Sustainability in the selection and assessment of suppliers: from qualification to ongoing contracts

Various systems for qualifying suppliers of works, goods and services are active in Acea in observance of principles of competition and equal treatment.
The Supplier Qualification Unit:

• coordinates working groups to identify the qualification requirements;
• draws up the Qualification Regulations;
• establishes Qualification systems of European significance¹²⁰ and Supplier Lists for so-called “below threshold” or private

During 2022, the product tree shared between the Group companies whose procurement is managed centrally included 567 product groups and the Unit in charge managed, as of 31.12.2022, 162 Supplier lists. To register with the Lists/qualification systems, companies must visit the Acea institutional website (www.gruppo.acea.it suppliers section) which is a dedicated portal; the requests are processed, including verification of the possession of the requirements and related communications to the supplier. During 2022, a total of 1,554 applications for registration in the Qualification Systems/Lists were processed (+66% compared to the 934 applications in 2021), amounting to 713 successful applications in total. Specifically:

• 253 qualification applications processed for “works” Qualification systems”;
• 460 qualification applications processed for Qualification Systems/Suppliers’ Lists for “goods and services”.

The qualification requirementsrequested of suppliers to register on the Qualification System are “standard” – these include requirements of a moral nature envisaged by the laws in force in the sector – and “specific”, i.e. they refer to the product group or groups included in each Supplier List.
Among the specific requirements, in some cases Acea requires its po- tential suppliers to have certain Authorisations and/or certifications:

• UNI EN ISO 9001 certification (binding requirement for all the “works” product groups and for almost all the “goods and services” suppliers);
• UNI EN ISO 14001 certification (for inclusion in the lists of suppliers for special non-hazardous waste, cleaning services, armed surveillance service and concierge/reception);
• Registration with the National Environmental Operators’ Register or authorisation to manage a plant for the recovery/disposal of waste (for inclusion in suppliers’ lists for Waste Management Systems);
• UNI EN ISO 45001 certification (for inclusion in the suppliers’ list for the electro-mechanical maintenance of industrial plants and cleaning services);
• UNI EN 15838:2010 certification (for inclusion in the suppliers’ list for “Call Centre and Back Office”);
• SA 8000 certification (for inclusion in the suppliers’ list for “Cleaning services”);
• UNI 10891 certification (for inclusion in the suppliers’ list in the “Armed surveillance service and concierge/reception”).
• Pursuant to Article 134 of Legislative Decree 50/2016 as amended.

For admission to the Qualification Systems of Community-wide significance, companies wishing to qualify must declare their availability to undergo an audit at the administrative head office, aimed at assessing the truthfulness and adequacy of the documentation provided, and at the operating plants or product warehouses, in order to assess the implementation and application of the active management systems.

The assessment of suppliers involves different types of controls that are implemented depending on the List and the different statuses that the supplier acquires with respect to Acea:

• during the qualification phase;
• qualified;
• qualified with contract in progress.

In order to be able to register on the suppliers’ list relating to the Single Regulations for Goods and Services and Works which, for 2022, concerned 116 out of 162 total Suppliers’ Lists (“qualification phase”), suppliers must complete a self-assessment questionnaire on the Quality, Environment, Safety, Energy and Social Responsibility (QASER) management systems that are considered important for sustainability on the Vendor Management platform. In 2022, this questionnaire was completed by 288 suppliers (201 for goods and services and 87 for works), representing 100% of the qualified suppliers on the supplier lists for the aforementioned Single Regulations and 78% of the total qualified suppliers in the year (equal to 368)¹²¹.

Furthermore, in continuity with a practice that has been consolidated for several years, the Purchasing and Logistics Function, in synergy with the Sustainability Planning & Reporting Unit, sent a panel of 100 Group suppliers an in-depth questionnaire to assess their commitment on environmental issues, with a particular focus on energy consumption. 47 companies responded to the questionnaire in full and the results of the survey are shown in the Relations with the environment section, in the chapter on The Use of Materials, Energy and Water (Energy Consumption paragraph), to which reference is made.
Of the companies that manage their own procurement, it should be noted that Deco, which requires suppliers that intend to register in the company’s vendor list to complete a questionnaire, signed by their legal representative, centred around topics of socio-environmental importance, such as the adoption of a 231 Organisational Model, any presence of current legal proceedings for the offences envisaged by Italian Legislative Decree no. 231/01 or by environmental or occupational safety regulations as well as any possession of certifications on QASER management systems or EMAS registrations. Furthermore, Deco requires suppliers during registration to sign a commitment to corporate social responsibility on the aspects envisaged by international standard SA 8000, which allows for a higher score to be achieved during qualification. As at 31 December 2022, Deco had 541 letters of commitment signed by the legal representatives of the suppliers on the vendor list, 87 of which from the 155 new suppliers registered in 2022. The company carries out an analysis to identify its “key” suppliers, namely those that, while performing their activities, could have a greater influence on the corporate activities and, in particular, impact the quality of the service, the environment and certain aspects of health and safety at work. In addition to their obligation to complete the aforesaid questionnaire before entering into a contractual relationship, all key suppliers are periodically assessed to confirm their qualification and may be subject to second-party audits.

AdF also applies, where relevant, preferential sustainability criteria upon registration on the Suppliers’ List, and for qualification in the product categories, for example by requiring operators who intend to qualify in the product category “hazardous and non-hazardous special waste disposal services” to certify that they have ISO 14001:2015 certification.
AdF continues its application of the Circular Economy Protocol, in order to protect local suppliers and enhance the quality and socio-environmental sustainability of the supply chain. The Protocol, specifically promoted by AdF and drawn up with the direct involvement of stakeholders (institutions, sector authorities, credit institutes, universities, trade unions, etc.), makes it possible to reserve part of the procurement of goods, services and works, that are not subject to the rules of the Procurement Code, to local economic operators, who can register in a dedicated and specially created register to qualify in the product categories related to the circular economy. Social and environmental responsibility is also taken into account when assessing qualification requests, and incentive criteria that are linked to further commitments are envisaged, such as, for example, hiring staff belonging to protected categories, good practices in terms of health and safety in the workplace, use of vehicles with low environmental impact, etc. (see the Circular Economy Regulation available in the "Suppliers Area" of the institutional website www.fiora.it). As at 31 December 2022, there were more than 130 qualified suppliers within the scope of the Protocol. Finally, in order to assess the effectiveness of the process, AdF constantly monitors the qualifications in the categories included in the Register, periodically checking the results achieved and the quality of the actions taken and sharing them with local stakeholders. The success of the initiative, launched in 2020, is based on mutual benefit and generates a virtuous cycle in terms of reliability and an increase in sustainability: on the one hand, local suppliers can be confident of long-term assignments, on the other they assume the commitment, in order to remain on the Register, of full compliance with the envisaged sustainability criteria.

Once qualified, the supplier may be subjected to a second-party audit on Quality, Environment, Safety, Energy and Social Responsibility (QASER) Management Systems in order to verify the actual application of active certified Management Systems and the management methods of other areas relevant to sustainability. In 2022 audits were conducted on the Teams platform, with remote sharing of documentation; 29 of the main suppliers were selected and subjected to an audit. These suppliers operated in the most critical sectors for “environment” and “safety” (waste management and works).
Each supplier was sent feedback indicating the degree of compliance per scheme and overall, as well as a report with recommendations for improvement. Overall, it was found that 100% of the audited suppliers are certified for Quality (ISO 9001), 97% for Environment (ISO 14001), 93% for Safety (ISO 45001), 52% for Social Responsibility (SA 8000), and 41% for Energy (ISO 50001). An overall average overall average compliance, compared to the requirements of the audited schemes (QASER), of about 83% (88% for Quality, 82% for Environment, 88% for Safety, 66% for Energy and 83% for Social Responsibility).

During the year, Deco also prepared an Audit Plan of its “key suppliers” and investigated 2 companies on aspects envisaged by the standard SA 8000 such as the use of child labour or forced or compulsory labour, discrimination, worker safety, compliance with national collective bargaining agreements and labour law, and freedom of association, which found no non-conformities. Should non-conformities be detected, based on their severity, a recovery plan is defined which allows the supplier to raise awareness and improve its performance, with the exception of particularly serious findings that could lead to the interruption of the contractual relationship.

The Group Vendor Rating system has been implemented in the single purchasing portal since 2021. The system monitors various supplier performance indicators (punctuality, quality, safety) and generates a “vendor rating index”, which in 2022 was calculated for 900 suppliers; this was supplemented by a sustainability rating, according to the EcoVadis model, calculated during the year on 339 suppliers (see the info box and Chart no. 36).

Chart no. 36 – management systems and policies of suppliers evaluated by Ecovadis (2022)

N.B. suppliers may have several management systems/policies.

120 Pursuant to Article 134 of Legislative Decree no. 50/2016 as amended.
121 The number of qualified suppliers does not coincide with the 713 successfully processed applications for registration in qualification systems, as suppliers can register in more than one qualification system.