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Fuel procurement

  • GRI
    

Purchasing solid and liquid fuel is a strategic activity for the Group, since it plays a leading role in guaranteeing the security and continuity of thermal energy production. The selection of fuel suppliers makes use of the “Know Your Customer” process, which evaluates the reputation, economic and financial aspects and the possession of suitable technical and commercial requirements by each counterpart.

A check is also conducted to ensure that suppliers are not on specific Black Lists of the UN, European Union and the Office of Foreign Assets Control (OFAC).

These are lists that respectively identify individuals or organizations connected with terrorist organizations, organizations subject to financial sanctions by the EU and socalled SDN (Specially Designated Nationals) organizations that are subject to sanctions by the United States for accusations, among other things, of terrorism or drug-trafficking. Purchase contracts signed with each supplier are subject to the rules adopted by the Group regarding the Code of Ethics and the Zero Tolerance of Corruption Plan, to which suppliers must adhere.

For its part, Enel reserves the right to terminate the contract in the event of severe non-compliance with said principles. Finally, in order to mitigate the risks from fuel transport by sea, Enel has adopted a tool to assess and select the transporters used, known as vetting.

Vetting is a recognized industry standard for oil transport, but for some years Enel and an ever-growing number of operators have started to apply the same methodology to dry bulk transport.

Fuel purchase (mln euros)

fuel purchase

Bettercoal

Enel, together with major European power utilities, is actively engaged in Bettercoal, a global initiative to promote continuous improvement of corporate responsibility in the international coal supply chain. Bettercoal has published a code of conduct based on existing and agreed social responsibility standards in the mining sector.

It establishes in detail the guidelines that mining companies can refer to in defining their social, environmental and ethical policies.

The Bettercoal Code conveys to the suppliers members’ expectations regarding their practices with reference to four macro-categories (management, ethical commitment and transparency, human and labor rights and environmental performance), promoting continuous improvement.

In addition to the growing presence of Bettercoal in several forums related to the sustainability of coal and the supply chain, the initiative has become an example of cooperation aimed at improving socially responsible practices in the supply chain. In 2018, evaluations by Bettercoal covered over 370 mln t of coal production, two work groups were launched to focus specifically on Russia and Colombia, and a new assurance system and a new evaluation system were completed and launched by Bettercoal. On-site inspections were also conducted in Russia, Colombia, Indonesia and South Africa and 13 plans for improvement were monitored.

For more information, visit www.bettercoal.org.