Materiality Topics

Positive Impacts

• Creates opportunities to develop and expand markets for low-carbon and specialty products that align with evolving customer demand and sustainability trends.
• Generates new revenue opportunities through carbon credit trading and the development of carbon credit-related business activities

Negative Impacts

• Climate change-induced physical impacts on agricultural feedstocks, such as droughts, floods, and storms, may disrupt production, reduce raw material availability, and affect supply chain continuity.
• Failure to adapt to evolving environmental regulations may increase compliance costs, carbon credit procurement expenses, and investments required for greenhouse gas emissions reduction, leading to higher operating and production costs.

Positive Impacts

• Effective implementation of greenhouse gas emissions reduction and climate change adaptation initiatives strengthens livelihood of the communities, customers, investors, and other stakeholders.
• Enhances market access and business opportunities in low-carbon products provide more alternatives to customers and business partners, driving the growth of low carbon economy

Negative Impacts

• Inadequate climate action or failure to keep pace with evolving ESG expectations and the transition to a low-carbon economy may limit customers, business partners, investors, and local communities in achieving their own sustainability and climate objectives, while increasing their exposure to climate-related risks.

Positive Impacts

• Responsible supply chain management based on fair trade principles, together with collaboration with suppliers and farmers, enhances ESG standards, strengthens transparency and stakeholder trust, improves the security of raw material supply, reduces cost volatility, and supports the Company's long-term sustainable growth.

Negative Impacts

• Developing a sustainable supply chain requires significant investment and resources for supplier selection, monitoring, and performance assessment, increasing operational costs and complexity. Procurement processes may become more time-consuming and less flexible, particularly during the transition to a more sustainable supply chain.
• Encouraging farmers to adopt sustainable agricultural practices requires time and demonstrable outcomes. Failure to achieve this transition may affect the security and reliability of raw material supply.
• Failure to improve supply chain sustainability may result in higher raw material costs, reduced continuity of raw material supply, and adverse impacts on the Company's operational efficiency and long-term competitiveness.

Positive Impacts

• Capacity building and technical support for farmers enhance agricultural productivity, improve the quality and availability of raw materials, and strengthen long-term income generation and livelihood security.
• Collaboration between the Company and farmers strengthens supply chain resilience, enhances the security of raw material supply, and fosters long-term relationships with suppliers and business partners.
• A stable supply of high-quality raw materials enables reliable product delivery to customers while reinforcing investor and business partner confidence in the Company's operational resilience and long-term business potential.

Negative Impacts

• Fluctuations in agricultural raw material prices and availability, together with uncertainty in government policies, may adversely affect the income, livelihood security, and production planning of farmers and raw material suppliers.
• Uncertainty in the supply of biodiesel and methanol arising from geopolitical factors, such as developments in the Middle East, may result in delays or insufficient product deliveries to customers.
• Supply chain disruptions may undermine customer and business partner confidence, weaken business relationships, and increase dependence on alternative suppliers or raw material sources in the future.

Positive Impacts

• Effective corporate governance reduces business risks, strengthens regulatory compliance, and enhances organizational management and operational efficiency.
• Strengthens the Company's credibility, creating business opportunities and supporting sustainable long-term growth.

Negative Impacts

• Governance or ethical failures, such as fraud, corruption, or non-compliance with applicable laws and regulations, may result in regulatory penalties, legal costs, reputational damage, and the loss of business opportunities.

Positive Impacts

• Strong corporate governance and transparent business practices enhance the confidence and returns for shareholders, investors, business partners, customers, employees, and other stakeholders, while fostering long-term business relationships.

Negative Impacts

• Fraud, corruption, or ineffective corporate governance may undermine the confidence of shareholders, investors, business partners, and other stakeholders, adversely affecting business relationships and shareholder value.

Positive Impacts

• Effective risk management reduces the likelihood and impact of risks, supports informed decision-making, and strengthens business continuity.
• Enhances the confidence of investors, business partners, and other stakeholders, while improving the Company's resilience to uncertainty and changing business conditions.

Negative Impacts

• Ineffective risk management may result in financial losses, operational disruptions, and non-compliance with applicable laws and regulations.
• Failure to identify or respond to risks in a timely manner may adversely affect the Company's reputation, stakeholder confidence, and long-term competitiveness

Positive Impacts

• An effective risk management and corporate governance framework, together with transparent business practices, strengthens investor and stakeholder confidence and returns from the Company's long-term resilience, stability, and growth potential.
• Diversifying the business portfolio toward higher value-added biochemical products with lower price volatility enhances the Company's competitiveness, reduces dependence on commodity-based products, and strengthens the confidence of customers, investors, and business partners in the Company's sustainable growth.

Negative Impacts

• Volatility in agricultural feedstocks resulting from climate conditions, seasonal fluctuations in palm oil prices, and regulatory constraints may disrupt production continuity and affect the Company's ability to generate revenues, hence lower returns to shareholders and investors.
• Planned plant shutdowns and external factors, such as fluctuations in raw material prices and transportation costs, may affect product delivery, customer confidence, and relationships with business partners.
• Uncertainty in raw material supply may reduce the Company's ability to undertake long-term business planning and weaken its bargaining power with suppliers. This highlights the importance of proactive stakeholder communication and effective relationship management during supply chain disruptions.

Positive Impacts

• Product stewardship throughout the product life cycle ensures product safety, compliance with applicable standards and regulatory requirements, and reduces regulatory compliance risks.
• The development of sustainable products and the use of circular materials enhance product value, strengthen competitive differentiation, and foster innovation across the Company's product portfolio.
• Sustainable products, including specialty products and green methanol, create opportunities for premium pricing, improve gross margins, and expand the Company's customer base in high-value markets.

Negative Impacts

• Managing products throughout their life cycle in accordance with safety and sustainability standards requires significant investment in research and development (R&D), as well as higher testing and product certification costs.
• The adoption of circular materials and alternative feedstocks may be constrained by cost, quality, and supply chain availability, potentially increasing production costs and affecting operational continuity.
• Failure to meet regulatory requirements, industry standards, or evolving market expectations for sustainability may result in lost business opportunities, reduced competitiveness, and declining market share, particularly in specialty product and low-carbon product markets.

Positive Impacts

• Effective implementation of greenhouse gas emissions reduction and climate change adaptation initiatives enhances the Company's credibility and strengthens the confidence of communities, customers, investors, and other stakeholders.
• Supports customers and business partners in achieving their sustainability and decarbonization objectives by providing low carbon products and services that align with growing ESG expectations and demand for low-carbon solutions.

Negative Impacts

• Products that fail to meet quality or safety standards may adversely affect the health, safety, and confidence of customers and consumers.
• Insufficient transparency regarding product information or sourcing may prevent customers, business partners, and other stakeholders from effectively assessing product sustainability attributes and making informed decisions.

Positive Impacts

• Systematic human capital management, encompassing capability development, employee well-being, and a supportive working environment, enhances workforce productivity, strengthens employee engagement, and supports the long-term retention of high-potential talent.
• Continuous investment in employees enhances the Company's competitiveness, reduces recruitment and employee replacement costs, and supports sustainable business growth.

Negative Impacts

• Implementing comprehensive human capital policies may require significant financial resources and management effort, increasing operational complexity and necessitating continuous investment in talent development and retention.
• Excessive workloads, long working hours, or frequent meetings may increase the risk of employee burnout, leading to higher absenteeism, lower productivity, and increased employee turnover. This can result in higher human resource costs and adversely affect the Company's overall operational performance.

Positive Impacts

• Promoting local employment and workforce development through internships and local hiring creates career opportunities, enhances the capabilities and quality of life of local communities, strengthens trust and relationships between the Company and its stakeholders, and supports sustainable local economic development.

Negative Impacts

• Insufficient investment in employee development may limit opportunities for employees to enhance their skills and advance their careers, reducing employee engagement and long-term retention.
• Skills gaps and high employee turnover may negatively affect customers, local communities, and business partners by reducing service quality, delaying project delivery, and limiting the Company's ability to consistently meet stakeholder expectations.

Positive Impacts

• Proactive, transparent, and inclusive community engagement helps build trust and strengthen the Company's social license to operate, supporting long-term business continuity.
• Effective stakeholder engagement and grievance management mechanisms help address community concerns, reduce conflicts, and strengthen the management of social risks.
• Strong relationships with local communities help minimize project delays, reduce costs associated with disputes or legal proceedings, and enhance operational continuity.

Negative Impacts

• Maintaining effective community relationships requires significant time, financial resources, and ongoing stakeholder engagement efforts, increasing operational costs.
• Balancing the expectations and perspectives of diverse stakeholder groups may increase the complexity of decision-making processes and extend project implementation timelines.
• Inadequate community engagement or ineffective management of stakeholder concerns may lead to community opposition, project delays, increased costs, operational disruptions, or legal disputes, adversely affecting the Company's financial performance and long-term reputation.

Positive Impacts

• Communities benefit from social development initiatives, such as reforestation programs, knowledge transfer, and community development activities, which enhance quality of life and strengthen local self-reliance.
• Ongoing community engagement fosters trust, collaboration, and strong relationships between the Company, local communities, and other stakeholders, supporting long-term shared development.
• Empowering resilient and self-reliant communities strengthens social capital and contributes to sustainable economic, social, and environmental development at the local level.

Negative Impacts

• Failure to sustain community development initiatives or adequately address community needs may reduce development benefits and limit opportunities for communities to strengthen their capabilities and self-reliance.
• Inadequate stakeholder engagement and communication may limit local communities' and other stakeholders' ability to participate meaningfully in decision-making, express concerns, and access information that may affect their livelihoods, well-being, or environment.
• If local communities are unable to become self-reliant in the long term, they may remain dependent on corporate support, potentially undermining the sustainability of community development and the resilience of collaborative partnerships in the future.

Positive Impacts

• Effective product quality management and customer relationship management ensure that products are safe, meet quality standards, and fulfill customer expectations, thereby enhancing customer satisfaction, trust, and the Company's reputation.
• A customer-centric approach, supported by the continuous improvement of products and services, strengthens customer loyalty, increases repeat business, reduces customer acquisition costs, and contributes to stable long-term revenue generation.

Positive Impacts

• Customers and business partners benefit from products and solutions that better address their needs through collaborative product development, while gaining access to more sustainable and value-added products.
• Continuous communication and collaboration strengthen trust, foster long-term partnerships, and promote knowledge sharing, contributing to a resilient business ecosystem and sustainable mutual growth.

Positive Impacts

• Transparent management and disclosure of biodiversity-related information enhance corporate credibility and support ESG-focused investors in making informed investment decisions.
• Biodiversity and sustainable sourcing assessments and certifications strengthen the Company's competitiveness, expand business opportunities, and improve preparedness for emerging biodiversity-related regulations and market expectations.

Negative Impacts

• Failure to comply with current or emerging biodiversity-related regulations and requirements may increase operational costs, expose the Company to regulatory and compliance risks, and potentially limit market access.

Positive Impacts

• Biodiversity-conscious operations contribute to the conservation of natural resources, promote sustainable supply chain management, and create shared value for society.
• Transparent management and disclosure of biodiversity performance enhance the confidence of investors, customers, and business partners while supporting biodiversity conservation, responsible sourcing, and long-term environmental sustainability.

Negative Impacts

• Inadequate biodiversity management and disclosure may undermine the confidence of investors, customers, and business partners, affecting investment and business decisions. It may also contribute to adverse impacts on ecosystems, natural resources, and local communities, while increasing stakeholder concerns regarding the Company's environmental performance

Positive Impacts

• Transparent and ongoing communication regarding environmental impacts strengthens community trust, reduces conflicts, and supports the Company's social license to operate and long-term business continuity.

Negative Impacts

• Inadequate or non-transparent communication on environmental impacts may lead to conflicts with local communities, undermining the Company's reputation, stakeholder trust, and operational continuity.

Positive Impacts

• Communities and other stakeholders receive accurate and transparent environmental information and are able to participate in monitoring environmental issues, allowing stakeholders to make meaningful decisions

Negative Impacts

• Insufficient environmental communication may increase concerns over pollution-related impacts, reduce community trust, and lead to complaints, disputes, or conflicts between the Company and its stakeholders.

Positive Impacts

• Respecting and protecting human rights throughout the value chain helps reduce legal and operational risks while strengthening the Company's long-term sustainability.
• Effective human rights management enhances the confidence of customers, investors, and business partners, supporting the Company's competitiveness and long-term business growth.

Negative Impacts

• Human rights violations may result in legal or trade sanctions, reputational damage, and a loss of trust among customers, investors, and business partners.
• The loss of key customers or restricted market access due to human rights-related issues may have a significant adverse impact on the Company's revenue and overall business performance.

Positive Impacts

• Adhering to internationally recognized human rights and labor standards enhances the confidence of customers, investors, business partners, and other stakeholders.
• Achieving recognized standards, such as SMETA, and integrating climate justice considerations into business practices strengthen market access and create opportunities for collaboration with global customers and business partners.

Negative Impacts

• Failure to comply with human rights and labor standards or to meet stakeholder expectations may undermine the confidence of customers and business partners, limiting business opportunities and access to international markets.

Positive Impacts

• Effective cybersecurity and data protection management reduces the risks of cyberattacks and data breaches, strengthens customer and business partner trust, and supports business continuity.
• Robust cybersecurity governance and internal controls help minimize system recovery costs, business disruptions, and legal risks, while improving data management efficiency and ensuring compliance with applicable regulations.

Negative Impacts

• Cybersecurity incidents or data breaches may result in financial losses, system recovery costs, regulatory penalties, and operational disruptions.
• The complexity of cybersecurity investments and governance may increase operational costs and reduce organizational agility. In addition, insufficient employee awareness or adaptation to evolving cyber threats may increase internal cybersecurity risks.

Positive Impacts

• Protecting personal and organizational data through robust security measures enhances the confidence of customers, business partners, investors, and other stakeholders that information is managed securely and in compliance with applicable data protection regulations.
• Strong data governance and responsible AI governance help mitigate privacy and data protection risks while fostering stakeholder trust in the Company's use of data and digital technologies.

Negative Impacts

• Cybersecurity incidents or data breaches may compromise the privacy and security of customers', business partners', and other stakeholders' information, reducing trust and confidence in the Company.
• Inadequate data governance or irresponsible use of AI may raise concerns regarding privacy, ethics, and data protection, adversely affecting stakeholder relationships and trust.