Workers in the value chain (ESRS S2)

When we speak of workers in the value chain, or workers, we are referring to all workers who are under contract with our suppliers and are subject to the instructions of those suppliers or who perform outsourced services at our sites, such as tradespersons or third-party forwarding agents. Our own employees, temporary workers or self-employed persons (contractors) are not taken into account, as they are already covered by the reporting on our own workforce.

We are fully aware of our responsibility toward workers in the upstream value chain due to our business activities and our global reach. We have therefore put in place strict ethical, social and environmental principles to guide us in our business activities. Those principles are set out in our Supplier Code of Conduct. The Supplier Code of Conduct is, in general, a binding component of our relationships with our suppliers and obliges them to adhere to our standards and to implement them in their own supply chains. In the event that breaches are identified, remedial actions are discussed with the supplier and plans for corrective actions are agreed upon. In this way we want to protect workers in the upstream value chain and to enable them to enjoy the same high standard of working conditions that our own employees expect. We do not have direct relationships with these workers or with the contractual partners of our suppliers, supplier relationship management.

Material impacts, risks and opportunities identified (ESRS 2 SBM⁠–⁠3)

The materiality assessment did not identify any material risks or opportunities arising from workers in our upstream value chain. However, it did identify both potential and actual impacts, which are set out in the table below. Neither our strategy nor our business model needed adjusting as a result, since they already take account of the impacts identified, materiality assessment.

The evaluation is based on the Verisk Maplecroft risk score assigned to the procurement categories, among other factors. We also use this risk score to evaluate the potential geographical risks of child or forced labor. No significant risks that could affect workers in the value chain were identified.

Policies related to value chain workers (ESRS S2⁠–⁠1)

The workforce of our suppliers, especially in road transport, has a significant impact on our reputation and on the success of our strategic goal of being the best provider and a pioneer in ethical business.

DHL Group does not have any direct relationships with workers in the value chain. However, we require DHL Group suppliers to adhere to all applicable laws and standards as laid out in our Supplier Code of Conduct and to implement those laws and standards in their own supply chains. Our Supplier Code of Conduct is based on the principles of the United Nations Global Compact, the UN Universal Declaration of Human Rights, the UN Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises as well as the 1998 International Labor Organization (ILO) Declaration on Fundamental Principles and Rights at Work, in accordance with national laws and practice. In this way, we also want to counter the identified negative effects - potential and actual - which we address in our Supplier Code of Conduct under the topics covered by “human rights and fair labor practices” (child labor and forced labor, compensation and working hours, freedom of association and collective bargaining, and diversity and inclusion) and “occupational health and safety.” We reserve the right to monitor adherence to the Code of Conduct, for example by way of audits.

The Supplier Code of Conduct and the management of relationships with suppliers are the primary means by which we implement our ethical and social standards in the upstream value chain. During our supplier selection process and continuous risk assessment process, we check that our standards are implemented and adhered to, and we review progress on agreed action plans. This also applies to the impacts of our business identified in relation to working conditions, equal treatment and equal opportunities, child labor, and occupational health and safety. They also address the topics of forced labor and prohibit human trafficking. Our Supplier Code of Conduct and our supplier relationship management system also address the topics of forced labor and human trafficking, which is prohibited in any form. We publish information about the expectations we place on our suppliers in the supplier portal on our Group website. The procedures for monitoring adherence to those requirements are described in detail under supplier relationship management. Responsibility for supplier management lies with the Global Business Services Board department, which is headed by the CEO. If a breach of the Supplier Code of Conduct is identified, remedial actions are discussed with the supplier and plans for corrective action are agreed upon.

Engagement of workers in the value chain (ESRS S2⁠–⁠2)

Our Supplier Code of Conduct is also designed to protect the rights of workers in the upstream value chain. Adherence to the Supplier Code of Conduct is monitored during supplier relationship management. In onsite audits, the supplier’s workers are also invited and their perspective is considered. DHL Group does not otherwise have any direct contact with these workers.

Remediation of negative impacts and channels for value chain workers to raise concerns (ESRS S2⁠–⁠3)

We address the potential negative impacts identified by setting clear requirements in our Supplier Code of Conduct, including providing fair and appropriate remuneration, avoiding workplace harassment, promoting occupational health and safety as well as excluding child labor. These factors are taken into account in the supplier selection process with respect to each procurement category or according to the potential geographical risk, and compliance is effectively monitored, supplier relationship management.

Value chain workers can report concerns or possible breaches of our Supplier Code of Conduct or of the law at any time through our whistleblower system, which is publicly accessible on the Group website. We describe how we handle incoming reports in the section entitled whistleblower system. Our suppliers are required to inform their own workers and the workers in their supply chains about our whistleblower hotline. The incidents reported via the whistleblower system provide an indication of the effectiveness of this measure.

Managing material impacts (ESRS S2⁠–⁠4)

We address the actual material negative impacts identified that could affect workers in the value chain and review the effectiveness of the action taken. In line with our strategic approach to be seen as a role model for responsible corporate governance in our industry and as a credible business partner, we expect our employees to act with integrity and in full compliance with the law, including when dealing with our suppliers. As part of this approach, we also aim to foster stable and sustainable relationships with our suppliers.

Actions taken as part of our supplier management system address the potential negative impacts identified and help to prevent material risks from arising. In addition, our actions to respect human rights comply with the requirements of the German Supply Chain Due Diligence Act (LkSG). In this way, we also consider the potential impact on our company as well as on the upstream supply chain. The implementation and effectiveness of these actions are monitored by the LkSG Council, which acts as a Human Rights officer as defined by the LkSG. There are no other actions in place to address the identified negative impacts on such workers. Incidents reported via the whistleblower system are systematically reviewed. If necessary, the reports are addressed and followed up on by implementing appropriate plans for taking remedial action.

On the authority of the Board of Management, Corporate Internal Audit performs regular or ad hoc independent audits at all DHL Group subsidiaries and at corporate headquarters to evaluate management and monitoring processes (including procurement processes) and compliance with Group policies, thereby contributing to their improvement.

No serious human rights incidents were reported in the year under review.

Targets for managing material impacts (ESRS S2⁠–⁠5)

We evaluate the effectiveness of our actions using our entity-specific metrics in supplier management: “supplier spend covered by an accepted supplier code of conduct” and “suppliers with high risk potential assessed.” The first metric measures our ability to enforce adherence to our standards in the upstream value chain, while the second measures our ability to contractually enforce such adherence. These metrics cover the information required by the ESRS, even if they go beyond the aspects required here. No other metrics have been set, supplier relationship management.