The case for CSR/ Sustainability Reporting Done Responsibly


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Case study: How the LEGO Group ensures it is operating with integrity

As a family-owned, values-based company, with products sold in more than 140 countries around the globe and over 19,000 employees, the LEGO Group strives to have a positive impact on children, society and the planet, not least by operating according to the highest ethical standards.

This case study is based on the 2016 Responsibility Report by the LEGO Group 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/ 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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Abstract

With 131 LEGO Brand Retail Stores and sales offices in 37 countries, the LEGO Group is the world’s largest toy company. Operating ethically is, thus, a top priority. In order to ensure it is operating with integrity the LEGO Group took action to:

  • ensure compliance through the Corporate Compliance Board
  • provide ethics training
  • enhance third party due diligence

What are the material issues the company has identified?

In its 2016 Responsibility Report the LEGO Group identified a range of material issues, such as product safety, climate change, waste, employee safety, the play and learning experience children get from products. Among these, ensuring it is operating with integrity stands out as a key material issue for the LEGO Group.

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 the LEGO Group engages with:   

Stakeholder Group
Consumers (children)
Customers/Suppliers
Employees
Toy industry associations
Media
Local communities
Interest groups and trade associations

How stakeholder engagement was made to identify material issues

To identify and prioritize material issues, the LEGO Group engaged with a wide range of stakeholders. They included consumers, customers, employees, NGOs, interest groups and industry associations. To achieve engagement, the LEGO Group conducted an online survey among over 1,500 respondents. Moreover, it carried out interviews with 1,500 additional participants, to identify stakeholders’ top priorities.

What actions were taken by the LEGO Group to ensure it is operating with integrity?

In its 2016 Responsibility Report the LEGO Group reports that it took the following actions to ensure it is operating with integrity:

  • Ensuring compliance through the Corporate Compliance Board
  • The Corporate Compliance Board (CCB) is the highest decision authority regarding non-compliance issues in the LEGO Group. The CCB ensures proper handling of ethical issues and compliance with external regulations. The CCB is also responsible for providing relevant operational guidance and reviewing policies. In 2016, the CCB reviewed the updated Responsible Marketing to Children Policy and the Digital Child Safety Policy.
  • Providing ethics training
  • [tweetthis]All LEGO employees participate in mandatory training on the importance of operating ethically.[/tweetthis] More specifically, the LEGO Group offers training on the LEGO Code of Ethical Business Conduct and Corruption Awareness and Competition Law e-learning programmes. Moreover, the LEGO Group reached the target of training 100% of senior business leaders bi-annually on the LEGO Code of Ethical Business Conduct. Additionally, more than 98% of salaried employees have received bi-annual training on ethical business conduct and anti-corruption principles.
  • Enhancing third party due diligence
  • The LEGO Group carries out integrity due diligence screenings of third parties and continually improves its third party due diligence process. The LEGO Group addresses risks holistically, including issues concerning anti-bribery and corruption, social responsibility, human rights and environmental sustainability.

Which GRI indicators/Standards have been addressed?

The GRI indicator addressed in this case is: G4-SO4: Communication and training on anti-corruption policies and procedures and the updated GRI Standard is: Disclosure 205-2 Communication and training about anti-corruption policies and procedures

 

References:

1) This case study is based on published information by the LEGO Group, 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) http://www.fbrh.co.uk/en/global-reporting-initiative-gri-g4-guidelines-download-page

3) https://g4.globalreporting.org/Pages/default.aspx

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

Note to the LEGO Group: 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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