Case study: How Banpu promotes sustainability among its suppliers
Banpu is an “Integrated Energy Solutions Company” operating three core business groups across Asia Pacific under the “Greener & Smarter” strategy, with experience for almost 4 decades. Promoting ESG principles across its supply chain, making sure that all existing and potential suppliers operate their business in adherence to environmental, social and governance standards, is one of Banpu’s missions.
This case study is based on the 2019 Sustainability Report by Banpu published on the Global Reporting Initiative Sustainability Disclosure Database 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.
In 2019, Banpu announced its Supplier Code of Conduct, as a foundation for creating sustainable growth together with its suppliers. Tweet This! In order to promote sustainability among its suppliers Banpu took action to:
- assess suppliers
- implement a Supplier Code of Conduct
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With this case study you will see:
- Which are the most important impacts (material issues) Banpu has identified;
- How Banpu proceeded with stakeholder engagement, and
- What actions were taken by Banpu to promote sustainability among its suppliers
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What are the material issues the company has identified?
In its 2019 Sustainability Report Banpu identified a range of material issues, such as community engagement, human capital development, occupational health and safety, socioeconomic compliance. Among these, promoting sustainability among its suppliers stands out as a key material issue for Banpu.
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 s 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 Banpu engages with:
To identify and prioritise material topics Banpu engages with its stakeholders through the following channels:
| Stakeholder Group | Method of engagement |
| Government | · Occasional visit · Support to governmental initiatives and activities · Response to requests for data disclosure · Publication of Annual Report and Sustainability Report · Public information on Banpu’s website |
| Employee
| · Communication between human resources department and employee · Employee involvement in committees · Complaint channel · “Banpu Heart” behavioural survey · Employee engagement survey · Town Hall Meeting |
| Customer | · Customer satisfaction survey · Compliant channel · Customer visit · Response to requests for data disclosure · Report on annual maintenance plan and emergency drill |
| Supplier | · Regular meeting with supplier |
| Contractor
| · Regular meeting with contractor · Annual mining contractor meeting |
| Financial Institution | · Analyst meeting · Publication of Annual Report and Sustainability Report |
| Business Partner | · Board meeting at subsidiaries and associated companies · Publication of Annual Report and Sustainability Report · Report on annual maintenance plan and emergency drill |
| Shareholder
| · Annual general meeting of shareholder · Publication of Annual Report and Sustainability Report · Complaint channel · Public information on Banpu’s website |
| Investor | · Opportunity investment roadshow · Presentation on Opportunity Day organised by Stock Exchange of Thailand · Publication of Annual Report and Sustainability Report · Public information on Banpu’s website |
| Media and NGOs | · Response to requests for data disclosure · Fact sheet summary · Public information on Banpu’s website |
| Community | · Community Consultative Committee (CCC) · Stakeholder satisfaction survey · Compliant channel · Communication with community development officers · Public information on Banpu’s website |
What actions were taken by Banpu to promote sustainability among its suppliers?
In its 2019 Sustainability Report Banpu reports that it took the following actions for promoting sustainability among its suppliers:
- Assessing suppliers
- In 2019, Banpu engaged with 1,992 suppliers in Indonesia, 1,536 suppliers in Australia and 509 suppliers in China. For mining business in Indonesia, 48 suppliers were identified as critical suppliers and 43 of them were assessed for ESG risks, consisting of mining and hauling contractors. For conventional power business in China, out of the 147 suppliers identified as critical suppliers, 92 were assessed for ESG risks, including 37 new critical suppliers.
- Implementing a Supplier Code of Conduct
- In 2019, Banpu officially published its Supplier Code of Conduct to become binding conditions included in supplier contracts, making sure that suppliers operate their business adhering to ethical, social, and environmental responsibility. The Supplier Code of Conduct emphasises 7 areas as follows:
- Business Ethics: operate the business with integrity and transparency in information disclosures to the public, prevent any possible corruption in all dimensions, retrain from conflict of interests, and respect customers’ confidentiality and intellectual property
- Labour and Human Rights: conduct business with respect for human rights and non-discrimination by complying with labour laws and human rights practices, preventing forced labour as well as providing good working conditions
- Occupational Health and Safety: comply with occupational health and safety laws in each country, provide a safe work environment to employees, and monitor OHS (occupational health and safety) risks
- Environment: fully comply with environmental regulations, protect the environment by all means to reduce impacts on biodiversity and conserve natural resources, as well as transparently report environmental issues with effective solutions
- Community and Society: respect the interests of people in local communities, especially indigenous peoples, immigrants, and vulnerable groups as well as open contractive dialogue with such people
- Business Continuity: identify possible risks, conduct emergency drills, and immediately notify where situations may become liable to the company
- Supply Chain Collaboration: encourage suppliers to practice the same in accordance with this Supplier Code of Conduct as a standard for joint business
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:
1) This case study is based on published information by Banpu, 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 original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:
http://database.globalreporting.org/
2) https://www.globalreporting.org/standards/gri-standards-download-center/
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