The main activities within Madrileña Red de Gas’s supply chain include the expansion of infrastructure, networks, and proprietary assets dedicated to gas distribution.
Madrileña Red de Gas’s operations also encompass the provision of technical services related to the operation and maintenance of distribution systems, as well as ensuring the continuity of gas supply to users in the various municipalities across the Madrid region where the company operates.
7.1Suppliers
To efficiently carry out these activities, Madrileña Red de Gas relies on an extensive network of suppliers.These stakeholders play a fundamental role in the development and optimization of its processes, providing services and technical capabilities that are essential for ensuring quality, operational continuity, and the company’s competitiveness. The active and aligned participation of suppliers with Madrileña Red de Gas’s standards is a key pillar in generating value for its customers and other stakeholders.
With regard to supplier qualification, particularly in connection with critical business processes, Madrileña Red de Gas works exclusively with previously approved suppliers. This policy ensures high standards in safety, quality, on-time delivery, competitiveness, and environmental responsibility across all activities linked to its operations.
The main activities within Madrileña Red de Gas’s supply chain include the expansion of infrastructure, networks, and proprietary assets dedicated to gas distribution
Specifically, suppliers that provide essential services and are considered critical suppliers must undergo a strict process that includes both an initial evaluation and formal approval before being authorized to perform any work for Madrileña Red de Gas.
It is worth noting that, during fiscal year 2024, no new outsourcing processes were initiated. Likewise, no significant changes occurred in the organization’s supply chain, reflecting continuity and stability among its network of strategic partners.
In 2024, Madrileña Red de Gas worked with a total of 158 suppliers, covering both product procurement and service contracting. Of these, 15 were classified as critical suppliers, while 48 were considered relevant—10 of which also fell into the critical supplier category
During fiscal year 2024, Madrileña Red de Gas recorded total supplier invoicing exceeding 30 million euros. This increase compared to the previous year reflects a higher demand for goods and services, which has strengthened operational capacity and enabled the company to efficiently meet its needs.
It is worth noting that 80% of the total purchasing volume in 2024 was concentrated in just 17 suppliers, highlighting a high operational dependency on a small but strategic group of partners, with whom the company maintains a strong and trusted relationship.
When considering core activities, the invoicing amounts to suppliers become particularly relevant, reflecting the scale of operations and the scope of the projects managed.
7.2Responsible and sustainable purchasing
Madrileña Red de Gas understands that sustainability in supply chain management is a key pillar for responsible and long-term development. For this reason, the company actively works to minimize its environmental, social, and economic impacts, while promoting good governance practices throughout the entire lifecycle of its goods and services.
Likewise, it reaffirms its commitment to respecting and upholding Human Rights in all its operations, its value chain, and in every environment in which it operates, in accordance with the provisions set forth in its Human Rights Policy.
With the aim of extending these principles across its entire supply chain, Madrileña Red de Gas communicates these commitments to its partners through the Sustainable Procurement Policy and the Supplier Code of Conduct—mandatory compliance documents that reinforce its vision of sustainable, ethical, and shared growth
With the aim of ensuring an effective commitment to responsibility throughout the value chain, Madrileña Red de Gas requires its suppliers to adhere to the Responsible Business Principles set out in its Sustainable Procurement Policy. These principles are based on core values such as integrity, commitment, transparency, and respect for Human Rights.
Madrileña Red de Gas places particular emphasis on the eradication of all forms of forced labor, the protection of labor rights—including freedom of association, collective bargaining, and access to decent employment, as well as the firm rejection of child labor and the safeguarding of the rights of ethnic minority communities. Currently, neither Madrileña Red de Gas’s own operations nor those of its suppliers present significant risks of non-compliance with these rights.
In this way, Madrileña Red de Gas’s suppliers adopt the company’s commitments as their own, commitments that are clearly communicated and actively monitored throughout the execution of their services
Service quality and safety, environmental protection, and occupational health and safety are also fundamental pillars for the company. These aspects are fully integrated and certified within its Integrated Management System, which also encompasses the activities carried out by its suppliers. In this way, Madrileña Red de Gas’s suppliers adopt the company’s commitments as their own, commitments that are clearly communicated and actively monitored throughout the execution of their services.
Moreover, both suppliers and their employees have access to dedicated channels for reporting grievances, as well as for resolving queries or conflicts related to the observance of these principles. All communications received through these channels are handled with the utmost confidentiality.
Suppliers ESG evaluation
At Madrileña Red de Gas, an external tool is used for supplier registration and prequalification.
This platform enables the evaluation of suppliers’ positioning in terms of sustainability and facilitates benchmarking against other companies in the sector.
In the area of sustainability, the assessment is based on three pillars: environmental, social, and governance (ESG). Each pillar is scored on a scale from 0 (high risk) to 100 (low risk). The overall score is calculated by averaging the individual pillar scores assigned to each supplier.
Suppliers scoring above 81 points are ranked within the top 15% of best-performing companies among all those assessed by the tool. Those scoring between 61 and 80 are considered to be at a good level and generally perform above average. Conversely, if a company receives a score of 45 or below, it is recommended that purchasers review the underlying reasons for this low rating in order to identify potential areas for improvement.
Based on this methodology, 12 critical suppliers of Madrileña Red de Gas have been evaluated in the ESG (Environmental, Social, and Governance) domain).
For the remaining critical suppliers who have not been assessed, there is insufficient data available for the tool to assign a score. The ratings are determined based on responses to questionnaires as well as external information sources.
Regarding the ESG ratings of Madrileña Red de Gas’s critical suppliers, in 2022 only 18% were rated as “Excellent”, a figure that increased to 25% in 2024. At the same time, there was a significant reduction in the lowest ratings: suppliers classified as “Needs Improvement” fell from 36% in 2022 to 17% in 2024. This trend suggests a general improvement in the ESG performance of suppliers.
MRG expresses its commitment to sustainability and urges all its contractors to implement sustainable policies
In accordance with the current contractual clauses, Madrileña Red de Gas expresses its commitment to sustainability and urges all its contractors to implement sustainable policies. The objective is for these suppliers to achieve the highest sustainability score (Excellent Level) within the supplier portal.
In this context, it should be noted that during 2024, no significant negative environmental or social impacts, either potential or actual, have been identified on the part of existing suppliers.