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Supplier sustainability

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The Group's goal is to increase the number of suppliers from the Third Sector in the Vendor List by 20% by 2023 (compared to 2019) in line with the Social Supply Chain policy

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2,758 reputational checks were carried out on suppliers, subcontractors and participants in tender procedures

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

In addition, in July 2020, Snam implemented a new process aimed at gaining a deeper knowledge of its suppliers, including a new category of verification in addition to the reputational one: "Compliance Verifications", which involve carrying out analyses also on the financial soundness of suppliers (or potential suppliers), as well as on their suitability and adequacy, both from a technical point of view and in terms of HSEQ.

 

>Read more on how Snam manages relationship with third parties

 

Suppliers due diligence

In 2020, about 2,758 reputational checks were carried out on suppliers, subcontractors and participants in calls for tender.
20 measures were adopted as a result of these checks.

Breakdown by type (no.)

 

Measures (no.)

 

 

Besides environmental Due-diligence is carried out on some suppliers and is foreseen as part of Snam acquisition process which is regulated in an ad hoc procedure which is not publicly available.

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Vendor management in 2020

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 2020 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.
 

The qualification process resulted in contacting more than 700 companies, covering more than 250 different product areas, and initiating the accreditation/qualification of more than 1,000 new applications.

The number of spontaneous applications received from potential suppliers was 1,007 (+2.7%).

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.  
During the year, 877 feedbacks were collected, referring to the performance of 166 suppliers (+41% compared to 2019), 371 contracts were analysed and, in line with the promotion of sustainable behaviour along the supply chain, 3,815 checks were also carried out on the contributory regularity of 1,768 suppliers and subcontractors, intercepting irregularities in 2.28% of cases (+1.3% compared to 2019).
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.

 

2020 suppliers assessment

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 630 48% 48% 100%
of which critical 98 100% 100% 100%
Total qualified Labour suppliers 309 69% 69% 100%
of which critical 79 100% 100% 100%
Total qualified Services suppliers 1,328 41% 41% 100%
of which critical

54

100% 100% 100%
International projects outside EU (non of them are critical)

10

90% 90% 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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updated
05 May 2021 - 10:19 CEST