Why is it important
B.Grimm Power places great importance on sustainable supply chain management. We closely collaborate with our suppliers to uphold good governance principles by considering the economic, social and environmental impacts, including human rights issues, across the supply chain. This approach helps mitigate risks, strengthen supply chain resilience, and enable the company and its stakeholders to respond effectively to any circumstance that impacts the supply chain. It also enhances competitiveness in an increasingly dynamic global landscape.
Target and Performance
| 2024 Performance |
2024 Target |
|
|---|---|---|
| Tier 1 Suppliers acknowledge the Suppliers’ Code of Conduct and Guidelines for Sustainability (Percentage of all Tier 1 Suppliers1) |
100 % | 100 % |
| Conduct ESG risk assessments (Percentage of Critical Tier 1 and Critical Non-Tier 1 Suppliers2) |
100 % | 100 % |
| Conduct a comprehensive ESG audit to Significant Suppliers2, and agree on corrective action plans (Percentage of Significant Suppliers) |
100 % | 100 % |
1 This covers Tier 1 Suppliers from our operation in Thailand, contributing to 91.5 percent of our total revenue
2B.Grimm Power classifies suppliers based on their importance to our business operations and ESG risk level as follows:
- Tier 1 Suppliers: Suppliers with direct purchase agreements for products and services with B.Grimm Power.
- Critical Tier 1 Suppliers: Tier 1 Suppliers that have high spending value, receive continuous orders, provide critical products/services, or have high business reliance from B.Grimm Power.
- Critical Non-Tier 1 Suppliers: Suppliers that do not directly provide products/services to B.Grimm Power but supply critical products/services to Critical Tier 1 Suppliers.
- Significant Suppliers: Critical Tier 1 and Non-Tier 1 Suppliers assessed with medium to high ESG risks, which undergo annual comprehensive ESG audits.
Management Approach and Strategy
Policy and Commitment
Our Suppliers’ Code of Conduct and Guidelines for Sustainability (SCOC) is embedded within our procurement procedure, ensuring that suppliers operate in alignment with the SCOC. We expect our suppliers to uphold ethical business practices, particularly in relation to labour and human rights, occupational health and safety, and to consider social and environmental impacts beyond legal requirements. This includes minimising negative impacts, actively promoting a net positive impact, and contributing to the preservation of biodiversity while delivering products or services to us.
Supplier’s Code of Conduct
Environment
- Environmental Management
- Natural Resources and Environmental Conservation
- Greenhouse Gases
- Waste Management and Pollution Control
- Hazardous Chemicals and Substances
Society
- Occupational Health, Safety and Working Conditions
- Emergency Prevention and Response
- Human Rights
- Treatment of Employees
- Community and Social Engagement
- Freedom of Association and Collective Bargaining
Governance
- Compliance with Laws, Regulations, and Relevant Requirements
- Business Ethics and Transparency
- Anti-Corruption
- Intellectual Property Protection and Confidentiality Preservation
- Conflict of Interest
- Quality Standards
Governance Structure
B.Grimm Power categorises procurement governance and management into 3 groups:
1. Procurement of key raw materials for electricity generation under long-term agreements including natural gas and water, is overseen by each power plant. This process involves monitoring the quality and consumption of natural gas, and verifying the source, quality, and treatment of wastewater to ensure compliance with legal standards. The structure and duration of supply contracts are aligned with power plant operations, while contract details and legal requirements are reviewed by the Corporate Legal department to ensure full compliance. Regular meetings with suppliers are conducted to review contract terms and delivery conditions, and real-time monitoring systems are used to optimise contract management and improve operational efficiency.
2. Procurement of goods and general services is conducted through a transparent, auditable, and efficient process. Procurement methods include direct negotiation, price inquiries, and competitive bidding. For high-value procurements, approval is required from the Purchasing Committee, which is appointed by the Management Committee. Additionally, the Inspection Committee is responsible for verifying the quality and accuracy of goods and services prior to acceptance.
3. Procurement of Liquefied Natural Gas (LNG) as an alternative fuel for power generation is overseen by the LNG Business division. The Procurement Unit within this division is responsible for preparing Request for Proposal (RFP) documents, ensuring compliance with pricing and quality requirements set by relevant regulatory authorities. Proposals are submitted by suppliers under Master Sale and Purchase Agreements. The selection process involves comparing offers to identify the supplier providing the best price and quality in each procurement round. The final selection is approved by the Head of LNG Business and endorsed by the relevant regulatory authorities.
Strategy
B.Grimm Power’s management and employees are required to actively support, promote, and strictly adhere to procurement management policies and frameworks. This includes implementing a supply chain strategy that aligns with the Suppliers’ Code of Conduct and Guidelines for Sustainability as follows:
Compliance and Transparency
- Implement transparent procurement process.
- Select suppliers that conduct business in compliance with legal and ethical standards.
Occupational Health, Safety, and Environment
- Select suppliers that prioritise occupational health, safety and environmental impact on stakeholders such as employees, communities and society in alignment with the goal of maintaining a zero-accident and fatality-free workplace.
Business Relationship and Opportunities
- Treat all suppliers fairly and equally while maintaining strong business relationships
- Foster collaboration with suppliers to maximise mutual benefits.
Digital Technology and Innovation
- Leverage digital technology and innovation to enhance efficiency in supplier collaboration.
ESG Responsibility
- Select suppliers that prioritise ESG responsibility through self-assessment during the selection and operational processes, with evaluations verified by B.Grimm Power.
Supplier Management
B.Grimm Power recognises the importance of sustainability and has integrated Environmental, Social and Governance (ESG) criteria into its supplier management process, while maintaining quality and fostering strong business relationships with suppliers. We emphasise transparency and accountability through the following processes:
Supplier Screening and Selection
Suppliers are selected based on the preliminary criteria, including quality, price, delivery, occupational health and safety, and ESG practices to ensure their suitability and reliability. All suppliers must acknowledge and adhere to the Suppliers’ Code of Conduct and Guidelines for Sustainability (SCOC), and cooperate in assessments to ensure compliance with the SCOC requirement.
New Supplier Registration Process
New suppliers are required to complete the New Supplier Pre-Qualification Form and acknowledge the Suppliers’ Code of Conduct and Guidelines for Sustainability (SCOC). For suppliers with transaction values exceeding THB 5 million, their ESG performance is included in the selection criteria assessed by the Procurement Committee, with a 10 percent weighting in the evaluation process.
Supplier Classification
Supplier Classification aims to enhance procurement efficiency and mitigate ESG-related impacts from supplier operations. This is achieved through risk assessments and defining tailored procurement strategies for each supplier category. Suppliers are classified into 3 groups based on their business criticality and ESG risk level, as follows:
1. Critical Tier 1 Suppliers: Suppliers that have high spending value, receive continuous orders, provide critical products/services, or have high business reliance from B.Grimm Power.
2. Non-Tier 1 Suppliers: Suppliers that do not directly provide products/services to B.Grimm Power but supply critical products/services to Critical Tier 1 Suppliers.
3. Significant Suppliers: Critical Tier 1 and Non-Tier 1 Suppliers assessed with medium to high ESG risks, which undergo annual comprehensive ESG audits.
Supplier ESG Risk Assessment
B.Grimm Power conducts ESG risk assessments for suppliers to identify Significant Suppliers with medium to high ESG risks. This assessment supports the development of appropriate management approaches, such as planning the comprehensive ESG audit, strategic development initiatives, and effective follow-up on ESG improvement areas. These processes ensure consistent and comprehensive management of ESG risks across our supply chain. The ESG risk assessment for suppliers follows these key steps:
1. Identification of ESG risk issues considers emerging ESG trends in global supply chains and their direct relevance to the nature of suppliers' business operations. These issues are categorised under the following assessment dimensions:
| ESG | ESG Risks |
|---|---|
Governance |
|
Environment |
|
Social |
|
2. The ESG risk level of suppliers is assessed based on our enterprise risk assessment criteria, which considers both the severity and likelihood of potential events. The risk analysis is categorised into 3 levels: 1) Country-specific Risk: based on related ESG performance indicators in the countries where suppliers operate. For further details, please refer to the Sustainable Supply Chain Management Guideline. 2) Sector-specific Risk: suppliers are classified into 5 sectors, including industrials, chemicals, energy, utilities, and consulting services, based on the Global Industry Classification Standard (GICS). 3) Commodity-specific Risk: focused on raw materials directly purchased for production and considered critical to the business, including natural gas and acidic-alkaline chemicals. Commodity types are referenced from the Science Based Targets for Nature (SBTN) High Impact Commodities List. In 2024, we identified key ESG risk issues among suppliers, including corruption and bribery, non-compliance with environmental regulations, occupational health and safety, and human rights issues such as employee and labour welfare and the prohibition of forced labour.
Supplier Comprehensive ESG Audit and Performance Monitoring
B.Grimm Power continuously conducts comprehensive ESG audits of its suppliers, based on prior ESG risk assessment results. This approach ensures effective monitoring of suppliers’ compliance with the Suppliers’ Code of Conduct and Sustainability Guidelines.
These audits are conducted at a frequency aligned with each supplier’s risk level and incorporate globally recognised ESG frameworks and verification methods. We reference international standards and principles such as the International Labour Organisation (ILO), ISO 14001, and ISO 45001, and benchmark our approach against leading sustainability reporting and evaluation frameworks, including GRI and other globally adopted ESG guidelines.
- Significant Suppliers are assessed annually.
- Critical Suppliers with low ESG risk are assessed every 3 years.
The audit process incorporates various methods, including:
- Supplier Self-Assessment Questionnaire (SSAQ) which is reviewed and evaluated by our staff.
- On-site audits to verify actual practices, with a focus on assessing high-risk project suppliers and suppliers who have not yet undergone assessment.
We compile audit reports to monitor the progress of corrective actions and ESG improvements. Additionally, structured capacity-building plans are developed to enhance the sustainability standards across the supply chain.
Furthermore, we benchmark each supplier’s ESG assessment results against peers within the same industry group. This enables a better understanding of best practices and supports the development of targeted ESG capacity-building activities for suppliers, such as training sessions, workshops, and one-on-one advisory support.
Performance 2024
- In 2024, Grimm Power had a total of 1,210 Tier 1 suppliers, of which 36 were classified as Critical Tier 1 Suppliers. There were no Critical Non-Tier 1 Suppliers. From the ESG risk assessment, it was found that 34 suppliers had medium and high ESG risks, classified as Significant Suppliers.
- 100 percent of our suppliers acknowledged our Suppliers’ Code of Conduct and Guidelines for Sustainability
- A comprehensive ESG audit was conducted on the following suppliers: 1) All 34 Significant Suppliers were audited annually, and 2) 2 Critical Tier 1 Suppliers with low ESG risk were audited every 3 years. All audited suppliers have agreed on corrective action and improvement plans of their ESG issues.
- Organised a training session on the topic “ESG Performance and Climate Change: Addressing Risks and Opportunities to Become a Sustainable Supply Chain” to enhance understanding of environmental management systems and preparedness for climate change-related business impacts. This topic was identified as a key area where most suppliers required further knowledge, based on the results of the comprehensive ESG audits conducted in the previous year. A total of 89 percent of Significant Suppliers participated in the training.
- We are committed to enhancing knowledge and understanding of sustainable supply chain management among procurement staff and relevant personnel, who play a crucial role in ensuring supplier compliance with the Suppliers’ Code of Conduct and Sustainability Guidelines. In 2024, our procurement staff participated in the Strategic Supply Chain Management Workshop, organised by the Stock Exchange of Thailand. This workshop equipped them with the skills to analyse, set targets, and define supply chain management indicators aligned with corporate strategy, as well as to effectively integrate sustainability principles into supply chain management.
- Conducting business with responsibility and fairness across all aspects of the supply chain is prioritised, with particular emphasis on financial management practices that may affect partners’ liquidity. In 2024, the average payment period was 46.1 days, based on a comprehensive calculation that includes all types of financial obligations, such as accrued construction-related expenses and certain employee-related costs, including accrued bonuses, which are not directly related to supplier payments. When considering only trade payables, which reflect core transactions with suppliers, the average payment period was approximately 36 days. This aligns with the company’s standard practice of settling invoices within 30 days of receipt, in accordance with agreed terms, reinforcing a commitment to fair and sustainable supplier relationships.
