Thai energy firms are more seriously adopting ESG as part of their business direction, driven by the global trend to take better care of the environment, combat global warming and improve people's lives.
ESG refers to environmental, social and corporate governance standards that are able to lead to business sustainability.
Stricter regulations scheduled to be enforced by many countries in an effort to curb carbon dioxide emissions are causing businesses to pay more heed to environmental protection as a crucial part of their daily operations, rather than just projects implemented on a voluntary basis.
EV-DRIVEN BUSINESS
PTT Oil and Retail Business Plc (OR) is stepping up its efforts to promote the clean energy utilised by electric vehicles (EVs).
As the government promotes greater use of EVs as part of plans to achieve carbon neutrality, a balance between carbon dioxide emissions and absorption, by 2050, OR sees the move as an opportunity to expand its EV charging services at petrol stations.
The company does not want to depend only on selling oil, which could be disrupted by EV technology.
"We aim to increase the number of EV chargers to 7,000 within 2030, up from 400 at present," said Disathat Panyarachun, chief executive of OR.
The National EV Policy Committee announced in 2021 that it wants EVs to constitute 50% of locally made vehicles by 2030, part of an ambitious plan to make Thailand a regional EV hub.
If, in the future, hydrogen fuel is proven to be commercially available, the company will not hesitate to consider venturing into hydrogen fuel-related businesses, he said.
One type of hydrogen fuel is green hydrogen, which can be used to fuel power generation and manufacturing processes. It is produced by using electricity made from renewable energy to split water molecules into oxygen and hydrogen.
COMMUNITY INITIATIVE
OR launched a project in Mae Wiang village in the northern province of Chiang Mai to help villagers improve their lives. The project has brought about a change from chemical-based farming of single crops in the area to the cultivation of arabica coffee and organic vegetable plantations.
The farmers sell organic produce to Pluk Phak Praw Rak Mae Co, the operator of Ohkajhu organic salad restaurants.
OR bought a 20% share in the company in 2021.
This project has not only increased crop productivity but has also boosted villagers' income to almost 17,000 baht a month, up from 5,000 baht a month previously, said Mr Disathat.
"We believe ESG is good for people, the planet and our business performance," he said.
After partnering with OR, Ohkajhu expanded its business by opening its first restaurant inside a PTT Station at Active Park in Muang Thong Thani, Nonthaburi.
It also sells food through 45 branches of Cafe Amazon, a coffeehouse brand owned by OR. This year Ohkajhu plans to expand its service to cover 100 Cafe Amazon branches, OR said earlier.
SECOND-PHASE OF ESG
Energy conglomerate Bangchak Corporation Plc is pushing ahead with a project to make biofuel for aircraft, known as sustainable aviation fuel (SAF), under what it views as the second-phase development of its ESG-related businesses.
SAF can replace aircraft fuel because its properties are similar to those of conventional jet fuel, while it has a smaller carbon footprint.
Like OR, Bangchak is aware that the rapid growth of EVs can disrupt oil retail business. The company views SAF as a solution, which will also keep it on track in terms of its ESG-run business operations.
The company earlier announced it is building a 10-billion-baht SAF production facility adjacent to its oil refinery in Bangkok's Phra Khanong district.
Construction of Thailand's first SAF production plant is expected to be completed before the end of 2024.
The factory, with a production capacity of 1 million litres a day, is scheduled to commence commercial operations in 2025.
SAF, together with some other new businesses, will follow Bangchak's initial efforts to direct its business using the ESG concept.
In 1990, the company encouraged agricultural cooperatives to earn more revenue by joining a programme to invest in oil retail under the Bangchak brand. So far, they own and operate 600 of a total of 1,340 Bangchak petrol stations.
"ESG is not a donation allocated from the company's profit. We think it should be embedded in our business operations in order to ensure return on investment in a sustainable manner," said Chaiwat Kovavisarach, president and chief executive of Bangchak.
CROSS-BORDER ESG
Banpu Power Plc (BPP), the power generation arm of Banpu Group, is growing greener energy businesses in the US, which was announced as the "second home" for its business expansion, as it applies ESG in overseas markets.
The company earlier announced it completed a 16-billion-baht buyout of the Temple II gas-fired power plant in Texas. The 755-megawatt facility uses combined-cycle technology, which uses both gas and steam turbines to generate electricity.
Natural gas is considered to be cleaner than other types of fossil fuel.
Retail business operators in Texas prefer to run their businesses on clean energy even though it is more expensive than fossil fuels.
This is an opportunity for Banpu as it aims to become a provider of cleaner energy.
ESG not only helps the world deal with climate change and natural resource management issues, but also supports ways to cut costs and improve people's quality of life, said Kirana Limpaphayom, chief executive of BPP.