Case study: How Thai Union promotes supply chain responsibility

What are the material issues the company has identified?

In its 2017 Sustainability Report Thai Union identified a range of material issues, such as ocean plastic, human rights and ethical labour practices, climate change and environmental protection, transparency and governance. Among these, promoting supply chain responsibility stands out as a key material issue for Thai Union.

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 organization should identify its stakeholders, and explain how it has responded to their reasonable expectations.”

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 Thai Union engages with:   

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics Thai Union conducted face-to-face meetings with key stakeholders, who included governments, customers, consumers, non-governmental organisations (NGOs) and civil society, along with staff and research institutions.

What actions were taken by Thai Union to promote supply chain responsibility?

In its 2017 Sustainability Report Thai Union reports that it took the following actions for promoting supply chain responsibility:

• Promoting digital traceability
• Thai Union’s custom-built traceability system, Trax, provides the company with digital data management tools to not only run its global operations efficiently, but also to facilitate the functionality of can trackers on its brands’ products around the globe. In 2017, Trax was expanded to cover more Thai Union facilities and supply chains, as the Trax digital mapping system provides better visibility into Thai Union’s supply chain, helping Thai Union carry out an effective risk analysis.

• Conducting supplier assessments
• Since launching its updated Business Ethics and Labor Code of Conduct in 2015, Thai Union started formalising a supplier approval process. This helps ensure Thai Union procures from qualified suppliers that meet its procurement criteria, including environmental, social, legal compliance and governance aspects. Thai Union evaluates suppliers against its procurement criteria at all stages of the procurement cycle, including prospective and existing suppliers. All prospective and contracted suppliers must acknowledge and sign Thai Union’s Business Ethics and Labor Code of Conduct and, in Thailand, prospective suppliers will be pre-assessed to determine whether they meet Thai Union’s requirements, by completing a one-time Self-Assessment Questionnaire (SAQ). Those that pass the SAQ are confirmed as approved suppliers, and procurement can begin. In addition, a local purchasing committee will evaluate suppliers and determine their ratings on a rolling basis. Suppliers identified as high-risk – especially those associated with environmental, social and governance issues – will receive a third-party audit, to verify their ability to meet Thai Union’s Business Ethics and Labor Code of Conduct. High-risk suppliers that do not pass the audit have an opportunity to undergo a supplier performance improvement programme, to meet Thai Union’s compliance requirements. If, at the end of the programme, the gaps are closed, procurement can resume, but if the gaps remain, procurement is discontinued. All Thai Union contracted suppliers globally are subject to internal or third-party audits, at any point during the procurement cycle – not just the ones with a high-risk profile. Thai Union randomly selects a percentage of its suppliers to confirm their capacity to strictly follow its Business Ethics and Labor Code of Conduct, to help avoid non-compliance. Additionally, in Thailand in 2017, SGS trained Thai Union’s auditors on social compliance with its standards and Thai labour laws, and provided announced social audits for 10 percent of Thai Union’s non-fish procurement supply base.

• Enhancing social compliance
• In 2017 Thai Union embarked on a large-scale programme to audit, improve and enhance social compliance within the shrimp supply chain in Thailand. The project will complement the increase in certified farms by raising the social standards of non-certified farms to Best Aquaculture Practice (BAP) equivalence, with a focus on compliance with both local and importing-country regulatory requirements. Rolled out digitally in 2018, the programme will improve not only Thai Union’s supply chain but also the lives of farmers and fishers working in the Thai shrimp supply chain.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standards addressed in this case are:

1) Disclosure 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor

2) Disclosure 414-1 New suppliers that were screened using social criteria

Disclosure 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor corresponds to:

• Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
• Business theme: Elimination of forced or compulsory labor

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

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

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References:

1) This case study is based on published information by Thai Union, 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) http://www.fbrh.co.uk/en/global-reporting-initiative-gri-g4-guidelines-download-page

3) https://g4.globalreporting.org/Pages/default.aspx

4) https://www.globalreporting.org/standards/gri-standards-download-center/

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