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Lufthansa Group Balance 2014 EN - Sustainability in the procurement process

Sustainability in the procurement process As a globally operating aviation company, the Lufthansa Group stands for fair competition, integrity, and responsible action. The Group is unreservedly committed to compliance with all applicable laws, directives, and regulations. The Lufthansa Group expects this not only from its employees, but from its suppliers and competitors as well. Lufthansa assumes corporate responsibility by integrating sustainability into the procurement process. At the same time, we minimize risks and thereby avert potential damage to the company. For us as a globally operating Group with nearly 500 subsidiaries and affiliated companies, this is a challenging task. Ú Group purchasing ­guidelines approved In May 2013 the Executive Board approved Group purchasing guidelines requiring suppli- ers to enter into a commitment to social and ecological responsibility. The guidelines are meant as an umbrella directive for all of the Group companies’ purchasing guidelines. They also serve as a manual for purchasers and all employees with contacts in the pro- curement market. They are regularly updated and adjusted. The guidelines prescribe, among other things, that the following duties be included in con- tracts with suppliers: Compliance with the 10 principles of the UN Global Compact. The principles range from respect for human rights through commitments to labor standards and envi- ronmental protection to working against corruption. In 2002 Deutsche Lufthansa AG became the first aviation company to join this strategic United Nations initiative for companies, thereby agreeing to uphold the 10 principles formulated by it (see the Global Compact overview on page 27). Compliance with the International Labour Organization’s (ILO) four fundamental prin- ciples for labor. These concern freedom of association, the right to collective bargain- ing, the elimination of forced labor and child labor, and prohibition of discrimination in respect of employment and occupation. Consent to announced and unannounced audits of the supplier by companies of the Lufthansa Group. Recognition of Lufthansa’s right to termi- nate the contractual relationship in the event of a breach of the aforementioned agreements. Suppliers must also observe the Lufthansa Group’s Environmental Pro- tection Guidelines. By including these commitments in contracts, the Group ensures that the issue of sustain- ability is taken seriously and that sustainability becomes a way of life across the supply chain. To familiarize our purchasers with the Group purchasing guidelines, we train them in our Procurement Academy, which pro- vides continuing education opportunities for employees from throughout the Group. ß  38 // Sustainable Business Practice

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