Responsible
business conduct

The Business Principles apply to all companies in the Alfa Laval Group and apply to all employees, including temporary employees and consultants. They also guide the relationships with business partners, such as suppliers and customers.

There are internal guidelines available to help employees understand the Business Principles, with concrete examples for how they should be implemented in everyday work life for everyone at Alfa Laval.

Alfa Laval’s Business Principles incorporate the ‘Protect, Respect and Remedy’ concept of the United Nations Guiding Principles on Business and Human Rights, the OECD Guidelines for multi-national enterprises and the concepts in the UK Modern Slavery Act. The Business Principles are approved by the Alfa Laval Board.

Compliance with laws, regulations and Alfa Laval Business Principles

Conducting business with honesty, integrity, and respect for others is fundamental for Alfa Laval. This means that we not only follow the applicable laws and regulations in the countries in which we operate, but we are also determined to follow the highest ethical standards of business conduct. Alfa Laval carefully monitors the development of international legislation, social standards, and voluntary initiatives, including those concerning Anti-Bribery, Anti-Corruption, and conflicts of interest.

A Three Lines of Defence model has been implemented to clarify roles and responsibilities in applying the Alfa Laval Business Principles and underlying governing documents. The governing documents are policies, directives, and procedures. Adherence to the governing documents is mandatory for all employees in the Alfa Laval Group.

Governance

The Three Lines of Defence concept is the cornerstone of good governance. This is a model to secure compliance and a good working environment, identify gaps and secure that remedial actions are taken on discovered deficiencies. The first line of defence includes operational management, the second line is oversight functions normally at a corporate level, the third line of defence involves internal audit, external auditors and external regulators.

The first line is responsible for implementing controls and managing day to day operations, these are the people who own and manage risks. The second line provides oversight and helps to ensure that the first line is properly managing risks. They develop policies, provide guidance, and monitor compliance. The third line of defence are independent of operational management and report directly to the Audit Committee of the Board of Directors. The internal audit team provides an independent assurance that the first and second lines are functioning effectively through audits and reporting on their findings, both to the operational management and the Audit Committee.

The Risk and Compliance Board is the corporate oversight body. This board is responsible for reviewing the effectiveness of risk management and compliance processes within the company and consists of CEO, CFO, Chief Legal Officer and the VP Risk & Compliance. The Risk and Compliance Board secures identification, assessment, mitigation, and monitoring of enterprise-wide risks. They also ensure implementation and administration of the company’s policies, directives, and ethical programs, including the Business Principles.

All managers are responsible for ensuring compliance with Alfa Laval’s policies, including the Anti-Bribery and Anti-Corruption (ABAC) policy and the implementation of local guidelines. Line managers are continuously trained to keep up their awareness of the latest developments in Alfa Laval corporate policies and global compliance programs.

Reporting breaches

Alfa Laval encourages its people to report any concern about actual or potential violation of the Business Principles or the law, and any unethical conduct. Reporting concerns to your manager is always the first step. If this is not an option, Alfa Laval has a company-wide whistleblowing system, which enables both internal and external stake­holders to report suspected breaches anonymously. Alfa Laval’s whistleblowing system is a secure and efficient tool that enables employees to combat fraud and uphold the good reputation of the company. The system complies with the EU data privacy regulation (GDPR) and EU Whistleblower Protection Directive.

Informing people about Alfa Laval’s whistleblowing system and encouraging people to report is an ongoing process. In some countries, Alfa Laval has established a hotline for whistleblower support, along with a web-based supporting system.

Anti-Bribery and Anti-Corruption

Alfa Laval has zero tolerance for any form of bribery or corruption. The international scope of Alfa Laval’s organization means that Alfa Laval is active in several countries where there is a high risk of corruption. One of many tools used by Alfa Laval in assessing risk is the Transparency International Corruption Perception Index.

Alfa Laval’s recently updated ABAC policy is aligned with the ISO 37001 standard on Anti-Bribery management systems to prepare for possible future certification of Alfa Laval’s Anti-Bribery and Anti-Corruption program. The policy applies to all employees and the implementation of the policy is supported by an ABAC e-learning course. The expectation is that all white-collar employees take this training at least every second year to maintain awareness. Per year-end 2024 the training hade been completed by 79 percent of the target group.