2017 Sustainability Report

Supply chain

Building thriving supply chains

We aim to promote inclusive, ethical and sustainable procurement practices. By using our substantial purchasing power to this effect, we expect – by creating long term value for those with whom we do business and the communities in which we operate – to create long-term value for our shareholders.

We have over one thousand suppliers globally. They supply goods and services which include ships, aircraft, fuel, sugarcane, auditing, office supplies and uniforms. We use our purchasing power and our close relationships with suppliers in ways designed best to meet the needs of our businesses and customers.

Sustainable procurement helps to manage risks, improve efficiencies and reduce costs. We aim to procure goods in a way that does not degrade the environment and to only procure services from those who are accountable for their workplace practices.

It is our policy to comply with all applicable laws and regulations relating to procurement. Our own general code of conduct covers procurement and includes relevant provisions about bribery and competition.

The supplier corporate responsibility code of conduct

Our supplier corporate social responsibility code of conduct has been adopted by all our operating companies. It sets out minimum standards with respect to:

  • Legal and regulatory compliance
  • Forced labour
  • Child labour
  • Health and safety
  • Environmental protection
  • Compensation and working hours
  • Human rights
  • Subcontractor management
  • Ethics and reporting

Our Supply Chain Sustainability Working Group (which later in 2018 will become the SwireTHRIVE Sustainable Materials Working Group) encourages consistent implementation of the supplier corporate social responsibility code of conduct by our operating companies.

The code in practice

We need to purchase goods on competitive terms. But in doing so, we must take due account of labour standards, health and safety and the environment.

In addition to Swire Pacific’s supplier corporate social responsibility code of conduct, Swire Beverages follows the supplier guiding principles of The Coca-Cola Company. These principles cover workplace policies, health and safety, human rights, environmental protection and business integrity. Swire Beverages’ own major suppliers are audited. Swire Beverages shares information about suppliers with other Coca-Cola bottlers in Mainland China.

The objective of this collaboration is to pool resources and knowledge between bottlers to manage the procurement process. This facilitates the identification and selection of suppliers who follow the above principles. With other members of the oneworld alliance, Cathay Pacific shares information about suppliers using the SEDEX supply chain platform. It is considering whether to continue to use SEDEX or to assess suppliers independently. Cathay Pacific Catering Services has stringent procedures for supplier selection and ingredient procurement. Its Hazard Analysis and Critical Control Point (HACCP) team and its technical laboratory staff conduct regular audits of its food suppliers’ food safety systems.

Case study

Swire Beverages ‘World Class Operations’

Swire Beverages’ World Class Operations (WCO) management and supplier benchmarking system was introduced in 2017. It aims for continuous improvements in the following areas:

  • Supply risk and continuity
  • Finance
  • Sustainability
  • Capability and productivity
  • Quality and customer service
  • Innovation
  • Regulatory and social responsibility

The intention of WCO is to enhance the performance of Swire Beverages’ suppliers, with the specific aim of minimising defects.

34 suppliers participated in an introductory meeting about WCO in June 2017. By the end of 2017, 22 sites had been visited and assessed. Seven suppliers have signed up to WCO.

Case study

Cathay Pacific – Supplier scorecard

Cathay Pacific has a scorecard by reference to which it rates its suppliers. The elements of the scorecard are as follows:

  • Cost
  • Innovation
  • Satisfaction
  • Assurance of supply
  • Quality of goods and services
  • Sustainability

Suppliers are vetted by reference to self-declarations that they comply with the supplier corporate social responsibility code of conduct.

Case study

Swire Properties – e-Contractor list management system

Those who wish to contract with Swire Properties may apply to do so online. They must (by responding to a questionnaire) confirm that they have appropriate policies and systems in place to manage their environmental impact and to protect their employees. Confirmations are checked by the Swire Properties technical services department. Accepted suppliers are monitored.

In 2017, Swire Properties assessed its 20 largest suppliers using an enterprise risk management framework.

Swire Properties may visit the sites of its key suppliers and may request them to obtain ISO14001 Environmental Management System and OHSAS18001 Occupational Health and Safety Management System certifications. They may also be required to submit environmental and health and safety management plans for review.