Sustainability in the supply chain

We ask our suppliers to ensure their business model is sustainable and responsible over time. We are committed to supporting them on their path.

To ensure the integrity and sustainability of the Group’s supply chain, the commitment of all players involved is essential

Increasing attention to sustainability issues and the need to measure, manage and mitigate ESG (Environmental, Social and Governance) risks drive us more and more to promote and encourage responsible business not only for the Group, but above all for our suppliers.

We therefore demand not only competence and professionalism from our suppliers, but also adherence to our corporate values and principles. Suppliers must confirm in their contractual documentation that they are aware of our Model 231 and the principles of the Italgas’ Code of Ethics, of the Suppliers’ Code of Ethics and of the Italgas Vendor List Regulations,  thereby undertaking to comply with regulations on occupational health and safety, environmental protection and international standards on employment rights.

Moreover, we require you to meet important criteria in terms of human rights and work by accepting the Italgas Policy on Human Rights, health and safety, environmental protection and the ethical and meticulous management of the business.

Our priority objectives include continuous monitoring of the environmental, social and governance impact on the entire supply chain, supporting our partners in their growth process.

Being a sustainable supplier

We are on the frontline to provide our partners with the support they need to integrate the sustainability criteria required in their business and to strengthen their performance in terms of sustainability. 

Becoming a responsible supplier means proactively meeting the requirements in three different areas.

Italgas ESG suppliers program

 

Over the years, Italgas has implemented a robust and comprehensive ESG program for suppliers, which is constantly updated and consists of a collection of activities and measures aimed to recognize and assess potential ESG risks and, accordingly, to plan corrective measures to ensure solid sustainability performance of the Group’s supply chain.

To ensure the integrity of the supply chain and to maintain the expected quality and efficiency standards, Italgas uses a series of instruments, such as supplier qualification and appraisal processes, inspections audits and performance monitoring during the execution of contracts.

Supplier assessment process is the initial step to identify, monitor and manage potential risks. Italgas performs a systematic desk assessment with an integrated corrective action plan. Also, on-site assessment provided by 2nd party suppliers are carried out for relevant and strategic suppliers. Auditors provide also a guidance and support on the implementation of corrective and improvement actions, through their check list and their CAP (Corrective Action Plan) for each supplier. This is the base of Supplier Development Process.

Supplier Development Process consists in a series of trainings regarding both Italgas’ suppliers ESG program, process and requirements, and specific workshop where case studies are shared to provide ESG benchmarking to suppliers with the final aim of spreading best practices on different ESG topics (circular economy, wastes, D&I, energy efficiency, cybersecurity).

Moreover, Italgas supports suppliers on the implementation of corrective actions identified during the Supplier Assessment, also through the implementation of capacity building programs. The aim of this initiative is to systematically improve supplier practices and performance on specific ESG topics (e.g., CO2 emissions), sharing Italgas’ objectives and targets with suppliers.

The procurement strategy, that includes all ESG suppliers programs indicated above, has been validated by the Board of directors and the results of the monitoring carried out are constantly subjected to top executive management, to align ESG strategies of different functions to reach Group’s sustainability goals, included in the Sustainable Value Creation Plan.

Finally, Italgas is committed to provide continuous training for buyers and for relevant internal stakeholders in their roles, in order to let them understand how their day-to-day actions and decisions are essential part of the Italgas ESG Strategy.

 

ISO Certifications

 

In order to maintain a constant and high-quality level, we require suppliers to have specific ISO Certifications. These confirm the creation, application, and maintenance of a management and work organization system consistent with specific reference standards recognized internationally.

During the qualification phase and to participate in the tender procedure, we require the following certifications:

  • ISO 9001 on quality management systems.
  • ISO 14001 or EMAS on environmental management systems.
  • OHSAS 18001/ISO 45001 on health and safety management systems.

Their mandatory nature is a requirement of product classes with a high level of complexity, but it may represent a bonus requirement for qualification and participation in tender procedures. The certificates must be issued by the Accredited Organisation “Accredia” or equivalent in the case of Foreign Certifying Bodies.


2022 target

  • 100% – ISO 9001 for critical suppliers
  • +5% of suppliers with specific ISO/ year

We have launched a suppliers awareness campaign for them to also obtain certifications that are not yet mandatory:

  • SA8000 on social responsibility.
  • ISO 37001 on management systems for the prevention of corruption.
  • ISO 50001 on energy management systems.
  • ISO 27001 on information security.

We periodically ask our suppliers to update all their certifications on IT4Buy. We aim to increase the percentage of suppliers that are qualified and in possession of ISO certifications, constantly monitoring the environmental, social and governance impact on the entire supply chain.


The advantage of ISO Certifications for suppliers

  • Highlight and optimize the company’s commitment to the continuous improvement of its standards.
  • Participate and obtain a higher score in tender procedures.
  • Increase the market value in terms of credibility and image.
  • Involve employees in the improvement of processes and create a company culture based on sustainability and solid and measurable impact.

Our reporting

Year 2021

 

Certifications
year (2021)

 

Critical suppliers (no.)

 

Total qualified suppliers of Italgas (no.)

 

Critical suppliers (%)*

 

Qualification renewal contribution amount (%)

Total suppliers (nr.) 337 1,935
Total Supplier  (nr.) – w/o limitation** 237 1,641
ISO 9001 228 879 96% 54%
ISO 14001 185 583 78% 36%
OHSAS 18001 (ISO 45001) 180 561 76% 34%
ISO 50001 39 77 16% 5%
ISO 37001 36 89 15% 5%
SA8000 (NEW) 50 139 21% 8%
ISO 27001 (NEW) 10 70 4% 4%

*Critical suppliers (high level of complexity, ranking “A” and “B” until 2020, “Strong” from 2021).

**Note “limitation”: suppliers who have had qualification limitations following integration into the group of new companies are excluded.

 

Year 2020

 

Certifications
year (2020)

 

Critical suppliers (no.)

 

Total qualified suppliers of Italgas (no.)

 

Critical suppliers (%)

 

Qualification renewal contribution amount (%)

Total suppliers (nr.) 326 1,602
ISO 9001 305 624 94% 39%
ISO 14001 158 395 48% 25%
OHSAS 18001 (ISO 45001) 151 370 46% 23%
ISO 50001 25 42 8% 3%
ISO 37001 26 49 8% 3%
SA8000 (NEW) 33 79 10% 5%
ISO 27001 (NEW) 2 32 1% 2%

*Critical suppliers (high level of complexity, ranking “A” and “B” until 2020, “Strong” from 2021).

 

Year 2019

 

Certifications
year (2019)

 

Critical suppliers (no.)

 

Total qualified suppliers of Italgas (no.)

 

Critical suppliers (%)

 

Qualification renewal contribution amount (%)

Total suppliers (nr.) 332 1,369
ISO 9001 308 497 93% 36%
ISO 14001 128 158 39% 12%
OHSAS 18001 (ISO 45001) 116 136 35% 10%
ISO 50001-2018 4 4 1% 0,3%
ISO 37001-2011 5 5 2% 0,4%
ISO 37001 (NEW) 5 5 2% 0,4%
SA8000 (NEW) 0 0 0% 0%

*Critical suppliers (high level of complexity, ranking “A” and “B” until 2020, “Strong” from 2021).

 

Metric: Number and % of suppliers with the main certifications.

Target: 100% – ISO 9001 for critical suppliers, +5% ISO/ year, (target at constant scope).

Year/Period of reference: 2019 – 2022

 

 

Sustainability criteria in tender procedures

 

Since 2018 Italgas has set sustainability theresholds and criteria in tender procedure. Each year the model has been enhanced and the target to have 100% of coverage has been further extended.

In 2021, Italgas further developed and consolidated its scoring model setting new minimum sustainability requirements and covering all product categories, works and strategic services. The new assessment criteria present in the offer model include: legality index (AGCM), injury rates (severity index and frequency index), direct and indirect CO2 emissions and sustainability report.

This model has also been introduced for small and medium enterprises, increasing their accessibility and participation through “guided” and responsible growth and taking into account the different sizes of the companies and the heterogeneous nature of their businesses. For 2022 the objective is to add additional assessment criteria with particular attention paid to indirect emissions (Scope 3) and waste management

Italgas is also working for introducing further criteria focused on environmental impacts (circular economy, both in the area of material reuse and waste recovery) and on social sphere (especially to raise awareness and monitor the growth of gender diversity within the supply chain).

Our reporting

Metric: % of tender bids using ESG criteria

Trend
2018
2%
2019 54%
2020 100%
2021 100%

Target: 100% of strategic and at high sustainability risk suppliers qualified in 2021 and 2022.

 

Sustainability questionnaire

 

The questionnaire is compulsory for most of all qualified suppliers and results in a rating assigned. The aim is to use the information collected to determine the general and specific level of sustainability of each supplier.

“Sustainability Index” is a desk assessment certified by a third party (CRIF Synesgy). This Platform provides suppliers with a rating or “Sustainability Index”, which certifies its ranking and allows it to obtain an action and improvement plan. Evaluation is based on Environmental, Social and Governance criteria, including also business potential risks related to the specific Country, Sector and Commodity of the supplier. The rating allows access to the Italgas Supplier Portal.

If the resulting rating is lower than the set threshold, the supplier cannot be admitted to the qualification process. Average-low ratings will be subjected to development plans, and an on-site audit will be carried out to identify the areas of improvement and to monitor performances in the short and long term, through a CAP (Corrective Action Plan) and in some case capacity building programs.

From 2022 onwards, systematic monitoring is carried-out through regular reports with a special focus on certain issues to analyze rating trends, such as, for instance, air emissions or respect for human rights and gender equality.

These reports are shared and discussed with company’s buyers and internal stakeholders, who are provided, on a periodical basis, awareness and training activities in order to ensure alignment between the supplier ESG strategy and how they implement their roles within the organization. It’s important to highlight that Purchasing practices are continuously reviewed and updated to ensure alignment with the Supplier Code of Conduct and to avoid potential conflicts with ESG requirements.

In addition to qualification requirements, the sustainability score is also required as a minimum criterion for participation in tenders. Suppliers with better ESG performance are preferred by applying a minimum weight to ESG criteria in supplier selection and contract awarding. If they cannot achieve minimum ESG requirements within a set timeframe, they’re excluded from contracting.

Italgas objective is to systematically improve supplier practices and performance on specific ESG topics trough trainings, workshops, developing knowledge and skills.

Our reporting

Metric: % of suppliers who are qualified, strategic and at high sustainability risk (direct and indirect)

Trend
2019
32%
2020 100%
2021 100%

Target: 100% of qualified suppliers.

 

Relations with suppliers: ethics and sustainability

We require suppliers to endorse and share our principles and values, complying with our model 231 and the principles of the code of ethics and the code of ethics of the Group’s suppliers.

Become a supplier

Do you want to grow alongside the Italgas Group? Our qualification process is easy, we guide you step by step.

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