SUSTAINABILITY |
Climate Change APPROACH |
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 |
Climate Physical Risks | Timeframe | Impact | Description | Adaptation Measures |
Acute | ||||
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. |
Chronic | ||||
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. |
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 |
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Target area of analysis | Operations and value chain |
Scope of financial impact calculations | ThaiBev Group |
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. |
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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. |
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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. |
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:
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0.00-2.5% negative impact to profit by 2030 |
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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 |
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Consumer Trends on Low Carbon Products | Medium term (3-10 years) |
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Not yet calculated |
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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.
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Not yet calculated |
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Reducing Cost of Renewable Energy | Medium term (3-10 years) |
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Cost savings of 7,000,000-10,000,000 USD/year |
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Shareholder and Stakeholder Sentiment | Medium term (3-10 years) |
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Not yet calculated |
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Figure 5: Risk Management Process relevant to Climate-related Risks and Opportunities
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 |
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 |