Case study: How First Resources promotes sustainability across its supply chain

What are the material issues the company has identified?

In its 2019 Sustainability Report First Resources identified a range of material issues, such as fire prevention and management, labour conditions and human rights, conservation and management of High Conservation Value (HCV) areas, business conduct and ethics, protection of High Carbon Stock (HCS) forests. Among these, promoting sustainability across its supply chain stands out as a key material issue for First Resources.

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:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

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 First Resources engages with:

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics First Resources engaged with its stakeholders through an online survey and one-on-one interviews.

What actions were taken by First Resources to promote sustainability across its supply chain?

In its 2019 Sustainability Report First Resources reports that it took the following actions for promoting sustainability across its supply chain:

• Engaging with suppliers
• First Resources endeavours to communicate its sustainability policy to its suppliers with the aim of developing a supply chain network that embodies the Group’s sustainability goals and practices. Once it has traced where the supply of its raw materials comes from, First Resources is able to focus its supplier engagements with the key players in its supply chain. One-on-one meetings and group sessions are held to communicate First Resources’ sustainability policies and expectations, and to help suppliers understand the importance of aligning their practices with First Resources’ requirements. To date, feedback from participating suppliers has been generally supportive and constructive. Through constant dialogue with its suppliers, especially smallholders, First Resources hopes to build a relationship of mutual trust in order for them to feel confident in sharing information about the challenges they face in meeting new sustainability standards. A strong rapport with suppliers strengthens First Resources’ ability to support them in their sustainability efforts without compromising on its policies.

• Assessing suppliers
• Building on its traceability information and supplier engagement efforts, First Resources assesses its suppliers to make sure their practices are in line with its Policy on Sustainable Palm Oil. Suppliers found to be non-compliant will be given the opportunity to undertake corrective actions within a certain timeline. In line with its policy, First Resources will suspend sourcing from non-compliant suppliers found to be engaged in the development of High Carbon Stock (HCS) forests, High Conservation Value (HCV) areas or peat areas, using of fires during land preparation or in the exploitation of local communities, and who do not take immediate remedial actions. In 2019, First Resources did not find any suppliers in breach of its policy requirements. All new suppliers are also screened, using social and environmental criteria during First Resources’ supplier onboarding process. This process involves the signing of an onboarding form to acknowledge that they will comply with First Resources’ policy requirements, as well as providing their mill or estate information to fulfil First Resources’ traceability process. First Resources will verify the information provided, and companies who cannot meet its requirements will not be onboarded as a new supplier.

• Collaborating with stakeholders
• First Resources acknowledges that getting suppliers on board is not a task it can undertake on its own and, as a result, relies heavily on stakeholder collaboration. External stakeholders may hold better monitoring tools and intelligence to detect potential errant or non-compliant suppliers. In addition to its own assessments, First Resources leverages on external parties to help it identify suppliers that it should further assess and engage with. For example, a non-governmental organisation (NGO) that works to protect the environment, sends to First Resources monthly reports of their deforestation detection. First Resources looks through these to see if any of the highlighted companies are in its supply chain, which require First Resources to undertake follow-up actions.

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

78% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.

7 GRI sustainability disclosures get you started

Any size business can start taking sustainability action

GRI, IEMA, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom  (venue: London School of Economics)

• Exclusive FBRH template to begin reporting from day one
• Identify your most important impacts on the Environment, Economy and People
• Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP. 
• Benchmarking methodology to set you on a path of continuous improvement

See upcoming training dates.
References:

1) This case study is based on published information by First Resources, 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/

Note to First Resources: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.