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.

Results of the Materiality Assessment

For the 2024 review of material sustainability topics at CH. Karnchang, the method of presenting evaluation results has been revised. Previously, topics were categorized into a three-tier matrix format (highest importance, high importance, and important topics). Now, a two-tier classification system is used, consisting of Significant Material Topics and Material Topics. Additionally, the number of material topics has increased from 11 to 12, with Product Safety and Quality introduced as a new topic. This inclusion reflects industry trends in both private and government construction sectors—spanning large-scale and smaller projects, domestically and internationally—where sustainability frameworks are placing greater emphasis on product safety and quality. This encompasses factors such as the quality and type of construction materials, including low-emission building materials, to ensure compliance with environmental standards. The goal is to enhance customer and stakeholder confidence in receiving high-quality, safe, and environmentally responsible products. The details of the 2024 material topics are illustrated in the following image.

For all 12 material topics identified in 2024, CH. Karnchang has established policies, strategies, and business management plans to address stakeholder needs, mitigate potential impacts across the entire supply chain, and support the company’s commitment to sustainability. To ensure effective implementation, CH. Karnchang has set clear goals and key performance indicators (KPIs) for each material topic. Further details can be accessed through the CH. Karnchang Sustainability Website.

Material Topics for 2024		SDGs
Significant Material Topics
	Energy Management and Climate Change Adaptation
	Good Corporate Governance
	Occupational Health and Safety
	Environmental Management
	Human Resource Management
	Product Safety and Quality*
	Community and Social Engagement
Material Topics
	Sustainable Supply Chain Management
	Human Rights
	Risk Management
	Biodiversity
	Customer Relationship Management	-

*The material topic newly introduced in 2024 was previously categorized under environmental management. Note: The text color is used to classify material topics into three key dimensions as follows.

Environment

Social

Governance and Economic