Supply Chain

SUSTAINABILITY

Sustainable Supply chain

The Group constantly strengthens our relationships with strategic suppliers of the principal raw materials we use to make our cables, seeking to build a common organizational process with them that is focused on sustainability throughout the entire production chain. During 2022, we continued developing a number of environmental and social strategies for the supply chain, taking ESG factors into account. We carefully analyze the risks associated with suppliers and raw materials, apply ethical standards and policies on such topics as Human Rights and Conflict Minerals, and adopt a responsible code of business conduct.

During 2022, the Prysmian Group has managed to further develop and implement environmental and social strategies in the supply chain area. We use qualified suppliers that apply sustainability strategies in their production activities, and we are steadily reducing emissions generated by products used by the Group. To further support our goals, we have incorporated ESG KPIs into our supply chain valuation and have implemented a new supplier portal for better monitoring of ESG principles.

Our sustainable supply chain

6,000

base metal and raw material suplliers*

3,600

of Prysmian's base metal and raw material suppliers are in Europe*

2-3%

of the world's copper production is consumed by the Group

7%

of the copper used in the electrical and electronic sector

In 2022 Prysmian purchased metals, plastics and other materials from 5,977 suppliers used to produce energy and telecommunications cables and accessories, as well as buying special types of glass and coatings for optical fibers. Suppliers for recurring and strategic materials/services must subscribe to the Code of Ethics. Prysmian picks its suppliers through a formal process based on economic and financial analysis; it examines information and data on, for example, the risk of dependence on the supplier, or on the supplier’s technical and technological capacity and skills. Of our total number of suppliers 3,644 or 60.97% are in Europe, where we purchased 69% of its goods locally. The Group consumes slightly more than 2-3 % of the world's copper production and about 7% of the copper used in the electrical and electronic sector, making it one of the leading economic players in the sector. Long-term strategies for the purchase of copper and aluminum lead Prysmian to work with the largest players in the respective sectors with a strong focus on sustainability, thus creating a highly sustainable end-to-end cycle. Due to the high electricity consumption required by aluminum production process, Prysmian has included the aluminum carbon footprint as a supplier selection criterion, assigning a considerable portion of the business portfolio to low-carbon aluminum producers.

Our Sustainable Supply Chain Strategy

From an environmental standpoint, supplier selection is key to reducing the Scope 3 emissions of the Group, so that the entire supply chain can achieve carbon neutrality by 2050. In addition, Prysmian seeks to support those suppliers that use recycled materials in their production the Supply Chain Strategy and Vendor Managementprocesses.

This applies both to metals (especially copper) and to plastics, such as polyethylene. Notably, transportation and logistics also have a non-negligible impact on the Group’s emissions. Accordingly, Prysmian continuously monitors and optimizes its logistical flows, in order to assure the sustainability of the business in economic and other terms, given the considerable weight and volume of the products handled. In this context, constant efforts are made to reduce CO2 emissions by improving the efficiency of the distribution networks and fleets of the various logistics partners.

Prysmian carries out its sustainable supply chain strategy through three macro-activities.

Firstly, new suppliers must subscribe to our Code of Ethics and Code of Business Conduct, our Conflict Minerals Policy and Human Rights Policy. New suppliers are carefully vetted through a seven-part questionnaire; materials are technically approved by our R&D labs, and often undergo product or process audits.

Secondly, we carry out Sustainability Desk Analysis, Risk Analysis and product/process and sustainability audits to assess the sustainability components of our supply chain. Prysmian Group started adopting these tools in 2014, in order to review its supply base periodically. In 2014 the Group assessed 62 suppliers covering 50% of the total spend; in 2022 that number reached 500 suppliers with a 77% coverage of the total spend.

Lastly, we managed the performance of our supply chain’s implementation of actions with a view to achieving the objectives included in the Sustainability Scorecard targets for the year 2022.

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PROJECT SPOTLIGHT

Carbon disclosure project

Prysmian Group has an on-going partnership with the Carbon Disclosure Project (CDP) to tackle climate risk and find new low-carbon opportunities. The CDP helps Prysmian to collect and analyze Scope 1 and Scope 2 emission data from suppliers, following which feedback is sent to suppliers and new targets are set for the continuous reduction of adverse environmental effects. In 2022, the Group concentrated on improving the response rate from the suppliers concerned (who represent about 50% of total spending by the Group). Based on 2022 CDP disclosure the Group was among the top 8% assessed for supplier engagement on climate change.

PROJECT SPOTLIGHT

CARBON TRUST

In 2020, Prysmian partnered with Carbon Trust, which has supported the Group in setting a science-based target for greenhouse gas reduction. In fact, Prysmian climate strategy adopts “science-based” targets aligned with the requirements of the Paris Agreement, and aims to decarbonize its own operations by 2035 (Scopes 1 and 2) and the whole value chain by 2050 (Scope 3). During 2022, the Group submitted new updated targets in order to match the latest standard from SBTi, increasing its decarbonization speed. Since 2021, Prysmian publishes a GHG Statement with the aim of tracking its progress against established targets and giving a transparent disclosure of the whole value chain carbon footprint. The 2021 Scope 3 emissions represents more than 99% of the total emissions of the Group.

PROJECT SPOTLIGHT

Responsible Mica Mining

In order to manufacture certain safety cables and make them fire resistant, Prysmian purchases limited quantities of a few types of glass-based tape that contain small quantities of mica through both producers and distributors. The extraction process for this mineral takes place in geographical areas where a variety of factors contribute to poor working conditions and the use of child labor. Prysmian has been tackling this issue since 2016, by requesting that all suppliers provide sufficient information about mica mineral sources and related “Child-Labor Free” Certificates. In 2021, Prysmian Group became the first company in the cable sector to join the Responsible Mica Initiative (RMI), a non-profit coalition working to eliminate child labor and poor working conditions in mica supply chains. By joining the RMI, Prysmian Group is moving forward with its commitment to social responsibility and promoting ethical conduct by taking concrete action. Membership in RMI will help Prysmian be even more effective in increasing its control of its supply chain.

PROJECT SPOTLIGHT

Align Ethics

Minerals extracted from conflict zones may result in prolonged fighting, and rules in the US and EU require that companies monitor their supply chains to prevent using these raw materials. Prysmian enforces a "Conflict Minerals-free" policy regarding tin, tungsten, tantalum and gold. In 2022, considering the 4 minerals covered by the Conflict Materials Policy, the Group purchased limited quantities of tin.

PROJECT SPOTLIGHT

Assess

Prysmian Group has developed a Risk Analysis to asses raw material suppliers. In 2022, Prysmian evaluated 500 suppliers accounting for 77% of spending to assess their current or potential impact in relation to environmental criteria, human rights and working conditions. Sustainability audits (direct materials) were introduced in 2017 and, since then, 32 have been performed.

PROJECT SPOTLIGHT

Manage and Improve

In addition to regular audits and assessments, Prysmian involves its suppliers in various activities in order to build awareness about ESG matters. A number of initiatives are presented below:

since 2015, the annual “Purchasing Fundamentals” training course includes a broad, in-depth section on the topic of sustainability in purchasing. Each year, 30 buyers (with differing levels of seniority) from Prysmian companies all over the world are invited to attend this training course;
Prysmian began development of the Vendor Management portal in 2021. This modular, web-based application will improve the efficiency of supplier relationship management and enable the Company to monitor their ESG compliance. This platform, comprising 4 modules, seeks to harmonize and improve the business processes involved;
a member of the Purchasing department sits on Prysmian Group’s Sustainability Steering Committee, given that procurement is an area of interest for the sustainability of operations. Some members of the Purchasing Team who manage and follow-up ESG activities are also directly involved in procurement activities, giving them greater knowledge of the supplier base and a superior ability to manage initiatives with suppliers.

Targets & Achievements

In 2022, regarding non-renewable materials Prysmian purchased:

64% metals;
19.% compounds;
15% ingredients.

The Group definition of "local" is all those suppliers whose operational headquarters are in the same country as the legal entities of Prysmian. In EMEA, Prysmian purchased 69% of its supplies locally; in APAC, 84%; in North America 100%; and in LATAM 95%.

INNOVATION

Sustainable Innovation

Empowering customers:

To us, innovation means meeting the needs of our customers and communities by understanding their business drivers as quickly as they do. Our team of over 1000 Research & Development professionals looks around the corner each day to see what’s coming next in each of our markets. Our ability to innovate is what makes us a market leader, with a track record of delivering products that are faster, smarter and more sustainable than before. In other words, products that are the best.

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