Business Conduct
Shel
The purpose of this standard is to define disclosure requirements that help users of the company’s sustainability statements understand its strategy, approach, processes, procedures, and performance related to business conduct. ‘Business conduct’ is a collective term that comprises of the following matters:
business ethics and corporate culture, including anti-corruption, anti-bribery, whistle-blower protection, and animal welfare;
management of relationships with suppliers, including payment practices, particularly regarding late payments to small and medium-sized companies; and
activities and commitments of the company related to its political influence, including lobbying activities.
(Expand each chapter below to view more details about the disclosure requirements of this standard.)
CH 1. Governance
When providing information about the role of the administrative, management, and supervisory bodies, the company should address their role in relation to and their expertise regarding business conduct matters.
CH 2. Impact, risk and opportunity management
When explaining the process for identifying material IROs related to business conduct matters, the company should disclose all relevant criteria used in the process, including location, activity, sector, and transaction structure.
This disclosure requirement provides insight into the extent to which the company has policies addressing the identification, assessment, management, and/or remediation of its material IROs related to business conduct matters, as well as its approach to corporate culture. This includes how the company established, develops, promotes, and evaluates its corporate culture.
This disclosure should cover the following aspects of the company’s policies on business conduct matters:
a description of mechanisms for identifying, reporting, and investigating concerns about unlawful behavior or behavior that contradicts the code of conduct or similar internal rules, including whether reporting is accommodated from internal and/or external stakeholders;
if the company lacks anti-corruption or anti-bribery policies consistent with the United Nations Convention against Corruption, it should state this and disclose whether it plans to implement such policies and the timetable for implementation.
information on whistleblower protection, including:
details on internal whistleblower reporting channels, whether the company provides information and training to its workers, and information on the designation and training of staff receiving reports;
measures to protect whistleblowers from retaliation, in accordance with applicable law transposing Directive (EU) 2019/1937;
if the company lacks policies on whistleblower protection, it should state this and disclose whether it plans to implement such policies and the timetable for implementation;
- in addition to procedures for handling whistleblower reports under Directive (EU) 2019/1937, whether the company has procedures for promptly, independently, and objectively investigating business conduct incidents, including corruption and bribery;
where applicable, whether the company has policies regarding animal welfare;
the company’s training policy on business conduct, including the target audience, frequency, and depth of coverage;
the functions within the company most at risk of corruption and bribery.
The company may consider the following aspects when determining its disclosure in this section:
the aspects of corporate culture discussed by the administrative, management, and supervisory bodies and the frequency of these discussions;
the main themes promoted and communicated as part of the corporate culture;
how members of the administrative, management, and supervisory bodies provide direction to promote corporate culture;
specific incentives or tools used to encourage and foster corporate culture among workers.
This disclosure requirement provides insight into the company’s management of its procurement process, including its commitment to fair behavior with suppliers. The company is required to disclose information about how it manages relationships with its suppliers and its impacts on the supply chain. This includes describing its policy to prevent late payments, particularly to small and medium-sized enterprises (SMEs).
The disclosure required in this section should include:
the company’s approach to managing relationships with its suppliers, considering risks related to the supply chain and impacts on sustainability matters;
whether and how the company considers social and environmental criteria in the selection of its suppliers.
Management of relationships with suppliers may include the following:
how the company’s practices, including efforts to avoid or minimize supply chain disruptions, align with its strategy and risk management;
training provided to the procurement or supply chain workforce on supplier engagement and dialogue, as well as incentives for procurement staff, including whether such incentives relate to price, quality, or sustainability factors;
screening and evaluation of suppliers’ social and environmental performance;
inclusion of locally based suppliers or suppliers with certifications in the supply chain;
how the company addresses vulnerable suppliers (suppliers exposed to significant economic, environmental, or social risks);
the company’s targets and actions for communication and management of relationships with suppliers;
evaluation of the outcomes of these practices, such as supplier visits, audits, or surveys.
This disclosure requirement provides transparency on the key procedures used by the company to prevent, detect, and address allegations of corruption and bribery. This includes training provided to its workers and/or information shared internally or with suppliers. If no such procedures are in place, the company should disclose this and, if applicable, provide information on plans to adopt such procedures.
The disclosure required in this section should include:
a description of the procedures in place to prevent, detect, and address allegations or incidents of corruption and bribery;
whether the investigators or investigating committee are independent of the management chain involved in the matter;
the process, if any, for reporting outcomes to the administrative, management, and supervisory bodies.
This disclosure should include how the company communicates its policies to relevant individuals to ensure they are accessible and understood.
With regards to training, the disclosure should contain the following information:
the nature, scope, and depth of anti-corruption and anti-bribery training programs offered or required by the company;
the percentage of functions at risk covered by the training programs;
the extent to which training is provided to members of the administrative, management, and supervisory bodies.
‘Functions-at-risk’ refers to those functions that are considered to be at risk of corruption and bribery due to their tasks and responsibilities.
Disclosures may include details about the risk assessments and/or mapping, as well as monitoring programs and/or internal control procedures carried out by the company to detect corruption and bribery.
The company’s policies on corruption and bribery may be relevant to specific groups of people, either because they are expected to implement the policies (such as employees, contractors, and suppliers) or because they have a direct interest in their implementation (such as value chain workers or investors). The company may disclose the communication tools and channels used to communicate policies to these groups, including methods such as flyers, newsletters, dedicated websites, social media, face-to-face interactions, unions, or workers’ representatives. This may also include the identification and/or removal of barriers to dissemination, such as translation into relevant languages or the use of graphic depictions.
The company may disclose an analysis of its training activities by factors such as region or category of its workforce, especially where training programs differ significantly based on these factors, and if such information would be useful to users.
CH 3. Metrics and targets
The objective of this disclosure is to provide transparency regarding corruption or bribery incidents and their related outcomes during the reporting period.
The company should disclose:
the number of convictions and the amount of fines for violating anti-corruption and anti-bribery laws;
any actions taken to address breaches of procedures and standards related to anti-corruption and anti-bribery.
Additionally, the company may disclose:
the total number and nature of confirmed incidents of corruption or bribery;
the number of confirmed incidents where its own workers were dismissed or disciplined for corruption or bribery-related incidents;
the number of confirmed incidents involving contracts with business partners that were terminated or not renewed due to violations related to corruption or bribery;
details of public legal cases regarding corruption or bribery brought against the company and its own workers during the reporting period, including the outcomes of such cases. This includes cases initiated in previous years where the outcome was established in the current reporting period.
These disclosures should include incidents involving actors in its value chain, only when the company or its employees are directly involved.
The goal of this disclosure requirement is to provide transparency on the company’s activities and commitments related to political influence, including political contributions and the types and purposes of lobbying activities.
The disclosure required here should include:
if applicable, the representative(s) responsible within the administrative, management, and supervisory bodies for overseeing these activities;
for financial or in-kind political contributions:
the total monetary value of financial and in-kind political contributions made directly and indirectly by the company, aggregated by country or geographical area where relevant, and the type of recipient/beneficiary;
where appropriate, how the monetary value of in-kind contributions is estimated.
the main topics covered by its lobbying activities and the company’s main positions on these topics, briefly outlined. This should include explanations on how these activities relate to its material IROs identified in its materiality assessment per ESRS 2.
if the company is registered in the EU Transparency Register or an equivalent transparency register in a member state, the name of the register and its identification number.
In this standard, ‘political contribution’ refers to financial or in-kind support provided directly to political parties, their elected representatives, or persons seeking political office. Financial contributions can include donations, loans, sponsorship, advance payments for services, or the purchase of tickets for fundraising events, along with other similar practices. In-kind contributions can include advertising, use of facilities, design and printing, donation of equipment, provision of board membership, and employment or consultancy work for elected politicians or candidates for office.
On the other hand, ‘indirect political contribution’ refers to political contributions made through intermediary organizations, such as lobbyists or charities, or support given to organizations like think tanks or trade associations that are linked to or support particular political parties or causes.
This disclosure should also include information about any members of the administrative, management, and supervisory bodies who held a comparable position in public administration (including regulators) within the 2 years prior to their appointment in the current reporting period.
The company may disclose the following information about its financial or in-kind contributions related to lobbying expenses:
the total monetary amount of internal and external lobbying expenses;
the total amount paid for membership to lobbying associations.
If the company is legally required to be a member of a chamber of commerce or another organization that represents its interests, it may disclose this fact.
This disclosure requirement provides insights into the contractual payment terms and the company’s performance in paying invoices, especially concerning how these terms impact SMEs, specifically with respect to late payments.
The disclosure required here should include:
the average time the company takes to pay an invoice, starting from when the contractual or statutory payment term begins, expressed in number of days;
a description of the company’s standard payment terms, in number of days, for main categories of suppliers, and the percentage of payments made in accordance with these standard terms;
the number of legal proceedings currently outstanding for late payments;
any additional information necessary to provide sufficient context.
If the company used representative sampling to calculate the information required under point (a), it shall state this and briefly describe the methodology used.
In some cases, the company’s standard contractual payment terms may vary significantly depending on the country or type of supplier. In such cases, providing information about the standard terms by main categories of suppliers or by country or geographical region could offer additional context to explain the disclosures above.