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ThaiBev works diligently to manage risks through its sustainability strategy, which enables it to explore opportunities, prevent and mitigate impacts, respond efficiently to challenges, and take full advantage of execution to achieve its goal of becoming the stable and sustainable ASEAN leader in beverage and food business.
Management Approach
ThaiBev’s risk management strategy focuses on monitoring global trends, potential rules and regulations, and peers’ actions, evaluating ESG topics, and managing uncertainties throughout the value chain through the integration of the concept of sustainability risk into the company’s “Enterprise Risk Management Framework”, which is aligned with the COSO: Enterprise Risk Management Framework, has been implemented with the following key components:
  • Governance Structure
  • Understanding of Business Context and Sustainability Strategies
  • Holistic Risk Management Process
  • Communication, Reporting, and Evaluation
  • Sustainability and Risk Management Culture
Risk Assessment to Risk Management Strategy
ThaiBev performs an annual review of its identified risks under three categories: Strategic, ESG (Environment, Social and Governance) and Operational, all of which are linked to key sustainability issues in 3 dimensions: environment, social, and economic. The annual risk review and assessment enables the company to formalize effective corporate risk management strategies and approaches.

In 2021, despite the risks and challenges that were heavily centered around COVID-19, ThaiBev incorporated external and internal factors, global impacts of COVID-19, sustainability risks, global trends after the COVID-19 pandemic, expectations among stakeholders and ThaiBev business goals into the risk analysis and assessment process. The outcome of risk review and assessment indicates the risks with higher risk level and emerging risks that pose challenges and require the company to pay close attention, adopt effective mitigations, including adapt its strategy and/or business model. For the risks with unchanged risk level, ThaiBev will continue to monitor and analyze changes in risk level periodically, and maintain pre-COVID-19 risk mitigation plan.
Towards 2025 and Beyond
Risk Category (1) Risk with unchanged risk level (2) Risk with higher risk level
Strategic Risk
  • Corporate image and reputational risk
  • Business Investment Risk
ESG Risk
  • Water-related Risk
  • Ethics and compliance risk
  • Climage change risk
  • Stakegolders' health and safety risk
  • Changing consumer behaviour and demograhic shifts
Operational Risk
  • Human capital development to sustain business growth
  • Business circumstance and market competition risk
  • Supply chain
  • Financial risk
  • Regulatory Changes
  • Cyber threats and data security risk
(3) New / Emerging Risk
  • Global infectious diseases
    In the globalization era, people of the world become more interdependent and connected through international trade and transportation which allows infectious diseases to rapidly spread over wide geographic areas and affect global economy, society and businesses. In addition, urbanization and climate change are the factors contributing to increasing disease emergence in the society and environment. Despite the medical advances, finding medication or vaccines as a cure-all for all diseases currently remains extremely difficult and the development of new medication or vaccine for new diseases is usually lengthy. Therefore, Therefore, ThaiBev anticipates global infectious diseases as one of the emerging risks that we are exposing in the future.

    Emerging Risk
    Link to Sustainability Issues
    • Employee Wellbeing
    • Sustainable Supply Chain
    • Corporate Governance & Business Ethics
    • Community Development & Partnerships
    Potential impact
    • Potential impact on revenue and financial performance
    • Operational disruption
    • Death and disease of employees and contractors
    • Increased costs of operation and damage compensation
    • Impact on corporate image and reputation
    • Failure to achieve our business growth plans
    Key mitigations
    • Implement operational measures on employee safety and product safety
    • Establish the specific committee to monitor the signals on development of new infectious diseases, and evaluate situations and impacts as well as to determine and implement preventive and surveillance measures in our business operation
    • Communicating information about disease and preventive measures to employees and stakeholders continuously
    • Adopt information systems and technologies to anticipate, assess risks and prepare for the pandemics Build the networks and strengthen the community and stakeholders’ engagement for prevention, detection and response to outbreaks
  • Climate change-related regulatory trasition risk
    The 2017 Global Climate Risk Index ranked Thailand among the world’s top 10 countries most affected by climate change. It will have significant impact on water resource which is a critical factor for ThaiBev’s production. In addressing global warming, Thailand has joined the global effort on climate change mitigation through its national climate change policy. Thai government has announced the “National Reform Plan” requiring relevant government agencies to improve laws on climate change to be enforced within 3–5 years. The laws must incorporate suitable economic mechanisms conducive for the private sector’s GHG emission reduction. It includes measures to encourage people to change their behavior in daily life to be a part of the climate change solution, for example, mass transit development and promotion, reduction of plastic bag usage, as well as an enforcement of Water Resources Act B.E. 2561 (2018) for national water resources management. However, the changes in public policies, laws, and regulations concerning climate change, which have not been clearly defined of mechanism and enforcement, are regarded as the business transition risk.

    Emerging Risk
    Link to Sustainability Issues
    • Climate Strategy
    • Energy Management
    • Water Stewardship
    Potential impact
    • Potential enforcement of tariffs, laws and legal obligations regarding climate change especially carbon tax and surface water tariff
    • Increase in production and operating costs from the tax levy through the enforcement of laws and regulations for climate change mitigation
    • Increase in investment, production costs and operating costs from the adjustment of production processes and operations to comply with the climate change related regulatory
    • Failure to comply with the climate change- related regulatory
    • Failure to meet customer demands for low-carbon products and social demands for low-carbon renewable energy
    • Potential impact on revenues and financial performance
    • Long-term damage to the Company’s reputation and image including a license to operate
    Key mitigations
    • Utilize resources for production, such as energy, water, chemicals and packaging materials in alignment with the circular economy concept and waste reduction
    • Implement various projects in our operations, beginning with conducting energy efficiency assessments in all business units, in order to determine suitable technology applications such as the installation of once-through boilers, high-capacity motors, and solar panels on the rooftops of the production plants for own electricity generation and consumption as well as the construction of biogas plants in both domestic and overseas sites to reduce GHG emission and decrease dependence on fossil fuels
    • Develop products that reduce GHG emission and register for certifications in GHG emissions for plant operations (Carbon Footprint for Organization: CFO), GHG emissions of products (Carbon Footprint of Product: CFP) and carbon footprint reduction labels (Carbon Footprint Reduction: CFR) for beer products and non-alcoholic beverages in the category of drinking water and green tea from the Thailand Greenhouse Gas Management Organization (Public Organization)
    • Register a project entitled Thailand Voluntary Emission Reduction Program (T-VER) to be prepared for changes in laws on climate change. The amount of GHG reduction (carbon credits) can be offset with GHG emission in approaching a future low-carbon society
    • .
    • Analyze and manage climate-related financial risks (both climate physical and transition risks) and business opportunities in line with TCFD (Task Force on Climate-related Financial Disclosures) recommendations
    • Establish ThaiBev’s climate strategy, including climate-related goals and targets, such as those of 15% GHG emission reduction and 40% renewable energy use by 2025
    • Engagement and partnering with internal and external stakeholders on energy and climate change management
  • Technology and innovation disruption
    Like many industries, food and beverage industry is prone to be affected by the development and employment of technologies and innovations so as to increase production efficiency, decrease the dependence on human labor, save costs for the business in the long run, and respond to the ever-changing demand of consumers. They range from the blockchain for product traceability, the Artificial Intelligence (AI) and robotics in production process control and development of new products and services to the innovative food and beverage products constantly launched in the markets. Hence, if currently ThaiBev does not give importance to digital technology and innovation or delay application of them in the business operation, it could have significant impact on the Company in the long run.

    Emerging Risk
    Link to Sustainability Issues
    • Innovation
    Potential impact
    • The threat of new and smaller entrants, including existing competitors which leads to more intense business competition
    • Potential impact on revenue and financial performance
    • Loss of competitiveness and market share, including market leadership
    • Loss of consumer base
    • Impact on corporate value and brand loyalty
    • Failure to achieve our business growth plans
    • Loss of business opportunities
    Key mitigations
    • Continually assess and invest in new technologies to leverage the strength of our product portfolio, enhance the capabilities of our people, improve the efficiency of our manufacturing and distribution, and innovate in our route to market
    • Adopt “ThaiBev Transformation Program” to emphasize on building new business, strengthen competitiveness and current market leadership position, and unlock new opportunities to add values to the organization and fully contribute to society and stakeholders for organizational benefits.
    • Collaborate with global-leading universities to enhance the activities in ThaiBev’s value chain with new technologies
    • Have in place ThaiBev’s Research and Development Center and our subsidiary, BevTech Co., Ltd., as a technology and engineering hub, to focus on innovations which cover product, process and business model innovation
  • Macroeconomic and geopolitical risk
    The impact of COVID-19 on the macroeconomic system, the geopolitical conflicts and uncertainties together with the global adverse events, inequality between countries, issues on the nation’s health and public health system as well as climate change can affect consumer demand and create security risks in both domestic and international markets where ThaiBev operates. It is considered an increasing challenge of business management, especially at the board level. It is expected that after the COVID-19 crisis many countries tend to focus more on domestic affairs based on nationalism, domestic consumption to revive the economy as well as diversifying the economic risks from reliance on one country to many countries. If ThaiBev is not prepared to deal with the macroeconomic and geopolitical risks promptly, it may have a significant impact on the Company in the long run as well as an opportunity loss to create or gain new business opportunities.

    Emerging Risk
    Link to Sustainability Issues
    • Employee Wellbeing
    • Sustainable Supply Chain
    • Corporate Governance & Business Ethics
    Potential impact
    • Potential impact on revenue and financial performance including business continuity
    • Eroded consumer confidence affecting spending discretion
    • Potential imposition of discriminatory taxation
    • Inflationary pressures
    • Social unrest
    • Safety of people and assets particularly the employees and assets of ThaiBev
    • Failure to achieve our business growth plans
    • Loss of business opportunities
    Key mitigations
    • Continuously monitor important information and news related to economic conditions both domestically and internationally, political events, issues on international relations or conflicts that may affect business operations
    • Perform scenario analysis to identify and assess the likelihood and impact that may affect ThaiBev's operations to prepare a response plan for business continuity accordingly
    • Communicate to relevant business units within the organization to be prepared and adjust the crisis response strategy or operational guidelines appropriately and in accordance with the situation.
    • Apply security practices and procedures to protect the Company’s employees and assets