ThaiBev Sustainability 2019

SUSTAINABILITY

SUSTAINABILITY REPORT 2019

ThaiBev Sustainability Approach

Caring for the Environment

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Climate Change

GRI 305-1, GRI 305-2, GRI 305-4

Climate change is one of the most urgent global challenges, with direct impacts not only on ThaiBev’s value chain, but also the communities of which ThaiBev is a part.

To address this challenge, ThaiBev is seriously assessing the risks posed by climate change to its operations and also striving to continuously minimize the company’s environmental impacts from all operations.

By reducing the company’s greenhouse gas emissions and aligning company targets with Thailand’s latest science-based Nationally Determined Contributions (NDCs), ThaiBev’s goal is to help Thailand meet the Paris Agreement targets.

ThaiBev has identified climate change risks and integrated these into its overall risk management processes. These risks are then ranked and monitored by the Sustainability and Risk Management Committee, which is comprised of directors, senior management, and independent directors. The committee is tasked with ensuring sound risk and sustainability policy by monitoring possible impacts from climate change on the company’s operations, and planning and taking actions to mitigate these risks.

Climate Change Workshops

ThaiBev has prioritized raising awareness about climate change in the organization. A climate strategy workshop with all business units was conducted to identify both the transition and physical risks, as well as the opportunities presented by climate change. Executives from all business units attended the workshop to brainstorm risks and opportunities. Examples of physical risks include increasing water and other natural resource scarcity.

Transitional risks are production limitations, cap and trade schemes, and fuel or carbon taxes. Each business unit then ranked these risks as per ThaiBev’s corporate risk management process. Lastly, opportunities were identified to ensure required changes could be planned for at the earliest date; opportunities included low carbon products, resource efficiency, alternative raw materials and energy, and engaging and collaborating with suppliers. ThaiBev has already implemented schemes such as water sustainability assessment studies at two locations: Pathum Thani and Ayutthaya provinces.

These evaluations of the current water sustainability situation and associated risks in these two provinces are illustrations of how ThaiBev is taking the risks and opportunities presented by climate change seriously. A further five locations are planned to undergo studies in 2020.

Scenario Analysis

ThaiBev conducted a desktop physical risk assessment of natural hazards up to 2030 at all production sites in Thailand and overseas to better understand the physical risks and prepare for the impacts of climate change under numerous scenarios. The following natural hazards were studied: earthquakes, cyclones, wild fires, water stress, floods, landslides, extreme winds, sea level rise, and storm surge. From these identified issues, individual production sites are developing appropriate risk management and mitigation plans.

Natural Hazards

Cyclones

Wild Fires

Floods

Storm Surge

Water Stress

Sea Level Rise

Landslides

Earthquakes

Extreme Winds

Emissions Reduction

ThaiBev used the Quick Environment Savings Technique (QUEST) and Marginal Abatement Cost Curve (MACC) methodologies to model new projects with associated emission reductions against numerous climate targets. ThaiBev is able to use these tools to model transitional risks such as production limitations or carbon tax.

This project was started at one spirit factory, Red Bull Distillery Samut Sakhon and then rolled out to all other business units by analyzing their production plans and emission reduction projects. As a result, company-wide, ThaiBev is able to be fully prepared for the emission reductions required in order to meet the newest targets.

Commitments and Achievements

In the food and beverage industry, stakeholders expect to see efforts to improve eco-efficiency and make environmentally friendly products available. As a result, ThaiBev has set new climate targets for 2025. Firstly, ThaiBev has aligned the company’s business plan with Thailand’s Nationally Determined Contributions up to 2030. This involved forecasting growth to 2030 and associated environmental impacts. However, to show ThaiBev’s commitment to being a Stable and Sustainable ASEAN Leader the company has brought the environmental targets forward to 2025. As a result, ThaiBev has committed to reducing the greenhouse gas intensity in the beverage business by 14% by 2025.
ThaiBev encourages the efficient reduction of greenhouse gas emissions in our production processes, and makes this clear and transparent by certifying the carbon footprint of both products and the organization with the Greenhouse Gas Management Organization (a public organization) of Thailand. ThaiBev continues to pursue certification for further products and organizations; to increase its portfolio of Low Carbon Products and help mitigate climate change. In fiscal year 2019 ThaiBev had the following certifications:

companies
Carbon Footprint for Organization certification

products
Carbon Footprint of Products certification

products
Carbon Footprint Reduction certification

Greenhouse Gas Emission Intensity (Beverage Business)
Including Direct GHG emission (Scope 1),
Indirect GHG emission (Scope 2) and total
GHG emission from 2016 to 2019

Greenhouse Gas Emission Intensity (kgCO₂e/hL)

	Direct GHG emission (Scope1)
	Indirect GHG emission (Scope2)

Greenhouse Gas Emission Intensity (Food Business)
Including Direct GHG emission (Scope 1),
Indirect GHG emission (Scope 2) and total
GHG emission from 2017 to 2019

Greenhouse Gas Emission Intensity (kgCO₂e/hL)

	Direct GHG emission (Scope1)
	Indirect GHG emission (Scope2)

Remarks :

Greenhouse Gas Emission Intensity of Beverage business in Thailand
Greenhouse Gas Emission Intensity of Beverage business including overseas in 2019 is 35.23 kg of CO2e/hL
The 2020 target emission intensity reduction is 10% in comparison to the base year 2014

ThaiBev is committed to managing environmental impacts related to climate change and expanding the scope to outside the organization. As part of the company’s recognition of opportunities from climate change, ThaiBev has commenced engaging with suppliers and business partners to reduce emissions and improve resource efficiency in order to reduce ThaiBev’s scope 3 emissions and mitigate climate change. In fiscal year 2019 ThaiBev invited suppliers to participate in the Sustainable Collaboration Award (refer to page 50) by submitting examples of the sustainability initiatives they implemented. The finalists were found to have reduced emissions in their operations by over 6,000 tCO2e through collaborations with ThaiBev. Additionally, ThaiBev has begun developing processes to accurately account for other indirect greenhouse gas emissions (scope 3) emissions and to incorporate these emissions into relevant disclosures.

Insight

Peerapong Krinchai
Operations Director
Sermsuk Public Company Limited

How does Sermsuk adapt to climate change?

As the country’s leading beverage producer, Sermsuk PLC recognizes the importance of reducing greenhouse gas emissions. Since 2016, with support from government bodies such as the Thailand Greenhouse Gas Management Organization (TGO), the Industrial Environment Institute, the Federation of Thai Industries, Sermsuk has participated in two carbon footprint projects, which are the “Carbon Footprint for Organization (CFO) Label Project” and the “Carbon Footprint Reduction (CFR) and Carbon Footprint of Products (CFP) Label Pilot Project”. To lead these projects, Sermsuk used its factory in Pathum Thani province, with products “Crystal Drinking Water” and “est Cola carbonated soft drinks” as pilot projects.

For the Carbon Footprint Reduction (CFR) label, Sermsuk currently has a total of 16 products certified, including Crystal Drinking Water packaged in PET bottles and est Cola packaged in aluminum cans. According to TGO standards, the products to be certified must have achieved greenhouse gas emission reductions by at least two percent in the past two years. In addition, Crystal Drinking Water, one product of which Sermsuk is most proud, is the first drinking water in the country to be awarded the CFR label. For the Carbon Footprint for Product (CFP) label, the company has a total of 22 products certified, including drinking water packaged in PET bottles, soft drinks packaged in PET bottles and aluminum cans, Power Plus mineral drinks, and Rangers drinks. The assessment process includes all stages of the product life cycle. In the past year, Sermsuk has continuously expanded the project to seven other factories and further expanded to all types of its products. The company aims that by 2020, all of its products and packaging sizes will be certified with the CFP label.

The results of these carbon footprint projects have helped Sermsuk identify which activities have significant greenhouse gas emissions. This leads to improvements in the production process to reduce carbon emissions and aligns with the company’s energy conservation approach. Successfully implemented projects include the boiler fuel conversion project, the lightweight PET bottle packaging project, the reduction of aluminum can thickness project, the use of liquid sugar instead of white grain sugar project, and the changing of cooling tower to evaporation system project. These projects have resulted in significant reductions in Sermsuk’s overall greenhouse gas emissions. They can also help reduce environmental impacts in other aspects such as unused material management, water management and air pollution.

In addition, in order to increase consumer awareness of the importance of climate change and their recognition of the company’s certified products with the Carbon Footprint Reduction (CFR) label, Sermsuk has highlighted the greenhouse gas emission reductions of Crystal Drinking Water through a new communication campaign called “Meticulous in Every Step, to Serve You Best”. The campaign highlights the six standards that Crystal Drinking Water have been certified with, including the CFR label. This encourages consumers to learn about and purchase low carbon products.

Moving Forward

ThaiBev has set climate change targets in line with Thailand’s Paris Agreement commitment
to reduce the greenhouse gas intensity by

14%

in all beverage businesses by 2025
with 2018 as the base year

ThaiBev 2019 Sustainability

ThaiBev
2019 Sustainability