To develop the Group’s supply chain in line with its Sustainability Goals and Sustainability Plan, Leonardo is involving its suppliers in initiatives and management models – LEAP, LEADS, the Supply Chain Sustainability Manifesto that focus on key aspects such as digital transformation, safety, cyber security, and social/environmental responsibility. These efforts generate a significant industrial and employment benefit across the entire supply chain.
For example, leveraging new digital technologies results in the creation of a ‘collaborative digital ecosystem’ with SMEs, accelerating the development of new products and improving the efficiency of operations along the supply chain and the provision of services to customers. Collaborating with the supply chain is essential to develop a sustainable and circular shared model. This is particularly relevant for the AD&S sector, which is characterised by very long innovation and development cycles.
Leonardo supports the supply chain with specific training activities to keep suppliers constantly up to date on strategic issues with the greatest impact, while asking them to observe a series of important requirements.
All suppliers are required to share and observe Leonardo’s environmental, ethical and social responsibility principles, such as the Modern Slavery Act, by viewing and accepting its Code of Ethics, its Supplier Code of Conduct and the guidelines of its Organisation and Control Models, and by complying with its economic, financial and legal ethics and anti-corruption requirements. These requirements are verified during the supplier pre-qualification phase and monitored throughout the supply relationship.
Leonardo assesses and classifies its suppliers using a structured process based on the following criteria: turnover; supply risk (difficulty in securing an alternative supplier); financial health and dependence on Leonardo; technical and management skills; sustainability and performance (quality and punctuality of deliveries). In 2022, among the over 10,500 suppliers that received orders from Leonardo, 673 Tier-1 suppliers were classified as strategic/critical (which overall represent 53% of total spend), in addition to 64 non-tier-1 suppliers, which despite not having direct relations with Leonardo, have an important role within the supply chain.
Specific risk mitigation actions are defined for strategic/critical suppliers (which are those suppliers with high-volume turnover and high-risk of supply), and for suppliers with a high ESG risk (country-, sector- and commodity-specific risk screening).