Attentive to the principles of environmental, social and governance (ESG) practices throughout its supply chain, Neoenergia has developed a pioneering project to help the company's main suppliers achieve the sustainability criteria established by it. By 2025, the company aims to surpass the mark of 80% of its main trading partners with policies and sustainable development standards implemented. To contribute to this process, Neoenergia has offered advice and direction of actions that can promote the adequacy of suppliers.
To achieve the goal, Neoenergia has developed an innovative model that is based on a global supplier management platform. Through this platform, it is possible to measure the sustainability of partner companies. The results of this monitoring serve as a parameter in making purchasing decisions. Neoenergia's goal is to offer technically approved and economically competitive suppliers the opportunity to meet ESG criteria.
To promote sustainability among its suppliers, Neoenergia's advisory work helps partners to achieve the standards established by the company. The company created a model to evaluate the positioning and performance of each supplier around three fundamental axes of sustainability: environmental, social and governance (ethics and compliance), aligned with the principles of the Neoenergia Code of Ethics.
At the beginning of 2021, when the project opened, only 30% of suppliers were framed in ESG standards. By the end of 2021, the number had risen to 60 percent. In 2022, to 76%. "By adopting ESG practices and fostering them in its supplier network, Neoenergia promotes a multiplier effect, encouraging trading partners to adopt more sustainable practices in their respective supply chains. For us, the benefits are also varied, such as reducing operating costs, improving the company's image and reputation, attracting conscious customers, gaining efficiency in the use of natural resources and reducing environmental impact," said Pollymark Aquino, director of Purchasing, Insurance and General Services at Neoenergia.
The model adopted by Neoenergia evaluates 43 ESG-related questions. Some examples of criteria evaluated in the environmental axis are the calculation of greenhouse gases, the reduction of greenhouse gases and management of the rational use of water. In the social sphere, aspects are studied to ensure that the workforce of suppliers is in accordance with current legislation, that the hiring procedure is fair and with a living wage for all its employees and that there can be equality and diversity policies, as well as the participation of social activities to support the communities where it is present.
Finally, in the governance axis, topics such as having a corporate social responsibility policy, code of ethics or own conduct, a compliance system and a platform for rating and evaluating suppliers and third parties based on ESG criteria are positively evaluated by Neoenergia.
This year, Neoenergia was among the top-rated companies for supplier engagement on climate change, based on its 2022 CDP Supply Chain disclosure. The nonprofit mobilizes investors, companies and governments to build and accelerate collaborative actions for development that works for current and future generations.