SCG ROAD TO SUSTAINABILITY
Kitjar Ruangthai, MD
Executive Consultant, Corporate Total Quality Promotion Center
Siam Cement PLC. 1 Siam Cement Road, Bangsue, Bangkok, Thailand 10800
E-mail: [email protected]
Penlada Pisapanit
Consultant, Corporate Total Quality Promotion Center
E-mail : [email protected]
ABSTRACT
In the past, the objectives of a conventional business operation were mainly aimed at creating profits to
business owners and shareholders, while left behind environmental issues to government regulators.
Growing environmental concerns, for examples; environmental pollutions and depletion of natural
resources, coupled with public pressure, stricter regulations and higher expectation from stakeholders, are
changing the way people do business nowadays across the world. For business operation towards
sustainability, it is necessary to find the right balance between economics, social and environment which
known as Sustainable Development (SD).
In order to fully achieve the Siam Cement Group’s vision of being a role model in corporate governance
and sustainable development, the group has integrated sustainable development into business strategies
and developed “SCG Sustainable Development Guidelines” which defines a framework for sustainable
development, covering economics, social and environment aspects subject to the principles of good
corporate governance and disseminated to all operations in SCG as a standard practice and roadmap for
the implementation toward sustainability.
Keywords: Sustainable Development, Corporate Governance, Stakeholder
INTRODUCTION
SCG was first established in 1913 following a Royal Decree of His Majesty King Rama VI. The group
has diversified to 5 core businesses comprises of SCG Chemicals, SCG Cement, SCG Paper, SCG
Building Materials and SCG Distribution. Ever since its first inception, SCG is committed to 4 business
philosophy as shown in Figure 1.
Adherence to Fairness
Dedication to Excellence
Believe in the Value of the Individual
Concern for Social Responsibility
Figure 1 – SCG Business Philosophy
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SCG has long been conducted business in tune with good corporate governance in regard to all parties
concerned and adhere to responsibility for all its stakeholders toward sustainable mutual benefits. With
business expansion into regional markets and the increasing number of employees over 25,000 persons
globally, the communication of business directions toward sustainable development is hence an important
task to the organization. In order to clearly communicate implementation approaches to all businesses,
companies and employees, SCG Sustainable Development Committee was developed “SCG Sustainable
Development Guidelines” as a corporate directive handbook.
COMMITMENT ON SUSTAINABLE DEVELOPMENT
SCG Sustainable Development Committee is comprised of president from each SCG business.
Figure 2 – Structure of “SCG Sustainable Development Committee”
DEVELOPING PROCESS OF “SCG SUSTAINABLE DEVELOPMENT
GUIDELINES”
SCG Sustainable Development Guidelines was developed under the framework of sustainable
development which covers economic, social and environment aspects, defined by world class
organizations, and conformed to Good Corporate Governance.
Figure 3 – SCG Sustainable Development Framework
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Under the umbrella of Sustainable Development Framework, SCG proceeded with the following steps in
developing the guidelines;

Identified key global SD issues which international organizations and world businesses, for
example; United Nations Global Compact, United Nations Framework Convention on Climate
Changed (UNFCCC), World Business Council for Sustainable Development (WBCSD), World
Resources Institute (WRI), Global Reporting Initiatives (GRI), ISO 26000 Corporate Social
Responsibility, International Energy Agency (IEA), International Labour Organization (ILO),
Dow Jones Sustainability Indexes (DJSI) and Financial Times and the London Stock Exchange
(FTSE) give importance to as all concerned parties should take responsibilities.

Compared those identified global key issues with SCG business environment and stakeholders’
expectations to summarize SCG key concerns and actions need to be taken.

Benchmarked / gap analysed SCG key concerns with world class companies in search for
improvement practices.

Developed SCG SD Roadmap and action plans. Established and disseminated “SCG
Sustainable Development Guidelines” to all business units.
Figure 4 – The development process of SCG Sustainable Development Guidelines
By prioritizing SCG key concerns following those mentioned processes, 17 issues were identified as most
important to the group sustainable business strategy. Policy and practices in regard to these 17 issues are
explained in “SCG Sustainable Development Guidelines” and can be summarized as follows;
1. Governance
1.1 Good Corporate Governance
1.2 Integrated Risk Management
1.3 Disclosure & Reporting
2.
Economy
2.1 Direct Economic Value Generation
2.2 Economic Value Distribution
3.
Society
3.1 Community Investment & Donation
3.2 Labour Standards & Practices
3.3 Human Rights
3.4 HR/Human Capital Development
3.5 Occupational Health & Safety
3.6 Stakeholder Engagement
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4.
Environment
4.1 Energy Conservation
4.2 Climate Change
4.3 Water Management
4.4 Waste Management
4.5 Ecosystem & Biodiversity
4.6 Eco-product
In order to put these policy and guidelines into effective practices, SCG Sustainable Development
Committee had set the implementation approaches as follows;
Management Structure
Appoint “Sustainable Development Committee” at business level and company level with the following
structures;
1. Business Level: Sustainable Development Committee is chaired by business president and the
managing directors of each company are committee members.
2. Company Level: Sustainable Development Committee is chaired by managing director and
division or department managers are committee members.
Implementation
All concerned corporate functions and companies are requested to integrate the following actions into
their business strategy planning;
1. Business Level: Develop medium term plan with relevant key performance indicators.
2. Company Level: Develop action plan with relevant key performance indicators.
3. For corporate functions or working units with direct responsibility under SCG sustainable
development framework, action plan shall be developed with relevant key performance
indicators.
4. Benchmark performance target with industry specific world class organizations.
5. Establish communication procedures to disseminate policy, action plans as well as significant
sustainable development issues to employees at all levels.
6. Establish data collection system of results of action plans to ensure consistency, reliability,
transparency and accountability.
7. Carry out a periodic sustainable development performance monitoring and assessment by
external expert.
Examples of implementations under the guidelines
Some of the 17 issues defined in the guidelines have been implemented with progresses as follows;
Energy Conservation
SCG has implemented energy conservation strategies both at factories and head office. For energy
conservation at factories, production processes are modified to reduce energy loss continuously. While at
the head office, most buildings are modified to reduce energy consumption by installing insulation and
reflective glass. Lighting system in all buildings was switched to T5 fluorescent light. Solar cell, an
alternative energy source, is also installed at pilot building to supply electricity for indoor lighting system
which considered as one of the energy saving building model in Thailand.
Climate Change
Even though some of SCG businesses are energy intensive, which contributes to the emission of
greenhouse gases, by following the guidelines, SCG Cement has implemented Waste Heat Generator
(WHG) project which can reduce fossil fuel used by returning waste heat from cement production process
back to generate electricity. The result of this project is not just the reduction of fuel cost but can also
reduce greenhouse gases up to 300,000 tons.
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Waste Management
SCG has promoted the target of Zero-Waste to Landfill within 2012 with 3R concept, Reduce,
Reuse/Recycle and Replenish. R&D activities are fully supported by the corporate to encourage the reuse
and recycle of waste as raw materials across SCG businesses for the optimum benefits. For examples, fly
ash from SCG Paper can be used as raw material in ready mixed concrete or lightweight concrete block,
iron dust from dust collector can be use as an additive in cement production, etc.
Community Investment & Donation
SCG has a policy of sincere and continuous promotion of the well-being of a society and communities not
only in Thailand but also in every country where SCG operates. SCG fully performs its duty as a good
corporate citizen and encourages its employees to contribute to socially beneficial activities by raising
awareness of employees and all relevant parties in every business unit, such as “Sharing
Opportunities…Drawing the future” project which encourages employees’ active participation in social
responsibilities based on their creativity, employees can propose the project for sponsorship by SCG
Foundation, or “One Community One Project” (OCOP) of SCG Cement which encourage employees’
cooperation with local communities in search of the real community needs.
Besides from donation and employees participation, building sense of ownership and awareness of the
communities is vital in creating a strong society. At present, we are facing the problems of an unbalanced
quality and quantity of water, leading to serious impacts. SCG has launched a program called
“Conserving Water for Tomorrow” to replenish water sources. The program also aims to involve
communities in sustaining a healthy environment. The Group has instilled a sense of responsibility and
ownership for water conservation through supporting the construction of 10,000 check dams, and
enhances awareness of people by printing instructions on check dam constructions to be distributed to
interested people and producing TV advertisements showing the usefulness of check dam construction.
After making every effort, SCG conducted surveys on public opinions after viewing the TV
advertisement. It was found that the majority of people is more aware of the value of water conservation.
In 2007, proportion of community investment & donation are; environment 30%, education 22%, sports
3%, cultural arts & religion 3%, public health 1% and other (charities, disaster relief, fund, etc.) 41%.
Apart from establishing “SCG Sustainable Development Guidelines” for all company to integrate into
business planning, SCG has also promote sustainable development awareness among employees at each
level with different content and format depends on their backgrounds, knowledge and management levels.
Sustainable development awareness raising strategy is intended to educate employees in regards with
issues related to sustainable development and promote awareness in sustainable development perspective
in hope that SCG people together can contribute to the sustainable future of the society.
CONCLUSION
The result of our strong commitment to sustainable development is well accomplished from recognitions
and awards received both at national and international levels such as Best Corporate Governance
Company from Finance Asia Magazine, Best Corporate Social Responsibilities (CSR) Awards from the
Stock Exchange of Thailand and Money & Banking Magazine, Gold Class-Outstanding Sustainability
Result in the Sector of Building Materials & Fixtures from DJSI. and honorable trophy from H.M. the
King for the best practice of the Philosophy of Sufficiency Economy Competition for the Large
Enterprises Category from The Office of the Royal Development Projects Board.
SCG was also invited to join a member of World Business Council for Sustainable Development
(WBCSD) since 2000 which provide excellent opportunity for networking as well as sharing of knowhow and best practices among world industry leaders.
REFERENCES
The Siam Cement Group (2008), SCG Sustainable Development Guidelines.
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