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Supplier sustainability

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The supply chain activities strive towards an inclusive growth and in 2018 the Company published a social supply chain policy through which it is committed to open and sustain the involvement of social businesses in its supply chain, promoting opportunities of collaboration through networks and consortia of social enterprises

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Snam’s suppliers are familiar with the Model 231 and the principles of the Code of Ethics, which they have adopted as a means of sharing Snam’s commitment to occupational safety, health and environmental protection, and labour law

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To evaluate their performance, Snam uses a rating index (IR) which takes into consideration the compliance with technical contractual requirements (Quality), the health-safety-environment (HSE) requirements, the agreed delivery times (Punctuality), the setting up of a good relationship with the customer for the entire duration of the contract (Behaviour)

Knowledge of Model 231 and Snam’s Code of Ethics are the prerequisite for establishing a collaborative relationship with suppliers.

In the early stages of the qualification process, all Snam suppliers are required to make themselves familiar with the organisational,management, monitoring and control model (Model 231) and the principles of the Code of Ethics and to comply with the regulations on occupational safety, health and environmental protection, and labour law.
Furthermore  the ten principles of Global Compact are communicated to suppliers with the aim of disseminating its values.


>Read the Code of Ethics' pages about suppliers (bilingual).

The "Ethics and Integrity Agreement" represents a major commitment from suppliers towards Snam's core values.

Snam has implemented an "Ethics and Integrity Agreement" with suppliers to protect the integrity of the sustainability process of the supply chain and to retain further commitment from suppliers / subcontractors to comply with the principles and values deemed most important and of great reputational significance to the company.

Each supplier / subcontractor,in order to receive an order from Snam, are asked to sign this document requiring them to comply with Snam's principles of loyalty, transparency and fairness, and to respect and mantain the standards set out in the Code of Ethics.

 

>Read more on how Snam manages relationship with third parties

 

Suppliers due diligence

In 2018, about 2,074 reputational checks were carried out on suppliers, subcontractors and participants in calls for tender.
31 measures were adopted as a result of these checks.

 

Reputational check breakdown by activity (%)

 

Measures adopted (no.)

 

 


Vendor management in 2018

In the interests of transparency generally, Snam aims to ensure that the selection process – both during the qualifying phase and the award of contracts – guarantees equal opportunities for all suppliers, once they meet the required quality standards.
In order to begin collaborating with Snam, each supplier must pass several stages of preliminary assessment depending on the criticality level of the product category to be supplied. To achieve this, Snam uses assessment criteria that take into account the volume of orders supplied, their economic importance, the extent of investments made, and the analysis of operating costs. The assessment is performed with the support of IT systems to ensure the traceability and comparability of the information gathered.
Especially during the qualification phase, Snam pays particular attention to the management of risks related to the economic, environmental and social context of the supplier. This takes place for the most critical product categories, whose procedures also contain very stringent requirements, such as, for example, the implementation by the supplier of certified management systems.

The vendor management process is constituted by three phases:

phases activities 2018 data
1) Checks during the qualification phase Assessment is based on key issues broken down into four different levels (A, B, C, D) allocated to each category of goods depending on technological complexity and impact on Snam’s performance.
Many elements are assessed, starting with technical and operational capabilities. We pay particular attention to the candidate’s financial reliability and to their commitment to workplace health and safety and environmental protection.
We have further requirements relating to the most critical categories of goods (A and B), such as possessing management systems that have been certified in accordance with international standards.
 
611 suppliers were subject to renewals and new allocations.
As at 31 December 2018, there were 1,465 suppliers on the vendor list.
2) Service monitoring during the contract execution phase Monitoring includes audits, inspections and assessments of services with the help of the teams responsible for managing the contracts.  
We got 815 feedbacks from 157 suppliers
We performed 3,980 checks on 1,831suppliers and subcontractors as to the regularity of their social security contributions, uncovering 2.2% of irregularities.
3) Performance evaluation
Snam uses a ratings index that assess compliance with technical and HSE contractual requirements (Quality), compliance with delivery deadlines (Punctuality) and relations for the duration of the contract (Conduct). We periodically send our evaluation to the suppliers in the form of analysis.
Snam is entitled to limit, suspend or revoke the qualification of any supplier that falls short of the agreed standards. Suppliers who manage to complete their gas infrastructure construction or maintenance work with no accidents will be rewarded in their score.
 
 For HSE activities, monitoring indicators (KPIs) were prepared within this remit to assess performance with respect to each contract issued for works, services and/or goods involving on-site installation.
The KPIs consider: accidents, contractor and subcontractor personnel management, safety and environmental protection documentation management, and represents 30% of the new rating index.

 

2018 suppliers sustainability analysis

Throughout their collaboration with Snam, suppliers are monitored by means of audits, inspections and performance assessment processes, both to respond to any requests for assistance and to confirm that the partnership will continue in a linear, consistent manner over the years. As part of the performance assessment process, behaviours in terms of social and environmental responsibility are rated highly. In the following table it is possible to find the number of suppliers (total and critical one) divided for category submitted to checks about sustainability issues. 

Suppliers (1) number working practices (2) environmental criteria human rights (3)
Total qualified Goods suppliers 495 45% 45% 100%
of which critical 105 100% 100% 100%
Total qualified Labour suppliers 244 65% 65% 100%
of which critical 81 100% 100% 100%
Total qualified Services suppliers 1,066 37% 37% 100%
of which critical

91

100% 100% 100%

 

(1) A single supplier may be in possession of more qualifications

(2) Aspects relating to health and safety

(3) Ethical aspects (regular contributions/DURC, Law 231, child labour, forced labout, etc.)

Visit the dedicated supplier portal

Visit the dedicated supplier portal

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Transparency and good governance

Listen to Snam's General Counsel explain Snam's commitment to business conduct, transparency and good governance

Watch on snam's Youtube channel
Business conduct

Discover Snam's approach to business conduct

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updated
19 April 2019 - 18:09 CEST