Case study: How Bangkok Bank promotes sustainability among its suppliers
Bangkok Bank is a leading bank in Thailand and a major regional bank in Southeast Asia, a market leader in corporate and business banking with a large retail customer base. Bangkok Bank is committed to managing its supply chain counterparty relationships so that they understand and recognise their respective environmental, social and governance (ESG) responsibilities Tweet This!, including respect for human rights and labour rights, business conduct with transparency and fairness, and effective ESG risk management.
This case study is based on the 2020 Sustainability Report by Bangkok Bank, 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
Bangkok Bank prioritises the sustainable management of its supply chain by treating every supply chain counterparty equally and fairly in accordance with its code of conduct and business ethics, while also encouraging supply chain counterparties to take responsibility for all stakeholders and society. In order to promote sustainability among its suppliers Bangkok Bank took action to:
- screen suppliers
- assess risks
- monitor and evaluate supplier performance
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With this case study you will see:
- Which are the most important impacts (material issues) Bangkok Bank has identified;
- How Bangkok Bank proceeded with stakeholder engagement, and
- What actions were taken by Bangkok Bank to promote sustainability among its suppliers
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What are the material issues the company has identified?
In its 2020 Sustainability Report Bangkok Bank identified a range of material issues, such as cyber security and customer data, risk and crisis management, privacy protection, digitalisation and innovation, responsible finance. Among these, promoting sustainability among its suppliers stands out as a key material issue for Bangkok Bank.
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 Bangkok Bank engages with:
| Stakeholder Group | Method of engagement |
| Shareholders and investors
| · Annual General Meeting of Shareholders and Extraordinary General Meeting of Shareholders · Disclosure of information in the Annual Registration Statement (Form 56–1), Annual Report (Form 56–2) and Sustainability Report published on the Bank’s official website · Disclosure of information through the SET portal of the Stock Exchange of Thailand, electronic publications and the Bank’s official website · Meetings with investors and stock analysts (11 persons) · Conference calls with investors and stock analysts (274 persons) · Meetings with stock analysts and individual investors (256 persons) · Investors’ meetings (3 meetings) · Virtual investors’ meetings (5 meetings) · Information inquiries through the Bank’s official website |
| Customers | · Customer satisfaction survey at least once a year · Relationship building activities for the Bank and customers throughout the year · Periodic seminars to provide knowledge about finance, saving, trade and investment, and cyber threats which are held throughout the year · Customer visits to enhance relationships and accommodate customers’ needs through year-round appointments · Regular communications via digital channels e.g. LINE, Facebook and Twitter · Complaint and whistleblowing channels available through Bualuang Phone 1333 or the Bank’s official website www.bangkokbank.com 24 hours a day, 7 days a week |
| Employees | · Orientation programmes for new employees which are held twice a month · Nationwide executive conference for policy announcements which is held once a year · Meetings between the Bank and representatives from the Bangkok Bank Managerial Officers Union, and Bangkok Bank Workers Union on a weekly basis. · News releases through the twice-monthly internal newspaper Our News · Timely dissemination of interesting news and activities for employees through internal communication channels such as BBL CONNECT, email, and the public address system · Sharing and exchanging opinions between managers and their team members during the employee performance evaluation period twice a year |
| Counterparties
| · Clarification of the Bank’s rules for new counterparties or new contracts · Written communication for counterparties in case of material changes in the Bank’s rules · Regular visits or phone calls to counterparties to strengthen the relationship and exchange opinions on products and services |
| Creditors
| · Direct and indirect communication via mass media or advertising media as needed · Suggestion and complaint channels through Bualuang Phone 1333 or the Bank’s official website www.bangkokbank.com 24 hours a day, 7 days a week |
| Industry peers
| · Exchange of ideas between members of the Thai Bankers’ Association in monthly meetings and collaboration under different clubs and working groups such as CSR Club, Credit Cards Club, 5-Year Plan Working Group and Sustainable Banking Working Group · Participation in the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB – Thailand) comprising the Board of Trade of Thailand, the Federation of Thai Industries, and the Thai Bankers’ Association |
| Community, society and the environment
| · Production of weekly television programmes to promote tourism and small community businesses as well as the regular sharing of knowledge on finance and business administration with the general public and the business sector · Occasional community, social and environmental activities to promote religion, the arts and Thai culture · Regular awareness building and knowledge sharing on finance, investment, saving and business administration through training, seminars and various media channels for interested people and businesses · Suggestion and complaint channels through Bualuang Phone 1333 or the Bank’s official website www.bangkokbank.com 24 hours a day, 7 days a week |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Bangkok Bank engaged with its stakeholders through several rounds of surveys and in-depth interviews.
What actions were taken by Bangkok Bank to promote sustainability among its suppliers?
In its 2020 Sustainability Report Bangkok Bank reports that it took the following actions for promoting sustainability among its suppliers:
- Screening suppliers
- Bangkok Bank has created a systematic screening process for suppliers, starting by inviting potential suppliers to discuss their understanding of the bank’s supplier code of conduct, and giving them the opportunity to recommend products and services, and make other inquiries. Bangkok Bank requires all new suppliers and contractors to conduct a self-assessment on product and service quality, business security and ESG management approaches such as impact on the environment, respect for human rights in compliance with international principles and standards, respect for basic rights at the workplace in compliance with International Labour Organization (ILO) Conventions, the prevention and protection of personal information, and the prevention of corruption. When registered suppliers pass the assessment criteria set by Bangkok Bank and submit relevant evidence, officers of the concerned unit will visit the business before seeking internal approval to accept them as registered suppliers. For outsourced companies, the scrutinising committee will consider the application based on the selection guidelines for the outsourced company, which cover various issues including knowledge, ability, experience, past performance, financial security, business risk and company policies that are compliant with Bangkok Bank’s standards.
- Assessing risks
- Bangkok Bank has an assessment process that analyses ESG risks that critical suppliers may bring to the supply chain. Critical suppliers include high spending suppliers, from which the bank procures products and services with high value; critical component suppliers, which produce essential goods and services for the bank; and non-substitutable suppliers, which produce products and services that cannot be easily replaced by other sources. The assessment is attended by management, employees from the procurement department, user units, suppliers and the Compliance Division, involving discussions on possible measures to cope with risks and possible impacts, where necessary. Regarding identification of ESG risks from a supplier, Bangkok Bank identifies the top three most important risks in each sector:
- Environment: 1. Greenhouse gas emissions, 2. Energy management, and 3. Waste and hazardous material management.
- Social: 1. Human rights, 2. Treatment of employees, and 3. Occupational health and safety at the workplace.
- Governance: 1. Corruption, 2. Privacy Protection, and 3. Fraud.
- To assess whether a critical supplier is a high ESG risk, Bangkok Bank considers the likelihood and severity of a potential violation to identify appropriate preventive and mitigation measures. The outcome of this risk assessment and potential impacts will be used in the formulation of the supplier code of conduct and for improving the bank’s risk management processes to be more efficient and effective.
- Monitoring and evaluating supplier performance
- Every new Bangkok Bank supplier is required to pass a self-declaration that covers ESG issues and business security and reliability before being able to register as a bank supplier and participate in a procurement contract with the bank. Bangkok Bank carries out regular supervision, monitoring and evaluation of a supplier’s performance to ensure that they can comply with the contract and has also established a process for identifying and assessing risks and potential negative ESG impacts that may arise from the operations of suppliers that could prompt the bank to take appropriate preventive and remedial measures. Bangkok Bank expects the units involved in the procurement of suppliers to conduct monitoring, auditing and evaluation of suppliers’ ESG operations, and to carry out tracking information to indicate work that is non-compliant with the law or good ESG practices. Bangkok Bank will use this information, as well as information gathered from supplier registration to review an application for renewal upon completion of the contract. This is to make sure that the bank’s suppliers act in a responsible manner and are able to carry out their work as specified in the contract. During the review, Bangkok Bank will pay close attention to a supplier’s commitment and ability to conform to ESG best practices, along with other key factors such as their reliability, quality and the ability to produce products or provide service. Additionally, Bangkok Bank has established a channel for receiving complaints in case activities undertaken by its suppliers under a procurement contract have a negative impact on related stakeholders. Bangkok Bank has established a process for verifying evidence and remedying the effects that arise. All stakeholders are able to file complaints through the bank’s various filing channels. In addition, Bangkok Bank has established principles and measures for dealing with suppliers who breach the terms of the contract, which are clearly written in the procurement contract.
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 414-1 New suppliers that were screened using social criteria
Disclosure 308-1 New suppliers that were screened using environmental criteria 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
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References:
This case study is based on published information by Bangkok Bank, 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:
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