Management of ESG issues

The membership structure of the Management Board, the Supervisory Board, and the Supervisory Board Committees may be found in on: „Company and Capital Group organisational chart and management structure”, „Supervisory Board and Supervisory Board Committees” and „Management Board” pages. The Chairman of the Supervisory Board does not hold any managerial positions at Grupa KĘTY S.A. or any of the Capital Group companies.

At the Capital Group of Grupa KĘTY S.A. we identify sustainable development and social responsibility as being equivalent to ESG.

The competencies of the President of the Management Board comprise management and supervision of the processes related to climate change mitigation, the Company’s environmental responsibility, social engagement of the Capital Group, processes and procedures in the area of value management within the broadly understood supply chain, as well as ethical processes.

Reporting to the President of the Management Board is the CSR Department with the CSR Director, who coordinates and develops processes in the area of the organisation’s impact on the society and the environment, and who is responsible for developing policies in these areas.

The CSR Director is responsible for convening the Committee meeting and appointing new members (in reference to the Committee’s meeting schedule, new participants are invited to act as temporary members). The Committee meetings are held at least once a year. The Committee’s main role is to supervise the performance of social and environmental processes, as well to care for the Company sustainable development, in reference to the adopted Mission, Vision and Values, as well as the ESG strategy.

The CSR Director, together with the Sector Managers who are responsible for ESG processes at the Capital Group, including: the Director for Quality and Environmental Protection, Chief HR Specialist, IR Director, Compliance and Risk Management Director, and Chief Specialist for Supervisory Board Assistance, prepare strategic ESG projects and policies for the Committee meetings, which are further submitted to the Management Board for decision.

The policies governing the Company approach to ESG areas include but are not limited to: the Code of Ethics, the Climate Policy, the Respect for Human Rights Policy (referring to the European Convention on Human Rights), the Code of Conduct for the Suppliers of the Grupa KĘTY S.A. Capital Group, and the Occupational Health and Safety Policy. They are treated as foundations for the supervision of due diligence processes. Strategic topics are implemented into policies and procedures. The policies are signed by all Members of the Company Management Board and Heads of the operating segments, and published in the Company OrangeBook Platform, i.e. a system for managing strategic processes, which makes them valid throughout the Capital Group.

OrangeBook contains a set of procedures, policies, instructions, recommendations, and orders, representing the most important guidelines and assumptions for the strategic and operational management of the Capital Group. In order to maintain a consistent and effective oversight and control system, once a year a review is carried out with regard to the Capital Group procedures and policies compatibility with those published in the OrangeBook. During the review, compliance is confirmed or reasons for any non-compliance are analysed.

As a signatory of the Global Compact initiative, the Capital Group undertakes actions to support 10 goals, and includes the Global Compact principles in the relevant policies and procedures. The 05.30_Ethical Business Principles Procedure maps the process of due diligence with regard to respecting the 10 Global Compact principles.

Other procedures are also described in the Environmental responsibility and Ethical and anti-corruption processes sections.

All ESG policies, documents and strategy are available for the internal purposes of the organisation in the ‘OrangeBook’ strategic processes management system, and for the external stakeholders at corporate site in the Sustainable Development section. Maintaining the standards of communication with the market and the stakeholders, the Company publishes results forecasts on a quarterly basis and organises conferences for capital market participants. The Company reports its impact on the environment and the society in the ‘Non-financial Information Statement’, as part of the Report of the Management Board of Grupa KĘTY S.A. on the operations of the Company and the Capital Group, available at corporate website, and also in its integrated report. The corporate website comprises the contact details of the CSR Director and the IR Director as persons designated for contacts in matters related to the ongoing ESG Strategy. In 2022, no critical comments were received regarding the Company activities in that area. In case any negative impact is identified, the Company commits to carry out corrective actions.

Apart from the contact details of the CSR and IR Directors published on the corporate website, the Company does not have a formalised channel for monitoring enquiries regarding the ESG management system for external stakeholders.

Internally, there are two formal channels through which each employee may contact the Management Board and the Supervisory Board. The first is the path indicated in the Code of Ethics – for reporting violations in the environmental, corruption, and employee areas. The second is the internal procedure OB.00.26_Internal Control System, specifying the possibility to report the perceived irregularities and violations directly to a Member of the Management Board or, in justified cases, directly to the Supervisory Board. In addition, through the ‘Green Group’ – employee suggestions programme, employees at all levels are invited to submit proposals to optimise processes and co-create the climate policy of the Capital Group. In 2022 there were 24 suggestions reported.

In the area of awareness raising and communication of the relevant ESG issues, the Company issues its ‘Aluway’ newsletter, which periodically, at least once a month, describes the current activities of the Capital Group companies in the social and environmental area. Further, each new or updated procedure or policy is communicated to the employees in the internal OrangeBook handbook, whereas training courses in anti-corruption policy, GDPR regulations, or cyber security are available on the internal eOK platform.

The Company employees involved in the ESG strategy development process and responsible for its individual areas benefit from a wide range of expert resources (seminars, webinars) as well as dedicated subject-matter workshops – in 2022 these concerned taxonomy. Moreover, Area Managers prepare regular internal training courses. In 2022, the CSR Director graduated from employer-funded postgraduate studies in CSR Management conducted by Collegium Civitas.

With regard to the Company Management Board, ESG issues are communicated and discussed in the meetings of Committees for Sustainable Development and Corporate Social Responsibility. In 2022 there were held two training courses: one related to ESG goals update, i.e. reduction of GHG emissions intensity, was held by the Director for Quality and Environmental Protection, and the other one devoted to the current situation in the ESG area was held by the CSR Director.

The principles of remuneration of Grupa KĘTY S.A. Management and Supervisory Boards Members are stipulated in the Remuneration Policy of the Management Board and Supervisory Board Members of Grupa KĘTY S.A., adopted on 20 August 2020 by Resolution No. 19/20 of the Annual General Meeting of Grupa KĘTY S.A., which is available at corporate website.

The remuneration of the Management Board Members consists of fixed and variable components, as well as in-kind benefits. The variable remuneration is partly dependent on the performance of non-financial goals (GHG emissions reduction, OHS improvement, social engagement), whereas the goals attainment is assessed as a factor of the oversight of the organisation’s impact on the environment, the society and the economy.

The Company has adopted the Conflict of Interest Prevention Policy, which applies to all employees of the Capital Group of Grupa KĘTY S.A., including the Management Board of Grupa KĘTY S.A. (‘Policy Subjects’). The policy covers the methods of prevention, identification and solving the conflicts of interest, as well as the principles of excluding a Policy Subject from the participation in considering a matter related to or threatened with a conflict of interest. The policy is available at corporate website.

In 2022, the Capital Group has not recorded any material instances of non-compliance with laws and regulations. The Group has an extensive compliance system in place, including regular risk assessments, training programmes as well as monitoring and reporting mechanisms to ensure legal compliance.