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

In order to assure sustainability, functionality and traceability of procurement, the Poste Italiane Group manages its supply chain responsibly. In this respect, the company undertakes to guarantee compliance with current regulations and company directives and bases its procurement processes on pre-contractual and contractual relations hinged on values of legality and transparency, placing central attention on compliance with agreements, payment methods and times. Poste Italiane therefore includes, within its own fleet, suppliers possessing adequate quality characteristics and capable of ensuring the protection of workers and compliance with environmental standards.

The Group guarantees equal opportunities to all suppliers, giving them 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. The company also requires them, 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 line with the trends seen in recent years, Poste Italiane’s procurement makes constant, massive use of competitive procedures that guarantee the Company competitive advantages. The procurement process takes due account of ESG topics, in the form of a vehicle for the spread of a sustainability culture. These Group policies are integrated into the corporate governance system and laid out in the procurement process. Moreover, together with the Internal Regulations for the Award of Works, Service and Supply Contract Procedures (approved in November 2017 and modified in July 2019) and the Public Contracts Code, the procedures constitute documents for the governance and regulatory compliance oversight of Poste Italiane’s contract awards. In this regard and with a view to continuous improvement, in 2021, the review was launched of the system of procedures, amongst others also including ESG principles already in force and functional to sustainable procurement. In addition to strengthening the central role played by Business Process Management (BPM) as a tool for the management, dematerialisation and tracing of the expenditure cycle, in October 2021, ISO 20400 certification was obtained, which guarantees a guide to integrate sustainability into the procurement processes, allowing Poste Italiane to make more informed choices, introducing supplier and product/service assessment processes based on the related sustainability performance. 

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. This function assures the permanent integration of sustainability topics into the tender procedures and ESG criteria into the technical assessment of bids. The aim is to pursue a sustainable change through the definition of significantly impacting projects, such as logistics, the decarbonisation of properties, consumable materials, fostering attention paid to the use of resources, investment plans and technological development, coupled with the “green” interpretation of more traditional needs.

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.

As further evidence of the Group’s attention paid to ESG topics, again in 2021, significant increases were recorded in connection with tenders run on the basis of social and environmental criteria. Specifically, 84.5% of suppliers, as compared with 74.1% in 2020, were selected in line with specific social standards in 2021. If this indicator is considered net of the tenders without technical bids (insofar as awarded to the lowest price), it certifies that almost all tenders run demand social criteria (> 95%). On the other hand, 83.4% of tenders run in 2021, as compared with 75.9% the previous year, respect certain environmental performance criteria. 
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, brought together, give the model the following strengths:
  • assessment focused on the supplier’s relevant ESG risks, through the use of a specific questionnaire for each economic sector (risk-based approach);
  • use of a quantitative algorithm, which guarantees the attribution of a rating that is highly representative of the level of risk coverage guaranteed by the supplier, resulting in a robust analysis;
  • 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, which is made up of multiple closed answers to facilitate completion; 
  • reliability and recognisability of the proposed methodology, which is 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.

Over the years, Poste Italiane aims to raise awareness in its suppliers and assist them as they embark on a sustainable growth path. This is why the Group looks to progressively introduce social and environmental criteria into its tenders over the years, guaranteeing a gradual extension of the areas required, as well as the coverage and weighting of the ESG criteria on the tender score.