Balance 2015 ENG - Sustainability in the procurement process

Sustainability in the procurement process As a globally operating aviation company, the Lufthansa Group stands for fair competition, integrity, and responsible action. The Group is unreservedly committed to compliance with all applicable laws, directives, and regulations. The Lufthansa Group expects this not only from its employees, but from its suppliers and competitors as well. Lufthansa assumes cor- porate responsibility by integrating sustain- ability into the procure- ment process. At the same time, we minimize risks and thereby avert potential damage to the Company. For us as a globally operating Group with about 540 subsidiaries and affili- ated companies, this is a challenging task. Group purchasing ­guidelines approved In May 2013 the Executive Board approved Group purchasing guidelines requiring suppliers to enter into a commitment to social and ecological responsibility. The guidelines are meant as an umbrella directive for all of the Group companies’ purchasing guidelines. They also serve as a manual for purchasers and all employ- ees with contacts in the procurement mar- ket. They are regularly updated and ad- justed. The guidelines prescribe, among other things, that the following duties be included in contracts with suppliers: Compliance with the 10 principles of the UN Global Compact. The principles range from respect for human rights through commitments to labor standards and environmental protection to working against corruption. In 2002 Deutsche Lufthansa AG became the first aviation company to join this strategic United Nations initiative for companies, thereby agreeing to uphold the 10 principles for- mulated by it (see overview on page 19). Compliance with the International Labour Organization’s (ILO) four fundamental principles for labor. These concern free- dom of association, the right to collective bargaining, the elimination of forced labor and child labor, and prohibition of discrimination in respect of employment and occupation. Consent to announced and unan- nounced audits of the supplier by com- panies of the Lufthansa Group. Recognition of Lufthansa’s right to ter- minate the contractual relationship in the event of a breach of the aforemen- tioned agreements. Suppliers must also observe the Lufthansa Group’s Environ- mental Protection Guidelines. By including these commitments in con- tracts, the Group ensures that sustainability is taken seriously as an issue and that it becomes a way of life all across the supply chain. To familiarize our purchasers with the Group purchasing guidelines, we train them in our Procurement Academy, which provides continuing education opportunities for employees from throughout the Group. Sustainability Report Balance // Issue 2015 // Lufthansa Group // 31

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