RAC Modern Slavery Statement

For the financial year January 2023 to December 2023

This statement is made pursuant to section 54(1) of the Modern Slavery Act 2015 (the “Modern Slavery Act”). It constitutes RAC Group’s modern slavery and human trafficking statement for the financial year ending 31 December 2023.

Our structure

RAC is a consumer services subscription business providing a range of driving and mobility related services, principally breakdown assistance, for consumer and business customers; service, maintenance and repair services delivered through our mobile mechanics; and RAC branded retail insurance products underwritten by a panel of leading insurers.

Our business is built around providing Complete Peace of Mind to our members for their driving needs. We are set up to deliver long term sustainable growth from a growing base of subscription customers, underpinned by a quality customer experience and enabled by digital platforms, data and our colleagues. As of 31 December 2023, RAC employs C.4,200 dedicated colleagues who carry out a broad range of roles across our breakdown and insurance divisions, Head Office and Contact Centres across the UK. In 2023, RAC’s C.1,600 strong patrol force attended approximately 2.6 million breakdowns. Full details of our businesses and subsidiaries are set out in our Annual Report and Accounts, which are available on our website.

RAC has a network of partners, contractors and suppliers which support it in running its business, both operationally and in the supply of goods and services. Although RAC’s outsourced services and supply chains are predominantly UK based, we do use a limited number of well-known and low risk third party suppliers for the provision of recovery services abroad; technology and consultancy services; and parts and products, from suppliers whose operations and/or supply chains span other jurisdictions.

We are aware of the emerging risks and the need to be alert to the ever-changing nature of modern slavery and the impact on our operations. We will therefore continue to review and seek opportunities for further improvements in assessing and developing our approach to modern slavery as set out in this statement.

This statement applies to all companies in the RAC group (meaning companies with RAC Group (Holdings) Limited as parent company) including RAC Motoring Services, RAC Financial Services Limited, RAC Brand Enterprises LLP and RAC Insurance Limited (the “RAC Group”).

Introduction from RAC CEO, Dave Hobday

We are committed to respecting, protecting and championing the human rights of all who come into contact with our operations, including employees, suppliers and contractors. This means that we take a zero-tolerance approach to offences under the Modern Slavery Act, or any other violation of human rights.

Modern slavery is unacceptable within our business and supply chain, and combatting it is an important element of our approach to business and human rights. We accept our responsibility to support transparency; to find and resolve problems; to review our business practices regularly; and to collaborate with others to protect the rights of workers, particularly those who are most vulnerable to abuses such as modern slavery.

We conduct our business in a manner that protects human rights within our sphere of influence, and we are committed to upholding the principles and objectives of the Modern Slavery Act. We believe that doing the right thing builds trust, which in turn strengthens reputation and increases value. Ensuring we have a reputable and dependable supply chain not only helps us to safeguard the reputation and integrity of our business but also enables us to continue to provide a high standard of service to motorists and offer complete peace of mind to our members resulting in a continued positive contribution to society.

Slavery and human trafficking: Our commitment

We recognise that our responsibilities extend beyond our own commercial interests. As such, all members of the RAC Group are committed to helping combat slavery and human trafficking.

We acknowledge that colleagues, customers and suppliers are at the heart of everything we have achieved and are essential to our ongoing success – people are our business. To build on this, we are committed to taking all reasonable steps to ensure slavery and human trafficking do not feature in our business or supply chain. This is reflected through our internal systems and controls.

Business Environment

2023 has been another challenging year for businesses internationally, as the macro-economic environment continues to be affected by international crises such as the conflict in Ukraine and the Middle East, affecting global supply chains in multiple sectors.

We recognise that turbulent times such as these increase cost pressures on suppliers, and so increase the risk of human rights abuses, including modern slavery. Despite this, we have seen no adverse effects of the current environment in respect of modern slavery, and we have continued to work effectively with suppliers to implement measures to support them to ensure we all operate in a way which continues to champion worker’s rights and prevent their exploitation.

Modern Slavery Risk in RAC’s Supply Chain

As identified in the Global Slavery Index, RAC operates in an industry and jurisdiction where the risks of slavery and human trafficking are relatively low. Nevertheless, we acknowledge we are not immune from the risks of slavery and human trafficking and have a responsibility to be alert to any risk. We therefore ensure we are continually assessing these risks and mitigating against their occurrence through our supplier onboarding processes as well as our standard contractual requirements.

To strengthen our efforts further, this year we have begun to map our supply chain, to increase our understanding of businesses with which we work, and to understand how their supply chains operate in turn. We are currently focussing on our highest risk and business critical suppliers at present and will continue working through our remaining suppliers in future years. While at an early stage of roll out, this exercise has identified no key risks and no incidences of human slavery in our supply chain.

In addition we have strengthened governance in respect of our supply chain by the introduction of an enhanced Modern Slavery Due Diligence questionnaire which is utilised when considering contracting with suppliers who act in higher risk industries or areas. This has enabled us to better assess the risk of Modern Slavery entering our supply chain from the outset. Again, no notable risks have so far been identified.

Policies

Modern Slavery Policy

Our Modern Slavery Policy confirms we will not tolerate or condone abuses of human rights within our business and will take seriously any allegations relating to breaches of human rights. Our Modern Slavery Policy is an internal resource with user friendly guidance on the types of risks we should be identifying as an organisation, what steps can be taken to address these risks, and how to raise a concern. The policy is clear on the individual responsibilities of RAC colleagues and ensures we take collective corporate responsibility. The policy also reflects our commitment to acting ethically, with integrity and implementing and enforcing our policy across all our business relationships.

Human Rights Policy

Our Human Rights Policy further enhances our approach, by stating our commitment to safeguarding human rights throughout our business and supply chain. It incorporates the United Nations Guiding Principles on Business and Human Rights and the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work. This ensures RAC and our suppliers’ employees are treated fairly, with respect and dignity. It further underpins our Modern Slavery Policy by re-iterating our commitment to prevent all forms of forced labour and human trafficking.

Whistleblowing Policy

Our Whistleblowing Policy seeks to encourage colleagues to report wrongdoing, including suspected violations of the Modern Slavery Act, via an independent third-party agency. Employees can report by calling a toll-free number or using an online, secure web portal. Reports can be made anonymously and in confidence. All reports are directed to the Chair of the Board Risk and Audit Committee, who reviews any reported concerns and, where necessary, instructs that appropriate action is taken. No concerns have been reported this year regarding modern slavery.

RAC Code of Conduct

Our Code of Conduct sets out our minimum expectations on how colleagues conduct themselves at work and reiterates RAC’s values. RAC requires all its people to “Own It”, taking responsibility for their actions in all aspects of their work which includes taking responsibility to report any suspected wrongdoing. We ask our colleagues to “Handle it Together”, ensuring there is a zero-tolerance attitude to unlawful or discriminatory behaviour and a requirement to promote our principles of transparency, honesty, and operating in an ethical manner.

Breaches of our Code of conduct carry potential disciplinary sanctions for RAC employees. Conversely, employees are incentivised to comply with the Code of Conduct through RAC’s reward structure.

Code of Conduct for Suppliers

RAC’s Code of Conduct for Suppliers requires that our suppliers ensure that they do not use forced labour, and that suppliers monitor and provide RAC with evidence of this in relation to their supply chains, upon request. As above, we continue to ensure all new supplier relationships, or renewals of existing relationships, reflect these requirements in our contracts, wherever possible.

Due diligence processes for slavery and human trafficking

As a first step in any purchasing process, RAC colleagues are required to undertake due diligence on any new supplier. Similarly, due diligence must be repeated annually or on significant relationship change for our material and key suppliers, and on contract renewal for all existing supplier relationships. Our internal due diligence checklist makes specific reference to considering the risks of modern slavery and human trafficking within the supplier relationship/supply chain. Any risks identified in the due diligence process (including any potential modern slavery risks) are then assessed by key stakeholders.

We have robust contract sign off processes which must be followed each time we enter into or renew contracts, and a policy driven process for the annual review of our material and key supplier relationships. Both processes require steps to be undertaken and documented to consider, flag and ensure rectification of any risks associated with modern slavery and human trafficking. These processes provide assurance to our executive committee that appropriate due diligence has been undertaken, all risks have been considered, and appropriate contractual provisions reflecting those risks are in place.

As a minimum, every contract should require third parties to comply with all applicable laws. Our standard form contracts contain robust contractual terms to meet the requirements of the Modern Slavery Act, including controls to prevent slavery and human trafficking and an obligation to notify RAC immediately if a supplier becomes aware of any modern slavery within their supply chain.

Additionally, every contract should grant RAC a right to audit its suppliers, which allows RAC to assess a third party’s (and its employees’, agents’ and contractors’) compliance with the Modern Slavery Act.

Awareness and training

We place responsibility on every colleague in our business to uphold RAC’s legal and ethical obligations. Our policies are available to all colleagues on the RAC intranet. All colleagues, including new joiners must complete annual mandatory training on modern slavery as part of our computer based Essential Learning training programme.

The business ethics module, incorporating modern slavery prevention, forms part of the compulsory computer-based training undertaken by all new colleagues. Refresher training is undertaken by all colleagues annually. This will be updated in accordance with any future guidance published.

To emphasise the message, in line with the publication of this, our seventh modern slavery statement, we shall publish an update on the RAC intranet, to reiterate our colleague’s obligations in supporting our commitment to combatting modern slavery and human trafficking.

Monitoring

RAC has in place internal procedures to ensure the business is clear on its obligations in respect of due diligence and whistleblowing to combat modern slavery and human trafficking and our Incident Reporting Policy requires reporting of any breaches of these procedures. Incidents are reported and monitored at our Executive Risk and Audit Committee, our Regulated Entities Boards and our Board Risk & Audit Committee.

In addition, our ESG strategy sets out our vision of working sustainably to strengthen the RAC and create value for customers, colleagues, communities and planet. The scope of our strategy covers safety and wellbeing, working with global communities to promote common goals, and ethical and sustainable sourcing. Implementation of our ESG strategy forms a key part of our wider business strategy and is overseen by our Executive Risk & Audit Committee and a Board ESG Committee.

We have dedicated control functions, which provide advice and support to the business on a range of issues and conducts testing, monitoring and assurance of our compliance with key policies and procedures. The team consists of the following teams, who report into our Chief Risk & Legal Officer, who in turn reports to the CEO and Chair of the Risk & Audit Committee

Key Priorities

Our focus for the next financial year will be to:

This statement signed on behalf of RAC’s Board of directors by Dave Hobday, CEO