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

Various systems for qualifying suppliers of works, goods and servic- es are active in Acea, in observance of principles of competition and equal treatment.

The Supplier Qualification Unit:

• coordinates working groups to identify the qualification require- ments;
• draws up the Qualification Regulations;
• establishes Qualification systems of European significance95and

Supplier Lists for so-called “below threshold” or private contracts.

During 2021, the product tree shared between the Group compa- nies whose procurement is managed centrally included 544 product groups and the Unit in charge managed, as of 31/12/2021, 159 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 ver- ification of the possession of the requirements and related commu- nications to the supplier. During 2021, a total of 934 applications for registration in the Qualification Systems/Lists were processed (+17% compared to the 798 applications in 2020), amounting to 733 suc- cessful applications in total. Specifically:

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

The qualification requirements requested of suppliers to register on the Qualification System are “standard” – these include require- ments of a moral nature envisaged by the laws in force in the sector

• and “specific”, e. they refer to the product group or groups includ- ed 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 sup- pliers for special non-hazardous waste, cleaning services, armed surveillance service and concierge/reception);
• Registration with the National Environmental Operators’ Reg- ister or authorisation to manage a plant for the recovery/disposal of waste (for inclusion in suppliers’ lists for Waste Management Systems);
• OHSAS 18001/UNI ISO 45001 certification (for inclusion in the suppliers’ list for the electro-mechanical maintenance of in- dustrial plants and cleaning services);
• UNI EN 15838:2010 certification (for inclusion in the suppliers’ list for “Call Centre and Back Office”);
• SA8000 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”).

For admission to the Qualification Systems of Community-wide significance, companies wishing to qualify must declare their avail- ability 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 2021, concerned 114 out of 159 total Suppliers’ Lists (“qualification phase”), suppliers must complete a self-assessment questionnaire on the Quality, Environment, Safety, Energy and Social Respon- sibility management systems that are considered important for sustainability on the Vendor Management platform. In 2021, this questionnaire was completed by 386 suppliers (243 for goods and services and 143 for works), an increase of 6% compared to 363 in 2020, representing 100% of the qualified suppliers on the supplier lists for the aforementioned Single Regulations and over 80% of the total qualified suppliers in the year (equal to 481)96.

Furthermore, in continuity with a practice that has been consoli- dated for several years, Purchasing and Logistics, in synergy with the Sustainability Planning & Reporting Unit, sent a panel of 100 Group suppliers (79 in 2020) an in-depth questionnaire to assess their commitment on environmental issues, with a particular focus on energy consumption. 40 companies responded to the question- naire in full and the results of the survey are shown in the Relations with the environment section, in the chapter on The Use of Materi- als, Energy and Water (Energy Consumption paragraph), to which reference is made.

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 "cadastral cleaning ser- vices - waste disposal" to certify that they have ISO 14001:2015 certification.

In addition, after initiating the Circular Economy Protocol in 2020, in 2021 AdF continued and consolidated this activity, which aims to protect local suppliers and enhance the quality and socio-environmental sustainability of the supply chain. The Protocol, drawn up with the direct involvement of stakeholders, including institutions, sector authorities, banks, universities, trade unions, etc., allocates part of the procurement of goods, services and works, that not sub- ject to the rules of the Procurement Code, to local economic oper- ators, 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 exam- ple, 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 Regu- lation available in the "Suppliers Area" of the institutional website www.fiora.it). In 2021, in particular, AdF wished to promote aware- ness of the project through periodic information campaigns and also through the signing of agreements with the main trade associations in the area to involve their members. As of 31/12/2021, there were more than 100 qualified suppliers within the scope of the Protocol. Finally, in order to assess the effectiveness of the project, AdF set up a monitoring table to periodically check the results achieved and the quality of the actions undertaken and to share them with local stakeholders.

Once qualified, the supplier’s headquarters may be subjected to a second-party Audit on Quality, Environment, Safety, Energy and Social Responsibility (QASER) Management Systems to verify the actual application of active certified Management Systems and the management methods of other areas relevant to sustainability. Again in 2021, the Covid-19 pandemic situation prevented audits being carried out at the supplier's premises, and they were partly replaced by audits conducted on the Teams platform and remote sharing of documentation, which made it possible to maintain an active relationship with the supply chain on issues of quality, envi- ronment, safety, energy and social responsibility. The suppliers to be audited were selected from among the main suppliers- based on the economic weight on the volumes of the 2020 "works" order, processed in 2021, and of a share of the 2020 "services" order in- cluding the waste management orders – that have operated in the most critical sectors for "environment" and "safety" (waste man- agement and works). In particular, 22 suppliers or 20% (approxi- mately 91 million) were audited with regards to the 2020 "works" item and the share of 'services' (a total of € 458 million).

Each supplier was sent feedback indicating the degree of compli- ance per scheme and overall, as well as a report with recommen- dations for improvement. Overall, it was found that 100% of the audited suppliers are certified for Quality (ISO 9001), 95% for Environment (ISO 14001); 91% for Safety (ISO 45001) and 68% for Social Responsibility (SA 8000), while only 41% have Ener- gy certification (ISO 50001). An overall average overall average compliance, compared to the requirements of the audited schemes (QASER), of about 83% (86% for Quality, 85% for Environment and Safety, 64% for Energy and 83% for Social Responsibility).

In addition, in the case of a supply of Granular Activated Carbon used for water purification, Acea Ato 2 included in its purchase specifications the possibility of carrying out audits at production plants located abroad, including in "countries at risk". Two audits were carried out during 2021, the findings of which were shared with the supplier for the development of a recovery plan.

The Group Vendor Rating started in 2020, continued in 2021 and is currently in the final fine-tuning phase. In particular, the evalua- tion system will monitor several performance indicators, including a composite sustainability indicator, developed with the involve- ment of Ecovadis in the project; see box for further details on the project's progress during the year.

⁹⁵Pursuant to Article 134 of Legislative Decree no. 50/2016 as amended.
⁹⁶The number of qualified suppliers does not coincide with the 733 successfully processed applications for registration in qualification systems, as suppliers can register in more
than one qualification system.