Our Group-wide procurement strategy and derived guidelines take full account of the issue of sustainability. These guidelines affect the entire procurement process. The strategy is put into action using internal and external performance indicators and management tools.

• Until the end of 2021, the responsibility for ensuring sustainable procurement lay in the Finance, and Human Resources and Legal Affairs Board departments. As of January 1, 2022, this responsibility now lies with the Chairman of the Board of Management department and the Finance Board department.
• The issue of sustainability is taken into account throughout the procurement process. Right from the onboarding process, suppliers must always adhere to our Supplier Code of Conduct. This includes our ambitious CR targets and requirements.
• As part of tenders, we assign a maximum 20 percent weighting to sustainability performance as part of the supplier selection process.
• In 2022, we refined specific sustainability criteria for the supplier selection: Particular importance is attached to the CO₂ footprint of our suppliers and their commitment to achieving ambitious climate targets; after all, the reduction of carbon emissions in our supply chain (Scope 3) plays a key role in achieving our goal of being climate-neutral by no later than 2040 along the entire value chain.
• In close collaboration with the telecommunications company Orange we have developed a set of product-specific criteria for IT and network/hardware products as well as for passive products such as fiber-optic  cables. As of 2023, these criteria will be used with selected tenders for IT/NT hardware products and fiber-optic cable/hardware products.
• In 2022, we made the necessary adjustments to our procurement processes and guidelines to enable us to meet fully the requirements from the Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz – LkSG) in our supply chain from 2023.
• We monitor potential sustainability transgressions by our suppliers through third-party providers. In the event of a relevant violation of our requirements, we initiate a corresponding risk escalation process.
• We train our employees throughout the Group using CR e-learning . In addition, our Global Procurement Policy and a guideline for buyers provides an overview of which CR criteria must be considered at which point in the procurement process.
• In the framework of our working group “Sustainable Procurement Group,” which has been internationally oriented since 2021, procurement staff consult with each other, nationally and internationally, regarding sustainability issues.
• We ensure business partners and suppliers are up to the mark by offering workshops on specific topics and operating our Supplier Development Program.

Corruption and bribery may cause long-term economic losses, prevent fair competition and needs-based investment, destroy jobs, and accentuate poverty and inequality in the population. As part of the impact analysis of our materiality assessment process, we have also analyzed in detail our suppliers' sustainability performance. We identified a moderate risk here for the issues of corruption and bribery. 

We are therefore committed to promoting, among other things, the responsible procurement of minerals and do our utmost to substitute conflict materials. We also offer our suppliers e-learning courses on Compliance.

Supplier Code of Conduct

Our Supplier Code of Conduct forms part of our General Terms and Conditions for Purchasing and must therefore be accepted by our suppliers. In line with our own Group Policies, ethical, social, and ecological principles as well as fundamental human rights are enshrined in the Code of Conduct:

• Code of Conduct
• Code of Human Rights & Social Principles:

With our Supplier Code of Conduct, we have furthermore made a commitment to complying with the internationally recognized norms and standards such as the ones set forth by the International Labour Organization (ILO), the Organisation for Economic Co-operation and Development, the Universal Declaration of Human Rights, and the UN Global Compact:

• ILO and OECD guidelines
• Universal Declaration of Human Rights
• UN Global Compact
• United Nations Guiding Principles on Business and Human Rights (“Ruggie Principles”)

Furthermore, it also includes requirements relating to additional relevant issues such as data protection, corruption, and artificial intelligence. For our strategically important and particularly risk-prone suppliers, we have on-site audits conducted regularly by external auditors to verify compliance with the Supplier Code of Conduct. We also updated our Supplier Code of Conduct in 2022 based on the requirements set out in the German Act on Corporate Due Diligence Obligations for the Prevention of Human Rights Violations in Supply Chains.

Global Procurement Policy
Our sustainability principles for Procurement are set out in the Group’s Global Procurement Policy.

Procurement guidelines
The Procurement guidelines provide specific instructions for procurement in Germany and serve as recommendations for our national companies.

Other policies
The Group Policy on Avoiding Corruption, the Statement on Extractives, and the list of prohibited materials are binding for our suppliers, too.

Implementation in the company

• Our sustainability strategy in Procurement is derived from our CR strategy and is anchored in the procurement processes used throughout our Group. Until the end of 2021, the responsibility for ensuring sustainable procurement lay with the following two Board of Management departments: a) Finance and b) Human Resources and Legal Affairs. As of January 1, 2022, this responsibility lies with the Chairman of the Board of Management and the Board of Management department for Finance.
• The “Sustainable Procurement Group” working group assists the national and international Procurement units in implementing the sustainability requirements.

Steering tools

The ESG KPIs are an important steering tool for Procurement.

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Antonio Veloso