GRI Indicators covered in this section: |
---|
2-11, 12, 16, 17, 23, 24, 25, 26, 27, 28, 29 |
201-1, 2, 205-2, 206-1 |
SDGs covered in this section: |
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8.2, |
9.1, 9.4, 9.5 |
16.3, 16.5, 16.6, 16.7 |
13.1, |
GRI Indicators covered in this section: |
---|
2-11, 12, 16, 17, 23, 24, 25, 26, 27, 28, 29 |
201-1, 2, 205-2, 206-1 |
SDGs covered in this section: |
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8.2, |
9.1, 9.4, 9.5 |
16.3, 16.5, 16.6, 16.7 |
13.1, |
Dufry is aware that the long-term sustainability of its business relies on the capacity to build, establish and maintain trusted relationships with all our stakeholders. Integrity is a key element in our business behavior across all levels of the organization and that has served Dufry over the years to foster a sense of trust with our stakeholders.
Dufry´s Ethic and Compliance model is designed to ensure we go beyond the strict compliance of legal frameworks and are leading the way in terms of sustainability. To do so, Dufry has set up main lines of action, which include:
ESG governance
ESG lies in the responsibility of the Board of Directors. To reflect its importance, a dedicated Nomination and ESG Committee at Board level has been implemented following the AGM 2022 (former Nomination Committee). The Lead Independent Director, as chair of the Nomination and ESG Committee, supervises Dufry’s ESG strategy development and execution, ensuring alignment with the business strategy. The Lead Independent Director and another member of the Nomination and ESG Committee are experienced in corporate citizenship, sustainability and ESG, allowing them to exercise their supervisory duty successfully.
The entire Board of Directors is updated, at least on a quarterly basis on non-financial information such as, but not exclusively, progress on the implementation of the company’s ESG strategy, as well as status updates from the Global Internal Audit & Investigations Department.
Execution of the ESG Strategy is led by the CEO. He presides over the interdisciplinary ESG Committee, which meets every two months and is attended by several members of Dufry´s Global Executive Committee team (GEC), as well as Global Heads of other relevant functions. This committee meets at least six times a year and is supported by Dufry´s ESG department for the day-to-day execution of the strategy. In 2022, the ESG Committee met 6 times. Beyond the ESG strategy execution, the ESG committee assesses emerging risks, opportunities and concerns, as well as new or evolving reporting requirements, and shares them with the Nomination and ESG Committee and the Board of Directors.
Socio-economic compliance
Having operations in 62 countries means complying with different national laws and regulations, as well as maintaining an active dialogue to foster ongoing stakeholder and social engagement. For this reason, from a global perspective, Dufry’s position towards compliance necessarily needs to have a more holistic and broader approach, by also taking into account international norms and best practices, including the 10 Principles of the UN Global Compact. In this regard, Dufry has a number of initiatives and control mechanisms in place that permit the company to monitor and ensure compliance with national and international laws and follow respective ethical standards.
Governance
Dufry believes that active corporate governance is important to the development of the company, to ensure the sustainable provision of long-term benefits for shareholders, employees and society.
Dufry´s Governance system serves as a control mechanism in relation to a number of elements, including bribery and corruption, tax, executive remuneration, shareholders’ voting possibilities and internal control. Most of these topics are covered in the Corporate Governance Section of this Annual Report.
Especially relevant for the sustainability of our industry is the corruption and bribery phenomena, which can be the cause of negative economic, social and environmental impacts. From a business perspective, corruption distorts the functioning of the market and undermines governance institutions and in general, the rule of law.
In the case of Dufry, the subject of corruption is of considerable importance, as the company expands its operations to many countries with elevated corruption levels and participates in many public procureprocurement processes to bid for airport, seaport and other concessions around the globe each year.
Dufry prohibits bribery and corruption at all times and in any form. We believe that in order to remain a solid business leader, all business must be conducted ethically and in full accordance with all applicable laws, rules, and regulations. Dufry requires all of its employees, officers and directors to behave at all times with honesty, ethics and within the confines of applicable law and in full compliance with Dufry’s Code of Conduct. Where laws, rules or customs exist that are different from the principles set out in the Code of Conduct, Dufry employees, officers and directors are required to follow whichever sets the higher standard in this regard.
Dufry also wants its employees, officers and directors to fully respect the safeguarding of integrity and fair dealing when carrying out their activities on behalf of Dufry, and to promote standards adopted by the Dufry Group as set out in the Code of Conduct with respect to sustainability, diversity, decent work and human rights, as well as zero tolerance to harassment and discrimination.
Policy framework
Dufry has a set of internal policies and procedures which describe the minimum ethical principles applied by our employees at all times and which complement the Dufry Code of Conduct. These policies and procedures address specific topics and serve to guide our employees on the expected standards and behaviors in their day-to-day work. This set of policies and procedures is made available to all our employees through the internal communication tools of the company – Dufry´s Intranet (Gate) and the employee communication tool Beekeeper – as well as the corporate website, hence ensuring universal access to them. This set of information includes:
Compliance education
Beyond ensuring universal access to policies and procedures, Dufry also conducts compliance training of employees, officers and directors, as applicable, on an ongoing basis. These training sessions reflect the ongoing changes introduced in our Code of Conduct. Dufry’s Compliance Department regularly evaluates the content of Dufry’s training on Compliance and Corporate Policies. The efforts of the Compliance Department are fully coordinated with, and supported by, the COOs of each Region and the respective HR departments, who help identify the individuals, including new hires, who should receive the training.
Individuals who receive training are selected based on the following criteria:
During 2022, over 740 managers at all levels of the organization and across all the regions have completed this training. This figure includes both personnel new to Dufry and managers who have already been trained and with whom the training has been refreshed. New employees, officers and directors are provided with a copy of the Dufry Code of Conduct when they join the company and are required to acknowledge acceptance of its terms in writing. Additionally, Dufry employees, officers and directors have access to all of Dufry’s compliance and corporate policies, including its Code of Conduct on Dufry Gate for their reference.
All employees not included in the managers list also receive compliance training. In 2022, this training reached over 14,500 employees via online compliance update trainings and communication campaigns. The primary training topics included harassment, discrimination, insider trading, data privacy and instructions on how to report a wrongdoing.
Dufry properly investigates all complaints and prohibits retaliation or discrimination against any employees, officers and directors who report a concern made in good faith. Since 2018, two new Group-wide reporting channels complement the email reporting channel compliance@dufry.com: (1) a worldwide, toll-free hotline in 9 languages (English, Spanish, Portuguese, French, Italian, Mandarin, Russian, Greek and German) also accessible via local dial-in numbers for all countries in which Dufry operates; and (2) the online reporting website.
These reporting channels, run by an independent third party, ensure the integrity of such investigations by acting as a centralized contact point, through which any wrongdoing or corruption concern are reported directly to the Compliance Department, reporting to Dufry’s General Counsel and member of the Global Executive Committee, for further investigation.
Risk management and control
The risks inherent to Dufry´s business are divided into two groups: Financial risks – related to interest rates, exchange rates, credit risks and liquidity risks – and non-financial risks. A comprehensive description of the Group’s risk mapping is available in the Sustainability Report 2022 Annex as well as in the TCFD Report.
Dufry adopts a risk management model based on three levels. This model is applicable to all subsidiaries of the Group. The company is supported by an Enterprise Risk Management software called GRC (Governance, Risk and Compliance), which allows a comprehensive identification and management of potential risks that may affect the business.
First level – The commitment of Dufry and all its subsidiaries to integrity and transparency begins with its own staff. Dufry requires all its employees, officers and directors to act at all times in accordance with the provisions of the Code of Conduct. The latter describes the types of behavior not allowed, and imposes strict rules regarding the operation of the business.
In addition, the rules require each employee, officer and director to perform due diligence and carefully assess new external partners with whom Dufry plans to work, including a procedure to be followed to examine all new minority partners, consultants for business development projects, partners for transactions and M & A, as well as similar counterparts.
Second level – There are different governance functions across the organization including the Compliance, Legal, Finance and Human Resources departments in charge of monitoring the main risks and establishing the most appropriate controls to mitigate, as well as ensuring compliance with the policies and procedures of the Group. The scope of the Compliance and Corporate Governance function is based on the following pillars:
Third level – The Group’s Internal Audit provides independent and objective monitoring and consulting services designed to add value and improve Dufry’s operations. This function covers all subsidiaries and applies a systematic and disciplined approach to evaluate and improve the effectiveness of governance processes, as well as risk management and control, including assessing risk management procedures and the potential committing of fraud. The main risks identified in the course of internal audits are reported to senior management and the Audit Committee of the Board of Directors, and its status is updated periodically until resolution or acceptance are given by the governing bodies.
Corporate citizenship: Key partnerships and initiatives
We engage in numerous external initiatives and strategic collaborations with relevant organisations and partners to support and inform about our work on the most material sustainability issues. We have grouped them under four different categories:
Commitments
Reporting
Assessments and Ratings
Dufry is regularly assessed and rated by ESG-specialized rating agencies, including Sustainalytics, MSCI ESG Ratings, ISS ESG, Moody’s ESG Solutions (Vigeo Eiris) or Inrate. Dufry´s ESG department engages with ESG analysts to assist them in their assessment of our company and to support their research work. Dufry recognises the value of external feedback from these independent agencies as their work helps us to further develop our lines of action towards strengthening our long-term commitment to be a successful, sustainable business.
Industry Initiatives
Dufry participates in several industry initiatives geared towards safeguarding the consumer and environmental protection. Amongst others, Dufry has contributed to the development of several Codes of Conduct for the travel retail industry (such as the UK Code of Conduct on Disruptive Passengers and the ETRC and DFWC Codes of Conduct on Sale of Alcohol), and is a member of the ACI Climate Change Task Force.
Stakeholder interaction and dialogue
Engaging with our stakeholders on a regular basis to understand their expectations, needs and concerns is part of our ongoing commitment to sustainability. We interact with our stakeholders in a number of different ways, both formal and informal. For 2022, the group of relevant stakeholders included in our materiality assessment remains valid, and includes airports and other concession partners, customers, employees, investors (incl. shareholders, bondholders and lending banks), public authorities, suppliers, media and communities.
The eco-system illustration included in the ESG Strategy graphically describes the close interaction of Dufry with its core stakeholders. Especially remarkable is the interaction with both suppliers and concession partners, which permits Dufry to provide a superior service to customers. Known in the industry as the Trinity (concession partners, retailers and suppliers), the tight lines and collaboration between these three groups allow for an improved dialogue and mutual understanding between concession partners, retailers and suppliers, to the ultimate benefit of our customers. This interaction has remained critical and valuable during 2022 as air traffic started to be restored and the operation of our stores further recovered.
Beyond the Trinity described above, our employees and investors are the other two key stakeholders contributing to our company’s success. Dufry however, holds relationships with a larger group of stakeholders, which include:
Partnerships with concession partners and suppliers
The Trinity approach mentioned above is of special interest for Dufry, as a way of achieving the company’s ultimate objective of delivering a superior shopping experience for our customers. The pursuit of this objective however requires both joint collaboration – in the way the offer is presented to customers – and ensuring that responsibility towards society and the environment as expected by Dufry, is also demonstrated and shared by our partners.
Close ESG Cooperation
The close ties with concession partners and brand suppliers have significantly extended in 2022 to ESG-related topics, and especially environmental ones. From the suppliers’ standpoint, Dufry has participated in a number of sustainability events and working sessions to identify ways of better engaging with customers when it comes to communicating the environmental brand values. By sharing different visions and strategies, Dufry has learnt more about suppliers’ ESG propositions to better engage with our customers.
On the airport front, and as indicated in the Environmental Protection focus area of the report, Dufry plays an active role in several airport´s sustainability bodies, supporting the airport efforts when driving their ESG strategy. This includes cooperation on environmental topics, where Dufry for example, as part of a multi-stakeholder group, has an active role in determining and planning for levels of energy and resource consumption savings that work for the airport´s reduction objectives and targeting.
Collaboration however is also extended to other dimensions of ESG. In this regard, Dufry is also involved in airport forums aimed at establishing responsible employment practices and helping building a pipeline of skills required today and in the future.
Supplier Code of Conduct
As stipulated in its Supplier Code of Conduct, Dufry expects suppliers and business partners to comply with the law, stipulated contract conditions and international best practices in respect of human rights, the environment, health and safety and labor standards. As a further step towards achieving a more sustainable supply chain, Dufry has already developed its Supplier’s Code of Conduct in 2017, with the purpose of ensuring that our suppliers across all product categories, have in place and apply accepted business standards, as described by the UN Global Compact, regarding: – Ethics and integrity – Labor and employment practices and working conditions – Environmental compliance and sustainability – Product safety and security.
Combined with the Corporate Governance and the Remuneration Reports, both the Supplier Code of Conduct and the Dufry Code of Conduct provide detailed insights on how Dufry assumes its responsibility concerning social, ethical and environmental standards and how we put into practice the principles of sustainable development in our day-to-day work. Both Codes are regularly assessed to ensure they remain relevant and reflect developments in law, regulation and professional ethics.
We expect all of our suppliers and business partners to comply with the principles included in Dufry Supplier’s Code of Conduct, and ultimately to replicate these standards further down their own supply chain. As explained in Customer Focus in the section Recertification of Supplier Code of Conduct, in 2022 we continued our efforts to proactively share the Code with additional suppliers from all product categories and we will continue to extend the reach to additional suppliers in 2023.
Stakeholder Value Allocation
Dufry contributes to the development of the economies in countries where it operates through the payment of fair and competitive salaries, taxes and the purchase of local products and services. As a way of assessing the economic impact of our business, Dufry annually discloses its stakeholder value allocation, which reflects the direct monetary impact of its operation over its main stakeholders.
Accrued value allocated to our employees in form of remuneration, retirement benefits, social security payments and other personnel expenses amounted to CHF 997.9 million in fiscal year 2022. CHF 284.6 million were interest expenses as payments to our bondholders and lending banks. Income taxes paid to public authorities and communities amounted to CHF 76.1 million in 2022. In view of the 2023 General Meeting of Shareholders, the Board of Directors resolved to propose not to pay a dividend for the business year 2022. This allows us to focus on strengthening the company’s financial position and on closing the business combination with Autogrill.
Additionally, Dufry contributes every year to a comprehensive number of social initiatives, which are described in the Community Engagement section.