Sustainability Framework and Strategy

Sustainability Journey

PTTEP set sight to become a sustainable organization since its inception in 1985. The journey started with a goal to be a "green organization" to which environment stewardship and management was a priority. The sustainability concept that involves Environmental, Social and Governance elements was subsequently applied and in 2011, PTTEP participated in the United Nations Global Compact (UNGC), demonstrating our commitment to uphold the UNGC 10 principles that highlight 4 main aspects - human rights, labor, environment and anti-corruption. Later in 2015, PTTEP, adhering to all advanced criteria, was named at Advanced Participant level of the UNGC.

Moreover, PTTEP has adopted several international sustainability assessment criteria, like Dow Jones Sustainability Indices (DJSI), MSCI, FTSE4Good, etc. as part of its sustainability management. In addition, the sustainability reporting complies with Global Reporting Initiative (GRI) and International Petroleum Industry Environment Conservation Association (IPIECA) which are guidelines on international sustainability.

In 2019, PTTEP formulated sustainability framework and strategy, and set clear long-term targets (2030). Under the inside-out approach, PTTEP strived for impressive performance on strong business foundation, to deliver sustainable values to society (From We to World).

In 2020, the Board of Directors made an important step in pushing the organization's sustainable development for concrete implementation. It approved sustainability strategy with long-term targets and SD Statement, to ensure common understanding among employees and other stakeholders. The Corporate Governance Committee's scope of responsibilities was extended to cover the formulation, supervision and promoting of overall sustainable development policy and activities which are closely monitored on a quarterly basis. The Committee was renamed to Corporate Governance and Sustainable Development Committee, following the shareholders' resolution at the 2020 annual meeting. Currently, the Committee name is Corporate Governance and Sustainability Committee.

Sustainability Framework and Strategy

Sustainability Framework

With PTTEP's strong belief that the "Right Balance" of business, social and environment aspects will contribute to business sustainability, the "Sustainability Framework" was formulated. The framework plays a vital role in assuring business continuity to support national energy security while safeguarding society and environment. PTTEP strives to build sustainability from within through its operational excellence on a strong business foundation while being committed to delivering long-term values to all stakeholders as the Company believes that this will ultimately bring sustainability to society (From We to World) and enable PTTEP to achieve its vision of "Energy Partner of Choice". The Sustainability Framework emphasizes High Performance Organization (HPO), Governance, Risk Management and Compliance (GRC), and Sustainable Value Creation (SVC). The framework supports 17 United Nations Sustainable Development Goals (UN SDGs), whereas the sustainability-related material issues correspond with the UN SDGs: 7, 8, 12, 13, 14 and 16 which are directly related to the Company's business operations.

  1. High Performance Organization (HPO)
    Emphasizing continuous performance improvement to become more effective, efficient, and productive in response to the energy transition with a focus on technology and innovation, decarbonization and future energy.
  2. Governance, Risk Management and Compliance (GRC)
    Emphasizing transparent and efficient operations for the organization's stability and sustainability through governance, appropriate risk management, and internal control as well as strict compliance with relevant laws and regulations.
  3. Sustainable Value Creation (SVC)
    Emphasizing long-term value creation for all stakeholder groups through organizational sustainability, responsible operations, natural resource conservation, environmental rehabilitation as well as community and social development.

Materiality Issues

Materiality Assessment Process

In 2022, PTTEP assessed and reviewed materiality issues on sustainability encompassing the Environmental, Social and Governance (ESG) issues and considered in the 2-dimensional aspects which were significance of issues in the view of impacts on PTTEP and significance of issues in the view of impacts on stakeholders which are (1) Government Agencies and Regulators (2) Vendors, Suppliers/Contractors (3) Customers (4) Employees (5) Shareholders, Investment & Financial Institutions and Creditors (6) Business Partners, Consortium and Joint Ventures (7) Communities (8) Independent/Public Organizations, NGOs and Academics (9) Press and Media. The 2-dimensional issues were prioritized according to the Global Reporting Initiative Standards: GRI Standards (2021) and AA1000 AccountAbility Principles: AA1000APS (2018). The materiality issues reflected national and international sustainability trends that corresponded with the United Nations Sustainable Development Goals and Sustainability Accounting Standards Board's SASB Materiality MapTM for Oil & Gas – Exploration & Production Industry. The materiality assessment results served as the crucial inputs for developing and improving corporate strategies and were integrated into the Enterprise Risk Management process, enabling PTTEP to effectively respond to any risks concerning the Company's sustainability materiality issues. The assessment process was completed as follows:

  1. Understanding the Organization's Context
    Review entire business activities, business relationships, sustainability context, and all stakeholders through its value chain
    Review global trend and peer reviews across the industry as well as engage relevant stakeholders to predetermine materiality issues
  2. Identifying Actual and Potential Impacts
    Identify actual, potential impacts of materiality issues on the economy, environment, stakeholders, and human rights, which include both positive and negative impacts in the short term and long term, covering all PTTEP's business activities throughout the value chain via conducting an interview with relevant stakeholders and collecting their opinions via an online survey
  3. Assessing the Significance of the Impacts
    Based on the principle of double materiality, the assessment method will:
    Engage with external stakeholders to take note of their perceptions on the company's impacts on economy, environment, stakeholders, and human rights
    Engage with internal stakeholders (management level) to collect their perceptions on sustainability context impacts on the company
    Assess and determine the significance of identified impacts from stakeholder engagement by considering 2 dimensions: 1) severity (scale, scope, irremediability) and 2) likelihood of the impacts
  4. Prioritizing the Most Significant Impacts
    Define criteria for the selection of key sustainability issues (materiality)
    Verify key sustainability issues (materiality) against expert testing by reviewing environmental, social, governance and economics (ESG) issues from both international and national NGO thought leaders. Then, the impact score from expert testing is combined with the score obtained from the stakeholders
    Inform key sustainability issues (materiality) to the Management Committee for approval and the Corporate Governance and Sustainability Committee for acknowledgement for further reporting alignment of PTTEP operational activities
    Include materiality issues as part of the key inputs for sustainability strategy development and revision
    Collect data on sustainability performance across all sustainability issues and publicly disclose through various channels to efficiently respond to each stakeholder group. Additionally, gather feedback and recommendations from stakeholders to enhance the report and ensure that it effectively addresses their concerns

2022 Materiality Issues

  1. Energy Transition towards Net Zero
  2. Technology and Innovations
  3. Governance, Risk Management, and Compliance
  4. Safety, Security, Health, and Environment
  5. Contribution to Communities and Society
  6. Human Resource Preparation
  7. Circular Economy
  8. Biodiversity Impact Management
  9. Supply Chain Management
  10. Cybersecurity
  11. Human Rights
  12. Stakeholder Management

Sustainability Strategy

As guided by the Sustainability Framework and material issues, PTTEP sets 3 main strategy pillars as well as other strategies to strengthen our sustainability performance covering Environment, Social and Governance (ESG). PTTEP's sustainability strategies and long-term targets are as follows:

Sustainability Collaboration and Networking

Collaboration and networking play a crucial role for both PTTEP's current business operations and future growth. We, therefore, emphasize the importance of establishing business, social and environmental collaborations and networks with relevant parties to support the Sustainable Development Goals of Thailand and the United Nations; as well as PTTEP's vision of "Energy Partner of Choice".

Currently, PTTEP actively participates in various sustainability-focused networks, including the United Nations Global Compact (UNGC), Global Compact Network Thailand (GCNT), Thailand Business Council for Sustainable Development (TBCSD), Thailand Responsible Business Network (TRBN), and the ESG Network of the Thai Listed Companies Association.

Furthermore, PTTEP acknowledges the significance of driving public policies with government agencies by leveraging its knowledge and initiatives to effectively address national issues such as climate change and biodiversity. PTTEP actively participates in various sustainability committees/ networks, including serving on the Climate Action through CCUS Application Subcommittee under the National Climate Change Policy Committee and participating in the Thailand Carbon Neutral Network. Moreover, PTTEP has established a Memorandum of Understanding (MoU) with the Office of Natural Resources and Environmental Policy and Planning to launch joint actions on climate change and biodiversity conservation, and an MoU with the Royal Forest Department; the National Park, Wildlife and Plant Conservation Department; Marine and Coastal Resources Department; as well as PTT Group for a two-million-rai reforestation project. PTTEP also has collaboration agreement with leading university and institutes to foster research and development networks through collectively leveraging their organizational knowledge. Examples include an MoU with Kasetsart University to promote ocean sustainability, an MoU with the Hydro-Informatics Institute to develop an ocean data platform, and an MoU with Mae Fah Luang Foundation under Royal Patronage to conserve and restore natural resources through community engagement and application of technology for sustainable development.

In addition, PTTEP actively engages in relevant Thailand public hearing process such as draft Thailand Climate Change Act, draft Biodiversity Conservation (Areas & Species) Act, and draft Thailand Taxonomy of the Bank of Thailand (BOT), in which the current scope and boundary does not include oil and gas exploration and production. The progress of the Thailand Taxonomy is being closely monitored to ensure appropriate and timely response of the Company.