Climate Strategy
Climate change is an integral part of RATCH’s Sustainability Strategy in environmental dimension, as it is a pressing issue in the energy and electricity sector. Stakeholders expect market players to reduce greenhouse gas emissions, so as to limit an increase in global temperature and mitigate climate impacts. RATCH thus prepared the Climate Change Strategy to achieve carbon neutrality in 2050. Approving the strategy, the Board of Directors demanded studies in feasible carbon emission approaches and methods for the formation of Decarbonization Roadmap and setting of achievable targets in alignment with Thailand’s target.
The Climate Change Strategy will also shape operational guidelines in support of SDG 12: Responsible Consumption & Production and SDG 13: Climate Action.
Governance on Climate Change
Organizational body | Role and responsibility concerning climate change |
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Board of Directors |
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Risk Management Committee |
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Corporate Governance and Sustainability Committee |
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Audit Committee |
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Investment Committee |
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Chief Executive Officer |
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Chief Business Development Officer |
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Chief Project Development Officer |
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Chief Asset Management Officer |
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Chief Financial Officer |
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Executive Vice President -Corporate Administration |
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Assessment of climate-related risks and opportunities
In 2022, the 22 entities in which has operation in Thailand, Australia, Indonesia and Vietnam conducted the assessment on climate risks accordingly to the Recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). They are categorized as physical risks that cover acute risks and chronic risks; and transition risks, based on a change in stakeholder mindset, technology as well as relevant policies, legislation and rules.
Physical Risk assessment and managing the impacts of climate change
Identification of physical risks | |
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Acute physical risks | Chronic physical risks |
Extreme climate events like storms and flooding
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Long-term shifts in climate patterns like higher temperatures that cause sea level rise or heat waves
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Physical risk analysis
RATCH based the assessment of physical risks of the company and operational controlled entities in Thailand, Australia, Indonesia and Vietnam on 2 scenarios:
- Scenario RCP2.6: Average global temperature could be 1.6 degree Celsius warmer in 2050
- Scenario RCP8.5: Average global temperature could be 4.3 degree Celsius warmer in 2050
The risk assessment took into consideration significant impacts on the company’s strategies in 6 aspects:
- Finance
- Health, safety and the environment
- Partners/customers
- Regulatory landscape
- Reputation, image and society
- Target/achievements.
The impacts may be witnessed in 3 impact periods: short term (within 2 years), medium term (3-5 years) and long term (6-10 years). The assessment result is as follows:
Physical risk factor: Drought
Impact forecast |
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Impact period | Short and medium terms |
Assessment result | Australia’s drought timescale tends to lengthen the most under Scenario RCP2.6 (8%) in 2030 and 2050. A similar result is established under Scenario RCP 8.5. |
Examples of financial impacts |
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Change in maximum drought period (versus the base period 1995-2014) | |
Response measure | More investment to secure supplementary water sources |
Physical risk factor: Flooding
Impact forecast |
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Impact period | Short and medium terms |
Assessment result | The maximum number of days with heavy rainfall in Thailand, Vietnam and Indonesia tend to increase the most under Scenario RCP 8.5 in 2050. |
Examples of financial impacts | Small power plants’ THB 50 million investment in flood preventing foundation |
Change in maximum heavy rainfall period (versus the base period 1995-2014) | |
Response measure |
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Physical risk factor: Extreme weather conditions
Impact forecast |
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Impact period | Long term |
Assessment result | The wind speed in Thailand, Vietnam and Indonesia tends to increase the most under Scenario RCP8.5 in 2050. |
Examples of financial impacts | No impact on the company |
Change in wind speed (compared to the base period 1995-2014) | |
Response measure | No impact on the Company Group |
Transition Risk assessment and managing the impacts of climate change
Analysis of transition risks
RATCH applies the scenario analysis to analyze transition risks that may cause significant impacts on the strategies in 6 aspects:
- Finance
- Health, safety and the environment
- Partners / customers
- Regulatory landscape
- Reputation and image
- Target / achievements
The impacts may be witnessed in the short term (within 2 years), medium term (3-5 years) and long term (6-10 years).
Scenarios for analysis of transition risks
Scenario | Explanation | Target years towards Net Zero Emission | Change in global temperature in 2100 |
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State Policy Scenario |
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Above 2°C |
Sustainable Development Scenario |
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1.5-1.7°C |
Net Zero Emissions (NZE) | SDG’s net zero emissions by 2050 for the energy sector, chiefly concerning access to modern energy by 2030 and energy efficiency to reduce impacts on air quality |
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Maintained at 1.5°C |
Summary of analysis on transition risks
Risk | Impact period | Risk and impact on finance | Response measure |
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Imposition of carbon tax | Medium term (3-5 years) |
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Analysis of climate-related opportunities
RATCH had analyzed transition opportunities in the marketing, technology and regulatory landscape aspects. The result revealed opportunities to diversify to non-power businesses like hydrogen; renewable energy; and the installation, production and maintenance services for renewable power projects
Opportunity | Type of opportunity | Period | Opportunity and impact on finance | Management approach |
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Diversification to non-power businesses | Marketing | Medium term | RATCH plans for hydrogen use and study technology development in aboard |
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Shift to renewable energy | Energy source | Medium term | RATCH’s plans to raise renewable energy generation in support of national and global carbon emission targets, setting to achieve the 25% and 40% ratios of 10,000 MW capacity in 2025 and 2035, respectively | Emphasize the generation from all forms of solar power (solar panel, solar rooftop and solar floating) and businesses involving with solar and wind power as well as installation, production and maintenance services |
Climate Change Strategy
The above assessment results shaped the Climate Change Strategy, formulated as operational guidelines on the company’s climate mitigation and adaptation. The strategy consists of 2 components.
1) Greenhouse gas reduction, focusing on 3 key areas:
2) Internal and external collaboration:
Climate-Related Targets
Strategy | 2025 Targets | 2035 Targets |
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1. Setting of percentage shares of energy sources in electricity generation |
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2. Emission reduction |
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3. Enhancement of carbon capture |
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4. Knowledge and awareness building |
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5. Information disclosure |
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