2017 Sustainability Overview | Prysmian Group

ON THE ENVIRONMENT SIDE PRYSMIAN GROUP 2017 SUSTAINABILITY OVERVIEW Starting from the end of 2016, Prysmian has launched structured activities for the integration of Environmental, Social and Governance factors within its supply chain. To this purpose, an internal document, called "Supply Chain Strategy" has been drawn up containing the strategic approach and the objectives of the Group. The strategic management of the Prysmian Group supply chain is based on four principles: risk assessment, identification of critical suppliers, supplier management and performance evaluation, search and selection of the supplier according to standardised processes. Enhancing Sustainability. In relation to these principles, Prysmian identified and developed 3 main macro-activities for the enhancement of sustainability aspects. The first is the subscription of ethical standards in the introduction of new suppliers, such as the Code of Ethics, the Code of Business Conduct, the definition of Conflict Minerals Policy and Human Rights Policy. Subsequently comes the sustainability assessment of the current supply chain, in a process that includes the Sustainability Desk Analysis, the Risk Analysis and the self-assessment questionnaires on sustainability issues. Then we manage and constantly improve a set of sustainability aspects, with the implementation of actions with a view to achieving the objectives included in the Sustainability Scorecard. Strategic Relations. The Group constantly strengthens relations with strategic suppliers, seeking to build together a common organisational process focused on sustainability throughout the entire production chain. Group suppliers source the principal raw materials used by Prysmian in the production processes, from copper to aluminium, to lead, to various petroleum derivatives such as PVC and polyethylene and components for Power and Telecom cable accessories, as well as special types of glass and sheathing for optical fibre. Five Priorities. The strategic approach adopted to supply chain management is based upon five priorities that the Group has established to take environmental and social objectives into account: • Only use qualified suppliers. • Only use materials whose technical characteristics have been authorised. • Develop strategies for commodities that guarantee continuity of supply and availability of the required volume. In particular, the financial health of the supplier is important, as is only modest dependency on specific suppliers by Prysmian. • Guarantee on-time delivery and a high level of quality over time. • Ensure competitive prices. The Group's continued commitment in relation to sustainability issues has further strengthened in 2017 in order to make the supply chain even more sustainable and reliable. ALWAYS RELYING ON SOUND SUPPLIERS World class producers Continuosly monitoring mica mining The majority of the Group's purchases of raw materials, about 70%, comprise metals, especially copper and aluminium, which are a fundamental resources for our activities. Prysmian purchases copper and aluminium wire rod from the world's leading manufacturers, in order to make the conductors for cables. In special cases, Prysmian produces its own copper rod from copper cathode, but the output volume is less than 10% of total consumption. The Group management of potential risks in the business relationship includes supplier approval of Prysmian's Code of Ethics. In particular, whenever a contract is awarded, the supplier must accept and sign the Group's Code of Ethics, in full awareness of the related rights and obligations. In 2017, the Group continued analysing the results collected through the questionnaires sent to suppliers with the aim of developing increased monitoring aimed at avoiding the use of suppliers at potential risk of child labour in their supply chain. In order to manufacture certain safety cables and make them fire resistant, Prysmian purchases limited quantities of a few types of glass-based tape that contain small quantities of mica, but we do not use this mineral directly in our products and production processes. The extraction process for this mineral is considered to be at risk of under-age working, especially in geographical areas like India where large quantities are mined. The Group tackled this issue since 2016 by requesting all suppliers with a sub-supply of mica to certify the absence of child labour.