Ferrovial - Annual Report 2012

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Supply Chain

Sustainable standards

Controlling the origin of wood

In its contracts, Ferrovial requires its wood suppliers to provide information and guarantees on the origin of their materials. Since 2005, all orders and purchasing contracts include clauses setting out the contractual obligation that the material supplied must be of a guaranteed origin. Ferrovial uses wood as an auxiliary material, and it thus does not constitute a critical element for its commercial operations, except in the case of housing construction. In this case purchasing specifications establish the technical, quality, environmental etc. requirements that must be met by the materials supplied, among them wood and materials that use wood in the manufacturing process. Wood from the tropics, which poses the highest risk, has been managed since October 2011 by following very strict specifications to ensure that it is legally sourced and that its traceability is available until it is received on site.

Given that in most of the work executed by the construction business the projects are designed by another company (not Ferrovial) contracted by the client, the use of certified materials depends on the client, although if Ferrovial's advice is sought it always recommends the use of certified wood.

Recycled materials

Ferrovial undertakes to increase as far as possible the use of recycled materials or products manufactured using recycled materials in its operations. With this aim, in 2011 Ferrovial Agroman carried out a survey of its main suppliers, covering the activities in which these products are most likely to be included. This list will be supplemented on an ongoing basis.

The aim of these surveys was to have systematic information available on the use of these materials in its operations. As a result of these surveys, a Supplier Database was created in 2012 to include certificates that prove that the suppliers use recycled materials in their construction products, and to identify to what extent these products can be recycled. Authorized personnel from the Purchases Department, Environment Services, Contracts Department and Line Management can access this database.

Green purchasing

Ferrovial pays attention to the environmental aspects of construction activity, particularly in terms of the use of recycled and recyclable materials. The Purchases Department has an IT knowledge management application called "compras", which enables information to be exchanged between national and international production centers.

The Services Division has prepared its own green purchasing guide that includes specific products, equipment and manufacturers for its own needs.

The database is a useful tool for preparing construction bids for clients, and also after the project has been assigned. All the tender bids include the greatest proportion possible of construction materials that are recycled, reused or environmentally-friendly, backed up by the certificates that guarantee these characteristics. The database provides information quickly and simply and is constantly updated during the process of preparing the bids.

Once the project has been assigned, the information contained in the database is used to identify the best opportunities in terms of costs.

Buyers' Code of Ethics

Supplier management and relations in Ferrovial should be based on a rigorous, ethical and effective bond.

The Buyer's Code of Ethics for the Purchases Department in the Construction division was updated in 2009. Among the changes was the need to pay particular attention to compliance with the Corporate Responsibility rules in procurement, both from the point of view of the source of products and the labor force that has been used in their manufacture. This code was implemented in Ferroser in 2012, in the services business.

The document supplements Ferrovial’s Code of Ethics and applies to all staff in the Purchases Departments in which it is in force. The staff are trained in the Code and required to acknowledge their commitment to it in writing.

The aim of the document is to draw up the general lines of action for day-to-day work in purchasing, without aiming to cover all the possible situations exhaustively. The Code specifically establishes the following principles, which must be taken into account in all purchases:

  • Ferrovial’s general interest. This goal must be present in any negotiation.
  • Integrity. An immediate supervisor must be advised of any direct or indirect conflicts of interest arising from family connections, personal ties, financial interests or other factors. Employees involved in purchasing are prohibited from accepting special discounts or gifts valued at over € 90 in one year. Gifts of a lesser value may only be accepted if they are delivered to corporate headquarters. The immediate superior must give prior approval for any invitations for trips and events, or payment of company meals. The Code requires the purchaser to ensure compliance with the Corporate Responsibility rules and to promote the Principles of the Global Compact among suppliers.
  • Professionalism. Professionalism is required to prevent overly-personal relationships outside the strictly professional realm with suppliers from interfering in negotiations. Information that may influence the final result of a concession must be treated in a formal way by the purchaser. The purchaser must also maintain an appropriate level of professional training.
  • Confidentiality. Confidentiality is required for commercial or technical information related to the purchase in question, and for any other aspects that may affect the company's position in the negotiation, or benefit a particular supplier over others.

Corporate Responsibility Clauses

In 2008, Construction introduced a specific Corporate Responsibility clause into its supplier-partner agreements. These agreements are made with major suppliers.

In 2012, Services included the clause in its contracts, in order to extend Ferrovial's Corporate Responsibility commitment to its supply chain.

Ferrovial has informed its suppliers of its adherence to Global Compact Principles, presented them with a copy of those principles and urged them to take them into account in their operations.

The new Corporate Responsibility clause includes the following commitments for the supplier:

  • Compliance with the Global Compact Principles.
  • Comply with all environmental and sector-based legislation applicable to any aspect of Ferrovial’s activities or services.
  • Comply with all health and safety rules and occupational safety commitments established at Ferrovial workplaces.
  • Study possible collaboration with Ferrovial to carry out joint aid projects for disadvantaged groups.

Failure to comply with the requirements established in this clause could lead to a prohibition on contracting with the supplier in question.

It is also important to note that during 2012 a clause to require compliance with the Global Compact Principles was introduced into orders and contracts with suppliers worldwide.

Human Rights Compliance

An analysis of the profile of suppliers, products and countries of origin carried out by the different company businesses does not reveal significant changes with respect to previous years. Most of Ferrovial’s investments are in OECD countries or in upper-middle or high income countries according to the World Bank classification. Their legislation recognizes and guarantees respect for Human Rights, which is why the risk of Ferrovial's supply chain has been rated as low.

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  • LBG Spain
  • The Global Compact
  • FTSE4Good
  • Carbon disclosure project
  • Corporate Responsibility Prime. Rated by oekom research

This is an electronic version of the 2012 Annual Report prepared by Ferrovial, S.A. for its stakeholders, which aims to be complete and accurate. The contents of this version can be checked by referring to the print version. A copy of the print version in PDF format is available to download on this web page