Responsible Supply Chain Management
Charoen Pokphand Group operates through value chains that connect suppliers, farmers, and other stakeholder groups across multiple countries. Therefore, suppliers’ capabilities in managing environmental, social, and governance matters directly affect business continuity, product quality and safety, respect for human rights, regulatory compliance, transparency, and stakeholder confidence.
Accordingly, Charoen Pokphand Group integrates sustainability criteria into its procurement and supplier management processes, encompassing supplier selection, risk assessment, audits, corrective action monitoring, and supplier capability development. The Sustainable Sourcing Policy and Guidelines and the Supplier Code of Conduct serve as key frameworks for establishing expectations and minimum standards for conducting business together.
Goals and Progress
Significant suppliers are audited on sustainability
| Year | Goals |
|---|---|
| 2025 | 95.37% |
| 2024 | 91.31% |
| 2023 | 69.81% |
| 2022 | 73.76% |
Goals and Progress
of high-risk raw materials can be traced back to the source by 2030
| Year | Goals |
|---|---|
| 2025 | 89.62% |
| 2024 | 38.20% |
| 2023 | 33.40% |
| 2022 | 53.26% |
Supporting the SDGs
Stakeholders Directly Impacted
Key Performance 2025
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.
Five-Step Responsible Supply Chain Management Approach
Charoen Pokphand Group has developed a five-step responsible supply chain management approach based on the UN Global Compact framework to promote integrity, fairness, transparency, responsibility, and accountability, as well as responsible procurement practices. Under this approach, the Group regularly reviews its procurement practices to ensure alignment with the Supplier Code of Conduct and to avoid potential conflicts with environmental, social, and governance requirements. In addition, the Group integrates sustainability matters into its procurement processes and conducts supplier assessments in accordance with international frameworks, such as the Universal Declaration of Human Rights and the UN Guiding Principles on Business and Human Rights. These operating approaches are communicated through training provided to employees and all parties involved in the procurement process, including those involved in assessing supplier performance, to ensure compliance with requirements and effective implementation.
Under this process, suppliers, contractors, and business partners are monitored to assess compliance with requirements. Where gaps are identified, Charoen Pokphand Group implements the necessary corrective actions and improvements. The Group also engages suppliers through training, communication, and capacity-building programs to enhance their understanding of compliance requirements, including human rights, fair labor practices, non-discrimination, and the prevention of harassment. Monitoring and assessment information is regularly reviewed to ensure the appropriateness of practices, strengthen accountability, and enhance transparency.
Charoen Pokphand Group has announced the Sustainable Procurement Policy and Guidelines, the Supplier Code of Conduct, strategies, goals, and indicators. Furthermore, the Group has appointed Group-level and business group-level units in charge of responsible supply chain management to oversee, control, and monitor the implementation of relevant policies and guidelines, as well as report performance directly to the Sustainability Committee, which is chaired by the Chief Executive Officer of Charoen Pokphand Group. The performance and operational plans must then be reported to the Board of Directors.
Charoen Pokphand Group organizes communication and training on the Sustainable Procurement Policy and Guidelines to personnel involved in the Suppliers ESG Program, as well as provides communication and training on the Supplier Code of Conduct to all suppliers through various channels on an annual basis. Suppliers are required to sign acknowledgement of and demonstrate their intention to comply strictly with the Supplier Code of Conduct.
Charoen Pokphand Group has integrated ESG criteria into the new supplier selection and annual supplier assessment processes. The Supplier Code of Conduct is affixed as part of the contract while additional requirements are specified for high-risk suppliers. In order to ensure effective supplier management, the Group has identified Significant Suppliers based on their priority level as follows:
- Suppliers with high purchasing value
- Suppliers of critical components, goods and services
- Supplier of irreplaceable or rare goods and services
In addition to the abovementioned criteria, Charoen Pokphand Group also considers the level of sustainability risks across the supply chain using a two-dimensional evaluation criteria, namely severity and likelihood. The risk factors are derived from reliable sources, including 1. news, 2. past performance, 3. risk factors related to product/industry/country, and 4. potential future risk trends. The risk assessment covers raw materials, packaging, and service providers, and is not limited to Tier 1 Suppliers with whom the Group holds direct trading relationships but also includes other Non-tier 1 Suppliers.
Charoen Pokphand Group annually conducts evaluation of compliance with the Code of Conduct and supplier sustainability requirements using appropriate methods including:
- Questionnaire/Self-assessment
- Site inspection by Group auditors
- Site inspection by independent auditors
- Analysis of suppliers' operational data assessment from reliable service providers
Once the evaluation is completed, suppliers identified with non-compliance with the Code of Conduct and other requirements shall submit a correction plan specifying the corrective measures and timelines to the Group for consideration of appropriateness, adequacy and effectiveness. The Group will keep a close eye on the progress of these measures according to the correction plan and offer advice to enhance and align the supplier's operations with the Group's standards.
Charoen Pokphand Group offers a wide range of supplier development programs, e.g., training, training materials, consultations on resolving cases of non-compliance detected during evaluation, and participation in projects to eliminate existing limitations. The Group also hands out awards in recognition of suppliers with outstanding performance. Suppliers identified with non-compliance during the supplier evaluation shall be offered training to enhance their business operations in accordance with Group and international requirements. On the contrary, if any supplier refuses to participate in any form of Supplier ESG Program or fails to address non-conformities according to the measures and timeframe agreed upon, said supplier shall be subject to a fair contract termination process.
