Procurement Policies

The parent company's Procurement & Material Management function defines policies and guidelines and manages, as a service, the procurement of goods, services and works requested by the departments of the Holding Company and the Group's main companies. To perform its duties, it values the technical skills of the buyers, handles the requests of “internal customers” (Functions/Companies in the Group) and develops a transparent relationship with suppliers.

DEALINGS WITH SUPPLIERS AND PROCUREMENT MANAGEMENT

The Code of Ethics, updated at the end of 2022, recalls the reference principles¹¹⁷ that should guide relations between Acea, as a contracting authority, and its suppliers (contractors and subcontractors), “on the basis of the principle of mutual benefit and cooperation that underlies such relations”:

• equal opportunities for each supplier;
• conduct based on mutual loyalty, transparency and collaboration;
• compliance with rules and procedures, including verification processes to identify potential risks to reputation and/or corruption;
• protection, by the supplier or sub-supplier, of the human rights of their employees (decent working conditions, protection of health and safety) and safeguarding of the environment (protection of ecosystems and biodiversity, rational use of natural resources, minimisation of waste, energy saving, etc.), respect for privacy, and guarantee of the quality of goods, services, and performance.

Suppliers issue a declaration of acceptance and commitment to comply with the provisions contained in the Code of Ethics, which constitutes an element of the contractual relationship. Any violation of the principles and criteria of conduct envisaged by the Code of Ethics, revealed by audits, will authorise Acea to take appropriate measures.

Additionally, in December 2023, following approval of the Human Rights Policy by the Board of Directors, Acea emphasised the care it takes with respect to its supply chain, dedicating one of its 20 reference principles to “Responsible management of supplier relations” (see the dedicated box).

For several years now, Acea has shared a Water Contracts Protocol with the trade unions involved in water tenders and with contractors, which includes aspects such as employment protection (proper application of the social clause with reference to contract changes), combating irregular work or work not in compliance with the relevant national labour contracts, workplace health and safety and compliance with contractual regulations. Additionally, in October 2023, Acea signed an innovative Protocol on tenders with the trade unions (see the dedicated box).

Acea mainly uses tenders¹¹⁸ to select suppliers. In 2023, 70% of procurement, managed at a centralised level, was awarded through a tender procedure.
For centrally-managed Group companies, the Procurement & Material Management function has published on the website¹¹⁹, in the “Supplier” Area, the documentation relating to purchases governed by the Public Procurement Code¹²⁰. Operators who are interested in participating in tenders can freely access the portal of the Qualification Systems and the portal for participation in online calls for tenders. The web portal is based on the same operational procedure as traditional tenders: it checks the adequacy of the supporting document, acknowledges possession of the eligibility requirements, discloses the bids and displays the ranking. The companies operating in the water segment, which manage their own procurement process, also carry out tenders electronically, while Deco does not use tenders, rather it follows a procedure that involves the qualification of suppliers, market surveys accompanied by several offers from qualified suppliers on the company’s vendor list and the issue of purchase orders.

The Administration, Finance and Control Function monitors supplier payment times: in 2023, for the companies in the scope¹²¹, the average payment delay was 28.8 days¹²² (a slight increase compared to the 34.4 days recorded in 2022); the same figure, when weighted in light of the amounts, falls to 15.7 days123 (compared to 26 days in 2022). This was the case for 55% of the value of payments made in the year (compared to 34% in 2022), while the percentage of amounts paid on time was 45% (66% in 2022).

Sustainability criteria in tenders

In 2023, for the Group Companies under analysis, about 7,100 orders/contracts were processed, for a total of more than 3,500 suppliers involved (please see the Order Analysis below).
Within the centralised management of tenders, which covers 81.5% of the total value of procurement within the 2023 scope of consolidation, amounting to 2,565 orders/contracts managed and 1,299 suppliers involved, as a requirement for participation, for 100% of tenders for the award of works contracts and for numerous contracts for the purchase of goods and services, Acea requires UNI EN ISO 9001 quality management system and the UNI EN ISO 45001:2018 occupational health and safety certifications. Furthermore, for the product categories subject to tender and relating to the purchase of goods, services or works, evaluation criteria of the technical offer based on the following systems are included during the tender process, when applicable: UNI EN ISO 14001 – UNI CEI EN ISO 50001 – UNI ISO 37001 – FSC Chain of Custody. These requirements were added to potentially eligible calls for tenders, awarded on the basis of the most economically advantageous offer: in 2023 75% of tenders, out of a total of 125 effectively eligible¹²⁵ were awarded using criteria that reward sustainability.

Additionally, when relevant, Acea adds to tender specifications regulatory references to the Minimum Environmental Criteria (CAM) adopted by Decree of the Ministry for the Environment, Land and Sea¹²⁶, as binding parameters or bonuses. In particular, the refer- ence to CAMS is applied in tenders related to the rental services for generators, ordinary and extraordinary maintenance contracts for lifting systems, the purchase of computers and printer cartridges, in addition to categories such as paper, oce furnishings, public lighting – supply and design of LED lighting fixtures – work clothes, cleaning of buildings, maintenance of green areas and vehicles.

115 For the NFS scope, see Disclosing sustainability: methodological note. With reference to this scope, the water companies Gori, AdF and Gesesa, the environment companies Berg, Demap, Deco and Ecologica Sangro (the latter in the NFS scope from 2023) and the companies operating in PV (with the exception of Acea Solar) are not centrally managed.
116 The data of the three companies operating in the water sector that manage procurement activities independently and of Decoare aggregated here with those managed centrally in order to represent overall relations with suppliers in the year under review. The figures for Berg, Demap and Ecologica Sangro and the photovoltaic companies (with the exception of Acea Solar) have not been included, as these companies recorded very low costs for materials and services during the year, equal to 1.6% of those incurred by the companies in the NFS scope and 1.2% of those incurred by the companies consolidated on a line by line basis.
117 The Code of Ethics dedicates a specific section to Relations with Suppliers, as well as making many other references to the same there in. The Code is shared on the company’s intranet and is available online on the website. Special attention is paid to social safeguards in higher-risk settings: “IIn supply contracts with suppliers located in at-risk countries, defined as such by recognised organizations, contractual clauses have been introduced that involve compliance of the supplier with specific social obligations (e.g. measures that guarantee employees respect for their fundamental rights, the principles of equal treatment and non-discrimination, protection against child labour, the fight against forced labour, guaranteed minimum wage, limited work hours, etc.).”
118 Acea issues tender procedures for the procurement of works, goods and services in compliance with current legislation (Legislative Decree no. 50/2016), with reference to the ordinary and special water and energy sectors. In particular, for tenders in special areas involving amounts below the EU threshold, Acea applies Internal Regulations consistent with the principles of the EU Treaty for the protection of competition. Finally, for tenders that do not fall within the scope of application of the Code on public contracts (so- called “extraneous or private law”), selection procedures are used which comply with the principles of free competition, equal treatment, non-discrimination, transparency and proportionality.
119 In compliance with the requirements of the National Anti-Corruption Authority (ANAC) and the so-called “Anti-Corruption Law” (Law 190/2012).
120 Legislative Decree no. 50 of 18 April 2016 and subsequent amendments and additions. Public Contracts Code.
121 The 2023 analysis produced by Administration, Finance and Control also included the companies Gori, AdF and Gesesa, which have provided data even through they are not managed at the centralised level. It was not possible to include Deco in that it lacks ERP SAP. Additionally, Berg, Demap, Ecologica Sangro and four photovoltaic companies were also left out of the analysis due to the low share of the costs incurred.
122 The calculation of the figure is a simple average of the difference between the due date of the invoice in the system and the date of actual payment.
123 The calculation of the figure is the result of the average of the dierence between the expiry date of the bill in the system and the date of actual payment weighted according to the amount of the bills.
124 The figures for the 2023 dispute refer to all the Companies within the NFS scope (see Disclosing Sustainability: Methodological Note).
125 Consultancy activities are excluded from this calculation.
126 From www.mite.gov.it: “Minimum Environmental Criteria (CAM) are the environmental requirements defined for the various phases of the purchasing process, aimed at identifying the best design solution, product or service from an environmental point of view throughout the life cycle, taking into account market availability. [...] Their systematic and uniform application makes it possible to spread environmental technologies and environmentally preferable products”.