Climate Change Strategy and Target
| Stakeholder | Type of Impact | Cause of Impact |
|---|---|---|
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Shareholders
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Operations and Products/Services | |
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Business Partners
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Operations and Products/Services | |
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Customer
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Operations | |
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Investors
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Operations and Products/Services | |
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Local Communities
|
Operations and Products/Services | |
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Customer
|
Operations and Products/Services | |
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Employee
|
Operations |
SDGs Targets
| Long-Term Targets | 2025 | ||
|---|---|---|---|
| Targets | Progress | ||
| Net Zero |
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Remark:
★ Executive KPI and Compensation Metric
* Performance in 2025 for all projects commencing in 2022, calculated based on GC’s annual business plan for the year in which the project started
** GC has revised its approach to calculating greenhouse gas management performance, as the company reviewed its 2025 targets and changed its original goal of reducing greenhouse gas emissions (Scope 1 and 2) by 20% by 2030 to more than 20% by 2035, in alignment with the PTT Group’s targets. As a result, GC’s greenhouse gas management targets and performance have been reviewed and adjusted to ensure consistency.
Challenges and Opportunities
Climate change represents a critical issue that has garnered significant attention from all sectors at both national and global levels. It poses major challenges that impact business continuity, including physical risks such as extreme heat, flooding, droughts, and water shortages, as well as transition risks arising from regulatory enforcement, which lead to higher costs in production, raw material procurement, and compliance adaptations.
GC fully recognizes the potential impacts that its business activities may have on both internal operations and external stakeholders. Accordingly, it places strong emphasis on effective greenhouse gas management in order to mitigate cost-related risks, meet the expectations of environmentally conscious consumers, build greater credibility with investors, and ensure alignment with national commitments as well as the broader goal of achieving net-zero greenhouse gas emissions.
Business Case, Business Impact: Risk/ Cost / Revenue
Why business must focus on Climate Strategy and Energy Management
Climate change management and energy management are crucial to GC. They constitute global challenges that affect business continuity in terms of physical risks, such as floods, droughts, severe storms, and transition risks as a result of the enforcement of laws, leading to higher costs in terms of production, access to raw materials, and adaptation to meet new regulations. Therefore, effective greenhouse gas management contributes to reducing risks related to costs, responding to the demands of environmentally conscious consumers, and building credibility with investors. Such effort is consistent with national commitments and the Net Zero Target. It also presents opportunities to develop sustainable products and create added business value with new technologies.
Respond to Physical Risks |
Prepare for natural disaster risks caused by climate change, such as floods and droughts, to prevent production disruptions by implementing internal preventive measures, collaborating with stakeholders, and assessing risks throughout the supply chain, while setting a target to reduce water consumption. |
|---|---|
Respond to Transition Risks |
Improve production process efficiency, promote the use of low-carbon and renewable energy technologies, and implement carbon capture and offset projects to reduce the potential impact of rising costs as a result of the carbon pricing mechanism due to the nature of energy-intensive businesses |
Increase Business Opportunities |
Expand business opportunities and increase revenue through investments in high value-low carbon businesses and the development of sustainable products to meet the needs of environmentally conscious consumers. |
Management Approach GRI 3-3 GRI 3-3 (2021)
Commitment
GC is committed to the efficient management ofclimate change and energy in accordance with the Sustainable Development Goals (SDGs).GC has set a target to reach net zero emissions in Scope 1 and 2 by 2050 through three drivens, namely 1) Efficiency-driven, 2) Portfolio-driven, e.g., investment in High Value-Low Carbon Business, and 3) Compensation-driven. GC also aims to explore business ventures by leveraging technological innovations in tandem with building partnerships with all stakeholders to support the transition to an eco-friendly, low-carbon economy.
Business Strategies
GC has defined the Energy Management and Climate Strategy in accordance with the guidelines of the International Financial Reporting Standards S2 (IFRS S2) - Climate-related Disclosures, focusing on three areas of operations, namely Efficiency-driven using modern technology, Portfolio-driven to shift towards High Value-Low Carbon Business, and Compensation-driven, in order to achieve the Net Zero Target and expand operations to cover other indirect emissions (Scope 3) across the value chain.
GC is committed to implementing Thailand’s Long-Term Low Greenhouse Gas Emission Development Strategy (LT-LEDS), while simultaneously pursuing new business growth. This commitment is guided by three strategic approaches:
- Decarbonization is achieved through operations in three key areas:
- Efficiency-driven: Enhancing operational efficiency by adopting technologies that reduce energy consumption and greenhouse gas emissions in production processes, while transitioning to renewable energy or low-carbon energy sources.
- Portfolio-driven: Long-term restructuring of the business portfolio toward high-value, low-carbon businesses (High Value–Low Carbon Business).
- Compensation-driven: Capturing and offsetting carbon to manage residual greenhouse gas emissions from production processes and business operations
- Low Carbon Growth
- Sustainability Excellence
“GC’s Decarbonization Pathways”
“GC integrates sustainability into our business operation”
GC has defined unequivocal management guidelines and medium-term goal to cut down greenhouse gas (scope 1 and 2) emissions more than 20% by 2035 This is part of the process towards achieving net-zero emissions in 2050 and is in line with the Paris Agreement. Accordingly, GC supports and encourages customers and suppliers to participate in the endeavor to accomplish such a goal. Moreover, the company is committed to conducting business through cooperation and engagement with various organizations around the world to maximize operational efficiency. GC has incorporated stakeholder engagement into the low carbon pathway framework as it coincides with the goals of the Paris Agreement and can also stimulate the accomplishment of the low-carbon business goal.
GC has set climate-related targets and Key Performance Indicators (KPI) to monitor GC’s performance and support global ambition to reduce effect caused by climate change. Hence, GC’s climate-related target has set in accordance with national and global targets, for instance, Thailand’s Nationally Determined Contribution (NDC), Paris Agreement in the 26th Sessions of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26) and Sustainability Development Goals (SDGs), which emphasis on reducing greenhouse gas emission from its operations by enhancing energy efficiency and encouraging alternative energy. These are aligned with the Sustainable Development Goal 7: Affordable and Clean Energy (SDG 7), and Sustainable Development Goal 13: Climate Action (SDG 13) of the United Nations, as well as Carbon Disclosure Project (CDP).
(UN SDG 7: Affordable and Clean Energy)
(UN SDG 13: Climate Action)
To achieve the mentioned target, GC has analyzed internal and external risk factors, which may affect the business operation in both short-term and long-term. Additionally, GC monitors the Emerging Risks from the Early Warning System to identify climate change risks that may cause widely impacts on GC and/or industry over the next three to five years. Therefore, GC has established risk and crisis management approaches to manage risk within an acceptable limit in response to GC’s Climate Strategy.
Climate-related Performance GRI 305-1 (2016,) GRI 305-2 (2016), GRI 305-3 (2016), GRI 305-4 (2016), GRI 305-5 (2016)
Organizational Greenhouse Gas Inventory
GC has established organizational greenhouse gas inventory based on ISO 14064-1:2018, the Greenhouse Gas Protocol, American Petroleum Institute (API 2009), Intergovernmental Panel on Climate Change (IPCC) 2006 and Thailand Greenhouse Gas Management Organization (Public Organization)/TGO in order to serve as a greenhouse gas management guideline and to regularly report organizational greenhouse gas emission. The company has also disclosed information in accordance with guidelines of the International Financial Reporting Standards S2 (IFRS S2) Climate-related Disclosures, which cover four key aspects: 1) Governance, 2) Strategy, 3) Risk Management, and 4) Metrics and Targets, as well as in responding to the Climate Change Questionnaire conducted by the globally recognized sustainability assessment institute, CDP Climate Change.
Greenhouse Gas Emissions (Scope 1 and Scope 2)
| Performance | Target | ||||
|---|---|---|---|---|---|
| 2022 | 2023 | 2024 | 2025 | 2025 | |
| Emission (tons CO2 equivalent) | 8.18 | 7.96 | 7.82 | 7.32 | 8.89 |
Furthermore, GC has collected greenhouse gas emissions data from other related activities (scope 3) according to the Technical Guidance for Calculating Scope 3 Emissions of the GHG Protocol. This leads to the management of greenhouse gas emissions throughout the supply chain. GC has evaluated 9 activities, and other related activities within Scope 3 of greenhouse gas emissions from below nine categories.
Greenhouse Gas Emissions (Scope 3)
| Activity | Emission (tons CO2 equivalent) |
|---|---|
| Purchased Goods and Services | 5,872,136 |
| Capital Goods | 121,552 |
| Fuel and Energy Related Activities | 1,277,531 |
| Upstream Transportation and Distribution | 580,966 |
| Downstream Transportation and Distribution | 35,726 |
| Processing of Sold Products | 3,608,576 |
| Use of Sold Products | 25,989,989 |
| End-of-life Treatment of Sold Products | 1,076,756 |
| Investments | 1,593,811 |
The GC Greenhouse Gas Report related to direct GHG emissions and energy indirect GHG emissions and other indirect GHG emissions are assurance by the third party verification in accordance with the ISO 14064-1.
Internal Carbon Pricing
GC has implemented an Internal Carbon Price (ICP) mechanism to evaluate the carbon impact on projects as part of the investment decision-making process. This ensures that the projects in which the Company invests can deliver returns in line with the long-term targets set. Specifically, the Company applies ICP in the form of a Shadow Price to support investment decisions for projects that reduce greenhouse gas emissions. Currently, the Company has set its internal carbon price at an average range of 14–113 US dollars per tonne of carbon dioxide equivalent.