Strategy

Select and assess supplier with capability in sustainable business conduct.
Conduct risk assessment and supplier segmentation to formulate strategy and supplier development plan corresponding with the risks.
Develop and advance supplier's capability towards sustainability.
Raise awareness and enhance employee's competency for efficient procurement.

Management

Conduct risk assessment and certify all suppliers annually and continually, applying enterprise risk management framework covering environmental, Social, and Governance issues and spend analysis.

Segment supplier into 4 groups: general tier 1 supplier; critical supplier; high potential sustainability (ESG) risk supplier and critical non-tier supplier.

Segment Supplier into 4 Groups

General Tier 1
Suppliers:
General Tier 1 Suppliers
refer to manufacturers and distributors of products and services that do business directly to SCGP.
High Potential Sustainability (ESG)
Risk Suppliers:
High Potential Sustainability (ESG) Risk Supplier
refer to manufacturers and distributors that are likely to cause adverse impacts from their improper operations in the social (e.g., human rights, Employee and labor care, environment (e.g.,waste management), and governance (e.g., legal compliance) aspects.
Critical
Suppliers:
Critical Supplier
refer to manufacturers and distributors of products and services that are significant to SCGP's business operations, such as high purchasing volume, critical components, or non-substitutable products.
Critical Non-tier 1
Suppliers:
Critical Non-tier 1 Suppliers (SCGP manages them through General Tier 1 Suppliers' control)
refer to manufacturers and distributors of products and services that do not do business directly to SCGP but deal with products services that are important to SCGP's Critical Suppliers.

Formulate supplier development and capability enhancement plan for consistency and efficiency.

Credit Term Policy for Suppliers

Current situation resulted in an economic recession, causing entrepreneurs to have lack liquidity. SCGP realized the situation and wanted to maintain the supply chain as well. Therefore, SCGP encouraged SCGP's SME partners to continue their business without any financial liquidity problems by setting 'Credit Term Policy' to reduce the credit term to allow business partners to increase the working capital faster with payment in 7-180 days depends on products categories.

In 2021, the average payment period was 35 days. It was faster than the average payment period in 2020 which was 38 days.

Establish a supply chain partner development committee to formulate strategies and plans at business-level in line with the sustainable business partner development approach and promote training of business partners in accordance with sustainable development guidelines.

Target

90%

of procurement value from suppliers with a commitment to comply with the SCGP's Supplier Code of Conduct.

100%

of supplier in procurement spend passed the annual Environment, Social, and Governance (ESG) risk assessment.

100%

of operation contractors certified under SCG Contractor Certification System: SCS

Performance 2021

The total number of business partners operating in 2021 totaled
2,580
90%
of procurement value from suppliers with a commitment to comply with the SCGP's Supplier Code of Conduct.
100%
of suppliers in procurement spend passed the annual Environmental, Social, and Governance (ESG) risk assessment.
0
Suppliers of High Sustainability risk.
7
Critical Supplier were audited, representing 100% of all critical supplier
100%
of operation contractors certified under SCG Contractor Certification System: SCS.
145
transportation contractors certified as major transportation contractors, representing 100% of all major transportation
contractors.
The ratio of procurement spending on environmentally friendly products accounted for11% of total procurement purchased,
16 products
96%
of employees in the supply and purchasing function had training on the ESG knowledge

SCGP guarantee the origin of pulp, wood logs and wood chips used in our manufacturing through FSC™ Certification
Pulp Sourcing​
100% of our imported pulp is FSC-certified
Wood Logs & Wood Chips Sourcing
100% of wood logs & wood chips used in our manufacturing is FSC-certified
- 5% is FSC-FM (Forest Management) from SCGP forestry products and contracted farms
- 95% is FSC-CW (Controlled Wood) from external sourcing

The Ratio of Procurement Spend on Products and Services by Category in 2021

The Ratio of Procurement Spend on Products and Services by Group of Suppliers in 2021

The Ratio of Procurement Spend of High Potential Sustainability Risk Suppliers in 2021

SCGP have zero high potential sustainability (ESG) risk but we have 7 medium sustainability (ESG) risk suppliers

Sustainability risks of medium ESG risk suppliers

  • Non renewable natural resource utilization
  • Potential environmental impact from operation activities
  • Hazardous waste generation from some component in the product

Examples of corrective action of medium ESG risk suppliers

  • Reduce and effectively use non renewable natural resource in production as well and seek substitute raw material
  • Follow up operation of medium ESG risk supplier and reduce activities caused environmental impact
  • Collaborate with supplier to develop product to use less resource with same property/ quality

Corrective actions have been monitored under the oversight of SCGP Sustainable Supply Chain Committee

Supplier Collaboration & Partnership

We encourage our wood logs & wood chips suppliers to participate in our sustainable sourcing initiatives:

  • Set work instruction to address and assess risk of the origin of wood logs/chips​
  • Conduct training to enhance knowledge and competency​
  • On-site visit to give suggestion and recheck compliance ​

Collaboration with suppliers to address impacts of raw materials

Supplier Governance and Enhance towards Sustainability

Strategy Implementation Measurement 2018 2019 2020 2021 Target
Economic Select and assess suppliers with the capability for sustainable business.
  • Evaluate vendors in terms of quality, cost and delivery (QCD Supplier Evaluation).
Evaluate suppliers under Approved Vendor List (AVL) with vendor evaluation (QCD Supplier Evaluation). 100% 100% 100% 100% 100% suppliers under Approved Vendor List (AVL) receive vendor evaluation (QCD Supplier Evaluation).
Conduct risk assessment and supplier segmentation to formulate strategy and supplier development plan corresponding with the risks.
  • Conduct a supplier assessment program and segmentation of critical suppliers with a systematic approach.
Assess and classify critical suppliers. 100% procurement spend (18% procurement spend is from critical suppliers) 100% procurement spend (17% procurement spend is from critical suppliers) 100% procurement spend (14% procurement spend is from critical suppliers) 100% procurement spend (10% procurement spend is from critical suppliers)
  • Conduct sustainability risk assessment and supplier segmentation since 2018.
Assess sustainability risks (ESG Risk). 100% procurement spend 100% procurement spend 100% procurement spend 100% procurement spend 100% suppliers of the procurement spend pass the annual ESG risk assessment every year.
Environment Develop and enhance supplier's capability towards sustainability.
  • Promote and audit suppliers for registration in the Green Procurement List.
  • Purchase products and services according to the Green Procurement List.
Green procurement and products on the Green Procurement List. 5,806 million baht 4,363 million baht 4,790 million baht 5,421 million baht
14 products 14 products 14 products 16 products
  • Promote and support suppliers to participate in the assessment of Green Industry (GI)*
Suppliers achieve the Green Industry Level 2 or higher certification. 33 suppliers 41 suppliers 66 suppliers 69 suppliers
Social Develop and enhance supplier's capability towards sustainability.
  • Raise awareness and behavioral change to create safety culture.
  • Use safety management system to uplift contractors safety standard.
  • Having contractors informed and signed for Life Saving Rules in every access for work.
Operation contractors certified under Contractor Safety Management 69% 58% 95% 100% 100% Operation contractors certified under Contractor Safety Certification System
Major carriers certified under Fleet Carriers Standards. N/A 87% 100% 100% 100% major carrier certified under Fleet Carriers Standards.
Lost Time Injury Frequency Rate (LTIFR) for contractors. 0.706 cases / 1,000,000 Hours Worked 0.678 cases / 1,000,000 Hours Worked 0.296 Cases / 1,000,000 Hours Worked 1.018 Cases / 1,000,000 Hours Worked Lost Time Injury Frequency Rate in 2019 was 0.235 and 2020 was 0.165 respectively and target for zero by 2022
Governance Select and assess suppliers with the capability for sustainable business.
  • Conduct following to Supplier Code of Conduct
  • Started supervising new and main suppliers to commit to comply SCGP Supplier Code of Conduct
Suppliers committed to comply with SCGP Supplier Code of Conduct. N/A 90% procurement spend 90% procurement spend 90% procurement spend 90% of the procurement spend comes from suppliers who commit to comply with SCGP Supplier Code of Conduct

*Green Industry: certification developed by the Ministry of Industry, Thailand, to encourage the industrial sector to operate a green business for sustainable development