6.2 Suppliers

Collaboration and commitment with our value chain

In an ever-changing world, to be able to respond to the needs of the market, the collaboration of its suppliers is of vital importance for Cellnex.

Cellnex strives to be a business partner to its suppliers, where long-term relationships are built on mutual benefits and trust. In this sense, Cellnex regularly update its suppliers about new projects and invite them to cooperate. Moreover, for Cellnex, it is essential that suppliers are aware of corporate policies and values and ensure compliance with each of them.

The procurement process is key for the Company due to its high economic, environmental and social impact. For this reason, Cellnex has established and promotes a guide for action in the procurement process that goes beyond price, product and/or service quality, by also considering social, ethical, environmental and privacy aspects in the performance of Cellnex's suppliers.

The supplier relationship model is based on a collaborative approach between the requesting areas and the procurement team that work together to deliver the optimal procurement practice. Relationship with suppliers is in many cases built on years of cooperation between Cellnex staff and the supplier.

Cellnex has a supplier management model based on collaboration and continuous improvement, seeking the most efficient procurement procedures and finding technological solutions that result in improvements. In early 2023, Sustainability Linked Confirming was also launched, a payment solution for suppliers with sustainable criteria, since it is linked to the supplier's CDP score.

Procurement Policy

During 2022, the Procurement Policy has been renewed with the aim of including the ESG and risk integration model in the supply chain, as well as the incorporation of the supplier code of conduct, which includes the basic rules that all Cellnex suppliers must know and comply with. The policy has been approved by the Board of Directors in January 2023. The  basic principles on which the Procurement Policy is based are the following:

Supplier code of conduct

Cellnex adopted the Supplier Code of Conduct that acts as a framework of trust and cooperation for the Organisation with its value chain, resulting in the continuous improvement of procurement 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.

Integrating risk and ESG in the supply chain

In relation to the aforementioned, during 2022, work has been done on the definition of the Risk Integration and ESG model in the supply chain. This project is aligned with the objectives of the ESG Master Plan for the year 2022. Therefore, together with different areas (Legal, Health & Safety, Security, Sustainability and Quality and Risk Management) the risks associated with the supply chain have been defined, the suppliers have been categorized and a management model has been defined for the inclusion of ESG and risks criteria in the contracting, approval and evaluation of suppliers.

The implementation of the ESG and risk integration model in the supply chain will be carried out through the processes defined in the Ariba tool and will be carried out in parallel to the implementations of Ariba Sourcing and Contracts and Ariba SLP throughout the Group. The model will be fully implemented throughout the Group in 2023.

ARIBA Tool

Supplier management is carried out in a coordinated and homogeneous manner among all the Business Units under the Cellnex Industrial Model. Since 2020, work has been carried out on the implementation of the Ariba tool to improve and update the way of managing procurement in the Group. From the beginning, the implementation was proposed in three phases and in a staggered manner in the different countries. The implementation plan runs from 2020 to 2023, when the Ariba implementation project will be completed throughout the Group. Therefore, by 2023, all Group companies will manage their procurement processes end to end through the Ariba tool. The three phases of the implementation are divided into the different pillars of the tool:

• Ariba Buying: In the first phase of the implementation, the aim has been to standardize the way in which the Group carries out the operational purchase, from the purchase order to the accounting of the invoice and its subsequent payment. This phase has been deployed since the start of the project and has concluded in 2022 with the implementation of Ariba Buying in all the countries in which the Group operates. During the year 2022 it has been implemented in Poland, Denmark and Sweden.
• Ariba Sourcing and Contracts: in the second phase of the implementation, the objective has been to improve and automate the tactical procurement processes, which include the Sourcing process (bidding, negotiation, auctions, etc.) and the Contracts process (contracts database, electronic signature, automation of contract review flows and full integration with operational procurement management). During 2022 the model has been defined and implemented in the Corporation and Spain. Likewise, the model and the tool have been implemented in Italy, the UK, and Poland. During the first half of 2023 it will be implemented to the rest of the Group.
• Ariba SLP: in the third phase of the implementation, the focus will be on the automation of supplier registration and qualification management. The definition of the model has been done during 2022 in line with the Risk Integration and ESG model in the supply chain.
• The Ariba Network: this module is the supplier portal that strengthens the relationship with suppliers, centralizing 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 2021, 500 suppliers were incorporated into the portal.

CDP Supply Chain

In 2022, the CDP Supply Chain campaign has been carried out once again. Through CDP, Cellnex suppliers can report their carbon footprint, which allows a more accurate calculation of the emissions associated with scopes 3.1 and 3.2 of Cellnex's carbon footprint, as well as their plans to reduce emissions. 

In line with the commitment acquired to reduce by 21% the emissions of scopes 3.1 and 3.2 by 2025, contracts have been signed with strategic suppliers in which carbon footprint reduction plans have been defined. Likewise, the suppliers of these contracts have committed to report their emissions through CDP during the term of the contracts.

In 2022 CDP Supply Chain questionnaire was launched for Cellnex suppliers, with 224 responses in 2022 (178 in 2021).

Supplier evaluation, selection and monitoring

Cellnex is committed to generating local value by contracting most of its suppliers locally. Cellnex suppliers must share the same values and commitment to society and the environment as Cellnex does, which is why the Company periodically evaluates the sustainability of our suppliers, as well as their impact on climate change.

The supplier selection, approval and evaluation processes are considered critical within the procurement process. During 2022, as in the last two years, the ESG supplier evaluation campaign was again carried out using the Ecovadis platform. For 2022, the supplier categorisation criteria have been taken into account to ensure that all the Group's main suppliers have been assessed by Ecovadis. Once the assessment is completed, feedback is given to suppliers and the areas with the highest risk of non-compliance have been identified. On this basis, an action plan is drawn up for the supplier, which is registered and managed through the Ecovadis platform. In this sense, no suppliers with negative environmental impacts were identified in 2022.
For its part, Cellnex Italia has also evaluated 50% of its suppliers on environmental and social issues through other mechanisms.