For goals and planned key actions for 2024 and beyond, please refer to the full Combined Annual Report 2023.
Maintaining the highest standards of integrity is essential for securing and maintaining the trust of Borealis’ customers, suppliers, employees, shareholders and society at large. Failure to meet its ethical and compliance obligations could expose Borealis to the loss of stakeholder trust and reputational damage, as well as to fines, legal claims, loss of business, contracts or licenses, or even the imprisonment of management and employees involved. An unethical or non-compliant environment can also affect employees’ engagement and job satisfaction.
Borealis is strongly committed to ethical business conduct. The Borealis Ethics Policy provides guidance to Borealis’ employees and sets out the Group’s ethical principles, most importantly including human rights, ethical business conduct based on respect, honesty and integrity, and compliance with applicable laws.
The Group’s Compliance & Ethics function has both preventative and controlling roles. It looks to prevent infringements of laws, ethical principles and compliance matters, and to mitigate risk, react to issues and implement lessons learned. The function is headed by the Group Compliance & Ethics Officer, who reports to the Vice President Legal & Compliance and also has a reporting line to the Audit Committee, which receives an annual report on compliance and ethics issues. The Group Compliance & Ethics Officer is supported by a team of compliance managers and a network of more than 60 Ethics Ambassadors. The Ethics Ambassador network is a key tool for promoting and strengthening Borealis’ ethics culture. The network has global coverage, with one ambassador at almost every location and across all hierarchy levels.
Borealis’ Ethics Council is sponsored by the CEO and General Counsel and chaired by the Group Compliance & Ethics Officer. It consists of senior leaders or senior representatives from Legal, Internal Audit, Health, Safety & Environment (HSE), People & Culture and the different businesses. The Council aligns the Group’s approach to ethics and provides updates on compliance and ethics matters to ensure consistent Group-wide ethical standards. It also has the exclusive right to decide on important and strategic ethics-related matters, such as disciplinary actions, highvalue sponsorships and clearance of conflicts of interest. Decisions of the Ethics Council are binding for Borealis.
Group Compliance & Ethics regularly provides ethics-related information and updates to the Executive Board and the Ethics Council. This information includes major new projects, a report on substantiated unethical conduct, updates on training conducted and any other major developments. The Executive Board and the Supervisory Board (SVB) annually review the Compliance Management System and provide input to further enhance its effectiveness. In addition, Group Compliance & Ethics regularly exchanges information with its counterparts at the Group’s owners, OMV and ADNOC.
The Borealis Ethics Policy is accessible to the public on Borealis’ website. The Policy is available in ten languages and applies to the entire Borealis workforce.
Borealis’ contractors, suppliers and other business partners are required to adhere to the Ethics Policy for Business Partners. It defines the Group’s approach to key aspects of business ethics when sourcing, such as anti-corruption, anti-slavery, child labor, forced labor, human trafficking and HSE. The Ethics Policy for Business Partners is available from the Borealis website and is also actively communicated to Borealis’ business partners.
Corruption and Bribery
Borealis is strongly committed to complying with global anti-bribery and corruption requirements, including but not limited to the US Foreign Corrupt Practices Act and the UK Bribery Act.
Accordingly, Borealis’ Ethics Policy strictly prohibits offering, giving or accepting gifts or anything of value, in order to obtain or grant an improper business advantage. Any gift or hospitality in connection with Borealis’ business activities must be reasonable and appropriate and must have a legal and reasonable business purpose. In accordance with Borealis’ Ethics Policy, gifts and hospitality offered or received by Borealis’ colleagues must be registered in an internal gift registry, which is maintained and monitored by Group Compliance & Ethics.
Borealis communicated its anti-corruption policies and procedures to all of its employees (100%) as well as the Executive Board and SVB (100%). All of Borealis’ business partners (100%) have been provided with Borealis’ Ethics Policy for Business Partners.
Competition
Borealis is committed to healthy, lawful, equitable and ethical competition between companies. The Group applies policies to ensure full compliance with applicable competition laws in all jurisdictions where it carries out business. Borealis also puts special focus on anti-trust and competition requirements in its compliance training and workshops.
Data Privacy
Borealis must treat all personal information relating to its employees and business partners as confidential and in line with legal requirements. The Group takes its obligations under the General Data Protection Regulation (GDPR) and any other applicable data protection laws seriously and makes sure to prevent unauthorized disclosure. Certain employees may, as part of their role, deal with personal information about other employees or third parties. Those employees receive specific training on what is required from them in relation to such data. Borealis expects all employees dealing with personal data to always treat it as confidential and in accordance with the applicable law. In addition, Borealis implements IT security measures to help ensure data is adequately protected.
As an issuer of bonds traded on the Vienna Stock Exchange, Borealis must comply with the Market Abuse Regulation (MAR). Moreover, as Borealis is an integral part of the listed OMV Group and significantly contributes to its financial performance, Borealis’ non-public and important businessrelated information may constitute inside information in relation to OMV shares. The same applies to Borouge’s non-public and important business information in relation to shares that Borealis holds in Borouge Plc and Borouge Pte. Borealis must therefore manage its risk exposure related to the misuse of inside information. In accordance with MAR requirements, Group Compliance & Ethics maintains a list of permanent insiders, requests and collects undertakings on compliance adherence and manages annual MAR training for colleagues who are specifically exposed to issuer compliance risks.
Managing Conflicts of Interest
The Group’s process for preventing and mitigating conflicts of interest is outlined in its Code of Conduct, which applies to all Borealis employees, including the Executive Board.
A conflict of interest may occur when an employee’s personal interest could interfere with their duties to act in Borealis’ best interests. Conflicts of interest can occur in many ways and typically arise in the following situations:
Borealis expects everyone to avoid any activity that creates even the remote appearance of a conflict between their interests and Borealis’ interests. Employees must disclose to their line managers, People & Culture and the Group Compliance & Ethics Officer any actual, perceived or potential conflicts that they might have, in order to protect themselves and the Group. Group Compliance & Ethics is responsible for clearing all reported conflicts from a Compliance & Ethics perspective.
All reported conflicts are documented in the Group’s Integrity Tool and reported to the Ethics Council each quarter. Where actions are taken, the stakeholders affected and the Executive Board are informed. In 2023, neither the SVB, the Executive Board nor the Audit Committee members held shares in Borealis or the majority of the shares in a holding company, thereby preventing any related conflicts of interest.
The Executive Board and SVB members’ cross-shareholdings and cross-board memberships of have been assessed for any potential conflicts of interest. No such conflicts have been identified.
Human Rights
Human rights are universal values and guide Borealis’ conduct in every aspect of its activities. Borealis is committed to preventing adverse human rights impacts, addressing any impacts it becomes involved in and taking adequate measures for their prevention, mitigation and, where appropriate, remediation.
Borealis does not tolerate any form of slavery, human trafficking, child labor, forced labor, harassment, bullying, discrimination, disrespect, exploitation of a person’s vulnerability or dependency, or any other violation of human rights. In meeting its human rights responsibilities, Borealis strictly complies with applicable national laws. Where national laws fall short of Borealis’ standards, which are based on international human rights law, Borealis is guided by its higher standards while ensuring it complies with applicable laws.
The Group also expects all its suppliers, customers and other business partners to strictly comply with universal human rights and respective national laws. The Group is strongly committed to the Ten Principles of the United Nations’ Global Compact and the International Labour Standards of the International Labour Organization, and has an Operative Instruction to ensure compliance with the UK Modern Slavery Act.
Group Compliance & Ethics consistently monitors and checks Borealis’ business partners, throughout the time the Group does business with them, using the Diligent automated IT tool. These checks highlight any convictions, ongoing proceedings, suspicions or other red flags with regard to human rights violations. In 2023, Borealis thoroughly reviewed and updated its Operative Instruction which sets out the due diligence requirements and escalation procedure in the event of a higher risk rating or red flags being detected. In addition, Borealis conducts an annual human rights assessment in different regions, to determine local human rights risks and recommend actions to mitigate those risks.
Ethics Hotline: Whistleblowing and Speaking Up
Borealis complies with the EU Whistleblower Directive (Directive (EU) 2019/1937). The Group’s stance is that “looking away is not an option” and the Ethics Policy therefore obliges employees to speak up about any actual or suspected ethical or compliance breaches. As part of this, every white-collar employee must confirm, in the course of their Annual Certification, that they have reported all witnessed and suspected violations of the Ethics Policy.
The Group continuously promotes speaking up and creates awareness of its Ethics Hotline and how to use it, in particular through the Ethics Policy, quarterly business updates from the Executive Board, articles on the intranet and in each Ethics training.
The Ethics Hotline is based on an automated cloud-based case management tool, “Integrity”, provided by the German service provider EQS. The tool is user-friendly, self-explanatory and practical for both the reporter and the managers of reported cases, and has been well accepted by all relevant stakeholders.
Reports to the Ethics Hotline can be made 24/7 in 24 languages, by following the link: borealis.integrityline.com. The link is published on the intranet and on Borealis’ external website, enabling individuals inside and outside Borealis to file reports. These reports can be fully anonymous, in which case the identity of the reporter is not tracked.
All reports to the Ethics Hotline are directly recorded and tracked in the management tool. Each reporter is notified that the report has been received and is being handled. Group Compliance & Ethics is immediately notified of each new report and can then administer it in the management tool. Reports received through other channels are manually set up in the tool by the Group Compliance & Ethics team. Access to the tool is strictly limited to the Group Compliance & Ethics team, the General Counsel and the Director Internal Audit and Risk Management.
Every report is assessed and handled with the utmost priority, in accordance with Borealis’ Investigation and Ethics Case Handling Procedure. The Procedure sets out the process for determining whether a report should be investigated and was thoroughly updated in 2023. While Group Compliance & Ethics is responsible for the intake, categorization, documentation and initial handling of each case, Internal Audit, People & Culture and subject matter experts are involved in the investigation, depending on the compliance areas and risks involved. Reports that do not suggest a violation are either forwarded to the department that is best placed to deal with it or, if the report is unreasonable or without serious intent, it is dropped and closed.
The Ethics Council carefully reviews each investigation that substantiates unethical conduct. The Group Compliance & Ethics Officer provides quarterly updates to the Executive Board on all conducted and substantiated investigations, and the Audit Committee receives an annual report of all investigations and remediation actions.
In compliance with the EU Whistleblower Directive, the Ethics Hotline allows Borealis’ workforce and external stakeholders to make reports related to the following categories:
In 2023, Group Compliance & Ethics’ activities included:
The team also introduced new compliance-related policies, including a Social Compliance Procedure, an Operative Instruction covering cooperation with authorities, and a process for handling whistleblower reports from people external to Borealis. In addition, Group Compliance & Ethics thoroughly amended and updated the Ethics Policy for Business Partners, the Compliance Due Diligence Instruction, the Data Protection Procedure, and the Investigation Manual.
Borealis obtained recertification for ISO 37301 (Compliance Management) and ISO 37001 (Corruption & Anti-Bribery) during 2023. To obtain recertification, Group Compliance & Ethics, amongst other measures, worked with Group Quality to conduct a Group-wide compliance audit and thoroughly reviewed the effectiveness of Borealis’ compliance management, with discussion and input from the Executive Board and SVB.
In 2023, Group Compliance & Ethics received 186 reports, of which 176 cases were investigated. 64 of these investigations substantiated or partially substantiated misconduct by Borealis colleagues. 20 Employees have been dismissed in connection with violation of the Ethics Policy.
Critical concerns are communicated quarterly during the compliance update to the Executive Board and on a yearly basis to the Borealis Audit Committee. Two critical concerns were communicated during the reporting period, as described in the sub-chapter Non Compliance and Legal Actions.
As per Borealis´ investigation procedure laid down in “Ethics Case & Investigation Handling Procedure”, Group Compliance & Ethics needs to assess and consistently update the criticality level of each Ethics & Compliance related incident ranging from Level 1 to Level 4. The most critical cases shall be classified as Level 1 and shall be exclusively reserved for cases which may bear risks for (i) significant damages or fines; (ii) risk of reputational damages; or (iii) involves a senior employee with pay grade 16 or higher. Borealis, to the best of its knowledge, was not involved in any material violations of anti-corruption, anti-trust or competition law, monopoly legislation, human rights or data privacy restrictions during 2023.
There have been two incidents classified as Level 1:
In 2023, Borealis employees (BC/PO) completed 5,983 e-learning courses. Altogether, 88% of the Borealis workforce completed an ethics-related e-learning course.
1) Today, security personnel at Borealis sites are exclusively provided by external vendors. In 2023, Borealis has assigned Ethics training (including human rights) to more than 1,500 external contractors, including to security personnel. // 2) DYM SOLUTION CO., LTD and mtm plastics GmbH, mtm compact GmbH as well as Ecoplast Kunststoffrecycling GmbH are excluded from e-learning courses. // 3) Due to the divestment of Fertilizer, Melamine and TEN in the first half of 2023, training figures representing the whole year, the complete annual cycle, are not available and, therefore, are not reported. // 4) Ethics & Compliance e-learning courses subsume various types of courses. Some employees have completed several e-learning courses. // 5) Human rights training has been mandatorily assigned to the entire Borealis workforce.
In 2024, Borealis will roll out e-learning courses as illustrated in the E-learning schedule.
In 2024, Borealis will further strengthen its ability to prevent any type of unethical social behavior within the Group and its suppliers. Amongst other initiatives, the Group will:
