EDF Energy is committed to ethical business practice which includes paying our suppliers in accordance with contractually agreed terms. We monitor our payment performance as part of our normal business operations and take action to address the root cause of identified exceptions. In 2017, we made 87% of our payments on-time with our average payment period being 61 days. To support the working capital requirements of our supply chain, we also offer a free-to-join Supply Chain Financing facility enabling suppliers to draw down funds from approved invoices in exchange for a small financing fee.
CHARTERED INSTITUTE OF PROCUMENT AND SUPPLY (CIPS) SUSTAINABILITY INDEX
Ensuring that we support a sustainable and responsible supply chain is an important area of The Better Plan. To date, 141 suppliers representing 22% of our total expenditure have now published scores within the CIPS Sustainability Index. This index is an annual assessment of supplier performance across Social, Economic and Environmental dimensions. In addition to the CIPS index, a further 5 suppliers have subscribed to EcoVadis, a similar form of sustainability accreditation.
Throughout 2018, we will continue to engage our key suppliers on sustainability by promoting subscription of the CIPS Sustainability Index and actively manage improvement plans for any suppliers falling short of the database average. We will also identify and explore alternative and additional accreditations our key suppliers hold now or could hold in future through our programme of Supplier Compliance Reviews.
UNITED NATIONS GLOBAL COMPACT
The Better Plan ambitions are aligned closely to both the United Nations Sustainable Development Goals and the ambitions of the United Nations Global Compact. It aims to support business in aligning their strategies and operations with the ten Principles on human rights, labour, environment and anti-corruption and in taking strategic actions to advance broader societal goals with an emphasis on collaboration and innovation. During 2017, 98.3% of our suppliers have declared compliance with the Ten Principles of the UN Global Compact.
DIVERSITY & INCLUSION
We have continued our efforts to encourage and promote diversity within our supply chain during 2017. Under the strategic direction of our supply chain-specific Diversity and Inclusion Action Group, we have now established a baseline understanding of the diversity of ownership of our supplier organisations from which to build targeted, pro-active interventions; leveraging the strong links we've built with industry partners to promote EDF Energy as a customer of choice for diverse suppliers.
Doing business in an ethical way is one of our most important values. Through The Better Plan, we are working to ensure the responsible operation of our supply chain including emulation of our commitment to zero tolerance of fraud, corruption or abuse of human rights. We recognise that Modern Slavery is a growing global concern and we are working to ensure that our own operations and those of our supply chain are appropriately evaluating the risk that it poses.
In June 2017, we published our Modern Slavery Statement. It outlines the processes we have in place to review and mitigate the possible risks of modern slavery in our operations and those of our suppliers. During 2018, we will further develop our approach and work with partners to consider additional steps to protect our workforce and supply chain.
EDF Energy is committed to fair employment practices. We continue to be an accredited Living Wage Employer, confirming we pay our own employees the Real Living Wage and ensure that the Real Living Wage is paid to the employees of our suppliers who work regularly on our sites.
The principle of paying a real living wage is adopted into the Hinkley Point C Social Covenant Agreement reached with the Trade Unions and is aligned with our overall project values. In addition to paying a living wage, we also remain sensitive to the dynamics of the local labour market and are careful to avoid adversely impacting the labour market for local employers.
 Regularly is defined as suppliers working 2 hours per week at an EDF Energy controlled location for more than 8 or more consecutive weeks in a year
SUPPLY CHAIN COLLABORATION
During 2017 it became clear that an improved method of digital collaboration across teams was required to enhance the effectiveness of our teamwork throughout our supply chain. The concept for Supply Chain Collaboration is built upon the concept of access to a ‘Community Cloud’ team directory of international Workspace Members.
Our selected method has been to use the A-Site Doddle platform. We will create multiple secure online areas to share information with others, inviting users to join our workspaces and we can join theirs. During 2018 we will begin scoping functionality requirements of the system and expect to be fully using the system later in 2018.
DEVELOPMENT OF THE HINKLEY POINT C SUPPLY CHAIN
During 2017, we have continued to develop an innovative sustainable supply chain for the construction of Hinkley Point C. Our strategy for has been to utilise local supplier capability, local sources of labour and materials /components as far as possible. This requirement has been reflected in contract tender documentation, instructions given to bidders and was encapsulated in the local consultation documentation and the approved Development Consent Order application. The extent and effectiveness of this engagement is being monitored by local authority stakeholders and by national government. During 2017, we have:
- Sought to continually raise awareness within the region of the opportunities arising for the construction of HPC through working collaboratively with the Somerset Chamber of Commerce and other key business stakeholders.
- Set up and continue to develop an up to date register of businesses wanting to engage with the project, mapping suppliers against a listing of project needs.
- Set up and maintained a listing of HPC contracts on the www.edfenergy.com website in order to inform Tier 2 suppliers of the scale and scope of the Tier 1 contracts.
- Introduced and developed relationships with key Tier 1 contractors in order to uncover possible opportunities for local businesses.
- Supported and developed collaborative mechanisms that offer early sight of contract opportunities for local & regional companies and have leveraged support to help suppliers become “Hinkley Ready”, creating a stronger economy in the South West and a legacy beyond HPC.
- Through the medium of two supplier steering groups, secured senior leadership commitment from NNB & Tier 1 industrial partners to engage with local supply chain capability.
- Facilitated the formation and development of several local consortia and alliances to compete for, win and deliver Site Operations work packages. This has already created hundreds of local jobs and has seen local spend approach £400 million.
During the lifetime of the project, numerous opportunities will arise for local businesses to engage and become part of the HPC supply chain. EDF Energy will continue to support the development of a sustainable new build supplier base within the UK and thus leave a legacy beyond HPC.