Business principles
THE FORBO CODE OF CONDUCT
The Forbo Code of Conduct sets out our most important business principles and basic values. It is central to the way we protect and develop our reputation. It is founded on the principles of integrity, transparency, and fairness, and describes how we are to behave. The Forbo code of conduct is based on the guiding principles of the ‘Forbo Way to Win’. It not only ensures compliance with the applicable laws and regulations wherever we do business, it also goes beyond compliance by demonstrating our commitment to acting ethically and with integrity in every situation, while at the same time respecting people’s rights as individuals. We expect this of every single employee, everywhere, every day. We also expect this of all our business partners. High standards in our relationships are the foundation for lasting success.
Throughout the reporting year, we maintained our efforts to further develop our conscious awareness of what we do. We did this by again repeating and reinforcing awareness of the contents of the Code of Conduct, competition law, and anti-corruption principles, and through the uncompromising implementation of the risk management process. All were conducted via mandatory e-learning modules for our senior management, middle management and responsible employees. The Forbo Code of Conduct is also part of our induction program for new employees, and can be found and downloaded on our corporate website.
SUSTAINABLE PROCUREMENT
The process and levels of responsibility when selecting suppliers are governed by the binding rules set out in our supplier selection policy. In addition to standard criteria such as price, quality and service, ethical criteria are also questioned and evaluated. We expect partners in our supply chain (and their upstream suppliers, subcontractors and service providers) to comply with the minimum social standards that apply in their country and with the principles of the United Nations Global Compact Initiative. These include workers’ rights to collective bargaining, equal opportunities in terms of recruitment and employment, no forced and child labor and a responsible approach to the environment. Child labor, violations of human rights, local laws and regulations or breaches of compliance policy, such as corruption, are just some of the things that rule out any collaboration. The aforementioned policy also includes the description of the assessment process and the instruments and documentations thereof – including, among others, the possible necessity for on-site supplier audits.
In our endeavor to innovate and improve on our environmental footprint we also cooperate with our world-wide supplier network – as well as new suppliers – in order to find raw materials that provide an alternative for conventional virgin raw materials. Replacements with raw materials that are fully recycled or contain a percentage of recycled content are tested in our laboratories to find suitable use in our product recipes. Added to this is our quest for bio-based raw materials, for other products than our current linoleum portfolio as they promote the circularity of our portfolio.
Risk management
RISK MANAGEMENT & RISK ASSESSMENT
Risk management and risk assessment are an integral part of Forbo’s organizational processes, and are included in every decision-making process. Periodically, financial and hazard risks are identified and assessed internally. Once risks have been identified and assessed, we manage the risk by applying techniques that fall under one or more of the following major categories:
- Avoidance (eliminate)
- Reduction (mitigate)
- Sharing (outsource or insure)
- Retention (accept and budget)
The Forbo Group conducts an annual risk assessment that analyses all the business areas within the company for the divisions. The assessment covers internal controls and business risk, and includes targeted questions concerning fraud and corruption and is supported by independent third party assessment. An additional and more focused risk assessment devoted entirely to fraud and corruption, is conducted annually with key executives and senior management. This risk assessment addresses corruption in business areas on a materiality basis.
Please read more about risk management and all that is associated with it in the Groups' Annual Financial Report.
RISK AND OPPORTUNITIES DUE TO CLIMATE CHANGE
Due to the energy-intensive nature of the operations in our supply chain, we are subject to risks related to climate change and to costs related to energy and climate regulations. Global efforts to combat climate change also present certain strategic opportunities for Flooring Systems. Our linoleum products are based on renewable materials with a zero-carbon footprint, which helps our customers and society at large to reduce CO₂ emissions by providing a favorable alternative to floor coverings based on fossil fuels and non-renewable materials. The European Union (EU) is pursuing its climate targets through a combination of financial incentives and regulations. The EU countries are also required to support renewable energy sources such as wind, solar and biomass to reach the EU’s green energy targets. The EU’s Emissions Trading System (ETS) is a cornerstone of the EU’s efforts to combat climate change, and a key tool for the cost effective reduction of industrial greenhouse gas emissions. The ETS in effect imposes a cost on Flooring Systems’ CO₂ emissions within the EU, and indirectly increases energy generation costs for our electricity suppliers and the cost of our raw materials. EU member states also have binding annual greenhouse gas emission targets for 2021-2030 for those sectors of the economy that fall outside the scope of the ETS.
Description of our organization
The development and production of the product portfolio is managed in four separate business units: linoleum, vinyl, textile and building and construction adhesives. The sales and marketing organizations are divided in 4 regions: North Central Europe, Southern Countries, North America and Asia/Pacific.
Business units and sales regions work together in a matrix structure. They are supported by a number of central functions such as finance, IT, global procurement, logistics, quality, HR and business development.
CREATE, MAKE, SELL
The processes and strategy is developed according to the principles of 'creating products, making products and selling products'. Creation and production lies within the responsibility of the individual business units, whilst sales and marketing are the responsibility of the sales regions. Each one of the sales organizations defines the product mix for the country or region it represents, in a dialogue with the business units. The focus is to sell a segment-oriented product portfolio worldwide, with local adaptations.
MANAGEMENT TEAM
The Flooring Systems management is headed by Jean-Michel Wins as Executive Vice President. There are Vice Presidents for the four business units and the four sales regions. In addition there are Vice Presidents for finance and IT, for business development as well as directors for global procurement, global logistics and HR.
ORGANIZATION OF SUSTAINABILITY WITHIN FLOORING SYSTEMS
Our Sustainability Policy document, which is endorsed by the Flooring Systems’ Executive Vice President, sets out the triple bottom line under which we strike a balance between the ecological, social, and economic aspects of sustainability, as described in this report. Our manufacturing plants comply with ISO-9001, ISO-14001 and SA8000 and our sales organizations comply with ISO-9001. As part of this, they are obliged to continually raise their sustainable performance by formulating annual programs for improvement.
This practice is now captured in our ‘Sustainability 2025’ program which is part of our sustainability strategy. Goal-setting and improvement are measured internally by our Vice President business development. Sustainability is one of the policies that translates in our areas of action program, and is a mandatory category for our business units and sales regions, to check the progress of the ‘Sustainability 2025’ program on a monthly basis. As a division, we also set goals for our R&D departments regarding product improvement programs based on the three fundamentals of our Sustainability Policy. The newly introduced operational concept of ‘Areas of Action’ (AoA) for (amongs others) sustainability measures progress on the sustainability year plan secured for the business units, the sales regions and the central functions.