Declaration of principle in accordance with § 6 of the German Act on Corporate Due Diligence Obligations in Supply Chains (LkSG) for the DEPENBROCK Group

The Depenbrock Group, headquartered in Stemwede, has been a family-run construction company since 1928. Almost 1,400 employees work at 22 locations in all areas of construction. In 2022, Depenbrock generated operating revenues of around 750 million euros.

Taking responsibility for the people, environment and economy in our fields of activity is an essential part of our corporate strategy and culture. Our entrepreneurial activities are also geared towards preserving the living environment for people today and for future generations. We want to use the resources required to implement our construction activities in a responsible and ecologically sound manner. Our most important resource and largest stakeholder group are the people who work hard every day to create value on our construction sites. We therefore expect our employees to treat everyone involved in the supply chain under fair conditions and in compliance with human rights and the German General Equal Treatment Act (AGG). This excludes any form of discrimination, corruption, child labour, slave labour, unfair pay, wage dumping, antitrust agreements and discrimination. In addition, occupational health and safety and integrity are an indispensable part of our actions. We also expect this commitment from our suppliers and subcontractors. As firmly anchored as the responsibility for sustainable trade is in our corporate policy, we also want it to be lived and implemented beyond the boundaries of the company The term “supplier” as defined in the LkSG is used below to refer to all subcontractors and suppliers.

In the construction industry, there are unique risks and challenges in terms of human rights and environmental responsibility due to the numerous trades involved in construction and the variety of materials used. Our company has established special procedures to meet the requirements of the LkSG. This includes identifying, assessing and managing risks that may arise in our industry.

As a group of companies, we have integrated a risk analysis within the meaning of § 5 LkSG into our procurement processes. In this analysis, all existing and new business partners are sorted into risk groups based on a country index and an industry index. The criteria are weighted and prioritised. This risk analysis is carried out in each individual procurement process, which ensures constant compliance. In this way, our requirements for a sustainable business partnership can always be met.

As part of the risk analysis completed on 31 December 2023, it was determined that there is no knowledge of a breach of the duties of care specified in § 2 LkSG in any current business relationship. This shows the efficiency of the compliance systems already in place before the LkSG.

In general, the management sees risks primarily in the area of indirect suppliers. No significant risks relating to the LkSG were identified in the area of direct suppliers following an extensive risk analysis. This is due to extensive control mechanisms that have been established within the Depenbrock Group for many years. As part of the general contractor liability, all subcontractors are checked with regard to the avoidance of undeclared work, avoidance of illegal employment, compliance with occupational health and safety, working conditions and collectively agreed wages. To this end, clearance certificates and payment confirmations are requested from the subcontractors.

The indirect procurement risk relates primarily to electronic components or wood and steel products. These risks are counteracted by regional procurement wherever possible. However, indirect risks cannot be completely ruled out. For this reason, the Depenbrock Group also requires all suppliers to comply with the rights specified in § 2 LkSG along their supply chain.

With regard to the risks identified in the risk analysis, the Depenbrock Group has introduced, or will introduce, the following preventive measures for its own business operations:
a) Guidelines, process instructions and management systems within the meaning of § 6 para. 3 no. 1 LkSG

Guidelines for implementing the LkSG in procurement were drafted and implemented for all departments concerned. In addition, detailed process instructions were drawn up to ensure constant compliance with the LkSG. The Group also has an integrated management and sustainability system, which ensures that environmentally conscious and sustainable work is integrated into the entire Group.

b) Development and implementation of suitable procurement strategies within the meaning of § 6 para. 3 no. 2 LkSG Based on the outlined risk criteria, all suppliers of the group of companies are divided into risk groups. For certain suppliers, this may ultimately result in a ban on business relationships. Procurement can use the risk group at any time to identify the points that require special attention when placing orders. This ensures optimal procurement for every product or service.

1. Conducting training courses within the meaning of § 6 para. 3 no. 3 LkSG
The employees of the departments concerned are being or have been trained with regard to the expansion of the procurement processes to include the LkSG. This training is repeated and updated as required.

2. Implementation of control measures pursuant to § 6 para. 3 no. 4 LkSG

Every quarter, the Human Rights Officer will carry out a review of the commissions made and report to the management in the event of violations of the established procurement processes. In addition, regular spot checks are carried out by the Human Rights Officer.

In the event of a violation of the regulations specified in § 2 LkSG by a supplier, this must be reported to the Human Rights Officer. This violation is noted in the supplier’s risk group and the risk group is changed to the highest level. The consequence of this is that, in future, orders may not be placed without the approval of the management and the Human Rights Officer. In this case, moreover, further measures must be taken, which are determined on an individual basis.