PTT

PTT has announced its intention to spend 32% of its total capital expenditure (CapEx) between 2021 and 2030 on low-carbon solutions. This is significantly lower than the sectoral expectation which indicates that companies should invest 77% of CapEX in low-carbon projects to align with a 1.5°C scenario. To align with its decarbonisation pathway, PTT will need to financially commit to the development of low-carbon technologies. PTT uses an internal shadow carbon price of USD 20 per ton of carbon dioxide (tCO2) for its new investment decisions. This is misaligned with the International Energy Agency (IEA) Net Zero by 2050 aligned pricing. PTT would also benefit from disclosing the resilience of its existing assets to different carbon prices.

PTT has implemented board level oversight of climate change issues. Although the CEO does not appear to have relevant climate change-related experience, PTT’s Chairman of the corporate governance and sustainability committee holds a PhD in environmental technology and management. He is also the director of the Thailand Greenhouse Gas Management Organisation and the chairman of the board of the Forest Industry Organisation. This valuable climate change insight presents PTT with the opportunity to develop resilient low-carbon business models outside of its current oil and gas focus.

PTT is aiming to increase in its renewables capacity to 12 gigawatts (GW) by 2030 and is investing in green hydrogen and electric vehicle charging. The PTT Innovation Institute is planning the development of a hydrogen business port and in collaboration with others, PTT has launched a pilot hydrogen refueling station for fuel cell electric vehicles (EV). PTT has aims to produce 50,000 four-wheel EV’s per year by 2024. PTT is also planning the development of a carbon capture utilization and storage (CCUS) network. Although not yet profitable, with sufficient investment these low-carbon businesses present an opportunity for PTT to move away from its reliance on oil and gas.

PTT is aiming to reduce its scope 1 and 2 emissions by 15% by 2030 and 100% by 2050. PTT has no scope 3 emissions target. However, these targets could not be scored due to a lack of quantified offsets. PTT plans on increasing its renewable energy capacity to 12 GW by 2030 from 2.7 GW in 2021. PTT has recently outlined its intention to spend 32% of its total capital expenditure between 2021 and 2030 on its low-carbon portfolio. However, this is far from the 77% needed to align with a 1.5°C scenario.

PTT has developed a strategy and its 3P decarbonisation pathways, with the aim of increasing the company’s low-carbon product portfolio and defining new low-carbon businesses. However, PTT’s plan contains little evidence of financial planning and few short- and long-term actions set out to achieve its targets. PTT also has no scope 3 emissions reduction target. Although PTT has recently divested its coal assets, its strategy does not suggest it is planning on reducing its oil production.

PTT is expanding its gas production and has initiated plans to develop future gas pipelines. PTT is likely to be heavily reliant on gas as a transition fuel, suggesting LNG will be a key alternative in its energy transition. In 2022, PTT’s capital expenditure was USD 8 billion, but the company has not disclosed how much, if any, went to low-carbon technologies. Although PTT is aiming to increase its renewable energy capacity by 2030, the group’s current capacity is low. In 2022, PTT’s Innovation Institute developed a strategy to build a green hydrogen business port.

Since the last ACT assessment, PTT has increased its renewable generation target from 8 GW to 12 GW by 2030. In 2021, PTT launched a blockchain renewable electricity trading system (RENEX) and signed an agreement to develop and invest in green hydrogen projects. However, there is limited evidence of current growth as the company still does not report any revenue from low-carbon products. A positive step for PTT’s transition, was the company’s recent divestment of 100% of its coal investments.

PTT has not committed to stop oil and gas exploration and expansion. Although PTT discloses its category 11 scope 3 emissions, it has not set a target for these emissions. Yet, in 2019 PTT’s scope 3 emissions accounted for 80% of its total scope 1, 2 and 3 emissions. Between 2017 and 2021, PTT’s scope 1, 2 and 3 emissions intensity remained relatively static. This is not in-line with the over 4% reduction it would need to align with its 1.5°C decarbonisation pathway.

The company publicly discloses a commitment to engaging in social dialogue with workers and unions. However, no relevant disclosure was found regarding the categories of stakeholders it engages with on a just transition. Nor was there any evidence to show the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking just transition planning to mitigate the social impacts of the low-carbon transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

No public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. No public commitment by the company was found stating its intention to re-skill and up-skill workers displaced by the transition to a low-carbon economy. Additionally, no evidence was found that the company re-skills and up-skills workers in a way that ensures gender balance and inclusion of vulnerable groups.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

The company commits to respecting human rights and the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. Furthermore, the company discloses a human rights due diligence process that includes the identification and assessment of salient human rights risks, such as the security and occupational health and safety, labour rights, supplier working conditions, communities’ quality of life, and indigenous rights. The company takes action to mitigate these risks in its own operations and supply chain, and it engages with affected stakeholders. Additionally, the company has a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. The company also discloses that it considers the living wage as the minimum baseline in determining remuneration. No evidence was found that the company discloses the proportion of its direct workforce covered by collective bargaining agreements and the company’s required working hours. The company discloses the gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. No evidence was found that the company commits to gender equality and women’s empowerment.

The company commits to protecting personal data. However, no evidence was found of a privacy statement regarding the collection, sharing and access to personal data. The company discloses its global tax strategy and the corporate income tax paid for each relevant jurisdiction. The company does have a policy prohibiting bribery and corruption, and it includes corresponding clauses in its contracts with business relationships. While the company specifies that it does not make political contributions, no evidence was found that it has a lobbying and political engagement policy. No relevant disclosure was found of the company’s expenditure on lobbying activities.