Materiality

Materiality Assessment

SCGP annually assesses double materiality in accordance to the GRI Standard (GRI3: Material Topics 2021) by considering both the financial and non-financial impacts of sustainability issues on its business operations and stakeholders. Double materiality is a concept that recognizes the importance of assessing both the internal impacts of sustainability issues on a company's financial performance and the external impacts of the company's activities on the environment, society, and governance.

SCGP also considers the financial materiality of sustainability issues by evaluating their potential impacts on the company's financial performance, including risks and opportunities. This involves analyzing factors such as regulatory changes, market trends, resource availability, and customer preferences that may affect SCGP's financial performance.

Furthermore, SCGP assesses the impact materiality (non-financial materiality) of sustainability issues by evaluating their impacts on the environment, society, and governance. This includes analyzing the company's carbon footprint, water usage, waste management practices, labor conditions, human rights, community engagement, and ethical business practices.

Process of Materiality Assessment and Prioritization

COLLECT AND IDENTIFY SUSTAINABILITY ISSUES

Analyze sustainability issues throughout the value chain covering activities from raw material procurement, production, transportation and distribution, the use of products and services, and analysis of significant changes.

PRIORITIZE MATERIALITY ISSUES

Identify the actual and future impacts of materiality issues by various committees under the supervision of the SCGP ESG Committee.

REVIEW AND VALIDATE

Evaluate impacts on economy, environment, society, and others aspects according to the enterprise risk management principle.

COMMUNICATE MATERIALITY ISSUES TO STAKEHOLDERS

Evaluate and prioritize SCGP materiality in accordance with importance to SCGP and importance to stakeholders with the participation of the Chief Executive Officer and high-ranking executives to mutually approve and sign off.

Step 1: Collect and Identify Materiality issues
Potential Materiality issues from external stakeholders Key issues in Container and Packaging Industry based on principles outlined from external sustainable reporting standards: GRI standards, Task Force on Climate-related Financial Disclosures (TCFD) External ESG assessment : S&P CSA (formerly DJSI), EcoVadis, CDP ESG ratings systems : MSCI, FTSE4Good, Sustainalytics Survey results from stakeholder engagement and materiality survey including surveys from annual ESG events (e.g. ESG Symposium, Supplier Day) Questions raised by investors and customers during the year (e.g. analyst conferences, customer inquiries) New ESG-related laws and regulations	Materiality issues within SCGP management Materiality assessment results from previous years Issues foreseen by Board-level and senior executive level (Audit Committee, Risk Management Committee) Issues raised and monitored through internal ESG and other related work-group level committees (e.g. Energy and Climate Change, Water, Waste) Issues set as short, medium and long-term goals for business. Performance related to these issues is a part of the remuneration criteria for the Chief Executive Officer and top executives

Step 1: Collect and Identify Materiality issues

Potential Materiality issues from external stakeholders

Key issues in Container and Packaging Industry based on principles outlined from external sustainable reporting standards: GRI standards, Task Force on Climate-related Financial Disclosures (TCFD)
External ESG assessment : S&P CSA (formerly DJSI), EcoVadis, CDP
ESG ratings systems : MSCI, FTSE4Good, Sustainalytics
Survey results from stakeholder engagement and materiality survey including surveys from annual ESG events (e.g. ESG Symposium, Supplier Day)
Questions raised by investors and customers during the year (e.g. analyst conferences, customer inquiries)
New ESG-related laws and regulations

Materiality issues within SCGP management

Materiality assessment results from previous years
Issues foreseen by Board-level and senior executive level (Audit Committee, Risk Management Committee)
Issues raised and monitored through internal ESG and other related work-group level committees (e.g. Energy and Climate Change, Water, Waste)
Issues set as short, medium and long-term goals for business. Performance related to these issues is a part of the remuneration criteria for the Chief Executive Officer and top executives

Step 2: Prioritize Materiality	Step 3: Review and Validate	Step 4: Communicate to stakeholders
Focus on key sustainability issues SCGP conducts regular sustainability assessments and materiality analyses to identify and prioritize the key sustainability issues that are relevant to its business and stakeholders. This involves engaging with internal and external stakeholders, such as employees, customers, suppliers, communities, and investors, to understand their perspectives and expectations. Key materiality issues are expected to reviewed at-least annually.	Assessing materiality By considering both impact and financial materiality, SCGP aims to ensure that its business operations are aligned with the principles of sustainable development and create long-term value for its stakeholders. This approach enables SCGP to identify risks, seize opportunities, and make informed decisions that contribute to its overall sustainability performance. Validation of result ESG leadership team and senior executives participated in a workshop to validate materiality results. The double materiality requirement was passed if that materiality issue was deemed material from both financial and impact materiality aspect. SCGP integrates its Double Materiality assessment and Enterprise Risk Management (ERM) Framework across strategic, operational, and investment functions. In 2024, 18 key issues were identified, with 10 incorporated into SCGP’s risk management process. Of these, 10 issues are actively managed within the company’s risk management plan. For more details, visit Risk Management	Reporting Communicate sustainability management information to the organization's stakeholders in accordance with established standards and guidelines for information disclosure, ensuring effective engagement with stakeholders.

Step 2: Prioritize Materiality

Step 3: Review and Validate

Step 4: Communicate to stakeholders

Focus on key sustainability issues

SCGP conducts regular sustainability assessments and materiality analyses to identify and prioritize the key sustainability issues that are relevant to its business and stakeholders. This involves engaging with internal and external stakeholders, such as employees, customers, suppliers, communities, and investors, to understand their perspectives and expectations. Key materiality issues are expected to reviewed at-least annually.

Assessing materiality

By considering both impact and financial materiality, SCGP aims to ensure that its business operations are aligned with the principles of sustainable development and create long-term value for its stakeholders. This approach enables SCGP to identify risks, seize opportunities, and make informed decisions that contribute to its overall sustainability performance.

Validation of result

ESG leadership team and senior executives participated in a workshop to validate materiality results. The double materiality requirement was passed if that materiality issue was deemed material from both financial and impact materiality aspect.

SCGP integrates its Double Materiality assessment and Enterprise Risk Management (ERM) Framework across strategic, operational, and investment functions. In 2024, 18 key issues were identified, with 10 incorporated into SCGP’s risk management process. Of these, 10 issues are actively managed within the company’s risk management plan. For more details, visit Risk Management

Reporting

Communicate sustainability management information to the organization's stakeholders in accordance with established standards and guidelines for information disclosure, ensuring effective engagement with stakeholders.

Double Materiality Matrix

2024 Materiality Issues

Utilizing the Double Meateriality method, the review concluded that SCGP identified four material sustainability issues in 2024 which are as follows:

Following the review if SCGP’s materiality issues in 2024 through a Double Materiality assessment, four key issues were identified:

Double Materiality Assessment 2024 (GRI 3-3)

Climate Action and Strategy

Items		Impact on SCGP	Impact on Stakeholders
Affected Stakeholders		Employees	Customers / Investors / Suppliers / Business partners / Environment / Society
Cause of Impact	Operations	+ Resilience to upcoming carbon related law and regulations - High investment for GHG reduction projects + Less Energy Cost	- High GHG emissions affecting public health of local communities, ecosystems
	Products/Services	+ GHG Emission Reduction + Better reputation and customer confidence through ESG ratings and climate actions	-High GHG product may lead to export ban or fee due to stringent carbon-related regulations.
	Supply Chain	+ Reducing emissions is essential to maintain market access (e.g. Carbon Tax).	+ Meet requirement/need of customers or investors focused on climate change
Sectoral Damage		Health, Energy
Net Impact Valuation		> 1,000 million Baht

Opportunities	Investing in research and development of Carbon Capture, Utilization and Storage (CCUS) technologies and renewable energy. Designing and developing products and services based on circular economy principles, promoting and increasing the use of recycled materials. Implementing Internal Carbon Pricing (ICP) as a tool for investment consideration. Collaborating with government, private sectors, industries, and global organizations to continuously monitor situations, assess risks, and develop response and business continuity plans in case of disasters.
Main reference SDGs and ESG4 Plus
Management Strategies	Reducing greenhouse gas emissions with 3 measures: Improving energy efficiency through the adoption of best available technologies. Increasing the use of renewable energy and clean energy sources. Developing low-carbon products based on circular economy principles. Absorbing and sequestering greenhouse gases with 2 measures: Exploring Carbon Capture, Utilization, and Storage (CCUS) technologies. Supporting and participating in forest conservation and ecosystem restoration for biodiversity and as carbon dioxide sinks. Utilizing economic tools such as Internal Carbon Pricing (ICP).
Targets & Performance	Achieve Net-Zero emissions by 2050. Reduce scope 1 & 2 greenhouse gas emissions by 25% by 2030, compared with the base year of 2020 [2024 Performance 17.5%] Reduce energy comsumption by 13% by 2025, compared with business as usual (BAU) at the base year of 2007 [2024 Performance 8.76%] Reduce energy intensity (per ton of production) by 15% by 2030, compared with the base year of 2020 [2024 Performance 15.2%]

Circular Economy

Items		Impact on SCGP	Impact on Stakeholders
Affected Stakeholders		Employees	Customers / Investors / Government / Suppliers / Business partners / Environment / Society
Cause of Impact	Operations	+ Reduce costs in the production process and increase the efficiency of using resources due to 3Rs (Reduce/Reuse/Recycle). - Higher investment in management for difficult-to-recycle product groups, such as multilayer plastic packaging.
	Products/Services	+ Increase opportunities to sell environmentally friendly products with more recyclable, reusable and compostable packaging. + Increased sales revenue	+ Customers have more eco product choices. + Circular economy initiatives lead to consumer preference for environmentally friendly products with awareness to minimize greenhouse gas emissions. - The price of the product has increased.
	Supply Chain		+ The government sector has received support for Extended Producer Responsibility (EPR) system, providing an opportunity for producers to create an ecosystem for circular economy. + Less waste management cost + Zero waste community project to reduce waste in society around SCGP factories - Additional cost on EPR fee - Residents near landfills will experience less impacts on their health, property values, and quality of life.
Sectoral Damage		Health, Social Cost of Carbon
Net Impact Valuation		> 1,000 million Baht

Opportunities	Leveraging waste and diverse raw materials due to a variety of industries. Collaborating with customers to recycle waste into new products, in line with circular economy principles.
Main reference SDGs and ESG4 Plus
Management Strategies	Efficiently managing existing limited resources to maximize utilization. Adopting the circular economy principles to manage limited resources such as water, energy, and raw materials for maximum benefit.
Targets & Performance	SCGP is committed to engineer packaging products through co-creation with customers, aspiring to achieve 100% recyclable, reusable, or compostable packaging by 2030 [2024 Performance 99.7%].

Customer & Consumer Centricity

Items		Impact on SCGP	Impact on Stakeholders
Affected Stakeholders		Employees	Customers / Investors
Cause of Impact	Operations
	Products/Services	+ Able to respond to customer needs appropriately and completely + More loyally customer - Require both time and expenses for data collection and analysis. + More customer experience score + Increased sales revenue	+ Customers receive products that meet their needs. + Customers feel they are getting value for their money. + Better customer experience with SCGP brand
	Supply Chain
Sectoral Damage		No
Net Impact Valuation		< 500 million Baht

Opportunities	Delivering innovative products, services, and solutions that meet customer needs sustainably. Expanding electronic channels to facilitate customer convenience in ordering, payment, and tracking product status. Developing systems for receiving and managing customer data to enhance efficiency and speed of service
Main reference SDGs and ESG4 Plus
Management Strategies	Analyzing and monitoring customer experiences from understanding problems and needs, behaviors, product and service selection, to the use of solutions. This involves engaging with customers across all business segments to improve products and services and launching surveys to gauge satisfaction with products, services, and solutions.
Targets & Performance	Customer experience score of 85% [2024 Performance 89%].

Risk & Disruption Management (Water Management)

Items		Impact on SCGP	Impact on Stakeholders
Affected Stakeholders		Employees	Customers / Investors / Communities / Suppliers / Business Partners
Cause of Impact	Operations	+ No cost in losing production opportunities + Reduce water withdrawal + Reduce water consumption cost - High investment especially implementing water recycling projects
	Products/Services
	Supply Chain		+ Reduced water withdrawal causes more water for living and agriculture. - Drought can make access to water for community become more difficult. - Flood can disrupt supply and transportation of finished goods to customers. - Flood can disrupt communities.
Sectoral Damage		Agriculture
Net Impact Valuation		> 1,000 million Baht

Opportunities	Managing risk and disruption systematically in line with international standards and integrating them within the business framework under acceptable risk levels to ensure business continuity.
Main reference SDGs and ESG4 Plus
Management Strategies	Managing risks across the organization according to the Committee of Sponsoring Organization (COSO) and ISO31000 to minimize the likelihood and impact of potential risks. Analyzing the severity and prioritizing risk items using tools, such as WRI AQUEDUCT, satellite imaging, and Risk Map. Continuously managing business risks according to the Business Continuity Management (BCM) framework for sustainability, in line with the approaches of the United Nations Office for Disaster Risk Reduction (UNDRR).
Targets & Performance	Reduce water withdrawal 35% by 2025 compared with business as usual (BAU) at the base year of 2014 [2024 Performance 27.3%]. Reduce water withdrawal intensity (per ton of production) by 10% by 2030, compared with the base year of 2022 [2024 Performance 3.12%].