Sustainable Business The organization is committed to managing business partners to create sustainable value together by emphasizing the selection of business partners with the potential to conduct business ethically, with expertise, and ready to adapt to changes that affect sustainability under the risk management plan. In addition, SCG aims to create opportunities together with business partners through an effective evaluation system and joint development plan.

Targets

• 95% of business partners of procurement value sign the SCG Business Partner Code of Conduct by 2023.
• 100% of business partners of procurement value over 1 million baht pass the ESG risk assessment process.
• 100% of business partners in the production process pass safety certification since 2012 and continue every year.

Strategy

1. Select and evaluate business partners with potential to conduct sustainable business

Select business partners based on their commitment to comply with the Business Partner Code of Conduct and their potential to grow their business sustainably. Conduct regular assessments and certify all business partners every year to reduce risks in the supply chain.

2. Risk assessment and business partner grouping

Analyze expenses and assess business risks, along with environmental, social and governance (ESG) risks, by prioritizing risks that may affect SCG’s business operations, and using the results to group business partners to determine strategies and develop business partners in line with the risks.

3. Develop and enhance the potential of business partners towards sustainability

Develop a development plan and enhance operational efficiency in line with risks and further develop the competitive capabilities of business partners to be ready to grow with SCG.

4. Create awareness, knowledge and skills of employees.

Management

• Conduct risk assessments and certify all business partners on an annual basis using the enterprise-wide risk management framework and implementing the “SCG Sustainable Procurement Framework”, which covers environmental, social, and governance (ESG) aspects along with cost analysis. 
• Categorize business partners into 4 groups: General Business Partner Group 1, Significant Business Partner Group, Business Partner Group with Sustainability Risk, and Significant Indirect Business Partner Group. 
• Develop a plan to continuously and effectively develop and enhance the performance of business partners in terms of sustainability, covering environmental, social, and governance (ESG) aspects, such as Contractor Safety Management and SCG Transportation Safety: Sustainability Program.
• Establish a committee to develop the knowledge and skills of employees in the procurement, material, and logistics professional group, as well as exchange knowledge, information, and practices with government and private sector procurement organizations.
• Establish a Procurement (Sub Academy Steering Committee) to develop the knowledge and skills of employees, as well as exchange knowledge, information, and practices with government and private sector procurement organizations, both in terms of procurement and business partner development towards sustainability, so that employees can perform their duties efficiently and in line with the goals.

Governance Structure: Oversight and Implementation of the supplier ESG program

Governance Structure: From the Board of Directors to the Sustainable Supplier Committee​

SCG has adopted supply chain management as a key strategy for risk reduction and organizational resilience by establishing responsible units at both the corporate and business levels. These units work to enhance the efficiency of all processes across the value chain while maximizing benefits for stakeholders.​

The SCG Board of Directors provides oversight of supply chain management policies, strategies, and the supplier ESG program. This oversight extends beyond addressing current supply chain challenges to ensuring a long-term, comprehensive strategy for sustainable operations.​

To execute these responsibilities effectively, the Board delegates oversight authority to the Sustainable Development Committee SCG (SDC), chaired by the President and CEO, who is also a member of the SCG Board of Directors. The SDC is responsible for supervising and driving sustainability efforts across SCG, ensuring alignment with corporate strategies and ESG commitments.​

The Sustainable Development Committee (SDC) consists of five subcommittees that oversee various sustainability dimensions, including economic, environmental, and social aspects. One of these subcommittees is the Sustainable Supplier Committee, which plays a crucial role in implementing and strengthening the supplier ESG program under the broader governance of the Governance & Economic Excellence Committee.​

Role of the Sustainable Supplier Committee​

The Sustainable Supplier Committee serves as the central mechanism for integrating ESG principles into SCG’s supply chain management. Its key responsibilities include:​

• Establishing supplier screening and risk assessment criteria to ensure due diligence and responsible sourcing practices.​
• Prioritizing suppliers based on risk levels to mitigate potential ESG-related risks across the supply chain.​
• Creating sustainable value by enhancing supplier capabilities through collaborative programs and support initiatives.​
• Providing training and development programs for SCG buyers, ensuring they uphold supplier ESG program requirements.​

The Sustainable Supplier Committee reports on supplier management progress to the SDC, ensuring that all actions are aligned with the Board of Directors’ strategy, ESG principles, and SCG’s Supplier Code of Conduct.​

Additionally, the committee continuously improves procurement practices by refining the Sustainable Procurement Framework and enhancing the SCG Supplier Portal to promote efficiency, transparency, and accountability in sustainable supply chain management. This approach reinforces SCG’s commitment to responsible sourcing and long-term supplier engagement.​

Significant Supplier Monitoring

Supplier with Corrective Action Plan

Minimum weight of ESG for assessment process*​

Suppliers shall meet a minimum requirement 70%

Step 4 Supplier Segmentation​

Managing supplier according to the level of impact and risk, based on results of Spend Analysis and Supplier Assessment. Prepare a Comprehensive Assessment plan or Audit Plan, as well as plan for monitoring and corrective action.

• Significant Supplier–Critical Supplier /Business relevant Perform audit and plan risk management​
• Significant Supplier–High Potential Sustainability (ESG) Risk Supplier. Conduct Supplier Assessment, along with planning of long-term collaboration to enhance the suppliers’ capability.​
• General Supplier. Supplier is a signatory to SCG Supplier Code of Conduct. Or the supplier has an existing business code of conduct/regulations/business guideline that is compatible with SCG Supplier Code of Conduct.​
• Supplier with high potential or significant business opportunities (Focused or High Opportunity Supplier) should consider opportunities for collaboration to develop products or services. This includes jointly planning with business partners to drive development and advance business growth together.

Supplier Development and Capacity Building Program

To further strengthen supplier capabilities, SCG has implemented a comprehensive training program designed to enhance their capacity in ethical principles, legal and regulatory compliance, technical knowledge, and the integration of Environmental, Social, and Governance (ESG) into their business operations. This initiative aims to drive sustainability throughout the value chain while aligning with SCG’s Sustainability Goals, ensuring that suppliers can meet national and international standards while adapting to sustainability challenges.​

SCG fosters strong collaborations and continuous improvement across all suppliers, with a strategic focus on three key groups.​

1. Focused or High Opportunity Supplier: collaborates with suppliers that have the potential to co-develop products through co-creation plans, SCG strengthens partnerships, fosters innovation, and drives mutual growth, ensuring long-term value creation within the supply chain.​
2. Significant Supplier – Critical Supplier: ensures long-term collaboration and supply chain stability by 1)strengthening supplier relationships to enhance efficiency and reliability 2)promoting business continuity by securing essential materials and services and 3)supporting suppliers in adopting best practices for quality and operational excellence.​
3. Significant Supplier – High Potential Sustainability (ESG) Risk Supplier: actively supports suppliers in this category by promoting sustainable business practices and mitigating environmental and social risks. The company works alongside suppliers to elevate their ESG performance through: Environment risk such as Efficient resource use, waste management, GHG emissions reduction. Social risk such as ethical labor practices, workplace safety, human rights. Governance risk such as legal compliance, corporate integrity, and adherence to regulatory requirements.​

Supplier Capacity Building and Development Program 2024​

GHG Scope 3 Supply Chain Decarbonization

Since 2022, SCG has continuously enhanced supplier capabilities through its Supplier Decarbonization Program to reduce Scope 3 GHG emissions. The initiative began with Supplier Day (2022), followed by the first Supplier Workshop (2023), where 12 partners were trained on GHG emissions calculations. In 2024, SCG expanded its efforts by collecting emissions data from 113 suppliers in the categories of Purchased Goods and Services and Fuel- and Energy-Related Activities (not included in Scope 1and Scope 2) , which were used extensively in production and thus had a significant impact on Scope 3 emissions, divided into 20 strategic suppliers (already tracking emissions) and 93 high-impact suppliers (not yet collecting data). Additionally, in-depth workshops were conducted for 19 high-impact suppliers to improve GHG data management. This ongoing effort reflects SCG’s commitment to building supplier readiness for carbon emission policy and regulation, and sustainable business practices, ensuring long-term growth and a low-carbon value chain.​

SCGC Safety Practice Day 2024​
“Moving Forward” – Advancing with Care toward Sustainable Safety ​

SCGC recognizes the importance of elevating safety standards in collaboration with SCGC’s suppliers to promote efficient and safe operations. The focus lies on establishing practical safety standards that can be effectively implemented, providing knowledge and sharing insights on safety to enhance work efficiency, listening to feedback from suppliers to find collaborative solutions, and honoring outstanding safety performances.​

To achieve these goals, SCGC organized the SCGC Safety Practice Day 2024, a platform not only for promoting workplace safety but also for fostering an open dialogue between SCGC and suppliers. The event aimed to exchange ideas and collaboratively develop sustainable safety standards, ultimately enhancing operational efficiency and safety across all sectors.​

The event took place on July 31, 2024 with participation from 80 suppliers, totaling 143 attendees from;​

1. Suppliers with significant working hours at SCGC sites during 2023–2024.​
2. Suppliers with a strong safety record.​
3. Suppliers who have provided feedback or suggestions on safety practices.

Awards Presented The Best Safety Performance Award – 10 awards, Outstanding Engagement Award – 7 awards, Exemplary Safety Culture Award – 1 award, The Best Safety Improvement Award – 5 awards, The Best Operation and Performance on SCGC System – 5 awards​

The SCGC Safety Practice Day 2024 received highly positive feedback from participants. According to the survey, 97% of attendees expressed satisfaction with the event and the knowledge gained.​

This initiative not only fostered a deeper understanding of SCGC’s safety standards and management systems but also strengthened confidence in SCGC’s collaborative approach with suppliers. The event successfully enhanced partnerships and laid the groundwork for continuous improvements in sustainable safety practices

SCG Smart Living – Housing Product Solution Business: Advancing the Circular Economy

SCG Smart Living actively promotes and drives the Circular Economy policy through sustainable material management. Currently, Aluminum Pallets have an average lifespan of approximately two years before being sold as scrap, a process that involves fluctuating market prices and additional time for disposal.​

This project mitigates raw material cost risks associated with new Aluminum Pallet production, which is impacted by global aluminum market price volatility. Under this initiative, business partners buy back expired pallets at a pre-agreed price, ensuring stability while facilitating the rycling process. The collected aluminum is then melted and repurposed as raw material for new production. This approach benefits both SCG and its suppliers by improving cost management and operational efficiency, while reinforcing the Circular Economy principle by optimizing expired material handling and enhancing procurement stability.​

In 2024, three business partners joined the project, generating an estimated value release of 10% compared to traditional scrap sales, amounting to approximately THB 4 million. Additionally, the initiative significantly improved efficiency, reducing procurement process time by 500 hours per year, equivalent to THB 0.5 million in cost savings.Through this innovative approach, SCG is enhancing resource circularity, cost efficiency, and procurement resilience, setting a benchmark for sustainable business practices.​

DOCUMENT DOWNLOAD

SCG Supplier Code of Conduct
SCG Procurement and Vendor Selection Policies and Guidelines
SCG Human Rights Expectation Letter
SCG Guidelines for Green Procurement