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Suppliers’ sustainability Incorporation of ESG criteria within the procurement process.

Poste Italiane promotes responsible supply chain management to ensure sustainability, functionality and traceability of procurement. The Company guarantees compliance with current regulations and company directives and bases its purchasing processes on pre-contractual and contractual relations oriented towards full respect for legality and transparency, placing central attention on compliance with agreements, payment methods and times. The Group makes sure to include, within its own fleet, suppliers possessing adequate quality characteristics and capable of ensuring the protection of workers and compliance with environmental standards.

Poste Italiane guarantees equal opportunities to all suppliers, and the opportunity to compete in contract awarding procedures. Suppliers involved are required to comply with the EU and Italian legislation on competition, refraining from anti-competitive or unethical conduct that is contrary to the rules that safeguard competition. Poste Italiane Group requires its suppliers, including any subcontractors, as well as its partners, to formally accept the inspiring principles and criteria of conduct of the Group, described in the Group's Code of Ethics and Policies.
 
In 2020, in line with 2019, a continuous revision and update of the internal procedures which govern the procurement process have taken place, regarding contracts that are subject to the Public Contracts Code as well as those excluded from its scope of application. During the updating of the "Procedure for the authorisation and issue of purchase requests", the "target times" for the sending of the PR by the requesting functions have been regulated, as a tool to guarantee the respect of the expected delivery times, functional to ensure the continuity of recurrent services and the start-up of new projects. In 2020, the "Procedure for managing the contractual execution phase" was issued, which governs the activities linked to the execution and management of passive contracts entered into by Poste Italiane Group, identifying roles and responsibilities involved. 

 
supplier's sutainability


With the aim of ensuring a selection of products and suppliers able to guarantee the best environmental performance, the Green Procurement function was established in December 2019. With a view to the continuous integration of sustainability aspects into the company’s strategy and organisation, the new function has the responsibility of:

 
  • ensuring the definition and adoption of sustainability requirements to be integrated into the technical assessment criteria for the identification of suppliers operating in accordance with the ESG principles adopted by the Group;
     
  • ensuring the identification of specific performance indicators on sustainable development issues related to procurement processes in order to monitor the degree of sustainability of the entire supply chain, with related reporting;
     
  • implementing the verification processes aimed at ensuring compliance with internal and external regulatory provisions in the procurement sector.


Selection of suppliers

The Group has paid special attention to the social and environmental aspects of its supply chain management, in the belief that the development of transparent and long-lasting relationships with suppliers, paying utmost attention to quality, respect for the environment, safety and social implications in the procurement process, are useful principles for constantly improving the service offered to its customers, as well as for pursuing a public interest objective for Italy's entire economic system63 . In this regard, specific environmental and social criteria are provided for in the supplier selection process, in the participation requirements, in the evaluation parameters of the technical offer and/or in the contractual conditions, of the tender procedures carried out during the year.
The Group's growing attention to ESG issues is shown by the numbers achieved. In 2020, in fact, there was an increase of 27 percentage points, compared to 2019, of tenders carried out on the basis of environmental criteria (75.9% vs 49.1%) and an increase of 16 percentage points, compared to the previous year, of procedures carried out on the basis of social criteria (74.1% vs 57.7%).
 
The path undertaken in the area of purchasing provides for the inclusion of environmental, social and governance aspects, investigating the possession of specific requirements through sustainability audits to which suppliers will be subjected. The methodology is characterised by the adoption of a highly personalised approach, which translates into the definition of an ad hoc questionnaire by sector and size, and the definition of a scoring process structured in three different levels, which provides for the attribution of a rating for each relevant risk, for each dimension analysed and a total ESG rating. These elements provide the following strengths to the model:
  • assessment focused on the supplier's relevant ESG risks, thanks to the use of a specific questionnaire for each economic sector (risk-based approach);
  • robustness of the analysis deriving from the use of a quantitative algorithm, which guarantees the attribution of a rating strongly representative of the level of risk coverage guaranteed by the supplier;
  • multi-level view of risk, with the ability to analyse ESG risk at the aggregate level, at the level of individual E/S/G aspects, and at the level of individual risks;
  • clear identification of areas for improvement on the basis of the rating given to the way individual risks are managed;
  • facilitated compilation of the questionnaire, characterised by multiple closed answers with the aim of facilitating and making compilation immediate;
  • reliability and recognisability of the proposed methodology, based on internationally recognised studies that are renowned best practices in relation to the area under analysis;
  • expendability of the proposed model by Poste Italiane, which may consider making it a proprietary model and offering it on the market once it has been registered with the appropriate trademark.
Aiming at increasing awareness of its suppliers over time and accompanying them on a path of sustainable growth, Poste Italiane plans to gradually introduce environmental and social parameters into its tenders over the years, thus ensuring a gradual expansion of the scope, coverage and weight of ESG criteria on the tender score.