“The procurement process increasingly assumes a central role in value creation, thanks to greater interaction and integration with the outside world and with the different parts of the company’s organisation”
Through this commitment to a sustainable supply chain, Enel also contributes to the United Nations Sustainable Development Goal (SDG) #12 - Responsible Consumption and Production.
Our ambitious 2020 target aims to evaluate 100% of our qualified suppliers on aspects of health and safety, environment and human rights or business ethics within the main supply sectors.
Building a sustainable supply chain
Laterza and Ciomei believe that building a sustainable supply chain requires implementing various actions. First of all, it is essential to have an updated analysis of the supply chain, which requires mapping out individual suppliers and their critical points.
Then it is necessary to be clear about the Group’s expectations. Not only do we need to communicate Enel’s values and sustainability culture to suppliers effectively, we must also set an example in our daily activities.
After that it becomes necessary to check that the message has been clearly received and properly applied. A first step includes assessing results with questionnaires and self-evaluation tests; when the answers suggest a need for improvement, it is time to move to a phase of meetings, sometimes at suppliers’ headquarters, to clarify critical points and, in particular, to develop programmes that will improve processes through the suppliers’ increased commitment.
“Enel bases its purchasing processes on pre-contractual and contractual conduct which is focused on reciprocal loyalty, transparency and collaboration in order to have a resilient and responsible supply chain”
Finally, it is also useful to work alongside other companies in our sector: to define common standards and good practices in order to evaluate suppliers with the same criteria.
Respect for human rights
With regards to the question of human rights in particular, the Enel Group supports the Universal Declaration of Human Rights in every country where it is present: having adopted the approach indicated by the United Nations, Enel has created a specific human rights policy.
“With this formal commitment – Laterza and Ciomei explain – Enel explicitly promotes respect for these rights, on behalf of subcontractors, suppliers and commercial partners,” with particular attention to areas where is high risk or even conflict.
The clauses of the Enel policy require suppliers to respect, protect and uphold human rights in general, to effectively recognise the right to collective bargaining and the freedom to unionise, the elimination of any form of forced or child labour and the abolition of discriminatory practices.
From the very preliminary qualifying phase, Enel requires suppliers to compile a questionnaire on human rights that was created following the indications set out in the United Nations “Guiding Principles on Business and Human Rights” and UNICEF’s “Children’s Rights and Business Principles.” Enel has included specific questions about the presence of policies and actions to oppose child and forced labour and to ensure respect for human rights by suppliers and subcontractors.
Circular procurement: innovation and sustainability
The circular economy is a business model with enormous potential. It can generate competitive business by bringing together innovation and sustainability.
In leading the Group towards the principles of the circular economy, Enel has integrated sustainability and innovation as pillars of its growth strategy and it promotes a systematic approach to circular economy as the guiding path for a competitive edge.
Enel is creating solid circular economy solutions thanks to this approach and to the open and inclusive relationship the Group has with its stakeholders.
In order to support and promote this change, Enel launched the “Circular Economy Initiative for Enel Suppliers Engagement” in the first months of 2018. This project involved 30 significant global suppliers.
This is how it becomes possible to talk about “circular procurement,” which means tracking materials as they come and leave, having detailed knowledge about the flows of components, environmental impact and product recyclability. These are all activities which make suppliers essential allies.
“In this way – continue Laterza and Ciomei – we can kick-start a process of continuous improvement in performance, both internally and among suppliers, that leads to the increasingly sustainable production and distribution of goods.”
The project foresees the use of a web tool where the suppliers insert their data to determine the circular economy index of their company. This shows how digitalisation is continuously improving the efficiency and speed of our processes. The use of artificial intelligence technologies for the analysis of our supplier’s sustainability data confirms this, as Enel is able to monitor the entire supply chain in real time, intervene rapidly in case of critical situations and also plan structural interventions and more efficient processes. These are shining examples of our idea of innovability: innovation and sustainability moving forward together.