The voluntary development of industrial synergies between EDF entities reinforces the Group’s coherence in its relations with suppliers and service providers. This is the case, for example, for purchases of wind turbines (for which Luminus and EDF Renewables cooperate) and also for hydro, nuclear, thermal and HVB power and tertiary and IT purchases, for which nearly all of the European subsidisers benefit from EDF framework agreements.

When implementing purchasing contracts, the Group Purchasing Department ensures that financial balance is maintained with respect to suppliers, in particular through compliance with payment deadlines and pricing actions. Each buyer shall sign the mandatory ethical undertaking which lists the principles to be complied with in relationships with current and prospective suppliers.

In August 2019, EDF was sanctioned following an inspection by the DGCCRF (French Competition, Consumer Affairs and Fraud Office), as it had paid more than 10% of its invoices late in 2017 (see section 6.6.3 “Information on invoice settlement times (accounts payable and receivable) required by Article L. 441-6-1 of the French Commercial Code (Code de commerce)”).

The EDF group offers its suppliers collaborative reverse factoring, granting them the possibility to pre-finance their invoices before the contractual due date, as soon as EDF issues the payment voucher⁽¹⁾.

Responsible, balanced supplier relations

In 2019, a follow-up audit reaffirmed the “Supplier Relations and Responsible Procurement” (RF&AR) Label conferred on EDF in 2015 by the Ministry for the Economy, Company Medication and the French Procurement Board (Conseil National des Achats). It rewards companies that have sustainable and balanced relationships with their suppliers⁽²⁾. In March 2019, Enedis, the distribution network manager, signed the Responsible Supplier Relations Charter and began the process of obtaining the “Supplier Relations and Responsible Procurement” label.

An online service reserved for suppliers is available on EDF’s website. It helps suppliers promote themselves, access to “one-stop shop” spaces dedicated to nuclear and hydraulic service providers and for SMEs to have a single point of access where they can publish their product and service offerings; This service provides access to the Group Purchasing platform, a discussion tool for authorised suppliers, and to all reference tools and documents (such as the general terms and conditions of purchase for “small” and “simplified orders” and the GDPR conditions that apply to EDF) for all suppliers. In addition, a toll-free number (08 00 97 10 79) can be used to anonymously report any difficulties that cannot be resolved during the usual monitoring of contractual relations. Finally, as is the case for all stakeholders, suppliers can use the Group’s whistleblowing system, set up in accordance with the Sapin 2 and Duty of Care laws, which guarantees anonymity and is available in the Group’s six languages.

In order to foster dialogue and promote local sourcing and skills development for local businesses, the entities in each country organise regular forums or specific schemes such as “CAP ENR” and the “One River, One Territory” workshops. At the same time, the Group Purchasing Department organises themed Supplier Days, organised by the main purchasing divisions (generation and engineering, IT and telecommunications, the tertiary sector and services).

The Group Purchasing Department continued its proactive programme of “Productivity Partnerships”. The aim is to improve contract performance through cooperation between EDF and its suppliers, to their mutual benefit. The benefits may be financial, organisational or technical (indirect gains, such as shortened construction times or avoided costs). Results are up:

Enhanced risk analysis

Supplier compliance with CSR commitments is primarily ensured by a mechanism prioritising assessments based on risk mapping covering EDF’s 253 purchasing segments. On this basis, in 2019, the Group Purchasing Department enhanced the performance of its risk analysis, implemented in particular in accordance with the “Duty of Care” law. The new methodology factors in all CSR aspects (environment, working relations and working conditions, human rights, ethics and compliance), and ultimately allows it to determine the level of residual risk and identify the action to be taken with the supplier.

Inherent risks and residual risks⁽³⁾ are assessed on a scale of 1 to 4: low, material, major or critical risk. Any critical residual risk in the assessed segments can be secured using countermeasures implemented prior to contracting, the contractual clauses and contract monitoring. Major residual risks have been identified in the various sectors of purchasing, mainly concerning safety, ethics, waste, the use of rare materials and human rights. 14% of the purchasing segments analysed are classified as having a major residual risk, 43% are classified as having a material residual risk and 43% are classified as having a low residual risk.

Supplier monitoring is mainly carried out by the Division or Contract Management, which uses Performance Assessment Sheets and Supplier Assessment Sheets. Almost 10,000 assessments are completed each year, on almost 2,000 suppliers. CSR assessments and audits are also carried out. For example, the Nuclear Generation Division conducts around 100 qualification or follow-up audits each year and the Group Purchasing Department arranges hundreds of questionnaires and around 50 audits worldwide each year:

• the Group Purchasing Department uses Afnor’s Acesia online assessment and dialogue platform to send these questionnaires. The questionnaires completed by the supplier are systematically (and independently) checked by the Afnor teams. This tool makes it possible for purchasers and suppliers to share an approach of continuous improvement in corporate social responsibility;
• on-site supplier audits are conducted by external, independent providers.
  
  

(1) EDF enables its suppliers to benefit from interest rates based on its own financial risk and credit standards.
(2) EDF was one of the first signatories of the Responsible Supplier Relations Charter.
(3) Residual risks are the risks remaining after countermeasures have been adopted.