Compliance:

Abiding by laws and regulations

As early as 1887, when his sons joined the company, founder Carl Johann Freudenberg drafted his first principles of business conduct. The document forms the basis for the Freudenberg Group’s 10 Business Principles with which Partners and employees identify. One principle stipulates that success must come from performance. Another states that Freudenberg shall not engage in illegal or unethical business practices.

Business Principles and Guiding Principles

Supplemental Guiding Principles were derived from the Freudenberg Group’s Business Principles and define the values shaping conduct toward employees, business partners, stakeholders and third parties.

Compliance Structure

Freudenberg consists of Business Groups that operate entrepreneurially and largely independently. Along with the Holding level, they accordingly hold responsibility for adherence to laws and regulations. Both the Board of Management of Freudenberg SE and the top management of the individual Business Groups are clearly committed to this.

At the Holding level, the focus is on the compliance issues that are the most important to the Business Groups and internationally, and that might specifically pose a threat to Freudenberg’s reputation.

Anti-corruption and cartel legislation risks have been classified as potentially dangerous due to the company’s global presence and the diversity of Freudenberg Group’s products and markets.

Freudenberg’s goal is to continuously improve its compliance organization, documentation, and processes. A function at the Holding level coordinates Freudenberg-wide compliance measures. It strengthens and expands collaboration between departments on the Group level and the Business Group compliance managers. Among other benefits, this promotes the implementation of Freudenberg compliance standards, the sharing of best practices, and the further development of compliance programs.

An updated training program on various compliance issues was developed in 2021 and is available online. E-learning courses are available for many individual topics and offer the opportunity to selectively sensitize employees from particular workplaces and areas of responsibility to specific sets of issues.

Code of Conduct

The Code of Conduct is derived from the company’s Business Principles and Guiding Principles, especially those related to “Responsibility.” It covers standards of behavior that apply uniformly worldwide. It is designed to ensure that respect for the law and responsible behavior remain the cornerstone of the company’s business conduct.

The Code of Conduct is available to all employees in 26 languages. It has been communicated and explained to all employees worldwide. The Business Groups have been using all the available communication channels in a range of different forms. This integrated, ongoing communication, which is mandatory for new employees, and the binding nature of the Code of Conduct (for example, as an attachment to employment contracts), underscore the unambiguous obligation to adhere to these standards of behavior. The e-learning tool on the Freudenberg Code of Conduct is an appropriate way for all employees to become familiar with its content. The tool also makes it possible to monitor participation and success, and it invites feedback from employees.

Freudenberg wants to strengthen and further develop the role of the Code of Conduct as a cornerstone of the company culture and expand help and support for employees and their supervisors. In these efforts, Freudenberg especially relies on regular information-sharing with the compliance managers of the Business Groups and on active cooperation with Ethics Offices and their staffs. Ethics Offices 

Training is regularly held on compliance-related subjects. Employees are selectively sensitized to specific sets of compliance issues.

Ethics Offices

Ethics Offices are an important element of the Compliance Management System at Freudenberg. They serve as a starting point for employees who for different reasons cannot turn to their supervisors, human resources managers or employee representatives, or choose not to. The opportunity to report compliance violations proactively or to expose looming violations through a channel guaranteed to be confidential should help maintain a culture of trust and safeguard Freudenberg’s internal Values and Principles even more effectively.  

In 2021, the Corporate Ethics Office presented a statutory report about its work, especially focusing on trends in the cases that were handled.  

Risk Management and Corporate Audit

Fraud prevention and anti-corruption measures, along with reviews of their effectiveness, have continued to be components of risk management and the mission of Corporate Audit, a Group-level function. Aside from the main objective of reviewing the effectiveness of internal monitoring systems, the focus has been on uncovering potential property damage and instances of criminal corruption as well as monitoring the effectiveness of the measures taken, and their improvement when necessary.   

UN Global Compact-Index

The UN Global Compact (UNGC) is the world’s largest and most important initiative promoting responsible corporate management. Since its signing in 2014, Freudenberg has voluntarily agreed to make sure its business is values-based and sustainable. The following Global Compact Index provides an overview of the 10 principles in the Global Compact and references the pages of the Annual Report where readers can find information about the progress we have made in implementing these principles.

The UN Global Compact Progress Report 2021 by Freudenberg

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UNGC PrincipleContentReference to page in PDF
Human Rights 17, 18, 42, 53-55, 58
Principle 1Protection and compliance with international human rights42, 53-55, 58
Principle 2No violations of human rights42, 53-55, 58
   
Labor standards 17-19, 21, 38-45
Principle 3Uphold the freedom of association and the right to collective bargaining17, 18, 42, 46-48, 50-51, 58
Principle 4Elimination of all forms of forced labor17, 58
Principle 5Abolition of child labor17, 58
Principle 6Elimination of discrimination17, 42, 48
   
Environmental Protection 14, 18-20, 22-37, 48, 50, 52-55
Principle 7Environmental protection through care principle22-37, 48, 50, 52-55
Principle 8Support for environmental awareness18-21, 20, 22-37, 48, 52-55
Principle 9Development of environmentally friendly technologies14, 20, 22-37, 48, 52-55
   
Anti-corruption 56-59
Principle 10Anti-corruption measures56-59

The UN Global Compact Progress Report 2021 by Freudenberg

This is how Freudenberg applies the United Nations Global Compact and the Sustainable Development Goals.