Case study: How GC promotes sustainability across its supply chain
GC is a leading global integrated petrochemical and chemical producer focused on business expansion to performance chemical/specialty, green business, and increasing investment in other countries. GC is resolute on managing its supply chain efficiently, in support of its continuous efforts to enhance potential and boost investment according to its growth strategy.
This case study is based on the 2019 Integrated Sustainability Report by GC 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.
Abstract
As a leader in chemical business, GC seeks to promote green procurement, or the procurement of environmentally friendly products and services, in addition to its general procurement criteria Tweet This!, in order to build trust and gain acceptance from customers as well as create shared value for consumers and society. In order to promote sustainability across its supply chain GC took action to:
- implement a Supplier Code of Conduct
- audit suppliers
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With this case study you will see:
- Which are the most important impacts (material issues) GC has identified;
- How GC proceeded with stakeholder engagement, and
- What actions were taken by GC to promote sustainability across its supply chain
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What are the material issues the company has identified?
In its 2019 Integrated Sustainability Report GC identified a range of material issues, such as energy management and climate, product stewardship, occupational health and safety, eco-efficiency, human capital development. Among these, promoting sustainability across its supply chain stands out as a key material issue for GC.
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 GC engages with:
To identify and prioritise material topics GC engaged with its stakeholders through the following channels:
| Stakeholder Group | Method of engagement |
| Shareholder | · Annual General Meeting once year · Annual Report / Integrated Sustainability Report · Company visit by shareholders once a year · Shareholder satisfaction survey once a year · Whistleblower channel · Contact through the company secretary |
| Business Partner
| · Annual supplier meeting and annual customer meeting once a year · Monthly meeting with suppliers · Supplier registration · Customer Solution Centre (CSC) · Customer satisfaction survey once a year · Various media channels, such as newsletters, magazines, and social media · Joint CSR activities 2 times per year · Quarterly analyst meeting · Whistleblower channel · Contact through company website |
| Community, Society and the Environment
| · Community visit 2,011 times in 2019 · 414 CSR activities in 2019 · Community satisfaction survey once a year · Join the government network · Communication activities with media through all media channels · Company visit by media · Supporting and participating in media’s activities · Whistleblower channel · Contact through company website |
| Employee | · Various communication channels and company’s internal online system · CEO townhalls, quarterly · Employee satisfaction and engagement survey once a year · Whistleblower channel · Contact through company website |
What actions were taken by GC to promote sustainability across its supply chain?
In its 2019 Integrated Sustainability Report GC reports that it took the following actions for promoting sustainability across its supply:
- Implementing a Supplier Code of Conduct
- Throughout the years, GC has continuously improved its Supplier Code of Conduct and encouraged strict compliance from suppliers. GC also partnered with suppliers to develop their capacities that are consistent with supporting the company’s business expansion and maintaining competitiveness. Key issues on which GC places importance in the operation of suppliers include Human Rights and Labour Rights, Good Governance and Business Ethics, Occupational Health and Safety, Environmental Management, and Social Responsibility. Moreover, GC has established a supplier risk management system to verify the qualifications of potential suppliers. The performance of suppliers is evaluated annually through the yearly performance evaluation, which is conducted by GC and the Supplier ESG (environmental, social and governance) Audit on 1st Tier Critical Suppliers, which is conducted by an external party. In 2019, GC registered a total of 274 new suppliers, all of whom acknowledged and conformed to the Supplier Code of Conduct. To encourage and supervise all new suppliers to conform to the Supplier Code of Conduct, GC communicated the Supplier Code of Conduct to new producers, raw material suppliers and service providers during the process of vendor registration. GC has also put in place a comprehensive supplier risk management system in parallel with the supplier potential audit and supplier performance monitoring, that covers ESG aspects annually.
- Auditing suppliers
- GC regularly evaluates the ESG performance of its 1st Tier Critical Suppliers. In 2019, three 1st Tier Critical Suppliers, one feedstock supplier and two non-feedstock suppliers were audited. The audit revealed that all three suppliers possessed good ESG performance with no violations of labour rights or human rights. Additionally, GC continuously deployed a green procurement policy to reduce environmental impacts throughout its supply chain. The green procurement policy is deployed in suppliers’ processes, namely production, transportation, and end-of-life waste management.
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 GC, 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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