The globe is experiencing unprecedentedly high temperature as the greenhouse gas emissions accelerate to the record highs. More frequent extreme weathers, unpredictable seasons, and sea level rises are apparent everywhere. This alarming the fact of global warming is threatening food security, given that agriculture is highly dependent on the climate.
Climate change is increasingly recognized as an important business agenda and has become at the heart of strategy formulation for business operations. We register climate change as having the potential to interrupt our business unless adaptation strategies are taken since we are tremendously dependent on agricultural raw materials. As a forward-thinking leading agro-industrial and food conglomerate, we emphasize the importance of finding the effective climate change mitigation and adaptation approaches to ensure that our business, the society, and the environment are going to be least affected in the near and far future.
Climate Change Mitigation
We have set the targets to reduce greenhouse gas emissions per production unit for Thailand operation at 15% by 2020 and 25% by 2025 compared to the base year 2015. We aim to achieve this through energy conservation and energy efficiency projects, increasing proportion of renewable energy, together with improvement, transformation, and valorization of waste and wastewater in order to reduce emissions throughout the value chain.
In addition to effective management throughout the production process, we also focus on developing “product sustainability” to encourage participation from customers and consumers in mitigating environmental impacts. We also put our efforts in protecting biodiversity through projects to conserve and restore mangrove forests and watershed forests which help absorb carbon dioxide.
Climate Change Adaptation
We recognize our increased exposure to climate change risks, especially risk related to supply security of agricultural products. Supply shortage exerts upward pressure on price, causing higher costs for the whole supply chain, from feed manufacturing to food processing. Climate change also negatively impacts the quality of raw materials in some cases.
Our company has introduced a strategy as part of our Climate Change Adaptation Campaign that will address the short, medium and long-term:
We assess supply risks, monitor global demand and manage our agricultural raw material stocks in response to changing situations. We closely observe the balance between supply and demand and explore potential sources of our key raw materials so that alternative sources are in place when there is a risk of shortage.
To protect our business from price volatility, we hedge using forward contracts and monitor our safety stock as well as our stock capacity on a daily basis in all countries where we operate. Additionally, by using satellite data to support the analysis of past climate trend, we can better project future conditions that will allow us to optimize our current sourcing methods and plan for unexpected scenarios.
We seek to develop substitutes for key raw materials that are highly vulnerable to climate change. For instance, wheat, cassava, canola meal or distillers dried grains with solubles (DDGS) can be used as substitutes for corn, soy and rice bran in animal feed. Furthermore, protein extracted from soy and grains can replace fishmeal in shrimp feed. The development of raw material substitutes allows us to manage the cost of production, control quality, prevent raw material shortage during a certain period, and ensure our business continuity.
We have been working in partnership with our suppliers, recognizing that changes in agricultural practices and supply chains can help mitigate greenhouse gas emissions and increase farmers’ adaptive capacity. We focus on providing practical information and technological resources to lower production costs, increase productivity and enable the ability to be self-reliant and adaptable to climate change. We collabourate with government agencies, the private sector, and the civil society so that all could achieve mutual growth in the long run.
In addition, we also commit to operate our businesses transparently. Every year, we disclose our climate change strategy and performance through the sustainability report and also participate in the Carbon Disclosure Project (CDP) continuously since 2015. Read more details for CDP Climate Change 2018 here.
The Company recognize the importance of the impact of climate change to our business. Therefore the climate-related risks and opportunities were assessed in accordance with the recommendation of Taskforces on Climate-related Financial Disclosures (TCFD) in order to understand the impact of climate change problems both from external and internal factors to the company, develop the actions to control and reduce GHG emission, and further ensure our business driving toward sustainability. Read more details here