To ensure accountability for sustainability and climate-related actions, ThaiBev has integrated climate change-related key performance indicators (KPIs) and monetary incentives into employees’ targets, including at the Executive level. These incentives include:

• The incorporation of the Company target of a 42% reduction in GHG emissions for Scope 1, 2 and 3 by 2030 compared to the 2023 base year as one of the executive officers’ KPIs.
• BU managers' target of more than 7% reduction in water intensity by 2025 (compared to base year 2030).
• Performance KPIs in energy reduction for employees. Completion/progress of GHG reduction is included as one of employees’ KPIs.

ThaiBev has integrated climate change risks and opportunities into its strategy and operations to drive continuous improvement and to enhance its resilience toward climate change and value creation for ThaiBev’s business and connected communities.

In 2023, ThaiBev deepened the scenario analysis conducted for both physical risks and transition risks and opportunities, A Net Zero Emissions scenario (IEA NZE) was added to assess transition risks and the financial impact on the company was quantified at asset level to identify operational and supply chain vulnerabilities. With regards to the overarching risks and opportunities identification and qualitative assessment, the drivers identified and assessed from 2022 remain relevant to ThaiBev.

A physical risks 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 water intrusion, and increasing temperature. In addition, ThaiBev has conducted a 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. A transition risks assessment was conducted based on the International Energy Agency (IEA)’s Stated Policies Scenario (STEPS) and Sustainable Development Scenario (SDS) (discontinued by IEA and replaced with Announced Policy Scenario (APS)).

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). ThaiBev conducted a desktop-based physical risk assessment of prominent natural hazards at 57 locations in Thailand, Vietnam, Scotland, Myanmar, and Cambodia based on the intensity and frequency of historical events/hazards and corresponding projected risk rating under SSP1-2.6/ RCP 2.6, SSP2-4.5/ RCP 4.5, and SSP5-8.5/ RCP 8.5 scenarios. The assessment was conducted for the baseline conditions, with SSP1-2.6/ RCP 2.6, SSP2-4.5/ RCP 4.5, and SSP5-8.5/ RCP 8.5 scenarios covering the 2020, 2030 and also considered the longer-term 2050 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. ThaiBev will update the physical risks assessments when IPCC updates the scenario data. The scope of the physical risks assessment is outlined in Table 4. The qualitative results of the scenario analysis conducted in 2019-2022 with adaptation measures is outlined in *Represents additional scopes/target areas for risk assessments conducted in 2023, while Table 6 and Table 7 demonstrate the potential financial impact of physical risks on transportation and distribution logistics at asset level.

Table 3: ThaiBev Physical Risk Scenario Analysis Parameters

Purpose	To analyze whether physical related risks (both acute and chronic) have a significant impact on ThaiBev’s business in the future, and the mitigation measures/adaptation plan required for significant risks.
Scenarios	SSP1-2.6/ RCP 2.6: A low emissions pathway limiting warming to below 2 °C. SSP2-4.5/ RCP 4.5: An intermediate emissions pathway where global temperature rises by 2.5 - 3 °C. SSP3-8.5/ RCP 8.5: High emissions. A pathway that represents a baseline where no additional mitigation measures are implemented, assuming that increase in temperature will be about 4.3 °C by 2100
Scenario time horizons	2020-2030 (near-term): covers “Short-term” and “Medium-term” timeframes.* 2050 (long-term): covers “Long-term” timeframe These scenario time horizons are aligned with ThaiBev’s timeframes for risk and opportunity identification.
Scope of assessment	57 facilities in Thailand, Vietnam, Scotland, Myanmar, and Cambodia, accounting for 100% of the total number of facilities.
Target area of financial analysis	Operations and supply chain, transportation disruptions from factory to distributed dealers.*

Table 4: ThaiBev Physical Risk Scenario Analysis Parameters

Climate Physical Risks	Timeframe	Impact	Description	Adaptation Measures*
Acute
Extreme Rainfall	Medium term (3-10 years)	Medium to high	The extreme precipitation events, such as one-day maximum rainfall and number of days with heavy rainfall, are likely to increase the probability of floods causing damage to ThaiBev’s assets and increasing the costs of production due to supply chain disruptions.	ThaiBev conducted a 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. 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.
Wind Storm	Medium term (3-10 years)	Medium to high	Greater probability of disruptions within the operations, supply chain, and finished goods inventory due to 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, which covers all production sites, in order to conduct 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 disruption to ThaiBev’s production, leading to more spending on the operational cost of buying fresh water. ThaiBev’s assets located in coastal areas may be impacted, resulting in increased costs of production as well as supply chain disruptions.	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 systems, and rainwater harvesting systems. Adaptation measures for coastal floods are drawn from our adaptation measures for riverine flood risks.
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 educational and training initiative with farmers to help conserve resources, prepare for natural disasters and adopt technology for production efficiency.

Table 6: Flooding Scenario Analysis Risk Level and Financial Impact Results

Impact to Profit	Risk Level
0 – 20 Million THB	Low
20 – 100 Million THB	Medium
100 – 500 Million THB	High
500 – 2,000 Million THBB	Very High

Table 7: ThaiBev’s Transition Risk and Opportunity Scenario Analysis (2022-23)

ThaiBev has identified a list of transition risks and opportunities that are considered relevant and are used in scenario analysis:

Purpose	To analyze 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 STEPS5: 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 SDS6: 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. IEA APS7 (For carbon pricing only): IEA’s announced pledges scenario includes all recent major announcements (as of September 2022) for 2030 climate targets and longer-term net zero pledges. IEA NZE 20508 (For carbon pricing only): A net zero emissions scenario which sets out a narrow but achievable pathway for the global energy sector to achieve net zero emissions by 2050.
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 conducted group-wide workshops to prioritize transition risks and opportunities for each scenario and time horizon, resulting in the risk and opportunity matrix below:

Figure 3: Results of Transition Opportunities Scenario Analysis

Figure 4: Results of Transition Risks Scenario Analysis Table

Consequently, ThaiBev dived deeper into higher priority and most material transition risks and opportunities, as presented in Table 8.

Table 8: Scenario Drivers, Business Impacts, and Response Measures

Driver	Timeframe	Business Implications (Impact to Business)	Response Measures
Carbon Pricing (operational and value chain)	Medium term (3-10 years)	The application of carbon-pricing in Thailand would mean a company with high emissions would bear more operation costs, 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 system.	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 the 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 tariff rates increases may not be frequent and that Thailand may be less impacted by on droughts due to the government’s active strategy and mitigation measures. Nonetheless, increasing investment costs in innovation for water efficiency are expected.	Assessing operation sites for potential risks and developing a management/mitigation plan. Establishing a clear climate & water strategy to address the issue, including channels 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 influence demand for ThaiBev's products, thus impacting revenue.	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 having 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 they may be integrated with current and future ThaiBev products or operating procedures.
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. This action aligns with the national strategy of the Bio-Circular-Green Economic Model, which aims to maximize resources efficiency and circular to assist 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.	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 the cost saving of renewable electricity generation according to levelized cost of electricity (LCOE).	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. It is considered that ThaiBev's reputation and access to capital may be impacted by stakeholder demands for climate action. Consumers are more environmentally conscious and expect companies to consider environmental issues.	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.

ThaiBev’s Climate-related Issues Prioritization and Management
ThaiBev has integrated climate-related risks into its multi-disciplinary company-wide risk management processes through the four steps in ThaiBev’s risk management process (Refer to Annual Report 2022 pg. 136-138).

The SRMC is responsible for ensuring sound risk and sustainability management across ThaiBev’s operations in Thailand, United Kingdom, and Myanmar – 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 risks management is embedded into ThaiBev’s risk management process, which is aligned with the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Enterprise Risk Management Framework. An overview of roles and responsibilities related to climate-related issues is presented in Figure 5.

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

The identified climate-related risks are prioritized via the following primary activities to develop effective risk management measures:

• Stakeholder engagements with senior ThaiBev executives to assess the impact of identified climate-related risks on the organization across three key aspects: finance, operations, and reputation.
• Interviews to evaluate the significance of potential climate-related impacts across eight key stakeholder groups: customers, consumers, investors, communities, regulators, employees, and suppliers.

Climate-related issues that were ranked as “very important” by ThaiBev and its relevant stakeholders were considered material sustainability issues.

As part of the ranking, assessment, scoping, prioritization, and monitoring of identified risks, emerging regulatory risks are also considered. In line with the potential implementation of a carbon trading scheme proposed by the Thailand Greenhouse Gas Management Organization (TGO), carbon-pricing policies may be applied in Thailand in the future, which will affect ThaiBev’s operational cost in a medium term between three and 10 years.

Climate-related Targets
ThaiBev has set targets for its operations and value chain to raise its ambition level in its mitigation and adaptation efforts. Beyond GHG emission reduction targets, ThaiBev has also set targets regarding the use of renewable energy as well as efforts towards reducing water withdrawal. While this section focuses on climate change mitigation, other targets can be found in ThaiBev’s Sustainability Report.

GHG Emission Reduction Targets
ThaiBev increased its ambition level to further reduce its GHG emissions in the near-term as well as to set net zero targets for the organization in the long term. ThaiBev has been reducing emissions primarily through the installation of solar panels on factory rooftops, as well as the use of biogas produced from wastewater treatment in the production process. ThaiBev will be providing additional details regarding the roadmap towards meeting near term targets within the next reporting year, while emission reduction initiatives in the reporting year can be found in ThaiBev’s Sustainability Report. Table 10 GHG Emissions Data.

2030 Target	Net Zero Targets
42% reduction of GHG emissions for Scope 1 & 2 combined, compared to 2023 base year 50% renewable energy by 2030	Net zero GHG emissions for Scope 1, 2 and Scope 3 by 2050.

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, it has expanded its 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 FY2019. ThaiBev began accounting for public disclosure for the first time in FY2021, 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. From FY2021, ThaiBev started reporting other indirect (Scope 3) GHG emissions in line with the reporting requirements of GHG Protocol.

Emission Factor
For Scope 1 and 2, ThaiBev uses emission factors from the 2022 IPCC Guidelines for National Greenhouse Gas Inventories and the United States Environmental Protection Agency (US EPA). For Scope 3 emissions, the Company uses emission factors from Thailand Greenhouse Gas Management Organization, UK Government GHG Conversion Factors for Company Reporting, and other literature-based emission factors. 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 (https://sustainability.thaibev.com/pdf/lrqa2023.pdf)

Third-party Verification
ThaiBev has completed its assessment of Scope 3 emissions which has also been third-party verified. The climate-related parameters that are being verified are Scope 1, Scope 2, Scope 3 (Category 1–7, 9, 11, 12, 15 only) GHG emissions as well as climate-related metrics on energy consumption, energy intensity and water consumption with reference to GRI Standards 2021. The Company plans to incorporate these data into its science-based targets in the future. The breakdown by Scope 3 category can be found on page 42 of ThaiBev’s Sustainability Report 2023. The assurance report can be found on https://sustainability.thaibev.com/pdf/lrqa2023.pdf