SECTION 1 – Corporate Governance

1.1 Legal Compliance

A sustainable organisation ensures that all relevant requirements (1legal, social or any other form) are met, so that business activities may continue. This section specifies the minimum requirements for legal compliance, which ensure that an organisation may operate within its context without being at risk of facing legal issues.

1.1.1 Rules

  • The organisation shall obtain all statutory approvals necessary for operation under applicable national legislation.

1.1.2 Requirements

  • The organisation shall develop a policy set out to ensure legal compliance.
  • The organisation shall implement a system for identifying relevant and applicable legislation.
  • The organisation shall operate a system for addressing non-compliance with applicable legislation.
  • The organisation shall maintain sufficient documentation of all relevant statutory approvals.

1.2 International best practice

Ensuring continuous improvement within the organisation can be achieved by strategically analysing and implementing relevant best practice guidelines. This section sets out criteria to assess relevant best practice guidelines and derive actions for sustainable development.

1.2.1 Rules

  • The organisation shall comply with or exceed national laws and regulations that define best practice with regard to sustainable production practices.

1.2.2 Requirements

  • The organisation shall implement and operate systems for identifying and analysing compliance with relevant international best practice guidelines for achieving the SDGs.  

1.3 Business Integrity

Becoming a sustainable organisation requires accountability for all effects and consequences of business activities, whether these are direct or indirect. This section sets out various rules and requirements for promoting the integration of business integrity into day-to-day business. 

1.3.1 Rules

  • The organisation shall ensure a high level of integrity when conducting its business.

1.3.2 Requirements

  • The organisation shall develop, document and implement a policy prohibiting bribery and other forms of corruption by employees and contractors.
  • The organisation shall implement systems for identifying and managing risks related to all forms of corruption.
  • The organisation shall refrain from any sort of business activity that support criminal organisations, illegal armed groups or illegal political organisations.
  • The organisation shall disclose the total monetary value of financial assistance received from and paid to any government.

1.4 Stakeholder involvement

Stakeholder involvement is an integral part of sustainable business conduct. The process of stakeholder communication should be proactive, accountable, inclusive and transparent to allow the organisation to perform to its best ability while fostering development opportunities for its stakeholders. This section sets out rules and requirements to initiate a comprehensive stakeholder involvement process.

1.4.1 Rules

  • The organisation shall actively initiate and maintain a strong stakeholder dialogue.

1.4.2 Requirements

  • The organisation shall perform a comprehensive analysis of stakeholders relevant to its business activities.
  • The organisation shall develop a plan for engaging with its most relevant stakeholders.
  • The organisation's relevant stakeholders shall be involved in the organisation's due diligence process/analysis.
  • The organisation shall disclose to its stakeholders its performance with regard to the CERA Performance Standard.

1.5 Supply chain due diligence

An organisation’s sustainability performance should be based on the impacts it causes by its direct activities (e.g. production process) and indirect activities (e.g. business relationships with suppliers). Thus, it is important for the organisation to analyse and understand its supply chain, in order to mitigate negative impacts and identify and strengthen relationships with sustainable suppliers. This section sets out rules and requirements on how to perform due diligence on the organisation’s supply chain.

1.5.1 Rules

  • The organisation shall implement a sustainability due diligence process (for its supply chain), following the OECD Due Diligence Guidance.

1.5.2 Requirements

  • The organisation shall develop a policy/procedure for addressing sustainability issues (incl. human rights) within its supply chain.
  • The organisation shall assess all relevant suppliers for sustainability risks.
  • The organisation shall mitigate risks, monitor and track progress.
  • The organisation shall disclose the outcome of its due diligence to its stakeholders.

1.6 Complaints and Grievance Mechanism

An accessible and effective complaints and grievance mechanism significantly contributes to the success of strong stakeholder involvement. It provides a platform for stakeholders to raise concerns and means for the organisation to timely react to these. This section sets out rules and requirements for the implementation of a complaints and grievance mechanism.

1.6.1 Rules

  • The organisation shall implement a complaint and grievance mechanism on an operational level.

1.6.2 Requirements

  • The organisation shall appoint an executive-level position with responsibility for the grievance mechanism.
  • The organisation shall develop a grievance procedure, enabling all stakeholders to raise complaints.
  • The organisation shall monitor the performance of its grievance mechanism.
  • The organisation shall disclose the performance of its grievance mechanism.

1.7 Management approach

Implementation of sustainability aspects into business requires a structured approach. This approach is usually defined within the scope of a management system. This section sets out management system requirements, which enable the organisation to systematically address the CERA Performance Standard criteria. The requirements follow the Plan-Do-Check-Act (PDCA) approach of current ISO standards in order to leverage synergies with existing systems within the organisation. It provides an iterative process to achieve continuous improvement.

  • Plan: establish objectives and processes necessary to deliver desired results
  • Do: implementation of planned processes
  • Check: monitoring and reporting of processes and results
  • Act: actions for continuous improvement

1.7.1 Rules

  • The organisation shall implement strong management systems in order to address the topics covered by this Performance Standard and/or which are relevant to its business activities.

1.7.2 Requirements

1.7.2.1 PLAN

  • The organisation shall systematically analyse and identify sustainability issues/risks that are relevant to its business activities.
  • The organisation shall analyse and identify all relevant internal and external stakeholders relevant to its business activities, as well as their respective expectations.
  • The organisation's management shall demonstrate commitment to implementing the CERA Performance Standard criteria by appointing a management representative.
  • The organisation's management shall establish and implement a sustainability policy that is appropriate within the context of the organisation's material sustainability issues.
  • The organisation's management shall ensure that assigned roles and relevant policies are communicated to relevant internal and external stakeholders.
  • The organisation shall prepare and implement an action plan for all those topics that are deemed material.
  • The organisation shall establish objectives for those issues included in the action plan.
  • The organisation shall determine and provide the resources needed for the implementation and maintenance of the management system.

1.7.2.2 DO

  • The organisation shall implement processes to meet the requirements of the CERA Performance Standard, the organisation's action plan, and potential emergency situations or grievance situations.

1.7.2.3 CHECK

  • The organisation shall monitor, measure, analyse and evaluate its compliance with the criteria of the CERA Performance Standard.
  • The organisation shall communicate relevant performance information both internally and externally in an appropriate manner.

1.7.2.4 ACT

  • The organisation, based on its compliance evaluation, shall determine opportunities for improvement or corrective actions to improve performance and/or eliminate non-compliances with the CERA Performance Standard.
  • The organisation shall review the implemented corrective actions and track their results.