Materiality Assessment

Double Materiality Assessment Procedure

(GRI 2-14, GRI 3-1)

OR materiality assessment considers the organization’s context, as well as the positive and negative impacts it has on the economy, environment, society, and all stakeholders. In addition, Materiality analysis is reviewed at least annually, and the assessment is conducted in accordance with the Global Reporting Initiative Standards (GRI Standards) framework and the principle of double materiality according to the following process:

1. Understanding organizational context and integrating sustainability material issues into business activities

OR has carefully considered the characteristics of its operations and the organizational context in which it conducts its downstream oil and retail businesses across the entire value chain and with its business relationship. This includes joint ventures with control, business partners and suppliers, oil & gas dealers, and food and beverage franchisees, as well as all relevant stakeholders both within and outside the organization who may be affected by each activity.

The value chain diagram and related stakeholders can be found in the “Stakeholder Engagement”

In the process of identifying and linking key sustainability issues, OR has taken a comprehensive approach that encompasses environmental, social, governance, and economic dimensions, while also considering human rights principles. Furthermore, OR has gathered key material issues from domestic and global sustainability trends of various standards and though leaders such as the UN Global Compact Network Thailand (UNGCNT), UN Global Compact (UNGC), Morgan Stanley Capital International (MSCI), The World Business Council for Sustainable Development (WBCSD), World Economic Forum (WEF), and others. In addition, OR has considered the issues from peers (same sectors), both oil and retail businesses, are paying attention to, both globally, regionally and locally where OR operates.

	Though Leader
Material Issues
Material Issues	UNGCNT 5 SDGs Mega Trends 2023	UNGC 10 Principles	MSCI ESG Industry Materiality Map (Oil & Gas Refining & Marketing)	WBCSD 2023 Projects	WBCSD Vision 2050	WEF Global Risk Report 2023
Economic and Governance Dimensions
Governance, Risk and Compliance: GRC
Sustainable Supply Chain Management
Data Security and Privacy
Innovation and Technology
Environment Dimension
Biodiversity
Climate Action
Environmental Management
Packaging and Plastic Management
Food Loss & Food Waste
Social Dimension
Human Rights
Labour Practices
Talent Attraction and Retention
Occupational Health and Safety
Community Development

Note:

2. Analyzing the sustainability materiality impact

OR identifies and analyzes the actual or potential impacts, both positive (opportunity) and negative (risk), as well as short-term and long-term impacts, on the key material issues identified in Step 1.

The process of identifying and analyzing these impacts involves the conducting questionnaires and interviews with stakeholders designated by the primary stakeholders of the organization, and individuals who have a strong understanding of the business and context of OR. This ensures that the process involves external stakeholders in identifying the material issues, including those related to impact materiality and financial materiality. Impact materiality encompasses six groups of stakeholders: country, shareholders/investors, business partners and suppliers, society and communities, customers, and employees. For stakeholders involved in the analysis of financial materiality, it includes board members and executives.

OR has summarized the results of the stakeholder interviews on the impacts of key material issues. This summary will be used to prioritize material issues. The potential positive and negative impacts of key material issues on stakeholders are identified in the “Importance” section of each chapter of the Sustainability Report 2024.

3. Assessing the sustainability materiality impact significance

OR gathers stakeholder feedback on material issues from the perspective of Impact Materiality and Financial Materiality in step 2. By calculating the level of positive and negative impact from the feedback obtained from the interviews, consider the level of severity which covers scale, scope of impact, and irremediability and the likelihood of impact. The evaluation criteria are defined as 4 levels (critical, high, medium, and low) based on the severity that will occur, using the impact matrix that references the enterprise risk matrix to identify the impact level.

4. Prioritizing sustainability material issues and review

OR prioritizes material issues using a two-dimension approach according to the assessment conducted based on the principle of double materiality. To effectively manage these issues, OR has established a three-tiered prioritization system: Fundamental, Strengthen, and Value Creation. This framework guides OR’s efforts in addressing sustainability concerns, ensuring that the most critical issues receive the necessary attention and resources. The entire process involves consulting sustainability experts from external agencies who analyze and assess the alignment of the importance ranking with relevant OR departments. Additionally, the material issues are tested with experts and information users.

5. Endorsing the double materiality assessment result

OR’s Sustainability and Business Cooperation Executive Committee reviews and approves the results of OR’s sustainability risk and opportunity assessment. This assessment considers the impact of sustainability issues on OR’s stakeholders in the areas of economics, environment, society, and human rights. The committee is responsible for setting OR’s corporate sustainability strategy and goals. It also approves the scope of disclosure of sustainability material issues in the Sustainability Report 2024 and presents the materiality assessment results to the Corporate Governance and Sustainability Committee (Board of Directors) for final endorsement and signed off. Furthermore, the material issues are identified through a materiality assessment process that is integrated into OR’s enterprise risk management (ERM) process. These issues are also considered as inputs into the planning and development of OR’s strategies and initiatives.

Enterprise Risk Management

6. Continuous development

OR has developed materiality assessment process based on the principles of the GRI Standards to ensure that its sustainability assessment and reporting is comprehensive. This process is carried out in conjunction with the development of the annual sustainability report, and the materiality assessment process is verified by a third-party assurance provider. In addition, OR analyzes areas for continuous improvement, which are then integrated with the feedback from all stakeholders. This feedback is used to improve OR’s operations and sustainability reporting.

OR Double Materiality Assessment Results

(GRI 3-2a, GRI3-2b)

OR’s materiality assessment, conducted in accordance with the GRI Standards, considers the company’s business operations, stakeholder expectations and impacts, and global sustainability trends. The assessment identified 16 key sustainability issues for 2024: stakeholder engagement and biodiversity. These issues have gained increasing attention from stakeholders. OR has also refined the details and names of other key issues to align them more clearly with stakeholder expectations and the company’s business strategy.

The material issues for OR in 2024, as summarized from the above process, are as follows:

Impact Level			Key content to consider
2.50- 3.00	Value Creation	Material issues that create value or pose high risks, with the key issues classified at this level, are those that can either create value for OR’s stakeholders and business, or pose risks to OR’s stakeholders and business. Value Creation may involve generating good operational results, achieving high profits, and fostering business growth, while high risks may result in significant expenses, losses, or damage to the business. This level requires OR to establish clear objectives, action plans, and reports on operations results.	Establishing organizational Key Performance Indicators (KPIs) and using them as input for strategy development and various initiatives. Setting long-term targets and reporting progress in operation. Defining management approaches. Collecting data for at least 3 years and verifying it through third-party validation. Presenting Outstanding operational highlight cases.
2.00-2.49	Strengthen	Material issues that promote value creation/risk management, with key issues identified at this level considered to enhance the organization’s resilience and drive value creation for stakeholders and OR’s business, are areas where OR should develop improvement plans or consider as significant. These areas can help create value or mitigate risks.	Establish organization metrics and incorporate them as factors in strategy development or various initiatives. Set long-term targets and report progress in operations. Define management approaches. Collet data for at least 3 years and verify it with a third party.
0.00-1.99	Fundamental	Material issues that are fundamental must be managed according to regulations, requirements, and laws, including normal standards/practices, are essential for OR’s business operations. This level represents the basic level that OR should maintain, monitor, and vigilantly ensure there are no violations or outcomes below industry peer standards.	Establishing a management approach according to the business as usual model. Collecting data according to the specified indicators.

OR's Double Material Issue Prioritization

Note:
– Value Creation – Material issues that create value or pose high risks, with the key issues classified at this level, are those that can either create value for OR’s stakeholders and business, or pose risks to OR’s stakeholders and business. Value Creation may involve generating good operational results, achieving high profits, and fostering business growth, while high risks may result in significant expenses, losses, or damage to the business. This level requires OR to establish clear objectives, action plans, and reports on operations results.
– Strengthen – Material issues that promote value creation/risk management, with key issues identified at this level considered to enhance the organization’s resilience and drive value creation for stakeholders and OR’s business, are areas where OR should develop improvement plans or consider as significant. These areas can help create value or mitigate risks.
– Fundamental – Material issues that are fundamental must be managed according to regulations, requirements, and laws, including normal standards/practices, are essential for OR’s business operations. This level represents the basic level that OR should maintain, monitor, and vigilantly ensure there are no violations or outcomes below industry peer standards.

Definition, priority, value chain, and relevant stakeholders, including both positive and negative impacts, as well as the level of impact on stakeholders and business operations for each key sustainability issue, are as follows:

Definitions	Priority	Value Chain	Stakeholder	Impact (Positive/ Negative)
Economic Aspect
1. Governance, Risk and Compliance: GRC (GRI 2, 205, 415) Corporate Governance Business Ethics, Code of Conduct and Corporate Compliance Risk and Crisis Management Tax Strategy Economic performance
Conducting business operations with transparent systems or processes and ethical conduct ensures that the company can oversee and manage its operations to meet the needs of stakeholders appropriately and in compliance with relevant regulations, laws, and standards. This applies across economic, social, and environmental aspects, as well as having mechanisms for risk management, crisis situations, and operations under abnormal conditions. This also includes preparing to cope with leading the business through various situations effectively.	Value Creation	– Procurement of raw materials – Transportation – Production and service operation – Delivery of products and services – Supporting activities	Country Shareholders Business Partners/Suppliers Societies and Communities Customers Employees	• This is a fundamental issue that the company must address. If there are good practices, stakeholders will gain confidence and trust. + • It affects the management of other risks that impact performance and the positive image of the organization. + • It may affect the company’s image and the confidence of stakeholders in investment, business collaboration, and service utilization. –
2. Supply Chain Management (GRI 2, GRI 308, GRI 414) Sustainable Procurement Sustainable Supply Chain Management
Managing the supply chain through fair partner selection, monitoring, and assessing partner risks, as well as establishing measures to mitigate risks that occur or may occur in the supply chain. This enables partners to efficiently fulfill responsibilities throughout the supply chain, both in normal and unexpected situations, and promotes sustainable business operations in economic, social, and environmental aspects.	Fundamental	– Procurement of raw materials – Transportation – Production and service operation – Delivery of products and services – Supporting activities	Country Shareholders/Investors Business Partners and Suppliers Societies and Communities	• Increase efficiency in production by reducing costs, leading to increased profits. + • Promote the development of partners’ capabilities in quality, service, and sustainability practices. + • Inefficient supply chain management leads to poor quality control and substandard manufacturing processes. – • Promote transparency in partner management practices. +
3. Customer Relationship Management (GRI 418) Customer Satisfaction Management Online Service Management
Managing customer relationships by fostering rapport and ensuring customer satisfaction through delivering positive experiences, including customer service that meets their needs. This ensures customers receive quality, safe products and services, fulfilling expectations and instilling confidence in choosing the company’s products and services.	Strengthen	– Delivery of products and services – Supporting activities	Country Shareholders/Investors Customers Employees	• Building confidence in providing excellent service to customers and consumers. + • Stimulating sales and increasing revenue for dealers. + • Promoting the development of safe products and services and catering to diverse stakeholders. + • The organization lacks a database for operations and management, which affects confidence and brand loyalty. –
4. Product and Service Stewardship (GRI 416, GRI 417) Quality Products and Services Product Stewardship Health and Wellbeing Promotion Products
Ensuring the quality and safety of products and services in compliance with laws, regulations, international standards, and stakeholder expectations to assure that the company’s products and services do not negatively impact society and the environment. This also encompasses supporting products that promote health and well-being in society.	Fundamental	– Procurement of raw materials – Production and service operation – Delivery of products and services – Supporting activities	Country Shareholders/Investors Societies and Communities Customers Employees	• Promoting the enhancement of quality and safety of products and services. + • The impact of using products and services on the environment and society. + • If complaints are received regarding products and services that do not meet standards, it can lead to a poor reputation and loss of trust from customers. –
5. Innovation and Technology for All (GRI -) Digitalization ESG Investment and Market Opportunities Innovation for Productivity Improvement
Meeting stakeholders’ expectations through technology and digital systems’ involvement in product and service development to add value, addressing present and future changes, and internal innovation to enhance operational efficiency, elevating the organization’s competitive edge.	Fundamental	– Procurement of raw materials – Transportation – Production and service operation – Delivery of products and services – Supporting activities	Country Shareholders/Investors Business Partner and Suppliers Societies and Communities Customers Employees	• Delivering value-added products and services to meet the diverse needs of stakeholders. + • Convenience in Employee Operations. + • Opportunities for innovation and technology development in collaboration with SMEs. + • Resulting in operations not meeting the expectations of stakeholders. –
6. Data Security and Privacy (GRI 418) Cybersecurity Governance Cybersecurity and Cybersecurity and System Availability Data Privacy & Privacy Protection
Maintaining data security by implementing systems to prevent incidents related to data security and/or cybersecurity, including responding to and managing serious security incidents (such as data theft of sensitive organizational information through cyber means), appropriately. Additionally, emphasizing the importance of privacy data and building confidence in safeguarding personal data of stakeholders both within and outside the organization.	Fundamental	– Supporting activities	Country Shareholders/Investors Business Partner and Suppliers Societies and Communities Customers Employees	• Financial losses occur when addressing issues and operations come to a halt. – • Leads to a loss of trust and confidence from stakeholders. – • Confidence of stakeholders in the organization. + • Opportunities arise to enhance the data security system. +
Social Aspect
7. Human Rights (GRI 2, GRI 406, GRI 408, GRI 409, GRI 410, GRI 411, GRI 414) Labour Practices Diversity and Equal Opportunity and Inclusivity
Respecting labor rights according to international human rights principles, and establishing policies and business operations dedicated to respecting and protecting human rights, as well as avoiding causing adverse human rights impacts through business activities. This includes considering the rights of workers that employees of the organization should receive appropriately, such as wages, salaries, diversity, and equality through creating a work environment and organizational culture that fosters a sense of belonging, embraces diversity, promotes mutual respect, and does not discriminate based on differences in age, gender, sexual orientation, religion, disability, education, or nationality.	Fundamental	– Procurement of raw materials – Transportation – Production and service operation – Delivery of products and services – Supporting activities	Country Shareholders/Investors Business Partner and Suppliers Societies and Communities Customers Employees	• Violations of human rights of stakeholders within the supply chain can significantly impact the confidence and reputation of the organization in the eyes of those stakeholders. – • Promoting equality in society through the operations of the organization. + • Demonstrating the ethical operation of the organization and fostering positive relationships with stakeholders involved. + • The opportunity to perceive human rights issues and establish appropriate preventive and mitigating measures. +
8. Workforce Development & Well-Being (GRI 2, GRI 201, GRI 401, GRI 405) Human Capital Development Talent Attraction and Retention Employee Health and Well-Being Employee Support Program
The development of human resources to align with business strategies and enhance efficiency in the workplace through employee development initiatives, such as training and supporting employee education expenses, as well as implementing tracking and evaluation systems that reflect the return on investment in human resource development. Additionally, it encompasses efforts to retain employees and reduce turnover rates through fostering inclusivity, providing advancement opportunities, and ensuring occupational stability, as well as offering appropriate benefits and rewards that promote employee well-being and satisfaction.	Strengthen	– Procurement of raw materials – Transportation – Production and service operation – Delivery of products and services – Supporting activities	Country Shareholders/Investors Business Partner and Suppliers Customers Employees	• Enhancing employees’ skills and abilities leads to increased productivity in production. It fosters progress and builds career stability. + • Employee efficiency at work has decreased, and the resignation rate has increased. – • There is a risk of producing outdated products and services, which affects consumer or service user satisfaction.There is a risk of producing outdated products and services, which affects consumer or service user satisfaction. –
9. Occupational Health and Safety (GRI 403)
Occupational Health and Safety management that covers the safety of the company personnel and contractors working for the organization. This is under a good safety policy and management system which will help reduce and control the risks that may arise from operations. This is to ensure that the company can operate its business continuously without emergency incidents such as oil and chemical spills, transportation accidents, and epidemics. This leads to interruption of operations. Loss of life, property, and organizational reputation including impacts on the environment and community.	Fundamental	– Procurement of raw materials – Transportation – Production and service operation – Delivery of products and services – Supporting activities	Country Shareholders/Investors Business Partner and Suppliers Societies and Communities Customers Employees	• Ensuring the safety of both lives and property of those that are involved. – • Promoting the creation of a safe environment and society from both normal and abnormal events. – • Continuity in business operations. – • Building trust among stakeholders and establishing a good reputation for the organization. +
10. Community Development and Social Collaboration (GRI 201, GRI 413) Corporate Citizenship & Community Development Community Investment, Engagement and Development, Social Contribution Local/ Business Partnership
Business operations are intertwined with creating value for the community and society through activities or projects that benefit them economically, socially, and environmentally. This fosters community trust in the organization. Additionally, it entails being a responsible citizen by conducting business in alignment with the sustainable development goals (SDGs) set by the United Nations, promoting sustainable development.	Value Creation	– Procurement of raw materials – Transportation – Production and service operation – Delivery of products and services – Supporting activities	Country Shareholders/Investors Business Partner and Suppliers Societies and Communities Customers Employees	• Minimize the risk of generating adverse impacts from business operations on the environment, communities, and society. + • Opportunities to integrate social activities into every process of the organization (CSR in Process). + • Sourcing raw materials or supporting local community activities can help develop skills and increase income opportunities for the community. + • It affects the image of the organization, which may be perceived as solely profit-seeking. –
11. Sustainable Branding (GRI 417) Branding Management Social License to Operate Wealth Distribution Collaborativeness Ethical Marketing Communications
Operating the business according to the organization’s vision and mission to establish a sustainable organizational image through ethical practices, community and societal acceptance, and meeting stakeholder expectations. This involves focusing on collaboration with various sectors and promoting income distribution to localities, ensuring confidence that the company can grow sustainably alongside the community.	Fundamental	– Procurement of raw materials – Transportation – Production and service operation – Delivery of products and services – Supporting activities	Country Shareholders/Investors Business Partner and Suppliers Societies and Communities Customers Employees	• The confidence of stakeholders. + • Collaboration in executing various projects together with stakeholders, both internal and external. + • A positive image impacts shareholders and stakeholders as the Brand Carrier of the PTT Group. + • Failure to promote sustainability to stakeholders and having a less prominent reputation for the organization. –
12. Stakeholder Capitalism Stakeholder Management Stakeholder Engagement
Ensuring the continuous improvement of business operations to meet the expectations of all stakeholders, both internal and external, involves developing strategies for stakeholder engagement based on their interests and expectations. This includes appointing efficient managers responsible for stakeholder relations, consistently monitoring collaborative efforts, and incorporating stakeholder feedback to align management practices with their needs effectively. By doing so, the organization can mitigate risks, foster confidence, build strong relationships, and establish long-term commitment with stakeholders.	Strengthen	– Procurement of raw materials – Production and service operation	Country Shareholders/Investors Business Partner and Suppliers Society and Community Customers Employees	• Improving business efficiency and better meeting stakeholder expectations. + • Leading to a better understanding of business context and the ability to respond effectively to stakeholders’ needs. + • Impacting expectations and potentially leading to future conflicts. –
Environmental Aspect
13. Climate Action (GRI 305) Climate Strategy and Target Climate Governance Climate Risk Management Policy Influence, Lobbying and Trade Associations – Climate Alignment Energy Efficiency Energy Transition Greenhouse Gas Emissions Report
Prioritizing climate change management throughout the company’s operations and supply chains, including direct and indirect impacts, and assessing risks and opportunities to effectively plan for climate change. This involves addressing both physical risks and transitional risks that may impact the company. Additionally, reporting greenhouse gas emissions data to identify significant sources and causes, leading to management efforts to reduce emissions. The goal is for the organization to achieve carbon neutrality by 2030 and net-zero emissions by 2050. Furthermore, it involves fostering collaboration to support efforts to address climate change at both national and global levels.	Value Creation	– Procurement of raw materials – Transportation – Production and service operation – Delivery of products and services – Supporting activities	Country Shareholders/Investors Business Partner and Suppliers Societies and Communities Customers Employees	• Supporting the use of alternative energy and installing electric vehicle charging stations can drive compliance with government policies aimed at achieving net-zero greenhouse gas emissions. Additionally, it meets the increasing demand from customers. + • This impacts business opportunities and stakeholders’ expectations due to investors’ emphasis on it as a critical issue. –
14. Environmental Management (GRI 303, GRI 304, GRI 306, GRI 307) Environmental Management & Policy Operational Eco Efficiency Water Management Air Quality Management Food Loss & Food Waste
Establishing environmentally friendly policies and implementing efficient and standardized environmental management systems is crucial. This includes processes for preventing and mitigating impacts, such as controlling pollution release into the environment, particularly from transportation and service provision. Additionally, it encompasses efforts to reduce food waste and manage food waste generated from operations.	Strengthen	– Procurement of raw materials – Transportation – Production and service operation – Delivery of products and services – Supporting activities	Country Shareholders/Investors Business Partner and Suppliers Societies and Communities Customers Employees	• Reducing environmental impacts from business operations on stakeholders both internally and externally. + • Opportunities to seek efficient environmental management technologies and reduce resource loss. + • Leading to non-compliance with environmental regulations and standards. –
15. Circular Economy (GRI 301, GRI 306) Packaging and Plastic Management Circular Economy Waste Management Sustainable Consumption
Operating businesses according to the principles of the circular economy to create value for stakeholders while simultaneously reducing social and environmental costs. This involves prioritizing material selection, product design, and the use of innovation and technology in all stages of the product lifecycle to maximize resource efficiency throughout the supply chain. This approach aims to promote sustainable consumption, minimize waste and pollution throughout the product and service lifecycle.	Fundamental	– Procurement of raw materials – Transportation – Production and service operation – Delivery of products and services – Supporting activities	Country Shareholders/Investors Business Partner and Suppliers Society and Community Customers Employees	• Promoting the well-being of communities and societies through the process of economic circulation. + • Businesses creating innovative products and services that align with sustainability goals. + • Preserving natural resources and the environment. + • Increasing waste from production and service processes. –
16. Biodiversity
Managing business operations responsibly to preserve biodiversity and mitigate impacts from operations in all operational areas. This includes comprehensive management throughout the supply chain, focusing on traders dealing with wildlife, aiming to minimize negative impacts on biodiversity (both directly and indirectly). This involves risk assessments regarding biodiversity, along with the establishment of appropriate prevention, mitigation, and restoration measures.	Fundamental	– Production and service operation	Country Shareholders/Investors Society and Community Customers	• Demonstrating responsibility towards the betterment of society by the organization, as well as supporting the maintenance of environmental balance. + • Causing environmental degradation and disrupting the balance of ecosystems. –