Ethics and human rights
Since 2008, Danfoss has maintained the company’s Ethics Handbook detailing our internal rules and requirements regarding human rights, labor rights, anti-corruption and fair competition. The Ethics Handbook is updated when new or revised legislation is issued and complemented by compliance manuals and online training programs for the above issues along with data privacy and export control.
Transparency about ethical issues is important for maintaining an ethics culture in the company. To track ethical behavior, Danfoss monitors the number of dismissals due to unethical behavior.
Human rights and modern slavery
Danfoss is committed to living up to United Nations’ Guiding Principles (UNGP) on human rights. The UNGP requires companies to carry out a due diligence process to identify and mitigate negative impacts on human rights.
Danfoss’ human rights due diligence process is based on a regional, risk-based approach with the aim of building local capacity to handle human rights issues in the different regions where we operate. Key functions in each region are appointed by regional top management, who also approves the local action plans at the end of each regional project. Hereby implementation is facilitated and ownership at local level is established. Regular follow-up meetings ensure progress on action plans. Regions at highest risk of negative impacts on human rights have been prioritized first.
So far, the following Danfoss regions have been covered: Eastern Europe (Poland, Slovakia and Romania), China/APAC (China and Korea), and India, Russia and Latin America (Brazil and Mexico). In 2019, the process was extended to Turkey/Middle East/Africa (Turkey, Arab Emirates and South Africa).
Based on the human rights due diligence processes, we have identified our salient rights; meaning which of the human rights can be most severely impacted by the operations of our company.
Danfoss considers Modern Slavery (an umbrella term covering forced labor, human trafficking, work performed under threat of penalty and other exploitative practices) to be part of our work with human rights due diligence.
Danfoss supports the growing international focus on regulation and legislation in areas such as anti-corruption, competition law, export control, and good business ethics. We have implemented compliance programs to anchor and sustain our ethical guidelines at all levels in the Group. Our compliance programs cover ethics, anti-corruption, competition law, data privacy and export control.
Internal compliance programs and control mechanisms have been established to minimize the risk of rule violations. These programs contain clear ownership, policy setting, operational procedures, as well as recurring training and awareness activities. The new Data Privacy regulation came into effect in 2018. A data privacy handbook and e-learning activities has been developed and were rolled out in the first quarter of 2018.
Responsible supplier management
We work systematically with supplier management and our Code of Conduct for Suppliers defines the Group’s environmental and social requirements. All suppliers must sign the Code of Conduct and we perform regular supplier audits to verify compliance. Supplier risk assessment forms the basis of measures taken with the individual supplier. The risk assessment model includes the location of the supplier which ensures that the highest priority is given to suppliers in the areas which pose the greatest risk of non-compliance.
Danfoss operates two hotlines available to both our business partners and employees. Employees can get answers to any questions or doubts regarding ethics through the dilemma driven “AskUs” webpage.
Danfoss has a whistle-blower function, the Ethics Hotline, which can be used to anonymously report suspected breaches of internal guidelines and legislation. Corrective actions, including disciplinary action, are taken for all substantiated allegations. No reports, thus far, have had a material impact on Danfoss.