Supplier portfolio and purchase volumes

In 2021, purchase orders were issued to 4,492 suppliers for over 1,580 million Euro.

Impacts on the local areas

Suppliers are deeply rooted in the local areas of reference, both in terms of the number of active suppliers (48%), as well as the economic value of the orders (59%). This highlights the importance of the effects of Iren Group on the territorial areas of reference.

Within the context of public tender procedures, in compliance with current legislation and community principles which require that all companies can compete, no matter their location, the Group does not select suppliers by geographical origin, but on quality and economic criteria, favouring the best quality/price ratio as the determining factor. In order to guarantee an adequate level of competition, where feasible, it arranges the tender into functional lots, so as to allow separate awards and greater participation by economic operators, including those that are small and medium enterprises. Nonetheless, with reference to the instrumental tenders, which are carried out via invitation because excluded from the Public Contracts Code, Iren Group reserves a 50% share for local economic operators with suitable qualifications that are present in the Register when identifying the panel of qualified suppliers to invite to the tender. This measure aims to favour local development and, consequently, social cohesion.

The economic impacts on local business generally occur due to subcontracting to local companies – within the limits allowed by law – that are able to work on segments of the activities and apply more competitive prices given that they are already present locally and guarantee efficient services due to their local knowledge. The large number of suppliers by geographical area and the relevant volumes ordered are shown below and refer to all purchases with exclusion of contracts for the supply of raw materials.

Social cooperatives

The Group supports social cooperatives whose main aim is to ensure the incorporation of disadvantaged people within the labour market. Social cooperatives are particularly active in waste collection and environmental hygiene services. Within the general qualification questionnaire, suppliers are asked if the company’s main purpose is the social and professional integration of disadvantaged people or those with disabilities (pursuant to Article 4, subsection 1, Law 381/1999 “Social Cooperatives Regulation”).

In 2021, 4 new social cooperatives were acquired, making a total of 60 cooperatives present in the Procurement Portal. Of these, 35 have worked with Group Companies in the year. The overall order amount to social cooperatives was over 20 million Euro, representing 1.3% of the total value of Group orders. The order trends can vary significantly from one year to the next in relation to the signing of multi- year contracts, including ones for significant sums.

Coop. Social 2021 2020 2019
Suppliers (no.) 35 24 38
Orders (Euro) 20,944,620 22,209,800 95,414,752

In 2021, the Group lost, definitively, 28 lawsuits brought by employees of former suppliers/contractors of the Group against their employer for non-payment of wages, and in which Iren Group was held liable according to and for the effects of joint and several liabilities. In these cases, since the plaintiffs’ employer failed to execute the judgement, the Group was forced to pay the amounts owed to the employees directly and subsequently implemented all suitable measures for the recovery of the amounts paid.

The Group also incurred an outlay of approximately 1,000 Euro as part of a dispute regarding compensation paid to a supplier for promotional activities carried out by the latter.