DISCLOSURE 102-31: REVIEW OF ECONOMIC, ENVIRONMENTAL, AND SOCIAL TOPICS

Bi-annually the CFO and Board review economic, environmental, and social topics. In M&A, those reviews and consultations might take place as part of the due diligence process.

DISCLOSURE 102-32: HIGHEST GOVERNANCE BODY’S ROLE IN SUSTAINABILITY

The Board and the Chief Technology Officer review and approve the Sustainability Report as an integrated part of the Annual Report.

DISCLOSURE 102-33: COMMUNICATING CRITICAL CONCERNS

Addressing critical cases helps Sika not only to detect possible risk areas, but also to address them right away with targeted measures. Sika identifies critical concerns compliance cases based on internal audits as well as internal and external complaints that are escalated to Corporate HR & Compliance via several channels, including Sika’s whistleblower platform (“Sika Trust Line”). Flat hierarchies, the value-based corporate culture and internal audits are catalyzing the communication of critical concerns to the highest governance body

All cases, complaints or inputs regarding critical concerns are presented to the audit committee.

DISCLOSURE 102-34: NATURE AND TOTAL NUMBER OF CRITICAL CONCERNS

Sika identifies compliance cases based on internal audits as well as internal and external complaints. Complaints are escalated to Corporate HR & Compliance via several channels, including Sika’s whistleblower platform (“Sika Trust Line”) permitting anonymous reporting. In 2020, Corporate HR & Compliance received 60 complaints. The complaints triggered 44 internal compliance investigations. In 21 cases, allegations of misconduct could be substantiated. 19 cases could not be substantiated. 4 cases still are under investigation.

The analysis of the 2020 compliance investigations allows for the following conclusions:

  • Sika’s number of reported (60) and confirmed/substantiated (23) compliance cases is very low, considering the size of the company.
  • Most investigations (80%) centered on either interpersonal tension (17) or fraudulent behavior (18).
  • Of 23 reports submitted anonymously, only 1 (4%) could be substantiated.
  • Sika employees remain the main channel to openly report misconduct. Of the 18 incidents they’ve escalated, 10 (56%) could be substantiated. While 11 of the 18 cases were reported by business employees (first line), 5 were reported by assurance functions (2nd line) and 2 by Internal Audit (3rd line).