ThaiBev Group’s risk management framework requires that risks significant to business operations and organization are identified, assessed, mitigated and promptly reported to the Board of Directors through the Sustainability and Risk Management Committee (SRMC). The policy framework ensures that all significant risks in each product group/business unit across the group are monitored and managed in a consistent way, with clear delegation of responsibility to relevant personnel to manage the risks under their control, in order to establish a sound risk management system as an integral element of ThaiBev Group’s routine management activity.

To comply with the applicable Code of Corporate Governance, ThaiBev conducts business with acceptable risk levels in order to achieve our objectives and fulfill the expectations of our stakeholders. We have designated risk management as part of annual business planning, decision-making, project management and day-to-day routine processes.

• All our management and employees are risk owners who are responsible for identifying and assessing the risks in their business areas, and formulating appropriate mitigation measures.
• All risks to the achievement of the company’s objectives must be:
  • Identified in a timely manner;
  • Assessed on likelihood of occurrence and potential impact;
  • Managed in a manner that is consistent with the company’s risk criteria with regard to costs and benefits; Monitored to ensure that they are properly managed.
• All risks to the company’s business plans and strategies which have a “high” or “extremely high” risk level must be reported to the Executive Committee, the SRMC, the Audit Committee, and the Board of Directors for appropriate risk oversight according to our governance structure.

ThaiBev reviews, at least annually, the risks affecting our sustainability in the environmental, social, and economic dimensions through analyses of internal and external factors, significant trends and the expectations of all stakeholders.

According to our risk review and assessment, ThaiBev separates principal risks into three categories: Strategic, ESG (Environmental, Social, and Governance), and Operational. Their potential impacts, key mitigations, and linkages to material sustainability issues are identified and dealt with through the company-wide management system. Furthermore, ThaiBev pays attention to emerging risks caused by external factors which are expected to have a significant long-term impact on our business and require us to adapt our strategy and/or business model in response. ThaiBev develops and implements our sustainability and risk management framework in line with the COSO Enterprise Risk Management Framework, comprising three key components: Governance structure is the foundation of ThaiBev’s sustainability development and risk management. The Board of Directors has ultimate responsibility for risk oversight to ensure sustainable and successful business operations of ThaiBev Group. The SRMC, a board-level committee consisting of independent directors, senior executives and distinguished external experts, is responsible for overseeing management of key corporate risks and sustainability- related matters and opportunities, including review of risk appetite and tolerance before making recommendations to the Board of Directors for approval. The SRMC serves as the primary focus for risk assessment and management across all key functions, product groups, business units, and subsidiaries to ensure that all issues related to sustainability and corporate risks are covered.

The SRMC also works closely with the Audit Committee which is responsible for reviewing and monitoring the integrity of the group’s reporting process, audit process, and internal control system while ensuring compliance with legal and regulatory matters. At corporate level, there are also a range of committees responsible for overseeing specific risks within their scopes and responsibilities.

The senior executive of each product group is responsible for implementing ThaiBev’s sustainability and risk management direction within his/her scope of responsibility. Each product group is responsible for setting up initiatives, policies and goals that are aligned with ThaiBev’s sustainability targets, while managing risks to an acceptable level, and reporting results of sustainability and risk management to the SRMC. Each product group has established its own sustainability and risk working team as well as a risk coordinator, who help control and track the performance, and work closely with the Sustainability Development Working Team and the Corporate Risk Management Working Team, under the Sustainability and Strategy Group. Chief Sustainability and Strategy, serving as an SRMC member and Secretary to the SRMC, is responsible for orchestrating ThaiBev Group’s strategy and transformation in alignment with sustainability plans. ThaiBev proactively manages sustainability initiatives and risks-both strategic and operational-across the organization, product groups, and business units. Our sustainability and risk management process incorporates global trends, risk factors, particularly ESG-related risk factors, and peers’ actions into consideration. During the business and investment planning process, senior executives are required to establish strategies to respond to both risks and opportunities, and identify key risk indicators and key performance indicators to assess and monitor situations.

The company’s sustainability and risk management process comprises the following four steps:

• Understanding business context and setting aligned objectives for ThaiBev Group, product groups, and business units
• Identifying principal and emerging risks and opportunities for achieving specified objectives, using risk identification and assessment techniques such as scenarios and stress-testing exercises to assess their potential impacts on ThaiBev and our stakeholders
• Setting and implementing action plans, together with controls, according to the determined countermeasures, while exploiting opportunities in line with our strategies and sustainability objectives
• Monitoring, reporting, and evaluating the results of sustainability and risk management actions at least on a quarterly basis

To ensure adequacy and effectiveness of the risk management process, the Office of Internal Audit, our internal independent unit under the supervision of the Audit Committee, is responsible for auditing risk management, internal control, and governance processes. ThaiBev’s sustainability and risk management culture aims to instill in all employees the right attitude, knowledge, and behavior in regard to sustainability development and risk management, with mutual objectives to achieve our sustainability and business goals. A strong sustainability and risk culture is an important factor for the effectiveness of the organization’s sustainability development and risk management. It helps us be responsive and prepared to face potential situations, while maintaining business performance and creating continuous growth. ThaiBev integrates sustainable development and risk management, in both generic and specific areas, into new employee orientation, annual training, and employee activities.

Furthermore, ThaiBev uses sustainability and risk management as a criterion for employee performance evaluation and organizes annual WOW (Way of Work) Awards to allow our employees to create solutions and new operational practices that can potentially improve sustainable development or mitigate risks for ThaiBev. Our senior executives act as judges, who select the best projects to be implemented across the organization.

As for risk reporting, employees can report potential risks or any concerns to their supervisor in the first instance, or through the recommended channels such as whistleblowing@thaibev.com

In addition, ThaiBev has integrated sustainability and/or risk management metrics that are aligned with the group’s targets into all executives’ annual performance assessment in areas such as:

• Environment
  Energy Management, Carbon Emission Reduction, Water Stewardship
• Social
  Employee Safety, Health and Well-being, Human Capital Development

Sustainability and risk management metrics are weighted at 10–15% of our executives’ and employees’ annual performance assessment.

To extend the scope of sustainability and risk management culture to our Board members, during FY2023, ThaiBev arranged a sustainability training program conducted by University of Cambridge Institute for Sustainability Leadership and Earth on Board. Offered to directors and senior management, the training covered key topics on understanding the global sustainability context for business, Board duties, sustainability at the centre of strategy, sustainability reporting to drive progress, as well as Board leadership and actions. ThaiBev has integrated material sustainability issues into our holistic risk management process by identifying risks under three categories: Strategic, ESG (Environmental, Social, and Governance) and Operational. Potential downside and opportunities in relation to the company’s strategic objectives are identified and prioritized. In addition, we focus on emerging risks which may impact us on a mid- or even long-term basis. The identified risks and emerging risks are managed as part of Enterprise Risk Management.

The outcome of this process indicates significant risks and emerging risks that require the company to pay close attention and adopt effective mitigations, including adapting our strategy and/or business model. For risks with an unchanged or lower risk level, ThaiBev will continue to monitor and analyze changes in risk level periodically.