Forestry and Biodiversity | SCG Packaging Public Company Limited (ESG)

Forestry and Biodiversity

SCGP has strong determination to maintain the ecosystem's balance by managing biodiversity and ecosystems according to the community's sustainability and conservation. We have been applying international indicators to benchmark our operations, intending to be a role model in biodiversity conservation.

Strategy

Management of sustainable biodiversity with universal indicators.

Serve as a model for preserving biodiversity for expanded results in other areas.

Foster community participation and stakeholder involvement to increase awareness and understanding of conservation.

Manage the utilization of forest community areas with community involvement and following the principles of community forestry.

Target

Biodiversity conservation area certified by FSC^TM standard at least

10% of agroforestry area

No gross deforestation

Performance 2023

Biodiversity conservation area certified by FSC^TM standard

13.7% of agroforestry area.

100%

Progress towards No gross deforestation

SCGP Biodiversity Management Timeline 2020 - 2024

Monitoring operations in accordance with laws and standards.

SCGP sets targets and operates in line with “No gross Deforestation” throughout the supply chain, which covers SCGP operations is covering Supplier in tier 1 and Non-tier 1 in order to monitor executions and ensure that Biodiversity execution complies with Thai and international laws/regulations and standards, therefore SCGP has defined monitoring guidelines as per following:

Internal : Setting up of FSC^TM Management Committee in order to set execution guideline to be in line with policy strategy, and standard of forestry and biodiversity topic, especially FSC^TM Standard.
External : SCGP undertakes annual verification process by third party as follow;
2.1 Forestry Research Center : SCGP will be assessed in term of species, plants, animals according to the status of registered by the IUCN Red List (2011) and classified status by the Convention on International Trade in Endangered Species of Wild Fauna and Flora-CITES. ) highlighting the essence of the Convention for the Control of Exports and Imports or the commercial transfer of plant and animal species listed in Lists 1, 2 and 3 of the Convention for further compliance with the requirements.
2.2 FSC^TM : SCGP will be assessed in form of executions and performances in accordance with the FSC^TM Standard and cooperated with the communities to monitor and find measures to prevent operational risks

Biodiversity Risk Assessment

We assess nature-related impact and dependency, with a focus on identifying potential risks and opportunities in the future following the LEAP (Locate interface with nature/Evaluate dependencies and impacts/Assess risks and opportunities/Prepare to respond to nature-related risks and opportunities and report) approach proposed by TNFD, our analysis integrated Enterprise Risk Management process and framework that included policy & regulatory, technology, market, physical, and reputational risks.

1. Locate interface with nature

We meticulously mapped our business sites within a 50km, 10km, and 5 km radius, focusing on direct operations, upstream and downstream in the components of the suppliers, own operations, and customers.

SCGP has been assessed by using the IBAT program, which integrates 3 databases, including Protected Areas (PAs), Key Biodiversity Areas (KBAs), and IUCN Red List species, as part of their rapid screening of biodiversity-related risk and assess area of water stress.

2. Evaluate dependencies

After a thorough analysis of the area detected in the first step, we assess the potential impact of natural degradation in these areas, taking into account the degree of dependency (e.g., procurement volume, manufacturing volume) and analyze size and scale of our biological degradation impacts on the business and surrounding communities.

SCGP has collaborated with Forestry Research Center for evaluating and assessing of plant and animal species in SCGP’s conservation areas, based on the IUCN Red List (2011) and the status of trade between countries under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), to execute align with regulatory requirements.

3. Assess risks and opportunities

For the “Access” step, SCGP has assessed risks and opportunities, and set plan to mitigate risks and increase opportunities. Water is a crucial resource for the operation of SCGP, SCGP track and map our plant water usage with a comprehensive water tool (such as Aqueduct) taking into account local water stress, the results are 0 % of sites are in water stress areas, and dependency on ecosystem services are water scarcity, forest and pollinator, including impact on water, forest and GHG.

4. Prepare to respond to nature-related risks and opportunities and report

In the “Prepare” step, the nature-related, together with other ESG issues, have been integrated into Enterprise Risk Management Framework in the part of operational risk that included Risks from Natural Resources and Environmental Management and Physical Risks from Climate Emergency. SCGP has set target and monitor performance of biodiversity related issue. The risks, opportunities and performances which relate to biodiversity, there are reported to the Risks management committee, Audit Committee and Environmental, Social and Governance (ESG) Committee on a quarterly basis. SCGP has set plan to manage biodiversity aligned with The Biodiversity Mitigation Hierarchy are included; avoid, reduce, restore, and transform. SCGP has committed to having a Net Positive Impact on biodiversity.

Scope of Biodiversity Risk Assessment

SCGP’s biodiversity risk assessment covers various critical areas to comprehensively understand and address potential impacts on nature. SCGP focuses on 4 key components:

Own Operations:

SCGP assesses the biodiversity risks associated with our own operations, ensuring that our activities promote conservation and minimize negative effects on ecosystems.

Significant issues	Risk Management	Opportunity	Significant stakeholders	Importance to the 6 Capitals^*
Forestry and Biodiversity	The loss of biodiversity globally is due to human activities Expectation for responsible	Conserving biodiversity and Promoting the sustainable use of forests, conservation efforts should be reinforced enhancing the carbon sink capacity of forests under T-VER standard, and managing resources in compliance with legal regulations and the well-being of the community is also crucial.	Suppliers/Contractors Community Civil Society Sector/Scholars/Thought Leaders Government agencies	Natural Capital Social and Relationship Capital Production Capital

* Reference is made to the value chain and the creation of sustainable value, as described by the 6 dimensions of the integrated reporting (IR) framework, which provides information that is linked to outcomes and impacts, as well as stakeholders throughout the value chain.

Adjacent Areas to Own Operations:

Recognizing the interconnectedness of ecosystems, SCGP considers risks and impacts from adjacent areas to own operations. So, SCGP extends assessment to adjacent areas near own operations within a 50 km, 10 km, and 5 km and meticulously mapped our business sites.

Upstream Activities (suppliers):

SCGP evaluates the biodiversity risks of upstream activities (suppliers). SCGP has raw materials from timber resource such as eucalyptus tree, pulp and paper. SCGP focuses on environmental friendly raw materials and aligned with global standard (Forest Stewardship CouncilTM). SCGP identifies and evaluates supplier’s activities on biodiversity, including corporate set mitigation plan to reduce any adverse effects on biodiversity.

Downstream Activities (customers):

Our assessment also includes downstream activities, considering the impacts of our products and services on biodiversity. SCGP works closely with customers to promote sustainable practices and encourage biodiversity conservation throughout product use and disposal.

Dependency and Impact

We’re conscious of potential risks to nature and biodiversity from our business footprint, especially near wild and biodiversity-rich areas. Using TNFD-recommended tools like IBAT, WWF Biodiversity Risk Filter, and Aqueduct, we map our sites globally, ensuring responsible environmental stewardship. Together, we safeguard ecosystems and promote sustainable practices.

Biodiversity Risk Filter Result 2023

SCGP has no operation sites located in globally or nationally important biodiversity areas, including Thailand and International Protected Forest Area.

Nature-Related Risks

Physical Risk
Acute Risk	Weather event change and increased severity such as cyclone, floods, water scarcity and biodiversity
Chronic Risk	Rising of temperature, Extreme weather, Sea level rising and make flooding in risk areas which lead to changing weather patterns.
Water Scarcity	Disruption of supply chain and operation on water withdrawal and water usage.
Riverine Floods	Impact on plantation sources to be raw materials in production process.
Urban Floods	Impact on raw materials and products transportation. Impact on safety of employee and supply chain. Increased cost for replacement or repair of damaged assets from flooding.
El Niño and La Niña	During 2023-2025, El Niño and La Niña will be significant to lower rain, more drought and higher temperature in Asia Pacific, It will impact on SCGP operation.
Forest Risk	Low protection and increase deforestation. Decreasing of number of animal and plant species.
Transition Risk
Policy and Legal	More stringent trend of laws and regulations related to the environment, especially biodiversity issue such as EU deforestation regulation.
Market	All supply chain expects and demands factories to produce environmentally friendly products and not impact to biodiversity. Customers required products which are received global label such as FSCTM Label Scaling up the production of environmentally friendly products requires a complex and interconnected supply chain.
Technology	Expensive cost of technologies development to produce products and services with a lower/improved impact on nature or reduced dependency on nature.
Reputation	Stakeholder’s expectation on biodiversity conservation and restoration action from organizations. Need collaboration to drive biodiversity conservation and restoration action through value chain.
Systemic Risk
Ecosystem Collapse	Risk that a critical natural system no longer functions e.g. tipping points are reached and the natural ecosystem collapses resulting in wholesale geographic or sectoral losses.
Aggregated	Linked to fundamental impacts of nature loss to levels of physical and transition risks across one or more sectors in a portfolio (financial or corporate).
Contagion	Originates in the financial or real economy as a risk that financial difficulties at one or more financial institution spill over to the financial system as a whole.

Biodiversity Mitigation Hierarchy

Diversity species status in Conservation Areas

Encourage Projects with Partners

Partner	Cooperation Activity
Forest Stewardship Council^TM	- FSC^TM is dedicated to promotion of responsible forest management worldwide
Forestry Research Center ,Kasetsart University	- Survey, study and research for long-term on biodiversity & ecosystem conservation and biodiversity management.
Faculty of Forestry ,Kasetsart University	- Support the experts about biodiversity management to give advise, knowledge and consult to the company.
Thai Forest Ecological Research Network ,Kasetsart University	- Monitor and give research knowledge in Long-term about conservation of biodiversity and ecosystems to company in order to develop Ecological Research
Forest resource management office, Royal Forest Department	- Promote conserve natural resources activities in the agroforestry area