Case study: How C.P. Group promotes sustainability across its supply chain
As Thailand’s largest private company C.P. Group (Charoen Pokphand Group) operates across many industries, ranging from industrial to service sectors, that are categorised into 8 business lines covering 14 business groups. C.P. Group has developed a supply chain management system implemented across its entire supply chain which does not only reduce potential risks, but also creates opportunities for sustainable business operations.
This case study is based on the 2020 Sustainability Report by C.P. Group, 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
Expanding sustainability operations to its suppliers in order to scale up positive changes, is a top priority for C.P. Group. Tweet This! In order to promote sustainability across its supply chain C.P. Group took action to:
- implement a Supplier Code of Conduct
- manage supplier risks
- assess suppliers
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With this case study you will see:
- Which are the most important impacts (material issues) C.P. Group has identified;
- How C.P. Group proceeded with stakeholder engagement, and
- What actions were taken by C.P. Group 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 C.P. Group identified a range of material issues, such as corporate governance, climate change management, health & well-being, leadership & human capital development. Among these, promoting sustainability across its supply chain stands out as a key material issue for C.P. Group.
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 C.P. Group engages with:
| Stakeholder Group | Method of engagement |
| Employees and Families | · Digital Communication or Reports · Meetings, Discussions, Activities, Collaborative Projects · Complaints or Suggestions Channels · Academic Service and Counselling Centre · Satisfaction Survey |
| Customers and Consumers
| · Digital Communication or Reports · Meetings, Discussions, Activities, Collaborative Projects · Complaints or Suggestions Channels · Academic Service and Counselling Centre · Satisfaction Survey |
| Farmers
| · Digital Communication or Reports · Meetings, Discussions, Activities, Collaborative Projects · Complaints or Suggestions Channels · Academic Service and Counselling Centre |
| Business Partners
| · Digital Communication or Reports · Meetings, Discussions, Activities, Collaborative Projects · Complaints or Suggestions Channels · Academic Service and Counselling Centre |
| Communities and Societies | · Digital Communication or Reports · Meetings, Discussions, Activities, Collaborative Projects · Complaints or Suggestions Channels · Academic Service and Counselling Centre · Satisfaction Survey |
| Governments | · Digital Communication or Reports · Meetings, Discussions, Activities, Collaborative Projects · Complaints or Suggestions Channels |
| Shareholders, Investors and Creditors
| · Digital Communication or Reports · Meetings, Discussions, Activities, Collaborative Projects · Complaints or Suggestions Channels |
| Non-governmental Organisations
| · Digital Communication or Reports · Meetings, Discussions, Activities, Collaborative Projects · Complaints or Suggestions Channels |
| Media
| · Digital Communication or Reports · Meetings, Discussions, Activities, Collaborative Projects · Complaints or Suggestions Channels |
| Competitors | · Digital Communication or Reports · Meetings, Discussions, Activities, Collaborative Projects · Complaints or Suggestions Channels |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics C.P. Group surveyed stakeholder opinions across its value chain to identify the sustainability topics most important for stakeholders.
What actions were taken by C.P. Group to promote sustainability across its supply chain?
In its 2020 Sustainability Report C.P. Group reports that it took the following actions for promoting sustainability across its supply chain:
- Implementing a Supplier Code of Conduct
- P. Group has announced the implementation of a Supplier Code of Conduct as well as provided training on and shared this set of rules and relevant videos with its suppliers, so as to enable their acknowledgement and strict compliance. The primary target audience in communicating the Supplier Code of Conduct are currently C.P. Group’s critical tier-1 suppliers, who have all acknowledged and been educated on the Code.
- Managing supplier risks
- P. Group manages supplier risks across its entire supply chain in order to identify suppliers with high sustainability risks, covering suppliers of raw materials, packaging, and services. Supplier risk management is not only limited to tier 1 suppliers with direct purchasing relationships with the Group, but also includes non-tier 1 suppliers. The assessment is conducted from the process of planning through to follow-ups on corrective actions and performance reviews. This is to ensure that suppliers have continuous and effective sustainability risk management.
- Assessing suppliers
- P. Group has incorporated social and environmental issues into the Supplier Selection Process, requiring suppliers to conduct Supplier Self-Assessments and undergo assessments by companies within the Group or by reputable third-party agencies. Meanwhile, social and environmental requirements have been included into contracts. Additionally, the Group has instructed all suppliers to complete a sustainability assessment at least once every 3 years. In 2020, 72% of new suppliers were screened using environmental and social criteria.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
1) Disclosure 308-1 New suppliers that were screened using environmental criteria
2) Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken
3) Disclosure 414-1 New suppliers that were screened using social criteria
4) Disclosure 414-2 Negative social impacts in the supply chain and actions taken
Disclosure 308-1 New suppliers that were screened using environmental criteria does not correspond to any SDG.
Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken does not correspond to any SDG.
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
Disclosure 414-2 Negative social impacts in the supply chain and actions taken 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 C.P. Group, 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.cpgroupglobal.com/Portals/0/PDF/CPGSR2020_EN.pdf
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