4.1. ESRS G1. Business Conduct
We start from the essential premise that all Viscofan people act in accordance with the principles set out in the Code of Conduct and in the policies of the Compliance System. Compliance expectations that go beyond legal requirements and regulatory standards, and are the basis for achieving exemplary performance and quality in all products, processes and stakeholder dealings.
Viscofan promotes the development of its Regulatory Compliance System to guarantee actions to prevent misconduct, mitigate compliance risks and effectively protect people. Business conduct training ensures that all employees understand the behaviour expected of them.
Suppliers are also expected to meet the highest professional and ethical standards in the industry, as business conduct applies not only to Viscofan's own operations but also to responsible sourcing and supplier relations.
Current and potential incidents, risks and opportunities
Positive
- Compliance through a culture of shared values
- Maintaining a good corporate reputation
Negative
- Non-compliance with rules, regulations and laws. Financial penalties
- Loss of customers and business partners
- Decrease in the Viscofan share price
Policies and commitments
The basis of the Regulatory Compliance System is Viscofan's Code of Conduct, complemented by specific policies in the areas of good governance, commercial, financial resources and taxation, information and systems, people and production.
Objetivos de sostenibilidad, medidas y progresos
- Audit on compliance with the Supplier Code of Conduct for 50% of suppliers of key raw materials by 2024 (met) and 100% by 2030
- Zero incidents of corruption
Governance
- Board of Directors
- Audit Committee of the Board of Directors
- Appointments, Remuneration and Sustainability Committee of the Board of Directors
- Ethics and Compliance Committee
- Legal department, secretary of the Board
- Local Compliance Officers
4.1.1 Governance
ESRS G1, ESRS 2 GOV-1
Viscofan's business conduct and compliance system is not only a matter of compliance with laws, but also a matter of values, an attitude that reflects a culture of shared values of tolerance and integrity in all the people who work at Viscofan and who contribute to achieving the objectives and conducting business conduct in a sustainable manner.
Viscofan considers that integrity and transparency contribute directly to achieving its objectives and managing its business in a sustainable manner. To ensure this, it has an ethics and compliance system whose objectives are to promote an ethical culture in the organisation that strengthens its competitiveness and long-term sustainability, reputation and ensures compliance with the regulatory system by all employees.
The ethics and regulatory compliance committee is the body responsible for overseeing and supervising the proper implementation and monitoring of the Group's compliance system, defined by the Board of Directors.
The Audit Committee supervises the effectiveness and functioning of the Ethics and Regulatory Compliance Committee and, to this end, receives periodic information from the Committee on compliance with the Internal Code of Conduct in matters relating to the Securities Market and the Code of Conduct and in particular, on the whistleblowing channel.
Based on the policy of diversity in the composition of the Board of Directors and the selection of directors, the directors of the Audit Committee have the necessary training and experience in the functions attributed to this committee by the Regulations of the Board of Directors. See curricula vitae described in the Annual Corporate Governance Report which forms part of the Directors' Report.
In addition, the Ethics and Compliance Committee is staffed by individuals with training and work experience in ethics, governance and compliance issues.
In addition, in each of the Group's companies there is a local compliance officer, who is the person appointed by the ethics and regulatory compliance committee in charge of monitoring and continuous training in the Group's compliance system for employees, managers and directors at the local level. This system has been widely disseminated and is published and available to employees on the Group's intranet.
4.1.2 Incident, risk and opportunity management
ESRS G1-1, ESRS 2 IRO-1
Elements of the Ethics Regulatory Compliance System
This system has implemented elements in order to prevent, detect and respond to possible risks with a negative impact on the Group.
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PREVENT Internal Regulations Ethics and Compliance Risk Map Training |
REPLY Control Procedures System Monitoring and Supervision Ethics Channel. Integrity Line |
DETECT Disciplinary and Response System Review of the system based on detected incidents |
At the recommendation of the Ethics and Regulatory Compliance Committee and subject to a report by the Audit Committee, the Board of Directors approved the Group's Compliance Plan, which contains action plans in different areas: improved internal regulations, annual update of the procedural compliance risk map, training plans, internal control improvement plans. In relation to the training plans, work is carried out in a transversal manner with the Human Resources Department to ensure the dissemination of the Code of Conduct, which in turn participates in the implementation of the annual compliance training plans.
Every three years, a compliance monitoring and follow-up plan is defined, based on the risk assessment to identify, analyse and prioritise those risks that should be included in the plan. It is a dynamic plan and reviewed with management and the audit committee to ensure that it is in line with the organisation's priorities. Communication and integration of all compliance risks in a comprehensive manner, in collaboration with all functional units performing specific compliance risk monitoring and control tasks, is essential.
In this way, the identification and assessment and updating of compliance and business ethics risks considers aspects such as geographical location, and the scope of transactions carried out by the different departments of Viscofan according to a business model based on the manufacture and marketing of packaging to customers through direct sales or through distributors. According to this business model, the areas of sales, purchasing and management are considered to be most susceptible to risk.
In addition, the compliance system covers specific issues such as market abuse regulation, data protection, conflicts of interest and corruption, and import and export trade with sanctioned countries.
The objective is that all relevant ethics and compliance risks of the company are monitored at least once a year.
Finally, Viscofan's compliance system has a reporting process by virtue of which the ethics and compliance committee reports at least twice a year to the Audit Committee on the development of the compliance plan for the year, which includes the proper functioning of the ethical channel and the management of those received through this channel. The committee in turn reports to the Board of Directors on the operation of the System and the improvement plans to increase its effectiveness.
Within the ethics and compliance committee, in addition to the experience mentioned in the previous section, specific training is promoted for the persons in charge of receiving complaints in the form of specific qualifications in compliance matters, or specific subjects such as money laundering.
Business conduct and corporate culture policies
The prevention system is based on internal regulations, consisting of a Code of Conduct indicating ethical principles and behavioural guidelines, complemented by internal operational policies and procedures.
Code of Conduct
It contains a set of binding principles and guidelines for each and every person in the Viscofan Group to guide actions and behaviour within the company and in relation to our shareholders, customers, suppliers and society in general, in accordance with Viscofan's corporate ethics, as well as local, national and international laws and regulations.
One of the functions of the Board of Directors is to ensure the correct application of the Code of Conduct, with the collaboration of the Ethics and Regulatory Compliance Committee, which supervises and monitors compliance with the Code and reports on a recurring basis to the Audit Committee.
Internal regulations
The internal rules governing the functioning of the governing bodies, supplemented by the applicable rules to ensure good corporate governance at the Viscofan Group, are available on the Company’s website within the Corporate Governance section, as well as in compulsory publications and registrations, on the website of the CNMV and in the Mercantile Registry of Navarre.
These internal regulations are mainly formed by the regulations of social bodies and committees:
- Articles of Association: These are the basic rules governing the Company and all its bodies. The articles set out the main features and operating principles of the General Shareholders' Meetings, the Board of Directors and its committees.
- Regulations of the General Shareholders' Meeting: This text lays down the regulations governing the General Meeting of Shareholders to ensure transparency and safeguard shareholders’ rights, and their access to Company information. The rules stipulate the formalities of calling, attending, holding and recording General Meetings of Shareholders and of access to prior and General Meeting information by shareholders.
- Regulations of the Board of Directors: These determine the principles of action of the Board of Directors, including an evaluation mechanism, the rules of organisation and operation of the same, the rules of conduct of its members, the duties of the directors and the general principles that must govern its actions. They also govern committees existing within the Board of Directors, their organisational and operational rules, and their remit and powers.
- Audit Committee Regulations and Appointments, Remunerations and Sustainability Committee Regulations: These establish the scope and functions of each Committee, its composition and operation, relations with government bodies and other entities, as well as the possibility of requesting advice.
- Internal code of conduct on matters relating to the securities market: This Code lays down rules of conduct to ensure that the institutional and personal acts of the Viscofan Group's directors and employees strictly comply with current laws and regulations on transparency in the markets and to protect investors’ interests.
Hence, within the regulatory compliance system, the Viscofan Group has approved procedural policies in the following areas:
| Scope | Policy |
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| Good governance |
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| Commercial |
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| Financial and tax resources |
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| Information and systems |
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| People |
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| Production |
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Ethics and compliance risk map
As part of the global risk system, Viscofan draws up an ethics and compliance risk map based on the following:
- Identification of risks, especially criminal offences and other non-compliance affecting the legal person
- Grouping in blocks in order to be able to devise common measures to combat groups of crimes and other non-compliances.
- Identification of the conduct in the exercise of which offences and breaches may be committed and the groups that may be involved.
- Association of details of offences and non-compliance for each block, especially those of a criminal nature, in accordance with Spanish regulations as the Group's parent company. However, each Viscofan Group company analyses the applicable regulations in the different countries in which it operates and develops local regulations for compliance where appropriate, informing and reporting them to the Ethics and Regulatory Compliance Committee.
- Identification of the mechanisms for monitoring and detecting crime and other non-compliance, both internal and external. Preventive controls have been identified, differentiating between policies and procedures that address the prevention of the behaviours identified, and specific controls.
- The estimate of the impact and probability, both inherent and residual, of each conduct is represented, obtaining the Viscofan Group's Ethics and Compliance heat map, which helps to guide the management of compliance risks.
The ethics and compliance risk map is reviewed and assessed annually at working meetings of the ethics and compliance committee led by the Group's compliance area. In addition, an annual CLA (Compliance List Assessment) is drawn up, which shows the perception of compliance risks throughout the Group, both by companies and by functional areas. The resulting valuation is provided to the Directorate General and the Audit Committee for oversight.
Ethical channel – Integrity line
The ethics channel is a key element of the system and was modified during the 2023 financial year to adapt it to law 2/2023 of 20 February 2023, regulating the protection of people who report regulatory infractions and in the fight against corruption.
To facilitate supervision of compliance with Viscofan's Code and Ethics and regulations, employees and any person with a legitimate interest can access the Ethical Channel on Viscofan's web page under the Corporate Governance section, on the employee's Intranet or by email to officeofethics@viscofan.com or by post to the Ethics Committee at Viscofan's central offices (Berroa Industrial Park, C/Berroa 15-4 floor, 31192 Tajonar-Navarra, Spain) to notify any sign of conduct that they deem to be a possible risk.
The Ethics and Compliance Committee is the body responsible for commencing, on its own account or at the request of a third party, an investigation on events or practices that may give rise to a situation of risk for the Viscofan Group as a result of a breach of the Viscofan Group's Code of Conduct or prevailing regulations.
The established process that follows completed investigations pursues several objectives:
- Seek redress and assistance to those who may have been affected by non-compliance or irregularities, especially for non-compliance or irregularities of criminal relevance.
- Identify possible improvements in the implementation of the ethics and compliance system so that new measures can be put in place that would have prevented risks from materialising.
- Provide support to the Group's companies and monitor the implementation of the recommendations to ensure the improvements identified.
- Conduct global monitoring of cases. The information sent to the Ethics Committee throughout the company on possible infringements is recorded for a unified monitoring to identify trends and areas for improvement in the compliance system.
Viscofan has a general policy on the internal reporting and whistleblower protection system, which guarantees the right of employees and third parties to communicate information on the breaches provided for therein through an internal reporting channel and determines the obligation to process the communication in accordance with a procedure that meets the due guarantees for whistleblowers and other affected parties. Article 8. Guarantees and protection of the whistleblower establishes the following:
The whistleblower shall have the guarantees provided for by law and in particular:
- Decide whether he or she would like to make the communication anonymously or non-anonymously.
- Make the communication in writing and, upon request, in person or by videoconference
- Indicate an address, e-mail address or safe place to receive the communications that he or she makes or renounce, if applicable, to receive communications.
- Appear on his or her own initiative or when summoned, being assisted, if necessary and if he or she considers it appropriate and at his or her own expense, by a lawyer he or she appoints.
- Exercise the rights conferred by personal data protection legislation.
- Know the status of the processing of his or her complaint and the results of the investigation.
Likewise, persons who communicate or disclose reportable facts are entitled to the protection provided by law. In particular, acts constituting retaliation, including threats of retaliation and attempted retaliation against informants and third parties protected by the regulations in force, are expressly prohibited.
During 2024, the Ethics and Compliance Committee met five times and followed up on eleven communications received through the Ethics Channel/Integrity Line, six of which were accepted for processing, and in five of these cases, breaches of the Group's internal regulations or the principles of the Code of Conduct (not constituting a criminal or administrative offence) were confirmed, following the processing of the corresponding file and its investigation, the breach of the internal regulations and the Code of Conduct, and the necessary measures were proposed and adopted by the competent bodies.
Promotion of corporate culture. Training and dissemination
This is the first and one of the most important strategies to foster a corporate culture in line with the Group's ethical principles and Code of Conduct to promote the prevention of non-compliance.
Training and dissemination of the corporate culture and compliance system empowers people to proactively do the right thing. On this basis, the Code of Conduct states that executives and managers should emphasise the importance of ethical and compliance-oriented conduct, make it a matter of course in day-to-day business and promote it through personal leadership and training.
Without prejudice to the role of the Ethics and Compliance Committee at corporate level, as the body responsible for the management of the System and the specific training plans it promotes, given the importance of adapting to the needs and local culture of the different countries in which the Group operates, the role of the local ethics and compliance officers is essential. They plan and develop the necessary training and communication actions at local level, with the support and monitoring of the ethics and compliance committee.
In this respect, Viscofan understands that training in human rights is a fundamental tool for raising employees' awareness in this area. The breakdown of the hours of training in this subject is as follows:
| 2024 | 2023 | |||||
|---|---|---|---|---|---|---|
| Dedicated human rights training | Men | Women | Total | Men | Women | Total |
| Training hours | 3,441 | 1,215 | 4,656 | 1,739 | 846 | 2,585 |
| % of total training hours | 7.08% | 5.52% | 6.59% | 3.10% | 3.30% | 3.20% |
Additionally, in 2024, in order to reinforce awareness and knowledge of regulatory compliance, specific training was provided in different areas:
- Antitrust and money laundering
- Conflict of interest
- Prevention of workplace harassment
- Internal Code of Conduct – Market Abuse
During the year, positions at risk have not been covered by specific training programmes.
The Group's compliance officer and member of the ethics and compliance committee has received specific training for the performance of their duties.
Supplier relationship management
ESRS G1-2
Viscofan expects suppliers to comply with applicable laws and to follow recognised environmental, social and governance standards. The Group also makes a global commitment to its suppliers and establishes relationships with them based on respect and trust, and on the quality of products and services.
As a result of this objective and commitment, Viscofan has implemented outstanding elements in supplier management:
Codes, policies and commitments
Supplier Code of Conduct: approved in 2022 by the Board of Directors, seeks to extend Viscofan's culture to suppliers of goods or services in terms of compliance with applicable laws and generally accepted standards, ethical behaviour, labour practices, the environment, the legality of goods and raw materials, and respect for the communities in which they operate. The implicit acceptance of the code is included in the Group's general conditions of purchase.
Sustainability Policy: This establishes commitments and actions for the responsible management of the supply chain from the point of view of human rights, respect for the environment and the fight against climate change.
Code of Conduct and Human Rights Policy: Viscofan rejects any type of child labour and, in accordance with this, a commitment similar to that included in our code of ethics is requested from suppliers.
Anti-Corruption Policy that includes the company's commitment to fight against bribery and corruption, and establishes the dealings and commercial relationship with third parties.
Ethical channel Integrity line: It allows the filing of anonymous complaints and is open to third parties so that any supplier or potential supplier can report facts or situations that may be contrary to the code of conduct or current legislation through the channel enabled for this purpose on the corporate website, on its home page, in a separate and easily identifiable section.
Payments: Viscofan does not have a specific supplier payment policy and has no plans to establish one for the time being, as the Group has an established supplier payment practice in all Group companies that promotes the payment of supplier invoices in due time and form regardless of their size. See payment practices and average payment period in section 4.1.3. of this ESRS.
Selection, approval and verification of compliance with the Supplier Code of Conduct
Viscofan has established a supplier approval system that ensures non-discriminatory treatment in the selection processes of suppliers and contractors, while seeking to ensure their compliance with quality, safety and cost criteria.
In particular, the system for suppliers of raw materials and packaging includes a declaration of conformity with their performance commitments, in accordance with internationally accepted ethical principles and human rights.
Moreover, all suppliers of raw materials, packaging and maintenance must approve an internal approval procedure consisting of a verification, either in person or through the completion of a questionnaire. In both cases, among other matters, the following systems are assessed: quality management (ISO 9001, IFS), food safety management in the case of raw material suppliers (FSSC 22000, BRCGS Food Safety, BRCGS Packaging Materials), occupational health and safety management (OHSAS 18001/ISO 45001), environmental management (ISO 14001), energy management (ISO 50001) and human rights management (UN Global Compact, BSCI). In the specific instance of collagen, the acquisition of animal hide (mainly cows) is required. In Europe this must comply with the European regulations of welfare of animals at the time of slaughter.
As part of the 2022-2025 Sustainability Action Plan, a commitment has been made to carry out audits on compliance with the aforementioned Supplier Code of Conduct.
In this regard, within the multi-year incentive plan for the 2022-2024 period for Viscofan's executive directors, managers and other key personnel, the objective has been set to conduct audits on compliance with Viscofan's Supplier Code of Conduct in 2024 on a volume equivalent to 50% of purchases from suppliers of cellulose, collagen skins, cellulose paper and polyamide, a threshold reached by the end of 2024. This target has been extended to 100% by 2030.
Prevention and detection of corruption and bribery
ESRS G1-3
As stated in Principle 10 of the United Nations Global Compact, of which Viscofan is a signatory, "Business should work against corruption in all its forms, including extortion and bribery".
This principle governs at Viscofan, being expressed in the Code of Conduct, and it has been enacted and reinforced in recent years with the approval by the Board of Directors of the Anti-corruption Policy, and the Crime Prevention Policy, and the Prevention of Money Laundering and Terrorist Financing Policy, which, encompassed within the Regulatory Compliance System, demonstrate the Group's commitment to the permanent monitoring and sanctioning of fraudulent acts and conduct and the development of a business culture of ethics and honesty.
The fight against corruption is one of the central elements that defines our principles. In this regard, we are committed to the United Nations Convention against Corruption (UNCAC).
Both the Code of Conduct and these policies are available on the Viscofan website and on the internal intranet and training on them is encouraged.
To avoid any type of corruption, the regulations establish a series of guidelines, and communication and training is encouraged in this area on forbidden procedures that may form the scope of corruption: bribery, extortion, facilitating payments and influence peddling, gifts, business courtesies, donations and sponsorships and relationships with third parties.
In addition, the ethics and compliance committee carries out the more specific management of ethics and compliance risks, including the prevention and detection of corruption and bribery. This management has been described in section 4.1.2.
This Committee is made up of people separated from the management chain and in the event that they have any connection, it is established that they must be outside the matter in question.
The training on the prevention and detection of corruption and bribery has been detailed in the subsection Fostering corporate culture. Training and dissemination of this ESRS.
Further, the global risk committee carries out an analysis of fraud risks, and its different forms are regulated in various policies; and sets specific controls and mechanisms to reduce their likelihood of occurrence. The identified risks are: conflict of interest and internal fraud, private corruption, and fraud and misleading advertising. In particular, the positions most at risk of corruption and bribery are in the areas of sales, purchasing and management. The definition and assessment of these is reviewed, evaluated, and the controls in place in the organisation are identified to reduce the likelihood of their occurrence. The identification and assessment of risks and controls is included in the ethics and compliance risk map, specifically identifying those risks of a criminal nature.
4.1.3 Metrics and targets
ESRS 2 MDR-T
Targets
Supplier Audit in the Supplier Code of Conduct
The United Nations Global Compact, of which Viscofan is a signatory member, is committed to SDG 12. Responsible consumption and production. A commitment that Viscofan has voluntarily undertaken on the basis of the Supplier Code of Conduct, establishing a supplier audit target.
The objective is to audit 100% of the suppliers of the main raw materials (cellulose, collagen skins, abaca paper, polyamides), which represent around 50% of total purchases, by 2030. This is a target set for 2022, the year in which the Board of Directors approves the Supplier Code of Conduct.
In addition, and linked to the Long Term Incentive Plan for Executive Directors, Management and other key personnel, an intermediate target of this audit objective of 50% of suppliers has been set in 2024.
The development of this target is as follows
| 2030 Commitment | 2024 Commitment | 2024 | 2023 | 2022 | |||
|---|---|---|---|---|---|---|---|
| Percentage of suppliers audited | 100% | 50% | 83% | 45% | 0% |
Zero cases of corruption or bribery
ESRS G1-4
It should be reported that during the 2024 financial year there have been no acts that have been the subject of relevant legal actions relating to breaches of anti-corruption and anti-bribery laws, nor have any actions been taken to address breaches of anti-corruption and anti-bribery procedures and standards.
Political influence and lobbying activities
ESRS G1-5
The Viscofan Group's Code of Conduct, within its guidelines, establishes that the relationship with public institutions must be guided by institutional respect, communication, transparency and legality. Also, that Viscofan does not make political contributions (donations to politicians, political parties or political organisations) or engage in political influence and lobbying. For its part, as a responsible member of society, Viscofan makes monetary donations or donations of its products for educational and scientific, artistic and cultural purposes, and for social and humanitarian projects. However, all donations must be transparent. This means, among other things, that the identity of the recipient and the destination of the donation must be clear and the reason and purpose of the donation must be justified and documented. Quasi-donations, i.e. donations that appear to be compensation for a service, but are substantially higher than the value of the service, are prohibited as they imply a violation of the principle of transparency.
The Code of Conduct expressly prohibits the following types of donations:
- To individuals and for-profit organisations,
- Payable into private accounts,
- Organisations whose objectives are incompatible with Viscofan's corporate principles, or
- That may damage Viscofan's reputation.
For their part, all sponsorships must be transparent, in accordance with a written agreement, for legitimate commercial purposes and in accordance with the consideration offered by the event organiser. Whereas contributions must not be promised, offered or made to secure an unjustified competitive advantage for Viscofan or for other improper purposes, or that may damage our reputation.
This activity is regulated by the Code of Conduct, the basic regulation of the Viscofan Group's regulatory compliance system. In this respect, the ethics and compliance committee is the body responsible for overseeing and supervising these activities, and the Audit Committee of the Board of Directors oversees the effectiveness and functioning of the ethics and compliance committee.
No specific financial policy contributions were made by Viscofan during 2024. Viscofan is also registered in the EU Transparency Register under the registration name Viscofan S.A. and identification number 634007348792-32.
No member of the Board of Management was appointed during 2024 who has held a comparable position in the civil service in the two years preceding such appointment in the current reporting period.
Payment practices
ESRS G1-6
Viscofan does not have a specific supplier payment policy; however, based on its commitment to this stakeholder group, all Group companies seek to pay supplier invoices in due time and form regardless of their size and category. In this respect, the usual payment practice is 45 days, which is applied to most of the payments made, with the average payment period for the Group being 34 days.
This deadline is in line with Spanish law 15/2010, of 5 July, amending Law 3/2004, of 29 December, which establishes measures to combat late payment in commercial transactions. This regulation applies to Viscofan's Spanish companies whose average payment period in 2024 was less than the 60 days set out in article 4 of the law. See note 14 of the consolidated annual report for information on the average term of payments made to suppliers in commercial operations resident in Spain.
Viscofan does not have any relevant pending legal proceedings based on delays in payment. The Viscofan Group's legal proceedings are described in Note 13.3. Contingent assets and liabilities in the notes to the consolidated financial statements.
