Our Inspiration

The ThaiBev Sustainability Strategy

ThaiBev is inspired and guided by the Sufficiency Economy Philosophy (SEP) of His Majesty King Bhumibol Adulyadej, who worked tirelessly to benefit his people and country. ThaiBev is also committed to helping the world achieve the 17 Sustainable Development Goals adopted by the United Nations.

Message from the President and CEO

 

I am pleased to report that ThaiBev’s sustainable development effort is recognized by Dow Jones Sustainable Index (DJSI) in awarding Thai Beverage Public Company Limited as an index component of the Beverage industry in Emerging Market category in 2016. Our management, staff and stakeholders are most honored and encouraged by this sustainability recognition. And we are even more committed now to strive harder in creating and sharing the value of growth for a sustainable world, of which the goal is also in line with United Nation’s sustainable development initiative.

 

Our inspirations for this journey are drawn from our commitment to business excellence, our strong values applied with heart, our pride of being Asian and our desire to give back. Most of all, our sustainability journey is inspired by the example of our late king, His Majesty King Bhumibol Adulyadej of Thailand.

 

His Majesty King Bhumibol Adulyadej, in his reign of 70 years, had devoted his life to help and develop better lives for his people, especially the poor in the rural areas. He worked tirelessly to fulfill the promise he made on his coronation in 1950: “I shall reign with righteousness for the benefits and happiness of the Siamese people.” Over seven decades, His Majesty King Bhumibol Adulyadej fulfilled this promise by creating more than 4,400 sustainable development projects across Thailand. The lessons he learned and the principles
he applied have been distilled into a compelling sustainability strategy known as the Sufficiency Economy Philosophy (SEP).

 

At ThaiBev, we have adopted SEP into our working principles to achieve sustainability, good governance and regional cooperation. We have also placed a special emphasis on supporting the preservation of culture. It is remarkable how much His Majesty King Bhumibol Adulyadej’s SEP has in common with the United Nations’ more recently launched Sustainable Development Goals (SDGs). By committing ourselves to honor His Majesty’s lifelong work, we believe we will also help the world achieve these SDGs.

 

One example of ThaiBev’s leading role in pursuing sustainability is our support and participation in the Thai government’s “Pracharath Policy”, which enables collaborations between the government, private sector, academic, civil society and people sectors. We are proud to be part of this project, with special focus on assisting the rural economy through area-based social enterprise initiatives. In particular, ThaiBev is focused on helping rural communities improve their agricultural products, enhance their agriproduct processing capabilities and strengthen their community-based tourism. We helped the local communities realize their resources and share our experience in helping them develop initiatives to raise their income and improve their competitiveness and capabilities, thereby making the communities become more self-sufficient and independent.

 

Besides our social and community development projects, ThaiBev also conducts and supports numerous activities that advance arts and culture, health, education and sports. All of these endeavors are in line with the principles of SEP and many of the SDGs as well.

 

In the environmental area, ThaiBev has increasingly integrated, adopted and applied our business to the so-called “circular economy”, meaning we are managing our resources with greater productivity through effective water management, by preventing pollution, and recycling and reusing waste materials. ThaiBev is also continually upgrading our technology to improve Supply Chain Management and investment in packaging innovation.

 

As ThaiBev strives to be the “Stable and Sustainable ASEAN Leader in Total Beverages Business” by 2020, we are fully committed to aligning the sustainable development platform of our own Vision 2020 with the principles of SEP, the UN’s SDGs, SGX’s practice note and GRI guidelines, as well as global sustainability trends and innovations to create a powerful, multi-pronged platform that enables both growth and balanced sustainable development. We see this as an effective way to act as both a business and a social enterprise, to succeed together with our local communities, to earn the trust of stakeholders, and to create and share even greater opportunities to make a sustainable world, and to be a truly responsible and sustainable total beverage company.
Thapana Sirivadhanabhakdi
President and CEO

About This Report

Thai Beverage Public Company Limited (“ThaiBev”) has issued an annual Sustainability Report since 2011. This 2016 Sustainability Report is the third issue that has been developed in compliance with the “Core” option of the Global Reporting Initiative G4 Guidelines and covers issues that are material for both ThaiBev and its stakeholders. This report further includes the strategies, guidelines, and measures that are important in driving the Company’s sustainable development practice, complying with ThaiBev’s commitment to achieve the 17 Sustainable Development Goals (SDGs) of the United Nations.

Economic performance such as revenue, expenditure, and tax are referenced from ThaiBev’s 2016 Annual Report. The environmental and social performance reported covers the period from 2013 to 2016, and is presented to ThaiBev’s stakeholders with the aim of demonstrating the changes, improvements, and continuous progress in ThaiBev’s journey towards sustainability.

 

In 2016, ThaiBev revised its fiscal year from January to December, to January to September. The report therefore covers performance over a 9-month period, in accordance with the methodology used in ThaiBev’s 2016 consolidated financial statements and Annual Report, and differs from previous years’ reports (2013-2015) that covered a 12-month period. The scope of this report includes ThaiBev and its subsidiaries in Thailand, and does not include overseas subsidiaries, and associates. Environmental performance was consolidated from 31 factories: 18 distilleries, 3 breweries and 10 non-alcoholic beverage production facilities (3 Oishi factories and 7 Sermsuk factories ).*

 

ThaiBev has published this sustainability report in both Thai and English. The report is also available on www.thaibev.com. Additionally, ThaiBev has engaged ERM CVS, an independent third party, to provide external assurance for selected environmental and social indicators and ensure the accuracy and reliability of the data reported herein.
For any inquiry about ThaiBev’s 2016 Sustainability Report, please contact the Sustainable Development Working Team (SDWT) at info@thaibev.com. Additional comments can be submitted through the form attached to this report. The Working Team would appreciate any input in order to improve the Company’s report in the future.

 

*Scope of this report does not include SPM Foods and Beverages Company Limited.

About ThaiBev

About ThaiBev

Vision

ThaiBev Group’s vision is to be Thailand’s world-class total beverage producer and distributor embodying commercial excellence, continuous product development and premiumisation, as well as professionalism.

 

Mission
ThaiBev’s mission is to build strong mutually beneficial relationships with all stakeholders in every aspect, guided by the following six principles:

  • Offer top quality products to all customer segments
  • Respond professionally to distributors’ demands
  • Grow revenue and profits in a sustainable manner to create value for shareholders and provide favorable returns on investments
  • Be a role model of the highest standards of
    professionalism, corporate governance, and transparency
  • Build a sense of ownership among employees by trusting, empowering, and rewarding them
  • Contribute to society

 

Strategies

  • Growth
  • Diversity
  • Brand
  • Reach
  • Professionalism

 

Background
ThaiBev was established in 2003 to consolidate a number of leading spirits and beer businesses in Thailand belonging to its founding shareholders and other investors. In 2006, ThaiBev registered its listing on the Singapore Exchange (“SGX”). The market cap of ThaiBev is currently US$18 billion (as of 30 September 2016). Subsequently, ThaiBev expanded its business to the non-alcoholic beverage and food sectors to diversify its product portfolio, enhance logistics efficiency, and mitigate business risks. Today, ThaiBev is not only Thailand’s leading beverage producer, but also one of Asia’s largest beverage producers. ThaiBev’s business consists of four segments – spirits, beer, non-alcoholic beverages, and food.

 

Product or Services
ThaiBev has 127 subsidiaries (as of 30 September 2016), including 18 distilleries, 3 breweries, and 11 non-alcohol beverage production facilities. The Group has an extensive distribution network covering 400,000 points of sales in Thailand. ThaiBev’s most recognized spirits brands include Ruang Khao, SangSom, Mekhong, Hong Thong, and Blend 285. Chang Beer, the Group’s signature beer, is very popular among Thai beer drinkers. For non-alcoholic beverages, ThaiBev’s leading brands include Oishi green tea, est, and Crystal drinking water. ThaiBev has an international presence in over 90 countries and engages in several distillery operations overseas; it has 5 production facilities in Scotland, which are famous for the production of single malt scotch whiskies such as Balblair, Old Pulteney, and Speyburn. ThaiBev also owns 1 distillery in China, which produces a famous Chinese spirit branded Yulinquan.

 

 

Note:
Sales revenue and Net profit cover a 9-month period.

Economic Performance

 

 

 

 

 

Note:

 

  • Economic value generated and distributed is defined by Income (refer to G4-EC1: Revenues), Cost of Sales (refer to G4-EC1: Operating Costs), Employee Benefit Expenses (refer to G4-EC1: Employee Wages and Benefits), Income Tax Expenses (refer to G4-EC1: Payment to Government), and Annual Dividend (refer to G4-EC1: Payment to Providers of Capital). The scope of this report is limited to operations in Thailand. However, the Economic performance section refers to ThaiBev and subsidiaries and is consistent with the 2016 Annual Report.
  • Employee benefit expenses, which is part of Cost of Sales, was 2,665.15 million baht during the period of Jan – Sep 2016, and was 3,412 million baht during the period of Jan – Dec 2015. The excise tax paid to the government is also part of Cost of Sales.
  • Geographic income for the Thai Beverage Group according to ThaiBev’s financial statements for the period ended 30 September 2016, Jan-Sep 2016.
  • Annual dividend to ThaiBev’s shareholders.
ThaiBev’s Value Chain

ThaiBev firmly believes that delivering high quality and valuable products to consumers while maintaining responsibility towards stakeholders is the heart of a sustainable supply chain. This starts from the very beginning of the value chain with good governance in management, which is applied to all stages from Sourcing, Production, Distribution, Sales and Route to Market, all the way to Post-Consumer Packaging Management.

 

ThaiBev has established guidelines to ensure that the company’s value chain remains sustainable, while engaging with all stakeholders to ensure mutual long-term growth and sustainable development.

 

 

 

 

1.  Sourcing
ThaiBev focuses on sourcing quality raw materials and the continuous development of its suppliers. The company’s supplier selection process assigns high importance to suppliers’ environmental and social performance, and also prioritizes capacity-building for procurement staff, encouraging them to adhere to sustainable purchasing standards and to practice good business ethics in all aspects of their work.

 

2. Production
ThaiBev adopts a standardized and safe production process that complies with all relevant standards, in order to deliver high quality products to consumers. The production process not only optimizes environmental resource use, such as water and energy, but also considers the environmental and social impacts of waste, effluents, and emissions from all production stages. ThaiBev closely engages with local communities, particularly those living in the vicinity of ThaiBev’s factories and operations, to foster strong relationships, cooperation, and effective communication.

 

3. Distribution
ThaiBev’s fully integrated and extensive distribution system ensures that the company’s products are efficiently distributed to all consumers. Throughout the distribution process, ThaiBev focuses on sustainably mitigating any potential environmental and social impacts from transportation, including by managing energy use, fuel consumption, pollution, as well as personnel, processes, and community safety. These measures ensure that ThaiBev can effectively control and manage all impacts from its operations.

 

4. Marketing and Sales
ThaiBev delivers products to consumers through efficient distribution and production channels, and emphasizes responsible marketing and sales practices throughout nationwide. ThaiBev takes active steps to regularly engage consumers and customers through various activities, and gathers input from both consumers and customers in order to improve marketing practices and move towards sustainable growth.

 

5. Post-Consumer Packaging Management
ThaiBev strives to minimize the impact of post-consumer waste on the environment, society, and stakeholders from its packaging and bottles by conducting research and development to deliver innovative and environmentally-friendly packaging and labelling, conducting carbon footprint assessments, and applying the 3Rs principle – Reduce, Reuse, Recycle.

ThaiBev’s Sustainability Approach

Sustainability Strategy

ThaiBev’s sustainability approach is inspired by and based on the Sufficiency Economy Philosophy (SEP) of His Majesty King Bhumibol Adulyadej of Thailand and on the United Nations’ Sustainable Development Goals (SDGs). ThaiBev believes that such an approach is essential in guiding it towards growth in knowledge and experience, and enabling ThaiBev to share the value of this growth with its stakeholders and society as a whole. SEP, as a decision-making framework, emphasizes three guiding principles: Moderation, Reasonableness, and Prudence. According to His Majesty King Bhumibol Adulyadej, if these principles are applied with Knowledge and Virtue, they will help lead one’s business to sustainability and success.

 

 

As a whole, the application of SEP will lead to balanced progress across the four dimensions of life: Economic, Social, Environmental, and Cultural. Through its sustainability strategy, ThaiBev is committed to using SEP in its own decision-making across all aspects of its business operations, and to achieving positive outcomes in those four dimensions of life. As ThaiBev pursues its journey and gains experience along the way, ThaiBev believes it can create limitless
opportunities for the company and the world.

 

 

In addition to SEP, ThaiBev has fully embraced the aspirational 17 SDGs of the United Nations’ 2030 Agenda for Sustainable Development. The SDGs are helping ThaiBev set targets to improve the efficiency of its operations in many areas. ThaiBev sees SEP and the SDGs as consistent with each other, providing both a local and international basis for the company to approach sustainable development. Both SEP and the SDGs highlight the need to use knowledge, experience, and creativity in the name of creating shared prosperity and balanced progress. Both recognize the importance of protecting the environment and treating human resources with sensitivity and compassion. Both believe in the positive consequences of economic growth, but only if such growth is reasonable and does not court excessive risk.
SEP and the SDGs are also consistent with ThaiBev’s Vision 2020 to be the “Stable and Sustainable ASEAN leader” in the beverage industry. ThaiBev focuses on building relationships and participation from stakeholders in order for them to sustainably grow as ThaiBev’s business grows.
ThaiBev believes that by basing its sustainability strategy on SEP and the 17 SDGs the company, its entire value chain, the environment, society, and the countries in which it operates will benefit and achieve more balanced progress.

 

ThaiBev’s Corporate Sustainability Structure

 

The President and CEO established ThaiBev’s Corporate Sustainability Development Committee on 12 May 2014. The Committee consists of 12 high-level executives, namely the Chief Executive Officer, Director and Senior Executive Vice President, Executive Vice President, Senior Vice President, and high-level executives of each business unit. The CEO serves as the Chairman while the Corporate Sustainability Development Committee is responsible for reviewing, planning, developing policies, and ensuring that the sustainability management operations are consistent with the company’s direction.
The Committee also established the Sustainability Development Working Team to tackle the issues of sustainability under the Center of Excellence, which comprises experts from all business groups, including the Spirit Product Group, Beer Product Group, Non-Alcoholic Beverage Product Group, Supply Chain Management, and the Corporate Function Committee (such as the Office of the President, Office of Accounting, Office of Treasury, Office of Corporate Communication, Office of Corporate Secretariat, Office of External Affairs, Office of Legal Affairs, Office of Human Capital, Office of Asset Management Services, Center of Excellence, and Office of Information Technology). The Staff are rotated on a two-year basis in order to generate greater learning opportunities and instill the values of sustainability throughout the organization.

Engaging with ThaiBev’s Stakeholders

Stakeholders of ThaiBev and its subsidiaries are categorized into two brackets:

  1. Stakeholders who have an impact on ThaiBev and its subsidiaries
  2. Stakeholders who rely on the business operations of ThaiBev and its subsidiaries

 

ThaiBev undertakes regular internal reviews to identify all stakeholders, which comprise eight groups:

 

 

ThaiBev has involved stakeholders by receiving their feedback and comments on the sustainability issues that impact them, and utilizes this information in the stakeholder participation process.

Stakeholder Engagement and Survey Results 2015-2016

ThaiBev and its subsidiaries recognize the importance of all of its stakeholder groups. The company has therefore integrated the concerns and interests of all stakeholders under three different aspects – economic, social, and environmental – into the continuous improvement of its stakeholder engagement and collaboration processes.

 

Stakeholder Engagement Channels Issues of Stakeholder Interest and Concern ThaiBev’s Response to Stakeholders
Employees

  • News (ThaiBev E-News)
  • Radio (ThaiBev Radio)
  • Annual ThaiBev Magazine
  • Messaging (SMS)
  • Line Mobile Application
  • ThaiBev Intranet
  • Annual Meetings (Annual Executive Meeting, Labor Practice Committee Meeting, Employee Benefits Committee Meeting, Occupational Health and Safety Committee Meeting, Trade Union Meeting, and Functional Meeting)
  • Suggestion Box
  • Annual activities (ThaiBev Sports Day, Country Songs Singing Contest, Employee Club Activities from 11 Clubs)
  • Employee Roadshow (Core Values Roadshow, Vision 2020 Roadshow)
  • Annual Surveys (Annual Materiality Survey, Employee Engagement Survey)
  • Increasing internal efficiency to reduce costs
  • Social and community development projects that deliver social benefits
  • Employee skills training and education
  • Safety at work
  • Flexible working arrangements
  • New products developed according to consumer needs
  • Availability of employee benefits
For more information, please refer to the following chapters:

  • Limitless Opportunities for Employees
  • Occupational Health and Safety
  • Creating Value for Society
  • Innovation
 Suppliers

  •  Annual Audit (Approved Vendor List)
  • Supplier Meetings
  • Annual Sustainability Survey
  •  Robust procurement system
  • Social and environmental responsibility
For more information, please refer to the following chapters:

  • Responsible Sourcing
  • Creating Value for Society

 

Customers

  • Annual Conference and Exhibition (ThaiBev Expo 2016)
  • Annual Customer Meeting
  • Customer Training and Development Sessions
  • Business Development Activities
  • Annual Business Review Activities
  • Annual Customer Factory Visit
  • Annual Materiality Survey
  • Consumer health and safety
  • Responsibility to consumers
  • Involvement in business planning
  • Clear business policies
  • Training to enhance skills and knowledge
  • Transparency in business operations
  • Flexibility in marketing to meet market demands
For more information, please refer to the following chapters:

  • Governance, Risk, and Compliance
  • Responsible Consumption
  • Limitless Opportunities for Employees
Consumers

  • Creating a brand experience through outings, and marketing and sales promotion activities
  • Brand communication through mass media communications, including television, radio, advertisements and billboards, and digital screens
  • Social media interactions between brands and consumers
  • Annual Materiality Survey
  • Product quality and safety
  • Responsibility for consumer health
  • Responsible servicing and product presentation
  • Environmental management responsibility
  • Environmentally-friendly packaging
  • Transparency in business operations
  • Social and community development projects that deliver social benefits
  • Fair and appropriate product prices
For more information, please refer to the following chapters:

  • Governance, Risk, and Compliance
  • Responsible Consumption
  • Consumer Health, Safety, and Wellbeing
  • Creating Value for Society
Investors

  • Annual Shareholders Meeting
  • Face-to-face meetings and conference calls
  • Annual Factory Visits
  • Investor Roadshows
  • Annual Materiality Survey
  • Transparency in information disclosure
  • Business performance
  • Product management and development
  • Disclosure of relevant business information to shareholders and investors
For more information, please refer to the following chapters:

  • Governance, Risk, and Compliance
  • Responsible Consumption
  • Consumer Health, Safety, and Wellbeing
  • Creating Value for Society
  • Innovation
Communities

  • Community activities in areas surrounding factories
  • Interviews with community representatives
  • Annual meetings with community representatives
  • Surveys (Annual Materiality Survey, Community Satisfaction Survey)
  • Promoting community education
  • Job creation and promotion in communities
  • Promoting good health and quality of life for communities
  • Community collaborations to combat drug-use
  • Skills development in sports, music, and arts
  • Stimulating local economies
  • Managing dust around factories
  • Travel and communication in areas surrounding factories
  • Disclosing information and providing channels for community engagement
  • Child labor and human rights
For more information, please refer to the following chapters:

  • Creating Value for Society
  • Limitless Opportunities for Employees
Regulators

  • Collaboration
  • Annual Materiality Survey
  • Tax Transparency
  • Ethical sales and advertising
  • Social and environmental responsibility
  • Fair and legal labor practices
  • Safety at Work
  • Human Rights
  • Compliance to environmental laws and regulations
  • Water Management and Water Footprint assessments
  • Waste Management
  • Environmentally-friendly labelling and packaging
  • Greenhouse gas emissions and air pollution
For more information, please refer to the following chapters:

  • Governance, Risk, and Compliance
  • Creating Value for Society
  • Limitless Opportunities for Employees
  • Water Stewardship
  • Effluents and Waste
  • Energy and Climate Change
  • Responsible Consumption
Non-Governmental Organizations (NGOs)

  • Annual Materiality Survey
  • Consumer health and safety
  • Social Responsibility
  • Compliance
For more information, please refer to the following chapters:

  • Occupational Health and Safety
  • Consumer Health, Safety, and Wellbeing
  • Governance, Risk, and Compliance
  • Creating Value for Society
Materiality Assessment Process

 

Step 1: Issue identification
Implications to Business: ThaiBev selected the sustainability issues that are consistent with its business operations, starting from global megatrends and focusing on topics that are relevant to ThaiBev in the following categories:

  • Consistency between the megatrends and ThaiBev’s future strategies and missions
  • Consistency between the megatrends and ThaiBev’s material issues of 2014 and 2015
  • Consistency between the megatrends and international standards such as the Sustainability Accounting Standards Board (SASB), the Global Reporting Initiative (GRI), and the Dow Jones Sustainability Indices (DJSI)
  • Consistency between the megatrends and industry trends in the global food and beverage industry, as well as the National Social and Economic Development Plan No. 12, and the UN’s Sustainable Development Goals

 

 

ThaiBev selected the issues with relevant experts and external sustainability experts in order to correctly identify the issues that are most relevant to ThaiBev’s strategy. As a result, 17 topics were deemed to be most important to ThaiBev in the present and future.

 

Economic

  • Sustainable Sourcing
  • Innovation
  • Packaging
  • Governance and Compliance
  • Responsible Consumption
Social

  • Health and Nutrition
  • Talent Management
  • Labor Practices
  • Human Rights
  • Occupational Health and Safety
  • Consumer Health and Safety
  • Creating Value for Society
Environmental

  • Water Stewardship
  • Energy and Climate Change
  • Effluents and Waste
  • Food Waste Management
  • Biodiversity
Cultural

  • Creating Value for Society (in terms of Art and Culture)

 

Implications to Stakeholders: In 2016, ThaiBev undertook a stakeholder survey of all eight groups related to the 17 sustainability issues. The survey results, which covered economic, social, and environmental dimensions, were used to prioritize these issues, and were also considered in comparison with ThaiBev’s 2014 and 2015 material issues. Additionally, the Company conducted interviews with international sustainability experts in order to receive comments, observations, and suggestions, which were utilized in the development of the most appropriate sustainability management frameworks.

 

 

“Water is a sustainability issue of global importance. Food and beverages manufacturing companies must demonstrate a determination to tackle this issue from the very beginning of their supply chain through to their customer. Additionally, ThaiBev, as an industry leader, can be a part of the global sustainable development effort by integrating the principles of environmental, social, and economic sustainability into the company’s strategies and by cooperating with its own and other sectors to generate positive effects on society and the environment.”

Ruth Mathews
Executive Director
Water Footprint Network

 

 

 

“Businesses such as ThaiBev have a critical role in delivering sustainability. Through the Sustainable Development Goals, governments around the world have agreed a strategy for a fair, prosperous, and sustainable society. By proactively aligning the strategy to these Goals, companies can generate new commercial value and mitigate risk while contributing to a vibrant and zero carbon society.”

Paul Begley
Programme Director
Cambridge Institute for Sustainability Leadership

 

 

 

Step 2: Issue Prioritization

The chosen 17 sustainability issues were prioritized using two categories: sustainability issues affecting the stakeholders and sustainability issues affecting the business in 5 to 10 years, which includes:

  1. Impact to Business (costs and income)
  2. Impact to Reputation

The assessment of the sustainability issues is consistent with ThaiBev’s risk management criteria.

 

ThaiBev’s Risk Management Criteria

 

 

The Sustainable Development Working Team and experts from relevant agencies held a workshop with the Corporate Sustainability Development Committee to seek endorsement on the 17 material issues of ThaiBev and its subsidiaries, which were selected from the materiality assessment process.

 

ThaiBev’s Materiality Matrix

 

 

Step 3: Establishment of the Reporting Boundaries
ThaiBev developed the reporting framework for the 17 material issues and gathered information from relevant stakeholders as follows:

 

 

Step 4: Verification and Continuous Development
ThaiBev reviews the assessment process of the material issues annually. The Corporate Sustainability Development Committee reviewed and endorsed the report, as well as the assessment results in conjunction with accredited independent organizations. The process was constructed to ensure that the finished report is comprehensive and transparent. The Committee also provides recommendations for future assessment processes to instill confidence in ThaiBev’s sustainability operations.