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Our vision for the supply chain is to promote a growth path based on innovation and sustainability, driving change and encouraging a new level of cooperation with our partners. This approach is based on sharing our values contained both in the Suppliers’ Code of Ethics and in the new Suppliers’ Identity, created at Fincantieri’s Supplier Summit held on 17 October 2023 in Genoa.
- Suppliers’ Identity, which defines a framework of values to be respected and promoted throughout the supply chain.
Group’s sustainable supply chain strategy aims to encourage continuous improvement approach, investing in environmental, social and governance issues (ESG) and promoting a culture that supports the development and wellbeing of local communities.
We are aware of the supply chain's importance and the need to coordinate a wide supply chain, creating a long-term partnership relationships. This is why our suppliers must adhere to the Group’s policies:
- Suppliers’ Code of Ethics, which sets out and disseminates the values, principles and responsibilities defined by the Code of Conduct, the Charter of Sustainability Commitments and the Sustainability Plan.
- Purchasing Policy, the primary goal of which is to affirm the Group’s commitment to strengthening the development of solid and long-lasting relationships with its partners in order to pursue a common goal of sustainable development together.
- Conflict Minerals Policy, in which a responsible supply chain without minerals mined, refined or traded under conditions of armed conflict and human rights violations is promoted, with a focus on the People's Republic of Congo and other conflict-affected or high-risk areas.
Moreover, our "Product Compliance" procedure has recently been updated, within which all suppliers and contractors are required to explicitly state that their sourcing is only from smelters or refineries certified as “conflict-free”.
Initiatives launched favouring the supply chain
PartnerShip
We are committed to supporting and guiding our supply chain in the evolution of sustainability, by providing our partners with the tools needed for this development path.
With this in mind, we initiated the PartnerShip supply chain program, which originated from our intention to develop a sustainable ecosystem involving the entire supply chain. PartnerShip marks an evolution in terms of supplier engagement and aims to develop more lasting relationships with our suppliers so that we can tackle and overcome the new strategic challenges together. This marks the beginning of a sustainable development path for the supply chain, supported by initiatives to share and dialogue with suppliers.
PartnerShip aims to:
- steer the ESG and Digital transition;
- strengthening our partners for collaborative growth;
- sharing knowledge and best practices.
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Webinar
The first engagement initiative stemming from PartnerShip was launched in December 2023, namely the program of thematic webinars for the supply chain which will cover several topics of strategic interest.
The first “Fincantieri Supply Chain Finance” webinar focused on the credit support tools available to the supplier base, through collaboration with major national financial institutions such as CDP, Simest, SACE, SACE FCT and has seen the registration of more than 140 suppliers.
During the first quarter of 2024 the second thematic webinar “Leading towards sustainable supply chain” on sustainability challenges, with a focus on the new Corporate Sustainability Reporting Directive (CSRD), and which saw the launch of the ESG journey, a pathway for suppliers to be accompanied and supported on an ongoing basis on ESG issues. The webinar reported great interest as more than 180 suppliers were involved).
Reverse factoring
With the aim of facilitating access to credit for our suppliers, we have entered into a series of reverse factoring agreements with some of the most important Italian financial operators, making available to the supply chain the possibility of monetizing the receivables owed to the Parent Company and/or its main subsidiaries before their natural maturity, at predefined economic conditions. We have also transformed existing agreements with some credit institutions into ESG-linked reverse factoring agreements to offer an immediate return to suppliers who have already embarked on a path of sustainability and to raise the supply chain's awareness of the importance of this issue, aligning the various stakeholders on ESG objectives common to the entire supply chain. Indeed, this instrument provides access to reverse factoring agreements on favorable terms depending on ESG performance.
Supplier management process: qualification, monitoring, assessment and audits
We have equipped ourselves with a new e-procurement portal e-NGAGE that aims to cover the main stages of the supply chain management process: registration, qualification, invoicing, supply status, etc.
Our digitization process aims to facilitate communication with all suppliers and increase compliance and efficiency in purchasing and supply chain processes.
Management and the continuous improvement of a pool of trusted suppliers is essential in order to achieve the goals we have set for ourselves in economics and sustainability terms. This is why a stringent qualification andperformancemonitoring process has been developed for strategic suppliers, based on the evaluation of economic, technical, reputational, social and environmental (with particular reference to integrity and anti-corruption).
Supplier selection is crucial to ensure impartiality and equal opportunity, which are essential for the development and efficiency of the supply chain. For all suppliers, both at the qualification and monitoring stages, emphasis is placed on safety, environmental and labor rights protection issues, with specific attention to the ethical and reputational aspects of suppliers.
For us, business integrity and the ethical aspects of fairness and professionalism tied to it are a constant guideline, in the knowledge that corporate reputation is a strategic asset to be enhanced and protected also to avoid compromising the trust placed in us by our stakeholders.
To this end, as part of the qualification process, we adopt a risk-based verification model - inclusive for cases considered higher risk of the use of enhanced due diligence extended to the beneficial owner(s) as well - in order to ensure that our supply chain tends to the widest compliance with regard to anti-money laundering, countering the financing of terrorism, international sanctions, as well as the highest standards of prevention and combating of corruption, in line with the Company's Anti-Corruption Policy, which can also be consulted on the institutional website.
We monitor the supply chain using a “life cycle” management approach to minimize the environmental and social impact of a product or service over its entire lifetime. In particular, we are committed to disseminating ESG aspects throughout the supply chain, with the increasing use of informational and documentary exchange moments with suppliers. As part of the supplier monitoring system, we use a continuous performance evaluation system (balanced score-card) in which all the relevant corporate departments take part, in order to guarantee that the required standards are met over time. A supplier remains qualified as long as the reasons for its inclusion in the Supplier Register continue to exist and as long as the monitoring of its performance is not deemed critical to the point of resulting in its expulsion.
The main problems are examined through cross-cutting involvement within the Supplier Oversight, the body that brings together several functions and corporate departments. This Oversight oversees critical suppliers through close monitoring of the problems encountered, processes their reporting, and makes consequent decisions, which may lead to the identification of targeted improvement plans for the individual supplier or, where necessary, to the establishment of the timing and modalities for the supplier's phase out.
With the goal of measuring our suppliers from an ESG perspective, 2023 saw the launch of the ESG assessment program. The program, managed at the Group level, has already rated 32,4% of the total purchase volume of all suppliers involved in the program. The score is assigned following criteria, defined by a working group from different companies in the industry and reported within the ESG Supply Chain Guidelines ensuring objectivity and independence.A supplier’s ESG score is based on the supply categories and is awarded following the completion of a specific questionnaire that is located on the SupplHi platform and is accessed by the supplier via the e-NGAGE portal and rates the three pillars: environmental, social and governance, with a scale of A (highest) to E (lowest).The scores help identify strengths and areas for improvement in sustainability. The presence of an ESG badge with a synthetic score facilitates the sharing of assessments with all potential stakeholders. The model is updated periodically based on the guidelines and meetings of the working group of which Fincantieri is an active participant.
Every year we conduct periodic checks of our suppliers using various types of audits, both in the area of sustainability and qualification and monitoring.
During 2023 we conducted a total of 98 audits, including 49 sustainability audits conducted by internal resources.
As of 2024, the ESG audit activity introduced a structured initial assessment phase with the objective of screening suppliers to be visited on a priority basis.
The methodology includes both ESG risk assessment elements of the supplier base as well as considerations related to relevance to the business, industry sector, commodity categories, and relative country risk.
Both ESG assessment and supplier audit activities have targets that can be traced back to the objectives of the Corporate Sustainability Plan, which is approved by the Fincantieri S.p.A. Board of Directors and periodically reviewed.
Which objectives do we have on this topic?
Sustainable Supply Chain: 2023-2027 Sustainability Plan objectives and targets
Promotion and support of a responsible and sustainable supply chain that shares our values and is based on long-lasting relationships founded on integrity, transparency and respect
Discover the objectives
Development of a Sustainable Supply Chain in order to integrate sustainability criteria into the supplier qualification system and to ensure adequate risk control
| Description/Target | Timeline | Perimeter | Status | SDGs |
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• Launch of an ESG assessment program and coverage of the most relevant suppliers in terms of purchasing volume of 30% |
2023 |
Group (excluding American subsidiary companies) |
At the end of 2023, suppliers accounting for 32,4% of the total perimeter purchasing volume were assessed in ESG terms, exceeding the 30% target defined in the Plan. The ESG score makes it possible to assess the supplier in terms of sustainability and at the same time provide it with a tool for analysis and improvement. |
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• Attribution of ESG scores to at least 50% of strategic qualified suppliers* |
2024 |
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• ESG assessment and gap analysis on the evaluated sample |
2024 |
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• Attribution of ESG scores to 100% of strategic qualified suppliers |
2025 |
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• Extension of ESG supplier scoring system to European subsidiaries** |
2025 |
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• Definition of a model for the use of ESG assessment in procurement processes: |
2025 |
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• Implementation of reward mechanisms linked to ESG assessment |
2026 |
Achieved
* Meaning suppliers in the Register, net of customer-referenced and imposed suppliers.
** The result is subject to the extension of the Fincantieri S.p.A. model to VARD (processes, systems, ERP and e-NGAGE portal).
Raising supplier awareness of ESG issues
| Description/Target | Timeline | Perimeter | Status | SDGs |
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• Organization of at least one engagement session on ESG issues per year with strategic suppliers |
2023-2027 |
Group (excluding American subsidiary companies) |
On October 17, 2023, the “Let's turn Collaboration into Innovation - Fincantieri's Supplier Summit” was held at the Genoa Aquarium. The event involved more than 200 partner companies and was an opportunity to recognize the value of Made in Italy and SMEs, the digital and sustainable evolution undertaken by the Company and its supply chain. |
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Managing «conflict minerals» along the supply chain
| Description/Target | Timeline | Perimeter | Status | SDGs |
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• Drafting and publishing a Policy on management of «conflict minerals»* |
2023 |
Group |
In 2023, the Conflict Minerals Policy was drafted and approved by the CEO of Fincantieri S.p.A., which aims to counter the use of minerals extracted, refined or marketed in contexts characterized by armed conflicts and human rights violations. |
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• Identification and implementation of contractual tools for the management of «conflict minerals» |
2024 |
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• Extension to relevant subsidiaries with reference to EU Regulation 2017/821 |
2025 |
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• Monitoring of relevant product groups |
2027 |
* Refer to raw materials or minerals -tin, tantalum, tungsten and gold (the '3TGs') -from high-risk areas or areas affected by armed conflict, the trade of which can finance armed groups, fuel forced labour and other human rights violations and support corruption and money laundering.
Human Rights: 2023-2027 Sustainability Plan objectives and targets
Commitment to creating the socio-economic conditions to ensure respect for human rights throughout the value chain
Discover the objectives
In accordance with the guidelines being defined* and international best practices, proactively identify and assess potential risks and impacts related to the respect of human rights, incorporated in the policy and Code of Ethics, referred to and signed by suppliers in the general terms and conditions of the order
| Description/Target | Timeline | Perimeter | Status | SDGs |
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• Due-diligence on Italian and European production sites and their satellite businesses |
2023 |
Group |
In order to identify any human rights impacts during the year, the due diligence process was initiated on Italian and European sites, including contractors and suppliers (Tier 1) with whom Fincantieri does business. |
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• Implementation of a plan of targeted interventions following due diligence |
2024 |
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• Monitoring compliance through the formalization of the monitoring and maintenance plan |
2025 |
* In order to anticipate the demands contained in the Proposal for a Directive of the European Parliament and of the Council on the Duty of Care of Businesses with regard to sustainability.
Annual (second party) sustainability audits by Fincantieri at suppliers’ premises to assess and monitor suppliers' compliance with human rights, health and safety and the environment
| Description/Target | Timeline | Perimeter | Status | SDGs |
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• Audits of the Group's suppliers of priority/ strategic interest on respect for human rights, health and safety and the environment (approx. 200 suppliers including the remaining 7 not carried out due to COVID pandemic issues) with at least 40 audits per year Starting from 2023, depending on the score obtained from the audit, recovery plans, progressive or immediate phaseouts will be defined on an ongoing basis, based on the severity, with evidence being reported in Supplier Oversight. |
2023-2027 |
Group (excluding American subsidiaries) |
In 2023, 49 second-party sustainability audits were conducted through internal Fincantieri resources. Based on the results of the audits, actions to be implemented regarding that specific supplier are defined. In 2023, no audits fell short of expectations. |
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