Investor Presentaiton
BOARD OF DIRECTORS' REPORT
HUMAN RIGHTS, ANTI-CORRUPTION AND
BRIBERY
KONE's Code of Conduct was renewed in 2021 as part of
KONE's sustainability actions, to better reflect our new values
and strategy. The Code of Conduct forms an integral part of
KONE's company culture and is the foundation of our ethical
business practices. The Code sets out the responsible and
ethical conduct expected of KONE employees and companies
and is available in 33 languages. With an even stronger
emphasis on diversity and inclusion, expanded guidance on
fraud, corruption and fair competition and new sections on
human rights, trade compliance and cybersecurity, the Code
of Conduct is well aligned with international practice as well as
stakeholder expectations. Integrity, responsibility and
accountability are highlighted as essential themes.
The topics covered in the new Code are: conflicts of
interest, corruption, competition compliance, trade
compliance, workplace well-being, health and safety,
environmental compliance, human rights, privacy, fraud and
theft, cybersecurity, intellectual property and confidentiality,
external communications and insider trading. Also
emphasized is KONE's non-retaliation policy which states that
we do not tolerate any form of retaliation against anyone
having made good faith compliance reports. The human rights
section highlights our commitment to respect and endorse
internationally recognized labor and human rights standards
and specifies that we take steps to remediate adverse impacts
on human rights that we become aware of.
Dedicated compliance officers help employees comply
with KONE's Code of Conduct, and our global and regional
compliance committees advise and take decisions on
compliance matters, including investigations into allegations of
employee misconduct as well as human rights and corruption
violations. All KONE employees are expected to understand
and abide by the Code and to report any violations using the
channels available for this purpose. Our internal reporting
channels include reporting to management, HR, Legal or
Compliance. We also have a confidential externally hosted
reporting channel, the Compliance Line, to which all
employees, suppliers and distributors have phone and/or web
access. Reports can be made in the employee's native
language and can be anonymous where permitted under data
protection laws. Reports can be submitted on a range of
topics including fraud and theft, fraudulent reporting,
corruption, competition law, harassment and discrimination,
data protection and confidentiality, environment and safety,
trade compliance and conflicts of interest. All reports are
handled by a dedicated impartial KONE Compliance team.
In 2021, we received a total of 152 reported compliance
allegations, of which 41% were received through the
Compliance Line. Of these reports, 35% were fraud/corruption
related, 35% were HR related, 10% related to conflicts of
interest, and the remaining 20% fell under various other
categories. In total 40% of the 141 cases closed in 2021 were
either substantiated or partially substantiated, and disciplinary
actions in those cases ranged from coaching discussions to
termination of employment, with 23 employees who were
dismissed or resigned as a result of compliance
investigations.
In 2021, the Code of Conduct e-learning course was
refreshed to reflect the changes in the new Code of Conduct
and assigned to all KONE employees. The training covers
topics such as conflicts of interest, fair competition, anti-
bribery, privacy and confidentiality, work safety, harassment &
discrimination, gifts & hospitality and trade compliance and
has a strong focus on scenarios that reflect day to day
situations employees might face. The course is available in 37
languages. Regular face-to-face compliance training is also
provided to managers and other target groups. Of KONE
employees, 96% have completed at least one compliance
training in 2021, including the Code of Conduct e-learning.
KONE's general Code of Conduct is complemented by our
Supplier and Distributor Codes of Conduct. Our Supplier Code
of Conduct is available in 30 languages and sets out the
ethical business practice requirements that we expect from
our suppliers. It covers areas such as legal compliance,
ethical conduct, our zero tolerance for bribery and corruption,
and the standards we require from our suppliers in terms of
labor and human rights, health and safety, and environmental
issues. KONE may terminate its contracts with suppliers for
failure to adhere to the Code.
KONE expects its suppliers to comply with the
requirements of the Supplier Code of Conduct in all their
dealings with KONE, as well as with their own employees and
suppliers, and third parties including government officials. All
our suppliers are expected to sign KONE's Supplier Code of
Conduct. By the end of 2021, 80% of KONE's total spend was
with suppliers and installation subcontractors who have
signed KONE's Supplier Code of Conduct or equivalent.
KONE's Distributor Code of Conduct was updated in 2021
and covers similar topics as the Supplier Code of Conduct. It
is available in 6 languages. As business partners, our
distributors are likewise expected to comply with the
requirements of the Code in all their dealings with KONE, as
well as in respect of their own employees, customers and
suppliers, and third parties including government officials. Our
target is to have the Code signed by all our distributors. By the
end of 2021, 100% (100%) of our distributors in China, and
99% (88%) of our distributors in the rest of the world, had
signed the Code.
All the above Codes of Conduct are available on
kone.com.
During the year, we continued focusing on human rights in
the supply chain by further developing a supplier human rights
assessment process within KONE. The COVID-19 pandemic
continued to impact the roll-out of planned on-site pilot
assessments. However, an extensive online questionnaire
was rolled-out to over 200 suppliers' production sites to
assess their potential and actual human rights risks. Human
rights training was also provided to our internal human rights
assessors. The Global Compliance Committee is responsible
for the oversight of the Human Rights program at KONE.
Disclosure according to the EU
Taxonomy Regulation
KONE discloses information according to Regulation (EU)
2020/852 of the European Parliament and of the Council of 18
June 2020 on the establishment of a framework to facilitate
sustainable investment and amending Regulation (EU)
2019/2088 (the "Taxonomy Regulation"). The Taxonomy
Regulation forms the basis for the EU Taxonomy, a
classification system that establishes a list of environmentally
sustainable economic activities for six environmental
objectives. The implementation of the Taxonomy Regulation
will progress in phases. The first delegated act setting out
technical screening criteria for the first two environmental
objectives, climate change mitigation and adaptation (the
"Climate Delegated Act"), was adopted in 2021. Another
delegated act for the remaining four environmental objectives
(the "Environmental Delegated Act") will be published in 2022.
In the report regarding fiscal year 2021, undertakings are
required to disclose the proportion of Taxonomy-eligible
economic activities in their turnover, capital expenditure and
operational expenditure. Taxonomy-eligible activities currently
include those in the scope of the Climate Delegated Act.
Undertakings are not required to assess Taxonomy alignment
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