Sustainable Supply Chain

Building a Sustainable and Ethical Supply Chain

At San Miguel Corporation, we recognize that a sustainable business is only as strong as the supply chain that supports it. Our commitment goes beyond procurement—we are fostering a resilient, responsible, and transparent ecosystem that advances both business success and environmental and social progress.

By embedding sustainability into procurement, we ensure that supply chain decisions not only enhance efficiency but also drive ethical sourcing, local economic growth, and environmental responsibility. In 2024, 60% of our total procurement spend—equivalent to PhP 187.5 billion—was directed toward local suppliers, fueling economic growth while lowering emissions associated with long-haul transportation.

SMC’s Corporate Procurement Group, in collaboration with our business units, plays a key role in integrating ESG principles across our supplier network. Through sustainable sourcing strategies, supplier engagement, and compliance-driven decisionmaking, we are shaping a supply chain that is both responsible and future-ready.

Governance and Supplier Engagement

Maintaining the highest standards of governance is critical to our responsible sourcing practices. The SMC Supplier Code of Conduct, refined in 2022, sets clear expectations for suppliers on environmental conservation, occupational health and safety, human rights, and fair labor practices.

To ensure compliance and mitigate ESG risks, we conduct a rigorous supplier accreditation process, evaluating business ethics, labor conditions, and environmental impact. In 2024, we expanded our Supplier Sustainability Questionnaire to an additional 500 suppliers, covering 10% of our supplier base. This initiative baselines ESG maturity levels and helps suppliers strengthen their sustainability programs.

To further enhance accountability, we are engaging a third-party solutions provider to improve supplier monitoring, risk assessment, and compliance validation. This digital platform will enable us to streamline accreditation, identify ESG risks earlier, and use data-driven insights to improve procurement practices.

Our supplier engagement model is structured to provide targeted support based on each supplier’s ESG maturity level:

• For established global suppliers, we aim to collaborate on sustainability benchmarking and best practice sharing to raise industry standards.


• For small and emerging suppliers, we will provide training, ESG orientation sessions, and capacity-building programs to equip them with the knowledge and tools to meet evolving sustainability expectations.

Through these efforts, we will ensure that sustainability is a shared priority across our value chain, fostering long-term supplier resilience while strengthening our own sustainability commitments.

Future Goals and Initiatives

As we move forward, we are scaling up efforts to deepen supplier engagement, enhance ESG monitoring, and advance ethical procurement standards. Our key priorities for 2025 include:

• Expanding supplier ESG assessments and third-party compliance monitoring.

• Introducing supplier training programs to accelerate sustainability adoption.

• Implementing a digital procurement platform for increased transparency.

We are building a responsible supply chain rooted in partnership — initially engaging 500 suppliers on ESG, directing 60% of our spend to local businesses, and working together to raise sustainability standards across the value chain.

By 2040, we aim to build a fully ESG-integrated and climateresilient supply chain. Through collaboration, innovation, and accountability, we are shaping a procurement ecosystem that not only supports sustainable business growth but also contributes to a more just and responsible Philippine economy.

For more details on our Supplier Code of Conduct and sustainability initiatives, visit San Miguel’s website.

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