Responsible supply chain

We ensure the Group's sustainability principles of action in the purchasing and contracting processe

We promote responsible supply chain management, especially in environmental, social and good governance matters, guaranteeing, among others, ethical behavior and human and labor rights, transparency, full and fair opportunity, respect by the interests of the interested parties, respect for the principle of legality and international standards of behavior, focus on needs, integration and continuous improvement.

We establish objective and impartial mechanisms for the evaluation and selection of suppliers, ensuring that the supply chain complies with the principles established by the Supplier Code of Ethics, to which all suppliers must adhere and whose content emanates from the Naturgy Code of Ethics, from the Policy Human Rights, Health and Safety Policy, Anticorruption Policy, as well as internationally recognized principles of good governance.

Values we convey to our suppliers

Transparency

We guarantee equality, independence and free competition.

Integrity

We are committed to acting in an honest, upstanding, dignified and ethical manner.

Sustainability

We develop our business with a strategic time horizon that transcends immediate economic interests, thereby contributing to economic, environmental and social development.

Results

We draw up plans, set objectives and take decisions based on the objectives sought by our vision, ensuring those targets are met.

Responsible action principles

To extend the company’s culture to the supply chain, share the goal of service excellence and the responsible action principles upheld by the company, and encourage the incorporation of sustainability criteria into their day-to-day management, mainly by conducting environmental, social and governance audits.

To promote compliance with the company’s codes and policies in the supply chain, especially in terms of human rights, ethics and health and safety.

To encourage the signing of contracts with domestic or regional suppliers in the countries where the company operates, thereby helping to create a positive social impact and foster practices that favour traceability and fair trade in raw materials from source.

Strengthen the commitment and increase the demand by incorporating sustainability criteria in the bidding processes.

Phases of the supply chain management process

Contract model

Unified and universal contract conditions for the whole company.

A code of ethics applicable to procurement processes that is contained in the Supplier Code of Ethics and based on the principles of transparency, traceability, auditability and equality.

Classification process

Classification of suppliers based on the procurement category they can supply and the level of risk implied by the supply. This process results in a supply tree that groups suitable suppliers together so they can take part in the various tenders acording to the risk levels involved.

Approval process

Processes that require approval are determined by quality, health and safety, environmental, social and governance, and operational risk factors in order to guarantee that suppliers meet the requirements defined.

Contractual compliance and document management

Monitoring and control of the documentation required of awarded suppliers in the development of services.

Performance assessment

Performance tracking and analysis of successful bidders from various points of view in order to obtain an objective assessment that can be used in subsequent tender processes and supplier improvement and development actions.

Supplier development

To establish strategic relations capable of providing partnership opportunities and improvements in the products and services supplied.

Supply chain indicators

Performance indicators for supplier assessment

The supplier assessment process consists of two components: business classification and activity certification.

The supplier business classification model establishes:

For suppliers with low or intermediate risk, there is a basic level of assessment that ensures their compliance with Naturgy’s Code of Ethics for Suppliers and declaration of adherence to key legal, fiscal, organisational, environmental, social, health and safety, cybersecurity, compliance , quality and personal data handling criteria required by Naturgy.
For high-risk suppliers, an extended level of assessment is applied, which additionally requires a comprehensive questionnaire and evidence of financial information, sustainability practices, health and safety measures and compliance adherence.

	Indicator	2022	2021
Supplier evaluation	Suppliers assessed via desk assessments/on-site assessments (nº)	1290	1302
	Significant suppliers assessed (%)	100	100
	Suppliers assessed with substantial actual/potential negative impacts (nº)	39	31
	Suppliers with substantial actual/potential negative impacts with agreed corrective action/improvement plan (%)	100	100
	Suppliers with substantial actual/potential negative impacts that were terminated (nº)	2	0
Corrective action plan support	Suppliers supported in corrective action plan implementation (nº)	39	31
Corrective action plan support	Suppliers assessed with substantial actual/potential negative impacts supported in corrective action plan implementation (%)	100	100
Capacity Building programs	Suppliers in capacity building programs (nº)	348	221
Capacity Building programs	Significant suppliers in capacity building programs (%)	27	17