AA Limited and its subsidiaries (the AA or the Group) provide roadside assistance, driving services and insurance products to customers in the UK. The AA is one of the most widely recognised and trusted brands in the UK, building on more than 115 years of service provision and innovation. We are proud of our history of protecting the motorist and making our roads safer.
The AA has a policy of zero tolerance towards acts of modern slavery which are unlawful or are a violation of fundamental human rights. We are committed to acting ethically and to ensuring that we have effective systems and controls in place to mitigate the risk of modern slavery occurring in our operations and supply chains. This statement, relating to the financial year ending 31 January 2021, is made pursuant to section 54(1) of the Modern Slavery Act 2015 (the Act).
The AA is the UK’s leading provider of roadside assistance, with around 2,700 patrols attending an average of around 8,000 breakdowns daily. The AA has around 40% of the UK consumer market and around 50% of the business-to-business market. We aim to differentiate ourselves from our competitors by our leading brand and market position, excellent standards of service, strategic investments in our digital proposition and by training and developing the best people. We have a growing insurance business and are well placed to capture market share through our proprietary data, strength of brand and scale. Our insurance broking business focuses primarily on motor and home policies, operating a diverse panel of underwriters including our in-house underwriter. Full details of our businesses and subsidiaries are set out in our 2021 Annual Report and Accounts, which is available on our corporate website.
The AA’s business model puts people, safety and the environment at its core. This is reinforced through our policies, management and training. The AA’s Policy Committee oversees an effective, auditable and systematic process for the creation and review of all policy documentation.
The commitment to our role in eradicating modern slavery in commercial supply chains is embedded into relevant policies and codes, which are aligned with our values and created to ensure effective working practices. They include:
Enhanced disclosure on relevant internal policies is provided on page 38 of the 2021 Annual Report and Accounts to meet the requirements of the Non-Financial Reporting Regulation.
The AA employs over 7,000 people in locations across the UK who carry out a broad range of roles within Road Operations, Contact Centres and at our Head Office. Our HR processes ensure that those recruited, including through employment agencies, have appropriate approvals to work. Approximately 37% of our people are patrol staff employees.
We have a contracted network of around 450 third-party garages who support us when we are unable to make repairs at the roadside and in areas which we are not able to reach. We inspected around 360 garages during the 2021 financial year. The inspection process includes due diligence related to modern slavery, and no issues were reported during the year.
Used Car Sites Limited, a 100% owned subsidiary of the AA, has contracts with 1,500 dealer groups for the advertisement of used cars. All dealers sign up to the AA dealer promise to ensure they meet required standards and are visited by an AA representative who assesses their suitability to advertise under the AA Brand. All dealers within our network are monitored by an account management team to ensure standards are met.
Our business operations are supported by over 1,500 suppliers that provide a wide range of goods and services. Our direct supply chain is predominantly UK based, though some suppliers are based abroad. Many of these direct suppliers have their own extensive supply chains. Our standard terms and conditions require our suppliers to adhere to all applicable legislation and make specific reference to the Act.
The AA’s procurement team is a centralised head office function that assumes responsibility for the governance of the AA’s purchasing requirements. In the 2021 financial year, the procurement team conducted detailed analysis of suppliers, which make up circa 80% of total supplier spend (excluding garages). These suppliers have been rated according to factors such as main country of operations, spend levels, type of goods/services being supplied and knowledge of the company and its ongoing supply chain. This data is being used to ensure a consistent approach is implemented to managing our supply chain according to the risk they pose to the AA.
The AA has a dedicated supplier audit team, which audits and reviews the AA’s suppliers on a periodical basis. The supplier onboarding process is very robust; it requires new suppliers to answer a series of questions and provide supporting evidence, including commitment to and adherence to the Code. New suppliers also have to confirm that the behaviours and ethics we demand of them with regards to modern slavery and human trafficking will be met. Once populated and returned, specialist approvers from across the business are required to review and approve each supplier before the supplier can work with the AA.
The AA’s Group Risk function facilitates the Risk Management framework providing operational support and challenge of design and operation of the business’ risks and controls. The team check and challenge risk events reported by the business and support in considering the actions to remedy, identifying root cause and additional controls which may be required. Group Risk oversees the business-led activities and gives assurance that appropriate mitigating activities are in place. Controls are tailored to suit the relevant business area and are subject to quarterly Risk and Control Self-Assessment. Any material risks or issues are escalated to Executive level and considered at applicable Committees and Boards, including the Executive Risk and Compliance Committee on a monthly basis. No incidents of modern slavery have been reported since the last Modern Slavery Statement published for the year ended 31 January 2020.
It is important that our colleagues and suppliers understand what Modern Slavery is and how they can escalate any concerns. A revised Whistleblowing Policy and procedure was published in May 2021 which encourages AA employees to voice concerns and details the various channels our people can use to speak up. Victimisation or harassment of anyone who raises concerns in good faith and in accordance with the Whistleblowing Policy will not be tolerated at the AA. The AA has also launched a dedicated training program for new employees recruited at management level, to raise awareness of the Act, the Code and the AA’s commitment to mitigating the risk of modern slavery in supply chains.
During the 2022 financial year, we will continue to seek opportunities for further improvements in how we risk- assess, monitor and engage with our suppliers.
This statement demonstrates the AA’s commitment to helping eradicate modern slavery from the global supply chain and has been reviewed and approved by the Board of AA Limited on 12 July 2021. We look forward to reporting on our progress next year.
Jakob Pfaudler, Chief Executive Officer
12 July 2021
This is a Group statement covering AA Limited and its applicable subsidiary entities which operate in the UK and have an annual turnover exceeding £36 million, this being Automobile Association Developments Limited, Automobile Association Insurance Services Limited, AA Brand Management Limited, AA Corporation Limited, AA Intermediate Co Limited and DriveTech (UK) Limited.
Police-Referred driver courses continue to be delivered online in accordance with the latest Government advice. Courses will be accessed via a secure video link from either your laptop, tablet or phone.