SGS : 2021 Human Rights Report

SGS 2021

human rights report

WWW.SGS.COM

In this report

I		Introduction	04
II		Governance	07
III		Embedding human rights in our policies,	07
		principles and due diligence processes
IV		Delivering on our human rights commitments	08
		Fair labor practices	08
		Supply chain	11
		Data privacy	11
V		Additional progress reports	13
VI		Looking ahead	13

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1. Introduction

At SGS, we are led by our purpose to enable a better, safer and more interconnected world. As a fundamental part of this, we commit to respecting human rights - not just an ethical obligation, but as an important part of our role in society. Respecting human rights enables us to live up to our purpose and to build trust.

This report consolidates the principles, policies and initiatives that demonstrate our commitment to human rights. We aim to improve transparency to our stakeholders in everything we do, and to report on our progress around these efforts.

"Human rights are fundamental to our beliefs, guiding our behavior and supporting our commitment to enabling a better, safer and more interconnected world. At SGS, we are fully committed to supporting human rights and preventing violations across our global network."

Frankie-Ng

Chief Executive Officer

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1. Governance

At SGS, human rights permeate the highest levels of management. The SGS Human Rights Executive Committee, formed in early 2017 and chaired by the Chief Executive Officer, is ultimately responsible for and oversees the application of our human rights commitments across the Group. The Chief Compliance Officer is responsible for managing compliance with the SGS Code of Integrity, while the SGS Supplier Code of Conduct

is jointly managed by our global procurement and corporate sustainability teams. Senior managers are expected to demonstrate visible and explicit support for human rights as defined in the SGS Code of Integrity, the SGS Business Principles, the SGS Human Rights Policy and the SGS Supplier Code of Conduct.

In 2020, a Human Rights Task Force was created with the purpose of strengthening SGS's human rights due diligence program and ensuring

it remains suitable to the company's nature and operations. This taskforce is integrated by high-ranking representatives and steered

by Corporate Sustainability.

Lastly, a dedicated Sustainability Committee of the Board has been appointed to reflect the growing importance of sustainability, including human rights, to all our stakeholders and build on the substantial work already achieved.

1. Embedding human rights in our policies, principles and due diligence processes

Our unwavering commitment to respecting human rights is grounded in our SGS Code of Integrity and our SGS Business Principles, and reflected in our Human Rights Policy, Supplier Code of Conduct and other relevant policies.

Additionally, we utilize a wide range of controls to assess, prevent and mitigate risks related to human rights and broader labor rights violations across our operations.

Relevant human rights risks are embedded in our Enterprise Risk Management Framework, which places the responsibility and accountability for managing risk close to our operations.

In addition, we have integrated controls, specifically targeting human rights related risks in our group-wide Internal Control Framework. These controls include, but are not limited to, compliance with minimum wage requirements, overtime rules, changes to pay, collective agreements, etc.

To further mitigate any adverse human rights impact, SGS applies the Four-Eyes Principle in a rigorous manner to all employment-related decisions.

All employment contracts and any changes in an employee's general conditions require at least two levels of approval and the validation of a human resources professional.

We continue our efforts to integrate human rights into our group-wide policies and control systems.

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IV Delivering on our human rights commitments

SGS applies these methodologies throughout the SGS Group to promote the principle of equal pay for work of equal value and to support diversity.

In line with our Anti-Discrimination and Dignity at Work Policy, we are committed to promoting a workplace that provides equal opportunity for all

ANTI-DISCRIMINATION AND DIGNITY AT WORK

As a global company, we consider that it is our responsibility to stand up for human rights and practice tolerance, inclusion, and respect to enable a better, safer and more interconnected world.

We use communication tools such as Yammer as SGS's private and social collaboration network to foster open dialogue. All our employees can join the SGS private network on Yammer, ask questions, share ideas, express their opinion, and create and join communities.

To bring our human rights commitment to life, we embrace and follow the principles of the United Nations Global Compact and United Nations Guiding Principles (UNGPs) on Business and Human Rights. The UNGPs incorporate by reference the rights and principles expressed in the International Bill of Human Rights and in the International Labor Organization Declaration on Fundamental Principles and Rights at Work with its eight core conventions, all of which we respect.

As part of our continuous effort to respect human rights, SGS has implemented numerous policies, programs and plans to prevent and mitigate the risk of causing adverse impacts to human rights.

Unless specified otherwise, all policies, programs and plans aimed at preventing and mitigating human rights risks as described in this report apply to all SGS employees and over 2,600 offices and laboratories operated by SGS.

FAIR LABOR PRACTICES

As an employer, we impact the lives of over 96,000 employees and their families. We want our employees to be well and thrive during their time with SGS. We embed human rights in our policies, principles and due diligence processes and invest in programs and services to support human rights throughout the entire employee lifecycle.

ZERO-RECRUITMENT-FEE POLICY

Large recruitment fees can leave employees in situations of debt bondage, a form of forced labor in which a person's labor is demanded as means of repaying a loan, trapping the individual into working for little or no pay until the debt is repaid.

SGS applies a Zero-Recruitment Fee Policy. As part of this fair recruitment practice, SGS never requires an administration fee for processing job applications and never requests money or financial information from an applicant to secure a job as an employee, intern, or to provide services as a contractor.

In recent years, it has come to our attention that various individuals and organizations have contacted people offering false employment opportunities with SGS. Many of these schemes consist of an offer of employment,

or a contract with SGS, along with the use of counterfeit checks. These schemes often request upfront payment for training, tools or travel, as well

as banking information. Sometimes, these forms of cybercrime can even be the starting point for cases of human trafficking. We have taken this matter seriously and notified appropriate legal authorities in an effort to stop such fraudulent schemes.

In addition, we have launched internal and external communication campaigns to prevent candidates from becoming victims.

We proactively share the fact that SGS applies a Zero-Recruitment-Fee Policy through our corporate website, our recruitment portals and our intranet.

We invite candidates to check the legitimacy of a job offer or to report potentially fraudulent job offers to our Corporate Security Department.

EMBRACING DIVERSITY IN OUR RECRUITMENT PROCESS

To ensure that we are increasing the diversity of our hiring, we train our recruiters on recruitment best practices and talent acquisition, and our managers in recruitment, interviewing and diversity best practices. We are also measuring the gender diversity of our applicants.

SGS has a standardized recruitment process. The process includes the use of interview scorecards to standardize the evaluation of our candidates in the interview process. The proper and consistent use of interview scorecards helps us to remove potential interview bias, create a quantitative standard for candidate evaluation and to make better hiring decisions.

Furthermore, SGS designed the Gender Bias Toolkit to help us prevent using gender-biased wording in job adverts. Gender-biased words can be viewed as discrimination toward male or female candidates and could discourage people from applying to work for SGS.

FAIR AND COMPETITIVE

REMUNERATION

SGS provides fair and competitive remuneration packages in all the markets in which we operate.

We ensure a fair and competitive remuneration package by using a well-known and broadly used global grading methodology throughout the SGS Group. This methodology helps us evaluate each job's contribution to our business success and it allows us to benchmark our remuneration packages against local market practices. The benchmarking data we use is collected through salary surveys performed by reputable professional service providers.

The remuneration is defined according to the grade of the job that employees will perform, their knowledge, qualification, skills and experience. Salary increases are reflective of the employee's contribution and impact on our business success, as well as external factors, such as local legislation and collective bargaining agreements.

employees. All employment-related decisions, including compensation, benefits, recognition and promotions will be made solely on the basis of an individual's qualification, performance and behavior or other legitimate business considerations.

We respect minimum wages defined by the local regulations and comply with all the mandatory requirements defined by local legislation or binding collective bargaining agreements with regards to wages and their evolution.

NO CASH POLICY

SGS recognizes that cash-based wage payments are not only inefficient for employers, but also risky and disempowering for workers.

We therefore follow the recommendations of the International Labor Organization and the UN-based Better than Cash Alliance to shift wage payments from cash to digital, in order to promote respect of workers' rights, broaden financial inclusion and to make payments safer and more transparent.

Our group policies require wages to be paid digitally and not through cash or cheques.

EDUCATION AND EMPLOYABILITY

SGS promotes the right to education by offering continuous learning opportunities to all our employees. Our employee online learning portal offers a large portfolio of learning opportunities, ranging from technical knowledge to interpersonal and management skills. It enables our employees to fully customize their individual learning path to their needs. We believe that helping our employees embrace a lifelong learning mindset, will empower them to increase their employability and help them be more resilient to life challenges.

We achieve this goal through the promotion of greater debate and transparency, and the exchange of different views, experiences and perspectives.

The general obligation of every employee to abide by the principles of anti-discrimination is embedded in our SGS Code of Integrity and our Group Policy on Anti-Discrimination and Dignity at Work.

The latter aims to raise awareness of our zero tolerance of any form of discrimination and provide guidance on how to deal with it. It supports our commitment to promoting an equal opportunity workplace for all employees and an environment in which we treat everyone with dignity, consideration and respect.

We encourage our employees to act immediately and speak up if they encounter discrimination.

At SGS, there is no place for any form of discrimination.

FACILITATING THE FREEDOM OF EXPRESSION AND OPINION

At SGS, we value an open culture and are committed to cultivating an environment where everyone feels comfortable about engaging in an open dialogue, contributing ideas, and expressing thoughts and opinions without any fear of retaliation.

As expressed in our Business Principle on Leadership, we are committed to encourage an honest and transparent relationship with our people to promote sharing, collaboration and engagement.

To enable our employees to share their honest feedback anonymously and to help us understand how our employees feel about working for SGS, we conduct regular employee engagement surveys.

BONDED LABOR, CHILD LABOR AND FORCED LABOR

SGS does not engage in bonded labor, child labor or forced labor.

As an inspection, verification, testing and certification company, it is in the nature of our business to employ workers with a certain level of occupational qualifications

(e.g., inspectors, auditors, office workers, laboratory personnel, etc.). In our own operations, a large part of our activities is therefore considered inherently low-to-medium risk for bonded labor, child labor or forced labor.

We believe the policies and procedures in place mitigate any risks related to bonded labor, child labor or forced labor.

HEALTH AND SAFETY

At SGS, we recognize that our operations can impact the health of our workforce. Some of the harmful health risks and agents in our workplaces include exposure to noise, dust, chemicals, thermal and musculoskeletal stressors.

We monitor the health status of our workforce through the conduct of pre- employment and subsequent periodic health surveillance, to ensure early detection of potential ill health, and assist in the management and recovery from illness resulting from these exposures through appropriate case management.

In line with our culture of care, we promote initiatives to enhance the physical and mental well-being of our employees to ensure their fitness for work. This includes the provision of preventative health measures, such as vaccinations, and mental and physical health programs focused on awareness, support and resilience.

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