People and Community Sustainable Supply Chain
What is a way to grow with suppliers?
Our Approach
CJ CheilJedang aims to achieve a sustainable supply chain by eliminating negative factors affecting ethics, human rights, and the environment in the supply chain. As part of this, we established the Supplier Code of Conduct in 2017, which provides minimum expectations for ethics, human rights, environment, health, and safety and is continuously updated and revised. In 2022, we organized a working-level council of experts from the purchasing organizations of each business to discuss and implement the revision of the Supplier Code of Conduct and supplier support, with the aim of strengthening sustainable supply chain management and accelerating the implementation of strategic tasks. Our sustainable supply chain management plans and policies undergo approval by the Corporate Sustainability Committee under the Board of Directors. In addition, we worked with an external consultant to conduct the first-ever second-party due diligence to identify potential risks along the supply chain. In the future, we will establish a global supply chain management system covering the entire global supply chain, enhancing information credibility and execution.
Sustainable supply chain system
CJ CheilJedang operates a global supply chain to source raw materials, goods, packaging materials, and equipment. To enhance the sustainability of the supply chain, we have established and updated the Supplier Code of Conduct and Guidelines and developed supply chain management processes to ensure its sustainability.
Supply Chain Management Policy
CJ CheilJedang has established the Supplier Code of Conduct to assess and manage ESG risks in the supply chain. To consider sustainability factors when selecting and evaluating suppliers, we specifically include provisions from the Supplier Code of Conduct, including human rights, environment, safety, and ethical management in standard contracts for compliance. In 2022, 84% of all contracts were in compliance with the Supplier Code of Conduct.
Management of the supply chain and key suppliers
CJ CheilJedang evaluates ESG factors such as human rights and safety upon new registration of suppliers to determine the possibility of further transactions. In addition, suppliers of raw materials are managed through assessments and regular audits. If the result of the assessments proves to be unfit, a penalty is given depending on the seriousness of the matter along with recommendations for improvement. In addition, CJ CheilJedang selects and manages key suppliers based on scale of transactions, substitutability, and sustainability.
Enhancing transparency in the supply chain
Advancing the G-SRM system ㅣ G-SRM(Global Supplier Relationship Management) operates on a cloud-based purchasing system to increase transparency in purchasing and to streamline purchasing operations. Also, through automatic sharing of bid results and consent of supply chain ethics/human rights management, we have strengthened transparency as well as ESG activities. The new system is supported in five languages and compatible with all internet browsers which increased user accessibility, and enabled online global technical support by achieving interactive communication through online systems.
Supply Chain Governance
At CJ CheilJedang, the Corporate Sustainability Committee under the Board of Directors takes charge of the Sustainable Supply Chain Policy, and operates a supply chain working committee for the implementation of the supply chain management policy and a company-wide cooperation. The supply chain working committee operates based on the leadership of the Purchasing Department of Food, Grain, and BIO sectors, and executes tasks that enhance the supply chain’s sustainability through collaboration with departments by function, including human rights, safety, etc.
Supply Chain Sustainability Assessment
CJ CheilJedang conducts ESG evaluations for its suppliers to strengthen the sustainability of its supply chain. In 2022, we improved our supply chain ESG assessment system and assessed our suppliers’ ESG practice through online self-assessment and on-site inspections. The supplier ESG assessment is based on the Supplier Code of Conduct and covers four areas: human rights management, safety management, environmental management, and ethical management. We use the results of the supplier assessment to implement improvement plans.
Supply Chain ESG Assessment Results and Directions for Improvement
The Self-assessment revealed that manufacturing suppliers scored low on energy, GHG emissions, and sustainable sourcing. They also need improvements in human rights management and ethical management. For non-manufacturing suppliers, inadequacies were identified in human rights management and ethical management. On-site inspections were conducted at seven companies, resulting in 122 improvement tasks, the majority of which related to environmental management. Based on these findings, we have requested corrective actions and will monitor the progress of the tasks on a quarterly basis.
Mutual Growth
Based on the shared growth philosophy of the CJ Group, CJ CheilJedang pursues win-win cooperation with the goal of maximizing capabilities of the supply chain. In particular, we continuously operate the ‘CJ Partners Club’ to maintain sound partnership, and we also carry out the ‘Happy Companion’ project to secure sales channels for local food companies. In addition, we not only support with education, fund, and technical support, but we also provide support in quality and cleanliness as well as employment safety through various shared growth programs that offer practical benefits to our partner SMEs.
ESG Management Support
To support suppliers' ESG management, CJ CheilJedang developed ESG management indicators and made them available on the Shared Growth Portal to help suppliers review their ESG practices. We have also provided 51 suppliers with training on global ESG trends and information on our ESG policies. In addition, we provide ESG consulting support to help suppliers fulfill their social responsibilities.
Technical Support
We support suppliers’ product and production technology development, work with them to co-develop various products for CJ CheilJedang and support original equipment manufacturing and launch.
Financial Support
To bridge the wage gap for our suppliers and help retain their core workforce, we offer the Naeil Chaeum Deduction for Win-Win Growth with Larger Enterprises and provide a range of financial support, including shared growth funds, interest-free loans, early payment for holidays, employee training costs, and welfare support, to indirectly support their ability to pay wages.
Grievance Settlement Channel
To help our business partners sharpen their competitive edges and build trustworthy partnerships with them based on integrity, CJ CheilJedang operates the Subcontracting Dispute Settlement Council and the CJ Shared Growth Portal to receive reports on unfair trade and pain points. We also have a council of suppliers to discuss issues related to the health and safety of suppliers' employees and make improvements accordingly. In addition, we hold monthly meetings of the Internal Review Committee for Subcontracts to address key issues related to our suppliers.
