Organisation and management

Clear responsibilities for a sustainable approach

Taking a sustainable approach is linked with clear responsibilities at the KION Group. For this purpose, the overall structure of the sustainability management system, as described below, was approved by the KION Group Executive Board in March 2017.

While the Executive Board’s decisions ensure that the Company’s sustainability aspirations are underpinned by specific measures, its Sustainability steering committee ensures that the Group’s sustainability programme is uniform across the Company and continually developed further (> Figure 4).To do so, it monitors the activities and achievements in each action field, indicating undesirable developments and gaps. The Sustainability Committee convened for the first time in November 2017, and will meet biannually going forward. Key topics at the inaugural meeting included the establishment of the group as well as the appointment of its members and the setting of their areas of responsibility. Those responsible for the action fields as well as the operating unit coordinators also presented their points and programmes. The committee also dealt with aspects of the requirements of the EU Directive on non-financial reporting, and the resulting requirements on the KION Group. The agreed sustainability programme will be presented at the start of 2018 to the KION Group Sustainability Board, which comprises members of the GEC (see About this report – Report content).

Figure 4 KION Group Sustainability steering committee as a central element of the sustainability organisation

The KION Sustainability Management head office department controls and coordinates the sustainability programme in the Group, defines sustainability KPIs and monitors targets achievement. It also ensures the individual action fields, units and activities within the Group are coordinated, and is available to provide support as the specialist in this area. Those responsible manage the programme relevant to their action field and have full responsibility over their allocated budgets and resources. They are also responsible for implementing the agreed packages of measures, through to their expansion to cover the operating units and subsidiaries. In doing so, they coordinate their activities with the operating unit coordinators. At an operational level, each unit establishes its own sustainability programmes that correspond to the KION Group action field model, which are in turn broken down to a local level. When the Sustainability steering committee convenes, both those responsible for the action fields as well as the operating unit coordinators report back on the progress achieved to date, and develop the programme further.

Comprehensive sustainability regulations

The KION Group sustainability strategy and the corresponding objectives are based on existing Group-wide standards and codes of conduct that ensure compliance with rules and regulations (> Table 3). These include the KION Group Code of Compliance (KGCC), which sets out the guidelines for ethical, value-based and lawful business activities. The KGCC is available in 23 languages and is binding on all of the Group’s employees around the world. It sets out clear rules that include guidance on correct conduct between employees and their colleagues, as well as on how they deal with customers, partners and the public. Work began in the reporting year to update the KGCC, not least to take into account the acquisition of Dematic.

As a German corporation, KION GROUP AG is primarily subject to German law. The Company is also required to uphold national laws at its global locations. Where there are legal conflicts, the KGCC sets out the Company’s approach. If local legislation contains more stringent provisions than German legislation, local laws and regulations apply. If local laws around the world are less stringent than German legislation, the KION Group can decide as a company whether a more stringent regulation is generally desired, appropriate or legally necessary. These regulations are then laid down and published in internal policies and instructions. The national companies may also issue more stringent internal guidelines to take into consideration local customs or other considerations in a suitable manner. Group policies apply across the Company, unless they infringe or contradict local laws. In any cases of doubt concerning legal requirements, the Group’s Compliance or Legal departments serve as the points of contact. The KION Group Code of Compliance is publicly available on the KION Group’s corporate website.

Furthermore, the KION Group’s Company-wide compliance programme covers further regulations that apply across the Group (> Table 3). These include its primarily internally-focused KION policies on a range of specialist topics, the KION Group Principles of Supplier Conduct, and KION Compliance Principles for external business partners.

Among other things, the Group HSE policy requires as a minimum that every company in the KION Group observes all relevant national laws, codes of conduct and industry standards. In addition, they are to ensure safe working conditions and that employees are trained accordingly. Furthermore, negative environmental impacts must be avoided as far as possible (see also the section Environment).

Additionally, sustainability aspects are embedded in the KION Group Principles of Supplier Conduct and Purchasing Terms, which its suppliers and service providers are required to observe. Sustainability aspects, particularly in relation to environmental and resource protection as well as occupational safety, also play a major role when the Company develops new or enhances existing products.

At Group level, minimum employment standards apply based on the fundamental conventions drawn up by the International Labour Organization (ILO). These include freedom of association, the right to collective bargaining, the elimination of child and forced labour, and a ban on discrimination in respect of employment and occupation. Furthermore, the KION Group is committed to ensuring health and safety standards in the workplace and to paying its employees in line with the industry average in their respective country, and at the very least providing them with a living wage. It has devoted the Employees section of this report to the KION Group’s responsibility as an employer.

The Group currently monitors its units’ compliance with the Company’s minimum employment standards by means of a self-assessment, as part of annual internal sustainability reporting activities. In the reporting period the KION Group was not made aware of any significant incidents or violations of minimum employment standards. Furthermore, the Company has no evidence that any of its individual units may have infringed human rights, specifically the right to freedom of association or collective bargaining, as well as the ban on child and forced labour.

To ensure that the minimum standards are also complied with by external partners or in joint ventures, contracts typically include a clause based on the KION Group Code of Compliance, which among other things requires the contracting parties to observe human rights.

Table 3Group-wide sustainability principles and guidelines

In its sustainability communication activities the KION Group strives to meet the requirements of transparent reporting in accordance with the internationally recognised standards of the Global Reporting Initiative (GRI). In 2018 it intends to participate in the CDP (formerly the Carbon Disclosure Project).

At individual subsidiary level, further sustainability reporting elements exist based on customer requirements. The KION Group, for example, draws on the results of the EcoVadis rating, a process in which various units took part in the reporting year. So far KION Latin America (part of KION Americas), STILL EMEA and LMH EMEA have each been awarded a silver rating, with Linde China (part of KION APAC) achieving bronze. The results for KION North America (part of KION Americas) and Dematic were still pending at the editorial deadline.

By 2020 all operating units as well as the entire KION Group will be rated by EcoVadis. The KION Group intends to use the process primarily for internal control and optimisation. Furthermore, some of the ratings for individual national companies are needed based on specific customer requirements.