RATCH's corporate sustainability development principles set forth in the Code of Conducts as the operational framework and guidelines are as follows:

• The Company adheres to sustainable development as a guideline for business operations based on responsibilities to economy, society, and environment.
• The Company decides to conduct business based mainly on economic, health, safety, environmental and social issues.
• All activities of the Company must be carried out under sustainability principles and aim for sustainable results in order to maintain the acceptance and trust of all stakeholders.
• All executives and employees have the duty to regularly create good interactions with stakeholders who are related to their operations.
• All executives and employees are obliged to strictly comply with the Company's regulations regarding occupational health, safety, security, and environmental and social responsibilities.
• The Company shall operate business that creates sustainable benefits to the society by taking care of occupational health and safety of employees, partners, and communities while minimizing impacts on the community, keeping greenhouse gases from production to the minimum, best protecting the ecosystem and biodiversity, and using energy, water and other resources with maximum efficiency.

The Corporate Sustainability Development Policy, RATCH sets forth as the strategy for economic, environmental and social development of the Group's operations in Thailand and overseas, also sets force sustainability development strategies as follows:

• Impose the corporate sustainable development strategy covering good governance, enterprise and project risk management, and emerging risks.
• Assess risks and set measures to cope the risk impacts that may affect the company's sustainability in economic, social, environmental and governance aspects. This should be considered as materials for business planning, decision-making and operation for the organizational stability and sustainability.

Strategic review

In 2021, RATCH conducted a review on sustainable development strategies as well as economic, social and governance issues significant to the Company and stakeholders. RATCH accordingly considered an improvement to the current principles and international practices. In light of the sustainable development review, the following actions will be completed in 2022 along with the setting of targets and enterprise indicators, are as follows;

• Improve sustainable development strategies, and set the roadmap, targets and 5-year work plans.
• Improve the human rights policy and the human rights risk assessment process.
• Develop the Climate Change Strategy, the roadmap and greenhouse gas emission reduction targets.

More Info : The Code of Conduct , Corporate Sustainability Development Policy

The climate change is a significant factor to RATCH's operations and challenges the Company's ability in adapt to impacts and turning crises to opportunities, particularly when it concerns power generation which is the Company's core business.

RATCH has devised the approach and guidelines in response to climate change and includes them in the Code of Conduct and the Corporate Sustainability Development Policy, which serve as the framework for corporate operations and activities. Climate change risks on the Company's strategies and targets concerning fossil-fuel power project investment and power plant operations have been assessed. The Company also assessed the potential of renewable power plant investment.

Climate Change Response Strategy

RATCH's climate change response framework is geared towards maintaining business continuity and addressing two Sustainable Development Goals which are Goal 12: Ensure responsible consumption and production and Goal 13: Take urgent action to combat climate change and its impacts.

RATCH's Climate Change Response Strategy covers five aspects:

Assessment of climate change risks and opportunities

RATCH outlines the guidelines to manages likely impacts from the climate change and assesses the emerging opportunities that can bring corporate value-added as follows:

More Info : Risk Management

GHG emission monitoring through carbon footprint assessment

RATCH Group, through Ratchaburi Power Plant and RATCH Cogeneration Power Plant, monitored the greenhouse gas emissions in accordance with Carbon Footprint for Organization methodology (Revision #5) of Thailand Greenhouse Gas Management Organization (Public Organization) (TGO). GHG Inventory under Scope 3 emissions was prepared, with this year selected base year as the emissions covered direct emissions from the Group's activities as well as indirect emissions from other sources from upstream to downstream.

Ratchaburi Power Plant, RATCH Cogeneration Power Plant and RATCH Group Building's carbon footprints in 2019 and 2020 were certified by TGO. The 2021 carbon footprints will be filed for certification in 2022.

Remark: *The information is under verification process.

Ratchaburi Power Plant's greenhouse gas emissions in 2021 increased from the previous year, as Ratchaburi Thermal Power Plant was instructed to generate electric power with bunker oil. Bunker oil consumption in the year totaled 161 million liters, up by 100% and 76% from the previous year and the base year 2015 respectively.

The two power plants' emissions in Scope 1 and Scope 2 to the net energy output were 0.4122 in 2021 compared to the 2015 base year were at 0.4567 tCO₂e per megawatt-hour, or a reduction of 2,177,373 tCO₂e

The carbon footprint data will support the formulation of the Company's GHG-reduction strategy, roadmap and target, which will be carried out in 2022.

Emission reduction through renewable energy

RATCH's net output of electric power generated by renewable sources totaled 7,247,621 megawatt-hour, or a reduction of 4,268,513 tCO₂e of greenhouse gas emissions. The reduced GHG accounted for 24 percent of total emissions in 2021.

Greenhouse gas emissions reduced by renewable energy projects in 2021
(Unit: tCO₂e)

Emission reduction through production efficiency enhancement

In 2021, each power plant succeeded in carrying out fuel-saving projects and activities, resulting in 140,804 million BTU of saved fuels and 23,717 megawatt-hours of saved electric power. In total, they reduced greenhouse gas emissions by around 21,573 tCO₂e of total emissions. The GHG emission per kilowatt-hour was continuously maintained, while the production cost was cut by Baht 54,992,579.

Emission reduction under T-VER program

In 2021, Ratchaburi Power Plant submitted two projects for carbon credit certification under Thailand Voluntary Emission Reduction Program (T-VER), in preparation for Thailand's Emission Trading Scheme (ETS)

Promotion of external emission reduction

Community Energy Project Phase 3 (2020-2022), at Yang Hak sub-district, Pak Tho District, Ratchaburi Province

In the second year of the Community Energy Project, RATCH promoted the use of solar-powered water pumps. Eight pumps were handed out to the community and they were used for agricultural purposes. Aside from this, two energy learning centers were established to transfer the knowledge in solar power application for equipment and tools instead of fossil fuels, to help reduce greenhouse gas emissions. The centers also demonstrated how solar-powered tools and equipment worked.

Assessment of impacts

* Based on TGO's calculation methodology: Gasoline combustion of not-moving engine releases 2.1896 kg. of carbon dioxide per liter (kgCO₂e).

Low Emission Support Scheme (LESS)

The Company submitted two community energy-saving projects and Head Office's energy-saving project to GHG evaluation under LESS Scheme in the energy-efficiency category. The projects reduced GHG emissions by 4.86 tCO₂e per year.

Carbon sink creation

RATCH has shown support to community forests across the country through its "Love the Forest and the Community Project". Under the project, community forest contests have been organized and prize money has been awarded to the forests with sustainable management that covers safeguarding, rehabilitation and utilization of forest resources. The project has been implemented in collaboration with the Royal Forest Department since 2008.

Community Forest Contests (2008-2021)

In 2021, RATCH prepared a forest reforestation project (2022-2025) to create a carbon sink. The project will be improved and registered under TGO's T-VER Scheme in the forest and green area category. Encompassing approximately 50,100 rai, the project is expected to capture a total of 670,000 tons of carbon dioxide equivalent throughout the initial 10-year crediting period. It is part of the carbon sink-creation strategy.

GHG disclosure

RATCH received "The Sustainability Disclosure Award" from Thaipat Institute for the third consecutive year, recognized for the Completeness, Credibility and Communication of its publicly-disclosed Sustainability Report based on the Ceres-ACCA criteria.

RATCH foresees that climate change will remain a major factor that influences businesses in the future, particularly those in the electricity and energy industry. Several countries are setting their Carbon Neutrality and Net Zero Emission targets after the 26th UN Climate Change Conference (COP26) and that is a catalyst for changes in all dimensions. Such can constitute emerging risks that affect the Company's competitiveness and business sustainability. The risks that are expected to emerge in the next 3-5 years and create significant impacts on the Company are as follows: