Responsible Supply Chain Management
Goal and Performance
Charoen Pokphand is committed to responsible supply chain management. Our goal is to ensure transparency, sustainability, and ethical practices throughout our supply chain. By fostering strong partnerships, adhering to rigorous standards, and prioritizing environmental and social considerations, we strive to create a positive impact on the communities we serve and the planet we share.
of high-risk suppliers are audited
Supporting the SDGs
Charoen Pokphand Group's commitment to responsible supply chain management support the achievement of three Sustainable Development Goals
More Details on Sustainable Development Goals Report 2022
Stakeholders Directly Impacted
Charoen Pokphand Group performs stakeholder assessment and prioritization process on an annual basis to evaluate impacts we have on them and how can they influence our strategies and actions over time. In 2022, the evaluation results showed that our commitment to fostering strong partnerships, adhering to rigorous standards, and prioritizing environmental and social considerations creates impacts on four stakeholder groups.
More Details on Stakeholder Engagement Report 2022
Responsible Supply Chain Management Approach
Charoen Pokphand Group has incorporated sustainability issues into our procurement process and operated under the Responsible Supply Chain Management Framework. We have also encouraged our suppliers to adhere to the Charoen Pokphand Group Code of Conduct to achieve mutual sustainable growth and create added value for the business across the supply chain and for a wide range of stakeholders.
Furthermore, in order to enable rapid implementation and support our businesses worldwide, Charoen Pokphand Group has adopted information technology to develop a sustainability risk assessment tool to identify opportunities for improvement and establish proactive measures that feature the partnership between the Group and our suppliers.
Supplier Assessment
Charoen Pokphand Group is dedicated to upholding the highest levels of accountability and sustainability across our supply chain. Our Supplier Assessment program is crucial to our efforts to guarantee that all of our partners share our values and contribute to our objective of making a good difference in the world. We evaluate our suppliers using a thorough set of criteria that includes environmental, social, and ethical considerations. These criteria are intended to enhance supply chain openness, accountability, and continual improvement.
Environmental Impact
We carefully assess our suppliers' environmental effects to guarantee they share our commitment to environmental preservation. We want partners who are committed to sustainable practices and environmental stewardship, from resource management and energy efficiency to waste reduction and carbon emissions.
Social Responsibility
We place a high value on employee well-being and fair treatment. We perform extensive audits to verify that our suppliers adhere to fair labor practices, prioritize worker safety, and respect human rights. We aggressively promote workplace diversity and inclusivity, providing an environment in which everyone's rights are acknowledged and protected.
Ethical Business Practices
Our supplier partnerships are built on ethical behavior. We carefully analyze potential partners to ensure that their operations adhere to the highest ethical standards. We expect our suppliers to conduct themselves with integrity, honesty, and adherence to all applicable laws and regulations.
Continuous Improvement and Collaboration
Our Supplier Assessment is a continuous path toward excellence, not a one-time event. We collaborate with our suppliers, providing direction and support to help them continuously improve their operations. We establish an environment in which suppliers feel empowered to improve their responsible supply chain initiatives via open communication and collaboration.
Transparency and Accountability
Transparency, we feel, is the key to establishing trust and accountability. We maintain clear and open contact with our partners throughout the Supplier Assessment process, conveying our expectations and requirements. We hold ourselves to the same high standards that we expect from our vendors.
Empowering Positive Change
We hope to create a good ripple effect throughout the industry by engaging with responsible suppliers. Our Supplier Assessment program not only ensures compliance, but also aims to make a positive influence and promote sustainable practices in the supply chain community.
C.P. Group remains committed to responsible supply chain management through our dedication to supplier assessment. We think that by partnering with organizations that share our goal for sustainability and ethical practices, we can collectively create a brighter, more sustainable future for the globe.
Weighting for ESG
New and existing suppliers must be evaluated on a regular basis. Charoen Pokphand Group has established particular evaluation criteria for both new and existing vendors. Product and service quality, pricing, delivery, and sustainability are important considerations for new suppliers. Weighting is assigned to each criterion to ensure that the best product and service are delivered to the Group, and hence to our customers and consumers.
Because the Group places a high value on sustainable practices and encourages our suppliers to do the same, the weighting for sustainability criteria contributes to up to 30% of the total assessment score. Simultaneously, existing vendors must undergo a yearly assessment to check their capabilities and performance against contract and Supplier Codes of Conduct standards. The weighting for sustainability criteria, like the weighting for new supplier assessment, accounts for up to 30% of the total assessment score.
Supplier Screening Process
Given the large number of suppliers involved in C.P. Group's business, we begin our approach to responsible supply chain management by focusing on major suppliers, which are a combination of critical suppliers and ESG high-risk suppliers.
The following criteria are used to classify critical suppliers: 1) high procurement value; 2) suppliers of key raw materials/components; and 3) suppliers of non-substitutable raw materials/components or a small number of suppliers who can meet the requirements. Furthermore, we identify high-risk suppliers by completing a sustainability risk assessment across the entire supply chain, employing evaluation criteria in two dimensions: impact severity and risk likelihood. The following risk elements are incorporated in the assessment: 1) news; 2) historical performance; 3) risk factors connected to country, sector, and commodity; and 4) future emergent risk trends.
C.P. Group's risk assessment encompasses raw material, packaging, and service providers, and is not restricted to tier 1 suppliers (those having direct purchasing connections with the Group), but also non-tier 1 suppliers. Please see the responsible supply chain management technical guidelines for further details.
Suppliers’ Gender Assessment
At C.P. Group, we believe that empowering all genders is not just a moral imperative but also a strategic advantage. By integrating gender assessment into our supply chain management, we aim to create a positive impact on the lives of our employees, suppliers, and communities while contributing to a more inclusive and sustainable world.
Result from assessment, with ESG, gender, and compliance
Example of Potential Findings from Sustainability Assessment |
|
|---|---|
Risk Issues |
Risk Management Measures |
| Environmental Dimension | |
| Environment impact assessment | Establish aspects and impacts identification process including measure determination |
| Pollution control | Set up a pollution control plan for the related aspect and monitor at appropriate intervals. |
| Sewage management according to the Ministry of Industry announcements | Notification of registration to the Ministry of Industry and license application according to the announcement of the Ministry of Industry |
| Social Dimension | |
| Employment contract | Prepare a written employment contract in a language comprehendible by employees |
| Employee health checks based on risk factors | Establish health monitoring guidelines according to risk factors and perform employee health checks |
| Registration of personnel in charge of SHE at the management level, supervisory level, etc | Appoint personnel at various levels and provide them with training prior to registration notification with the Office of Labor Protection and Welfare |
| Governance Dimension | |
| Training provision according to relevance regulations ex. firefighting, fire drills, and chemical spills | Organize an annual training plan and compile a training report summary |
| Revise legal changes associated with business operations | Appoint responsible person and prepare legal registration and review changes in various laws |
| Personal Data protection | Set up the structure and systematic process with communication with all relevant stakeholders |
Supplier development programs
Charoen Pokphand Group strives to enhance the capabilities of our suppliers in various key areas, including safe and sustainable production practices. This is achieved through a management system that ensures proper planning and continuous improvements, creates learning networks, adopts digital technologies, and supports marketing to enhance the value and capabilities of suppliers to achieve sustainable business operations.
Increasing Value
- Product development
- Increasing efficiency
- Using modern agricultural tools
- Identifying production inputs using theoretical principles
Synergy
- Building learning networks
- Joining forces with the public sector
- Sharing experiences and best practices
- Creating agricultural equipment networks to reduce costs
Knowledge sharing
- Occupational health and safety
- Using resources efficiently
- Food safety
- Sustainability principles
Management System
- Good Agricultural Practices (GAP)
- Good Manufacturing Practices (GMP) for food
- Traceability system
Finance, Marketing and Technologies
- Planning production based on actual market needs
- Setting fair prices
- Guaranteeing Product price buyback
- Using digital platforms
- International standards
Supplier Development Initiatives
Promoting Corn Cultivation for Animal Farming in CLMVT Irrigation Zones
Distributing knowledge on integrated agricultural management
The lack of appropriate knowledge on integrated agriculture and agricultural inputs, including the limitations of modern agricultural technology, are driving forces behind an important transformation among rice farmers. In particular, this concerns farmers adapting to the option of growing other plants instead of off-season rice farming, where previously farmers would cultivate rice off-season, despite the risks of drought or insufficient water resources. Recognizing this issue, the Crop Integration Business Group (Corn) conducted research and development and found that growing corn for animal feed during the dry season – after the rice has been harvested – will yield better results for farmers, as corn requires two to three times less water than off-season rice farming. In addition, to stimulate a business-to-consumer (B2C) model of agricultural management, the Crop Integration Business Group (Maize) also disseminated knowledge and promoted various types of agricultural inputs, providing support in areas such as: selecting quality seeds that are most suited to the conditions of the area; analyzing nutrients in the soil to recommend appropriate types of fertilizers; using machinery provided by farmers’ networks for sowing/ ploughing; identifying water sources for farming; and caring for various tree species. Overall, this support covers the cultivation stage through to recommendations on proper harvesting methods.
participated in the project
farmers’ areas included in the project