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G1-2
Norms and standards
The PZU Group conducts business activity in compliance with all laws, health and safety rules, human rights and health protection. With its implemented measures, it contributes to shaping the attitudes of suppliers.
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 of the PZU Group. It is in force in all PZU Group companies that are parties to the Agreement on the principles of cooperation within the PZU Group dated 21 March 2017, including: PZU Zdrowie, LINK4, TUW PZUW, TFI PZU, PTE PZU, PZU Pomoc, PZU Centrum Operacji and the PZU Group companies in the Baltic Countries 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 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 management procedure
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.
The supplier registers in the Supplier Database 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 that it has familiarized itself and accepted the Code of Conduct and CSR Best Practices for PZU Group’s Suppliers.
An employee of the PZU Supplier Qualification and Assessment Team checks the data and documents presented in the form, collects opinions within the organization. Then he or she decides on whether to reject a Supplier or commence its qualification process.
Involves an assessment of the collected data or documents against a specific procurement category. The qualification decision is made by the employee and approved by the manager.
| Supplier Status | 2022 | 2023 |
|---|---|---|
|
904 | 927 |
|
2,098 | 2,500 |
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ESRS S2-1
Supplier selection procedure
The “Procedure for the Selection of Suppliers of Goods and Services” defines the principles and method of running the supplier selection procedure in PZU and PZU Życie.
- tender proceedings;
- negotiations;
- single-source procurement.
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 decisionmaking 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.
| Supplier Status | 2022 | 2023 |
|---|---|---|
| Procurement proceedings completed by the Purchasing Office (tenders, negotiations, negotiated contracts, requests for information – RFIs) in PZU and PZU Życie | 290 | 319 |
| Total contracts concluded with Suppliers in PZU and PZU Życie | 8,108 | 8,616 |
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308-1
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414-1
Any company wishing to cooperate with PZU shall familiarize itself with and accept the “Code of Conduct and CSR Best Practices for PZU Group’s Suppliers” at the stage of submitting the Supplier Registration Form to be entered into the List of Qualified Suppliers. The Code is a collection of principles for the PZU Group and all its suppliers. Conducting business in accordance with these principles and promoting the Code’s values constitute an important criterion for evaluating potential business partners. Moreover, when suppliers submit their offers, they must sign the declaration that they have familiarized themselves with and accepted the Code.
The Code defines requirements for suppliers in the areas of environment, society and corporate governance.
The PZU Group expects Suppliers to respect human rights, which includes expecting them to:
- ensure safe and ergonomic working conditions for employees;
- guarantee fair wages and respect the right to freedom of association;
- show zero tolerance to any form of slavery and forced labor;
- comply with the applicable regulations prohibiting child labor;
- ensure the development of employee competences;
- take care of work-life balance;
- ensure equal treatment in the workplace and refrain from any discriminatory practices due to age, gender, disability or race;
- strictly prohibit workplace harassment and any other forms of bullying.
The PZU Group expects Suppliers to comply with environmental and climate change mitigation rules, which includes expecting them to:
- strive to recycle secondary raw materials, reduce waste production, and segregate waste that has already been produced;
- minimize the emissions of greenhouse gases, exhaust and dust;
- consume electricity and heat rationally,
- strive to use energy from renewable sources;
- participate in actions for environmental protection and biodiversity restoration;
- promote pro-environmental attitudes.
The PZU Group expects Suppliers to comply with the highest standards of data protection, and
- apply the highest business standards in terms of the principles of fair and free competition and accuracy and credibility in communication with clients;
- adhere to the rules arising from the anti-corruption standards, as laid down in the PZU Group;
- protect and not disclose confidential information obtained in the course of cooperation;
- prevent conflicts of interest;
- respect the intellectual property, moral and property rights of copyright holders.
Code of Conduct and CSR Best Practices for PZU Group’s Supplier
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2-25
Prevention of corruption and conflicts of interest
The Code of Conduct and CSR Best Practices for PZU Group’s Supplier deals with the prevention of corruption and conflicts of interest. Suppliers are also obliged to act in this regard by prohibiting the giving or offering of undue benefits to anyone in exchange for a specific action or failure to do so. A Supplier that respects the Code avoids and prevents situations conducive to the emergence of conflicts of interest, both in the process of applying for cooperation with the PZU Group and during the subsequent course of cooperation.
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 of PZU SA and PZU Życie2 , each cooperation agreement between PZU and a business partner should comprise anticorruption 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.
2 The Anti-Corruption Program of PZU SA and PZU Życie lays down the standards of conduct to reduce corruption risk. The master rules described therein for managing corruption risk form the basis for introducing detailed internal regulations in the various areas of the company’s business. This Program aims to uphold the company’s reputation as an honest company in terms of its managerial practices and business activities.
Within every procurement process, PZU employees who are members of procurement teams are informed about the Rules for managing conflicts of interest.
The Anti-Corruption Program, and the need to report to the relevant PZU units when the possibility of a conflict of interest is identified. Notwithstanding the above, the senior management involved in the purchasing process makes representations regarding business and personal relations with the supplier recommended in a given procurement procedure.
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ESRS S2-1
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ESRS S2-2
Supplier audits with ESG elements
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.
- periodic – their purpose is to regularly check suppliers with which PZU Group 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 of 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. Since 2022, the audits also have covered topics related to human rights, employee rights and environmental protection in terms of energy management, water management and production management.
The ESG area has been mandatory as part of supplier audits since 2023.
Appropriate audit recommendations may be made if a supplier is found to commit serious violations or fails to comply with required standards of respecting human rights or the environment. Based on these standards, a mitigation plan for the risks as identified may be prepared, implemented and monitored.
Cooperation with suppliers – banks
With a view to ensure the highest operating standards and mitigate 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, including in particular in terms of: financial stability, “warning signals” (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, which concern, among other issues, compliance with employee rights, compliance with applicable standards and 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.
Those suppliers who continue their cooperation with the bank and whose turnover exceeds PLN 100 thousand are subject to the current Annual Supplier Qualification. The areas of verification are in line with those 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”.
In addition, in an effort to act in accordance with the Bank’s values, the Procurement Department had developed the Code of Ethics for Bank Pekao S.A. Supplier, which was adopted by the Bank’s Management Board on 4 October 2023. The Code promotes the Bank’s values, providing its business partners with expectations, principles and standards of Bank Pekao with regard to environmental protection and natural resources, compliance with social factors and corporate governance rules. The Code also presents the business partners with models and ways forward the Bank intends to follow. Suppliers wishing to cooperate with the Bank agree to comply with the Code.
Notwithstanding the principles described in the Code, 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”. The form contains questions regarding the observance of environmental protection regulations and human rights in the daily activities of the supplier or business partner. All potential tenderers are also subject to verification in terms of corruption risks and sanction lists (US and EU sanction lists).