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6 June 2021

Climate Resilience and Energy

Acute impacts of climate change and global warming necessitate collaboration worldwide in effort to reduce greenhouse gas emissions and deploying innovations for carbon removal. SCG thus sets greenhouse gas mitigation target in support with the Paris Agreement’s ambition goal of limiting global warming to 1.5 degrees Celsius and net zero in 2050. Our efforts are subject to strict business governance and execution in line with international norms among all business units working to achieve the target. SCG has integrated Task Force on Climate-related Financial Disclosures (TCFD) in business strategy.

Task Force on Climate-related Financial Disclosures (TCFD)

Climate change issue is one of top 3 of SCG materiality. SCG has integrated TCFD into business strategy since 2019. SCG has reviewed TCFD elements across existing structures and performances, such as governance structure, sustainable development strategy, risk management and target related KPI. SCG also identifies, assesses and manages climate-related risks.

Governance

SCG has integrated climate change and related issues, including TCDF, in SCG managing structures from top management to operations business; The Board of Directors, President & CEO, SCG Sustainable Development Committee (SDC), SCG Climate Change & Energy Committee, SCG Risk Management Committee, and business units.

  1. Board will decide the company direction including overall climate change strategy and cascade to management team leading by President & CEO
  2. President & CEO leads ambition all business units to net zero by setting short term, medium term and long term plan to align with Paris Agreement and countries’ Nationally Determined Contributions (NDC). President & CEO supports investments and economic instruments; Internal Carbon Pricing (ICP) to encourage environmental investment projects.
  3. SCG SDC provides global trends, ESG, SD framework, networking, such as WBCSD, UNGC, Ellen MacArthur Foundation, GCCA and monitoring all SCG performances related to climate change & TCFD.
  4. SCG Climate Change & Energy Committee is responsible to climate change and energy issues, set up climate strategy, net zero pathway, transition risk, physical risk and adaptation plan, R&D GHG reduction, collaborating with global and local networks for new technologies such as CCU/S, Energy storage, Hydrogen energy sources.
  5. SCG Risk Management Committee creates risk culture, risk scenario which potential impacts to SCG.

SCG has announced new climate ambition to new zero 2050, now SCG has joined Science Based Target (SBT) and analyzed climate scenarios to well below 2C (WB2C).

Strategy

SCG has identified climate change as top 3 of enterprise materiality. SCG Climate Change and Energy Committee is responsible to set up and propose to president & CEO and board of directors. SCG foresees both climate-related risks and opportunities over the short term (2025), medium term (2030) and long term (2050).

  1. Increase the share of biomass and renewables to replace fossil fuel.
  2. Improve or modify process and equipment to enhance energy efficiency.
  3. Research and development (R&D) of technology to achieve Net Zero in 2050.
  4. Develop products, services and solutions that reduce emissions across the value chain.
  5. Apply economic tools to promote greenhouse gas (GHG) emissions reduction.
  6. Forestation and rehabilitation of terrestrial forest, mangrove and seagrass as carbon sink.
  7. Awareness raising on energy conservation and climate resilience among employees and contractors.
  8. Implement Internal Carbon Pricing (ICP) at 18 USD/ton CO2 for investment, which reduce GHG scope 1 and 2.

SCG has set up process to identify, assess both transition risks and physical risks. SCG can see the risks and opportunities,

  • Risks such as regulation change, trade barrier, water flooding, water scarcity, customer’s environmental needs, and stakeholder expectations.
  • Opportunities such as new green technologies, new low carbon products such as low clinker cement content, new low carbon investments and businesses such as solar, biomass power plant, energy storage.

Risk Management

SCG has implement process to identify, assess and manage climate-related issues; physical risks, transition risks and adaptation plan as existing, medium term and long term. SCG has risk assessment system to all operation sites to evaluate all risks including climate change such as water flooding, water scarcity. This system is required to review at least quarterly or any significant changes.

Metrics and Targets

SCG has disclosed GHG scope 1 and 2 annually in SCG Sustainability Report and on SCG website. Scope 3 is a minor portion, SCG has initial to collect GHG data from transportations, avoided emission at customer boundary. SCG will continue to collect relevant scope 3 data align with WBCSD GHG scope 3 protocol.

Target

  • Net Zero in 2050
  • By 2030, reduce GHG emissions by 28% compared with business as usual (BAU) from the base year of 2007.
  • By 2025, reduce GHG emissions by 20% compared with business as usual (BAU) from the base year of 2007.
  • By 2025, reduce Energy Consumption by 13% compared with business as usual (BAU) from the base year of 2007.

2020 Performance (Metric)

  • Greenhouse gas emission reduction by 10.9% compared with BAU from the base year of 2007
  • Energy consumption reduction by 7.6% compared with BAU from the base year of 2007
  • Portion of Alternative Fuel by 14.3%