Purchasing Policy
Purchasing Policy
25 February 2025
The Board of Directors of IBERDROLA, S.A. (the “Company”) has the power to design, assess and continuously revise the Governance and Sustainability System, and specifically to approve and update corporate policies, which contain the guidelines governing the conduct of the Company and the companies belonging to the group of which the Company is the controlling entity, within the meaning established by law (the “Group”).
In exercising these powers, within the framework of applicable legal provisions, the By-Laws and the Purpose and Values of the Iberdrola Group, as well as the provisions of the General Risk Control and Management Foundations of the Iberdrola Group, the Board of Directors approves this Purchasing Policy (the “Policy”).
The Company recognises as strategic objectives sustainability in the supply chain, the securing of strategic supplies, which enables it to comply with its growth plans, and efficiency in overall purchasing cost, all based on alignment of tender awards with the Company’s strategy and strict compliance with applicable law and the provisions of the Code of Ethics.
1. Purpose
The purpose of this Policy is to establish the principles that must govern, on the one hand, purchases of equipment and materials and the contracting of works and services, and, on the other, the organisational, corporate and shared services model for the companies of the Group, in view of the particularities of the various countries or territories in which they are present, with full respect for their corporate autonomy and within the limits established in the legal provisions applicable to the regulated activities they carry out, for purposes of achieving greater efficiency in Group-level purchasing processes as a fundamental element for the achievement of the strategic objectives.
2. Scope of Application
This Policy applies to all companies belonging to the Group, as well as to the companies in which the Company holds an equity interest that do not form part of the Group but over which it has effective control, within the legally established limits.
Without prejudice to the provisions of the preceding paragraph, listed country subholding companies and their subsidiaries, under their special framework of strengthened autonomy, may establish an equivalent policy that must conform to the principles set out in this Policy and in the other environmental, social and corporate governance and regulatory compliance policies of the Governance and Sustainability System.
At those companies in which the Company holds an interest to which this Policy does not apply, the Company shall promote the alignment of its own policies with those of the Company through its representatives on their management decision-making bodies.
Furthermore, this Policy also applies, where appropriate, to joint ventures, temporary joint ventures (uniones temporales de empresas) and other equivalent associations, when the Company assumes management thereof.
This Policy applies to all forms of purchases of equipment and materials and to the contracting of works and services, regardless of whether or not they are executed pursuant to a formal purchasing process, except for the provision of services between companies of the Group, which are governed by the corresponding regulations.
Energy, fuel or raw material supply activities are also excluded from the scope of this Policy and provided for in the risk guidelines and limits of the corresponding businesses.
3. Main Principles of Conduct
The main principles of conduct that the Company adopts and promotes in the area of purchases of equipment and materials and contracting of works and services are described below:
a) Foster a supplier relationship policy based on principles of corporate ethics and transparency, striving for continuous improvement and mutual benefit and promoting sustainability, innovation and development activities.
b) Promote sustained, inclusive, accessible and sustainable economic growth, as well as endeavour to ensure productive and dignified work for the professionals forming part of the value chain.
c) Implement the mechanisms required for purchasing decisions to in any event ensure the achievement of balance among technical competence, quality, accessibility, occupational safety and cybersecurity, with respect to environment and price, as well as the sustainability and quality of the supplier as a key condition for the contribution of value.
d) Establish supplier selection procedures that conform to standards of objectiveness, impartiality, non-discrimination and equal opportunity, ensuring at all times compliance with the Code of Ethics, regardless of own or third-party interests.
e) Promote compliance by suppliers with contractual terms and conditions and applicable legal provisions, and particularly with the provisions of the Code of Ethics, of which it must inform its professionals and subcontractors, together with the existence of the internal reporting channels.
Suppliers and the entities that they in contract in turn for supplies, works and the provision of services to the Company must communicate, through the internal reporting system established by the Company and on the terms established in the Governance and Sustainability System, any conduct that might entail, on the part of any director, professional or supplier of the Company (or of the supplier’s subcontractors or professionals), potentially improper conduct or an act that is potentially illegal or contrary to law or to the governance and sustainability system with an impact on the Company, on its contractual relationship with its suppliers, or on the interests and image of the Company, without prejudice to the ability to address their grievances or reports to the Spanish Independent Whistleblower Protection Authority (Autoridad Independiente de Protección del Informante) (A.A.I.) or any other competent institution, body or entity.
f) Guarantee occupational health and safety for the professionals participating in the value chain, raising awareness and establishing controls to mitigate the risks inherent to the work done, in accordance with the risk guidelines and limits for purchasing, and require contractors to comply with the established safety rules, causing them to participate in the preventive culture that has been implemented, all based on international best practices in the area.
g) Endeavour to ensure compliance with rules on the separation of activities. If the same entity provides supplies, is contracted for works or provides services to companies of the Group that engage in regulated activities and to companies of the Group that engage in unregulated activities, it must comply with applicable legal provisions and with the requirements and conditions established in the corresponding codes for separation of activities of the Group’s companies or similar regulatory instruments.
In this regard, it shall be necessary to respect the effective decision-making capacity of the companies of the Group that carry on regulated activities with respect to the assets required for the operation, maintenance and development of their own activities, as well as with respect to limitations on access to commercially sensitive information of the aforementioned companies.
4. Group-level Coordination of the Purchasing Strategy
The Resources and Services Division (or such division as assumes the powers thereof at any time) shall establish an organisational, corporate and shared services model for the companies of the Group with the main objective of minimising the costs and risks associated with purchases and supplies and the contracting of works and services, taking advantage of synergies, aligning strategic decisions and efficiently managing resources, all while fully respecting the corporate autonomy of each of the Group’s companies, and particularly the strengthened autonomy of the listed country subholding companies and their subsidiaries, as well as fully respecting legal provisions on the separation of activities.
5. Implementation and Monitoring
For the implementation and monitoring of the provisions of this Policy, the Company is assisted by the Resources and Services Division (or such division as assumes the powers thereof at any time), which shall further develop the procedures required for such purpose.
This Policy was initially approved by the Board of Directors on 18 June 2013 and was last amended on 25 February 2025.
