The purchasing process is key for the company due to its high economic, environmental and social impact. For this reason, Cellnex Group has established and promotes a guide for action in the purchasing process that goes beyond price, product and/or service quality, also taking into account social, ethical, environmental and privacy aspects in the performance of Cellnex Group's suppliers.
Cellnex has a supplier management model based on collaboration and continuous improvement, seeking the most efficient purchasing procedures and finding technological solutions that result in improvements.
For Cellnex, it is essential that suppliers are aware of corporate policies and values and ensure compliance with each of them. Commitment to suppliers is essential for the development of a responsible supply chain.
Supplier management is carried out in a coordinated and homogeneous manner among all the Business Units under the Cellnex Industrial Model. In 2021, work was undertaken to consolidate an industrial purchasing model that includes five key pillars: Guidelines, Organisation, Processes, IT Tools and Dashboard. In addition, the strategic purchasing planning process was strengthened for all Business Units with the aim of obtaining a consolidated purchasing plan that allows the Company's purchasing needs to be anticipated at global level.
In this regard, the Operations area is in charge of coordinating the purchasing process throughout the Company, as well as promoting efficient, innovative, transparent, sustainable and quality purchases.
Cellnex has a Purchasing Policy that establishes the basic principles that the Group must take into account in the Purchasing process. These principles are:
Based on the Industrial Model, Cellnex has implemented the SAP Ariba Suite, a tool for managing the purchasing process in an operational, strategic and decentralised manner in all areas and Business Units. The various modules in the tool make it possible to unify the purchasing processes in all the Business Units, provide greater autonomy to suppliers and improve the transparency of the process. In this way, a unified vision of purchasing is obtained throughout the Company. In addition, it makes it possible to analyse and classify purchases and define purchasing strategies for the most strategic and significant categories, and to digitalise the entire purchasing process.
During 2021, SAP Ariba was implemented in seven countries (France, Switzerland, Portugal, the United Kingdom, Italy, Ireland and Austria), which, together with Spain, the Netherlands and the company at a corporate level, are now fully active and in operational development. By 2022 it is planned to implement the tool in the new countries and Business Units incorporated into the Company (Sweden, Denmark and Poland).
The Ariba Sourcing module will allow the establishment of homogeneous and scalable processes in relation to the management of purchasing events (RFQ, RFP, RFI, auctions, etc.), and the processes for the preparation and management of contracts for all Business Units will be established through the Ariba Contracts module, which will allow the contract information to be shared transversally between them. In addition, it will act as a centralised repository and will enable standardised preparation of contracts.
The Ariba Network module is the new supplier portal that streghnthens the relationship with suppliers, centralising all communication in a single place which is updated in real time. It manages all the information relating to purchase orders, incoming goods notifications, invoices and payments. In this regard, suppliers register directly as new suppliers by means of a predefined questionnaire where they have to confirm that they accept the Code of Ethics, the Purchasing Policy, the Data Protection Policy and Cellnex's general contracting conditions. In 2021, 500 suppliers were incorporated into the portal.
In this regard, the supplier must be aware of Cellnex Group's Management System Policies, guarantee that it will comply with each of its guidelines, as well as the specific requirements regarding the performance of its work, and make the established standards known to all its contracted and subcontracted personnel. To this end, the supplier shall adopt any preventive measures necessary to avoid creating negative environmental impacts during the performance of its work, and, should any occur, it must adopt the necessary corrective measures to correct them, at its own expense, and immediately inform Cellnex Group's contact personnel. In addition, Cellnex Group establishes coordination requirements in terms of Occupational Risk Prevention between Cellnex and its suppliers of works and services to comply with the obligations established in the Law on Occupational Risk Prevention and other supplementary legislation.
In addition, a series of actions have been defined within the strategic line "Expanding our commitment to customers" in Cellnex's ESG Master Plan, to be implemented in coordination with its suppliers. In this regard, at the beginning of 2022 Cellnex adopted a Code of Conduct for Suppliers that acts as a framework of trust and cooperation for the Organisation with its value chain, resulting in the continuous improvement of purchasing processes and, establishing long-lasting stable business relationships.
As such, the Supplier Code of Conduct aims to bring together in a single document the key references to the set of principles, rules and policies of Cellnex Group, that govern suppliers, in the following areas:
In addition, Cellnexx aims to establish an industrialised model for Strategic Purchasing through the implementation of two new SAP Ariba suite modules (Ariba Sourcing and Ariba Contracts), planned for 2022. During 2021, the Strategic Purchasing project was awarded and the process of defining the tools was initiated at a corporate level and by the Business Units in Spain. During 2022 these tools will be implemented in all of Cellnex Group's Business Units
Cellnex Italy works with suppliers to find solutions for its business based on the circular economy. As such, in 2021, a solution was identified to apply of the circular economy to batteries. Cellnex Italy is currently working with local suppliers to replace batteries to bring 80% of its material under the circular economy concept.
Cellnex Denmark is carrying out a project regarding the steel material components used in the installation of network towers and the resulting impacts. The project will continue until 2022.
Cellnex signed a long-term framework agreement with iLOQ for it to be one of the priority providers of access control to Cellnex's telecommunications tower network and data centres.
The iLOQ project focuses on a new access system with NFC technology that allows remote access to subcontractors who need to enter Cellnex sites, facilitates access traceability. The power required to unlock comes from a smartphone, using the iLOQ S50 mobile app. Access rights can be updated remotely, in real time, and multiple sites can be consolidated simplty onto a single, secure, cloud-based software platform.
Furthermore, iLOQ S50 is also a battery-free solution. This will help Cellnex reduce maintenance costs, eliminate battery waste and minimise the environmental impact of traveling between sites and administrative offices to update access rights.
Cellnex is committed to generating local value by contracting most of its suppliers locally.
Cellnex Spain opted at an earlier date for a model of partner companies with a strong presence in the territory, with their own staff low turnover, and with a high level of loyalty. This proved a key model the pandemic and the lockdowns, when telecommunications services were essential for informing the population and facilitating communications. In 2021, the provision of quality-assured services was mantianed during the successive waves of infection and the restrictions imposed by COVID. Cellnex transfers to its suppliers the criteria it applies to itself in terms of ESG policies.
Cellnex Italia’s sustainability values are applied over the entire supply chain. To this end, ESG requirements have been integrated in every stage of the purchasing processes:
Stakeholder engagement initiatives have been developed with the most compliant suppliers to identify and implement joint sustainable projects.
In 2021, for the fourth consecutive year, the CDP Supply Chain questionnaire was launched for Cellnex suppliers, with 178 responses in 2021 (169 in 2020). In this questionnaire, the company's suppliers report data on their emissions and environmental conduct to assess their efforts to combat climate change. In 2021 Cellnex has improved its score, rising from an A- to an A, which is considered a Leadership stripe.
One action undertaken during 2021 within the framework of the Cellnex ESG Master Plan was the implementation of training and awareness-raising actions on ESG issues for suppliers. For example, as Cellnex is a member of the CDP - Supply Chain, suppliers were given training to explain the context and importance of the CDP questionnaire, in addition how to answer it and the information and documentation they need to collect. The training was attended by Cellnex's Environment and Purchasing departments and CDP representatives, and a total of 91 suppliers from all over Europe took part in the session (61 from Spain for the training conducted in Spanish and 30 from the rest of Europe for the training conducted in English).
The Deutsche Telekom Group has renewed Cellnex Telecom’s certification as a "Zero Outage Supplier" for the fifth year running. This certification is part of the German group’s worldwide programme to select and certify their key connectivity service providers in each country. The programme sets the Deutsche Telekom Group quality standards for its customers based on the operational excellence, security and stability of the systems, monitoring of critical components and reduction/resolution of incidents with 24/7 availability by its key suppliers.
Cellnex has been working for Deutsche Telekom in Spain since 2015, providing connectivity services to T-Systems. This company in the German group was responsible for performing the type-approval and certification process for Cellnex, based on the criteria and quality levels set by Deutsche Telekom.
This type-approval and certification process measures indicators linked to commercial service, compliance with the delivery dates of contracted services, continuity of service, and constant real-time information, scaling, response time and resolution of incidents, to name just a few. T-Systems monitored these indicators throughout 2021 along with the quality of the connectivity service and the level of continuity offered by Cellnex.
The supplier selection, approval and evaluation processes are considered critical within the purchasing process. Therefore, in 2021, a project was launched to redefine the model in line with the Company's objectives in terms of ESG, Risks, Quality, Compliance and Information Security. This process is part of the action defined in the ESG Master Plan on the definition of a model for the analysis and assessment of the risk associated with suppliers, including factors related to ESG and the definition and identification of critical suppliers.
As such, the strategic purchasing model must include the criteria defined in the supplier selection, approval and evaluation model. Together both projects seek to transform the way in which the Company undertakes the purchasing process and aim to transfer Cellnex's strategic objectives to the supply chain. To ensure this, Cellnex companies carry out a supplier evaluation and selection process.
During 2021, work continued with EcoVadis for the evaluation of suppliers, on this occasion by carrying out a selection of the suppliers with the highest risk in terms of ESG. As such, they were selected according to criteria of purchase volume, type of service or product they provide, risk situation in a given country and lack of alternative suppliers. Once the evaluation has been completed, the results are explained to the suppliers and the areas with the greatest risk of non-compliance are identified. Based on this, an action plan is drawn up for the supplier, which is registered and managed directly through the EcoVadis platform. In 2021, a total of 489 suppliers were evaluated based on environmental criteria, 257 suppliers were evaluated in relation to their potential environmental impact, 402 suppliers based on social criteria and also 402 suppliers whose impact on labor practices has been evaluated.
Cellnex Ireland assesses its suppliers on an annual basis. The assessment model is based primarily on safety legislation, which sets out procurement, design and management requirements for contractors involved in construction projects and maintenance programmes.
As part of the procurement process, the competence and resources of each contractor are assessed. The contractor is required to complete a selection questionnaire, designed to ensure that new service providers have an appropriate level of competence and resources to safely manage and execute the project.
Once a contractor has passed the assessment, they are formally appointed. In addition, once they are selected as an approved contractor, there is no need to repeat the questionnaire process for similar types of projects or work.
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