Strategy

Our commitment: Ensure the secure and responsible use of data, value our associates, invest in the community, and protect the environment.

Message From Our CEO

2015 was another solid year for Alliance Data’s financial performance, and we couldn’t be more proud of the business success that our management team and associates helped fuel for all of our stakeholders.

In today’s business environment, the measurement of success extends beyond a company’s financial returns. Being among the world’s elite top-performing companies comes with expectations. Clearly, companies must operate responsibly, but the expectation is increasing to embrace sustainable practices that result in positive outcomes, not just for our business, but for society as a whole. Making investments in our communities strengthens our local economies. Making investments in our associates leads to a highly engaged and committed workforce. The right thing to do is now the expected thing to do. And our 15,000 associates have high expectations for us. In a recent associate survey, 79% of associates said that their jobs allow them the opportunity to do challenging and interesting work. And 82% are proud to work for Alliance Data.

When we outlined our three-year corporate responsibility goals in 2014, we were bold in our plans. These were challenges we were willing to take on. Looking at our 2015 results, I am pleased with our progress. While we’ve come a long way, we will continue to forge ahead in our commitments.

Sincerely,

u58

Ed Heffernan

Strategy

In 2015, we continued to place an emphasis on our four areas of focus: data, people, community, and the environment. We know our associates, business partners, and other key stakeholders look to us to take a leadership role in continuing to advance these shared priorities, and we are committed to doing just that.

Continuing to work on our goals in these areas will help us drive our long-term organizational strategy forward, enhance our competitive position, and demonstrate our commitment to continual improvement to our stakeholders.

Engaging Our Stakeholders

In the dynamically changing business environment in which we operate, our stakeholder universe continues to evolve as well. It’s imperative that we continue to place the biggest emphasis on the interconnectedness of our associates, clients, and the end consumer. Our business must also closely manage relationships with our investors, suppliers, government officials, and the local communities in which we operate. These groups are fundamental to our continued success, and it’s essential that we continue to mature our approach to how we proactively manage these partnerships.

In the early stages of developing our corporate responsibility strategy, it was natural that we placed the most emphasis on engaging our associates by seeking their input and perspectives through our annual associate survey and tapping into their innovative thinking to inform how we approach the business.

As we have begun to more proactively share information and progress about our corporate responsibility activities with all of our stakeholders, through the development of our corporate responsibility website and report, we’ve seen an increased interest for more transparent communication. The number of requests we receive from our clients to participate in the Carbon Disclosure Project (CDP) and for other information related to our non-financial performance is increasing. We view this as a growing trend and will continue to aim to exceed their information needs.

In an effort to ensure we continue to meet expectations of our growing stakeholder universe, as stated previously, in 2016 we plan to update our materiality assessment (last conducted in 2012/2013). This assessment will include outreach to external stakeholders to request specific feedback related to our CR strategy and performance. The outcomes of that assessment will be shared in our next report.

Examples of more current stakeholder engagement, including our responses, are shown below.

Associates

In direct response to input from our annual associate survey, we introduced two new initiatives in 2015. We rolled out paid bonding leave for dads, adoptive parents, and long-term foster parents. We also piloted 90-minute training courses in response to associates’ requests for training that could fit into their busy schedules.

Consumers

As we strive to increase our level of transparency and provide consumers with access and choice to how their data is being used, we enhanced Epsilon’s online Knowledge Center, a website that gives consumers information about Epsilon’s marketing practices, consumer privacy, and ways to protect consumer personal information. Consumers can request access to a summary of the information that Epsilon has in our databases and even opt out of the various services we provide.

Clients

An increasing number of clients have asked us to respond to the Carbon Disclosure Project (CDP) and complete supplemental supply chain questionnaires. In 2015, we received our first CDP submission score of 69 (above the supply chain average of 60). Supply chain questionnaires highlighted a gap in our supplier diversity efforts, driving us to begin to identify processes to more effectively measure and monitor our diversity spend.

Governance

Our Corporate Responsibility Leadership Council is an enterprise-wide team of dedicated change-agents who help to set direction, gain buy-in, implement programs, and measure progress. Each business has representation on the Council and works together to ensure commitments are met while retaining some level of autonomy. This enables each individual business to meet enterprise-wide corporate responsibility goals while maintaining local and cultural relevance that’s most meaningful to their population.

A group of senior executives within each business provides guidance, oversight, and accountability for the strategy and performance outcomes, and at the highest level, we have full support of our CEO and the presidents of all three businesses. This group of senior executives reviewed the progress we made against our 2015 goals and helped shape our new goals.

Acting Ethically

We have long cultivated a culture that adheres to a strong code of ethics and ensures personal accountability of our associates at all levels. Our Code of Ethics has received one of the highest ratings (A-) by ethics and compliance expert NYSE Governance Services. Annually, our associates must certify they have read and agree to adhere to the Code and biannually complete additional mandatory training on the Code, anti-harassment, and non-retaliation. Our Senior Director of Corporate Ethics conducts focus group meetings with many of our associates around the globe to determine what the ethical culture is like at their specific location. He also conducts supervisor and manager training sessions that are geared to all managers and, in particular, people managers. The training sessions focus on the criticality of their roles, especially as first-line responders to associate concerns, and address non-harassment, non-retaliation, and our Code of Ethics policy. During the training, statistical data is shared that we receive through the Ethics Helpline. In addition, we conduct a biannual Ethics Week to reinforce our strong ethical culture and make our associates aware of the various ways they can report any ethical violations.

Our approach to ethics further underscores our culture of open communication. It is publicized and encouraged that any business irregularities or misconduct be reported confidentially through our Ethics Helpline or online through our 24-hour Ethics and Compliance Helpline, managed by a third-party, EthicsPoint. We also have a strong open-door policy for all of our associates and encourage communication with managers and/or supervisors if they have issues or concerns.

The integrity and principles around which Alliance Data was formed comes from the top, but it’s imperative that all of our associates understand the expectations of ethical conduct. It’s at the heart of who we are and how we behave every day.

Managing Our Risks

Our Enterprise Risk Management Policy provides each business with a framework for identifying and managing risks recognized as material to the success of the enterprise’s operations. This framework encompasses and promotes the inclusion of economic, compliance, operational, and reputational risk factors in decision-making. All significant risks are documented in an enterprise risk register that is reviewed biannually by our Board of Directors. The risk register includes those risks identified to have the greatest potential impact to the organization. Select key risks noted in our risk register include: regulatory compliance, major security breach, privacy legislation, talent attraction and retention, market changes and competitive pressure, international growth, and supply chain.

Awards

Best IR by a CEO

(mid-cap)
IR Magazine Awards

#4, 10 Best Workplaces for African Americans

Fortune

#39, 50 Best Workplaces for Diversity

Fortune

#94, 100 Best Workplaces for Women

Fortune

#67, 100 Best Workplaces for Millennials

Fortune

Customer Care Centers ranked “Best in Class”

Benchmark Portal
(10th year in a row)

One of Canada’s Greenest Employers

Canada’s Top 100 Employers

Best Employers in Canada

(Platinum Level)
Aon Hewitt

#61, Top 100 Most InDemand Employers

LinkedIn

Epsilon named to OTA Honor Roll