Modern Slavery Act 2015

Close Brothers Group anti-slavery and human trafficking statement for the financial year ended 31 July 2024

This statement is made pursuant to Section 54(1) of the Modern Slavery Act 2015 and sets out the steps the Company has taken during the financial year from 1 August 2023 to 31 July 2024 to ensure that slavery and human trafficking is not taking place in our supply chains or in any part of our business

Group overview

Close Brothers Group plc and its subsidiaries (“Close Brothers” or “the group”) is a leading merchant banking group providing lending, deposit taking, wealth management services and securities trading. 

 

Close Brothers was established in 1878 and today employs approximately 4,000 people, principally in the UK. 

 

The group is comprised of three divisions – Banking, Asset Management and Securities, the Banking division being the largest. 

 

Close Brothers’ Banking division, comprising Close Brothers Limited and its subsidiaries, provides specialist lending to small and medium-sized businesses and individuals across a diverse range of asset classes, and also offers deposit taking services. 

 

Close Brothers Asset Management provides a range of financial advice and investment management services to private clients and professional advisers in the UK. 

 

The group’s Securities division comprises Winterflood, a leading UK market-maker offering execution services to retail stockbrokers and institutional clients. 

 

The group is a financial services provider, with a limited supply chain which predominantly focusses on procuring professional and technology services, with most of its suppliers based in the UK and the EU. 

Policy and principles 

Close Brothers is committed to complying with its obligations under the Modern Slavery Act and other relevant legislation relating to the detection and prevention of modern slavery and human trafficking. Close Brothers is committed to implementing and enforcing effective systems and controls that seek to ensure that modern slavery is not taking place anywhere in its business or in its supply chains. 

 

Consistent with its obligations under the Modern Slavery Act, the group is committed to ensuring there is transparency in its own business and in its approach to tackling modern slavery throughout its supply chains. Close Brothers expects and requests the same standards from its contractors, suppliers and other business partners. 

 

Close Brothers has a Group Modern Slavery Policy as well as a Group Third Party Management Policy to ensure the identification, assessment, mitigation and monitoring of risk within its supply chain. This includes a third-party risk appetite statement which formalises the position that Close Brothers has no appetite for third parties taking risks on its behalf that would be unacceptable if taken internally. The Group Third Party Management Policy is further underpinned by standards and procedures which prescribe the risk assessment and due diligence requirements to consistently and effectively identify and mitigate against risks in the supply chain, including consideration of those related to modern slavery. 

 

As a signatory of the United Nations supported Principles for Responsible Investment (“PRI”), our Asset Management division is committed to improving the way we measure, report and manage environmental, social and governance (“ESG”) issues throughout our investment activities 

Sourcing, contractual standards and due diligence 

Close Brothers adopts a risk-based approach for selecting and managing its supply chain to ensure that risk is appropriately identified, assessed and mitigated. With a framework underpinned by technology to facilitate the process and drive MI and reporting, the group considers a broad range of risks, including those specifically relating to modern slavery. The Chartered Institute of Procurement and Supply (“CIPS”) Corporate Code of Ethics has been incorporated into our Third-Party Management (“TPM”) framework. 

 

Close Brothers has template contractual provisions which require suppliers to comply with laws and regulations, including the Modern Slavery Act. These are used wherever possible for new and renewed supplier relationships and include requirements for standards to be passed down the supply chain where appropriate. For suppliers performing more labour intensive services, like transportation or manufacturing for example, enhanced due diligence is performed to identify supplier policies in place to prevent modern slavery, including forced labour, child labour, discrimination and inappropriate labour rights practices. 

Actions taken in financial year ended 31 July 2024 

During the financial year ended 31 July 2024, Close Brothers took the following steps with the intention of further ensuring that slavery and human trafficking does not take place in its business or supply chains.

 

  1. Group TPM Modern Slavery Policy
    There is continued adherence to the Group TPM Modern Slavery Policy. The policy applies to all group companies, divisions and subsidiary businesses, and their respective permanent and fixed-term employees, temporary staff and contractors.

     

  2. Third Party Management Framework:
    Continuing to review and update the Group Third Party Management Policy and supporting standards and procedures to ensure that the framework continues to be in line with good practice and applicable regulatory requirements, including those in relation to modern slavery and human trafficking. We also continue to review and rollout our Code of Conduct amongst our top tier suppliers.
    Moreover, we have continued to collate key data as part of our annual supplier survey and monitor our supply chain through specific KRIs for some of our most critical suppliers.

     

  3. Sourcing Practices and Due Diligence
    In line with the requirements of the Modern Slavery Act, Close Brothers has continued to consider these requirements when sourcing new goods and services from the third-party supply market. This includes conducting risk assessments based on the nature of the services and suppliers, resulting in increased due diligence in heightened risk scenarios.

     

  4. Third Party Monitoring 
    The Group’s Third-Party Monitoring function is continuing to undertake risk-based reviews via desktop assessments and on-site visits. The team regularly monitors our key suppliers to seek to ensure they meet Close Brothers’ standards. To enhance our approach further, we have onboarded a new partner which utilises a collaborative system where suppliers complete and maintain a single profile which is shared by their major customers in the financial services sector. Using this platform, the Third-Party Monitoring team will have access to standard supplier due diligence responses and supporting documents to conduct Close Brothers’s Third Party Monitoring reviews. The platform also drives regular supplier information updates and will enable a greater reach across suppliers in the industry over time. The findings of these reviews continue to be categorised and formally tracked, reported and communicated to the supplier, where relevant, along with our expectations for the implementation of time-bound corrective actions. There were no instances of non-compliance identified in relation to Modern Slavery during FY24 as a result of these reviews. The team also continues to feed into the Sustainability Working Group with any relevant outcomes resulting from their reviews to support opportunities for continued improvement.

     

  5. Third-Party Team Restructuring
    Close Brothers has restructured the Third-Party Management function to enhance outcomes from CBL’s supplier relationships and optimise supplier performance. The team is now organised by category, focusing on sourcing goods and services with a transparent and holistic overview of market-facing categories. This is further enhancing the teams understanding and knowledge of industry in the supply chain. By having Subject Matter Experts for each Category, it is further enabling our ability to identify and address key risks and ensure we have a proactive approach to compliance and ethical standards.
     

Next steps

Actions currently planned for the 2025 financial year include:

  1. Continue to demonstrate high levels of knowledge and awareness regarding ethical issues including the refreshing of CIPS Ethical Procurement and Supply certifications.
  2. Continue to implement and integrate our Third-Party Monitoring partner, enhancing our ability to gather comprehensive information and extend our reach over the supply chain, as well as enhance reporting.
  3. Continue to thoroughly review and progressively implement our Code of Conduct strategy.
  4. Refresh our wider sustainability strategy to help to ensure that initiatives continue to evolve and advance our Environment, Social and Governance agendas, driving trackable KPIs and enhanced reporting

Approval

This statement is made with respect to the financial year ended 31 July 2024 in accordance with section 54(1) of the Modern Slavery Act 2015. This statement covers Close Brothers Group plc, Close Brothers Limited, Close Leasing Limited, Close Invoice Finance Limited, Close Brothers Vehicle Hire Limited, Winterflood Securities Limited, Close Asset Management Holdings Limited and Close Asset Management Limited, and Commercial Acceptances Limited (each a “Group Company”) and it has been approved by the Board of Directors of Close Brothers Group plc and each other Group Company.

 

  • Winterflood Securities Limited, Close Asset Management Holdings Limited and Close Asset Management Limited have been included based on draft statutory accounts only. Close Brothers to update as required upon receipt of signed statutory accounts.
  • Close Asset Management (UK) has been removed from the list this year as its turnover fell below £36m in FY24, and Close Brothers Holdings Limited has been removed on the basis that no dividend income (the only source of income) was received during FY24.
     

The statement will be reviewed and updated (if necessary) annually to reflect Close Brothers’ ongoing commitment to ensuring that its business and supply chains are free from slavery and human trafficking. The statement is signed by a director of Close Brothers Group plc, the holding company of the Close Brothers Group.