Duty of vigilance
The Air France-KLM Group is subject to the obligations introduced by the Act of March 27, 2017 relating to the duty of vigilance for parent companies and ordering companies.
Since 2018, in response to the regulatory requirements, the Group has implemented a vigilance plan in compliance with the legal provisions, it being understood that the Group already had processes in place to comply directly or indirectly with the requirements of the new Act. In particular, having established verification processes in the areas required to be covered by the vigilance plan, the Group has ensured that it is in a position to benefit, as effectively as possible, from the contributions of its various entities. In 2019, Air France-KLM pursued these actions and focused on measuring their effectiveness within the Group and its subsidiaries.
IDENTIFICATION AND REGULAR RISK EVALUATION PROCEDURES
The identification and evaluation of the various risks relating to the duty of vigilance are part of the overall risk management process established within the Air France-KLM Group. As a facilitator of risk management, Group Internal Audit regularly evaluates the risk management process and its conclusions are presented to the Group Executive Committee and the Audit Committee.
The Air France-KLM Group’s overall sub-contracting management system applies to all risk areas. It is based on contract reviews, compliance monitoring and supervision such as audits, inspections and checks, carried out by the sub-contractors themselves where appropriate.
Every year, the Group conducts a review of the non-financial risks generated by its activities. This analysis verifies the relevance and comprehensiveness of the measures and action plans aimed at the effective prevention, control and mitigation of the non-financial risks deemed to be the most material.
See Air France-KLM Universal Registration Document 2019 Section 3 Risk and risk management and paragraph 4.1.2 Identification of the key priorities in building long-term relationships.
MEASURES DEPLOYED TO PREVENT AND MITIGATE THE RISKS AND MONITORING MECHANISMS
Air France-KLM’s policy enshrines the respect of fundamental rights as established in the leading international principles: Universal Declaration of Human Rights, International Labor Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work, and the Organization for Economic Cooperation and Development’s (OECD) guiding principles.
Air France-KLM has been a signatory of the United Nations Global Compact since 2003 and is committed to respecting and promoting its ten principles in the areas of human rights, labor, the environment and anti-corruption. This undertaking is reaffirmed each year by the Group’s top management.
The duty of vigilance is a multi-risk approach. The management of risks is at the heart of the steering of the Air France-KLM Group’s business activities, based on a rational of prevention and homogeneous management via common methods and tools.
Human Rights and fundamental liberties
In its Corporate Social Responsibility Statement, the Group presents its commitment to scrupulously respect human rights, oppose all forms of child and forced labor, apply laws, and ask its service providers and suppliers to uphold these principles.
The Social Rights and Ethics Charter affirms the Group’s commitment to fostering a climate of mutual trust and respect among staff, and ensuring a safe working environment. The Group is committed to apply the labor legislation of the European Union and its Member States and all national collective agreements, and to respect the exercise of trade union rights in all the relevant countries.
In 2019, the Social Rights and Ethics Charter was reviewed by a working group bringing together the relevant Group entities and the European Works Council, to develop its content towards the formalization of principles fostering the respect of human rights. This new document, for both internal and external use, will be published in 2020.
The Group delegates the responsibility of respecting and promoting the content of these commitments locally, in respect of the national provisions and legislation specific to each country, to its subsidiaries.
See Air France-KLM Universal Registration Document 2019 Section 4.2 Human resources and 4.5.2 Respect of human rights.
Health and safety
For Air France-KLM, the health and safety of both customers and staff is an absolute priority.
Flight safety is paramount for the Group. It is key to retaining the trust of customers and imperative for the long-term viability of its operations. All the Group’s activities are the subject of multiple checks and certifications, comply with extremely strict norms and achieve the highest standards in the industry.
Both companies deploy Safety Management Systems, which are integral to their business organizations, processes and corporate cultures.
See Air France-KLM Universal Registration Document 2019 Section 3 Risk and risk management and Section 4.4 Customer trust.
Safeguarding health and safety in the work place is a human priority to which the Group responds by preventing vocational risks and improving the quality of life in the workplace.
See Air France-KLM Universal Registration Document 2019 Section 4.2 Human resources.
The Group must guarantee its customers and flight crew safe catering services and, to this end, has put in place a Food Hygiene and Safety process to respond to the regulatory requirements linked to the preparation and supply of meals.
See Air France-KLM Universal Registration Document 2019 Section 4.4 Customer trust.
Air France-KLM’s Climate Action Plan embodies the Group’s strategy and main priorities for reducing its impact on climate change. In November 2019, the Group presented its global strategy on environmental sustainability towards 2025 and its Horizon 2030 environmental targets.
The Air France and KLM Environmental Management Systems (EMS) aim to prevent and mitigate the environmental impacts of their operations. They are ISO 14001 certified and internal and external audits enable the verification of their effective deployment.
In 2019, the Group adopted the format recommended by the Task Force on Climate-related Financial Disclosures (TCFD) for the management of financial risks linked to climate change (TCFD concordance table, section 4.3.2).
See Air France-KLM Universal Registration Document 2019 Section 4.3 Environment.
In its relations with sub-contractors and suppliers, Air France-KLM ensures that the fundamental social rights and principles, and environmental protection provisions, are properly respected everywhere in the world.
A supplier selection process has been implemented to respond to the duty of vigilance requirements. To this end, Air France-KLM’s Procurement division provides awareness training on these risks to its buyers.
A risk-mapping process is in place with, for each segment and procurement domain, an evaluation of the environmental, social and ethical risks. Risk is also evaluated by country.
For all new contracts or contract renewals, the signature of the Sustainable Development Charter or an equivalent commitment covering the four areas (environment, social, ethical and supply chain) is mandatory and is included in the contract’s appendix.
In the segments most exposed to risks, suppliers are asked to submit an evaluation of their sustainability performance, carried out by a specialized organization. This evaluation must address four areas: environment, social, ethics, supply chain. The “Supplier supply chain” section provides visibility for tier 2 suppliers.
Suppliers failing to reach an acceptable level are required to put in place a remedial action plan. Independent in-situ audits may also be carried out.
Independently of the level of risk, all suppliers are encouraged to carry out evaluations of their CSR performance.
In 2019, at the Group’s request, 414 suppliers had their sustainability performance evaluated.
See Air France-KLM Universal Registration Document 2019 Section 4.6 Societal value.
LISTENING TO STAKEHOLDERS AND WHISTLE BLOWER MECHANISM
In 2019, Air France-KLM realized a new materiality analysis by questioning a representative panel of internal and external stakeholders. The comparison of these results with those of the analysis carried out in 2017 enabled confirmation of the relevance of Air France-KLM’s strategic choices in the light of the issues deemed to be priorities for its activities and the expectations of its stakeholders.
Several processes enable the Group to regularly evaluate the perception of its stakeholders and to understand the related risks. The Group also has a number of feedback channels in place enabling stakeholders (particularly employees, customers and local residents around airports) to communicate any complaints.
See Air France-KLM Universal Registration Document 2019 Section 4.1.2 Identification of the key priorities in building long-term relationships
The Air France-KLM Group has updated the scope of its internal whistle-blower procedures to enable employees to report any situations arising within the scope of the Act of March 27, 2017 relating to the duty of vigilance of parent companies and ordering companies. For reports under the Whistleblowing procedure see Air France-KLM Universal Registration Document 2019 section 4.5.3 Business ethics.