Emmi is aware of the responsibility that the growing size of the global company entails towards all stakeholders – be they employees, farmers, suppliers, shareholders, customers or consumers, as well as the local environment of the various sites. Emmi defines “responsible business conduct” as management structures, processes and practices that contribute to fairness and transparency and ensure compliance with laws and (self-)regulations. It also enables corporate governance in the best long-term interests of Emmi and its stakeholders. The information that is also relevant to this topic in terms of product information and communication can be found in the section “Nutrition, product quality and safety” and responsibility in the supply chain in the section “Responsible sourcing”.
Today, the various stakeholders expect companies – not least food producers like Emmi – to act responsibly and meet their due diligence obligations in this regard. Strict compliance with national and international laws as well as regulations is of key importance in this context. These include, for example, competition regulations, respect for human rights and combating corruption. The latter is particularly relevant for Emmi, because the company operates in individual countries that, according to Transparency International’s Corruption Perceptions Index, are liable to a high risk of corruption. Corruption can endanger the availability and safety of food and thus the health of consumers, but it can also hinder fair competition and lead to unfair economic benefits for some companies. In addition, anti-competitive behaviour, such as cartel agreements and price manipulation, runs counter to the principles of social responsibility, such as fairness and equal opportunities, inhibiting the sustainable development of free markets. Suspected or proven violations and misconduct against these principles and expectations of responsible business conduct can damage the basis of trust with the various stakeholders and entail risks to reputation as well as of litigation. They may result in injunctions detrimental to business for the Emmi Group (prohibitions on marketing) and criminal penalties or have substantial financial consequences such as fines or claims for damages as well as loss of revenue.
Negative impacts on employees that may arise due to the power imbalance between employees and employers must be counteracted. Internal commissions, trade unions and other forms of participation can play an important role in improving working conditions and social justice. Trade unions have contributed to improving the culture of collaboration and feedback at Emmi – for example, through employees’ rights of co-determination. Depending on the country, however, dealing with trade unions can also be a challenge for companies like Emmi, for example in Germany, Spain or Italy. This sometimes makes direct dialogue with employees more difficult or hinders economically necessary structural adjustments of the company.
Companies that take action against corruption and human rights violations enjoy a better reputation due to their ethical responsibility. In addition, competitive advantages can be gained when suppliers are selected. Suppliers who can demonstrate that they respect human rights and avoid corrupt practices are essential for Emmi as a partner, which leads to more stable and reliable supply chains. It also facilitates access to new markets, especially in countries with more stringent regulatory requirements. In addition, it promotes the development of innovative solutions that are not only environmentally friendly but also socially responsible. Through ethical business practices, Emmi also sees an opportunity to attract and retain talented employees in the long term, which is essential for its ongoing orientation.
The Emmi Group is committed to openness and transparency in its corporate governance. Emmi’s corporate governance is based on the requirements of the SIX Swiss Exchange as well as national and international best practice.
Corporate governance of the Emmi Group
For Emmi, responsible corporate governance includes conscientious interaction with customers and consumers, employees, society and other stakeholders, as well as with the environment. These are of vital importance for the economic and long-term development of the company. The internal basis for this is provided by Emmi AG’s Articles of Association and the Organisational Regulations as well as the Code of Conduct for Employees and the corresponding Code for Suppliers.
Articles of Association of Emmi AG
Organisational Regulations of Emmi AG
The Emmi Group is active in a total of 15 countries with its subsidiaries. The governance requirements of Emmi and the respective company vary depending on the legal provisions and regulatory requirements of the respective countries. Country-specific requirements are derived in particular from national laws and supranational regulations (particularly EU-wide regulations) as well as from industry-specific (non-)legal requirements. In compliance with central Group-wide principles and regulations (Articles of Association, Codes of Conduct, Modern Slavery Act), the company aligns governance in its subsidiaries with local conditions and challenges. Many guidelines and regulations exist at both Group and country level.
The Emmi Group recognises the global relevance of and compliance with human rights and considers the protection of these rights to be fundamental for responsible business conduct. For example, Emmi is committed to ensuring that neither the company nor any part of its supply chain is involved in slavery or human trafficking. This commitment is set out in the Emmi UK Modern Slavery Act Statement. Emmi is committed to strict guidelines and cooperates with more than 20 labels to promote social and ethical standards along the value chain on a sustainable basis. Through the Code of Conduct, (sub-)suppliers undertake to uphold human rights as well as ethical, social and environmental regulations. In the event of serious violations, Emmi reserves the right to terminate the cooperation. In addition, defined rules and processes ensure a fair and ethical working environment for all employees. In accordance with the requirements of the Swiss Ordinance on Due Diligence and Transparency Obligations regarding Minerals and Metals from Conflict-Afflicted Areas and Child Labour (DDTrO), the Emmi Group annually reviews the supplier base of its subsidiaries for the risk of child labour (see section “Responsible sourcing”).
In the current reporting period, Emmi did not receive any indication of significant grievances relating to human rights violations, either directly through supplier audits or indirectly through the whistleblowing hotline or other channels. However, if risk assessments of the consolidated Group companies reveal new risks or if the annual risk analyses of the Swiss Ordinance on “Due Diligence and Transparency Obligations regarding Minerals and Metals from Conflict-Affected Areas and Child Labour” reveal shortcomings, a separate human rights risk analysis may be required.
Emmi’s corporate values and the associated guidelines for action are set out for employees in the Group-wide Code of Conduct. In addition to compliance with laws and guidelines, this includes a clear understanding of quality, safety and health requirements, a strategy for protecting the environment, fair working conditions, equality and integrity. The Code of Conduct also emphasises the fair treatment of all stakeholders, respect for human rights in accordance with the UN Guiding Principles on Business and Human Rights, and the defined quality of its products. The Code of Conduct applies to all employees of the Emmi Group worldwide and supplements the applicable General Terms and Conditions of Employment.
At the operational level, the Code of Conduct is set out in more detail by means of internal guidelines that apply throughout the Group – for example on quality management and food safety, safety of people and infrastructure, environment and sustainability, and on the handling of raw materials from critical countries of origin.
Emmi has a Group-wide Code of Conduct for suppliers and a corresponding management system to ensure respect for human rights in the supply chain (see section “Responsible sourcing”).
The internal regulations on whistleblowing apply throughout the Emmi Group. The regulations set out minimum internal guidelines on whistleblowing that apply to all legal entities belonging to the Emmi Group and all its employees worldwide (temporary or full-time, internal or external). The external “SpeakUp” whistleblowing platform is available to employees and suppliers to report misconduct, breaches of the Code of Conduct or other legal violations on an anonymous basis. The internal regulations stipulate a prohibition of retaliation against reporting persons. Reports received are brought to the attention of Group Executive Management and the Board of Directors on an annual basis.
Emmi’s significant business activities are concentrated in countries with – according to Transparency International’s Corruption Perceptions Index – low levels of corruption: Switzerland (rank 6), the Netherlands (8), Germany (9), the United Kingdom (20), France (20), Austria (20), the United States (24), Chile (29), Spain (36) and Italy (42). However, higher corruption risks exist in Tunisia (87), Brazil (104) and Mexico (126), where Emmi has subsidiaries. The rating of the Corruption Perception Index has a direct impact on Emmi’s risk analysis and, in addition to other selected key figures, is taken into account and weighted in the analysis. If the index changes significantly, this can have an impact on risk classification, increase a company’s risk category (e.g. from B to A) and thus change the frequency of the internal audit. Compared to the previous year, the index of the individual countries shows only minimal change, which is why the existing management approach will be continued.
The Code of Conduct for Employees at Emmi also provides the framework for combating corruption. It encourages employees to report misconduct with regard to compliance with laws, guidelines and values. The points of contact are managers or the HR departments. Reports of suspected legal violations, among other things, can be submitted through the “SpeakUp” whistleblowing platform. The Code of Conduct also addresses the fact that sourcing decisions must be made exclusively on the basis of performance references. This is also set out in the terms of employment and the directive on anti-corruption, which employees receive on taking up their position and which must be confirmed in writing.
The Supplier Code of Conduct expects suppliers to conduct their business without bribery, corruption, money laundering or any form of fraudulent behaviour.
Emmi strives to create a working environment in which employees are allowed to exercise a right of participation, whether in Switzerland through the Personnel Commission (Peko) or, in an international context, through works councils and general freedom of assembly. As part of the freedom of assembly, subsidiaries adhere to the legal requirements of the respective country when dealing with trade unions. The basic principles of the International Labour Organization (ILO) serve as a benchmark.
The implementation of co-determination rights for employees is firmly anchored in Emmi’s culture, institutionalised and based on local conditions:
Emmi also encourages all employees to report suspected misconduct. Points of contact are managers, the personnel/works committees, the Emmi HR department or, if necessary, the “SpeakUp” whistleblowing platform.
At Emmi Switzerland, product complaints can be submitted to Consumer Services by telephone (24/7 hotline) or online using the contact form. First of all, a basic distinction is made between technical non-conformity (TNC) and a food safety incident (FSI). Some examples are given below:
TNCs are dealt with in the standard process. A systemic report is sent to the responsible production plant or branch office. In the case of an FSI, an additional direct or telephone report is sent to Quality Assurance. Depending on the scope and impact or severity of a deviation, the case can be further escalated to Crisis Management from the site up to Group Executive Management.
Complaints from abroad concerning products manufactured by Emmi Switzerland are also recorded and dealt with according to this process. Following tracing and investigation of the cause, appropriate corrective measures are checked and implemented (see section “Nutrition, product quality and safety”).
In principle, the described process applies to all companies in all Emmi Group divisions. Depending on the size and IT systems, for example, with smaller companies that do not operate an independent consumer service, a complaint is reported by email, contact form or telephone to the Internal Sales department or directly to Quality Assurance, and is then processed by the responsible specialist unit.
For non-product-related complaints, the “SpeakUp” whistleblowing platform is available to all stakeholders.
Compliance with laws and guidelines by employees and in the Emmi Group’s plants (including combating corruption) is ensured by means of an internal control system (ICS). The effectiveness of the internal control system is regularly reviewed by Internal Audit.
The updated internal control system in the form of a self-assessment is distributed annually to all Heads of Finance and processed with the departments concerned. This provides for specific controls in the relevant business processes for combating corruption. Specific checks are carried out in the sourcing process, including in the following areas: supplier selection, master data recording and maintenance, ordering process, goods receipt, incoming invoice monitoring and supplier payment. Specific checks are carried out in the sales process, including in the following areas: customer acquisition, master data recording and maintenance, ordering process, outgoing goods checks, outgoing invoicing, credit management and credit notes. Specific checks are carried out in Human Resources, including in the following areas: entry and exit process, master data recording and maintenance, wage and salary payment process and expenses. Specific checks are carried out in the area of property, plant and equipment, including in the procurement and disposal processes.
In addition, the Head of Finance is obliged to document the corresponding controls as part of an Internal Control Self-Assessment (ICSA, identical to the ICS) and to return the completed ICSA to the Group. Financial reporting and controlling at local and Group level also provide opportunities to combat corruption. This is where deviations can be identified and tracked. The underlying basis consists of the correctness of the financial reporting, which is regularly confirmed by licensed auditing firms at local and Group level.
Other important functions for combating and monitoring compliance with laws and guidelines (including corruption) include Risk Management, the Legal department, Quality Management and the Group Supply Chain.
There is no systematic review of compliance with the provisions of the Supplier Code of Conduct. If there are grounds for suspicion, a questionnaire and situational review of the supplier is initiated (see section “Responsible sourcing”).
Internal Audit provides independent and objective assurance and advisory services on behalf of the Audit Committee. It is designed to improve business processes and thus create added value. It supports the organisation in achieving its objectives by applying a systematic approach to evaluating the effectiveness of the internal control system as well as management and monitoring processes, and offers support for continuous improvement. Internal Audit also coordinates the risk management process and ensures the appropriate identification, evaluation and definition of measures.
Using a risk-oriented approach, Internal Audit determines the focal points of the audits to be carried out annually together with the CEO and CFO and draws up a proposal for the annual audit programme. The internal audit is based on the Audit Universe, which includes all possible internal audits. Not only individual companies but also corporate processes, current corporate projects and material risks that are identified as part of the risk management process are taken into account. Before consideration by the Audit Committee, the annual audit program is sent to the Chairperson and the Chair of the Audit Committee. The Audit Committee approves the annual audit programme. Based on this strategy, Internal Audit regularly reviews the internal checks that serve to ensure responsible business conduct, including the prevention of corruption. The regularity of the audit depends on the classification of the risk category and, depending on the classification, aims for the following audit periods:
Any compliance findings made by the internal audit are recorded in the audit report and shared with local management as well as the CEO, the CFO, the division head and the Head Group Controlling. The report is made available to all members of the Audit Committee, presented at the next meeting (five times a year) by the Head Internal Audit and then discussed. The agreed measures must be implemented and their implementation reviewed twice a year by Internal Audit.
Group-wide data on significant legal disputes against Emmi are collected by Legal Services on an annual basis. Reported cases are analysed and described and disclosed to the CEO, CFO, Board of Directors and Internal Audit. If necessary, provisions are formed on this basis.
Emmi has the following two goals:
In the year under review 2024, there were no legal proceedings due to anti-competitive behaviour or violations of antitrust and monopoly law.
No confirmed incidents of corruption were identified at the Emmi Group in the year under review 2024.
In the year under review 2024, Internal Audit conducted a total of 14 audits (previous year 14) (a total of 20% of the Emmi Group’s Audit Universe) of varying scope. The following companies and departments were audited in the year under review:
The Audit Universe comprises exclusively Group companies, corporate functions and centralised functions, such as processes of Emmi Schweiz AG (e.g. Sales). The Emmi Group’s Audit Universe currently comprises 69 different units to be audited. Ad hoc assignments are not included.
No significant risks related to corruption were identified at Emmi in the year under review. Identified weaknesses in business processes that do not pose a significant risk of corruption but could potentially favour corruption are documented in the audit report along with all other relevant findings and measures derived from them.
In the year under review, Emmi analysed various key employee figures to identify indications of unequal treatment. The equal pay analysis required by law in Switzerland is one of these tools. As the largest legal entity, Emmi Schweiz AG is certified for equal pay for men and women in accordance with the Gender Equality Act, i.e. equal pay is within the tolerance limit of 5% stipulated by the federal government. The subsidiaries belonging to the Emmi Group are required to review their salary structures on a regular basis and to comply with the legal requirements. This includes equal pay analyses.
|
Collective bargaining agreements |
2024 |
2023 |
2022 a) |
|
Percentage of employees covered by collective bargaining agreements (Emmi Group) |
44% |
43% |
53% |
|
Percentage of employees covered by the personnel commission (Switzerland) |
100% |
100% |
100% |
a) Including Gläserne Molkerei (divested in 2023) but excluding Emmi Dessert USA, Mexideli and Quillayes Surlat.
In the year under review, employees were involved in Emmi Operational Excellence (EOE) activities as well as quality and safety initiatives and encouraged to actively participate and contribute their ideas for improvement.
Various employee surveys were also carried out. In commitment surveys, answers were collected and evaluated in the areas of skills, motivation and working environment at Leeb (AUT), Emmi Deutschland, Emmi Österreich and the Group Supply Chain team, for example, with measures for improvement then being derived. Darey Brands (USA) conducted an employee survey on the topic of “Great Place to Work”, which also aimed to survey employees’ commitment levels and served as a prerequisite for obtaining “Great Place to Work” certification. A “cultural team” supported by employees is currently being set up and is actively involved in the topics of collaboration and culture in day-to-day work. Cowgirl Creamery (USA) conducted a survey on the topic of work culture. As part of a cross-functional culture club in which employees from all hierarchical levels are involved, the team examines the results of the survey and jointly derives measures from them.
Within the Emmi Group, 76 reports were received and processed via the SpeakUp whistleblowing platform.
The current efforts and strategies will be continued. Adjustments and supplementary measures will be initiated on an individual basis based on the results of the internal audit and the self-assessments (ICSA), and reviewed on an ongoing basis. In the area of antitrust legislation, training sessions are to be held in the USA, Brazil, France, Italy, Germany and Austria in 2025.