Creating economic, social and environmental value

Supply chain

Milestones 2016
  • Launch of the annual performance assessment on environmental, social and ethical aspects (ESE) on the company’s supply chain.
  • Expansion of the performance/reliability assessment of suppliers to new company departments.
  • ​Finalisation of two new projects regarding efficiency, sustainability and innovation within Enagás’ Suppliers Circle.
  • Implementation of the electronic Supplier Management platform.

Lines of progress 2017

  • Development of collaborations with suppliers as part of the Entrepreneurship Programme (Open Innovation).
  • Expansion of product or service families within the scope of the reliability analysis (including critical criteria).
  • Incorporation of sustainability criteria for the review of the new accreditation procedure (reputational, reconciliation, equality and disabilities).

 

  • Definition of the risk levels and action plans associated as a consequence of the results of the performance assessment conducted with suppliers.  
  • Assessment of risks regarding legal compliance and reputational risks of suppliers included at the Repro platform (categories 1 and 2 and the main ones in category 3).
  • Conducting audits on critical suppliers via their participation in the Achilles working group (derived from the ESG risk assessment conducted in 2016).

Suppliers must be approved in order to work with Enagás. The company currently works with 1,800 approved suppliers, which are classified in families according to the products or services they offer.

  • Suppliers of works and services: IT & communication suppliers, engineering, etc. In 2016, 328 service providers carried out work at Enagás facilities.
  • Suppliers of supplies: Electrical equipment suppliers, piping manufacturers, rotary machine manufacturers, manufacturers of instrumentation and control devices, among others.

Providers are in turn classified by category according to security and cost. Product and service suppliers that represent a higher cost and security risk are classified as "main" or "critical" (categories 1 and 2). Enagás has 1,065 suppliers of this type. In 2016, we began working with 20 new suppliers and stopped working with 9 suppliers because they discontinued their activity, merged with third parties or for breach of contract. 

A high percentage of procurement carried out by Enagás is done for facilities located in Spain. This means that contracting for most works and services is done with Spanish companies as their implementation makes contracting easier.

In its international activities, Enagás promotes the use of local suppliers in the country where the services or materials are to be procured, as is the case in Mexico, Chile and Peru. To that end, we are continuously seeking and contacting new local suppliers that we can use in said countries, providing they meet Enagás' approval requirements. 

Volume of supplier management
 

 

Works and services

Supplies

Number of orders

3,813 (97% in Spain)

5,071 (98% in Spain)

Order value (€Mn)

142.3 (89% in Spain)

35.5 (79% in Spain)

In 2016, Enagás was awarded, for the third year in a row, the “Purchasing Diamond” prize at the 7th edition of the event organised by the Spanish Association of Purchasing, Contracting and Procurement Professionals (AERCE).

This award highlights the knowledge strategy and market analysis conducted in order to pinpoint the most qualified suppliers to carry out the renovation project at the head office, promoting values of transparency and competence. 

Choosing the most qualified suppliers has allowed the company to optimise costs and reduce the risks associated with the supply chain thanks to the numerous requirements and certifications requested during the selection process; this also offers a higher guarantee and better utility of the products purchased.

In addition, in 2016, Enagás set the goal of conducting audits of its critical suppliers linked to the variable remuneration of employees. This goal aims to be a continuation of the environmental, social and ethical (ESE) performance evaluation of the company’s supply chain during the year and whose results have been integrated into the risk assessment outlined in the next point.

 

Enagás' suppliers meet the following approval requirements:

  • Capacity and resources to meet technical, quality, environmental and safety requirements, and upholding thereof over an extended period of time.
  •  Observance of the principles of the United Nations Global Compact and the Universal Declaration of Human Rights.
  • Requirement for certifications for suppliers of certain product or service families: quality (required from 48% of critical suppliers), environment (required from 28% of critical suppliers) and occupational risk prevention (required from 23% of Enagás' critical suppliers).

Como consecuencia de estos requisitos de homologación, así como de aspectos adicionales, Enagás realiza las siguientes evaluaciones a sus proveedores, en aquellos ámbitos de la cadena de suministro en los que se han identificado riesgos (calidad, medio ambiente, seguridad, aspectos laborales, cumplimiento y responsabilidad corporativa):

 

Global assessment areas

Assessment aspects

Critical suppliers assessed

Assessment results

Impact of the assessment

Quality

Availability of ISO 9001 certification.

510 suppliers, 15 of which are new, were required to have this certificate.

98% of the suppliers required to have this certificate are in possession of it.

Focus on continuous improvement and on the management of processes with our suppliers.

Reliability analysis (assessment of aspects such as technical quality, meeting deadlines and the quality of the service provided).

Assessment made of 246 suppliers, belonging to 92 product categories.

95% of suppliers received scores above the acceptable level (50/100).

The cumulative average results obtained since 2011, by supplier type, are as follows:

  • Suppliers of equipment and material: 77.70/100.
  • Civil work and facility assembly suppliers: 76.95/100.
  • Service providers: 79.72/100.

Following this analysis, Enagás reported the resulting assessment to each company, and their position compared to the average for each category. They were also informed of all deficiencies identified so that they could work to improve them.

Meetings were held with suppliers with particularly poor scores to assess the results and propose corrective measures.

 

 

 

 

 

 

 

 

 

 

Environment

Availability of ISO 14001 certification.

298 suppliers, 10 of which are new, were required to have this certificate.

93% of the suppliers required to have this certificate are in possession of it.

Focus on continuous improvement and on the management of processes with our suppliers.

Environmental impact during construction of infrastructures (on-site environmental audits

14 critical suppliers of construction work in domestic projects were audited.

21% of audited suppliers have passed the audit without significant non-compliance.

The negative impacts detected relate to document deficiencies in waste management and environmental management procedures, failure to conduct emergency drills and environmental monitoring inspections.

Process improvement. 100% of the suppliers audited have implemented actions to mitigate their environmental impact.

Impact in relation to climate change. 

45 suppliers responded to the CDP Supply Chain questionnaire on climate change (85 were invited to take part). . 

76% of suppliers indicated that they have integrated climate change into their business strategy and 58% of them have emission reduction targets.(*)

Supplier emissions information is included in Scope 3 of our Carbon Footprint.  

Assessment carried out with 117 suppliers, representing 49% of billing and 46% of the amount paid.

35% of the suppliers surveyed measure their CO2 emissions and 14% stated that these had been verified by an external and independent third party.

31% of suppliers have climate change targets

23% of suppliers carry out a risk assessment on climate change.(*)

Identification and communication of improvement actions to 100% of the suppliers who were analysed.

Availability of a public environmental management policy.

Assessment carried out with 117 suppliers, representing 49% of billing and 46% of the amount paid.

71% of the respondents have a public environmental management policy.(*)

Identification and communication of improvement actions to 100% of the suppliers who were analysed.

Labour

Social Security status of permanent staff at Enagás facilities.

328 service providers that performed work at Enagás' facilities in 2015.

100% of providers have documentation accrediting the social security registration status of their employees.

Work performed while respecting employees' labour rights.

Collective Bargaining Agreement and/or trade union representation.

Assessment carried out with 117 suppliers, representing 49% of billing and 46% of the amount paid.

77% of the suppliers surveyed are covered by a Collective Bargaining Agreement and/or the workers are represented by independent trade unions.(*)

Identification and communication of improvement actions to 100% of the suppliers who were analysed.

Diversity and reconciliation

Gender Equality Plan.

Assessment carried out with 117 suppliers, representing 49% of billing and 46% of the amount paid.

52% of suppliers surveyed have implemented a Gender Equality Plan.(*)

Identification and communication of improvement actions to 100% of the suppliers who were analysed.

Reconciliation measures.

Assessment carried out with 117 suppliers, representing 49% of billing and 46% of the amount paid.

60% of suppliers have policies or measures to foster the work-life balance of their employees.(*)

Identification and communication of improvement actions to 100% of the suppliers who were analysed.

 

 

 

 

 

 

 

 

 

 

 

Safety

Existence of OSHAS 18001 certification (approval requirement).

246 suppliers, 8 of which are new, were required to have this certificate.

93% of the suppliers required to have this certificate are in possession of it.

Focus on continuous improvement and on the management of processes with our suppliers.

Information/Documentation included in the Enagás Contractor Access System (SACE) tool.

83 documental audits were conducted on 72 suppliers who have carried out work at Enagás facilities.

48% of the audits had favourable results. 

Limited access to Enagás facilities by suppliers who did not pass the audit favourably.

Occupational Risk Prevention measures.

Assessment carried out with 117 suppliers, representing 49% of billing and 46% of the amount paid.

100% of suppliers are covered by occupational risk prevention measures with regard to safety.(*)

Identification and communication of improvement actions to 100% of the suppliers who were analysed.

Monitoring accident rates.

Assessment carried out with 117 suppliers, representing 49% of billing and 46% of the amount paid.

98% of suppliers conduct monitoring of the accident rate of their workers.(*)

Identification and communication of improvement actions to 100% of the suppliers who were analysed.

 

 

Compliance

Legal obligations relating to tax and Social Security, existence of penalties or non-compliance.

1,800 (all approved suppliers).

100% meet their obligations.

Guarantee of legal compliance and performance of work while respecting employees’ labour rights.

Environmental non-compliance.

Assessment carried out with 117 suppliers, representing 49% of billing and 46% of the amount paid.

1% of suppliers did not comply with one or more legal obligation and/or were fined or sanctioned (>€10,000) related to the environment (emissions, discharges, residue, etc.) over the past 4 years.(*)

Identification and communication of improvement actions to 100% of the suppliers who were analysed.

Corporate Responsibility

CSR certification.

While Enagás does not require any supplier to have CSR certification in order to work with the company, it does value those that have it positively.

7 critical suppliers approved by Enagás have CSR certification.

Focus on continuous improvement and on the management of processes with our suppliers.

CSR score(1): ethics, Human Rights, labour practices (workforce structure, hiring of disabled people, etc.), safety, the environment, stakeholder engagement, quality and transparency..

487 main suppliers rated (15 are new). Moreover, audits were conducted on 39 critical suppliers using Achilles.

Enagás has a detailed score for each supplier and a comparison with the average of the suppliers included in the platform.

As a result of these assessments and audits, agreed-upon actions are proposed and monitored in subsequent visits.

Extension of Enagás' commitment to the sustainability of the supply chain

Ethics

Code of conduct and policies regarding corruption and bribery.

Assessment carried out with 117 suppliers, representing 49% of billing and 46% of the amount paid.

78% of suppliers have implemented a Code of Conduct and 60% have a policy, action guidelines or directives regarding matters of corruption
and bribery.(*)

Identification and communication of improvement actions to 100% of the suppliers who were analysed.

Human Rights

Human Rights Policy and identification of vulnerable groups.

Assessment carried out with 117 suppliers, representing 49% of billing and 46% of the amount paid.

50% of suppliers are publicly committed to Human Rights (e.g. Global Compact Principles) that cover both direct and indirect activities (third parties who are clients or suppliers), while only 18% have identified vulnerable groups regarding Human Rights (indigenous communities, children, etc.).(*)

Identification and communication of improvement actions to 100% of the suppliers who were analysed.

Risks

Risk control and management systems.

Assessment carried out with 117 suppliers, representing 49% of billing and 46% of the amount paid.

75% have a risk control and management system and 69% report the results of the analysis to senior management at least once a year.(*)

Identification and communication of improvement actions to 100% of the suppliers who were analysed.

Filantropía

Policy regarding philanthropy.

Assessment carried out with 117 suppliers, representing 49% of billing and 46% of the amount paid.

42% of suppliers have a policy/directives/procedure that specify the goals and areas to which they contribute to financially (donations, sponsorships, patronage, etc.), with their time (volunteering), and in-kind.(*)

Identification and communication of improvement actions to 100% of the suppliers who were analysed.

(1) Assessment carried out using the Achilles Repro platform.

(*) The assessment results refer to performance figures for 2015.

 

 

The goal of Enagás’ Suppliers Circle initiative is to identify and develop collaboration projects with our approved suppliers. We thus contemplate the likelihood that new, non-approved suppliers can participate in the initiative through collaborations that involve new business opportunities and/or undertaking projects related to efficiency, sustainability and innovation.

This initiative is linked to the company’ s corporate entrepreneurship programme.

As part of the framework for this Enagás initiative, two projects were finalised in 2016. The first of these regards the renewal of the marketing agreement for the proGas software tool to allow it to be more competitive in the market and thus promote its commercialization for Enagás customers. Under the agreement, Enagás continues to own proGas’ intellectual property rights and both parties are committed to promoting its commercial use and facilitating its commercial success.

ProGas is a computer application that allows the thermo-physical properties of natural gas and LNG to be calculated. The tool allows the transmission properties of natural gas and the conditions of the phase change from liquid to vapour to be determined. It is thus possible to carry out energy balances and simulate processes in which natural gas and LNG are involved.

As a result of this agreement, it is expected that, as of the end of the year, Enagás will have a new, free version of this software available exclusively to the company’s employees.

The second project consists of the signing of an agreement for the implementation of a new fiscal management system (SIGEFI). This system, that is unique on the market, allows the integration and exchange of information between all the areas of the company in order to improve the efficiency of fulfilling tax obligations, favouring the digital transformation of the company and fostering an agile, efficient and secure response for tax management and reporting. The SIGEFI technological solution aims to respond to the demands that companies currently require from a fiscal point of view, both in terms of compliance with their tax obligations that are constantly changing, as well as with regard to the transparency of their procedures and their tax information.