Supply chain

Ferrovial integrates environmental, social and good governance (ESG) principles into all stages of its supply chain by using an integrated model that aims to foster quality, sustainability, efficiency and transparency, respect for Human Rights and nondiscrimination and equal opportunities.

INTEGRATION OF ESG PRINCIPLES IN THE SUPPLY CHAIN

Ferrovial has a Global Purchasing Policy that is applicable to all Ferrovial companies and subsidiaries. The policy sets out the commercial, environmental, social and good governance principles that underlie the company’s relations with all its suppliers. They are based on the Code of Business Ethics, the Corporate Responsibility and Human Rights Policies and the Due Diligence Process to Ensure Supplier Integrity and Ethics.

The business purchase procedures were updated in 2019 to establish more rigorous criteria in managing suppliers in aspects related to ESG criteria, especially with regard to compliance with Ferrovial’s ethical and anticorruption policy principles, in line with the procedure of due diligence of ethical integrity of suppliers, established in the previous year. This has also been reflected in the contractual clauses of Ethics and Anti-Corruption Policy with suppliers. In addition, the company is developing a Supplier Code of Ethics through which the company expects to promote responsible behavior in its value chain, complying with the main standards in ethics and integrity, Health and Safety, the environment and Human Rights.

Supplier management starts with a preliminary classification based on their degree of criticality. A supplier will qualify as critical when its purchasing volume is deemed significant in financial terms or if the goods or services they provide could have a negative impact on business continuity in the event of an incident.

Throughout the purchasing life cycle, both in the screening and initial assessment stages, such as bidding and final control, evaluation and monitoring specific quality management, classification, evaluation and risk control processes that include ESG criteria are applied, as well as the usual criteria of product/service quality, technical capacity, price compliance, meeting deadlines and compliance with occupational Health and Safety. All suppliers are subjected to evaluation and monitoring processes, the result of which may result in them receiving a warning, an improvement action plan being established, or even them being disqualified from working with Ferrovial depending on its severity. In the case of a verified breach of the Anti-Corruption Policy, the supplier is automatically disqualified.

In 2019, 25,840 suppliers joined the Ferrovial supply chain and 14,458 of them were evaluated, less than 1% of which were rejected. A total of 1,523 suppliers were considered critical, which accounted for 24.3 % of total supplier invoicing.