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Case study: How CNH Industrial fights bribery and corruption

CNH Industrial is a global leader in the capital goods sector designing, manufacturing and selling agricultural equipment, construction machinery, trucks, buses, specialty vehicles, and powertrains. To ensure full compliance with applicable anti-corruption legislation and regulations, CNH Industrial engages in benchmarking with peer companies, to verify the continued adoption of best practices in preventing and detecting corruption.  Tweet This!

This case study is based on the 2018 Sustainability Report by CNH Industrial 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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CNH Industrial’s employees are required to report compliance issues, including corruption, by any of multiple means, such as by reporting them to managers or through CNH Industrial’s Compliance Helpline. In order to fight bribery and corruption CNH Industrial took action to:

  • implement an Anti-Corruption Policy
  • provide corruption prevention training
  • establish a Global Anti-Corruption Practice Team
  • implement a Third-Party Due Diligence process

What are the material issues the company has identified?

In its 2018 Sustainability Report CNH Industrial identified a range of material issues, such as circular product life cycle, employee engagement, CO2 and other air emissions, renewable energy, water and waste efficiency. Among these, fighting bribery and corruption stands out as a key material issue for CNH Industrial.

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 organization should identify its stakeholders, and explain how it has responded to their reasonable expectations.”

Stakeholders must be consulted in the process s 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 CNH Industrial engages with:

Stakeholder Group                Method of engagement
Customers

 

·      Direct engagement in materiality analysis

·      Market research

·      Focus groups

·      Customer satisfaction surveys

·      Above-the-line and below-the-line communication channels

·      Two-way communication through: web, direct

mailing, dealerships, toll-free numbers, etc.

·      Events (product launches, etc.) and participation in exhibitions, trade fairs, and conventions

·      Customer-Driven Product Development (CPD)

·      Compliance Helpline

Dealer and service network

 

 

·      Direct engagement in materiality analysis

·      Daily contacts and periodic meetings with the network

·      Two-way communication through the web Dealer Portal and dedicated phone lines

·      Individuals responsible for monitoring the network and ensuring fulfillment of contractual standards

·      Dealer development programmes

·      Programmes to support dealers, including training, definition of standards, financing, and promotional campaigns

·      Compliance Helpline

Employees ·      Direct engagement in materiality analysis

·      Daily dialogue

·      Intranet portal

·      Meetings to communicate expected and actual performance levels and professional development path

·      Compliance Helpline

Professional organisations

and associations

·      Direct engagement in materiality analysis

·      Meetings to share and align with corporate objectives and decisions

Employees’ families

 

·      Participation in initiatives (e.g., Children’s Christmas, Family Day)

·      Internal publications

Financial community: Traditional and Socially Responsible Investors (SRIs)

 

·      Direct engagement in materiality analysis

·      General Meeting

·      Price-sensitive disclosures and information

·      Quarterly conference calls

·      Seminars, industry conferences, roadshows, and meetings

·      Daily dialogue (meetings, telephone, emails)

·      Investor Relations section of the Company website

·      EU Annual Report

·      Sustainability Report

Journalists, media, and opinion leaders ·      Direct engagement in materiality analysis

·      Daily dialogue

·      Presentations and press conferences

·      Meetings

·      Brand and Company websites

Local communities: Religious, cultural, and socio-political associations, health systems, schools & universities, and non-governmental & non-profit organisations ·      Direct engagement in materiality analysis

·      Meetings with representatives of associations, organisations or local communities

·      Actions or projects, managed directly or in partnership

·      Cultural exchange programmes

·      Compliance Helpline

 

Public institutions: Government, local authorities, public agencies, regulatory bodies, international institutions, trade associations, and non-governmental organisations ·      Direct engagement in materiality analysis

·      Periodic ad hoc meetings on corporate objectives and position

·      Participation in working groups, development of joint projects and alliances

·      Collaboration on R&D projects

·      Initiatives to highlight regulatory issues

·      Dialogue with institutions and environmental associations

Scientific and technological research centres and universities ·      Direct engagement in materiality analysis

·      Open-source tools

·      Periodic meetings

Suppliers and commercial partners ·      Direct engagement in materiality analysis

·      Daily relationship through buyers

·      Web Supplier Portal

·      Come to our Plant initiative

·      WCM suppliers

·      Supplier Advisory Council (SAC)

·      Conventions

·      Technology Days

·      Suppliers’ Proposals programme

·      Compliance Helpline

·      Dedicated email addresses

Trade unions and employee representatives ·      Direct engagement in materiality analysis

·      Institutional meetings and other exchanges pursuant to legal or contractual provisions at plant, legal entity, regional or national levels

·      Trilateral meetings (Company, trade unions, and government bodies) on matters of particular importance

·      Ad hoc meetings at plant, legal entity, regional or national level

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics CNH Industrial engaged with a sample of 1,687 stakeholders among employees, customers, dealers, opinion leaders, public institutions, NGOs, investors and journalists.

What actions were taken by CNH Industrial to fight bribery and corruption?

In its 2018 Sustainability Report CNH Industrial reports that it took the following actions for fighting bribery and corruption:

  • Implementing an Anti-Corruption Policy
  • CNH Industrial’s Anti-Corruption Policy establishes procedures designed to ensure full compliance with applicable anti-corruption legislation and regulations. As stated in its Anti-Corruption Policy, CNH Industrial does not tolerate any kind of bribery (the paying or offering of anything of value in order to obtain an improper business advantage) concerning public officials or representatives of international organisations, or any other party connected with a public official, or private entities/ individuals or anyone otherwise prohibited by applicable laws. The Company’s culture of integrity requires all employees to actively collaborate in monitoring the Policy’s enforcement, and to set an example of ethical conduct by reporting any possible violations to their managers, HR, Compliance representatives or through the Compliance Helpline. CNH Industrial’s Anti-Corruption Policy is supplemented by regional addendums that take into account the specific corruption risk factors of different geographical areas. The Policy is disseminated to all Company employees and senior management worldwide, and is available on CNH Industrial’s Intranet site in 16 languages.
  • Providing corruption prevention training
  • CNH Industrial provides corruption prevention training using both online and scenario-based classroom training. In 2018, the Code of Conduct online training included a segment on corruption, with training provided to all members of the GEC (Global Executive Committee) and to approximately 24,600 employees (of whom 80% were professional and salaried employees and 20% managers), for a total of 11,592 training hours. These employees represented the entire workforce deemed to present a higher level of risk, given their roles and responsibilities, at the time the training initiative was launched.
  • Establishing a Global Anti-Corruption Practice Team
  • CNH Industrial’s Legal and Compliance departments have established a Global Anti-Corruption Practice Team of internal legal advisors from each geographical area. This Practice Team meets regularly to provide updates on new developments in corruption prevention, regulations, and enforcement, and to share best practices across the Company. It also designs training materials, provides classroom training and develops and distributes legal notices and other information to all applicable employees. The Practice Team assesses various aspects of CNH Industrial’s anti-corruption compliance and ethics programme, identifying opportunities for and assisting in programme development and improvement. Additionally, company contracts include specific clauses relating to the acknowledgment of, and adherence to, the fundamental principles of the Code of Conduct, Supplier Code of Conduct, and related policies, as well as compliance with applicable laws, especially those related to bribery and corruption.
  • Implementing a Third-Party Due Diligence process
  • In 2016, CNH Industrial’s Compliance and Ethics function developed and launched a new and enhanced Third-Party Due Diligence process, using a new web-based third-party risk assessment and due diligence workflow tool. This process gives CNH Industrial more insight into the specific risks posed by different third parties with whom it does business, based on attributes such as location, type of interaction between the third party and the Company, and possible interaction between the third party and government officials in connection with work for CNH Industrial. The new process provides a ranking of high-risk third parties representing CNH Industrial in the marketplace, including dealers and distributors. Third parties identified as posing a high risk are subject to variable levels of additional due diligence, based on their specific risk profile. Additional controls (such as particular contract provisions and certifications) may be implemented with higher-risk third parties. The due diligence process ranges from the basic screening of relevant watch lists to obtaining in-depth corporate intelligence reports from external diligence sources.

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

The GRI Standard addressed in this case is: Disclosure 205-2 Communication and training about anti-corruption policies and procedures

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

  • Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
  • Business theme: Anti-corruption

 

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.

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References:

1) This case study is based on published information by CNH Industrial, 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 CNH Industrial: 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.

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