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80 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020
Managing Environmental and Social Risks Building a Sustainable Supply Chain
The CSR Code of Practice for Suppliers sets out Our Towngas Sustainable Purchasing Policy
the CSR requirements every Towngas supplier must spells out the environmental considerations that should
follow. They are assessed on their CSR performance be taken into account in every purchasing decision,
according to the following criteria: including the process of procuring services and
evaluating product specifications.
We are one of the founding members of the
Sustainable Procurement Charter launched by the
Green Council, and our procurement decisions and
Business
Ethics processes are in compliance with the ISO 20400
Sustainable Procurement Guidance as verified by the
British Standard Institution (BSI). Making reference to
Environmental Workplace ISO 20400, we have adopted the Life-cycle Costing
Undertakings Operations
(LCC) methodology to ensure that the products and
services we purchase achieve value for money, with
the lowest negative environmental impact and most
positive social results. The total costs of the goods and
services we procure are estimated over their lifespan,
Community Marketplace rather than just their capital costs. We also take into
Contact Activities
consideration future costs such as energy use and
maintenance costs.
Apart from a self-assessment survey to understand Training in sustainable procurement is provided to our
how suppliers align with our CSR Code of Practice procurement staff in order to build up their capabilities
for Suppliers, selected key suppliers are evaluated and knowledge in this area.
through site visits. Additionally, they are provided with
improvement plans in the spirit of working together to Supplier Engagement
identify opportunities for improving ESG performance.
We treat our suppliers as partners and regularly
At Towngas, we are committed to following 6S engage them in pursuit of our shared values for
1
management principles for a safe and efficient sustainable development. To that end, we maintain
workplace. We also promote 6S practices among continuous dialogue with our suppliers and invite them
our suppliers and support those who follow this to participate in forums, seminars and site visits so
methodology for improving efficiency, productivity and we can benchmark their performance and share best
product quality, as well as reducing the risk of industrial practices.
accidents.
1 6S refers to the Japanese words Seiri, Seiton, Seiso, Seiketsu,
Shitsuke (which mean Sort, Set in order, Shine, Standardise,
Sustain) and Safety
CONTRIBUTING TO STAKEHOLDERS 81
Sustainable Procurement
Progress
Areas How we manage our sustainable supply chain involves
the complete supply chain life-cycle, from product
Supplier Performance and Engagement design to disposal. We have been sourcing more
sustainable products such as feedstock (natural gas
In 2020, over 90 per cent of our key suppliers in and landfill gas), pipelines for town gas/natural gas
Hong Kong and mainland utilities (based on total distribution, and environmentally friendly office supplies
purchase value) completed a CSR self-assessment. and equipment, including energy-efficient lighting and
It found that no key suppliers had a significant Forest Stewardship Council (FSC) certified products.
negative impact, actual or potential, on our business
ethics or environmental, human rights and labour We also work closely with our suppliers to develop
practices during the year. We will continue to monitor efficient delivery of gas appliances, affix energy
our suppliers and ensure their activities have no
negative environmental or social impacts. labels to water heaters and reduce the use of plastic
packaging, among other considerations. Additionally,
we provide support for the recycling industry through
Requirements on our suppliers have also been the long-term partnerships we have established with
tightened, and they are now obligated to provide recyclers at EcoPark in Hong Kong.
relevant certifications on ISO standards such as
ISO 9001 and ISO 14001 on the e-Tendering During the year, LCC methodology was extended
System (eTS) platform when they register as our
from vehicle purchases to light-emitting diode (LED)
vendors. The agreed specifications of the products lighting. We will continue to extend this method to other
and/or services are written into their legally binding
contract agreements with us. We also plan to categories of products and services for further savings
encourage more suppliers to obtain ISO 14001 in other procurement categories.
and to promote ISO 45001 certifications as we will
eventually include these standards in our tender To ensure that our staff are familiar with the new
assessment process. ISO 20400 standard, we organised a Sustainable
Procurement Awareness sharing session for all
In 2020, we held our Online Joint Purchase Supplier purchasing staff in Hong Kong in 2020.
Management Meeting in mainland China to keep our
major suppliers updated on our group standards, We will continue to work closely with our suppliers to
quality management experiences, and new system ensure that they are adopting sustainable business
applications. practices and will help them comply with our
sustainable procurement policy.
In our Hong Kong operation, Suppliers’ profile by geographical
over 80% of our suppliers* have location (Hong Kong business)
achieved ISO 14001 certification.
Hong Kong 89.1%
3.1%
Mainland China
over 80%
Others 7.8%
*Based on total purchase value of product and material