Impact, risk and opportunity management
S2-1 – Policies related to value chain workers
The Lufthansa Group’s risk management is described in its LkSG policy statement
The Lufthansa Group expects its employees and suppliers to respect human and environmental rights, to prevent related impacts and risks and to avoid, mitigate or eliminate violations. The Lufthansa Group has established a risk management system to promote compliance with these due diligence obligations, which is described in the annual policy statement on the LkSG approved by the Executive Board. Alongside the Code of Conduct, the Group procurement policy and the Supplier Code of Conduct, the policy statement forms the basis for implementing the due diligence obligations under the LkSG and reflects the Lufthansa Group’s expectations of its managers, employees and suppliers. It is publicly available on the Lufthansa Group website.
The policy statement applies worldwide to all consolidated companies of the Lufthansa Group unless they are legally required to publish their own statement. To monitor LkSG-related risk management, the Lufthansa Group has created the role of Human Rights Officer within the Human Resources and Infrastructure division. The Human Rights Officer reports directly to the responsible Executive Board member and the Group Executive Board. The Corporate Audit function regularly verifies that implementation is appropriate and effective. In addition, the Group Human Rights Steering Board has been established as a steering committee, which is capable of making recommendations on risk management. The policy statement addresses the following impacts, risks and opportunities identified in the materiality assessment: human and labour rights in the value chain, training and development opportunities in the value chain, and social dialogue in the value chain.
Group procurement guideline obligates suppliers to assume social and environmental responsibility
The Lufthansa Group expects its suppliers to respect human and environmental rights and to support the Lufthansa Group in preventing, minimising or eliminating related impacts and risks. The obligation to assume social and environmental responsibility is an element of the Group procurement guideline. This guideline is a mandatory requirement for all purchasing units of Group companies and their employees involved in the procurement process, and is centrally approved by the Group Executive Board. It is accessible to all employees on the intranet. By including obligations in contracts with suppliers, the Lufthansa Group endeavours to ensure responsible practices by its direct suppliers in order to meet its own standards for corporate responsibility and prevent negative impacts. The suppliers’ obligations include adherence to the ten principles of the UN Global Compact, the four core labour standards of the International Labour Organization and contractual requirements under the German Corporate Due Diligence in Supply Chains Act (LkSG). The Group procurement guideline addresses the following IROs identified in the materiality assessment: human and labour rights in the value chain.
Supplier Code of Conduct describes the basic rules of cooperation for suppliers
The Supplier Code of Conduct applies to all suppliers of the Lufthansa Group. It primarily addresses three core sustainability areas: environmental protection, social aspects and responsible corporate governance. It sets the minimum standards for suppliers, their employees and subcontractors. The focus is on respecting human rights, complying with labour and health standards, protecting the environment and conducting business with integrity. The Lufthansa Group expects its suppliers to comply with the applicable laws and regulations of the countries in which they procure, manufacture, offer or supply products or services. The Lufthansa Group does not tolerate any unethical business conduct such as corruption, bribery, forced labour, child labour or violations of environmental, labour and social standards, and expressly prohibits such practices. The Supplier Code of Conduct is approved by the Senior Vice President Procurement Group and is publicly available on the Lufthansa Group website. In addition, supplier contracts refer to it. The Supplier Code of Conduct takes into account the following IROs identified in the materiality assessment: human and labour rights in the value chain and diversity and inclusion in the value chain.
Lufthansa Group policies take international frameworks into account
Integrating human rights and sustainability into the business processes, policies and global supply chains of the Lufthansa Group is an ongoing task. In doing so, the Company aligns itself with key international conventions and declarations such as:
- the United Nations’ Universal Declaration of Human Rights,
- the International Covenant on Civil and Political Rights (ICCPR),
- the International Covenant on Economic, Social and Cultural Rights (ICESCR),
- the four core labour standards of the International Labor Organization (ILO),
- the UN Guiding Principles on Business and Human Rights,
- the ten principles of the UN Global Compact,
- the OECD Guidelines for Multinational Enterprises,
- the International Air Transport Association (IATA) Resolution against Trafficking in Persons and
- environmental agreements such as the Minamata Convention on Mercury, the Stockholm Convention on Persistent Organic Pollutants and the Basel Convention on the Transboundary Movement of Hazardous Wastes.
S2-2 – Processes for engaging with value chain workers about impacts
Engaging with workers in the value chain on relevant decisions
The Lufthansa Group pursues a needs-based approach to the inclusion of workers in the value chain. In this context, the Lufthansa Group takes into account the perspectives of workers in the value chain through processes such as human rights and environmental risk analysis as part of due diligence procedures and the targeted inclusion of suppliers. This ensures that potential material impacts are addressed proactively. The views of workers in the supply chain may also be obtained through on-site audits and supplier questionnaires as part of preventive and remedial measures. In addition, procurement officers may directly contact suppliers and their employees.
Involving stakeholder representatives, such as works councils and trade unions, offers another way to capture the interests of workers in the value chain, mitigate potential impacts and introduce remedial measures in the event of violations. Such involvement occurs as needed and is triggered, for example, by a complaint, a detected potential impact or a rule violation that leads to appropriate remedial action.
In light of the introduction of the LkSG in the reporting year, cross-sector dialogues and discussions with the business community were used to share initial knowledge and experiences. For example, the Lufthansa Group Human Rights and Non-Discrimination Team and Group Procurement regularly take part in events such as the Peer Learning Group Human Rights of the UN Global Compact’s German network and the econsense Forum for Sustainable Development of German Business. In addition, the Lufthansa Group Human Rights Officer, together with econsense, has established a Human Rights Officer Roundtable to share experiences on effective risk management.
The Human Rights and Non-Discrimination Team coordinates the Lufthansa Group’s activities regarding its human rights responsibility as defined by the LkSG. The Group Procurement Team manages risk with regard to the Lufthansa Group’s suppliers. Both teams are supported by contact persons from specialist departments such as Occupational Health and Safety, Human Resources, Compliance and Procurement, as well as by Key Accounts from priority Lufthansa Group companies.
S2-3 – Processes to remediate negative impacts and channels for value chain workers to raise concerns
Complaints procedures
Complaints and reports regarding potential negative human rights and environmental impacts or compliance violations by suppliers can be submitted confidentially using an electronic whistleblower system or the external ombudsperson for the Lufthansa Group. Moreover, in their contracts, suppliers are prompted to notify their suppliers and their suppliers’ employees of the Lufthansa Group’s reporting channels. The Lufthansa Group’s rules of procedure on handling reports are available on the Company’s website. The Human Rights and Non-Discrimination Team consolidates all complaints and forwards them to the Group Procurement Team. If necessary, the Human Rights and Non-Discrimination Team also provides technical support to the Group Procurement Team. In cases of specific negative impacts or assigned measures, the Group Procurement Team contacts suppliers directly. The Human Rights and Non-Discrimination Team may also initiate contact with workers in the value chain as part of the complaints procedure. Interaction may be initiated either by a central expert team in Procurement, by the responsible procurement officers or by the Human Rights Officer.
The complaints procedure is designed to be transparent for the reporting party while ensuring confidentiality, data protection and respect for legally protected interests. If the Lufthansa Group Human Rights Team deems a complaint credible, it is forwarded to the responsible department, which then investigates the matter and contacts the whistleblower to discuss the complaint and obtain a detailed account of the incident. For this purpose, the whistleblower must either provide contact details when submitting the complaint or, in the case of an anonymous complaint submitted using the electronic whistleblowing system, have a designated mailbox that permits communication. The main investigation may include, depending on the case, interviews with suppliers, witnesses or other parties with knowledge of the matter. Based on the outcome of the investigation a decision is made on which remedial or preventive measures are necessary to end the identified negative impacts or violations, mitigate their extent or prevent a recurrence. Such measures may include repercussions under labour law for employees or the termination of business relationships. The whistleblower is informed of the conclusion and outcome of the complaints procedure. After the complaints procedure concludes the Lufthansa Group monitors the implementation of remedial measures. The results of the implementation are evaluated. This may, depending on the case, involve further correspondence with the whistleblower.
Within the framework of the complaints procedure, the Lufthansa Group has established various reporting channels. Complaints may be submitted in writing using the Lufthansa Group’s electronic whistleblowing system (including anonymously), or in writing, by telephone or in-person to the Lufthansa Group’s ombudsperson, by email to the Lufthansa Group Human Rights Office or by post to the registered office of Deutsche Lufthansa AG.
Information on how to reach these reporting channels – including telephone numbers, website links, email addresses, registered addresses and details about the ombudsman – is provided in the complaints procedure document available on the Lufthansa Group website. The Lufthansa Group’s electronic whistleblowing system and the ombudsperson are available in several languages. Employees of the Lufthansa Group may also submit complaints using any of the channels agreed for this purpose between employee representatives and the respective Lufthansa Group company.
The effectiveness of the complaints procedure is reviewed at least once a year and on an ad hoc basis. A review occurs on an ad hoc basis when the Lufthansa Group anticipates a significantly changed or expanded risk situation in its own business area or among its direct suppliers – for example, due to the introduction of new products, projects or a new business segment. The review covers, among other things, the actual utilisation of the complaints procedure by whistleblowers, compliance with the rules of procedure, monitoring of any remedial measures taken, and, if necessary, adjustments to the risk analyses required under the LkSG. The Human Rights Officer and Corporate Audit department of the Lufthansa Group conduct the review of the complaints procedure’s effectiveness. To promote the inclusion of end users and stakeholders, the Lufthansa Group instructs its suppliers in their contractual documents to inform their employees, including their own suppliers and their employees, that the Lufthansa Group has provided complaint channels for them to use.
In 2024, six incidents were reported via the Lufthansa Group’s complaints channel in relation to sexual harassment (2), withholding of adequate wages (2) and unequal treatment (2). These complaints were thoroughly examined and feedback was obtained from the relevant suppliers. Following a detailed review, none of the complaints could be substantiated at the time of reporting, so no further remedial action was taken. Consequently, no substantiated cases of non-compliance with the referenced international frameworks concerning workers in the value chain were identified during the reporting year.
Protection against retaliatory measures for whistleblowers established
The Lufthansa Group follows a zero-tolerance policy regarding retaliation against whistleblowers and, as far as legally possible, protects those reporting concerns from any disadvantage arising from their complaints. In principle, every complaints procedure is conducted confidentially and no one outside the procedure is informed of the whistleblower’s identity. Exceptions to this rule exist only where legally permitted under the German Whistleblower Protection Act. Employees of the Lufthansa Group are protected in all Group companies against disadvantages, disciplinary measures and discrimination because of a complaint.
Retaliation against whistleblowers is not tolerated. Such measures are investigated if reported to the Lufthansa Group through the designated complaint channels. Disciplinary measures may be taken against those against whom a complaint is lodged. If a report of retaliation against a whistleblower is received, the complaints office must be informed immediately. Whistleblowers who are not employees of the Lufthansa Group also receive corresponding protection. The Lufthansa Group intends to ensure with its suppliers that no investigations are conducted to determine a whistleblower’s identity and that whistleblowers are neither disadvantaged nor penalised. Personal data is collected, processed, transmitted and stored during the complaints procedure in compliance with data protection requirements. Section 10 (1) LkSG applies. Whistleblowers are informed on the website through which the electronic whistleblowing system is accessed about how they will be protected and can choose to remain anonymous. The Lufthansa Group further emphasises on the website that it protects whistleblowers from retaliation. These provisions are described in the publicly available Rules of Procedure for Complaints.
S2-4 – Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions
Sustainability criteria are considered in supplier selection
The Lufthansa Group has adapted its procurement processes so that sustainability criteria play a key role in supplier selection. For example, human rights and environmental requirements are included in the specification during the tender process. They are to be included in the evaluation matrix for supplier selection.
Before concluding contracts, suppliers are generally assessed for compliance with human rights, labour and environmental standards and integrity. A supplier review process is conducted to detect potential risks and negative impacts. If a supplier falls within a risk category, an in-depth review will be carried out, including external sources, if necessary. By incorporating obligations into contracts with suppliers, the Lufthansa Group aims to achieve responsible conduct among its direct suppliers so that risks of negative impacts are prevented from arising in the first place. In its review, the Company considers both external data sources and internal insights such as information received through complaints channels including the anonymous whistleblowing system. Through the inclusion of human rights and environmental aspects in the procurement process, the Lufthansa Group aims to ensure that business relationships are only established with companies that share and implement its requirements. In addition, suppliers are informed about the expectations the Lufthansa Group places on its suppliers in the tender documents referencing the Supplier Code of Conduct.
Freedom of association for workers in the value chain has been deemed particularly relevant by the Lufthansa Group. As part of the risk analysis, freedom of association is continuously monitored and evaluated. Global framework agreements are yet to be concluded with international trade union federations in this context.
Remedial measures jointly developed with affected companies as required
A weekly exchange takes place between the experts from the Human Rights Department and Group Procurement. In these meetings, any complaints and material negative impacts are discussed along with possible measures and further action. The central expert team from Group Procurement monitors the implementation of measures.
If the Lufthansa Group detects an actual or imminent violation of human rights or environmental obligations, it introduces appropriate remedial and preventive measures. In cases when it is not possible to eliminate, prevent or minimise a violation in relation to a supplier, the Lufthansa Group develops and implements an appropriate remedial and/or preventive policy. Various measures are considered when developing and implementing a remedial policy. The first step is to develop and implement a plan to eliminate or minimise the violation together with the responsible company. To reduce risk, the business relationship may be temporarily suspended. As a last resort, the Lufthansa Group reserves the right to terminate the business relationship.
The Lufthansa Group then monitors the implementation of the remedial measures. The results of the implementation are evaluated. Depending on the case, this may also involve correspondence with the whistleblower.
If potential negative impacts are detected in relation to a supplier, the Lufthansa Group selects appropriate measures according to a defined logic based on risk categories. A central team of experts from Procurement take care if this for suppliers. Measures will subsequently be agreed with the supplier in consultation with the responsible purchasers with related discussions and follow-up. Potential measures may involve, for example, awareness training, statements or contract reviews with possible adjustments.
If a specific negative impact is identified in relation to a supplier, the Lufthansa Group also reviews whether it contributes to the issue. This involves reviewing delivery times, purchase prices and the duration of the contractual relationship. Based on this review, appropriate remedial measures are either implemented immediately or targeted action plans are developed.
Regarding business partners in the upstream and downstream value chain, the following prevention measures were carried out, planned or implemented in 2024: Over 200 internal and external investigations of critical suppliers and external incidents were concluded, with more than 50 further investigations initiated. Furthermore, over 25 self-assessment questionnaires were collected from business partners, and, in ten cases, further information was requested in the form of individual statements and direct correspondence with suppliers. A supplier training programme was also conducted, and, in ten cases, additional documents were requested from suppliers, seven of which have already been reviewed. These documents include certificates, codes of conduct, anti-discrimination and human rights procedures, as well as rules of procedure for supplier grievance mechanisms. Additionally, contracts concluded by the Lufthansa Group with seven suppliers were reviewed, including their terms and conditions, and were revised or supplemented to include ESG criteria where necessary. The implementation and monitoring of these measures are carried out by a central expert team from Group Procurement, who work in collaboration with the responsible purchasers. Measures taken are intended to continuously improve the Lufthansa Group’s supplier base, particularly with regard to human rights aspects. So far, the Lufthansa Group has not specifically examined direct opportunities in relation to workers in the value chain and has therefore not defined any further measures in this regard.
Human Rights Officer ensures integration within the Company
To oversee risk management, the role of human rights officer was established within Human Rights and Infrastructure, reporting directly to the Executive Board member. This role is exercised by the Vice President of Labor Relations Ground. The Human Rights Officer reports to the Group Executive Board on the work of the responsible employees on a regular and ad hoc basis. Corporate Audit is deployed to support the Human Rights Officer and to conduct implementation-level audits. The Corporate Audit department regularly verifies that implementation is appropriate and effective. In addition, the Group Human Rights Steering Board was established as a governance body to provide recommendations and guide decisions on risk management. The board is chaired by the Human Rights Officer and comprises the heads of the Sustainability, Compliance, Audit, Procurement and Occupational Safety departments.
Audits help to ensure compliance with human rights and environmental due diligence
Audits are conducted within the Lufthansa Group to verify whether human rights and environmental due diligence obligations are being upheld and whether the Lufthansa Group’s risk management system is adequate. These audits are primarily conducted by Corporate Audit. For direct suppliers, and, where necessary, for indirect suppliers, audits may be carried out by external auditors in individual cases. Additionally, audit findings contribute to the sustainability-focused design of procurement processes and purchasing strategies.
The allocation and follow-up of preventive, mitigating and remedial action in relation to direct suppliers and the implementation of due diligence requirements in relation to indirect suppliers are also electronically tracked and evaluated. As a result, measures are tracked on a continuous basis. A measure with a positive outcome can contribute to improving the risk assessment, whereas a measure with a negative outcome, such as an audit with critical findings, can contribute to a deterioration in the risk assessment. Media monitoring is also conducted for high-risk suppliers. Violations identified through media observation, grievance mechanisms or other findings also contribute to a deterioration in the risk assessment. The assessment continuously reflects the current risk situation and assists with evaluating the effectiveness of measures taken.
Lufthansa Group is committed to promoting occupational safety for workers in the value chain
The Lufthansa Group is committed to occupational safety for employees in joint ventures and at supplier companies. In addition to regular employees, the Lufthansa Group also seeks to focus on particularly vulnerable groups. This commitment is supported through various initiatives outlined in the Lufthansa Group’s Code of Conduct, Supplier Code of Conduct and policy statement on respecting human and environmental rights. Among other conditions, the Supplier Code of Conduct set forth requirements for ensuring occupational safety and health protection, as well as compliance with applicable rights at the place of employment for workers in the value chain.