Supply Chain

The Group continuously strengthens its relationships with strategic suppliers of the main raw materials used to manufacture cables, seeking to build with them an organizational process marked by sustainability throughout the entire production chain. In 2023, we continued to define a set of environmental and social strategies for the supply chain that take ESG factors into consideration. We carefully analyze risks relating to suppliers and raw materials and apply ethical policies and standards to issues such as Human Rights and "Conflict Minerals", and also adopt a Code of Responsible Business Conduct.

To further support our goals, we have included ESG KPIs in our supply chain assessment and activated a new supplier portal for the improved monitoring of ESG principles.

Sustainable supply chain

6,000

suppliers of base metal and raw materials

3,600

of base metal and raw material suppliers are in Europe

2-3%

of world copper production is absorbed by the Group

7%

of the copper used in the electrical and electronics industry

Prysmian’s suppliers

Being a global leader in manufacturing and having to directly source metals and raw materials entails a number of challenges, including the need to continuously monitor the entire procurement base, ensuring that all of Prysmian’s business partners apply ethical conduct in their business processes.

Prysmian can count on a broad and diversified procurement base, with mutually advantageous business relationships. Most of the Group’s suppliers are established leaders in their markets, applying best practices for the management of ESG factors.

At the same time, the Group also works with smaller players which can benefit from working with a customer like Prysmian, willing to support their business continuity and make recommendations on how to improve their sustainability management.

Prysmian's suppliers fall into three categories:

Base Metal: aluminum, copper and lead; the first two account for the majority of raw materials purchased by the Group;
Raw materials for a broad range of products and applications;
Non-raw materials: all goods and services that are not closely related to end products. Utilities account for more than 50% of total spending for the category.

The table below shows the expenditure for each of the macro-categories presented above:

	2023	2022	2021
Base metal	55%	56%	59%
Non-raw materials	19%	23%	19%
Raw materials	26%	21%	22%

Project Spotlight - Deforestation

Prysmian mainly uses wood packaging, carefully selecting vendors that take a responsible approach to forest conservation. Thanks to this commitment, more than 60% of the wood purchased by Prysmian is verified by forestry certifications from the major internationally recognized bodies (PFEC, FSC, SFI, Canadian Wood Pallet certification program, Timber Trade Federation).

Wherever possible, Prysmian aims for the utmost standardization of its wood packaging design so as to facilitate and encourage reusability, also involving other players in the industry. Projects for the reuse of reels include the establishment of the "k-drum standard" (through Selcable) in Scandinavia and the co-ownership of KABELTROMMEL GmbH & Co. KG, a company that manages Germany's largest rental system.

In recent years, Prysmian companies have also contributed directly to forest restoration initiatives in different areas of the world:

direct planting of trees at different sites;
funding of tree planting through the Treedom platform;
active participation in tree planting in the Philippines and Colombia.

Supply chain strategy and vendor management

The increasing development of supply chain sustainability activities has made it necessary to develop a specific strategy. The "Supply Chain Strategy and Vendor Management" document summarizes the main characteristics of Prysmian’s supply chain strategy and the actions taken to integrate ESG factors into its management.

CLICK HERE TO DOWNLOAD SUPPLY CHAIN STRATEGY AND VENDOR MANAGEMENT

Supplier analysis and management

As envisaged by the Supply Chain Strategy, Prysmian carries out the following assessment activities to analyze further and monitor the related risks:

1. Supplier Desk Analysis: the main purpose of developing the Supplier Desk Analysis is to assess the sustainability of major suppliers. The analysis considers social, economic and environmental (ESG) criteria and is performed by a third-party partner of Prysmian on relevant topics for the Group.

In 2023, the assessment analysis of suppliers with potential social and environmental impacts covered 71% of the Group's expenditure.

2. Supplier risk analysis: the supply chain risk analysis is based on the assessment and analysis of data obtained from the Desk Analysis and combines sustainability scores obtained with a list of parameters deemed critical by Prysmian for risk assessment purposes. The combination of these elements enables Prysmian to identify the clusters of risk and, among these, critical suppliers: liers with potential social and environmental impacts covered 71% of the Group's expenditure.

3. Sustainability audits and potential impact management: suppliers subject to audits are identified based on the score assigned to them downstream of the Risk Analysis.

If the results are satisfactory, the supplier is no longer considered to be high risk. If the audit results are not satisfactory, a follow-up audit is carried out on the basis of an agreed action plan.