Ethics and integrity

Ethics and Integrity
We are Grundfos
Green at heart
Passionate about water

We are deeply committed to being an ethical organisation from the top down. We have a culture of honesty and we behave consistently across the different markets and legal jurisdictions in which we operate. we want to ensure we live up to our responsibility to respect human rights and, wherever possible, have a positive impact on them.

Below are 2018's highlights. Please go to the Sustainability Report 2018 for the comprehensive version. 

Ethics and integrity highlights

Legal compliance

At Grundfos, we set goals to eliminate any form of money laundering and corruption associated with our business.

Our CoC and Grundfos Anti-corruption Compliance Programme are helping us to reach these goals and manage compliance in all the markets where we are present. 

We implement rules that govern our day to-day processes to minimise the risk of corruption. This includes a mandatory ‘four-eye’ principle, strict anti-corruption clauses contract templates. All companies are reviewed before we enter into any form of partnership or affiliation with them.Those companies that are in high-risk zones are rigorously checked to ensure that they have the proper measures in place to protect themselves from extortion, bribery, kickbacks, or other financial misconduct and that they comply with the Grundfos Supplier Code of Conduct (SCoC).

Looking ahead, a Response and Activity Plan was formulated by the Legal Department in 2018 to cover and coordinate company activities for the upcoming three year period.

To evaluate our approach, a dedicated third-party global anti-corruption risk assessment was conducted in 2017-18. The assessment reached local sales companies in more than 55 countries where we have a presence, and assessed transactions affiliated to Grundfos in more than 190 countries worldwide.

Code of Conduct training

Code of Conduct Training 

In 2017, every employee received this training through e-learning exercises or face-to-face training programmes in all our companies.

In 2018, we targeted white-collar employees worldwide and more than 80% of them participated in the training. The focus was on travel, entertainment, gifts and personal benefits, conflict of interests as well as human rights and avoiding discrimination.

Competition law

Competition laws affect almost every aspect of Grundfos’ dealings, including pricing, promotion, sale and service, as well as relationships with competitors and customers. We make sure that we are fully compliantwith these laws.

In 2017, we started to roll out e-training to selected countries in Europe. This year, the work has continued with a global review of competition law requirements to provide a further basis for training. We will continue to work on this until 2020 to provide training to the whole group.

Whistleblower system

Whistleblower system

We have made a whistleblower system, managed by a third party, available and easy to access from all countries where we operate for our employees and partners.

In 2018, we received 48 complaints through the system. Of these, five were considered breaches of the Code of Conduct in the areas of corruption, conflict of interest, bookkeeping and accounts, and iance with laws and regulations.

Data privacy

We make sure that any form of personal data remains completely private. We do so by building safeguards, security checks and privacy policies into our work and by closely adhering to legislation like the EU’s General Data Protection Regulation.

We have created a new service portal and a dedicated team that specifically handle data privacy. The team has processed more than 50 requests, none of the complaints concerning breaches of customer privacy, data leaks, thefts, or losses of customer data. 

Our Code of Conduct contains 15 rules, seven of which directly relate to corruption
In general, we handle internal employee data and external third party data

In Practice:

Efforts in protecting data

The European General Data Protection Reulation (GDPR) came into force on 25th May 2018. In response, we ran a communication campaign to raise awareness and conducted a mandatory training.

The GDPR is a European Union regulation. Because wehave EU-based IT systems, where we store all of ourdata (even data coming from non-EU countries).

In October 2018, we devised mandatory onlinetraining for all of our employees worldwide who mayhandle personal data and achieved a worldwide participation rate of about 90%.

The training consists of general information on what personal data means and how to handle it, as well as learning what data breaches are, including data privacy-related dilemmasthat employees may encounter.

In 2018, we conducted HRIA in India and Serbia

Human rights and forced labour

Human rights

Respect for human rights is one of our core values. Our objective is to make sure we do not violate human rights directly or indirectly, as well as proactively contributing to advance those rights where we have the biggest influence.

We endorse and use the United Nations Guiding Principles for Business and Human Rights (UNGP) as a frame of reference.

Forced labour

The prohibition of forced labour and modern slavery is part of Grundfos’ overall human rights due diligence programme. Our progress is reported annually in our Prevention of Modern Slavery Progress Report.

Human rights impact assessment 

In 2017, we conducted a pilot HRIA in one of our manufacturing facilities in China. The assessment revealed some key areas, include that some employees had expressed their preference for candidates of a certain age group and gender and that many employees are exceeding the amount of overtime permitted by law. We developed an action plan, included efforts to reinforce our employees' understanding of our global policies regarding discrimination, the development of a flexible working hour initiative, and a pilot assessment of key high-risk service providers.

One of the recurrent findings of our second HRIA in one of our facilities in India was that we need to look deeper into our supply chain, taking a closer and more comprehensive look at our service providers to assess potential areas of risk. 

From our latest HRIA was conducted in Serbia, we found that we need to strengthen the implementation of our SCoC with service providers and that we need to make an extra effort to engage with additional external stakeholders. We are now in the process of developing an action plan as a follow up to the HRIA in Serbia.

Sustainability audits
Supplier Code of Conduct

Sustainable supply chain

Sustainability is at the heart of everything we do as a business. As such, we aim for all of our suppliers to share the same high standards of ethical practice.

Our Supplier Code of Conduct (SCoC) serves to guide the actions of our suppliers.

As an initial filter, all new suppliers go through a pre-screening process conducted by our internal team using strict environmental and social criteria. In 2018, we conducted five system audits of existing suppliers and 17 system audits of potential suppliers. If any issues are identified, we create a corrective action plan, which we follow up until it is completed or remediation is achieved. One potential supplier was rejected in 2018 because it failed to comply with Grundfos’ requirements on sustainability.

We also conduct external third-party sustainability audits of selected suppliers every year and assess a selection of global direct material suppliers (tier 1) on environmental and social aspects.

A closer look at our sustainability audits

In 2018, we conducted 91 third-party audits; 21 out of 91 assessed suppliers had a minor potential negative impact on the environment and 58 had a potential negative impact on social aspects.

We also found that 33 suppliers could be categorised as Cs — non-compliance with the law — and 28 as Ds — life-threatening issues/severe reputational damage. In all cases, we were able to agree on a suitable action plan with the suppliers, and none of them was terminated as a result of the assessment.

Because of the depth, intricacy and geographical diversity of our supply chain, it was highlighted by our HRDD programme as an area that requires increased attention. One of the key things we need to do is expand the programme to include service providers and suppliers beyond tier 1.

    Sustainability Report 2018