The case for CSR/ Sustainability Reporting Done Responsibly


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Home / case studies / Case study: How Baker Hughes promotes business integrity and compliance

Case study: How Baker Hughes promotes business integrity and compliance

With operations in over 120 countries, Baker Hughes is a leading energy technology company that is developing and deploying the technologies to take energy and the industry forward, making energy safer, cleaner, and more efficient for people and the planet. At Baker Hughes, ensuring integrity and compliance is a foundational element of its culture and a business priority.  Tweet This! Accordingly, Baker Hughes sets high expectations, outlined in its code of conduct and reinforced through its leadership.

This case study is based on the 2019 Report on Corporate Responsibility by Baker Hughes published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

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Baker Hughes’ global ethics and compliance programme is designed to prevent, detect, and properly respond in a timely manner to any potential violations of the law, company policies, or Baker Hughes’ code of conduct. In order to promote business integrity and compliance Baker Hughes took action to:

  • launch the newly refreshed Baker Hughes Code of Conduct
  • implement an Anti-Bribery & Corruption and Anti-Discrimination policy
  • apply a global compliance programme

What are the material issues the company has identified?

In its 2019 Report on Corporate Responsibility Baker Hughes identified a range of material issues, such as community and stakeholder engagement, reducing greenhouse gas emissions and other pollutants, attracting, retaining and developing talent, corporate governance and board oversight, process safety and asset management. Among these, promoting business integrity and compliance stands out as a key material issue for Baker Hughes.

Stakeholder engagement in accordance with the GRI Standards              

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups Baker Hughes engages with: 

Stakeholder Group                Method of engagement
Customers ·      Global, regional and local industry events, forums, and conferences

·      Proprietary company events and meetings

·      Partnerships and working groups to advance best practices

Investors ·      Public quarterly earnings calls

·      Annual shareholder meeting

·      Executive meetings, presentations, and operational tours

·      Outreach programme led by Baker Hughes’ Investor Relations group, the Corporate Secretary’s Office, and Executive Compensation Team

Employees

 

·      Culture and pulse surveys

·      Town hall meetings

·      Interactive online forums

·      People leader engagement

·      Employee Resource Groups, many with senior leader sponsors

·      CEO’s Employee Pulse Group

Governments ·      Formal and informal bilateral meetings with public officials at all levels of government

·      Lobbying and other direct engagement in compliance with applicable laws and regulations

Community

 

·      Civic engagement through economic development groups, chambers of commerce and related forums

·      Collaboration and social investments where Baker Hughes operates and in support of broader society

Policy groups and industry associations

 

·      Membership participation across the globe

·      Working groups, committees, and public-private partnership activities in industry groups and associations

·      Leadership and committee positions that extend and strengthen organisational capabilities

Universities, Institutions, and NGOs

 

·      Connections, collaborations and partnerships on a variety of shared business, industry, social and environmental interests globally

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics Baker Hughes engaged with its stakeholders through in-person interviews, focus groups and surveys.

What actions were taken by Baker Hughes to promote business integrity and compliance?

In its 2019 Report on Corporate Responsibility Baker Hughes reports that it took the following actions for promoting business integrity and compliance:

  • Launching the newly refreshed Baker Hughes Code of Conduct
  • In November 2019 Baker Hughes launched Our Way, the newly refreshed Baker Hughes Code of Conduct. The code of conduct is titled “Our Way” because it is premised upon doing things the right way, the ethical way, and the compliant way. Baker Hughes seeks to make sure that employees, suppliers, and partners understand and conduct their activities in accordance with the code of conduct and takes active steps to offer global learning courses in various formats and languages, so that its integrity and compliance expectations are clear and understood. In 2019, Baker Hughes offered tailored courses in many areas, including the following:
    • HSE (Health, Safety and Environment)
    • Improper payments and anti-bribery
    • Working with governments
    • Controllership
    • Supplier relationships
    • Securing operations globally
    • Competition law
    • Conflicts of interest
    • International trade compliance
    • Intellectual property
    • Fair employee practices
    • Anti-money laundering
    • Cyber security and privacy
    • Insider trading and stock tipping
  • Implementing an Anti-Bribery & Corruption and Anti-Discrimination policy
  • Baker Hughes’ Code of Conduct includes its Anti-Bribery & Corruption policy, which prohibits bribery in all business dealings with governments, employees of state-owned companies and the private sector, or anyone else whatsoever, in every country around the globe. Baker Hughes’ Anti-Discrimination policy, also included in its Code of Conduct, prohibits discrimination or harassment against any employee or applicant based on race, colour, religion, national or ethnic origin, sex (including pregnancy), sexual orientation, gender identity or expression, age, disability, veteran status or other characteristic protected by law. The policy also prohibits retaliation for concerns raised in good faith.
  • Applying a global compliance programme
  • Baker Hughes’ global compliance programme consists of the following key elements:
    • Compliance leadership: A global structure of compliance counsels and professionals provides advice, training, and support in places where Baker Hughes does business.
    • Review board: A Compliance Review Board, composed of senior officers of the company, meets quarterly, as well as Product Company and regional compliance committees.
    • Risk Assessments: Regular compliance risk assessments focus on country and third-party risks (including corruption risk), to identify opportunities for continuous improvement and resource allocation.
    • Employee training: Baker Hughes’ comprehensive employee training programme targets key risks that employees face, on an ongoing basis. In 2019, a total of 59,464 employees, representing 94.2% of Baker Hughes’ workforce, completed ethics and compliance programmes, including Code of Conduct training.
    • Open Reporting Environment: Employees are encouraged to report any ethics or compliance matters without fear of retaliation, including a global network of trained employee ombudspersons, a dedicated website where employees can raise anonymous concerns, and a worldwide, 24-hour integrity helpline operated by a third party and available in 150 languages.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standards addressed in this case are:

1) Disclosure 205-1 Operations assessed for risks related to corruption

2) Disclosure 205-2 Communication and training about anti-corruption policies and procedures

3) Disclosure 205-3 Confirmed incidents of corruption and actions taken

 

Disclosure 205-1 Operations assessed for risks related to corruption corresponds to:

Disclosure 205-2 Communication and training about anti-corruption policies and procedures corresponds to:

Disclosure 205-3 Confirmed incidents of corruption and actions taken corresponds to:

 

80% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.



FBRH GRI Standards Certified, IEMA & CIM recognised Sustainability Course | Venue: London LSE

By registering for the next 2-day FBRH GRI Standards Certified, IEMA & CIM recognised course you will be taking the first step in gaining the many benefits of sustainability reporting.

Most importantly, you will gain the knowledge to use the GRI Standards, project manage your own first-class sustainability report and:

  • Identify your most important impacts on the Environment, Economy and Society
  • Begin taking solid, focused, all-round sustainability action ASAP

 

References:

1) This case study is based on published information by Baker Hughes, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) https://www.globalreporting.org/standards/gri-standards-download-center/

Note to Baker Hughes: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.