“Ethics, honesty and respect for the natural environment and human rights: these are some of the fundamental values that guide our conduct in the PZU Group. We do care that our external partners also follow these principles in their operations. That is why we feel compelled to review our suppliers through a qualification system and by conducting both periodic and ad hoc audits.”
Each company that wants to cooperate with PZU and PZU Życie is required to familiarize itself with the “Code of CSR Best Practices for the PZU Group’s Suppliers” and compliance with its provisions by business partners is incorporated into their contracts with PZU. An indispensable part of the offer submitted by a supplier is signing the declaration on familiarization with the Code and acceptance of its clauses.
The Code of CSR Best Practices for the PZU Group’s Suppliers can be found on the website www.pzu.pl/grupa-pzu/o-nas/kultura-compliance-pzu/kodeks-csr
The PZU Group conducts its business activity while respecting all legal regulations, human rights and the principles of occupational safety and health protection. For that reason, it also wants to influence the shaping of its suppliers’ attitudes, expecting them to comply with the standards and principles applied by the Group in the conduct of its own business. The Group wants to promote the idea of corporate social responsibility in relations with its suppliers, cooperating only with business partners who observe human rights, act in compliance with legal regulations, especially with regard to prevention of corruption. Suppliers cooperating with PZU Group entities should ensure safe and fair work conditions for their employees and apply the highest ethical standards and care for the natural environment.
The PZU Group wants to build long-term relations with suppliers based on mutual trust, respect and professionalism. In particular, we appreciate suppliers which apply proven market practices and represent the highest level of professional ethics.
Code of CSR Best Practices for the PZU Group’s Suppliers
PZU is aware that it has material impact on the procurement market and assumes responsibility for fostering the highest business standards in its environment. Driven by care for the quality of business relations, promotion of best market practices and positive impact on the society and natural environment, it has developed the “Code of CSR Best Practices for PZU Group’s Suppliers”. It is a collection of principles for the PZU Group and all of its suppliers. Doing business in accordance with this Code and promoting its values are an important criterion in the classification and assessment of prospective suppliers.
The Code of CSR Best Practices for the PZU Group’s Suppliers covers the following areas:
Human rights
The PZU Group expects that its suppliers respect and will continue to respect human rights and act against discrimination in their businesses, in particular that:
- they abide by employee rights, they ensure safety and the appropriate working conditions for their employees;
- they reject the option of hiring children and do not tolerate any form of slave or forced labor;
- they ensure equal treatment in the workplace and do not employ any discriminatory practices due to age, gender, disability or race.
Environmental protection
Every PZU Group supplier is expected to follow the very same principles of environmental protection, in particular by:
- striving to reduce the quantity of waste produced and segregating the waste produced;
- rationally consuming electricity and heat;
- reducing water consumption and countering its pollution;
- minimizing the emission of greenhouse gases, exhaust and dust.
Professional ethics
PZU is a public trust institution. The PZU Group’s professional ethics reflect the vision and values by which we are guided on a daily basis in our companies. That is why we expect the following of suppliers:
- application of the highest business standards in terms of the principles of fair and free competition and accuracy and credibility in communication with clients;
- protection of confidential information;
- prevention of corruption and conflicts of interest.
GDPR
The PZU Group ensures the security of its data and protection of personal data of its clients. It makes sure all of its processes are compliant with the GDPR regulation and local regulations. The PZU Group expects an equally mature approach from its business partners. The basic requirements are as follows:
- submitting to all of the guidelines and obligations imposed by and following from the General Data Protection Regulation and domestic regulations in the field of personal data protection;
- educating and enforcing employees’ adherence to the GDPR and domestic regulations regarding personal data protection.
Procurement Policy
The Procurement Policy in the PZU Group lays down the fundamental principles in the process of selecting the suppliers of goods and services, and the principles of cooperation and information exchange in procurement the PZU Group. It is in force in all PZU Group companies that are parties to the agreement on the rules of cooperation in the PZU Group dated 21 March 2017, including, among others: PZU Zdrowie, LINK4, TUW PZUW, TFI PZU, PTE PZU, PZU Pomoc, PZU Centrum Operacji and the PZU Group companies in the Baltic States and Ukraine. Bank Pekao and Alior Bank have entered into a cooperation agreement with PZU on cooperation in procurement. Its subject matter is to cooperate for the purpose of achieving procurement-related synergies, exchange information about the supplier market and key variable contractual terms as well as cooperate in the area of procurement procedures, processes and tools.
The Procurement Policy in the PZU Group stipulates that persons participating in supplier selection avoid situations in which their personal interests may be in conflict with the interests of the entity, they represent the entity with dignity in interactions with suppliers by presenting merits-based qualifications, a pristine ethical attitude and concern for its image and mutual satisfaction derived from cooperation while simultaneously showing concern for the economic interests of the entity.
The procurement process is conducted in a manner that guarantees observance of the principles of fair competition, while the entity entering into a contract with a supplier undertakes to share information on the contents of the contract with PZU.
Supplier audits
The Supplier Audit Team administers business audits on suppliers who have concluded an agreement with PZU or PZU Życie or with both companies and on the PZU Group’s prospective business partners. Supplier audits are carried out in compliance with specific priorities and criteria.
Types of supplier audits:
- periodic: their purpose is to check suppliers regularly with which PZU cooperates. They are conducted according to a predetermined plan;
- ad hoc audits: they are done under order, e.g. in a situation in which a given supplier needs to be checked urgently on account of problems encountered during collaboration or as part of checking a new supplier.
A supplier audit may be conducted in a fundamental scope. In that case it encompasses a diagnosis of the supplier utilizing information from inside and outside the organization, a remote audit using an abbreviated audit form filled out by the supplier and the entire process is wrapped up by drafting a final report and a possible list of recommendations. An extended audit includes an on-site audit in the supplier’s premises. The full audit form filled out on site or directly after the visit is utilized in this type of audit. A representative of the substantive unit may also participate in an extended audit.
In both cases, the subject matter of the audit covers, among other issues, topics related to data protection, including personal data protection and environmental protection in the context of waste management, and since 2022 also topics related to human rights, employee rights and environmental protection in terms of energy management, water management and production management.
Corruption risk
Corruption risk assessment is a constant part of the procurement process. Each potential supplier is subject to corruption risk assessment on the basis of a pertinent risk assessment questionnaire. In addition, in accordance with the Anti-Corruption Program, each cooperation agreement between PZU and a business partner should comprise anti-corruption clauses. One of the clauses is a confirmation of acceptance of the anti-corruption standards prevailing in PZU by the supplier. In accordance with the internal procedures, entities cooperating with PZU and PZU Życie are informed about the Anti-Corruption Program in place in the company.
List of PZU Qualified Suppliers
PZU and PZU Życie have in place a Supplier Management Procedure governing the area of supplier registration, verification and qualification. In line with the Procedure, the placement of a supplier on the List of Qualified Suppliers is preceded by supplier registration, verification and qualification processes that take place by using the procurement platform.
Process of registration:
The supplier registers on the procurement platform at its own initiative or in response to an invitation from a PZU employee if the supplier has not yet been placed on the List of Qualified Suppliers. It fills out the form with the data and submits declarations on having familiarized itself with the Code of CSR Best Practices for PZU Group’s Suppliers.
Process of verification:
An employee of the PZU Supplier Qualification and Assessment Team (ZKiOD) checks the data and documents presented in the form, collects opinions, among other things, form the security, compliance and planning and controlling units. Then he or she decides on whether to reject a supplier or commence its qualification process.
Process of qualification:
This involves an assessment of the collected data or documents. An employee of ZKiOD makes a decision and the manager of this unit approves it.
Content of the Supplier Database:
As at the end of 2021, there were 1,681 Suppliers with a status of at least “registered”.
New Procurement Model
PZU actively looks for areas with potential to augment its operational efficiency and profitability. Changes to procurement were launched from the moment of creating the New Procurement Model project. As part of this project, PZU launched a procurement platform available to suppliers on the following site: zakupygrupy.pzu.pl. It serves as the core communication tool with current and future suppliers.
In 2021, the project was underway in PZU, PZU Życie and PZU Centrum Operacji. It is slated to be completed at the end of May of 2022. In 2020, the first module of the procurement platform had its production launch: registration and verification of suppliers, the purpose of which is to create and develop the PZU Group’s supplier database. In 2021, modules for the circulation of requirements and orders as well as electronic procurement procedures and contracts were rolled out for suppliers in the area of administration and real properties. In 2022, a supplier evaluation and audit module is scheduled to be deployed for suppliers in the area of administration and real properties.
The project focuses on the following:
- developing, followed by implementing the target model for the operation of procurement in the PZU Group;
- implementing savings drivers pertaining to the management of internal demand, procurement planning and managing suppliers;
- devising the concept for the IT system and implementing it to support the procurement process: from planning, to requisitioning, organizing requests for proposals, evaluating offers, to selecting a supplier, generating a contract and sending purchase orders;
- drafting and implementing internal acts covering procurement aligned to the new procurement model and system (Procedure for selecting the suppliers of goods and services, Rules for qualification, verification and assessment of suppliers).
The key benefits from implementing the New Procurement Model and procurement platform:
- implementing the best practices for running procurement processes in various categories;
- overall control of the current status of a launched procurement process at every stage of its duration;
- archiving information in the system register of events;
- shortening the time for the flow of information, acceptance;
- augmenting control over the safety of information;
- effective procurement planning and comprehensive management of the database of suppliers;
- reducing document-based workflow for most of the documents involved in the procurement process;
- aggregating procurement data to generate cost synergies flowing from shared purchases in the PZU Group.
The ultimate plan is for other Group companies to use this model.
Supplier selection procedure
The “Procedure for the Selection of Suppliers of Goods and Services” defines the principles and method of running the supplier selection process in PZU and PZU Życie. According to this document, suppliers are selected as follows:
- through single-source procurements;
- through tender proceedings;
- through negotiations.
Documentation related to the supplier selection process, including: requisitioning, invitations to participate in tender proceedings and other tender documents, submitted offers, documents related to the decision-making process of the tender commission or negotiation team and the supplier selection protocol is stored by the Procurement Department or the unit of the company unilaterally making the selection for at least the entire term of cooperation with the selected supplier, and then is archived according to the principles in force in the company.
The Procurement Department has the right to verify a requisition in terms of the expedience of a procurement and the description of the subject matter of the procurement.
In 2021, work was underway on rolling out the Procedure for the Selection of Suppliers of Goods and Services under the New Procurement Model for all organizational units in PZU and PZU Życie.
In 2021, the Purchasing Department completed 279 purchasing procedures (tender, negotiations, unconstrained purchase procedure, RfI) in PZU and PZU Życie. In total, 7,031 contracts were executed with suppliers in PZU and PZU Życie.
Cooperation with suppliers pursued by subsidiaries
With a view to ensuring the highest operating standards and mitigating the risk of establishing cooperation with an unreliable supplier, Alior Bank has put in place a two-stage supplier verification process within the framework of the Supplier Qualification procedure described in the Procurement Policy.
At the initial stage of qualification, suppliers establishing a relationship with Alior Bank are verified, within the framework of the applicable procurement procedures, on a number of levels, including in particular in terms of: financial stability, “warning signals” (i.e. information available from open sources), verification of checklists, including the KNF’s Public Warnings List, taxpayer status and incidents threatening the integrity of banking activities.
Moreover, suppliers must submit their “Business Ethics” statements, in which they take a stance on their organization’s observance of the ethical standards referred to therein. Such statements concern, among other issues, compliance with employee rights, compliance with applicable laws governing issues related to the natural environment, the immediate surroundings and other entities, compliance with generally applicable laws, principles of ethics and fair competition, and zero tolerance for corruption.
At the stage of ongoing qualification, those suppliers who continue their cooperation under existing arrangements and whose revenue generated from such cooperation exceeded PLN 100 thousand in the year preceding the current classification cycle, within the framework of the Annual Supplier Qualification, are vetted across the main dimensions, as described and binding also at the initial stage.
The conduct of procurement processes at Bank Pekao is defined by three key regulations that have been in place since 2018: “Procurement Policy at Bank Polska Kasa Opieki Spółka Akcyjna”, “Rules for the execution of purchases by the Procurement Department at Bank Polska Kasa Opieki Spółka Akcyjna” and “Rules for the execution of purchases without the participation of the Procurement Department at Bank Polska Kasa Opieki Spółka Akcyjna”.
A requirement is in force in Bank Pekao for suppliers participating in tenders for more than PLN 1 million net to fill out the “Social and Environmental Responsibility (CSR) Form”. Thus, action is taken by Bank Pekao aimed at ensuring sustainable development, protecting the natural environment and preventing breaches of human rights by the Bank’s business partners. The form contains questions regarding the observance of environmental protection regulations and human rights in the daily activities of the supplier or business partner. The following areas are covered by the form:
- In the environmental context:
- holding certificates attesting to the environmentally-friendly business profile of a given business partner;
- adhering to environmental protection laws and regulations, inspections conducted and criminal cases related to the failure to abide by the regulations in force in this field;
- implementing innovative and environmentally-friendly new technologies;
- holding training sessions and informational meetings for employees on ecological issues.
- In the social context:
- prohibition of forced labor;
- respect for the laws governing working time;
- respect for the laws governing occupational safety and health issues;
- compliance with labor law and regulations, including in respect of the payment of employee compensation to all staff in line with the practices applied normally in the sector.