***
**Does the entity have a policy or policies on governance issues?**
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## Assessment Instructions
Intent: What is the purpose of this indicator?
The intent of this indicator is to describe the existence and scope of policies that address governance issues. Policies on governance issues assist organizations with incorporating governance criteria into their business practices and managing governance risks.
Input: How do I complete this indicator?
**Select Yes or No:** If selecting ‘Yes’, select applicable sub-options.
**Material governance issues:** Select all issues that are covered by the entity’s policy / policies. The policy or policies must exist and be valid during the reporting year provided in EC4. It is possible to report using the ‘Other’ answer option. Ensure that the ‘Other’ answer provided is not a duplicate or subset of another option. It is possible to report multiple ‘Other’ answers.
**Other:** List applicable governance issues that apply to the entity but are not already listed. Ensure that the ‘Other’ answer provided is not a duplicate or subset of another option (e.g. “Solicitation ” when “‘Bribery ” is selected). It is possible to report multiple ‘other’ answers. If multiple ‘Other’ answers are accepted, only one will be counted towards scoring. Answers cannot refer to evidence and/or other indicators.
#### Terminology
**Audit committee structure/independence**
> A corporate board of directors establishes an audit committee to assist in discharging its fiduciary responsibility. An effective audit committee is an important feature of a strong corporate governance culture and should have a clear description of duties and responsibilities.
**Board composition**
> Composition of the board and its committees by (i)Executive or non-executive, (ii) Independence, (iii) Tenure on the governance body, (iv) Number of each individual’s other significant positions and commitments, and the nature of the commitments, (v) Gender, (vi) Membership of under-represented social groups, (vii) Competences relating to economic, environmental and social impacts, (viii) Stakeholder representation.
**Board oversight of sustainability**
> The highest committee or position that formally reviews and approves the organization’s sustainability report and ensures that all material topics are covered.
**Bribery**
> The offering, giving, receiving or soliciting an item of value to influence the actions of an official or other person in charge of a public or legal fiduciary duty.
**Compensation committee structure/independence**
> Compensation decisions are central to the governance of many entities. Compensation committees or analogous organizations are established to govern employee compensation and ensure employee remuneration decisions are made in a fair, consistent and independent manner. An independent compensation committee may be one indicator of effective governance.
**Conflicts of interest**
> Situations where an individual is confronted with choosing between the requirements of his or her function and his or her own private interests.
**Corruption**
> Abuse of entrusted power for private gain. Policies should be consistent with the United Nations Convention against Corruption.
**Cybersecurity**
> The protection of internet-connected systems, including hardware, software, and data, from any unauthorized use or access. Malicious attacks in particular can pose a significant threat to infrastructure assets.
**Data protection and privacy**
> Customer privacy includes matters such as the protection of data; the use of information or data for their original intended purpose only, unless specifically agreed otherwise; the obligation to observe confidentiality; and the protection of information or data from misuse or theft.
**Delegating authority**
> The process for delegating authority for environmental, and social topics from the highest governance.
**Executive compensation**
> The financial and non-financial compensation of executives, in a manner that motivates executives to perform their roles in alignment with the entities objectives and risk tolerance.
**Fraud**
> Wrongful deception intended to result in financial or personal gain.
**Independence of Board chair**
> A non-executive member of the board who does not have any management responsibilities within the organization and is not under any other undue influence, internal or external, political or ownership, that would impede the board member’s exercise of objective judgment.
**Lobbying activities**
> Any activity carried out to influence a government or institution’s policies and decisions in favor of a specific cause or outcome.
**Policy**
> Defines an organizational commitment, direction or intention as formally adopted by the organization.
**Political contributions**
> Disclosure of and guidelines for political contributions, such as the amounts and recipients of all monetary and non-monetary contributions made by an organization, which include political contributions made through third parties. Financial or in-kind support given directly or indirectly to political parties, their elected representatives, or persons seeking political office.
**Shareholder rights**
> Assessing the potential risk of breaking or working against the entity’s contractual shareholder rights. Shareholder rights are defined in the company’s charter and bylaws.
**Shareholder rights**
> Assessing the potential risk of breaking or working against the entity’s contractual shareholder rights. Shareholder rights are defined in the company’s charter and bylaws.
**Whistle-blower mechanism**
> A process that offers protection for individuals that want to reveal illegal, unethical or dangerous practices. An efficient whistle-blower mechanism prescribes clear procedures and channels to facilitate the reporting of wrongdoing and corruption, defines the protected disclosures, outlines the remedies and sanctions for retaliation.
Validation: What evidence is required?
#### Evidence
Evidence is required, but it is not subject to manual validation.
The provided evidence must demonstrate the existence of a formal policy document(s) that address(es) each of the selected governance issues and not simply a list of general goals and/or commitments.
A policy is a guide for action which can serve the purpose of:
* Outlining rules and procedures
* Providing principles that guide action
* Setting roles and responsibilities
* Describing values and beliefs
* Stating an intention to act or achieve defined goals and/or company vision
Acceptable evidence may include a governance policy document, official documents or links to online resources describing the entity's governance policy(ies). References such as bullet points or passages within a policy, can be provided to describe the goals or ambition for each issue.
The evidence should support each of the selected issues with a relevant document such as a cybersecurity policy, board charter, code of conduct or shareholder rights policy/agreement. Note that overarching governance policy documents covering multiple issues must have separate sections/clauses relevant to each of the selected issues.
#### Evidence Exemption Criteria
For PO1–3, GRESB recognizes that an entity’s policies typically remain consistent from year to year and across multiple reporting periods.
Therefore, GRESB will automatically reapply the previous year's validation decision for entities with **fully accepted evidence in the previous submission.**
* In this scenario, changing any selections or evidence will **not** affect the validation decision. However, an entity **cannot**:
* Remove the previously provided links and supply no evidence this year. Once an entity selects 'Yes’ for PO1–3, the portal will continue requiring supporting documentation.
**For entities that previously earned partial acceptance:** changing the indicator response and/or documentation *will* prompt GRESB to re-validate the indicator.
Please note that GRESB encourages participants to update their evidence if there have been any material changes to the policy that the entity wishes to present to investors.
Validation Basics
## Scoring
**Does the entity have a policy/policies on governance issues?**
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Scoring: How does GRESB score this indicator?
The scoring of this indicator is equal to the fraction assigned to the selected option, multiplied by the total score of the indicator.
This indicator is affected by dynamic materiality. See the 'Scoring Basics' page for more information.
Scoring Basics
## Frequently Asked Questions
My entity has recently updated our sustainability policy. Can I submit it as evidence?
Indicator responses must be true at the close of the chosen reporting year in indicator EC4
(i.e., calendar or fiscal year). The response does not need to have been true for the entire
reporting year. For example, if the policy was adopted one month before the end of the reporting
year, the document can be uploaded as evidence in the assessment, even if the policy was not
in place for the entire reporting year.
My company rebranded during the reporting year. Which version of policies should
we submit for PO1-3?
GRESB recommends uploading the most recent (post-rebranding) versions of documents,
as these will be used to pre-fill some indicators in the next assessment. However, GRESB
accepts policies that were in effect at any time during the reporting year (fiscal year or calendar
year, as selected in indicator EC4). This means participants can upload either the pre-rebranding policy, the post-rebranding policy, or both. Please use the open text box within the
evidence upload section to explain that the rebranding occurred, and that the entity name
changed during the year.
I have the relevant policies, but they aren't on our website. Can I still answer "Yes"
to these indicators?
Yes. Public disclosure is not required. If you have the policies documented and implemented
within your organization, you can answer "Yes," regardless of whether they are publicly available.
***
References
[Supply Chain Sustainability School (UK and Australia), 2012](https://www.supplychainschool.co.uk/topics/)
[Net Zero](https://www.un.org/en/climatechange/net-zero-coalition)
**Alignment with External Frameworks**
[GRI Standards 2021 - General Disclosures 2021: 2-23: Policy commitments](https://www.globalreporting.org/standards/gri-standards-download-center/)
[GRI Standards 2016 - 200 series: Economic Standards](https://www.globalreporting.org/standards/gri-standards-download-center/)
Good practice examples: Multiple policies on issues such as Good business conduct, or Tax can be found on [this](https://orsted.com/en/sustainability/our-priorities/governance-that-enables-the-right-decisions#policies) page.
## Get Support: Solution Providers
GRESB Solution Providers are independent, third-party organizations within the GRESB Partner network that offer specialized products, tools, and services to support sustainability performance outside the GRESB Assessment process.
The organizations below deliver commercially available solutions designed to help drive improvement for this indicator. Engagement is managed directly between the reporting entity and the Solution Provider.
GRESB will continue to update this section as the GRESB Solution Provider network grows. Please check back regularly to find GRESB Solution Providers who can support your sustainability performance.
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