26 COMPLIANCE Due di l igence In response to the tragedy of the collapse of a textile factory in Bangladesh, the legislator created the "duty of due diligence", which requires companies to prevent serious violations of human rights and fundamental freedoms, human health and safety, and the environment. The scope of application includes not only the company's activity, but also its sphere of influence (subsidiaries, subcontractors and suppliers). A due diligence fault may be committed due to a nonexistent, incomplete or ineffective due diligence plan. If a company fails to respond to a formal notice, it may be required to comply, with a penalty payment, or incur civil liability for environmental, health or human rights damage. The company executives' criminal liability may also be incurred. Finally, the company may suffer from a tarnished image in the event of a proven disaster. DESCOURS & CABAUD has assigned a team of 22 employees, based in Shanghai for over 15 years, to manage the supplier qualification policy throughout Asia. It is reflected in the dissemination of a CSR code of conduct covering respect for human rights, business ethics and reduction of the environmental impact. On-site audits conducted by a dedicated team of inspectors/auditors and by third parties (new models rolled out in 2021, with enhanced due diligence on CSR criteria), and general purchasing conditions that include CSR obligations. The rollout of the new audit models has continued in 2022, with the aim of guiding strategic purchasing policy decisions by assigning compliance scores on the pillars of CSR, quality and reliability in business. The general purchasing conditions (updated in 2020) that apply to our relationship with these suppliers include specific clauses concerning their obligations in terms of CSR criteria. In addition, a Suppliers’ CSR Code of Conduct has been introduced with the Group’s Asian suppliers, relating to respect for Human Rights, ethical business practices (primarily the fight against bribery), and reduction of the environmental impact of their activities. All employees benefit from a training plan on the prevention of corruption risks, which is periodically renewed to integrate new arrivals. For all suppliers, a CSR risk map, produced in 2019 by the independent organisation EcoVadis, determines the degree of exposure of each supplier, due to its geographical location and sector of activity. It made it possible to audit the purchases made from 234 suppliers exercising different activities (with 18 different categories in accordance with the international ISIC classification) and established in 28 countries. The results of this mapping have revealed variable levels of CSR risk, leading us to improve our purchasing process, both for our current suppliers and for the new ones. It has led the Group to improve its purchasing process. This was done in parallel with a CSR assessment campaign of our main suppliers from 2019 to 2021. Our action plan also includes an internal whistleblowing system that allows employees to report any suspected or proven cases of serious breach. RISKS AND CONSEQUENCES MEANS OF CONTROL
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