Sustainability 2003 credit-suisse

2003SUSTAINABIL ITY REPORT

Contents

1 Editorial2 Company profile4 Context5 Sustainability and performance6 Commitments and implementation8 Employees

10 Clients13 Society 16 Environmental management18 Developments and innovations in products and services21 Information

Unless otherwise indicated, the information in this Report relates to the whole of Credit Suisse Group and refers to the status as at end-2003. Performance indicators are shown for 2003.

Credit Suisse Group is a leading global financial services company headquartered in Zurich.

The business unit Credit Suisse Financial Services provides private clients and small and medium-sized

companies with private banking and financial advisory services, banking products, and pension and

insurance solutions from Winterthur. The business unit Credit Suisse First Boston, an investment bank,

serves global institutional, corporate, government and individual clients in its role as a financial intermediary.

Credit Suisse Group’s registered shares (CSGN) are listed in Switzerland and in the form of American

Depositary Shares (CSR) in New York. The Group employs around 60,800 staff worldwide.

¤ This symbol is used to indicate topics on which further information is available on our website. Go to www.credit-suisse.com/annualreporting/bookmarks.html to findlinks to the relevant information. This additional information indicated is publicly accessible and does not form part of the Sustainability Report. Some areas of CreditSuisse Group’s websites are only available in English.

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EDITORIAL

Dear readers

For Credit Suisse Group, 2003 was a critical year. Duringa time of continued global economic weakness anduncertain market trends, we succeeded in returning thecompany to sound profitability and considerablystrengthened our capital position. In accomplishing thesegoals, we restored the trust of our clients, employees,shareholders and other stakeholders, and laid a solidfoundation on which to build our future success.

To improve our performance across all of ourbusinesses, and thus re-establish confidence in ourcompany following the losses suffered in 2002, welaunched and systematically implemented a series ofmeasures throughout the year. When confronted withpainful decisions – as was partly the case during thisperiod – it is especially important to address the issue ofcorporate social responsibility, which is a core aspect ofCredit Suisse Group’s commitment to sustainability.

We endeavor to prudently balance the interests ofvarious stakeholders with our accountability towardssociety and the environment. Our approach is to upholdour internal Code of Conduct, to which all Credit SuisseGroup employees are expected to adhere.

In fact, our ability to live up to our guiding principlesmust be the basis on which we are judged. Throughtargeted projects and programs, we continually seek tomaintain and enhance the Group’s corporate value whilesimultaneously fulfilling our social and environmentalresponsibilities. In 2003, for example, we launched anumber of local and international initiatives. Theseincluded setting up an internal business school inSwitzerland and re-certifying our global EnvironmentalManagement System under ISO 14001. We alsoadopted the Equator Principles, a voluntary set of

guidelines developed by banks for managingenvironmental and social risks related to project finance,as well as for implementing the UN Global Compact, ofwhich we were one of the first signatories.

As expectations about corporate responsibility towardclients, shareholders, employees and all other sectors ofsociety and the environment increase, we strive to betterunderstand the concerns of stakeholders around theworld, and to openly communicate our decisions andachievements. Credit Suisse Group’s SustainabilityReport 2003 – which forms part of our corporatereporting – underlines the values we endorse anddescribes the ways in which we put our businessprinciples into practice. We encourage you to read it andwelcome any comments you may have.

Oswald J. GrübelCo-CEO Credit Suisse GroupChief Executive OfficerCredit Suisse Financial Services

John J. MackCo-CEO Credit Suisse GroupChief Executive OfficerCredit Suisse First Boston

Oswald J. Grübel John J. Mack

March 2004

2

COMPANY PROFILE

The activities of Credit Suisse Group are structured intotwo main business units: Credit Suisse Financial Servicesand Credit Suisse First Boston. The Credit Suisse GroupCorporate Center performs parent company functions forthe benefit of the entire Group.

Credit Suisse Financial ServicesCredit Suisse Financial Services offers private bankingand financial advisory services, investment products andinsurance and pension solutions for private and corporateclients, predominantly under the Credit Suisse andWinterthur brands.

Credit Suisse Financial Services consists of foursegments:

Private Banking, providing wealth management servicesfor high-net-worth clients around the world;

Corporate & Retail Banking, serving corporate andretail banking clients in Switzerland;

Credit Suisse Group is a global financial services company domiciled in Switzerland. It offers clients needs-orientedbanking and insurance products, high-quality services and professional advice. Its core activities are: investmentadvisory, asset management and insurance, as well as investment banking. Credit Suisse Group aims to deliversuperior value to its clients and shareholders, to be an employer of choice and to act as a respected member of thecommunity.

Life & Pensions, providing Winterthur’s insurance andpension solutions to private and corporate clients inEurope and selected Asian markets;

Insurance, providing Winterthur’s non-life insurance toprivate and corporate clients predominantly in Europe andthe United States. Effective January 1, 2004, theInsurance segment was renamed Non-Life.

As of December 31, 2003, Credit Suisse FinancialServices’ distribution network consisted of 214 branchesserving Corporate & Retail and Private Banking clients inSwitzerland, approximately 50 Private Banking locationsabroad, approximately 500 insurance locations inSwitzerland and insurance representation in 18 countriesworldwide. Approximately 70 of the banking branchesand insurance agencies in Switzerland are joint locations.

Credit Suisse First BostonCredit Suisse First Boston serves global institutional,corporate, government and high-net-worth clients in itsrole as financial intermediary and provides a broad rangeof financial products and investment advisory services.

Credit Suisse Group structure ¤

Credit Suisse Group

Credit Suisse Financial Services

Private Banking Life & Pensions

Corporate & Retail Banking

Insurance*

Institutional Securities CSFB Financial Services**

Credit Suisse First Boston

Credit Suisse legal entity Winterthur legal entity Credit Suisse First Boston legal entity

* Renamed Non-Life as of January 1, 2004.** Renamed Wealth & Asset Management as of January 1, 2004.

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Credit Suisse First Boston consists of two segments:

The Institutional Securities segment provides financialadvisory and capital raising services and sales and tradingfor users and suppliers of capital around the world. Itcomprises three divisions: Fixed Income, Equity andInvestment Banking.

The CSFB Financial Services segment providesinternational asset management services to institutional,mutual fund and private investors and financial advisoryservices to high-net-worth individuals and corporateinvestors. It includes the institutional asset managementbusiness, which operates under the brand Credit SuisseAsset Management, and Private Client Services.

Effective January 1, 2004, Credit Suisse First Bostonreorganized its operations by transferring the privateequity and private fund groups from the InstitutionalSecurities segment to the CSFB Financial Servicessegment, which has been renamed Wealth & AssetManagement.

Sustainability ratingsIndependent rating agencies and index providers haverepeatedly rated Credit Suisse Group as one of thesector leaders in terms of sustainability; it hassubsequently been included in various sustainabilityindices ¤, such as the Dow Jones Sustainability Index,the FTSE4Good Index and the Humanix Ethical Index.Credit Suisse Group is also represented in variousinvestment funds that focus on ecological and socialissues.

Changein % from

31.12.03 31.12.02 31.12.02

Switzerland banking 19,661 21,270 (8)insurance 6,426 7,063 (9)

Outside Switzerland banking 20,310 25,057 (19)insurance 14,440 25,067 (42)

Total employees Credit Suisse Group 60,837 78,457 (22)

Number of employees (full-time equivalents)

Changein % from

in CHF 2003 2002 2002

Net profit/(loss) in millions 4,999 (3,309) –

Basic Earnings per share 4.13 (2.78) –

Dividend/capital repayment 0.50 1) 0.10 2) 400

Return on equity 16.6% (10%) –

Changein % from

31.12.03 31.12.02 2002

Market capitalization in millions 54,943 36,909 49

Total assets in millions 962,164 955,656 1

Shareholders’ equity in millions 34,692 31,394 11

Total assets under management in billions 1,199 1,160 3

1) Capital repayment 2) Dividend

Key figures 2003

4

CONTEXT

A challenging environment for the financial servicesindustryThe financial services industry has faced a number ofserious challenges in recent years as a result ofcontinuing global economic weakness and its subsequentimpact on the financial markets. At the same time, theindustry had to battle with a loss of confidenceworldwide, as company and stock market scandals,lawsuits in investment banking, investigations targetingfund managers and the issue of corporate governance hitthe headlines. There was a general call for strictercontrols and the issue of corporate responsibility becameincreasingly important.

As a result of various measures such as rules toensure analyst independence, regulations for IPOallocations, stricter corporate governance guidelines andincreased transparency, the financial services industryhas recently achieved considerable progress in its effortsto adapt to the altered market environment and regainpublic confidence.

The measures implemented at various levels appearto have been recognized and accepted by the generalpublic. In Switzerland, for example, the “Sorgenbarometer”survey – a representative opinion poll of the Swisspopulation which has been commissioned by CreditSuisse Group each year for over two decades – revealedthat confidence in banks rose for the second consecutiveyear in 2003 after hitting a record low in 2001.

A year of consolidation Credit Suisse Group was also impacted by thesedevelopments. After posting a large loss in 2002, CreditSuisse Group’s main goal last year was to return to solidprofitability and to regain the confidence of its variousstakeholders.

The Group therefore implemented systematicmeasures that included aligning costs with reducedrevenues, refocusing its onshore European privatebanking activities, returning Winterthur to profitability,strengthening the Group’s capital base and reducing thelegacy asset portfolios at Credit Suisse First Boston.

Cost management was a key priority throughout theGroup in 2003. The rigid cost controls also entailedheadcount reductions, which placed considerablepressure on all of the Group’s staff. The measures takenin 2003 also included the divestiture of parts ofWinterthur’s insurance business in the US, the UK andItaly, as well as the sale of Credit Suisse First Boston’sPershing unit.

Two additional committees were created at Boardlevel – the Chairman’s and Governance Committee andthe Risk Committee – in order to further strengthen theGroup’s corporate governance and risk management.Furthermore, an industry-wide settlement aimed atensuring the independence of research analysts andimproving certain IPO allocation practices was reached inthe US last year. In Switzerland, political debate centeredaround the preservation of bank client confidentiality andthe long-term future of occupations pensions.

The measures initiated by Credit Suisse Group torestore its earning strength and adapt to the alteredmarket environment had the desired effect in 2003. TheGroup will continue to concentrate on generating soundprofitability, while maintaining a focus on costmanagement, efficiency gains and the strengthening ofclient relationships. Given its return to sound profitabilityin 2003, Credit Suisse Group is well positioned tocompete successfully in its primary markets, and itexpects to continue to make progress towards achievingleading performance in its respective businesses.

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SUSTAINABIL ITY AND PERFORMANCE

Sustainability and corporate performance For Credit Suisse Group, sustainability means achievingeconomic success by addressing environmental, socialand commercial expectations vis-à-vis the company andby reaching decisions that achieve a fair balancebetween society’s needs today and in the future.

The active consideration of social and environmentalissues contributes to long-term business success atvarious levels, thus creating added value for thecompany.

¡ Employees: Dedicated and well-qualified employeesare a company’s most important asset. An interestingand challenging working environment, progressiveworking conditions and a culture that encourages asense of responsibility towards the environment andsociety make a company an attractive employer forthe most talented employees.

¡ Clients: Continuous product and service innovationand an awareness of client needs are key factorsdetermining a company’s success. Sustainability-oriented investments are a growing product segment;the volume invested in this area has increasedsubstantially over the last ten years. By offering abroad and innovative range of such products,companies can access new areas of business andsecure existing client relationships.

¡ Investors: The number of investors taking social andenvironmental factors into account has grown. Variousindices such as the Dow Jones Sustainability Indexand the FTSE4Good Index, rate companies accordingto sustainability criteria, i.e. the ratings they issue aredetermined not only by financial key figures but alsoby the company’s environmental and socialperformance. If a company achieves a goodsustainability performance, it will be attractive toinvestors who consider these criteria when makingtheir investment decisions.

¡ Risk management: The nature of risk has changedin recent years and the number and scale of non-traditional risks has increased. The environmental andsocial risks associated with clients and projects canalso become credit, liability or reputational risks forthe financial institutions involved. These aspects musttherefore be taken into consideration as part of thecompany’s risk management procedures to ensure it

pursues a prudent policy when deciding whether –and under which conditions – to grant corporateloans, make investments or underwrite insurancepolicies.

¡ Cost savings: The conscious use of energy andresources helps to save costs – at the time ofpurchase, during maintenance, and upon disposal.

¡ Trust / reputation: Values such as credibility,integrity and the ability to maintain viable partnershipswith various stakeholders are vital for long-termbusiness success, as are corporate governancestructures that meet the highest standards. Bycarefully managing and adopting a transparentapproach vis-à-vis its intangible values, a companycan maintain the trust of clients, employees,shareholders and other stakeholders, as well aspositioning itself as a credible and attractive financialservices provider.

The third Sustainability ReportCredit Suisse Group published its first SustainabilityReport in spring 2002 as a follow-on from itsEnvironmental Reports and a component of its corporatereporting. With this third Sustainability Report, the Groupis once again presenting details of the way it deals withthe challenges related to the wider social environment inwhich it operates.

The Report contains information about the company’srelations with various stakeholders and demonstrates howCredit Suisse Group fulfils its responsibilities in importantareas not reflected in its financial performance, thuscreating added value for the business. Furtherinformation on sustainability indicators and ratings,commitments and publications is available on the Internetat: www.credit-suisse.com/sustainability. Details of thecompany’s financial performance can be found in itsQuarterly and Annual Reports (www.credit-suisse.com/annualreporting).

Credit Suisse Group is taking account of theguidelines set out by the Global Reporting Initiative (GRI)for the further development of its sustainability reportingactivities.

Developments over the past few years, as well as the daily challenges confronting any globally active company, havehighlighted the close interrelationship between economic and social factors. A company’s market value is influencedto a significant extent by intangible values (e.g. intellectual capital, corporate culture, client loyalty, reputation), andits business success is dependent to a large degree on the confidence of its stakeholders and on it being acceptedin the environment in which it operates. Consequently, one of the challenges that a company faces when striving toachieve sustainable business success is that of identifying the expectations of key stakeholder groups and ofaddressing them appropriately.

6

COMMITMENTS AND IMPLEMENTATION

CommitmentsThe shared basic values and principles that the Groupaims to put into practice have been set out in its internalCode of Conduct since 1999. In both its Code ofConduct and its Environmental Policy, Credit SuisseGroup commits itself to the principle of sustainability. The Group has reaffirmed this commitment by signing a series of international pledges. As early as in 1992, it signed the UNEP Declaration for Financial ServicesProviders and, in 2000, it signed up to the UN GlobalCompact ¤ – a UN initiative under which companiescommit themselves to nine principles relating to humanrights, working conditions and environmental protection.

System of shared valuesThe Code of Conduct ¤ focuses on six ethical and sixperformance-related principles, and thus forms a sharedsystem of values that all employees are expected toadhere to.

Ethical values Performance values¡ Integrity ¡ Service¡ Responsibility ¡ Excellence¡ Fairness ¡ Teamwork¡ Compliance ¡ Commitment¡ Transparency ¡ Risk culture¡ Confidentiality ¡ Profitability

On January 1, 2004, an updated version of the Code ofConduct came into effect, which further explicates theexisting principles and takes account of the newrequirements arising from the Sarbanes-Oxley Act of2002 and the New York Stock Exchange’s revisedCorporate Governance Rules.

The basic values set out in the Code of Conduct alsoform the basis for conduct towards employees, clients,investors, society and the environment. They areexpressed in concrete terms in the guidelines anddirectives issued by Credit Suisse Group’s businessunits.

Responsibility at all levelsResponsibility for the individual aspects of sustainabilityrests with employees and management at various levelsof the organization. While Credit Suisse Group’sEnvironmental Management System is controlled centrally

for the whole Group, the management of issues relatingto employees and clients is decentralized. As nationallegislation and practices – as well as the specificbusiness focus and the respective general conditions –need to be taken into account, responsibility foremployee and client issues is borne by the individualbusiness units. Likewise, the scope and the precisefocus of Credit Suisse Group’s social commitments aregeared towards the markets in which it operates.

¡ Employees: The human resources departments ofthe Corporate Center and the two business units areresponsible for issues relating to the Group’spersonnel policy. Dedicated units such as DiversityManagement or the specialists in charge of healthand safety in the workplace are responsible forspecific issues. The representation of employeeinterests to management is the responsibility of theStaff Council in Switzerland and the European WorksCouncil at a pan-European level.

¡ Clients: Professional conduct and the provision of rapid and superior service to clients is first and foremost the responsibility of each individualemployee. The managers responsible for individualbusiness areas and products, as well as the respectivemarket regions, ensure that the company’s highstandards are met. Specialist quality managementunits identify where there is a need or opportunity toimprove the company’s product and service quality,and help employees to deal with client complaints.

¡ Investors / analysts: The Investor Relations unitprovides investors and analysts with a comprehensivepicture of Credit Suisse Group’s strategy andbusiness development. Tools such as the company’sQuarterly Reports, road shows, analyst conferencesand seminars for investors underpin its efforts toinform the market rapidly, transparently and inaccordance with applicable regulations, thus enablingthe company to be assessed as accurately aspossible.

¡ Society: Planning and support units such as Legal &Compliance use training and monitoring to ensurethat employees comply with legal and regulatoryprovisions, as well as with internal standards andregulations. The regular exchange of information withsupervisory bodies and regulators also contributes

A company’s long-term business success is dependent on its ability to gain a comprehensive understanding of its responsibilities vis-à-vis its clients, shareholders and employees, as well as society and the environment. CreditSuisse Group is committed – at several levels – to taking these different aspects into account when conducting itsbusiness.

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towards this. Its “External Affairs and Public Policy”,“Economic & Policy Consulting” and “Public Affairs”departments monitor political, economic and socialdevelopments and enter into dialog with the relevantstakeholders. Various foundations such as CreditSuisse Group’s Jubilee Foundation and the CreditSuisse First Boston Foundation support charitablehumanitarian, social and cultural organizations andinstitutions.

¡ Environment: Credit Suisse Group operates anEnvironmental Management System based on itsenvironmental policy and the internationalcommitments it has made. The system is certifiedunder ISO 14001 and managed centrally for thewhole Group.

¡ Risk management: Credit Suisse Group has acomprehensive approach to risk management, whichalso takes account of social and environmental risks.Monitoring functions are carried out at various levels.Detailed information about Credit Suisse Group’s riskmanagement organization can be found in theGroup’s Annual Report.

In 2004, Credit Suisse Group will endeavor to adopt aneven more integrated approach when assessing differentaspects of its business activities that are relevant tosustainability (see chart). To this end, it will formulate asustainability strategy comprising short and medium-termobjectives. In conjunction with this, efforts will be madeto increase employees’ awareness of the wide variety ofsustainability issues facing a financial services provider,irrespective of their function or area of responsibility. TheGroup aims to report on its main priorities and initialresults in its next Sustainability Report.

The practical challenges of sustainabilityBy taking account of sustainability issues, it is oftenpossible to underpin business objectives directly, as inproduct and service innovation or the prudent use ofresources. Occasionally, however, demands and interestsmay be opposed, leading to conflicting objectives.

One example of this is in project finance, certainaspects of which occasionally attract criticism from thegeneral public and special interest groups. Whenfinancing large-scale projects in investment banking or inthe case of exposure to controversial industries – e.g. oilexploration, mining, the pulp and paper industry orhydroelectric projects – the environmental and socialimplications may sometimes trigger public debate. On theone hand, there are the opportunities that a project cancreate for a region, such as energy provision or economicdevelopment and employment; on the other hand, thereare the potential environmental and social risks, whichwill be accorded different degrees of significance bydifferent stakeholders. In such cases, it is important toweigh the expected benefits of a possible commitmentagainst the potential negative consequences. TheEquator Principles, which Credit Suisse First Bostonadopted in 2003, serve as a useful guide by setting outthe standards according to which the risks should bejudged. By highlighting the criteria on which decisions arebased, a business can increase transparency and ofteneven achieve some level of understanding amongstakeholders who take a critical view of a particulardecision.

Credit Suisse Group is very conscious of thechallenges that arise as a result of this complex range oftopics and the constantly changing circumstances inwhich it operates. In each case, it is therefore essentialto carefully consider all of the factors and to weigh upthe various interests involved in order to reach consciousand transparent decisions.

Global Compact

HR Policies

Philanthropy

Code of Conduct

Supplier Guidelines

Health and Safety

Products and Services

Environmental Management

ISO 14001

Legal Compliance

Marketplace

Envir

onm

ent S

ociety

Workplace

Envir

onm

enta

l Iss

ues

Shareholders

NG

Os

Soc

ial Is

sues

Economic Issues

Unions

Employees

Suppliers

Governm

ent

Loca

l Com

mun

ities

Finan

cial Analysts

Customers

Media

This chart illustrates the interrelationship between the differentmeasures that Credit Suisse Group uses to pursue a sustainablebusiness policy. It also shows the stakeholder groups with which itmaintains a dialog.

8

EMPLOYEES

The market creates a need for actionIn 2003, restructuring measures made unavoidable bycorrections on the financial markets led to a significantreduction in the Group’s headcount. The decrease in thenumber of employees was driven primarily by thedivestiture of parts of the company. Moreover, a total of920 full-time positions were cut at Credit Suisse FirstBoston last year, and a further 2,500 at Credit SuisseFinancial Services. As of December 31, 2003, thecompany employed 60,837 staff on a full-time basis. Ofthese, 26,087 worked in Switzerland and 34,750 outsideSwitzerland.

A series of measures drawn up in conjunction withCredit Suisse Group’s social partners in Switzerland aimedto avoid structurally-driven redundancies wheneverpossible and ensured that the employees concernedreceived professional advice and support in their searchfor new internal or external positions. Although theseefforts went beyond the minimum legal requirements inmany ways, some employees felt insecure for longperiods or had to adapt to a new situation. Persistentcompetitive pressure is forcing Credit Suisse Group tocontinue with regular reviews of its cost structures acrossall areas and to measure them against market conditions.

Achieving a healthy work/life balanceCredit Suisse Group strives to help its employees toachieve a healthy balance between their careers and theirprivate lives. At both Credit Suisse Financial Services andCredit Suisse First Boston, flexible working models – such

as part-time positions, opportunities to work from homeand job-sharing – are used wherever feasible from anoperational perspective. At the end of 2003, 19.5% of allstaff at Credit Suisse Group in Switzerland were employedon a part-time basis. More than three-quarters of thesewere women, but the percentage of men (22%) andmiddle management (10%) is growing.

Flexible working models and maternity leave – which,in many locations, exceeds the legal requirements – allowCredit Suisse Group employees to balance their familyobligations with a career. This approach is also reflectedby the provision of internal and subsidized child carefacilities. In 2003, the US magazine “Working Mother”named Credit Suisse First Boston one of the top 100employers for working women with families. Credit SuisseFirst Boston in the UK was also recognized by OpportunityNow, a leading organization supporting the advancementof women in the workplace, with awards for its“Empowering Change for Women” program.

In order to remain fit and well, employees can takeadvantage of Credit Suisse Group’s health and wellnessinitiatives. These include on-site or centrally locatedfitness centers, health screening and voluntaryvaccination, as well as presentations and seminars onissues related to health and well-being, such as stress ornutrition.

Creating and cultivating a corporate cultureLast spring, Credit Suisse Financial Services formulatedsix “Leadership Priorities” to help meet the challenges itfaced and improve management skills at all levels. Theaim of these priorities is to make personal responsibility, apositive approach to criticism and cooperation an evenstronger part of the existing corporate culture.

At Credit Suisse First Boston, there were continuedefforts to promote a uniform corporate culture thatencourages employees to realize their full potential. Thisincludes the “One CSFB Award” that is presented toemployees who stand out on account of their specialefforts in the areas of client focus, teamwork,entrepreneurial spirit and the promotion of diversity.

This Firm-wide culture also encourages all staff to bevigilant with regard to ethical behavior and conduct. Tothis end, structures and procedures have been introducedacross the Group for the reporting of suspected

Highly-qualified, well-trained and dedicated staff are essential to the success of a financial services provider such as Credit Suisse Group. It is just as important for an employer to offer a challenging range of work, targeted training anddevelopment programs, competitive market-driven compensation and attractive social benefits as it is for it to adopt aresponsible attitude towards employees even in the face of adverse economic conditions.

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infringements of legal, regulatory or ethical rules andguidelines. This includes a hotline at Credit Suisse FirstBoston that can be accessed by any employeesworldwide.

A future built on educationWell-trained staff are the key to ensuring optimal clientservice and an innovative range of products. Credit SuisseGroup’s training and development programs range fromapprenticeships and graduate programs to managementtraining courses. In 2003, Credit Suisse and Winterthuroffered more than 1,000 vocational apprenticeships inSwitzerland, while the Career Start program enabledaround 220 university graduates to gain their first targetedprofessional experience. The establishment of the Credit

Suisse First Boston Leadership Institute in March 2002has given Credit Suisse First Boston a central platform foremployee and management training. In September 2003,Credit Suisse Financial Services launched its own internalbusiness school.

Fairness demands equal opportunitiesAs a globally active company, Credit Suisse Group’sworkforce is made up of employees from many differentcountries and ethnic backgrounds. In fact, the Groupemploys people from more than 100 different nations. Bystaging events during “Heritage and History Months” (e.g.Black History Month, Hispanic Heritage Month, Gay andLesbian Month), Credit Suisse First Boston actively offersits employees an opportunity to gain greater awareness oftheir colleagues’ varied ethnic and cultural backgrounds,thus promoting greater mutual understanding and respect.In 2003, the company’s efforts to ensure equalopportunities for all employees were acknowledged byawards from two organizations (Opportunity Now and theHuman Rights Campaign).

One of Credit Suisse Group’s central objectives is topromote equal opportunities in the workplace. Over thelast five years, the percentage of women in middlemanagement positions in Switzerland has increased from18% (1998) to 21% (2003). Over the same period, thepercentage of women in senior management positionshas risen from 6% to almost 10%. Following theappointment of several female Members to the ExecutiveBoards of Credit Suisse First Boston and Credit SuisseFinancial Services, Barbara Yastine – Chief FinancialOfficer of Credit Suisse First Boston – became the firstwoman to be appointed to the Executive Board of CreditSuisse Group in July 2003.

Credit Suisse Business SchoolLife-long learning is of vital importance for employeesand companies alike. In an effort to bring its trainingprograms more closely into line with its businessstrategy, to support the systematic transfer ofexperience and best practice, and to further promoteshared values and a uniform culture, the Credit SuisseBusiness School was launched in autumn 2003. TheBusiness School builds on the company’s tried-and-tested range of training programs and adds specificmeasures such as the development of certifiedspecialist training in conjunction with external partnerschools. It offers specialist and sales training andcontributes to the further development of thecompany’s leadership culture. With the motto “APassion to Learn and Perform”, the Business Schoolhas been in operation since January 1, 2004.

Strengths¡ Credit Suisse First Boston’s efforts to ensure equal opportunities were recognized by awards from Opportunity

Now (UK) and the Human Rights Campaign (US).¡ With more than 8,000 people attending training programs and courses, the Credit Suisse First Boston Leadership

Institute, established in March 2002, has become a central platform for employee and management training.¡ A comprehensive series of measures was drawn up in conjunction with the Group’s social partners for the

realization of the restructuring within Credit Suisse Financial Services in Switzerland.

Weaknesses¡ Despite communication at an early stage and the provision of help and support for staff, the unavoidable

restructuring processes led to uncertainty and disappointment among some employees.¡ Despite considerable efforts and progress, women are still underrepresented in senior positions, especially in

Switzerland and the rest of Europe.

Next steps / objectives¡ Targeted expansion of existing training programs within the framework of the Credit Suisse Business School.¡ Further efforts to encourage employees and managers to identify with the Credit Suisse Financial Services

Leadership Priorities.¡ Continued efforts to promote women and employees from different ethnic backgrounds to key positions to

ensure appropriate representation.

10

CLIENTS

Adapting to economic and social changeIn order to respond rapidly and flexibly to the latestdevelopments, a company must continuously adapt itselfto the social and regulatory environment. A currentexample of this is the new model for occupationalbenefits foundations introduced by Winterthur in 2003 ¤:Winterthur developed a model that takes greater accountof both the economic environment in Switzerland andchanges in life expectancy. The key components of theWinterthur model are the separation of the insurance andpensions relationships and the distinction betweenmandatory and extra-mandatory employee benefits.Winterthur was the first company to launch this newmodel publicly and consequently faced considerablecriticism. The fact that Winterthur was granted thenecessary approval to implement the change – and wassoon followed by other life insurers making similaradjustments – confirmed just how essential this movewas to secure the long-term future of occupationalpensions in Switzerland.

A changing environment for bankingAn ability to adapt to changing conditions is just asimportant in the banking sector. This is especially due tothe fact that the foundations of banking have undergoneconsiderable changes in recent years, driven byderegulation, consolidation and increased competition,including pressure from financial services providersoutside the banking industry. The needs and expectationsof clients have also altered as they turn their focus fromsavings towards investment. In addition to the traditionaloffering of products and services and modern means ofcontact and communication, clients now also requiremore guidance to help them find their way around thesteadily growing range of information and productsavailable.

As a result, the demands placed on client advisorsand on the bank infrastructure have increased sharplyover the last few years. With clients seeking diversificationacross various investment categories, for example,advisors must now have a very detailed knowledge of amultitude of investment products. Employee educationand training are factors that have thus now become evenmore decisive for business success than in the past.

The range of products on offer must also be adaptedcontinuously to meet clients’ expectations. Investors havebecome more risk-aware as a result of stock marketvolatility in the past, and Credit Suisse Group has reactedto this change in demand by launching new productsdesigned to focus on capital preservation and stablereturns. In addition to inflation-proof bond funds, theseproducts include “profit lock-in units” that offer capitalprotection up to the maturity date as well as locking inprofits that accrue during the term of the instrument.Another innovative product is the cat bond issued byCredit Suisse First Boston to insure against the financialrisks of the 2006 Football World Cup.

Client confidence and client satisfaction are objectives which companies must continuously strive to achieve.Innovation and adaptation are essential if a company is to keep pace with a changing society. An acute awarenessof responsibility is vital in order to maintain client confidence in the long term. It is by offering good service qualityand an attractive range of products and services that a company is able to meet its clients’ various needs.

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Central role – enhanced responsibilityAs financial intermediaries, providers of banking andinsurance services also play a central role in the nationaleconomy. They provide the infrastructure for paymentoperations and stock exchange transactions, offer capitalfor investment, and assist in the creation andpreservation of wealth, as well as insuring againstdamage to people and property.

Credit Suisse Group can only fulfill these roles if itmeets the highest standards of credibility and trust. Itthus has to prevent its services from being abused whilestill respecting the privacy of its clients. Switzerland’slegislation on the prevention of money laundering andterrorist funding is among the most advanced in theworld. The principles it lays down are applied by all ofCredit Suisse Group’s business units around the world.As a member of the Wolfsberg Group, Credit SuisseGroup has also committed itself to the international fightagainst money laundering and terrorist funding by thefinancial services industry (Wolfsberg Principles) ¤.

Prevention through reconstructionWinterthur assigns considerable importance toaccident prevention. It has had its own department forresearch into traffic accidents and traffic safety since1990 and is one of only three insurers in Europe tohave a unit of this kind. The department examines howand why traffic accidents occur and studies theirconsequences. Its findings are of relevance in accidentreconstructions and help to improve preventativemeasures. Winterthur’s accident research unitoperates internationally and works together withvarious external partners. Its activities focus primarilyon preventing whiplash injuries, maintaining accidentdatabases and performing crash tests.

Discussions about credit policyIn a new study by the Swiss Federal Department ofEconomic Affairs, around 60% of the small and medium-sized enterprises (SMEs) surveyed expressed a positiveopinion about their banks, while only about 15% weredissatisfied. Over recent years, there have been repeateddiscussions about the Swiss banks’ credit policy. A studypublished by Credit Suisse Financial Services’ Economic& Policy Consulting department in summer 2003revealed that the credit market in Switzerland isfunctioning properly, and that there has been neither ageneral shortage of loans nor any evidence ofdiscrimination against small and medium-sizedenterprises in favor of larger corporations. Recentstatements by the Swiss National Bank and the SwissGovernment support these findings.

The assumption of risk is an inherent part of thecredit business and something for which banks wish tobe adequately compensated. They will endeavor tofurther improve their risk management, thus alsobenefiting their clients and investors. Attention willtherefore remain focused on the issue of credit policy.Credit Suisse Financial Services and Credit Suisse FirstBoston today already issue credit ratings for theircorporate clients, based on qualitative factors such as anassessment of their management and market, theiraccounting and current business performance, as well asquantitative factors such as their earnings situation,financing power and the soundness of their balancesheet. Credit ratings are important for clients, as theyindicate a client’s creditworthiness and where a client canachieve improvements. At Credit Suisse FinancialServices, ratings are therefore discussed with corporateclients. Transparent communication between banks andcompanies strengthens their mutual trust and helps tominimize misunderstandings.

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Quality and satisfaction – integrating the clientperspectiveCredit Suisse Group is implementing targeted measuresto ensure that the highest standards of client focus andservice quality are maintained over the long term. Thisinvolves drawing up a clear and detailed picture of itsclient structure and client needs. Credit Suisse’s QualityManagement team conducts around 15,000 telephoneinterviews with private and corporate clients in Switzerlandeach year. These surveys provide management with keyinformation on how to focus even more sharply on clientrequirements.

Current studies have shown, for example, thatcompared to men, women invest with a longerinvestment horizon and tend towards a more security-oriented risk profile. The challenge is to take evengreater account of such distinctions in future.

The series of awards won by Credit Suisse Group’sdifferent businesses in 2003 confirm the company’sachievements to date, as well as encouraging furthereffort. A wide-ranging survey placed Credit SuissePrivate Banking, Credit Suisse (Germany) and Bank Leu(a private banking subsidiary of Credit Suisse Group)among the top 18 asset managers in the German-speaking world. For its part, Credit Suisse First Bostonwon “Euromoney Awards for Excellence 2003” in allthree investment banking categories in Switzerland (BestM&A House, Best Debt House, Best Equity House) aswell as being named Best M&A House in EmergingEurope. Many of the deals arranged by Credit SuisseFirst Boston are recognized as “Deals of the Year” byleading financial publications.

However, ensuring the satisfaction of clients is evenmore important than gaining the approbation of experts.Despite the adverse market environment in 2003, therewas a clear year-on-year rise in client retention and inoverall satisfaction amongst Credit Suisse Group’sprivate and corporate clients in Switzerland. This trendcan be attributed to improved information, increasedreliability and the considerable efforts assigned toaddressing clients’ concerns and questions. The maincriticisms voiced by clients related to the execution oftransactions and provision of specialist advice, as well asfees and prices. These issues will be addressed in 2004in order to maintain the company’s image as a reliablepartner. The aim is to ensure that all clients experiencethe Credit Suisse brand in a positive way whenever theycome into contact with the bank.

CLIENTS

Strengths¡ Close contact with clients through worldwide presence and multi-channel approach.¡ Improved client retention and client satisfaction among Swiss private and corporate clients.¡ Awards for quality in asset management and investment banking.

Weaknesses¡ Despite increasing client satisfaction in the Swiss corporate banking business, Swiss corporate clients have

experienced some uncertainty about their own credit rating.¡ The essential amendments to occupational pensions prompted criticism from the general public; Winterthur

responded by providing additional information and being a willing partner for discussion.

Next steps / objectives¡ A more differentiated approach to the investment requirements of specific client groups, e.g. women.¡ Further improvements in client advisory and support services through targeted improvements in training for

employees with client contact (Credit Suisse Business School).¡ Targeted measures to achieve improvements in the areas criticized by clients, such as execution and advice, in

order to further increase client satisfaction.

www.credit-suisse.com 13

SOCIETY

Credit Suisse Group plays by the rulesIntegrity and professionalism are the essentialfoundations on which client, shareholder and publicconfidence are built. Over the last two years, CreditSuisse Group has further strengthened its internalcompliance structures and has been at the forefront ofthe implementation of reforms in response to industry-wide settlements.

In February 2003, for example, Credit Suisse FirstBoston created a high-ranking Global ComplianceCommittee to ensure that any adaptations of thebusiness in line with future changes in the regulatoryenvironment can be carried out quickly and implementedefficiently by means of additional training and strongercontrols.

In the US and Switzerland, discussions focused onequity research and the ban on the personal ownershipof equities by analysts to ensure the independence oftheir financial research. Both of Credit Suisse Group’sbusiness units – Credit Suisse Financial Services andCredit Suisse First Boston – had already prohibited theirresearch analysts from owning the securities which theyhave to evaluate on a professional basis.

In spring 2003, as part of the industry-widesettlements, Credit Suisse First Boston concluded anagreement with the US regulatory authorities regardingtheir investigations into research analyst independenceand the allocation of Initial Public Offerings (IPOs) tocorporate executives. This marked an important steptowards restoring investor confidence in the financialservices sector.

Corporate Governance ¤Good corporate governance enables differentstakeholders to assess the quality of a company and itsmanagement, as well as supporting investors in theirinvestment decisions. Credit Suisse Group is committedto the implementation of internationally accepted highstandards of corporate governance. The Group observesthe principles set out in the Swiss Code of Best Practiceand is subject to the SWX Directive Governing theDisclosure of Information on Corporate Governance.

The Corporate Governance Guidelines adopted by theBoard of Directors of Credit Suisse Group form the basisfor a sound corporate governance framework and refer toother documents that govern certain individual aspects in

detail. As of year-end 2003, the Board of Directors ofCredit Suisse Group had four standing committees: theChairman’s and Governance Committee, the AuditCommittee, the Compensation Committee and the RiskCommittee. The Group’s corporate governance has beenrated as excellent in studies by independent parties.

In dialog with societyCredit Suisse Group conducts a continuous dialog withits various stakeholders – including clients, shareholders,analysts, competitors, the media, regulators, politicalparties, international organizations and non-governmentalorganizations (NGOs). Furthermore, Credit Suisse Groupparticipates in discussions about social challenges atvarious levels.

In its talks with politicians and the authorities, andwhen taking part in professional associations and workinggroups, Credit Suisse Group strives, among other things,to establish framework conditions that favor economicgrowth. Through its involvement in the Avenir Suissethink tank and other bodies, it is contributing to aproactive, scientific debate about subjects such as theageing society, educational policy, deregulation,competition policy and the encouragement of innovation.Meanwhile, Credit Suisse Financial Services’ Economic &Policy Consulting department analyzes key economic andpolitical topics, proposing possible solutions in its well-researched studies.

As a globally active provider of banking and insurance services, Credit Suisse Group operates against a complexbackdrop of interrelated social and economic forces. Transparency about its own business activities and an opendialog with politicians, the authorities and the general public are therefore prerequisites for its long-term success.Equally important is its commitment to the communities in which it operates.

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SOCIETY

Credit Suisse’s survey of the Swiss public’s concerns –the “Sorgenbarometer” – which a Swiss research institutecarries out every year on behalf of the bank’s clientmagazine “Bulletin”, provides a good indication of theproblems and issues which the general population believeare most pressing. The study thus takes the pulse of theSwiss people and contributes to the debate about thekey challenges facing the country today.

With its launch of the Winterthur model, Winterthurreacted to changes in the demographic structure ofSwiss society and thus not only proposed a solution forthe long-term funding of occupational pensions, but alsoprovided the impetus for a broad debate on a subjectclose to its heart.

In December 2003, the first UN World Summit onthe Information Society was held in Geneva. CreditSuisse Group took this opportunity to participate in theglobal discussion about narrowing the digital dividebetween rich and poor. As a business, Credit SuisseGroup is not only a heavy user of information technologybut also sets standards in the further development of IT.The workshop, led by the Chief Information SecurityOfficer of Credit Suisse Financial Services, enabled thetransfer of knowledge about this issue – which was wellreceived by all participants.

The results of Credit Suisse Group’s dialog withNGOs are also illustrated by the example of the gasextraction plant on the Russian island of Sakhalin.Following a thorough analysis of the relevantenvironmental impact assessment, Credit Suisse FirstBoston decided in 2002 to become involved in theconstruction of the plant as a financial advisor. In summer2003, the WWF launched a campaign against thisproject, partly to protect the local population of graywhales. Credit Suisse discussed the situation with theWWF and told it what measures were planned to makethe project as environmentally sustainable as possible.Credit Suisse and WWF agreed to have theenvironmental conditions regularly examined by anindependent party.

Supporting non-commercial initiatives All Credit Suisse Group institutions contribute toinnovative charitable projects via both financial donationsand the personal efforts of their employees. Thesecommitments demonstrate the company’s awarenessthat a business relies on the existence of a stableenvironment for itself and its employees, meaning that ithas a responsibility to contribute towards improving thelot of disadvantaged people and to encourage a richcultural life. Some illustrations from 2003 ¤:

¡ Credit Suisse Group’s Jubilee Foundation:commitments to charitable and cultural projects. Onemajor area of focus is the promotion of outstandingmusical talent, for example with the Credit SuisseYoung Artist Award and the Prix Credit Suisse JeunesSolistes; another is its commitment to projects thatinvolve people with disabilities, such as “PlusportDay”, an annual event for 1,500 disabled and able-bodied sports enthusiasts;

¡ Credit Suisse Group’s Donations department: supportfor numerous small and large-scale social andcharitable institutions, as well as for educationalorganizations – with an emphasis on higher educationin banking and finance in Switzerland;

¡ Credit Suisse First Boston Foundation, New York:support for educational projects for inner-city youthwith a particular focus on community-based and after-school education programs in disadvantaged parts ofthe city, including programs that incorporate art,music, sport, recreation and community building;

¡ Credit Suisse First Boston European CharitiesCommittee, London: The National Children’s Home(NCH), Credit Suisse First Boston’s Charity of theYear 2002, granted the “Helping the Children whoNeed it the Most” award to Credit Suisse First Bostonin London in 2003;

¡ Credit Suisse First Boston Asia Pacific PhilanthropicCommittee, Hong Kong: support for building,renovating and equipping educational facilities in ruralareas of lesser developed countries in the region;

¡ Winterthur: the main priorities are pension provisionand accident prevention. The Winterthur Foundationfor Accident and Loss Prevention is active in theprevention of traffic accidents, particularly thoseinvolving children. The Foundation “Zentrum amObertor” encourages different generations to meetand integrate. The spirit of the Foundation is relivedeach day through education and meetings for all agegroups.

The dedicated voluntary work of the employees andmanagers of Credit Suisse Group in bodies promotingculture, art, education and research, complements thesecommitments.

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The Splash Girls project for Aids orphans“Splash Girls” is the name of a bicycle courier servicein Bulawayo, Zimbabwe, which is run by young womenaged between 18 and 23. They are all Aids orphans.

In autumn 2003, a group of Splash Girlsaccompanied their fellow couriers in Switzerland ontheir rounds in various Swiss cities, at the same timeraising awareness of the plight of Aids orphans inSouthern Africa. With every courier trip, money wasraised for the expansion of the technical infrastructurethat will create opportunities and work for more youngwomen.

Credit Suisse Group helped to organize thisinternational act of solidarity among bike couriers andpublicized the project through its local branches.

Strengths¡ A wide range of charitable and community activities focused on a variety of social and cultural environments.¡ Participation in debates about social challenges, proposal of concrete solutions (e.g. public finances,

pension provision, growth policy, funding of higher education).¡ Active dialog with stakeholder groups.

Weaknesses¡ Synergies between the worldwide philanthropic commitments of Credit Suisse Group are not yet

sufficiently utilized.¡ Credit Suisse Group’s efforts and contributions in the social field are not sufficiently known to the general public.

Next steps / objectives¡ Maximum utilization of synergies between philanthropic commitments within Credit Suisse Group in

order to increase the effectiveness of the contributions made.¡ More active communication of Credit Suisse Group’s contributions to society.¡ Continued active stakeholder dialog and contributions to knowledge transfer.

SponsorshipCredit Suisse Financial Services has long been a leadingsponsor of Swiss cultural and sporting events. In the fieldof cultural sponsorship, Credit Suisse focuses onclassical music, jazz and fine art. In addition to itscommitment to outstanding performances by elitesportsmen and women and top performers, it has alwayspaid attention to young talent. A good example of this isthe Swiss Football Association, whose juniors celebrateda series of well-observed successes in 2003. Thecrowning glory of the bank’s football sponsorshipcommitment was the Swiss national team’s successfulqualification for the 2004 European FootballChampionships.

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ENVIRONMENTAL MANAGEMENT

The commitment growsThe framework for its internal environmentalmanagement is provided by the international pledgessigned by Credit Suisse Group, such as the UNEPStatement ¤ and the UN Global Compact, as well as byits internal Code of Conduct. This framework representsCredit Suisse Group’s commitment to being one of theworld’s leading institutions in the field of environmentalmanagement.

Credit Suisse Group is constantly adjusting its work inthis area in the light of the latest developments. In 2000,for example, the Environmental Management Systemwas recertified for the first time to cover all of theGroup’s banking locations around the world, as well asits insurance operations in Switzerland. The secondrecertification by SGS AG in 2003 confirmed that CreditSuisse Group is running its Environmental ManagementSystem to a high standard and improving it on acontinuous basis. The main focus in future will be onmaintaining the good standards achieved inenvironmental management. The internal directive usedto regulate the Environmental Management System willthus be revised to take account of the altered conditionsand to update procedures and priorities.

Involvement of external partnersThe sound state of Credit Suisse Group’s EnvironmentalManagement System is attributable not only to theexpansion of the system to include locations such asNew York, London and Singapore, but also to theincreasing involvement of key external partners. Individualagreements ensure that partner firms with environmentalrelevance respect Credit Suisse Group’s standards andwork to improve their own environmental performance. Inautumn 2003, for instance, MIB AG Property + FacilityManagement, which manages Credit Suisse Group’soperational premises in Switzerland, also had itsenvironmental management system certified.

Another example is the outsourcing of the eco-risksunit (part of Swiss corporate credit management) to anexternal partner in 2003 due to cost factors. Here, too,appropriate contracts and audits were used to ensurethat the examination of environmental risks would still besufficiently well integrated into the EnvironmentalManagement System and meet the relevant standards.The effects of this change on the credit portfolio arebeing monitored.

Energy determines environmental performanceEnergy consumption is by far the largest direct impactthat Credit Suisse Group has on the environment. Energyefficiency measures thus contribute considerably towardsimproving the company’s environmental performance,and are also important with regard to the issue of climatechange. When building new premises or renovating andmaintaining existing buildings, the company followsappropriate environmental criteria, as the followingexamples show:

¡ Credit Suisse Group is one of Switzerland’s largestinvestors in “Minergie” standards. Several of itsbuildings have been awarded this quality label for theirparticularly energy-efficient construction.

¡ As a result of close collaboration between theproperty management firm MIB AG Property +Facility Management and Credit Suisse FinancialServices Real Estate + Provider Management, awide-reaching project was launched in 2003 tooptimize energy use at the bank’s business premisesthrough the use of heat recycling and free-coolingplants.

In 1997, Credit Suisse Group became the first bank to have its environmental management system certifiedaccording to the ISO 14001 standard. Targeted measures are used to implement the Group-wide environmentalpolicy globally.

www.credit-suisse.com 17

¡ A bundle of measures were implemented at CreditSuisse First Boston’s offices in London in responseto obligations arising from the energy accreditationawarded in 2002 by the UK National EnergyFoundation. Various rehabilitation and optimizationprojects relating to climate control, ventilation andlighting, along with the use of energy-efficient ITtechnology, has already led to a 10% reduction intotal energy consumption in only the second year.

¡ In New York, Credit Suisse First Boston also focusedits operational ecology efforts on energy issues.Renovation of the cooling tower in the computercenter, for example, led to a 10% increase inefficiency. Optimized lighting control also helped tocut electricity consumption significantly. With thelaunch of a waste campaign, waste disposalprocesses were further optimized and recycling ratesfor various materials were substantially improved. Thisalso paid off financially.

¡ The use of video-conferencing as a cost-effectivealternative to air travel increased by 15% at CreditSuisse First Boston compared to 2002.

Decision-making criteria pass practical testA globally active corporation such as Credit Suisse Groupworks with numerous partners. At the end of 2002, apilot project was launched in Switzerland under the name“Sustainable Procurement at Credit Suisse Group”. Itsaim was to formulate objective environmental and socialcriteria to be used by decision-makers when assessingproduct and service suppliers. It was important to ensurethat these criteria could be integrated easily into existingsupply management processes. Checklists weredeveloped and their practical usefulness was confirmedwhen actual supply contracts were negotiated – feedbackfrom the firms involved was positive. Subsequently, thechecklists were integrated into a new electronic tenderingsystem. In parallel with these efforts, Credit Suisse FirstBoston in London is also actively involved with a group ofUK financial services providers that are formulatingminimum environmental criteria for procurement andpurchasing.

Energy still plays the central roleEnergy remains the central concern of operationalecology at Credit Suisse Group in 2004. A key focushere for Swiss operating locations is the updating of theEnergy Guidelines, which set out the main priorities andother objectives in this area. However, targeted energy-related action is already being taken today as part ofwider rehabilitation projects; and at locations outsideSwitzerland, further energy-specific efforts are also apriority. The Group is also working on realizing potentialsavings in the area of paper consumption.

Efforts at all levelsThe continuous improvement of environmentalmanagement is a duty for staff at all levels and in allbusiness areas. A good example of how thisresponsibility is put into practice is the reduction oftotal paper consumption at Credit Suisse Group’slocations in Switzerland. Various measures initiatedbetween 1999 and 2003 have resulted in a reductionof about one third in the amount of paper consumed.An internal working group is currently evaluating thepracticability and business sense of further potentialsavings. Paper consumption has also been reduced atCredit Suisse First Boston. The use of copier paperper person has, for example, fallen by 18 percentsince 2001.

Strengths¡ Leading sustainability rating agencies e.g. the Dow Jones Sustainability Indexes and FTSE4Good, rate Credit

Suisse Group as “best-in-class”.¡ Recertification of the worldwide Environmental Management System under ISO 14001.¡ Successful implementation of environmental and social standards in procurement.¡ MIB AG, a key partner of Credit Suisse Group in Switzerland, has now also received its ISO 14001 certification.

Weaknesses¡ The transfer of environmental know-how between business units is not always as good as it could be.¡ Despite a strong drive to work electronically, the volume of paper used is still quite high.

Next steps / objectives¡ Revision of the Group-wide directive about the Environmental Management System.¡ Update energy targets for Swiss business premises and for the largest operating locations around the world.¡ Realize further optimization potential in the area of paper use.

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DEVELOPMENTS AND INNOVATIONS IN PRODUCTS AND SERVICES

Review of environmental and social risksThe nature of risk has changed in recent years. Ascompanies and their interaction with the outside worldhave become more complex, risks have also becomeincreasingly diverse, and the number and scale of non-traditional risks has increased. Effective risk managementthus has to identify environmental and social risks thatmight be associated with clients and projects at an earlystage in order to avoid exposure to credit, reputation orliability risks.

At Credit Suisse Group, examining these risks is partof the risk management process – both when makingcredit decisions at Credit Suisse Financial Services and ininvestment banking activities at Credit Suisse FirstBoston. Internal directives define the procedures – andwhen transactions carry high levels of environmental risk,external experts are brought in to help.

An insurer such as Winterthur has a somewhatdifferent focus. Potential threats have to be identified andevaluated at an early stage; it is only thus that theinsurer’s long-term success can be guaranteed. Inparticular, large-scale loss events such as hail, storms,earthquakes or floods, could affect all of Winterthur’sinsured portfolios in all markets. Ensuring as accurate anassessment of the potential risks as possible is thereforevital not only for the insurer’s long-term price structurebut also to protect society from major events that are offundamental importance.

An internal unit uses scientific computer models tosimulate the natural disasters that pose the greatestpotential threat to the relevant insurance policies. Usingthese simulations, the experts subsequently determinethe amount of reinsurance cover required. In addition,Winterthur has developed a code of conduct for under-writing and claims management, which defines theactuarial and ethical principles that must be applied in thevarious countries while taking account of local practices.

Equator PrinciplesIn June 2003, ten financial services providers signed upto the Equator Principles ¤, marking a significant stepforward in environmental risk assessment. This voluntaryaccord obliges the participating financial institutions –including Credit Suisse First Boston – to adopt acommon approach when considering environmental andsocial risks in project finance. The assessmentprocedures are based on guidelines laid down by theWorld Bank. Projects are divided into different riskcategories, and additional clarifications and action areinitiated if required by the degree of risk involved.

The Equator Principles are consistent with the internaldirectives and processes that Credit Suisse First Bostonhad already been applying to determine these types ofrisks. However, the Equator Principles have – for the firsttime – given participating financial services providers acommon terminology. By the end of 2003, 20 banksaround the world had signed up to the Principles. In2003, these 20 financial institutions collectively arrangedfunding for over 75% of the total market volume ofproject finance. The Equator Principles are a standardnow applied almost industry-wide.

The further implementation of the Equator Principlesis a priority for CSFB in 2004. Training programs forspecialists are planned, based on documentation drawnup in conjunction with other financial services providers.

Dealing with sustainability involves identifying, assessing and appropriately managing risks, as well as creating attractiveinvestment opportunities that generate added value in environmental or social terms.

www.credit-suisse.com 19

Carbon Disclosure Project and energy contractingGlobal climate change has brought potential risks andopportunities for companies which could ultimately havean impact on their business performance. In autumn2003, Credit Suisse Group therefore joined a group of87 institutional investors that form the Carbon DisclosureProject for the second time, to call on the world’s 500largest listed companies to disclose stock market-relevant information on greenhouse gases. This campaignincreases transparency for investors interested in thepossible risks and opportunities that climate change maybring for a business.

To promote synergies and economies of scale, and tofacilitate the implementation of energy-efficient solutions,Credit Suisse Leasing has teamed up with the energyservices forum Swiss Contracting to offer financing inthis area. Between 2001 and 2003, finance alreadytotaling CHF 85 million was provided in Switzerland forenergy services based on district heating systems, wood-fired power stations, small-scale hydroelectric plants andsimilar facilities.

Microfinance To this day, hundreds of millions of people in developingcountries are denied access to the formal banking sectorbecause they cannot offer the required securities.Microfinance ¤, a relatively new form of developmentcooperation, helps small and very small businesses indeveloping countries to help themselves. By taking outloans that are often as small as USD 50, micro-businesses can make their operations or their tradingactivities significantly more profitable. Access to suchloans makes these entrepreneurs less dependent onmiddlemen, provides them with an opportunity to carryout additional value-added steps in the processing chain,or simply gives them a chance to achieve better pricesfor their goods in a more distant market place.

Project financing for wind powerLast year, Credit Suisse First Boston was involved inproject financing for a large-scale wind power projectin the US. It arranged USD 380 million of funding forthe energy company Florida Power and Light tofinance seven wind power projects in four differentregions within the US. These wind farms in theMidwest, California, Texas and New Mexico have acombined capacity of 697 megawatts. The transactionwas the first of its kind in the US, and it demonstratesthe business potential of wind energy.

Since it is viable from a commercial point of view,microfinance is a particularly promising initiative. Andbecause a growing number of investors are looking forinvestment opportunities that offer a social return as well as a financial one, there is a healthy demand formicrofinance instruments. Credit Suisse Group thereforejoined other representatives of the Swiss financialservices industry in 2003 to help create a platform topromote microfinance investment opportunities. Thecompany created by these efforts, responsAbility AG,bridges the gap between the financial market anddevelopment cooperation; its innovative investmentconcept allows private and institutional investors to make investments that are of benefit in both economicand development terms.

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Strengths¡ Credit Suisse First Boston signed up to the Equator Principles and has thus been involved in developing a standard

that applies almost industry-wide.¡ Expansion of the range of sustainable products to include investment opportunities in microfinance.¡ Active participation in projects and initiatives aimed at creating greater transparency for sustainability-oriented

investors (e.g. Carbon Disclosure Project).

Weaknesses¡ Social and ethical aspects of risk assessment are not yet systematized in all areas. ¡ The broad range of products offering sustainable investment opportunities is not marketed actively enough.

Next steps / objectives¡ Training for further implementation of the Equator Principles.¡ Increase awareness of the sustainable products range – including microfinance investment opportunities.¡ Further steps on evaluating opportunities and risks relating to climate change.

Sustainable investingThere has been a huge increase in the volume ofsustainability investments over the last ten years.Although it is still a niche market, the range of productson offer in this area is continuing to grow. A study byEurosif suggests that in the European market in 2003,over EUR 300 billion was invested according to whatcould broadly be described as sustainability criteria.

Credit Suisse Group was quick to bringenvironmental and ethical investment instruments to themarket, and it has continued to steadily expand itsproduct range in this area. This now extends frominvestment funds to industry products to tailor-madeindividual solutions.

The CS EF (Lux) Global Sustainability Fund, forexample, follows a “best-in-class” approach. In additionto traditional financial analysis, sustainability analysis isconducted, meaning that the fund ends up containing aglobal mix of the best companies in each industry interms of sustainability. Meanwhile, the CS FellowshipFund chooses stocks by assessing a range of positiveand negative criteria. It invests in UK companies thattake a responsible line on the use of natural resources,as well as on environmental and social issues. Finally,the investment company Prime New Energy AG focuseson renewable energy, while the CSFB Global WaterBasket concentrates on selected businesses involved inwater supply and treatment. An overview of this topicand background information on the range of sustainableinvestment products offered by Credit Suisse Group can be found on the Internet at: www.credit-suisse.com/sustainable-investments.

In addition to these sustainability-oriented products,Credit Suisse Group also offers its clients the opportunityto apply individual environmental and ethical criteria totheir portfolios. They can, for instance, use the StockScreener – an equity analysis tool – to pinpointsustainability stocks, or review an existing portfolio bymeans of ethical and environmental screening.

In the medium term, sustainability criteria are likely tobe applied more and more to the structuring ofinstitutional investors’ portfolios. The practicalities ofimplementation are currently being considered, e.g. byincluding corporate governance criteria in the analysis ofstocks.

DEVELOPMENTS AND INNOVATIONS IN PRODUCTS AND SERVICES

INFORMATION

ValidationThe Sustainability Report 2003 was validated by SGSAG, which stated for the record:

“We have examined the plausibility of the statementsmade in Credit Suisse Group’s 2003 SustainabilityReport using documentation and interviews and,wherever necessary, obtained the evidence required toback them up. We hereby confirm that the report hasbeen produced with due diligence, that its content iscorrect, that the key aspects of Credit Suisse Group’ssustainability management have been described, and thatit is a true reflection of current practice.”

Heinrich A. Bieler and Dr. Franz HeinzerZurich, March 8, 2004

ContactCredit Suisse GroupPublic Affairs & Sustainability Affairs

Tel. +41 1 333 82 95Fax +41 1 333 69 68

[email protected] www.credit-suisse.com/sustainability

In this year’s corporate reports, we have chosen the work of Swissartist Daniel Grobet to represent Credit Suisse Group’s 360°approach to finance. In his hand-crafted iron sculptures, Danielachieves a harmonious balance by carefully combining static anddynamic elements. ¤

Design by Pauffley, LondonPhotos by Mike Ellis, London; Jürg Isler, BasleProduced by Management Digital Data AG, ZurichPrinted by Druckerei Feldegg AG, Zollikerberg

Printed on Magno Pearl, a European paper that is a marketleader in its category in terms of environmental impact.

March 2004

Credit Suisse GroupPublic Affairs & Sustainability AffairsP.O. Box 18070 ZurichSwitzerlandTel. +41 1 333 82 95Fax +41 1 333 69 68www.credit-suisse.com

5500064English