ThaiBev Sustainability

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

Definition

The formalized processes to screen suppliers using both economic and ESG criteria in order to preliminary identify the suppliers that has high business impact or the suppliers that may cause potential negative ESG impacts in ThaiBev’s supply chain. The economic criteria are developed based on business impact and relevance and ESG criteria are developed based on key ESG issues in supply chain management.

Scope

100% of active suppliers using business relevance consideration and 100% of critical suppliers using ESG criteria

Output

Significant suppliers: Critical suppliers with potentially high ESG risks

ESG Program in Supply Chain Management

Significant Supplier Matrix

Definition of Significant Suppliers

ThaiBev defines Significant Supplier as critical suppliers who have high ESG risk exposure. These are suppliers with high business impact and have the potential to cause significant negative ESG impacts in ThaiBev’s supply chain and operation.

CRITICAL SUPPLIERS

Number of Critical Supplier

Contribution to Total Spend

44%

Critical Tier 1 Suppliers

Procurement Spend Contribution

Criteria to identify critical non tier-1 suppliers

Business Impact

Dependency

Market Influence

Number of Critical Non-tier 1 Suppliers

Non-tier 1 suppliers who supply goods and services to ThaiBev’s tier 1 suppliers are also rated in order to identify Critical Non-tier 1 Suppliers. ThaiBev works closely with its tier 1 suppliers to identify Critical Non-tier 1 Suppliers and assess their sustainability risks to improve the assessment quality and gain more insights to risks in the supply chain.
Non-tier 1 suppliers are deemed critical when their total criticality score are equal to or higher than 65.

SUPPLIERS WITH POTENTIALLY HIGH ESG RISKS

ThaiBev uses the CROSS Supplier Risk Management (SRM), an automated supplier risk database platform to screen the suppliers with potentially high ESG risks. The risk identification matrix in the screening process includes country-specific risk, sector-specific risk, and commodity-specific risk. The risk rating is developed with reference to multiple ESG databases, e.g., S&P Global, The Sustainability Yearbook 2023, SASB, CCPI: Climate Change Performance Index 2023, Freedom Index by Country 2023, and The 2022 Corruption Perceptions Index (CPI).

RISK RATING SCALE
Low	Medium	High
<= 3	4 - 12	13 - 15

100%

of critical suppliers screened using ESG criteria

Critical suppliers have potential high ESG risks

SUPPLIERS SCREENING METHODOLOGY

Pre-Screening	Business Relevance	ESG Criteria
Active Supplier	Criteria to identify critical tier-1 suppliers Business Relationship Sustainability Maturity Business Goal Alignment Critical Material Supplier Procurement Allocation Alternative Source Annual Spend Contribution	5 key ESG issues to identify suppliers with potentially high ESG risks Climate Change and GHG Emission Water Management Human Rights and Labor Practices Employee Wellbeing, Health and Safety Business Ethics and Integrity Supplier Risk Country-specific risk Sector-specific risk Commodity-specific risk
Screening Output
	Critical Supplier	Critical Suppliers with potentially high ESG risks or Significant Suppliers


Read More Information about SUPPLY CHAIN MANAGEMENT in Sustainability Report 2023