Governance Structure of Sustainability Development
The Company has established a sustainability policy and appointed a Sustainability Committee to ensure the effective implementation of the policy. This is carried out in parallel with compliance with relevant regulations and laws concerning greenhouse gas emissions, the development of sustainability initiatives, and the establishment of a dedicated Sustainability Working Group responsible for driving the execution of sustainability efforts in alignment with the Company’s defined goals.
Board of Directors
- Approve the Sustainability Policy and Practices.
- Monitor governance to ensure operations align with the established framework.
Sustainability Committee
- Strategic Direction Setting: Define the vision, objectives, and sustainability policy of the company, including measures related to climate change and environmental transitions.
- Monitoring and Directional Guidance: Assess the performance and effectiveness of sustainability initiatives and monitored climate-related risk management measures.
- Regulatory Compliance and Standard Practices: Review and ensure that the company’s sustainability practices align with international standards, such as UN SDGs and ESG assessments, including IFRS standards.
- Risk Management and Sustainability Assessment: Analyze sustainability-related risks and assessed their potential impact on business operations, including implications for the organization’s direction, opportunities, and strategy.
Sustainability Workforce
- Implementation of Sustainability Initiatives: Drive forward projects related to greenhouse gas emission reduction, energy efficiency enhancement, and the development of environmentally friendly innovations.
- Execution of Climate Change Policy: Develop and institutionalize climate-related policies by integrating climate transition strategies into daily business operations, aligning with the goal of achieving Net Zero Emissions by 2040.
- Data Monitoring and Performance Reporting: Consolidate ESG-related data and monitor performance against defined Key Performance Indicators (KPIs), preparing reports for the Sustainability Committee and relevant stakeholders. Report verified emissions data to the Thailand Greenhouse Gas Management Organization (TGO) to ensure accuracy and alignment with sustainability standards.
- Stakeholder Engagement: Collaborate with internal departments, industry peers, government agencies, and partner organization to foster awareness and drive broad-based sustainability efforts.
The Company has established a sustainability policy and appointed a Sustainability Committee to ensure the effective implementation of the policy. This is carried out in parallel with compliance with relevant regulations and laws concerning greenhouse gas emissions, the development of sustainability initiatives, and the establishment of a dedicated Sustainability Working Group responsible for driving the execution of sustainability efforts in alignment with the Company’s defined goals.
The Company has adopted the climate-related risk and opportunity assessment framework of its parent company, AEON Financial Service Co.,Ltd. This approach supports consistent evaluation of potential impacts and the implementation of effective mitigation strategies across the organization and Group.
Scenario Analysis Approach
Assessed climate change-related risks and opportunities under 2 scenarios:
- 1.5 degree C Scenario – Strong climate policies, lower emissions
- 4.0 degree C Scenario – Flexible climate policies, higher emissions
Risk & Opportunity Categorization
- Transition Risks – Risks arising from policy, market, and technology shifts.
- Physical Risks – Risks from climate-related disasters & environmental changes.
- Opportunities – Potential benefits from climate adaptation & sustainability efforts.
Risk Impact Assessment
- Evaluate the impact of each risk and opportunity.
Time Frame Target
- Short-term – Immediate to 5 years
- Medium-term – 5 to 10 years
- Long-term – Over 10 years
Climate Change-Related Risk Classification and Impact Assessment
| Risk Category Level 1 | Risk Category Level 2 | Risk Category Level 3 | Impact | Timeframe | Scenario 1.5 °C | Scenario 4.0 °C |
|---|---|---|---|---|---|---|
| Transition Risk | Legal and Regulatory Risk | Carbon Tax | Higher tax expenses due to carbon pricing | Short-term/Long-term | High | High |
| Market Risk | Rising Energy Price | Increase energy costs affecting operational expenses | Short-term/Long-term | High | High | |
| Technology Risk | Transition to new technologies (e.g., clean energy) | Increase investment in cleaner technologies and impact on competitiveness, loss of competitive advantage and market share if unable to meet ESG expectations. | Short-term/Middle-term | Moderate | High | |
| Transition Risk | Acute Risk | Extreme Weather events (e.g., Typhoons, floods) | Physical damage to facilities and infrastructure, causing disruptions, higher costs in storage, operations, insurance and capital expenditures. | Middle-term/Long-term | Moderate | High |
| Chronic Risk | Rising Temperatures & Sea Levels | Moderate | High |
Climate-Related Opportunity Classification and Impact Assessment
| Opportunity Category Level 1 | Opportunity Category Level 2 | Opportunity Category Level 3 | Impact | Timeframe | Scenario 1.5 °C | Scenario 4.0 °C |
|---|---|---|---|---|---|---|
| Transition Risk | Resource Efficiency Improvement | Carbon Tax | Reduce impact from carbon taxes through emission reductions, such as renting green building certifications (LEED) | Short-term/Long-term | High | High |
| Innovation in Products and Financial Services | Demand for climate-resilient products and green finance solutions | Increase revenue from the development and new financial products, such as electric motorcycle hire-purchase loans and loans for solar panel installations. | Middle-term/Long-term | High | High | |
| Customer Base Growth | Engagement with environmentally conscious customers | Opportunities to build brand value and strengthen relationships with environmentally conscious customer segments. | Middle-term/Long-term | Moderate | High | |
| Business Adaptability and Digitalization Process | Business Resilience and Efficiency | Opportunities to invest in technology and digitalization to ensure business continuity and efficiency amid rising risks, such as natural disasters, increasingly stringent environmental regulations, and shifting customer behavior. | Middle-term/Long-term | Moderate | High |
The Company disclosed its greenhouse gas (GHG) emissions data for Scope 1, 2, and 3 based on the Year 2023 operational performance. The disclosed data was verified by an external auditor and has been certified and registered with the Thailand Greenhouse Gas Management Organization (Public Organization) or TGO on November 26, 2024.
Greenhouse Gas Management Plan
- The Company has implemented its greenhouse gas emissions reduction plan with the goal of reducing emissions in the short, medium, and long term efficiently and in alignment with AEON Group’s commitment to achieving net-zero emissions by 2040, as declared in the AEON Group’s Carbon Neutrality Declaration and Paris Agreement by 2050.
- The Company has established a roadmap for disclosing GHG emissions by expanding data collection coverage to operational centers nationwide and initiating the certification process under ISO 14064-1, which outlines organizational-level principles and requirements for future emission disclosures in accordance with international standards.
- The Company promotes and supports sustainability projects aimed at reducing its GHG emissions and encouraging ongoing use of environmentally friendly resources. Employees are encouraged to participate in sustainability activities, including initiatives that contribute to GHG reduction.
- The Company has organized regular training sessions to raise awareness on climate change and GHG emissions through both in-person and online formats throughout the 2024 fiscal year, ensuring that all employees understand the importance and potential impacts of these issues.
- The Company reviews its sustainability policy annually to ensure alignment with relevant laws, regulations, and guidelines concerning sustainability and GHG emissions, taking into account the latest developments and conditions.
- The Company complies with its climate change policy by developing and integrating climate-related strategies into daily business operations, in alignment with the goal of achieving net-zero greenhouse gas emissions by 2040.
Greenhouse Gas Management Process
- Assess the Current Situation
- Review greenhouse gas (GHG) emissions by collecting energy consumption data and resource usage related to GHG emissions under Scope 1, 2, and 3. This data is used to calculate annual emissions based on the Company’s operations.
- Analyze the data to identify emission sources as a basis for setting reduction targets and formulating GHG mitigation action plans.
- Set Greenhouse Gas (GHG) Reduction Targets
- Establish short-, medium-, and long-term targets based on the Company’s baseline GHG emissions calculations, to ensure measurable progress.
- Assess the feasibility of achieving the targets by taking into account available resources, technology, limitations, laws, and applicable regulations, to ensure the targets are realistic and achievable.
- Planning and Implementation
- Improve energy and resource efficiency across operations that contribute to GHG emissions. For example, implementing projects like the use of 100% recyclable label-free water bottles in corporate activities.
- Expand the Company’s sustainable finance offering to support environmentally conscious customers, such as electric motorcycle loans and solar panel installation loans.
- Promote carbon offset activities, such as collaborating with the AEON Thailand Foundation on tree-planting initiatives, or supporting the Foundation in sponsoring solar panel installations for charitable organizations that seek to install them but lack funding.
- Monitoring and Evaluation
- Monitor and record performance to track progress against the GHG reduction plan, and continuously assess and improve outcomes on an annual basis.
- Awareness and Engagement
- Providing ongoing training and education for employees on greenhouse gas reduction.
- Foster collaboration among employees, customers, communities and all stakeholders to promote GHG reduction. This includes encouraging employees to propose sustainability initiatives, developing environmentally conscious products and services, promoting the use of eco-friendly products and services among customers, and partnering with environmental organizations. Examples include encouraging customers to opt for e-statements instead of paper billing.
- Executive Support
- The Company ensures regular reporting of sustainability performance to Sustainability Committee on a quarterly basis. This allows the Committee to review and monitor progress, assess implementation plans, and ensure that the Company remains on track to achieve its defined sustainability goals.
Compliance with principles and standards for greenhouse gas or climate change management
The Company complies with all applicable environmental laws, regulations, and requirements in Thailand, and adopts the ISO 14001: Environmental Management System as a framework for establishing environmental policies and implementation plans. In addition, the Company has expanded its efforts to disclose and verify GHG emissions from its operations in the 2023 fiscal year, with the aim of effectively reducing emissions. This includes registering and certifying the organization’s carbon footprint data for 2024 in accordance with the requirement of the Thailand Greenhouse Gas Management Organization (Public Organization) or TGO, and ensuring the data is verified by an accredited third-party auditor as required by TGO standards.
Setting greenhouse gas emission goals
The Company supports and encourages participation from all stakeholders in efforts to reduce greenhouse gas emissions. It also supports the global community’s efforts to address climate change by committing to achieve net-zero GHG emissions by 2050, in line with the goals of the Paris Agreement.
The Company aligns its direction with the climate-related policy and targets of AEON Co., Ltd. (Japan), which aims to reduce GHG emissions by 35% by 2023, and to achieve net-zero emissions by 2040. The Company is also actively involved in initiatives led by AEON Financial Service Co., Ltd. (Japan) to reduce GHG emissions across the AEON Group. These efforts reflect the Company’s commitment to contribute to mitigating climate change and reducing global warming.
Setting net-zero greenhouse gas emission target
The Company has established short-, medium-, and long-term targets for reducing greenhouse gas (GHG) emissions from its operations on a continuous basis. It has also set a goal to achieve net-zero emissions for Scope 1, 2 and 3 by 2024, in alignment with the climate policy of the AEON Group.
The Company conducts ongoing assessment of climate-related business risks and opportunities to ensure alignment with relevant laws and regulations. This includes addressing external environmental, technological and other evolving factors, enabling the Company to proactively adapt to changes in global conditions and future climate scenarios.
Details of setting net-zero greenhouse gas Emissions target
| Greenhouse Gas Emission Scope | Base Year 2023 | Short-term Target Year (period 5-year) 2028 | Long-term Target Year 2040 | Certification |
|---|---|---|---|---|
| Scope 1,2, and 3 | 3.183 TonCO2eq | Reduce Greenhouse Gas Emission (GHG) by 10-25% from the baseline year | Greenhouse Gas Emission (GHG) Net-Zero | Thailand Greenhouse Gas Management Organization (TGO): Net Zero |
Performance and outcomes of greenhouse gas management
In 2024, the Company was awarded the Carbon Footprint for Organization (CFO) certification by the Thailand Greenhouse Gas Management Organization (Public Organization), or TGO, on November 26, 2024. This certification was based on verified greenhouse gas emissions data from the Company’s operations in the 2023 fiscal year (from March 1, 2023 to February 29, 2024fd), covering Scope 1, 2 and 3 emissions.
The emissions data used for certification included activities from the Company’s three main operational sites:
- Head Office – Exchange Tower
- Operation Center – Sermmit Tower
- Operation Center – Modernform Tower
All data mentioned above was verified by an independent third-party auditor, Bureau Veritas Certification (Thailand) Ltd.
Green House Gas Emissions (GHG) Report
The Company disclosed its greenhouse gas emissions data from its operations in the 2023 fiscal year as the baseline, which was verified for accuracy by an external auditor (Bureau Veritas Certification (Thailand) Ltd. And subsequently certified and registered under the Carbon Footprint for Organization (CFO) program by the Thailand Greenhouse Gas Management Organization (Public Organization) or TGO on November 26, 2024.
The emission data is detailed as follows;
| GHG Emission Scope | GHG Emissions (TonCO2eq) |
|---|---|
| Scope 1 Emissions | 0.187 |
| Scope 2 Emissions | 1.953 |
| Scope 3 Emissions | 1.043 |
| Total GHG Emissions | 3.183 |
Diagram of Performance and outcomes of greenhouse gas management
Greenhouse Gas Management: Verification of the Company’s Greenhouse Gas Emissions
The Company disclosed its greenhouse gas emissions data from its operations in the 2023 fiscal year as the baseline, which was verified for accuracy by an external auditor (Bureau Veritas Certification (Thailand) Ltd. And subsequently certified and registered under the Carbon Footprint for Organization (CFO) program by the Thailand Greenhouse Gas Management Organization (Public Organization) or TGO on November 26, 2024.