Ethics and human rights
Sustainability and ethical behavior are integral parts of our DNA and our license to operate. This is a precondition for our long-term success as a business and the respect for human rights, proper working conditions and social and environmental considerations are integral parts of our identity.
Since 2002, Danfoss has been part of the UN Global Compact and its 10 principles for responsible business behavior. We are committed to aligning our business practices with the UN Guiding Principles for business and human rights.
Our ethical guidelines
Danfoss’ Ethics Handbook incorporates our internal rules and requirements regarding human rights, labor rights, anti-corruption and fair competition. The handbook is updated when new or revised legislations are issued. It is 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 ethical culture in the company. To track ethical behavior, Danfoss monitors and reports on the number of dismissals due to unethical behavior.
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.
Danfoss has a whistleblower-function, Ethics Hotline, where you anonymously can report concerns or suspicions about violations of Danfoss ethical guidelines, criminal actions or human rights violations. The reporting line is open to employees, business partners and other impacted parties.
Additionally, employees can contact ‘AskEthics’ if they need advice on how to handle a difficult situation related to business ethics or how to apply company policy on a specific situation.
Handling of human rights
According to the UN Guiding Principles, companies must carry out a ‘due diligence process’ to identify and mitigate negative impact 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 oversees 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, rights which we can potentially impact most severely.
One of the pillars of the 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 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 in our supply chain. We ensure that suppliers we work with do 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. 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 salary, benefits, property, or documents to force personnel to continue working for the company.
Responsible supplier management
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.
Handling Human Rights complaints
Frequently Asked Questions on Ethics and Human Rights
Danfoss has an Ethics Handbook which describes our guidelines in different areas, e.g. human rights, working conditions, rules for cooperation with business partners, conflicts of interest etc.
All employees must read the Ethics Handbook and all managers must conduct mandatory ethics training (e-learning) on an annual basis.
Since 2004, Danfoss has monitored and reported on the number of dismissals due to unethical behavior. We do this to maintain a high level of awareness on ethics.
Danfoss’ human rights due diligence process is based on a regional approach where human rights are identified, assessed, prioritized and mitigated locally. So far, the process has been rolled out in China, India, Latin America, Russia and Turkey-Middle East.
Salient rights are the human rights which can be most severely impacted by the individual company. Danfoss’ salient rights are: Right to life, land rights, freedom from forced labor, freedom from discrimination, right to health and right to fair working conditions.
You can file a human rights, labor rights or environmental complaint to Danfoss’ Ethics Hotline.
In case of a complaint, Danfoss has a process for giving access to remedy. The appropriate process to enable remediation will be dependent upon several factors. The factors could be legal obligations, stakeholder preferences, availability of mechanisms and the nature of the adverse impacts and where the adverse impacts occur.
Danfoss has compliance programs within the following areas: Ethics, Anti-corruption, Competition law, Export control and Data Privacy.
Danfoss produces an annual Modern Slavery Act statement where we communicate about our efforts to combat forced labor and other forms of involuntary work.