Materiality Assessment and the Definition of Impact on Stakeholders

Materiality Assessment

P.S.P. Specialties Public Company Limited (“the Company”) places importance on assessing and prioritizing sustainability issues (Material Topics) as a key mechanism for defining the organization’s ESG direction, strategy, targets, and operational approaches in alignment with its business context, stakeholder expectations, as well as risks and opportunities that may affect long-term sustainable growth.

The Company conducts its materiality assessment in accordance with the GRI Standards 2021, particularly GRI 3: Material Topics, which focuses on the organization’s impacts on the economy, environment, and society, including human rights (impact materiality), together with the degree of influence each issue has on stakeholder and investor decision-making. This ensures that the assessment reflects both sustainability impact and strategic risk dimensions in a comprehensive manner, consistent with the FTSE Russell approach that emphasizes ESG issues material to business performance and value creation.

PSP Materiality Determination Process

In 2023, PSP began identifying and prioritizing material sustainability topics as the first step, and this process is conducted annually in accordance with the GRI 3: Material Topics 2021 guideline as part of alignment with the GRI Standards.

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Note:

The process in steps 3 and 4 is an iterative and continuous process. Step 4 is the determination of material topics for reporting based on the assessment results.
Material Topics 2021 (Figure 2): Guidelines for Defining Report Content, PSP

Step 1 Understand the organization's context

A high-level overview of business activities and business relationships (including suppliers and the upstream and downstream value chain) is prepared. Stakeholder analysis and the sustainability context in which the organization operates are conducted by considering the Company’s vision and mission, business model, industry characteristics, geographical location, as well as economic, environmental, and human rights challenges. This also includes applicable laws and international frameworks such as the ILO, OECD Guidelines, UNGPs, and the Paris Agreement. This step establishes a foundational dataset for identifying impacts and relevant stakeholder groups comprehensively, including indirect stakeholders such as supply chain workers and distant communities with no direct relationship to the Company.

Primary Activities — 5 Areas

Sourcing and selecting suppliers of raw materials and packaging with quality standards; managing domestic and international raw material deliveries; procurement planning; utilization of customs tax incentives; securing financing, equipment, and production technologies; product research and development; as well as transportation, storage, and issuance of raw materials.

Production planning and execution; product packaging; quality and standard inspection; machinery maintenance and installation; process improvement and optimization; manufacturing products according to customer requirements; and compliance with laws and EIA requirements.

Safe product storage, warehouse management, and transportation management of finished goods.

Providing product information; pricing management; customer relationship management; acquiring new customers; presenting products and services; and product registration to meet customer requirements.

Product warranty management; complaint handling; customer satisfaction evaluation; and providing consultation and problem-solving for products and services.

Support activities

The functions supporting all primary activities include

Accounting and Finance

Procurement

Human Resource Management

Good Corporate Governance

Risk Management

Occupational Health and Safety Management

Information Technology (IT)

Internal Audit, and Corporate Standards Control

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Step 2: Identification of Actual and Potential Impacts

Identify the organization’s impacts on the economy, environment, and people, including both positive and negative impacts in the short and long term, across all business activities and relationships. A variety of sources are used, such as impact assessments, legal compliance reviews, enterprise risk management (ERM) systems, grievance mechanisms, and consultations with stakeholders and experts. If resources are limited, negative impacts should be prioritized first. The Company analyzes the level of its involvement in negative impacts in three categories: cause, contribute, and directly linked through business relationships. These classifications determine the organization’s responsibilities in managing and remediating such impacts.

Step 3: Assessing the Significance of Impacts

Assess the significance of each impact in order to prioritize them, using both quantitative and qualitative analysis. For negative impacts, significance is determined based on “severity,” which includes scale, scope, and irremediable character, combined with the “likelihood” of occurrence for potential impacts. For positive impacts, significance is assessed based on the scale and scope of benefits. For human rights impacts, severity is always given greater weight than likelihood, regardless of probability. The assessment must compare impacts across the organization to determine relative materiality. This step may be integrated with the Enterprise Risk Management (ERM) system, provided that the system evaluates external impacts alongside risks to the organization.

Step 4: Prioritizing the Most Significant Impacts for Reporting

Rank impacts from highest to lowest significance and group related impacts into “Material Topics.” A defined threshold is established to determine which topics are considered material for reporting purposes. The Company then reviews alignment with relevant issues in the GRI Sector Standards, as well as feedback from experts and data users, before presenting the results for approval by the Board of Directors or senior management.

The results of the materiality assessment are used as a baseline for defining policies, targets, indicators, and operational plans for each business unit. They also serve as a framework for sustainability reporting and stakeholder communication. This process is reviewed annually and presented to the Board of Directors and relevant executive management for approval, ensuring that the identified material topics continue to reflect evolving business conditions and external contexts.

PSP Materiality Matrix

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Corporate Governance and Business Ethics
Anti-Corruption
Risk Management & Business Continuity Management
Conflict and Security
Business Development and Resilience
Innovation
Process Improvement
Tax Management
Procurement Practices & Supplier management
Customer and Product Stewardship

Occupational Health and Safety
Employee Management
Employee Development
Corporate Philanthropy

GHG emissions
Energy Management
Water Management and Emissions
Waste Management
Biodiversity
ESG Compliance

Impacts on Stakeholders

P.S.P. Specialties Public Company Limited (“the Company”) places importance on stakeholder engagement as a key mechanism for obtaining insights into perspectives, expectations, concerns, and suggestions from all parties related to its business operations. The Company recognizes that maintaining strong relationships and continuous communication with each stakeholder group is essential to supporting risk management, business strategy development, operational enhancement, and long-term sustainable growth.

Accordingly, the Company has established a systematic stakeholder management framework to identify, categorize, and prioritize groups that are directly and indirectly associated with its business operations across the entire value chain, including upstream, midstream, and downstream activities. This framework is linked to potential risks, impacts, and opportunities across economic, social, environmental, and governance dimensions.

In 2025, the Company continues to classify its stakeholders into nine main groups: employees, customers, suppliers, communities, shareholders, creditors, government agencies and state enterprises, media, and business competitors. These groups are considered materially relevant to the Company’s operations across all dimensions.

To ensure effective engagement, the Company has designed communication channels and participation mechanisms tailored to each stakeholder group, including direct meetings, surveys, executive–employee meetings, shareholder meetings, analyst meetings, customer and community engagement activities, online communication platforms, emails, and various complaint and feedback channels. These enable the Company to capture comprehensive feedback from all stakeholders.

The information and feedback received are analyzed and used as inputs for management decision-making, including the development of corporate strategy, product and service improvement, operational efficiency enhancement, and the determination of key sustainability issues aligned with stakeholder expectations and the Company’s growth direction.

Stakeholder Engagement Approach of the Company

Engagement Channels

Executive–Employee Town Hall meetings
Monthly employee meetings
Communication via online platforms, intranet, and email
Welfare Committee meetings
Annual employee engagement survey
Establishment of grievance and complaint channels

Stakeholder Issues

Business direction
Company performance results
Business ethics
Employee quality of life
Fair compensation, welfare, and benefits
Good working environment
Employee capability development
Equal treatment and non-discrimination