4.2 CSR – key priorities, stakeholders and responsible corporate governance

Create purpose. Foster personal fulfilment at work. Offer guidance to employees in diversity and innovation. Combine excellence with corporate responsibility. Anticipate the needs of a changing society. Align respect for objectives with respect for the planet. These challenges are directly related to the Lagardère group’s businesses and are reflected in the commitments made as part of its Corporate Social Responsibility (CSR) policy designed to achieve three primary objectives: comply with increasingly stringent regulatory requirements, align the approach with the Group’s evolving strategy and structure, and strengthen stakeholder relations.

4.2.1 CSR POLICY OBJECTIVES

4.2.1.1 COMPLYING WITH INCREASINGLY STRINGENT REGULATORY REQUIREMENTS

The CSR reference framework applies internationally.
In France, non-financial disclosure requirements have become stricter over the years. This section represents the Group’s non‑financial statement, to be published pursuant to articles L. 225-102-1 and R. 225-105 of the French Commercial Code. It also contains the duty of care plan, which is obligatory for parent companies and contracting entities (see section 4.7). Regarding tax evasion, the Group takes a responsible approach to tax matters to support its business operations, paying taxes where its economic activities take place. The Lagardère group also takes steps to comply with international requirements, such as country-by-country reporting (CBCR), and undertakes to provide the utmost transparency in its dealings with tax authorities.
In application of its tax policy, Lagardère ensures that no Group business aims to transfer profits to tax havens. Intangible assets are located in countries where its economic activities take place.
Internationally, Lagardère applies a number of core CSR documents and principles, such as the International Bill of Human Rights, the ILO’s Fundamental Principles(1), the OECD(2) Guidelines for Multinational Enterprises, and the Guiding Principles on Business and Human Rights.
The Lagardère group draws on other guidelines in carrying out its business activities, including ISO 26000 (used as a basis for updating the 2012 Code of Conduct), Unesco’s Convention on the Protection and Promotion of the Diversity of Cultural Expressions and Unicef’s Implementation Handbook for the Convention on the Rights of the Child.
Lastly, the UN’s Sustainable Development Goals (SDGs) – formulated in 2015 and setting out the societal priorities for building a more sustainable society – have become the reference for CSR best practice. Accordingly, the Group endeavours to build a strategy consistent with those goals that are most relevant to its businesses. Broken out into 17 global development goals on wide-ranging topics including gender equality, climate action, quality education and innovation, the SDGs cover all of the core sustainability priorities for the period through to 2030. They set out a clear framework of standards and shared language for all stakeholders, ensuring synergy and consistency in actions and initiatives at all levels. As in previous years, the Group’s General and Managing Partner Arnaud Lagardère is renewing his commitment to the principles of the United Nations Global Compact, to which the Group has adhered since 2003 and which have guided its CSR strategy for the past sixteen years.

Items appearing in the Annual Financial Report are cross‑referenced with the following symbol AFR

(1) Organisation for Economic Co-operation and Development.
(2) International Labour Organization.
(3)Sustainable Development Goals.

With operations on every continent, the Lagardère group is one of the world’s leading publishing and travel retail businesses. As an international Group, we need to be rigorous and exemplary in promoting rights and principles that are universally recognised and adopted to ensure that globalisation is respectful of humankind and the environment. This international commitment is expressed through the Group’s membership of the United Nations Global Compact, which we joined in 2003, and which encourages businesses to operate responsibly. To reaffirm our commitment, each year we report on the progress made by our Group in the Compact’s ten principles.

HUMAN RIGHTS
Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights.
Principle 2: Businesses should make sure that they are not complicit in human rights abuses.

LABOUR
Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining.
Principle 4: Businesses should uphold the elimination of all forms of forced and compulsory labour.
Principle 5: Businesses should uphold the effective abolition of child labour.
Principle 6: Businesses should uphold the elimination of discrimination in respect of employment and occupation.

ENVIRONMENT
Principle 7: Businesses should support a precautionary approach to environmental challenges.
Principle 8: Businesses should undertake initiatives to promote greater environmental responsibility.
Principle 9: Businesses should encourage the development and diffusion of environmentally friendly technologies.

FIGHTING CORRUPTION
Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.


Arnaud Lagardère
General and Managing Partner of Lagardère SCA

4.2.1.2 ADAPTING CSR TO GROUP STRATEGY AND DEVELOPMENT
The Lagardère group aligns its CSR policy with its development strategy for its various businesses. For several years, the CSR roadmap has therefore paid special attention to:

  • changes in the Group’s activities. The development of activities offering growth potential, as well as changes in the business models of the more historical activities, to the extent that innovation is an essential component that affects the social, environmental and societal impacts of the Group’s activities;
  • the Group’s increasingly international footprint. The international expansion of the Lagardère group’s activities, entry into new emerging markets and the objective of ensuring that growth becomes less centred on France are also factors to bear in mind since they alter the contours of the Group’s CSR strategy (inclusion of issues with an international reach, impacts on local communities, promotion of cultural diversity, etc.).

4.2.1.3 STRENGTHENING STAKEHOLDER RELATIONS

Authors and other artists, readers and listeners, employees and suppliers, concession granters and the travelling public, customers and investors, consumers and shareholders: Lagardère’s various stakeholders – internal, external, public and industry – are mapped out in the chart below. The Group maintains regular and constructive dialogue with its stakeholders at local and national level in each of the countries where it operates. Dialogue takes varying forms depending on the stakeholder, at Group level and within each entity. The information provided below refers to dialogue largely structured at Group level.

A) EMPLOYEES AND REPRESENTATIVE BODIES

The Group recognises the importance of social dialogue at various levels (sites, entities, subsidiaries, Group) for regular discussion of the operational and/or strategic decisions that best reconcile the company’s responsibilities to its employees with its economic interests. Depending on local regulations and cultures, social dialogue is carried out with independent partners serving as employees’ legitimate representatives. Occupational health and safety issues, working conditions and organisational changes impacting the professional environment are among the main topics dealt with.
At Group level, two committees have been formed to address strategic priorities and the overall management of operations in France and internationally: the European Works Committee, set up in January 2003, and the Group Employees’ Committee, set up in January 2002. Both bodies have regular exchanges with Management about the Group’s activities and the changes required to ensure their sustainability.
The Group Employees’ Committee comprises 30 employee members who represent the employees of the Lagardère group’s French operations. The European Works Committee also comprises 30 members who are employees of the Lagardère group in Europe.
Since the committee’s renewal in July 2019, French employees have held 15 seats, with the remaining 15 seats held by representatives from ten other European countries – Austria, Bulgaria, Czech Republic, Germany, Italy, Netherlands, Poland, Romania, Spain and the United Kingdom.
The articles of association of the Group Employees’ Committee and the European Works Committee stipulate that each of these bodies must hold an annual ordinary meeting. In addition to these annual meetings, extraordinary meetings or meetings between committee members and union representatives may be held if the situation requires.
The exceptional situation prevailing in 2020 made social dialogue especially intense and sustained at all levels.
Locally, most of the topics discussed revolved around the impact of the health crisis:

  • safety of personnel and implementation of all measures necessary to protect employees;
  • adoption of home working for all jobs that allow it and management of the individual and collective consequences of the new working arrangements;
  • implementation of furlough (or its equivalent in countries without such systems);
  • initiation, as a last resort, of redundancy plans linked to the shutdown of activities.

News flow was very dense at Group level due to the combined effects of the Covid-19 crisis, the end of the Group’s strategic refocusing plan and the sale of businesses finalised in 2020 (Lagardère Sports and Lagardère Studios).
Governance issues and employee concerns about changes in the shareholding structure and their possible impacts were also prominent in discussions.
Several special meetings were accordingly organised in addition to the two regular meetings of the European Works Committee and the Group Employees’ Committee to allow these issues to be dealt with extensively.
In January and July 2020, two special meetings of the European Works Committee Bureau were held to discuss the disposals of Lagardère Sports and Lagardère Studios, respectively.
In February, the Bureau of the Group Employees’ Committee was asked to vote on the Group’s decision to give the Committee responsibility for appointing employee representatives to the Supervisory Board. In November, a special session was held to officially appoint these representatives.
In April, ahead of the General Meeting and in view of the changes in shareholding structure and the demands expressed by certain shareholders, a special meeting of the Group Employees’ Committee was held to allow representatives to voice employees’ concerns, and to provide them with reassurance by clarifying the Managing Partners’ position.
Lastly, in December, in response to a request for an expert appraisal to assess the impact of the health crisis on the Group’s activities, as well as the risks associated with the possible desire of certain shareholders to dismantle the Group in whole or in part, a special meeting was held with the European Works Committee. 

B) SUPPLIERS

For nearly ten years, the Group has been formally committed to a continuous improvement process to bolster its sustainable procurement strategy and practices. Since then, the Group’s strategy in this area has been based on:

  • procurement policies that promote issues such as respect for the environment, diversity and social inclusion, quality of governance and easier access to VSEs and SMEs for the Group’s procurement specialists, encouraging them to consider the cash flow constraints of small suppliers and select sustainable suppliers;
  • a Responsible Supplier Charter based on a certain number of international standards, such as the OECD Guidelines, the ILO Conventions and the UN Global Compact, which must be signed by new contractors working with a Group company;
  • a joint project with EcoVadis to conduct regular assessments of the social, environmental and ethical performance of its suppliers and subcontractors.

A map of the Group’s risks associated with the activities of suppliers and subcontractors was defined in 2017 as part of the duty of care plan. This map has strengthened the Group’s sustainable procurement strategy by identifying seven major procurement categories that are most likely to generate risks involving personal health and safety, human rights or the environment (see section 4.7.1 for further details on these seven procurement categories).
Throughout the year, the Group’s operating entities implemented action plans designed to address specific business concerns, in line with the decisions made under the duty of care plan. They primarily focused on suppliers and subcontractors operating in procurement categories at the highest risk level and in countries considered to have the most exposure to CSR risks, and with which procurement spending was most significant.
In 2020, supplier assessments were very much hampered (if not suspended) by the health crisis. The subsidiaries nevertheless took a number of measures to ensure minimum business continuity over time or to maintain commitments, particularly with small suppliers so as not to aggravate what were already very complicated economic conditions:

  • regular communication with suppliers on available capacity;
  • minimum business volumes and production maintained so as to ensure business continuity and avoid sudden shutdowns; ? orders for specific products;
  • reallocation and reordering of production, taking into account changes in suppliers’ capacities and the Group’s requirements;
  • posting and validation of uninterrupted invoices, commitment to payment terms and close monitoring of payments;
  • invoicing of significant advance payments for production whose delivery was delayed;
  • identification of “key” at-risk suppliers, with specific follow-up or action.

The Responsible Supplier Charter stipulates that publishers can initiate on-site compliance audits at the supplier or subcontractor premises, or at any of their production sites, with penalties applied for any infringements.
Hachette Livre commissioned three on-site supplier audits in 2020, and was also able to review some 20 social audits on other suppliers. The findings did not reveal any critical non-compliance. Other instances of non-compliance were nevertheless the subject of action plans in accordance with the commitments made by suppliers to correct any situations of non-compliance identified. The results obtained will be validated in subsequent audits.

C) NON-FINANCIAL COMMUNITY

Since the creation of the Sustainable Development and CSR Department, Lagardère has maintained frequent and ongoing dialogue with non-financial investment analysts. This continuous engagement, in response to numerous requests from actors such as MSCI, CDP, VigeoEiris, Sustainalytics, ISS-Oekom etc., enables the Group to deliver steady progress in its outcomes with each new rating.
On the back of its strong performance in the year’s Corporate Sustainability Assessment questionnaire, the Lagardère group was included in the S&P Global Sustainability Yearbook 2021, placing it among the leaders in its peer group in terms of ESG performance for the third consecutive year.

D) STAKEHOLDER PANEL

To take a more innovative approach to stakeholder dialogue, in 2015 Lagardère set up a stakeholder panel, an advisory body that seeks to ensure continuous improvement in the Group’s CSR practices. Lagardère’s stakeholder panel is chaired by Thierry Funck- Brentano, one of the Co-Managing Partners of Lagardère SCA, and coordinated by the Sustainable Development and CSR Department.
Its 12 members – 11 of which are external to the Group – are appointed for two years and represent the Group’s main priorities, business lines, and industries.
The panel has three main goals:

  • establishing regular dialogue at Group level between Lagardère and its stakeholders;
  • obtaining a better understanding of stakeholders’ perception and expectations of the Group;
  • supporting Lagardère’s forward-looking strategy for its main social, environmental and societal priorities.

This ongoing stakeholder dialogue was given its full meaning in 2017, when the Lagardère group produced its first materiality matrix and updated its CSR roadmap.
After determining the initial qualitative and quantitative methodology, the final matrix, shown below, was fine-tuned with the aim of simplifying the overall CSR roadmap. The last step involved presenting the matrix to the stakeholder panel.

The panel has three main goals:

  • establishing regular dialogue at Group level between Lagardère and its stakeholders;
  • obtaining a better understanding of stakeholders’ perception and expectations of the Group;
  • supporting Lagardère’s forward-looking strategy for its main social, environmental and societal priorities.

Lagardère group materiality matrix

4.2.2 CSR PLAYERS AND GOVERNANCE

At Group level, the Sustainable Development and CSR Department, which reports to the Managing Partners, coordinates a Steering Committee comprising CSR managers from each subsidiary and representatives from several cross-functional departments. Chaired by the Group’s Chief Human Relations, Communications and Sustainable Development Officer, who is also a Co-Managing Partner of the Lagardère group, this Committee fine-tunes the Group’s CSR strategy and proposes initiatives to be undertaken while promoting the sharing of best practices. Specific committee meetings are also held with each subsidiary throughout the year.
The Group-level CSR policy has been adapted to the purposes of each subsidiary. It is implemented by a correspondent belonging to the Management Committee of each subsidiary, who coordinates the networks of internal correspondents, organises local steering committees and rolls out the tools required to embed CSR policies deeply into its business activities.
In parallel, the Sustainable Development and CSR Department steers the various working groups dealing with key issues in liaison with the corporate functions. It also coordinates dialogue with the stakeholder panel.
Since 2015, the Supervisory Board has incorporated CSR within the duties of the Appointments, Remuneration and CSR Committee. In 2020, the Sustainable Development and CSR Department updated the Supervisory Board on the CSR roadmap as well as presenting Lagardère’s ESG ratings.
Lastly, Lagardère’s Code of Ethics, which was updated in 2020, comprises a series of guidelines underpinning the values shared by all Lagardère employees. The Code of Ethics is one of the core documents used to define the Group’s CSR policy.

4.2.3 CSR ROADMAP

The CSR roadmap is centred around three key principles:

  • Placing people at the heart of our strategy.
    This represents our core responsibility to employees, namely that we should provide them with a diverse, varied, attractive and stimulating environment in which to work.
  • Limiting the environmental impact of our products and services.
    The Lagardère group works towards a pragmatic, environmentallydriven commitment that is relevant to its business activities, by focusing on three fronts: climate change, responsible resource management and an environmentally responsible approach to the food chain.
  • Sharing the social and cultural diversity of our businesses.
    The Lagardère group promotes access to education and knowledge while defending freedom of speech, pluralism of ideas and cultural diversity through the content it produces and distributes, as well as through its various partnerships and cultural and social solidarity programmes.
    In addition to these three strategic pillars, the Lagardère group strives to develop its activities in accordance with the major priorities of ethics and compliance. The Group’s CSR roadmap is accordingly based on a core of responsible corporate governance reflected in its ethical principles and in compliance programmes applicable to its employees (see section 3.2.6.6).