Supply Chain Management
Importance and Mission
The significance of sustainable and responsible supply chain to the Group: As the Group operates within the renewable energy business, managing a sustainable and responsible supply chain is a key issue that impacts the success of the organization and all stakeholders. This is because the renewable energy business requires collaboration with partners, suppliers, and stakeholders across the entire value chain. This includes sourcing equipment and technology for solar power plants, wind energy, and biomass, as well as maintenance and the management of expired materials.
SDGs in the Supply Chain Management
Goals and Performance Highlights
Goals
Communicate the Supplier Code of Conduct to partners for sustainable business development by providing all suppliers with purchase orders with the relevant documentation.
100% of new suppliers with purchase orders exceeding 500,000 baht, evaluated by using ESG selection criteria.
100% of current critical suppliers (Critical Tier-1 Suppliers) and critical suppliers who do not conduct business directly with the company (Critical Non-Tier-1 Suppliers), evaluated by using ESG criteria.
Performance Highlights 2024
In 2024, 100% of new suppliers with purchase orders exceeding 500,000 baht, evaluated by using ESG selection criteria.
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| New Suppliers Screened Using Environmental/Social Criteria | 2023 | 2024 |
|---|---|---|
| Number of New Suppliers Requiring Environmental/Social Evaluation* | 3 | 12 |
| New Suppliers Approved Based on Environmental and Social Criteria | 3 | 12 |
*For the selection of suppliers (vendors/contractors) with initial orders exceeding 500,000 baht, an evaluation of environmental and social criteria is required. Suppliers must meet these criteria in order to proceed with the order/contract. After the process is completed, a re-evaluation will be conducted. If the supplier does not meet the criteria, they will be removed from the approved vendor list.
The Group conducted an assessment of the potential negative impacts across the supply chain, evaluating both actual and anticipated environmental and social impacts that could be of significant concern. This assessment was carried out for Critical Tier-1 Suppliers and new suppliers, totaling 20 suppliers. No significant negative impacts on the environment or society were identified from these suppliers.
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| Negative Impacts Across the Entire Supply Chain | 2023 | 2024 |
|---|---|---|
| Number of Suppliers Assessed for Environmental Impact | 3 | 20 |
| Number of Suppliers Found to Contribute to Significant Actual and Potential Negative Environmental Impacts | 0 | 0 |
| Number of Suppliers Assessed for Social Impact | 3 | 20 |
| Number of Suppliers Found to Contribute to Significant Actual and Potential Negative Social Impacts | 0 | 0 |
Management Approach
The Group applies risk-based and resilience-focused supply chain management to uphold sustainability objectives and business continuity. The management approach is based on risk management and resilience principles to ensure that operations align with sustainability goals, while also fostering strong relationships with partners for business continuity.
In its operations, the Group places significant importance on managing risks and impacts across all dimensions, including economic, environmental, social, and human rights, throughout the entire supply chain. The Group selects partners who are committed to responsible production and service practices, comply with laws and regulations, and operate in alignment with the Group's policies and ethical standards. Social and environmental criteria are used in the selection of new partners and for procurement from current critical suppliers (Critical Tier-1 Suppliers). Additionally, the Group aims to enhance the ESG capabilities of its partners, improve operational quality, and drive mutual growth, leading to the long-term sustainability of the supply chain and fostering confidence among stakeholders. The Board of Directors oversees this process, while the procurement department is responsible for implementing the Group’s sustainable procurement policy as follows:
01
Sustainability: Committed to integrating ESG principles into the procurement process, considering the environmental, social, and governance impacts throughout the supply chain.
02
Transparency and Accountability: The procurement process must be transparent, fair, and auditable, with relevant information disclosed to stakeholders.
03
Compliance with Laws: The Company and its partners must strictly comply with laws, regulations, and rules related to procurement.
04
Human Rights: Respect for internationally recognized human rights, including non-discrimination and freedom of association.
05
Labor Standards: The Company and its partners must adhere to labor standards, including fair wages, working hours, health and safety protection, and prohibiting child labor and forced labor.
06
Environmental Protection: The Company and its partners must operate with consideration for environmental conservation, sustainable resource use, biodiversity protection, reducing environmental impacts, controlling pollution, particularly reducing greenhouse gas emissions, and efficient waste management.
07
Anti-Corruption: Implement and enforce anti-bribery and anti-corruption policies.
08
Social Responsibility: The Company and its partners must actively contribute to the development of society and communities.
The Group's Approach to Managing a Sustainable Supply Chain
Selection of New Suppliers
Risk Assessment and Identification of Key Suppliers
Evaluation of Current Suppliers
Supplier Development
The Group communicates the SSP Supplier Code of Conduct to partners for sustainable business development, in line with the sustainability management approach within the supply chain. This aims to raise awareness among partners about its importance and provides a guide for conducting business that aligns with the Group's practices, which prioritize social and environmental responsibility, as well as transparency in operations. The Group also encourages partners to adopt policies and practices for sustainable procurement and to implement the principles outlined in this Supplier Code of Conduct for sustainable business development with their own suppliers and contractors. The implementation is divided into six areas, as follows:
01
Business Ethics: Comply with laws and regulations, operate within a fair competition framework, disclose information transparently and in an auditable manner, respect intellectual property, avoid conflicts of interest, and fight against corruption.
02
Labor and Human Rights: Ensure lawful employment practices in accordance with labor laws, treat all employees equally, and prohibit all forms of child labor and forced labor.
03
Occupational Health and Safety: Comply with occupational health and safety laws, provide appropriate and adequate protective equipment, prepare for emergency situations, and ensure clear communication and adherence to safety protocols.
04
Environment and Climate Change Impact Reduction Comply with environmental laws and regulations, manage pollution and waste according to legal requirements, use resources efficiently, cooperate in monitoring, improving and disclosing greenhouse gas emissions, and promote the use of environmentally friendly products and services.
05
Community Engagement and Social Development: Conduct business with consideration of potential impacts on local communities and society, and actively contribute to improving the quality of life in communities and society whenever opportunities arise.
06
Collaboration in Innovation Development: Propose products and practices that incorporate innovation to achieve positive social and environmental impacts, and encourage partners and contractors to follow the principles outlined in this Code of Conduct.
Selection of New Suppliers
The Group has established criteria for selecting new suppliers to ensure that they can deliver products/services that meet the organization's standards or requirements, through an evaluation process that covers the following aspects:
- Quality Products/Services with Environmental Friendliness (e.g., recyclable materials, non-toxic ingredients), certified by relevant industry standards or other trusted certifications.
- Reasonable and Competitive Pricing for products/services.
- The supplier conducts business in accordance with environmental standards, whether international or legal, such as having a systematic approach to waste disposal and avoiding activities that cause pollution.
- The supplier conducts business with respect for social issues, ensuring no discrimination, compliance with labor laws, corporate social responsibility, and respect for human rights.
For the Group's biomass power plant business, operated by Uni Power Tech Company Limited (UPT), the fuel used for production consists of agricultural waste or by-products, such as wood chips, bark, and other forms of biomass fuel. When selecting suppliers of fuel for production, the source of the fuel is carefully considered to ensure that it is sourced legally and does not negatively impact the environment. Suppliers providing wood chips and bark must be certified by FSC (Forest Stewardship Council), ensuring that the wood is sourced from sustainably managed forests or plantations, in line with internationally recognized standards, promoting environmental protection and reforestation.
In addition to the requirement for suppliers to hold FSC Certification for the fuel source used in production, biomass power plants also face potential environmental impacts on surrounding communities. Therefore, UPT’s supplier selection process is stringent and includes the requirement that suppliers be certified with ISO 9001 for quality management systems and ISO 45001 for occupational health and safety management systems as part of the evaluation criteria.
Supplier Development
The Group prioritizes the development of suppliers and contractors within its supply chain, particularly key partners in the renewable energy sector, such as solar, wind, and biomass power plants. This effort aims to reduce social and environmental risks, as well as mitigate the risk of non-compliance with relevant laws and regulations. Additionally, the Group supports improving the operational efficiency of its suppliers and contractors to ensure alignment with its standards. For example, the Group encourages suppliers and contractors who provide core products and services to implement business process improvements and achieve certification for management systems in accordance with international standards, such as ISO 9001, ISO 14001, and ISO 45001.
Payment to Suppliers
The Company has established payment terms for suppliers based on fairness and appropriateness to create opportunities and business cooperation, which is a key factor for sustainable business growth. The Company’s standard payment term is within 60 days. However, payment periods may vary depending on the specific circumstances of each business and other factors to consider, such as the type of products and services, the contractual terms with suppliers, and the quality and standards of goods and services.