It was almost a year ago that the invasion of Ukraine commenced. A few days after the invasion something strange happened. It might be said that Environmental, Social and Governance (ESG) took a backseat. Climate targets were also largely shelved as Russian companies were sanctioned by Western democracies. And whilst in the U.S., Diversity, Equity and Inclusion (DEI) continued to trend. Back in Europe things became lax.
A few weeks ago Greta Thunberg was criticized for refusing to condemn oil producing nations in the Middle East or Russian President Putin. The inference was that it is simply easier to criticize European companies and governments instead. However, what with recent record profits at Shell and others, it seems like Greta still has plenty to do.
And, seeing as Greta was recently detained by the German police during a protest over the expansion of a German coal mine. It would appear that the ‘Environmental’ part of ESG is not a top priority amongst those same companies and governments.
But what about the ‘Social’ and ‘Governance’ part of ESG?
Social factors that draw on a company’s workforce and its involvement with society. It, the ‘S’, includes topics such as DEI and humane working conditions.
Whilst many of us have been duped into accepting that the Climate Emergency can go on hold, have some companies also put S and G on hold?
What about ESG in Poland?
Poland is a very unique place. It has traditions and national trends that one could only describe as ‘Polish’. But when Poles get upset, it can get really heated.
Just consider this tweet:
It had an instant impact in Poland. Literally within a few hours, Robert Lewandowski, Captain of the Polish National Football Team and a key player at Bayern Munich, terminated his sponsorship agreement with Huawei. Even though there was no actual evidence to back the allegations made by a UK politician up.
The news received a big reaction in Poland. It affected people’s perceptions of anything Chinese for a long time. However, in the grand scheme of things, was this really a story at all? No evidence was ever found to back it up. No investigation has ever been undertaken.
When one of the longest rivers in Europe, the Odra, was poisoned, the backlash was much less. Whilst the environmental repercussions were enormous in comparison.
News sites, public sentiment and government propaganda have a huge hold on the way things happen in Poland. But can these activites be called ‘Greenwashing’?
Is the right to form a trade union part of ESG?
As far back as 2010 there have been discussions about the involvement of trade unions in creating the correct ESG strategy. Trade unions as a concept are very familiar to Polish people. Just consider the Solidarnośċ movement and Lech Walesa if you need a reminder.
One of the areas raised in 2010 is just as valid today:
“Trade union involvement in the process of monitoring labour standards in the supply-chain should itself be an indicator in ESG disclosure.”
There are probably many leading European organisationss who see this differently. Especially in their Polish subsidiary businesses. Perhaps like the German Commerzbank’s mBank subsidiary.
It was in Poland where a worrying story about the dismissal of the head of a trade union came to light at the end of 2021. mBank was heavily involved in the story.
One would hope that this was an isolated incident. But one might also be disappointed to learn that the situation seems to have persisted. Trade unions are not popular amongst banks, or many other companies for that matter.
Trade Unions in Tech?
Last November the situation in Poland worsened. Especially if you wanted to set up a trade union and were working in the Polish tech market.
There are some compelling counter-arguments to setting up a trade union in the tech market. These include how the tech market is somewhere that you can find a job too easily. Just watch a few YouTube videos and read a couple of ebooks on some coding language or another and you’re in. A year later you can demand up to 20,000 PLN/month c. $4,500/month or $54,000/year as a senior.
You can also change jobs in a flash. Which is a very unusual industry, and arguably priviledged industry, to have a trade union.
Yet this is what happened, not for the first time, in Poland in November. But this time things would be different.
Sii, arguably the largest software outsourcing company in Poland and the Polish subsidiary of the Euronext Paris listed Sii. The firms employees formed a trade union. Something that the CEO of Sii in Poland didn’t take kindly to.
Problems of the Polish Tech Industry
2 weeks ago Magazyn Rekruter shared a story about the controversial behaviour of the CEO of Sii in Poland. The CEO wrote to an employee how Sii doesn’t need trade unions. And how he hadn’t come to Poland to have to put up with strikes and trade unions like was the case back in France. He then had the employee fired for allegedly being involved in the setting up and promoting of a trade union within Sii.
Perhaps he forgot that employees have a right to form a trade union in Poland.
The Sii corporate website only needs him to mirror values and principles “including kindness, the right to make mistakes, the right to disconnect, etc…”
The Polish Labour Inspector’s Opinion
Fortunately there is the Polish Government Labour Inspectorate. Who has also had a look at the matter. The Inspector responsible, Arkadiusz Ziecik, submitted his opinion on the matter on the 9th of January 2023. An opinion that is widely available online and that is anything but positive about how Sii have dealt with their employee.
The Inspector found that Sii had indeed violated the rights of their employee. Krystian Kosowski, the employee in question, was delegated to work at ABB in Poland at the time of his termination. As his rights were violated it would appear clear that by the end of January companies who use Sii’s services had become aware of the accusations laid against their supplier. And that the Labour Inspectorate had confirmed these accusations and found Sii to be in breach of the labour code in Poland.
Being argumentative, one could just brush this story under the table. It’s just some problematic programmers from Poland causing trouble. Who cares?
Actually, a lot of people care. And so do the shareholders. And, more importantly, as the cost of living crisis continues, the consumers.
Expectations of Shareholders and Consumers in Europe
In a situation like Huawei it’s pretty clear that the story was blown out of proportion. Robert Lewandowski didn’t need to act so hastily. In the case of ABB, PUMA, Roche Polska, mBank, or BNP Paribas, who are some of the companies working with Sii, there seemed to be NO reaction. Many of their logos, recommendations and mentions of their companies are still splashed all over the Sii website. The profiles of many of Sii’s employees and contractors across social media list these companies as organisations they have been delegated to work at. They are still listing this information even after the labour inspectorate confirmed that Krystian’s rights had been violated.
#DisruptionBanking contacted the above mentioned organisations to find out if their ESG and social commitments to supply chain management were being investigated.
We analysed in more detail both the commitments the organisations made, and their responses to both the story and the response of the Labour Inspector in Poland. The results of our findings are below:
How Commerzbank / mBank responded to the Problems of the Polish Tech Market
From the Bank’s website at Commerzbank there is the following declaration: “The ecological, social and governance criteria (ESG) specified in the standard for sustainable procurement reflects Commerzbank’s corporate responsibility demands on its service providers and suppliers.”
The standard goes into further detail: “Suppliers and service providers must respect their employees’ rights to freedom of association and collective bargaining and must ensure employees active in trade unions or employee organisations are not discriminated against or preferred in any form.”
However, this is the response that our Editorial team received from the mBank spokesperson:
“Unfortunately, we know that matter based on the media coverage only. Therefore we are not able to comment it.”
mBank in Poland is a subsidiary of the Commerzbank Group.
How ABB responded to the Problems of the Polish Tech Market
In the case of ABB, the story has particular significance. As Krystian had been delegated to ABB in Poland during the forming of the trade union. ABB’s reliance on the support of Sii employees and contractors is normal in a competitive Polish tech market. Therefore it shouldn’t come as a surprise to learn that Sii employs or contracts up to 2% of the entire Polish Tech Market. At least 2% of the programmers anyway.
ABB have a large IT operation in Poland which has been running for over five years. A representative from the Group Communications team at ABB sent the following response to our questions:
“We are aware of the information which has been published in the media concerning Sii but cannot comment on matters that specifically refer to the supplier. We can confirm that Sii does supply IT services to ABB in Poland. Sii is subject to a strict supplier evaluation process and the ABB Supplier Code of Conduct, which demands compliance with local labor laws, and we are currently looking closely into the case.”
How Roche responded to the Problems of the Polish Tech Market
Roche is a pharmaceutical company that doesn’t usually hit international news about their tech developments in Poland. Roche does have a lot of involvement in the Polish tech market though. The firm is listed on the SIX Swiss Exchange. It declares on its website that it “complies with all laws relating to employees…. Employees can choose to be represented by unions, works councils or similar organisations…”
Our Editorial team reached out to Roche in Poland to see if the firm also monitors the status of employees amongst its suppliers. This is what a representative of the communications team sent:
“Roche is a company creating and producing high-quality, innovative healthcare solutions for unmet medical needs. Our framework and purpose statement focus on patients, and our corporate values guide our decisions and behavior. We do business in a responsible and ethical manner, with a high commitment to sustainable development.
“We also expect our business partners to respect and adhere to our values. We have received information about the situation that took place in the Polish branch of Sii. We would like to emphasize that Roche is not a party to this dispute, and we do not have a comprehensive set of information that would enable us to undertake business decisions impacting our operations.
“However, we are monitoring the situation and the ongoing activities that are being implemented, as a result of which Roche will be able to take appropriate steps.”
How PUMA responded to the Problems of the Polish Tech Market
Another customer according to the website of Sii is PUMA in Poland. Importantly, PUMA’s Head of Global IT even submitted a written reference that proudly sits on the main page of the Sii Poland site.
Our Editorial team received the following response from the Corporate Communications team at PUMA:
“PUMA commits to the right to freedom of association, the right to organize or join unions or other work or industry related associations of their own choice and the right to collective bargaining.
“We expect no interference from the management of our suppliers throughout the process of forming a new trade union. We expect that all the necessary actions are taken, so no trade union members/leaders face any retaliation, intimidation, harassment, repression in any way. We expect the same from all of our partners.
“We have followed up with Sii to discuss the specific situation you refer to. These discussions are ongoing.”
How BNP Paribas Poland responded to the Problems of the Polish Tech Market
BNP Paribas Poland is a subsidiary of BNP Paribas which is one of the largest financial institutions in the world. Certainly one of the largest in Europe. The bank’s Polish subsidiary is an active participant in ESG initiatives in Poland. However, the banks logo is also paraded prominently on Sii’s website.
The BNP Paribas Group Code of Conduct states how if someone within the bank notice something in the press about a manager of a supplier being involved in a corruption scandal they should: “immediately raise the matter… The Group’s suppliers are held to the same ethical standards as the Group itself. It is likely that Procurement is already aware of the matter and reviewing the supplier, but it is better to err on the side of caution in the interests of the Group.”
Perhaps the actions of the CEO at Sii shouldn’t be referred to in the same category as a corruption scandal. But, as the bank suggests, it is better to “err on the side of caution”. As a result #DisruptionBanking approached the bank for commentary. This was the response:
“Bank BNP Paribas is committed to rigorous compliance with the Polish legal order and conducts all activities in accordance with it. The bank is unable to refer to the issues of internal disputes in independently operating entities on the Polish market. There is also no practice at the bank to comment on situations that concern other, independent enterprises.”
Press Office of BNP Paribas
How the Polish Tech Market disrupted the largest European organizations
Krystian’s case has highlighted an alarming situation amongst some of the largest European organizations and banks. All of them are striving to achieve recognition for their efforts to solve social problems and being good employers. But are their efforts enough?
In the case of a company like Huawei this is a very straightforward situation, according to the government. When controversy involves European organisations it can’t be that bad. Can it?
Much like Greta Thunberg has highlighted. We have plenty of European companies who owe their employees and their customers a much better supply chain. A supply chain that is not just there to lower costs but to ensure that employees have a say. Even if they want to form a trade union which will affect profitability. Is the average consumer going to care? No. Perhaps the shareholders will. But shouldn’t the shareholders be worrying about their ESG commitments as well?
In Poland a lot of participants in the tech market really like Opels (the car). But they don’t necessarily like the brand new blingy Opels with the big alloy wheels and the huge price tags. They prefer the Opel Kadett and other classic models. Real proper Opels. They also like to sell Opels to eachother. All sorts of Opels. New ones, old ones, even the odd diesel Opel.
If ABB, PUMA, Roche Poland, BNP Paribas Poland or mBank were Opels, one has to wonder which Opel they might be in the eyes of a Polish programmer. You can only imagine whether or not the participants of the Polish tech market would buy that particular Opel. Especially in the light of the response to the story emanating from Sii and the firms inability to resolve the matter with Krystian.
Polish Tech Professionals want more than just an Opel
Much like they wanted to be treated as well as their Western counterparts. Polish tech professioals also have their traditions. However unusual they might be. And, just as Greta has tried to show, we have plenty of work to do back home within Western democracies when it comes to ESG. The tech industry shouldn’t be excluded from social dialogue just because it offers better career opportunties than other industries.
More importantly, do you agree with the ESG ratings provided by Sustainalytics? Have they focused enough on the Social part of ESG? And what ESG rating would you give the Opels that the participants of the Polish tech community so like to sell to eachother? A better rating than ABB, PUMA, Roche Polska, BNP Paribas Polska or mBank? Or Worse?
Author: Andy Samu
