Water Stewardship

Water is an essential resource for SCGP's business operations. Regarding the use of water resources with the most value and most significant benefit, SCGP has applied the 3R principle to improve the production process to reduce water withdrawal, reuse, and recycle water in the production process, including the restoration of the natural water resources. To discharge water to public sources, SCGP strictly complies with laws & regulations to prevent any impact on the environment or communities.

Moreover, with today's climate change conditions, which has a significant effect on water management, such as unseasonal and erratic rainfall patterns, no rains at the headwater area, depletion of water volume in the dams. Coupled with the increasing demand of water consumption in all geographical areas and sectors creates a risk of water shortage in the manufacturing process and nearby communities. SCGP is committed to leveraging the capability to manage the water through the Integrated Water Management Working Team comprising of representatives from every business to formulate a strategy to address water-related risks and water usage efficiency. SCGP also set up a function unit for water-related risks – monitoring, working with the government and industry sectors, with digital technology adoption, and creating innovation to increase water usage efficiency in the production process and recycle the treated water.

SCGP Executives, including CEO, have set water withdrawal intensity as one of their KPIs which is periodically monitored through regular meetings by ESG committee and Water Management Committee.

Sustainable Water Management Approach

1. Governance & Accountability

The Company has established formal board-level oversight of water stewardship. The Board of Directors, together with the Chief Executive Officer (CEO) and relevant board-level committees—including the Audit Committee, ESG Committee, Risk Management Committee, and Remuneration Committee—holds direct responsibility for water-related matters. Water issues are included as a standing agenda item at Board meetings at least annually. Key decisions relating to water-related capital expenditure (water CAPEX), the management of water-related risks and opportunities, and the setting of water reduction targets are clearly defined under the Board’s mandate, ensuring robust governance and accountability.

2. Water Policy & Commitment

The Company has adopted a corporate-level Environmental Policy that comprehensively addresses sustainable water management. The policy focuses on reducing both water withdrawal and water withdrawal intensity, preventing and controlling water pollution, and enhancing water efficiency through reduction, reuse, recycling, and efficiency improvement measures. This policy applies across the Company’s direct operations, subsidiaries, suppliers, and the entire value chain, ensuring a consistent and integrated approach to water stewardship throughout all business activities.

3. Water Risk Assessment & Integration

The Company conducts annual water risk assessments using internationally recognized tools such as WRI Aqueduct and the WWF Water Risk Filter. These assessments evaluate water-related risks associated with drought, flooding, water stress, and regulatory changes. Identified water risks are integrated into the Company’s Enterprise Risk Management (ERM) framework, Business Continuity Management (BCM), and strategic and financial planning processes. Water-related risks and mitigation measures are regularly reported to senior management and the Board of Directors to support informed decision-making.

4. Water Management Programmes

Operational water management is implemented under the 3Rs strategy (Reduce, Reuse, Recycle), supported by concrete programmes such as water recycling and reuse systems, closed-loop water systems, and advanced wastewater treatment (secondary and tertiary treatment). Internal water quality control standards are set to be more stringent than regulatory requirements. In addition, a dedicated Water Management Committee is established at each operational site to oversee, monitor, and continuously improve water performance at the plant level.

5. Quantitative Water Targets

The Company has established clear, measurable, and time-bound water targets. These include reducing total water withdrawal by 35% by 2025 compared to the 2014 baseline, and reducing water withdrawal intensity by 10% by 2030 compared to the 2022 baseline. The targets are supported by clearly defined baselines, timelines, and scopes that cover the Company’s core business segments, ensuring systematic and effective water management aligned with long-term sustainability objectives.

6. Monitoring, Data Quality & Assurance

Water withdrawal, discharge, and consumption data are measured and monitored across all operational sites on a regular basis. To enhance data reliability and transparency, water performance data undergoes third-party verification. The Company publicly discloses its water management performance through multiple reporting channels, including the CDP disclosure, the Sustainability Report, and the Annual Report, enabling stakeholders to access comprehensive and credible information.

7. Incentives & Performance Linkage

A clear incentive and accountability framework has been established to drive effective water management. Twenty percent of variable compensation for the C-suite and Board of Directors is linked to ESG performance, including water-related performance. Water-related KPIs are cascaded throughout the organization, from the Chief Operating Officer (COO) to Business Unit Managers, managers, and operational staff. Performance against these KPIs directly influences annual performance reviews and bonus considerations, fostering shared responsibility and consistent execution across all levels of the organization.

8. Stakeholder & Community Water Stewardship

The Company actively engages with local communities and stakeholders to promote sustainable water stewardship at the local level. Initiatives include allocating water resources to communities surrounding operational sites and supplying treated wastewater for agricultural use, which helps reduce pressure on natural water sources. The Company also implements watershed rehabilitation initiatives, such as check dam construction and ecosystem rehabilitation projects, to enhance watershed resilience and ecological health. These efforts play a vital role in strengthening stakeholder relationships and supporting the Company’s long-term social license to operate.

Further information is available in “SCGP’s CDP disclosure 2025” , particularly under the following sections:C.2 Risk Assessment C.3 Community Engagement C.4 Governance C.9 Targets

Water Management Committee :

Under the ESG Committee, chaired by the CEO, the Environmental Dimension has appointed Chief-level executives to oversee all environmental aspects, including the Water Management Committee and the performance results are reported regularly.

Within the SCGP Water Management Committee, a senior executive has been appointed as the committee head, with representatives from each plant participating as working team members. This structure aims to drive the development of water strategies and facilitate discussions on improving water use efficiency across all plants, both in Thailand and abroad. pls correct in better Committee roles and responsibilities are:

Develop policies and guidelines for comprehensive water management, encompassing both internal water usage and external wastewater discharge
Set operational targets and monitor implementation plans
Assess water-related risks and establish preventive measures
Benchmark against both internal and external standards
Explore emerging technologies to enhance water management efficiency

Strategy

Enhancing water efficiency.

Accelerating water circularity & adapting closed-loop water system in water-stressed areas.

Enhancing water replenishment & ecosystem restoration.

Strengthen water stewardship in water risk areas.

Management Practices

Oversight and Monitoring: Water efficiency has been monitored through key performance indicators (KPIs), with senior executives actively overseeing and participating in the process to set appropriate water usage targets and govern the use of water resources every year.

Integrated Water Management: The Water Management Committee has been established to develop and implement strategies for water risk management to enhance water efficiency in production processes.

Water-Usage Reduction based on 3Rs (Reduce, Reuse, Recycle): 3Rs have been applied to the Company’s water management by reducing water consumption, reusing and recycling water in its production processes. The application helps decrease dependence on external water sources and improve overall water efficiency.

Wastewater Treatment and Recycling: Compliance with stringent wastewater treatment standards has been upheld with the help of advanced technology to ensure that the quality of treated wastewater meets prescribed environmental regulations and is suitable for use in production processes. This approach helps reduce reliance on external water sources.

Community Engagement: Rehabilitation of ecosystems of water sources and providing water supply for communities’ consumption.

Stakeholder Engagement in integrated water resource management.

Water Risk Assessment Tools: Advanced tools such as WRI AQUEDUCT, satellite images and Early Warning System (EWS) have been utilized to assess water risks such as water shortages, floods, and droughts.

Target	Performance in 2025
Reduction in Water withdrawal intensity (per ton of production) compared with the base year 2022	2.4%

Reduce water withdrawal intensity
(per ton of production)

10%

by 2030, compared with the base year of 2022

Reduce water withdrawal intensity
(per ton of production)

2.4%

The proportion of recycled water

15.1%

Net Fresh Water Consumption

16.9 million cubic metre

Net Fresh Water Consumption

16.2 million cubic metre

0 case

no water-related incidents such as operational interruptions or plant closures with material impacts on costs or revenues during the past four fiscal years.

In 2024, SCGP enhanced its use of the latest version of the Aqueduct 4.0 tool to assess water-related risks, based on risk area identification by WRI’s Aqueduct Global Water Tool.The assessment revealed that 28 sites, or 48.3% of SCGP’s total 58 operating sites, are located in areas exposed to water risk. These sites collectively generated approximately 40% of the company’s total sales revenue.

Water Intensity

Note :

Include abroad in 2022
Abroad include Vietnam, Philippines, Indonesia and Malaysia
SCGP Business: PP = Paper packaging, FB = Fiber-based packaging, CIP = Consumable Industrial Packaging, CPP = Consumer and Performance Packaging Business

SCGP identifies and assesses water-related risks in a systematic manner, covering risks arising from water stress, drought, and flooding in key river basins where the Company operates. These assessments also include regulatory risks, such as potential increases in groundwater abstraction fees, as well as risks that may affect operational continuity and manufacturing processes at certain facilities.

Financial Quantification of Costs Associated with Water-related Risks

SCGP conducts a quantitative financial assessment of water-related risks to understand their potential impacts on business performance. This assessment covers both increases in operating costs resulting from water-related fees and charges, as well as potential impacts on production and revenues arising from water scarcity or physical water-related events. The analysis is based on actual water withdrawal data and operational assumptions to ensure consistency and reliability.

Facilities and Revenue Exposure to Water-related Risks

The Company identifies facilities located in water-stressed river basins and assesses the proportion of revenue that may be exposed to water-related risks. This information supports enterprise risk management, capital allocation decisions, and long-term resilience planning across SCGP’s operations.

Capital Expenditure (CAPEX) to Mitigate Water-related Risks

SCGP places strong emphasis on continuous investment to mitigate water-related risks. Key investments focus on water recycling and reuse systems, upgrading wastewater treatment facilities, improving water-use efficiency in production processes, and deploying digital monitoring and control systems. These investments aim to reduce dependency on natural water sources and enhance long-term water security across the Company’s operations.

Compliance and Regulatory Oversight on Water Management

SCGP operates in strict compliance with applicable water-related laws and regulations. Over recent years, the Company has not incurred any fines or penalties related to water management. In addition, SCGP has established internal water and wastewater management standards that are more stringent than regulatory requirements, supported by real-time water quality monitoring systems. These measures are designed to prevent adverse environmental and community impacts while safeguarding operational continuity.

Financial Quantification of Investment in R&D to Mitigate Water-related Risks

SCGP recognizes the importance of research and development (R&D) investments to enhance resilience against water-related risks and climate variability. The Company invests in R&D initiatives aimed at strengthening the resilience of key raw materials, particularly through the development of hybrid eucalyptus varieties that are more tolerant to drought and resistant to pests. These initiatives help reduce the risk of supply disruptions and strengthen raw material security over the long term in an increasingly water-stressed environment.

Technological Innovation for Water Efficiency

SCGP continuously advances technological and process innovations to reduce water withdrawal intensity. These efforts include process innovations, the implementation of closed-loop water systems, and the reuse of treated wastewater in production processes. Such initiatives not only reduce reliance on natural water sources but also contribute to lower operating costs through improved water-use efficiency.

Governance and Oversight of R&D and Water-related Investments

The management of water-related risks and R&D investments at SCGP is overseen by the Board of Directors and senior management. Water considerations are integrated into corporate strategy, investment decision-making, and innovation development. In addition, water-related key performance indicators (water KPIs) are incorporated into performance management and incentive structures, reinforcing accountability and driving sustainable water management practices across all levels of the organization.

Additional details can be found in SCGP’s CDP Disclosure 2025 , available via the following sections:C.2 Risk Assessment,C.3 Disclosure of Risks and Opportunities,C.4 Governance

Highlight Activities:

Water Management 2023-2024

Risk Assessment

Conduct water related risks assessment using internationally accepted tools such as WRI AQUEDUCT / Satellite imagery of GISTDA - Geo-Informatics and the Early Warning System (EWS) connecting Application Programming Interface (API) with the Power BI to monitor, assess and create water situation dashboard. Constructing the preparedness plan for response any water crisis and water-related risks. (e.g. water scarcity, drought, flood)
In addition, SCGP has developed and disclosed the management of water issues e.g. Dependency-related and impact-related water risks considered in physical risk assessment throughout our supply chain in accordance with the guidelines of the Task Force on Climate-related Financial Disclosures (TCFD) (TCFD 2023, TCFD 2024, TCFD 2025) and SCGP water management through managerial committee as explained on Water Management Strategy.
SCGP continues the assessment process of water related risks in account with both country and local water stress
In product use phase, downstream water risks are also considered but they are insignificant because our products use water efficiently as driven by water committee with management strategy to reduce water withdrawal and consumption as target.

Assessment of Impact on local stakeholders

SCGP has participated local and national meetings to monitor and resolve problems of local residents with tracking movement of various projects that will affect community and environment. In addition, SCGP engages with communities to support water and reservoir to help manage water and environment concerns.

Risk Management on Stakeholders

Collaboration

In accordance to the Water Resources Act B.E. 2561, effective from January 27, 2019. SCGP representatives selected by the Federation of Thai Industries to join the Water User Organization to help achieve the set objectives of water resource management and people's livelihoods under the supervision of the National Water Resources Board. SCGP and business partners are involved in the five major river basins, namely the Mae Klong River Basin, East Coast Basin, Bang Pakong River Basin, Chi River Basin, and Tha Chin River Basin with the mission to comprises the water usage, development, management, maintenance, restoration, and conservation of water resources in the same direction, covering all dimensions to balance, sustain, and genuinely reflect all sectors' participation processes.
("Water User Organization" is a group of people using water in the vicinity of each other and are in the same watershed area registered as a working team to carry out mutually beneficial activities among members regarding the use, development, management, maintenance restoration and conservation of water resources.)

Furthermore, SCGP assesses water-related risks and future changes on regulations, quantity to prepare for water situation on all factory sites. For our assessment, although some operational sites are located in water-stressed areas, there is still sufficient water supply for operations. For changed regulation, water will be priced as used quantity. Water charges are incurred for the purpose of accomplishing the objectives of the law concerning water resources, not for the purpose of earning money. According to the type of water use, different rates will be collected to cover the fees. The use of free water resources is authorized by the Water Resources Act, B.E. 2561, Chapter 4, Water Allocation and Use, Section 41. Before bringing it for further discourse by the Sub-Committee on Considering the Law on Water Resources Management and Utilization, it needs to be considered via the Watershed Committee and the Provincial Water Sources Sub-Committee. As the result, the risk on this regulatory change is low.

Risk Management: Pricing structure

Evidence of Using Alternative Resources

For our production machines, SCGP has SaveAll to filter used water in process as clear, cloudy and clear water to re-use in process such as pulp slurry dilution to reduce fresh water consumption. Moreover, SCGP has a variety of improvement projects such as APM Water Ring (as below in integrated water withdrawal reduction). Therefore, SCGP can have the proportion of recycle water use as shown on performance above.

Water Management Strategy

SCGP has set water committee to direct and monitor water consumption through relevant policies, management, idea generation to improve overall water performance with leading managers (as shown on the figure below) that set water consumption as one of key performance indicators due to environmental impact focus.

Interactions with water as a shared resource

SCGP water sources are mainly from surface water and ground water, counting as around 95%. The rest is from 3rd Party water. The purpose of water usage is in production process (namely as blending, chemical mixing, dilution) and in office. After use, all sites take efforts to reuse and recycle used water, as well as treated wastewater, by passing through screening and treatment to use again and again in process. For wastewater, SCGP treats it with better quality standard when compared with Thai laws so it can be environmentally safely released to river, communities, for example, to do farming and agriculture.
SCGP managed the agricultural project’s water circulation by supplying treated water with the quality as specified standards from the mill to the farming areas (such as rice, sugar cane, lotus) of communities nearby that can reduce the water shortage in cultivation.
SCGP continuously implements water for agricultural projects by delivering treated water in reference with relevant standards and laws to rice, sugar cane and lotus fields at least 45,000 cubic metre per month. Besides, Farmers in nearby areas agree to accept SCGP treated water for use.

Management of water discharge-related impacts

SCGP treats wastewater from the factory’s production process before releasing it into the environment.

SCGP measures the quality of water discharged in many parameters such as pH, temperature, BOD, COD and TSS tested with standardized measurement methods and certified laboratories. SCGP sets internal standard: SS (mg/l) < 30, BOD (mg/l) < 16, COD (mg/l) < 110.

SCGP monitors water-related incidents at all time. If improvement gap is found, related department will be informed to solve the problem to improve wastewater quality such as reducing chemicals which increase suspended solid in water.
(Compared with Thai Law on treated wastewater quality standard B.E.2560: SS (mg/l) < 50, BOD (mg/l) < 20, COD (mg/l) < 120)

SCGP also tracks water quality in natural water sources before and after the factory by measuring various parameters such as the total dissolved solids (TDS) according to the standard method. It is to classify the water intake quality to ensure that the treated effluent does not affect nature and continually enhances the company’s efforts to improve wastewater quality.

Additionally, SCGP has actions to improve wastewater quality. For example,

The use of an anaerobic process in primary treatment helps reduce energy consumption in the treatment process and also generates biogas that can be used as fuel for the boiler
effluent water treatment improve concentration of sludge by developing screw press to squeeze drier sludge
finding the optimal condition to run the system efficiently as well as chemicals that can help overall system performance. Meanwhile, SCGP has efforts to find new technologies to develop step-by-step. SCGP emphasizes the importance of effluent treatment as one of production processes.

By providing knowledge and understanding to employees, always puts high importance on the water to business, and sets water KPI target so that employees are committed to creating innovation continually. The example of continuous and innovative improvement called “APM Water Ring” which was developed and used in couple with a packing seal to eliminate the sealing water leakage at the water pump due to the corrosion of its original packing seal system. This could reduce the water loss by 80% and improve water pump efficiency. The successful results have expanded to various factories in SCGP, which can save a total of 1.4 million cubic meters of water per year. Currently, this innovation is in the process of applying for a petty patent.

Water use assessment to identify opportunities for water efficiency improvements with awareness on water use:

To identify opportunities, each site will collect the periodical quantity of water use such as monthly, quarterly or yearly performance to make decisions in meeting with site directors and managers to discuss why water withdrawal is high or low and what the lesson learned is or what the good practice is. In this session, managers can share each other and develop for their own machines. Annually, SCGP has to collect and analyze data to summarize as projects to reduce cost in various aspects including water. One of ways to develop projects is to do workshop as Idea Generation to accumulate ideas from operators to managers. Therefore, there is the assigned team with specialists and engineers to assess received data by 2x2 matrix (Benefit/Saving and Ease of Implementation) to prioritize proposed ideas and projects to do on annual action plan or medium term plan. Besides, awareness on water is built from 2P2S workshop to consider necessary changes on culture for water use.

Action to reduce water consumption:

SCGP has invested in technology to reduce water used in the production process and circulate water used in the production process to be reused and recycled. There are such technologies as installing and improving water filtration systems (SAVEALL/PETEX), installing high-efficiency machine cleaning equipment ,to reduce the use of cleaning water. Including the selection of machinery that uses the minimum water technology.

SCGP has continuously reduced water usage in its production processes by reducing the amount of water used and recycling water through the use of technology and innovation.

Expanding the use of treated water in production processes has increased the reuse of water as recycling water in various systems such as machine sealing system, floor cleaning and chemical dilution, resulting in a reduction of 4 million cubic meters of water usage per year.
Improving the high-pressure water cleaning system has also reduced water usage by approximately 0.7 million cubic meters per year.
Installing high-technology water screening system has also decreased water usage by approximately 0.8 million cubic meters per year.
The Reuse RO Reject Project has further reduced water usage by 0.4 million cubic meters per year.

Water Stewardship