Supply Chain

The Supplier Code of Ethics allows us to formalize and communicate the values, principles, and responsibilities contained in our Code of Conduct, the Sustainability Commitments Charter, and the 2023-2027 Sustainability Plan. In the Supplier Code of Ethics, we ask our partners to take concrete responsibility for:

• The environment, acting in full compliance with regulations and adopting measures to minimize environmental impacts, also through eco-design practices and a focus on product quality and safety
• People and communities, ensuring health and safety in the workplace and promoting decent working conditions, preventing all forms of forced or child labor, respecting freedom of association and collective bargaining, guaranteeing inclusion, gender equality, prevention of all forms of violence and harassment, privacy protection, and the rights of local communities
• Ethical and integrity-driven business, promoting anti-corruption, preventing conflicts of interest, complying with competition and anti-money laundering regulations, guaranteeing accurate and transparent bookkeeping, protecting the confidentiality, security, and privacy of information, and adopting ethical procurement criteria throughout the value chain.

The Conflict Minerals Policy aims to promote a supply chain free from minerals that are extracted, refined, or traded in conditions of armed conflict and human rights violations, with particular attention to the Democratic Republic of Congo and other conflict-affected or high-risk areas. Recently, in line with the Policy, we updated the “Product Compliance” procedure, which now requires all suppliers and contractors to explicitly declare that their sourcing is exclusively from smelters or refiners certified as “conflict-free.”

The management and ongoing improvement of a reliable supplier base are essential for achieving our economic and sustainability objectives. For this reason, we have developed a rigorous process for the qualification and performance monitoring of strategic suppliers, based on the assessment of economic, technical, reputational, social, and environmental aspects, with particular focus on integrity and anti-corruption.

For all suppliers, both at the qualification and monitoring stages, we emphasize issues of safety, environment, and the protection of labor rights, with specific attention to the ethical and reputational aspects of suppliers.

For us, business integrity and the related aspects of professional fairness and loyalty are a constant guiding principle, in the awareness that corporate reputation is a strategic asset to be valued and protected—also to avoid compromising stakeholder trust. To this end, as part of the qualification process, we use a risk-based verification model, and for higher-risk cases, we apply enhanced due diligence extended to the ultimate beneficial owners. This allows us to ensure that our supply chain approaches the highest possible level of compliance with anti-money laundering, anti-terrorism financing, and international sanctions regulations, as well as with the highest standards for preventing and combating corruption, in line with the Anti-Corruption Policy, available on our website.

We monitor the supply chain with a “life cycle” management approach, to minimize the environmental and social impact of a product or service throughout its entire life cycle. We use a continuous performance evaluation system (balanced scorecard) involving all relevant company functions, in order to ensure compliance with the required standards. A supplier remains qualified as long as their performance monitoring does not become critical enough to warrant removal from the Supplier Register.

The main critical issues are reviewed by the Suppliers’ Observatory, which involves various company functions and departments. The Observatory monitors critical suppliers closely, reviews problematic cases, prepares reports, and makes resulting decisions, which may include identifying targeted improvement plans for individual suppliers or, where necessary, determining timelines and methods for supplier phase-out.

We have launched a four-year ESG assessment program involving the Group’s 1,000 strategic suppliers out of 3,950 Tier 1 suppliers operating for Fincantieri S.p.A. In 2024, we evaluated over 760 suppliers, representing 85% of the total purchase volume from strategic suppliers.

The score is assigned based on criteria defined by a working group from different companies in the sector and detailed in the ESG Supply Chain Guidelines, ensuring objectivity and independence. A supplier’s ESG score is based on supply categories and is assigned following the completion of a specific questionnaire, evaluating the three pillars (environmental, social, and governance) on a scale from A (highest) to E (lowest). The results help identify sustainability strengths and areas for improvement. An ESG badge with the overall score makes it easier to share the assessment with all potentially interested parties. The model is periodically updated based on the guidelines and meetings of the working group, in which Fincantieri is an active participant.

The supplier ESG assessment activity is part of a specific objective in the 2023-2027 Sustainability Plan. Its proper implementation is monitored by the Board of Directors and relevant top management.

Each year, we conduct a range of audits on our suppliers covering both sustainability and aspects of qualification and monitoring. In 2024, we carried out 117 audits, of which 85 were sustainability audits.

Compared to 2023, we introduced a structured initial assessment phase with the goal of screening suppliers to prioritize those to be visited. The preliminary phase of the ESG audit follows a risk-based methodological approach, taking into account a range of risk factors based on the three pillars of sustainability, geographic location, relevant sector, and business strategic relevance. To group suppliers into clusters and define the audit perimeter according to prioritization logic, several assessment phases are conducted, from risk assessment to relevance assessment. The checklist includes verification of environment, energy, health and safety management systems and organization models, compliance with human rights and HSE requirements, control of elements required by ex D.Lgs 231/2001, management of chemical products (with reference to EU Regulation 1907/2006 REACH and other sector regulations), as well as checking compliance with the Fincantieri Supplier Code of Ethics.

For each audit carried out in 2024, we received, analyzed, and assessed a detailed report containing all findings, the checklist with the partner’s performance levels in the three ESG areas, and a module for observations and non-conformities, which was shared and discussed with the supplier. Concerning the observations shared with suppliers (through the observations/non-conformities module), the assessment process is supplemented by ongoing support to manage an ESG performance improvement plan according to Group criteria. Specifically, based on observations from independent auditors—findings that indicate opportunities for improvement or areas to strengthen for the assessed organization—72 improvement plans were formulated, with progress monitored regularly via ongoing dialogue with the suppliers involved.

Specific non-conformities were found in relation to 7 suppliers visited, for whom we adopted an immediate and decisive approach, requesting prompt resolution. Specifically, 3 cases were resolved within the year, with closure certified by formal documentation. For the other 4, ad hoc remediation plans were developed, with those suppliers required to comply by the first half of 2025. None of the non-conformities involved human rights violations. However, suppliers may be excluded from contract awards if they do not meet minimum ESG requirements within a set timeframe.

Supplier ESG audits fall under a specific objective of the 2023-2027 Sustainability Plan, and their proper implementation is monitored by the Board of Directors and relevant top management.

The overall results are summarized in the diagrams below, where a value of 100% represents full compliance with the expected standards.