ThaiBev strictly complies with the principles of supervision and risk management outlined in The Three Lines Model of The Institute of Internal Auditors (IIA) including process to oversee risk management, separating structures, roles, duties, responsibilities, and decision-making authority, ensuring process transparency through ThaiBev’s Board of Directors, Sustainability and Risk Management Committee (SRMC), Audit Committee (AC), and Sustainability and Strategy Group Center.

Senior executive of each Product Group and Business Unit is responsible for implementing ThaiBev’s sustainability and risk management direction within his/her scope of responsibility. As First Line of Defence, each Product Group has established its own Sustainability Representative as well as a Risk Coordinator who help control and track the performance and work closely with the Sustainable Development Working Team and the Corporate Risk Management Working Team under the Sustainability and Strategy Group Center.

As Second Line of Defence, Sustainable Development Working Team and the Corporate Risk Management Working Team report to Sustainability and Risk Management Committee (SRMC) concerning overall risk management in the organization. This includes probability and impact analysis to ensure the effectiveness of ThaiBev’s risk management plan. Sustainability and Risk Management Committee’s meeting is held quarterly. The Chairman of SRMC also reports to the Board of Directors on the company’s overall risk management performance on a quarterly basis. Additionally, Sustainability and Strategy Group Center reports to Group CEO to ensure that the risk management execution is effective and timely in controlling risk parameters within predetermined risk appetite.

As Third Line of Defence, the Office of Internal Audit directly reports to Audit Committee (AC) to consult and assess whether operational and compliance control policies and strategies adequately address existing and emerging risks to the company. The reporting line enables independent assessment without potential conflict of interests with management team. Audit Committee’s meeting is held at least quarterly with additional meetings among internal auditors to express independent opinions without Management’s influence. The chairman of AC reports to the Board of Directors on the company’s overall control and relevant issues on a quarterly basis. Additionally, the Office of Internal Audit reports the implementation of projects contributing to risk management, monitoring and auditing to Group CEO, to ensure effective internal control covering financial, operational and compliance control.

ThaiBev takes a proactive approach to managing sustainability initiatives as well as strategic and operational risks across the organization, Product Groups, and Business Units. The sustainability and risk management process integrates global trends, risk factors—particularly ESG-related risks—and industry benchmarks into its framework. During the business and investment planning process, senior executives are tasked with developing strategies to address risks and opportunities, while identifying key risk indicators (KRIs) and key performance indicators (KPIs) to monitor and evaluate outcomes effectively.

The company’s sustainability and risk management process is structured into four key steps:

• Understanding business context and setting business strategies and objectives for ThaiBev Group, Product Groups, and Business Units
• Identifying and assessing risks and opportunities against business objectives, using risk identification and assessment techniques such as scenario analysis and stress-testing exercises to assess their potential impacts on ThaiBev and our stakeholders
• Implementing sustainability action plans while controlling and managing risks according to established risk appetite, while exploiting opportunities in line with our strategies and sustainability objectives
• Monitoring, reporting, and evaluating progress and results 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 seeks to foster the right attitudes, knowledge, and behaviors among all employees, aligning them with the company’s sustainability and business objectives.

We believe a strong culture of sustainability and risk awareness is essential for effective management, enabling the organization to respond proactively to challenges, sustain business performance, and drive continuous growth. To embed these principles, ThaiBev integrates sustainability and risk management into new employee orientations, annual training programs, and employee engagement activities. Additionally, these factors are incorporated into employee performance evaluations.ThaiBev also promotes innovation through the annual WOW (Way of Work) Awards, encouraging employees to develop solutions and operational improvements that enhance sustainability or mitigate risks. Senior executives serve as judges, selecting outstanding projects for implementation across the organization, reinforcing the company’s commitment to sustainability and risk excellence.

For risk reporting, employees are encouraged to raise potential risks or concerns with their supervisors or through designated channels, such as whistleblowing@thaibev.com. ThaiBev has also integrated sustainability and risk management metrics into the annual performance assessments of all executives, ensuring alignment with the group’s targets. These metrics include:
Environmental:
Energy management, carbon emissions reduction, and water stewardship.
Social:
Employee safety, health and well-being, and human capital development.
Sustainability and risk management metrics constitute 5–10% of the annual performance assessments for both executives and employees.

ThaiBev integrates material sustainability issues into its comprehensive risk management process by categorizing risks into three key areas: Strategic, ESG (Environmental, Social, and Governance), and Operational. Potential challenges and opportunities related to the company’s strategic objectives are identified, prioritized, and addressed. Additionally, ThaiBev emphasizes the importance of emerging risks that could impact the business in the mid- to long-term, incorporating these into its Enterprise Risk Management framework.

This process highlights significant and emerging risks that require focused attention and effective mitigation measures, including adjustments to the company’s strategy and/or business model. For risks with unchanged or reduced levels, ThaiBev continues to monitor and periodically reassess them to address any changes in their status.

In light of intensifying environmental challenges, societal shifts, and heightened geopolitical tensions, ThaiBev recognizes the necessity of advancing beyond traditional risk management, which has primarily focused on planning and minimizing vulnerabilities to clearly defined risks.

To address these evolving complexities, the company is broadening its approach to incorporate resilience management. This expanded focus entails strategic preparation for unforeseen events, the establishment of strong response capabilities, and enhanced adaptability to enable swift recovery from disruptions. ThaiBev is dedicated to strengthening key resilience domains to uphold exceptional business performance amid crises and climate-related adversities. By strategically balancing short- and long-term financial expenditures, and managing funding sources aligned with its investment and commercial objectives, while maintaining a solid capital position and ample liquidity, ThaiBev is well-positioned to withstand potential scenarios involving sharp revenue declines, escalating costs, and financial market volatility. ThaiBev’s resilient and adaptable production capabilities allow the company to swiftly adjust to shifts in demand and sustain stability amid operational disruptions, while maintaining uncompromised quality standards. Additionally, ThaiBev places strong emphasis on its supply chain and distribution networks, fostering engagement and collaboration with business partners to ensure operational continuity and reliable product distribution to customers and consumers. This approach enables ThaiBev to uphold service delivery even in scenarios involving supplier or distributor disruptions, natural disasters, or geopolitical events. ThaiBev’s investment in a resilient, secure, and adaptable technological infrastructure enables effective management of cyber threats and mitigates the risk of technological disruptions. A diverse array of IT projects is continuously deployed to align with evolving customer expectations, competitive pressures, and regulatory requirements. Simultaneously, ThaiBev advances employees’ digital competencies and maintains comprehensive business continuity and disaster recovery capabilities, ensuring consistent service delivery for customers and seamless internal operations. Stakeholders play a critical role in holding organizations accountable for their actions, brand promises, and commitments to Environmental, Social, and Governance (ESG) matters. ThaiBev has established a clear mission, core values, and strategic framework that guide its business conduct and ESG practices. The company maintains an open approach to engaging with stakeholders, actively listening to their concerns, and proactively addressing societal expectations. ThaiBev has established a business model that is designed to adapt to dynamic and uncertain environments, including shifts in consumer demand, changes in the competitive landscape, emerging technologies, and evolving regulatory frameworks. Our Transformation Program and PASSION 2030 strategy are focused on ensuring the long-term resilience of our business model by:

• Developing new capabilities and driving innovation to refine our business and service models, expand our product offerings, optimize sales channels, and collaborate with stakeholders on sustainability efforts.
• Reinforcing our leadership and competitiveness in key markets—namely Thailand, Vietnam, Myanmar, Singapore, and Malaysia—by fostering a sustainable supply chain, digitalizing business processes, and managing our brand portfolio effectively.
• Unlocking opportunities to enhance shareholder value by strengthening partnerships, increasing asset value, and cultivating a highly skilled and talented workforce.

ThaiBev has consistently enhanced its processes for identifying, assessing, and managing climate risks and opportunities relevant to the organization across short, medium, and long-term horizons. This ongoing effort has led to expanded and more detailed scenario analysis, incorporating climate-related issues into both our climate governance and business strategy.

Additionally, ThaiBev has conducted capacity-building sessions focused on climate risks and opportunities, while establishing relevant metrics and targets to ensure accountability for sustainability and climate-related initiatives.

After assessing both climate-related physical and transition risks and opportunities, ThaiBev has launched a range of climate-related initiatives that include both mitigation and adaptation measures. These efforts encompass investments in resource efficiency and material circularity, the development of low-carbon products, supplier engagement, and reforestation. As part of our commitment to climate action, ThaiBev’s net-zero targets have approved by Science Based Targets initiative (SBTi) aligning our goals with global efforts to limit temperature rise. Our objective is to reduce the impact of climate change across our operations and value chain while seizing opportunities arising from the transition to a low-carbon economy.

ThaiBev acknowledges that comprehensive foresight capabilities are a critical foundation for successfully building the types of resilience described above.

Consequently, the company actively engages with stakeholders to solicit feedback, insights, and expertise that enhance our capacity to anticipate and adapt to change. We systematically gather and analyze pertinent data to develop scenarios and conduct stress tests, identifying potential gaps in resilience. These assessments enable us to proactively prepare for future crises.

Furthermore, we develop and rigorously test appropriate crisis response capabilities to ensure timely and effective action in the event of disruptions.