Ancillary companies and supplier network
The Group relies on the contribution of more than 6,700 businesses located in more than
15 countries throughout the world to carry out its own activities. These provide essential goods and services for Brembo’s industrial processes. During 2022 the total number of raw materials, components, materials and auxiliary production services processed and integrated in Brembo products generated a purchasing value of more than
€2,393
million, in addition to about
€241 million for machinery and industrial plant.
Promoting sustainable business models through responsible purchasing practices
For Brembo,
supply chain management is a priority and is essential to ensuring responsible supplies, with a
focus on environmental protection and the rights of workers and local communities. For this
reason the Company asks for its model of conduct to be shared and applied also by its supply chain. These principles and values are at the basis of the supplier selection and as of 2022 they were formally defined within the new
Sustainable Procurement Policy.
This policy was distributed to the main global Brembo suppliers, which are required to sign it and abide by it. It includes verification and audit programmes, monitoring, training sessions and corrective measures to support suppliers in a collaborative manner.
Over the years, the Group has thus established a structured supplier management process that seeks
to promote the development of stable relations with its partners, as well as ensuring continuous innovation and improved quality and sustainability throughout the industry.
This process is structured into
three main phases:
1.
Clear communication of the standards that Brembo expects from its business partners in terms of product and service quality, respect for human rights and employee protection and, more generally, attention to ESG aspects.
2.
Assessment of suppliers’ capacity to meet ESG-related technical specifications and requirements both during the qualification phase and during the business relationship and monitoring of the supply risk.
3.
Providing suppliers with support to continually improve their own performance and strengthen their ability to innovate.
Supplier selection and assessment
Brembo has defined a
structured process for the assessment and approval of new suppliers.
• The first phase of the process involves inviting suppliers to register with Brembo’s Supplier Portal and asking them to complete a pre-assessment questionnaire.
With effect from 2023, Brembo will avail of an ad hoc digital platform, developed with the help of an external service provider. By implementing the SAQ 5.0 self-assessment questionnaire formulated within the framework of the Drive Sustainability initiative, it will enable Brembo to ensure its compliance with its own industry sustainability guidelines, together with the most consolidated international sustainability due diligence standards throughout its supply chain.
The above enables Brembo not to establish commercial relationships with suppliers who do not comply with minimum requirements (including, for instance, the signing of the Sustainable Procurement Policy) and allows it to identify in advance any critical issues regarding new potential suppliers and to devise and implement corrective actions accordingly.
• Once the pre-assessment phase is concluded positively, all potential suppliers of direct materials receive onsite visits from the Quality GCF to check whether the quality and process requirements are met effectively.
• Once the approval process has been completed, the supplier becomes part of the supplier base to which Brembo can award orders. The assignment of a specific supply takes place by benchmarking the various offers received on the basis of the following assessment criteria:
A. Compliance with technical specifications;
B. Technological and innovation capabilities;
C. Quality and service;
D. Economic competitiveness.
The above-mentioned criteria will be subsequently integrated with the
Supplier Sustainability Assessment performed through the new digital platform for ESG profiling.
• Finally, Brembo has conducted
third-party ESG audits of suppliers for the past several years with the specific goal of assessing compliance with the sustainability standards mandated by the Group.
Engagement and awareness raising
In the area of supply chain engagement and transparency, the main surveys conducted in 2022 were:
•
Supplier Engagement Survey “Materiality Matrix”: in contrast to previous editions, for the specific purpose of providing direct support in view of the changes made to the assessment process, 13 suppliers were involved, with a 92% response rate;
•
Supplier Engagement Survey “Conflict Minerals”: conducted on a panel of 230 relevant suppliers with a response rate of 90%; in 2022, suppliers belonging to the Friction Materials, Raw Materials and Mechatronics product categories were also involved in the Conflict Minerals Survey as these components are potentially at risk of using these materials;
•
Engagement Survey “Extended Minerals (Cobalt and Mica)”: unlike the Conflict Minerals Survey, for the analysis of Cobalt use in Brembo components, the product categories that use this material in the production process were defined and the suppliers belonging to these categories involved. The survey was conducted on 13 suppliers with a redemption rate of 85%;
•
CO2 Maturity Assessment: to assess the maturity level of suppliers with regard to the fight against climate change and their commitment to initiatives to reduce climate-altering gas emissions, a survey was conducted of 197 direct material suppliers and 269 auxiliary material suppliers. Thanks to the results of this study, Brembo will be able to formulate specific approaches for reducing Scope 3 emissions for homogeneous groups of suppliers as a function of their level of maturity.
Combating the use of conflict minerals
Promoting the full protection of human rights in its own supply chain as set out in the Group’s Code of Ethics, Code of Basic Working Conditions and Sustainable Procurement Policy, Brembo does not directly purchase minerals from conflict zones and requires its suppliers and commercial partners to declare the presence and provenance of conflict minerals for Brembo Group supplies so that a check can be made that they do not originate in countries at risk.
To this end, Brembo investigates its supply chain, in compliance with the provisions of the Organisation for Economic Co-operation and Development (OECD), which specify the due diligence activities required.
As of 2021, the Brembo Group decided to launch an investigation also on the origin of cobalt, another high-risk material that comes from conflict zones.
