We are committed to ensuring ethical conduct, transparency, and respect for Human Rights in our operations. To achieve this, we drive various initiatives in line with corporate compliance policies and programs: Human Rights and Business Due Diligence processes and a Comprehensive Risk Management System.
Falabella is firmly committed to acting ethically and with integrity in the development of its activities, recognizing the need to promote a culture of integrity and compliance that guides the conduct of all its employees. We also ensure that our suppliers and business partners adhere to these standards. In all relationships that involve us, we strive to prioritize the values of honesty, fairness, respect, and integrity.
Falabella and its business units operate in a dynamic and variable environment, which exposes them to a wide range of risks that, if materialized, could affect the achievement of objectives and the sustainability of the business. In this context, risk management is an essential element to effectively safeguard the value generated, emphasizing the need for continuous and adaptive management to address the specific challenges and nuances of this ever-evolving environment.
The implementation of proactive risk management practices becomes a strategic necessity, allowing for the early identification and assessment of risks to develop effective responses that mitigate their impacts.
We have developed and adopted a comprehensive approach that allows us to group the main risks from different areas and implement measures aimed at identifying, managing, and mitigating them. This integration strengthens our global perspective, addressing risks holistically and in alignment with sustainability principles. The model seeks not only to preserve financial stability but also to contribute positively to the surrounding environment.
Our risk management is based on the Three Lines Model of the Institute of Internal Auditors (IIA), which establishes key structures to ensure solid governance that guides us towards proper management.
Our suppliers must also follow the guidelines and controls established in the Supplier Validation and Creation Policy, in addition to applying the Background Review Procedure. This internal regulatory framework serves as the guide that every new supplier must navigate to begin a relationship with our company.
We have an internal Goods and Services Procurement and Contracting Policy that sets forth the principles and rules to be observed in the processes of acquiring and contracting goods and services. In this way, we ensure the quality of the process at competitive prices and within a framework of legality, transparency, and objectivity, which guarantees efficient decision-making and proper risk management.
In accordance with the United Nations Guiding Principles on Business and Human Rights, Falabella promotes and considers the respect for human rights in its impacts.
For this reason, the Board of Directors approved a Human Rights and Business Policy in 2021, which, in addition to reflecting Falabella’s commitment to respect and promote human rights, establishes mechanisms for the proper identification and assessment of risks in this area, with the aim of preventing and mitigating impacts on people’s fundamental rights and, where appropriate, their remediation.
It also promotes that our suppliers align their conduct with our standards, guidelines, and principles, and establishes the Falabella Integrity Channel as a communication route so that its stakeholders and any third party can make complaints and inquiries.
This policy was updated during 2023 and includes the following general principles that guide Falabella’s actions: (i) respect for internationally recognized human rights; (ii) promotion of a diverse, equitable, and inclusive organizational culture; (iii) non-arbitrary discrimination; (iv) respect for labor rights and rejection of forced labor; (v) respect for and promotion of the rights of children and adolescents; (vi) recognition of integrity as a central element of the organization; (vii) promotion of transparency in the performance of its activities; and (viii) protection and respect for the environment.
In addition to the measures implemented to ensure the compliance and ethical conduct of our suppliers, Falabella deploys measures to ensure the implementation of sustainable practices throughout our value chain in each of our businesses. Falabella S.A. subsidiaries implement policies and strategies designed to promote fair and sustainable control of their supply chain. Our goal is to cultivate shared value and minimize financial and sustainability-related risks (ESG), taking into account the specific situations of each individual business, its geographic location, and the different needs and obstacles they face within the local community.
At Falabella, we have taken initiatives to reduce the impact on the use, manufacturing, and end-of-life of the products we market. Various programs in collaboration with our suppliers and/or local authorities allow us to offer a mix of certified or third-party evaluated products that prevent negative impacts on all stakeholders around us. To achieve this, we stock eco-efficient products, those with lower water or energy consumption, or those whose production prevents animal suffering, gives back to their communities of origin, or is produced sustainably. Finally, we seek products that use recyclable, recycled, or renewable materials.
