ESG Overview
SCG Chemicals and ESG for Better Society, Sustainable Environment and Sustainable Growth

SCG Chemicals and ESG for Better Society, Sustainable Environment and Sustainable Growth

SCG Chemicals strives to become the “Chemicals Business for Sustainability”, conducting business in accordance with ESG that responsibly address the impact on the environment, society, and governance and meet the Sustainable Development Goals (SDGs). The Circular Economy concept has been applied in the business operations to increase global competitiveness and long-term growth.

How does ESG drive the sustainable business?

How does ESG drive the sustainable business?

ESG concept demonstrates the company's operational commitment to good corporate governance and transparent management that actively manage social and environmental risks while also considering the significance of all stakeholders and the potential for competitive advantage and the ability to generate long-term returns.

ESG consists of three key areas:

  • Environmental (E) dimension which include management of energy use, water, waste, air pollution, and greenhouse gases.
  • Social (S) dimension which include employee treatment, customer responsibility, and social and community development.
  • Governance (G) dimension which emphasize good corporate governance, risk management based on sustainability, and supply chain management.

E: Environmental

Environmental awareness has long been a priority at SCG Chemicals. The following circular economy actions have been implemented to ensure that targets are met:

  1. Improving manufacturing efficiency to reduce resources use, waste generation, and greenhouse gas emissions from both manufacturing and throughout the value chain.
  2. Enhancing business operations and implementing the integration throughout the value chain by:
    1. Developing eco-efficient materials and innovations from the design of plastic resins and technology to minimize their use (Reduce), designing for recyclability while retaining all of their fundamental properties (Recyclable), converting post-consumer plastics to high-quality PCR or recycled feedstock (Recycle), and bioplastics (Renewable).
    2. Creating products that are SCG Green Choice certified to provide consumers with eco-friendly options and encourage consumers to join in environmental conservation by minimizing the use of natural resources, energy and extending product life.

S: Social

SCG Chemicals prioritizes fair treatment of stakeholders involved in business operations as demonstrated by the following:

  1. Putting employee and business partner health and safety a high priority, starting from within the organization to achieve Zero Accidents and Good Occupational Health.
  2. Contributing to the social and community development in which it operates by assisting in handling challenges facing the community's livelihood and quality of life, and empowering the community to flourish together sustainably.
  3. Being responsible to customers, business partners, and consumers, including delivering a sense of confidence when utilizing Medical & Healthcare and High Value-Added (HVA) products and services.

G: Governance

SCG Chemicals conducts business with integrity, trust, fairness, good corporate governance, and ethics, all of which are guided by the Code of Conduct and are founded on balanced and sustainable interests. All interlock to ensure that business runs smoothly and harmoniously for everyone.

ESG is a critical concept in transforming the business toward a Chemicals Business for Sustainability, which SCG Chemicals has implemented in accordance with ESG concept, with clear goals and driven plans in addition to the passion for making the world a better and more sustainable place for the environment, society, and the greater good of all.

SCG Chemicals' ESG objectives

SCG Chemicals' ESG objectives

ESG Performance

ESG Performance

Structure of Management and Execution Team

Structure of Management and Execution Team Structure of Management and Execution Team

SCG Green Choice

SCG Chemicals is committed to researching and developing products, services, and solutions that enhance the general public's quality of life while promoting environmental stewardship. It also assertively explore new business opportunities in competitive market situations by seeking the “SCG Green Choice” certification, a label that recognizes products and services that promote environmental stewardship.

SCG Chemicals has embraced the SCG Green Choice label selection criteria to improve the manufacturing process, design, and product development. It has established revenue targets for SCG Green Choice-certified products, services, and solutions to account for two-thirds of total sales revenue by 2030.

Circular Economy in Business Operations

Plastic was created to mitigate environmental effects and lower greenhouse gas emissions. However, due to a lack of usage control, some used plastic has leaked into the environment and seeped into the ocean, creating a global concern about ocean pollution. The circular economy concept is being applied as a means of resolving issues throughout the value chain.

SCG Chemicals has integrated the circular economy concept throughout the value chain to boost resource efficiency and increase recycling innovations, thereby reducing global warming and meeting the needs of environmentally conscious customers.

To promote the circular economy, it has introduced the following action plan:

  1. Awareness: raise awareness of the value of natural resources to encourage green mindsets and actions that will help sustain and maximize the value of plastic.
  2. Business: create and develop circular economy solutions through SCG Green PolymerTM in four areas: Reduce, Recyclable, Recycle, and Renewable.
  3. Collaboration: encourage circular economy networking by empowering partnerships and exploring new technologies to sustainably develop economic growth, society, and environment throughout the value chain.
Environmental

On environmental aspects

SCG Chemicals conducts end-to-end management of all processes, from natural resources and energy consumption at the point of origin to emissions of waste, garbage, pollution, and greenhouse gases at the end point. The Company takes responsibility for the innovation of manufacturing processes and products that are as environmentally friendly as possible.

Environmental Management
Chemicals Business places the utmost importance on conserving natural resources and the environment. To this end, the Company regards adherence to the law as a baseline standard for operation and utilizes the latest and most eco-friendly technology in every step, from facilities design to process control and continuous improvement, all in an effort to optimize the Company’s eco-efficiency as well as extend the value of its success to other industries as a model organization for sustainable business practices.

Chemicals Business has established the following measurable objectives and goals with regards to the environment:

  1. Climate change – To release net zero carbon emissions by 2050;  
  2. Water withdrawal – To reduce the amount of water withdrawn from ground or surface sources by 5% compared to business as usual in the base year of 2014 by the year 2025;
  3. Waste – To reduce the amount of waste disposed without recycling or reusing by 75% by the year 2025 compared to the base year of 2014.

Chemicals Business also recognizes the importance of preventing and reducing waste and pollution generation in all activities and processes, especially the emission of volatile organic compounds (VOCs), which is a significant issue towards which the local government and the community of Map Ta Phut, Rayong, have turned their attention.

Climate Change and Energy Management
Chemicals Business aims to reduce greenhouse gas emissions in accordance with the Paris Agreement under the United Nations Framework Convention on Climate Change to limit global warming to less than 2 degrees Celsius. The Company has worked to continuously improve the energy efficiency of its production processes and develop innovations to help reduce the amount of greenhouse gases emitted as a result of its activities. An example of this is the formulation of a coating for the interior of reaction furnaces to help reduce heat loss and thus energy consumption by 2%. This, in turn, contributes to the reduction of greenhouse gas emissions from fuel combustion by 69,439 tons of carbon dioxide equivalents per year. The benefit of this innovation has been further expanded over 192 reaction furnaces in other industries all over Asia. Additionally, the Company intends to transition towards using renewable fuel sources and reduce its reliance on fossil fuels by installing solar farms near reservoirs and on the roofs of its offices. The goal of this initiative is to substitute 20 megawatts of electricity usage by 2025.

During its operations in 2020, the Company was able to reduce its energy consumption by 9.1%, thus reducing greenhouse gas emissions by 577,715 tons of carbon dioxide equivalents compared to business-as-usual operations in the base year of 2007.  

Water Management
Water is a vital resource in the manufacturing processes of Chemicals Business, especially for cooling and steam production. The Company has consistently applied the 3R (Reduce, Reuse/Recycle, Replenish) and circular economy principles to its operations in order to limit water withdrawal, such as by changing the chemicals used within the system to reduce cooling tower blowdown, reclaiming and recycling water released from the cooling system with reverse osmosis, and improving its sand filtration system. All of these efforts have enabled the Company to reduce its water withdrawal by 8% compared to the business-as-usual amount in the base year of 2014, or equivalent to 2.2 million cubic meters of water per year.  

Furthermore, Chemicals Business has undertaken risk management with regard to the possibility of future water shortage for industrial applications by participating in a war room organized by the National Bureau of Water Resources (ONWR), the Royal Irrigation Department, the purpose of which was to promote efficient management of water basins by all sectors. In 2020, every region suffered from drought as a result of the intensification of the phenomenon known as La Niña. The Company cooperated with other industrial estates in reducing water withdrawal and was able to exceed its goal by drawing on reserve water from backup reservoirs and reducing cooling tower blowdown as well as applying water reclamation and recycling technology in accordance with the principles of circular economy.

Chemicals Business prioritizes the preservation of the environment and, therefore, routinely monitors the quality of the sewage that passes through its wastewater management system to ensure compliance with the standards set forth in the notification of the Department of Industrial Works regarding standards for industrial wastewater control B.E. 2560 and the standards according to the the Environmental Impact Assessment (EIA). Daily analysis is performed by the Company’s own ISO17025-certified laboratory, while monthly testing is conducted by an external agency registered with the Department of Industrial Works. On top of this, the Company has also installed online chemical oxygen demand (online COD) systems which allow for continuous real-time monitoring and delivery of data directly to the Informaton Center of the Industrial Estate Authority of Thailand.

Waste Management
Each step in the production and consumption of the goods used in daily life generates waste, from the acquisition of resources to production and consumption, all the way until the end of the product’s life cycle. As a manufacturer of premier plastic pellets, Chemicals Business recognizes the importance of waste management in every process in order to reduce the amount of waste that needs to be disposed of, which could result in other environmental impacts, such as the emission of carbon dioxide due to waste incineration, the usage of space for landfills, and the leakage of waste into natural water sources.     

The application of circular economy principles from the very first step, beginning with the design process, is a crucial strategy in reducing waste at every stage, from production and molding all the way to usage by the consumers, where the Company collaborates with consumers to develop products that can be recycled.

Chemicals Business firmly adheres to laws and regulations pertaining to waste management, from taking care to select only waste management service providers who meet established standards and providing training for staff and affiliates all the way to conducting waste storage and transport and reporting to government agencies in such a way that ensures waste products are properly managed and will not lead to adverse effects on the environment. Moreover, the Company has instituted a “Zero Waste to Landfill” policy since 2007 and set the goal of reducing disposal of waste by 75% compared to the base year of 2014 by redirecting waste generated during manufacturing and maintenance processes to other use, such as the use of sludge from the raw water quality improvement system and from the wastewater treatment system as alternative raw materials in cement production or soil amendments and the utilization of waste with high heating value as alternative fuel sources, all the way to research and development on the process of converting slurry sludge yielded in the process of plastic pellet production into titanium slurry for use as an alternative raw material in cement or ceramic production. Currently, the Company has been able to reduce the amount of waste it disposes of by up to 98%.

Society
ON SOCEITAL ASPECT

Society Treatment and Safeguard

Safety Management
SCG Chemicals has established a corporate social responsibility policy which ensures that all operations are undertaken in such a way that takes into account the impacts on all stakeholders and with the utmost consideration for safety. To this end, Chemicals Business has implemented a process safety management (PSM) system, which is regarded as the world’s leading process safety systemm in order to bring the safety management to the next level. This system has been in place within local companies since 2012 and was subsequently expanded to overseas companies in 2019 in the effort to achieve “Zero Accident” status for the safety of workers as well as the prevention of exigent circumstances from occuring at manufacturing facilities and the instilling of confidence within surrounding communities in the Company’s safety management system.            
The process safety management (PSM) system begins with the identification, control, and reduction of the risks involved in the production process through various processes, such as risk assessment, safe operation management, process facility management, change management, people risk management, and emergency management. 

Furthermore, Chemicals Business has established guidelines for Workplace Safety by determining 9 Corporate Safety Principles and a Corporate Safety Standard as universal guidelines for safe operations. In addition, the Company seeks to promote a safety culture within the organization and encourages mutual safety support through safety observation tours (SOTs), which encourage all parties, including both staff and suppliers, to be actively involved in ensuring their own and others’ safety. As a result of this undertaking, the Total Recordable Injury has trended downwards continuously, and there has been no incidence of lost-time injury since 2020 until now (July 2021).      

As for external safety management, Chemicals Business has established a goods transportation safety standard and a motor vehicle safety standard to ensure that the transportation of raw materials and products or any other use of vehicles for company business will not cause any negative impact or loss for external parties. To this end, the Company has installed two-way cameras and Global Positioning Systems (GPS) in all vehicles used for goods transportation and other processes. The GPS signal delivers data to a logistic command center in order to automatically notify the drivers and overseers of the transportation and motor vehicle fleets used for the Company’s business operations of any risky behavior that occurs, such as parking in the shoulder lane, using a mobile phone while operating a vehicle, exceeding the speed limit, and driving for four consecutive hours without break, in order to prevent accidents from occurring.            

Health Management
Health risks may occur due to contact with hazardous chemicals during the production process, resulting in direct impact on workers’ health. In order to enhance the quality of life of the operators, Chemicals Business has implemented the industrial hygiene management system (IHMS), which starts with the process of categorizing personnel into similar exposure groups (segs) by the exposure rating of employees in each risk category using individual health risk assessment (HRA) in order to prioritize risk level for the purpose of establishing control measures to reduce or limit risks to an acceptable level.    

The risk level determined through HRA can also be utilized as a guideline for establishing measures to control exposure to occupational risk factors through medical surveillance, such as through annual health checks and biological monitoring, which will ensure the control and prevention of occupational illness and proper health monitoring among employees as well as the improvement of the health care system as a tool for analyzing and storing data collected from health risk assessments and health checks. Chemicals Business is confident that the systems it has put in place and the processes undertaken will help reduce the health risks of its employees and suppliers in a sustainable fashion.   

Human Resources Management
Chemicals Business believes that the quality of its human resources is the primary factor that contributes directly to operational success as well as drives the business towards sustainable and efficient growth. In line with this belief, the Company has improved and implemented guidelines, systems, and tools for human resources management that are cutting-edge and meet international standards. Additionally, the Company regularly reviews the impacts of various external factors.

The Company aims to provide opportunities for, support, and attract diverse candidates, in terms of aptitude, knowledge, skills, and job-specific qualifications in the recruitment process, in an egalitarian fashion, using a competency-based approach for the selection process. Candidates who have been selected will receive remuneration, benefits, and welfare comparable to those offered by leading organizations, and new hires will receive training in various areas of the business, including training and practice on the environment, health, and safety, to ensure that employees are able to operate in accordance with standards.

Employees at all levels are encouraged to pursue continuous self-development and learning, both in terms of the knowledge and skills necessary for their current job, as well as to prepare them for new opportunities in future job assignments, along with advancements in management and leadership skills, by a promotion system that bases career growth on competency in order to help employees successfully achieve their work goals. All of this is part of an effort towards multi-dimensional employee development, utilizing a digital learning system for course management and constant content updates in order to stay abreast of industry changes.

To develop technical skills, Chemicals Business has established an Operation Excellence Training Center (OETC) in Rayong, equipped with modern learning tools to provide employees with practical training towards the goal of fostering knowledge and expertise in operating petrochemical plants.

The Company also offers scholarships to employees who demonstrate potential, so that they may pursue a master’s degree and a doctorate degree at leading universities abroad. Degrees supported by the Company’s scholarships include Master of Business Administration (MBA) and technical degrees.

In order to encourage employees to continuously strive for self-development, the Company bases career development on competency, performing annual assessments to gauge functional competency as well as leadership competency.

In terms of employee wellness and welfare, the Ccompany has a flexible benefit policy in place to accommodate the diverse needs of different employee groups and those of their families, but always with health and safety as the primary emphasis.

Finally, the Company welcomes feedback from employees through an annual employee engagement survey, which utilizes concepts, methods, and tools that are in line with those of world-class companies to analyze employee engagement. The results are then assessed in an effort to improve the human resources management system in order to develop the organization towards international standards.

Human Rights
Chemicals Business believes in conducting business with integrity and responsibility towards society and all stakeholders in accordance with good corporate governance principles and business ethics. In terms of human rights protection, the Company strictly complies with laws and international standards, particularly in supporting and implementing the United Nations Global Compact (UNGC) and the International Labor Organization (ILO) Declaration on Fundamental Principles and Rights at Work.

The Board of Directors, executives, and employees at all levels recognize the importance of and respect all aspects of the rights of every individual as well as those of society and communities; treat all people in accordance with the principles of human rights equally and without discrimination; and seek to avoid acts that violate human rights while actively supporting and promoting human rights.

In addition, the Company has established guidelines and communicated them to everyone involved in business operations throughout the business value chain, including suppliers, contractors, and joint venture partners, so that all parties involved may participate in conducting business with integrity and respect for human rights, with equal treatment towards every individual in accordance with human rights principles.

Chemicals Business continually seeks to improve and implement its human rights management processes in order to identify risks of human rights violations, determine the groups or people affected, and establish guidelines for and undertake corrective and preventative action in response to human rights violations, as well as to perform follow-up and monitoring by setting forth appropriate mitigation procedures in the event of human rights violations.

Fair Labor Treatment
“Adherence to fairness” is one of the Company’s core business philosophies. In other words, employees and suppliers must be treated fairly while working with the Company

Chemicals Business strictly adheres to labor laws and international labor standards as the basic principles for managing employees in every country where it operates, in regards to both employment and working conditions and encompassing aspects such as wages, working hours, time off, and safe working environment. In addition, the Company treats employees equitably, without discrimination based on physical attributes, race, sex, and religion, among other factors.

With regard to wage and remuneration, the Company adheres to the principles of fairness both internally and externally. Therefore, in determining the wages and remuneration of both short-term and long-term employees, the Company has established a policy that takes into consideration the duties, responsibilities, and abilities of individual employees on par with other leading companies and participates annually in an employee wage and remuneration survey project with a group of other companies in related industries.

Treatment of Suppliers
Chemicals Business places importance on engaging with suppliers in accordance with the principles of good governance and equality. Furthermore, the Company integrates environmental, social, and governance issues into the supplier management process, covering all aspects from the process of selecting and assessing suppliers, performing quality control of products, as well as providing servicing throughout the duration of use, and building and maintaining relationships, all the way to reporting to the management continuously to reduce risks that may arise from suppliers’ operations and ensure the sustainable growth of the business.

The Company has established SCG Supplier Code of Conduct as a guideline for business operations and communicated with suppliers regarding relevant rules, regulations, and laws. One hundred percent of the suppliers registered with Chemicals Business have signed their acknowledgment of the aforementioned practices.

When performing recruitment and selection of suppliers, the Company assesses the capabilities of potential suppliers along with ESG risks. Meanwhile, for suppliers registered on the vendor list, an annual review of performance and competitiveness is conducted.

In addition, Chemicals Business has fostered good relationships with its suppliers through various projects, such as the contractor safety management program, the purpose of which is to promote environmental awareness among suppliers in order to maximize potential as business allies towards sustainable mutual growth.

Government Affairs
Chemicals Business is committed to fostering cooperation, supporting, and participating in activities with government agencies at both national and local levels to promote sustainable development and help elevate the progress of Thailand’s industrial sector in terms of the economy, society, and the environment. Chemicals Business has adopted the 3Cs (Compliance, Collaboration, and Care) principle in its activities as follows:

  • Compliance: Chemicals Business is committed to conducting business in compliance with laws and regulations. In this effort, the Company has designated parties responsible for auditing and following up on compliance with laws as well as electronically storing licenses (e-Compliance) for ease of verification. The Company also cooperates with government agencies in complying with laws in various aspects, such as receiving suggestions, performing audits, and regular submission of information.
  • Collaboration: The Company places great importance on cooperation with the government sector to raise the standard of living and foster peaceful coexistence among members of society. To this end, the Company has consistently participated in various government activities, such as royal ceremonies. traditional festivals, and other commemorative days.
  • Care: The Company supports and attends to the government’s various social activities and initiatives by donating items, labor, talent, or money to assist these efforts in successfully fulfilling their objectives. Some examples include facilitating the establishment of a vaccination center against COVID-19, donating cardboard beds, and distributing tools and equipment for the prevention of COVID-19 to various field hospitals.

Social Development and Improvement of Quality of Life in Communities
Education 
Chemicals Business has carried out the following initiatives to support education in communities:

  • Commitment-free scholarships for community youth, which have consistently been granted since 2003 to this day in the amount of 2,500,000 baht per year and managed solely by the communities themselves.
  • V-ChEPC and SCG Model School scholarships, along with programs aimed at developing the potential and readiness of recipients in preparation for entering the workforce so that scholarship recipients may commence employment with the Company at an industrial estate immediately after graduating. The funding for this program totals 3,000,000 baht per year.
  • A joint scholarship with the Community Friends Association to provide students who excel academically but lack resources with funding to pursue a bachelor’s degree, with a total amount of 4,340,000 baht per year.
  • A scholarship for nursing students in collaboration with the Community Friends Association to help foster the development of medical personnel in local hospitals, with a total amount of 2,160,000 baht per year

Safety Chemicals Business has instilled a safety culture in the organization though an initiative called the Lifesaver in order to encourage all employees to embody the role of a lifesaver by mutually ensuring one another’s safety.

The benefits of this initiative were subsequently extended to communities which at that time were struggling with the problem of road safety. Rayong had one of the highest road accident incidence rates in the country. In response, Chemicals Business collaborated with government officials and people in the community to launch campaigns encouraging safety, discipline, and adherence to traffic rules, such as the wearing of helmets and fastening of seatbelts and not driving under the influence of alcohol, leading many to adopt positive changes in their behavior. This initiative was also taken up by 1,250 students per year as part of the Lifesaver in School project, as well as 16 communities in 8 districts along with 16 police stations in Rayong, or 1,000 participants per year, in the Lifesaver in Community project.

Personal and Public Health Chemicals Business supports the field operations of village health volunteers or VHVs by providing education in order to facilitate capability development among VHVs, giving assistance in the form of tools and equipment, as well as encouraging employees to accompany VHVs on the field. Aside from this, the Company has organized psychology training in collaboration with Chulalongkorn University

Chemicals Business promotes good health within the community by encouraging regular exercise along with disseminating information about how to reduce the risk of non-communicable diseases (NCDs), which consist of diabetes, high blood pressure, high cholesterol, obesity, and cardiovascular disease and are very prevalent in the area, through a variety of activites. These include SCG - Map Ta Phut Running-Walking Event, regularly organized since 2011, Hoon Suay Wai Sai project, King’s Cup football leagues, and football camps, all of which are aimed at reducing NCDs in children and teenagers.

Tradition and Culture Chemicals Business recognizes the importance of local traditions and culture and encourages its executives and employees to participate in related activities as well as think and work collaboratively with the Thai, Chinese, and Muslim communities surrounding its manufacturing facilities to preserve good local traditions for generations to come. These include the third lunar month merit making ceremony, the bamboo rice burning tradition, seeking blessings from the elderly on Songkran Day, the almsgiving ceremony on the End of Buddhist Lent Day, Kathina, Loy Krathong, Tay Krajad procession, and attending Hajj.

Community Economy, Career, and Income Initiative: 3Hs (Hatch, Head, Hand) Chemicals Business strives to enhance community products through innovation and technology by integrating the principles of circular economy and leveraging local identity to stand out and generate sustainable income for the community as well as to foster modern entrepreneurs who will reinvest profits from selling products back into solving the problems of and developing the community. All of this is part of an effort to help raise the income of the community and enable members to contribute towards the growth of the country’s economy under the 3Hs (Hatch Head Hand) approach. Examples of this initiative are as follows:

  • Hatch: Product Development through Innovation This refers to the development of products through innovation and by highlighting the unique identity of Rayong Province, such as the Eight Immortals Chinese pastries with traditional Rayong-style curry fillings, pineapple fiber fabric which makes use of local resources, the innovation of enhancing the staying power of dyes with seawater, and the creation of natural dyes and color powder from local fruits. It also includes the updating of packaging to make products more competitive in national grocery chains, such as the packaging of Rice Me processed rice products, which has accurate nutrition information, making it possible to expand to more markets, such as convenience stores and coffee shops in Thailand and even overseas.
  • Head: Education and Development by Experts Ths refers to development programs aimed at enhancing community potential and led by experts, who give the localsrecommendations regarding the registration of enterprises and educate them onhow to calculate costs and product prices,how to sell products online, and how to establish community enterprisesEach year, an annual meeting is held for community vendors to share issues and suggestions, with approximately 120 businessesparticipating each timeIt is expected that about 1,000 community members benefit from these initiatives.
  • Hand: Widespread Promotion of Community Products and Services In order to promote the communitys products and services, the Company has provided assistancebycreating marketing materialand increasing offline and online distribution channelsThe Company has alsodesignated areas in its facilities, both in the Rayong plant and the headquarters in Bangkok, as sales floors for community products as well asinvitedcommunity enterprises to various provincial and national trade fairs, created gift sets comprising community products for sale during various festivals, and created catalogues and informative pamphletsfor internal and external agencies to encourage support for community productsAdditionally, to meet the demand of consumers who prefer to shop for products online, the Company has promoted online sales through various channels such as MeZ, LocalAroi, Carelicious, and Foodpandaas well as initiated a new distribution channel in the form of the Rayong Shop Hionline market on Facebook,as another means of increasing income for the community and stimulating the economy during the COVID19 pandemicThis page has more than 6,000 users and has helped ease the strain on community businesses at a time when products cannot be sold in normal conditions.

The initiatives detailed above have contributed a total of around 7 million baht worth of income for community enterprises as well as helped to provide suggestions on processes that help increase the potential of local businesses and the opportunity to become suppliers for the Company, which could yield around 40 million baht worth of income for the community per year.

Currently, many community-run enterprises contribute a portion of their profits from business operations towards various social causes. For example, in Rayong, the Tulip Housewife Association Nern Payom Community Enterprise, which is the distributor of the Eight Immortals Chinese pastries, allocates part of its profit to support activities in the public interest of the community and provides scholarships to youth in the area. Similarly, Tan Batik organizes drawing and indigo dyeing classes for children, while the Map Chalut-Chak Klang Recycling Community Enterprise offers scholarships to children within the community. Kemin Landscaping and Car Rental, which the company is currently contracting, has also apportioned part its profits as scholarships and continuously seeks to increase employment in the community. Finally, during the COVID-19 pandemic, sewing groups from many communities have also helped to expand community income opportunities by teaching unemployed individuals to sew cloth masks, thus giving these people a means to gain income and also valuable sewing skills that can be further developed into a career.

Governance

On governance aspects

Corporate Governance
SCG Chemicals has established a corporate governance policy in writing as part of its policies for responsibility, transparency, and fairness, such as the anti-corruption policy, the whistleblowing policy, the internal information management policy, and the information technology policy, so as to facilitate communication to all personnel in the Company for acknowledgment and compliance as well as enable them to efficiently apply the policy. This policy also ensures that the Company demonstrates responsibility towards every stakeholder group with fairness as well as oversees and develops its corporate governance to meet international standards so as to provide guidelines for business operations, encourage policy adoption, and set an example for compliance with the principle of corporate governance and the code of conduct.

Fair Business Practices
Chemicals Business has established a code of conduct and a code of business ethics and promoted full compliance among its personnel. In addition, the Company is committed to fair business practices, taking into consideration business ethics and competition laws of the countries where it operates when engaging with both customers and suppliers as well as compliance with relevant practices of the Company.

Trade Competition
Chemicals Business has introduced a compliance management system (CMS) to ensure compliance with trade competition laws and make certain that relevant executives and employees know, understand, and can properly and fully comply with such laws in accordance with the trade competition policy and practices established by the Company. In addition, compliance with trade competition laws is assessed on a yearly basis, while trade competition protocols of each company have been established and are regularly reviewed to ensure their suitability.

Thus far, Chemicals Business and its employees have never been involved in lawsuits, complaints, or accusation of violation of trade competition laws, nor have they been penalized or fined for non-compliance with such laws. In addition, there has been no internal complaint about violation of the Company’s trade competition policy or practices among the employees.

Implementation and Reporting
Chemicals Business strives to demonstrate responsibility towards every stakeholder group to show its commitment to achieving its aspiration. Aside from CSR activities that benefit society and the stakeholders, the Company also issues corporate social responsibility reports and publicly discloses them along with its annual reports, with plans to also publish sustainability reports as an additional channel for stakeholders to access the Company’s sustainability data.

Risk Management (Sensitivity)
To enhance its ability to accomplish the defined objectives and manage risks in an efficient, effective, and timely manner, Chemicals Business has introduced SCG’s Enterprise Risk Management (ERM) Framework to the organization for organization-wide risk management. The components of the framework are as follows:

  • Strategic risks: Long-term strategic risks (3-5 years)
  • Investment risks: Investment risks related investment projects that require approval by SCG’s authorized persons
  • Operational risks: Operational risks in the next 3-12 months

Risks can be divided into eight categories as follows:

  1. Safety health environment risks
  2. Compliance risks
  3. Intantible risks
  4. Hazard risks
  5. Input risks
  6. Process risks
  7. Financial risks
  8. Business risks

The risk management process utilized in Chemicals Business, which encompasses the entire activities in its business operations, helps identify both acceptable risks and risks that require additional control as well as enables the suitable allocation of limited resources for the level of importance of each risk.

Chemicals Business employs a sustainable development structure in the supervision of risk management through a committee in the economic, environmental, social, and governance dimensions, which oversees and supports the management plans for major risks on the business unit level to ensure that such risks can be managed and subsequently reports the business unit-level risk management status on a quarterly basis to the Risk Management Committee for acknowledgment.

Furthermore, to accommodate potential fluctuations in business operations, the Company has integrated risk management and business continuity management (BCM) and prepared prepared business continuity plans (BCPs) for responding to emergencies and crises so as to minimize impacts that may impact the business and the stakeholders.

Code of Conduct
Chemicals Business has established SCG Chemicals Code of Conduct as a handbook for employees to foster an understanding and enable them to accurately and appropriately put it into practice. To reach more employees, the code of conduct is communicated and publicized through the following activities:

  • The Company fosters awareness and encourages its employees to express their opinions on SCG Chemicals Code of Conduct and proper practices by publicizing GRC Helpline – a channel through which employees can seek consultation on governance, risk compliance, and internal control – to enhance operational efficiency among employees even when working from home.   
  • The code of conduct on gifts and receptions is publicized to raise awareness about appropriate practices regarding the offering and receiving of gifts and receptions on various occasions.
  • The Company organizes activities that promote and cultivate awareness of the code of conduct, such as orientations, for employees and refresher sessions for various units.
  • The Supplier Code of Conduct has been established to develop correct understanding among suppliers and serve as practical guidelines for conducting business together.

Ethics
Chemicals Business utilizes ethics tests as part of its proactive and preventive system to assess and develop an understanding of ethical practices among employees at all levels. Administered on a yearly basis, Ethics e-Testing and e-Policy e-Testing are aimed at enabling employees to correctly apply SCG business philosophy, the code of conduct, and the anti-corruption policy and produce tangible outcomes. In 2020, the Ethics e-Testing and e-Policy e-Testing were conducted for the sixth and fourth consecutive year respectively. All SCG employees must give correct responses to pass the tests. In addition, the responses are analyzed and then communicated to employees at all levels to foster correct understanding. Both tests are reviewed annually to reflect current risks. This year, questions related to the Personal Data Protection Act (PDPA) and the Integrated Governance, Risk Management, and Compliance Framework (Integrated GRC) have been added.

Compliance  
Chemicals Business has established corporate governance policy and practices to ensure that its business operations are fully compliant with relevant laws and regulations and that there are operational standards in place to help control and ensure sustainable compliance, focusing on areas relevant to the law as follows:

  • A compliance management system (CMS) has been introduced to ensure that all business operations both in Thailand and overseas comply with relevant laws in that country. The Company has aimed to expand the system, currently utilized in local businesses, to businesses in Vietnam by 2022 and is now making preparations to introduce the system to Long Son Petrochemicals (LSP). The Company is also developing a CMS handbook to facilitate communication and serve as guidelines for compliance management in the future.
  • The Company has taken initiatives to foster awareness and understanding among the units and assessed compliance with relevant existing and newly-introduced laws and/or amended laws. It has also set targets and performed assessment on compliance with key laws relevant to new projects and normal operations. Preparations have also been made to issue operational standards for relevant units based on these laws to achieve sustainable compliance with such laws.
  • Chemicals Business has developed a digital system solution for storing and updating a database of laws relevant to the Company, processing and reporting compliance performance, and managing all relevant permits to enhance the efficiency of compliance management. The program has been adopted by domestic businesses in 2021; the goal is to introduce it to businesses in Vietnam in 2023.

Anti-corruption
Chemicals Business places great emphasis on compliance with the principle of good corporate governance as well as anti-corruption efforts. The Board of Directors has approved the Anti-corruption Policy, which has been reviewed for suitability and included as part of SCG Chemicals Code of Conduct, which forms the behavioral foundation of all employees and has been integrated into the corporate culture. The Company also communicates the policy to employees as well as provides training to foster an understanding of the policy and enable them to extend relevant practices to subsidiaries. The Company also analyzes risk indicators and assesses risks of corruptions. This year, the Company initiated a program in support of the Anti-corruption Policy, in which it issued a control self-assessment form for the assessment of the internal control system and risks of corruption that included operations where such risks were present, such as sales, procurement, coordination with government agencies, and community relations. Employees were also required to take part in self-learning, which was in line with the guidelines of the Anti-corruption Policy and integrated into the Ethics e-Testing.

Furthermore, as part of the proactive and preventive system, Chemicals Business has established methods for risk mitigation and control that employees can use as guidelines to prevent corruption. The Internal Audit Office is responsible for assessing policy compliance and reporting to the Management Team of Chemicals Business, the Audit Committee, and the Board of Directors for improvement. In addition, SCG Chemicals Supplier Code of Conduct has also been developed to communicate and foster an understanding of the Company’s corporate governance practices as well as establish standards for conducting business together. Chemicals Business has also provided whistleblowing channels and instituted a whistleblower protection policy to give its personnel and stakeholders opportunities to submit information or tips related to violations or irregularities in the business operations of Chemicals Business. Guidelines for complaint investigation have also been established and publicly disclosed in the Company’s annual report (Form 56-1 One Report).