GRI 2-12, 2-13, 2-14, 2-27, 3-1, 3-2
Step 1

Identification

Step 2

Assessment and Prioritization

Step 3

Validation

Step 4

Review and Response

Process

Relevant issues impacting the sustainability of GPSC and its stakeholders throughout the value chain across economic, social and environmental dimensions are identified through the consideration of impacts (positive and negative); the expectations, interests, and concerns of all eight stakeholder groups (shareholders, investors, government agencies, employees, suppliers, partners, customers, communities, and communities and society); as well as changes in global trends and the industry, past events, risk factors with potential impacts in the future, business opportunities, GRI Standards indicators, and human rights principles.

GPSC operates in strict compliance with the law and applies various international guidelines to its operations, with dedicated compliance units and audit systems in place to ensure compliance. In addition, GPSC has put in place whistleblower channels and an effective due diligence process. In 2022, no violation of the law or relevant regulations was reported.

Guidelines
  • PTT Group’s and GPSC’s Sustainable Development Guidelines
  • Sustainable Development Goals (SDGs)
  • International guidelines, such as GRI1, DJSI2, SDGs3, WBCSD4, CDP5, ISO 260006, UNGC7, IIRC8, and others
  • All internal and external stakeholders’ voices
  • Community satisfaction surveys
  • Employee engagement surveys
  • Customer satisfaction surveys
  • Corporate image improvement process
  • Complaint channels
  • Corporate risk assessment
Process

Impacts (positive and negative) on stakeholders are assessed through the consideration of stakeholder opinions and expectations collected through interview of purposively selected external stakeholders and online surveys for internal stakeholders. The obtained stakeholder data is analyzed into scores for material issues based on criteria of severity and likelihood of impacts on GPSC and stakeholders in both positives and negatives (according to double materiality principle). Material issues then categorized into two groups using a rating scale based on their severity: 1) key material issues, which are issues with high and very high impact ratings, and 2) fundamental material issues, which are issues given low and medium ratings. The latter are issues that GPSC is legally mandated to manage.

Guidelines
  • External stakeholder interviews
  • Online opinion surveys for internal stakeholders
  • Impact assessment and categorization based on the level of impact
  • Materiality prioritization
Process

A summary of material issues is reported to GPSC. The material topics are tested by experts to ensure that they are in line with global trends and cover all issues in the electricity generation industry as well as to ensure alignment with GRO aspects. The material issues are then proposed to responsible internal units for the subsequent formulation of management strategies and guidelines.

GPSC’s Management Committee (GPSC MC) is responsible for validating and approving the content of the material issues as well as assigning relevant units to prepare management plans for the impacts of such material issues. In addition, GPSC MC is charged with reviewing the reported data to ensure its transparency, accuracy, and compliance with reporting requirements in accordance with GRI Standards indicators to disclose in the Annual Integrated Sustainability Report.

Guidelines
  • Material issue validation by experts or third-party assurance provider
  • Meeting and review of material issues by GPSC’s executives
Process

GPSC consistently reviews and improves its sustainability reporting and conducts validation to ensure that the material issues that need to be managed meet stakeholder expectations. In addition, GPSC has developed the stakeholder participation process by obtaining stakeholder voice and suggestions through various communication channels, such as by participating in sustainability reporting assessment by the Securities and Exchange Commission and the Thaipat Institute. These efforts are essential to the improvement of reporting quality and reflect issues that stakeholders consider vital in a more effective way.

Guidelines
  • Third-party sustainability report validation
  • Integrating the materiality assessment results into the Company's Enterprise Risk Management Process (ERM)
  • Receiving complaints and suggestions through various channels
  • Sub-group meetings of sustainability units to review sustainability reporting and sustainability development performance as assigned
  • Quarterly report of the implementation of sustainability plans to GPSC’s executives
Remark:

1 Global Reporting Initiative (GRI) is the organization that initiates international report standards which are used as a prototype for sustainability report preparation.

2 Dow Jones Sustainability Indices (DJSI) are a family of capital indices that assesses the effectiveness of business operations according to sustainable development guidelines of the world’s leading companies and is used as investment criteria by various funds worldwide.

3 Sustainable Development Goals (SDGs) are of a set of sustainable development goals stipulated by the United Nations (UN), comprising 17 main objectives to be achieved and implemented by 2030.

4 World Business Council for Sustainable Development (WBCSD) is the committee of businesspersons for the environment that comprises over 120 leading international companies and was accepted in the Earth Summit in 1992.

5 Carbon Disclosure Project (CDP) is a global institution given the highest level of recognition in terms of environmental management assessment.

6 ISO 26000 is an international standard for social responsibility.

7 UN Global Compact (UNGC) is a United Nations initiative that serves as guidelines for formulating strategies and practices in line with international accepted principles in the areas of human rights, labor, environment, and anti-corruption efforts.

8 8 International Integrated Reporting Council (IIRC) is a council on integrated reporting, which refers to a report on an operation’s operations in accordance with its business strategies, corporate governance, as well as its performance and outcomes that contribute value to the organization and internal and external stakeholders over the short, medium, and long term.

GPSC’s Double Materiality Assessment 2022
GRI 3-2
Remarks:
Key material issues

Issues viewed as significant by stakeholders in economic (governance), social, and environmental aspects rated to have significant impacts, both positive and negative, (high and very high levels of impacts) based on the criteria of severity and likelihood of impacts on internal and external stakeholders as well as impacts on GPSC’s business operations

  • Positive impacts: Healthy operating results, business growth, quality of life enhancement, promotion of environmental quality, etc.
  • Negative impacts: Business losses or remediation expenses, violation of relevant laws or regulations, degradation in quality of life, environmental degradation, etc.
Fundamental material issues

Issues arising in the normal course of business that need to be managed to ensure compliance with laws, standards, and general practices and are rated to have a low or normal level of impact

The material issues, which are the results from Materiality assessment, are then integrated as the inputs into Company's Enterprise Risk Management Process (ERM) in order to prepare business strategy and risk management plan that can meet stakeholder expectations as well as business goals as shown in the picture below.

The material issues were taken into company risk identification process (process 1), as supplementary inputs, together with the potential changes for both external and internal factors for identifying corporate risks. Moreover, the key material issues were also used for cross-checking the significant corporate risks with the linkage as shown in the below table.

Key Material Issue Risk Area Linkage to Corporate Risk
Clean Energy Towards Net Zero Strategic Risks Climate Change
Being an Innovative Leader Strategic Risks Investment and Business Expansion
Capturing the Future Sustainability Market Strategic Risks Investment and Business Expansion
Employee-focused Organization Strategic Risks Organizational Capability
GPSC’s Double Materiality Assessment 2022

In 2022, the Company has assessed the key sustainability issues. They are divided into 4 key material issues and 10 fundamental material issues. The details of the impact on the company and external stakeholders, including shareholders, investors, government, employees, suppliers, partners, customers and communities, (according to the Double Materiality Principle) as follows:

Material Issue Impacts
(Positive and negative)(1)
Occurrence Related
Stakeholder
Financial Impact
on the Company(2)
Global
reporting
Initiative: GRI
Alignment with
Sustainable
Development Goals
(SDGs)
Past and
present
Possible in
the future
Key Material Issue
Clean Energy Towards Net Zero (Climate Transition & Physical Risks)
  • Play a vital role as a power service provider in advancing the country’s clean energy and climate change goals.
  • Attract foreign investors in the energy industry
  Government sector, customers, suppliers
  • Management Approach (3-1, 3-2, 3-3)
  • Energy (302-1, 302-3, 302-4)
  • Emission (305-1, 305-2, 305-3, 305-4, 305-7)
  • Support low-carbon businesses and innovations showing trends of potential growth
Shareholders, investors, partners, customers
  • Promote consumer access to clean energy sources
  Customers, society and communities
Capturing the Future Sustainability Market
  • Ensure alignment with and accommodate changes in market trends, customer needs, and government policies
  Shareholders, investors, government sector, customers, suppliers
  • Management Approach (3-1, 3-2, 3-3)
  • Foster collaboration for product development initiatives that create value and market opportunities for GPSC and its business partners
  Partners
Being an Innovative Leader (Innovation Management)
  • Prevent disruption by new players and create operational strengths
Shareholder, investors, partners, customers, employees
  • Management Approach (3-1, 3-2, 3-3)
  • Enhance operational efficiency
  • Enhance employees’ efficiency and give them time for skill development in accordance with their interest
  Employees
  • Impact the operating results through the development and procurement of innovation that can further enhance GPSC’s products and services in the future
  Shareholder, investors
Employee-focused Organization
  • Employees form a vital force in driving the business towards its established goals.
  • Create differentiation and competitive advantages
  Shareholders, investors, employees
  • Management Approach (3-1, 3-2, 3-3)
  • Collective bargaining agreements (2-30)
  • Training and Education (404-1, 404-2, 404-3)
  • Freedom of association and collective bargaining (407-1)
  • Diversity and Equal Opportunity (405-1, 405-2)
Fundamental Material Issue
Environmental Management
  • Comply with laws applicable to GPSC, which directly affects the corporate image and operations
  Shareholders, investors, government sector, society and communities, customers
  • Management Approach (3-1, 3-2, 3-3)
  • Water (303-1, 303-2, 303-3, 303-4, 303-5)
  • Emissions (305-7)
  • Effluents and Waste (306-1, 306-2, 306-3, 306-4, 306-5)
  • Environmental Compliance (307-1)
  • Promote the development of life quality in communities
  • Respond to government policies
  • Foster a positive corporate image and confidence in the organization
Shareholders, investors, government sector, society and communities, customers
Maintaining Availability and Reliability
  • Foster customer confidence, which continuously affects GPSC’s operating results
  Shareholders, investors, customers
  • Management Approach (3-1, 3-2, 3-3)
  • System Efficiency (EU-1, EU-2, EU-11)
  • Demand Side Management (EU-10)
  • Availability and Reliability (EU-28, EU-29, EU-30)
  • Foster confidence, leading co-creation of business value
  • Foster marketing stability for suppliers
  Partners, suppliers
Corporate Social Responsibility
  • Enhance quality of life in communities and develop their potential
  • Enhance the corporate image
  • Foster pride among employees
Society and communities, employees
  • Management Approach (3-1, 3-2, 3-3)
  • Local Communities (413-1, 413-2)
Risk & Crisis Management
  • Emerging risks towards the business operations may affect GPSC’s operating results.
  • Confidence in GPSC may be affected without proper management.
  Shareholders, investors, customers
  • Management Approach (3-1, 3-2, 3-3)
  • Governance (2-16)
Corporate Governance & Compliance
  • Foster confidence in the business operations among stakeholders
Shareholders, investors, partners, customers, suppliers
  • Management Approach (3-1, 3-2, 3-3)
  • Organization Profile (2-11)
  • Governance (2-9, 2-10, 2-11, 2-13, 2-15, 2-23, 2-24, 2-25, 2-26, 2-27)
Occupational Health and Safety
  • Reduce risks of work-related loss, injuries, and illness
  Suppliers, employees
  • Management Approach (3-1, 3-2, 3-3)
  • Occupational Health and Safety (403-1, 403-2, 403-3, 403-4, 403-5, 403-6, 403-7, 403-9, 403-10, EU-25)
Customer Relationship Management
  • Foster customer satisfaction
  • Attract new customers
  • Promote partners’ services
Partners, customers
  • Management Approach (3-1, 3-2, 3-3)
Information Security/ Cybersecurity Governance
  • Foster corporate credibility
  • Maintain operational continuity
  • Impact the corporate image
Partners, customers, employees
  • Management Approach (3-1, 3-2, 3-3)
  • Customer Privacy (418-1)
Supply Chain Management
  • Impact GPSC’s operating results and operational continuity
  • Impact the corporate image
  • Promote suppliers operating in line with GPSC’s policies
Shareholders, investors, suppliers
  • Management Approach (3-1, 3-2, 3-3)
  • Health and Safety for Contractor and Subcontractor Employees (EU-17, EU-18)
Biodiversity
  • Maintain biodiversity
  • Impact the quality of life in communities
  • Foster a positive corporate image
Shareholders, investors, government sector, society and communities
  • Management Approach (3-1, 3-2, 3-3)
  • Biodiversity (304-1, 304-2, 304-3, 304-4)

Note:

(1) Impacts, in each material issue both are actual and/or potential, can be considered in positive and negative.

(2) Financial impact on the Company sorted by the number of red dots that appear in the table, divided into 3 groups: 1.) 3 red dots mean the impact or opportunity from that material issue in the financial aspect to the Company at a “high” level. 2.) 2 red dots mean impact or opportunity from that material issue in financial aspect to the Company at a “moderate” level and 3.) 1 red dot means impact or opportunity from that material issue in financial impact on the Company at a “low” level

Targets and Executive Compensations linked to the top material issues

GPSC has established the targets linked to the top material issues to effectively drive sustainability performance in long-term. The targets have set in three timeframes comprising annual, short-term and long-term targets. To achieve the targets and maintain the performance, GPSC dedicates responsibilities to employees from executives level to staff level to manage material issues as KPIs which are linked to annual its performance appraisal. The achievement of this KPI will be linked to the compensation consideration of relevant executives.

This ensures that the ambitions and targets are embedded throughout the company and that management is held accountable for the achievement of these goals as shown in the table below:

Material Topic 2022 Target Short- and long-term targets Type of
Incentive
Incentivized KPIs for
Executives
Clean Energy toward Net Zero
  • Keep GHG emission intensity under 0.49 kgCO2e/kWh
  • Make joint investment with PTT to raise the proportion of renewable power generation overseas
  • Increase the proportion of renewables to over 50% by 2030
  • Decrease GHG emission intensity by 10% and 35% by 2025 and 2030 (compared to the base year of 2020)
  • Achieve carbon neutrality by 2050 and net zero emissions by 2060
  • Achieve no net deforestation by 2025
  • Carry out reforestation in additional 250 rai by 2023 and maintain seagrass grown in a 6 rai area in 2021
Monetary
  • Eco-Efficiency (GHG Intensity in tCO2e/MWh and GHG emissions in tCO2e/year)
  • Renewable - Additional MWe Growth
Being an Innovative Leader
  • Forge awareness and share knowledge of battery products with customers and suppliers
  • Develop an ESS pilot project and install it in various industries
  • Formulate service level agreements or MoU on installation of battery ESSs
  • Offer more products in support of the energy industry and the EV market
  • Implement projects to advance GPSC towards becoming a digitalized organization
  • Develop new high-quality products at reasonable costs and new business models to enhance the competitiveness
  • Become an ESS leadership in the industrial sector in Thailand and Southeast Asia’s ESS production hub
  • Expand ESS production capacity to the giga-scale by 2025 and to 5-10 GWh per year by 2030
  • Establish an R&D center for battery recycling process in line with the government’s targets
  • Drive the organization to be an innovative and digitalized organization
Monetary
  • Battery value chain execution
  • Nuovo plus company set up and execution
  • share of profit/loss of Flash project and Nuovo plus
  • MOU/JDA with partner to create battery demand / new business
Employee-focused Organization
  • Lower turnover rate than the industry average
  • Not lower rate of employee engagement than the average within the industry
  • Succession plans are established for 100% of the key positions by 2030
Monetary
  • Organization capability: Succession planning & pool readiness
  • New S Curve Knowledge Management
The External Impact Value from GPSC’s Activities

Impact 1 - Climate Transition & Physical Risks from the key material issue “Clean energy towards Net Zero”

Cause of the impact - The impact caused by the operation of the business value chain with >50% of business activity coverage.

Impact area(s) evaluated – Environment & Society area.

Type of the evaluated impact – Positive

Rationale

GPSC assessed the impacts since it is material to the environment and society due to global concern of climate change issue. This also directly involves with GPSC operation as currently using fossil fuel as a source for power generation. GPSC, as a power producer and significant GHG emitter, considers the Clean Energy toward Net-Zero as one of the key material issues. GPSC implemented several activities to avoid and mitigate those GHG emissions in several ways. GPSC also support national climate-related targets, join and support external climate-change networks to build on and promote low-carbon business and practices. These are important to evaluate externalized impacts from those activities to inform business decision, progress, strategy planning as well as how much climate related impacts the company can avoid in the environment and society. This is to encourage external parties in joining and sharing low carbon activities/practices along with the company.

External Impacts

Environmental externalities

Impact type Output Metric
(Impact Valuation)
Impact Metric Evaluated in 2022 Reference
Positive GHG emissions avoidance*
(Environmental value lost/ gained)
GHG avoided from fossil fuel power
generation: 294,505 tCO2e
IRIS, 2021.
Greenhouse Gas
Emissions Avoided
(PI2764). v5.2.
Positive NOx avoidance
(Environmental value lost/ gained)
NOx avoided from fossil fuel power
generation: 31.34 tonnes
N/A
Positive SOx avoidance
(Environmental value lost/ gained)
SOx avoided from fossil fuel power
generation: 8.75 tonnes
N/A
Positive Dust avoidance
(Environmental value lost/ gained)
Dust avoided from fossil fuel power
generation: 1.18 tonnes
N/A

Note: * the output metrics refer to performance metrics included in the IRIS (Impact Reporting & Investment Standards) catalog and accepted as good practice to define output targets to measure social and environmental success.

For the social externalities

Impact type Output Metric
(Impact Valuation)
Impact Metric Evaluated in 2022 Reference
Positive Social cost caused/avoided
(Social Cost of Carbon)
Social cost of carbon reduced since people’s
heath impact will be mitigated by reducing
GHG emission: 17,136.29 USD*
IRIS, 2021. Social Impact
Objectives (OD6247).
v5.2.

Note: * The social cost of carbon (SCC) represents the marginal social damage from emitting one metric ton of carbon dioxide-equivalent at a certain point in time (in monetary unit/one excess death). The SCC can be determined by using the mortality cost of carbon (MCC) (in tCO2e emitted/ one excess death). (Bressler, R.D. The mortality cost of carbon. Nat Commun 12, 4467 (2021). https://doi.org/10.1038/s41467-021-24487-w )

Impact 2 - Innovation Management from the key material issue “Being an Innovative Leader”

Cause of the Impact – The impact caused by the products/services and supply chain of the business value chain with >50% of business activity coverage.

Impact area(s) evaluated – Consumers/ end-users

Type of the evaluated impact – Positive

Rationale

GPSC assessed the impacts since it is material to the consumers/end-users to get benefits from the new innovative energy storage system (ESS) or battery, which GPSC places importance on and considers as the new S-curve business opportunity. With the rising trend of EV, renewable energy and electrification where ESS plays a key role in the energy ecosystem, GPSC implemented several activities to accelerate innovation which are to conduct R&D in ESS, develop pilot project manufacture and apply into its partners/customers. As mentioned to the benefits above, from the advantages of the new innovative, including extended lifetime, reduced materials and chemicals usage, and low risk for short-circuiting, the consumers/end-users could get the benefits in term of energy cost saving by using the battery to store their self-generated power contributing to the more energy reliability and resilience.

External Impacts

For the environmental externalities

Impact type Output Metric
(Impact Valuation)
Impact Metric Evaluated in 2022 Reference
Positive Energy Storage Capacity*
(Other)
Energy stored: 28,811.64 MWh/year IRIS, 2022. Energy Storage Capacity (PI0915). v5.3.
Positive Waste Reductions from Products Sold
(Environmental value lost/ gained)
Waste reduced from the new innovative design by removing 40% inactive material and no binder needed for combining different battery module: at least 40% of material usage IRIS, 2021. Waste Reductions from Products Sold (PI5926). v5.2.

Note: * the output metrics refer to performance metrics included in the IRIS (Impact Reporting & Investment Standards) catalog and accepted as good practice to define output targets to measure social and environmental success.

For the social externalities

Impact type Output Metric
(Impact Valuation)
Impact Metric Evaluated in 2022 Reference
Positive Cost saving from external power
purchasing of customer (Other)
Maximum cost saved from
external power purchasing of
customer: 2,557,563.94 USD/year*
N/A
Positive Social Cost of Carbon
(Social cost caused/avoided)
Social cost of carbon reduced
since the new battery technology
promote renewable 4,040.53 USD/year **
IRIS, 2021. Social
Impact Objectives
(OD6247). v5.2.

Note:

* The value is calculated using the electricity tariff used which is 3,109.7 THB/MWh (Electricity tariff for medium-sized business, Metropolitan Electricity Authority, https://www.mea.or.th/profile/109/113) and the average exchange Rates for 2022 which is 35.0316 THB/USD (Exchange Rates UK, https://www.exchangerates.org.uk/USD-THB-spot-exchange-rates-history-2022.html). The assumptions include energy cost saving equal to cost of the energy provided by official Thai Electricity Authority replaced by self-generated energy stored in the GPSC’s product (Battery).

** The social cost of carbon (SCC) represents the marginal social damage from emitting one metric ton of carbon dioxide-equivalent at a certain point in time (in monetary unit/one excess death). The SCC can be determined by using the mortality cost of carbon (MCC) (in tCO2e emitted/ one excess death). (Bressler, R.D. The mortality cost of carbon. Nat Commun 12, 4467 (2021). https://doi.org/10.1038/s41467-021-24487-w)