WIXLIB

Chemicals BusinessChallenges and GoalsSustainable ChangeAmidst the global economic fluctuation andchemicals market slowdown, and geopoliticaltensions, we place full emphasis on creatingand developing High Value Added, safety andenvironmentally friendly products and servicesto meet consumer’s needs with responsibleproducts and services and also CircularEconomy principle. We applied technology anddigital systems to enhance operational efficiencythroughout the value chain. We implementProcess Safety Management (PSM) andIndustrial Hygiene Management System toaccidents, injuries prevention and to be preventwithout occupational illness. We are ready toexpand production capacity and aim to bethe sustainable leader in ASEAN region. Transforming from a regular commodity chemicalproducts producer to a creator of innovativeHigh Value Added products and services andmoving forward to become Service SolutionProvider. Research and development of products byfocusing on vastly increasing recyclable resourceraw materials into the system and reducingnatural resources materials. Driving the Circular Economy principle throughcontinually educating and providing informationon resources consumption and wastemanagement to employees and communities. Investing in Start-ups and Venture CapitalFunds relating to in-depth technology to addressCircular Economy. Developing employees’ potential through DigitalPlatform to enable them to be organizationalleaders in preparation for future businessexpansion in the ASEAN region.SCG eco value Productsand Services49%Fatality and Lost TimeInjury Case0Achievements and Progress RIL Industrial Estate has been certified asEco-World Class, which is the first industrialestate in Thailand to achieve the highest honorarystatus, from the Industrial Estate Authority ofThailand. Build the prototype of “Community Like (No)Garbage” by encouraging the communityengagement at Khao-Phai Village, RayongProvince and developing the application named“Koomkah” to manage the waste banks, in 2019,the application has been used in more than23 areas. Collaborate with Department of Marine andCoastal Resources to develop 24 sets of “floatinglitter trap” to be installed in the estuaries andcanals in 13 seaside provinces. In 2019, thefloating litter traps reduce the amount of wasteentering the sea by at least 30 tonnages. Become the joint founding member of Allianceto End Plastic Waste (AEPW) in collaboration witha group of the world’s leading companies to solveocean plastic waste in the sustainable way.What we do 09

Packaging BusinessChallenges and GoalsSustainable ChangeAs the consequence of the economic slowdownfrom trade war, include changing customers’behavior by digital technology advancementand the trend of customers to pay more attention tothe environment. We, therefore, emphasize onfinding new packaging solutions in response toconsumers diverse and different needs underthe Circular Economy principle and strive to becomethe leader of packaging solutions in ASEAN region. Adjust to be aligned the rapid growth business bybecoming Packaging Solutions Provider,particularly in the high growth potential ofASEAN Market. Apply digital technology and automation in theproduction process to reduce production time,reduce minimum production lot size, and be ableto fullfill more needs of customers. Maintain leading position through packagingsolutions accordance with the Circular Economyprinciple to meet the needs of consumersin terms of environmental friendliness and gain thecompetitive advantages. Modify the organizational management structureand enrich employee development for morecapabilities, competence consistent withsustainable development with goodleadership skills and new capabilities on digitaltechnology to create value that meets thecustomers’ needs.Recycled Material50.2%Recycled Water12.0%Alternative Energy30.6%10 Sustainability Highlights 2019Achievements and Progress FEST BIO, a biodegradable and non-chemicalhazardous food packaging made from naturaleucalyptus membranes from commerciallyafforestation. FEST Chill, a recyclable and non-chemicalhazardous food packaging made from naturaleucalyptus membranes from commerciallyafforestation. The production of packaging with Digital Printingtechnology shortens the lead time of printing platepreparation and production process, enables toprint on variety of materials, and reduce minimumproduction lot size. The “Sharing is Caring, FEST Giving Back toThe Environment” Project is the collaboration with9 partners to promote the use of safe andenvironmentally friendly food packaging andcontribute for purchase the fertilizer productionmachine from food waste to The SirindhornInternational Environmental Park Foundationunder the patronage of HRH Princess MahaChakri Sirindhorn. Collaborate with Tesco Lotus launching a campaign“Rethinking Packaging : New Think New Idea forEnvironment” to collect and recycle used paperpackaging to be paper bags replacing plastic bags andto collect and transform plastic bottles into fabric bags.

MaterialityProcess of Materiality Assessment1. Analyze sustainability issues along the value chain, covering the phaseof raw material procurement to production, transport, distribution,utilization of products and services, together with the analysis ofsustainability issues in related industries2. Analyze the issues that matter to the stakeholders through variousmeans comprising survey, panel discussion3. Analyze the alignment with the enterprise risk management framework4. Validate the material issues and improve continuallyThe Process of Materiality Assessment and Prioritizationin Accordance with the Global Reporting Initiatives(GRI) Standards High aterWManagement uman CapitalHDevelopment Importance to StakeholdersEconomy GHG Management Business Ethics ransparencyT& DisclosureSociety nergyEManagement Safety ommunity/SocietyCDevelopment BiodiversityEnvironment ustomerCExperience roductPStewardshipI nnovation andTechnology Human Rights takeholderSEngagement Air Emissions Labor PracticesCompliance orporateCGovernance Risk & Crisis Management ccupationalOHealth asteWManagement pstream SupplyUChain Management Low ustainable Raw MaterialsSand Fuel Low Importance to SCG HighThe way we work 11

Sustainable Development ApproachEconomyCreate values not exclusively for profitability, but for mutual benefitsfor all stakeholdersEnvironmentCommit to conservation of the environment and natural resources,recognition of consumption value of resources, and sustainable preservationof ecological balanceSocietyAdhere to ethical business conduct, social responsibility and life qualityimprovement in communities where SCG ortunityInnovationand Technology The world is facing the megatrendsin technology advancement that thetraditional pattern of activities hasbecome outdated under the intensecompetitive and volatile setting Become an innovation leader whois agile and adaptable to dynamicchanges including increasedinvestment in research anddevelopment of new business modelsCustomerExperience The speedup of digital disruptivetechnology and online social mediahave changed customers’ behaviorswith more varied and diverse needs Be the first choice of brand forcustomers by fostering customerintimacy to develop innovation anddeliver value that creatively meet thecustomer expectations Supplier’s key operations in thesupply chain including manufacturers,service providers, carriers, anddistributors could cause SCG’sbusiness interruption Select suppliers on the basis ofethical business conduct and thespirit of collaboration to raise thesuppliers’ capability for the mutualsustainable growth Oil price volatility and limitedavailability of natural resources, aswell as the increasing impacts offossil use on climate change Research and develop alternativeenergy technology by embracing theCircular Economy principle as the keystrategy and continual improvementto increase energy efficiency Escalating global warming and climatechange has led to the internationalcooperation to ultimate target ofgreenhouse gas emissions in linewith the Paris Agreement to controlthe global average temperature riseto well below 2 degrees Celsius Develop products and services thathelp reduce GHG emissions, controlGHG emissions and restore theecosystem to increase carboncapture area in conformity with theParis Agreement The speedup of digital disruptiontechnology has changedcustomers’ behaviors and causesthe traditional pattern of activitiesto become outdated while theclimate change issues draw globalattention Utilize the strength of being theinnovation-oriented organization todevelop products, services and solutionsthat meet the needs of customers, elevatebetter living, reduce resource and energyconsumption and minimize emissionsand waste to the agementGreenhouse GasManagementProductStewardship12 Sustainability Highlights 2019

DimensionSustainabilityIssueRiskOpportunity Climate change is the cause ofunseasonal rain and drought in theupstream watershed leading todecreased water input to reservoirsand the risk of water stress forfactory use Enhance the integrated water managementability and construct water reservoirwithin the factory’s area througha collaboration with public and industrialsectors to apply international tools toassess water situations, increase waterusage efficiency, and develop productsthat consume less waterWasteManagement The depletion of natural resourcesfrom industrial growth and pollutionfrom improper waste managementhave adverse impacts on theenvironment and communities Research and develop innovationto reuse/recycle raw materials andwaste as well as to add value towaste, in line with the 3Rs principlefor waste management and CircularEconomy principleBiodiversity Higher expectation from thestakeholders and society towardsbusiness conduct with environmentalconcern and stringent law onconservation of biological resourcesin domestic and international levels Be a role model in biodiversityconservation through sustainabledevelopment and the application ofinternational index to evaluate thequality of management Human Rights violations,occurred in SCG’s direct businessactivities, the business valuechain, and in joint ventures whereSCG has no authority in management,have entirely impacts on SCG’sbusiness operations Announce Human Rights Policy todemonstrate SCG’s commitment toachieve being the role model of humanrights respect and protect, by directlyand indirectly promoting andadvocating those involved in its valuechain to conduct business with respectto human rights Tendency on accidents ofemployees and contractors has notyet reduced as targeted. Fatalitycases of the contractors remainhigher than target. Safety managementsystem is to be implementedregionally to ensure the conformitywith SCG standards Create change for practical andcontinual practices by applying digitaltechnology as the monitoring tools toelevate safety standards andmanagement Dynamic change and intensebusiness competition as well asvaried needs of customers result inthe lack of proper knowledge andskills of employees to cope withsuch change Redesign courses and trainingprograms to equip the employeeswith knowledge and skills to promptlyadapt to present and futurecircumstance Business operations, locally andregionally, might affect neighboringcommunities, coupled with higherexpectation from stakeholders andsociety towards our businessconduct in terms of social andenvironmental concern Develop a role model community toachieve its sustainable, self-reliant,and higher quality of life by drawingthe involvement of all stakeholdersand employing knowledge andcompetency of SCG and other relatedentitiesEnvironmentWaterManagementHuman RightsSocietySafetyHuman CapitalDevelopmentSocial andCommunityInvolvementThe way we work 13

Sustainable Development in ActionEconomyInnovationand Technology41%revenue from salesof High Value Addedproducts and servicesof total revenue fromsalesTarget50% DoCare Project Innovation that helps monitorand provide special care at home, particularly for elderly,by the installation of the motion detector within bedroomor bathroom and submission of data processing onactivities, along with the transmission of a distress signalto the Care Center for 24 hour on-call support available tocoordinate with the hospital in case of emergency. AddVentures Investment in the startupcompanies worldwide by either investing indirectly throughthe leading investment funds, which increased from 2 to4 investors in 2019, or investing directly in the startup,increased from 9 to 14 investors. Examples of the startupsby category are Logistics startup: Giztix (Thailand),and Logivan (Vietnam), Agriculture Technology startup:Adatos, HG Robotics. Hatch-Walk-Fly Internal Startup Project. In 2019,entering the Fly phase with the increase of customer baseand the rapid expansion of business totaling5 companies, namely Rudy, Dezpax, Mez, Agcuraand Urbanice: Platform.CustomerExperience SCG Marketing Way Marketing guidelines,developed by SCG, has been implemented to enhancecustomers’ satisfaction of all business units in 2019.100% HDPE S111F Plastic resin that Chemicals Businesshas joined hands with Betagro Group to develop a plasticflexible packaging for fresh food with the same resistanceto high impact.of overall customersatisfaction basedon surveys via SCGContact CenterSustainableValue towardsSupplier100%of suppliers withprocurement spend over1 million baht, passed theEnvironment, Society andGovernance riskassessmentsTarget100%14 Sustainability Highlights 2019 World Star Winner 2018 Packaging Businessand Chao Phraya Abhaibhubejhr Hospital worked ina collaboration to add value to the products by redesigningthe hospital’s packaging, of which had been awarded thePackaging Design Award. PP Woven Bag The determination to developbusiness potential of its suppliers led to the successfulinnovation development of plastic woven sack for whitecement by Lucky Star Co., Ltd. by reducing materialconsumption while maintaining mechanical properties interms of strength and load. Good Business Conduct organizing theseminars for 39 of the suppliers’ companies with theemphasis on Anti-Corruption and Circular Economy. Sustainable Procurement Frameworkorganizing the training programs for related employeesto foster the understanding concerning SustainableProcurement Framework to allow the employee to managerisks and start the collaboration with suppliers to improveoperational efficiency.

EnvironmentEnergyManagement Excellence Award, Thailand EnergyndAwards 2019 and 2 Runner-up,ASEAN Energy Awards 2019 SCG Ceramics7.5%Public Company Limited implemented “Solar Floating andSolar Rooftop Project” to increase efficiency of tap waterproduction within Nong Kae Industrial Estate, reducingenergy consumption by 14%, lowering Greenhouse GasEmissions by 134 ton CO2 per year.energy consumptionreduction comparedwith BAU at the baseyear of 2007Target13%in 2025Greenhouse GasManagement9.2%greenhouse gas emissionsreduction compared withBAU at the base year of2007Target28%in 2030SustainableProducts andServices29%revenue from sales of SCGeco value products andservices of total revenuefrom salesTargetTwo-third or66.7% Excellence Award, Thailand Energy Awards2019 SCG Paper Energy Co., Ltd., Siam Kraft IndustryCo., Ltd. and Thai Paper Co., Ltd. launchthe Biogas from Wastewater Treatment System Project atWangsala plant to substitute fuel oil and coal, energy ofwhich had been used as fuel in the lime kiln of Thai PaperCo., Ltd. to substitute fuel oil at approximately 3.3 millionliters per year and in Siam Kraft Industry Co., Ltd. tosubstitute coal at approximately 4,500 tons per year. Internal Carbon Pricing (ICP) Adoption ofInternal Carbon Pricing Scheme worth 18 USD per tonCO2 as criteria for approval of project that reducegreenhouse gas emissions. Task Force on Climate-RelatedFinancial Disclosures (TCFD) Applyingguidance of the TCFD to assess risks, impacts, andopportunities relating to climate change to plan SCG’sbusiness operations. Natural Climate Solutions (NCS) Establishingthe Natural Climate Solutions Committee to take care forthe capture of carbon dioxide with nature solutionsconforming to international standards under thecollaboration with both domestic and international entitiessuch as WBCSD. Energy Smart Solution New business thatprovides service solution to save building energyconsumption and converting the building into a SmartBuilding through leading technologies from worldwidestart-ups. Building Information Modeling (BIM)Cement-Building Materials Business implements BIMtechnology to use with building construction project toprecisely estimate the material use in production, reducethe construction materials waste, and enhance operationefficiency. Optibreath Packaging developed by PackagingBusiness with characteristics to control the rate ofrespiration and extend the shelf-life of fruits andvegetables for longer storage before consumption.in 2030The way we work 15

EnvironmentWasteManagement92%reduction of wastedisposal per unit ofproduction, comparedwith the base year of2014Target60%in 2025WaterManagement10.5%reduction of waterwithdrawal, comparedwith BAU at the baseyear of 2014Target23%in 2025Biodiversity1number of quarrywith Biodiversity Indexin the limestone quarryrehabilitated area,compared with naturalforest buffer zone ofat least 60%Target4by 202216 Sustainability Highlights 2019 Concrete Waste Management The CPAC Roof TileCo., Ltd. conducts a research and development on roof tilesscraps from Nakhon Pathom plant to be used as substituteraw materials for sand in construction, civil work, andproduction. In 2019, the substitute materials for natural sandhave been used within SCG and external at around 4,546tons. ECO Energy Power Plant IWPP SCG build theindustrial waste power plant located in Map Ta Phut IndustrialEstate, with 8 MW capacity. It is the first plant with theability to handle both hazardous and non-hazardous wastefrom industry as its feed at approximately 65,000 tons peryear. Waste Water Treatment Fuel Energy ThaiPolyethylene Co., Ltd. improves the process of catalystproduction to reduce the volume of waste water for more than5,000 tons yearly. By further recycling such waste water asan alternative fuel for cement kiln, the company reduces solidwaste by 1,000 tons per year. WRI AQUEDUCT Applying Water Resources Institute(WRI)’s Water Risk Atlas Tool to assess water-related risks.The tool is well accepted internationally for assessment ofwater stress situation. The data from the tool

Solar Roof System” as the integrated solution for installation of solar power system on the residential roofs Expanding solar rooftop project to other SCG’s factories Developing solar floating system to provide integrated solutions for customers with water reservoir Bioga