Why it is important
B.Grimm Power emphasises the importance of sustainable supply chain management. We have close cooperations with suppliers to promote the good governance principles by considering the economic, social and environmental impacts including human rights issues in supply chains to reduce risks such as sourcing the supplies and services which affecting to the production process, corporate image, and customer trust as well as promoting supply chain resilience to prepare the corporate and stakeholders in supply chain to respond for any circumstance that impact supply chain and enhance the competitiveness in the rapidly changing global situation.
Target and Performance
| 2023 Performance |
2023 Target |
|
|---|---|---|
| Suppliers acknowledge the Suppliers’ Code of Conduct and Guidelines for Sustainability (% of total suppliers)1 |
100 % | 100 % |
| Conduct ESG risk assessment (% of Critical Tier 1 and Non-tier 1 Suppliers)2 |
100 % | 100 % |
| Conduct a comprehensive ESG audit to Significant Suppliers2, and agree on corrective action plan (% of Significant Suppliers) | 100 % | 100 % |
1 This covers suppliers whose trade volume is for our operation in Thailand which contribute to 92.6 percent of revenue from total revenue.
2 B.Grimm Power classifies suppliers based on their importance to our business operations and ESG risks as follow:
- Critical Tier 1 Suppliers: These have high order value, frequent/continuous orders, and critical components, or we heavily rely on these suppliers.
- Non-tier 1 Suppliers: Suppliers who provide products/services to Critical Tier 1 Supplier impacting B.Grimm's business directly.
- Significant Suppliers: Critical tier 1 Suppliers and Non-tier 1 Suppliers with medium to high ESG risk assessment results.
Management Approach and Strategy
Policy and Commitment
Suppliers’ Code of Conduct and Guidelines for Sustainability
Environment
- Environmental management
- Natural resource and environmental conservation
- Greenhouse gas
- Waste management and pollution control
- Hazardous chemicals and substance
Society
- Occupational health, safety and work environment
- Emergency prevention and response
- Human right
- Treatment of employees
- Community and social engagement
- Freedom of association and collective bargaining
Governance
- Compliance with related legislation and regulations
- Business ethics and transparency
- Anti-corruption
- Intellectual property and confidentiality
- Conflict of interest
- Quality standard
Governance Structure
We divide our governance in procurement activities into two major groups:
1) Procurement of raw materials for electricity generation under long-term agreements, i.e., natural gas, water, and feedstock, These are high value items and are supervised by Contract Management Department.
2) Procurement of general goods and services. We create the plans and processes to promote transparent, accountable and effective operations aligned with our procurement procedure, for example, price negotiations, comparisons and tenders. The high-value procurement must be approved by the Purchasing Committee, appointed by the Management Committee, and inspected by the Acceptance Committee, who verifies the quality and correctness of the procurement.
Strategy
B.Grimm Power requires all of our executives and employees to support, drive and comply with our framework, therefore we have set up strategic guidelines in aligned with our SCOC which is divided into 5 focused issues: 1.Compliance and Transparency 2.Occupational health, safety, and environment 3.Business relationship and opportunities 4.Digital technology and innovation, and 5.ESG responsibility as following detail:
Compliance and Transparency
- Our procurement process must be transparent
- Our suppliers must be legal and conform to social norms
Occupational health, safety, and environment
- Our suppliers must conform with occupational health and safety standard and mitigate their environmental impact to stakeholders such as employees and community to achieve zero accident and fatality workplace target
Business relationship and opportunities
- We must treat all suppliers equitably and transparent to maintain the good relation
- We are willing to cooperate with suppliers to reduce risk and expand opportunities for mutual benefits
Digital technology and innovation
- We encourage the application of digital technology and innovation in to increase efficiency in supply chain management,
ESG responsibility
- We must consider our suppliers’ ESG practice throughout all processes by supplier self-assessment under B.Grimm Power verification
Supplier Management
Recognising the importance of sustainability, B.Grimm Power incorporates environmental, social and governance (ESG) criteria in the supplier management process, together with maintaining quality and fostering good relationships with suppliers. We emphasise transparency and accountability through the following processes:
Supplier Screening and Selection
Suppliers (also known as vendors) are selected based on the established preliminary criteria, including quality, price, delivery, safety and occupational health, and ESG since initial screening and selection process to ensure that the suppliers we are about to engage are suitable and reliable. All partners must be informed and adhere to the “Supplier Code of Conduct and Guidelines for Sustainability (SCOC)”, including cooperating in assessments to ensure compliance with SCOC.
New Supplier Approval Process
New suppliers/vendors are required to complete the New Vendor Pre-Qualification Form and acknowledge the Suppliers’ Code of Conduct and Guidelines for Sustainability (“SCOC”).
For suppliers/vendors with transaction values over 5 million Baht, the ESG performance of the suppliers/vendors will be considered in the selection criteria by the procurement committee with a weight of 10 percent in the assessment.
Supplier Categorisation
We have supplier categorisation criteria in place to analyse and formulate appropriate strategies as well as to conduct a risk assessment on them to increase efficiency in our procurement process and mitigate ESG risks from suppliers’ operation. We categorise the supplier into two classes:
1) Critical Tier 1 Suppliers: These suppliers have high order value and frequent/continuous orders. Their products or services are highly important (critical components), or we heavily rely on them (non-substitutable).
2) Non-tier 1 Suppliers: These are the suppliers of our Critical Tier 1 Suppliers who provide products and services that have a direct impact on B.Grimm Power’s business.
3) Significant Suppliers: Critical Tier 1 Suppliers and Non-tier 1 suppliers whose ESG risk assessment results are at medium and high levels. This must be continually assessed and evaluated on the sustainability performance of suppliers every year.
Evaluation and Post-Evaluation Action
We will monitor the suppliers’ compliance with sustainability ethics and guidelines through Supplier initial ESG assessment (self evaluate), reference to internationally recognised sustainability standards complied by suppliers and/or on-site assessments at suppliers’ facilities annually for significant suppliers with medium and high ESG risks and every 3 years for those with low ESG risks. Reports on assessments and corrective actions will be prepared and joint development will be conducted.
Supplier ESG Risk Screening
At B.Grimm Power, we conduct Environment Social and Governance (ESG) risk assessment on all 100 percent of our significant suppliers every year. By considering ESG risks from the countries where the suppliers operate (Country-specific risk) based on the ESG performance index at the country level as follows:
| ESG | ESG aspect to consider | County Indices to refer |
|---|---|---|
Governance |
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Environment |
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Social |
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Furthermore, we have assessed risks by grouping suppliers according to the characteristics of products and services (Sector-specific risk), based on reference from the Global Industry Classification Standards (GICS) and our business operation context, we divided into 5 groups such as industry group, chemical group, energy group, utilities group and consulting business, then identify key sustainability risk issues in each dimension of each supplier group and determine the severity of their impact and their likelihood in the risk matrix aligned with our organisation “Enterprise Risk Management” to identify suppliers with ESG risks A comprehensive ESG audit is conducted for significant suppliers assess to have high and medium ESG risks continuously annually and every 3 years for suppliers with low-level risks in order to provide recommendations and sustainable business operation plans for suppliers. We continually monitor their progress against jointly developed ESG corrective action plans on a regular basis every year.
Performance 2023
- In 2023, there were a total of 1,084 Tier 1 Suppliers, consisting of 24 Critical Tier 1 Suppliers and none of Critical Non-tier 1 Supplier. From the assessment, it was found that there were 18 suppliers with medium and high ESG risks, catagorised as Significant Suppliers that are important to business.
- We conducted a comprehensive ESG audit with 18 Significant Suppliers by supplier self-assessment or reference to internationally recognised sustainability standards complied by suppliers. All Significant Suppliers who have been audited, have agreed corrective action and improvement plan for ESG improvement.
- 100% of new supplier acknowledged our SCOC
