Materiality Assessment

CH. Karnchang conducts its sustainability reporting by identifying and analyzing key material sustainability topics through an evaluation of both internal and external organizational factors, stakeholder expectations across the value chain,

and the risks and opportunities affecting the business. This assessment follows the principle of Double Materiality, covering economic, corporate governance, social, and environmental dimensions in alignment with the Global Reporting Initiative (GRI 3) standards. To ensure continuous relevance, CH. Karnchang engages with stakeholders every two years to reassess its material sustainability topics. In the intervening period, the company conducts a materiality review by analyzing industry trends and sustainability-related documentation to keep its approach aligned with evolving business and environmental conditions.

In 2024, CH. Karnchang conducted a materiality assessment to reassess key sustainability issues by evaluating various internal and external factors. These factors include regulatory changes, legal requirements, international sustainability standards, and emerging global trends within the construction industry. To align with stakeholder expectations, CH. Karnchang analyzed both potential benefits and adverse effects, as well as associated risks and opportunities. Additionally, the company assessed the potential human rights impacts of its business operations and external influences across the value chain. The materiality assessment process follows four key steps:

CH. Karnchang has collected and analyzed all business activities, including its roles as both a main contractor and a subcontractor, to assess the impact on eight key stakeholder groups—government agencies and related organizations, customers, business partners, employees, communities and the general public, shareholders, investors and analysts, the media, and competitors—throughout the value chain. Furthermore, the company has evaluated relevant environmental, social, and economic issues.

Furthermore, the company has analyzed data from industry peers with similar business operations to CH. Karnchang, taking into account emerging trends, sustainability standards, and assessment frameworks at both national and international levels. To ensure alignment with evolving industry expectations, key sustainability issues have been updated to reflect current best practices.

The company assesses and identifies the impacts of its business operations across economic, environmental, and social dimensions, considering both positive and negative effects that arise from various activities, either directly or indirectly. The company's value chain is composed of five key activities: sourcing and procurement of construction materials and partners, engineering design and construction, construction execution, project delivery, and post-construction management. Additionally, supporting activities include corporate infrastructure management, human resource management, procurement, and the integration of technology. This assessment aims to provide a clear understanding of the scope of impacts on stakeholders and their connection to CH. Karnchang’s sustainable development goals.

Based on the assessment of key material issues impacting stakeholders in Steps 1 and 2, CH. Karnchang has developed a weighted heat map to evaluate the significance of each issue. This process includes analyzing peer companies, industry standards, emerging trends, and both national and international sustainability assessment frameworks. Key references include the Dow Jones Sustainability Indices (DJSI), the Sustainability Accounting Standards Board (SASB), and the Stock Exchange of Thailand’s SET ESG Ratings. Additionally, the company is preparing for upcoming changes in the Stock Exchange of Thailand’s sustainability assessment methodology, particularly in alignment with FTSE Russell’s evaluation framework.

In the 2024 review of CH. Karnchang’s material sustainability topics, the company categorized these topics into two levels: Material Topics and Non-Material Topics. This classification ensures a structured approach to prioritization, guiding policy formulation, delegation of responsibilities, strategic planning, and the development of short-, medium-, and long-term operational frameworks. It also supports the implementation of strategic initiatives and performance monitoring to enhance future management practices. The reviewed material sustainability topics were presented to and approved by the company's board of directors and leadership for public disclosure.