ThaiBev Sustainability 2019

SUSTAINABILITY

SUSTAINABILITY REPORT 2019

ThaiBev Sustainability Approach

Caring for the Environment

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Risk Management

GRI 102-18, GRI 102-29, GRI 103-1, GRI 103-2, GRI 103-3

ThaiBev manages risks by monitoring, evaluating and managing uncertainties in accordance with the ThaiBev’s enterprise risk management framework, which is integral to good corporate governance.

ThaiBev identifies the key business risks and opportunities related to its continuous and sustainable growth, in order to be able to respond to challenges and mitigate impacts, and also capitalize on arising opportunities to achieve our goal of becoming the stable and sustainable total beverage leader in ASEAN.

Prasit Kovilaikool
Independent Director,
Chairman of the Audit Committee and Chairman of the Sustainability and Risk Management Committee

ThaiBev is committed to sustainable development as a guiding principle for conducting business based on environmental, social and economic responsibility. ThaiBev’s sustainability strategy therefore covers good corporate governance and risk management, especially the risks that could affect the company’s sustainability.

For effective risk management, ThaiBev manages the entire organization’s risk management according to the COSO: Enterprise Risk Management Framework, with the following key components:

ThaiBev’s Enterprise Risk Management Framework

1. Governance structure

covers the level of the Board of Directors, Sustainability and Risk Management Committee, Audit Committee, Executive Committee, Corporate Sustainability Development Committee, Sustainability Development Working Team, Corporate Risk Management Working Team, Sustainability and Risk Committee of product groups or business units, and the risk coordinators of product groups or business units.

2. Understanding the context and strategies in conducting business with a focus on sustainable development

in which all functions work closely together to understand, analyze, monitor, and communicate risk factors and significant future trends that may affect business operations or corporate strategy.

3. An integrated risk management process

is set at the corporate level, product group or business unit level down to the operational level. Assessing key risks and establishing strategies for managing risks, including creating new business opportunities, are in line with the sustainable development strategies and initiatives, which is based on the sustainability materiality of ThaiBev.

4. Continuous monitoring, reporting and evaluating

of the results of the sustainability and risk management at all levels, from departments and subsidiary entities, product groups or business units, to the corporate level.

5. Creating a culture of sustainability and risk management

by providing knowledge and understanding about sustainable development and risk management to the directors, executives and employees at all levels in the organization, through trainings, orientations and by disseminating knowledge, information and news via corporate newsletters. The employees are encouraged to discuss or comment on sustainability and risk management in spaces, such as the academic conference “Thailand CorporateSustainability Symposium”, in which understanding and knowledge about sustainability was shared among leading organizations recognized by the Dow Jones Sustainability Indices (DJSI). In addition, “ThaiBev Sustainability Day” is organized to create understanding and share knowledge about ThaiBev’s sustainable development to employees and stakeholders, such as business partners, customers, etc. Moreover, the Ways Of Work (WOW) Award project is organized as a platform for employees to present projects based on ideas or methods that are consistent with ThaiBev Global Values and that support sustainable corporate development or risk management for the company. Employees are encouraged to enter the competition and selected projects may ultimately be put into practice.

Key Commitments and Achievements

ThaiBev considers “Corporate Sustainability Risks” from our sustainability materiality in three aspects: environment, society and economy, on an annual basis. The corporate sustainability risk that has both a “high” level of business impact and opportunity, and a “high” level of impact and influence on stakeholders pose challenges that require us to find new and different ways to manage it. In this regard, the Company has initiated the Internal Sustainability Assessment by each product group in order to raise all product groups’ awareness of sustainable development and risks, and incorporate them into the operations of all product groups. Risk issues with medium or low impact are closely monitored by the respective committees and working groups. ThaiBev also assesses and monitors emerging risks that may occur in the next three to five years and to prepare suitable and timely risk management measures.

ThaiBev’s Key Sustainability Materiality

Environment

Packaging Management
Water Stewardship
Operational Eco-Efficiency
Circularity

Society

Corporate Citizenship
Responsible Consumption

Economy

Consumer Health and Safety
Corporate Governance and Business Ethics
Innovation Management

ThaiBev’s Key Sustainability Risk

1	Water related risk
2	Climate change and environmental risk
3	Value chain management risk
4	Compliance risk
5	Disruptive technology and innovation risk
6	Corporate reputation and image risk

Significant Risk Management Measures

Related risks

Creating a comprehensive water management system, from the beginning to the end of the value chain.
Conduct water sustainability assessment of each production plant to determine water management guidelines.
Use water and resources for efficient business operation by adopting 3Rs (Reduce, Reuse, Recycle) principles and the Water Footprint assessment.
Collaborate with communities and stakeholders in the use of water, water resource conservation and management of waste and pollutions from the production processes and packaging.

Related risks

Design, develop and manage packaging in the circular economy efficiently, especially plastic packaging, in order to reduce environmental impact.
Define and comply with the Sustainability Policy and the Supplier Code of Practices, which are standards of business conduct for business partners in accordance with ThaiBev.
TheBev’s production processes and products are certified by international standards for safety and quality.
Control and reduce greenhouse gas emissions by developing technology and renewable energy projects, promoting activities to conserve energy and worthwhile use of resources in the production.
Increase the value of waste or by-products to be reused or reproduced in agricultural and industrial sectors.
Use waste from the beverage production to produce renewable and biomass energy.
Provide knowledge, train and encourage employees to participate in reducing and preventing waste.
Responsible waste treatment and disposal.

Related risks

ThaiBev’ s Office of Legal Affairs is responsible for monitoring important news about changes in government policies and regulations that affect business operations, including communicating with related departments within the organization when there is a tendency to enforce the law or when it is promulgated so they are able to prepare, adjust operations and perform correctly; and used as part of assessing the economic worth of various projects to support the Company’s investment decisions.

Related risks

Establishing an IT master plan for long-term support and management of digital technology.
Study and develop technology to change the current work process to be more efficient and able to respond to consumers’ needs in a timely manner.
Innovate and develop new types of products continuously to create business diversity, meet the needs and lifestyles of consumers of all ages, at every moment.

Insight

Pol Narongdej, PhD
Executive Business Process Development Office

Sustainability and Risk Culture

Effective and efficient sustainable development and risk management will occur within an organization that instills sustainability and risk culture as part of the organization. To raise awareness among all employees about the importance of sustainability and jointly develop sustainability, including preventing, monitoring and managing risks that may affect the sustainability of the organization, ThaiBev has determined that risk management is a part of business decisions, from strategic planning, action planning according to the organization’s strategy, budgeting and daily operations. The Company considers the balance between risks, opportunities for business growth, and benefits for stakeholders.

In addition, training and seminars are organized annually for employees to enhance their knowledge and understanding of sustainable development and continuous risk management. A “Risk Clinic” is also organized on a monthly basis for the risk coordinators of each product group or business unit to be able to consult and present various risk issues to the Corporate Risk Management Working Team, who will record those information in the organization’s risk register and report to the executives of the respective product groups or business units and the Sustainability and Risk Management Committee.

Moving Forward

After expanding into important markets in Southeast Asia, such as Vietnam and Myanmar, in the last two years, to ensure the business continues to grow with stability and sustainability, ThaiBev has set long-term goals for overall sustainable development and risk management as follows:

Applying various tools and processes for efficient risk assessment and risk management, such as sensitivity analysis and scenario analysis. This is to ensure sustainability, especially in regards to the impact of water resource challenges, as well as environmental, social and climate issues, on ThaiBev’s business operations, both domestically and internationally. These tools will improve ThaiBev’s the environmental operation strategy, management of the value chain, and the company’s reputation.
Defining and compiling key risk indicator metrics for early warning and monitor the likelihood of risk events. These give the company the ability or time to address problems before they intensify.
Performing self-assessment of sustainability and risk management by executives and employees at the manager level upwards to measure the level of understanding of sustainable development, the perception of risks within the organization, the application of risk management knowledge, and the success of building a culture of sustainability and risk management.

Target for 2025

100%

of business entities/units that adopt risk management framework, tools and processes in operations

100%

of key risk indicators of business entities/units

100%

of the management level performing sustainability and risk management self-assessment

ThaiBev 2019 Sustainability

ThaiBev
2019 Sustainability