Material Issues

Emphasis on All Material Issues for Sustainability in All Dimensions

CP ALL Plc. and its subsidiaries (“the Company”) has continuously published its sustainability report for the 7th consecutive year, serving as a communication channel for performance under sustainable development policies and strategic frameworks, informing all stakeholder groups. This is inclusive to the Company’s, environmental, social, and governance and economic dimension.

Published performance cover the period of 1 January to 31 December 2022, encompassing 3 key business units. In 2022, the Company’s net revenue was at 852,605 million Baht. Additional information regarding subsidiaries is disclosed in on page 2 of 2022 annual report.

This report’s content was established upon the foundation that is the Company’s overview operation and material topics affecting 3 dimensions of sustainability, all according to every stakeholder group’s perspective and key impact assessment. The reporting framework aligns with international sustainability reporting standard 2022 edition (GRI Sustainability Reporting Standards 2021: GRI Standards 2021) and The Food Processing Sector Supplement. Simultaneously, the Company assigned an internationally reputable and credible third-party, LRQA (Thailand) Limited to verify the report.

In 2022, the data set reviewed comprises GRI 302-1, GRI 302-3, GRI 303-3, GRI 305-1, GRI 305-2, GRI 305-3 (Purchased goods and services, Upstream transportation and distribution, Business travel), GRI 305-4, GRI 306-3, GRI 306-4, GRI 306-5, GRI 403-9, GRI 403-10, 403-10, FPSS FP6, FP7 and GRI 405-2

Retail business Convenience store

Wholesale and Retail businesses Service

Determining the Report’s Content

The Company developed the report by considering and assessing significant impacts to every group of the Company’s stakeholders, addressing both positive and negative impacts. Considerations are also given to sustainability material topics from internal factors in business operations, and external factors of global trends among peers, including world-renown sustainability indices. This ensures the Company’s sustainability performance disclosure is in accordance with the 8th reporting principles, as follows.

Global Reporting Initiative Standards (GRI)
1. Accuracy Disclosed data accuracy
2. Balance Balance of performance reported, both positive and negative
3. Clarity Comprehensibility for all stakeholder groups
4. Comparability Data compatibility to illustrate performance trend
5. Completeness Data completeness and comprehensiveness
6. Sustainability context Balance of performance reported, both positive and negative
7. Timeliness Scope of reporting timeline
8. Verifiability Verifiability

To serve as supporting information for stakeholders’ decision making, in 2022, the Company has made changes to material topic assessment,
respective process and steps in 4 primary steps, as follows:

Identify and assess impacts on continuously basis
1. Understand the organization’s context Consider business activities to establish stakeholder groups throughout the value chain, as well as connecting sustainability material topics. This encompasses environmental, social, governance and economic dimension, as well as human rights and business activities, by considering impacts towards each stakeholder group.
2. Identify actual and potential impacts Identify impacts from sustainability material topics, both actual and potential impacts. The impacts are to be determined as either positive or negative impacts, while considering impacts of sustainability material topics whether they are short- or long-term. This includes establishing remediability. Sustainability material topics identified prior as positive and negative impacts will be considered, in collaboration with experts, to assess severity and likelihood of material topic’s impacts happening in the next step.
3. Assess the significance of the impacts The Company obtained sustainability material topics as initially reviewed by experts, and categorized
affected stakeholders of each sustainability material topic at each value chain stage. This enables survey design to ensure suitability with stakeholders. The assessment criteria considers scale, scope, remediability and likelihood in order to assess and prioritize sustainability material topics.
Determine material topics for reporting
4. Prioritize the most significant Impacts for reporting

The Company took the survey results used for assessing every stakeholder group to analyze, in order to identify sustainability material topics according to expectations of and impacts towards stakeholders. Sustainability material topics significant to stakeholder groups are considered and reviewed for their linkage and appropriateness regarding the Company’s business operations under the process of material testing by experts. These are individuals highly knowledgeable and capable when it comes to retail groups, wholesale and retail, and related business. Considerations are given to linkage and global trends, as well as world-renown sustainability indices, such as ESG from Morgan Stanley Capital International (MSCI), Dow Jones Sustainability Indices (DJSI), Global Trend, and Sustainability Accounting Standards Board (SASB). The result of sustainability material topics would be presented to the Executive Committee (Ex.Com), who are high-level Management, to verify the prioritization, with considerations to level of influence towards the assessment and stakeholders’ decision. This was in tandem with considerations to the level of significance to environmental, social, economic and governance impacts, as well as human rights.

Impact on Social/Environment and a company’s value drivers

CPALL assesses the materiality issues based on Double Materiality

  1. Issues that impact business value creation
  2. Issues that impact the environment and society as a result of business activity
Assessing Impacts of double material topics result
Material topics Impact on society/Environment and business value drivers Actual/
1. Corporate Governance and Anti-Corruption Good governance promotes efficiency in the Company’s business conducts, enhance business competitive capacity, build confidence, and attract investors’ interests. It serves as a crucial approach that adds values to the business.

If the Company’s governance is inefficient, untransparent and negligence of morals, ethics and human rights, this affects the business competitive capacity, reduces stakeholders’ trust to the Company and minimized investors’ interests, as well increased risks relating to violations against human rights and the laws.
Actual Negative
2. Occupational Health and Safety & Labor Practices (Human Rights and Labor Practice) Efficient occupational health safety management may reduce the number of work-related accidents, increase the Company’s capacity and enhance confidence of employees as well as business suppliers in the Company’s operations.

Poor occupational health management may result in loss of lives and assets, resulting in discontinuation of the production process. This has impacts on the labor cost due to decreased productivity. Furthermore, such issue would affect the employees’ morals, increased cost of operations from fine, as well as negatively impact the Company’s reputation and trust worthiness.

In addition, it may affect the safety of the lives and properties of customers who come to use the service in 7-Eleven stores.
Actual/potential Negative
3. Responsible Supply Chain Supply chain management can decrease cost risks, inventory and raw material risks, human right violation risks. It can build business suppliers’ confidence in the Company’s operations, as well as boosting the profit-revenue generation capacity.

Inefficient supply chain management which neglects human rights can result in risks of business discontinuity, production of no quality, delayed logistics to consumers. This can consequently increase the production and logistic cost, as well as affecting the Company’s reputation and image, as well as heighten environmental and social cost due to society and investors’ expectations.
Actual/potential Negative
4. Climate Resilience Efficient use of natural resource as supported by technology, in tandem with the Company’s circular economy strategy can reduce energy consumption and GHG emissions. This responds to the society’s expectation regarding climate change, which promotes business opportunities with business partners taking climate actions. Thus reinforces confidence for investors and creates partnership with the public sector.

Failure to acknowledge climate change impacts on the Company’s business operations may result in higher operational costs due to climate change, as raw material’s price fluctuation may lead to supply chain’s interruption. This includes increased operational budget from business adaptation to climate change, such as fees, carbon taxes or pre-emptive operational costs to ensure business continuity.

Furthermore, business operations with no considerations to climate change impacts may pose impacts on stakeholders’ life, health and safety throughout the value chain. This includes long-term air pollution impacts on the workers’ health and safety, as well as communities in the vicinity. Impacts encompass droughts and floods as impacts to suppliers in procurement, product and raw material logistics.
Actual/potential Negative
5. Efficient use of resources and Energy Efficient energy management, clean energy development, and renewable energy management help mitigate the severity of climate change impacts, as well as enhance business opportunities and bolster confidence for investors.

Notably, inefficient energy management may result in higher product cost, subsequently reducing the production and profit-generation capacity, as well as may become the cause behind community rights violation in allocation or accessibility to clean water in areas around the Company’s operational sites.
Actual/potential Negative
6. Sustainable Packaging Management  Product distribution, both retails and wholesales, which consider the use of environmentally friendly packaging, take-back systems, and effective recycling. This can lead to appropriate plastic packaging in the Company, create value-added, decrease production cost, and build stakeholder engagement both within and beyond the Company.

The lack of regards of packaging’ recyclability may lead to leftover plastic waste accumulated in the environment in a large volume. This would affect the ecosystem’s prosperity, as well as humans’ nutritional safety and other health concerns. The issue may extrapolate to operational cost, the Company’s reputation, and image, as well.
Actual Negative
7. Sustainable Waste and Surplus Food Management Efficient product distribution and food waste management helps mitigate food waste from overproduced food, food loss during logistics, distribution and storage. This includes management utilizing waste as other alternative raw materials to build economic values, mitigating the issue of food waste and the Company’s operational cost.

Furthermore, inefficient management lead to increased food waste and subsequent greenhouse gas emission. This affects the ecosystem and natural resource, as well as the community’s livelihood. Additionally, it may increase the Company’s operational cost in waste management.
Actual Negative
8. Social Impact and Economic Contribution Socially responsible business operations, which promotes employments and provide community with livelihoods, resulting in positive relationships with the communities and social license to operate. Furthermore, the public and private sector greatly prioritize supporting all in accessing products and services equally to reduce inequality, as well as elevating livelihood and provide wellbeing to the civil society.

If the Company conducts operations impacting communities, this may lead to violations of nearby community’s wellbeing, as well as conflicts between the communities and the Company. This may affect the license to operate and positive image of the Company.
Actual/potential Negative
9. Good Health & Well-being Management throughout sourcing, production, distribution, as well as full cognizant of the risks in delivering safe products of good standards, help increase business opportunities in delivery safe products with nutritional values and standards. This includes delivery of accessible services for the community’s health and wellbeing.

Additionally, the negligence regarding consumers’ safety may lead to risks in delivering unhealthy products with negative impacts to consumers, in the form of NCDs. There could be additional cost incurred from lawsuits, with impacts to the Company’s reputation and image, as well.
Actual Negative

2022 Materiality Topic

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