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Climate Change APPROACH

Climate Change

Scenario Analysis
of Transition Risks

Scenario Analysis
of Physical Risks
Thai Beverage Public Company Limited (ThaiBev or Company) recognizes the need to accelerate its actions to address the climate crisis, while contributing to global efforts to limit the global temperature increase to below 1.5°C as part of its contribution to the Paris Agreement, and to improve the Company’s resilience to potential climate impacts. The Company recognizes the importance of managing climate-related risks, as well as maximizing the opportunities from climate change, to ensure a sustainable long-term future for its food and beverage operations. In doing so, ThaiBev engages with direct and indirect value chain parties to help them align their activities with the Paris Agreement and international best practices.
ThaiBev’s TCFD journey started in 2019, by expanding the coverage of greenhouse gas (GHG) emissions accounting and reporting to include international subsidiaries and emissions from value chain activities. ThaiBev also organized workshops with employees, management, and executives to discuss the TCFD framework, climate-related risks and opportunities, and climate strategy based on the best international practices and expectations. In 2021, ThaiBev published its first climate-related financial risks and opportunities disclosure in line with the TCFD recommendations.

Since then, ThaiBev is continuously developing its climate-related risks assessment and disclosure, by reviewing climate transition scenario analysis, adding one more physical climate scenario to the assessment, developing and updating climate-related risks and opportunities metrics and targets, and assessing financial impacts of climate risks and opportunities on its business.

This document aims to represent the holistic picture of how ThaiBev identifies, manages, and responds to financial implications of climate-related risks and opportunities according to the TCFD recommendations and summarizes key achievements to date.
1. Governance
ThaiBev’s Board of Directors oversees managerial performance, guides corporate strategy, and incorporates environmental and social standards to meet stakeholder interests. To address climate-related risks and opportunities at the corporate level, the Board of Directors established the Sustainability and Risk Management Committee (SRMC), which comprises independent directors, executive directors, and senior executives, to support strategic planning for sustainable development while also managing the overall risks of the ThaiBev Group. The SRMC reports directly to the Board of Directors.

Table 1: Climate Governance Responsibilities
Role Responsibilities Meeting Frequency
Board of Directors (BoD) Oversee climate-related risks and opportunities through a three-dimensional sustainability approach (environmental, social, and governance and economic) as part of ThaiBev’s overall corporate performance and operational risks.

Monitor and approve ThaiBev’s climate strategy, goals, and targets. This includes annual climate strategy revisions, strategic direction, and high-level improvement recommendations upon receiving reports from the SRMC.
Quarterly basis
Sustainability & Risk Management Committee (SRMC) Oversee, monitor, and manage identified climate-related risks and opportunities as part of corporate material risks. This includes climate-related policy development, climate risk management, strategic adaptation, and progress updates against goals and targets for addressing climate-related issues.

Monitor climate-related operational processes from each product group/business unit including review and updates of climate-related regulations / frameworks, scenario analysis and risk assessment.

Report on climate risks (as part of corporate risks) and management approach to the BoD and Audit Committee on a quarterly or on ad hoc basis (i.e., incorporate climate-related oversight into the board meeting agenda).
Quarterly basis
President and Chief Executive Officer (CEO) Oversee ThaiBev’s climate strategy implementation and monitor progress of climate-related goals, targets, and programs/projects.

Agree on and propose climate-related programs/projects under the three pillars of ThaiBev’s climate strategy to the SRMC, which will be approved by the BoD.

Assign responsibilities within ThaiBev functions to implement ThaiBev’s climate strategy.
Monthly basis
Sustainable Development Working Team (SDWT) Develop / implement climate-related programs/projects under the three pillars of ThaiBev’s climate strategy, covering capacity building, stakeholder engagement programs, and partnerships initiatives.

Coordinate with internal and external stakeholders for climate strategy implementation and climate risk management.

Collect climate-related primary data from the PG/BUs, consolidate and analyse climate-related data for performance tracking, and prepare periodic (quarterly/annual) reports for the SRMC (and subsequently the BoD).
Quarterly basis
Corporate Risk Management Working Team (CRMWT) Risk identification via (internal and external) stakeholder engagement as part of the risk management system

Coordinate with PG risk coordinators to monitor PG/BU-specific climate-related risks, and report to PG/BU-level senior executives and the SRMC, as needed.
Bi-monthly basis
Investment Committee Oversee potential climate-related financial risks and opportunities. Incorporate climate-related risks and opportunities as a factor in the analysis of major capital expenditures, acquisitions, and divestments.

Consider financial impacts of climate risks and opportunities for investment decisions.
Quarterly basis
Senior executives from each PG/BU level, in coordination with other committees and working teams, support the SRMC by integrating sustainability, climate-related issues, and environmental policies and guidelines into their strategic and operational management, covering strategic planning, budgeting, implementation, and day-to-day operations. Additionally, the senior executives are responsible for reporting on sustainability and risk management results to the SRMC for their respective PG/BUs, at least on a quarterly basis.

ThaiBev has implemented climate-related scenario analysis, physical and transition risks, and opportunity analysis, and created awareness on TCFD reporting by hosting training sessions throughout the organization. To ensure accountability for sustainability and climate-related actions, ThaiBev has integrated ESG, climate change-related key performance indicators (KPIs) and monetary incentives into employees’ targets.
2. Strategy
ThaiBev has integrated climate change risks and opportunities into its strategy and operations to drive continued improvement and to enhance its resilience toward climate change, while also enhancing value creation for ThaiBev’s business and connected communities.
Improve ThaiBev’s climate resilience and support a low-carbon economy in line with the 1.5-2°C pathway.
“To adapt to and mitigate climate change while enhancing value creation for ThaiBev’s business and connected communities”.
Figure 2: ThaiBev’s Three Pillars of Climate Strategy
ThaiBev has developed a climate strategy that implements projects throughout its operations and value chain to mitigate potential risks and create opportunities from both physical and transition impacts. These projects include supplier engagement initiatives, development of low-carbon products, reforestation and mangrove rehabilitation, and organic farming initiatives. Similarly, ThaiBev uses this climate strategy to inform financial planning conversations and modeling. Details of climate related initiatives can be found in ThaiBev’s Annual Report 2022 and Sustainability Report 2022.
Scenario Analysis of Climate Risks and Opportunities
ThaiBev has conducted an in-depth scenario analysis for both physical risks and transition risks and opportunities. Physical risk assessment was conducted using Representative Concentration Pathway (RCP) scenarios from the Intergovernmental Panel on Climate Change (IPCC), and considered the following natural hazards: riverine floods, storms, water stress, sea level rise, and increasing temperature. Transition risk assessment was conducted based on the International Energy Agency (IEA)’s Stated Policies Scenario (STEPS) and Sustainable Development Scenario (SDS).

In addition, ThaiBev has conducted Water Sustainability Assessment (WSA) for its production plants, including both surface water and groundwater, for an in-depth assessment of any potential climate-related risks.

ThaiBev has identified timeframes for climate-related physical and transition risks in line with the timeframes used for business operations. These timeframes are as follows: short term (1-3 years), medium term (3-10 years), and long-term (>10 years).

Physical Risk
ThaiBev conducted desktop-based physical risk assessment of prominent natural hazards at 35 locations in Thailand and Myanmar based on the intensity and frequency of historical events/hazards and corresponding projected risk rating under RCP 2.6, RCP 4.5, and RCP 8.5 scenarios. The assessment was conducted for the baseline conditions, and medium term (2030), while RCP 2.6 considered the longer-term 2050 and 2080 impacts as well, with the latter corresponding to the Paris Agreement goal to limit warming to ‘well below 2°C’ by the end of the century. Please see the scope of the physical risks assessment in Table 2 and results with adaptation measures in Table 3.

Table 3: ThaiBev Physical Risks and Adaptation Measures
Climate Physical Risks Timeframe Impact Description Adaptation Measures
Riverine Floods Medium term
(3-10 years)
Medium to high The extreme precipitation events, such as a number of days with heavy rainfall, are likely to increase the probability of floods causing damage to ThaiBev’s assets and increasing cost of production due to supply chain disruptions. ThaiBev conducted flood risk assessment in areas prone to flooding for all key assets, and highlighted areas that were the most likely to be affected. To mitigate any impacts ThaiBev constructed flood barriers, storm water draining, or pumping stations in the areas highlighted.

Further, alternative transportation routes are planned to minimize supply chain disruption due to potential floods.
Storms Medium term
(3-10 years)
Medium to high Greater probability of disruptions within the operations, the supply chain and finished goods inventory due to storms. Each production site tracks and monitors the weather forecast including the storm and earthquake reports from the Thai Meteorological Department to receive the earliest warnings. All production sites shall ensure that the external roofing or solar rooftop systems are in adequate condition and implement response mechanisms to reduce impacts during the storms.
Water Stress Long term
(>10 years)
Medium to high Changes in water availability can affect ThaiBev’s production lines, supply chain, and revenue, especially when factories operate in high water stress areas. ThaiBev has initiated the Water Sustainability Assessment (WSA) for both surface water and groundwater in order to receive an in-depth assessment of present and future risks and opportunities.

The assessment has led to the development of Integrated Water Resources Management Plan (IWRM) for each assessed factory focusing on implementing a long-term adaptation and mitigation plan.
Sea level rise Long term
(>10 years)
Low to medium (for coastal locations) Seawater intrusion into natural water sources such as rivers and aquifers can cause disruptions to ThaiBev’s production, leading to more spending on the operational cost of buying fresh water. Seawater intrusion into aquifers: ThaiBev will engage with local communities and governmental authorities near the identified high-risk areas to improve the groundwater wells.

Seawater intrusion into rivers: Expand freshwater stock facilities and implement a management plan to ensure sufficient fresh water supply by using water saving technology, water recycling system, and rainwater harvesting system.
Increasing Temperature Long term
(>10 years)
Low to medium Changes in air temperature will decrease crop yields throughout ThaiBev’s supply chain, which may cause a higher cost of material sourcing. ThaiBev has continued the educating and training initiative with farmers to help conserve resources, prepare for natural disasters and adopt technology for production efficiency.
Transition Risks & Opportunities
ThaiBev has conducted a scenario analysis for transition risks and opportunities covering two scenarios from the IEA and assessed five drivers over two main time horizons between 2030 and 2050 to evaluate the financial impact of key drivers on our organization. In increasing the breadth and depth of ThaiBev’s transition scenario analysis, certain transition risk and opportunity assessments extended to include upstream and downstream activities in the value chain. For instance, carbon tax in the supply chain from agricultural supplies was included in the financial impact analysis, while ThaiBev also assessed the downstream opportunities in material and packaging circularity.

Please see the scope of scenario analysis in Table 4 and results in Figure 3 and Figure 4
Table 4: ThaiBev Transition Risk and Opportunity Scenario Analysis
Purpose To analyse whether transition related drivers (policy/legal, market, technology, reputation) have a significant impact on ThaiBev’s business in the future, and what risk mitigation actions are required for significant risks.
Scenarios IEA STEPS: IEA’s stated policies scenario, which expects a 2.5-3.3°C rise in global temperatures by 2100. This scenario acts as a base case for transition scenario analysis.

IEA SDS: IEA’s sustainable development scenario, which aligns with a global trajectory that meets the ambitions of the Paris Agreement, forecasting a well-below 2°C rise in global temperatures, with efforts to limit the rise to 1.5°C by 2100.
Scenario Time Horizons
  • 2030 (near-term): covered “Short-term” and “Medium-term” timeframes
  • 2050 (long-term): covered “Long-term” timeframe
These scenario time horizons are aligned with ThaiBev’s risks and opportunities identification timeframes.
Target area of analysis Operations and value chain
Scope of financial impact calculations ThaiBev Group
ThaiBev has identified a list of transition risks and opportunities which are considered relevant and are used in scenario analysis:
Risk Category
Policy and Legal Water Tariff:
possibility of increased production costs of beverage products caused by an increased water tariff in Thailand.
Carbon Pricing (operational and upstream):
carbon pricing policies that are already in place in markets of ThaiBev’s supply chain and expected policies in operational areas.
Market Changes Consumer Trends on Low Carbon Products:
changing consumer and market preferences towards products seen as better for the environment.
Technology Advances Low Carbon Refrigerants:
emergence of new refrigerants with lower global warming potential to replace existing refrigerants – however, no material risk from high emission refrigerants and climate-related reputation is identified due to less exposure and usage.
Opportunity Category
Technology Advances Material Circularity:
increasing financial feasibility of recycling technologies where recycled materials become cheaper than virgin materials.
Resource Efficiency:
utilizing / investing in energy efficient and emissions reduction technologies / machineries to potentially reduce future costs.
Market Changes Development of Low-carbon Products:
ThaiBev increasing the share of products that receive an approval for the Carbon Footprint of Products and Carbon Footprint Reduction Label

Reducing Costs of Renewable Electricity:
due to increased demand from the marketplace and economies of scale while investing in these materials.
Reputation Stakeholder Sentiment:
increased stakeholder expectations on climate action, especially investors, shareholders, consumers, and societal expectations.
ThaiBev conducted group-wide workshops to prioritise transition risks and opportunities for each scenario and time horizon, resulting in the risk and opportunity matrix below (Figure 3 and Figure 4):
Consequently, ThaiBev conducted a deeper dive into higher priority and most material transition risks and opportunities as presented in Table 5.
Table 5: Scenario Drivers, Business Impacts, and Response Measures
Driver Timeframe Business Implications (Impacts to Business) Potential Financial Impact Response Measures
Transition Risks
Carbon Pricing (operational and value chain) Medium term
(3-10 years)
Applying carbon-pricing in Thailand would mean a company with high emissions will have to bear more operation costs, therefore potentially affecting ThaiBev in the following ways:
  • Increasing raw material and production costs, especially agricultural products due to transfer of carbon price costs by suppliers, and
  • Increasing operational costs from regulatory carbon pricing and investment costs to install clean energy.
0.00-2.5% negative impact to profit by 2030
  • Set up an internal carbon price where the price reflects current or expected carbon pricing in operating and supplier jurisdictions​.
  • Engage with suppliers that may be implementing carbon pricing to reduce impacts
  • Implement initiatives towards a net zero goal and reduce emissions
Water Tariff Short term
(0-3 years)
Thailand is in the process of developing a water tariff, according to Water Resources Act, B.E. 2561 (2018). The level of expected impact is subject to the amount of water consumption and agreed upon national regulations on the water tariff.

It is assumed that the frequency to increase tariff rates may not be often and that Thailand may have less impact on droughts due to the government’s active strategy and mitigation measures.

Nonetheless, the impact of increasing investment costs in innovation for water efficiency is expected.
0.2-0.5% negative impact to profit by 2025
  • Assessing operation sites for potential risks and developing a management/mitigation plan.
  • Establishing a clear climate & water strategy to address the issue, including avenues for water recycling and water efficiency
  • Mapping market expansion and assessing the water requirements.
Consumer Trends on Low Carbon Products Medium term
(3-10 years)
  • Development of a low carbon portfolio indirectly suggests increasing production efficiency to reduce company emissions per product.
  • Shifting consumer trends may change the demand of ThaiBev's products, thus impacting revenue.
Not yet calculated
  • Monitoring domestic consumer trends to meet domestic demands and international patterns for upcoming trends and adapting marketing campaigns to emphasize ThaiBev’s low carbon products in regions with demand for such products.
  • Continue developing low carbon products and getting them certified to meet customers’ demands, while expanding the low carbon products in the beer and non-alcoholic beverage business.
  • Conduct feasibility studies for low-carbon technologies, including how it may be integrated with current and future ThaiBev products or operating procedures.
Transition Opportunities
Material Circularity Short term
(0-3 years)
Thai Beverage Recycle Co., Ltd. (TBR) focuses on adding more value to recycled and waste materials to supply the group companies and external clients, which aligns with the national strategy of the Bio-Circular-Green Economic Model, aiming to reuse and recycle resources and is seen as business growth.
  • High investment costs of technology for an early transition to a low carbon business
  • Increasing opportunities to reduce cost of using secondary materials.
  • Potentially increasing the number of clients, which results in business growth.
Not yet calculated
  • Engaging with researchers and partnering with innovators to initiate low carbon and take back technology customised for ThaiBev’s business.
  • Expand and increase engagement in collection/take back campaigns of product packaging, including educational and awareness campaigns on packaging indicating how each product can be recycled.
Reducing Cost of Renewable Energy Medium term
(3-10 years)
  • Increasing demands and viability of renewable energy in operations.
  • Increasing cost saving of renewable electricity generation according to levelized cost of electricity (LCOE)
Cost savings of 7,000,000-10,000,000 USD/year
  • Expanding self-generating renewable energy initiatives/investment.
  • Exploring and preparing to purchase renewable energy certificates (REC) within company financial planning for assets that cannot access direct sourcing of renewable energy.
Shareholder and Stakeholder Sentiment Medium term
(3-10 years)
  • Stakeholders globally, including shareholders and investors, are increasingly aware of the Paris Agreement and the 26th UN Climate Change Conference of the Parties (COP26). It is considered that ThaiBev's reputation and access to capital may be impacted by stakeholder demands for climate action.
  • Consumer is more environmentally conscious and expect companies to consider environmental issues.
Not yet calculated
  • Continue ThaiBev’s sustainability & climate journey disclosure through a credible framework, such as TCFD.
  • Continue engaging with key stakeholders and policy makers to encourage the transition to a low carbon society.
3. Risk Management
ThaiBev has integrated climate-related risks into its multi-disciplinary, company-wide, risk management process, through five steps covering the assessment of size and scope of identified risks. (Refer to Annual Report 2022 pg. 136-157)

The identified risks are ranked, assessed, scoped, and monitored by the Sustainability and Risk Management Committee (SRMC). This committee is responsible for ensuring sound risk and sustainability management, by monitoring possible impacts of climate change on company operations, planning, and taking actions to mitigate these risks. To ensure comprehensive oversight and group-wide monitoring, climate-related risk management is embedded into ThaiBev’s overall risk management process. For an overview of roles and responsibilities related to climate-related issues, please see the diagram below.

Figure 5: Risk Management Process relevant to Climate-related Risks and Opportunities

4. Metrics and Targets
ThaiBev utilizes its own environmental data collection tool across the ThaiBev Group to ensure standardized data collection and calculation. This tool collects energy, emissions, water, wastewater, waste, and environmental compliance data. The tool quantifies the following Scope 1 GHG emissions activities:
  • Stationary combustion (including biogenic emissions)
  • Mobile combustion (including biogenic emissions)
  • Biogas flaring
  • CO2 from carbonation (direct emissions)
  • Fugitive emissions of hydrofluorocarbons (HFCs) and sulfur hexafluoride (SF6)
  • Fugitive emissions from wastewater treatment
  • The tool quantifies the following Scope 2 GHG emissions activities:
  • Location-based emissions from grid electricity consumption
  • Market-based emissions from other electricity provider
Gases included in our inventory are CO2, CH4, N2O, HFCs, and SF6. PFCs and NF3 are not relevant to our operations. ThaiBev uses emission factors from the 2022 Intergovernmental Panel on Climate Change (IPCC) Guidelines for National Greenhouse Gas Inventories and the United States Environmental Protection Agency (US EPA). For energy conversions, Net Calorific Values (NCVs) sourced from the IPCC and Thailand’s Ministry of Energy were used. Global warming potentials (100-year) from the IPCC 6th Assessment Report, 2022, were used. Our GHG data undergoes annual third-party assurance as part of our sustainability reporting process (see page 214 of Sustainability Report 2022).

ThaiBev’s operating plants measure ozone-depleting substances, CO, NOx, and SOx, including Total Suspended Particles (TSP) from boiler stacks every six months, in compliance with the regulations of the Industrial Works Department, at the Ministry of Industry. ThaiBev has long collaborated with suppliers and business partners to reduce Scope 3 GHG emissions, through application of the CROSS Procurement solution with the Supplier Life Cycle Management (SLCM) system. Given ThaiBev’s commitment to the 1.5–2°C temperature limit this century, we have expanded our GHG accounting to all material Scope 3 emission categories based on the GHG Protocol. A screening assessment of relevant Scope 3 GHG emission categories was first performed in FY 2019. ThaiBev began accounting for public disclosure for the first time in FY 2021, allowing a base year to be set and incorporation of the Scope 3 GHG emissions total into ThaiBev’s target of net-zero Scope 3 GHG emissions by 2050. Other climate-related metrics and targets for energy, water, waste and post-consumption packaging management can be found in Sustainability Report 2022.
ThaiBev has completed its assessment of Scope 3 emissions which has also been third-party verified. The company plans to incorporate these into its science-based targets in the future. The breakdown by Scope 3 category can be found on page 205 of Sustainability Report 2022.
2030 Target 2040-2050 Target
50% reduction of GHG emissions Scope 1 and 2 combined, compared to 2019 base year Net-zero GHG emissions for Scope 1 & 2 by 2040
50% renewable energy used by 2030 Net-zero GHG emissions for scope 3 by 2050
Performance Unit 2019 2020 2021 2022
Gross Scope 1 GHG emissions Tonnes CO2e 1,335,633 1,300,640 1,218,876 1,194,495
Direct Scope 1 GHG emissions Tonnes CO2e 945,064 906,081 800,393 742,488
Biogenic CO2 emissions Tonnes CO2e 390,569 394,559 418,483 452,007
Scope 2 GHG emissions Tonnes CO2e 185,731 180,371 174,890 194,734
Scope 2 GHG emissions Location-based Tonnes CO2e 180,509 177,205 170,861 192,239
Scope 2 GHG emissions Market-based Tonnes CO2e 5,222 3,166 4,029 2,495
Scope 1 and 2 GHG emissions Tonnes CO2e 1,521,364 1,481,011 1,393,766 1,389,229
Scope 3 GHG emissions Tonnes CO2e N/A N/A 1,404,457 1,330,365
ThaiBev has completed its assessment of Scope 3 emissions which has also been third-party verified. The company plans to incorporate these into its science-based targets in the future. The breakdown by Scope 3 category can be found on page 205 of Sustainability Report 2022.
Transition Risk and Opportunity 2019 2020 2021 2022
Renewable Energy
Target: At least 50% renewable energy use annually by 2030
Renewable energy generation (MWh) 565,676 632,877 648,802 868,429
% of renewable energy consumption out of total energy consumption 27.7% 30.8% 31.9% 42.8%
Low-carbon Products
Revenue from low-carbon products (% of total revenue) 18.9% 15% 19% 0.74%
Number of products with Carbon Footprint of Product (CFP) certification 59 105 107 76
Number of products with Carbon Footprint Reduction (CFR) certification 21 19 38 42