Material Issues

The Company considers the material topics identified in Step 2 alongside the nature of CP ALL business operations and organizational context to assess the impact on stakeholders (Impact Materiality). The assessment criteria include the severity of impact (Scale), extent of impact (Scope), ability to remedy or restore (Remediability), and likelihood of occurrence (Likelihood). Additionally, business risks and opportunities (Financial Materiality) are evaluated in conjunction with survey results from stakeholders.

The Company then held a workshop with relevant departments, including the Sustainability Audit Unit, Corporate Sustainability Management Office, Enterprise Risk Assessment Committee, and executives responsible for risk management, such as the Executive Committee and Executive Officers. The purpose was to assess the Impact Rating Scale and the Probability Rating Scale before prioritizing material topics that affect the Company’s operations.

The Company analyzed and reviewed the material topics identified from the workshop in Step 3 to prioritize significant issues for business operations while considering the relevance and alignment with the organizational context.

Additionally, the Company has a process for testing material topics (Material Testing) by engaging food industry experts (Expert Testing) to develop business strategies. The results from this testing are presented to the Sustainability Development Subcommittee, Executive Committee, and the Board of Directors for endorsement. The prioritization process takes into account the influence on stakeholders’ assessments and decisions, as well as the importance in terms of economic, social, environmental, and human rights impacts.

Efficient resource utilization, supported by technology and the Company’s circular economy strategy, has reduced energy consumption and greenhouse gas emissions, meeting society’s expectations regarding climate change issues. This has increased business opportunities with climate-focused partners, enhanced investor confidence, and fostered collaborations with government sectors, such as innovations to reduce greenhouse gas emissions, low-carbon products, and the use of renewable energy.

Efficient energy management, the development of clean energy technologies, and renewable energy help mitigate the impacts of climate change, increase business opportunities, and build investor confidence. Examples include the use of electric vehicles and improving the efficiency of renewable energy utilization, such as rooftop solar energy. However, inefficient energy management may lead to increased production costs, reduced production capacity and profitability, and potential violations of community rights in accessing clean water resources in areas surrounding the Company’s operations.

Operating a retail and wholesale business that prioritizes eco-friendly packaging, reducing usage, implementing take-back systems, and promoting efficient recycling contributes to effective plastic waste management within the organization. This approach adds value, lowers production costs, and encourages stakeholder engagement both internally and externally. The adoption of innovations for sustainable waste management such as eco-friendly materials and non-plastic packagin-helps reduce negative environmental impacts and improves the efficiency of packaging waste management.

The failure to consider recyclable packaging materials and the biodegradability of materials used in packaging could result in a significant amount of plastic waste being left in the environment. This affects ecosystem fertility, compromises human food safety, and causes health-related problems. Moreover, it can increase operational costs and damage the Company’s reputation and image. Inconsistent efforts to extend sustainable packaging management projects may lead society, communities, and investors to q

Inefficient management leads to an increase in food waste, such as waste from overproduction of food, food loss during transportation, distribution, and storage, resulting in higher greenhouse gas emissions. This impacts ecosystems and natural resources, affecting the health and well-being of surrounding communities. Additionally, it increases the Company’s operational costs related to waste management.

Operating a socially responsible business supports job creation and enhances community well-being, fostering strong relationships and gaining acceptance in the communities where the Company operates. Moreover, both the public and private sectors emphasize ensuring equal access to products and services for all groups to reduce inequality, improve quality of life, and promote societal well-being.

The Company also contributes to society through purchasing products at 7-Eleven, such as donating M-Stamps in place of cash to assist flood victims and supporting donation programs through product purchases in projects such as “Chef Cares.”

Efficient management throughout the entire process from raw material sourcing, production, and distribution while addressing the risks associated with delivering safe, non-hazardous, and traceable products enhances business opportunities. This enables the Company to provide nutritious, safe, and high-quality products, along with services that promote health and well-being for communities and society, such as herbal products, low-sodium options, reduced-sugar, low-fat, and trans fat-free products

Failure to prioritize consumer safety and the lack of an effective traceability process could lead to health-risk products, loss of consumer trust in both the products and the Company, increased costs from damage claims and lawsuits, and harm to the Company’s reputation and image

If the Company has an ineffective governance system that lacks transparency and does not uphold integrity, ethics, and human rights, the Company’s business competitiveness will be significantly impacted, as well as reducing stakeholder trust, and diminishing investor interest. Other risks include legal actions for violations such as corruption, discrimination, and labor rights abuses.

Substandard safety and occupational health management pose serious risks to employees’ lives and property at every stage, from production and transportation to customer service at 7-Eleven stores. The resulting impacts are diverse and affect multiple aspects of the business, such as medical expenses, compensation, and fines. Additionally, this can reduce productivity, increase labor costs, and cause operational liquidity problems

An unsafe working environment affects employee morale, causing insecurity and potentially leading to the resignation of skilled employees, which further impacts the Company’s credibility and reputation. Moreover, it may pose safety risks to customers visiting 7-Eleven stores

Effective supply chain management can reduce risks related to costs, raw material shortages, and inventory, as well as mitigate the risk of human rights violations. It builds trust among business partners regarding the Company’s operations, enhances profitability, and ensures efficient product transportation, which helps minimize negative impacts on the environment and communities. For instance, using electric vehicles for transportation reduces pollution in surrounding communities.

Conversely, inefficient supply chain management that disregards human rights can result in business disruptions, substandard product quality, and delays in delivering goods to consumers. This increases production and transportation costs and damages the Company’s reputation and image. Other potential impacts are higher environmental and social costs due to heightened societal and investor expectations.

Economic growth may increasingly rely on specialized labor to meet the diverse demands of consumers. Workers need to be trained to enhance their capability and work efficiency, as well as to learn and understand the technology integrated into work processes. Furthermore, developing human resources to keep pace with global changes may result in higher costs of sourcing labor that meets the needs of the organization

Providing opportunities in education for society, communities, and vulnerable groups to improve quality of life and facilitate effective access to the labor market. The Company promotes job creation and income generation for communities while contributing to economic development and national stability. Moreover, extending educational opportunities to communities helps enhance the Company’s reputation and builds a positive corporate image.