1 2 4 3 1 Policy statement Festo undertakes to protect human rights and related environmental rights, as well as to prevent legal violations, both within its own business area and towards its business partners (direct and indirect suppliers). This is set out in the policy statement on respect for human rights and related environmental rights. GRI 2-23, GRI 407-1, GRI 408-1, GRI 409-1 The policy statement on respect for human rights is available for download here: www.festo.com/ethics-and-governance 2 Risk analysis The basis of the corporate diligence is the risk analysis. In the future, we will examine the effects of our business activities on human rights and their related environmental impact on both an annual basis and as required. We analyse internal and external data sources to identify potential risks to our business and our direct suppliers. We take into account both general risks, such as country and product group risks in purchasing, and specific risks that correspond to our business purpose. To assess the country risk, we use sources such as the ITUC Global Rights Index and the Countries’ Risk Classification of the Business Social Compliance Initiative (BSCI). We also use internal information from on-site inspections and other control measures to assess human rights risks. Risks are prioritised according to their severity and degree of responsibility. The methodology for human rights impact assessment as part of the Act on Corporate Due Diligence in Supply Chains was piloted and adopted in 2022 at four Festo Group business locations (Festo Didactic Germany, Festo India, Festo Brazil and Festo Bulgaria). GRI 412-1, GRI 413-2 Furthermore, the methodology for risk analysis for suppliers was completed and tested in 2022. To this end, 2,500 suppliers of production materials were analysed as part of a preliminary analysis (based on data from 2021) and classed according to country risk, industry risk and the influence of Festo. GRI 412-1 The results showed that this risk analysis and associated monitoring cover more than 90 per cent of sales. In the area of non-production materials, a further analysis revealed that the greatest human rights risks exist in the areas of construction services, maintenance (buildings) and services (buildings) including renting and leasing. GRI 407-1, GRI 408-1, GRI 409-1, GRI 414-1, GRI 414-2 Furthermore, we conduct system-based audits (embargo, sanctions list and goods list audits as well as a critical end-use audit) as part of our export control. Risk analysis Reporting Complaint mechanism Policy statement Measures and effectiveness monitoring 3 Complaint mechanism Festo offers three different ways to file a complaint or information concerning any possible human rights violations. – Anonymous reporting via our whistle-blower portal – Direct reporting to Corporate Responsibility – Direct reporting to our Compliance Office In 2022, one hint was reported via the whistle-blower portal. This was processed and concluded. GRI 2-25, GRI 413-1 4 Reporting Reporting to the Management Board and relevant authorities takes place on an annual basis. As part of the sustainability report, the core elements of the Act on Corporate Due Diligence in Supply Chains are reported on annually. The GRI Index explains the corresponding key performance indicators (KPI) on the topic of human rights. Measures and effectiveness monitoring In addition to the policy statement and the complaints procedure, the following additional preventive measures were implemented: GRI 412-2, GRI 412-3 – Establishment of risk management for corporate due diligence in the area of human rights with the defini- tion of clear responsibilities – Establishment of a globally applicable process – Awareness training on the topic of human rights for various stakeholders – Communication campaigns on Act on Corporate Due Diligence in Supply Chains and human rights – Supplier day to present the Act on Corporate Due Diligence in Supply Chains – Escalation levels for suppliers – Updating the terms and conditions of purchase to reflect the requirements of the Act on Corporate Due Diligence in Supply Chains – Updating the supplier self-assessment – Sustainability rating of Festo SE & Co.KG through EcoVadis, NQC SUPPLIERASSURANCE and IntegrityNext The diagram shows the systematic approach to respect human rights and related environmental rights. Approach to respect human rights and related environmental rights 114 115 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
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