Dear shareholders and stakeholders,

Countries around the world are nowadays attempting to solve problems and ease impacts of global climate change through international cooperation, with goals for greenhouse gas (GHG) reduction and Sustainable Development Goals (SDGs) to frame these countries’ implementation. To these, Thailand has agreed and set out clear work plans and goals. This matter is significant to RATCH’s business and lead to its redesigned business paradigm with due regard for aspects of climate change and SDGs more and more, as seen in its effort to set top goals for GHG reduction of its power plants and intention to address SDG 12 (sustainable consumption and production) and SDG 13 (coping with weather conditions) because they benefit society and the environment directly and indirectly.

To RATCH, these trends have led to technological disruptions or innovations that exert pressure on the business sector. RATCH has had to amend its business model. For this year, it has revised its business plans to deal with such change by diversifying investment in businesses of RATCH’s expertise apart from power generation and the deployment of the sustainable development approach in the company and its subsidiaries’ operations.

Scoping GHG reduction
In scoping GHG reduction goal-setting for the Group, this year RATCH focused on setting the GHG concentration derived from a unit of power generated and the approach to GHG reduction, which is being investigated for the sensibility of goals and work plan details.

RATCH also defined a capacity rise goal for renewables this year at 10% of its 7,500-MW equity capacity goal and RATCH’s proportion of renewable energy-based capacity now stands at 676.50 MW, accounting for 9.2% out of the entire capacity as a result of higher capacity proportion of fossil fuel in its power generation. However, the company established a long-term goal to achieve the renewable capacity of 20% of its 10,000-MW target in 2023.

Our plan is for Ratchaburi power plant, our core asset, to generate solar power by installing a 2-MW floating solar farm on a reservoir at the plant for its own consumption to trim power purchase from outside and cut GHG emission, with the construction and operation scheduled to start next year.

These actions addressed SDG 13, urgent action to combat global climate change and its impacts. Going forward, RATCH will continue to develop, promote, and support all GHG reduction activities.

Environment and safety
All our power plants’ environmental quality management strictly complies with the law while maintaining their standards, a result of the maximized operation efficiency and diligent efforts to cut fuel and water consumption in their processes. In particular, Ratchaburi power plant this year saw the replacement of water quality control systems for the cooling tower, which has multiplied water reuse, thus reflecting our commitment to generate electrical power that is friendly to the environment, while fulfilling SDG 12 (sustainable consumption and production).

Work safety is RATCH’s ultimate aim, for which zero accident is the goal, particularly for power plants aged more than 10 years and during outage, which typically see suppliers work in the plants. At Ratchaburi power plant, executives are instructed to meet with suppliers to educate them and foster awareness while reminding everyoneto pay attention to risk prevention in their own work and look after colleagues. Tri Energy power plant, our pride in safety and operational excellence, won the Ecomagination Nation Award (Gold Level) presented by General Electric, its service provider for plant operation and maintenance. This year there was no incident impacting the lives and properties of employees, contractors, and RATCH.

Shared benefit with communities and society
Vital to RATCH’s sustainability and secure growth are communities’ trust and acceptance. In looking after communities, RATCH values communication aiming at fostering mutual understanding and trust and enables communities to jointly monitor power plant’s operations. Several plants appointed joint panels featuring community members, the civil sector, public agencies, and the plants. Also, efforts have been made to improve the community quality of life in several ways. This year RATCH expended 50.07 million baht (0.81% of the net profit) to promote and support communities and society apart from 1.346 billion baht in government tax payment.

Strengthening the corporation
Based on the revised business plan drawn up to keep pace with global trends as mentioned above, this year RATCH has applied several management tools to upgrade operational excellence, ranging from HPO (High-Performance Organization), designed to scrutinize aspects of the corporate against high-performance entities in Thailand and around the world. The identified gaps were incorporated into RATCH’s work plan to be implemented in 2018. Meanwhile, employee engagement was surveyed for the first time this year to make RATCH aware of its current status. RATCH intends to elevate employees’ satisfaction and engagement to a comparable level with industrial peers.

To address evolving business expansion plans and business models moving toward digital and innovation drivers, RATCH has taken steps to spur and promote corporate innovation approaches by staging “Corporate Innovation through Design Thinking” workshops for the Board, executive team, and relevant engineering teams. These people will form our mainstay in our strides for emerging businesses.

Economic growth
The company is marching to supplement business values under the 10-year strategic plan (2013-2023), which strives for 10,000 MW equivalent in total equity capacity, including investment other than power generation. This year we managed to bring capacity up to 7,380 MWeq. RATCH made investment in five projects this year, with the combined capacity of 510.39 MW. The 120-MW generation capacity missing target this year will be accumulated in the 2018 target. Meanwhile, the asset management, particularly for power plants remains the key driver towards business growth and the financial stability. RATCH’s 2017 profit sharing from joint ventures increased to 23% of the 46.438-billion-baht total revenues, compared to 2016.

Grappling with future world dynamics
Global climate change will continue to exert tremendous pressure on RATCH’s growth and sustainability. Recognizing this threat, RATCH diligently eyes investment opportunities throughout its renewable-energy value chain as well as green businesses and start-ups, hoping to supplement values and extend our businesses more swiftly. Next year should see more tangible outcomes, building on the work begun this year. Naturally, our efforts will be based on prudent and watertight risk prevention, as well as continual good corporate governance and execution. Above all, RATCH will adhere to its advocacy of environmental stewardship, human rights protection, employee equitability, and as a CAC ally, all forms of corrupt practices.

This sustainability report brings to you detailed concepts and strategies for sustainable development together with this year’s goals and performances in economic, environmental, and social aspects. I am grateful to the Board of Directors, the management team, employees, and stakeholders for their comments, which inspired helpful ideas for the improvement of this report.

RATCH assures you that our formulated approaches being executed with various sectors today will-in time-lead us to our destination of sustainability.