Sustainability at PPG
Ethics and Compliance
Operating with integrity is at the core of PPG’s mission and culture. The company’s 128-year history of growth and success demonstrates the value of a reputation built by conducting business in an ethical and responsible manner and maintaining the trust of business partners, customers, investors and employees alike.
PPG's Global Code of Ethics
PPG’s commitment to perform with integrity is instilled in every employee as an expectation of behavior guided by the PPG Global Code of Ethics, A Guide to Corporate Conduct. This code sets forth the principles that apply to PPG people everywhere and in every circumstance. It provides a clear, unwavering set of standards for business conduct, underpinned by the following specific commitments:
- To furnish goods and services that meet our customers’ and society’s needs
- To provide employees with a safe, healthy and fulfilling work environment
- To afford our shareholders a superior return on investment
- To contribute as a good corporate citizen to each nation and community in which we operate
The PPG Global Code of Ethics is issued by the company’s Global Ethics and Compliance Committee. Headed by PPG’s Chairman and CEO, the committee has been in existence since 1989 . Its purpose is to set and review ethics-related policies and practices within PPG.
Integration and Alignment
PPG expects its employees to comply with local laws while demonstrating the highest level of ethics at all times . From time to time, this has required the Global Ethics and Compliance Committee to revise the code in order to ensure that it is consistent with evolving global standards . To that end, the committee is currently revising the code to reflect new industry initiatives, government regulatory reforms, and societal concerns.
For example, in 2010, the Automotive Industry Action Group – a not-for-profit association of companies advancing issues in the automotive industry – asked its suppliers to align with its Global Working Conditions Guidance Statement, which requires responsible working conditions and the treatment of all individuals with dignity and respect throughout the supply base . PPG fully supports these standards and has updated the code to add specific language to that effect. Also, at the end of 2010, the committee initiated several other updates to the code . These are focused on (1) better integrating the code with the company’s evolving sustainability blueprint, (2) strengthening anti-corruption and anti-bribery language pursuant to the U .S . Foreign Corrupt Practices Act (FCPA), and (3) explicitly prohibiting human rights violations such as forced labor.
In addition, specific to its U.S. operations, PPG recently issued a supplemental ethics policy that provides specific ethical guidance with respect to PPG’s dealings with the U .S . government . As a federal contractor and subcontractor, PPG is subject to the ethics and compliance obligations that are contained in federal procurement regulations and contract clauses . This stand-alone policy addresses ethics issues specifically regarding the federal contract process and related reporting obligations, covering subjects such as kickbacks, gratuities, entertainment of public officials, contingent fee arrangements and the integrity of the procurement process . Nearly 400 PPG employees were asked to certify their understanding of and compliance with the obligations in this supplemental policy.
Finally, PPG is supplementing the code to reinforce its commitment to the highest standards of ethical conduct in public policy and the political process . This includes strict adherence to laws regarding financial campaign contributions, lobbying and political action committees (PACs), as well as the government contracts process.
Code of Ethics for Senior Financial Officers
PPG puts a special emphasis on promoting transparency in its reporting and ethical conduct in financial management. The company requires the principal executive officer, principal financial officer, principal accounting officer or controller, and any other officials performing similar functions in every location to adhere to an additional Code of Ethics for Senior Financial Officers. This code emphasizes compliance with regulations of the U .S . Securities and Exchange Commission as well as other applicable federal, state and local laws and regulations.
Respecting the Code
The PPG Global Code of Ethics is supported by an extensive system of policies and procedures, including training and communications programs . Each new PPG employee, no matter where in the world he or she works, is to receive a copy of the code within days of joining PPG. PPG publishes the code in 19 different languages, and offers it both in printed form and on the Web. PPG also invests considerable time and resources in managing a customized ethics training program . Every employee at the manager level or above is required to complete ethics and compliance training annually, as is every employee involved in purchasing, law or finance. Training for current and potential corporate leaders often includes practice scenarios for tackling key ethical dilemmas. Each year, an estimated 17,205 PPG employees from around the world participate in the company’s ethics training program, accounting for approximately 8,500 hours of training . Hundreds more complete customized ethics and compliance training sessions. In 2010, PPG trained more than 3,700 employees in live sessions on ethics and compliance, accounting for nearly 2,800 hours of training . Between the two formats, nearly 55 percent of PPG employees completed training on ethics compliance. In 2010, approximately 20,000 employees also participated in training on export control . Other training topics have included anti-corruption, harassment, contracts and competition rules. In 2010, 29 percent of PPG employees enrolled in the PPG Policies, Ethics and Legal Training course.
As PPG enters new markets, makes acquisitions and expands, the company is committed to reinforcing its standards of conduct and upholding respect for human dignity and rights, as expressed in the PPG Blueprint. With all of its acquisitions, PPG’s due diligence process includes an evaluation of the company’s ability to operate within the guidelines outlined in the PPG Global Code of Ethics, ensuring that the acquired company operates safe and healthful workplaces, and does so within the confines of local laws.
In addition, PPG encourages employees to ask legal or ethics-related questions through the "Ask the Experts" feature on the company's ethics intranet sites. PPG has committed to providing a response to these questions within two business days.
The PPG Ethics Hotline provides a completely anonymous way to report any concern about unethical, illegal or questionable business activity. The hotline is available to employees around the world in their own languages. It is also available to the company’s suppliers and customers.
In 2010, PPG took steps to ensure that the hotline is administered consistently around the world and further enhanced it by adding an anonymous email capability. The hotline is now managed by one independent firm whose representatives are trained to investigate each call, maintain the caller’s anonymity and bring each situation to an appropriate resolution.
In the 12 years since its institution, the PPG Ethics Hotline has received more than 1,460 calls from employees. While more than 80 percent of these calls are related to issues other than ethics, PPG
management investigates and responds to every call.
PPG maintains a strong commitment to compliance, which is an important element of its emphasis on ethical business practices. PPG’s philosophy is to first proactively educate its employees on a broad array of compliance issues in order to help its workforce avoid violations. However, when an incident of non-compliance does occur, PPG systems allow the issue to be reported and addressed as quickly as possible. For example, employees are encouraged to report any suspected violations of any U.S. export control laws or regulations; PPG’s export compliance policies, controls or procedures; or PPG’s Global Code of Ethics related to PPG’s export compliance policies, controls or procedures by contacting the company’s Chief Compliance Officer directly.
A recent export compliance issue demonstrated PPG’s ongoing determination to squarely meet both its legal obligations and ethical commitments in this area. In December 2010, PPG and its wholly-owned subsidiary, PPG Paints Trading Shanghai (China) (SPT), reached a settlement with the U.S. Department of Justice (DOJ) and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS). The settlement resolved investigations by the DOJ and BIS of shipments by SPT of small quantities of protective coatings for potential use in Pakistan that were made without the required export license. PPG acted promptly once it learned of the wrongdoing. With the assistance of outside counsel, the company immediately began an internal investigation, quickly responded to administrative and federal grand jury subpoenas, and cooperated with the DOJ and BIS on their investigation. PPG’s aggressive response on this matter, and its renewed commitment to an enhanced export compliance program that will further overall compliance with export control laws, reaffirm its commitment to maintaining a vigorous global ethics and compliance program.