This criterion focuses on aspects of corporate leadership, decision-making and control, including:
- Tax strategy: How does a company structure its tax policy to ensure transparency and adherence to tax regulations in its global operations?
- Executive compensation: What framework governs the compensation of executive board members, considering equity, sustainability, and fairness across the organization?
- Donations and lobbying: Does a company make political donations? Does it conduct lobbying activities in alignment with ethical standards?
- Corruption and bribery: To what extent does a company combat corruption and bribery in its own operations and the supply chain?
- Diversity and composition of leadership teams: How diverse are a company's executive team and board of directors? Does a company extend diversity considerations to its supply chain?
Example: Implementation of a code of conduct that stipulates rules for responsible and ethical behaviour. Similar frameworks can be extended to the supply chain.
ESG principles aim to promote transparency, ethical conduct, and effective corporate governance, not only in companies' own operations but also throughout their supply chains.