Integrity

Code of conduct

A safe working environment as well as ethical behaviour among employers and employees are important to Stedin Group. We have therefore laid down our standards and values in a code of conduct. The code covers the desired conduct between employees themselves, but also in contacts with external parties such as customers, shareholders or regulators. Violations of human rights, bribery and other forms of corruption will not be tolerated.

The code of conduct has been elaborated in guidelines for a range of specific topics, including competition, privacy and social media. The code of conduct of Stedin Group and the guidelines are available on the Group's website, in line with the Corporate Governance Code. DNWG Group applies its own code of conduct based on similar principles.

The Compliance Officer held ten integrity sessions at various locations in 2019. Articles focusing on integrity risks also appear regularly on the Intranet.

Privacy

Treating personal data with due care is important to us at Stedin Group. We operate on the basis of the three lines of defence model to ensure this privacy. This model comprises an operational first line, an advisory/supporting second line and a monitoring third line. The privacy coordinators working in each department are the first line in this model. The Privacy Office is active as adviser and provides support to the organisation from the second line. Lastly, the Data Protection Officer provides privacy advice to management on an independent basis and performs the monitoring function as internal supervisor. 

Privacy concerns the protection of personal data and is laid down in European privacy laws. With a view to complying with these applicable laws, Stedin Group's Privacy Office elaborated the privacy policy into practical guidelines with corresponding feasible tools in 2019.

Reporting Facilities

Stedin Group has separate reporting facilities for security and integrity incidents. This is where employees can report actual or suspected instances of non-ethical behaviour or security incidents in the work environment. Non-ethical conduct is also understood to comprise bribery, other forms of corruption or human rights violations. Security incidents in a work setting may concern both data protection and physical security. Integrity incidents are handled on the basis of the Guideline for Integrity Incidents and Abuses. In 2019, Stedin Group (excluding DNWG) received 344 reports at the reporting facilities regarding possible violations of the code of conduct. To date, 63 reports have been found to contain an integrity element. None of these had a discriminatory element within the meaning of the discrimination article.

Confidential advisers

Employees with integrity issues can also contact one of the organisation's confidential advisers. As in 2018, there were three confidential advisers at Stedin in 2019. DNWG has four confidential advisers. Confidential advisers have an obligation of confidentiality and never act on their own initiative or without the approval of the employee concerned. A confidential adviser receives a fee for this work.

External report

If an employee believes that an abuse within the company has not been addressed or not been addressed adequately in accordance with the internal whistleblower procedure, and if the abuse concerned is relevant to society in general, the employee can opt to report it to the external House for Whistleblowers. The whistleblower procedure has been posted on Stedin Group's website.

Supply chain responsibility

In 2019, we extended the material topic about purchasing materials and services from 'sustainable purchasing' to 'social responsibility in the supply chain'. This extension does greater justice to our One Planet ambitions regarding CO₂ emissions, mobility, raw materials and inclusive society. With a purchasing volume of € 810 million per year in the Netherlands, we have a significant impact on this area.

Stedin Group expects its suppliers to demonstrate an ethically responsible attitude in dealing with resources and people alike. By means of purchase conditions, framework contracts, tendering criteria and the tightened version of the Stedin Supplier Code of Conduct as issued at the end of 2019, we safeguard compliance with laws and regulations in the field of socially responsible purchasing at our suppliers. By signing our Code of Conduct, they commit to the basic principles concerning human rights, working conditions, fair and honest business practices (including the prevention of fraud and corruption), safety, integrity as well as to our One Planet goals. We also expect our suppliers to focus closely on whether their suppliers and the third parties that they engage comply with national or international laws and regulations as well as our Code of Conduct.

Our Code of Conduct is based on the OECD (Organisation for Economic Co-operation and Development) guidelines, the Universal Declaration of Human Rights as well as the labour standards and working conditions drawn up by the International Labour Organization.

The principal changes in the tightened Stedin Supplier Code of Conduct are the greater emphasis on human rights as well as the prohibition of materials which are sourced in areas with armed conflicts and which are often traded illegally.

Stedin Group recognises that suppliers are at differing stages of development and seeks to build strong relationships based on equality. Where necessary, we develop solutions jointly with our suppliers to address societal challenges.

Supply chain risk analysis

Stedin Group carried out a Potential Risk Analysis in 2019 on the basis of CSR Netherlands' CSR Risk Check tool. The criteria, which are based on the OECD guidelines, relate to fair business practices (such as preventing fraud and corruption), human rights & ethics, labour laws and the environment. Our top 50 suppliers (including two suppliers added in 2019) of products that are essential for our operations (such as cables, pipes, transformers, smart meters and workwear) have been given a score that reflects the potential risks. The score is based on the products that we procure from them and the country of origin of those products. This top 50 represents € 160 million in purchasing volume. Of the primary materials that we purchase from these 50 leading suppliers, 97.4% comes from Europ, 2.5% from Asia and 0.1% from North America.

From the risk analysis based on the CSR Risk Check tool, we have gained insight into the risks facing our supply chain. This analysis has taught us that 18 suppliers from the top 50 run a potential risk with regard to freedom of association, 7 suppliers from the top 50 run a potential risk of child labour within the chain and 21 suppliers from the top 50 run a potential risk of forced labour. It is often the case that these potential risks occur further upstream and derive from the country of origin or the nature of the product. The fact that we are now aware of these potential risks enables us to take appropriate action together with the supplier.

The risk analysis is utilised in two ways:

• firstly, as a guideline for buyers to draw up selection and award criteria. For instance, if a contract expires, we can adapt the award and selection criteria when inviting tenders for these products in order to reduce the potential risks. We also monitor this matter closely in invitations to tender that will be issued in 2020;
• secondly, we use the analysis to determine the existing suppliers at which we want to perform audits and/or assessments in 2020. We do so at the suppliers with the highest scores in the Potential Risk Analysis. The aim is to ascertain proper compliance with our Stedin Code of Conduct. If not, the supplier is given an opportunity to mitigate those risks by implementing an improvement plan. Should this plan prove to be insufficiently successful, we will exclude the supplier concerned. In 2020, we will extend the Potential Risk Analysis to our other suppliers.

The Purchasing department has a clear insight into the corporate social responsibility criteria that are applied in new tendering procedures and into the extent of suppliers' compliance with them. As a result, it is able to manage for improvements continually.