Procurement Policies

[GRI - 103-1], [GRI - 103-3], [GRI - 203-2], [GRI - 413-1], [GRI - 102-16], [GRI - 102-40], [GRI - 102-42], [GRI - 102-43], [GRI - 102-44], [GRI - 403-4], [GRI - 414-2], [GRI - 419-1], [GRI - 102-9], [GRI - 308-1], [GRI - 414-1], [GRI - 102-12],

Consolidated report

The Purchasing and Logistics Department of the Parent Compa- ny defines policies and guidelines and manages, as a service, the procurement of goods, services and works required by the Depart- ments of the Holding Company and the main Group Companies. To perform its duties, it values the technical skills of the buyers, han- dles the requests of “internal customers” (Functions/Companies in the Group) and develops a transparent relationship with suppliers. The department also oversees the flow of materials, logistics and warehouses of the Group, managing the operations of the central depot and most of the territorial depots of Areti and Acea Ato 2, at the service of the operational personnel dispatched to the territory. It also supplies materials for scheduled and urgent works, interacting with most of the companies contracted by Areti and Acea Ato 2. After the testing and operation of the measurement laboratory for the verification of water meters built by Acea Elabori at the new shed of the logistics centre of Santa Palomba, set up in 2020, at the same site, in 2021, the setting up of the low voltage laboratory of Areti (Engineering and Testing Unit) was also completed.

DEALINGS WITH SUPPLIERS AND PROCUREMENT MANAGEMENT

The Acea Code of Ethics recalls the reference principles83 that should guide relations between Acea, as a contracting authority, and its suppliers (contractors and subcontractors):

  • compliance with rules and procedures, including processes of due diligence aimed at assessing any risks of corruption;
  • the principles of transparency and protection of competition;
  • principles of good faith, loyalty, professional propriety;
  • promotion of ethical and sustainability aspects, such as respect for the protection and safety conditions of workers, the quality of goods and services, respect for the environment and the pur- suit of energy savings.

Suppliers issue a declaration of acceptance and commitment to comply with the prescriptions contained in the Code of Ethics, attached to the documents produced for participation in tender procedures for the awarding of works, goods and services. Any violation of the principles contained therein revealed by audits will result in the exclusion from the tender or cancellation of the award. Acea mainly uses tenders84 to select suppliers, adopting criteria of transparency: in 2021, 61% of procurement, managed at a central- ised level85, was awarded through a tender procedure.

For centrally-managed Group companies, the Purchases and Logistics Function has published on the website86 – “Supplier” Area – the documentation relating to purchases regulated by the Public Procurement Code87. Operators who are interested in par- ticipating in tenders can freely access the portal of the Qualifi- cation 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. Companies that manage their own procurement process also carry out tenders electronical- ly and interact remotely with suppliers; this method helps to limit face-to-face meetings, in compliance with the provisions aimed at limiting the spread of the pandemic.

The Administration, Finance and Control Function monitors sup- plier payment times: in 2021, for the companies in the scope88, the average payment delay was 27.3 days89 (a marked decrease com- pared to the 42 days recorded in 2020); the same figure, weighted in light of the amounts, falls to 22.6 days90. This was the case for 26% of the value of payments made in the year (compared to 35% in 2020), while the percentage of amounts paid on time was 74%, an improvement on the 65% recorded in 2020.

WATER CONTRACTS: A DEDICATED CHANNEL ON PROCUREMENT WAS ACTIVATED AND SAFETY MEASURES AGAINST COVID-19 HAVE CONTINUED

Acea Group promotes, towards stakeholders, transparency and accuracy of information and maximum attention to the issues of safety at work, with specific regard to the personnel of contractors. In this sense, in line with the provisions of the applied NCBA, the Company confirms its interest in the fair application of the social clause on the subject of contract changes, aimed at the maximum protection of workers' employment, combating irregular forms of work or work that does not comply with the applied NCBA.

On the basis of the commitments shared in the Water Contracts Protocol, during 2021 several meetings were held with the trade unions involved in water contracts and the contractors on key issues such as health and safety at work, compliance with the con- tractual regulations applied, and protection of employment; Acea has expressed its willingness to make available to the trade unions a dedicated channel (a certified e-mail address), which has been ac- tivated, through which to convey any specific reports on the subject of water contracts.

It should be noted that in 2020 an "Advisory Committee to analyse and propose actions to improve safety at construction sites" was set up in accordance with the "Shared protocol for the regulation of measures to combat and contain the spread of the Covid-19 virus at the workplace", with provision for periodic meetings as necessary.

DISPUTES WITH SUPPLIERS 2021

The disputes91 between the company and its suppliers mainly concern non-payment of invoices and judgements on procurement matters. With regard to non-payment of invoices for supplies of goods, ser- vices and works, there has been a decrease in the number of dis- putes that have arisen: 8 in 2021 (12 in 2020). These are injunc- tions concerning invoices that were not paid for reasons of a formal nature and are quickly resolved by settlement proceedings.

For the remaining civil litigation in the field of procurement con- tracts, mainly concerning the registration of reservations by con- tractors, contract terminations and damages, 14 cases were filed in 2021, a slight increase compared to the previous year (8 cases).

As at 31 December 2021, there was a total number of pending dis- putes with suppliers (including disputes started in previous years) of 100, down from the 2020 figure (137 disputes), although there is still a slowdown in activity in relation to the health emergency. Lastly, 20 administrative disputes began in 2021 (15 the previous year) concerning tenders. It should also be noted that, as of 31 December 2021, there were also 27 pending disputes started by employees of contractors, who are appealing against the latter and against the contracting authority - as jointly and severally liable - for work credits accrued as an employee of the contractor during the duration of the contract.

SUSTAINABILITY CRITERIA IN TENDERS

In 2021, for the Group Companies under analysis, over 6,480 or- ders/contracts were processed, for a total of more than 2,870 sup- pliers involved (please see the Order Analysis below).

Within the centralised management of tenders, which covers 86.4% of the total value of procurement within the 2021 scope of consolidation, amounting to over 3,400 orders/contracts managed and more than 1,780 suppliers involved, as a requirement for par- ticipation, 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 ISO 45001:2018 occupational health and safety certi- fications. Furthermore, for the 149 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 ISO50001 - UNI ISO 37001

- FSC Chain of Custody.

Beginning in 2020, these requirements were added to potentially eligible calls for tenders, awarded on the basis of the most eco- nomically advantageous offer. In 2021 approximately 23% of the 400 potentially eligible contracts concluded92, were awarded on the basis of sustainability criteria. Specifically, for some tenders for water, electrical and civil engineering works awarded with the method indicated, rewarding criteria were also included regarding the use of ecological vehicles, additional training of workers in the area of safety, and the possession of certifications (where not al- ready participation requirements) in the following areas: environ- ment, health/safety, energy efficiency, the use of environmentally sustainable materials and corruption. Finally, the technical specifi- cations for procurement by Group Companies include sustainability criteria concerning materials, such as recycling, re-usage and the repairability index.

For an electromechanical tender that took place in 2021, Gesesa (among the companies that are not centrally managed) added UNI EN ISO 9001 and UNI CEI EN ISO 50001 certifications as a special requirement.

Acea will include, where relevant, the normative references to the Minimum Environmental Criteria (CAM) adopted by Decree of the Ministry for the Environment, Land and Sea Binding parame- ters or bonuses in tender documents93. In particular, the reference to CAMS was 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, office furnishings, public lighting – supply and design of LED lighting fixtures – work clothes, cleaning of buildings, maintenance of green areas and vehicles.

83Acea's Code of Ethics, approved by the Board of Directors, is shared on the company's intranet and is available online at www.gruppo.acea.it, in the Governance section. The
Code devotes article 15 to suppliers, as well as numerous other references in the text. Particular attention is paid to social safeguards in higher-risk contexts: “In supply contracts
with 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)” (Code of Ethics, Art 15.2).
84Acea 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 (socalled
“extraneous or private law”), selection procedures are used which comply with the principles of free competition, equal treatment, non-discrimination, transparency and
proportionality.
85Equal to 86.4% of the total volumes of the companies in the NFS scope, including those not managed centrally.
86In compliance with the requirements of the National Anti-Corruption Authority (ANAC) and the so-called “Anti-Corruption Law” (Law 190/2012).
87Legislative Decree no. 50 of 18 April 2016 and subsequent amendments and additions. Public Contracts Code.
88The 2021 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. However, the companies Berg and Demap and some photovoltaic companies are not included, due to the low incidence of costs incurred.​​​​​​​
89The 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.​​​​​​​
90The calculation of the figure is the result of the average of the difference between the expiry date of the bill in the system and the date of actual payment weighted according to
the amount of the bills.
91The figures for the 2021 dispute refer to all the Companies within the NFS scope (see Disclosing Sustainability: Methodological Note).
92Consultancy activities are excluded from this calculation.
93From the www.minambiente.it website: “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”.

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