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80 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 CONTRIBUTING TO STAKEHOLDERS 81

Managing Environmental and Social Risks Building a Sustainable Supply Chain Sustainable Procurement
Progress

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

achieved ISO 14001 certification.
1 6S refers to the Japanese words Seiri, Seiton, Seiso, Seiketsu, Hong Kong 89.1%
Shitsuke (which mean Sort, Set in order, Shine, Standardise,
Sustain) and Safety 3.1%
Mainland China
over 80%
Others 7.8%

*Based on total purchase value of product and material