Impact Valuation of PTT Group Logistics Zero Accidents

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1 Impact Valuation of PTT Group Logistics Zero Accidents Increased effectiveness and efficiency due to standardized processes and requirements The purpose of this valuation is to determine the: BUSINESS BENEFITS Lower liability and reduce business interruption SHARED VALUE SOCIAL BENEFITS Lower social and environmental impacts Improved qualityoflife SET INDUSTRY STANDARDS FOR ROAD SAFETY Higher standards leading to greater risk controls Reduced number of high impact accidents Improved transportation safety records Contribution to human capital development SAFE DRIVING PROGRAMS Value of avoided to PTT value chain and: Value of avoided to society Lower risks from being in a roadrelated accident

2 Social Capital Protocol STEP 12 Plan for wider application and advocacy or social capital measurement and valuation, internally and externally STEP 11 Plan for integrating social capital measurement and valuation into business systems and processes STEP 10 Analysis of results, key assumptions and recommended actions STEP 1 Identify the business case STEP 2 Map relevant natural & social capital issues across the value chain STEP 3 Prioritized list of natural & social capital issues STEP 9 Results of measurement and valuation STEP 8 Develop indicators and metrics STEP 7 Select valuation technique STEP 4 Primary and secondary audiences and key objectives STEP 5 Set organizational, geographic and temporal boundaries STEP 6 Create impact pathways for each priority natural & social capital issue 2

3 Impact Pathway INPUT ACTIVITIES OUTPUTS OUTCOMES IMPACTS Resources spent on Zero Accident Program Operational activities/safety measures and training Safety measures implemented or people trained Changes in number of transportation accidents Changes in wellbeing and strain on national medical services Indicators PTT financial contributions to the program Supplier training Safe driving training for suppliers # of people trained # of accidents by category: Property damage Minor injury Serious injury Fatality # of safety measures implemented Loss of life and life quality Loss of productivity Legal and administrative Travel delay for society Medical services cost 3

4 Total Cost of a Major Transportation Accident Total Cost of a Major Accident Costs to PTT Value Chain Costs to Society Property Damage Administrative Loss of life and life quality Medical Human capital Reputational Legal & Insurance Environmental damage Business interruption Clean up Loss of productivity Travel delay

5 The Societal Cost of a Traffic Accident in Thailand Social benefits of the Zero Accident program were derived from a value transfer approach, using values from a World Bank study of traffic accidents in Thailand. The World Bank study found that an average road crash is comprised of the societal below: Medical, 2.5% Nonvehicle damage cost, 0.2% Avoided legal and insurance, 2.0% Avoided medical services cost, 0.4% Travel delay, 16.9% Loss of productivity, 19.5% Vehicle damage, 24.5% Loss of quality of life, 31.4% Adapted from World Bank Study of Traffic Accidents in Thailand 5

6 Impact Valuation Results Impact of PTT s Zero Accidents Program Application of the Social Capital Protocol identified key social externalities resulting from the first year after the launch of PTT s Zero Accidents program. The following illustrates the change in economic and social (externalities) resulting from a reduction of PTT supplier transportation accidents in 2016, compared to PTT Value Chain: Economic Outcomes Societal Impacts: Externalities (Social Costs) $ Program Costs (PTT) Training Costs (Supplier) accidentrelated (PTT) Reduction in accidentrelated (Supplier) loss of life & life quality loss of productivity travel delays legal & insurance medical service medical and property damage to accident victim Limitation: This document presents a summary of the findings from ERM s engagement of 2017 DJSI application support and review of performance in place, and presents the forecast in relation to these findings and best practices. The score forecast is based on only those which came to our attention during the course of our work and will not necessarily be a comprehensive forecast of actual score by RobecoSAM. This report has been prepared solely for your use and should not be quoted, copied or made available (in whole or in part) to any other person without our prior written consent. 6