Sustainability and human rights

Sustainability as a roadmap

Grifols has made major strides in recent years to integrate sustainability into its business model and elevate the positive impact and value generated by its operations.

This objective is reflected in Grifols’ Sustainability Policy and 2021-2023 Sustainability Master Plan, which is included in its Strategic Plan and aligned with the United Nations Sustainable Development Goals (SDGs).

Numerous policies, programs and formal commitments support Grifols’ Sustainability Policy to promote the material aspects of its activity from an ESG perspective.

Grounded on a thorough analysis of Grifols’ relevant or material aspects, the Sustainability Master Plan outlines the 30 corporate objectives included in Grifols 2030 Agenda.

Our Sustainability Master Plan is grounded on 6 Pillars

Main pillars

CARING ABOUT OUR PEOPLE

Our Aim: employees feel they are part of a company that promotes diversity, continuous development, equal opportunities, gender equality and that strives to improve well-being at the workplace

COMMITTING TO SOCIETY

Our Aim: healthier and wealthier society, by positively contributing to social progress, supporting organizations and actively participating in local communities

FOSTERING HEALTH

Our Aim: solid community where every donor feels valued for its commitment and understands its impact beyond compensation, and every patient receives the treatment it requires

EMBRACING NATURE

Our Aim: advance towards the common good of having healthy places to live, work and play, by raising awareness on the need to protect the planet

Transversal pillars

ENCOURAGING ETHICAL PRACTICES

Our Aim: placing human rights at the core of our practices and having the highest ethical standards integrated throughout the supply chain

FOSTERING INNOVATION

Our Aim: scientific progress addressing the needs of our patients, lead by our pioneering spirit and protecting the rights, safety and well-being of clinical trial participants

Access to:

Grifols’ Sustainability Policy
Sustainability Master Plan
2030 Agenda
Overview of all Grifols policies: “Corporate Governance”

Materiality

Grifols conducts an annual materiality analysis to identify the most relevant issues related to its economic, social and corporate governance (ESG) performance. The study’s findings and the contents of the Integrated Annual Report are approved by Grifols’ Board of Directors.

In 2023, the materiality analysis followed a methodological approach grounded on universal GRI 3 standards: Material Topics 2021 and the ESRS 1 (EU Sustainability Reporting Standards) methodology, developed by the EFRAG (European Financial Reporting Advisory Group). This two-pronged materiality approach facilitated the analysis of Grifols’ activity, products and value chain on the environment, as well as the environmental impacts and opportunities that could influence its financial performance.

The methodology comprised three blocks: (1) defining the material issues to report; (2) identifying impacts, risks and opportunities; and (3) assessing and prioritizing material issues according to the identified impacts, risks and opportunities

Objectives with a clear timeline: Grifols 2030 Agenda

As part of its sustainability strategy, in 2021 the company established the Grifols 2030 Agenda, which contains 30 SDG-aligned corporate objectives. The company ratified these commitments again in 2022, establishing intermediate milestones with 2024 targets that are tracked and evaluated every year.

In 2023, the company advanced at a progress rate of over 90% on its intermediate targets, significantly narrowing the gap to achieving its Grifols 2030 Agenda objectives.

*During 2023, the donor satisfaction measurement system was under review, and there is not enough information available to assess progress against the initially set goals, although progress up to 2022 has been positive.

* Not including employees at Grifols plasma donation centers.

Incentives to promote sustainability

The Appointments and Remuneration Committee conducted an in-depth review of the directors’ compensation policy and the company’s overall remuneration system, taking into consideration feedback received from shareholders, investors and other stakeholders.

In general, remunerations for executive directors (executive chairperson and CEO, COO and CCO) include the following elements: (i) fixed remuneration to reward the performance of executive functions and (ii) variable remuneration to reward the fulfillment of corporate objectives (financial and non-financial), established to support Grifols’ long-term strategy and interests.

Grifols’ COO and the CCO remuneration system also includes options on Class A shares to incentivize the attainment of its long-term strategic priorities, performance over time and sustainable value creation for stakeholders.

Variable remuneration is subject to financial and non-financial metrics and parameters, among others, including a specific metric for environmental, social and governance (ESG) objectives. In 2023, 10% of variable remuneration was linked to ESG factors, 25% of which are environmental, 40% social and 35% good governance.

More information: Remuneration Policy
More details on Grifols’ remuneration system: “Corporate Governance” section.

Four areas of action

Grifols made significant efforts in 2022 and 2023 to analyze and review its due diligence processes, and integrate internal and external best practices in its business model.

Due diligence

Grifols bolstered its human rights due-diligence processes in 2022 and 2023 by performing a thorough analysis to identify, prevent and mitigate related impacts and main risks. These findings were published in the 2023 Human Rights Due Diligence Report, which takes the entire value chain into consideration.

This due diligence process and resultant reporting follows the Human Rights Based Approach (HRBA) and UN and OECD guidelines. By integrating international standards into its plans and processes, Grifols ensures adherence to the OECD’s due diligence phases and the human rights impact assessment (HRIA) created by the Danish Institute of Human Rights, a globally recognized methodology to detect actual and potential human rights impacts.

In line with these frameworks, Grifols carried out the following actions:

i) Considered not only the geographies where the company is most active but also those regions where the risk of human rights violations is inherently greater. This approach aligns with OECD recommendations and serves to enhance Grifols’ commitment to responsible business practices.

ii) Assessed the adverse impacts of Grifols on the rightsholders across the entire value chain of the company, including tier I suppliers, joint ventures and others. This focus extends to the most vulnerable groups, including employees, third-party employees, local communities and other relevant rightsholders.

iii) Identified mitigation and remediation measures related to the adverse impacts on human rights to understand Grifols’ ability to address and avoid those risks and support the disclosure of how they are managed.

The evaluation process included the following phases:

Integration

Phase 1. Integrate respect for human rights into management and policy-making systems.

On February 25, 2022, Grifols approved its Human Rights Policy under the supervision of the Sustainability Committee. The company’s Internal Audit Department periodically audits its systems to ensure compliance with the policy and improve procedures as necessary.

In collaboration with other departments, the Investor Relations and Sustainability Department oversees the integration of respect for human rights into Grifols’ processes and activities in its markets of operation. The company has developed specific policies to address identified risks and reinforce its commitment to its main stakeholders¹.

1. Plasma Donor Policy, Patient and Patient Organization Policy, Environmental Policy and Anti-Corruption Policy, among others.

Indentification and evaluation

Phase 2. Identify and evaluate real and potential adverse impacts associated with Grifols’ operations, products or services.

2.1. Identify actual and potential impacts

To identify actual and potential impacts on human rights, Grifols conducted a review of industry organizations, statements on conceptual frameworks, international frameworks and applicable human rights agreements.²

These were compared to the 35 human rights included in the Human Rights Impact Assessment and Management (HRIAM) Guide. After consolidating the list of human rights, 99 risks potentially relevant to Grifols’ activities were identified.

Interviews were conducted with various departmental teams to compare the list of risks and assure alignment with current risk assessment procedures. The list resulted in 17 groups of risks associated with rights holders, countries that may be affected and their decision-makers.

2.2. Assess actual and potential impacts

The methodology followed by Grifols to assess current and potential human rights-related risks determines criticality by considering the severity and probability of an impact. Grifols’ internal audit area and enterprise risk management team worked closely together to align this methodology with the global corporate risk assessment.

Meetings were held with the affected areas to help them evaluate and determine the criticality of both of actual and potential risks.

2. ICCPR (International Covenant on Civil and Political Rights), ICESCR (International Covenant on Economic, Social and Cultural Rights), Universal Declaration of Human Rights (UDHR) and International Labour Organization (ILO), along with principles that Grifols supports, such as the Declaration of Helsinki and the Universal Declaration on Bioethics and Human Rights (UDBHR).

Risk management and monitoring

Phase 3. Detain, prevent and mitigating adverse impacts

Grifols has a robust control environment to address adverse impacts, with a three-tiered approach that includes organizational controls such as the Code of Conduct and the whistleblowing channel. This system extends to human rights, diversity and anti-corruption policies, with a detailed accountability matrix to guarantee an integral risk management process.

Phase 4. Track implementation and its results

The company actively tracks the proper execution and effectiveness of its due diligence activities. Grifols’ comprehensive approach includes actions to identify, prevent, mitigate and, if necessary, remediate impacts. This continuous monitoring boosts the efficacy of mitigation measures by quickly implementing corrective measures to address the challenges detected in the analysis phase.

Reporting and remediation of violations

Phase 5. Reporting on how impacts are addressed

Grifols discloses the results of its human rights due diligence both internally and externally. Publicly available on Grifols’ corporate website and on the employee intranet, these findings underline the company’s commitment to transparency and the robust risk management.

Phase 6. Take corrective action or cooperate in its implementation where appropriate

Grifols offers solid remediation mechanisms to help affected parties voice their concerns and seek solutions. The company recognizes this responsibility by establishing clear channels for filing complaints and resolving human rights-related disputes.

More information: “Due Diligence Report on Human Rights”.

Indentified risks

The following table details the impacts resulting from very high and high inherent risks, including the associated rights holders and mitigation measures in place to address these risks.