Today’s global community places a high emphasis on climate change issues caused by human greenhouse gas emission activities. The United Nations Framework Convention on Climate Change (UNFCCC) was founded with the ultimate objective of stabilizing human-induced greenhouse gas concentrations at a level that will not harm the climate system and will allow time for ecosystems to adapt naturally to climate change. From the tenet of this Convention came guidance and a request for cooperation from individual countries to support the continuous reduction of greenhouse gas emissions. This then culminated in the Paris Agreement in 2015 with intensified efforts to limit the global average temperature rise to less than 2 degrees Celcius. The Paris Agreement also targets reaching a global peak in greenhouse gas emissions as soon as possible followed by rapid reductions thereafter and the utilization of the best available science to achieve a “balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases.” Therefore, Thailand, as a member of the United Nations, takes part in the National Determined Contribution (NDC) which has set the goal of a 20-25% reduction in greenhouse gas emission by 2030, aligned with SGD 13: Climate Action. GPSC, as a member of the global community, is committed to providing our full support and collaborating enthusiastically with every sector to achieve the challenging goal of reducing greenhouse gas emissions by adopting the following climate change policy and management approach.

Climate Change Management Approach

GPSC has established a climate change policy with the expectation that every business unit throughout GPSC Group’s supply chain will adhere to the policy at each step of the project starting from planning and design, through to implementation and completion.

Climate Change Policy

Management of climate change is under the supervision of the management committee of the company, which is chaired by the chief executive officer and the president, whereby it has assigned the Change and Sustainability Management Department to oversee the implementation of climate change policies and strategies. In addition, the Corporate Risk Management Division, under the Corporate Strategy and Risk Management Department, is responsible for assessing the risks and opportunities of the business in the field of climate change, which is a clear and comprehensive management of climate change in all aspects of business operations.

GPSC Organization Structure
Climate Change Governance Structure

Due to the trend of using clean energy (Renewable energy), which play a great role in the electric power business, the company therefore is determined to develop technologies, seek new opportunities and expand energy investments to increase the proportion of renewable energy in electricity generation to support changes in customer demand and in order to build long-term energy security, as well as establishing measures to cope with the risks and impacts of climate change. The company has hence created a management strategy that is in accordance with the goals and missions of the organization with operational guidelines which are as follows:

Do Now

The company operates according to the principles of eco-efficiency, where the use of resources is both cost effective and sustainable to reduce through improving the efficiency of the production process with efficient innovation and technologies, including a project to reduce greenhouse gas emissions continuously.

Decide Now

The company plans to diversify its investment proportion to postrenewable energy projects, aiming to increase the share of renewable energy to 30% by 2025 and plans to set a carbon price as a basis for considering new investments in the future, including the expansion of scope 3 greenhouse data collection from the value chain to cover operational activities.

Design Now

The company is looking for new and innovative business opportunities to support low-carbon operations, as well as supporting research and development of batteries and energy storage systems that promote

In addition, the company also promotes raising awareness and employee participation in reducing greenhouse gas emissions within the organization, such as via employee training and education, employee training on carbon price mechanisms, participating in climate change risk and opportunity assessments, campaigns to reduce energy consumption and saving resources in the organization, in order to create a good culture within the organization.

GPSC Climate Strategy & Disclosure

The production of energy through renewable energy, whether this may be in the form of solar, hydro, wind and biomass energy, are all non-exhaustive and renewable in nature, where these also only impact the environment to a small degree due to their emission in greenhouse gases of a significantly smaller extent in comparison to the energy produced from fossil fuels. For these reasons, in order to use non-carbon dioxide energy (Decarbonization), the company sees the importance of increasing the proportion of renewable energy production as a driving force for reducing greenhouse gas emissions by supporting the use of clean energy and in moving towards a low-carbon society as follows:

In 2020, the company has assessed the risks and opportunities of climate change, in order to formulate impact measures and create new business opportunities by integrating them into corporate risk management, with the following risks and opportunities having been identified.

Risk
  • Floods
  • Droughts
  • Windstorms
  • Lightning threats
Effects

The impacts of natural disasters may directly or indirectly affect the company, whether it is the disruption of production processes or damage to machinery and utilities, as well as customer needs, all of which combined could result in over 1,410 billion baht worth of damages if not dealt with.

Management Approach

The company has developed a business continuity plan covering natural disasters due to climate change. This includes monitoring situations closely, reserving sufficient raw materials and fuel in emergency situations and strictly following measures in accordance with the environmental impact assessment report.

Risk
  • Determining greenhouse gas emissions, carbon prices and applicable laws.
  • Changes in stakeholder needs and concerns.
Effects

The impact of alterations in legal requirements and the changes in stakeholder needs, such as customers and communities all result in the company having to take action to respond and mitigate the potential impact in the loss of income, reputation, investments and business operations with the expectation that if not managed well, may lead to 347 million baht worth of loss due to these impacts.

Management Approach

The company plans to increase energy production from renewable energy to reduce greenhouse gas emissions and environmental impacts, control greenhouse gas emissions, continuously research and develop products to improve their efficiency, which includes planning for carbon pricing and will also monitor relevant legal changes to develop effective guidelines for impact mitigation.

Expanding business opportunities through application of innovation and new technologies

Increasing the proportion of energy production from renewable energy

Energy production from low carbon technology and innovation

The company has identified business opportunities in response to climate change, including increasing the proportion of renewable energy production and reducing investment in coal-fired power plants. In addition, the company also will invest in research and innovation to support new business in the future, such as in energy storage systems and production technology, which emit low emissions and improve efficiency, whereby the company expects to generate income from such opportunities of up to 6,000 billion baht.

The company has studied carbon pricing (Internal carbon price), which determines the value of greenhouse gas emissions of an organization in a monetary form to be applied to drive climate change actions in organizations, including preparing for climate change risks and impacts, setting greenhouse gas emissions reduction targets and using such as a basis for new investment projects consideration in the future, in order to be used as a mechanism to drive action towards long-term low-carbon operations. The company was selected as one of the first six companies to receive technical support from the Thailand Greenhouse Gas Management Organization (Public organization), as well as having cooperated with the World Bank in potential development, establishing and applying in-house carbon-pricing mechanisms (ICP) appropriate to the context and strategies of the organization, while also fostering environmentally friendly investments, where at present, the company has set operational guidelines in 3 activities as follows:

The use of “Shadow Prices” to assess the risks and effects of carbon price on the future earnings of the company.

Shadow prices are used as a base for project investment decision-making (CAPEX).

Using the carbon price as one of the decision criteria for the operating costs (OPEX).

The company has set up a team and committee responsible for the carbon price study project in the organization with the objective of planning and monitoring the implementation of the corporate carbon price, in order to be suitable for business operations, as well as assessing the financial situation and investment guidelines (Green finance). The company has also expressed its opinion on the development of operational guidelines to further strengthen its in-depth knowledge of carbon pricing, as well as other financial instruments.

Additionally, the company plans to establish carbon prices in the organization for a period of 10 years, with having started planning from 2020 and laying out the appropriate action guidelines within the specified period by applying the carbon price mechanism in the organization in the 3 following forms: Prices determined by the amount of money the company uses to reduce greenhouse gas emission (Implicit price), the hypothetical price of greenhouse gases (Shadow price), as well as including the determination and collection of greenhouse gas emission fees of each business unit in the organization (Internal carbon fee/ Internal trading system) to benefit and cover greenhouse gas emissions in every emission scope as follows:

Near-Future Term (2021-2022) Longer Term (2023-2030)
ICP Objectives
To increase internal capacity and learn to apply internal carbon pricing
To reduce greenhouse gas emission lower than 0.49 kgCO2e/kWh by 2030
To increasing renewable energy up to 30% of GPSC's installed capacity
Coverage Scope of GHG Emissions
Scope 1
Scope 2
Scope 1
Scope 2
Scope 3
Coverage Scope of GHG Emission
Investment Decisions
Investment Decisions
Operation Decisions
ICP Approach
Implicit Price
Shadow Price
Shadow Price
Internal Carbon Fee/ Internal Trading System

In 2020, the company participated in the Low Carbon and Sustainable Business Indexes (LCSi) assessment, which is conducted by the Greenhouse Gas Management Organization (Public organization) and refers to a measure of businesses that take action in solving climate change problems by utilizing mechanisms in effectively reducing greenhouse gas emission, while also taking into account the three dimensions of balance: Economy, environment and society. The company also manages and reduces greenhouse gas emissions in accordance with the sustainable development goals of the country, which can be considered a good example to follow for other organizations.Furthermore, in 2020 the company also was selected as one out of four companies to have received an “excellent” rating through outstanding climate change actions, whether it was in the reduction of greenhouse gas emissions, product life cycle assessment (Life Cycle Assessment or LCA), preparation of the Carbon Footprint Product (CFP), participation in the Voluntary Emission Reduction Program in accordance with Thailand’s standards (Thailand Voluntary Emission Reduction Program: T-VER), supporting the sustainable development goals, which includes achieving zero-waste to landfill targets, etc. These show that the company has tackled a group of issues affecting the company itself and its stakeholders in regards to numerous matters, which cover all aspects of sustainability as follows:

Energy Mix
Emission Reduction
Contribution to Decarbonization
Innovation
Decentralized
Disruptive Technology
Energy Policy & Regulation
Customer’s Ability to Control and Make a Choice
Customer Data and Information Privacy
Natural Disasters
Efficiency of Operations
Workforce Planning
External Transparency to Build Credibility
Internal Communication
Training for Current Employees
Diversity and Equal Opportunity
Labour Rights
Board of Directors
Code of Conduct
Crisis and Risk Management
Personal Safety and Health
Waste
Community Relationship
Community Involvement and Development Project to Improve Livelihood
Manage Supply Risks
Leverage Opportunity with Suppliers and Contractors
Supplier Rights
Revised as of February 2021

The above content has been produced in accordance with the Global Reporting Initiative (GRI Standards) sustainability reporting standard, validated by third parties and provides limited assurance of reporting information (Limited assurance).

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