SD Cover ENG AW 2014_Edit.pdf 1 3/3/15 9:08 AM 1 About SCG

SCG has been conducting business consequently, SCG has become one of according to good corporate governance and ASEAN’s leading companies that operates sustainable development for more than 100 business with sustainable growth and years since the establishment in 1913, following adheres to its visions. a royal decree of His Majesty King Rama VI to At present, SCG has more than 200 create innovative products and services as well subsidiaries, located throughout the ASEAN as business processes and approaches. This region, and has more than 51,000 employees is done to add value and respond to the needs comprised of more than 15,000 local of all relevant parties and to initiate sustainable employees from ASEAN, diversified into 3 development to communities nearby SCG core business units which include Cement- operation. In addition, SCG has been continually Building Materials, Chemicals and Paper. expanding business toward ASEAN; 2 3 Sustainability Initiative: WBCSD-CSI. SCG implements packaging. SCG has initiated production and which produces leading offset paper boxes in the business under the concept of green supply chain distribution of T.U.X™, a special LLDPE plastic film country. In addition, SCG paper has expanded which has good environmental management which is transparent and well-sealing, appropriate into Flexible Packaging Chain, for food and system in line with caring of all stakeholders, for food packaging. Moreover, SCG Chemicals consumer goods, by investing on a 22% share in Prepack Thailand Co., Ltd. This is considered especially, communities around SCG plants. SCG features innovation on home modification and to be a key strategy, leading to a one stop attempts to promote good quality of life and to decoration, the WINDSOR Fast Renew, is created service producer and service provider. In the develop sustainable living, resulting in the success to replace vinyl door-window within 1 day installation part of Fibrous Chain, machinery is improved to SCG Cement-Building Materials of the Siam Cement (Lampang) Co., Ltd., the first by adopting Fast Frame Technology, developed produce Glassine paper, the first in ASEAN. With SCG Cement-Building Materials is formed Company in Thailand to have received the Green and patented by SCG, only in Thailand. its smoother surface and more transparency, the from re-structured internal management of 3 Industry Level 5, the most honorable award from SCG has leveraged itself to be the prototype Glassine paper is used as backing material for core businesses, comprising SCG Cement, SCG the Ministry of Industry Thailand. In addition, the of Eco Factory by applying Eco Innovation in factory sticker label in the packaging industry. Building Materials and SCG Distribution, as an Siam Cement (Kaeng Khoi) Co., Ltd., the Siam management procedure to promote better quality SCG Paper emphasizes on the continual attempt to increase capacity in product and Ceramic Group Industries Co., Ltd., Siam Sanitary of life and sustainable living between the industry, innovation development by improving printing service development, focusing on how to meet Ware Industry Co., Ltd. and Sosuco Ceramic Co., environment and community. As the result, technology for rolling paper with pre-print customer needs rapidly and effectively as well as Ltd. were also certified by the Carbon Footprint Rayong Olefins Co.,Ltd. and Thai Polyethylene flexography system that has the same quality supporting business expanding in ASEAN. for Organization (CFO). Co.,Ltd. were the first two companies in Thailand with offset printing system. Moreover, SCG Paper SCG Cement-Building Materials has been which were certified as Eco Factory from The develops machine glazed paper production for continually expanding business in ASEAN by Federation of Thai Industries. In addition, SCG packaging that requires a high hygiene and safety constructing SCG’s first cement plant in Laos PDR develops green supply chain by adopting industrial such as medical equipments, and Idea CarePack. constructing a Mortar plant in Thailand and symbiosis for waste management as well as The Idea Carepack is a sanitary packaging made investing in 55% shares of Panel World Company building green networks with the suppliers and from pure pulp using food grade paper which is Limited, the Company which produces contractors. This results in the success of Map safe for consumer use, and applies Curve Lock cement-bonded particle board used for interior Ta Phut Olefins Co.,Ltd. the first petrochemicals Technology that prevents water leakage as well and exterior design. Furthermore, SCG has been plant in Thailand to receive the Green Industry as fluorescent test certified by the Thai Industrial expanding business outside ASEAN by investing SCG Chemicals Level 5 from the Ministry of Industry Thailand. Standards Institute (TISI). Further more SCG 33% in joint business with Florim Ceramiche SCG Chemicals manufactures and supplies Paper develops the Idea Green Plus Paper which S.p.A, in Italy, aiming to invest in a high-end a complete range of chemical products in line composes of high-quality EcoFiber obtained ceramic plant. with continual investment expansion in ASEAN, from used paper. Finally, SCG Paper develops As for innovations, SCG initiates The NEST conducting business in joint-venture with 10 species of Eucalyptus which are appropriate – The Next Eco-Sustainable Technology for Home, PT Chandra Asri Petrochemical Tbk. (CAP) to for planting in various soil types. The new ASEAN’s first home innovation of the future which increase productivity of Olefin plants and with species help reduce plant diseases and pests produces more energy than energy consumption. Compagnie Financière Michelin to implement while increasing the plant’s productivity and weight. Also, SCG researches and develops SCG Eldercare synthetic rubber plants that produce high value SCG Paper conducts business in Solution collaborating with the Siriraj Hospital added (HVA) rubbers, supporting the increasing sustainable development manner by considering and Mahidol University in order to study elderly demand of petrochemical products in Indonesia. SCG Paper benefits and impacts of all stakeholders through needs and living behavior. Further more, SCG Furthermore, SCG has invested in the first one SCG Paper manufactures and supplies a the concept of 3Gs: Green Product, Green emphasizes on research and development of stop service petrochemical business in Vietnam in complete range of paper products and packaging Process and Green Mind. Green Product adds hybrid-formula cement which is environmentally- cooperation with Thai Plastic and Chemicals Public paper as the largest paper manufacturers in value to Eucalyptus by making use of all the friendly since it reduces carbondioxide emission Co., Ltd., together with Vietnamese and Qatari ASEAN. It comprises of 2 main businesses parts at the high efficiency and expanding to new from the production process while still maintaining partners. The investment is in the stage of negotiation including Packaging Chain and Fibrous Chain. products, Green Process develops production the product’s good qualities. This hybrid formula for loan with creditors and contractor auction. SCG Paper is also a member of The Sustainable technology which consumes less energy, cement has great quality, creates beautiful, To support research and development in Forest Products Industry (SFPI) under The World using alternative resources and recycling or smooth and easily-dried texture, appropriate for continuity, SCG Chemicals has invested a 51% Business Council for Sustainable Development reusing waste as raw materials or renewable structural work which requires strength. share in Norner Holding AS Company, in Norway, (WBCSD) energy. Green Mind builds environmental In order to conduct businesses in compliance which is an advanced innovation and technology SCG Paper has been expanding continual awareness through CSR projects targeted at with sustainable development framework, complex in materials and polymers at the global investment in ASEAN. For the Packaging Chain, employees and consumers using social media, SCG Cement-Building Materials is the first company level. This expansion is to develop high value SCG Paper has invested on the total share of ‘We are Greeners’, in order to exchange updated in Thailand that has joined the international added products such as specialized polymers for D-In Pack Co., Ltd. which produces products to news, knowledge, environmental experience and cooperation network, namely, the World Business medical equipment, high-pressure pipe, electrical meet needs of niche market and invested on a to build green market networks. Council for Sustainable Development-Cement appliances, automotive parts and plastic films for 90% share of PT Indoris Printingdo in Indonesia 4 5 Message from President & CEO

Our world is undergoing many changes and volatile taking with us the most up to date standards and technology to and services through SCG eco value label. Sales of SCG eco view to modernizing their paradigm with emphasis on logical events that are becoming more complicated, and which impact, apply wherever we go. For instance, in Thailand and overseas value line have increased 31% from the previous year and now thinking, problem-solving skill and self-sufficiency. We hope that inevitably, the economy, society and the environment. Organizations we install the Waste Heat Power Generation (WHG) to recover account for 31% of revenue from sales. the pioneering batch of trainees will become agents of change must be well prepared in order to cope with those changes waste heat from our cement kilns in the cement production In the area of empowerment and enhancing quality of life in driving a critical mass, making our communities and society and volatility. Therefore monitoring and analysis of situations process, as well as we apply the Fluidized Bed Gasifier technology of the community and society, SCG has scaled up the successful strong, self-sufficient and sustainable. and risks is extremely important in ensuring that organizations to turn waste materials and biomass from agriculture into fuel implementation of SCG Conserving Water for Tomorrow Project In recognition of its commitment to sustainable business can withstand and mitigate impact, while sustaining itself and gases. Moreover, SCG is dedicated to creating value for our and the Innovative Technology for Remediation of Saline Land practice, SCG maintains its top ranking position in the continuing to grow. Entering our 101st year, SCG can manage customers, workforce and stakeholders, in the belief that the Project by setting up two Community Learning Centres to Construction Materials Industry of Dow Jones Sustainability its growth well, even though many challenges abound. In 2014, ASEAN Economic Community will empower and strengthen the showcase good practice and lessons learnt. Titled ‘Satanee Indices for the fourth consecutive year. The ranking represents our overall revenue from sales increased 12% over the previous region significantly. Plook Khid Pun Sukh’ (Instilling Thinking and Sharing Happiness the pride beyond SCG, for it is being shared with our partners year. We remain committed to our goals to grow alongside a SCG conducts its business with sustainability throughout Station), these community-based Learning Centers located at and stakeholders whose contributions form part of our success. sustainable society and the environment. the entire supply chain. We start by implementing Green Ban Toey, Phimai District, Nakhon Ratchasima province and at SCG strives to improve its transparency in disclosing information As member states gear up for the scheduled realization of Manufacturing as an example of good practices. Then we give Hom Phaya Sasobhok in Jae Hom District, Lampang province further, by committing to using globally accepted sustainability ASEAN Economic Community (AEC) in 2015, the business sector importance to capacity development of our suppliers through serve as on-site learning facilities for those interested in reporting guidelines, the fourth generation of Global Reporting must likewise brace for the changing landscape of resources, the enactment of SCG Supplier Code of Conduct in September community empowerment on sustainable livelihoods. We have also Initiative (GRI-G4). labour and radically different patterns of consumption. SCG 2013. To date, all major suppliers, sharing the same value with followed up on the foundation with our ‘Power of Wisdom’ project in As SCG takes its operation into the new century, adding has made preparation through our vision that is committed to us have signed the SCG Supplier Code of Conduct. We are which SCG collaborates with other development partners namely value to Thai and ASEAN society through its balanced approach conducting business in parallel with promoting sustainable currently taking this endeavour a concrete step further through Man Pattana Foundation, the Royal Thai Army, National Science of sound sustainable business conduct, there remain many progress for ASEAN, and particularly in communities where SCG a pilot program involving 21 suppliers with the aim of enabling and Technology Development Agency, and the Thai Chamber of challenges in the path ahead which require close collaboration operates. We do this by promoting competitiveness through them to become our sustainable suppliers. On top of these, we Commerce to develop and offer a curriculum to train community between SCG and stakeholders to overcome, and to achieve expansion of our manufacturing bases to ASEAN countries, have enhanced consumer’s participation in sustainable goods leaders, opinion leaders, military officers and farmers, with a sustainable development for all. 6 7

P.84 Environmental Investment Sustainability (percent of revenue from sales) Business Highlights 2014 Philosophy 2,542 Million Baht HVA Products and Services P.63 ‘SCG eco value’ P.63 (0.52%) Products and Services and Vision 35% 35% 26% 31% of revenue of revenue of revenue of revenue 2013 from sales from sales from sales from sales 2,687 Million Baht 2013 2014 2013 2014 (0.62%)

Research & Development Investment P.63 Green Procurement Purchased P.59 Alternative P.47 (percent of revenue from sales) Energy 2014 SCG’s business philosophy is to operate 2,068 Million Baht 2,710 8,172 Million Baht business with ethics and responsibility ( 0.48 % 0.56 ) 2013 to our stakeholders. This has been consistently adopted and practiced by the Board of 2013 2014 5,198 Million Baht SCG Vision Directors, management and employees at all SCG strives to become a regional 13.0% 12.5% levels, which allows SCG to be trusted as leader that is committed to operate business a leading organization that conducts its while contributing to sustainable development Hazardous/ P.57 P.63 P.85 2013 2014 Carbon Label Lost Time Injury business transparently, accountably, and in ASEAN and the communities where Non-Hazardous Certified Frequency Rate Waste to Landfill provides fair treatment to all stakeholders. it operates, as well as creating value for (Carbon Reduction Label (Employee/Contractor) Percent and Carbon Footprint Label) Moreover, SCG has also established its employees, contractors, customers and *Items *Case/200,000 Man-hour Social P.84 0.01/0.0 vision for all its employees to adopt as their stakeholders by world-class quality 2013 Contribution Percent *Million Baht main work goals. management in line with corporate 0.0/4.6 525 555 2014 166 2014 2013 2014 governance principles and high safety 2014 0.05 / 0.06 standards. SCG commits to enhancing the 2013 quality of life and well-being of people by 134 0.07 / 0.06 2013 SCG Business Philosophy our high quality productions, technology development and creation of excellent Adherence to Fairness SCG is committed to the concept of fairness innovations. Enhance Professional Skill of Fleet Carrier P.33 Number of Check Dam P.70 Sharing Opportunities, P.71 and equal treatment to all stakeholders. SCG will be recognized as an innovative Employees through Trainings from Skills *Units Drawing the Future workplace of choice and a role model in Development School 65,440 Program Dedication to Excellence 12,919 62,812 SCG earnestly focuses on right performance corporate governance and sustainable 2014 208 132 Projects striving to consistently provide excellence in all development. SCG believes in the value 10,702 Million Baht and potentiality of employees to creatively 2013 29.8 14.4 aspects. Belief in the Value of Individuals work together in an honest, transparent and 2013 2014 2013 2014 SCG believes that employees are enthusiastic work atmosphere. Every SCG valuable assets and consistently develops the employee will adhere to and comply with potential of employees at all level. the SCG Business Philosophy and the SCG Global Reporting Initiative P.92 Dow Jones Sustainability Indices (DJSI)/ P.110 Code of Conduct. During the past several Robeco Sustainable Asset Management Concern for Social Responsibility SCG recognizes its duty towards society years, SCG has valued the development 2013 2014 while doing business and will fully perform its of employees of diverse nationalities, cultures and experiences to be committed to Industry Leader for Industry Leader for duty as a good corporate citizen by contributing the 3rd consecutive year, the 4th consecutive year, to the communities and countries where it fulfilling customers’ needs, have a wide ranked Gold Class for ranked Gold Class for vision and be both talent and ethical people. th th operates. 2013 2014 the 6 consecutive year the 7 consecutive year 8 9

In 1991, SCG announced the Apart from clear policy, result Sustainable Management Approach Environmental Conservation and Safety extension that leads to action is also SCG Sustainable Policy following by the Environment important. Therefore, SCG has developed Development Framework Conservation Policy in 1995. These ‘SCG Sustainable Development 2 documents are considered as key Guidelines’ in 2008 to promote and vernanc turning points that emphasize on the support operations in various aspects Go e control of impacts generated by SCG appropriately and clearly. Then, other operations. Later, SCG adopted and practice guidelines are announced Economy applied International Standards on continually, such as Green Procurement Environmental Management System Guideline and SCG Safety Framework. (ISO 14001) and Occupation Health SCG has been monitoring and Environment Society and Safety Management (ISO 18001) in implementing management systems 1997 and 2003, respectively, in order to and standards in continuity, such as Total acknowledge all companies under SCG Quality Management, Total Productive management to take environmental, Maintenance and Guideline for Social occupational health and safety aspects Responsibility (ISO 26000) in order to in consideration as parts of corporate develop outcomes, leading to management that illustrate achievement of objectives and targets. independence, responsibility and continual development. Successful Sustainable Management outcomes were extended in energy Structure provision aspect. In 2011, SCG adapted The key composition to drive and applied Energy Management policy on standard system and SCG conducts business in System Standard (ISO 50001) in use. operational guideline, including the Sustainable Development Committee compliance with 4 core values, not SCG had also been implementing support of operating employees is SCG (as of 1 January 2015) only focusing on economic aspect, Environmental Performance Assessment Sustainable Development Committee 1. Roongrote Rangsiyopash Chairman fundamental factor of business sector Programme (EPAP) and Safety that has responsibility to determine President, SCG Paper or revenue from business, but also Performance Assessment Programme and review sustainable policy, guideline 2. Pichit Maipoom Member emphasizing on social and (SPAP) since 2001 and 2003 in continuity and target. The SCG Sustainable President, SCG Cement - Building Materials environmental stewardship. SCG has in order to build up trust among Development Committee adapted 3. Cholanat Yanaranop Member been implementing the 4 core values stakeholders on SCG performance, roles and responsibilities from SCG President, SCG Chemicals until it embeds and becomes the including environmental, occupational Environmental Conservation and Safety 4. Somchai Wangwattanapanich Member corporate culture. From the past to Vice President - Operations, SCG Chemicals health and safety aspects. Committee that was set up in 1995 5. Aree Chavalitcheewingul Member present, growing numbers of employees In corporate governance aspect, to cover sustainable development Vice President, Regional Business are in alignment with business growth, SCG Code of Conduct was announced in SCG’s overview. At present, SCG SCG Cement-Building Materials social and environmental changes. In in 1987 and it was improved continually Sustainable Development Committee 6. Nithi Patarachoke Member order to maintain the leadership status to fit with periodically situations. comprises SCG Paper President as Vice President – Domestic Market or role model, building up corporate’s Results from SCG Code of Conduct a Chairman and top executives from SCG Cement-Building Materials cultural awareness among employees, were extended to contractors in 2013 to every business unit and corporate 7. Chaovalit Ekabut Member generation by generation, and conducting ensure trust in transparency, disclosure functions as committee members. In Vice President – Finance and Investment & CFO, SCG updated practice guideline that and accountability of business. order to drive sustainable development 8. Tanawong Areeratchakul Member responds to changes can create Furthermore, SCG announced toward same direction, committee and Vice President - Corporate Administration, SCG better understanding and clarify Stakeholder Engagement Policy, the working team for each sustainability 9. Venus Asavasitthithavorn Member practice in action which is developed additional policy on practice toward issue are set up to determine strategy, Director - Corporate Communication Office consequently. stakeholders in 2010 because SCG direction and target. Various committees 10. Cholathorn Dumrongsak Member and Secretary Director of Center of Excellence and believed that conducting business with in relevance with each stage of SCG Sustainability Development CSR and environmental respect would sustainable supply chain are mentioned 11. Numpol Limprasert Member and Assistant Secretary strengthen the corporate to conduct as below: Sustainability Development business with sustainability. 10 11 • Production process under world- business development toward ASEAN class standard or Green Manufacturing by extending process or good practice SPAP Result involves SCG Energy Committee, SCG from Thailand to other countries to create % Waste Management Committee, SCG fast development and exchange learning 100 Water Management Committee, SCG process, starting from safety aspect.

Climate Change Committee and SCG Safety is considered as materiality for the 80 75 Structure of Sustainable Management Green Building Committee. In 2014, SCG corporate. It enhances morale and mental 60 Hazardous Waste Committee was established. support of employees, contractors at work The Board of Directors • Leveraging management of and communities around plants. SCG will 40 The Siam Cement PLC upstream supply chain involves SCG start collecting information on significant 20 17 Supplier Development for Sustainability safety and environment as evidence of 4 4 SCG Foundation Committee which extends scope of green performance and analyzing improvement 0 0 procurement, SCG Contractor Safety guideline in 2015. Level 1 Level 2 Level 3 Level 4 Level 5 Certification System (SCS) and SCG Code To implement management effectively, EPAP Result The Governance and The Audit Committee of Conduct. it requires adoption of standard systems Nomination Committee % • Creating added value for producers abroad, including SPAP and EPAP that 100 and downstream consumers or downstream leverage effectiveness throughout corporate, The Remuneration Committee The CSR Committee for supply chain involves SCG eco value under international standard. Appropriate 80 Sustainable Development Committee, offering options in consumption targets complying with each area are then 60 60 of environmentally friendly products and set up. President & CEO services. In employee aspect, employees, who 40 27 SCG Risk Management • Promoting and disseminating have responsibility to drive operations, 20 Committee sustainable development guideline involves must be acknowledged with awareness 13

SCG CSR Committee for Sustainable on sustainable development at work and 0 0 0 Development and SCG Foundation that daily awareness on sustainability. Such Level 1 Level 2 Level 3 Level 4 Level 5 SCG Energy Professional SCG Sustainable support and strengthen the society. awareness must be added into work life Committee Committee such as Development Committee Level 1 Lack of responsibility Besides supply chain, SCG looks forward by various approaches, including training Level 2 Problems and dealt immediately to other organizations, considering as a and engagement. The learning process is Level 3 Prevention of possible problems part of SCG vision in CSR. adapted toward practice-based process SCG Climate Change • Production SCG Supplier Development SCG Waste Management Level 4 Business integration Committee • Energy for Sustainability Committee Committee To implement activities in compliance that has teams and supervisors to support Level 5 Leadership • Sustainable with business unit, companies, plants and effective and sustainable learning. Development SCG eco value SCG Water Management • Maintenance Committee Committee different areas have also set up Sustainable SCG became a member of The • Quality Control Development Committee at different World Business Council for Sustainable • Engineering SCG Green SCG Harmful Substance business units to ensure that policy and Development (WBCSD) in 2000. According • Quarry Building Committee Committee • Quality Management operational plan are implemented effectively. to Vision 2050 which WBCSD has • Human Resources determined as business conducting Next Step of Sustainable guideline for members, it helps building Management cooperation between members to create To expand businesses toward the greatest change at global level by SCG Cement-Building Materials SCG Paper Sustainable Sustainable Development international level, SCG has set up a vision 2050. At present, Action 2020 is prepared Committee Development Committee to become sustainable business leader in in progress, leading to Vision 2050 which ASEAN. At present, SCG has production SCG has followed up to improve strategy, SCG Head Office - Bangsue SCG Chemicals Sustainable Sustainable Development bases in other countries at 9%. SCG plan and review external target. Development Committee Committee determines a guideline on sustainable รู้จักเอสซีจี 13

Today, the ASEAN community must look look community must ASEAN the Today, income from businesses which have the the have which businesses from income exporting and from bases in ASEAN production worth of goods and services to ASEAN region, 21% of 100,912 million baht, accounting to from sales and the revenue from total revenue bases in businesses which have the production Baht or ASEAN, accounting to 44,397 Million sales. SCG has asset from 9% of total revenue 18% or Baht Million 84,875 valued ASEAN in 2014). 31 December, of total asset (data from for sustainable development mechanism in as the unity, common to keep moving forward and environmentally with efficiency growing friendliness for AEC sustainability.

Secretary-General of ASEAN Secretary-General 2014) ; 14 November, Symposium ASEAN Sustainable Development (from According to result of business operation of business operation to result According Economic aspect - To create value by value by create Economic aspect - To conserve aspect - To Environmental conduct business while Social aspect -To H.E. Le Luong Minh H.E. Le The ASEAN community takes significant role in driving the sustainable development at global level since since level at global role in driving the sustainable development significant takes The ASEAN community Therefore, citizens. global to food that produce resources and natural of population number is a great there will contribute which action key the sustainability is toward business and industry the of development the scale. in a large significantly citizens the global to advantages sustainable manner. based on the sustainable development all sectors, and the cooperation from approach receiving region, the in steadily grows SCG balancing in 3 aspects. balancing in 3 aspects. focusing only not goal, ultimate determining mutual benefit but also creating on profitability, parties. and happiness of all relevant and and natural resources the environmental maintain the balance of ecological sustainability, energy consumption. as well as effective communities in of surrounding taking care

SCG, as the leading company in ASEAN, SCG, as the leading company in ASEAN, SCG has also developed and improved the the SCG has also developed and improved management to be complied with changing and focused on leveraging the environment quality of life and well-being of the communities which SCG operates. The strategy of sustainable development in the business plan focuses on and face changes that will occur in various various and face changes that will occur in sectors, including building up a common to understanding of public and private sectors private The public and in collaboration. work sustainable development sectors must encourage to in terms of policy and action to respond and changes that occur rapidly in the region the utmost benefit to all the world and create parties consistently. with the society for more is steadily growing believe that the AEC will We than a century. SCG has with sustainability. strong grow the expanded business steadily throughout comprising Indonesia, Vietnam, ASEAN region, Myanmar and Cambodia which have more Thailand, from apart employees, 15,000 than total employees. of the accounting to 31 percent up as an effort to be friendly partner with the to be friendly partner with the up as an effort to be prepared neighboring countries in order

14 16 20 24 As for Thailand, the economic policy is set As for Thailand, the economic policy is set The integration between ASEAN countries countries ASEAN between integration The Entering the ASEAN Economic Community Entering the ASEAN Economic Community economic growth and expansion of urban and expansion of urban economic growth consumption natural resource the society affect to cooperate and also. ASEAN members have in the find out collaborative approaches to sustain it of natural resources preservation ASEAN Framework for sustainable under the Green of ASEAN. The development has to be growth implemented in line with air and water resources low carbon well as initiating management as to uplift the quality of life for society in order everyone in the ASEAN region. as the single market and production base will base will as the single market and production Member between gap development the reduce of States and upgrade the economic policies with the regional each country in accordance This cooperation will not only increase economy. chances capacity but also increase the region’s Engine a Growth as trading for negotiation of in the world or an important manufacturer economy. the does not cause positive changes only, also to is a challenge, not only to Thailand but all ASEAN Member States. Economic integration

Materiality Materiality Risk and Opportunity Engagement Stakeholder and Challenge Sustainable Action Towards ASEAN Towards 12 14 15 รู้จักเอสซีจี

• Compare sustainability issues with • Propose results from materiality G4-18, G4-19, G4-20, G4-21, G4-22, G4-23 enterprise risks, analyze and identify additional assessment process to SCG Sustainable Materiality issues. Development Committee for comments and • Assess sustainability issues based approval. on external stakeholders’ views (Y axis: Results from materiality assessment Importance to stakeholders) by: illustrate that some material issues are highly - Organize workshops with importance to both SCG and stakeholders, representatives from all functions, including i.e., Occupational Health and Safety and Risk corporate functions and business units, in order & Crisis Management. While some issues, SCG MATERIALITY MATRIX to evaluate possibility and severity of impact stakeholders consider as most importance, from the views of 11 stakeholder groups. where SCG views these issues as risks that can - Organize small group meetings with be managed, controlled or prevented, e.g., Air 8 Governance Occupational each function to review materiality of each Emission. SCG emphasizes on environmental Health and Safety issue, analyzed by the views of external impact prevention, adopting the most advanced 7 Risk & Crisis stakeholder groups. and effective technology to manage and Management 6 • Assess sustainability issues from prevent air pollution appropriately and in

eholders Labor Practice and Energy & Human Rights Climate Change SCG’s views (X axis: importance to SCG) by compliance with laws and regulations. Therefore, 5 organizing workshops with representatives environmental impact such as Air Emission is Air Emission Water / Waste Human Capital o Sta k Development from functions and internal experts related not considered material issue to SCG. 4 e t Environmental Supply Chain Customer Stakeholder to each sustainability issues to analyze and SCG will further improve the materiality Policy/Management Relationship Engagement System Management prioritize materiality from the views of SCG, assessment approach in collecting, analyzing

tan c 3 Materials Use Biodiversity Corporate covering material issues both within and o r and prioritizing of those sustainability issues Social 2 Responsibility outside SCG boundary. in the next year in order to reflect the

Im p International Water Product Related Risks • Plot ‘SCG Materiality Matrix’ with most materiality issues, including more Standards 1 Importance to SCG on the X axis and participation from stakeholders. This will lead Importance to Stakeholders on the Y axis, to a better management of materiality issues. 0 1 2 3 4 5 6 7 8 11 sustainability issues fall into Materiality Furthermore, SCG will take such issues in Importance to SCG Matters area. consideration to develop its strategies and • Organize meeting with each functions present these issues in the reports or media Economic Environment Social for comments and review the materiality that meet the stakeholder interests. assessment results.

SCG is committed to conduct its The assessment processes of SCG Aspect boundaries Aspect boundaries Materiality Aspect Location in this report Page businesses in conformance with the Sustainable sustainability issues can be divided into steps Code within SCG outside SCG Development Guidelines in line with visions, as follows; Occupational health and safety M1 All business units Supply chain, Communities Health and Safety 32-37 and to meet the needs of internal and external • Collect all relevant sustainability Risk & crisis management M2 All business units Not material Risk and Opportunity 16-19 stakeholders. Therefore, SCG has collected all issues to SCG, including issues raised by Governance M3 All business units Not material Corporate Governance 28-31 relevant sustainability issues, referring to SCG stakeholders from all events and channels Energy & climate change M4 All business units Communities Energy and Climate Change 46-49 Sustainable Development Framework, Global including; Human capital development M5 All business units Not material Employee Caring 38-45 Reporting Initiatives (GRI) and Dow Jones - Opinion Panels of experts from various Stakeholder engagement M6 All business units All stakeholders Stakeholder Engagement 20-23 Sustainability Indices (DJSI), to assess and professions Labor practice M7 All business units Supply chain Employee Caring 38-45 prioritize materiality through formal and - Employee Satisfaction Survey and human rights Customer relationship M8 All business units Customers Sustainable Value Chain 58-65 informal processes. SCG adopts GRI-G4 - Community Satisfaction Survey management Guideline as a reference to identify and - Brand Image Survey Water M9 Paper and Chemicals Communities Sustainable Water Management 50-53 Waste M10 Chemicals and Paper Communities Sustainable Resource Management 54-57 manage the most significant material - Complaints from stakeholders both Supply chain management M11 All business units Supply chain Sustainable Value Chain 58-65 sustainability issues and stakeholders in order internal and external to meet the needs of all parties appropriately. 16 17

Risk and Opportunity Risk Management Process

Risk / Opportunity Risk / Opportunity Risk Response Reporting and Identification Assessment Monitoring

SCG 8 Risk Categories designated risk limit, countermeasures must through the Business Continuity Management be clearly stated or emergency response and (BCM) system. The BCM office was responsible Reputation and Safety, Health and Compliance Risk Hazard Risk business continuity plans must be developed for conducting drills on emergency response Environment Risk Intellectual Property Risk in case of a crisis. For emerging opportunities, and business continuity plans, closely business plans must be developed to capture monitoring the situation and promptly alerting such opportunities on a timely basis. relevant parties. On another example, SCG Input Risk Process Risk Financial Risk Business Risk • Reporting and monitoring-The turned Thailand’s economic slowdown caused risk management results are reported to the by political situation into an opportunity for Business Unit Risk Management Committee, growing its export revenues, leveraging our SCG Risk Management Committee and The long-established export distribution channels. Audit Committee, respectively As for the event of falling crude oil prices, SCG In 2014, there were significant risks, Chemicals took up an opportunity from falling SCG places great emphasis on the established in terms of monetary value. namely, political instability in Thailand, uncertainty prices of Naphtha, its main raw materials, to Enterprise Risk Management, which is a key SCG risk management process focuses in domestic and global economic recovery, manage its production costs. process contributing to the attainment of the on both downside impact and business and falling of global crude oil prices. SCG In addition to the management of risks organization’s objectives and goals, and opportunity of a risk event and the incorporation adopted its risk management process when caused by external factors, SCG put great ultimately leading to value added for the of risk management as part of working dealing with these external risks. For example, efforts on risk management of safety, health organization, shareholders, and other processes, leading ultimately to a risk culture. SCG managed the situation of Thailand’s and environment; compliance; and reputation stakeholders, as well as contribute to SCG’s • Risk / Opportunity identification-SCG political unrest, which could have disrupted according to its risk appetite statement, as per sustainable growth. encourages forward-looking approach in risk SCG’s business operations and supply chains details that follow: To identify and evaluate potential risks and opportunity identification by using tools in the organization, SCG has categorized the such as key risk indicators (KRIs). risks into eight categories and established the • Risk assessment-SCG established risk appetite to create common language for common risk metrics to standardize assessment everyone in the organization. SCG manages methodology across the organization. Risk owners the risk appetite by placing emphasis on safety, use various tools (e.g. risk map, scenario analysis, health and environment risk; compliance risk; correlation analysis, and benchmarking), and and reputation risk. As these risks can have also identify critical process for crisis management significant impact on SCG’s business to assess the likelihood and impact of risk to performance as well as reputation, it is important prioritize which risk needs to manage actively that they be prevented. However, SCG can or require to monitor the circumstance closely. accept some types of risks based on a • Risk response-If the risk owners find risk-return trade off and the risk limit has been that a residual risk remains higher than the 18 19

Safety and Health Risk: SCG promoted the safety and health system with SCG Safety Framework and SPAP Laws and Regulations Compliance Risk SCG has established Corporate Compliance Structure to comply (Safety Performance Assessment Program) by establishing the systems to reduce risk behaviors, to diminish risks with laws and regulations by establishing Corporate Compliance Unit, BU Compliance Unit / Committee and SCG induced by shifts in working environments, and to regulate risk-reduction activities to meet the target. As a result Compliance Committee to develop strategies, to ensure compliance based on a uniform standard, and formulate of the implementation of the above safety and health risk systems, the number of total incidents decreased from SCG compliance policy throughout the corporate. the previous year. Besides, the safety management system was established in overseas companies operated by In order to achieve the law and regulation compliance, SCG has developed Compliance Management SCG and was introduced to its contractors under the SCG Contractor Safety Certification System so that the System as a key mechanism to ensure that all employees are able to implement works in compliance with laws practice could reach the wider society. and regulations efficiently and effectively. In preliminary, SCG has initiated Laws & Regulations Compliance Program as a priority. Environment Risk: SCG established the sustainable development framework for the organization to control the SCG has clearly determined work process, roles and responsibilities of operating employees, support units environmental impact and global resource used by its activities. Besides, Environmental Performance Assessment and audit office that are considered as three lines of defenses to manage risks and control internal factors. Also, Program (EPAP) was used to achieve the international standards. SCG continued to develop the organization to SCG will apply Compliance Management System with works related to the corporate’s reputation and public be a model of sustainable development based on its vision. As the energy-intensive industry, SCG realized that commitment, extending results toward other works and international level, respectively. the energy consumption went together with greenhouse gas emissions – the major cause of global warming, therefore, SCG continued to improve manufacturing process by increasing energy efficiency. As a result, SCG reduced energy consumption by 560 Million Baht in 2014. Apart from that, SCG increased the use of alternative energy and developed products and services that reduce energy consumption and greenhouse gas emissions, including the installation of waste heat power generator (WHG) in domestic and international cement plants, the production process of hybrid cement that releases less carbondioxide emissions, Idea Green Plus paper in which

high-quality eco-fiber derived from used paper is incorporated to substitute wood pulp, as well as the production Reputation Risk: SCG employs ‘Brand Protection’ and ‘Brand Building’ strategies. SCG’s Brand Protection process of melamine and ethylene that emits less greenhouse gases. Throughout the years, SCG has consistently strategy includes creating relevant public relations campaigns, installing internal and external communication systems demonstrated its commitments to corporate social responsibility by choosing the projects that strengthened the to be used both in normal situations and during crises for consistency, and conducting surveys on attitudes and people in the community and protected the environment, such as SCG Conserving Water for Tomorrow Project, satisfactions towards the image of the Group, the results from which are used for future risk assessment and check dam construction, The Innovative Technology for Remediation of Saline Land Project, Satanee Plook Khid planning. Furthermore, Brand Committees have also been established in strategic countries, and they are responsible Pun Sukh, as well as Sharing Opportunities, Drawing the Future Program. for outlining a brand management guideline. SCG has also adopted the ‘Brand Building’ strategy to strengthen the brand to increase its competitiveness. To this effect, SCG places emphasis on consolidating various product brands under a single brand ‘SCG’ , to establish a clear direction of business conduct to accommodate future growth, to create strength, and to increase the memorability of the brand for consumers.

In 2015, SCG will continue to dedicate efforts on improving the quality of its risk management by creating Risk management acts as a safeguard for SCG in our path awareness on the importance of risk management on all fronts and equipping employees with knowledge and towards sustainable development. The responsibility is of capability to enable them to better manage their risks. Furthermore, integrating and sharing of risk and risk everyone in the organization. management data will support a more efficient Enterprise Risk Management.

Chaovalit Vice President Ekabut Finance and Investment & CFO SCG 20 21

G4-24, G4-25, Stakeholder Engagement G4-26, G4-27 Stakeholder Engagement Approach

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Collaboration COMPETITOR EMPLOYEE

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COMMUNITY GOVERNMENT AGENCY Having been influenced by changing government agency and civil society/ circumstances such as global trends academics. In order to respond to and stakeholder expectations, SCG different needs and expectations of CREDITOR SHAREHOLDER has to conduct stakeholder analysis stakeholders, SCG applies various tools Information channels annually through meeting with relevant and channels to seek stakeholders’ INVESTOR with stakeholder functions to review roles and concerns and expectations, such as Stakeholders importance of stakeholders that could stakeholder dialogue, opinion panel, have impacts on businesses operation. joint meeting, satisfaction survey and Every group of stakeholders is Building Relationship The output of stakeholder analysis is complaints receiving. Recommendations important to SCG business operation, with Stakeholders taken into account for identification and expectations from stakeholders directly or indirectly. Discovering and SCG divides stakeholders into 12 and prioritization of key stakeholders enable SCG to improve current business understanding interests and expectations groups, including customer, employee, as well as for further development of operation and be a source for continual of stakeholders helps a corporate reduce contractor, supplier, community, stakeholder engagement plan based development plan in several aspects. potential impacts on operations and shareholder, investor, creditor, government on each stakeholder group’s interests To build up and shape up good create opportunities for improvement agency, media, civil society/ academic and expectations. relationships with stakeholders, SCG by integrating their concerns into the and competitor. In 2014, SCG has According to stakeholder analysis considers influence and interest of organization’s strategy and operational announced and adopted the stakeholder in 2014, stakeholders who are the most each stakeholder group in line with improvement. It is also considered as practice policy, setting up a clear practice important groups to SCG’s operations the corporate capability to determine a challenge to develop a collaborative guideline for each stakeholder group. are customer, employee, supplier, appropriate strategies and approaches value creation between SCG and surrounding community, shareholder, to stakeholder engagement. stakeholders. 22 23

Communication with Stakeholders

COMMUNICATIONS/ STAKEHOLDERS KEY CONCERNS OUTCOMES CHANNELS

• Quality products and services • Customer satisfaction survey annually • SCG receives complaints/ feedback on • Environmentally-friendly • Channels for customer complaints or products & services to develop current manufacturing processes for recommendations or new products & services to meet green products and services • SCG corporate reputation survey every customers’ needs. 3 years CUSTOMER

• Welfare and remuneration • Employee satisfaction survey annually • Employee satisfaction survey leads to • Knowledge development at work • Attitude survey improvement of employee caring and and off work • Executive meets employee forum welfare, such as welfare on father on • Career stability and growth quarterly maternity leave. Stakeholder Engagement development. SCG adopts inputs and EMPLOYEE • Business direction and adaptation through Opinion Panel feedback from the panel to incorporate Opinion Panel is an approach which in the sustainable development strategic SCG Sustainable Development Committee plan to build up value for all involving • Ethics and transparency on • Clarification and support supplier to • SCG understands suppliers’ problems has been continually implemented to stakeholders. In 2014, SCG has held the business transactions understand business conduct and and needs, leading to the initiative of th • Knowledge and competency practices ‘Supplier Development for Sustainability’ engage government sector, educational 5 Opinion Panel on business ethics since development • Supplier visit to listen to problems and with an objective to improve suppliers’ sector, civil sector and other specific this topic becomes vital in building trust suggestions performance in several area such as loss SUPPLIER stakeholders to share opinions and among shareholders, investors and relevant reduction etc. perspectives toward SCG sustainable parties at corporate and national levels.

• Development of life quality and • Community satisfaction survey annually • SCG understands problems and needs generation of community’s income and every 3 years of communities and then proceeds • Protection and care of environment • Dialogue and survey through community with development program which SCG surrounding the community relation activities annually conducts by itself or collaborates with Recommendations from Opinion Panel in 2014 • Open house for community visit relevant stakeholders such as government sector and peers in the same industry. COMMUNITY • SCG employees should be engaged to formulate practice guidelines rather Corporate governance than adopting policies from executives only. • Performance and business growth • Disclosure of SCG operating results • SCG understands more about and compliance • Management with transparency quarterly and place information on expectations of shareholders and • SCG should regularly review, update and improve practice guidelines to be • Understanding of SCG operations SCG website adapts to communication plan to complied with current situation, showing indicators and outcomes • Shareholder meeting annually cover shareholders/investors’ concretely. SHAREHOLDER • Plant visit and CSR annually interested topics. Information disclosure • SCG should concern about stakeholders’ interest and disclosed information should reflect both financial and non-financial performance. • Role models for other organizations • Compliance to government regulations • SCG is acknowledged about directions • SCG should provide effective and accessible channels of information in management with transparency • Annual report and sustainability report and future trends for improvement on disclosure for stakeholders such as websites. and excellence • Opinion Panel annually current operations and strategic plans • Utilization of SCG capacity to support • Communication through articles and for the future. government sector media • Good awareness should be embedded among SCG employees and Being a role model • Transparent information disclosure • CSR activities or projects to create extended to relevant stakeholders. • Conducting business by minimizing collaborafive actions • SCG, as a role model and change agent, should utilize organization’s GOVERNMENT impacts on environment and capability to drive other organizations or relevant parties to value good AGENCY/ communities governance and implement in their organizations systematically. CIVIL SOCIETY/ • Natural resources conservation and • Religious principles can be adopted as a mechanism to build up corporate ACADEMICS usage at the utmost benefit culture morals, ethics, contemplation and wisdom among existing employees, to train new employees and to extend outcomes to external parties. 24 25

MATERIALITY RESPONSIBLE BUSINESS ACTION PERFORMANCE PAGE UNIT OPPORTUNITY

Corporate • Corporate Secretary To create a policy to apply a corporate governance • Update SCG Corporate Governance Handbook Supporting and encouraging companies 28-31 Sustainable Action Office principle and guidelines as the standard throughout and board of C8 regulations. in Thailand to implement corporate Governance • Audit Office SCG and to implement the principle in accordance • Update SCG Corporate Governance governance that meets global standards and Challenge • Governance and with laws, regulations and requirements of each Development Plan to comply with corporate in order to create business competitive- Nomination Committee country where SCG invests. governance regulations of the listed ness and sustainable growth on the basis companies in ASEAN. of business ethics. • Set up SCG Whistleblower System. • Implement risk assessment on corruption and raise awareness on anti-corruption to employees.

Health and Safety • Center of Excellence • To analyze the accidental risk, set standards, No work-related fatality of employee and less Uplifting the standard of businesses' 32-37 and Sustainability improve, and initiate behavior based safety for work-related fatality of contractors 36% safety management by transferring best Developement employees and contractors. practice that makes each company learn • Sustainable • To implement Safety Performance Assessment and develop for sustainable safety. Development Office of Programme (SPAP) which is applied as an efficiency each business and effectiveness monitoring tool. Climate Change E n ne tio rg ta y es & r Fu fo e Employee Caring • Corporate Human • To implement labor practices and human rights, Achieve Thailand Corporate Excellence Awards • Labor practices and human rights 38-45 e l D Resource Office focusing on engagement and commitment with on Human Resource Management Excellence implementation is accepted and used as a • Human Resource stakeholders and to conduct employee opinion for the 13th consecutive year. model for other business M e a Office of each survey regularly. • Collaborating with the Government for the in t l e c S r business • To develop a new learning model and to design labor development projects. e i c a D a l • Management an individual development plan in technical, • Initiating courses on coach capacity r R c m e i e t s Development management and leadership skills including to development for supervisor that leads to t y o s u y Committee adapt the learning way as an integrated method the development of leader in compliance r s c

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E experience, coached by supervisor. The courses will be conducted throughout • To embed corporate culture on SCG people for SCG, domestically and internationally.

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Source: KPMG International, Expect the Unexpected, February 2012 Sustainable Water • SCG Water • To initiate production process improvement • Recycle treated wastewater in the • Reducing water withdrawal by reusing 50-53 Management Management Committee project to enhance business potential in continuity. production process by 7%. discharged water, targeting at zero • To create sustainable development for water water discharge. resources and water treatment for re-use. • Improving production process efficiency and reducing water consumption per ton product. SCG has been ranked as a global materials and clean water, rampant Sustainable • Production planing • To improve efficiency of production processes in • Bringing waste and renewable raw materials • Increasing the competitiveness by developing 54-57 leader in sustainable development in population growth in emerging countries Resource office of each business order to maximize the use of raw materials. to be circulated, replacing the use of natural innovative value-added products and • SCG Waste • To utilize alternative and renewable raw materials. resources by 6%. services that are environmentally friendly. Construction Materials of Dow Jones and high population density in megacities, Management Management • To manage waste to be recycled and value added. • Create innovation from collaboration among • Creating engagement with stakeholders to Sustainability Indices (DJSI) for the inadequate food, as well as degraded Committee • To encourage consumers to use environmentally businesses in waste management. meet and understand real needs of 4th consecutive year. It is a result ecology and forest. friendly products and services. • Carry forward the environmental protection consumers for development of innovative approach for the better living of all products and services that are of effectiveness development and According to materiality assessment stakeholders. environmentally friendly. performance improvement in aspects of SCG’s business operation, the SCG Sustainable • SCG Contractor • To priortize contractors based on the impact of • The amount of green procurement is 8.2 • Strategic suppliers will be provided a 58-65 of economic growth, social responsibility Sustainable Development Committee has Value Chain Sustainable Development sustainable development. billion baht. long-term development as a Co-creation and environmental conservation, especially assigned every relevant and responsible Committee • To expand sustainable development approach, • All contractors in the manufacturing process to create mutual business opportunities. • Corporate Procurement based on moral and ethics throughout have been certified SCG Contractor Safety • Developing products and services linked when social and environmental conditions party of each materiality to conduct Office upstream and downstream. Certification System. to the real needs of customers, resulting are fluctuating and crashing rapidly and an action plan and strategic direction, • Procurement office of • Sales of products and services of in development from upstream to each business SCG eco value account for 31% of revenue downstream. severely, such as extreme climate change, responding to risk management in • SCG eco value committee from the total sales. • Creating business opportunities with fuel and energy scarcity when price is accordance with a sustainable development • Corporate Supply Chain customers as Co-creation. fluctuating dramatically, insufficient raw approach. 26 27

Value Creation

Corporate Governance 28 Health and Safety 32 Employee Caring 38 Energy and Climate Change 46 Sustainable Water Management 50 Sustainable Resource Management 54 Sustainable Value Chain 58

Global society is growing and developing more than 100 years, manufacturing products purchasers to have more options, resulting in SCG and consumers. SCG eco value and HVA constantly, ranging from the improvement to and providing services with the focus to reduce sales of business contractors and to create products and services are ones of options for respond community and social needs that leads environmental impacts and to prioritize social indirect value toward environment. final consumers who can help creating good to goods exchange, trade, business sector responsibility by implementing the 4 core SCG Contractor Safety Certification System things, benefit and value for this society and and industrial sector. Globalization connects values in compliance with the vision of being (SCS) emphasizes on working system which the world. all countries to become unity. Products and role model in corporate governance and enhances the safety of contractor’s employees, According to the previous performance, services are distributed globally, as if they are sustainable development. reducing accidental risk. It decreases accident looking back in a short term, it may not be in the same market. In additional, information SCG has set up the corporate strategy statistics and reduces medical expenses and motivated to implement practices because the spreads rapidly in the social media, owning to on sustainable development as SCG SD property damages, building morale and spirit of results in value do not occur in a short period globalization. Pathway. That is to say, SCG does not focus on employees, resulting in well-being, happiness of time, such as investing in energy efficiency Due to the rapid growth, the higher the relevant supply chain only, but also attempts and security of employees’ families. project in order to reduce cost. Many projects population and the migration from rural to to expand the idea of sustainability toward SCG eco value, environmentally friendly are initiated continually, resulting in the gradual urban society are all the causes of natural other stakeholders, starting from SCG internal products and services, are options that have decline of investment return rate because the resource consumption, both direct and indirect. supply chain to external supply chain. As for positive impacts toward environmental impact projects those have good rate of return have Changes can be seen clearly from natural upstream, from SCG Green Procurement to reducing, especially, “Eco Use” products and been implemented. When the energy price is resource scarcity, climate change, severity of SCG Contractor Safety Certification System to services which affect consumers directly. These increasing, more yields are gained. These may rain storm and wind current as well as stress downstream, from High Value Added Products products and services result in values such as not happen if the corporate visual the return from struggling attempt for the financial factor and Services (HVA) to SCG eco value products energy saving, water saving, product life in a short term. But if looking in a long term or to make life convenient. These impacts derive and services which SCG views that these good extension and so on. These values reflect in taking risk factors in to consideration, it can from the development to meet human’s needs, things should be expanded externally to other better environment, health and happy society. lead to further sustainability development. without considering the balance of growing organizations or society, apart from supply High value added (HVA) products and Actions or development are valuable not economy, happiness of society and well-being chain, to respond customer needs by one stop services create value directly to consumers. only in economic aspects but also in social environment. All of us, especially in business service, creating higher social value. They require research and development (R&D) and environmental aspects, both positive and sector, are essential in driving the sustainable Green Procurement does not only create to improve, develop, meet increasing needs negative. Therefore, value of all three aspects development in the future. value for SCG and contractors who are the and expand markets. These things initiate should be considered to balance the integrity, SCG has been conducting business for direct producers, but also creates value for innovations that lead to pride and value of transparency and accountability together. 28 29 and risk management; as well as overseeing the appropriate short- and long-term remuneration. overall image of the organization. In addition, In addition to the data from the current year the Board is also tasked with a significant role and comparing them with retrospective data in in overseeing, reviewing, and evaluating SCG’s various aspects, findings from surveys on operating performance and the performance of the views of management employees on the Corporate top executives independently to ensure that President & CEO and top executives are they are in line with set plans. also incorporated in the consideration of the Governance As for the consideration of the remuneration remuneration. (The remunerations of the for the Board of Directors and the Sub-committees, Board of Directors and the Sub-committees which consists of a fixed fee, attendance fee, and payments of top executives are shown in and bonuses at a fixed rate not exceeding 0.5 the Annual Report 2014 under Management SCG Corporate Governance Structure percent of the dividends paid to shareholders, Structure Section.) the Remuneration Committee presents relevant With the vision of becoming a regional Annual General data and suggestions to the Board of Directors business leader, SCG has expanded its Meeting of Shareholders Create Return and Appoint, Remove and Long-term Value Approve the Remuneration for further consideration, taking into account business to all ASEAN countries and

The Board of Directors comparisons of remunerations for committees implemented it policies on adopting corporate of leading companies listed in the SET and governance principles and guidelines as a The Governance & Nomination Committee The Audit Committee those in the same industry as well as SCG’s standard all through SCG, which are localized to operating performance. Subsequently, the correspond to the laws, rules, and regulations The Remuneration Committee The Internal Audit Office amounts are presented for approval at the Annual of the individual countries in which SCG invests, CSR Committee for General Meeting of Shareholders. in order to increase the competitive capability Sustainable Development As for the remuneration of the President & and achieve sustainable growth on the basis President & CEO CEO and top executives at SCG, the Remuneration of business ethics. Moreover, SCG has also Committee provides relevant data to the Board exchanged its knowledge and experience on SCG Top Executive SCG Risk Management Committee of Directors, with SCG’s operating performance, issues regarding corporate governance such Corporate Administration implementation of policies given by the Board, as adherence to good corporate governance Corporate Corporate Risk Compliance Unit Management Unit implementation of SCG Sustainability guidelines, on both domestic and ASEAN-wide Finance & Investment Development Plan, which encompasses level, promotion and compliance of ethical SCG Investment economic, social and environmental issues, practices, anti-corruption, and complaints and the overall socio-economic circumstances procedures for stakeholders. SCG Cement-Building Materials SCG Chemicals SCG Paper taken into account in the consideration of the

Treat Equitably and Promote Sustainable Growth All Stakeholders Reporting Line Key corporate governance activities in 2014 1. Revision and improvement of the SCG Corporate Governance Handbook so that it corresponds to SCG operates its business with directives for corporate governance development directives of the corporate governance guidelines of the Stock Exchange of Thailand, the Thai Institute of Directors Association (IOD), and the criteria of the ASEAN Corporate Governance Scorecard. Additional responsibility, transparency and fairness, to the Board of Directors, monitoring, supervising, policies and good corporate governance approved by the Board of Directors were also appended. observes the principles that have been practiced and evaluating levels of compliance to SCG 2. Revision and improvement of the Charter of the Board of Directors and the Charter of the Sub-committees. through generations and are outlined in SCG corporate governance policies. SCG does this 3. Disclosure of all types of remuneration of the Board of Directors at the Annual General Meeting of Share Code of Conduct, as well as operates on the with a conviction that SCG Corporate Governance holders and adding the remuneration of the Board of Directors to the agenda to be approved at the basis of balanced and sustainable success, with principles will constitute a management system Annual General Meeting of Shareholders. the Company’s Board and top executives serving capable of creating trust among all stakeholders 4. Establishment of the SCG’s Procurement and Vendor Selection Policies and Guidelines, which clearly define the procurement policies, qualifications and application of SCG suppliers/business partners, and as role models in adhering to SCG Code of and increasing our competitive capabilities for business transaction procedures to ensure a systematic, fair, and transparent selection process Conduct and Corporate Governance principles. sustainable growth. 5. Creation of the Board Skill Matrix to be used in the consideration of the candidates nominated to replace As for the Company’s vision for 2015, SCG is Furthermore, the Board of Directors has directors retiring by rotation. strongly determined to develop its organization the duty of setting SCG’s visions, missions, 6. Executive in-house seminar to enhance essential knowledge for board members and top executives on into a role model for corporate governance. To strategies, business plans, goals and policies, “The Roles of the Board of Directors in Strategy Formulation and Business Planning” by Ms. Kate Costello, this effect, the Governance and Nomination by cooperating with top executives on both an expert from Governance Matters (Australia) as the seminar leader. 7. Improvement of SCG’s corporate governance development plan in accordance with the guidelines of Committee, a Sub-committee, has the duty short- and long- term operating plans; formulating ASEAN Corporate Governance Scorecard. of revising policies and guidelines, suggesting the Company’s corporate governance policies 30 31

Board Skill Matrix

• on businesses and industries which are related to SCG Macro-management knowledge, • on organization management and HR management in government and expertise and experience private sectors • on economy, investment, policy and strategy formulation • on marketing and public relations • on foreign affairs • on risk management

• on laws and government regulations related to business operations Specific knowledge, expertise • on accountancy and finance, with specific knowledge on financial statement; and experience accounting standards, or current/prior position as a member of an audit committee of a listed company For the first time in Thailand, • on communication and information technology SCG has been labeled a “Certified Company” for the conglomerate Corporate Governance knowledge, • on corporate compliance, including the formulation of relevant policies company from the Private Sector experience and expertise and guidelines • on stakeholder engagement Collective Action Coalition Against Corruption Council

SCG Code of Conduct employees can answer questionnaires to the operation and future preventative measures Subsidiaries and associates under the The four core values of SCG’s ethical measure their understanding of the Code of to forestall repeated cases. Currently, the management of the SCG are kept informed business conduct, which is continuously practiced Conduct as well as share their views and make Internal Audit Office is responsible to monitoring, so that they act in line with anti-corruption by the Board of Directors, management, and suggestions on the Code of Conduct through presenting, and reporting the progress to the policies corresponding to the mother company. employees at all levels, have been an important various channels on the intranet. Responsible Audit Committee at every meeting. SCG supports subsidiaries registered at the factor contributing to the Company’s sustainable working units for the different issues can then Thai stock exchange to establish clearer business growth. In 1987, the Board of Directors provide relevant advice. Anti-corruption anti-corruption policies, to assess risks and compiled business conduct guidelines for the In the event that employees or external After becoming a “Certified Company”, to conduct the IOD self-evaluation in order to first time in written form in Thai as well as in stakeholders encounter non-compliance with SCG has continuously set up campaigns to improve their anti-corruption measures and English as a directive for all employees at all SCG Code of Conduct, they can notify SCG create awareness and support a good culture increase their efficiency. levels, with the Board of Directors and top of such corruption and breaches of laws, of corporate governance through workshops in SCG has extended our measures of executives serving as role models. After four regulations, or Anti-corruption policy through all working units with high risks. SCG employs support and help for anti-corruption activities revision, with the latest revision in 2007, the the “SCG Whistleblower System” available both a policy of “Three Lines of Defense” for working to our supplier/contractor and established the Code of Conduct was renamed and published in Thai and English. Once a claim is submitted, units with risks: Employees and heads from the “SCG Supplier Code of Conduct”, a concept under the name “SCG Code of Conduct Handbook” the Internal Audit Office is responsible for first line can assess risks and the effects of risks for business operations on the basis of In the Code of Conduct, guidelines for each investigating and taking further appropriate at a given moment and in the future. Control correctness, honesty, ethics and transparency business are compiled, categorized, and actions as necessary, all of which are conducted mechanisms and measures for risk management for sustainable business operation. The SCG furnished with examples, with a list of codes in confidence. To this effect, SCG ensures the are then planned. This includes cases with new Supplier Code of Conduct contains guidelines clearly specified for greater clarity. security of the system, and a specific server risks. The first line must be able to learn about on the ethics of business, workforce and SCG cultivates its code of conduct in separate from other usage functions is used for risks and set appropriate control mechanisms human rights, occupational health and security, employees from their first day of their employment, the storage of such data. Additional measures and measures for risk management. The issues of the environment, law and regulations. and all new employees are given the “SCG Code are also put in place to ensure the protection working units for risk management and working Supplier/Contractor must sign their agreement of Conduct Handbook,” which is considered and fair treatment of reporters and informants. units for the supervision of activities form the on the Code of Conduct as mentioned. as part of the regulations which all employees In 2014, a total of 26 complaints were second line. They help with the examination SCG has furthermore set up systems must follow. In addition, SCG arranges training filed, eight of which are still being investigated of risks, plan processes and gather and give to receive claims via our website and other on the principles and guidelines of SCG Code and 18 of which were already investigated. advice to create trust in sustainable business communication channels and taken supportive of Conduct as well as raise awareness on their Among the 18 complaints, one fell into the performance. The Internal Audit Department measures to create awareness among our importance via various forms of communication. category of corruption, and another fell into constitutes the third line. It has created the stakeholders in all sectors with regard to this These include communication via short video the category of non-compliance, in which “Anti-Corruption Guideline” for investigations issue so that they truly place importance on clips that are easy to understand and correspond the financial impact was insignificant and the to ensure a good follow-up and supervision of using various suitable means of communication to contemporary lifestyle, distributed via employee was expelled in accordance with the activities in accordance with ethical principles and channels. In 2014, no claims related to e-newsletters and the SCG intranet. After Human Resources regulations. In addition, the and policies against corruption of the first line corruption were found. learning about SCG Code of Conduct, Company has used these complaints to inform and second line at every annual investigation. 32 33

has an aim of becoming a sustainable “Injury to reduce risk of exposure to moving machine, Health and and illness free workplace”. pivot, hazardous chemicals, and working at SCG has set the legal SHE Committee height. Safety structure for each plant. The committee consists In addition, the business also aims to of employees from senior management level and create and cultivate the habit of working operation level at the same ratio with the purpose safely to consumers, employees and of creating a platform for regular discussion contractors, through the implementation of safety and creating involvement in improvement of our observation and the cultivation of safe cases per 200,000 Man-hours safety management system. behavior (Behavior Based Safety) in the Due to the variety and diversity of the factory. SCG has set the indicators of industry related to each company, SCG has success, which are Leading Key Performance Lost Time Injury allowed each business or company to manage Indicators (KPIs) or Key Activities Indicators Frequency Rate its own risks according to the concerns of (KAIs), for executives, supervisors, employees (Employee/Contractor) stakeholders. The details are as follows: and contractors to be a part of the implementation. This action decreased the Case per 200,000 Man-hour SCG Cement-Building Materials accidents caused by working with machinery The most significant risks of SCG Cement- by 50 percent from the year before. 0.05/0.06 Building Materials are : 2) Transportation and road accidents, 1) The hazard from working with SCG Logistics apart from the establishment of The Health and safety of our employees machinery and falling from height. The cause the Skills Development School, for training of and contractors is a priority for SCG and of accidents can be divided into two parts: the 12,919 drivers in 2014 to the total of 30,842 our stakeholders. This matter affects condition of equipment and unsafe behavior drivers so that they are aware and possess the morale and motivation of more than of the workers. The business has set up a the skills to drive safely, the company also 100,000 employees and contractors. The standard procedure for safe machinery offers rest areas for each route as well as accidents that occurred in 2014 injured more operation, covering all machine types and risks monitoring and control equipment (Logistic than 244 people. Most of them resulted from and to improve safety of working conditions. Command Center) to monitor and control the work related causes (mechanical equipment This is done by encouraging employees and vehicles at all times. In 2014, various projects and falls from height). As for the accidents business partners to get involved in exploring were initiated to reduce accident risks as that have caused death, the majority involved various risks and applying foolproof concept follows: fleet traffic. Therefore, it can be concluded that SCG must intensify efforts to accidents on sight deaths as well as from transport and traffic related. SCG has established policies for safety and occupational health, as well as clear Saving our employees from danger is equivalent to saving safety management structures at all levels. In their family. That is why we set the highest standard and addition, SCG has also created an operating goals for safety and the issue of safety is uncompromising. framework and guidelines for the management of occupational health and safety (SCG Safety Framework) so that each company can adapt and use this to sustain our health management system, based on the TIS / OHSAS 18001 safety standard. Furthermore, SCG encourages our employees, contractors and the community to participate in raising the standards Pichit President Maipoom SCG Cement-Building Materials of safety in the work place. This is because SCG 34 35

• In Cab Coaching project: The training Tharua, Phra Nakhon Sri Ayutthaya Province as a management process of industrial health check-up and biological monitoring of more than 1,987 high-risk drivers to enhance well as at Kaeng Khoi and Baan Mho, Saraburi hygiene by using the International of exposure, which has lead to employees’ their skills and attitude toward safe driving province. Labor Organization Occupational Safety disease control within the working area. through group trainers. • Risk management and the creation of & Health Management System, ILO As for assessing the health risks of • In Cab Camera project: The random an accident database together with the Thai OSHMS 2001) as a guideline. The results of the employees, the guidelines from the installation of video cameras in the front of the Roads Foundation in order to explore and define operations can be grouped into employees International Council for Good Practice vehicles of more than 1,245 high-risk carriers the risks on the pilot routes that should be who are exposed similarly (Similar Exposure Guidance on Occupational Health Risk in order to observe their driving behavior and resolved, especially the four main routes that Group: SEG), the level of exposure Assessment and the American Conference give warnings of unsafe driving. are used to transport cargo and coal for the (Exposure Rating) of employees in each risk of Governmental Industrial Hygienists • Delivery Plan project: The creation company. factor, and an assessment of the health (ACGIH) were implemented in order to assess of a security database on the transportation This was to ensure that transport routes risk of individuals (Individual Health Risk the health risks of the employees and routes to identify specific points that might used by SCG would focus on safety of the Assessment: HRA) in order to prioritize the prioritize the Risk Level to contribute to be dangerous and appropriate rest areas so community and those who used the roads level of risk, which is useful in determining the formulation of measures to reduce and that the drivers can be informed and become before applying the results and solutions to measures to reduce it or control it to an control risks as well as correctly monitor careful when entering dangerous zones. This other nearby areas. acceptable level. their health. SCG Chemicals believes has been completed for 19 main routes. The risk level of HRA has also been that its systems and implementation will Although the results of our efforts have SCG Chemicals used as a guideline to consider measures sustainably reduce health risks for its reduced fatal accidents in fleet carriers and Fire accidents, chemical spills and to control exposed risks from work through employees and contractors. third-party by 50 percent, the goal of ‘Sustainable explosions in the manufacturing process medical surveillance, such as the annual Transportation Safety’ is still the driving force are the main risks that cause concern for for SCG Logistics to continue to find new ways the communities surrounding the industrial to reduce accidents in the future. estate and are unacceptable for the company To expand the body of knowledge in the itself. Therefore, since 2014, SCG Chemicals managing road safety to outside organizations, have hired professional companies to do SCG has worked with the Road Safety Group of Quantitative Risk Analysis for Worst Case Thailand, Thailand Road Safety Network, Thai Scenarios in order to improve and develop the Roads Foundation and Thailand Development production process, the monitoring process Research Institute (TDRI) to initiate a project and the process of safety management as called ‘Road Safety for Community’ with the a whole. In addition, this also included the objective of establishing standards for road development of experts within the organization The investment in safety is a ‘Must’ and it should be safety in the pilot areas and creating engagement to be able to identify unknown hazards, emphasized evenly to all the factories. Senior staffs are with community, local government, state understand the dangers and control the risks responsible for initiating and developing safety practices government and alliances to jointly build a in 2 pilot companies before extending this to and overseas safety of their subordinates. culture of safe driving and safe communities. other companies. As a result, in 2014, The committee has divided the project into accidents related to the production process two parts as follows: were reduced by more than 50%. • Community development together For health risks that may result from with the Thailand Road Safety Network to by exposure to hazardous chemicals in the educate the pilot communities regarding the manufacturing process and may affect the management of the risk and communication health of the workers directly, SCG Chemicals Cholanat President Yanaranop SCG Chemicals with the responsible agencies for improvement has collaborated with the Faculty of Public in 7 communities of the area, which are at Health, Mahidol University in order to develop 36 37

SCG Accident Record

Fatality

SCG Paper Cases Occupational health and safety risks this also requires employees in each level to As a result of the above operations, 16 in SCG Paper can be divided into two main engage in a continuous safe observation accidents at SCG decreased from the categories, which are accidents from so that management could demonstrate its previous year, with no deaths in 2014. 12 machinery and the risks of fire. Regarding leadership in the safety issue and set a good The Safety Performance Assessment Programme (SPAP) has been used to 8 7 the control of risks from the machinery, the example for the employees to follow. 3 6 Regarding fire risks in 2014, there was assess the efficiency and effectiveness 8 paper business aims to encourage employees 6 4 5 of the reduction and control of risks 4 5 and business partners to adopt the Karakuri a fire in a pile of recycled materials. Although 3 3 Kaizen guidelines and apply the No Touch this did not directly impact the corporate’s on occupational health and safety of 1 1 0 based approach to maintenance, or Total business or image, it directly affected the the individual companies or factories 2010 2011 2012 2013 2014 Productive Maintenance (TPM), in order confidence of the community around the for more than 10 years. SCG has set

to improve the condition of the machinery factory. Hence, the paper business focused targets for all its factories to achieve Employee Operation Contractor Logistics Contractor and how it works. This not only helped to on the process safety management system at least ‘Succeeding’ or level 4 on the optimize production but also reduced the risk of and adapted it for use in its plant through occupational health and safety level, which is higher than the general exposure to machinery in the various hazardous restructuring the administration; adding Total Accident Rate areas as well as jointly raising standards in security to take responsibility; and adding factory safety standards. In 2014, There Case per 200,000 Man-hour safety management of business processes teams to reassess the security systems are 17 factories passed the evaluation through Safety Best Practice Sharing, which fire control, assess equipment and the of SPAP level 4 which is more than 20 1.2 enables each company to learn and develop emergency team in order to regain the percent of the total number of plants that 0.9 even further in order to achieve a sustainable confidence of the community. must be assessed. O.83 safe and secure environment. In addition, 0.6 O.46 O.41 O.36 O.36 O.32 O.37 0.3

O.23 O.22 O.20 0

2010 2011 2012 2013 2014

Employee Contractor

Believing that employees are the most valuable asset to the Lost Time Injury Frequency Rate

organization, we commit to continuously promoting safety Case per 200,000 Man-hour

awareness not only in the workplace. Once employees 0.3 believe and see the benefits, they will be motivated to urge family members and others behave safely. 0.2 O.13 O.12

0.1 O.07 O.07 O.06 O.10 O.12 O.06 O.05 O.05 0 2010 2011 2012 2013 2014 Roongrote President Rangsiyopash SCG Paper Employee Contractor 38 39 Nations Global Compact (UNGC) since 2012, From past to present, the achievements SCG respects the diversity of labor in the of SCG, including human rights and labor corporate; SCG does not discriminate against practices, have been recognized through gender, age, or physical conditions; and it awards and approval in various aspects from Number of Employee respects the rights of labor to gather up in organizations both in Thailand and at the global Employee Caring the corporate. level. These include awards for sustainable Good human rights and labor practices development, business conducting according People will promote and create opportunities for to the ‘Sufficiency Economy’ philosophy, being building up reputation and developing a model of business governance, being the most capabilities for sustainable success in business admired organization, social and environmental 51,100 operations. Conversely, if the human rights and responsibility, and human resources management. labor practices proceed incorrectly, legal risks The most significant award and approval regarding will ensure and cause losses to the economy human rights and labor practice that SCG has and business sustainability. SCG would then received is the Thailand Corporate Excellence be unable to achieve its vision of being the Awards, an award which SCG has achieved leader of sustainable business in ASEAN; SCG continuously for the 13th consecutive year. would be unable to be a model of corporate Evaluating such achievements is a tool used governance and sustainable development; in risk management and creating opportunities SCG would be unable to be a corporation of in human rights and labor practice. Other than the innovation which people seek to work with, human rights and labor practices of SCG which and most importantly, all of this would impact also promote and corporate with various the trust of stakeholders including employees, contractors to ensure that the human rights and suppliers, contractors, customers, and the labor practices are good for the employees of relevant government agencies. business contractors.

SCG Management Development management, as well as in labor and SCG places emphasis on involvement Challenges of human Committee (MDC) leads by President human rights management. and building a commitment with stakeholders. SCG’s Labor Practices and resource management and SCG regularly gathers employment feedbacks organizational development and CEO, initiates direction and human Human Rights Focus in Recent Years and opinions through engagement surveys, as • SCG adopts a policy of hiring those with 1. Promote labor resource strategy for the whole Labor Practice and well as surveys on other topics both formal disabilities, and consistently supports activities standard and human rights organization. Business Unit human Human Rights and informal activities to exchange ideas and to improve the quality of life for the disabled. In to create opportunity. resource committees and company human SCG emphasizes on the implementation Reduce risks in labor issues resource committees are downstream of labor laws and internal regulations, such practices with state labor agencies to ensure 2014, SCG received 4 rehabilitated workers from and confidently guarantee organizations that are translated human as business code of conduct and strict SCG’s human rights and labor practice is the Industrial Rehabilitation Centre, Phathumthani the congruent with laws and resource strategy into actions in labor contract compliance, as well as approved and can be used as a model for Province, Social Security Office, for 1 month. On regulations in both local and recruitment, wage and remuneration publications to support the international other business in order to cooperate with completion of the internship, SCG hired 1 of the international. management, employee development, declaration of human rights. Being a government sectors in the development of rehabilitated workers. At present, there are more 2. Develop employees performance management, career supporting participant of the United their other labor projects. than 30 disabled persons working with SCG. to acquire potential and knowledge to work in their current jobs, as well as preparing for business We feel that friends and seniors are very warm, growth and future changes. helpful and offer kind advice. They sent us for the adequate external training and treated us like normal employees. We would like to work at SCG until we retire.

Natchai Phukbangchak and AutoCAD Draftman Phakawan Kullasawasdi SCG Cement-Building Materials 40 41

Regarding the employee care program prior to retirement, SCG provide Happy & Comfortable - That’s 2 words describing my excellent care and pave experience working with SCG for these almost 3 years and the way for a happy and still counting. The working environment here makes me healthy retirement by feel like I’ve been surrounded by my real family. A non-stop providing knowledge learning experience has also been given while working at about health, saving, social SCG. Some different cultures that we have in the company security, gold healthcare make us learn and exchange more knowledge between cards, and other matters local and expatriate employees. in so many essential areas before retiring, including exploring options for Nurluri Sales Coordinator generating revenue after Agustin SCG Plastics Co.,Ltd, Indonesia retirement Relationship building activities for retired employees

• SCG emphasizes on employee formally and informally. SCG also respects Development Plan in SCG Labor welfare and benefits that are even more caring fairly and equally, without the rights to organize and join labor unions Practices and Human Rights flexible and can be adapted according discriminating against gender, age, or and collectively welcome feedbacks for the • Our experience from receiving to the suitability and readiness of each ethnicity. To support this philosophy, SCG continuous improvement of appropriate rehabilitated workers for internships in business unit. uses a personnel management system employee care. the previous year showed us that the • Planning to improve and widen with the same principles and standards • SCG emphasizes on caring for facilities for disabled workers, in training the scope of our labor practices and in all aspects of employee welfare, all employees, from when they first join or work areas, were insufficient. SCG human rights. By further expanding the recruitment, wage and remuneration the organization through to retirement. must consider improving our facilities to scope to include business partners in management, employee development, Caring for employees before their enable wheelchair users to travel around the Business Supply Chain, SCG will set performance management, and career retirement is one of the important aspects freely within the organization. This can be standards in labor practices and human management. SCG employs a large that SCG provides care for. There is achieved by defining a plan to implement rights that are suitable and appropriate for Sutthichai Chaitanakunmongkol and continually growing ratio of female training prior to retirement to give the next improvement. our business partners in each category. Manager employees, while SCG also has a employees the knowledge to prepare • Reviewing and updating employee • Emphasizing our plans to create Office Supplies and Marketing Corporate Procurement Office significantly increased number of themselves to have the right mental and welfare and benefits to meet the needs opportunities for increased business, such employees of different nationalities from physical approaches needed when they and demands of Diversity are still as activities promoting better quality of overseas. Currently there are 15,437 reach their retirement age. They learn incomplete. As a large and varied business, life for the handicapped, and requesting overseas employees from a total of 51,100 techniques for saving and systematic the demands for designing appropriate certification of standards complying employees. SCG foreign employees financial planning, as well as gaining an welfare and benefits create a complicated with labor laws to provide an even more regularly participate in experience understanding of how to utilize their Health issue. In this respect, the next phase extensive and comprehensive business exchange programs with SCG’s Thai Security and Social Benefit Security should be to emphasize the design of range. employees and undergo training together. correctly. There are relationship building • SCG respects employees’ rights activities for employees who will retire for to gather up into groups, whether it could them to build strong relationships and be the Welfare Committee or Employees’ morale. In 2014, a 4 day / 3 night activity Committee. There are channels for was held in Chiang Mai – Chiang Rai employees to provide their feedbacks both province. 42 43

Employee Development has developed the New Learning Model, Other than developing New Learning This is coupled with the development of According to SCG’s rapid expansion, which follows the same approach to Model for SCG, we are still developing general knowledge, such as through the the number of employees both in country personnel development as is used by programs for continuous employee TQM, Safety, Code of Conduct, and and overseas has also increased rapidly. leading companies around the globe. The development. The board of directors, senior Innovation programs. The technical SCG had a total of 51,100 employees in New Learning Model includes the creation management, and all employees place competency of employees in their specific 2014, an increase of 1,813 people from of individual development plans to each importance on personnel development, fields is also developed, enabling the previous year. This number is expected employee with a focus on technical, which has been a highly valuable asset of employees to perform their work with to increase rapidly again in the future due management, and leadership fields. This the organization from the past to present. maximum efficiency. Furthermore, SCG’s to our continued business growth. vision includes the implementation of All employees at all levels from operations learning emphasizes a combination of With this leap in employee numbers, blended learning. Our focus is to assign to management, both in country and learning through real work practices SCG must increase our capabilities of tasks to employees so that they learn overseas, have opportunities to develop (Experienced Learning), teaching and developing our employees to their full from real experience with their supervisors their own abilities to prepare for the learning on the job from supervisors and potential and abilities not only for the serving as coaches to provide more company’s and their own sustainable colleagues (Learning from Others), and present, but also to develop them so that advice. Blended learning will combine growth from their first day as an employee, learning and training in the classroom they are prepared in the future to deliver active classroom learning with digital such as SCG Ready Together for new (Formal Training). In 2014, employees business solutions that keep pace with learning to be used more substantially to comers to gain SCG working environment, had on average approximately 10 days the expansion and context of our rapidly promote a learning culture of Self-Driven build networking, emphasize on social of training changing business. Our aim is also to Learning. It reflected caring from managers responsibility and environment, including Organizational culture of seniors support regional employee development for people development. In addition, activity on it such as check dam projects. teaching juniors that is always observed in terms of ensuring that course content the Company is developing a system to In the area of business development by all employees, SCG recognizes the and instructors are of the same standard accommodate the transfer of knowledge through the Abridged Business Concept importance of developing the potential as SCG’s, and that they have the various to future generations, to teach them what (ABC) program, as well as on Leadership and abilities of all supervisors to systems and guidelines to support them. is already good, and to develop them and Teamwork, such as through the effectively “teach” or “coach” those under To this end, SCG with the approval of the further. Leadership Development Program (LDP). their supervision at all times. Each business board of directors and senior management,

SCG Employee Development Courses

Level Leadership Skill Business Knowledge Functional

SCG Ready Together Program • Business/Function Orientation We use the SCG training roadmap as a model, adjust it to suit New Employee • LDP1* : the context of Indonesia, and then implement it to develop our • ABC : Abridged Business Concept • TQM/TPM/Safety Lead Self people. This adjusting gives our employees an overview of business • BCD : Business Concept Development • TRM : Training Road Map/ and teaches them what is necessary, especially with regard to • LDP2* : Supervisor • MBA Scholarship OJT : On the Job Training what they will use in their own work. For their progress, it also Lead Team • Technical Scholarship teaches them how to lead others and facilitate teamwork. In my opinion, the important thing for enhancing sustainable learning is • MDP : Management Development • TRM : Training Road Map • LDP3* : Manager Program /Project Short Course to make everyone work together on the projects assigned to them Facilitate at the same time, with a supervisor closely providing instructions. • Ex MBA Scholarship • EDP : Senior Executive • AMP : Advanced Management Program • Overseas Seminar Fauzan HR Manager Executive Development O. Inak PT. SCG Indonesia, Indonesia Program

* LDP : Leadership Development Program 44 45

The development of foreign employees and of Thai employees assigned to work overseas is therefore an important issue. As a result, SCG holds preparatory courses for those employees assigned to work abroad, such as the SCG Go Regional Program consisting of 5 core components which promote each other and are coherent. These SCG developed the culture of comprise Business Understanding, Self-Driven Learning. One of learning Organizational Impact, Interpersonal objectives as showed in this picture Understanding, Global Outlook, and is to emphasize reflection from the language of the country in environment and social responsibility which SCG is conducting business. activities.

group prepares high quality programs to model has incorporated international SCG prepares courses for local programs. The development programs are Five Components for develop the potential of its supervisors to courses standards such as those set in employees in the various countries intended to develop all SCG employees SCG Regional Program be coaches known as ‘Leader as Coach’, the Abridged Business Concept (ABC) or in which we have investments. These working overseas so that they have which follows a standard centralized Business Concept Development (BCD) in courses share the same standards as access to equal knowledge and abilities Business Understanding curriculum that is applied across SCG both order to emphasize, strengthen and clarify those in Thailand, such as the Abridged as are available in Thailand. We have at home and abroad. our Company culture. Business Concept (ABC), Business also established a threshold for foreign Organizational Language From the solid foundation of SCG’s employees of high potential (HP). SCG Impact Concept Development (BCD), and People Development Abroad employee development in Thailand, we Leadership Development Program shall put this group of employees Interpersonal Global In order to facilitate the continued have taken this approach to be applied (LDP) as International Programs, and through a plan of continuous and Understanding Outlook regional expansion of SCG business, it is to the foreign countries in which SCG other Technical Competency and varied development programs that are vital to foster organizational culture of SCG has invested so as to ensure compliance General Knowledge development both challenging and suitable. People among both foreign employees and with our corporate vision of becoming the Thai employees who are required to travel sustainable market leader in the region. overseas to work. In this way, we are able The development of foreign employees to create a working model in keeping with and of Thai employees assigned to work SCG’s approach which holds to the SCG overseas is therefore an important issue. SCG is always focusing on employee caring in order to obtain business philosophy and Open and As a result, SCG holds preparatory better outcomes in employee development. As a Project Director, Challenge in working, which SCG courses for those employees assigned I am very proud to engage and create changes for the corporate employees have adopted for the sustainable to work abroad, such as the SCG Go sustainable development. Even knowing that I may face operation of the company. In 2014, SCG Regional Program consisting of 5 core challenges, I feel proud to take responsibility of this position communicated the correct knowledge and components which promote each other and have chances to apply my HR and business knowledge and understanding to our employees, beginning and are coherent. These comprise Business experiences and add value with work. As a female executive, I with those operating overseas to serve Understanding, Organizational Impact, as Role Models sharing the SCG People Interpersonal Understanding, Global can say that gender is not the restriction for work. Just work with philosophy and culture with the Company’s Outlook, and the language of the country efforts and full competencies foreign employees. Additionally, our working in which SCG is conducting business.

Supaporn Director Chanchamroen Learning and Talent Transformation Program 46 impact on climate change and the Highlight Performances in environment. The cement plants were 47 organization’s reputation. SCG has 2014 able to switch to using alternative fuel by established Energy Management 900,000 Gigajoule which is equivalent to Energy and Climate Change Creating Energy Security Strategy policies based on the advantages and • Signing long-term fuel a reduction in greenhouse gas emissions disadvantages in terms of natural of 75,000 Tons per Year. purchasing agreements in ASEAN countries Creating energy resources for each country in which we where SCG has invested • Adopting gasification technology security Energy and To secure energy have invested. Production efficiency • Exploration and search for new into the building material factory to increase supply with improvements, increases of alternative fuel resources utilization of biomass fuel and alternative appropriate cost energy usage, exploration and research fuel for steam generation. Climate Change Enhancing the Efficiency of Energy for new alternative energy sources along Enhancing efficiency Consumption Launching Greenhouse Gas Reduction of energy with environment-friendly products In 2014, SCG made a total of 3.4 Products and Services consumption and services development are all Billion baht in investments to increase • Propylene products reduce Must-have for energy conservation and Stakeholder Engagement management approaches that SCG the efficiency of energy consumption, and greenhouse gas emissions from the GHG emissions Alternative reduction Energy uses for reduction of energy usage and was able to reduce energy expenses by production processes by at least 100 Key Stakeholders Concern Engagement greenhouse gas emissions. 560 Million Baht per Year. Kilogram per Ton of propylene. Issues Plan Increasing usage of In addition, SCG established a • Installation of the pre-grinding • Low density polyethylene plastics less greenhouse gas- committee to be directly responsible system for the cement mill of the Siam with recycled waste heat could reduce energy % To develop Business • Energy cost • Upgrading 12.5 for and to monitor energy-related issues Cement (Kaeng Khoi) Co., Ltd. This steam energy consumption by at least 50%. innovations and Partners/ suppliers’ technology to Suppliers management as well as greenhouse gas matters. The system reduces the electricity • ‘Hybrid Cement, Tra Chang’ is a • Project roadshow enhance capability committee is comprised of executive consumption of the cement mill by 13 new cement type of Portland Composite of using alternative fuels and reduce Since SCG operation significantly management and experts from all SCG Gigawatts-hours per Year, which is Cement where the formula has been production cost relies on energy, It is a big challenge for business units. The main responsibilities equivalent to a reduction in greenhouse developed and improved with preserving SCG to manage our energy usage and of the committee are establishing gas emissions of 6,500 Ton per Year. the environment in mind. It can reduce Developing Shareholders • Risk • Information greenhouse gas management disclosure operate our business while minimizing policies, strategies and targets as well • Efficiency enhancement of boiler energy in the combustion process, use less reduction products impacts on the environment, particularly as monitoring operations to ensure the (PB18) at the Siam Kraft Industry Co., Ltd. natural resources, and reduce greenhouse and services Customer climate change. accomplishment of the objectives. The This results in a decrease of more than gas emissions by at least 70 Kilogram engagement through SCG has prepared several preventive committee also needs to ensure the 50,000 tons in coal usage per year, which per Ton of cement. HVA and SCG eco value products actions to mitigate both tangible risks like benefits of stakeholders and monitor is equivalent to a reduction in greenhouse • The emisspro®, high emissivity and services Government Government policy, • Joint Agencies law & regulation meeting and energy costs and business interruption external factors that might affect SCG’s gas emissions of 120,000 Tons per Year. coating technology for furnaces in alignment cooperation cost and intangible risks, such as the operations. • Energy conservation in office petrochemical plants and ceramic tile Employees and buildings. In 2014, SCG was certified for factories to increase the efficiency of heat contractors’ capacity building having high energy efficient building to save transfer by re-radiation process, this To raise awareness and level up capacity more than 32% of energy consumption. technology reduces the consumption of to serve business Energy management is a tool to mitigate SCG 100th Year Building was awarded with natural gas by 2-6 %, which is equivalent expansion. Media • Energy • Information performance data disclosure risks while create business opportunities. Platinum certification for the Leadership in to 100,000 tons of greenhouse gas • GHG emissions performance data Enhancing the efficiency of energy Energy and Environmental Design (LEED), emissions per year. consumption takes top priority. which is the highest certification from the Simultaneously, we have to search Employees and Contractors’ Capacity U.S. Green Building Council (USGBC). for new alternative energy sources Building Proportion of Alternative that are environmentally friendly. SCG • SCG Energy Awards is a contest Energy Community • Pollution • Community Increasing the Proportion of Alternative management Satisfaction Survey uses an energy portfolio management Energy Usage and Changing Energy Types that supports energy conservation • Public liaison to use various types of energy properly, In 2014, SCG made investments to and the reduction of greenhouse gas % which creates a competitive advantage increase proportion of alternative emissions. Its purpose is to encourage 20 from having appropriate energy costs, energy to 12.5%, accounting to 21 awareness and provide knowledge 15 14.1 increase energy security as well as 13.0 12.5 Petajoules per Year, which is equivalent to for associates to continue gaining 11.5 11.2 flexibility amidst higher demand from 10 business expansion. Effective energy a reduction in greenhouse gas emissions of knowledge as SCG grows. management will also be an important 1.6 Million Ton per Year. • SCG Energy Forum offers 5 tool to decrease greenhouse gas emissions. • Modification of cement kiln opportunities to exchange ideas and 0 and Chloride Bypass System in order knowledge within the organization to 2010 2011 2012 2013 2014

Somchai Chairman to use various types of the alternative improve energy conservation practices. Wangwattanapanich SCG Energy Committee fuels produced from industrial and • Encouraging energy conservation municipal wastes without impacting the in the office building. to customers’ needs along with providing conservation and greenhouse gas reduction 48 environmental friendliness with the practices. Some of the examples include 49 same quality as used in transporting the Community Partnership Association Reduction of greenhouse fuels and raw materials for the production in Map Ta Phut, Rayong; Cement gas emission is an important processes. In the process of product Partnership Initiative in the Saraburi issue which everyone must be Energy Conservation and Greenhouse Gas (GHG) ready to respond and involve. Reduction throughout Value Chain usage, SCG encourages and educates Province; and Community Partnership the end users to obtain knowledge on Project in Nakhonloung District, Phra It is right for SCG to make investment on greenhouse gas environmental friendliness. In turn, this Nakhon Si Ayuthaya. reduction today since all costs provides benefits for consumers by • Suppliers including environmental cost reducing energy consumption, decreasing Suppliers are stakeholders to whom will increase in the future. SCG Transportation Use of Products expenses while contributing to climate change Sourcing of Energy Transportation of Production SCG realizes their importance and aims volunteers to become a and Raw Materials Fuels and Raw Process of Products issues for society as a whole. In the to share our expertise to provide the Materials piloting corporate for TGO disposal material management Select low GHG Improve efficiency of Improve production Improve efficiency Educate and knowledge required to achieve higher projects such as CDM, carbon emission energy and transportation and efficiency of transportation raise awareness processes, SCG manages to recycle standards in production processes, energy footprint for organization and raw materials inventory Develop alternative and inventory to promote disposal materials in the production management, and pollution control as product, showing its status of environmentally Improve production Change fuel type of energy Change fuel type of processes, such as using paper produced well as greenhouse gas reduction. being the leading corporate efficiency transportation friendly products Reduce GHG transportation from recycled materials. SCG also • Customers which is ready to work in Reduce loss of forest releasing from flare minimizes waste to landfill by recycling Since most of SCG’s customers are collaboration with TGO and areas Develop environmentally waste into process as alternative energy and business to business (B2B) customers, other organizations to drive friendly products raw materials. This can reduce greenhouse SCG introduces several tools, such as Thailand toward the target of greenhouse gas reduction. gas emissions, especially methane, which Quality Function Deployment (QFD), is the gas that has 25 times global warming Conjoint Analysis, Failure Mode and Effect Management of potential of carbondioxide. Analysis (FMEA) to search in-depth for our Product Disposals customers’ requirements. As the result, Expansion of Energy Management and Utilize waste as energy consumption and greenhouse Climate Change Knowledge outside of alternative energy the Organization gas emissions can be reduced when the and raw materials SCG realizes that sustainable customers use SCG’s products in further Minimize waste to development is beneficial for society as a production processes. landfill whole. For this reason, SCG in conjunction • Communities SCG is the first organization in Thailand 25,000 Rais. In the fuels and raw materials with other organizations from both the public SCG is proud to create advantages to disclose energy consumption and transportation processes, SCG developed and private sectors commits to expand for the public, especially for the communities greenhouse gas emissions performance an integrated logistics system by using the benefits to others for success on that are still in need of a better standard data for both Scope 1 and 2 annually. a multimodal system to achieve a more industrial and national levels. Furthermore, of living. SCG keeps seeking of opportunities The company has defined performance efficient transportation. The backhaul SCG introduces this collaborative model and responding to communities’ needs. Prasertsuk Charmornmarn indicators on greenhouse gas emissions system helps in reducing the number of empty to the ASEAN. The examples of these projects include for monitoring and reporting as well as trips, whereas the global positioning • Industry groups in the same area using communities’ waste (RDF) as a Executive Director Increase cohesive and Thailand Greenhouse adhesive, increase smooth defining target on reducing greenhouse gas system reduces the distance and number of SCG initiates a pilot program source of fuel for the kilns in the cement Gas Management Organization of surface, promote compressive strength, emissions per ton of product by at least 10 transportation trips. All of these procedures for collaboration with other industries factory and small hydro-power generation (Public Organization) reduce porous percent by 2020 from the base year of 2007. can help to reduce the greenhouse gas located in the same area to exchange in the Conserving Water for Tomorrow project. Reduce CO2 emission SCG aims to reduce energy and emissions by at least 13,000 Ton per knowledge and share ideas of their energy Environmentally friendly greenhouse gas emissions throughout the Year. In the production processes, SCG Reduce energy value chain. Starting from sourcing for implemented state-of-the-art technology consumption in combustion process energy and raw material resources, to increase production efficiency, reduce The leadership will only be meaningful when it can provide knowledge to help the processes use less energy and energy consumption, increase the use of By more than 1.4 million tons of release less greenhouse gases. Energy alternative fuels releasing less greenhouse others. We are proud to be one of a few organizations that other organizations ‘Hybrid Cement, Tra Chang’ sold in 2014, 100,000 tons of and raw material resources must be gases, and reduce greenhouse gas releasing can trust. They can see our capacity, especially in ‘SCG People’. We are one carbondioxide were reduced. environmentally-friendly. For example, from combustion of hydrocarbon vent of the wheels that drive the action on energy and climate change issues at a mining system in a semi-open gas during shutdown and startup process national and global levels cut method, and quarry rehabilitation by recycle hydrocarbon gas into the process, according to WBCSD-CSI guidelines and which reduced greenhouse gas emission by the creation of sustainable forests which 3,800 Ton per Year. In the end-product Somchai Chairman has increased forest areas by more than transportation processes, SCG can respond Wangwattanapanich SCG Energy Committee 50 51

Sustainable Water Industrial Sector Risk actually occur. In some unpreventable Management Awareness cases, an emergency procedure will Proportion of Water SCG uses more than 100 million be used to prevent the interruption of Withdrawal Sources m 3 of water each year from water workflow as well as to prevent other 2% sources throughout ASEAN. As a result, potential conflicts. 33% Tap Water water resources related risks can impact Ground Water SCG in several dimensions. Defining Global Standard • Floods and droughts caused by SCG has improved production inappropriate water management result procedures in order to increase in business interruption. Southeast effectiveness in all areas by implementing Asian countries still repeatedly and Total Quality Management (TQM) continuingly encounter floods and and Total Productive Maintenance droughts. Satellite photographs show (TPM) systems, and determining key 65% that many areas have both floods and performance indices of water withdrawal Surface Water droughts in the same year. Furthermore, per production unit, proportion of climate change also affects precipitation recycled water, and quality of discharged in terms of area and time, which makes water. The indices will be compared Recycled Water water management more difficult. with benchmarks from other global • The quality of water that is organizations and reviewed by executive brought in for usage and released out to management on a quarterly basis. communities must be managed in order Important projects include the to comply with the minimum standards construction of the Siam Kraft Industry of the applicable laws along with Co., Ltd.’s plant, the latest paper % consideration of current and potential production plant. PM16 is designed 7 fees. to have the highest efficient water • Surrounding community consumption, such as Turbo Vacuum Water is an important resource expense and of this essential resource acceptance is another impact. Water Pump to revoke using sealing water, Water Withdrawal Intensity and factor for the industrial sector as of the production process. In order resources are shared among several closed loop cooling water, as well (Revenue from Sales) well as for national security. It is the to ensure that water management is sectors, such as agriculture, household, as balancing of the pulp containers foundation of economic and social consistent with the Company’s vision business and industry. If more than 5% operation and water tanks to reduce Liter/baht survival. Although ASEAN has an for sustainable development, SCG of all local water supplies are used by filling water, in which only 6 cubic 0.34 0.31 0.30 adequate supply of water, some has established a Water Management industry, it can cause conflicts with local meters of water per ton of paper will

0.26 0.25 countries still encounter seasonal Committee. The committee is composed communities. be used. In addition, the anaerobic shortages. The main reason for this of representatives from all business water treatment system with an Internal is the rapid increase in demand from units and is responsible for articulating Managing Risks with Circulation Reactor, the most efficient industrial and agricultural sectors as a Water Management Policy. The aim of Sufficiency water treatment system, which is well as population growth. Therefore, the policy is to reduce the impact from SCG’s water risk management employed in Vina Kraft Paper Co., Ltd. integrated water resource management water usage on stakeholders throughout strategies emphasize proactive has been adopted to add to its success. is needed to ensure the equal accessibility the supply chain, which covers water operations by exercising relevant It also reduces energy consumption and 2010 2011 2012 2013 2014 to quality water supply for all sectors. usage reduction, innovative waste education, and applying appropriate provides biogas for steam and electricity SCG’s Water Management program water treatment technology and water research and modern technology. These production. has been set up as a measurement of recycling after treatment. strategies also have support plans to operational performance because of the monitor and control risks before they 52 53

Sustainable Water Resources of water recycling equipment. For example, Responding to Customers’ set a goal for each product group, such SCG adheres to the royal principles SCG Chemicals can recycle up to 970,000 Needs as chemical pulp production that has set proposed by His Majesty King Bhumibol cubic meters of wastewater by using a SCG develops our products with its target to reduce water usage by at least to create community engagement in reverse osmosis process. innovation that can respond to customers’ 25% by 2020 compared to the base year every operational area. There are several Similarly, the cement production needs on conserving water by introducing of 2012. community engagement projects, including process has been trying to reduce public water-saving products. For example, SCG the launch of the ‘SCG Conserving water usage by creating a reservoir in the plant implemented water-saving sanitary ware that Employee Development Water for Tomorrow’ project, constructing area. Since water in the cement production can conserve water by more than 12.5%. SCG is confident that all goals and more than 65,440 check dams to prevent process is mainly used for the cooling In addition, our SCG 100th Year Building targets can be accomplished due to the and decrease floods and provide water system, the factory can operate in a close has also installed the water-saving sanitary fact that the operators are encouraged to resources to forests and local communities. loop process and reserve wastewater to ware together with using recycled water be creative and remain innovative. Water Furthermore, SCG Chemicals has be reused. This procedure helps to reduce for flushing and watering the plants on our Management is at the heart of ensuring established a Drought Crisis Management water withdrawal by up to 60%. property, resulting in reducing water usage non-interruption of business operations. team in conjunction with Eastern Water by at least 6 Million liters per year. This Relevant employees will receive training in Resources Development and Management Reinforcement with Suppliers implementation has made our head office the form of course-training as well as on Public Company Limited, Royal Irrigation SCG expands the sustainable building become an ASEAN water-efficient the job training. The focus of these training sessions is set on thinking, rationale and Department, and other government development concept to our supplier to building prototype. agencies in order to monitor situations from increase the competitive advantage and improving processes. In particular on various water resources. The team is also raise the organizational image by providing Challenging Targets the anaerobic treatment system, anyone responsible for urging the water management consultation to our suppliers on Total SCG studies the possibility of water who operates the system must acquire of the Eastern region to ensure adequate Quality Management (TQM) and Total usage reduction by reusing water before it a basic understanding of microbiology of water for all sectors by joining reservoirs Productive Maintenance (TPM) principles. is discharged to the public. In this sector, microorganism. Simultaneously, all other with main rivers to maximize benefits This consultation also includes efficient cement manufacturing company takes the employees and individuals need to before releasing water to the sea. water utilization. For example, one business lead by storing all water from the production understand the potential impact of Recycling water from waste water partner, an ink manufacturer, proceeded to processes to reuse within the factory. production processes on the treatment treatment is another alternative which analyze ink production process and was Construction material companies, such as the system. SCG utilizes to reduce water usage in our able to reduce the problems of ink quality, CPAC Roof Tile Co., Ltd. arranged a storage production process. All businesses strive to increase accuracy and decrease water usage pond to store and reuse all wastewater. educate and encourage the implementation by at least 15%. SCG Water Management Committee has

Previously, in the area of Wang Sala sub-district villagers had to use ground water Vina Kraft Paper has an anaerobic wastewater treatment for agricultural activities. After SCG Paper established Wang Sala plant, treated system which is the first plant of SCG Paper that uses methane gas (CH4) water has been supplied to villagers for farming rice, sugarcane, corn and other generated from treatment, instead of coal, alternative fuel for vegetables since 1991. Regularly, people from the plant will come to talk to villagers. boilers. The Company conducts annual training on an operation of the If we need any assistance, we will tell and discuss with those people as friends. If anaerobic wastewater treatment system for employees in Wastewater there is any difficulty, they will come and solve it quickly. Regarding, quality of Treatment Department and encourages employees to participate in supplied water from the plant, there is no problem at all. The water is not harmful the environmental courses, conducted by governmental and private and does not cause skin rash. Yield of rice and sugarcane also meets with standards. sectors, offering opportunities for employees to understand and apply Once, when the water is pumped from the farmland, I often find snakehead fish new technology for their work improvement. and climbing perch and then free them back to natural water sources.

Wirat Rice and Sugarcane Farmer Rosawan Engineer in Charge of Wastewater Treatment System Chaiprapankoon Kanchanaburi Province Wuttipong Vina Kraft Paper Co., Ltd., Vietnam 54 55

Using Alternative Raw farmers can grow eucalyptus along the edge of their rice fields or canal-sides. Materials and Renewable Proportion of Renewable Sustainable Resource Recycled Waste Raw Materials The plants themselves can be used in Materials Use Due to the increasing in sand prices, the production of paper, wooden pallets, 10% some areas encounter a severe sand and construction materials as well as Management Non-Renewable shortage. This shortage results in higher other lumber products. In this way, the Materials expenses for both purchasing and farmers can create higher incomes, offer % transportation sand from other areas. alternative resources and protect the 94 Corporate technology development- national forest areas. materials in conjunction with the Raw At present, SCG continuous to replenish) as below. Material function, The Concrete Products Managing Waste by Reusing For the utmost utilization expand it’s investment in domestic and in 1. Increasing production efficiency and Aggregate Co., Ltd. (CPAC) carried or Recycling to Create its of resources, SCG emphasizes ASEAN to respond to increasing to maximize the potential of raw materials, out a research study to use limestone dust, Maximum Value customers’ needs. This expansion creates 2. Using alternative raw materials a by-product from the stone production SCG’s waste management that wastes should be 42% 48% a trend that more natural resources are and renewable raw materials, industry instead of natural sand. This becomes another important index Renewable Recycled well managed at its Materials Materials used as raw materials. Due to increasing 3. Managing waste by reusing or approach could reduce the amount of that reflects the effectiveness of the sources and reused/ of raw material scarcity and their price recycling to create its maximum value, natural sand used in ready-mixed concrete environment-related performance of recycled as much as fluctuations, a shortage of raw materials 4. Encouraging customers to production processes at CPAC by SCG. Waste management helps reduce possible. Apart from the may occur if there is no effective consume environmentally-friendly approximately 50% to 70%. risks from incorrectly managed waste, investment on efficiency management plan. This will cause an products and services. The innovation of Bio-PET is another which can have impacts on the improvement, it is required impact on production and service costs good alternative for the environment. It environment, stakeholders and affect the the cooperation from both or even business interruption. Furthermore, Increasing Production changes an admixture for Polyethylene image of SCG in the long term. internal and external if the expansion results in additional Efficiency to Maximize the Terephthalate (PET) production to the use In order to create a effective relevant parties in order waste, it will result in higher costs of waste Potential of Raw Materials of renewable materials from agricultural management plan, SCG appointed a to innovate to add value management. Simultaneously, if there is The Olefin plants of SCG Chemicals wastes, such as molasses, rice straws and Waste Management Committee to to the wastes in terms no appropriate waste management, the have launched a hydrocarbon exchange bagasse. These alternative agricultural operate and manage industrial waste. of cost reduction and environment and society will be affected project by installing a system to take materials replace between 5% and 30% The committee is composed of environmentally friendly in various ways. hydrocarbon waste back from burning of the petroleum-based raw materials. representatives from all business units aspects as well as to SCG strives to drive sustainable away at flares during suspending or The products made from the alternative of SCG along with researchers, who are responsible for establishing goals share know-how to our business growth by managing natural starting operations, passing through its agricultural materials attain the same resource management services to ensure production process (Flare Gas Recovery) property as those of normal PET in terms as well as supporting and encouraging stakeholders. that all natural resources will be utilized as an alternative fuel. This approach is of being lightweight, strong, versatile and waste management operations. The to their maximum capacity and waste able to reduce hydrocarbon waste by 450 safe for consumers. committee will ensure the efficient will also be minimized to the minimum. tons each cycle, which is equivalent to a In order to support the sustainable management of wastes within SCG, In order to achieve this, SCG follows the reduction of carbondioxide emissions of usage of the renewable raw materials, and provide value-added benefits 3R principles (reduce, reuse/recycle and 2,800 tons each cycle. SCG places importance on the wellbeing by research and development both of farmers by creating stable incomes for internally as well as externally of SCG. them. SCG Paper initiated a cultivation The SCG Waste Management support project with the slogan of ‘low Committee holds a workshop to train Flare Quench Quench investment, easy grow and selling all year and provide knowledge for employees in Section Section round’ in order to encourage the growing waste management procedures annually. of eucalyptus plantation. In addition to The workshop also provides opportunities Compressor Compressor Section Section developing more than 10 new varieties of for companies to collaborate in exchanging eucalyptus to be suitable to each location, information, reviewing goals and Suttipong Poomsrisa-ard Map Distillation Distillation Rayong the plant also produces higher yield, and establishing policies about waste Section Olefins Ta Phut Section requires no pesticide (pest-free). The management for SCG. Chairman Olefins Waste Management Committee 56 SCG Paper during the paper bleaching Encouraging Customers to 57 process. By means of this alternative salt, Consume Environmentally At the Product and Technology the company could also utilize the salt to friendly Products and Services Development Center, SCG Paper, we effectively digest wood pieces in the Kraft SCG encourages our customers have researched and developed on the environmental management pulp production. and other stakeholders to realize the including water, air and process Learning Centers, Organic Waste importance of the environment. The wastes. The 3R principle facilitates Management by Earthworms: The Company recognizes that a healthy our utilization of resources and contributes production efficiency, establishment of the learning center at environment can improve people’s quality for example, the use of chemical RIL Industrial Estate, Rayong Province of life and increase the Company’s competitive substance at least amount for by SCG Chemicals plays a major role advantages. For this reason, SCG has environmentally friendly purpose, the in the research and study of earthworm been encouraging this approach through reuse of sludge, lime mud and dreg farming in order to use dung for fertilizer. developing environmentally-friendly for the production of organic fertilizer, the modification of lime All surrounding communities can apply products and services. The ‘SCG eco mud to be used as additives in this knowledge for their own benefit and value’ is used as a measurement standard production of paper in cement and create additional income for their families. to certify that products and services are building materials industries, and SCG provides full support in terms of produced by means of environmentally- the reuse of wastewater from pulp processing. All of these are examples knowledge as well as providing consulting friendly processes (Eco Process), or are of technology implementations teams to assist communities in this environmentally-friendly products (Eco Use). for sustainable environmental matter. This is an innovation that can help These environmentally-friendly products management and treatment. Learning Centers, Organic Waste Management by Earthworms in terms of taking care of the environment, and services are of better property Given the target of avoiding landfill or used in cement production. As the ultimate result, adding value to the waste, and creating than other products, no matter whether in achieving Zero Waste to Landfill, in 2013 SCG SCG was able to reach its target of Zero Waste additional income for the communities. terms of design, production, packaging, was able to accomplish its goals for non- to Landfill and also add value to the industrial In 2014, SCG achieved the use transportation or performance. Examples hazardous wastes. In 2014, the company again wastes. of recycled materials by 94% with no of such products include: reached its target for hazardous wastes by In addition to reusing the waste to achieve hazardous waste sent to landfill. Due to COTTO Floor Tiles: Eco Touch and using the findings from research to develop the highest benefits, SCG conducted research lime mud increased from expanding the Eco Rockrete contain tile particles that techniques for reusing/recycling wastes within that created further development. The research production and an efficiency problem of are waste from other production process, SCG. The examples of the techniques include: resulted in the creation of programs of waste lime kilns occurred in paper business, which blend up to 60% of the total raw Insulation Waste Management Project: This exchange among companies in order to maximize approximately 4.6% of the non-hazardous materials. project is characterized by the procedure which their value, including: wastes were still sent to landfill. With Landscape Decoration Paving Blocks: uses extremely high temperatures in cement Innovation from the collaboration commitment to our goals, SCG has Cool Plus contains light weight concrete production to disintegrate and neutralize the between SCG Chemicals and SCG Paper that invested to increase capacity to turn lime block particles with Cool Plus technology Dr. Pongsuda Pongtanya deteriorated insulators. After the process, the facilitated the transfer of untreated wastewater mud into reusable materials along with that are waste from construction, which Director insulators will become the initial raw materials, in order to extract mixed salt. This mixed salt researching and developing for further blend up to 10% of the total raw materials. Product and Technology Development such as SiO2, Al2O3, CaO and MgO that can be can replace up to 4 tons of sodium sulfate salt in utilization. Center, SCG Paper

Hazardous Waste Non-Hazardous Waste

Manageable Amount* Manageable Amount* Proportion of Management Thousand Tons Proportion of Management % 1,448 3.6 2 % Thousand Tons 1.1 1.3 0.3 0.01 0.0 1,500 100 4.6 25 100 ** 1.0 16 1,233 18 31 31 1,200 1,154 80 36 37 1,061 1,100 20 18.5 80 39 43 17.4** 15.6 14.6 900 60 10 15 60 9 12.0 78 98 83 600 40 94.4 10 40 69 69 62 54 61 300 20 48 5 20 0 0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

recycle disposal landfill recycle disposal landfill recycle disposal landfill recycle disposal landfill

*Waste in the storage waiting for waste management is excluded. ** SCG Paper has revised data form “as dry basis” to “as received basis” since 2010 *Waste in the storage waiting for waste management is excluded. ** SCG Paper has revised data form “as dry basis” to “as received basis” since 2010 58 59

Sustainable improving environmental management for comprising regulatory compliance, suppliers under the Greening the Supply efficient use of energy and nature Contractor’s Incident Rate and Number of Contractor Chain Project, improving safety standards resources, green manufactory process, Value Chain Certified under SCS for contractors under SCG Contractor waste management and material recycling

Safety Certification System Project, and reuse. SCG provides advices and Case/200,000 Man-hours % enhancing professional skills of fleet assesses conformity under the Greening 1.00 100 100 100 100 carriers, and encouraging suppliers to the Supply Chain. In 2014, green 0.13 SCG Sustainable Value Chain 0.75 73 comply with the SCG Supplier Code of procurement value was accounted to Conduct. 8.17 billion baht. 0.50 52 50 0.70 0.12 0.05 0.06 0.06 0.25 World Class Operation, Green Procurement SCG Contractor Safety 0.25 0.18 0.16 0.14 SD Upstream Supply Chain - Green Manufacturing SD Downstream Supply Chain - SCG has initiated policies on 0 0 Make Supplier and Contractor Create added value and Certification System proficient toward sustainable environment friendliness green procurement and environmental SCG Contractor Safety Certification 2010 2011 2012 2013 2014 development to sustainably serve customer’s demands management leveraging our suppliers System (SCS) was developed in 2006 to Incident Rate without concretely since 2004, beginning from enhance effectiveness in safety to prevent day away from Work office supply and general items and and to reduce accidents of contractors. Incident Rate with Collaboration-Promote sustainable day away from Work development to all parties including extending to procurement of raw SCG conducts supporting activities % Contractor Certified those without direct relationship materials, spare parts and supply for contractors by educating, advising, materials. SCG considers registering assessing and certifying all of our products that comply with green label contractors in the production process. Regarding an overview of business oligopoly suppliers and supplier conflicts on or SCG green procurement criteria, direction, SCG focuses on strengthening and environment and safety laws. These risks can maintaining leadership in the country through affect the business sustainability and inhibit business competitions to provide value to SCG’s progress. In addition, it is to prepare stakeholders in compliance with Value-base to respond competitively and to expand competition. SCG employs business businesses under limitations. According to advantages from operating our business potential risks, competitiveness advantage covering the value chain and completing with with our sustainable value chain is considered resources throughout the process to create as a key strategy to be implemented strictly growth for SCG. Meanwhile, SCG enters the to create value in economic, environmental Number of Green Procurement List Green Procurement Product Status ASEAN Market proactively with investment and social aspects for stakeholders in every plans and strives to conduct new businesses process, from upstream such as contractors on a global scale. and suppliers, to downstream such as 800 771 Category Products Brands Models 737 724 customers and business partners. In value chain management, SCG has 600 Office and Sustainable Value toward 29 79 499 484 General Items Suppliers expanded the sustainable development SCG has expanded our businesses approach, Total Quality Management, and 400 340 Raw Materials 21 71 124 continuously in accordance with the Total Productive Maintenance, based on moral 254 220 211 209 Supply Materials 18 48 88 sustainable development approach applying 200 157 and ethics to apply throughout upstream 129 117 105 134 81 47 50 Spare parts 4 11 13 to a whole value chain. The SCG Supplier and downstream from selection, operation 20 0 6 21 36 40 48 60 70 72 Development for Sustainability Committee determination, assessment to development 19 and relevant divisions within SCG level and and leverage of suppliers in order to enhance 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total 72 209 724 business level are responsible for mitigating their competencies to professional level, and potential risks from the procurement of to grow together with SCG both in Thailand Products Brands Models raw materials and the main materials with and in other countries in ASEAN, for example, 60 61

Supplier Segmentation and Strategic Approach Supplier leverage does not only mean to develop competencies or management system

Co-creation but also means to create better relationships. It requires trust and readiness to grow together in line with changing view points Certification System All suppliers regarding and procurement approach,

Green Procurement Criterion covering the opportunity regarding SCG Contractor safety

All Contractors in Production Process to bring strength of SCG and suppliers to reinforce. Spend Analysis development approach to all suppliers is SCG adopts the spend analysis a key challenge of SCG since it has more SCG Supplier Code of Conduct Proportion of Overseas and Domestic Suppliers process to assess products and services than 8,000 suppliers at present and most procurement which affects the production of them are small and medium enterprises 11% Strategic Supplier General Supplier 89% Overseas process directly and indirectly, to identify which have limitations in finance, human Suppliers Domestic Suppliers diverse suppliers management strategies resources and knowledge that inhibit appropriately and to find development an the corporate changes in compliance approach together in order to enhance with laws and regulations throughout the efficiency and reduce potential risks from competitive competency leverage in the supply chain. balancing the triple bottom line. General Supplier is a group of all In order to create prototypes and SCG has determined strategies suppliers who are manufacturers, traders case studies for suppliers to adopt SCG Pride, a Role Model in supplier management by prioritizing or contractors. sustainable development approach of Green Industry Level 5: significant impacts on business, such as • All suppliers shall commit to concretely, SCG has chosen 21 suppliers Green Network purchasing volume, bargaining power, compliance with SCG Supplier Code of to participate in the supplier development Efforts in expanding the sustainable and potential risks in finance, environment, Conduct identifying ethics in business, for sustainability project. SCG provides development approach to suppliers in labor, safety and society, to identify labor and human rights, occupational consultation in development and creates continuity result in the successes of The appropriately supplier development health and safety, environment, and a learning process by applying problem Aukaradej Vassara Siam Cement (Lampang) Co., Ltd. and approach. applicable laws and regulations. solving concept (QC Story) as a tool to Chairman Map Ta Phut Olefins Co., Ltd., receiving • All contractors in the production develop suppliers and selects significant The SCG Supplier Development Green Industry Level 5 : Green Network Supplier Segmentation process shall be assessed and certified projects which impact the business for Sustainability Committee Awards from Ministry of Industry. The and Strategic Approach under SCG Contractor Safety Certification directly, such as waste reduction, energy Awards are to encourage our company Strategic Supplier is a group of System. consumption reduction and management, to support suppliers in conducting green significant suppliers that are ready to • All suppliers that provide water consumption reduction, quality In 2014, All major suppliers businesses with corporate social grow their business together. SCG has products and services regarding the problem solving, productivity improvement, agree to signed a commitment responsibility resulting in 92 suppliers on SCG Supplier Code of Conduct long term development plans in form of green procurement criteria shall be and inventory and logistics system participate in the Green Network Project. co-creation to establish mutual business assessed and registered on the green development projects. Expansion of the sustainable opportunities. procurement list. 62 63

Supplier Development Process for Sustainability Sustainable Value toward and development of high value added Customers products and services differentiated from R&D Investment High competitive market situations basic products and services such as Million Baht 3,000 Identify significant are rooted in development of competitors better quality including service devel- 2,710 project which impact with potential to produce varied products, opment to fulfill customers’ needs or 2,500 2,068 the business and price competition. Therefore, solution providers by intending to increase 2,000 differentiation in the market depends its budget and the number of researchers 1,500 1,430 1,111 on the accessibility of real customers’ continually. In 2014, SCG had 1,474 1,000 921 needs that are interested in products and researchers comprised of 92 researchers 500 Observation and services which improve a quality of life holding Ph.D. with a budget of 2.71 billion 0 Data collection and care for the environment. Besides, Baht. That results in the increase of high 2010 2011 2012 2013 2014 distribution channels are considered value added products and services sales Revenue from Sales of HVA essential in delivering value of products to 35 percent of revenue from sales while Products and Services and services to customers. Therefore, SCG aims to gain 50 percent of revenue % Data collecting and analysis are used for SCG emphasizes distribution channels from sales in 2015. Prototype Projects 50 Productivity Improvement by LEAN design new process and new quality as business advantages and risks by Green Products and services Analysis 40 35 35 Approach Project control. This approach has reduced 25 % of setting up its strategic foundation to drive SCG is the first Thai company that 32 34 30 Pallet Maker Group Co., Ltd. color remixing, and save color content 110 business under competitive situation sets a self-declared environmental label 29 The supplier needs to increase Kilogram per year. and sustainable growth. This strategic for environmentally friendly products and 20 productivity; therefore, it adopts a lean Process Productivity Improvement in foundation comprises products and services under ‘SCG eco value’ label, 10 approach to improve its productivity by Safety Shoe Manufacturing services development in response to started in 2009, by adopting ISO 14021: 0 balancing production line, reducing work in Pangolin Safety Products Co., Ltd. customers’ needs and distribution Environmental Labels and Declarations-Self 2010 2011 2012 2013 2014 Implementation process to increase production speed, and The supplier needs to increase channels to serve our customers. Declared Environmental Claims standard Revenue from Sales of improving process flow. This approach has productivity due to high sale. The supplier together with stakeholders’ needs and SCG eco value increased its productivity by approximately could not produce enough to keep pace with product life cycle assessment. In 2014, Product and Service % 40%. demand. Work-in-process material is also SCG had 86 ‘SCG eco value’ products Development to Meet 50 Waste Reduction from Septic Tank excess its stock area. LEAN was introduced in and services certified, contributing to 31 Customer Needs 40 Production productivity improvement, for example Value High Value Added Products and percent of revenue from sales, while the 31 Check 30 Entech Co., Ltd. streaming mapping analysis to balance the Services (HVA) target of ‘SCG eco value’ sales is one third 26 20 This supplier needs to reduce waste process, reduce work-in-process material SCG is committed to the research of revenue from sales in 2015. 13 14 generated from its septic tank production. and re-lay out the process. By this project, 10 Therefore, SCG advises the supplier to productivity increases 30%. 0 collect and analyze their data system to This engagement approach in the 2011 2012 2013 2014 Standardization find out causes of waste by creating plans, support of supplier development is only a part standards and an appropriate production of the value chain; however, strengthening controlling point. The approach reduced waste business requires customers’ needs to from septic tank production to zero waste. connect and develop from upstream to Process Optimization Project and Quality downstream. It is another challenge for SCG Control to commit in the research and development

Conclusion Chalermchaichan Co., Ltd. process to produce products and services Carbon Footprint Carbon Reduction Carbon Footprint SCG eco value The supplier needs to solve color that meet actual customers’ needs and Reduction Label Label Label Label distortion in ink that cause color remixing. maintain its leadership in the market. 8 products 38 products 128 products 86 products 64 65 Strengthening Distribution Value based Products and using the Air Tightness System, in working Channels with a product liability standard conducted by Services together with the Air Factory System that Channel capability enhancement is one SCG corporate offices. The assessment has According to the strategy of value-based brings high quality, allergic-free fresh air from of strategies continuingly executed through been performed continuously since 2013. This competition and market expansion toward outside with noise reduction. Therefore, various projects such as: year, 2014, SCG has monitored and assessed downstream which are high value added SCG HEIM is really a house for the farsighted • Dealer Integration : The exchange 19 companies and 1 function. Besides, SCG products and services, SCG emphasizes who looks for a comfort and high quality of of information with dealers will help SCG assessment program was extended into product and service development to meet living. understand real customer demands, and company level to conduct self-audit by the needs of each customer group, from • Pyrolytic Stone, under ‘GEOLUXE’, increase accuracy in production planning providing courses for internal auditors from real estate developer, retailer, and consumer. brand is the forming material which looks like and inventory management for both SCG and companies in order to prepare them to SCG is ready to invest in response to those natural stone with higher durability properties dealers. In 2014, 278 dealers participated in become consultants and internal auditors in customer demands. and it is able to meet the needs of customers the project, accounting for 83% of revenue accordance with Product Liability Management • Precast concrete : Using precast that require something different in line with from sales through dealer channel. Standards. In 2014, SCG conducted training concrete for building and residence natural resource conservation. • SCG Retail & Service Academy programs to develop 1,152 internal auditors construction provides solutions to reduce is set up as a learning center to develop from 56 companies and 1 function. construction time, to leverage quality Comprehensive Distribution various skills of dealers’ staff, including sales According to the 2015 Plan, SCG has standard of construction parts and to handle Channels with Accessing to and services, detailed design, installation and been developing internal auditors at company skill labor shortage. Customers consultation skill. It also provides trainings to level and planning to leverage internal control • The NEST (The Next Eco-Sustainable In 2014, SCG has set up a clear dealers’ staff with free of charge. In 2014, 3,308 systems implemented by the area owner more Technology for Home) : The prototype of management strategy in distribution distribution outlet employees participated systematically. In addition, SCG increases Smart Eco-Care house for sustainability is channels by considering different behaviors in the training. awareness on product liability management appropriate for living in a tropical zone, and needs together with designing supply • Development of Real Estate standards among employees through case combined technology of house with Smart, chain models for each distribution channel, Developers is to build up collaborative studies to control implementation of product Eco and Care. The NEST fits with the world’s including solution sales and retail sales. engagement in joint development by providing safety measures efficiently and effectively, living trend, considering the convenient, • SCG HOME SOLUTION is a advices, exchanging practices for real estate enabling delivery of safe products for use safe and environmentally friendly habitation distribution channel to meet the needs of developer to improve their organizations, and and to build trust among SCG customers and of people of all ages. Various Technologies home owners and installers in the form of initiating collaborative projects, with SCG product users. is integrated to achieve higher energy complete consultation and sales cycle in line offering value added services, such as Even though the leverage of SCG value efficiency houses, ‘The 1st Energy Plus House with one stop solutions offered by experts in special transportation, and precise chain, targeted to meet the stakeholders’ in ASEAN’. all major house components. In 2014, SCG production planning and delivery. needs, is considered as a continuing business • SCG HEIM : The Ultimate of Living, provided home services through 33 branches direction, the next step to be developed in an innovation in building modular house using of SCG HOME SOLUTION. Customer Product and Service Liability order to strengthen SCG value chain is that the most advanced in-plant manufacturing satisfaction is 95% according to our assessment. SCG focuses on quality assurance to working collaboratively within our supply and assembly robotic technology in Asia • SCG Experience is a communication build up trust among customers that use our chain to create agility in business adaptation Pacific. SCG HEIM brings happiness to channel, specifically targeted at home products and services under SCG brands, under harsh competition, to benefit from data residence through an ultimate quality of living owners, interior designers and architects and and sets up quality assurance systems to accessing technology which leads to offers ideas and knowledge through advanced ensure product safety in alignment with product and service development, meeting technologies along with consulting services Product Liability Standards. SCG has been customers’ actual needs, to extend the from the architect team (Dream Driver) with implementing and developing the quality scope of cooperation within value chain for free of charge. assurance system since 2009 to comply with solutions and to create i novations to build up • Global House Integration is an SCG both current products and newly developed value for stakeholders. building material retail center is considered products by SCG. the first step in retail center expansion in form In 2014, SCG has been monitoring and of warehouse store in Thailand and toward assessing companies in all business units ASEAN by taking advantage of SCG’s market through assessment programs in compliance leadership and ASEAN networks. 66 67

ASEAN Sustainable Development Symposium

Corporate Social Responsibility 68 Biodiversity and Ecosystem 76 Air Quality Management 78

and a group of entrepreneurs in the Map Ta Phut Secretary-General,said that challenges of ASEAN Thailand, The Thai Chamber of Commerce, The ‘ASEAN Sustainable Industrial Estate have established the Community is caring and searching a mechanism for Federation of Thai Industries, Commercial Bank Development Symposium Partnership Association to leverage the industry sustainable development under the Green ASEAN and the Business Council networks, which will 2014 : Collaboration for standards for environmental friendliness and concept. Views and opinions on sustainable support the expansion of businesses in ASEAN, ASEAN Sustainable Growth’ promote the quality of life for communities to live development are obtained from the world’s Under the current conditions, the natural in the future.” together with sustainability. SCG also extends leading business executives such as Mr.Yuo resource is rapidly declining due to consumption “The business sector has a critical role to outcomes to the Cement Plant Partnership by de Boer, Director General of the Global Green and the estimation of the world’s population predicts initiate change because of its agility which can coordinating with cement manufacturers in Growth Institute, Mr. David Pearson, Chief that there will be 9 billion people on earth in the drive the economy well and quickly and can Saraburi Province, as well as Community Sustainability Officer, Deloitte Global, Ms.Keryn next 35 years. Over 200 leading corporate’s expand throughout the supply chain. However, it is Conservation Group by cooperation among James, Regional CEO, ERM Asia Pacific executives around the world comment on the undeniable that changes of the global community cement manufacturers and coal importers in and Mr.Philippe Fonta, Managing Director of business world according to the vision of 2050 that in all dimensions occur rapidly causing severe Ayutthaya Province. Despite being business WBCSD-CSI. today’s businesses must concern on how to balance impacts. Although each business tries to focus on competitors, everyone collaborates for a The Cooperation is not only initiated to human’s economic behavior, and balance of the best outcome, it may not be enough. Thus, the sustainable society and such success is unlikely share knowledge, conduct social activities, transfer natural resources as well as creating and sustaining cooperation is undertaken bring about development to happen if organization individually operate. responsibility and take action with full capability, but a society to be within the sustainable development which varies from good to great practices as well as ASEAN Sustainable Development Symposium should be a fulfilling tasks. Strategic cooperation framework. Sustainable development is not an creating significant and sustainable performance, 2014 was honored by His Excellency, Mr. Sommai in horizontal and vertical dimensions can create option for organizations but it is the essential leading to a business that is acceptable and Pasi, the Minister of Finance, to preside and great power to extend results of actual sustainable practice or a must have agenda, which requires comply with the expectations of society, “said Mr. Kan discuss about challenges that will arise with the development throughout AEC at the end of 2015. planning and concrete implementation, by Trakulhoon, President and CEO of SCG in the upcoming AEC. H.E. Le Luong Minh, ASEAN coordination between the economy, social, and ASEAN Sustainable Development Symposium 2014. environment sector and to drive all factors forward As an example for successful business at the same time. sector cooperation, SCG is one of the 10 members “SCG held the ASEAN Sustainable of World Business Council for Sustainable Develop “In the past, Sustainable Development (SD) was an alternative to build the corporate acceptance and Development Symposium 2014 to build up - Cement Sustainability Initiative (WBCSD-CSI). reputation. However, the current sustainable development guideline is not an option for organizations, cooperation for change and extend the results of All members have coordinated to find ways for it is a must have guideline to be implemented. Organization must plan and implement sustainable sustainable development to all sectors. This can business sustainable development via technology development guideline concretely in alignment with businesses” be done by connecting knowledge throughout the and innovation in production to minimize impact supply chain, involving private and public sectors, toward business and conducting guidelines to Kan Trakulhoon SCG President and CEO financial institutions, the Stock of Exchange reduce carbon dioxide emissions. In Thailand, SCG 68 69

Corporate Social SCG’s Social Project Classification Strategy Responsibility ADVANCE LEADERSHIP • Career Fund Program • SCG Conserving Water for Tomorrow Project Scholarships in ASEAN • Bring Good Books to Thai Children Program • The Innovative Technology for Remediation High Social Impact High Social of Saline Land Project • SCG Future Engineer, Vietnam • Satanee Plook Khid Pun Sukh • The Power of Wisdom Project • Specialists…the Maker of the Nation Project Scholarship • Sharing Opportunities, Drawing the Future Program • Community Partnership Association , Cement Partnership Initiative and Community Partnership Project 4,597 • Road Safety for Community Project

people’s life for designing social development project in different angles. The second component involving communities around COMMITMENT ENGAGEMENT

manufacturing areas is governed by SCG • Philanthropy • SCG Sharing the Dream Scholarships

Sustainable Development Committee. Work Characteristics Project • SCG Donates Shelters to Vietnam • SCG Badminton Academy under this component draws collaboration • Fish Habitat & Beautiful Beach Project between the organization and community by combining organization’s expertise with ‘Corporate social responsibility’ is an community’s capacity to focus implementation essential duty of any business organization, on the area of green business, green community and being a philosophy that SCG adheres and life quality improvement of the community. to business operation wherever it operates. In addition, SCG Foundation plays General Support General SCG is determined to create social values an instrumental role in implementing social by focusing on solving problems that directly activities with its key mission on human Low SCG’s Participation High impact people’s livelihood and quality of life. resources development in order that they will In doing our work, we assign priorities to the be equipped with competency and ethics in development that serves the genuine needs readiness for the development of the country. • ‘Advance’ category includes education, sports and the environment. of stakeholders. We seek to expand, replicate The CSR Committee for Sustainable projects with high social impact on capacity SCG plays a role as an initiator drawing and build upon what we have previously Development classifies programs and practices building of the society which require engagement from within and then broaden achieved in order to enhance people’s quality to shape up and leverage support and know-how, expertise, and experience of the projects to involve other sectors for of life throughout ASEAN. involvement by considering the capacity and specialists from specific fields to implement. collaborative action. CSR activities at SCG are divided into competency of the organization in relations SCG would act as lead supporter to • ‘Commitment’ is aimed at reducing two components. The CSR Committee for to knowledge, financial support, and staff responsible agencies and the project success and alleviating social problems, enhancing Sustainable Development supervises the first participation. The four categories of undertaking could be expanded or further developed. quality of life in general, and narrowing equality component addressing a broad social impact. are as follows: • ‘Engagement’ covers projects that gaps. The approach is that SCG lends support The Committee provides policy and direction • ‘Leadership’ means master projects uplift life quality of people or capacity to credible competent organizations with track so that SCG can optimize the use of available which SCG initiates, drives implementation development in various fields such as record in the field. resources and capability through collaboration and engages stakeholders in the process. with various fields of expertise to identify The success of the projects can be replicated and select critical issues having impact upon and scaled up to other organizations. Value 70 71 Creation Changing in Managing the Mindset Life The Power of Wisdom Project In implementing Conserving is resulted from Water for Tomorrow Project, the success of Life’s leadership Siam Cement Lampang adopts Changed Logical development a participatory approach every Thinking under the step throughout. The emphasis Innovation Sustainable Technology for is on systematic learning and Livelihoods Remediation of adopting lessons learnt to be Saline Land applied in other matters relating Project. to the community. SCG assigns Balanced Living its role as ‘facilitator,’ playing the role of supporting and motivating leaders from the North and Northeast. The participants were trained, and the project aims members of the community Examples of Good Practice The Innovative Technology for objective is to equip them with new paradigm to expand into 1,200 villages nationwide by to act throughout the entire for Sustainability Remediation of Saline Land Project has of development, logical thinking and problem the end of 2015. process – with the intent to instill SCG Conserving Water for SCG Conserving Water for Tomorrow graduated to become ‘Satanee Plook Khid solving skills so that they can be self-reliant Sharing Opportunities, Drawing the the sense of Project ownership Tomorrow Project - 12 years (2003-2014) Project, established in early 2003, has now Pun Sukh’ (Instilling Thinking and Sharing and enjoy good quality of life. The project Future Program To instill corporate social among community members. - 65,440 check dams become ‘Satanee Plook Khid Pun Sukh Hom Happiness Station), the Community Learning will train the trainers, who will in turn train responsibility values among its workforce, The goal is sustainable - 77 communities in 11 provinces Paya Sa Sob Hok’, the Community Learning Center at Baan Toey, Phimai District, Nakhon their community members and counterparts SCG supports staff’s engagement in voluntary - 75,440 participants development, for the community The Innovative Technology for Center at Sa Sob Hok in Jae Hom District of Ratchasima province. This learning center from other communities. It is hoped that work for communities. Through this program, to be strong, self-reliant, can Remediation of Saline Land Project Lampang. The learning center captures the presents good practice on how the community beneficiaries will form a network of SCG employees are encouraged to carry out manage its own affairs and - 7 years (2008-2014) - desalinate over 6 million rais lived knowledge and success stories resulting in partnership with SCG and multi-partners communities of wisdom and self-sufficiency. projects that truly respond to community’s gradually become more of land in the Northeast from the partnership between SCG and the has successfully applied a range of innovative The Power of Wisdom project is a needs in a number of ways. empowered. Subsequently such - established 76 Farmers Skill communities in building check dams to resolve solutions to desalinate soil – through a unique collaboration between SCG and other partners Throughout 8 years of implementation, Centers in 16 provinces strong communities will multiply - over 15,000 leadership farmers a variety of problems gripping the community. combination of traditional knowledge and namely Thailand Sustainable Development 20,287 SCG staff members have participated in numbers to make for a strong, The partnership focuses on reviving the science. Among key results, currently rice Foundation, National Science and Technology in working for 1,314 community-based projects prosperous and happy society.” community forest that serves multiple practical output in Ban Toey community increases from Development Agency, the Royal Thai Army and in 77 provinces across Thailand, involving needs including livelihoods and natural defense previously 300-350 kilogram per rai to 600- the Thai Chamber of Commerce. To date, 800 budget of 132.16 million baht. In addition, SCG against forest fire. The community forest brings 1,000 kilogram per rai. The local villagers have back a healthy ecosystem and becomes a also earned more income since the desalinated source of food and income for villagers who soil enables them to do integrated farming and Sharing Opportunities, Drawing the Future Program earn 700-800 baht per day collecting wild production of organic fertilizers sold at the Participant Project rate of 2 tons per day with daily proceeds of mushroom. Some have reported a spike in 4,800 1,000 income to 60,000 baht during 6 months of 3,200 baht. The community now generates a 4,128 peak harvest season. Moreover, community revolving fund of 300,000 baht per year. 3,600 750 members can harvest 5,000 baht-worth of Members have learned to work together and 3,130 wild honey without having to make extra are now equipped with management skills. 2,555 investment. The series of checked dams also Following inauguration of these two 2,318 2,090 2,218 2,400 2,023 500 guarantee water supply for agriculture all year sites of Community Learning Center, we have 1,825 round and there is no more flooding during welcomed a total of 816 visitors, consisting of 1,200 250 rainy season. The most importance is that the 220 persons from neighbouring communities, 411 371 377 282 373 321 331 process of check dam construction provides 308 academics and NGOs, 158 SCG staff 293 258 Nopporn Nilnarong 208 143 142 opportunities for community members to unite members and over 100 members of the media. 156 138 137 132 0 0 Independent Academic for a clear purpose. The Community Learning The Power of Wisdom Project, has Shared about SCG Conserving Water 2007 2008 2009 2010 2011 2012 2013 2014 Center showcases how this is achieved to been extended from the successful training for Tomorrow Project (Million visitors and will also exemplifies a good of community leaders for the project on soil Baht) 12.5 13.1 11.7 12.0 26.6 12.0 29.8 14.4

practice of intimate collaboration between desalination. The project seeks to build Proposed Project Number of participated staff SCG and the community which is crucial to the capacity of community leaders, Approved project Amount of fund endure sustainable development. local scholars, military officers and farmer 72 73 staff members themselves have donated 5.92 confident that these future graduates will contribute quality of life of Saraburi residents. We have borrow. million baht in support of various projects. This sort to the pool of skilled workers to drive economic led efforts to rally other cement manufacturers 2) Welfare Fund focuses on maintaining of engagement contributes to strengthening the development. to come on board. In 2014, the Group a pool of savings among members, who can bond among workforce while fostering good ties Community Partnership Association in implemented a peer-to-peer support project borrow from it for livelihood purposes. Investment Fund • The Organic Fertilizer Fund by Ban with communities. The project approach serves Map Ta Phut, Rayong province was founded in on Biodiversity and Ecosystem Water The Career Fund Program operating Pla-bu Savings Groop in Mahasarakham as a model of engagement with other sectors and 2010. The Association brings together operators Management, Reduce Energy Consumption since 2008 strengthens the capacity of six province stakeholders within ASEAN. with facilities located in the area led by conglomerates and CO , along with Dedusting and EP communities in different parts of Thailand. • The Posterity Fund operated by Inpaeng 2 Farmers’ Group in Sakhon Nakhon Specialists…the Maker of the Nation like SCG, PTT Public Company Limited, BLCP Conversion. Also implemented were the ‘Green Managed by steering committees, these province Project While the job market requires at least Power Co., Ltd., Dow Chemical Thailand Co., Ltd., Truck’ and ‘Green Logistics’ activities. funds improve people’s quality of life, and have • Pig Farmers’ Revolving Fund in Nan province. 190,000 skilled workers from vocational branches and Glow Energy Public Company Limited with Outside these two provinces, the coal emerged good practice and models for other Welfare Fund per year, Thailand’s education system is unable the joint mission to enforce rigorous health, safety importer’s business located in Nakhonluang communities beyond Thailand into ASEAN. • The Family Support Fund for people to meet such demand due to unpopularity of and environment (HSE) standards to demonstrate District, Ayutthaya province adopted the Bring Good Books to Thai Children on duty in the southern border region (Narathiwat, Yala, Pattani and four vocational education as a choice among Thais. Left peaceful co-existence between industry and concept of peer-to-peer business support for Program Strong intellectual and emotional district of Songkhla province) unattended, such human resource shortfall could community. The operators seek to assure the sustainability, through the launch of ‘Community intelligence, integrity, creativity and concentration • The Revolving Fund for Fishing Boat Maintenance (Satingphra District, undermine the competitiveness of Thai industries communities of their quality of life and business Partnership Project’. The group intends to take root during formative years of 0-6, and Songkhla province, and Pakpayun in view of ASEAN Economic Community. sustainability through schemes such as Eco apply the concept and guidelines on HSE SCG’s Story Telling Through Book is a medium District, Pattalung province) To address the crisis, SCG Foundation Factory, Green Supply Chain, with a view to compliance, environment management, for child development during that age range. has come up with ‘Specialists…the Maker of the making Map Ta Phut an Eco Industrial Town along monitoring and evaluation of compliance by Given shortage of such reading materials in Nation Project’ to encourage Thai youths to pursue with supporting Eco Community and Eco School. To operators, with a view to ensuring good quality Thailand, and the fact that such books are education and career path along the vocational date, there are 16 members joining the Association. of life of stakeholders. generally too expensive to be widely accessible, track, by offering no-strings-attached scholarships In 2014, the Association joined force to bring Career Fund Program SCG Foundation SCG Foundation launched this project in 2008 to secondary-school-graduated students to study about world-class HSE compliance, through peer- believes that the unity of a community to produce affordable, high quality reading for vocational degree in areas of critical shortfall to-peer support. With this goal in mind, members members is key to ensuring sustainable materials in this category to make them including mechanical engineering, electrics and have developed a contingency plan together with development, because community members accessible to the general public. electronics, welding, mechatronics and molding. 38 communities in the vicinity, secured additional are directly aware of and impacted by SCG Foundation has also supported Apart from scholarships, the project offers medical staff, and organized 22 mobile medical problems and able to develop solutions most production of books in braille alphabets for additional trainings on skill development and service operations to serve the communities. In appropriate for their lifestyle. Therefore, the visually impaired children, the first of its kind in work ethics. This project engages other key addition, the Association granted 300 nursing Foundation employs SCG’s management Thailand. SCG staff members and the public stakeholders from both the public and private college scholarships. The first batch of scholarship model to social work in order to optimize result. were encouraged to participate in reading sectors namely the Thai Chamber of Commerce and recipients – 200 nursing students- are due to Through the Career Fund Program, SCG and producing audio books for the blind. the Board of Trade of Thailand, Federation of Thai graduate and ready to serve in Rayong province Foundation provides seed capital for the In 2014, SCG Foundation produced a Industries, and the Office of Vocational Education by May 2015. community to lend to members to generate pictorial book titled ‘Two Baby Turtles Not Afraid Commission to ensure that curricula do produce Achievements of the Association in the livelihoods suitable to the contexts. Thereafter, of Dinosaur’, for the blind and visually impaired the type of graduates the job market wants, and eastern region have been replicated to the cement they have to pay back according to conditions children and granted such book to 12 schools to offer apprenticeship in industrial sector to plan production sector in Saraburi province, where a that community members themselves decide for the blind and over 70 Special Learning their career path. group called ‘Cement Partnership Initiative Project’ so that the Fund continues to lend to others Centers nationwide, with 500 copies distributed To date, there are 750 scholarship recipients was formed with a mission to make cement in need. There are two types of Fund namely: through the Center of Education Technology under the project and SCG Foundation is production environment-friendly, while caring for 1) Investment Fund operates a revolving for the Blind. A total of 250 SCG workers and fund, with interest incomes for members to volunteers took part in the production.

Bringing Good Book to Thai Children Program released braille pictorial book Specialists...the Maker of the Nation title ‘Two Baby Turtles Not afraid of Project is launched to serve the need Dinosaur’ for the blind and visually of skilled workers of Thailand impaired children 74 75 SCG Future Engineer Program Since and U15 Championships. The Academy has also income while raising awareness on the importance 2013, SCG introduced the successful model of sent 11 players to join the training of Badminton of marine resource conservation. partnership in Thailand by cooperated with Association of Thailand as they are designated to Philanthropy In 2014, SCG donated a total Ho Chi Minh University of Technology to implement play in the Thai national team. of 150.8 million baht in support of philanthropic SCG Future Engineer Program in Vietnam. Under Fish Habitat & Beautiful Beach Project activities through a variety of charitable organizations SCG Sharing the Dream Scholarships in ASEAN (2007-2014) this program, we organize tutorials and provide The Project is inspired and driven by the recycling and entities with mission and track record of social higher education advice for secondary school aspect of SCG’s sustainable resource management contribution. Myanmar Laos Cambodia 399 Scholarships 100 Scholarships students who are interested in pursuing university policy. Engaging all stakeholders on board including SCG Donates Shelters to Vietnam 499 Scholarships 2.8 Million Baht 0.8 Million Baht 3.75 Million Baht degrees in the field of engineering. This program SCG Chemicals staff, coastal resource Continuing from the Sustainable Shelter in an Age of has attracted 250 participants to date, and we aim conservationists and local fishing folks in Rayong Climate Change and Disasters, a joint undertaking Indonesia 800 Scholarships to replicate this approach elsewhere in ASEAN. province, the Project uses PE100 pipes that between SCG and Habitat for Humanity Vietnam 5.6 Million Baht SCG Sharing the Dream Scholarships are disposed after plastic pallet testing process (HFHV), the Project combines SCG’s expertise SCG Foundation deems education as basis for but contains no toxic chemical substance to in construction materials and the award winning sustainable development. From the start of this assemble fish home. Blending well as part of prototype home ‘By the Floating Market’ created project in 1981, over 63,000 scholarships worth marine environment, these man-made fish homes by Tran Truong Thuy Nhi and Nguyen Hong Quan Vietnam 550 million baht have been made available. In 2014 reduce problems associated with operation of large from Van Lung University. As a result of the synergy, 3,145 Scholarships Philippines 13.2 Million Baht alone, 3,200 scholarships (4.4 million baht) were fishing trawlers. It is calculated that the project a series of climate-resilient shelters were built and 1,000 Scholarships awarded. From our field visits to interview scholarship could reduce the energy required in recycling used donated to Vietnamese families whose home were 6.5 Million Baht recipients, we discovered that over 60 percent of pipes by up to 20,000 kilogram per year. The new destroyed by flooding in Tien Giang province in the scholarship recipients graduated. Many of them have fish habitat helps local fisher folks to generate more Mekong Delta. jobs and successful careers and about 28 percent SCG Sharing the Dream Scholarships in Thailand of them pursued advanced degree education. In 2007, SCG started awarding SCG Sharing No. of Scholarship the Dream Scholarships in Vietnam, and subsequently

4,000 in Philippines, Indonesia, Myanmar, Laos, and 194 194 204 Cambodia. To date, over 5,900 scholarships worth 304 266 304 304 3,500 362 32.6 million baht have been awarded. In addition, 339 314 304 386 304 334 461 we have organized activities on leadership and 3,000 285 399 329 427 304 307 900 308 teambuilding among scholarship recipients in these 455 684 691 2,500 687 countries. 942 435 1,007 905 923 962 572 SCG Badminton Academy SCG has been 2,000 1,065 521 801 a major supporter of badminton sports since 1981, 1,061 544 1,500 609 working with Badminton Association of Thailand 682 563 1,055 1,210 2,173 under Royal Patronage to organize tournaments 1,000 1,357 1,852 736 including SCG Junior Badminton Championships, 1,475 1,135 719 My family is in a community in Ban Pong, Ratchaburi province. I received the scholarship 500 1,124 896 SCG All Thailand Badminton Championships and 571 364 378 continuously from secondary school (Grade 8) until I graduated with a BA. SCG 377 206 159 234 SCG Thailand Open Badminton Championships. 117 29 32 33 30 23 0 From there, we have expanded our role to nurture Foundation evaluated that I was committed to studying. But as our parents separated,

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 young talents by setting up SCG Badminton my mother had the burden of raising three children with a job that earned a few (Million Baht) 19.7 23.0 33.7 27.9 39.3 30.4 32.4 32.2 32.0 39.6 43.8 Academy in 2007 to groom a new generation of hundred baht a day. Tuition fees were beyond our reach as we struggled to make

Primary School High School Bachelor Degree excellent players for the Thai national team in the ends meet in terms of basic necessities. I received the scholarship until I finished my Secondary School Vocational Degree Public Health future. BA in mechanical and aeronautical engineering from King Mongkut University of Currently, there are 40 youngsters aged from Technology without having to worry about money. I gave my best to the study so 12-19 years being trained under the Academy. In the donor feel that I am worthy of the help. Now I have a secure job with a reputable 2014, some of their outstanding performances company. I can support my family for better quality of life. I would not be where I include male duo champions at BWF Junior am today without SCG scholarship Championships 2014 in Malaysia, best single woman player under 19 at Singapore Youth International, runner up of male duos under 17 Arthit SCG Scholarship Alumni category at SCG Badminton Asia Junior U17 Suanla 76 77

Key Stakeholders • Government agencies, such as Royal Forest Department, Department of Primary Rehabilitation of the Survival Rate of Seeding Industries and Mines, Office of Natural quarry areas, especially Biodiversity Resources and Environmental Policy and lime quarry, is a Planning (ONEP), Department of Environmental challenging task. and Ecosystem Quality Promotion (DEQP) and the International Union for Conservation of Nature (IUCN), take With lucid policy and more than % important parts in setting up framework of approach together with 80 quarry rehabilitation, promoting of conservation A drawing of Biodiversity and Rehabilitation knowledgeable and and sustainable use of biodiversity. Center by Forest Restoration Research Unit experienced team work (FORRU), Chiang Mai University • Scholars or NGOs that emphasize is a key success for on impacts from mining, mitigation measures • Survival rate of seedling must exceed quarry rehabilitation and quarry rehabilitation. at least 80% to show the success of quarry of all SCG quarries. • Communities around the areas rehabilitation, regarding development of which are the most important groups that are effective rehabilitation, seedling, planting and interested in impacts from mining (noise, dust maintaining technics. and vibration), conservation of biodiversity in The key challenges are to meet the area, engagement in quarry rehabilitation, expectations of stakeholders in effective and forestry plantation management which biological resource management, design and creates a stable income. conduct acceptable plan on quarry closure. The Quarry Rehabilitation Committee has Projects and Activities for initiated implementation plan in cooperation with a consultant for the next phase. Quarry site at Thung Song cement plant in 2010 Quarry site at Thung Song cement plant in 2012 Creating Stakeholder Engagement SCG Paper is conducting a business SCG has been implementing quarry these limestone-mountainous areas, especially • Establishing ‘Biodiversity and which causes impacts on biodiversity and rehabilitation and biodiversity conservation when mining activities are implemented in Rehabilitation Centers’ in 4 quarry areas as ecosystem. According to risks that an continually by taking in consideration as an ASEAN countries. In 2014, SCG Cement- knowledge sources in quarry rehabilitation and agriculturist may cut down trees in a forest important part in the compliance of a sustainable Building Materials has announced new policy key specific biodiversity databases of areas in and sell them as raw materials because the Dr. Sakhan Teejuntuk 3 provinces, Saraburi, Nakhon Si Thammarat infertile land is not appropriate for cultivation. development approach under our vision of on quarry rehabilitation and biodiversity that Department of Silviculture being a role model of environmentally friendly covers mining implementation abroad in order and Lampang. SCG Paper has put efforts on research and Faculty of Forestry Kasetsart University mining in cement business and a role model of to ensure that every quarry area implemented • Holding an open house activity in development of diverse eucalyptus species forest management in paper business. SCG is by SCG does not cause negative impacts on the each quarry area and inviting government which are appropriate for each area, fast committed in conservation of biodiversity in the existing environment. In addition, SCG focuses agencies and surrounding communities to visit growing, and less water consumption to limestone-mountainous areas that have specific on knowledge dissemination to external parties quarry rehabilitation and seedling. help creating stable career and income for ecosystems, differentiated from other areas. and interested persons in order to apply • Initiating the ‘Villagers and Planting’ agriculturists. At present, there are 24,450 rais Many groups of stakeholders are interested in knowledge in other areas. project which SCG has worked in collaboration of certified forest in compliance with Forest with communities to provide and plant native Stewardship Council Standard (FSC). In seedling in quarry rehabilitation activity which addition, agriculturists are encouraged to Semi-Open A drawing of bird found in Cut mining creates income for communities. engage in the community forest project Lampang cement plant by which uses empty areas in the community, Dr. Rungsrit Kanjanavanit Quarry Rehabilitation Results from Quarry ridges, canal sides and surrounding agricultural Rehabilitation and areas for eucalyptus plantations, leading to SCG towards Biodiversity Conservation the increase of their incomes and reducing of Biodiversity Sustainable Mining • All limestone quarries in Thailand forest destruction. At present, community Management must prepare biodiversity databases and forest areas in this project are accounted for master plans of quarry rehabilitation. 1,968 rais in Kanchanaburi and Ratchaburi Mine Closure Plan (Final Land use) Provinces. Green Mining Network 78 79

of the entire process, from the selection of at the Earth’s surface causing irritation to the Air Quality high-quality coal with low sulfur and an increase respiratory tract. Therefore, SCG Chemicals has in the usage of biomass and waste rejected provided surveying and mapping of the sources from waste paper raw materials so that it can of volatile organic compounds in various units Management be used as an alternative to coal. In addition, such as tanks of raw materials, products, loading air is treated before it is released by adding and unloading of materials or products, limestone to it in order to create gypsum for wastewater treatment and residual substances Under the ASEAN Economic Community of the World Business Council for Sustainable use in the cement manufacturing process. In left over in the burning flares. Consequently, liberalization act, ASEAN has developed Development-Cement Sustainability Initiative 2014, SCG successfully reduced emissions of SCG has taken measures to improve related environmental cooperation but such efforts (WBCSD-CSI) and has shown its commitment sulfur dioxide by up to 39 percent. processes in order to lessen the spread and have yet to tackle the adverse impacts to controlling the rate of emissions of oxides leakage of VOCs, such as changing material effectively. Air, which is essential for human of nitrogen gas, by not allowing it to exceed Particulate Matter handling systems so that they are transported life, has been affected due to air pollution, 1,700 grams per ton of clinker. This required the Particulate matter is the main issue from below; covering the sewage system; mainly from domestic activities, such as usage of high-performance technology, which causing air pollution in the cement inspecting and repairing joints, valves and pipe energy usage, transportation, manufacturing led to the installation of a Low NOx Burner production process. This happens in fittings; improving each sampling point by turning A Toluene Molecule Dust NOx Ozone - CFC SOx and construction, and this has extended across in all of SCG’s cement plants to reduce the the crushing stage of the raw materials, the it into a closed system; changing the plant the ASEAN region. formation of oxides of nitrogen, and the control combustion process and its reaction, the design into a closed system; choosing the valve SCG has used the best available technology of the combustion process, which allowed for crushing of the clinker, the product packaging stems (Bellow seal valve) and leak-proof pumps in the management of air pollution, such as the appropriate proportion of fuel, and reduced process as well as during the transportation (Sealless pumps); and choosing naphtha tanks installing the most efficient air treatment system excess air in order to reduce the reaction or arrangement of raw materials and cement. with covered ceilings. All of the above made it along with continuous monitoring of air quality between nitrogen and oxygen. Being a member of the WBCSD-CSI, SCG possible to control the ventilation and leakage through Continuous Emission Monitoring Map Ta Phut in Rayong province is another has shown its commitment to controlling the of VOCs to achieve a result 30 percent better Systems (CEMS). In addition, we have arranged area that gives importance to the oxides of amount of particulate matter emitted from the than the international standard. a mobile laboratory, which can monitor the nitrogen (Carrying Capacity) due to power stacks in the cement production process, which environment according to international standards plants and chemical industries within the region must not exceed 150 grams per ton of clinker. Ozone Depleting (ISO 17025) and alert us if there is any risk at which require high-temperature combustion. SCG has used various measures to achieve Substances any time. Employees and individuals associated SCG Chemicals recognizes the importance the set goals, such as the installation of a dust ASEAN member countries have with the air treatment system must be trained of the reduction of oxides of nitrogen, in collecting system with highly efficient A Toluene Molecule Dust NOx Ozonesigned - CFC the MontrealSOx Protocol. Following according to the air pollution control requirements particular, in the cracker furnace and, therefore, electrostatic precipitators and filter bag this, in Thailand, SCG has banned the use of the Department of Industrial Work. In started using an Ultra-Low NOx burner. This has systems, making it possible to increase the of ozone depleting substances, especially addition, SCG has applied the Total Quality reduced the emission of nitrogen oxides equivalent efficiency of dust collection to as high as 99.9 in the manufacturing of new products Management (TQM) and the Total Productive to up to 80 percent and has also reduced power percent. In addition to the above, the building since 1998 as well as SCG subsidiaries in Maintenance (TPM) principles in the management consumption. Hence, SCG has designated the design and the construction conveyor systems ASEAN have begun to reduce the use of of air quality control systems in order to Ultra Low NOx burner as minimum standard have been set up in a closed area in order to chlorofluorocarbon continuously since 2006. At improve the performance of the mechanical equipment for each chemical factory set up, prevent the spread of particulate matter outside the same time, SCG also explored the use of equipment and reduce its damage and right from the planning process itself. the operational area. equipment with ozone depleting substances in downtime. order to gradually switch to a device that does Oxides of Sulfer Volatile Organic not contain Halon. This mission is expected to Oxides of Nitrogen The main cause of acid rain is sulfur Compounds (VOCs) be completed in 2020 and includes the use of Oxides of Nitrogen in SCG are dioxide, 90 percent of which occurs in VOCs in the petrochemical industry a specially designed office building. In 2012, mainly caused during combustion the manufacturing and the burning process is caused by the raw materials, SCG renovated the Company’s headquarters A Toluene Molecule Dust NOx Ozone - CFC SOx in a kiln at the temperature of fossil fuels, especially coal, which contains products and by-products. Some building. Hence, the prescribed cooling was R-123, A Toluene Molecule Dust aboveNOx 1,000 degreesOzone Celsius - CFC of the cement sulfur.SOx SCG Paper, which uses coal as the main A Tolueneof Molecule the volatile organicDust compoundsNOx affect the Ozonewhich - hasCFC reduced the SOximpact to the ozone layer production process, and partly from molecular fuel for heating its boilers, has therefore taken health of those exposed, such as benzene, compared to the earlier substances by up to 98 nitrogen in the fuel which reacts with oxygen measures to reduce the formation of oxides toluene, and butadiene, while some volatile percent and has been defined as a standard for in the combustion chamber. SCG is a member of sulfur. This has been done through control organic compounds create ozone, an air pollutant, new buildings, such as the SCG 100th year building. 80 81

Dream of ASEAN

Road to Sustainability 82 Sustainability Performance Data 2010 – 2014 84 Cement Sustainability Initiatives (CSI) 90 About this Report 92 Subsidiaries included in Sustainability 94 Report 2014 GRI Content Index 98 United Nations Global Compact (UNGC) 104 Assurance Statement 106 Pride of SCG 110

Although the economic conglomeration of environmental and social development are: awareness developing into CSR activities, approach on natural resource and environmental countries in ASEAN region under the “ASEAN • Learning from others: Try not to lose creating corporate’s reputation and shifting to conservation, including how to respond with Economic Community” is considered to drive competitive advantages by adopting sustainable share value to create benefits to all sectors, upcoming social changes in compliance with economic system in this region toward rapid development process to stand out from others. throughout supply chain. economic growth to create better environment growth, it is undeniable that the growth in In order to compete, fast learning, fast The time has come for ASEAN countries and society of the “ASEAN Economic Community” economic system will result in the migration to adaptation and fast applying are required; to initiate processes of learning, management concretely for better lives of ASEAN and bright urban areas. In addition, increasing population • Searching for opportunities: Apply and collaborative problem solving to find out future for the next ASEAN generations. will drive a large province to become urban ASEAN’s advantages, such as cultural identities, society which requires standard of better living, capacity in adaptation, creativity to design leading to more consumption and natural sustainable development process according resource degradation. Such aforementioned to identity-styles; changes are causes that lead to unbalancing • Considering acceptance level of social and environmental aspects, affecting life stakeholders: At present, social media is quality of ASEAN population in a long term. considered a main channel for stakeholders I dreamed of clean and convenient meals - Myanmar All countries in ASEAN need to search for to express dissatisfaction that affects the I dreamed of having house that can generate energy - Vietnam economic system development mechanisms corporate’s business and reputation; in alignment with social and environmental • Finding strengths: Try to find strengths I dreamed of seeing advanced medical technology – Thailand balance for sustainable growth. Green ASEAN that reflect business identity and meet economic, I dreamed of living without fears of disasters – Indonesia approach is initiated as a main target for social and environmental requirements, in every country in ASEAN region to keep moving relevance with the corporate; and forward by focusing on clean industry, air and • Starting to implement sustainable water and response to rapid social changes. development process at your own supply The approaches for ASEAN’s success in chain: It can begin from donation to build up 82 83 Road to Sustainability

1913 1987 1991 1993 1995 1996

• Established The Siam Cement • SCG Code of Conduct • Environmental Conservation • Member of Thailand • The Environmental Conservation • SCG Environmental Indicator Public Company Limited and Safety Policy Business Council for and Safety Committee Standards Sustainable Development • Enviromental ( TBCSD ) Conservation Policy

2002 2001 2000 1999 1998 1997

• The Remuneration Committee • The Audit Committee • SCG Code of Conduct (1 st Revision) • Green Label • ISO 14001 Certificate for Environmental Management System

• The Governance and Nomination • SCG Code of Conduct (2 nd Revision) • Member of The World Business Committee • Cement Sustainability Initiative (CSI) Council for Sustainable Development (WBCSD) 2006 2007 2008 • Guidelines for Environmental • Environmental Performance • TIS 18001 Certificate for Occupational Conservation and Safety Assessment Programme (EPAP) Health and Safety Management System • Sustainability Report • Environmental Report

2003 2004 2005 • SCG Code of Conduct (4 th Revision) • Gold Class in the Sector of Building • Silver Class in the Sector of Building Materials & Fixtures from SAM/DJSI Materials & Fixtures from SAM/DJSI • The Forest Stewardship Council (FSC) SCG Corporate Governance • SCG and Business Operation following Grease Trap and Bio-organic Liquid Handbook • st • Hand book (1 Revision) the Principles of Sufficiency Economy • Risk Management Guidelines • SCG Sustainable Development Committee • SCG Vision • SCG Sustainable Development Guidelines • Guidelines for Sustainability Development • SCG Contractor Safety Certification System (SCS) Code of Conduct regarding SCG • The Donations Committee Sustainability Leader: Member of Dow Jones 3R (Reduce, Reuse/Recycle, Replenish) • • • • Intellectual Property Policy • SCG Safety Framework Information Disclosure • SCG Corporate Governance Handbook Sustainability Index (DJSI) in the Handbook Sector of Building Materials & Fixtures st • Greening Supply Chain Program • Check Dam Handbook • Whistleblower Policy Safety Performance Assessment • The 1 Community Satisfaction Survey • rd Sustainability Report SCG Distribution’s Recycle Handbook SCG Safety Framework (1 st Revision) Programme (SPAP) • SCG Code of Conduct (3 Revision) • Guidelines for Sustainability Development • • • Sustainability Report The 2nd Community Satisfaction Survey • Sustainability Report • Guidelines for Green Procurement • Sustainability Report • • • Sustainability Report • Sustainability Report

2014 2013 2012 2011 2010 2009

• Industry Leader for the 4 th consecutive year • Industry Leader for the 3 rd consecutive year • Sector Leader for the 2nd consecutive year • The Donations Committee renamed • Gold Class in the Sector of Building • Gold Class in the Sector of Building and Gold Class in Construction Materials and Gold Class in Construction Materials and Gold Class in Building Materials & Fixtures to The CSR Committee for Sustainable Materials & Fixtures from SAM/DJSI Materials & Fixtures from SAM/DJSI from RobecoSAM/DJSI from RobecoSAM/DJSI from RobecoSAM/DJSI Development Stakeholder Engagement Policy Gold Label for Outstanding Energy st • • • Instilling Thinking, Sharing Happiness Station • LEED BD+C Platinum from U.S.Green • LEED EB:OM Platinum, 1 certified • Sector Leader and Gold Class in Building • CSR by Heart: Anyone Can Do It Handbook Conservation Building Sustainable Happiness on the Salinity Building Council (USGBC) building in ASEAN from the U.S. Green Materials & Fixtures from SAM/DJSI Product Safety Management Guidelines • Thailand Sustainable • Land Handbook SCG 100 Years of Innovations for Building Council (USGBC) Green Happiness on the Salinity Land Handbook • • • Development Symposium • SCG eco value Label The 4th Community Satisfaction Survey Sustainability Book • Green Building Products Handbook Repairing Homes to Bring Back • • Sustainability Report • Carbon Reduction Label • SCG Supplier Code of Conduct • ASEAN Sustainable Development Symposium Happiness Handbook • • ASEAN Sustainable Development Symposium • Carbon Footprint Label • A Certified Company by The Thailand’s • Sustainability Report • Home Repair after Flooding Handbook & DVD • Sustainability Report • Bird Guide of SCG Cement, Lampang Plant Private Sector Collective Action Coalition • ISO 50001 Certificate for Energy against Corruption (CAC) Council Management System • Sustainability Report • Sustainability Report • The 3rd Community Satisfaction Survey • Thailand Sustainable Development Symposium • Sustainability Report 84 85

Revenue from Sales Proportion of Employees by Nationality Proportion of Employees by Country (G4-10) (G4-10) Sustainability 13% 0.06% 0.09% SCG Paper 0.3% Laotian 0.01% 0.3% Laos 0.02% Singaporean Singapore 51% 0.4% Malaysian 0.3% 0.4% Malaysia 0.3% Myanmarese Myanmar Performance Data SCG Chemicals Others Others 0.9% 0.9% 36% Cambodian Cambodia 2010-2014 SCG Cement - 2.1% 69.8% 2.1% 69.2% Building Materials Filipino Thai The Philippines Thailand 12.7% 12.9% Performance Data 2010 2011 2012 2013 2014 G4 Vietnamese Vietnam Economic Performance 13.6% 13.8% Revenue from sales (Billion Baht) 301.3 368.6 407.6 434.3 487.5 EC1 Indonesian Indonesia Profit for the year (Billion Baht) 37.4 27.3 23.6 36.5 33.6 EC1 Proportion of Employees by Age Number of New Employees Hire and Turnover EBITDA (Billion Baht) 45.9 46.3 45.7 61.3 66.5 EC1 (LA12) (LA1) Benefits to employees comprising salary, 21,270 23,997 27,361 32,417 35,356 EC1 3,000 wage, welfare and regular 6.9% 4.0% Male 2,000 3.6% 29 contributions (Million Baht) Over 50 year 2 Female 61.1% 2, 0 Divident to shareholders (Million Baht) 15,000 15,000 13,200 18,600 15,000 EC1 1,8 2 30-50 year 1,000 1.3% 1.0% Interest and financial expenses to lender (Million Baht) 4,670 6,048 6,321 8,193 7,266 EC1 1 6 7 32.0% 0 492 Taxes to governeant and local government 13,045 8,190 5,567 5,792 5,362 EC1 Under 30 year authorities such as income tax, local maintenance New Turnover tax, property tax and other specific taxes (Million Baht) Privilege tax and others from investment 1,187 1,734 1,277 1,156 1,294 EC4 promotion, and research and development (Million Baht) Investments and expenditures regarding 480 712 563 525 555 EC1 Performance Data 2010 2011 2012 2013 2014 G4 community development, social infrastructure Health and Safety Information and environment (Million Baht) Total Incident Rate (Case / 200,000 Man-hour) LA6 Environmental expenditures (Million Baht) 1,146 1,741 1,964 2,687 2,542 EN31 • Employee 0.46 0.41 0.36 0.36 0.32 • Contractor 0.83 0.37 0.23 0.22 0.20 Incident Rate (Lost Time Case) (Case / 200,000 Man-hour) LA6 Performance Data 2010 2011 2012 2013 2014 G4 • Employee 0.10 0.12 0.07 0.07 0.05 Employee Information • Contractor 0.13 0.12 0.05 0.06 0.06 Number of Employees Severity Rate (Day / 200,000 Man-hour) LA6 Proportion of Employees by Level 30,820 34,725 38,883 49,287 51,100 G4-10 • Employee 2.77 2.34 0.84 1.69 1.63 Proportion of Employees by Level G4-10 • Contractor 1.88 1.91 1.15 1.58 1.96 • Management 4.0 3.7 4.8 3.4 3.4 Total Number of Fatality (Case) LA6 • Supervisor and Technical Staff 31.8 31.0 32.2 27.4 28.3 • Employee (Male : Female) 0:0 0:1 0:0 1:0 0:0 • Operator 64.1 65.3 63.0 69.2 68.3 • Contractor (Male : Female) 12:1 5:3 11:0 11:0 7:0 Proportion of Employees by Gender LA12 Number of Fatality from Motor Vehicle Accidents (Case) LA6 • Male 79.0 78.0 78.5 77.8 77.5 • Employee (Male : Female) 0:0 0:1 0:0 1:0 0:0 • Female 21.0 22.0 21.5 22.2 22.5 • Contractor (Male : Female) 7:0 1:2 6:0 8:0 4:0 Proportion of Basic Salary of Female to Male LA13 Number of Chemical Spillage* (Case) EN24 • Management 0.96 0.86 0.83 0.83 0.83 Level 1 : High Severity 1 0 1 0 1 • Supervisor and Technical Staff 0.91 0.92 0.93 0.94 0.94 Level 2 : Moderate Severity 3 1 2 2 1 • Operator 0.92 0.93 0.95 0.95 0.94 Level 3 : Low Severity 8 2 1 6 2 Proportion of Local Senior Management * 25.7 22.8 20.5 18.3 20.8 EC6 Proportion of Absence by Type LA6 Level 1 : High severity means that the volume of chemical spills is more than 2,500 kg (plastic powder or granule is more than • Sickness 14.3 14.9 15.0 14.0 15.0 5,000 kg) that leak from primary containment or any spills to environment or causes injury. • Work-Related Injuries 0.4 0.3 0.2 0.2 0.3 Level 2 : Moderate severity means that the volume of chemical spills is between 500-2,500 kg (plastic powder or granule is • Others 85.3 84.8 84.8 85.8 84.7 between 2,500-5,000 kg) that can be contained (not reaching to environment), and no injury occurred. Return to Work after Parental Leave of Female Employees ** LA3 Level 3 : Low severity means that the volume of chemical spills is between 50-500 kg (plastic powder or granule is between 500-2,500 kg) that can be contained (not reaching to environment), and no injury occurred. Number of Employees that Took Parental Leave NA NA 217 202 235 Number of Employees who Returned to Work after Parental Leave Ended NA NA 210 202 231 * Excludes flammable gas and utility chemicals, e.g. raw water, filtrated water, distilled water, Nitrogen gas, instrument air, service air, or Carbon dioxide. * Calculate from percentage of overseas senior management and supervisor over total overseas staff Number of New Employees Hires and Turnover **Only female employees are entitled to parental leave by Thai law 86 87

Performance Data 2010 2011 2012 2013 2014 G4 Performance Data 2010 2011 2012 2013 2014 G4 Environmental Performance Total Energy Consumption (Petajoules) 140.68 167.68 174.58 175.93 182.27 EN3 Production (Thousand Tons) 32,168 34,784 37,702 37,132 37,838 Thermal Consumption (Petajoules) 128.30 153.65 159.70 161.50 167.22 EN3 Raw Materials (Thousand Tons) 38,413 41,078 45,822 44,007 46,268 EN1 Alternative Energy Consumption (Petajoules) EN3 Recycled Materials (Thousand Tons) 1,623 1,612 1,567 1,814 2,932 EN2 Biomass 7.31 9.10 9.86 10.26 9.50 Industrial Waste 10.71 8.78 8.35 10.70 11.44 Production Raw Materials Electrical Consumption (Million kilowatt hours) 3,441 3,895 4,133 4,008 4,180 EN3 Thermal Thermal Source Electricity 8% 9% Paper Paper 5% 3% 2% 8% Building Steam Oil 1% Paper 11% 10% Materials Building Building Cracker Bottom 41% 6% /Pet Coke 12% Materials Materials 68% Biomass Chemicals Cement 22% Building Materials 61% Paper Cement 13% 7% Chemicals Waste 20% 37% Chemicals 36% Cement 44% 39% Chemicals 37% Coal Cement Natural Gas

Energy Consumption Cement Building Materials Proportion of Raw Materials Petajoules GJ (109)/Ton Cementitious Petajoules GJ (109)/Ton Product Cement Building Materials 80 8 20 4 2% 3% 1% 3% Gypsum Recycled 60 6 15 3 Gypsum 2.45 2.44 Sand 1% 4% Materials 6% 2.26 2.32 2.35 Laterite Calcium Carbonate Building 40 4 10 2 3% 3.02 2.98 2.88 2.95 2.96 Recycled Materials Materials 6% 28% 20 2 5 1 Pottery Sand Stone 37% 0 0 0 0 Cement 7% 20% 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 19% Aggregate Clay Paper 7% Chemicals Paper 72% Feldspar 18% Limestone Cement 10% Petajoules GJ (109)/Ton Product Petajoules GJ (109)/Ton Product Others 16% 80 20 60 20 Clay 37% 60 15 45 15 Chemicals 13.1 12.5 12.6 13.2 12.8

9.11 40 8.39 8.53 8.67 10 30 10 Chemicals Paper 20 6.79 5 15 5 0.6% 0.7% Acetic Acid Amount Amount per ton product 0 0 0 0 0.7% Others 0.2% 3% Paper Pulp 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Chloride Recycled 0.8% Materials 7% Mono Ethylene Wood Chip SCG Alternative Energy* Cement Paper Glycol 2% Petajoules % Petajoules % Petajoules % Natural Gas 40 40 40 40 40 40 32.3 31.2 31.3 30.1 3% 48% 30 30 30 30 30 28.2 30 Alcohol Recycled 42% Materials 20 20 20 20 20 20 15.6 15.7 14.1 10% 67% Wood 14.1 13.0 12.5 12.5 11.5 11.2 11.4 Para-Xylene Naphtha 10 10 10 10 10 10

15% 0 0 0 0 0 0 Liquid Petroleum Gas 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

*Cement and Paper are main utilizers of alternative energy 88 89

Performance Data 2010 2011 2012 2013 2014 G4 Performance Data 2010 2011 2012 2013 2014 G4 GHG Scope 1 (Million Tons) 19.66 20.73 21.96 21.51 22.15 EN15 Water Withdrawal (Million Cubic Meters) 95.50 104.55 110.80 104.52 111.71 EN8 GHG Scope 2 (Million Tons) 2.09 2.27 2.23 2.28 2.61 EN16 Proportion of Recycled Water (%) 9.99 9.90 9.52 6.98 7.20 EN10 BOD (Thousand Tons) 0.51 0.46 0.59 0.49 0.49 EN22 COD (Thousand Tons) 7.50 7.34 8.20 6.75 6.73 EN22 GHGs Scope 1+2 Cement Building Materials TSS (Thousand Tons) 0.90 0.87 1.35 0.96 1.02 EN22

Million Tons C02 kg/Ton Cementitious Million Tons C02 kg/Ton Product

40 1000 1.00 180 178 200 170 170 169 Water Withdrawal Cement* Building Materials* 30 730 720 713 707 713 750 0.75 150 3 3 3 3 691 682 675 115 m /Ton Cementitious Million m m Ton Product 3% 667 671 104 105 102 102 Million m / Building 20 500 0.50 100 3% Materials Building 20 2.0 4 20 10 250 0.25 50 Materials 15 1.5 3 15 0.85 12% 0 0 0 0 10% 10 1.0 2 0.76 0.79 0.80 0.82 10 66% 0.51 0.54 0.49 Paper Cement 0.48 0.36 Cement 5 0.5 1 5 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 0 0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Chemicals Paper 55% 19% Paper Chemicals Paper Chemicals Million Tons C02 kg/Ton Product Million Tons C02 kg/Ton Product 3 3 3 3 8 800 8 1200 Million m m /Ton Product Million m m /Ton Product 1,094 1,062 1,052 1,049 1,042 617 1,028 40 8 80 40 572 596 999 992 989 967 6 543 566 600 6 900 32% 30 463 448 446 450 30 5.06 5.34 6 60 Chemicals 4.73 4.74 4.65 21.2 20.3 21.5 20.9 21.0 4 367 400 4 600 20 4 40 20 10 2 20 10 Scope 1+2 2 200 2 300 Amount Amount per ton product 0 0 0 0 Amount Scope 1 0 0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 SCG Recycled Water** Chemicals Paper

Million m 3 % Million m 3 % Million m 3 %

20 16 4 16 20 16 13.2 12.4 11.5 15 12 3 12 15 10.5 12 9.99 9.90 9.52 9.4 10 6.98 7.20 8 2 6.24 8 10 8 Performance Data 2010 2011 2012 2013 2014 GRI 4.14 4.39 5 4 1 2.45 2.64 4 5 4 Oxides of Nitrogen (Thousand Tons) 18.92 20.02 19.45 23.95 23.94 EN21 0 0 0 0 0 0 Oxides of Sulfer (Thousand Tons) 6.06 7.52 7.68 5.26 3.25 EN21 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Particulate Matter (Thousand Tons) 2.57 2.36 2.13 2.03 1.84 EN21 *Cement and Building Materials has revised scope of water withdrawal **SCG Chemicals and SCG Paper are main utilizers of recycled water

NOx SOx Particulate Matter Performance Data 2010 2011 2012 2013 2014 G4 8% 1% 11% 2% Hazardous Waste (Thousand Tons) 17.02 12.21 14.65 19.60 15.29 EN23 Chemicals Building Cement Building 12% Non-Hazardous Waste (Thousand Tons) 1,176.12 1,305.30 1,215.07 1,130.67 1,209.46 EN23 Materials Materials Building 12% Materials 53% Cement Paper Hazardous Waste*** Non-Hazardous Waste***

4% 10% 2% 79% Paper Building Chemicals Cement 87% 35% Materials Paper Paper 14% Building 12% Materials Cement 76% 64% Paper 18% Chemicals Cement

***Amount and proportion of waste management are shown on page 56-57 World Business Council for Sustainable Development, 90 WBCSD-CSI Operating Results of Cement Business 91 Cement Sustainability Initiative (WBCSD - CSI) ข้อมูลการดำ�เนินงาน 2010 2011 2012 2013 2014 1. Climate Protection and Fuels and Raw adopts are based on relevant government agencies and Climate Protection*, ** Materials Consumption WBCSD-CSI. Number of facilities adopting number of facility 6 6 6 6 6 Cement Business sets a target to emit specific net carbon Cement Business implements quarry rehabilitation in WBCSD CO2 Protocol % 100 100 100 100 100 dioxide, not exceeding than 620 kg carbon dioxide/ton cement accordance with forestry principle and works in collaboration Absolute Gross CO2 million tons of CO2 14.86 14.50 15.46 15.21 15.62 within 2020 or reducing carbon dioxide at least 10% within with external experts to conduct framework for quarry Absolute Net CO2 million tons of CO2 14.73 14.45 15.36 15.08 15.45 2020, compared to 2007. Production process is developed and rehabilitation plan, set up effective quarry rehabilitation forms Specific Gross CO2 kg CO2 ton cementtitous 697 685 680 675 679 improved alongside with innovation to reduce carbon dioxide and technics. Also, SCG implements activities in compliance Specific Net CO kg CO ton cementtitous 691 682 675 669 671 emission, including enhancement of efficiency energy used, with WBCSD-CSI Guidance on Quarry Rehabilitation. 2 2 increase proportion in renewable energy used such as refuse Cement Business focuses on community relations and Use of Fuels and Raw Materials** derived fuel (RDF), biomass and industrial waste and production stakeholder engagement in compliance with SCG’s clear vision Heat Consumption MJ/ton clinker 3,314 3,283 3,219 3,326 3,292 of products and services which support greenhouse gas reduction. on corporate social responsibility. Alternative fossil fuel % by heat 2.7 1.2 2.3 2.8 3.6 For energy management in cement plant, Cement Biomass % by heat 8.8 11.3 11.8 12.8 12.2 Business adopts advanced production technology in use 4. Health and Safety and improves machinery to reduce heat consumption per Cement Business has continuously committed to the Alternative Raw Materials % by weight 0.62 0.50 0.70 1.15 2.93 production unit continually by initiating a project on Waste safety which is aimed to be an organization of zero accident Clinker/Cementitious Ratio % 79.9 79.5 79.4 79.8 80.8 Heat Power Generation (WHG); waste is generated by clinker and work-related diseases. As such, a zero fatality and lost-time Emission reduction** production process, and installing WHG at all cement plants. injury related to the accident have been set. According to the For energy consumption and renewable raw materials, performance of 2014, this target has not been accomplished % of clinker produced by kilns covered % - - - - 99.23 by a monitoring system (Dust, NO , SCG improves machinery to support efficiency renewable fuel yet since there was a lost time injury of one employee. As for x SO2, VOC/THC, Heavy metal) (KPI 1) used, comprising biomass, and industrial waste and refuses the contractor, the accidents have increased and caused three Dust Emissions (KPI 3) tons 1,160 1,022 947 982 971 derived fuel (RDF). For RDF, SCG has collaborated with fatality cases and two cases of lost time injury. In addition, communities nearby the plant to segregate wastes from there were four cases of fatality of third parties. However, this Dust Emissions Rate (KPI 3) g / ton clinker 65 58 51 54 52 communities such as cloth, plastic and paper scraps and sent was because of re-organization of the businesses which have NOx (KPI 3) tons 14,602 14,887 15,274 18,845 18,872 them into transformation process prior use as fuels in cement included a logistic business into the same management. NOx Emissions Rate (KPI 3) g / ton clinker 817 844 820 1,033 1,005 production process. This is an appropriate waste disposal Consequently, the accidents related to cement logistic have SO2 (KPI 3) tons 1,232 1,367 1,122 534 355 approach which does not cause environmental impacts and been added to Cement Business too. This is therefore a SO2 Emissions Rate (KPI 3) g / ton clinker 69 77 60 29 19 does not cause a burden to take care of landfill that may cause challenging task for Cement Business to accomplish. % of clinker produced by kilns covered % 100 100 100 100 100 problems to nearby communities. Guidelines complied by Cement Business in order to by a monitoring system (Dust, NOx, SO2) develop a safety of contractor are the improvement of safety (KPI 4) management of contractor so that they can manage the 2. Emission Monitoring Local Impacts** Major air emissions of cement industry are control or safety by themselves which we call ‘SCG Contractor Safety minimize, e.g. dust, oxides of nitrogen and sulfur dioxide. Certification System or SCS’. This project has been aligned Quarry sites with rehabilitation plans number of site 4 4 4 4 4 Cement Business target and control air emissions in accordance with the Good Practice of Contractor Safety developed by % 100 100 100 100 100 with WBCSD-CSI. Dust oxides of nitrogen and sulfur dioxide WBCSD-CSI and the Cement Business adopted this Guidelines Sites with community engagement plans % 100 100 100 100 100 emission from kiln shall not exceed 150 g/clinker, 1,700 to be complied with SCG’s guidelines. At present, this Sites where biodiversity issues number of site 4 4 4 4 4 g/clinker and 120 g/clinker, respectively. Guideline has been employed so as to monitor and assess the are addressed (accumulate number) In addition, Cement Business has measured dust, oxides effectiveness of safety management of contractors continuously. Health and Safety*** of nitrogen and sulfur dioxide besides other air pollutants consist In case of accidents related to the logistic, Cement No. of fatalities of Dioxin, Mercury, Cadmium, Lead, Antimony, Arsenic, Beryllium, Business have complied with WBCSD-CSI’s Good Practice Chromium, Cobalt, Copper, Manganese, Nickel, Vanadium of Driving safety for logistic of concrete activities. After the • Directly employed case 0 0 0 0 0 and total organic carbon from spot check in accordance with good practices have been adopted, the fatality from accident • Indirectly employed case 2 0 0 2 1**** government requirement (quarterly basis). of logistic of concrete activities have been dropped gradually. • Third party case 0 0 0 0 4**** Moreover, SCG Cement has installed sulfur dioxide However, Cement Business shall apply such good practice to Fatality rate (Directly employed) case per 10,000 0 0 0 0 0 treatment system (Gas Suspension Absorber: GSA) which is the cement logistic system which have been included in the directly employed efficiency to reduce 80%-90% of sulfur dioxide. same management. No. of lost time injuries • Directly employed case 4 0 0 2 1 3. Local Impact 5. Reporting • Indirectly employed case 7 5 5 4 2 Prior to any project implementation of quarry or cement To assure the integrity and the transparency of Cement plant, environmental impact assessment and study are required Business performance data, Cement Business has requested Lost time injuries frequency rate case per million man-hour 0.76 0 0 0.38 0.18 (Directly employed) to conduct appropriate environmental and social mitigation external party to assure emission data (see detail on page measures at acceptable level. Guidelines the SCG Cement 108-109). Remark * The collection and reporting of GHGs data is accordance with WBCSD,The Cement CO2 Protocol based on company’s own control ** Only domestic cement plants *** Both domestic and overseas cement plants **** Included accident data from cement transportation and excluded overseas cement plants. 92 93 The environmental data is based on data sources from on the production process of each operation in which chemical Employees are categorized into 3 levels: operational, accounting evidence, meter reading, data from production substance is produced. It is based on a result and measurement supervisor, and management. system and estimation with ground rules. as stipulated by laws. The measurement of air emissions is at • Operational level is a front line worker who spends most • Energy the stacks during the operation according to US EPA Method of their time operating machines using their technical skills. Total energy consumption includes thermal energy and or equivalent standard. • Supervisor level is a front line manager who is responsible electricity used in the companies/plants areas. Reporting of air emission will be calculated based on for daily management or having a control over subordinates. About this Alternative energy is a part of thermal energy and defined concentration and hot gas ratio from spot check, multiplied by • Management level is a top manager who responsible for as biomass, industrial or rejected wastes, e.g. used tyres, used working hours. Spot check is made by laboratories which is addressing business strategies or policies. They delegate and oil, RDF and black liquor. certified and registered to Department of Industrial Works. For control supervisor level employees who implement policy and Report Calculation method of energy consumption is based on: cement business, refers to WBCSD-CSI (see details on page 90). daily jobs. 2. Contracted employee - a full time worker employs on fuel weight or steam volume (estimated from volume purchased • Water Water management (water withdrawal, water discharge, a yearly contracted basis. or stockpile) x heating value of each fuel type (provided by water treatment and water recycle) is considered in order to All employees and contracted employees are covered in SCG has been publishing the sustainability report every laboratory test or suppliers) year since 2001 by presenting the performance in 3 core business assess efficiency and any risks that may have when SCG this report units namely, SCG Cement-Building Materials, SCG Chemicals • Greenhouse Gas Emissions (GHGs) withdraws water from nature. 3. Contractor is an individual who gets consent from SCG and SCG Paper. Information disclosed in this report includes the GHGs in this report represent an account of SCG’s GHG Water withdrawal is the quantity of fresh water taken from to perform any job on SCG behalf but not an SCG’s employee. performance of subsidiaries, jointly-controlled entities and other emissions from the operation of based on WRI/WBCSD GHG external sources for use in any activities of SCG. The quantity Contractor is divided into 3 groups as follows:- companies for the economic aspect in order to comply with the Protocol. When choosing the inventory boundary, we considered of water includes water used in production process, offices, • Routine contractor is a contractor who performs an SCG Annual Report 2014. a number of factors as followings; maintenance and utilities and is obtained from accounting assigned job regularly or on a day-to-day basis under SCG’s For environmental and safety data, reporting sites are 1. Operational boundary evidences or meter reading. Sources of water are divided into working procedures. selected using the combination of equity share and control 1.1 Direct GHG emissions (Scope 1): GHG emissions surface water, ground water and tap water. • Non-routine contractor is a contractor who performs any approach. Domestic sites of the greater than or equal to 50% occur from sources owned by SCG, for example emissions Recycled water is the quantity of treated water return to specific job using their own working procedures. shareholding subsidiaries or controlled associates and voluntary from combustion of coal or natural gas in incinerators, boilers, the process but excludes non-treated reused water such as • Transport Contractor is a contractor performs companies are included. Except Cement business safety data furnaces, vehicles, etc. In addition, we include GHG emissions cooling water. transportation of raw materials or products under SCG’s according to WBCSD-CSI which includes overseas subsidiar- occur from chemical production process such as calcinations Effluent Water Quality is the quality of water discharged management (both with and without SCG Brand Logo) and those ies. For the detail of the reported sites, please see page 94-97. in cement plant. On the other hand, emissions from the to external sources such as BOC, COD and TSS. The quality of without SCG’s management but having SCG Brand logo on their Reporting Scope combustion of biomass, alternative fuels, water treatment water will be tested using standardized measurement. transportation vehicles. The reporting period for the information in this report is from process and landfill are excluded. • Waste All contractors are included in the data except for 1 January 2014 to 31 December 2014. This 2014 sustainability 1.2 Indirect GHG emissions (Scope 2): GHG emissions Waste Management is considered in order to assess non-routine contractor where cases will be recorded but report and its data were prepared in accordance with GRI-G4- occur from the generation energy purchased by SCG, such as the efficiency of production process, improvement of product man-hours are excluded. Transport contactor in logistics under Comprehensive. The information in this report offers an electricity, steam and hot air. quality and a decrease of production cost. SCG has established Cement-Building Material Business Unit records unit as kilometer. update on United Nations Global Compact (UNCG) at the 2. Inventory: ‘SCG Waste Reporting Guideline’ in March 2010 by SCG Waste Third party who does not categorize as directly employed Advance Level (see details on page 104-105) and the disclosure 2.1 Direct GHG emission calculation (Scope1) Management Committee. or contractors and third party is not covered in this report. of cement business performance according to WBCSD-CSI (see • From combustion The quantity of waste from production process is reported • Calculation of Working Hour details on page 90-91). - It will be calculated based on quantities of fuel and any waste which can be recycled in the production process 1. Data from clock-in system, HR database, accounting Reporting Assurance consumption (weight or volume) such as fuel oil and natural gas (Work in process, WIP) is excluded. unit or relevant administrative unit. Financial data has been obtained from financial management x emission factors which was referred to Thailand Greenhouse Type of industrial wastes is classified by the Notification of 2. In case the companies/ plants do not have a clock-in system similar to those presented in SCG Annual Report 2014 Gas Management Organization (Public Organization) emission Ministry of Industry on Industrial Waste Disposal 2005. It can be system or HR database, the below formula shall be employed and is verified by independent audit. To assure the integrity and factors. If there is no Thai emission factor, Intergovernmental divided into 2 categories, Hazardous Waste and Non-Hazardous to estimate the average man-hours. the transparency of environmental and safety data in this report, Panel on Climate Change 2006 (IPCC) emission factors will be used. Waste. Each category of waste is treated as recycle, disposal Number of man hours (man - hours) = Number SCG has requested external party to verify and assess the - It will be calculated based on fuel consumption or landfill. of employees / contractors x Number of working days (based on heating factor) such as coal x heating value x All waste data is measured as generated and managed selected data against GRI-G4 criteria (see details on page x Number of normal working hours (per day) + Number of 104-105). emission factor which was referred to Thailand Greenhouse Gas volumes, by reading weighting scale. Estimation according to Over Time (only operational employees and contractors) Reporting Principles on Environmental and Safety Data Management Organization (Public Organization). If there is no academic measurement is also used if weighting scale is not Environmental and safety data from all business units are Thai emission factor, Intergovernmental Panel on Climate Change available. • Recording of Safety Data included in the report except for overseas operations, newly 2006 (IPCC) emission factors will be used. • Efficiency Indices/Specific Data SCG records data on safety at work, divided into 3 categories acquired companies (less than 3 years for new establishment - It will be calculated from carbon mass balance from Efficiency indexes or specific data is calculated from 1. Number of fatality; death resulting from work-related and less than 4 years for M&A) and companies outside of fuel consumption. environmental data divided by tons production. accident where the victim is passed away suddenly or SCG management control. Exclusivity of the data is noted in • From raw materials reaction in stoichiometry e.g. Tons production data used in the efficiency indices is thereafter due to such accident. ‘Subsidiaries included in this report’ on page 94-97. limestone, is estimated and calculated using mass balance. measured based on data from production system. Estimation 2. Total incident rate; number of cases per 200,000 The selection of information included is based on what • For cement business, refers to WBCSD-CSI. will be used if it is applicable. man-hours. that is determined by SCG’s management to be responsible, 2.2 Scope 2 GHG emissions will be calculated from For cement business, tons production of clinker will be used 3. Incident rate (lost time cases); number of cases per relevant and of valuable for its stakeholders when measuring purchased electricity, steam or hot air consumption using for air emission and heat consumption (referring to WBCSD-CSI) 200,000 man-hours. sustainability performance. emission factors from supplier. efficiency indexes while other efficiency indexes, tons production Lost Time Injury (LTI) is a work-related injury causing the The type of GHG emissions of cementitious will be used. absence of one or more working days (or shifts). This includes Environment 3. Reporting of GHG emissions: to be reported includes CO , CH , N O, HFCs, PFCs and SF any work-related injury or illness which prevents that person The environmental data cover those activities that, based 2 4 2 6 converted to the universal unit of measurement by Global Safety from doing any work the day after the accident. on an overall environmental assessment and determined by Warming Potential (GWP) as CO equivalent. Referred GWP factors SCG management, could have a significant impact on the 2 • Data on number of employees and contractors The electronic file of this report and the previous are defined by IPCC. For NF , it will be reported in the future. Safety data includes information from three work streams: can be downloaded from SCG website environment. Sites with production process are included while 3 SCG employees, contracted For more information, please contact: sites with activities considered not to have a significant impact • Air Emission Air emissions are the quantity of air pollution (for example employees and contractors with the following definitions; SCG Sustainable Development Committee are not included, for examples; sales offices, R&D laboratories, 1 Siam Cement Road, Bangsue, Bangkok 10800 NO , SO , Particulate Matter) deriving from combustions and 1. Employee - a full time worker according to SCG lifetime services and holding companies. x x Tel : 0-2586-5071-2 Fax : 0-2586-2836 other components during the production process. This depends employment contract. E-mail: [email protected] and website : www.scg.co.th 94 95

Subsidiaries included in Subsidiaries included in Sustainability Report 2014 * G4-17 Sustainability Report 2014 * G4-17

Environment Environment Business / Company Energy Air Water Business / Company Energy Air Water Waste Safety Waste Safety

Production Water Recydled Production Water Recydled Thermal Electricity Dust SO NO GHG BOD COD TSS Thermal Electricity Dust SO NO GHG BOD COD TSS x x Withdrawal Water x x Withdrawal Water

SCG 34 SCG Experience Co., Ltd. 1 The Siam Cement Public Company Limited 35 SCG Skills Development Co., Ltd.

SCG Cement-Building Materials 36 The CPAC Roof Tile Co., Ltd. (Saraburi 1 / Saraburi 2 / Nakorn Prathom / 1 SCG Cement-Building Materials Co., Ltd. Chonburi / Nakorn Rajchasrima / Lamphun / NR NR NR NR NR NR NR 2 SCG Cement Co., Ltd. Khonkaen / Nakorn Sri Thammaraj) 3 The Concrete Products and Aggregate Co., Ltd. NR NR NR NR NR NR NR NR NR NR NR NR 37 Thai Ceramic Roof Tile Co., Ltd. NR NR NR NR 4 The Siam Cement (Kaeng Khoi) Co.,Ltd. NR NR NR NR 38 Thai Ceramic Holding Co., Ltd. 5 The Siam Cement (Ta Luang) Co., Ltd. 39 MRC Roofing Co., Ltd. NR NR NR NR (Ta Luang, Khoa Wong) 40 The Siam Sanitary Fittings Co., Ltd. NR NR NR NR 6 The Siam Cement (Thung Song) Co., Ltd. NR NR NR NR 41 Sosuco and Group (2008) Co., Ltd. 7 The Siam Cement (Lampang) Co., Ltd. NR NR NR NR 42 Saraburirat Co., Ltd. NR NR NR NR NR NR NR 8 Siam Mortar Co., Ltd. NR NR NR NR NR NR NR NR NR NR NR NR 43 Thai-German Ceramic Industry Public Company Limited NR NR NR NR 9 The Siam White Cement Co., Ltd. NR NR NR NR 44 Siam Sanitary Ware Co., Ltd. 10 The Siam Refractory Industry Co., Ltd. NR NR NR NR NR NR NR NR NR NR NR NR 45 Siam Sanitary Ware Industry Co., Ltd. NR NR NR NR 11 Cementhai Energy Conservation Co., Ltd. Data included in The Siam Cement (Ta Luang) Co., Ltd. The Siam Cement (Kaeng Khoi) Co.,Ltd. The Siam Cement (Thung Song) Co., Ltd. 46 Siam Sanitary Ware Industry (Nongkae) Co., Ltd. NR NR NR NR 12 ECO Plant Services Co., Ltd. NR NR NR NR NR NR NR NR NR NR NR NR NR 47 Quality Construction Products Public Company Limited NR NR NR NR 13 Siam Research and Innovation Co., Ltd. NR NR NR NR NR NR NR NR NR NR NR NR NR 48 Q-Con Eastern Co., Ltd. NR NR NR NR 14 SCI Eco Services Co., Ltd. NR NR NR NR NR NR NR NR NR NR NR NR 49 SCGT Automobile Co., Ltd. 15 Q Mix Supply Co., Ltd. 50 PANEL WORLD CO., Ltd. 16 Silathai Sanguan (2540) Co., Ltd. 51 Sosuco Ceramic Co., Ltd. NR NR NR NR 17 SCG Building Materials Co., Ltd. 52 SCG-Sekisui Sales Co., Ltd.

18 The Siam Fibre-Cement Co., Ltd. Associates, Jointly-Controlled entity and Other Companies (Saraburi / Ta Luang / Thung Song / Nongkae) NR NR NR NR NR 1 Sekisui-SCG Industry Co., Ltd. NR NR NR NR NR NR NR 19 The Fibre-Cement Products (Lampang) Co., Ltd. NR NR NR NR NR 2 Noritake SCG Plaster Co., Ltd. NR NR NR NR 20 Tip Fibre-Cement Co., Ltd. SCG Chemicals 21 SCG Landscape Co., Ltd. 1 SCG Chemicals Co., Ltd. (Khonkaen / Thung Song / Ladkrabang / Lamphun / NR NR NR NR NR NR NR Sriracha / Nongkae) 2 Thai Polyethylene Co., Ltd. NR NR NR NR 22 Siam Fiberglass Co., Ltd. NR NR NR NR 3 SCG Plastics Co., Ltd. 23 Cementhai Gypsum Co., Ltd. 4 SCG Performance Chemicals Co., Ltd. 24 Cementhai Ceramics Co., Ltd. 5 Rayong Engineering & Plant Service Co., Ltd. 25 Thai Ceramic Co., Ltd. NR NR NR NR 6 Protech Outsourcing Co., Ltd. 26 Gemago Co., Ltd. 7 RIL 1996 Co., Ltd. 27 SCG Distribution Co., Ltd. 8 Texplore Co., Ltd. 28 The Siam Ceramic Group Industries Co., Ltd. NR NR NR NR 9 Vina SCG Chemicals Co., Ltd. 29 Cementhai Home Services Co., Ltd. 10 Rayong Pipeline Co., Ltd. 30 SCG Trading Co.,Ltd. 11 Thai Plastic and Chemicals Public Company Limited NR NR NR 31 SCG Logistics Management Co., Ltd. 12 TPC Paste Resin Co., Ltd. NR NR NR NR 32 SCG Trading Services Co., Ltd. 13 The Nawaplastic Industries (Saraburi) Co., Ltd. NR NR NR NR NR NR 33 SCG Sourcing Co., Ltd. 14 Nawa Plastic Industries Co., Ltd. NR NR NR NR NR NR 96 97

Subsidiaries included in Subsidiaries included in Sustainability Report 2014 * G4-17 Sustainability Report 2014 * G4-17

Environment Environment Business / Company Energy Air Water Business / Company Energy Air Water Waste Safety Waste Safety

Production Water Recydled Production Water Recydled Thermal Electricity Dust SO NO GHG BOD COD TSS Thermal Electricity Dust SO NO GHG BOD COD TSS x x Withdrawal Water x x Withdrawal Water

15 Nawa Intertech Co., Ltd. NR NR NR NR NR NR NR NR NR NR NR NR NR 21 Thai Containers Khonkaen Co., Ltd. NR 16 Total Plant Service Co., Ltd. 22 Thai Containers Rayong Co., Ltd. NR 17 SCG ICO POLYMERS COMPANY LIMITED 23 Thai British Security Printing Public Company Limited 18 Map Ta Phut Tank Terminal Co., Ltd. NR NR NR NR NR NR NR NR NR NR NR NR 24 InfoZafe Co., Ltd. NR NR NR NR NR NR NR 19 Map Ta Phut Olefins Co., Ltd. NR NR NR 25 Thai British DPost Co., Ltd. 20 Rayong Olefins Co., Ltd. NR NR NR 26 TC Flexible Packaging Co.,Ltd. 21 Siam Stabilizers and Chemicals Co., Ltd. 27 Dyna Packs Co.,Ltd. 22 Flowlab & Service Co., Ltd. 28 Orient Containers Co., Ltd. Associates, Jointly-Controlled entity and Other Companies 29 Tawana Container Co., Ltd. 1 Siam Mitsui PTA Co., Ltd. NR NR NR 30 D-In-Pack Company Limited 2 SMH Co., Ltd. Associates, Jointly-Controlled entity and Other Companies 3 Rayong Terminal Co., Ltd. NR NR NR NR NR NR NR NR NR NR NR NR 31 Siam Nippon Industry Paper Co., Ltd. 4 Thai MMA Co., Ltd. NR NR NR NR Other Subsidiaries 5 Grand Siam Composites Co., Ltd. NR NR NR NR NR NR 1 Cementhai Holding Co., Ltd. 6 Thai MFC Co., Ltd. NR NR NR 2 Cementhai Property (2001) Public Company Limited 7 Siam Tohcello Co., Ltd. 3 Property Value Plus Co., Ltd. 8 Thai PET Resin Co., Ltd. NR NR NR NR 4 SCG Accounting Services Co., Ltd. SCG Paper 5 SCG Accounting Services Co., Ltd. 1 SCG Paper Public Company Limited 6 CTO Management Co., Ltd. 2 Thai Paper Co., Ltd. NR 7 Siam Eco Energy Business Co., Ltd. 3 Thai Union Paper Public Company Limited 8 SCG Learning Excellence Co.,Ltd 4 Siam Kraft Industry Co., Ltd. 9 Siam GNE Solar Energy Co.,Ltd 5 Siam Cellulose Co., Ltd. NR 6 The Siam Forestry Co., Ltd. * Economic performance covers all significant consolidated subsidiaries, associates, jointly-controlled and other companies according to 7 Panas Nimit Co., Ltd. NR Annual Report 2014 NR = Non Relavance 8 Thai Panason Co., Ltd. NR Office / Investment / Sales / Service where the collection of environmental and safety data is not necessary 9 Thai Panadorn Co., Ltd. NR Greenfield (less than 3 years) or newly acquired companies (less than 4 years) is not required to incorporate data into SCG 10 Thai Panaram Co., Ltd. NR NR NR NR NR NR NR NR NR NR NR NR 11 Suanpa Rungsaris Co., Ltd. NR 12 Siam Panawes Co., Ltd. NR 13 Thai Panaboon Co., Ltd. NR 14 Thai Wanabhum Co., Ltd. NR 15 Phoenix Pulp & Paper Public Company Limited NR 16 Phoenix Utilities Co., Ltd. 17 SCGP Excellence Traning Center Co., Ltd. NR NR NR NR NR NR NR NR NR NR NR NR NR NR 18 SCG Paper Energy Co.,Ltd.

19 Thai Cane Paper Public Company Limited 20 Thai Containers Group Co., Ltd. 98 99

Page Omission/ External G4 Description GRI Content Index Indicator AR SR Note Assurance G4-38 Composition of the board and its committees 41-42, 85, 87, 95-96 10,28

G4-39 Indicate if Chair of highest governance body is also an executive 87 28-29 officer G4 Page Omission/ External Description G4-40 Nomination and selection processes for the board and its committees 95-97 - Indicator AR SR Note Assurance G4-41 Processes for the highest governance body to ensure conflicts of interest are avoided and managed 76-77, 117 - GENERAL STANDARD DISCLOSURES STRATEGY AND ANALYSIS G4-42 Board and executives’ roles in the organization’s mission statements, strategies, policies, and goals related to sustainability impacts 85-87 - G4-1 Statement from the most senior decision-maker of the organization 2-3 4-5 Board knowledge of sustainability topics 89-91 30 G4-2 Description of key impacts, risks, and opportunities 110-116 16-19 G4-43 ORGANIZATIONAL PROFILE G4-44 Board performance with respect to governance of sustainability topics 88-89 30 G4-3 Name of the organization back cover 1, 94 G4-45 Board role in the identification and management of sustainability impacts, risks, and opportunities 110-116 30 G4-4 Primary brands, products, and services 6-19 2-3 G4-5 Location of the organization’s headquarters back cover 93 G4-46 Board role in reviewing risk management processes for sustainability 110-116 28 topics G4-6 Number of countries where the organization operates, and names of countries where either the organization has significant operations or 7 12-13 G4-47 Frequency of the board’s review of sustainability impacts, risks, and 110-116 17 that are specifically relevant to the sustainability topics covered in opportunities the report G4-48 Highest committee or position that formally reviews and approves 110-116 92 G4-7 Nature of ownership and legal form back cover - the organization’s sustainability report Markets served (including geographic breakdown, sectors served, and G4-8 6-19 1-3 G4-49 Process for communicating critical concerns to the board 110-116 28 types of customers and beneficiaries) Scale of the organization Scale of the organization 20-37 94-97 G4-50 Nature and total number of critical concerns that were communicated G4-9 to the board 110-116 28 G4-10 Total number of employees by type 68 84-85 Remuneration policies for the board and senior executives 63-65 - Percentage of total employees covered by collective bargaining G4-51 G4-11 - 40 agreements G4-52 Process for determining remuneration 63-65 - G4-12 Describe the organization’s supply chain - 58 Significant changes during the reporting period regarding the note: no significant changes G4-53 Stakeholders’ views on remuneration 63-65 - G4-13 1 92-93 organization’s size, structure, ownership, or its supply chain during the reporting period. Ratio of the annual total compensation for the organization’s highest- G4-54 63-65 - Explanation of whether and how the precautionary approach or paid individual to the median annual total compensation for all employees G4-14 110-116 16-19 principle is addressed by the organization G4-55 Ratio of percentage increase in annual total compensation for the G4-15 List externally developed economic, environmental, and social organization’s highest-paid individual to the median percentage 63-65 - charters, principles, or other initiatives to which the organization - 90-91,104-105 increase in annual total compensation for all employees subscribes or which it endorses ETHICS AND INTEGRITY Membership in associations 2-3, 77, 82-83, G4-16 101 Code of conduct 100 60 90-91, 104-105 G4-56 G4-57 Helplines or advice lines for employees 100-102 15, 30 IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES G4-58 Mechanisms for reporting concerns about unethical or unlawful behavior 102 30 G4-17 List all entities included in the organization’s consolidated financial statements or equivalent documents 20-37 94-97 no SPECIFIC STANDARD DISCLOSURES G4-18 Process for defining report boundaries and content 20-37 14 no CATEGORY: ECONOMIC G4-19 Material aspects included in the report - 14 no ASPECT: ECONOMIC PERFORMANCE G4-20 Descriptions of material aspect boundaries within the organization - 14 no G4-DMA Generic Disclosures on Management Approach 84-85 - G4-21 Descriptions of material aspect boundaries outside the organization - 14 no G4-22 Explanation of the effect of any restatements - 14 note: no restatement in 2014 no G4-EC1 Direct economic value generated and distributed 4-7 Significant changes from previous reporting periods in the Scope note: no significant changes G4-23 - 14 no G4-EC2 Financial implications and other risks and opportunities 113 46 and Aspect Boundaries from previous report for the organization’s activities due to climate change STAKEHOLDER ENGAGEMENT G4-EC3 Coverage of the organization’s defined benefit plan obligations 40, 65, 78 - G4-24 List of stakeholder groups engaged by the organization 77-82 20 no Financial assistance received from government - 84 Basis for identification and selection of stakeholders with whom to G4-EC4 G4-25 77-82 20 no engage ASPECT: MARKET PRESENCE G4-26 Approach to stakeholder engagement, including frequency of G4-DMA Generic Disclosures on Management Approach 84-85 38 engagement by type and by stakeholder group 77-82 20 no G4-EC5 Ratios of standard entry level wage by gender compared to local Key stakeholder topics and concerns and organization response 77-82 20 no - 40 G4-27 minimum wage at significant locations of operation REPORT PROFILE G4-EC6 Proportion of senior management hired from the local community 116 84 G4-28 Reporting period for information provided - 92 at significant locations of operation G4-29 Date of most recent report - 92 ASPECT: INDIRECT ECONOMIC IMPACTS Reporting cycle - 92 G4-30 G4-DMA Generic Disclosures on Management Approach 84-85 38-45 G4-31 Contact point for questions regarding the report or its contents back cover 93 Development and impact of infrastructure investments and 6, 33, 57, “In accordance” option, GRI Index and report assurance - 92, 108-109 * G4-EC7 124-125 G4-32 services supported 70-75, 77 G4-33 Policy regarding report assurance 122, 123-125 92 G4-EC8 Significant indirect economic impacts, including the extent of impacts - 70-75 GOVERNANCE ASPECT: PROCUREMENT PRACTICES G4-34 Governance structure of the organization 41-42, 91-95 34 G4-35 Process for delegating authority for sustainability topics from the G4-DMA Generic Disclosures on Management Approach 84-85 24-25, 58 54 8-11 board to senior executives and other employees G4-EC9 Proportion of spending on local suppliers at significant - 60 G4-36 High-level accountability for sustainability topics 93-95 9-11 locations of operation Processes for consultation between stakeholders and the board on G4-37 82 23 sustainability topics AR = Annual Report SR = Sustainability Report

AR = Annual Report SR = Sustainability Report * Only Selected Subject Matter : Report Assurance Page Omission/ External Page Omission/ External G4 Description Page G4 Description Page 100 IndicatorG4 Indicator Description AR SR OmissionNote ExternalAssurance Assurance IndicatorG4 Indicator Description AR SR OmissionNote ExternalAssurance Assurance 101 AR SR AR SR CATEGORY: ENVIRONMENTAL ASPECT: TRANSPORT ASPECT: MATERIALS G4-DMA Generic Disclosures on Management Approach 33-34, 48 G4-DMA Generic Disclosures on Management Approach 14-19, 24-25, 90 G4-EN30 Significant environmental impacts of transporting products and other 48 G4-EN1 Materials used by weight or volume 2-3 goods and materials for the organization’s operations, and transporting members of the workforce G4-EN2 Percentage of materials used that are recycled input materials 55 ASPECT: OVERALL ASPECT: ENERGY G4-DMA Generic Disclosures on Management Approach 24-25 G4-DMA Generic Disclosures on Management Approach 24-25, 46-47, 90 G4-EN31 Total environmental protection expenditures and investments by type 84 G4-EN3 Energy consumption within the organization 46, 87 ASPECT: SUPPLIER ENVIRONMENTAL ASSESSMENT G4-EN4 Energy consumption outside of the organization - Data are collected for logistics but G4-DMA Generic Disclosures on Management Approach 24-25, 58, 61 they are not publicly reported. G4-EN32 Percentage of new suppliers that were screened using environmental G4-EN5 Energy intensity 46, 87 criteria 59

G4-EN6 Reduction of energy consumption 47 G4-EN33 Significant actual and potential negative environmental impacts in the - note: no significant environmental impacts supply chain and actions taken in the supply chain and actions. G4-EN7 Reductions in energy requirements of products and services 47, 63 ASPECT: ENVIRONMENTAL GRIEVANCE MECHANISMS ASPECT: WATER G4-DMA Generic Disclosures on Management Approach 30 G4-DMA Generic Disclosures on Management Approach 24-25, 50-51 G4-EN34 Number of grievances about environmental impacts filed, addressed, - note: no grievances about environmental G4-EN8 Total water withdrawal by source 51, 89 and resolved through formal grievance mechanisms impacts filed, and addressed.

G4-EN9 Water sources significantly affected by withdrawal of water 51 There is no water sources significantly CATEGORY: SOCIAL affected by withdrawal of water. SUB-CATEGORY: LABOR PRACTICES AND DECENT WORK G4-EN10 Percentage and total volume of water recycled and reused 52, 89 ASPECT: EMPLOYMENT ASPECT: BIODIVERSITY G4-DMA Generic Disclosures on Management Approach 24-25, 38-39 G4-DMA Generic Disclosures on Management Approach 76 Total number and rates of new employee hires and employee turnover Operational sites owned, leased, managed in, or adjacent to, protected areas G4-LA1 84 G4-EN11 77, 91 by age group, gender and region and areas of high biodiversity value outside protected areas G4-LA2 Benefits provided to full-time employees that are not provided to G4-EN12 Description of significant impacts of activities, products, and services on temporary or part-time employees, by significant locations of operation 40 biodiversity in protected areas and areas of high biodiversity value outside 77 protected areas G4-LA3 Return to work and retention rates after parental leave, by gender 84

G4-EN13 Habitats protected or restored 76-77, 91 ASPECT: LABOR/MANAGEMENT RELATIONS Total number of IUCN Red List species and national conservation list species There is no IUCN Red List species and G4-EN14 G4-DMA Generic Disclosures on Management Approach 38 with habitats in areas affected by operations, by level of extinction risk - national conservation list species with habitats in areas affected by operations. G4-LA4 Minimum notice periods regarding operational changes, including 40 whether these are specified in collective agreements ASPECT: EMISSIONS ASPECT: OCCUPATIONAL HEALTH AND SAFETY G4-DMA Generic Disclosures on Management Approach 24-25, 78, 90 G4-DMA Generic Disclosures on Management Approach 18, 24-25, 32-33, 90 G4-EN15 Direct greenhouse gas (GHG) emissions (Scope 1) 47-49, 88 G4-LA5 Percentage of total workforce represented in formal joint management G4-EN16 Energy indirect greenhouse gas (GHG) emissions (Scope 2) 48-49, 88 worker health and safety committees that help monitor and advise on 32-33 occupational health and safety programs G4-EN17 Other indirect greenhouse gas (GHG) emissions (Scope 3) 48-49 G4-LA6 Type of injury and rates of injury, occupational diseases, lost days, G4-EN18 Greenhouse gas (GHG) emissions intensity 88 and absenteeism, and total number of work-related fatalities, by region 32-35, 85, 91 and by gender G4-EN19 Reduction of greenhouse gas (GHG) emissions 47-49 Emissions of ozone-depleting substances (ODS) 79 G4-LA7 Workers with high incidence or high risk of diseases related to their 35 G4-EN20 occupation NOX, SOX, and other significant air emissions 78-79, 88, 91 assurance on the emission from G4-EN21 G4-LA8 Health and safety topics covered in formal agreements with trade unions 32 Cement Business only (p.91) ASPECT: EFFLUENTS AND WASTE ASPECT: TRAINING AND EDUCATION G4-DMA Generic Disclosures on Management Approach 24-25, 54-55 G4-DMA Generic Disclosures on Management Approach 38 G4-EN22 Total water discharge by quality and destination 89 G4-LA9 Average hours of training per year per employee by gender, and by employee category 43 G4-EN23 Total weight of waste by type and disposal method 56-57, 89 G4-LA10 Programs for skills management and lifelong learning that support the G4-EN24 Total number and volume of significant spills 85 continued employability of employees and assist them in managing career 42-45 endings G4-EN25 Weight of transported, imported, exported, or treated waste deemed note: none waste under the terms Percentage of employees receiving regular performance and career hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, - of the Basel Convention Annex G4-LA11 42, 84 development reviews, by gender and by employee category and percentage of transported waste shipped internationally I, II, III, and VIII. ASPECT: DIVERSITY AND EQUAL OPPORTUNITY G4-EN26 Identity, size, protected status, and biodiversity value of water bodies and note: no plant located near by related habitats significantly affected by the organization’s discharges of - identity, size, protected status, and G4-DMA Generic Disclosures on Management Approach 42 water and runoff biodiversity value of water bodies. G4-LA12 Composition of governance bodies and breakdown of employees per employee ASPECT: PRODUCTS AND SERVICES category according to gender, age group, minority group membership, and 84 other indicators of diversity G4-DMA Generic Disclosures on Management Approach 24-25, 63-65 Extent of impact mitigation of environmental impacts of products and ASPECT: EQUAL REMUNERATION FOR WOMEN AND MEN G4-EN27 47, 53, 56-57, 63-65 services G4-DMA Generic Disclosures on Management Approach 38, 42 G4-EN28 Percentage of products sold and their packaging materials that are 57 G4-LA13 Ratio of basic salary and remuneration of women to men by employee category, reclaimed by category by significant locations of operation 84 ASPECT: COMPLIANCE G4-DMA Generic Disclosures on Management Approach 18-19, 24-25 AR = Annual Report SR = Sustainability Report G4-EN29 Monetary value of significant fines and total number of non-monetary - note: no fines for non-compliance with sanctions for non-compliance with environmental laws and regulations environmental laws and regulations.

AR = Annual Report SR = Sustainability Report G4 Page G4 Page G4 Page Omission/ External G4 Page Omission/ External Indica- DescriptionDescription Omission External Assurance Indica- DescriptionDescription Omission External Assurance 102 Indicator AR SRAR SR Note Assurance Indicator AR SR Note Assurance 103 tor tor AR SR ASPECT: SUPPLIER ASSESSMENT FOR LABOR PRACTICES ASPECT: ANTI-CORRUPTION G4-DMA Generic Disclosures on Management Approach 24-25, 31, 58, 61 G4-DMA Generic Disclosures on Management Approach 31 Total number and percentage of operations assessed for risks related G4-LA14 Percentage of new suppliers that were screened using labor practices criteria 59-60 G4-SO3 31 to corruption and the significant risks identified G4-LA15 Significant actual and potential negative impacts for labor practices in the note: no significant actual and G4-SO4 Communication and training on anti-corruption policies and 31 supply chain and actions taken - and potential impacts for labor procedures practices in the supply chain. G4-SO5 Confirmed incidents of corruption and actions taken - note: there ]was no incidents of corruption. ASPECT: LABOR PRACTICES GRIEVANCE MECHANISMS ASPECT: PUBLIC POLICY G4-DMA Generic Disclosures on Management Approach 30 G4-DMA Generic Disclosures on Management Approach - Non Relevance G4-LA16 Number of grievances about labor practices filed, addressed, and resolved - note: no grievances about labor through formal grievance mechanisms practices filed or addressed. G4-SO6 Total value of political contributions by country and recipient/ - Non Relevance beneficiary SUB-CATEGORY: HUMAN RIGHTS ASPECT: ANTI-COMPETITIVE BEHAVIOR ASPECT: INVESTMENT G4-DMA Generic Disclosures on Management Approach - Non Relevance G4-DMA Generic Disclosures on Management Approach 38 G4-SO7 Total number of legal actions for anti-competitive behavior, anti-trust, - Non Relevance G4-HR1 Total number and percentage of significant investment agreements and and monopoly practices and their outcomes contracts that include human rights clauses or that underwent human rights - note: all agreements are in compliance with SCG Code of Conduct. screening ASPECT: COMPLIANCE G4-HR2 Total hours of employee training on human rights policies or procedures concerning aspects of human rights that are relevant to operations, including 43 G4-DMA Generic Disclosures on Management Approach 19 the percentage of employees trained G4-SO8 Monetary value of significant fines and total number of non-monetary - note: there was no significant fines. ASPECT: NON-DISCRIMINATION sanctions for non-compliance with laws and regulations G4-DMA Generic Disclosures on Management Approach 39-40 ASPECT: SUPPLIER ASSESSMENT FOR IMPACTS ON SOCIETY G4-HR3 Total number of incidents of discrimination and corrective actions taken - note: there is no incidents of discrimination. G4-DMA Generic Disclosures on Management Approach 24-25, 31, 58, 61 ASPECT: FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING G4-SO9 Percentage of new suppliers that were screened using criteria for 59-60 G4-DMA Generic Disclosures on Management Approach 40 impacts on society Operations and suppliers identified in which the right to exercise freedom of note: there was no significant negative G4-HR4 G4-S10 Significant actual and potential negative impacts on society in - association and collective bargaining may be violated or at significant risk, and 40 the supply chain and actions taken impacts on society in the supply chain. measures taken to support these rights ASPECT: GRIEVANCE MECHANISMS FOR IMPACTS ON SOCIETY ASPECT: CHILD LABOR G4-DMA Generic Disclosures on Management Approach 30 G4-DMA Generic Disclosures on Management Approach 38-39 G4-S11 Number of grievances about impacts on society filed, addressed, 30-31 G4-HR5 Operations and suppliers identified as having significant risk for incidents of and resolved through formal grievance mechanisms child labor, and measures taken to contribute to the effective abolition of 31,38-39 child labor SUB-CATEGORY: PRODUCT RESPONSIBILITY

ASPECT: FORCED OR COMPULSORY LABOR ASPECT: CUSTOMER HEALTH AND SAFETY Generic Disclosures on Management Approach 64-65 G4-DMA Generic Disclosures on Management Approach 38-41 G4-DMA G4-PR1 Percentage of significant product and service categories for which health G4-HR6 Operations and suppliers identified as having significant risk for incidents of note: it has been stated in SCG Supplier - note: 100% of significant products. forced or compulsory labor, and measures to contribute to the elimination 31,38-39 Code of Conduct to eliminate all and safety impacts are assessed for improvement of all forms of forced or compulsory labor forced or compulsory labor. G4-PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services - None ASPECT: SECURITY PRACTICES during their life cycle, by type of outcomes

G4-DMA Generic Disclosures on Management Approach - ASPECT: PRODUCT AND SERVICE LABELING G4-HR7 Percentage of security personnel trained in the organization’s human rights note: 100% were trained according to G4-DMA Generic Disclosures on Management Approach 63, 65 note: existing management approach is applied. policies or procedures that are relevant to operations - contract agreement. G4-PR3 Type of product and service information required by the organization’s note: all significant product and service ASPECT: INDIGENOUS RIGHTS procedures for product and service information and labeling, and - categories are assess regarding health G4-DMA Generic Disclosures on Management Approach 38-40 percentage of significant product and service categories subject to and safety impact. such information requirements Total number of incidents of violations involving rights of indigenous note: there was no violation involving G4-HR8 - Total number of incidents of non-compliance with regulations and voluntary peoples and actions taken rights of indigenous peoples in 2014. G4-PR4 codes concerning product and service information and labeling, by type of 65 note: there was no incidents of non-compliance. ASPECT: ASSESSMENT outcomes G4-DMA Generic Disclosures on Management Approach 38-40 G4-PR5 Results of surveys measuring customer satisfaction 64

G4-HR9 Total number and percentage of operations that have been subject - note: 100% reviewed by Code to human rights reviews or impact assessments of Conduct. ASPECT: MARKETING COMMUNICATIONS G4-DMA Generic Disclosures on Management Approach 24-25, 63-65 ASPECT: SUPPLIER HUMAN RIGHTS ASSESSMENT G4-DMA Generic Disclosures on Management Approach 24-25, 31, 58, 61 G4-PR6 Sale of banned or disputed products - note: there was no banned or disputed products in SCG. G4-PR7 Total number of incidents of non-compliance with regulations and G4-HR10 Percentage of new suppliers that were screened using human rights 59-60 note: there ws no incidents of criteria voluntary codes concerning marketing communications, including 65 non-compliance. advertising, promotion, and sponsorship, by type of outcomes G4-HR11 Significant actual and potential negative human rights impacts in the - note: there was no negative human supply chain and actions taken rights impacts in supply chain. ASPECT: MARKETING COMMUNICATIONS ASPECT: HUMAN RIGHTS GRIEVANCE MECHANISMS G4-DMA Generic Disclosures on Management Approach 65 G4-DMA Generic Disclosures on Management Approach 30 G4-PR8 Total number of substantiated complaints regarding breaches of 65 customer privacy and losses of customer data G4-HR12 Number of grievances about human rights impacts filed, addressed, 30-31 and resolved through formal grievance mechanisms ASPECT: COMPLIANCE SUB-CATEGORY: SOCIETY G4-DMA Generic Disclosures on Management Approach 65 ASPECT: LOCAL COMMUNITIES G4-PR9 Monetary value of significant fines for non-compliance with laws and G4-DMA Generic Disclosures on Management Approach 68-69 regulations concerning the provision and use of products and services - note: there was no fines for non-compliance. G4-SO1 Percentage of operations with implemented local community engagement, impact assessments, and development programs 68-75 AR = Annual Report Operations with significant actual and potential negative impacts on note: there was no potential negative G4-SO2 68 SR =Sustainability Report local communities impact on local communities.

AR = Annual Report SR = Sustainability Report 104 105

Criteria for the GC Advanced Level Action Page

United Nation Global Compact Environmental Implementation 13 Commitments, strategies or policies in the area of • Promote management approach as per 8-9 environmental responsibility sustainable development guidelines to companies (UNGC) • Targeted to reduce greenhouse gas emission 46-49 for at least 10 percent by 2020 from base year (2007) • Defined Zero Waste to Landfill target (non- 54-57 hazardous waste: 2013, hazardous waste: 2014) Criteria for the GC Advanced Level Action Page 14 Effective management systems to integrate the • Sustainable development guidelines, complied 8-11 with ISO 14001 and ISO 50001 Strategy, Governance, and Engagement environmental principles • Projects to level-up Environmental Management 58-59 1 High-level sustainability in line with UNGC • Message from President & CEO 4-5 for contractors and environmentally friendly • Business Philosophy and Vision 7 procurement • Management approach to sustainability 8-11 • Create sustainable value from environmentally 62-63 friendly products, process, and services ( SCG eco 2 Effective decision-making processes and systems • Management approach to sustainability 8-11 value Label, Carbon Reduction Label, Carbon Foot of governance for corporate sustainability • SCG Code of Conduct 28-31, 60-61 print Label) • Role model in Green Industry Award for Green 60 3 Engagement with all key stakeholders • Defined stakeholder engagement policy 20-23 Culture (level 5) from The Ministry of Industry and practices 15 Monitoring and evaluation mechanisms of • Environmental Performance Assessment Program 11 UN Goals and Issues environmental performance • Progress of environment development plan 46-57, 78-79 • Create sustainable value to suppliers and contractors 58-65 4 Actions taken in support of broader UN goals and • Sustainable Management Approach 8-11 issues • Actions and Challenges 24-25 • Actions and Challenges 24-25, 46-57, 16 Outcomes of environmental principles integration • Corporate Social Responsibility 68-75 • Environmental performance 78-79, 86-91 Human Rights Implementation Anti-Corruption Implementation

5 Robust commitments, strategies or policies in the • Whistleblower system 30-31 17 Appropriate commitments, strategies or policies in • SCG business philosophy and vision 7 area of human rights • Continuous treatment and development of 38-45 the area of anti-corruption • Announced anti-corruption policy and guidelines 28-31 employee through corporate governance handbook and SCG’s • Respect to Diversity, Disability Recruitment, 38-41 Code of Conduct Employee Treatment with Equality and Fairness • Announced SCG Supplier Code of Conduct 4-5 • Enhanced awareness and understanding on SCG’s 30-31 6 Effective management systems to integrate the • Health and Safety for Employee and Contractor 32-37 Code of Conduct to employees human rights principles • Continuous Employee Caring 38-41 18 Effective management systems to integrate the • Clearly defined authority of each levels of executives 28-29 anti-corruption principle • Strict internal audit system and communicated 30-31 7 Monitoring and evaluation mechanisms of human • Project of Safety Performance Assessment 9-11 opinions or complaints via Whistleblower system rights performance Program • Employee opinion survey and engagement 22 19 Monitoring and evaluation mechanisms of • Audit reporting system to Board of Directors via 30-31 • SCG Contractor Safety Certification System 59 anti-corruption performance audit committee 8 Outcomes of human rights principles integration • Result of Safety Performance Assessment 11 • Defined guidelines for Three Lines of Defense and 30-31 Program 24 regular workshops for each business • Actions and Challenges 59 20 Outcomes of anti-corruption principle integration • Complaints found through Whistleblower system 30-31 • Approve of SCG Contractor Safety Certification and investigations of corruption cases reported by System 84-85 audit committee • Societal Performance 111-112 Value Chain Implementation Labor Principles Implementation 21 Implementation of the Global Compact principles • Identified Value Chain Management guidelines 58-64 9 Appropriate commitments, strategies or policies in • Risks, operation, and control under labor and 38-45 in the value chain • Green Procurement the area of labor safety laws • SCG Safety Contractor Certification System • Corporate safety guideline and target zero 32-37 • SCG Supplier Code of Conduct accident and fatality • Dealer Collaboration 10 Effective management systems to integrate the • Complied with Occupational Health and Safety • Installer Network Development labor principles Management System Standard TIS/OHSAS and 32-37 Occupational Health and Safety Management Transparency and Certification framework 22 Information on the company’s profile and business • About SCG 1-3 • Improve contractor safety standard by auditing 59 context against SCG Contractor Safety Certification System 23 Highest standards of transparency and disclosure • Sustainability Performance Data 84-89 11 Monitoring and evaluation mechanisms of labor • Result of Safety Performance Assessment 32-37 • GRI Content Index (GRI-G4, Compliance) 98-103 performance Program • Excellence: Sustainability Report Award 2014 by 110 • Employee Caring 38-45 Stock Exchange of Thailand 24 Independently certified by a credible third-party • Environmental Performance Assessment Program 106-107 12 Outcomes of labor principles integration • Summarised accident statistics and social indicators 37, 85, • Independent assurance statement on Sustainability (community satisfaction) and WBCSD-CSI indicators 90-91 Report 2014 Assurance Statement 106 107 SCG Based on the assessments conducted in 2014, the overview of management of each element and key issues being Environmental Performance Assessment Program focused by SCG to achieve the aim on operating businesses sustainably are summarized as followings.

SCG has implemented the Environmental Performance Assessment Program (EPAP) since 2001 with a continuous Governance increase in the number of subsidiaries participating in this program. Up to 2014, 52 subsidiaries in total Top management of each subsidiary involves in defining sustainability strategy, target and action plans for participated in the program with 169 assessments conducted. The participating subsidiaries are those required by Business and Company as well as shaping sustainability organization and functions to be in charge of monitoring SCG criteria considering business type and its activities that have potential environmental impacts. In 2014, the and reporting of environmental performance to achieve the defined targets. Currently, each Business has assessment approaches and criteria cover all dimensions of sustainable development that are relevant to commence the risk management process at both Business and Company levels in order to ensure that risks in environmental management. These will provide benefits to the subsidiaries involving the program by driving different aspects are completely identified and risk mitigation measures are routinely tracked for risk reduction environmental performance improvement and being in accordance with sustainable development policy of SCG. purpose. Environmental impact consideration and mitigation measure development are factored in project Each participating subsidiary will be assessed routine every 3 years with the scope of assessment including 5 main modification and management processes to ensure that key issues are efficiently managed. In addition, good elements i.e. Governance; Supply Chain; Operations; Product and Service; and Stakeholder Relation and management practices identified from each subsidiary (e.g. air emission management, wastewater management, Communication. energy management, waste management, etc.) are consolidated and standardized to be standards and guidelines

for each Business.

Supply Chain In general, each Business started launching processes to manage supply chain risks and increase the partnership opportunity with suppliers and contractors e.g. Greening the Supply Chain process, etc. These processes have been implemented differently based on business type. Each Business has realized the opportunities to improve such processes, for example, integrating key risk mitigation measures specific to activities carried out by suppliers and contractors into selection and contract management processes. Moreover, each Business has started development and defining specific criteria, that reflecting environmental performance, for evaluation of supplier and contractor performance as well as for further considering the evaluation results during the selection process.

Operations

Most subsidiaries have their own processes to control key environmental risks with the focus on compliance with

regulations as a minimum and to develop programs to enhance performance beyond regulatory standards through EPAP assessment result of each individual subsidiary, considering management system, compliance, effectiveness establishment of targets and programs taking into account of Best Available Technology with regular monitoring and performance, is demonstrated in terms of maturity levels comprising and improvement. Most companies achieved the defined key targets (e.g. zero waste to landfill) whilst some Level 1: Denial; companies have realized and planned to address the opportunities to improve their performance in some aspects Level 2: Reactive; e.g. development of energy and GHG emission reduction plans, reviewing the approach to prevent liability from Level 3: Assurance; potential environmental contamination, etc. Moreover, each company has realized and prepared for key Level 4: Business Integration; and emergency events through the implementation of emergency preparedness and response plans. Level 5: Leadership. The results of the assessments indicate a continuous improvement in the environmental performance. The Product and Service cumulative results of the assessment program until the end of 2014 are 71.9% and 15.6%, of the total subsidiaries Clear policy on environmental-friendly products development has been defined and implemented in order to that were assessed for at least 3 times, have achieved Level 4 and Level 5, respectively. increase number of products certified with SCG eco value and green label criteria. In addition, each Business has started conducting Life Cycle Analysis (LCA) to evaluate all key impacts arising from its key products and services. The results from LCA will be utilized in production process improvement to reduce the impacts including enhance business opportunities.

Stakeholder Relation and Communication

Key stakeholders are identified and prioritized and engagement plans are properly developed. Partnership with external experts are initiated and implemented in order to address concerns from stakeholders e.g. employee health risk assessment. Satisfaction survey with key stakeholder is conducted to obtain opinions for improvement of sustainable development programs. Moreover, the existing communication processes have been reviewed to enhance channels for communicating environmental performance in order to abate environmental concerns.

Plerngtape Chamikorn (Partner)

Environmental Resources Management Thailand Business Unit, 19 February 2015

ERM is a global provider of environmental, social and corporate responsibility consulting and assurance services. We have worked with

over half of the world’s 500 largest companies, in addition to numerous governments, international organizations and NGOs.

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SCG Cement-Building Materials Co., Ltd. SCG Cement - • Consumer Protection Thailand Call Building Materials Center Award 2014 from Office of The Pride of SCG Thai-German Ceramic Industry Consumer Protection Board Public Company Limited Thai Ceramic Co.,Ltd • ASEAN Energy Awards 2014 in • Award for Safety, Occupational Energy Management-Industry Special from Health and Working Environment from Ministry of Energy Ministry of Labor SCG Skills Development Co., Ltd. The CPAC Roof Tile Co., Ltd. • Internal Quality Assurance in Nakhonprathom Plant (TQM). Education Certificate : Excellence Level from • Award for Safety, Occupational • The Best CEO in Asset and Office of The Private Education Commission Health and Working Environment from SCG construction Materials from Investment Siam White Cement Co., Ltd. Ministry of Labor • HRH Princess Maha Chakri Analysis Association • TPM Excellent Awards from The Siam Fibre-Cement Co., Ltd. Sirindhorn’s Trophy for Thailand Corporate • Asia IP Elite 2014 from Intellectual Japanese Institute of Plant Maintenance Saraburi Plant Excellence Awards 2013 from Thailand Asset Management (IAM) ensuring that the • Award for Safety, Occupational • Award for Safety, Occupational Management Association (TMA) and Sasin corporate has the necessary expertise to Health and Working Environment from Health and Working Environment from HRH Princess Maha Chakri Graduate Institute of Business Administration create, manage, commercialise and drive Ministry of Labor Ministry of Labor Sirindhorn’s Trophy for Thailand Corporate Excellence Awards of Chulalongkorn University strategic value from intellectual property will The Siam Cement (Kaeng Khoi) Co., Ltd. 2013 - Human Resource Management be vital to continued success. • Award for Safety, Occupational Excellence for the 13th consecutive year • SET Awards of Honor in Best Health and Working Environment from th th SET Awards of Honor in Best - Innovation Excellence for the 9 Corporate Social Responsibility for the 7 Ministry of Labor Corporate Social Responsibility consecutive year consecutive year from The Stock Exchange The Siam Cement (Ta Luang) Co., Ltd. SCG Chemicals for the 7th consecutive year - Corporate Social Responsibility of Thailand (2008 – 2014) • Award for Safety, Occupational Grand Siam Composites Co., Ltd. Excellence for the 5th consecutive year • Sustainability Report Awards 2014 in Health and Working Environment from • Award for Safety, Occupational - Leadership Excellence Excellence from the Securities and Exchange Ministry of Labor Health and Working Environment from - Product and Service Excellence Commission, Thaipat Institute, CSR Club, The Siam Cement (Lampang) Co., Ltd. Ministry of Labor for the 3rd consecutive year - Consistency of Excellence Awards Thai Listed Companies Association • Green Industry Level 5 (Green Thai PET Resin Co., Ltd. for the excellence in various topics for 3rd • The Best Company from Southeast Network) from Ministry of Industry • Award for Safety, Occupational consecutive year Asia’s Institutional Investor Corporate Poll • Award for Safety, Occupational Health and Working Environment from • Industry Leader in Construction of Alpha Southeast Asia Magazine Health and Working Environment from Ministry of Labor Materials from Dow Jones Sustainability - Most Organized Investor Relations Ministry of Labor Thai MFC Co., Ltd. Indices (DJSI) by Robeco Sustainable - Strongest Adherence to Corporate The Siam Cement (Thung Song) • Award for Safety, Occupational Health Asset Management (RobecoSAM) for the Governance and Working Environment from Ministry Co., Ltd. Thailand’s Top Corporate Brand th th Sustainability Report Awards 4 consecutive year and ranked highest - Most Consistent Dividend Policy • Award for Safety, Occupational of Labor for the 4 consecutive year Values 2014 Real Estate and 2014 in Excellence level (Gold Class) for the 7th consecutive • Thailand’s Top Corporate Brand Health and Working Environment from Thai MMA Co., Ltd. Construction Group year (2008 – 2014) Values 2014 for the 3rd consecutive year Ministry of Labor • Award for Safety, Occupational • The Deming Distinguished Service from Real Estate and Construction Group Siam Sanitary Ware Co., Ltd. Health and Working Environment from Award for Dissemination and Promotion from Chulalongkorn University Manager • Award for Safety, Occupational Ministry of Labor for the 14th consecutive year (Overseas) from the Union of Japanese Magazine and SETTRADE.COM Company Health and Working Environment from Thai Polyethylene Co., Ltd. Scientists and Engineers (JUSE) to • IP Innovator & Creator Awards 2014 Ministry of Labor • Eco Factory from The Federation of Mr. Kan Trakulhoon, President and CEO from Department of Intellectual Property, The Siam Refractory Industry Thai Industries of SCG, making him the first Thai and Ministry of Commerce Co., Ltd. • Green Industry Level 4 (Green first non-Japanese businessman to have • Award for Safety, Occupational Culture) from Ministry of Industry Thailand received such a distinguished recognition. Health and Working Environment from • Award for Safety, Occupational This award reflects the company’s through Ministry of Labor Health and Working Environment from mission towards Total Quality Management Ministry of Labor for the 10th consecutive year 112 113113

• EIA Monitoring Awards 2014 from Office of Natural Resources and Environmental Policy and Planning Thai Plastic and Chemicals Public SCG Paper Company Limited (Rayong) Siam Kraft Industry Co., Ltd. • Award for Safety, Occupational • Thailand Energy Award for Creative Health and Working Environment from Energy Project Department of Alternative Ministry of Labor for the 8th consecutive year Energy Development & Efficiency, Ministry The Deming Distinguished The Nawaplastic Industries (Saraburi) of Energy Service Award for Dissemination Co., Ltd. • AsiaStar 2014 Awards for Consumer and Promotion (Overseas) • Award for Safety, Occupational Packaging from Ministry of Industry and Asian Health and Working Environment from Packaging Federation Ministry of Labor for the 2nd consecutive year Thai Containers Group Co., Ltd • Best Industry Certificate in Safety • Award for Safety, Occupational Management from Ministry of Industry Health and Working Environment from Nawa Plastic Industries Co., Ltd. Ministry of Labour • Award for Safety, Occupational • Green Industry Level 3 (Green Health and Working Environment from System) from Ministry of Industry Ministry of Labor for the 2nd consecutive year • Award for Excellence in Consistent Map Ta Phut Olefins Co.,Ltd TPM Commitment from Japan Institute of • Green Industry Level 5 (Green Plant Maintenance (JIPM), Japan Network) from Ministry of Industry Thailand Thai Containers Khonkaen Co., Ltd. • Award for Safety, Occupational • Good Manufacturing Practice (GMP) Health and Working Environment from from Management System Certification nd The Best CEO in Asset and Ministry of Labor for the 2 consecutive year Institute (MASCI) construction Materials Rayong Olefins Co., Ltd Thai Union Paper Public Company • Eco Factory from The Federation of Limited Thai Industries • Award for Excellence in Consistent • Green Industry Level 4 (Green TPM Commitment from Japan Institute of Culture) from Ministry of Industry Thailand Plant Maintenance (JIPM), Japan • Award for Safety, Occupational Thai British Security Printing Public Health and Working Environment from Company Limited Ministry of Labor for the 12th consecutive year • Award for TPM Excellence for A Siam Mitsui PTA Co., Ltd Category from Japan Institute of Plant • Award for Safety, Occupational Maintenance (JIPM), Japan Health and Working Environment from Ministry of Labor for the 12th consecutive year

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