The case for CSR/ Sustainability Reporting Done Responsibly


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Home / case studies / Case study: How PTTEP promotes sustainability among its vendors and suppliers

Case study: How PTTEP promotes sustainability among its vendors and suppliers

PTTEP is a national petroleum exploration and production company dedicated to providing a sustainable petroleum supply to Thailand and the countries where it operates as well as to bringing in foreign exchange earnings to the country. PTTEP has a comprehensive supply chain management framework that begins with the initial process of vendor and supplier selection  Tweet This!, to supplier risk management on Environmental, Social and Governance (ESG) issues, and supplier relationship and capacity building.

This case study is based on the 2019 Sustainability Report by PTTEP 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.

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For PTTEP responsible supply chain management not only prevents negative impacts on the business and the company’s reputation, but also helps to improve work efficiency, transparency, and create shared values for both PTTEP and its suppliers. In order to promote sustainability among its vendors and suppliers PTTEP took action to:

  • implement a Code of Conduct
  • audit suppliers

What are the material issues the company has identified? 

In its 2019 Sustainability Report PTTEP identified a range of material issues, such as governance, risk management and compliance, increasing petroleum reserves, lower carbon future, contributing to community and society. Among these, promoting sustainability among its vendors and suppliers stands out as a key material issue for PTTEP.

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 PTTEP engages with: 

Stakeholder Group                Method of engagement
Government agencies and public organisations

 

 

·      Case-by-case meetings

·      Monthly meetings with government agencies and local authorities

·      Reporting to government agencies

·      Participation in government networks

·      Tripartite Committee Meeting

·      Emergency plan exercise

·      Whistleblowing through CG hotline

Vendors and suppliers

 

·      Conferences, trainings, and seminars with vendors and suppliers

·      Whistleblowing through CG hotline

Employees

 

 

·      “CEO meets Employees” sessions

·      Regular electronic and other online communication

·      Whistleblowing through CG hotline

Shareholders, institutional investors, and analysts

 

 

·      Annual General Shareholders’ Meeting

·      Analyst meetings

·      Shareholder and investor roadshows

·      Quarterly journals

·      Visits by shareholders to company operations sites

·      Whistleblowing through CG hotline

Communities and society

 

·      Monthly meetings with local associations and organisations

·      Community field visits

·      Public hearings

·      Philanthropic activities

·      Stakeholder commitment survey

·      Emergency plan exercise

·      Whistleblowing through organisational representatives and CG hotline

Independent organisations, industrial associations and press & media

 

·      PTTEP membership of various organisations

·      Press releases and press conferences

·      Press trip to showcase company activities

·      Online social media

·      Websites

·      Whistleblowing through CG hotline

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics PTTEP engaged with its stakeholders through a stakeholder engagement survey to solicit and gather inputs from all stakeholders.

What actions were taken by PTTEP to promote sustainability among its vendors and suppliers?

In its 2019 Sustainability Report PTTEP reports that it took the following actions for promoting sustainability among its vendors and suppliers:

  • Implementing a Code of Conduct
  • PTTEP has put in place the PTTEP Vendor Sustainable Code of Conduct which governs the conduct of vendors on issues relating to their business operations and ethics, human rights, occupational health and safety, as well as environmental expectations. This, under PTTEP’s new vision of becoming an “Energy Partner of Choice through Competitive Performance and Innovation for Long-term Value Creation”, enables PTTEP to achieve sustainable values for all stakeholders, and reduce the risks associated with PTTEP’s procurement and contracting activities. All suppliers also understand and accept the PTTEP Vendor Sustainable Code of Conduct.
  • Auditing suppliers
  • PTTEP has established supplier management and audit measures to make sure that suppliers are complying with international requirements, for instance, the American Petroleum Institute (API) standard for Oil Country Tubular Goods (OCTG), the Oil Companies International Marine Forum – Offshore Vessel Inspection Database (OCIMF-OVID) standard for marine vessel service providers, and the Good Manufacturing Practice (GMP) standard for food and catering service providers. PTTEP’s requirements and the Vendor Sustainable Code of Conduct are communicated through an online assessment questionnaire (Vendor Management System) during the vendor pre-qualification process to let vendors respond to required standards prior to signing of contracts with PTTEP. Several other issues also need to be taken into account, including an assessment of the capabilities of the suppliers’ production in maintaining the quality of products and services, and their adherence to the Vendor Sustainable Code of Conduct and improvement in the sustainability capability in their respective organisations. Examples of supplier audit practices include Environmental, Social and Governance (ESG) On-site Audit and Key Supplier Site Visits. PTTEP conducted on-site audits with 13 suppliers in 2019.

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:

 

80% 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.



FBRH GRI Standards Certified & IEMA recognised Sustainability Course | Venue: London LSE

By registering for the next 2-day FBRH GRI Standards Certified & IEMA recognised course you will be taking the first step in gaining the many benefits of sustainability reporting.

Most importantly, you will gain the knowledge to use the GRI Standards, project manage your own first-class sustainability report and:

  • Identify your most important impacts on the Environment, Economy and Society
  • Begin taking solid, focused, all-round sustainability action ASAP

 

References:

1) This case study is based on published information by PTTEP, 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 PTTEP: 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.