Compliance at Brenntag

At the head of Brenntag’s compliance organization is the Board of Management and, within this body, its chairman. The Governance, Risk & Compliance (GRC) manager in Brenntag AG’s Corporate Internal Audit department regularly reports to the Board of Management on compliance issues. The regular meetings of theSupervisory Board’s Audit Committee also include reporting on compliance and whistle-blowing as well as on the ongoing development of the Groupwide compliance management system. The GRC manager is supported by the Compliance Committee as an internal advisory body.

At a regional level, the Regional Executive Management is responsiblefor the issue of compliance. Regional compliance managers have been appointed here. They receive, assess and report any compliance issues and/or questions referred to them, coordinate the compliance management system at a regional level and regularly pass on information and experience through dialogue with Brenntag AG’s GRC manager. This ensures that our compliance management is closely interlinked with our business activities at regional level.

Preventing corruption is an essential element of Brenntag’s compliance management system. Group-wide requirements relating to anti-corruptionare specified in codes and guidelines. They apply to all employees equally and compliance with them is monitored. If our employees fail to comply with these requirements, this could have reputational and financial risks for Brenntag. Employee misconduct is not tolerated by Brenntag (zero-tolerance policy) and can lead to corresponding disciplinary measures or have consequences under labour law.

In addition to the Code of Business Conduct and Ethics, there is a worldwide anti-corruption guideline for the Brenntag Group which specifies what type of conduct is expected of all employees in relation to anti-corruption and which provides guidance on how employees should behave in critical situations so that their conduct is compliant and risks are avoided.

The internal control guideline contains further requirements and measures to counteract corruption, such as ensuring the separation of functions, complying with the double-check principle and adhering to the requirement to obtain comparative bids from suppliers and service providers.

Internal audits are regularly conducted at our Group companies to ensure compliance with these guidelines. Further elements of the compliance management system relating to the prevention of corruption at Brenntag are target-group-oriented training courses for employees, which are essentially rolled out via our e-learning systems, and a whistle-blowing system, which can be used to provide anonymous information.

Observing human rights is one of Brenntag’s top principles and is regarded as an essential element of its general compliance management system. Through its voluntary commitment to the principles of the UN Global Compact, Brenntag seeks to lend further weight to its position here. The Brenntag Code of Business Conduct and Ethics stipulates that our company and employees must avoid violations of human rights in any form. We oppose all forms of forced labour or child labour, advocate equal opportunities and fair work conditions, and reject discrimination of any kind.Violations of human rights can be reported internally via our compliance organization and anonymously via our whistle-blowing system. If any suspected violations of human rights are confirmed, they are strenuously pursued and sanctions are incurred.For several years, Brenntag has voluntarily undergone a regular sustainability assessment by the international rating agency EcoVadis. EcoVadis evaluates the sustainability performance of companies in terms of four categories: environment, labour practices, fair business practices and sustainable procurement. The review of aspects in the area of human rights is an essential element of this external assessment of Brenntag.Brenntag believes that the biggest risk of potential violations of human rights is in our supply chain. Within the framework of our membership of the industry’s “Together for Sustainability” initiative, we request that our suppliers undergo Eco-Vadis sustainability assessments which also include a review of compliance with human rights. Brenntag’s Supplier Code of Conduct explicitly requests that our suppliers support the observance of international human rights and that they avoid violations of human rights. Furthermore, there are additional supplier assessments and audits based on standardized questionnaires that also deal with the observance of human rights.

Alongside organic growth, acquisitions are the second pillar of Brenntag’s long-term growth strategy. Every acquisition undergoes a thorough and comprehensive due diligence process. We hold a large number of face-to-face meetings and make many on-site visits in order to understand, analyze and assess the history, the current situation and the potential of the target business. Another element is an extensive analysis which covers, besides commercial issues such as the company’s structure and financing, tax and insurance arrangements, legal affairs and its information technology system, also the fields of HSE, corporate governance/compliance and human resources.

Alongside established processes in the area of environmental protection, the target company is also required to regularly disclose any contamination that may have occurred on its sites and any remediation measures implemented in response. In the area of occupational safety, topics such as on-site safety measures and employees’ personal safety equipment, among others, must be outlined. The company is likewise obliged to disclose its corporate governance structure and its compliance requirements. In the area of human resources, topics such as agreements on social benefits, retirement provision and company pension schemes as well as collective bargaining agreements must be covered.

In the event of the due diligence process revealing any shortcomings or if key issues remain unresolved, Brenntag will generally ask the target to permit a more in-depth review. We will then decide on a case-by-case basis how to proceed in case of insufficient clarification or even whether to terminate the negotiations outright.

Acquisitions are integrated into the Brenntag Group by way of a structured process which may unfold over a period of several years, depending on Brenntag’s strategy for the company, its size and the complexity of the business. If any discrepancies are identified in relation to Brenntag standards – e.g. in terms of the issues of safety, environmental protection, human resources and compliance – a key integration objective is their rapid elimination.

As the global market leader in chemical distribution, Brenntag must comply with all foreign trade and customs laws applicable in the countries, such as restrictions on exports or imports of particular goods, services and technologies to or from countries subject to sanctions or embargoes. The same applies to deliveries to or from companies or persons on sanction lists. In addition, Brenntag employees must comply with all applicable trade restrictions resulting from international embargoes, which typically restrict or prohibit payment and capital transactions with particular countries. Brenntag fulfils this obligation in part by using an automated, IT-based screening solution. With the help of a special software application, we regularly check our customers and suppliers against the sanction lists issued by the United Nations, the European Union, the USA and various other countries in which Brenntag operates. If suspicions are raised, a careful check is carried out on the basis of all the information available. Should a suspicion be substantiated, no delivery takes place and, if necessary, further measures are initiated in coordination with the authorities.

To meet the increasing requirements globally in the area of data protection, the Board of Management appointed a Group Data Protection Officer in 2018. As head of the Global Data Protection department she reports independently and directly to the Board of Management. The Global Data Protection department is responsible for developing, implementing and managing the data protection management system for the Group. Data protection coordinators in the various regions support the Global Data Protection department and report to the central unit. A Data Protection Committee was established in the reporting year comprising Board of Management members from Brenntag AG and Brenntag Holding GmbH as well as representatives from the departments Data Protection, Legal, Human Resources, IT, Internal Audit and Compliance. The participants hold regular meetings to discuss recommendations under data protection law and developments within the company.