Sustainable Procurement and Supplier Management

To ensure the smooth running of its business, the IBB procures goods, services and construction work, such as hardware and software, various services for events, marketing, strategic consulting and services for construction work in its own building. As a public institution, we are legally obliged to comply with public procurement law in our purchasing activities. The Notes on Sustainable Procurement at the Investitionsbank Berlin (IBB) define the basis for supplier relationships. It sets out the most important principles that form the basis for cooperation with suppliers and service providers.

For contracts with a net value of EUR 500 or more, an economic evaluation (economic pillar of sustainability) of all suppliers is conducted using a "self-declaration on the existence of grounds for exclusion" provided by the State of Berlin. This ensures that no criminal offenses are associated with the company.

In addition, the Berlin Tender and Public Procurement Act (BerlAVG) ensures that bidders meet social and environmental criteria, including the payment of minimum wages, the advancement of women, and specific environmental requirements. We also review the integration of sustainability criteria in all tenders, such as the consideration of ILO core labor standards in environmental specifications.

Above the EU threshold, we are required to apply EU procurement law and the above-mentioned regulations. Our procurement process aims to balance economic efficiency with environmental protection, energy efficiency and social aspects in accordance with applicable laws.

The corresponding declaration of non-existence of grounds for exclusion is specified by the State of Berlin and made available on the website of the Berlin Procurement Service.

In addition, as a Berlin company, we comply with the Berlin Tendering and Public Procurement Act (BerlAVG) and agree to the following contractual terms and conditions, depending on the amount of the contract:

• Special contractual conditions regarding minimum hourly rates and adherence to collective bargaining agreements
• Special contractual conditions for the advancement of women Part A
• Special contractual conditions for the prevention of discrimination
• Special Contractual Conditions (SCC) on Environmental Protection Requirements Part A
• Special Contractual Conditions for Compliance with ILO Core
• Labor Standards in conjunction with: BVB Control and Sanctions Part B

The subject matter of these conditions is the binding compliance with standards for adequate payment, prohibition of discrimination, equal treatment and working conditions. Among other things, the minimum wage is set higher than that required by federal law. In conjunction with the monitoring and sanctions section of the agreement, it is also possible to regularly monitor compliance with these standards and impose sanctions if necessary. Inspections will be carried out annually on a random basis, starting in 2024.

Bribery and corruption are crimes that IBB will not tolerate. All employees must successfully complete regular training on how to recognize and take action against corruption and money laundering. The same applies to cooperation with suppliers and service providers: IBB prefers to work with suppliers and service providers who have successfully passed a suitability check with regard to the existence of criminal offenses. In this context, the contractual partners confirm bindingly that there are no grounds for exclusion specified in advance.

In addition, as of June 1, 2022, all contracting authorities are obliged to consult the competition register with regard to the best bidder in award procedures with an estimated contract value of EUR 30,000 or more (excluding VAT) (cf. Section 6 (1) sentence 1 WRegG). The competition register contains relevant violations of law/serious economic crimes committed by companies, which must be reported to the competent authorities, in particular the public prosecutor's office, customs, tax and anti-trust authorities.

Further information on bribery and corruption is provided in the Notes on Sustainable Procurement at the Investitionsbank Berlin (IBB) .

In 2023, 2 percent of new suppliers and service providers were evaluated based on environmental criteria. Contracts with new partners primarily involved procurement items where environmental impacts were expected to be of minor significance. When assessing environmental criteria, the contracting partner is required to submit self-declarations and evidence, such as Blue Angel certificates, before contract initiation. If the specified minimum requirements are not met, the service provider or supplier generally cannot be commissioned.

Another goal of Purchasing department is to examine how compliance with these minimum standards can be demanded more frequently from suppliers and service providers beyond the legal framework. To achieve this goal, we promote close dialogue between IBB and its contracting partners.

In the 2023 financial year, a total of 27 percent of new suppliers and service providers (for contracts valued at 500 euros or more) were evaluated based on social criteria. Since 2020, these social criteria have included, where relevant:

• Verification of measures for the promotion of women in accordance with the Women's Promotion Ordinance
• Compliance checks for specific minimum hourly wages as per the special contractual conditions on minimum hourly wages (Wirt-241 P)
• Commitment of contractual partners to prevent discrimination according to the special contractual conditions for preventing discrimination (Wirt-2143 P)

The aforementioned special contractual conditions are specified and provided by the State of Berlin.

Violating these contractual conditions can result in contractual penalties and exclusion from current and future procurement procedures. Companies may be excluded from contract awards for three to five years in case of a violation. Additionally, the contracting authority or a third party appointed by them may be authorized to inspect wage statements or other company-related documents for control purposes, which demonstrate compliance with the contractual conditions and declarations.

Queries are conducted to assess the risk of suppliers and service providers, including:

• Regular delivery of creditworthiness data for our contractual partners with a net turnover of 20 000 euros or more over two years, provided by a service provider
• Random checks mandated by the Senate to ensure compliance with special contractual conditions (BVB) for the promotion of women for all contracts of 25 000 euros net or more
• Case-specific inquiries from the Competition Register, which provides information on companies associated with certain economic offenses, particularly bribery, formation of criminal organizations, terrorism financing, money laundering, fraud and subsidy fraud at the expense of public budgets, tax evasion, withholding and embezzlement of wages, violations of certain labor law provisions, and cartel agreements

If these reviews reveal that a contractor is in violation of contract terms or the law, current contracts will be terminated and future orders will not be placed until the violations have been corrected. In addition, reporting to the appropriate authorities will be considered. If violations of contract terms or laws are discovered prior to the conclusion of a contract, no order will be placed.

IBB is a regional institution, therefore we feel strongly connected to the Berlin-Brandenburg economic area. For this reason, we try to select our supply chains regionally whenever possible. In 2023, 50 percent of our contractual partners, based on the total number of contractors in 2023, came from the Berlin-Brandenburg region. Spending with local suppliers and service providers accounted for 45 percent of the total invoice volume. The positive side effect of strengthening regional contractual relationships is the indirect minimization of transport costs and CO₂ emissions from our suppliers.

The ten procurement professionals at IBB have access to an annual five-figure budget for professional development in specialized or personal topics. The procurement staff participates in various training sessions and events multiple times a year and regularly receives newsletters on current legal rulings to stay up-to-date with the latest legislation. Additionally, IBB is a member of industry associations such as the German Association for Supply Chain Management, Procurement and Logistics (BME).