Our annual procurement spend amounts to around £1 billion, of which 80% is with around 250 suppliers both in the UK and across the world.

Responsible procurement

2006 was an exciting year for the Procurement team in terms of CSR. Building on the implementation of a Procurement policy, which was approved by the E.ON UK Executive Board (EUEB) in October 2005, we spent a significant amount of time developing our approach to implementing social responsibility in the supply chain.

In April 2006, we took a team of eight Procurement team members to the Institute of Management Development (IMD) in Switzerland, one of Europe's top business schools, to look at how we could ensure our third-party suppliers work to our values and beliefs on CSR. By understanding how other companies deal with this issue and choosing the elements of their approaches most relevant to us, we developed a high-quality approach to responsible procurement.

Our fundamental approach has been to build responsible practices into our standard procurement process. This means that responsible procurement is simply seen as 'how we do business' rather than a separate project. Elements of our standard process that we have adapted include our plant audit checklist and supplier questionnaire. We've included a clause in our supplier questionnaire to confirm our suppliers sign up to our code of conduct and are working on a series of CSR questions to include in our plant audit checklist. These are part of our standard documentation used for over 70% of our key categories.

We have appointed a Responsible Procurement Manager to coordinate and drive this process throughout E.ON UK's third-party relationships. We are also now working with our colleagues in the other market units to align our approaches to responsible procurement across the Group.

We have also been looking at ways we can ensure, measure and improve the diversity of our supply base, improve the Procurement team members' contribution to charity events and continuously improve our responsible procurement knowledge.

Terms of business

Our terms of payment specify that we will pay our suppliers within 30 days unless the contract or supplier specifies otherwise - for example, agencies supplying temporary staff may require payment within 14 days while other contracts require immediate payment. We do not record average numbers of creditor days.

Our Accounts Payable team deals with enquiries or complaints about the late payment of bills as they arise. We do not record details of the number of complaints centrally, although our team endeavours to ensure that all invoices are paid in a timely manner. A list of outstanding invoices that are over three months old is regularly sent to the relevant business unit to ensure that delays in payment are minimised.