Suppliers

Commitment and collaboration with our value chain

Cellnex aims to establish enduring partnerships with its suppliers, founded on mutual benefits and trust, fostering a robust business relationship. In a constantly evolving world, the collaboration of its suppliers is crucial for Cellnex to effectively address market demands. In this respect, Cellnex regularly updates its suppliers regarding new projects and encourages their cooperation. It is essential for the company that suppliers are aware of corporate policies and values, and that compliance with all of them is ensured.

The procurement process is key for Cellnex due to its high economic, environmental and social impact. For this reason, Cellnex established and actively promotes an action guide for 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 the company’s suppliers.

The supplier relationship model relies on a collaborative approach between the requesting departments and the procurement team, working jointly to achieve optimal procurement practices. In many cases, relationships with suppliers are built upon years of cooperation between Cellnex staff and suppliers.

Cellnex employs a supplier management model emphasising collaboration and ongoing enhancements, aiming for streamlined procurement processes and discovering technological solutions to drive improvements. In early 2023, the company also launched Sustainability Linked Confirming, a supplier payment solution that follows sustainable criteria, as it is linked to the supplier’s CDP score. Through this programme, suppliers assessed by CDP obtain an incremental discount on the invoices they anticipate, versus the standard rate charged by the bank, depending on their CDP score. A higher score results in a higher discount.

Procurement Policy

The Procurement Policy underwent an update in 2022 to encompass the integration of the ESG risk model within the supply chain. Additionally, it now integrates the supplier code of conduct, outlining fundamental regulations that all Cellnex suppliers are required to understand and adhere to. The policy was approved by the Board of Directors in January 2023. The basic principles of the Procurement Policy are as follows:

Supplier Code of Conduct

Cellnex implemented a Supplier Code of Conduct, a foundation for trust and collaboration within the organisation's value chain. This initiative aims to drive ongoing enhancement in procurement processes and foster enduring, reliable business connections. The Supplier Code of Conduct consolidates the essential Cellnex Group principles, rules and policies governing suppliers into a unified document. The Supplier Code of Conduct explicitly mentions the commitment towards anti-bribery, conflicts of interests and antitrust, in line with the Cellnex Code of Ethics.

Integrating risk and ESG in the supply chain

In 2022, the definition of the Risk Integration and ESG model in the supply chain project was implemented, in line with the Group’s ESG Master plan. In cooperation with the various areas (Legal, Health & Safety, Security, Sustainability and Quality and Risk Management), the risks associated with the supply chain were defined, suppliers were categorised and a management model was defined for the inclusion of ESG and risk criteria in the sourcing, contracting, qualification and evaluation of suppliers.

In 2023, the model for integrating risks and ESG in the supply chain has been implemented, including the following milestones:

• The qualification process for suppliers has been redefined, including the following:

In 2023, the model for integrating risks and ESG in the supply chain has been implemented, including the milestones in the infographic below.

Suppliers evaluation:

• The qualification process for suppliers has been redefined, including the following:

As part of the qualification a screening of its main suppliers is performed through:

• Ecovadis (for ESG-related topics). Ecovadis specifically takes into consideration sectorial information to evaluate its suppliers.
• Financial Screening with Dunn & Bradstreet
• Compliance Screening with Catalyst (Bureau Van Dijk)
• When selecting which suppliers are included in the screening process, Cellnex takes into consideration the specific risks associated with the suppliers in terms of sector and good or service they are providing.
• In 2023 the Group qualified its Critical suppliers, covering 58,25% of the total Spend. Critical suppliers are those with an annual spend over 5M€ or those who are considered critical for the business continuity of the Group

Sourcing:

It is being progressively implemented the inclusion of ESG criteria in the selection of suppliers participating in tender processes, including but not limited to the following aspects:

• Prioritisation of qualified suppliers
• Depending on the good or service specific information or minimum requirement is requested (ISOs, Ecovadis scoring, CDP reporting)

• The selection criteria contain a percentage linked to ESG.
• Assessment of risks required to participate in tendering processes

Contracting:

ESG-related clauses are being integrated into the contracting process to ensure that its supply chain is aligned with its ESG commitments, including but not limited to the following aspects:

• Commitment to report carbon footprint and implement reduction plans
• Ensuring compliance with internal rules and external regulations (Information Security, Health and Safety, Compliance, etc.)

Supplier Performance Evaluation

In 2023 the Supplier Performance Evaluation included ESG and risk considerations to assess the performance of suppliers for contracts with ESG and risk clauses.

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 implementation of the Ariba tool to improve and update the way procurement is managed in the Group. From the beginning, implementation was proposed in three phases and in a staggered manner in the various countries. The implementation plan was active from 2020 to 2023, culminating in the completion of the Ariba implementation project across the entire Group in 2023. As such, all Group companies now manage their end-to-end procurement processes through the Ariba tool. The three phases of the implementation process were divided into the tool’s various pillars:

• Ariba Buying: In the first phase of the implementation process, the aim was to standardise the way in which the Group carries out operational purchases, from the purchase order to the accounting of the invoice and its subsequent payment. Deployment of this phase began at the start of the project and concluded in 2022 with the implementation of Ariba Buying in all the countries where the Group operates.
• Ariba Sourcing and Contracts: In the second phase of the implementation process, the objective was to improve and automate the tactical procurement processes, including 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). By the first half of 2023, the implementation was successfully completed across the whole of the Group.
• Ariba SLP: In the third and final phase of the implementation process, the focus was on the automation of supplier registration and qualification management. The definition of the model was completed in line with the Risk Integration and ESG model in the supply chain.

CDP Supply Chain

In 2023, the CDP Supply Chain campaign was carried out once again. Through CDP, Cellnex suppliers can report their carbon footprint, allowing for 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.

Aligned with the pledge to decrease emissions within scopes 3.1 and 3.2 by 21% by 2025, Cellnex has entered into contracts with key suppliers that include the outlining of plans to reduce carbon footprint. These suppliers have also committed to reporting their emissions through CDP throughout the duration of the contracts.

In 2023, the CDP Supply Chain questionnaire was launched for Cellnex suppliers, with 279 responses (224 in 2022).

Supplier evaluation, selection, and monitoring

Cellnex is committed to generating local value by contracting most of its suppliers locally. During 2023, Cellnex has increased the percentage of local suppliers from 90% to 96%. Cellnex suppliers must share the same values and commitment to society and the environment that Cellnex has, which is why the Company periodically evaluates the sustainability of its suppliers, as well as their impact on climate change.

The supplier selection, approval and evaluation processes are considered critical within the procurement process. During 2023, the ESG supplier evaluation campaign was again carried out using the Ecovadis platform. For 2023, 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 are identified. On this basis, an action plan is drawn up for the supplier, registered and managed through the Ecovadis platform. In this regard, no suppliers with negative environmental impacts were identified in 2023.

Social assessment (Ecovadis)

Environmental or ESG assessment (Ecovadis + CDP)

96 %
of local suppliers

	90%	(2023)
	89%	(2022)
	97%	(2023)
	93%	(2022)
	94%	(2023)
	90%	(2022)
	91%	(2023)
	91%	(2022)
	92%	(2023)
	90%	(2022)
	88%	(2023)
	88%	(2022)
	86%	(2023)
	77%	(2022)
	84%	(2023)
	89%	(2022)
	97%	(2023)
	77%	(2022)
	77%	(2023)
	79%	(2022)
	90%	(2023)
	93%	(2022)
	91%	(2023)
	97%	(2022)