to-face or through intranet messages, and information on policy compliance is escalated to management. Our board receives updates on our anti-corruption controls at least annually. We strongly encourage our people to have the courage and integrity to speak out when they have concerns. Our annually-reviewed Group-wide whistleblowing policy, available on our intranet, sets out the procedure for colleagues to confidentially raise genuine concerns about suspected wrongdoing and malpractice. Where a breach is material or not in compliance with regulations, we will report externally. We had no reported external breaches in 2016.
High risk countries
RSA operates in a global environment and we are frequently asked to provide insurance across borders.
As part of maintaining an appropriate level of scrutiny for the work we do, RSA operates a High Risk Country Framework incorporating guidance and requirements to refer the writing of certain business or the payment of certain claims to a more senior level where a matter is linked to a country that RSA deems higher risk in certain regards.
The Framework includes referral requirements for certain countries with financial sanctions exposure or where there may be war, civil unrest or other socio-political concerns. It also covers insurance linked to arms and military equipment in certain parts of the world.
RSA’s High Risk Country Committee meets regularly to ensure that our approach is current in a rapidly changing world.
We held approximately £14.4 billion of investments at the end of November 2016, the majority in bonds. Our investment fund managers include Deutsche Asset and Wealth Management, Skandinaviska Enskilda Banken and PH&N Investment Services.
Our Group Investment Committee manages investment policy and strategy and oversees the Group’s investment portfolios within strictly defined frameworks. Through our Annual Report and Accounts 2016, we communicated our strategy to maintain a core, high quality, low risk portfolio.
We aim to review the environmental and social policies of our fund managers to ensure that they contain no material differences from our own practices and policies. To date, we have not formally incorporated climate change into our investment policies. However, our fund managers continue to review all risks, including those from climate change, and incorporate them into their assessment of investment opportunities. We will continue to assess the risks and opportunities of responsible investment, as well as how we deliver maximum shareholder value whilst reducing carbon emissions and improving human capital.
We note the development of the Green Bond market and continue to review opportunities for participation where issuance aligns with the investment objectives of the Group.
As a Group, we contribute to public policy debates on issues relevant to our business both individually and through industry bodies such as the Investment Association, the Association of British Insurers and the Confederation of British Industry. We speak up about topics such as fraud, motor and pet insurance, asbestos, compensation culture, financial services regulation and renewable energy. The Group engages with policymakers to improve collective understanding of the role the insurance industry plays in society and the economy.
Our employees act openly, transparently, honestly and with integrity when liaising with policymakers. We adhere to principles of best practice by declaring our interests and ensuring that, to the best of our knowledge, the information we provide is unbiased, complete, up-to-date and not misleading.
The political landscape post-Brexit is challenging with potentially unresolved problems for financial markets. We are, however, shielded from a substantive impact by non-Sterling profits and separate, regulated European subsidiaries.
We do not rely on Freedom of Services, sometimes called European passporting, to achieve significant business volumes and we utilise our subsidiaries, branches and global network. Although some additional licences may be required, it is unlikely that we will need to make wholesale changes to the structure of our operations. Our current structure, with operations in a number of European centres, gives us the flexibility to continue to trade, regardless of whether the UK’s ability to “passport” continues in future.
The Paris Agreement drawn up at the 21st session of the UN Framework Convention on Climate Change (UNFCCC) Conference of the Parties, or COP21, in December 2015 marked a new course for the global climate effort. The Agreement, which is still to be ratified, reaffirms the goal of limiting global temperature increase well below 2°C. We continue to support industry bodies like ClimateWise in the UK, the Swedish Insurance Association and CONCITO, a Danish green think tank working alongside other insurance companies to fully understand the challenges and opportunities associated with a zero-carbon, climate-resilient transition. In July, our Chief Financial Officer, Scott Egan, was appointed to the ClimateWise Insurance Advisory Council, assisting high-level international engagement between the insurance industry and regulators.
We considered environmental, social and governance (ESG) risks when engaging stakeholders to create Making Things Better Together.
Our aim is to both provide products that protect our customers from the impact of risk and to make sure the risks we accept are managed collaboratively. This has the twin effect of maximising returns for investors and benefitting the environment and societies we operate in.
The Board’s Risk Committee (BRC) ensures we operate a robust risk management system and the Group chief risk officer shares any material ESG risks within a quarterly update to the BRC. We consider it imperative to evaluate any emerging risks.
We monitor global developments that could present social or political risks, such as human rights issues—read our Human Rights policy (PDF).
As signatories of the UN Global Compact, we are committed to protecting human rights and eliminating discrimination. We report our progress against the Global Compact’s ten principles annually.
We comply with all relevant law and regulation concerning financial and economic sanctions. A dedicated committee oversees our procedures and our approach to dealing with countries we perceive as higher risk. This approach is reviewed at least twice a year.