Ethics and human rights

Since 2008, Danfoss’ Ethics Handbook set detailed 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 and report on the number of dismissals due to unethical behavior.

According to the UN Guiding Principles, companies must carry out a ‘due diligence process’ where they identify and mitigate negative impacts on human rights.

Danfoss’ due diligence process is risk based and is focused on embedding human rights considerations in the regions where we operate. The regional top management owns the process and approves local mitigation plans.

Regular follow-up ensures progress and the regions with the highest risk of negative impacts on human rights are prioritized.

One outcome of the human rights due diligence process is the identification of our salient human rights, meaning the rights which we can potentially impact most severely.

One of the pillars in UN Guiding Principles is to give access to remedy in case of adverse negative impacts on human rights, labor rights or the environment. Danfoss has a process for how to handle such complaints.

Modern slavery is an umbrella term that covers forced labor, human trafficking, work performed involuntarily or under any threat of penalty. We address forced labor in our supply chain and in our own factories, where outsourced functions like cleaning, distribution and construction comes with increased risk of forced labor.

Danfoss does not permit forced or involuntary labor at our suppliers. They must not use or benefit from forced labor including forced prison work, work on a forced contract, slavery, and other forms of work, which are done against one’s will or choice. All personnel must have the right to leave the workplace after completing the standard workday and be free to terminate their employment with reasonable notice.

The supplier or any entity supplying labor to the supplier must not charge fees for recruiting personnel or withhold any part of any salary, benefit, property, or document to force personnel to continue working for the company.

Danfoss supports the growing international focus on regulation and legislation in areas such as anti-corruption and human rights.

We maintain internal compliance manuals, programs, mandatory training, and control mechanisms covering ethics, anti-corruption, competition law, data privacy and export control.

Danfoss Group Risk & Compliance ensures that we act with integrity and comply with legislation and internal policies.

Our Code of Conduct for Suppliers defines the Group’s ethical, environmental, and social requirements for suppliers. All suppliers must adhere to Danfoss’ Code of Conduct, and we perform regular supplier audits to verify compliance.

All new direct suppliers in high-risk countries are subject to internal audits and self-assessment questionnaires prior to having external audits. This is a precondition for being approved as a new supplier at Danfoss Sourcing Committee.

Existing direct suppliers are regularly visited by our Supplier Development Managers performing quality assessments and audits. If required, the existing suppliers are also subject to external audits.