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Vaillant GmbH Modern Slavery Statement 2017

Statement

The UK Modern Slavery Act 2015 came into effect on 29th October 2015. The law requires manufacturers and retailers doing business in the UK which supply goods or services and have an annual turnover exceeding £36 million to disclose information regarding their policies to eradicate slavery and human trafficking from their supply chain and within their business.

The Vaillant GmbH understands that slavery, servitude, forced labour and human trafficking (Modern Slavery) is a global and growing issue given the rapid rise in global migration, existing in every region in the world and in every type of economy, whether industrialised, developing or in transition.

The Vaillant GmbH is very proud of the integrity measures we take in this regard. The Vaillant GmbH efforts to eradicate slavery and human trafficking in its supply chain and own business include the following:

About Vaillant GmbH

The Vaillant GmbH is the second-largest company in the European heating, ventilation and air-conditioning (HVAC) industry. The Group’s core business centres on the development, production and distribution of energy-saving, environmentally friendly heating systems and water heaters based on natural gas and renewable energy sources.

Products and services

The Vaillant GmbH markets the entire spectrum of heating, ventilation and air-conditioning technology for building supply. The main fields of activity for the company’s products are residential properties.

Production network and Quality Management

The Vaillant GmbH manufactures products in a total of ten locations – of which eight of these are in Europe, one in Turkey and one in China.

Production includes the manufacturing of all performance- and quality-relevant key components as well as the final assembly of all devices, plus comprehensive testing of the performance attributes.

Our Policies

At Vaillant GmbH we have embedded our commitment to addressing slavery and human trafficking into a set of policies which are an integral part of how we shape our operations and business relations.

  • Our Code of Conduct sets the foundation for the values, rules and behaviour we aim for at Vaillant GmbH and reference for any form of relationship – with colleagues, customers, suppliers or external stakeholders.
  • Our Policy of Social Responsibility outlines our commitment to Corporate Social Responsibility and beyond. Continuous improvement, taking responsibility for the health and safety of our employees and partners as well as regular and targeted communication on CSR topics form the cornerstones of our CSR work.
  • Our commitment to the Principles of United Nations Global Compact stresses that Vaillant GmbH applies a comprehensive and ambitious approach to the most urgent global challenges. We report our progress on an annual basis.

Our risk assessment

Vaillant GmbH’s Integrated Risk and Opportunity Management (Integriertes Risiko- und Chancenmanagement (RCMS)) is an early warning system that closely monitors potential risks and opportunities. The holistic approach combines financial, regulatory, physical and reputational risks and is part of our regular internal management reporting system.

To adequately address the concerns of our business partners, customers and the general public we systematically conduct stakeholder dialogues. These guide us in pro-actively identifying potential needs for information or action.

Our CR Strategy

The Vaillant GmbH has combined all its sustainability activities into one strategic programme. Under the name S.E.E.D.S., binding, quantifiable targets have been set in the following fields of focus: Environment, Employees, Development & Products and Society. We develop specific measures based on these targets and continuously monitor the results. Transparently and group-wide.

We manage our sustainability performance using an established approach: the classic control circle applied to corporate management systems. On the basis of the sustainability strategy, binding and verifiable targets are set for all four fields of focus in the S.E.E.D.S. programme. For example supporting SOS Children’s Villages worldwide. In order to meet these targets we then implement operational measures in all relevant areas of the company. In order to test how effective these measures are, key performance indicators (KPIs) and a target figure are established for our targets. Every quarter, we survey all relevant data on a group-wide basis to calculate the individual KPIs. These are brought together in a central control tool, the Vaillant GmbH Sustainability Scorecard. By comparing figures from the same period in the previous year against the long-term targets during the annual review, we are able to gain an accurate picture of the current state of our sustainability performance.

Our Supply Chains

Our suppliers from various countries help us providing the quality our customers and business partners expect. We source a wide range of products and services from across the globe from small family-run business to large multinationals, all with their own supply chains.

As we expect our suppliers to meet our high standards, we are in constant exchange with them and seek for common understanding and united action.

Our Measures taken to address modern slavery

A robust governance, clear policies, an effective risk assessment as well as a profound understanding of our supply chain are basis for a targeted approach to addressing slavery and human trafficking. At Vaillant GmbH we incorporate mechanisms to preventing modern slavery at various stages: when selecting a supplier, when engaging with suppliers, when assessing them and when aiming for further development.

Selection process

For new suppliers we have integrated social and environmental aspects in our supplier pre-assessment. It includes:

  • A commitment to the United Nations Global Compact
  • Compliance with Minimum Wage legislation

This helps us to carefully select suppliers supporting the values Vaillant GmbH stands for. Furthermore it is expected that the supplier ensures compliance with the same diligence and regulations under which he operates for the Vaillant GmbH from all its sub-suppliers.

Key suppliers

Because of their degree of integration, the nature of their products and services or volume certain business partners play a key role in our company’s success. We are closely engaged with these key suppliers to reassure their commitment to the principles of the UNGC.

As a result, we have introduced our Supplier Quality Guideline in 2012 (updated in 2016) covering not only product and process related quality aspects but also environmental and social concerns, such as UN Global Compact.

Supplier Audits

All new suppliers are subject to a risk-oriented supplier audit covering quality, compliance, environmental and social concerns. In addition, we conduct audits of existing suppliers on a regular basis.

The audit touches “labour and ethics” issues including

  • Forced labour
  • Working hours
  • Discrimination based on race, colour, age, gender, sexual orientation, ethnicity, disability, pregnancy, religion, political affiliation, union membership or marital status
  • Free association
  • Corruption and bribery
  • Protection of intellectual property

In case necessary, corrective action plans are agreed on which will be subject to review during the next audit at the latest. In addition, in case of a violation of the 10 principles of the UN Global Compact, the auditor is entitled to conclude the audit result as “not capable”. Depending on the seriousness of the violation the supplier might be blocked.

In 2016 we have completed roughly 250 supplier audits. Our continuous efforts ensure that within the last 4 years we have covered more than 1.000 suppliers.

Training

To keep awareness high and ensure that measures preventing modern slavery are part of day-to-day business we have included respective aspects in our development efforts for suppliers and auditors.

  • Auditors receive initial training on the United Nations Global Compact, incl. how to address this during the on-site visit. An update training is currently under development.
  • Suppliers are supported by our Supplier Quality Guideline and are invited to seek for support in case needed.

Evaluation of the effectiveness of our measures

As part of our structured approach, we review the measures taken and – in case it is necessary – redirect our efforts. At Vaillant GmbH we rely on

  • Expert judgment (e.g. from our agents, regional experts)
  • Stakeholder dialogue (e.g. with industry associations)
  • Benchmark (e.g. to adopt best practice)

Forward Looking Statement

The Vaillant GmbH has taken various effective measures to address modern slavery and human trafficking. In an attitude of continuous improvement, we remain committed to further strengthen our efforts in the upcoming years. We are determined to even better understand our suppliers’ activities to combat modern slavery. We will provide an update on our activities in future statements.

This statement is made pursuant to section 54(1) of the Modern Slavery Act 2015 and constitutes our slavery and human trafficking statement for the financial year ending 2016:

Remscheid, 29.06.2017

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