ThaiBev Sustainability

Supply Chain Management	Sustainable Supply Chain Management Governance	Procurement Landscape
Supplier Screening	Supplier Assessment	Capacity Building Program in Supply Chain Management

In ensuring that all products and services are sourced using standardized and environmentally and socially responsible procurement processes throughout the value chain, ThaiBev enforces sustainable sourcing policies and upholds the highest procurement standards, while pursuing high-quality service in delivery, in addition to supplier assessment processes and supplier engagement activities. ThaiBev has developed strategies and systems to manage its supply chain and ensure business continuity, and to avoid negative economic, social and environmental impacts.

ThaiBev’s ESG program in supply chain management is structured with formalized framework and is governed by supply chain management strategy and sustainable sourcing policies and guidelines. ESG considerations are fully integrated into procurement, in line with the ISO 20400 Sustainable Procurement Guideline.

Click here to view ThaiBev’s Supply Chain Management Framework

Oversight of Sustainable Supply Chain Management Program

ThaiBev’s Sustainable Supply Chain Management Structure

Role	Responsibilities	Meeting Frequency
Board of Director (BoD)	Oversee ThaiBev’s procurement and sustainable supply chain management. Make decision and approve ThaiBev’s key raw material procurement and sustainable supply chain management-related issues upon receiving report from the GPC.	Quarterly basis
Group Procurement Committee (GPC)	Design ThaiBev's supply chain management strategy consists of five pillars: visibility, synergy, integrated risk management, centralized management, and standardization. Plan the raw material purchases of the companies in the plant groups aligned with the production plan and prevent procurement risks that may affect the production process of the companies in the plant group. Determine the purchase process and quality of raw materials by integrating sustainability factors into all aspects of our procurement process and requiring suppliers to comply with the Supplier Code of Practice and undergo strict supplier screening, which includes environmental, social, and governance (ESG) criteria and quality assurance processes. Selects quality raw materials for our productions through a socially and environmentally responsible procurement process in line with top global standards. Report the approval of the purchase of raw material to the Executive Committee on a quarterly basis.	Quarterly basis
President and CEO	Oversee ThaiBev's supply chain management strategy implementation and monitor the progress of supply chain management-related goals and targets. Assign responsibilities within ThaiBev functions to implement ThaiBev's supply chain management strategy.	Quarterly basis
Group Procurement Working Team	Execute the procurement operation from supplier screening to supplier performance evaluation. Identify procurement risks both in commercial and sustainability-related aspects and propose mitigative actions Implement ESG program in supply chain management and ensure supplier's compliance with ThaiBev's sustainability policies and guidelines. Identify significant suppliers (critical suppliers and high-risk suppliers) and implement supplier management and development plan Monitor and report market situations and procurement decisions to the Procurement Committees. Determine and propose category-specific sourcing strategy to the Group Procurement Committee	Monthly basis

Key ESG Issues in Supply Chain Management

ThaiBev has formalized process to identify key ESG issues in supply chain management. The key ESG issues are prioritized from the procurement perspective based on peer’s ESG risks issues in supply chain management, the indicators from recognized ESG standards, e.g., S&P Global, EcoVadis, and ThaiBev’s material issues. The key ESG issues are integrated in supplier screening, supplier assessment, and supplier development processes.

Environmental	Climate Strategy	Water Management
Social	Human Rights	Occupational Health & Safety
Governance	Business Ethics

ThaiBev’s Sustainable Sourcing

Applicable Policies & Guidelines	Environmental				Social	Governance
Applicable Policies & Guidelines	Environmental Guideline	GMO Guideline	Sustainable Agriculture Guideline	Packaging Guideline	Human Rights Policy	Supplier Code of Practice
Direct Material
Packaging
Agricultural Commodity
Petrochemical
Chemical
Indirect Material
Construction
Spare Part
Office & Factory Supply
Machinery
Marketing Material
IT & OA Equipment
Material Handling
Service

OVERALL PROGRESS IN

Target achieved

In procress

Sustainability Commitments	2019	2020	2021	2022	2023	Target	Target Year
Compliant Supplier Number of active suppliers complying with ThaiBev Supplier Code of Practice	85%	100%	100%	100%	100%	100%	2023
Local Procurement Number of suppliers whom ThaiBev procures goods and services from operating in Thailand	98%	97%	97%	96%	96%	95%	2023
ESG Risk Assessment Number of active suppliers undergo sustainability risk assessment	100%	100%	100%	100%	100%	100%	2023
Critical Supplier Audited Number of critical tier 1 and non-tier 1 suppliers being assessed on site by third-party or ThaiBev auditors	100%	100%	100%	100%	100%	100%	2023
Responsible Sourcing Volume of key agricultural raw materials responsibly sourced i.e. malt and hops, sugar, broken rice, tea leaves, and palm oil.	64%	100%	100%	100%	100%	100%	2025
Third-party Risk Assessment Number of active suppliers being assessed and examined on sustainability risks by a third party or using third-party risk database	100%	100%	100%	100%	100%	100%	2025
Strategic Suppliers Having Supplier Code of Conduct Implemented Number of strategic suppliers having their own supplier code of conduct implemented to their tier 1 suppliers (ThaiBev’s non-tier 1 suppliers)	41%	47%	56%	75%	83%	100%	2030

MANAGEMENT INCENTIVE AND COMPENSATION

Management Level	Type of Incentive	Incentivized KPIs:	Detail
Executives Officers	Monetary	Sustainable supply chain	ThaiBev sets Corporate KPIs that reflect our CEO, executive, and employee compensation. ThaiBev’s Corporate KPIs relating to Sustainable supply chain. We define and categorize the criteria for achieving Corporate KPIs into 5-level. Compensation and bonuses will be allocated to relevant executives and employees, with related targets to 100% of strategic suppliers to have their own supplier code of conduct implemented by 2030.
Business Unit Managers	Monetary	Sustainable supply chain	ThaiBev sets Corporate KPIs that reflect our CEO, executive, and employee compensation. ThaiBev’s Corporate KPIs relating to Sustainable supply chain. We define and categorize the criteria for achieving Corporate KPIs into 5-level. Compensation and bonuses will be allocated to relevant executives and employees, with related targets to 100% of strategic suppliers to have their own supplier code of conduct implemented by 2030.

SUPPLY CHAIN MANAGEMENT

ThaiBev’s supply chain management strategy is designed to be in line with PASSION 2025 and the company’s vision to become a stable and sustainable ASEAN leader in the food and beverage industry. The strategy consists of five pillars, as follows:

VISIBILITY

Integrate the digital system suite into total supply chain management for real-time visibility, including predictive risk management, procurement spending, profitability, efficiency, and traceable ESG impacts in the supply chain

SYNERGY

Engage with business partners to expand the adoption of sustainable business practices and strengthen Thailand’s business sector through multi-stakeholder collaborations and digital solutions.

INTEGRATED RISK MANAGEMENT

Improve overall business resilience and ensure business continuity by having multiple qualified suppliers in place, particularly those supplying critical materials and key agricultural raw materials, giving priority to local sources and strengthening the capability of domestic suppliers.

CENTRALIZED MANAGEMENT

Harmonize the global procurement policy, operating model and technology to maximize values throughout the supply chain, in both economic and sustainability aspects.

STANDARDIZATION

Integrate leading procurement standards into supply chain management (i.e., ISO 20400 Sustainable Procurement) and develop workers’ capabilities with specialized skill sets and increased sustainability awareness.

SUSTAINABILITY OBJECTIVES

SUSTAINABLE AGRICULTURE

Relevant Sustainability Commitments

100% of ThaiBev’s key agricultural raw materials sustainably sourced

Collaborate with agricultural commodity business partners to promote the adoption of sustainable agricultural practices among non-tier 1 suppliers, i.e, farmers in order to minimize any environmental impacts in the supply chain and improve farmer livelihood and well-being with performance tracking and reporting

Establish purchasing policy and bidding requirement to only procure key agricultural raw materials with the leading third-party certification / standards to reduce risk exposure to any ESG violation from the upstream supply chain

SYNERGY

INTEGRATED RISK MANAGEMENT

COMPLIANCE WITH SUSTAINABLE SOURCING POLICIES

Relevant Sustainability Commitments

100% of active tier 1 suppliers acknowledge and accept ThaiBev Supplier Code of Practice
83% of strategic tier 1 suppliers have their own supplier code of conduct in place

Set the requirement for all tier 1 suppliers to acknowledge and accept ThaiBev Supplier Code of Practice through online supplier portal (Supplier Life Cycle Management or SLCM) during the supplier registration process

Include the requirement to comply with ThaiBev Supplier Code of Practice in the contractual clause to ensure the compliance after procuring any goods or services

Extend the adoption of sustainability to non-tier 1 suppliers by requiring strategic suppliers to establish and implement their own supplier code of conduct

VISIBILITY

INTEGRATED RISK MANAGEMENT

CENTRALIZED MANAGEMENT

SUPPLY CHAIN TRANSPARENCY & IMPACT MANAGEMENT

Relevant Sustainability Commitments

Scope 3 emissions tracked and disclosed using the primary data from strategic suppliers
100% of suppliers undergo sustainability risk assessment via SLCM

Work with strategic suppliers to track and disclose ThaiBev’s scope 3 emissions using the primary data in order to measure and improve the visibility to the environmental impacts in the supply chain

Integrate sustainability factors in all aspects of the procurement processes, including supplier qualification, bidding, and supplier performance evaluation

Align the procurement procedures and processes with ISO 20400 Sustainable Procurement for better traceability in the supply chain

VISIBILITY

INTEGRATED RISK MANAGEMENT

STANDARDIZATION

BUSINESS PARTNER DEVELOPMENT & COLLABORATION

Relevant Sustainability Commitments

100% of ThaiBev’s critical suppliers are audited onsite annually
96% of ThaiBev’s procurement is locally sourced

Identify room for improvements from supplier audit data and on-going supplier monitoring

Promote supplier development, private sector competitiveness, sustainable business practices and innovation, and recognize business partners with outstanding performance through Business Partner Award Program

Strengthen local business sector from cross-industry collaboration via Thailand Supply Chain Network (TSCN)

SYNERGY

INTEGRATED RISK MANAGEMENT

ESG PROGRAM IN

ThaiBev assesses all aspects of risks in its supply chain including both commercial and sustainability risks. Sustainability is taken in to considerations and embedded in every step in the procurement process starting from new supplier registration, supplier qualification, tendering and awarding, supplier performance evaluation, and on-going monitoring. Additionally, for effective long-term risk management, ThaiBev is committed to develop supplier capability continuously and looks for collaboration opportunities with its critical suppliers to manage ESG impacts in the supply chain.

NEW SUPPLIERS		EXISTING SUPPLIERS
1 Registration Supplier Code of Practice Supplier screening Desk assessment	2 Pre-qualification Comprehensive sustainability assessment Third-party certification requirement On-site assessment	3 Bidding & Award Bidding condition with ESG requirements Contract clause with ESG requirements	4 Evaluation Annual supplier performance review Desk assessment On-site assessment Assessment based on recognized ESG standards	5 Capacity Building Corrective action request Supplier training & knowledge sharing program Business Partner Award	6 Collaboration Non-tier 1 supplier management Business continuity risk management ESG impact management

Mr. Udomsak Rungcharusup, Managing Director of Pan International (Thailand) Co., Ltd., received ISO 20400 certificate for sustainable procurement from Mr. Jongrak Rojpalasatean, EVP of Management System Certification Institute (Thailand) (MASCI) operating under the umbrella of the Foundation for Industrial Development (FID).

ISO 20400

Pan International (Thailand) Co., Ltd., a corporate purchasing and trading company for ThaiBev Group, has received ISO 20400 Sustainable Procurement certificate, marking ThaiBev Group as the first beverage company in Thailand to receive such certification. To be qualified for this certificate, a company’s process of procuring products and services from its critical suppliers and strategic suppliers with high procurement volume and/or supplying key materials has been evaluated.


Read More Information about SUPPLY CHAIN MANAGEMENT in Sustainability Report 2023