|Sustainable Development Goals|
Strategic Sustainability Framework for Business
Sustainability Strategy and Management System GRI 2-22, GRI 11.2
PTT is aware of and recognizes the plausible risks and opportunities that may have arisen due to climate change. Coupled with changes regarding Megatrends and Energy Outlooks in the future, PTT subjects’ high importance on these two factors when determining the strategic business direction and operations. The company's vision, strategic framework, and business plan clearly outline and reflect this.
Under PTT's new corporate vision concept of "Powering Life with Future Energy and Beyond," PTT emphasizes business diversification strategies to expand its future energy business and operations best, which encompasses new businesses beyond energy production in line with mega and Energy outlook trends, as well as mitigating key risk factors and opportunities arising due to climate change. Thus, investments have been directed to the following:
- Future Energy as Renewable Energy, consisting of renewable energy sources, energy storage systems, electric vehicle supply chains, and research into hydrogen-related opportunities, are being conducted.
- Beyond or businesses beyond PTT's energy business offerings:
- Life sciences such as pharmaceuticals, medical equipment, and nutritional products
- High-value business chemicals
- Mobility and lifestyle businesses, including non-oil retail-related offerings
- Logistics and infrastructure
- AI, robotics, and digital business
While also setting 2030 new targets to reflect PTTs importance of mitigation impact, including increases in abilities for Resilience & Adaptation as follows:
|Business Growth: Transform portfolios to focus on low-carbon businesses.
|New Growth: Increase profit shares from Future Energy & Beyond sector to no less than 30%.|
|Clean Growth: Reduce PTT Group's greenhouse gas emissions by 15% compared to 2020, announce PTT's carbon-neutral goal by 2040, and aim for net zero greenhouse gas emissions by 2050.|
PTT’s "4R" strategic, operational plan includes
- Resilience Creates flexibility and continuity of business operations while maintaining liquidity. Promote safety and operational excellence to encourage synergies and best utilize existing company assets. Encourage employees to remain agile and resilient with preparedness to cope with changes regarding business situations and focus on risk management and crisis management.
- Reenergize Strengthen market competitiveness for current businesses. Generate added value throughout the company's supply chain from upstream to downstream. Adjust existing portfolios to support the transition of hydrocarbon energy and reduce carbon emissions from existing business operations.
- Reimagination Initiation of business expansion to support the next normal transition, including energy businesses that have demonstrated potential to expand, such as LNG electricity. While also accelerating the development and growth of new business models beyond the hydrocarbon business, both within the Future Energy business and beyond.
- Reform Evaluation and adjustment of existing organizational structure or business models per the future business/strategy direction, thus ready to adapt to unforeseeable changes in the future.
All strategic frameworks have been transferred into PTT's business plans on relevant agencies, including subsidiaries within PTT Group. This movement includes operational plans conveyed to specific operations for responsibility as well as critical mechanisms and methods for driving PTT's sustainability business, such as regulatory structures, defining various indicators to ensure that operations can be effectively driven towards the vision and goals set for effective and systematic results.
Sustainability Strategy DirectionGRI 2-22
Under PTT's aspiration on PTT by PTT (Powering Thailand's Transformation by Partnership & Platform, Technology for All, and Transparency & Sustainability), In terms of Transparency & Sustainability outlooks, PTT diverts adequate attention to formulating transparency and sustainable business development practices to support the implementation of Sustainable Development Goals (SDGs), by placing importance upon balanced responses regarding requirements and expectations of all stakeholders related parties.
PTT has defined its "Strategic Sustainability Direction" within the "Sustainability Management Outlook Plan" to demonstrate corporate social and environmental responsibility.
PTT's outlook for 2021-2025 consists of 3 dimensions: environment, social, and governance (ESG), with a formulated set of indicators for short, medium, and long-term goals alongside strategies to maximize success. This outlook is in line with the 20-year national strategy and supports the following SDGs:
Sustainable Development Goals (SDGs) Contribution
PTT scheduled an assessment of its priorities regarding sustainable development goals related to its business operations for sustainable development goals to be incorporated within the company's strategic vision and aligned with its strategic and enterprise plans. The three assessment steps are as follows:
- Explore significant internal and external factors, including the organization's vision and new strategic direction, Corporate Sustainability Key Issues Policy, Sustainability Strategic Direction Policies, Targets Action Plans, and various global sustainability trends and directions that may affect business operations throughout the value chain including the needs and expectations of stakeholders.
- Prioritize level of response and importance of Sustainable Development goals according to the international frameworks and guidelines such as the SDG Ambition Integration Guide, UN Global Compact's SDG Compass, IPIECA's Mapping the Oil and Gas Industry to the SDGs: An Atlas, WBCSD's SDG Sector Roadmaps, and IPIECA and WBCSD's Accelerating Action: An SDG Roadmap for the Oil and Gas Sector. In addition, assessments will be made in consideration for alignment to Thailand's 20-year National Strategy (2018-2037) and the 12th National Economic and Social Development Plan (2017-2021) deemed relevant to PTT's operations. Said rankings of sustainable development goals were then concluded through the categorization of 2 categories. Ten goals were to be Integrated into Core Business, while the other seven goals were to fit into Collaboration with Other Stakeholders; notably, goal 17 is vital in facilitating the remaining goals' success.
- Justify prioritization and management approach to relevant departments for organizational development to consider feeding frameworks into the development of state enterprise plans, work plan, and projects supporting sustainability material topics, as well as engagement plans with stakeholders in subjected areas.
Governance Structure and Policies for Responsible Business Conduct
Sustainability Governance StructureGRI 2-9, GRI 2-13
PTT establishes a governance structure for its business spearheaded towards sustainability. Succinct clear responsibilities are directed through board-level management, managers, and internal departments to drive support and monitoring coupled with a review of its overall sustainability management. To achieve its stated goal efficiently, as shown below, the company has collected, evaluated performances, and reported results in accordance to "PTT's Sustainability Management Master Plan for Social and Environmental Responsibility" for the year 2021-2025. The progress is regularly reported to the Governance Risk Management Committee (GRMC) and Corporate Governance and Sustainability Committee (CGSC) to demonstrate its commitment to social corporate and environmental protection along with quarterly and performance reports reviews of the ongoing sustainability management process and its annual sustainability management plan for the PTT Board of Directors as well.
Regarding the management of key sustainability topics, each key specific issue is designated a responsible committee along with close supervision assistance ranging from management to the PTT Board of Directors. For more information, please refer to the Materiality Assessment section below.
Policies on Responsible Business PracticesGRI 2-9, GRI 2-13
PTT recognizes and upholds the great importance of responsible business operations and has expressed its commitment to the various policies as follows:
- PTT Sustainability Management Policy, Signed by the Chief Executive Officer and President of PTT Public Company Limited, consists of three-dimensional commitment intentions to manage, namely the environment, society, and governance sustainably.
- PTT Corporate Governance Policy Signed by the Chairman of the Board of Directors of PTT Public Company Limited to enable PTT Public Company Limited (PTT) to conduct its business efficiently, have good corporate governance, and excellent management by focusing on extending sustainable benefits to shareholders with consideration of stakeholders as a whole and maintaining business ethics, transparency, and accountability.
- PTT Human Rights Statement Signed by the Chief Executive Officer and President of PTT Public Company Limited
Nonetheless, PTT's policies have also been formulated to demonstrate the company's commitment to managing key issues for greater clarity as deemed appropriate as follows:
- PTT Quality, Security, Safety, Health, and Environment (QSHE) Policy
- PTT Stakeholder Management Policy
- PTT Anti-Fraud and Corruption Policy
Policies are subjected to a timely review of content annually to align with the changing landscape and key sustainability prioritization within the organization.
PTT Group Companies GovernanceGRI 2-24
PTT has since established PTT Group's Governance Policy through the publication of its PTT Group Way of Conduct, serving as a compilation of guidelines, principles, and procedures regarding working dimensions concerning PTT and PTT Group subsidiaries to remain consistent as a tool for implementing uniformed standards where PPT is a shareholder through selected representatives of the company. The members mentioned above are assigned to perform directorial, executive, and work-related decisions to foster unity within its operations, strengthening the potential and international competitiveness of PTT Group so that PTT Group can continue maintaining good business practices and growth within a transparent and sustainable manner.
PTT Sustainability Management StandardGRI 2-24
In 2021, PTT reviewed and revised the 2016 PTT Group Sustainability Management Framework as "PTT Sustainability Management Standards" to uphold consistency with various standards and practices at both the national and international levels to reflect current issues. Furthermore, measures introduced and applied include ISO26000 Social Responsibility Guidelines, United Nations Global Compact (UNGC), Sustainable Development Goals (SDGs), Global Reporting Initiative (GRI) standards, as well as State Enterprises Assessment (SE-AM), consisting of three parts as follow.
1. Sustainability management principles consist of 7 components as follows:
- Accountability: Corporate governance coupled with risk, opportunity, and sustainability management of key issues and establishing governance structure.
- Transparency: Disclosure of the corporate's activities that affect the economy, society, and environment with clarity, accuracy, timeliness, and completeness
- Ethical behavior: Adherence to the principles of fair business practices in any agreement may put other organizations and consumers at a disadvantage.
- Respect for stakeholder interest: Promote effective and fair engagement with stakeholders as well as provide comprehensive feedback.
- Respect for the rule of law: Compliance with regulations and various requirements, as well as review compliance with the law.
- Respect for international norms of behavior: Respect for the rule of law and avoid violation of policies and wrongdoings in line with international guidelines.
- Respect for human rights: Protecting the human rights of those who may be positively and negatively affected by PTT's business operations.
2. Sustainability core subjects consist of 7 components as follows:
2) Human rights
3) Labor practices
5) Fair operating practices
6) Consumer issues
7) Community Involvement and Community Development
3. Sustainability management process consists of 4 steps as follows:
1. Organizational Governance & Leadership
2. Materiality Assessment, Strategic Planning and Target Setting
4. Monitoring and Reporting
Materiality AssessmentGRI 3-1, GRI 3-2
PTT defines the materiality assessment process following the Global Reporting Initiative (GRI) Standards' Sustainability Reporting Guidelines, the International Integrated Reporting Council's (IIRC) framework, and the principle of double materiality to identify environmental, social and governance issues, which have both positive and negative impacts to stakeholders throughout the organization's value chain, as well as matters that trigger financial impacts to the enterprise value. PTT conducts materiality assessment annually to review significant changes to the organization and stakeholders. The assessment of key sustainability material topics is carried out in 4 steps as follows:
1. Understand the organization’s context
Analyze both internal factors (such as company’s vision, strategic objective, organizational operation, etc.) and external factors (such as relevant standards, requirements, guidelines, global trends and risks, material topics from PTT Group companies and industry peers, etc.). Additionally, PTT also examines stakeholders’ needs and expectations toward 15 business functions, as well as conducts corporate stakeholder survey annually with PTT’s 6 key stakeholder groups to identify material economic, environmental and social topics for further prioritization.
2. Identify actual and potential impacts
Identify actual and potential impacts, both positive and negative, in Environmental, Social, Governance dimensions with the consideration of human rights impacts throughout the organization’s operations. For negative actual and potential impacts, PTT explores the cause of impacts that the organization causes, contributes to, or is directly linked to for business benefits from the organization’s value chain. Next, PTT identifies the positive impacts that have occurred and have opportunities to deliver value for sustainable development in the future. The results are shown separately because positive and negative impacts cannot offset each other.
3. Assess the significance of the impacts
Negative impacts: Assess the significance of actual negative impacts, by considering the level of severity (scope, scale, and irremediable character). For the potential negative impact assessment, severity and likelihood are taken into account.
Positive impacts: Assess the significance of actual positive impacts, by considering the scale and scope of impacts. For the potential positive impact assessment, scale, scope and likelihood are taken into account.
4. Prioritize the most significant impacts for reporting
Prioritize the significance of all impacts and select the top three material topics, ranked within the high and critical/ extreme levels from positive and negative impact assessment, for reporting. The assessment result has been jointly reviewed by relevant functions, experts, and approved by the management and board committees such as the Governance, Risk and Compliance Management Committee (GRCMC) and the Corporate Governance and Sustainability Committee (CGSC), respectively. Furthermore, the material topics have also been verified by experts and external parties to ensure comprehensiveness, accuracy, credibility and transparency. PTT has taken notes of observation from experts and external parties to continuously improve the operational process and disclosure.
2022 Materiality Assessment GRI 3-2, GRI 3-3
Following PTT's 2022 materiality assessment, the top five material topics, from high to critical/ extreme levels, are as follows:
- Climate Action remains at the highest rank due to the global tension to tackle climate change for achieving the goal of limiting global temperature to well below 2oC and net zero GHG emissions by mid-century. PTT, as a state-owned national energy company regulated by the Ministry of Energy, has a direct mission to contribute to Thailand’s emission reduction, especially for the energy sector. Therefore, PTT integrates risk and opportunity assessment for climate change into the enterprise risk management by considering the risk factors from the energy transition and climate-related financial impact as well as considering possible opportunities for new businesses to the transition to a low-carbon economy.
With PTT’s vision “Powering Life with Future Energy and Beyond”, PTT is driven to achieve the mission to expand into businesses toward a low-carbon society with 3 corporate targets: 1) New Growth, 2) Business Growth, and 3) Clean Growth. Specifically, Clean Growth focuses on reducing greenhouse gas emissions to reach carbon neutrality and net zero emissions targets. In addition, PTT established the 3P Decarbonization Pathways to serve as a framework with “Pursuit of Lower Emissions” strategy to reduce greenhouse gas emissions with operational decarbonization initiatives such as carbon capture utilization and storage, hydrogen energy, renewable energy in operations, etc.
- Business Diversification became more focused corresponding to PTT Vision's "Powering Life with Future Energy and Beyond" to transform the business direction to enable future competitive advantage. The new business model increases opportunities of revenue growth from renewable energy businesses and other businesses beyond the energy industry. The corporate target ‘New Growth’ focuses on accelerating and diversifying new business models to replace the share of growth in hydrocarbon value chain, in the areas of “Future Energy and Beyond”. In addition, under the 3P Decarbonization Pathways, the “Portfolio Transformation” strategy serves as a framework to invest in businesses such as renewable energy, battery, EV value chain, AI & robotics, life science, etc.
- Occupational Health and Safety is always in the spotlight as our workers and contractors in the oil and gas industry may face the hazards that lead to injuries, illness, irremediable health damage, or loss of life. All of these can financially result in the cost of property damages, loss of revenue from sudden halts of critical operations, remedy, fines, etc. The challenges created opportunities for PTT to improve the company’s security, safety, and business continuity management to be more efficient and resilient, prepared for risks in every shape and form without any impacts on business operations and stakeholders.
PTT has set the sustainability strategic direction in its “Sustainability Management Master Plan” by considering three ESG (environmental, social, and governance) dimensions. Specifically, the Social strategic direction covers “promote safe working environment and respecting human rights principles” by implementing key actions related to occupational health and safety such as Life Saving Rules execution, health surveillance, Bow Tie Analysis and Barrier Validation, PTT Health Reporting system and an accident forecasting system for NGV transport vehicles, etc. Regarding the COVID-19 pandemic, PTT could systematically and effectively manage the pandemic, enabling employees and contractors to take appropriate actions and promptly receive aid when needed.
- Innovation and Technology had a high impact following the business expansion, which is related to the innovation and technology development for products and services, to accommodate new business opportunities.
- Corporate Citizenship played an important role as communities and society expect PTT to support public health safety amidst the COVID-19 pandemic, generate jobs and revenues, and restore the national economy following the abovementioned impacts.
Targets and KPIs of Top Material Topics
|Material Topics||Targets||Progress against |
PTT and PTT Group’s greenhouse gas emissions (scope 1 and scope 2 including domestic and international operations) are less than 12 million tons of CO2e and 52.5 million tons of CO2e, respectively.
“Clean Growth” target: Reducing PTT’s greenhouse gas emissions by 15% in 2030 compared to the base year 2020 to achieve carbon neutrality by 2040 and net zero emissions by 2050.
PTT and PTT Group’s greenhouse gas emissions are 9.99 million tons of CO2e and 45.40 million tons of CO2e, respectively.
* SE-AM KPI and Corporate KPI for ‘Climate Action’ measures Eco-efficiency performance, calculates from greenhouse gas emission and PTT-specific product
|Business Diversification||Percentage of income from Future Energy and Beyond businesses is more than 10% of the income in 2021, corresponding to the corporate KPI “PTT New Business Achievement”.||“New Growth” target: Future Energy and Beyond businesses generate more than 30% of net income by 2030.
PTT invested in the Future Energy and Beyond businesses as planned. Key projects in 2022 are as followed:
|Occupational Health and Safety||
Performance according to the key indicators for 2022 mostly met the targets as the number of accidents, injuries, and illnesses had decreased, except for the following indicators that did not meet the target:
* SE-AM KPI and Corporate KPI for ‘Occupational Health and Safety’ measures Safety Management Effectiveness performance, covering TRIR, LTA, and Process Safety Event.
|Innovation and Technology||
||Profit from in-house innovation will generate not less than 7% of net profit in 2030.
* If including the budget to mitigate the impact on people from the COVID-19 situation, the social investment budget is 1.66% of the net operating profit and the donation is 42.60% of the total social projects budget.
Download Material Topic Impacts and Management
Material Topic Impacts and Management
Sustainability True Value Assessment
PTT has assessed the true value of the organization from both positive and negative impacts on sustainability to provide investors with real insights into the performance of the organization, reflecting positive and negative externalities from the operations of the organization in the form of monetary value. It also allows the company to see opportunities to improve its operations to mitigate potential negative impacts and risks to the business and its stakeholders. This can lead to proper management, including being able to use in planning and making decisions in the implementation of various projects of the company in the future as well.
The true value assessment of corporate sustainability can be divided into 5 main steps, where the scope of the assessment covers PTT's business performance in each year (excluding PTT Group companies) as follows:
- Study the organization's policies and strategies related to sustainability management.
- Select material sustainability topics according to corporate policies and strategies to determine indicators that reflect direct and indirect impacts. Most of these indicators are constantly collected and reported in the organization's 56-1 One Report.
- Gather indicator data and valuation factors to analyze positive and negative externalities, including direct and indirect impacts, by considering all dimensions of sustainability.
- Assess the value of both positive and negative externalities using quantitative sustainability performance data multiplied by the valuation factors of the indicators.
- Sum up the value of each indicator on both positive and negative externalities to calculate the organization's true value.
|Externalities & Impact on External Stakeholders||Output Metric||Impact Valuation||Impact Metric|
Gross Value Added (GVA)
is a measurement of the contribution to Gross Domestic Product (GDP) made by an individual producer, industry or sector.
Direct way, such as net profit (after taxes), providing wages and other benefits to employees, and paying taxes to local governments.
Salary can be defined as “a basic but decent level of life that allows a household to get good nutrition, housing, health and education”. Societal impacts arising from paid salaries to employees in PTT’s own operations were compared to the living wage on country level.
DALY (Disability Adjusted Life Years) for negative impacts and QALY (Quality Adjusted Life Years) for positive impacts
Health & safety
The scope of occupational health and safety covers work related injuries, illnesses and deaths which impose costs on workers and the community. The social cost is measured from indirect costs that include items such as lost productivity, loss of current and future earnings, lost potential output, and the cost of providing social welfare programs for injured or incapacitated workers.
|Number and type of occupational incidents||Worker and community cost/incident||Baht/incident|
The transformation of land by a company can positively and/or negatively affect the functioning ecosystems and the life of local communities depending on the land use management.
|Hectare||Environmental cost of biodiversity degradation/restoration||Baht/hectare|
The release of greenhouse gases contributes to the negative impact of climate change which detrimentally affects society and the environment such as human health, economic disruption, agriculture, desertification, etc.
|Social cost of carbon||Baht/ton CO2e|
Cost from air pollutants including impacts on health, crops & forests, ecosystems, and material damage
|Ton of NOx, SO2 and VOCs||Social cost of emissions||Baht/ton emissions|
The social cost of water adjusted for purchasing power parity which depends on the water scarcity level area.
|m3||Purchasing power parity||Baht/m3|
Waste treatment can affect the society and environment (i.e. incineration lead to GHG emission, landfill lead to methane and contaminate groundwater etc.)
|Ton||Societal cost of waste/type and treatment type||Baht/ton|
- Sustainable Governance