1. Sustainable corporate governance // 2. Business model and business performance // 3. Social affairs // 4. Environnment
1. Sustainable corporate governance
1.1 About us
SQS assesses and certifies in many areas of sustainability management systems, products, processes and services. It was an international pioneer and is still the leading conformity assessment body (CAB) in Switzerland today. Federal authorities and trade associations founded it in 1983 as the world's second CAB for quality assurance. Its mission was and is to enable credibility and trust and thus facilitate co-operation between companies. SQS now has over 50 member organisations, including practically all relevant organisations in the Swiss economy as well as other important players in public administration, science and civil society.
Over the decades, numerous additional topics have been added to quality, in particular environmental and energy management, health and safety at work and sustainable corporate governance. But the drive has always remained the same:
Let the words be followed by deeds.
For sustainable entrepreneurship.
For a future worth living in.
We think and act entrepreneurially because we finance ourselves exclusively through the sale of our services. We are fully exposed to the market competition. As an «SME in the service of the Swiss SME economy», we also have a practical and market-orientated understanding of norms and standards: they are never an end in themselves, but instruments to contribute efficiently and effectively to solving common problems. This is why we are also involved in the development of new standards and train people and companies in how to use them.
Normative basics
SQS is an association headquartered in Zollikofen, Canton of Berne.
According to its statutes, which were last revised in 2023, it has the following mandate:
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to promote Switzerland as a business location and the performance of the Swiss economy through the assessment and certification of management systems, products, processes and services as well as through the training and qualification of economic operators;
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to provide independent auditing-, assessment-, inspection-, verification- and certification services in the regulated and non-regulated sectors and to ensure the widest possible recognition of their certificates and assessments;
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to promote the economy through the provision of services in the field of sustainable corporate governance.
With this mandate, we combine the following mission, vision and values:
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Mission: With auditing, evaluation, certification and training, we contribute significantly to the sustainable success of our clients.
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Vision: SQS is recognised in the market as a premium partner for management systems of comprehensive quality and sustainable success.
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Core values: Credibility, neutrality, independence, honesty and incorruptibility. We specify these basic values in our Code of Business Ethics.
SQS in sustainable development
In 2023, SQS joined the UN Global Compact, the world's largest initiative for responsible and sustainable corporate behaviour. We are thus committed to the ten principles of the Global Compact and to the Sustainable Development Goals of the United Nations 2030 Agenda. As a participant in the UN Global Compact, we will report annually on our efforts and progress with regard to these principles and goals.
As early as 2022, we described our understanding of sustainable development and our role in it as follows:
Sustainable development enables all people to have a present and future worth living in. It allows us to fulfil our needs today without compromising the ability of future generations to meet their own needs.
Sustainable development ensures the material basis of life, justice in society and intact ecosystems. It strives to harmonise the economic, social and ecological dimensions of development. Conflicting goals are resolved in the knowledge that the economy serves the society and that society must develop within the so-called planetary boundaries.
We see ourselves as an organisation that implements and strengthens entrepreneurship for the benefit of sustainable development.
The United Nations 2030 Agenda recognises the potential and responsibility of business to contribute to the achievement of the 17 Sustainable Development Goals. For SQS, which supports over 9,000 companies and other organisations in the application of management standards and systems, this means that sustainable development requires sustainable corporate governance.
SQS has been contributing to sustainable corporate management since its foundation in 1983. It strengthens the performance of its clients in the economic, social and ecological areas by assessing them according to appropriate procedures or auditing and certifying them according to suitable regulations, and by providing them with practical and impact-orientated training. From the very beginning, SQS has applied a holistic and systemic management approach, as required by sustainable corporate governance.
As a human community and economic organisation, we are also focused on sustainability. Economically: We are a not-for-profit organisation constituted as an association (not a charitable non-profit organisation). Profits are the basis for our stability, development and performance as a service provider for third parties. Social: We are an open organisation that makes great efforts in the training and further education of employees as well as for safe and attractive working and pension conditions. Ecological: We work as environmentally friendly as possible, focussing on climate protection.
However, in the interests of continuous improvement, we are striving for more.
We want to apply sustainable corporate governance even more consistently internally and enable and promote it externally. We are expanding our existing claim to strengthen our clients' performance in one or more of the three sustainability dimensions. From the holistic and normative perspective of the Triple Bottom Line, we link the three dimensions in order to create harmonised goals and resolve conflicting objectives.
We make the same claim for ourselves as a community and organisation. This is the only way we can become a credible and effective player in the transformation of our economy and society and in shaping a future worth living in.
Governance
The organisation of the SQS is laid down in the Association's Statutes, and further governance aspects are set out in the Code of Business Ethics and the Regulations.
Panels and Organisation Chart
The strategic management of the SQS lies with the Board, the operational management with the Executive Management. The supreme body is the Members' General Meeting. The member organisations (currently 50) and the individual members (currently 12) are entitled to vote at this meeting. The members provide idealistic support for the mission and concerns of the SQS. New members are admitted by the Members' General Meeting at the request of the Board.
External persons and organisations can report their dissatisfaction with the activities and services of the SQS or an organisation certified by the SQS via the reporting portal on the SQS website. The Supervisory Committee is the highest decision-making panel in cases of dispute regarding the granting of SQS certificates.
SQS employees can submit complaints or other problems in accordance with the reporting procedure provided for in the Code of Business Ethics. The external neutral Supervisory Committee acts as the last point of contact if the other bodies - the line manager, the management and the HR department - are not suitable from the employee's point of view or do not handle the matter satisfactorily.
The advisory councils have an exclusively advisory function. The Economic Advisory Council promotes dialogue with the business community, but also with the scientific community and other areas of society. The Political Advisory Council promotes contact with decision-makers in administration and politics. It is therefore an important body that enables the SQS to fulfil its statutory mandate to represent its interests towards these stakeholder groups. The SQS acts independently of political parties, movements and associations. Responsibility for this representation of interests lies with the Public Affairs Committee, which is made up of two members of the Board and two members of the Executive Management.
The Corporate Report is prepared annually for the attention of the Members' General Meeting. In it, SQS provides an account of the three dimensions of sustainable corporate management: environmental, social and economic and - as a cross-sectional dimension - corporate governance.
The report is a central instrument of internal and external corporate communication (CC). The primary addressees are the members. Other stakeholder groups that should be informed include employees and the Board (internal CC) as well as the Supervisory Committee, advisory councils, clients and other market participants, official and political decision-makers and media representatives (external CC).
The report is based on the normative categories and principles of the Communication on Progress to the UN Global Compact (governance, human rights and labour standards, environment) and the Global Reporting Initiative (economy, ecology, social affairs).
Delimitation
SQS-group structure
The corporate report refers to the activities and impact of the following organisations:
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The Association SQS based in Zollikofen, Canton of Berne;
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SQS Business Services GmbH, based in Zollikofen, Canton of Berne;
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The branch office SQS Italy in Milan and the subsidiary SQS Italia S.r.l. based in Milan, Italy;
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The subsidiary SQS Deutschland GmbH, based in Constance, Germany.
The subsidiaries in Germany and Italy are currently not subject to auditing and are therefore not included in the financial reporting. Otherwise - and unless otherwise stated - the information in this corporate report relates to the above-mentioned organisations.
The branch office in Milan is legally part of the association SQS and offers products accredited or authorised in Switzerland in Italy, while the Italian subsidiary offers accredited or authorised products in Italy. Operationally, there is a large overlap between the two units.
The Association SQS is also involved in the following organisations:
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Bio.inspecta (Minority interest)
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CargoSousTerrain (Minority interest)
In addition, SQS is represented as a supporting organisation - together with the Swiss Association for Quality (SAQ) - on the Board of Trustees of the sfaq Foundation for Research and Education «Quality».
These holdings are mentioned in the report if SQS has exerted relevant influence on their activities and effects or has experienced relevant influence from their activities and effects.
Unless otherwise stated, all information relates to the calendar year 2023 resp. the reporting date of 31 December 2023.
Essentiality
We derive the essentiality of our activities and impacts from our understanding of sustainable corporate governance and our role in sustainable development (see «SQS in sustainable development» in chapter 1.1). We therefore report in the three dimensions of the Triple Bottom Line:
- Economic responsibility (Chapter 2)
- Social responsibility (Chapter 3)
- Ecological responsibility (Chapter 4)
We assume this responsibility in cooperation with resp. towards the following stakeholder groups:
- Clients
- Permanent employees and freelancers
- Members and organs of the association (see «Governance», chapter 1.1)
- Regulators (norms and standards setters, accreditation and authorisation bodies, legislators, authorities)
- Partner organisations (including organisations of which SQS is a member)
- Consultants of SQS clients and other market participants
We are aware that the significance of our activities and impact is not determined by the size of our organisation, but by the nature of our services. The quality and consistency with which we fulfil our mandate - particularly in the area of assessments and certifications (see «Normative basics» in chapter 1.1) - have an influence on the trust between market participants and therefore on the functioning and legitimacy of the market. Due to our mandate and our client structure, these activities and effects relate primarily, but not exclusively, to Switzerland.
Against this background, for example, we do not report in detail on our impact as a purchaser of products and services. Only in the area of information and communication technology (ICT) do we make significant purchases due to advancing digitalisation. In this and other areas (mobility, accommodation, catering, building maintenance, event organisation, marketing, finance, legal advice and insurance), we give preference to our own clients wherever possible. Sustainability criteria are not systematically applied when awarding contracts.
Strategic target achievement
SQS works with the Balanced Scorecard as an instrument for managing and evaluating our development. We have defined key performance indicators (KPIs) for each of the four target areas - finance, clients, processes and employees, learning and development. The picture that can be drawn for the 2023 financial year based on these KPIs is overall positive.
Finance
In terms of key financial figures, the targets set were met or exceeded. With CHF 48 million, SQS was able to achieve the highest turnover in its history. These results are all the more important given that considerable funds will also have to be invested in the adaptation and introduction of MS Dynamics 365 as the new enterprise resource planning system (ERP) in 2024 and 2025.
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FINANCE |
Target 2023 |
Actual 2023 |
Target achievement |
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F1 |
Turnover |
CHF 46 039 661 |
CHF 48 022 000 |
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F2 |
EBITDA (Operating result I) |
CHF 1 700 472 |
CHF 1 753 000 |
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F3 |
EBITDA-Margin |
3.7 % |
3.7 % |
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Clients and markets
The results in the «Clients and Markets» area were also pleasing. On the one hand, customer satisfaction improved slightly at a high level. On the other hand, the ambitious acquisition targets were clearly exceeded. SQS's services are therefore in high demand on the market - both for the main standards ISO 9001, ISO 14001 and ISO 45001 as well as for industry-specific norms and standards.
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CLIENTS AND MARKETS |
Target 2023 |
Actual 2023 |
Target achievement |
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K1 |
Customer satisfaction auditors |
4.5 hold |
4.6 |
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K2 |
Acquisition targets
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750
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1046
|
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K3 |
Hit rate offers via
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55% |
56% |
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Processes
The fruits of the past years' work can be seen in the «Processes» area. Thanks to the introduction and consistent use of a centralised process management system (QM Pilot), process access has been significantly improved for all employees. The accreditation and authorisation bodies have also confirmed that our compliance has improved. Only the productivity of the auditors was slightly below target.
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PROCESSES |
Target 2022 - 2024 |
Target achievement |
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Productivity A full-time |
AP3 (Audit- and travelling time per auditor and month; average): > 100h by end of year (achieved: 95h) |
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P2 |
Technical Compliance |
Maintain authorisations, prevent suspensions and sanctions |
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P3 |
Organisational Compliance |
Risk mitigation in a dynamic legal environment |
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P4 |
CIP |
Timely ticket processing and traceable effectiveness checks |
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Employees
The KPIs in the area of «Employees», which were collected by means of a Pulse Survey, indicate a need for action. This does not appear to contradict the generally high level of employee commitment, but rather to be a consequence of it: SQS is important to its employees! Part of the dissatisfaction has to do with external requirements that lead to greater administrative effort. Where there is room for action, measures have been decided and some have already been implemented in 2023. These included increasing resources in the audit and back-office areas, the work of the teams for continuous improvement processes and several face-to-face events to promote encounters and participation (see «Organisation and Environment» in chapter 1.3 and chapter 3).
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EMPLOYEES, LERNING AND DEVELOPMENT |
Target 2022 - 2024 |
Target achievement |
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M1 |
Commitment to the employer |
Target: Positive trend in the results of the 2023 internal Pulse Survey compared to the 2021 employer survey Result: 82 (2023) vs. 80 (2021) |
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M2 |
Satisfaction with work situation |
Target: Positive development of the results of the internal Pulse Survey 2023 compared to the employer survey 2021 Result: 68 (2023) vs. 68 (2021) |
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M3 |
No resignation |
Target: Positive development of the results of the internal Pulse Survey 2023 compared to the employer survey Result: 73 (2023) vs. 74 (2021) |
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M4 |
Attractive employer |
Target: positive development of the results of the internal Pulse Survey 2023 compared to the employer survey) Result: 72 (2023) vs. 69 (2021) |
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M5 |
Recommending the employer |
Target: Positive development of the results of the internal Pulse Survey 2023 compared to the employer survey Result: 76 (2023) vs. 69 (2021) |
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Organisation and Environment
In particular, we consider the following events and developments that took place within and around the organisation in 2023 to be strategically relevant:
The teams set up in autumn 2022 for the purpose of continuous improvement processes (CIP) became operational in 2023:
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CIP team «Culture and Communication»: Development and dissemination of the Code of Business Ethics; development and communication of benefits for employees; upgrading/consistent use of employee events as meeting places; development, launch and management of the «SQSNet» intranet
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CIP team «Leadership and Organisation»: Development of five SQS core values with which management style and -activities are to be aligned; clarification of project management terms and methods
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CIP team «Human Resources»: Development of a concept for employer marketing; revision and consistent digital use of job advertisements; documentation and communication of support options for line managers in the recruitment process
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CIP team «Processes»: Identification of measures to increase the efficiency and effectiveness of SQS processes, i.e. further development of the QM Pilot as a tool for the management system, creation of a standardised text structure for ISO 9001 reports and introduction of a uniform CIP workflow
In order to utilise all relevant competencies and coordinate the CIP, the closed meeting of the management, the extended management and the team leaders was converted into a «Future Forum», which takes place three to four times a year. SQS specialists without a management function are also involved in this forum.
The SQS considers itself to be an organisation serving the Swiss economy and society. It was with this in mind that we celebrated our 40th anniversary. We published a non-fiction book which, for the first time, provides an overview of the standards system in Switzerland by means of basic articles and case studies and shows the development and significance of the SQS in this wider context. The book «Wheels of Normality. Building trust through standards» was published by NZZ Libro with a print run of 2 000 copies. They were given to clients, employees and other stakeholders. 300 of them were sold in independent bookshops. It was also published as an e-book in German, English, French and Italian.
Aware that we can only create relevant value as a community and in collaboration with our customers, we also organised two anniversary events: one for customers on 20 June at The Dolder Grand in Zurich and another for all employees on 30 June on Bern's local mountain, the Gurten.
The «D365» project, which was launched in 2022, was continued as planned in 2023. It involves analysing, designing and introducing (by 2025) MS Dynamics 365 as an ERP resp. as successor software to Microsoft Dynamics AX. The aim of this project, which involves considerable investment, is to make optimum use of the opportunities offered by digitalisation and, in particular, the Microsoft ecosystem and associated cloud services.
A milestone in the digitalisation of SQS in 2023 - as a supplement to the already established MS Teams - was the introduction of the intranet «SQSNet». It will considerably simplify individual work and collaboration within the organisation.
The key objectives and topics of Public Affairs activities in 2023 were:
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Receiving information on strategically relevant regulatory developments in Germany and abroad (particularly in the EU);
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Representing the interests of conformity assessment bodies in the area of state-regulated sustainability reporting.
The 2023 National Council and Council of States elections resulted in a reorganisation of the Political Advisory Board that had not yet been completed by the end of the year.
In 2021, SQS founded a subsidiary based in Constance to ensure uninterrupted access to the European Single Market for Swiss medtech companies in the context of the transition from MDD to MDR certificates. In spring 2023, the Board decided to suspend the notification procedure for SQS Deutschland GmbH with the responsible German supervisory authority, the Central Authority of the Länder for Health Protection with regard to Medicinal Products and Medical Devices (ZLG).
The reason for this was the European Union's decision to extend the transition period until the end of 2027 (for products with a higher risk) or the end of 2028 (for products with a low to medium risk). This meant that products with MDD certificates may be placed on the market for longer than originally intended - but only if they are registered for conformity assessment with a notified body that is already designated in accordance with the MDR and listed in the NANDO database. These regulatory changes removed the basis for SQS Deutschland GmbH's business plan.
SQS founded in 2023 the Italian subsidiary SQS Italia S.r.l. based in Milan. SQS had been strategically developing the Italian market since 1992 and established a branch office in Milan in 2011. The following factors led to the foundation of SQS Italia S.r.l.:
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In view of the meanwhile strategic dimension of the Italian business (around a quarter of all SQS certificates are issued to customers based in this neighbouring country), legal independence and institutional upgrading were the obvious choice;
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An independent company can react faster and better to the dynamic market environment and thus better utilise the potential in Italy - the world's second largest market for ISO standards;
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Accreditations should be able to be clearly assigned (adjustment or delimitation of accreditations for different countries);
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our services and certificates should be recognised more easily or better by the various stakeholder groups - in particular by the regulator and clients.
Furthermore, the foundation of SQS Italia S.r.l. is a recognition of the commercial success of the responsible team.
In 2023, SQS sharpened its strategy for serving international clients. In particular, this means that global certification activities will be used specifically to serve clients based in Switzerland and locations abroad and to expand these customer relationships. To this end, among other things, cooperation within IQNET, with local certification organisations (brokers), with the Swiss chambers of commerce in the countries concerned and with the SQS member Switzerland Global-Enterprise will be intensified.
