Case study: How BOCHK promotes sustainability across its supply chain
BOC Hong Kong (Holdings) Limited is one of the largest listed companies and commercial banking groups in Hong Kong, offering a comprehensive range of financial, investment and wealth management services to personal, corporate and institutional customers. In line with its sustainability strategy, BOCHK has set clear requirements on supplier standards regarding all aspects of social responsibility, ethics, corporate governance, environmental protection and labour conditions.
This case study is based on the 2020 Sustainability Report by BOCHK, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
BOCHK encourages its suppliers to effectively manage the social and environmental impacts of their operations Tweet This!, with the aim of building a supplier system that uses resources effectively and properly implements environmental and social risk management. In order to promote sustainability across its supply chain BOCHK took action to:
- apply a Sustainable Procurement Policy
- implement a Supply Chain Code of Conduct
- promote due diligence
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With this case study you will see:
- Which are the most important impacts (material issues) BOCHK has identified;
- How BOCHK proceeded with stakeholder engagement, and
- What actions were taken by BOCHK to promote sustainability across its supply chain
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What are the material issues the company has identified?
In its 2020 Sustainability Report BOCHK identified a range of material issues, such as economic performance, talent acquisition and development, financial inclusion, customers experience and satisfaction. Among these, promoting sustainability across its supply chain stands out as a key material issue for BOCHK.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups BOCHK engages with:
| Stakeholder Group | Method of engagement |
| Customers
| · Communications with frontline staff and relationship managers · Contact centres · Online workshops and seminars · BOCHK iService 24-hour video banking service · Customer satisfaction surveys · Net Promoter Score (NPS) Survey · Official WeChat accounts of BOCHK, BOC Credit Card, BOC Life, BOCHK Research and Southeast Asian entities • · Corporate website · Online surveys |
| Employees | · Employee mobile communication app EIM (Enterprise Instant Message) · Staff publications · Intranet · Internal circulars · Departmental meetings · Chief Executive’s mailbox · Staff hotline · Staff performance assessment · Staff training · Staff activities · Volunteer activities · Awards and recognition activities · Online surveys |
| Investors and Shareholders | · Annual General Meeting · Corporate communications · Annual and interim reports · Announcements · Result briefings · Road shows · Corporate day events · Annual conferences and seminars held by investment banks · Company visits, conference calls and virtual meetings · Online surveys / one-on-one interviews · Corporate website · Social media · Investor relations emails and hotline |
| Suppliers | · Meetings and communication · Due diligence procedures · Regular supplier reviews · On-site inspections · Online surveys |
| Community Partners
| · Sponsorships and donations · Seminars, forums and sharing sessions · Meetings and communication · Diverse activities for the community (including volunteer events, tours, exchanges and visits) · Online surveys/one-on-one interviews |
| Media
| · Press conferences · Media interviews · Result briefings · Annual and interim reports · Press releases · Corporate website · Media enquiries |
| Professional Institutions | · Representatives on committees of major professional bodies · Forums, seminars and talks · Events sponsorship |
| Government and Regulators | · Meetings, daily communication and reports · Representatives on committees of major industries and government bodies · Forums, seminars and talks · Circulars and guidelines of regulatory authorities · On-site visits |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics BOCHK developed different questionnaires for different groups of stakeholders and solicited their opinions through online surveys, focus group discussions, and one-to-one interviews.
What actions were taken by BOCHK to promote sustainability across its supply chain?
In its 2020 Sustainability Report BOCHK reports that it took the following actions for promoting sustainability across its supply chain:
- Applying a Sustainable Procurement Policy
- BOCHK’s Sustainable Procurement Policy sets out the entrance requirements and annual evaluation standards for its suppliers. New potential suppliers must undertake procedures such as register search and risk assessment. BOCHK has also put in place a supplier management system, to ensure compliance with sustainable development principles. During 2020, all new suppliers were evaluated on their social and environmental performance, with all meeting the required standards.
- Implementing a Supply Chain Code of Conduct
- BOCHK’s Supply Chain Code of Conduct provides guidelines for the Group’s procurement of major products and services and encourages suppliers to meet certain social and environmental standards. In determining its supplier standards, BOCHK has made reference to the International Labour Standards and Principles of Decent Work set out by the International Labour Organisation Core Conventions. Suppliers must formulate policies and recruitment measures in accordance with Hong Kong regulations, including those related to the prohibition of child labour and forced labour. BOCHK requires all new suppliers to submit a Supply Chain Code of Conduct Assessment Questionnaire, and will only consider them if they meet the required standards. If a supplier fails to meet the standards, BOCHK will take appropriate action including delisting them from its supplier list.
- Promoting due diligence
- BOCHK has clear requirements for suppliers’ due diligence on AML (anti-money laundering) and anti-bribery matters. When selecting suppliers, BOCHK follows its Anti-Bribery and Anti-Corruption Policy (“ABAC”) and its working documents, and attaches great importance to suppliers’ anti-bribery and anti-corruption management. To support due diligence on suppliers and monitor the procurement process, BOCHK has established policies and mechanisms such as the Centralised Procurement, Tender and Price Comparison Rules and the Administrative Measures for Supplier Management. BOCHK has also formulated anti-bribery and anti-corruption training for third-party suppliers that have business dealings with the Group. Under certain circumstances, BOCHK will require suppliers to complete the training and confirm their awareness of and compliance with the Group’s anti-bribery and anti-corruption requirements.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 414-1 New suppliers that were screened using social criteria
Disclosure 414-1 New suppliers that were screened using social criteria corresponds to:
- Sustainable Development Goal (SDG) 5: Gender Equality
- Targets: 5.2
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.8
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.1
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References:
This case study is based on published information by BOCHK, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
https://www.bochk.com/dam/bochk/desktop/top/aboutus/esg/report/SustainabilityReport2020_en.pdf
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