Strategy
ESRS 2 SBM-2 – Interests and views of stakeholders
Protecting the interests of all workers in the value chain is of central importance to the Lufthansa Group. The Company is aware of the considerable impact it has on the adherence to human rights and environmental standards together with its suppliers and business partners, as well as in the selection and management of its suppliers and business partners. Although the Lufthansa Group cannot influence the political situation in the countries where its suppliers operate and cannot rule out violations, it actively contributes to the observance of human rights among its suppliers through various measures.
The Lufthansa Group aims to identify potential negative human rights and environmental impacts early and to prevent violations. For this reason, the Company carefully selects its suppliers and contractually obliges them to comply with human rights as well as with occupational, safety and environmental protection requirements.
Since workers in the value chain represent a key affected stakeholder group, the Lufthansa Group takes their views into account and considers their rights when making certain decisions to the best possible extent. Several procedures have been established to capture the perspectives of workers in the value chain and integrate these into the purchasing strategy and supplier selection process. In addition, the Lufthansa Group maintains a close cooperation with its suppliers to promote compliance with rights and standards.
ESRS 2 SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and business model
The potential impacts, risks and opportunities identified during the materiality assessment with respect to workers in the value chain primarily relate to the following topics: ↗ ESRS 2 SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and business model.
- Human and labour rights
- Social dialogue
- Training and development opportunities
- Diversity and inclusion
Impacts on suppliers and downstream business partners identified
As a globally operating aviation group, the Lufthansa Group is aware of the influence it has together with its suppliers and downstream business partners on upholding human and labour rights in the value chain. In this context, the following rights and obligations are particularly relevant. In addition to fair working conditions, safe employment, appropriate wages, freedom of association, and health and safety standards, aspects such as equality of opportunity and inclusion, equal pay for equal work, measures against violence and harassment in the workplace, and the prevention of child and forced labour play an essential role. Suppliers and business partners can also make a significant contribution to diversity within the value chain. The Lufthansa Group can indirectly influence its suppliers in this regard by fostering a culture of diversity. In addition, potential positive impacts on workers in the value chain include an improved social dialogue as well as the provision of training and development programmes for suppliers and business partners.
Opportunities focus on policies and more transparency
Based on the potential impacts described above, the material opportunities for the Lufthansa Group lie in its ability to introduce policies on human rights and gain more transparency in particular. This can enhance the Company’s reputation, ensure financial and operational stability and enable access to regulated markets while simultaneously promoting human rights among its business partners. Promoting diversity among suppliers may improve the Company’s ability to attract and retain qualified employees and thereby increase productivity and resilience throughout the value chain. Opportunities also arise from sustainability-related social dialogue and training programmes for suppliers. For example, workplace accidents and associated lost time as well as breaches of policies can be reduced while increasing efficiency in the supply chain.
Identified risks may affect both the value chain and the Lufthansa Group itself
In addition to the opportunities described, disregarding human and labour rights standards and diversity policies can pose risks. These risks may affect workers in the value chain as well as the companies of the Lufthansa Group. Possible repercussions include reputational damage and penalties for the Lufthansa Group, its suppliers and business partners. Social unrest such as strikes resulting from human rights violations may further lead to inefficiencies, reduced productivity and higher operating costs in the value chain. A failure to engage in social dialogue may also lead to inadequate consideration of the views of suppliers and business partners, which in turn can result in less resilient value chains and higher operating costs.
The Lufthansa Group’s commitment to upholding human and labour rights and the resulting strategic implications are set out in its policy statement on human rights, the Supplier Code of Conduct and the procedure descriptions for the due diligence process. In this context, the Company aims to continue taking into account the identified potential impacts, risks and opportunities of its actions when developing sustainability-related strategies for the Lufthansa Group and in its supply chain operations. In order to take advantage of opportunities and mitigate risks as effectively as possible, the Lufthansa Group has implemented policies and due diligence processes in its business activities. These include the Supplier Code of Conduct and procedures for human rights and environmental supplier risk assessments. In particular, the risk assessment is intended to identify potential human rights violations in the supply chain at an early stage and mitigate them to the greatest extent possible. Another element of the due diligence processes is the implementation of development and corrective measures among suppliers. In this context, training and further education for business partners on the topics of environment, occupational safety and human rights provided by business partners represent a central opportunity for supplier development. As a signatory of the Diversity Charter the Lufthansa Group sees itself as a driver for diversity and places great value on respecting diversity among suppliers and business partners. Established channels such as the complaints procedure also enable the Lufthansa Group to engage with suppliers and business partners, solicit their views and enter into a dialogue on social and environmental topics.
The Lufthansa Group aims to uphold the rights of its employees and of those working through service providers at its sites and in the upstream and downstream supply chain while promoting their safety. The basis for respecting these rights includes, among other things, the Lufthansa Group Code of Conduct, occupational safety regulations and complaints management procedures.
In the upstream supply chain, the Lufthansa Group examines potential negative impacts and financial risks along the supply chain. The relevant employee types in the value chain include those working for business partners in the upstream value chain – in particular workers who provide various services or contribute to the production of technical components or goods as well as workers employed at the Lufthansa Group’s sites by service providers. ↗ S1 – Own workforce
Employees of suppliers in the downstream supply chain are considered primarily in the areas of logistics and in the procurement and distribution of services, as well as employees working in fully consolidated joint ventures within the Lufthansa Group. All affected groups are subject to the Lufthansa Group’s regulations, including access to the complaints procedure.
Human rights and environmental risk analysis to protect the Lufthansa Group and its suppliers
The Lufthansa Group has established a risk management system with the goal of identifying, preventing and eliminating potential negative human rights and environmental impacts and legal rights infringements within its own business operations and along the supply chain. Within this framework, the Company conducts annual and ad hoc human rights and environmental risk analyses for all existing suppliers of the Lufthansa Group. At the core of the analyses are the protected rights under the German Supply Chain Due Diligence Act (LkSG) – including the prohibition of child labour and forced labour, the ban on all forms of slavery, compliance with occupational safety and freedom of association, adequate wages, the prohibition of discrimination and the promotion of equal opportunities.
Failure to comply with laws and frameworks relating to human and labour rights can lead to fines and potentially negative financial consequences for the Lufthansa Group as well as less resilient supply chains. Based on the 2024 human rights and environmental risk analysis, the Lufthansa Group considers freedom of association and occupational safety among its suppliers to be of particular relevance. In addition, potential negative impacts of the Lufthansa Group in relation to working conditions, equal treatment and other labour and human rights are taken into account. To adequately assess, weight and prioritise the potential negative impacts, suppliers are subjected to country, industry and media-based screening. The identified potential negative impacts are weighted and prioritised based on the adequacy criteria of the LkSG. The most recent analysis conducted during the reporting year indicated that potential negative impacts occur primarily in the transport and logistics sectors and in the hospitality industry. All direct suppliers are included in the risk analysis, in which they are weighted according to their priority for action.
The identified potential financial risks and opportunities relate to all workers in the value chain and are not limited to specific groups. Indirect suppliers are also subject to an ad hoc risk analysis if substantiated information is obtained.
Suppliers with potential negative impacts regarding child labour are located in Senegal and Sierra Leone, for example. Potential negative impacts in relation to forced labour and modern slavery have been identified in the United Kingdom and India, among other countries. The potential negative impacts identified in relation to working conditions, equal treatment and equal opportunities as well as other labour-related rights do not indicate a systemic effect and are not based on individual incidents but on the potential negative impacts determined in the risk analysis.
The Human Rights Officer informs the Lufthansa Group Executive Board annually about the results of the risk analysis. These results are also communicated to other key decision-makers, including the Group Works Council and the Group Economic Committee.