In 2016, the process that defines activities aimed at improving the sustainability of the supply chain continued to be applied. These activities involve the qualification, incoming quality and vendor rating stages.
[G4-DMA Supplier Human Rights Assessment] In particular, the suppliers were classified according to the potential risks associated with their sustainability performance, carried out using a specific method that considers the social-environmental and business continuity aspects associated with the procurement markets in which they operate. For this reason, the procurement markets (i.e. procurement categories homogeneous among themselves) have been classified in accordance with parameters such as:
- the geographical areas of reference and the risks connected with them,
- the potential impact on the environment and on society of the suppliers’ activities and of the products/services supplied throughout their entire life cycle, including risks relating to violations of human, employment and environmental rights,
- the impact on the reputation of TIM as a customer.
A matrix has therefore been created which, by relating the spending associated with the specific purchase market to the risk index calculated on the basis of the parameters listed, has allowed purchase markets to be divided into four classes, identifying those most critical from the point of view of sustainability and economic impact. Suppliers belonging to the classes at greatest risk are the subject of sustainability audits carried out by Company personnel or by personnel from third party companies specialising in the sector. These audits are repeated periodically to monitor the implementation of any corrective actions and, if the results are positive, in order to verify that the standard of performance found is being maintained.
The tools developed and used for the Domestic BU have been explained and transferred to the Brazil BU, which is analysing the methods of application to its suppliers.
[G4-HR4a], [G4-HR5a], [G4-HR5b], [G4-HR6a], [G4-HR11] SAll suppliers of the Domestic BU have been assessed to consider the social/environmental risk1; in 2016, 48 were considered to be at greatest risk (+20% as compared with 2015 and +17% on 2014). 21 purchase markets2 and suppliers operating in the following geographical areas are considered to be at greatest social risk: Asia, Central and South America, North Africa and Eastern Europe.
[G4-HR7] For the employees of organisations which supply security guard services in Italy, the Consolidated Law on Public Security must be complied with, in particular article 138, subsection 2, which specifies the professional and training requirements of sworn guards. In Brazil Law 7102/83 lays down rules on private guards. Amongst others, it establishes that all those intending to be hired as guards for a guard business must have attended an advance training course, delivered by schools accredited by the Federal Police. After hiring, once every two years the guards must attend an update course.
[G4-DMA Supplier Human Rights Assessmenti] Since 2014, all suppliers interested in a qualification process (new, extension or renewal), relating to areas of procurement that present the greatest risk in terms of sustainability answer a specific self-assessment questionnaire to determine the socio-environmental sustainability risk. Periodically updated based on the results and evolution of the qualification process, the questionnaire was developed according to the main requirements of the relevant responsible corporate management standards relating to respect for ethical values and to safeguarding the environment (including SA 8000, Global Compact dell’ONU and ISO 14001) and to the best industry practices.
[G4-HR10], [G4-LA14] The self-assessment sustainability questionnaire is integrated into the application that handles the supplier qualification process, which automatically extended it to all new suppliers operating in markets where sustainability is considered to be at risk. Refresher campaigns were mounted for suppliers previously qualified in TIM’s Register of suppliers. The results of the questionnaire will make it possible to refine the risk matrix described above.
In 2016, a self-assessment questionnaire was sent out in Brazil on matters of sustainability to suppliers whose orders exceed one million reais, thereby involving 16% of the total number of suppliers. As of the end of 2016 replies had been received from all the 236 suppliers involved. The results will help direct future selection processes.
In October 2016, the ISO 9001:2008 certificate of conformity of the “Quality Management System” was confirmed for the Purchasing and Service Center Logistics Departments under the responsibility of the Business Support Office, with specific recognition for the initiatives taken in the field of sustainability. This initiative has led to the mapping of 23 department processes with the identification of 118 performance indicators that permit the monitoring and improvement of the administration of services supplied to internal clients and suppliers.
The application of the green procurement policy, which contains guidelines for establishing the environmental requirements of products/ services purchased, continues to be an integral part of the procurement policy. The policy covers all stages of the product life: design, production, use and end of life. Published on the “Vendors Hub” supplier portal of TIM and in the sustainability section of the telecomitalia.com website, the document helps to orient purchasing policies towards low environmental impact products and services.
Some questions on the annual satisfaction survey (see Involvement initiatives) relate to the green procurement policy and to principles relating to human and employment rights, as well as on their implementation by suppliers, with a view to increasing their involvement in matters of sustainability.
1 [DMA Freedom of Association and Collective Bargaining] ]The Group policy aimed at preventing the risk of violation of trade union rights is that relating to “Relations with Suppliers in the TIM procurement process”, which reads “...the Group demands of its suppliers and promotes, through them, and including with regards to sub-suppliers, respect for the following principles and provisions of law in force in the countries where these stakeholders operate. All workers must enjoy the legal right to establish and/or subscribe to trade union organisations to protect the individual and collective interests. The role of the workers’ trade union representatives must be acknowledged, and they must not be subject to any form of discrimination; in order to go about their union activities, they must be guaranteed remunerated permits and the means necessary to communicate with the workers on the workplace”. The same concepts are also stressed in the Group’s policy on respect for Human Rights.
2 Access gateway-marketing, 3G access, access/release software - mobile, NGAN devices, infrastructural applications, production/collaboration applications, assurance, call centre, cables, creation, data – GBE, delivery, development software, handset, materials-cables/masts/transmissions, middleware, environmental-civil maintenance services/ facility management, service layer-vertical applications, server/storage, tablet, WAN - VOIP.