Responsible organisation 3.2 Governance and responsible management

We comply with the best standards

We also expect our suppliers to implement and certify quality and food safety management systems. A business partner who has not implemented such a system or is a supplier of own brand products shall be qualified, in accordance with the Quality Qualification Manual in place, as a high-risk supplier and may cooperate with us only after undergoing a qualification audit whose assessment criteria are equivalent to the requirements of the quality management system. In the case of suppliers of own brand products who have implemented their own quality procedures, we shall audit their effectiveness before establishing a business relationship.

In 2021, we conducted twenty-nine qualifications audits — all suppliers passed them successfully. We also periodically verify compliance with quality standards by means of announced and unannounced verification audits — in 2021, we carried out fifty audits of this nature. Eleven suppliers were obliged to establish a remediation plan addressing the deficiencies identified. Those entities shall be subject to an audit ensuring that the corrective actions set out in the remediation plan have been implemented. We are also conducting qualification audits with regard to suppliers of producers’ brand products. The audit procedures revealed that three of them failed to receive a positive result, prompting us to refrain from commencing cooperation with them. If any complaints are submitted or improper product quality is reported, we perform intervention audits at our business partners – in 2021, such audits accounted for 8% of all audits performed among suppliers of own brand products, and for 12% of audits conducted among suppliers of producers’ brand products. The introduction of additional controls is a response to the challenge of ensuring the highest quality of the food produced and is intended to reduce the number of recalls caused by quality defects. In 2021, we recorded 12 such events — all of them related to producers’ brand products. In our stores and distribution centres, we also maintained the Safety and Hygiene+ certification system which we created, as the first chain of stores, together with TÜV Nord Poland. The system covers also suppliers of our own labels and franchisees operating stores under the Żabka brand. During the verification process, such areas as approach to safety and hygiene management in production processes, organisation’s crisis management, requirements for subcontractors, infrastructure and the environment, are verified. Conformity assessment is performed by auditing documentation, as well as production and storage premises, in order to verify the implementation of processes and to introduce crisis management procedures. The level of the employees’ awareness and their attitude are evaluated as well. In 2021, such reassessment and certification were performed at fifty-two of our own brand suppliers.

Ensuring a safe working environment

We are conducting extensive preventive measures — we have created a dedicated website for employees, where key health and safety documents, such as accident reporting forms and occupational risk assessment procedures, are published. Once a quarter, the Council of Employees, with the participation of the Member of the Management Board in charge of the People Strategy, is held. It serves as a venue at which issues related to occupational health and safety management system are discussed, among other things. We have also prepared Occupational Health and Safety Starter Kits for our distribution staff — they contain binders with all necessary procedures and manuals. We have also completed work on the OHS Knowledge Compendium – a publication that will be distributed to all newly hired employees after completion of general OHS training. We are also regularly conducting first aid training and contests. In 2021, 225 people completed such training courses. As a result of all those activities, the standard LTI (FR) accident rate, presenting the frequency of accidents per one million working hours, equalled 4.2 and was more than 20% lower than in 2020. In 2021, we recorded fifteen accidents at work, and all of them occurred at our distribution centres and terminals. Insufficient attention of employees performing their activities was the most frequent reason behind those accidents. Each event has been analysed by our accident investigation teams and appropriate measures have been taken with logistics staff to prevent similar accidents from occurring in the future.

Knowing that the level of safety is impacted by numerous factors, we have created a comprehensive Support Programme for employees and their families. Advice on financial and legal issues is offered under the programme, as is psychological support. It may be taken advantage of by calling our hotline or by contacting us via a dedicated app. The number of consultations offered is unlimited. Apart from individual support, we also provide all those eligible to participate in the Programme with access to training and knowledge resources related to human health and well-being. Interactive educational webinars are also held periodically, as a form of group support for our employees. The topics discusses include, among others, the pandemic, remote work, work-life balance or ability to concentrate.

We have adopted the Code of Conduct and Ethics for Employees

The document supports our employees whenever they face an ethical dilemma. It is applied throughout the entire value chain, referring both to relationships existing within our organisation and to those with external stakeholders. Provisions reminding about ways of reporting any violations of the Code, as well as about other applicable policies and procedures constitute a key element of the Code. The strengthening of ethical standards is supported by two mandatory annual training programmes focusing on compliance issues and on the Code of Ethics. In 2021, 90% and 77% of our employees completed those programmes, respectively. We are continuing our efforts to increase the share of those trained in the coming years. By expanding our employees’ knowledge, we also ensure more efficient management of the whistleblowing process. In 2021, we received four reports about potential violations of the Code. They were all subjected to internal investigations performed by the Ethics Committee and were deemed justified. They Approximately 190 suppliers generating more than 30% of our total turnover are being assessed in the pilot phase of the project. In the process, we use the global SMETA platform, developed to exchange information on production standards within the supply chain. Suppliers are evaluated in five areas, and the verification results in an assessment of the risk of cooperation with a given company. included allegations of discrimination and corruption, but the investigations failed to confirm any of those accusations. We have taken steps to prevent the similar situations from occurring in the future, in accordance with the procedures in effect.

We have implemented the Code of Conduct for Business Partners

The document is based on key international and national legislation. Its provisions cover the full spectrum of business activity – from ethical business management and respect for workers’ rights, through the quality of products and services offered, to environmental and climate impacts. We build our business relationships based on mutual trust. That is why the Code identifies channels for reporting potential violations of its provisions and clearly presents mechanisms for handling these. We require all business partners to confirm, with their signature, that they have read and understood the document. We also work on introducing a system for verifying our business partners and for analysing supply chain risks. Approximately 190 suppliers generating more than 30% of our total turnover are being assessed in the pilot phase of the project. In the process, we use the global SMETA platform, developed to exchange information on production standards within the supply chain. Suppliers are evaluated in five areas, and the verification results in an assessment of the risk of cooperation with a given company.