Case study: How TVO promotes sustainable procurement
Established in 1985, and registered in the Stock Exchange of Thailand in 1990, TVO (Thai Vegetable Oil) is the manufacturer and distributor of edible oil under the “Angoon” brand and raw material from soybean meal under the “TVO” brand. TVO believes that sustainable success must consider environmental, social, and governance issues (ESGs) by managing opportunities and risks that cover all dimensions of business operations, including its supply chain.
This case study is based on the 2021 Sustainability Report by TVO, prepared in accordance with the GRI Standards, 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
Promoting sustainability principles across its supply chain helps TVO ensure long-term value creation with its suppliers Tweet This! and increase its competitive advantage. In order to promote sustainable procurement TVO took action to:
- implement a Supplier Code of Conduct
- carry out economic, social and environmental risk assessments
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With this case study you will see:
- Which are the most important impacts (material issues) TVO has identified;
- How TVO proceeded with stakeholder engagement, and
- What actions were taken by TVO to promote sustainable procurement
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What are the material issues the company has identified?
In its 2021 Sustainability Report TVO identified a range of material issues, such as risk and crisis management, corporate governance and business ethics, safety and occupational health, business performance and growth capability. Among these, promoting sustainable procurement stands out as a key material issue for TVO.
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 s 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 TVO engages with:
| Stakeholder Group | Method of engagement |
| Employees
| · Internal communication (Intranet and E-mail) · Opinion box · Meeting of the welfare committee in the workplace · Team Building Activities · Channels for whistleblowing |
| Customers and Consumers
| · Meetings and discussions · Seminar training · Education and relation activities · Knowledge communication via social media (www.facebook. com/AngoonHeartClub) · Satisfaction survey · Channels for recommendations or complaints |
| Suppliers
| · Annual Meeting · Conference Meeting · Channels for recommendations or complaints |
| Shareholders | · Annual General Meeting of Shareholders · Analyst meeting quarterly (4 times) · Opportunity Day, financial performance 2020 organised by The Stock Exchange of Thailand · Meetings with institutional analysts and analysts (17 times) · Meeting with institutional investors at TISCO Exclusive Talk 2021 organised by TISCO Securities Co., Ltd. · Meeting with institutional investors at the Finansia Online investment conference organised by Finansia Securities PCL · Meeting with institutional investors at the Thailand Corporate Virtual Conference Event: CLSA Thailand Access Day organised by CLSA Securities (Thailand) Co., Ltd. · Conference call (virtual meeting) in Commodities Theme organised by Maybank Kim Eng Securities (Thailand) PCL · Providing information and meeting with the media throughout the year (3 times) · Channels for recommendations or complaints · Channels for whistleblowing |
| Community & Society | · The community relations team visits and listens to suggestions and complaints · Meetings with community leaders and government agencies · Participation in preserving local cultural traditions · Channels for recommendations or complaints |
| Competitors | · Channels for recommendations or complaints |
| Government agencies | · Meeting and seminars supporting · Participation in government projects |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics TVO engaged with its stakeholders through meetings, dialogues, trainings, seminars and questionnaires.
What actions were taken by TVO to promote sustainable procurement?
In its 2021 Sustainability Report TVO reports that it took the following actions for promoting sustainable procurement:
- Implementing a Supplier Code of Conduct
- TVO communicates with domestic and international suppliers to ensure their acknowledgment of the “Supplier Code of Conduct”, which covers human rights, labour, environment, and anti-corruption issues. The Code includes respecting, complying with the law and related regulations as a guideline for the business cooperation between both parties. It also helps to make sure that the business processes of TVO and suppliers are in line with sustainable development guidelines. Additionally, in 2021, TVO adjusted a new supplier registration document by adding some issues related to ESG, such as employment and labour practices covering Child Labour, Forced Labour, Safety, Occupational Health and Environmental Management, Good Corporate Governance, Anti-Corruption, and other systems related to, for example, the environment or safety. TVO delivered these document to all new suppliers through a self-declaration process. TVO will gradually review the existing suppliers every 2 years, to ensure that this is part of a comprehensive assessment approach to both ESG and human rights issues related to its suppliers.
- Carrying out economic, social and environmental risk assessments
- Predicting the environmental factors that may affect raw material procurement, such as the impact of COVID-19 on cargo transportation, change of seasons, harvest time, quality and price, TVO brings in the process of the supplier’s sustainability risk assessment economically, socially, and environmentally into selecting reliable suppliers. The selection process ensures that suppliers are certified on the traceability of the raw materials obtained in line with good governance principles. For example, do not negatively impact society and the environment, do not infringe on forests, do not use child labour, violate human rights regulations, etc.
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:
- 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:
This case study is based on published information by TVO, 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 following link:
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