SCG has implemented its Enterprise Risk Management Framework in alignment with international standards. The framework consists of the followings:
- Strategy Establishment
SCG has established explicit objectives and risk appetite in managing risks to ensure consistent risk management practice across the organization.
- SCG Risk Management Structure and Responsibilities The organizational structure of SCG’s risk management is illustrated below:
1. Risk Management Policy
SCG has implemented risk management framework in alignment with international standards and integrated it into the corporate business operations. This allows SCG to identify risks or business opportunities in an appropriate and timely manner, and to reduce the risks to an acceptable level or identify opportunities to add value to the organization in an attempt to achieve the established goals, meet the expectations of stakeholders, promote sustainable business operation, and comply with the good corporate governance principles.
2. Risk Management Process
SCG risk management framework applies to three areas: strategic risk, investment risk, and operational risk. The risk management process comprises risks or opportunities identification, risk assessment, risk response, and risk reporting.
Moreover, to prepare for possible crises that could disrupt SCG’ business function and/or processes, SCG has established Business Continuity Management Governance Structure and prescribed that companies under SCG implement a business continuity management system. They are required to analyze their business activities and material resources together with the possible impacts from the business disruption, assess, and prepare a risk management plan, a crisis management manual, an emergency response plan, and business continuity planning. SCG has also stipulated that executives at all levels and involved employees constantly practice, maintain, and revise the plans and manual so they can be implemented effectively during crises.
3. Building a Corporate Risk Culture
SCG is committed to building a strong risk culture organization-wide. SCG has, therefore, assigned top executives to communicate the significance of risk management and be role models in risk management. They are also entrusted with establishing practical guidelines on effective risk management practices and integrating them with decision-making process. Apart from that, related trainings and seminars are also provided to management and employees throughout the organization. SCG also places the importance of business management in line with an integrated GRC approach through various communication efforts.
Key Risks, Business Opportunities, and Risk Management Strategies
In 2020, SCG identified and assessed significant risks in alignment with sustainability issues, encompassing environmental, social, and governance risks as described below.
· Climate Change and Environmental Risks
· Safety and Health Risks
· Human Rights Risks
· Human Resources Management to Cater to Growth and a Shift in Business Model
· Regulatory Risks from Investment Expansion
· Merger and Acquisition Risks
· Compliance Risks from Changes in Laws & Regulations
· Risks from the COVID-19 Pandemic
· Geopolitical Risks
Production Cost Risks
· Fluctuation in Energy and Major Raw Material Price Risks
Business Environment Risks
· Foreign Exchange Rates Fluctuation Risks
· Risks from Global and Thai Economic Slowdown
- Risks from Rapid Changes in Business Landscapes
- Risks from Transition Toward Low-Carbon Economy
- Risks from Environmental Impacts Caused by Inefficient Plastic Waste Management
- Cybersecurity Risks from Business Reliance on Technology