Risk Management & Compliance                                                             

 

 

Risk Management and Compliance Strategy

 

BJC recognizes that effective risk management and compliance are fundamental to achieving its strategic objectives, safeguarding stakeholder interests, and creating long-term sustainable value.

 

The Company operates in an increasingly complex environment shaped by economic volatility, geopolitical tensions, evolving regulatory requirements, technological disruption, climate-related challenges, and changing stakeholder expectations. Global fluctuations in energy and commodity prices, supply chain disruptions, cybersecurity threats, and exchange rate movements may directly and indirectly affect business operations and long-term growth.

 

Accordingly, BJC integrates risk and compliance considerations into its strategic planning and business decision-making processes to strengthen organizational resilience, enhance preparedness, and support sustainable growth. By proactively identifying both risks and opportunities, the Company seeks to minimize adverse impacts while capturing opportunities that contribute to long-term competitiveness and value creation.

 

BJC continuously monitors emerging developments that may affect its operations, financial performance, reputation, and sustainability commitments, ensuring that timely and appropriate actions are implemented to address evolving challenges. Through its enterprise-wide approach, the Company reinforces responsible business conduct, business continuity, and its commitment to sustainable development.

 

Risk Management and Compliance Management Approach

 

To operationalize its risk and compliance strategy, BJC adopts an enterprise-wide and integrated approach to identify, assess, manage, monitor, and report risks and compliance matters across all business units, ensuring alignment with strategic objectives and stakeholder expectations.

 

Risk assessments are conducted regularly to evaluate both potential opportunities and threats that may affect business performance. Material risks are prioritized based on their likelihood and potential impact, with appropriate mitigation measures, internal controls, and action plans established to address identified exposures. Beyond mitigating potential adverse impacts, BJC actively seeks opportunities arising from changing circumstances to preserve and create long-term value for both the Company and its stakeholders.

 

BJC establishes and periodically reviews risk appetite and risk tolerance levels aligned with its strategic objectives, business context, and stakeholder expectations to support effective decision-making and ensure that risk exposures remain within acceptable thresholds.

 

To ensure effective corporate risk governance, the Risk Management Committee, authorized by the Board of Directors, oversees the Company's risk management processes, while senior management maintains oversight of risk management activities within each business unit. The Risk Management Committee also formulates and periodically reviews enterprise-wide risk management policies, objectives, and frameworks to ensure alignment with the Company's operations and applicable national and international standards.

 

BJC further strengthens the effectiveness of its enterprise risk management system through independent assurance mechanisms. In alignment with internationally recognized risk management principles and guidelines, including ISO 31000, the Group Internal Audit Department regularly reviews the adequacy and effectiveness of the risk management process. The Company also periodically undertakes independent external assessments of its risk management practices to validate the effectiveness and robustness of its enterprise risk management framework. The most recent assessment, covering fiscal years 2023 to 2025, identified no material non-compliance issues. Findings and recommendations arising from these reviews are used to support continuous improvement and enhance the Company's risk management capabilities.

 

Through continuous monitoring, cross-functional collaboration, and independent review, BJC enhances its ability to anticipate change, respond effectively to uncertainties, and support informed decision-making while reinforcing long-term business resilience and sustainability.

 

Risk Governance

The Board of Directors retains ultimate responsibility for overseeing the effectiveness of BJC's enterprise risk management and internal control systems, ensuring that material risks are appropriately managed and aligned with the Company's strategic objectives, risk appetite, and stakeholder expectations.

 

The Risk Management Committee (RMC), operating independently from the business units, is responsible for supervising the Company's enterprise risk management framework and overseeing the processes used to identify, assess, manage, monitor, and report risks and opportunities that may affect the achievement of business objectives. The RMC regularly reviews the Company's risk profile, emerging risk landscape, mitigation strategies, and overall risk exposure, and reports significant matters to the Board of Directors on a quarterly basis.

 

Risk Management Committee Composition

The Risk Management Committee (RMC) comprised three members, all of whom were Independent Directors, reinforcing the objectivity, independence, and effectiveness of enterprise risk oversight.

Name	Position in RMC	Board Status
Associate Prof. Pimpana Srisawadi, DBA	Chairman	Independent Director
Police General Krisna Polananta	Member	Independent Director
Associate Prof. Kamjorn Tatiyakavee, M.D.	Member	Independent Director

Remark: - Associate Prof. Pimpana Srisawadi, DBA was appointed to be a Chairman of the Risk Management Committee from the Board of Directors’ Meeting No. 1/2025 on 19 February 2025 effective on 22 April 2025 onwards.

              - Police General Krisna Polananta and Associate Prof. Kamjorn Tatiyakaveem, M.D. were appointed to be Member of the Risk Management Committee from the Board of Directors’ Meeting No.6/2025 on 17 December 2025 effective on 17 December 2025 onwards.

             - The remaining members of the Risk Management Committee resigned from their positions as members of the Risk Management Committee, effective from 17 December 2025 onwards.

 

Supporting the RMC, the Risk Management Subcommittee (RMS) conducts risk assessments at both the corporate and business unit levels. The RMS identifies and evaluates key risks, including ESG-related risks, consolidates enterprise-wide risk information, and reports the outcomes of risk assessments and risk exposures to the RMC regularly to support timely decision-making and effective risk oversight.

 

The Audit Committee independently evaluates the adequacy and effectiveness of BJC's risk management and internal control systems. Through oversight of the Group Internal Audit function, the Audit Committee provides objective assurance to the Board of Directors regarding the effectiveness of risk management practices and the Company's preparedness to address evolving risks.

 

Board Expertise and Risk Leadership
BJC recognizes that effective risk oversight requires directors with diverse expertise and experience. The Company's Board of Directors comprises members with extensive backgrounds across various industries and disciplines, enabling comprehensive consideration of strategic, operational, financial, and sustainability-related risks.

 

Among the Board members, Mr. Tevin Vongvanich brings extensive experience in risk oversight through his directorships at Amata Corporation Public Company Limited and Indorama Ventures Public Company Limited. In addition, Ms. Potjanee Thanavaranit completed the Risk Management Program for Corporate Leaders conducted by the Thai Institute of Directors (IOD), further strengthening the Board's competency in overseeing enterprise risks and emerging challenges.

 

Risk Culture and Risk Ownership

The Sustainability and Risk Management Division (SRM) promotes a strong risk culture throughout the organization by fostering risk awareness and encouraging active participation in risk identification and mitigation at all levels. Through training, knowledge sharing, and continuous communication, SRM establishes a common risk language, enhances employees' understanding of risk concepts, and supports informed decision-making.

 

These initiatives strengthen accountability, encourage proactive risk management behaviors, and reinforce the integration of risk considerations into day-to-day business activities.

 

Three Line of Defense

 

BJC adopts the principles of the Institute of Internal Auditors' (IIA) Three Lines Model (2020) to clearly define roles, responsibilities, and accountability for managing and overseeing risks across the organization. The model strengthens governance by distinguishing risk ownership, risk oversight, and independent assurance functions, thereby supporting effective decision-making, transparency, and organizational resilience.

 

1st Line Defense

Business units and management constitute the first line of the Three Lines Model and are responsible for owning and managing risks arising from day-to-day operations. They identify, assess, manage, and monitor risks within their respective areas of responsibility, while implementing appropriate controls and mitigation measures to ensure that risks remain within the Company's risk appetite. Employees at all levels are encouraged to proactively identify emerging issues, report concerns, and contribute to maintaining an effective control environment.

 

2nd Line Defense

The Sustainability and Risk Management Division (SRM), together with the Risk Management Subcommittee (RMS), forms the second line of the Three Lines Model. SRM and RMS establish enterprise risk management methodologies, frameworks, tools, and reporting mechanisms, while providing guidance, training, and oversight to support consistent implementation of risk management practices across the organization.

 

The second line also facilitates risk assessments, consolidates corporate and ESG-related risk information, monitors risk exposures, and challenges management's assumptions and mitigation plans where appropriate. Through these activities, SRM and RMS help strengthen risk awareness, promote a common risk language, and support management in responding effectively to evolving business and sustainability-related risks.

 

3rd Line Defense

The Group Internal Audit function serves as the third line of the Three Lines Model by providing independent and objective assurance on the adequacy and effectiveness of the Company's risk management, internal control, and governance processes. Through risk-based audits and advisory activities, Group Internal Audit evaluates whether the first and second lines operate effectively and whether key controls are appropriately designed and implemented.

 

To preserve its independence, the Group Internal Audit function reports directly to the Audit Committee while maintaining administrative communication with management. Audit findings, recommendations, and follow-up actions are reported regularly to the Audit Committee and relevant management to support continuous improvement and strengthen the overall control environment.

 

By applying the Three Lines Model, BJC reinforces accountability, enhances transparency, and promotes effective collaboration among risk owners, oversight functions, and assurance providers. This integrated approach supports the Company's ability to anticipate and respond to uncertainties, capitalize on opportunities, and sustain long-term business resilience.

 

Operation Leadership and Reporting Lines

 

Highest ranking person with dedicated risk management responsibility on an operational level: Ms. Anchalee Rimviriyasab, Chief Financial Officer and Chief Sustainability Officer.

Reporting line: Sustainability and Risk Management Division (SRM) reports to Risk Management Committee (RMC) concerning overall risk management in the organization. This includes risk analysis of impacts to the company if such risks were to occur, in order to ensure the effectiveness of BJC’s risk management plan. Risk Management Committee’s meeting is held quarterly (4 times per annum). The Chairman of RMC reports to the Board of Directors on the company's overall risk management performance on a quarterly basis. Meanwhile, SRM also reports to the CEO and President to ensure that the risk management execution plan is aligned with business strategy, on schedule, as well as effective in managing risk within risk appetite.

 

Highest ranking person with responsibility for monitoring and auditing risk management performance on an operational level: Mrs. Orawan Supamathaporn, Executive Vice President of Group Internal Audit.

Reporting line: Group Internal Audit Division (GAD) directly reports to Audit Committee (AC) to consult and assess whether operational and compliance control policies and strategies in status quo cover existing and emerging risks to the company. The reporting line enables independent assessment without potential conflict of interests coming from other departments. Audit Committee’s meeting is held at least quarterly (4 times per annum) with the addition meetings between internal auditors to expression of independent opinions without Management’s influence. The chairman of AC reports to the Board of Directors on the company's overall control and relevant issues on a quarterly basis.  Meanwhile, GAD also reports the implementation of projects or activities contributing to risk management, monitoring and auditing to CEO and President, to ensure effective internal control cover financial, operational and compliance control.

 

Risk Assessment and Management Process

 

BJC has a continuous risk management with the following Risk Assessment and Management Process;

 

 

BJC has established policies and risk management process in order to assess, consolidate and report corperate and ESG risk assessment on quarterly basis and annual basis respectively. In 2025, processes across BJC’s business group have 100% of risk assessment in all business unit, and 100% of all business unit have mitigation plan. The assessment has been implemented throughout BJC to constantly monitor risk management processes. Throughout the procedure, the key corperate risk (KRI) is developed to serve as a predicator for precaution and monitoring of risk management efficiency.

 

Furthermore, BJC uses Risk Management (RM) online system to collect data and prepare risk reports of business units to achieve more efficient risk management. As for the risk assessment, the risks are categorized as follows;

 

 

 

The RM online system enables the business units to access risk management real-time, anytime and anywhere. The system also saves time for BUs by providing risk evaluation tools, which are relevant to the objectives of each BU. This allows the Risk Impact to be more accurately calculated and the risk impact can better reflect the current situation of different business operations. Finally, the root causes of the risks are determined as well as the impact of the risks, which includes financial impact and non-financial impact. The Risk Level is then determined by assessing the impact and likelihood of the risks. The company assess the risk level before inherent risk, and then identify the existing management and management that needs to be done so that the level of residual risk is acceptable. For the risk management that needs to be done, responsible persons are assigned and the due date is also set.

 

Emerging Risk Landscape

 

BJC recognizes the importance of continuous learning, agility, and adaptation in navigating an increasingly complex and rapidly changing business environment. The Company regularly monitors external developments that may affect its operations, financial performance, reputation, and long-term business objectives.

 

These developments include geopolitical events, regulatory changes, technological advancements, climate-related challenges, cybersecurity threats, and evolving consumer expectations. BJC continuously evaluates the potential implications of such developments and formulates timely and appropriate mitigation measures to address emerging issues and strengthen organizational resilience.

 

Significant emerging risks that may affect the Company's businesses are reviewed regularly and updated as described below.

 

Emerging Risk

 

Emerging Risk Identification Process

BJC conducts periodic environmental scanning and emerging risk assessments as part of its Enterprise Risk Management (ERM) framework. Emerging risks are identified through the monitoring of regulatory developments, technological trends, environmental and social issues, stakeholder expectations, and macroeconomic developments. Identified risks are evaluated based on their potential business impact, likelihood, and time horizon, and are regularly reviewed by management to support proactive mitigation planning.

 

1. Emerging Regulatory Risk: Thailand's Extended Producer Responsibility (EPR) Framework for Packaging

Thailand is progressing toward the implementation of a national Extended Producer Responsibility (EPR) framework for packaging waste, which is expected to introduce greater accountability for producers regarding the collection, recovery, and recycling of post-consumer packaging. Although the detailed regulatory mechanisms are still under development, businesses are anticipated to bear increased responsibilities and costs associated with packaging waste management.

The emerging EPR framework could have direct implications for BJC's Consumer Business, particularly products utilizing plastic and multilayer packaging, as well as its Packaging Business involving glass and aluminum packaging. The transition may require significant adjustments to packaging design, material selection, data management, and collaboration across the value chain to ensure compliance with future requirements.

 

Business Impact

 

• Increased operational complexity arising from new obligations related to packaging reporting, collection, and recycling.

• Greater pressure to accelerate the transition toward recyclable and circular packaging solutions.

• Potential increases in packaging-related costs associated with EPR contributions, recycled content requirements, and packaging redesign initiatives.

• Heightened reputational and brand risks in the event of delayed preparedness or non-compliance with future regulations.

• Potential impacts on product pricing strategies and profit margins, particularly within high-volume consumer product categories.

 

Mitigation Plan

 

• Sustainable Packaging Design: Advance circular packaging solutions across BJC’s Consumer and Packaging Businesses to improve recyclability, increase recycled content utilization, and support future compliance with Extended Producer Responsibility (EPR) requirements. For personal care products under brands such as Parrot, increase the use of recyclable PET packaging and post-consumer recycled (PCR) materials to enhance packaging circularity and reduce future compliance burdens. Within the Packaging Business, promote the use of highly recyclable glass and aluminum packaging, increase the utilization of recycled materials, and strengthen closed-loop material recovery systems. BJC continuously enhances the use of glass cullet in manufacturing processes to reduce virgin raw material consumption, lower resource extraction impacts, and improve resource efficiency. In 2025, BJC initiated the “Glass Return Project” (Kaew Kho Kuen) on Koh Lanta to promote source segregation, collection, and recovery of post-consumer glass bottles through collaboration among government agencies, private sector partners, local communities, and local administrative organizations. The project supports higher glass collection and recycling rates, reduces waste management burdens, preserves environmental quality and tourism attractiveness, and promotes responsible consumption and disposal behaviors. Recovered glass bottles are returned to recycling and remanufacturing processes and supplied back to food and beverage producers, creating a closed-loop packaging system that supports resource efficiency and waste reduction. The initiative also contributes to the development of collection and recycling infrastructure, strengthens supply chain traceability, and enhances preparedness for future EPR requirements by establishing practical mechanisms for packaging recovery, recycling, and circular material management.
• Packaging Innovation: Invest in packaging research and development for snack products such as Tasto, Party, and Campus to explore recyclable mono-material alternatives while maintaining product quality, shelf life, and food safety standards.
• Packaging Data Management: Establish a centralized packaging data management system to monitor packaging material composition, weights, recycled content, and recovery status, enabling efficient regulatory reporting and EPR cost forecasting.
• Producer Responsibility Collaboration: Participate in industry-led Producer Responsibility Organization (PRO) initiatives and collaborate with stakeholders across the packaging value chain to support the development of effective collection and recycling systems in Thailand.
• Supplier Engagement: Work closely with packaging suppliers to strengthen recyclability, increase recycled content, and improve traceability of packaging materials. Encourage suppliers to provide supporting certifications and align with anticipated EPR requirements.
• Sustainability Communication: Communicate BJC's packaging transition efforts through product labeling, consumer awareness campaigns, and corporate disclosures to reinforce stakeholder confidence and demonstrate commitment to circular economy principles.
• Financial Planning: Integrate potential EPR-related expenses into medium- and long-term financial planning processes, incorporating anticipated packaging compliance costs into product cost structures and category strategies.

 

2. Emerging Risk: Digital Transformation, AI Governance and Regulatory Readiness Risk

Thailand is rapidly accelerating its digital transformation agenda, while the adoption of Artificial Intelligence (AI), particularly Generative AI, continues to expand across industries. Businesses are increasingly leveraging digital technologies to enhance customer engagement, improve operational efficiency, optimize supply chains, and support data-driven decision-making.

At the same time, regulatory and stakeholder expectations regarding the responsible use of AI are evolving. Thailand is advancing the development of AI governance principles and guidelines aligned with international best practices, emphasizing transparency, accountability, human oversight, data protection, cybersecurity, and ethical deployment of AI technologies. As digital regulations continue to mature, organizations may face increasing obligations to demonstrate effective governance and responsible use of AI.

For BJC, digital technologies and AI applications are expected to play an increasingly important role across retail operations, consumer analytics, marketing, manufacturing, procurement, and corporate functions. Inadequate governance over digital technologies and AI could expose the Company to risks related to data breaches, cyber threats, inaccurate AI-generated outputs, algorithmic bias, intellectual property concerns, regulatory non-compliance, and reputational damage.

 

Business Impact

 

• Increased compliance obligations associated with emerging digital and AI governance requirements and stakeholder expectations.

• Potential leakage of confidential business information or personal data through inappropriate use of Generative AI tools and digital platforms.

• Legal and reputational exposure arising from inaccurate, biased, or non-transparent AI-generated outputs.

• Increased cybersecurity threats targeting digital infrastructure and interconnected business systems.

• Additional investments required for digital governance, cybersecurity, technology upgrades, and workforce capability development.

• Operational disruptions if critical digital systems or AI-enabled applications fail to perform reliably or comply with future regulation

 

Mitigation Plan

 

• Establish an enterprise-wide Digital and AI Governance Framework covering policies, responsibilities, approval processes, and accountability mechanisms.

• Develop Responsible AI guidelines addressing fairness, transparency, explainability, and human oversight throughout the AI lifecycle.

• Implement internal protocols governing employees' use of Generative AI and prohibit the disclosure of confidential information through public AI platforms.

• Integrate digital and AI-related risks into the Enterprise Risk Management (ERM) framework and conduct periodic risk assessments for key use cases.

• Strengthen cybersecurity measures, access controls, and PDPA compliance to safeguard data and digital assets.

• Conduct regular employee awareness and capability-building programs on digital security, AI literacy, and responsible AI practices.

• Monitor developments in Thailand's digital and AI regulatory landscape as well as international standards to ensure future readiness.

• Assess third-party technology providers and AI vendors against defined governance, security, and compliance criteria prior to adoption.

• Establish a process to continuously monitor emerging AI technologies, evolving regulations, and industry best practices to identify potential risks and opportunities before they materially impact business operations.

• Develop workforce upskilling and reskilling programs to prepare employees for AI-enabled business processes and reduce operational risks associated with technology adoption.

 

3. Emerging Risk: Nature and Biodiversity Risk

Global momentum toward biodiversity protection and nature-positive business practices is accelerating following the adoption of the Kunming-Montreal Global Biodiversity Framework (GBF). Financial institutions, investors, and other stakeholders are increasingly expecting companies to identify, assess, and disclose nature-related dependencies, impacts, risks, and opportunities in alignment with emerging frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD).

In Thailand, biodiversity considerations are gaining prominence through national biodiversity strategies, sustainable sourcing expectations, and evolving market requirements. Companies with supply chains dependent on natural resources may face increased scrutiny regarding their impacts on ecosystems, deforestation, land use, water resources, and the sourcing of agricultural commodities.

For BJC, nature-related risks may arise across its value chain, particularly in relation to agricultural raw materials, packaging materials, water usage, and sourcing practices. Failure to anticipate these emerging expectations could result in supply disruptions, increased operating costs, reduced access to capital, and reputational challenges.

 

Business Impact

 

• Increased expectations from investors, customers, and rating agencies regarding biodiversity and nature-related disclosures.

• Potential supply chain disruptions caused by biodiversity loss, ecosystem degradation, and reduced availability of natural resources.

• Higher procurement costs due to the transition toward sustainable and traceable sourcing practices.

• Reputational risks if products are associated with deforestation, ecosystem destruction, or unsustainable resource extraction.

• Potential future regulatory requirements related to biodiversity reporting and due diligence.

   

 

Mitigation Plan

 

 

• Nature Risk Assessment: Conduct assessments to identify dependencies and impacts on nature across priority business activities and supply chains, considering alignment with TNFD recommendations.

• Sustainable Sourcing: Strengthen responsible sourcing practices for agricultural and packaging materials by incorporating environmental criteria, traceability requirements, and supplier engagement programs.

• Supplier Due Diligence: Integrate biodiversity considerations into supplier evaluations and encourage suppliers to adopt sustainable land-use and ecosystem protection practices.

• Water Stewardship: Enhance water efficiency initiatives and watershed management practices in manufacturing operations located in water-stressed areas while strengthening water stewardship across the agricultural supply chain. For key agricultural raw materials such as potatoes used in the snack business, collaborate with contract farmers and local communities to promote efficient water resource management practices, improve irrigation efficiency, and build resilience to water scarcity risks. BJC has introduced improved water resource management practices to 686 potato farmers covering 4,958 rai of farmland in Phayao and Chiang Rai provinces, resulting in a reduction in water consumption of approximately 1.32 million cubic meters. These efforts help secure long-term raw material availability, reduce water-related risks across the value chain, support sustainable agricultural production, and contribute to responsible water resource management in local watersheds.

• Biodiversity Enhancement Programs: Support ecosystem restoration, tree planting, habitat conservation, and community-based environmental initiatives in areas connected to the Company’s operations. As part of BJC’s “1+5 Sustainability Target,” the Company has established a target to plant 150,000 trees by 2032 to contribute to ecosystem restoration, enhance biodiversity, increase green cover, and strengthen climate resilience in local communities. BJC collaborates with government agencies, local communities, educational institutions, and other stakeholders to implement tree planting and conservation activities in priority areas, while promoting long-term stewardship of natural resources. These initiatives support the preservation of ecosystem services, help mitigate environmental degradation, and contribute to broader efforts to address climate change and biodiversity loss across the Company's value chain.

• Governance and Capacity Building: Raise awareness among management and employees on nature-related risks and integrate biodiversity considerations into the Enterprise Risk Management (ERM) framework.

• Nature-related Data and Monitoring: Strengthen nature-related data collection, monitoring, and performance measurement systems to support BJC’s biodiversity ambitions of achieving No Net Loss of Biodiversity, No Gross Deforestation, and Net Positive Impact (NPI) by 2030. Conduct baseline assessments and establish indicators to monitor biodiversity conditions, ecosystem integrity, land-use change, water-related impacts, and deforestation risks across priority operations and sourcing landscapes. Monitoring results will be integrated into risk management and sustainability reporting processes to support informed decision-making, continuous improvement, and alignment with evolving stakeholder expectations and emerging frameworks such as TNFD.

• Disclosure Readiness: Monitor developments in TNFD, global biodiversity standards, and stakeholder expectations to prepare for future disclosure requirements and enhance transparency on nature-related performance.

   

 

4. Emerging Risk: Energy Market Volatility and Supply Disruption Risk

Growing geopolitical tensions, regional conflicts, trade restrictions, and structural disruptions to global energy supply chains are increasing uncertainty in energy markets worldwide. Recent events have demonstrated that disruptions in major energy-producing regions can rapidly lead to fuel price volatility, supply constraints, and transportation challenges across multiple industries. In certain periods, fuel market disruptions have resulted in temporary supply shortages and operational constraints within transportation networks, affecting logistics efficiency and increasing distribution costs. The Company anticipates that these energy-related volatilities and supply risks will continue to intensify over the medium to long-term horizon, driven by ongoing geopolitical fragmentation and the complex global transition towards alternative energy sources.

As BJC operates extensive manufacturing, distribution, retail, and logistics networks, the Company is exposed to fluctuations in fuel and energy prices as well as potential fuel supply disruptions. Significant increases in fuel costs and temporary fuel shortages could materially affect transportation and distribution expenses, reduce logistics efficiency, and increase operational complexity across the value chain. These challenges may also impact raw material sourcing, product distribution, profitability, and overall business performance. Internal assessments indicate that sustained volatility in fuel prices and energy markets could have a material impact on the Company’s cost structure and financial performance, particularly through transportation, distribution, and logistics-related expenses. As geopolitical uncertainty, energy market volatility, and climate-related disruptions continue to evolve, the Company recognizes the need to strengthen resilience against emerging energy-related risks.

 

Business Impact

 

• Increased transportation, distribution, and logistics costs resulting from fuel price volatility.

• Potential disruptions to product delivery, raw material procurement, and supply chain operations due to fuel shortages or transportation constraints.

• Increased operational complexity and reduced logistics efficiency during periods of energy market disruption.

• Potential impacts on operating expenses, profitability, EBITDA performance, and overall business performance arising from sustained increases in fuel and energy costs.

• Potential inflationary pressure on raw materials and packaging components, as suppliers pass through their increased energy and production costs to the Company.

• Increased uncertainty in business planning, cost forecasting, and supply chain management.

• Greater exposure to external geopolitical events and global energy market developments.

 

Mitigation Plan

 

• Logistics Network Optimization & Fleet Transition: Continuously improve route planning, fleet utilization, and distribution network efficiency to reduce fuel consumption. Concurrently, evaluate and pilot the integration of electric vehicles (EVs) and alternative fuel options within the logistics network to gradually reduce long-term dependency on conventional fossil fuels.

• Energy Efficiency Programs: Continue implementing energy efficiency initiatives across manufacturing facilities, distribution centers, and retail operations to reduce overall energy intensity and dependence on conventional energy sources.

• Renewable Energy Expansion: Increase the adoption of renewable energy solutions, including solar energy projects and other alternative energy sources, where technically and economically feasible.

• Supply Chain Resilience: Strengthen business continuity planning, diversify sourcing channels where appropriate, and enhance supplier risk assessments to improve resilience against fuel supply disruptions and transportation constraints.

• Strategic Procurement and Contingency Planning: Enhance fuel procurement planning and establish contingency measures to manage potential disruptions affecting logistics and operations.

• Digital Logistics and Operational Monitoring: Utilize digital technologies and data analytics to improve logistics visibility, optimize transportation efficiency, and support rapid response to supply chain disruptions.

• Risk Monitoring and Scenario Assessment: Continuously monitor geopolitical developments, energy market trends, and potential supply chain disruptions, while conducting periodic scenario assessments to support proactive decision-making and risk preparedness.

 

Climate Change and Environmental Regulatory Risk

 

Governments and regulatory bodies around the world are accelerating the development of climate-related legislation and environmental regulations to support the transition toward a low-carbon economy. In Thailand, forthcoming measures such as the Climate Change Act, carbon pricing mechanisms, greenhouse gas reporting requirements, and other environmental regulations may create additional compliance obligations and operational challenges for businesses.

 

As a diversified business group operating across retail, consumer products, packaging, and healthcare sectors, BJC may be affected by evolving climate-related regulations through increased compliance requirements, higher operating costs, changes in customer expectations, and potential impacts on supply chains and business operations. Failure to adapt to regulatory developments could result in financial penalties, reputational impacts, and reduced competitiveness.

 

Business Impact

• Increased compliance and reporting obligations related to greenhouse gas emissions and environmental performance.

• Potential increase in operating costs resulting from carbon pricing mechanisms, energy transition requirements, and environmental compliance measures.

• Additional investments required to support decarbonization initiatives, resource efficiency improvements, and sustainable business practices.

• Increased expectations from customers, investors, regulators, and other stakeholders regarding environmental performance and climate action.

 

Mitigation Plan

To address these challenges, BJC implements the following mitigation measures:

 

• Continuously monitor emerging climate-related regulations and policy developments through dedicated internal teams and external stakeholder engagement.

• Participate in industry associations and collaborate with relevant organizations to stay informed of regulatory developments and contribute to policy discussions.

• Strengthen greenhouse gas data management, monitoring, and reporting systems to enhance regulatory readiness and support transparent disclosure.

• Accelerate greenhouse gas reduction initiatives, including renewable energy projects, energy efficiency programs, and transportation electrification.

• Conduct regular training and awareness programs to enhance employees' understanding of environmental regulations and compliance requirements.

• Collaborate with suppliers and business partners to strengthen climate resilience, improve environmental performance, and support compliance across the value chain.

• Periodically assess potential financial and operational impacts arising from climate-related regulations and integrate relevant considerations into business planning and risk management processes.

 

Raising Risk Awareness and Education

The Risk Management Division conducts annual Enterprise Risk Management training across the organization, covering Enterprise Risk Management principles, frameworks, and processes. This initiative aims to strengthen an effective risk culture in line with COSO requirements, with targeted sessions emphasizing risk management principles throughout the organization.

 

The Enterprise Risk Management Framework (ERM) offers instruction on assessing, minimizing, and monitoring relevant risks for each business division, as well as establishing a system for monitoring both new and existing business units (upon request). A risk management workshop was organized at the organizational level, involving responsible people from each business unit/factory. The purpose was to enhance their understanding of risk management and raise awareness among all employees. The objective was to foster an in-depth knowledge of proper risk management practices among all employees. BJC has developed a Standard Operating Procedure (SOP) for Enterprise Risk Management in the Risk Management Online System (Company Intranet). This SOP helps with risk assessment processes while rendering data collecting more efficient in the upgraded system. 

 

The Risk Management team conducted training sessions for employees in the manufacturing sector and other relevant personnel. Additionally, the Enterprise Risk Management training was expanded to include potential suppliers. The training covered the following topics;

• Importance and framework of Enterprise Risk Management

• Enterprise Risk Management process and methodology

• Risks trends (Covering Business risk, Environmental Social and Governance risk and emerging risk)

 

On a yearly the Risk Management Division presents a Top Risk Summary to both the Risk Management Committee (RMC) and the Sustainable Development Committee (SDC). The Top Risk Summary encompasses global risks, significant risks, and emerging risks that BJC firms currently encounter, along with a Risk Prevention and Mitigation Plan and the most up-to-date risk management strategies. The information was gathered and collected from reliable sources such as publications, research papers, and other credible references. Therefore, the report will be escalated to the executives of each Business Unit for review of the adequateness, appropriateness, and efficiency of their risk management plans and control measures in managing risks to risk appetite (acceptable level) and in accordance with established risk management principles. The purpose of this is to allow RMC and SDC to ensure that BJC's risk management is both effective and efficient, as well as suitable for the present scenario.

 

To cultivate an effective risk culture, BJC has integrated risk management processes, procedures, and employee awareness throughout its operations. This integration involves regular education on risk management for non-executive directors and focused training throughout the organization on risk management principles and Enterprise Risk Management processes, provided both at the corporate level and as required by individual business units.

 

Additionally, in its New Product Development (NPD), BJC meticulously considers various risk factors, including financial, regulatory, and operational risks, among others. Furthermore, BJC strategically links significant risk and opportunity-related issues to employee incentives, ensuring a cohesive and proactive approach to risk management across the organization.

 

Crisis Management

The Crisis Management Team (CMST) consists of representatives from many departments, including the Crisis Management Leader, Communications, Operations, Human Resources, Legal, IT, Finance, Supply Chain, and so on. The CMST is usually a senior executive who oversees the entire crisis management process and coordinates amongst departments.

 

Crisis Management Structure

 

The CMST role and responsibility include identifying and evaluating potential threats and emerging crises, developing and implementing a comprehensive crisis management strategy, and conducting frequent drills to ensure readiness. They will coordinate response operations across departments, provide clear and timely information to stakeholders, and efficiently manage resources during a crisis. They are also in charge of establishing and implementing business continuity strategies, maintaining legal and regulatory compliance, and dealing with any legal issues that arise. Following a crisis, they perform a thorough analysis of the response, identify lessons learned, and revise the crisis management plan to better prepare for future responses.

 

1. Flood, Windstorm and Natural Disasters Recovery & Preventive Actions: Coordinated with Big C employees at nearby branches to support affected branches in inventory management, flood prevention activities, and product transfers. Closely monitored updates from relevant government agencies, including the Meteorological Department, the National Water Resources Office, and the Hydro-Informatics Institute, and promptly alerted branches located in potentially affected areas. Established guidelines and response protocols for flood and storm preparedness, with enhanced surveillance of high-risk locations. Conducted periodic inspections to ensure the structural integrity and safety of Big C branches and manufacturing facilities situated in high-risk areas.
2. Insurgency in the Southern Border Provinces Recovery & Preventive Actions: Established a crisis coordination center to support affected Big C branches, monitor developments, and provide timely reports to the Crisis Management Team. Coordinated with local security authorities and maintained communication channels to monitor the situation continuously. Communicated emergency response procedures to branches in the affected areas and regularly conducted drills on actions to be taken upon identifying suspicious objects or security threats. Assigned designated “store partners” to provide operational support to affected branches during emergency situations.
3. Cybersecurity and Digital Disruption Recovery & Preventive Actions: Strengthened cybersecurity controls and continuously monitored potential cyber threats that could disrupt business operations. Implemented preventive measures to safeguard critical systems and sensitive information through access controls, system protection mechanisms, and regular security assessments. Conducted cybersecurity awareness and training programs to enhance employees’ ability to recognize and respond appropriately to cyber threats. Maintained incident response and business continuity procedures to ensure prompt recovery and minimize operational disruption in the event of a cyber incident.
4. Other Crisis Preventive Actions   Conducted self-defense and emergency response training for employees at the BJC Head Office to enhance preparedness for security incidents. Conducted advanced firefighting training and emergency response exercises for designated fire safety officers at Big C branches. Regularly reviewed and tested crisis management and business continuity plans to strengthen organizational resilience and preparedness for emerging threats.