68 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT The prolonged COVID-19 pandemic severely impacted Thai AirAsia from late March 2020 across much of 2022. The outbreak affected every sector of the economy, triggering economic volatility and posing persistent challenges. In response to constantly changing COVID-19 travel rules, Thai AirAsia sought to constantly adapt and manage factors within its control to the best of its ability. In particular, the Company implemented comprehensive health measures to minimise the risk of COVID-19 transmission in order to safeguard guests and employees. As the pandemic eased into endemic status, Thai AirAsia returned to full-scale service starting October 2022. As Thai AirAsia continues to advance its sustainability agenda, the Company maintains its listing on the Sustainable Index of the Stock Exchange of Thailand for the fourth consecutive year as the only airline in the industry to be listed. Reporting Guidelines About this Report Thai AirAsia has been publishing its sustainability report annually since 2018. Each year, we expand our reporting coverage and strengthen our disclosures in material sustainability areas that support the achievement of the United Nations’ Sustainable Development Goals (SDGs). This report covers the period between 1 January 2022 and 31 December 2022 and is prepared in accordance with the following reporting standards: • Global Reporting Initiative Standards (GRI Standards) (Core option level) • The Stock Exchange of Thailand Sustainability Reporting Guide for Listed Company (Core Option Level) • The Task Force on Climate-related Financial Disclosures (TCFD) Scope and Boundary The scope of coverage of this report covers Thai AirAsia operations in the year 2022. The report excludes the information from any business that Asia Aviation PCL has less than 50% ownership, either directly or indirectly, or where it does not have management control. Report Content and Validation The core content and critical information of this report have been reviewed by the Board of Directors and respective heads of departments to validate accuracy, pertinence to the material sustainability issues being addressed and relevance to stakeholders. While an external agency was not employed for the validation of this report, our financial data is verified by a certified public accountant while our carbon emissions data is verified by a third party verification company accredited by the Civil Aviation Authority of Thailand. The latter is submitted annually to the civil aviation authorities in compliance with requirements under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) by the International Civil Aviation Organization (ICAO). Material issues were reviewed and updated by the Company to reflect on the business development and global trends of 2022 in the following areas: (1) The content of this report encompasses 12 material areas, an increase from the 11 areas identified in our previous report. The new addition is in “Diversity and Inclusion” disclosures. (2) Key material issues to sustainability that are highly significant to stakeholders and the business, include; Customer Relationship and Operational Performance, Occupational Health and Safety, Corporate Governance and Conduct, Technology, Innovation and Information Security and Risk and Crisis Management. Contact us: Thai AirAsia welcomes recommendations and feedback to our report. These may be conveyed to the Sustainability Department andCorporate Communications Department at Email: email@example.com Address: Don Mueang International Airport, 3rd Floor, Central Office Building, Room No. 3200 Vibhavadee Rangsit Rd., Don Mueang Bangkok, 10210 Telephone: (66) 2562-5700 SUSTAINABLE BUSINESS DEVELOPMENT (GRI 2-1, 2-2, 2-3, 2-9, 2-14, 2-22, 2-23, 2-24)
69 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT Sustainability Management Policy and Sustainability Commitment (GRI 2-22, 2-23, 2-24, 2-27) Thai AirAsia is committed to providing guests with excellent travel services while enhancing our value chain through responsible business practices. Through observance of our 3G (Good/Green/Growth) sustainability strategy, we address our stakeholders’ expectations in the three pillars of economy, society and the environment. We believe that the 3G approach can be applied to every action to ensure that we consistently deliver on our commitment to sustainable development. In 2022, we aligned Thai AirAsia’s Sustainability Policy with the Capital A group aspirations and commitments. • Meet and uphold all environmental standards issued by the International Civil Aviation Organization and applicable civil aviation authorities. • Align ourselves with the International Civil Aviation Organization’s Long TermAspirational Goal to reach net zero by 2050. • Invest in the most efficient fleet and continue to innovate operational efficiencies that reduce fuel consumption and CO2 emissions. • Explore further carbon reduction opportunities- especially through the utilisation of sustainable aviation fuels and carbon offsets. • Conserve natural resources by optimising resource consumption, especially fuel, electricity and water. • Manage waste under the 3R principles to Reduce, Reuse and Recycle. Sustainability Policy Since its establishment as Capital A (previously known as AirAsia Group), the Company has remained at the forefront of innovation in the aviation and travel industries. The Company has now expanded into new digital businesses, acknowledging the importance of flexibility in different dimensions. The Company is committed to rebuilding for the future by minimising our environmental footprint, securing the integrity of our systems and serving our communities. The Company continues investing in our talent and creating the best conditions for them to thrive. Towards meeting its commitment, the Company acts according to the following policies: Environment
70 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT • Continuously improve on our safety practices and provide a safe and healthy work environment for our employees. • Nurture a diverse and inclusive culture that does not discriminate on grounds of gender, race, ethnicity, age, abilities, sexual orientation or any other condition. • Continue to be an industry leader that increases female participation in all roles including Science, Technology, Engineering and Mathematics (STEM). • Maintain an inclusive work environment that emphasises fair working conditions, safety, health and work-life balance. • Ensure the basic human rights of our employees, business partners and other parties are respected, while taking a zero tolerance stance towards exploitation of child labour and forced labour. • Contribute to ASEANCommunity-building aspirations by empowering entrepreneurship and building resilience amongst associated communities. • Support the growth of responsible tourism in ASEAN to conserve natural ecosystems and heritage sites. • Meet our sustainability ambitions as detailed in Capital A’s Sustainability Redbook. • Establish a sustainability framework to meet the aspirations of the United Nations Sustainable Development Goals (SDGs). • Conduct our business practices with transparency, integrity and robust corporate governance. • Continuously review and update policies and processes to maintain the highest standards of compliance across all key metrics. • Manage risk and opportunities of each line of business, including environmental, social, and governance (ESG) aspects. • Instil a culture of sustainability in our workplace and recognise exemplary conduct. • Communicate our sustainability values, approach and priorities to all stakeholders, including our investors, business partners, suppliers and guests. • Practise responsible sourcing and favour business partners that offer a value proposition that is consistent with our ESG priorities. This policy is periodically reviewed to ensure its suitability and adequacy. Social Governance
71 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT Sustainable Business Vision: We are committed to being an airline that engages in sustainable business practices and will apply the standards of our industry to hone our competitive advantage while upholding the sustainability indicators recognized on the world stage and by the stock market. We aspire to list on a global sustainability index by 2024. Sustainable Business Mission: Sustainability is to be instilled as a part of our corporate culture. We will: • Understand how sustainability affects our business • Be responsible to society, the economy and the environment and integrating factors for sustainability into our business decisions • Innovate to surpass requirements and return value from sustainability to our business
72 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT SUSTAINABILITY STRATEGIES GOOD Thai AirAsia operates with adherence to the principles of good governance, conducts its business with strict compliance to laws, rules, regulations, contracts and agreements, with transparency and accountability, with respect towards human rights, treating labourers with fairness and justice, fostering a good organisational culture, investing in developing personnel both in terms of skills and ethics, creating growth opportunities for communities surrounding the tourism industry and supporting sustainable growth with the goal of becoming an organisation that is accepted and trusted by society and its stakeholders. GREEN Thai AirAsia is dedicated to effectively managing its resources and the environment, seeking to safeguard the environment from impacts generated throughout its supply chain. The Company targets and acts to mitigate its effect on the environment in all aspects at all times, so that it may grow with harmony and true sustainability while also campaigning for travel that is responsible to the environment. GROWTH Thai AirAsia is dedicated to promoting sustainable social growth in all dimensions, starting with the growth of its own business to support social reinforcement. Thai AirAsia builds careers with stable income, creates opportunities and sources innovations that allow for safe and convenient travel alongside efficiently managing capital, communicates with stakeholders to ensure understanding and shares its knowledge and innovations by working with other organisations towards social sustainability, progress and positive change. The strategies are in line with the Company’s vision of “Being the leading sustainable travel technology company in Asia providing services with value greater than their cost” and mission to create a globally recognised, sustainable Asean brand focused on adding value to the economy, society and environment.
73 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT Thai AirAsia Corporate GovernanceandSustainability Committee Thai AirAsia established its Corporate Governance and Sustainability Committee to oversee sustainability governance, while Thai Airasia Sustainability Working Group, under supervision of Corporate Governance and Sustainability Committee coordinates actions by multiple departments across the Company. The Thai Airasia Sustainability Working Group comprises heads of each department, who are tasked with integrating sustainability policies that are material to the Company’s business into their plans, strategies and operations and setting measurable targets. Sustainability Management Structure (GRI 2-9, 2-14) TAA Board of Directors Risk Management Committee Audit Committee Sustainability Working Group TAA Sustainability Working Group Regional HoDs TAA HoDs Corporate Governance and Sustainability Committee Nomination & Remuneration Committee (NRC) Safety Review Board The scope and authority of the Corporate Governance and Sustainability Committee is as follows: 1. Review, devise appropriate strategies, policies, targets, practices and budgets for sustainability endeavours that take in account of stakeholder’s opinions and impacts. Refer relevant sustainability initiatives to the Company’s Board of Directors for approval. 2. Determine sustainability material issues that are essential to business operations so that stakeholder concerns are addressed. 3. Monitor and evaluate the implementation of sustainability strategies and policies. Advise and support sustainability initiatives that aim towards achieving set targets. 4. Report key sustainability updates to the Board of Directors for evaluation and approval. The Thai Airasia Sustainability Working Group will support the initiatives by meeting every quarter to review implementation and progress before presenting reports to the Thai AirAsia Corporate Governance and Sustainability Committee. Thai AirAsia Corporate Governance and Sustainability Committee hold a meeting twice a year. The Company holds an annual meeting with the Board of Directors to review the sustainability performance of the past year including reviewing the updated Company's sustainability policy and strategy. The policy and direction will be aligned with the direction from Capital A.
74 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT 2022 SUSTAINABILITY HIGHLIGHTS Good Green Growth No. of Flight operations 65,495 On-Time Performance 92% Net Promoter Score (NPS) 55% The Company measures its service efficiency using the Net Promoter Score, targeting a score of 50%. NPS in 2022 was 55%. Climate change 3gCO2/RPK Achieved Reducing the Carbon Intensity Ratio to 3gCO2/RPK per year GreenhouseGas emissions 806,643 tonnes CO 2 Scope 1, 2, and 3 Emissions No. Work-Related Diseases 0 No Thai AirAsia employees or contractors experienced work-related disease in 2022 Gender Diversity and Equality 36.3% In 2022, 36.3% of employees were female, of which 15.18% were Manager or HOD level. Disputes with Communities/Society 0 Zero disputes with communities or society Employee Training 24 Hours/Person/Year Average 24 hours of specialised training per employee per year Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) Cooperated with Civil Aviation Authority of Thailand (CAAT) for 4th year Thai AirAsia has cooperated with the Civil Aviation Authority of Thailand to participate in CORSIA program since 2019 Contactless self check-in Saved 3,472,821 Sheets of Paper Saved 3,472,821 sheets which is 1,041,846.30 THB worth of paper that would have been printed with seating charts Vibhavadi Zero Waste Participated for 4th year Continuously Participating in Vibhavadi Zero Waste. This year, the Company increased its Recycle Rate of Non- Hazardous Waste from 88.1% in 2021 to 100% at its Don Mueang Station. Reduce Water consumption on Flight and consume water only 53.16 per flight The Company targeted no more than 60 litres of water consumed per flight. This year, the Company was able to achieve its target, averaging 53.16 litres of water consumed per flight. International Organization for Standardization (ISO) ISO 9001:2015 The Company is ISO 9001:2015-Quality Management Systems certified *Data and definitions of on-time performance reference Cirium On-Time Performance Review 2022 Number of domestic and international flights conducted by Thai AirAsia in 2022 Most on-time airline in Asia-Pacific* based on on- t ime per formance. Company target was 90% No. Work-Related Fatalities 0 No work-related fatalities among Thai AirAsia employees or contractors in 2022 Non-Hazardous Waste Recycling at Don Mueang Station Green Operating Procedure 2,237 tonnes of fuel savings Company targeted Recycle Rate of over 80% of total Non-Hazardous Waste. Company recycled 100% of Non-Hazardous Waste from Don Mueang Station, achieving zero waste to landfills. 100% Thai AirAsia’s fuel efficiency programme (Green Operation) delivered 2,237 tonnes of fuel savings which converts to more than of 7,000 tonnes of CO2 emissions avoided or USD 1.8 million saving
75 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT COVID-19 RESPONSE The Company reviewed COVID-19 impacts in 2022 and additional views from stakeholders in meetings with its Sustainability Committee to identify responses and sustainability issues to be addressed. Evaluation of Continued COVID-19 Pandemic Impacts on Sustainability. KEY STAKEHOLDERS COVID-19 IMPACT ACTION MATERIALITY MAPPING Business Partner Communities and Environment Digitisation for new normal Workforce management to continue airworthiness during COVID-19 disruption Resource Management during non-operational period • Strengthen cyber security system and upgrade Chatbot capability for increased utilisation • Application of remote audit to overcome travel limitations in certain areas • Spilt team for operational workforce • Work from home for non-operational; Morning Health check • Morning health check online form • Operational team optimise usage of energy • Long-term parking of non-operated aircraft to reduce resources and energy • Technology, Innovation and Information Security • Sustainable Supply Chain management • Health and Safety • Climate Strategy • Waste management
76 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT Allstars Governance Agencies Management of Human Resources in accordance with Occupational Safety and Health Standards and the well-being of employees • Consideration towards relaxing international air travel requirements • Consideration towards national reopening policies and measures • Consideration towards relaxation of health measures for air travel • ATK testing 12 hours prior to operation • Second Job offering for employees • Vaccines are provided to staff • Additional training to prepare staff for recovery of air travel • Working closely with government entities on reopening the nation and lifting of strict travel requirements, use of vaccination certificates to allow for unimpeded international travel • Prompt cancellation of government required passenger spacing on flights • Prompt government allowance of in-flight meal and beverage service • Health and Safety • Human Rights • Human Capital Development • Cancellation of Test & Go • Cancellation of middle seat blocks during flights • Vaccine certification for unimpeded international travel KEY STAKEHOLDERS COVID-19 IMPACT ACTION MATERIALITY MAPPING
77 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT Thai AirAsia regularly engages with its stakeholders to understand their perceptions, attitudes and expectations using surveys and feedback from relevant agencies. We value our stakeholders’ feedback and their perspectives are taken into consideration for the organisation’s growth strategies to create long term shared value. Our stakeholders are divided into 9 main groups, namely, Board of Directors, government agencies, customers (passengers), communities, media, investors, Allstars (employees), financial institutes and business partners. Role of the Board of Directors in Stakeholder Engagement On top of setting general policies, strategies and operational frameworks within the Company, the Board of Directors also considers external views and data to ensure the direction of Thai AirAsia is perceived as transparent, honest and beneficial to both itself and its stakeholders. For efficient management, transparency, accountability and responsiveness to change, directors of the Board: • Practise good governance, effectively manage risks and comply with the requirements of regulatory bodies, relevant laws, the Board’s own objectives, regulations and the conclusions of shareholder meetings as well as monitor operations to ensure progress according to set plans and policies. • Discuss and approve essential key performance indicators for the dimensions of society, environment and financial efficiency along with related policies. The Board of Directors and Audit Committee meet at least four times a year, engage in sub-committee meetings as necessary and engage in shareholder meetings at least once per year for transparent disclosure of information to shareholders and major stakeholders. Investors Communities/Society Government Agencies Business Partners Financial Institutions Employees Media Customers (Passengers) Thai AirAsia STAKEHOLDER ENGAGEMENT (GRI 2-29)
78 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT Prioritisation of Stakeholders The Company prioritises stakeholders based on their influence and interests as follows: Interest Stakeholder Prioritisation Influence High High Customer (Passengers) Board of Directors Allstars Investors Government Agencies Financial Institutions Media Partners Communities and Environment
79 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT Stakeholder Engagement Customers (Passengers) • • • Safe and on-time travel Products and services that meet lifestyle demand The creation of shared value through the value chain • • • • • • Safe travel On-time flights Seamless, convenient travel experiences Products and services that adapt to changing demands Quality, legal and safe products Novel and attractive products • • • • Establishment of workgroups to respond to passenger demands directly Take remedial action in response to customer complaints to avoid repeated issues and losses for both parties Regular application of Customer Satisfaction Surveys Improved products and services that add value throughout the value chain • • • Quarterly Customer Satisfaction Surveys Complaints accepted 24/7 via employees, Live Chat or Chatbots, AirAsia website, Super App mobile application and social media channels Customer meetings at AirAsia Sales Offices, AirAsia Travel & Service Centres during daily operating hours Allstars (Employees) • • Necessary training for duties Decrease in workplace incidents • • • Occupational Health and Safety Salary and benefits A fair and transparent work environment • • • • Provision of channels for employees to communicate their opinions and request directly to management e.g. Santisuk’s Post Box, AskPAC, chatbot, email Occupational Health and Safety management Fair salary and benefits management Constant employee development • • • • • Communication via internal electronic channels including email, Google Workspace Quarterly employee performance review Weekly management discussions Quarterly operations meetings Weekly Coffee Talk between CEO and heads of departments Stakeholder Stakeholder Benefits Expectations/Interests Response to Expectations/Interests Channel and Frequency of Engagement
80 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT Investors • • • Accurately and timely access to information Upholding of investor rights as per legal regulations Confidence in the Company and investment opportunities in Company stocks and bonds • • • Business competitive advantage and return on investment Risk management Good Corporate Governance and transparent disclosure • • Transparent disclosure of information in accordance with Thai and international standards Opportunity for shareholders to express their opinions including discussing Company performance • • • • • Quarterly high-level executive operations summary Regular domestic and foreign investor meetings Annual shareholder meeting Investor visits, once a year as appropriate Timely disclosure of information on Company website Financial Institutions • Accomplishment of business targets within acceptable risk parameters • • • • Company’s competitive advantage Risk management Good Corporate Governance and transparent disclosure Financial policies appropriate to the business environment and Company strategies • • Operational returns disclosure according to international standards Hearing for recommendations and opinions on business processes • • • • Meetings, discussions and conferences on returns and project outcomes, twice a year Communication on different transactions throughout the year Monthly notifications and reports on transactions Quarterly seminars and conferences on economic, financial market and capital market developments Stakeholder Stakeholder Benefits Expectations/Interests Response to Expectations/Interests Channel and Frequency of Engagement
81 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT Government Agencies • • • Good relations Public Travel Safety measures Alignment of objectives and directions • • • Good Corporate Governance and transparent disclosure Cooperation and collaboration between government and private sectors Compliance with government laws, regulations and requirements • Cooperation and collaboration, compliance with government policies, orders, regulations and laws such as fare rates and safety measures • • • • • • • • Discussions with government agencies and regulatory bodies Monthly reports to government agencies Regular participation in government activities and programs Work closely within Thailand’s aviation development network (NTCAD) Regular support for domestic and international tourism policies from the Tourism Authority of Thailand Participation in activities of local agencies and organisations that promote Thai culture Monthly compliance with government prescribed COVID-19 prevention measures Applied for government assistance to airlines, to reduce key capital costs to support business continuity amid the COVID-19 pandemic Stakeholder Stakeholder Benefits Expectations/Interests Response to Expectations/Interests Channel and Frequency of Engagement
82 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT Media • • • Official updates on news beneficial to the public Exchanges with employees on Company vision and perspectives Foster good relations • • • Transparent and accurate Company information Timely and speedy news responses, especially in crisis situations Company visions and perspectives on the industry as a leader in the low-cost carrier industry • • • • Briefing on current circumstances at least once a quarter Bolstering confidence towards Company’s stability Establishment of a news community including a LINE group for the Corporate Communications Department and media groups Foster a Corporate Communications Department culture based on managing communication, ready contact and the presentation of timely and accurate updates, especially in crisis situations • • • • • Dispatch Company press releases via Email and LINE Group at least two times a week Press conferences each quarter Annual meeting with the press Regular participation in seminars, forums, etc. organised by media establishments and direct and indirect sponsorship of media activities Communication with media via online channels Business Partners • • Confidence in business operations Employment of innovations for the development of products and management • • • • • • Honest operations Enhanced competitiveness Future direction of business Collaboration and continuous support for product quality Transparent Procurement, and business partner evaluation Delivery of goods that meet standards and legal requirements • • • • • Extensions on partner credit terms Efficient and standards meeting operations, meeting of stakeholder expectations Participation in programs for the enhancement of safety with engineering & maintenance business partners Effectiveness and in line with stakeholders’ expectation Compliance with government requirements for food safety standards • • • • • Meetings, workshops, observational visits Conferences with aircraft and parts manufacturers to receive the latest updates Representatives of aircraft manufacturers to visit Thai AirAsia 24-hour contact channel between Thai AirAsia engineering team and aircraft manufacturers Operation and performance reports including annual business partner evaluation Stakeholder Stakeholder Benefits Expectations/Interests Response to Expectations/Interests Channel and Frequency of Engagement
83 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT Community, Society, Environment • • • • Minimisation of environmental impact due to business operations Compliance with environmental laws Promotion of responsible tourism awareness Support for activities that create shared value throughout the value chain • • • • Impact on communities, society and the environment resulting from the Company’s operations Transparent and accountable operations Cooperation with government agencies Activities that promote and build participation in driving sustainable tourism • • • • Adherence to Company policies for the minimisation of social and environmental impact Transparent communication and input from employees and stakeholders opinions Public seminar to educate on sustainability knowledge e.g. Sustain Me Talk with Chiang Mai University Open Houses and tours at AirAsia Academy • • • Airline services integrity Public forums at least once a year Tours and open houses at least once a month Stakeholder Stakeholder Benefits Expectations/Interests Response to Expectations/Interests Channel and Frequency of Engagement
84 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT THAI AIRASIA MATERIALITY ASSESSMENT 2022 (GRI 3-1, 3-2) At Thai AirAsia, it is important to us that we align our sustainability journey with our stakeholders’ evolving priorities to create meaningful long-term value and impact through our business. In 2022, we conducted a materiality survey with our stakeholders to identify our economic, environmental, and social (EES) challenges and priorities. As our business grows, we welcome and engage with more stakeholders that contribute to the success of our business. This year, we expanded our materiality survey to include both internal and external stakeholders for a better understanding of their expectations and priorities. Material topics were identified in 2021 and reviewed this year to ensure it remains relevant to our stakeholders’ priorities and business. Upon assessment, the material topics reflect our stakeholders’ and the business’ interests where the only amendment is the addition of “Diversity and Inclusion” as a new material topic. In line with global trends, we introduced “Diversity and Inclusion” as a standalone topic to highlight Thai AirAsia’s commitment in embracing a safe, inclusive and supportive environment where the talents and strengths of people are valued regardless of identity. We aim to conduct a more comprehensive assessment next year to ensure we remain on top of global and industry trends, meet our stakeholders’ priorities, and align with the Capital A Group.
85 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT We identified key material topics and categorised them according to the EES aspects. The material topics are based on the analysis of current global and industry trends, a review of global frameworks and a closer examination of the Group’s priorities. Next, we engaged our internal and external stakeholders through an online survey to gather the opinions of our stakeholders of the material topics. In total, we received a total of 350 responses to the survey. Step 2 Gathering stakeholder input Then, we collated and analysed the online survey results to determine material topics of greatest importance to our stakeholders and business. A total of 12 material matters were identified and categorised under the EES pillars. Step 3 Prioritising material topics Finally, we tabled the results of the materiality assessment to the Board of Directors and received approval and endorsement of the findings. Step 4 Verification and endorsement Materiality assessment process Step 1 Identifying material topics
86 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT Materiality Matrix Medium Medium High High Importance to Thai AirAsia Importance to Stakeholders Human Rights Diversity and Inclusion Sustainable Supply Chain Management Community Investment Waste Management Climate Change Crisis Human Capital Development Technology, Innovation and Information Security Risk and Crisis Management Health and Safety Customer Relationship and Operational Performance Corporate Governance and Conduct Economic Environmental Social
87 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT Our Material Topics Corporate Governance and Conduct Delivering integral and transparent operations by upholding the highest standards of corporate governance and ethical conduct to ensure the trust and best interest of our stakeholders and shareholders. Governance Agencies, Investor, Financial Institution, Media, Employee Technology, Innovation and Information Security Harnessing the capabilities of technology to innovate, build partnerships and unlock new opportunities for business growth. We ensure data privacy and information security of our employees, customers and all third parties by upholding robust cybersecurity systems. Partners, Customer, Media, Employee Risk and Crisis Management Ensuring a resilient risk culture through robust management systems and internal controls to reduce the risk the Company faces and prevent major disruptions to the business. Investor, Financial Institution, Employee Sustainable Supply Chain Management Reinforcing a sustainable supply chain through our Supplier Code of Conduct where our suppliers are expected to meet our expectations of environmental and social best practices. We make efforts to ensure responsible and ethical sourcing. Partners, Employee Customer Relationship and Operational Performance Building trust and loyalty with our customers through continuously improving our customer experience journey and service quality for greater satisfaction. Investor, Customer, Media, Employee ECONOMIC GOOD Material Topic Description Key Stakeholder and Impact Boundary
88 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT Climate Change Crisis Taking responsibility for our impact on the climate by putting in place an ambitious net zero strategy and managing our climate-related risks and opportunities. This encompasses the management of our greenhouse gas emissions, energy consumption, and water usage. Governance Agencies, Partner, Community Waste Management Monitoring and managing waste generated by practicing the principles of reduce, reuse, and recycle. This includes waste from food, packaging, and onboard materials. Governance Agencies, Partner, Community ENVIRONMENT GREEN SOCIAL GROWTH Health and Safety Prioritising and protecting the health and safety of our employees and customers throughout our operations. We inculcate a culture of safety through robust management systems and employee awareness initiatives. Customer, Partner Diversity and Inclusion Embracing a diverse and inclusive workforce where representation is reflected at all levels and where employees are treated with respect, dignity, and receive equal opportunities. Partners, Employee Human Capital Development Attracting top talent and investing in the training and development of our talent pool while nurturing our employees to achieve personal and professional growth. Partners, Employee Human Rights Committing to respecting the fundamental rights and freedoms of our employees as well as upholding our commitments to prevent human trafficking, forced labour, child labour, and discrimination in our business. Customer, Partners, Employee Community Investment Empowering and investing in our communities through initiatives that support gender empowerment, sustainable travel and ASEAN Community building. Community, Employee Material Topic Description Key Stakeholder and Impact Boundary
89 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT SDGs Material Topic 2022 Objective Results and Progress in 2022 Status Plan for Development Short-term Objective (Present-2025) Medium-term Objective (2035) Long-term Objective (2050) Climate Change Crisis Management Reduce the Carbon Intensity Ratio to 3gCO2/RPK per year Normalisation of passenger numbers and Green Operating Procedures reduced the Carbon Intensity Ratio to targets Achieved Added innovations and operating procedures to assist pilots to fly efficiently to reduce CO2 emissions. Strong marketing and flight scheduling increased Load Factor, reducing the Carbon Intensity Ratio Maintain CO2 emissions below median set by ICAO in accordance with CORSIA Continuously reduce Carbon Intensity Ratio to 3gCO2/RPK/per year Implement SAF utilisation in flight operations to reduce CO2 emissions Maintain CO2 emissions below median set by ICAO Achieve Net Zero Carbon Emissions Waste Management Don Mueang station recycles 100% of non-hazardous waste zero landfill of non-hazardous waste for Don Mueang stations No use of plastic straws and plastic bags for in-flight meals The airline is continuing to develop its recycling processes Achieved 1. Continue certification by the Low Emission Support Scheme (LESS) 2. Continue waste segregation and recycling Continue certification by LESS and publicise results in the Sustainability Report Reduce landfill waste from all main stations to zero by 2050 Governance and Code of Conduct Support directors and managements to train in Corporate governance and Code of Conduct for the benefit of their duties Sustainability Committee underwent relevant ESG training Disclosure and financial reporting of registered company Achieved All Sustainability Committee members undergo relevant ESG training Employees undergo business ethics training Employees understand and adequately practise Code of Conduct Communications through all channels promote employee awareness in good governance and company regulations Sustainability Goals Thai AirAsia based its sustainability goals on materiality issues and aligned them with those of Capital A. Each material topic and its objectives are matched to the United Nations Sustainable Development Goals (UN SDGs) it contributes to. The objectives are broken down into short-, medium-, and long-term targets for a progressive and attainable goal.
90 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT SDGs Material Topic 2022 Objective Results and Progress in 2022 Status Plan for Development Short-term Objective (Present-2025) Medium-term Objective (2035) Long-term Objective (2050) Technology, Innovation and Information Security Management Promote awareness in information security and add technological security measures - Cooperated with Group Information Security on cybersecurity - Information Security awareness promoted via online channels to all employees - Cooperation with DPO toward data security in compliance with PDPA law - Adoption of Single Sign-on for all platforms using Google G Space 2-Factor Authentication - Cancelled use of External Drives using Endpoint Security on client devices within the Company Achieved 1. Internal audit of Information Security in cooperation with Capital A Berhad Information Security 2. Employees received training in Information Security Awareness and operation with information security 3. Further integration of Cloud Infrastructure for increased work efficiency Increased utilisation of Multifactor Authentication within the Company Promotion of document classification for more accurate archiving Promote use of the Cloud Infrastructure for every application and Identity Management using 2-Factor Authentication All employees are aware of the importance of Information Security Risk and Crisis Management Risk management and business continuity plans for all department and stations Risk management and business continuity plans implemented for every department with only new stations that came into operation in 2022 still pending In Progress 1. Improve the Risk Management Policy 2. Train employees on risk management and business continuity 3. Devise/Improve risk management and business continuity plans consistently for maximum efficiency Effective risk management and business continuity plans for all department and stations Sustainable Supply Chain Keep up to date with relevant ESG regulations for auditing of business partners and apply ESG criteria to following year’s audit checklist Integrate ESG criteria to annual business partner audits In Progress Audit partners using ESG criteria Train auditors on additional ESG assessment topic and material issues Apply ESG audit and assessment to all business partners including major and minor partners and measure operational efficiency
91 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT SDGs Material Topic 2022 Objective Results and Progress in 2022 Status Plan for Development Short-term Objective (Present-2025) Medium-term Objective (2035) Long-term Objective (2050) Customer Relationship and Operational Performance OTP: On-time Performance of 90% Service efficiency measured by Net Promoter Score of 50% - OTP 92% - NPS 55% Achieved 1. Operation in accordance with OTP strategies 2. Perform root cause analysis and fix problems in a timely manner 3. Monthly OTP operation and efficiency briefings OTP 90% Health and Safety - Safety performance indicator does not exceed target - Employee physical, emotional and social health promoted - Foster a culture of safety aligned with the safety policy - Safety Management System effective enough to maintain Lost Time Injury Frequency Rate (LTIFR) at target of below 1.65 - 100% of employees undergo Occupational Health and Safety and workplace environment training Achieved Achieved In Progress 1. Operate according to Occupational Health and Safety and workplace environment plans announced in safety policy 2. Briefings to prompt participation by employees at all levels 3. Safety risk management 4. Safety assurance 5. Health and safety Promotion 6. Transitioned safety training for employees to online and E-Learning platforms - Reduce employee, contractor and business partner LTIFR - Conduct health promotion projects at least 3 times a year - Foster a culture of safety, conduct safety culture surveys, target high level of safety awareness among employees - Request and receive IATA Operational Safety Audit (IOSA) certification by 2025
92 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT SDGs Material Topic 2022 Objective Results and Progress in 2022 Status Plan for Development Short-term Objective (Present-2025) Medium-term Objective (2035) Long-term Objective (2050) Diversity and Inclusiveness Foster diversity and inclusiveness in the workplace and company culture Employee satisfaction score (eNPS) no lower than 50 eNPS 45 from target of 50 Employees are treated equally, with respect and accepted for their diversity 1. Employee recruitment policy does not discriminate based on gender, age, ethnicity, religion, sexuality, disability 2. Revise benefits to apply to a diverse range of employees 3. Company leadership support for diversity and inclusiveness declared in company values 4. Training provided on understanding differences based on age gaps Employee satisfaction score (eNPS: 50) Human Capital Management - Adapt structure and human capital appropriately, carry out Succession Planning - Intently develop employees in skills necessary to the modern context, foster work life balance - Build company loyalty Succession & Development Plan Turnover rate < 5% Employee receives an average 24 hours for specialised training and 2 hours for fundamental training per year Achieved and Turnover rate within target (4.7%) In Progress 1. Adapt structure and operations for efficiency, maximum utilisation of resources, proceed according to Succession Plan 2. Develop training courses and formats 3. Continually build bonds within the Company, conduct employee satisfaction surveys Successors & Development PLan Employee receives an average 24 hours for specialised training and 5 hours for fundamental training per year
93 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT SDGs Material Topic 2022 Objective Results and Progress in 2022 Status Plan for Development Short-term Objective (Present-2025) Medium-term Objective (2035) Long-term Objective (2050) Human Rights Respect employee freedom of expression, provide equality and provide health, work environment and personal information security Employee satisfaction score (eNPS) no lower than 50 eNPS 45 from target of 50 1. Operate with Workplace Benefits Committee 2. Operate with Occupational Health and Safety and Workplace Environment Committee 3. Flexi Work policy accommodates employee needs 4. Review Human rights policy Employee satisfaction score (eNPS) no lower than 50 Conduct Human rights due diligence for employees Community Investment Establish a network for driving sustainability through AirAsia Academy Conduct at least two activities per year to promote awareness and action on elevating the Sustainable Tourism value chain and maintain relationships with stakeholders via LINE groups Achieved: Conducted Sustain Me Talk with Faculty of Economics, Chiang Mai University and an Open House at AirAsia Academy 1. Stage activities to promote awareness and action toward sustainability across the value chain 2. Collaboration with allies on activities that promote action, such as a measurable Low Carbon Trip 3. Build confidence and trust among tourists to return to community tourism using advertising Conduct at least four activities per year to promote awareness and action on elevating the Sustainable Tourism value chain and maintain relationships by surveying participation Collaboration with allies on activities that promote action, such as a measurable Low Carbon Trip 1. Be a leader in Low Carbon tourism allowing carbon measurements to be redeemed for Big Points 2. Collaborate with partners towards developing community tourism that is sustainable and offers shared value 3. Maintain satisfaction of stakeholders
94 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT CUSTOMER RELATIONSHIP AND OPERATIONAL PERFORMANCE (GRI 2-29, 3-3) OTP Strategy The safe and on-time journey of each flight requires integrative management among all departments. The Company established an On-Time Performance Committee to oversee this matter. Led by the Chief Executive Officer, the committee meets monthly to discuss OTP performance and factors affecting our achievement of set targets. Below are some areas covered: • Flight Schedule Analysis - Analysis is performed to strategise improvement in OTP. Flight scheduling impact is reviewed and statistics are used to analyse ground operations, leading to amendments for more efficient time management. • Single Database Operation System - A connected online document system constructed to reduce communication time and facilitate operations. OTP indicators are transmitted through the system to each station. On-Time Performance Commitment On-time performance (OTP) is crucial to airline operation and flight delays impact both overall performance and are a major cost for the Company. Due to this, maintaining efficient OTP is a matter of high priority for Thai AirAsia. Our target OTP rate for 2022 was 90 percent. • Analysis of Delay Types and Patterns - A working group analyses the effects of delays for the effective addressing of root causes and sets KPIS to measure the performance of relevant teams. • Analyses of Weather Conditions - Analyses of weather at each station to mitigate delays due to weather Performance 2022 For the year, we are proud to have maintained consistent reliability with an on-time performance rate of 92 percent. (due to this year’s increased number of flights and return to normal operations by airlines, on-time performance fell from last year). 2020 96% 2021 97% 2022 92% On-time performance Target 90% Sustainable Strategy: GOOD
95 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT Future Plans Thai AirAsia is determined to improve its OTP to greater efficiency, even in light of impacts by the pandemic and regulations placed on flights. The plan for improvement is as follows: • Prediction of Future Delays - Predicting potential delays allows planning and remedy. Past data and current factors will be used to make predictions. • Prioritisation of Flights - Since Thai AirAsia flies to several countries, analyses and development of co-routes must be carried out collaboratively. Customer Satisfaction Evaluation Commitment Thai AirAsia is committed to providing high-quality service to passengers. To diverse needs, the Company believes that passenger feedback is critical in establishing trust and confidence as well as recognising the importanceof listening topassenger recommendations, which provide the key to operating ethically and with good governance as well as to sustainable growth. Customer Satisfaction For the effective enhancement of passenger service, Thai AirAsia has been using the Net Promoter Score (NPS) satisfaction index since 2019. The index measures customer satisfaction at set touch points along the Customer Journey with each point having a directly responsible department. Improving the NPS requires integrative work by all departments towards a common goal. The customer satisfaction evaluation process involves assessment and revisions to operations at each touch point on a monthly basis to ensure that passenger needs are being met and strategies are being adapted at a timely pace.