EQS Group AG

Munich - July 11, 2024 Driven in part by the national implementation of the EU Whistleblowing Directive, the share of companies in Europe that have a whistleblowing system in place has risen from 85% to 96% in the past year. This is according to the new Whistleblowing Survey 2024 published by EQS Group, which surveyed more than 700 compliance officers across Europe. Companies predominantly rely on digital channels to receive reports of unethical or illegal behavior at a central reporting point: 81% have introduced a software system for whistleblowers. Adhering to laws was the key driver for European companies to implement a whistleblowing system: 92% cited this as one of the most important factors – a increase of 8 percentage points compared to previous year’s survey (2023: 84 %), indicating an ongoing response to the EU Whistleblowing Directive and new legislation introduced in Germany and Italy in 2023. However, 46% of respondents surveyed said they have already been using their whistleblowing system for at least three years. This suggests that they implemented the solution even before the EU Directive had to be transposed into national law by December 2021. Only about 4% of European companies have not yet set up a whistleblowing system. Of these, 38% say they are not required to have one under the current regulation, likely because they have fewer than 50 employees, and another 38% of respondents cited a lack of resources. Whistleblowing as part of a corporate culture Whistleblower protection in organizations is not only driven by external factors, but is also a key aspect of the corporate culture. After compliance, developing a speak-up culture was cited in the survey as the second most important reason for implementing a whistleblowing solution. The importance of a speak-up culture decreased slightly compared to the previous year, from 62% in 2023 to 57% in this year's survey. Another 30% of respondents cited the prevention of financial loss or reputational damage to their organizations as a reason to implement a whistleblowing solution. Whistleblowing channels are generally well received by employees, in small and medium enterprises as well as larger corporations: More than half of European companies received at least one report through their whistleblowing system, and about a quarter received 10 or more reports in 2023. The majority of companies that received 50 or more reports were large corporations with more than 10,000 employees. Most of the reports were related to human resources (43%), followed by corruption and bribery (21%), violations of social standards and human rights (17%), and IT and data protection (17%). Anonymity is market standard Although the legislation does not require organizations to offer anonymous reporting capabilities, 9 out of 10 companies (90%) allow whistleblowers to submit reports without disclosing their identity. Previous studies (EQS Whistleblowing Report 2021) have shown that approximately half of all initial reports are made anonymously if the reporting channel allows for it. The availability of an anonymous channel had no effect on the number of abusive reports made with the intent to harm employees or the company. Marcus Sultzer, Member of the Management Board of EQS Group: "The survey results show that regulatory compliance remains the most important driver for whistleblower protection. While this is understandable, it does not sufficiently take into account the importance of whistleblowing for corporate integrity, ethics, and a positive corporate culture. Given the increasing complexity of the global compliance landscape, companies should also look beyond individual laws and take a more holistic and integrated view of compliance. Technology can play a central role in this. Digital solutions can help meet regulatory requirements more efficiently, mitigate risk, and communicate transparently with internal and external stakeholders. They are also the only channel that can ensure complete anonymity for whistleblowers.” Access for external stakeholders – particularly relevant in the supply chain  8 out of 10 of companies surveyed (80%) allow external stakeholders, such as customers, suppliers and partners, access to the reporting channels. This proactive approach is particularly important for organizations that need to comply with supply chain regulations. One example is the EU Directive on Corporate Sustainability Due Diligence (CSDDD), which was adopted by the EU member states in May 2023. Similar to the German Supply Chain Due Diligence Act (LkSG), the EU Directive requires that reporting channels be accessible to external stakeholders along the supply chain. "Many cases of misconduct may not be noticed by the company's own employees, but instead by customers, suppliers, business partners or local residents," says Marcus Sultzer. "Some companies fear they will be flooded with unfounded reports if they open their whistleblowing system to external stakeholders, but experience shows that this concern is unfounded and that companies instead benefit greatly from reports from their network, as they may become aware of irregularities more quickly to rectify them.” About the survey For EQS Whistleblowing Survey 2024, more than 700 compliance professionals from over 20 European countries were surveyed in June and July 2024. The respondents represent a wide range of different industries and company sizes, from small and medium-sized companies to large corporations with more than 50,000 employees. 81% of respondents were based in Germany, Italy, France and Spain. Press contact Christina Jahn Phone: +49 89 444430133 E-Mail: christina.jahn@eqs.com About EQS Group  EQS Group is a leading international cloud provider in the areas of corporate compliance, investor relations and sustainability reporting. Thousands of companies across the world use EQS Group’s products to build trust by reliably and securely meeting complex regulatory requirements, minimizing risks and transparently reporting on business performance and its impact on society and the environment.   EQS Group’s products are bundled in the cloud-based software EQS COCKPIT. This allows compliance processes in the areas of whistleblower protection and case handling, policy management and approval processes to be managed just as professionally as business partners, insider lists and reporting obligations. Listed companies also benefit from a global newswire, investor targeting and contact management, as well as IR websites, digital reports and webcasts for efficient and secure investor communication. In addition, EQS Group provides software for the fulfillment of human rights due diligence obligations along corporate supply chains, as well as for compliant sustainability reporting.   EQS Group was founded in Munich in 2000. Today, the group employs around 550 professionals and is represented in the world’s most important financial centers.  https://www.eqs.com/