The Company has developed a process for assessing and managing risks in the supply chain starting from the new supplier selection process. The Company has established criteria for selecting new suppliers that address both the quality and sustainability aspects of products and services. New suppliers (Thailand and Vietnam operations) shall respond to a self-assessment questionnaire, which is consistent with the Sustainable Sourcing Policy and Supplier Guiding Principle. This includes key topics in Environment, Social, and Governance (ESG) and/or assessments against other relevant standards e.g. Thai Labour Standards (TLS). Furthermore, considerations are also given to product traceability process and business operations’ legal compliance prior to commencing business with the Company.

For existing suppliers, the Company assesses and reviews sustainability risks (Sustainability Risk Assessment) covering economic, social, environmental, and governance aspects, as well as food quality and safety in every product group. The result of sustainability risk analysis (Desk Research) indicates the groups of suppliers that should be managed closely which are animal feed raw materials, food ingredients, packaging, equipment and machinery, fuels, chemicals, logistics, and other critical raw materials. In addition, the Company identifies critical suppliers, which are 1. suppliers with high spending, 2. Suppliers for critical components to production process, 3. non-substitutable suppliers. These critical suppliers shall undergo an ESG Risk assessment through a more rigorous self-assessment questionnaire compared to other suppliers. Moreover, if these companies identified as “high ESG risk”, on-site ESG audits shall be conducted by the Company’s personnel or third-party auditors.

Furthermore, the Company conducts on-site ESG audit of critical suppliers with a target “100% of the critical suppliers audited in Thailand and Vietnam operations by 2025”.

The Company has communicated the assessment result to suppliers to promote operational improvement. The communication of comparative ESG performance relative to peers in the same supplier group will be implemented in upcoming years to enhance supplier performance.

The Company collaborates with suppliers to support the formulation of corrective measures in case of non-conformity, promotes suppliers’ knowledge and understanding through various capacity building programs and awards suppliers with excellent performance. Based on the critical supplier ESG audit in 2023, the top three most common areas requiring improvement included occupational health and safety, labour practices and climate change management. Therefore, the Company has coordinated with these suppliers to develop management processes, monitor performance, and provide trainings to inform good labour practices, occupational health and safety in workplaces, as well as environmental management.

The Company integrates ESG considerations as part of the supplier selection process in order to incentivize suppliers towards conducting a sustainable business in line with Sustainable Sourcing Policy and Supplier Guiding Principle, while implementing measures to control ESG risks.

In case suppliers cannot comply with minimum ESG requirements within a set timeframe, a consideration process will be held by relevant committees for possible corrective actions which may ultimately result in exclusion from our vendor list.

The Company recognizes that growing a sustainable business is unattainable without suppliers, both large corporations and SMEs, with high potential to grow mutually and sustainably. Therefore, the Company strives to increase knowledge and strengthen the potential of suppliers through various sustainability capacity building programs, e.g. focus group training, providing understanding on the Company’s supplier ESG management process, both in overview and in depth. One of the objectives is to improve suppliers’ capability to address audits findings. CPF Partner Day was organized to honor CPF suppliers with high performance and who plays an important role in CPF’s supply chain sustainability. The Company also communicates the direction of CPF’s supplier development on sustainability and awards recognitions to suppliers with outstanding performance. Throughout 2023, 447 suppliers in Thailand operations and 85 suppliers in Vietnam operations have participated in supplier capacity building program (562 in total).

In 2023, the Company’s focused topics in economic aspect were efficiency improvement through innovation and quality & safety of raw materials. For social aspect, the focused topics were good labour practices with respect to human rights principle; for environmental aspect, they were net-zero transition, traceability and zero deforestation supply chain, as well as food loss management. The objectives were to increase knowledge, elevate competitive capacity and drive business excellence with considerations to sustainable growth, and reduce business disruption risks, while being environmentally and socially responsible in the supply chain. Throughout 2023, 447 suppliers in Thailand operations and 85 suppliers in Vietnam operations have participated in supplier capacity building program (562 in total).