Saipem believes in sharing sustainable value along its supply chain.
In over 65 years of services and operations, we have developed a strong and reliable vendor management system, based on mutual trust and ethical behaviour, including the protection of people and the environment.
We are committed to integrating ESG aspects into our supply chain in an increasingly advanced manner through ad-hoc initiatives. Learn more about our initiatives
In 2023, our supply chain faced significant upheaval, driven in part by regulatory changes. These changes catalysed a strong call for collaboration and alignment in our strategic vision for sustainability, with the goal to increase transparency at all levels of the supply chain. Throughout 2023, Saipem witnessed:
● Increased client engagement
● Enhanced vendor collaboration
● Growing involvement in international working groups
We have around 22,000 active vendors and more than 6,000 of these have been working with us for over 10 years.
We work in conjunction with local vendors contributing to the development of their skills and local economies: more than 50% of total purchases are from local vendors, in other words, vendors working in the same geographical area as the project being executed.
The complexity and heterogeneity of the Company’s supply chain lead to the need for a system guaranteeing an alignment between the Saipem standards and those adopted by its vendors, to prevent and mitigate risks and ensure an appropriate supply chain that can cope with the needs of current operational projects and potential acquisitions.
The procurement process is divided into five sub-processes:
Vendor requirements are assessed during the qualification phase and before the finalisation of purchase contracts. Monitoring and controlling vendor performance are critical components of our relationship management process with vendors.
Furthermore, sustainability considerations are integrated into various phases of our vendor management system, allowing for comprehensive examination and ongoing monitoring
These considerations encompass social and environmental sustainability as well as governance issues, which include ethical behaviour, respect for human and labour rights, worker health and safety, and environmental protection.
The level of risk associated with sustainability issues is determined by the country of origin of each vendor and the industrial sector and/or criticality of the supply. The vendors identified with a high sustainability risk level are subject to more comprehesive investigations.
Environmental sustainability of the supply chain
Environmental aspects are integrated into Saipem's Supply Chain processes. Saipem has developed and implemented a management system which includes policies and procedures designed to manage environmental risks in all phases.
▪ Qualification: Saipem Vendor Code of Conduct sets minimum expectations for all Vendors working with Saipem regarding also health, safety and environment. Moreover, Vendors respond qualification questionnaires based on the environmental criticality of the supply category for which they apply and, finally, they can be subjected to on site verification of technical capabilities (quality system, HSE etc.)
▪ Bid and Award: Vendors shall accept Saipem HSE requirements that are based on the stewardship level to be included in bids and purchasing documents. Moreover, Saipem is committed to selecting materials and services which take into account environmental criteria and encourages the use of low impact technologies through the research and adoption of solutions with the lowest possible impact on the environment during their entire life-cycle, in terms of the disposal/release/emission of pollutants, the use of hazardous substances and the production of waste. Some examples of factors considered in the bidding documents, when applicable, can be: Recyclability of the product, Fabrication process (energy, water consumption, etc.), Packing and transport means, Waste minimisation, Greater energy efficiency of the product, Use of clean technology and/or clean fuels / chemicals, Result in smaller production of toxic substances, upon disposal.
▪ Contract execution and performance monitoring: Vendors can be inspected / audited and they are monitored through a reporting performance system in order to verify the compliance with the requirements requested.
Social responsibility within the supply chain
Saipem requires that all vendors adhere to the principles outlined in our Code of Ethics and comply with the requirements of the Vendor Code of Conduct.
We have identified a series of social aspects as priority areas in the management of vendors, in particular:
▪ their respect for human and labour rights.
▪ their approach to protecting their workers in terms of health and safety.
These aspects are integrated into Saipem's Supply Chain Management System.
Our approach to the protection of human and labour rights is described in the document 'Human Rights and Modern Slavery', which is drafted in accordance with international legislation on Modern Slavery (e.g. UK Modern Slavery Act) and the Norway Transparency Act. This document sets out the main measures we take to ensure the protection of human and labour rights and the absence of modern slavery and human trafficking from our operations and supply chain.
Our actions include:
▪ Increase awareness on human and labour rights issues among Saipem’s main contractors;
▪ Conduct (desktop) audits on Saipem suppliers on human and labour rights;
▪ Strengthen skills on sustainability in the Supply Chain function through specific training.
Governance within the supply chain
Depending on the type of goods or services offered, vendors are subjected to a Counterparty Risk Assessment (“VERC”), aiming also to verify their ethical conduct in terms of anti-corruption, unlawful conduct and human rights, as well as any other aspect which could directly damage the reputation of the vendor, and indirectly the reputation of Saipem. The VERC is performed by analysing the key characteristics of the counterparty, with particular attention to economic-financial, ethical/reputational aspects and ownership.
Driven by our ambition to achieve the goals outlined in our Sustainability Plan, we launched strategic initiatives and engagement campaigns in 2022 to foster a sustainable supply chain. These efforts have continued in 2023, with specific objectives set for 2024:
1) Expand the Open-es platform vendor base and review vendor data. Following up on the onboarding activities started in 2022, Saipem organised a dedicated workshop on the Open-es platform, engaging about 800 international vendors. The workshops highlighted the role of Open-es as a development tool available for all Saipem vendors to measure, plan, and enhance their sustainability performances.
2024 objectives: Collaborate closely with Open-es to improve the questionnaire and collect ESG data during the qualification process of our vendors.
2) Verify the availability and costs of green technologies and minimum green design and implementation requirements. In 2023, we undertook several initiatives within the Sustainable Market Survey reference framework to support Saipem’s Scope 1 and 2 emission reduction targets and assist our clients in their decarbonisation efforts.
2024 objectives: Launch new Sustainable Market Surveys on key energy transition product categories (e.g. solar panels) and services; Define the design for the implementation of green minimum requirements (e.g. mandatory vs. guideline) based on Market Survey results.
3) Engage vendors to collect technical information to calculate Scope 3 emissions and refine the strategy to manage scope 3 targets. An initiative linked to Saipem's Net Zero Program with the ambition to manage our Scope 3 emissions related to the purchase of goods and services. In 2023, Saipem onboarded approximately 250 new vendors with high emitting commodity codes on the SupplHi Carbon Tracker Platform.
2024 objectives: Continue engaging key vendors while collecting information on their decarbonisation initiatives through the advanced functionalities offered by Carbon Tracker, enabling Saipem to carry out due diligence on vendors’ emissions reduction initiatives; Finalise Saipem’s overall Scope 3 strategy.
Click here to discover more about the solution
If you are not registered yet as a User on SupplHi platform, please register yourself at this link https://registration.supplhi.com/ and follow the instructions provided. If you are already registered access the platform on https://vendor.supplhi.com.
Supporting documentation: Vendor User Guide and Carbon Tracker User Guide
Carbon Tracker is an Energy-specific industry initiative for the measurement and monitoring of GHG emissions in the supply chain (focus on Scope 3). The tool is free-of-charge for Vendors of any size and – based on primary data collected from them – returns a calculation of the GHG emissions that is in line with the requirement of the ISO 14064-1 and of the GHG Protocol.
Saipem joined Open-es, an initiative to support the sustainable development of supply chains through an open and free digital platform for all companies.
Using Open-es, Saipem intends monitoring the sustainability performance of its supply chain in a more timely manner, strengthening the environmental, social and governance (ESG) requirements in the assessment of suppliers.
Click here to register.
In Italy, we involved our suppliers in the Saipem Sustainable Supply Chain live Open-es event webinar that included national suppliers and invited them to register on the platform. The event was also an opportunity to discuss the role of supply chains in the energy transition and Net Zero.
Click here to watch the webinar.