PGE CG’s approach to building business partnerships is defined in the PGE Capital Group Code of Ethics. Based on this, the Code of Conduct for Business Partners of PGE Capital Group Companies was developed. Every supplier cooperating with PGE CG is obliged to be familiar with and comply with this document. Each potential supplier uses a dedicated tool – the purchasing platform – where, upon registration, they confirm having read the Code and acknowledge that each potential contract will include an obligation to comply with the provisions of the Code.
Policy to prevent late payments
PGE CG does not have a formal policy specifically aimed at preventing payment delays to contractors. The companies within PGE CG operate in accordance with the provisions of the Act on counteracting excessive delays in commercial transactions. Most companies (excluding small entities with limited scale of operations) have internal procedures that define, among other things, the rules for the approval, circulation and posting of accounting documents, as well as the execution of payments. Detailed information on the implementation of rules and standards to prevent payment delays is provided in section G1-6.
Rules of cooperation with PGE Group suppliers
Contractual clauses referring to the CCBP Code (so-called ‘Compliance clauses’) are, as a rule, applied in all contracts concluded by PGE Capital Group companies with business partners. This obligation does not apply to non-disclosure agreements (so-called NDAs), provided that the other party to the agreement has been formally informed about the required clauses that will apply in the event of signing a final agreement following the NDA, or in agreements between PGE CG companies and a supplier whose shareholder/partner/general partner/limited partner is:
- the State Treasury with a shareholding exceeding 50%,
- a local government unit with a shareholding exceeding 50%,
- a state-owned enterprise with a shareholding exceeding 50%,
- a central government administration body, an EU Member State with a shareholding exceeding 50%, or an EU institution.
The Code contains a dedicated chapter on human rights and labour standards. It includes, among other things, a prohibition on child labour and forced labour, both in Poland and abroad. In the case of employing minors, the Code recognises only actions based on labour law provisions. Suppliers are also required not to tolerate any form of work performed for them or their subcontractors if such work exploits economic or political hardship, forcing people to work in conditions that endanger their health or violate their dignity. PGE CG also expects its suppliers not to practise or tolerate any form of mobbing or discrimination.
Additionally, the Code incorporates requirements stemming from the guidelines of the ‘Standards recommended for the compliance management system on counteracting corruption and the whistleblower protection system in companies listed on markets organized by the Warsaw Stock Exchange S.A.’, as well as internal rules applicable within PGE CG, including the gift policy and the possibility of reporting potential violations. Furthermore, PGE Group requires its contractors to implement procedures that ensure compliance with the OECD Guidelines for Multinational Enterprises, as well as the United Nations Guiding Principles on Business and Human Rights.
In case of justified concerns regarding compliance with the provisions of the Code, contractual clauses provide that the supplier shall undertake corrective actions to ensure compliance. In the event of significant violations of the Code, PGE reserves the right to take appropriate measures against the supplier, including the possibility of terminating the cooperation.
The communication of the requirements set out in the Code to suppliers of PGE CG companies is carried out via websites, procurement documentation, applicable contractual clauses, and dedicated thematic panels held during conferences aimed at current or potential business partners. In 2024, workshops were held for prospective and current suppliers, during which information regarding the Code of Conduct for Business Partners of PGE CG Companies was presented. In this way, PGE CG promotes the standard of compliance with legal regulations and ethical norms in the broad sense of conducting business operations.
As part of the social criteria based on the Public Procurement Law, PGE CG requires suppliers of selected services, such as customer service, sales support, after-sales service or metering and billing support, to delegate persons employed under an employment contract. During the execution of the contract with the supplier, PGE CG is entitled to carry out control activities regarding, for example, whether the supplier meets the requirement of employment under an employment contract. In terms of environmental criteria based on the Public Procurement Law, PGE CG ensures compliance with standards concerning current exhaust emission norms, energy consumption levels in combined cycles, and CO2 emission levels in combined cycles, ensuring they comply with regulations in force in the European Union.
- organising information meetings aimed at gathering information to verify the potential of Polish and foreign suppliers, e.g. in the construction of offshore wind farms, building a base of Polish suppliers for offshore wind farm development, identifying the needs of stakeholders in the offshore wind energy sector,
- building the supply chain of companies active in the offshore wind energy sector,
- building a positive image through relationships with suppliers.
While conducting procurement procedures, PGE CG strives to achieve maximum tangible benefits, without losing sight of the values set out in the PGE CG Code of Ethics, namely: Partnership, Development, Responsibility.
In doing so, the Group aims for the broadest possible involvement in social and environmental matters, also within the scope of its procurement procedures. To this end, PGE CG ensures:
PGE CG requires suppliers and their subcontractors to comply with occupational health and safety standards in selected procurement procedures.
PGE CG seeks the widest possible involvement of suppliers in social issues. In selected procurement procedures, it supports the labour market, small and medium-sized enterprises, local market and community development, as well as the activation of socially excluded persons and persons with disabilities.
PGE CG organises technical dialogues with potential suppliers in order to raise awareness and expand horizons in the search for optimal solutions. As requirements increase, PGE CG promotes suppliers offering the most technologically advanced and innovative solutions. In selected procurement procedures, in addition to economic bid evaluation criteria, PGE CG includes additional criteria promoting the innovativeness of the applied technologies.
GE CG promotes environmentally friendly solutions by requiring suppliers, in selected procurement procedures, to conduct business with respect for environmental protection standards.
As part of the concluded contracts (within a selected scope), PGE CG includes provisions guaranteeing the company the right to audit the Supplier with regard to social or environmental issues, for example in the area of appropriate waste management.
In 2024, PGE CG launched one of the first Dynamic Purchasing Systems (DPS) in Poland based on the provisions of the Public Procurement Law. The new system enables suppliers to join the procedure at any time, which allows for maintaining competition and sustaining relationships with suppliers.
Maintaining Corporate Governance in the purchasing process
Through the continuous support and education of PGE CG employees and the improvement of the procurement process, the Group develops its value chain in a sustainable manner. Procurement procedures are prepared and conducted in compliance with the principles of proportionality, transparency, purposefulness, fair competition and equal treatment of contractors, while safeguarding the interests of PGE CG. Activities related to the preparation and execution of procurement procedures are carried out by persons who ensure impartiality and objectivity. Each of these individuals is required to declare that they are not in a conflict of interest and do not have any relationships with business partners that could influence the decision regarding the selection of the final offer.
Fair conduct towards suppliers is also ensured by the Purchasing System o the PGE Capital Group, implemented in the Group’s companies and currently used by over 8,000 PGE CG employees. The Platform responds to market challenges and changing legal regulations – particularly regarding the digitalisation of public procurement. The use of the platform for electronic procurement processes ensures transparency, security and competitiveness.
In the purchasing process, possible risks arising from the supply chain are analyzed. The scope of risks includes, among others, social issues, risks of random events, including those related to climate.
An important part of the systemic approach to the procurement process is, among other things, the requirement to apply clauses concerning, for example, employment under an employment contract in agreements with contractors, taking into account the specifics of certain contracts such as security, cleaning or construction and renovation services. The requirement to employ workers under an employment contract constitutes a guarantee of the key employee rights for those performing contracts for the benefit of PGE Capital Group, particularly the protection arising from universally applicable legislation.
A prerequisite for the commencement of cooperation with a supplier by PGE CG is a verification process, which takes into account aspects such as the supplier’s compliance with legal obligations (social security, taxes), possession of appropriate insurance, permits, certificates, as well as, among others, identification of the beneficial owner and verification of the contractor against national and European lists of individuals and entities subject to sanctions and measures as referred to in the Act on special solutions for counteracting the support of aggression against Ukraine and protecting national security.
PGE CG aims for stable, long-term relationships with key suppliers, which allow not only for cost optimisation but also for better quality of services provided. Long-term relationships with reliable suppliers enable the company to ensure continuity of essential deliveries.
At the same time, PGE CG acknowledges that suppliers may face difficulties related to production or deliveries and offers support during challenging times. PGE CG seeks to balance its own needs with the interests of the supplier and also avoids imposing excessive requirements.
PGE CG minimises risks related to personal and material sanctions imposed on Russia as a result of the armed conflict in Ukraine by verifying contractors and the subject of the agreement to ensure due diligence using a developed verification mechanism. The guidelines created for this purpose cover procurement business relationships processes, including contract conclusion. They are in force in all PGE CG companies and form the basis for honest, reliable and secure cooperation with contractors. Recurring activities in the form of employee training, monitoring of legal conditions, and the implementation of uniform standards and procedures across PGE CG constitute the foundation of due diligence. In 2024, training sessions were conducted within PGE CG for selected employee groups on the verification of contractors on sanction lists. The training was conducted online.
The standards for the procurement planning and purchasing process, as well as the selection of suppliers, are defined in the PGE CG General Purchasing Procedure. This procedure ensures the unification of the procurement process within PGE Capital Group. Some companies are additionally required to comply with public procurement regulations.
A set of recommended behaviours and principles that employees and potential suppliers should follow during tenders is outlined in the Procurement Good Practices, developed in two language versions (Polish and English), which include, among other things, the anti-corruption principles in force within PGE Capital Group. One of the key principles is the ‘zero gifts’ rule, which applies to employees initiating the procurement process (submitting the procurement request), committee members and all persons involved in the process, as well as those responsible for the implementation of contracts concluded as a result of the procurement procedure.
During the procurement process, suppliers are also informed of the requirement to familiarise themselves with the Regulations of the Purchasing System of PGE Capital Group. This document defines the principles and procedures for using the system, as well as the rules for submitting offers and other documents in procurement procedures. Additional support for contractors includes:
- A detailed User Manual for the Purchasing System of the PGE Capital Group,
- PGE Group Purchasing System Essentials for Contractors.
Before making the final decision on the supplier selection, the submitted documents are properly analysed and assessed to determine whether the supplier meets the requirements specified in the given procedure.
