Sustainability
Governance
Management Governance
Banpu believes that strong governance is the foundation of sustainable business operations. By integrating environmental, social, and governance (ESG) strategies into every level of decision-making and management, we aim to drive long-term responsible growth.
To lead this effort, we have established the Sustainability Committee, a strategic group chaired by the CEO that comprises senior executives from all functions and business unit heads from all countries where we operate. In addition, we have established 3 sub-committees: Climate Change Committee, Human Rights Committee, and Supply Chain Committee, to drive ESG transformation across the organization, ensuring that sustainability is not only a goal but a core part of how we operate.
Sustainability Committee
Chairperson: Chief Executive Officer (CEO)
Members: Senior executives, Business unit heads
Meeting Frequency: Quarterly
Reporting Line: ESG Committee (Board level)
Roles and Responsibilities
• Align sustainability direction with Board mandates and oversee ESG strategies, policies, targets, and sub-committee governance.
• Monitor ESG performance, risks and opportunities, integration into business planning, and stakeholder and materiality processes, including incidents and regulatory developments.
• Strengthen ESG awareness, capability, and cross-functional integration across daily operations.
• Direct and oversee ESG-related sub-committees, ensuring alignment, progress review, and escalation of key issues.
• Review major ESG disclosures and monitor ratings and benchmarks to drive continuous improvement.
Climate Change Committee
Chairperson: Head of Global Corporate Sustainability
Members: Key functional heads (e.g., Corporate Strategy, Enterprise Risk Management) and representatives from all business units
Meeting Frequency: Quarterly
Reporting Line: Sustainability Committee
Roles and Responsibilities
• Oversee climate-related risks & opportunities in line with global frameworks and corporate strategy.
• Ensure achievement of decarbonization targets across short, medium, and long-term horizons.
• Oversee the implementation of Climate Change Policy, internal carbon pricing, and related initiatives.
Human Rights Committee
Chairperson: Head of Global Corporate Sustainability
Members: Key functional heads (e.g., Human Resources, Health & Safety, Compliance) and representatives from all business units
Meeting Frequency: Quarterly
Reporting Line: Sustainability Committee
Roles and Responsibilities
• Ensure effective governance and oversight of human rights risk management.
• Oversee the implementation of Human Rights Policy, due diligence processes, grievance mechanisms, and remediation efforts across the organization.
• Foster a culture of respect and awareness for human rights at all levels.
Supply Chain Committee
Chairperson: Head of Corporate Services
Members: Key functional heads (e.g., Procurement, Contractor Management) and representatives from all business units
Meeting Frequency: Quarterly
Reporting Line: Sustainability Committee
Roles and Responsibilities
• Oversee the enforcement of Sustainable Supply Chain Policy and Supplier Code of Conduct.
• Oversee the implementation of initiatives and action plans to improve suppliers’ ESG performance.
• Ensure cross-functional alignment and promote collaboration with suppliers and business partners.
CEO Performance Evaluation and Variable Compensation
The CEO’s key performance indicators (KPIs) are established under the oversight of the Board of Directors, with the Compensation Committee playing a vital role in reviewing and recommending these metrics. These KPIs guide the evaluation of the CEO’s annual performance and are directly linked to variable compensation, ensuring alignment with the Company’s strategic goals and long-term shareholder value. These indicators are assessed annually and benchmarked against industry peers to ensure competitive and responsible financial stewardship. Performance outcomes are reviewed by the Compensation Committee and approved by the Board.
The CEO’s performance scorecard is divided into 6 key areas: Company Performance, Finance Strategy, Group Strategy, Strategic Capabilities, Branding & External Trust, and ESG. Each category contributes to the CEO’s overall performance through specific weightings. For example, finance strategy metrics account for 20%, and ESG-related KPIs contribute 10%. The financial metrics used to evaluate the CEO’s performance focus on capital efficiency and return-based indicators, such as Total Shareholder Return (TSR), Average Internal Rate of Return (IRR), and Net Debt to Equity Ratio (Net D/E).
The ESG component of the CEO’s KPIs includes a focused set of performance indicators across environmental, social, and governance dimensions. These KPIs are selected based on materiality assessments and their alignment with sustainability objectives. Key ESG indicators include measurable outcomes related to environmental impact (e.g., GHG emissions reduction), social performance (e.g., fatality), and governance (e.g., cybersecurity incident).
Category
Objectives
Example of Metrics
Company Performance
Achieve core profit, return, and market-based performance targets that reflect sustainable value creation.
• EBITDA
• Net Profit After Tax (NPAT)
• Total Shareholder Return (TSR)
• Average Internal Rate of Return (IRR)
Finance Strategy
Maintain strong liquidity, effective risk management, and solid credit readiness to support financial resilience.
• Net Debt to Equity Ratio (Net D/E)
• Credit rating
• Interest rate
Group Strategy
Drive strategic initiatives and asset optimization to support long-term growth and portfolio resilience.
• Achievement of key operating numbers (e.g., MW of new renewables)
Strategic Capabilities
Strengthen organizational capabilities and accelerate digital and AI adoption to enhance competitive advantage.
• Employee engagement score
• Corporate culture score
• Succession plan
• AI literacy development
Branding & External Trust
Enhance brand presence and strengthen investor and media confidence in the Company’s strategic direction.
• Employee participation in CSR programs
• Media engagement level
• Investment community perception
ESG
Advance ESG practices to reinforce responsible and sustainable operations.
Environment
• GHG emissions reduction
• Non-renewable energy consumption reduction
• Waste direct to disposal intensity
• Air emissions intensity (SOX, NOx, TSP)
• Water consumption intensity
• Coverage of sites with biodiversity management plan
Social
• Occupational fatality and injury rate
• Process safety event
• Coverage of sites with human rights risk assessment
• Community complaint
• Progress of revegetation against annual plan
Governance
• Non-compliance case
• Corporate governance complaint
• Complaints regarding customer privacy
• Cybersecurity incident
• Coverage of crisis management team exercise
• Coverage of supplier ESG assessment
The variable compensation of senior executives, such as Chief Operating Officer (COO) and Chief Financial Officer (CFO), is directly tied to performance outcomes against the KPIs. This pay-for-performance approach ensures that remuneration and incentives are performance-driven and aligned with long-term business objectives.
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