Emerging Risk Monitoring
GC constantly evaluates risks that may derive from external factors by following the Early Warning System that utilizes the PESTEL Analysis Framework (Political, Economic, Social, Technological, Environmental and Legal)
which oftens captures the emerging risks that might have an affect to the company in short-term, middle-term and long-term. Therefore, the result from the Early Warning Systems would use as a proactive action to mitigate foreseable risks and to create growth opportunities to the business operations.
Emerging Risk with Risk Descriptions, Potential Impacts & Mitigations
GC is well aware of the impact of the emerging risks that may affect during the next 3-5 year period to ensure proactive protection from future risk trends.
In this regard, GC has analyzed the potential risk factors and impacts that can affect the company's business operations. GC has developed the effective risk mitigation measure and continually monitored the emerging risks in medium and long term. These allow GC to achieve the goals according to the strategic direction.
Disruptive Changes in Consumer behaviors from Low Carbon Economy
At present, both the private and government sectors place priority on the environment and the worsening climate change at both the national and global levels. Many governments have adjusted their policies and legislation to resolve environmental issues, such as eliminating single-use plastic, supporting the use of recycled plastic, etc., to reduce impact from the global plastic waste crisis, which has produced wide-range impact on the environment. These environmental issues have caused significant changes in consumer behaviors the trend toward more conscious consumption has accelerated as consumers are becoming more eco-focused. At the same time, the environmental issues have also heightened stakeholders’ expectation for GC to play a leading role in the sustainable management and to disclose more details about our future sustainability action plans.
Consumer demands have changed because of the trend in low-carbon economy. Consequently, GC is affected by the decreased demand for conventional plastics and chemicals as well as the rising production costs in complying with more stringent laws, rules, and regulations. Changes in consumer behavior also affects GC’s image as global leader in chemical production. Nevertheless, such factor also presents a business opportunity for GC to step up as a leader in sustainability that respond to the demand of the society, consumers and the environment, enhancing competitiveness and creating added value for stakeholders in a sustainable manner
- Reduce business risks by decreasing proportion of plastic resin production for single-use plastic, while increasing feedstock production for durable or semi-durable products.
- Adjust business portfolio towards low-carbon businesses, such as high value business (HVB), high value products (HVP), bioplastic, and recycled plastic, etc.
- Establish clear sales and marketing plan to introduce rPET and rHDPE plastic resin manufactured by GC’s plastic recycling plant into the market as well as create diverse options through business feasibility studies on new technology and investments in recycled plastics with partners
- Enhance efficiency in all processes using the “5Rs” principle and digital technology to reduce resource and energy consumption while implementing novel technology, such as the solar rooftop system in plants and product warehouses and seek new forms of low-carbon technology to overcome current technology limitations.
- Promote the replacement of hard-to-recycle single-use plastic with bioplastic. In this regard, GC has invented the GC Compostable label to certify products that are made of GC’s biodegradable plastic resins to demonstrate our commitment in developing innovation. The label has been authorized for use solely by GC’s partners to add value to their products and packing.
- Create comprehensive product circularity by reintroducing plastic waste into the recycling and upcycling process to become the Circular Economy Prototype for the country through cooperating and connecting relevant parts along the value chain, such as creating waste management model and awareness with universities, "Our Khung BangKaChao" project, "Sorting Bottles to Help Doctors" project, "Send Plastic Home" project, and "YouTurn" project, etc.
- Raise awareness, inspire new ideas, and create new approaches to optimize the cost-effectiveness of resource consumption, focusing on the Circular in Action concept and implementing the GC Circular Living approach in daily life and business operations. Additionally, we have conducted public relations and carried out activities with customers to develop eco-friendly products according to the circular economy concept.
Extreme Weather and Climate Events Adaptation
Weather-related disasters from climate change are becoming more frequent and severe. The World Meteorological Organization (WMO) revealed that the number of disasters, such as floods and heatwaves, driven by climate change have increased fivefold causing seven times more damage over the past 50 years. The exacerbating natural disasters will affect GC’s assets and business continuity, should the company lack adequate adaptation and preparations.
Without adequate adaptation and preparation, the more frequent and severe natural disasters may disrupt GC’s business and key activities. These climate events may also affect our assets and the safety of our employees.
- GC conducts crisis management drills and rehearses the Business Continuity Plan under different hypothetical at the corporate level, business group level, and subsidiary companies to ensure that the concerned executives and employees are aware of their roles and duties as well as the course of action that must be taken when an incident occurs. The drills also allow identification of any defects in the implementation of our backup measures in order to make necessary improvements before an actual incident takes place.
- Develop the Incident Management System (IMS) to manage data on an incident from its emergency status up to its escalation into a crisis and to announce the implementation of the Business Continuity Plan (BCP). Executives can monitor the incidents and consult relevant details, place of occurrence and roles and responsibilities while using such information to make appropriate decisions and hand out instructions. Emerging Risks Extreme Weather and Climate Events Adaptation Mitigation Measures Business Impacts Emerging Risks
- Arrange Risk & Disaster Management training course to educate employees about the different forms of natural disasters and prepare for possible natural disasters.
- Join forces with consultant to assess the likelihood of natural disasters and forecast the impact on GC’s assets and business operations for precaution and to prepare for risk situations under potential disaster incidents in accordance with the framework of the Task Force on Climate-related Financial Disclosures (TCFD) in order to assess the financial impact that relate with climate change.
Impacts from Advanced and Deep Technology
The rapid development of technology and digital technology has caused major changes on market landscape and business model. Such changes present both opportunities and challenges to GC’s business operations. For example, the exponential growth of automation machine, artificial intelligence (AI) and robotics, which can uplift the efficiency of GC’s business operations. At the same time, it produces challenges in the contexts of technology and digital infrastructure development and employee capacity development in correspondence with the progress of novel technology. Furthermore, the implementation of AI, which has the capability of accessing, learning, and analyzing big data rapidly may produce human rights and ethical risks, such as impact on employment, person-in-charge of errors, etc.
The fast-changing technological progress, which has changed the overall business environment, may cause GC to lose opportunities and competitiveness in the long run if the company does not make haste in adapting the development of infrastructure, employees, and knowledge. The accelerating progress of technological development may cause GC to invest more in technology to adjust work format or business style, including the need to prepare new skills for employees to keep up with and accommodate changes.
- Streamline innovation performance, including the implementation of cutting-edge technology, especially using digital technology for the modernization and innovation of factories, developing the production process into that of a smart plant
- Corresponding departments are assigned to supervise digital technology transformation and enable GC’s ability to sustainably preserve our future competitiveness with focus on three main aspects:
(1) Business – employ digital technology to increase competitiveness and respond to stakeholder demands, assess impacts and determine mitigation measures to address potential risks
(2) Technology – Develop IT/ Data Architecture and enhance efficiency in managing cyberthreats
(3) Personnel – Enhance employee knowledge and understanding to correspond with new technological progress, including digital technology adaptation.
- Establish clear digital transformation plan of action into three phases: (1) Digitization focuses on implementing technology to improve efficiency and increase productivity of work processes.
(2) Digital Transformation of Function (DTF) focuses on using technology to adapt work processes and way of work and the implementation of Advanced Analytics.
(3) Digital Transformation of Business (DTB) which can create opportunities for new businesses or change the format of existing businesses