ThaiBev Sustainability 2020

SUSTAINABILITY

SUSTAINABILITY REPORT 2020

ThaiBev Sustainability Approach

Caring for the Environment

Sharing the Value
with the World

Caring for People

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Sustainable Sourcing

To ensure that all products are sourced using standardized and environmentally and socially responsible procurement processes throughout value chain, ThaiBev has placed a strong value on raw material sourcing policies and standards, adopting high-quality service with regards to delivery, supplier assessment processes, and supplier engagement activities. ThaiBev has developed strategies and systems to manage its supply chain and business continuity as well as to avoid negative economic, social, and environmental impacts, especially during COVID-19 pandemic.

The Supply Chain of the Future

ThaiBev embraces the “Supply Chain of the Future” Strategy, as follows:

Stronger
Source key raw materials from various suppliers and reduce monopolization from single sourcing, giving priority to local sources and strengthening the capacity of domestic suppliers.
Synergized
Synergize digital technology into total supply chain management in order to improve data visibility
Sustainable
Manage the supply chain using an end-to-end approach to create value to all stakeholders throughout the entire chain to improve business resilience.

Thailand Supply Chain Network (TSCN) United Against COVID-19

In 2019, ThaiBev worked with its key business parters to form the Thailand Supply Chain Network (TSCN) in order to collaborate and increase investments among each other and in the future expand collaboration in other countries.

As the leading producer and distributor of food and beverages in Thailand and ASEAN, ThaiBev Group has been monitoring the COVID-19 crisis from the beginning to make sure it can properly handle the situation and prevent its spread. ThaiBev has conducted and organized numerous activities, such as:

Conduct business continuity risk assessment with key suppliers in order to evaluate suppliers’ processes and capabilities to supply goods and services during the pandemic and manage end-to-end supply chain risks. It aims to incentivize other suppliers to join ThaiBev in building more business resilience throughout the supply chain.
Survey the needs among TSCN co-founders and other business partners during COVID-19 in order to provide medical, human, and any other resources appropriately.
Work with PTT Global Public Company Limited, one of TSCN’s co-founders, to produce more than 1 million bottles of alcohol gel and hand them over to the Ministry of Public Health for further distribution to public health volunteers nationwide.
Deliver alcohol gel to the Ambassador of Maldives to Thailand via TSCN coordination along with other TSCN members.

TSCN Business Partner Conference 2020 and ThaiBev Business Partner Award

In 2020, ThaiBev and its partners from various networks, together with TSCN, organized the Thailand Sustainability Expo (TSX) 2020 under the concept of “Sufficiency for Sustainability” by applying His Majesty King Bhumibol Adulyadej The Great’s (Rama IX) Sufficiency Economy Philosophy and the first Royal Command of His Majesty King Maha Vajiralongkorn Phra Vajiraklaochaoyuhua (Rama X): “I shall continue, preserve, and build upon the royal legacy and shall reign with righteousness for the benefit of the people forever.” TSX used this as guidance, in order for stakeholders to recognize the significance of sustainable development.

Additionally, ThaiBev worked with TSCN to organize the TSCN Business Partner Conference 2020, as part of TSX, joint by a network of stakeholders. The conference was honored by the presence of executives from Thailand’s leading organizations on sustainable development, including Thai Beverage Public Company Limited, PTT Global Chemical Public Company Limited, and Thai Union Group Public Company Limited, who have shared their visions and success factors as global leaders in sustainability.

Furthermore, experts on sustainability from different industries also shared their experience and knowledge under the concept of “Creating and Sharing the Values of Growth for a Sustainable Future” in order to encourage business sector to take actions and align their goals with the UN SDGs. TSCN platform, an online business community, was also launched to allow business partners across all industries to be part of TSCN, creating business connection through demand and supply matching. It also acted as shared knowledge center for sustainable business practices and strengthen the Thai business sector.

In this occasion, ThaiBev has presented ThaiBev Business Partner Award to incentivize and recognize suppliers with outstanding performance. This also provided suppliers with the opportunities to expand their business to other TSCN members. And is now in its fourth year, with the goal to support business partners’ capacity development, stimulate business competition, and drive innovations in the industrial sector. Business partners who receive the awards possess standards of excellence and are considered role models for having sustainable business practices. The awards consist of 3 tiers, Silver, Gold and Platinum. In 2020, ThaiBev added sustainability criteria by specifying that all suppliers must develop Supplier Code of Conduct and enforce the compliance with the policy on their own suppliers.

CROSS – Procurement Transformation

In 2017, ThaiBev initiated the CROSS project to increase supply chain visibility and raise the standard of procurement by fostering stakeholder collaboration, process re-engineering, and online connectivity. The principles of the CROSS project include:

The CROSS project is a digital procurement system that improves sourcing processes for greater efficiency, while transparently improve data visibility and traceability. The system helps reduce operating costs by linking suppliers and buyers online. ThaiBev has implemented CROSS Procurement solution and connected it with the Supplier Life Cycle Management (SLCM) system. The SLCM system acts as the central interface to monitor and communicate with ThaiBev’s suppliers. Here suppliers can register to become ThaiBev’s suppliers, undertake their sustainability risk assessments, confirm purchase orders, and exchange documents online. The CROSS Procurement solution will also play a role in fulfilling the procurement processes. The solution instantly records the purchase of products and services that take place throughout ThaiBev’s operations. This ensures that procurement is fair, transparent, and traceable. The solution consists of 4 features: is for the selection of potential suppliers by taking into account environmental, social, and governance factors as well as the supplier’s capability. CROSS Source connects with the Supplier Life Cycle Management (SLCM) system and covers the entire supplier qualification process from Supplier Code of Practice compliance, to supplier registration and supplier screening. is for contract creation and agreement with suppliers through a traceable and transparent system. It also covers contract compliance, managing the purchase of products in line with contractual terms. is for purchase order issuance to and confirmation with the determined suppliers and for purchasing products through eCatalogs (online product catalogs). is for suppliers’ sustainability risk assessments covering environmental, social, and governance factors, and other areas such as supplier credibility, financial liquidity, operational risk, and negative media coverage that may affect suppliers’ reputations. The risk input is derived from third-party databases specializing in corporate risk assessments, such as the World Economic Forum, Dunn & Bradstreet, GDACS, and Semantic Visions. Economic Forum, Dun & Bradstreet, GDACS and Semantic Visions.

ThaiBev continues to apply CROSS Procurement in its sourcing processes to improve data visibility and analytic capability as well as support decision making and sourcing strategizing, in turn enabling effective and real-time risk management.

Commitments and Achievements

Collaboration for Sustainable Supply Chain

ThaiBev selects quality raw materials for alcoholic beverages, non-alcoholic beverages, and food production through socially and environmentally responsible procurement process in line with international standards such as BonSucro, ProTerra, SEDEX, RSPO, etc.
ThaiBev works with suppliers to provide knowledge and resources to farmers to help mitigate impacts from climate change and natural disasters that affect the quantity and price of agricultural raw materials as well as local farmers’ income and wellbeing.
ThaiBev has formalized processes to identify its critical suppliers annually in order to develop the supplier relationship management strategies, together with the prioritization of resources used and appropriate supplier risk management. This enables ThaiBev to identify and mitigate any potential risks in the procurement processes throughout the supply chain.

Business Resilience and Risk Management

ThaiBev considers sustainability factors in all aspects of its procurement process and requires suppliers to comply with the Supplier Code of Practice and undergo strict supplier screening and quality assurance processes. ThaiBev also makes sustainability one of the criteria in supplier qualification, bidding, and supplier performance evaluation.

Capacity Development for Local Suppliers

In 2020, 95% of ThaiBev’s procurement came from local suppliers following its policy to encourage sourcing from nearby business operations considering both sustainability and economic aspects. It aims to reduce environmental impacts by optimizing transportation distances.
ThaiBev builds local suppliers’ capacity through the Business Partner Award, provision of knowledge related to sustainability, and engagement in various sustainability projects. This allows ThaiBev to have more sourcing alternatives and mitigate risk from limited raw materials. This includes risks from the importation of raw materials and services, including delays in transportation and the interruption of business operations.

ThaiBev 2020 Sustainability

ThaiBev
2020 Sustainability