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Case study: How Ratos promotes business ethics and anti-corruption

 With 12,200 employees and 12 companies in three business areas, Ratos is a business group that enables independent mid-sized companies headquartered in the Nordics to excel by being part of something larger. Ratos’s parent company and Ratos’s companies must all ensure transparent and sound corporate governance, and carry out their businesses with good business ethics and proactive anti-corruption initiatives.

This case study is based on the 2019 Annual Report by Ratos 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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Ratos requires the implementation of sound business ethics and anti-corruption initiatives in its companies  Tweet This!, also expecting them to make sure they are not complicit in any human rights violations. In order to promote business ethics and anti-corruption Ratos took action:
  • implement a Code of Conduct
  • apply a whistleblowing system
  • impose requirements on the prevention of corruption
  • respect human rights

What are the material issues the company has identified?

In its 2019 Annual Report Ratos identified a range of material issues, such as sound corporate governance and transparency, attracting and developing the parent company and portfolio company employees, emissions and climate impact. Among these, promoting business ethics and anti-corruption stands out as a key material issue for Ratos.

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 Ratos engages with:

To identify and prioritise material topics Ratos engaged with its stakeholders through the following channels:

Stakeholder Group                Method of engagement
Employees at Ratos

 

 

·      Interviews with representatives in connection with stakeholder dialogues in 2016

·      Staff meetings, performance reviews

·      Structured discussion groups focusing on Ratos’s values, corporate culture, processes and future development

Employees of Ratos’s companies

 

·      Interviews with representatives in connection with stakeholder dialogues in 2016

·      Meetings within Ratos’s annual functional forum (CEO, CFO, HR, Sustainability, etc.)

The companies’ management groups and board members ·      Interviews with representatives in connection with stakeholder dialogues in 2016

·      Group-wide assessment of the work of the boards

Owners and investors

 

 

·      Interviews with representatives in connection with stakeholder dialogues in 2016

·      Participation in surveys from/or dialogues with organisations such as CDP, RobecoSAM, Vigeo and Sustainalytics

·      General meetings

·      Dialogues and individual meetings

Experts

 

 

·      Interviews in connection with stakeholder dialogues in 2016

·      Discussions as needed

What actions were taken by Ratos to promote business ethics and anti-corruption?

In its 2019 Annual Report Ratos reports that it took the following actions for promoting business ethics and anti-corruption:

  • Implementing a Code of Conduct
  • Ratos has a Code of Conduct that applies to employees in Ratos’s parent company and Board of Directors and contains written anticorruption and business ethics instructions. New employees are introduced to Ratos’s Code of Conduct, Work Environment Policy, Employee Manual and Environmental Policy. Deviations and irregularities are reported and followed up using Ratos’s external whistleblowing system. Both Ratos employees and external stakeholders can report suspected deviations anonymously. As in the preceding year, no deviations from the Code of Conduct were reported in 2019, including no reported cases of discrimination. Nor was Ratos imposed with any fines or other sanctions due to violations of laws or regulations. No whistleblowing reports were filed during the year. The companies are to implement a Code of Conduct that, at a minimum, corresponds to Ratos’s Code of Conduct, which stipulates that recognised international conventions, human rights and employee rights and conditions must be respected.
  • Applying a whistleblowing system
  • Every employee has a responsibility to report an incident if they suspect that an action is in breach of the company’s Code of Conduct. To make it possible to report violations anonymously, Ratos has procured an external whistleblowing system, Whistle B, which is fully independent of Ratos’s IT systems and online services.
  • Imposing requirements on the prevention of corruption
  • Ratos imposes requirements on the prevention of corruption, and the companies must carry out risk analyses and implement measures, in order to manage identified risks. Preventive work includes guidelines for employees, training programmes for individuals in positions of risk, and imposing demands and following up on business partners. During 2019 all 12 of Ratos’s companies were analysed for corruption risks. Six of the companies are considered to have an elevated risk of corruption based on their operations in exposed industries or in high-risk countries, according to the Transparency International Corruption Perception Index.
  • Respecting human rights
  • Ratos supports and respects the protection of human rights and expects its companies to make sure they are not complicit in any human rights violations. Some of Ratos’s companies have suppliers and partners in countries with an elevated risk of violations of human rights or employee rights. Respect for human rights and employee rights must be stipulated in the companies’ own codes of conduct, and in their work relating to suppliers and partners.

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 205-3 Confirmed incidents of corruption and actions taken

3) Disclosure 406-1 Incidents of discrimination and corrective actions taken

4) Disclosure 419-1 Non-compliance with laws and regulations in the social and economic area

 

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

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

Disclosure 406-1 Incidents of discrimination and corrective actions taken corresponds to:

Disclosure 419-1 Non-compliance with laws and regulations in the social and economic area 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.



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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 Ratos, 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/

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