Keppel is a Singaporean multi-business company providing solutions for sustainable urbanisation that meet the world’s needs for energy, clean environments, quality real estate, connectivity and more. Keppel contracts local and foreign suppliers for its different lines of businesses, and works closely with its suppliers to make a positive impact on their sustainability performance.
This case study is based on the 2018 Sustainability Report by Keppel 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.Tweet This!, and screen 100% of all new suppliers in accordance with ESG (Environmental, Social, and Governance) criteria. In order to promote sustainability among its suppliers Keppel took action to:
- screen new suppliers
- conduct due diligence
- build capabilities
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With this case study you will see:
- Which are the most important impacts (material issues) Keppel has identified;
- How Keppel proceeded with stakeholder engagement, and
- What actions were taken by Keppel to promote sustainability among its suppliers
What are the material issues the company has identified?
In its 2018 Sustainability Report Keppel identified a range of material issues, such as corporate governance, economic sustainability, product excellence, safety & health, environmental performance. Among these, promoting sustainability among its suppliers stands out as a key material issue for Keppel.
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 Keppel engages with:
To identify and prioritise material topics Keppel engaged with its stakeholders through the following channels:
|Stakeholder Group||Method of engagement|
|· Annual employee engagement surveys
· Regular townhalls
· Mentorship programmes
|Customers||· Regular meetings
· Ongoing communications via email and phone
· Regular customer satisfaction surveys
|Governments||· Occasional official visits and meetings
· Industry forums
|Shareholders & Investors
|· Regular conference calls
· Shareholder meetings
· Briefings to retail shareholders
· Facility visits
· Quarterly results webcasts
· Ongoing email and phone communications
|· Regular meetings by project managers and HSE teams with key subcontractors and suppliers
· Regular site visits by management
|Local Communities||· Regular meetings and community outreach initiatives|
In its 2018 Sustainability Report Keppel reports that it took the following actions for promoting sustainability among its suppliers:
- Screening new suppliers
- All Keppel suppliers are qualified in accordance with Keppel’s requisition and purchasing policies, and screened based on ESG criteria. Keppel reviews potential suppliers’ industry reputation, track record, financial performance, security practices and certifications, whereby suppliers with certifications for ISO 9001 quality management system, ISO 14001 environmental management system, OHSAS 18001 occupational health and safety assessment series or equivalent are preferred. All new suppliers that provide Keppel with products and services valued at $200,000 or more per contract or over cumulative purchase orders in the prior calendar year are expected to sign and abide by the Keppel supplier code of conduct, which covers areas pertaining to business conduct, labour practices, safety and health, and environmental management. All Group companies are required to include the acknowledgment and signing of the code, which is available in multiple languages, as part of their supplier selection process. In 2018, 99.8% of qualified suppliers endorsed the code or had their own codes, which met Keppel’s requirements. The remaining 0.2% comprised three suppliers who could not endorse the code. The business unit’s compliance team conducted further due diligence and assessed that the three suppliers were fit to be appointed. Third-party associates of the Group that provide services on behalf of a Group company or engage in business activities on behalf of a Group company are required to abide by Keppel’s rules of business conduct. The rules specify the Group’s policy with regard to ethical conduct and compliance with laws, anti-corruption, gifts and hospitality, and donations and contributions. The Group’s enterprise resource planning initiative for companies in Singapore was enhanced in 2018, with the enhanced system providing procurement managers across the Group with visibility on suppliers that have been qualified or suspended by other business units.
- Conducting due diligence
- Keppel O&M carries out regular audits of resident subcontractors to ensure their adherence to the International Labour Organisation’s declaration on fundamental principles and rights at work and Singapore’s Ministry of Manpower marine sponsorship scheme requirements for the employment of local and foreign employees. As part of the due diligence process, which covers topics such as fair remuneration, living standards and workplace safety, Keppel O&M conducts monthly interviews with subcontract workers on a rotational basis to determine their levels of satisfaction on the subject of worker welfare. The respective subcontractors’ management are required to address any cause for concern. Keppel Land has in place a five-step supply chain management process that covers the whole lifecycle of its project from its initiation and design development stages to subsequent construction and operation stages. For all project sites covered under the scope of Keppel Land’s environmental management system, contractors are required to conduct an impact assessment based on activities at the project site prior to construction. The assessment covers potential negative environmental impacts, including depletion of resources, biodiversity disturbance as well as air, water and noise pollution. Contractors are required to establish and implement appropriate measures to mitigate and/or prevent significant environmental impacts. Keppel Land also conducts regular site visits and internal audits as part of its supplier due diligence process. When lapses are identified, the company’s project team works closely with contractors to implement corrective action plans and preventive measures.
- Building capabilities
- Keppel works closely with its contractors and subcontractors to maintain high safety standards throughout its workforce. Forums and dialogue sessions with contractors are held regularly to ensure alignment in HSE (health, safety and environment) objectives, share experience and communicate Keppel’s expectations regarding performance. Keppel’s business units have incentive programmes that reward and recognise contractors with exemplary HSE performance. Keppel O&M carries out outreach programmes and briefings to subcontractor workers to inform them of their employment rights, and the available channels to report any violation of their rights.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
Disclosure 308-1 New suppliers that were screened using environmental criteria does not correspond to any SDG.
Disclosure 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships does not correspond to any SDG.
Disclosure 414-1 New suppliers that were screened using social criteria corresponds to:
- Sustainable Development Goal (SDG) 5: Achieve gender equality and empower all women and girls
- Business theme: Workplace violence and harassment
- Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
- Business theme: Labor practices in the supply chain
- Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
- Business theme: Workplace violence and harassment
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1) This case study is based on published information by Keppel, 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:
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