Corporate Governance and Sustainability Committee

Corporate Governance and Sustainability Committee Charter (Revision No.9)

Table of Contents

1. Objective
2. Definition
3. Appointment
4. Qualification
5. Duties and Responsibilities
6. Term and Remuneration
7. Meeting
8. Reporting
9. Effective Date

1. Objective

PTT Exploration and Production Public Company (PTTEP) is committed to conducting business with responsibility and resilience while continuously creating shared value to stakeholders through sustainability framework with committee to achieving Net Zero Greenhouse Gas Emissions by 2050. Our Sustainability Framework consists of 3 key aspects, namely High Performance Organization (HPO), Governance, Risk Management and Compliance (GRC) and Sustainable Value Creation (SVC). As a result, the Corporate Governance and Sustainability Committee has been appointed to establish target, policy/statement and promote sustainability operations. Along with responsibility towards the community, society and the environment.

2. Definition

“The Company” means PTT Exploration & Production Public Company Limited (PTTEP) and PTTEP’s subsidiaries “Board” means the Board of Directors of PTTEP

3. Appointment

The Board appoints the Corporate Governance and Sustainability Committee which is composed of at least three PTTEP directors, a majority of whom must be independent directors.

The Board will appoint one Committee Member as a Chairman of the Corporate Governance and Sustainability Committee while a Head of Corporate Secretary will be appointed as Secretary of the Corporate Governance and Sustainability Committee.

4. Qualification and Forbidden Elements

A Committee Member must possess qualifications and not have any forbidden elements based on the following criteria;

1. Be a Director and not the Chairman or Chief Executive Officer of PTTEP
2. Be able to give adequate time for the Corporate Governance and Sustainability Committee’s performance.
3. Be a Corporate Governance and Sustainability Committee member who is an independent director should possess independence qualifications as defined in Good Corporate Governance of PTTEP.

5. Duties and Responsibilities

The duties and responsibilities of the Corporate Governance and Sustainability Committee are as follows:

1. To establish the Company’s sustainability target, policy/statement, road map covering the key aspects of High Performance Organization (HPO), Governance, Risk Management and Compliance (GRC) and Sustainable Value Creation (SVC) including consider Sustainability’s work plan and budget which will be proposed to the Board for approval.
2. To advise, promote and ensure that the Company’s operation complies with the objective, the company’s sustainability policy/statement and achieves its target and matches with the practice of leading companies. To promote and assure that the Board, management, and all personnel follow and perform efficiently in line with the sustainability framework.
3. To review the Company’s sustainability target, policy/statement and road map in responding to changing of the business environment, along with the laws, the international best practices and the recommendations of leading institutions, taking into consideration shareholders’ proposals as well as responding to the shareholders.
4. To oversee, monitor and evaluate the Company’s performance related to sustainability to increase efficiency and balance while creating the most value to the Company and stakeholders. To regularly report the performance progress to the Board.
5. To establish the Company’s good corporate governance and business ethics policy which will be proposed to the Board for approval, recommend and ensure the implementation at every level and review annually the Policy in responding to the laws and the international best practices. To oversee the Company’s regular evaluation and report on the compliance of PTTEP’s good corporate governance and business ethics.
6. To oversee the disclosure of the information of the Company’s sustainability to stakeholders in the annual report and sustainability report.
7. To review this Charter regularly for its appropriateness and timeliness.
8. To disclose the Committee’s performance in the Company’s annual report.
9. To perform other duties as may be assigned by the Board.

In order to perform the duties according to this Article, the Corporate Governance and Sustainability Committee may seek opinions from any other independent professional counselor or appoint the working committee when it is deemed necessary and appropriate. The training and capability development of the Committee Members for the knowledge related to the Company’s activities shall be the responsibility of the Company.

The Corporate Governance and Sustainability Committee is responsible directly to the Board according to the duties and responsibilities, while the responsibilities for all activities of PTTEP towards third persons are still vested in the entire Board.

6. Term and Remuneration

The term of service of the Committee Member is equivalent to the director of the Board.

In case any Committee Member vacates from Office or is unavailable before the expiration of his term of service, the Board shall appoint replacement director(s) to be Corporate Governance and Sustainability Committee Members not later than 3 months from the date of incomplete composition of the Corporate Governance and Sustainability Committee.

Upon the expiration of the term of service, if there is no appointment of a new Corporate Governance and Sustainability Committee Member, the expiring Committee Member shall continue to perform the duty until the arrival of a new Corporate Governance and Sustainability Committee Member.

The expiring Committee Member(s) may be re-appointed for another term.

Besides vacating from the office by expiration of term of service, the Corporate Governance and Sustainability Committee Member has to resign once he/she no longer possesses the qualifications or has forbidden elements according to Article above.

The Corporate Governance and Sustainability Committee will receive an appropriate remuneration approved by the Shareholders’ Meeting for his duties and responsibilities and PTTEP has to disclose that remuneration in its annual report.

7. Meeting

The Corporate Governance and Sustainability Committee’s meeting shall be held at least four times a year.

The Corporate Governance and Sustainability Committee’s Meeting shall have a quorum of not less than a half of the Committee Members. If the Chairman is absent, the attending Committee Members have to choose one Committee Member as Chairman of the Meeting.

Each decision of the Meeting is exercised by majority vote. Each Corporate Governance and Sustainability Committee Member has one vote. If the votes are equal, the Chairman will have an additional casting vote. The Secretary of the Corporate Governance and Sustainability Committee has no right to vote.

Any Corporate Governance and Sustainability Committee Member who has any personal interest or any conflict of interest in a matter being considered must inform the Meeting and abstain from expressing an opinion and voting on the issue and leave the Meeting room. An exception can be made if the other Committee members vote unanimously to allow such Committee member to stay in the Meeting room to provide information on the issue so that the Committee can deliberate on the issue thoroughly. However, such Committee member is not allowed to vote or make a decision on the issue.

The Corporate Governance and Sustainability Committee has the authority to invite the management, or any other concerned parties or other appropriate persons to participate or to explain the concerned subjects in the Meeting.

8. Reporting

The Corporate Governance and Sustainability Committee must regularly report to the Board the result of the Meeting or other necessary reports.

9. Effective Date

This Charter has come into force since May 3, 2023.

The Corporate Governance and Sustainability Committee Report

PTTEP emphasizes on operating our business for sustainability by taking into consideration Thailand’s goals, global trends in combating climate change, and preparation for energy transition. The Company also adheres to Good Corporate Governance and Business Ethics. PTTEP’s Board of Directors has designated the Corporate Governance and Sustainability Committee, comprising at least 3 directors, most of whom are independent directors, to oversee and promote the sustainability and corporate governance of PTTEP.

In 2023, the Committee convened 3 times and provided useful recommendations to the management in order to improve the Company’s operations and Corporate Governance. The duties and responsibilities of the Committee this year can be summarized as follows:

1. Considered and revised the Corporate Governance and Sustainability Committee Charter by revising its previous name to the Corporate Governance and Sustainability Committee. Furthermore, the Committee’s duties and responsibilities were also extended to cover sustainability budget consideration, with emphasis on our commitment to achieve the target of Net Zero Greenhouse Gas (GHG) Emissions in 2050.
2. Considered and revised the Reporting and Whistleblowing Regulation of the PTTEP Group to align with internal operations and suit the present context.
3. Considered and reviewed the application of the Corporate Governance Code (CG Code) for listed company issued in 2017 to the PTTEP Group’s businesses to strengthen long-term business values. The Company also established corporate governance reporting in accordance with the SEC’s CG Code and international standards as well as incorporating the CG Report into the annual report (56-1 One Report) for disclosure to stakeholders.
4. Provided support for business operations of the PTTEP Group and the work of the Board, the management, and all employees in all operational areas to align with CG&BE by, for example, providing workshops to boost CG&BE understanding among employees so they can apply it in their daily work, communicating and inviting PTTEP suppliers to participate in online training regarding anti-corruption, emphasizing the importance of conflicts of interest (COI) and self-evaluation regarding the COI to employees at least once a year, communicating a No Gift Policy, engaging employees to participate in anti-corruption day activities, supporting PTT Group CG Day 2023 arrangement, and encouraging participation in various good governance assessment as part of maintaining and improving good corporate governance of PTTEP. Additionally, the committee also supported employees to apply Governance, Risk Management, and Compliance (GRC) principles in their work leading to a strong culture in the Company.
5. Reviewed Decarbonization Pathway and Offsetting Strategy to ensure that the Company’s operations are aligned with the targets of EP Net Zero 2050 as previously announced.
6. Monitored and provided advice on PTTEP implementation of the Sustainability workplan, which can be divided as follows:
   1. 6.1
      Monitored the implementation of EP Net Zero 2050 and GHG Emissions Accounting & Reporting to ensure accurate, standardized, and timely reporting. Furthermore, the Committee recommended incorporating Internal Carbon Price as part of the GHG Criteria for Investment Decision Guideline, along with the monitoring of GHG emissions effects. Strategies and guidelines on GHG offsetting were also taken into consideration, which include exploring short-term, medium-term, and long-term carbon credits to reduce risks. The approach covers studying and comparing the Company’s methods and results against those of other leading companies. This may include, for example, technology investments for obtaining carbon credit from agriculture and farming; studies of laws and regulations which may affect the Company’s operations such as international tax measures; benchmarking of the carbon credit registration standards for both domestic and international organizations. These measures are designed to enable PTTEP to operate to achieve the target of Net Zero GHG Emissions in 2050.
   2. 6.2
      Monitored the progress of Carbon Capture and Storage. PTTEP began the study and Front-End Engineering Design (FEED) for the two primary projects which are Arthit and Lang Lebah natural gas projects. The key objectives are to reduce GHG emissions from petroleum production process and develop a pilot project of applying technology to reduce GHG emissions. These efforts may lead to the establishment of a new business of PTTEP in alignment with sustainable business development plan, focusing on unit cost controlling and collaboration with partners.
   3. 6.3
      Monitored PTTEP’s implementation of corporate social responsibility (CSR) projects according to 2022 and 2023 workplans. The Committee recommended the Company to implement CSR projects that are linked to PTTEP’s sustainability strategy and advised us to prioritize the projects based on project implementation evaluation and their social return on investment (SROI). These aimed to ensure a viable return on investment and create benefits to society and the environment in line with the concept of Sustainability in Substance.
   4. 6.4
      Promoted a positive public awareness on PTTEP’s sustainability implementation by ensuring a clear and effective communication strategy. This can be achieved through exploring new ways to enable the wider society to perceive and recognize PTTEP from our sustainability efforts, such as forestation and initiatives under the Ocean for Life strategy.
   5. 6.5
      Monitored the result of sustainability assessments covering environmental, social and governance (ESG) dimensions via various raters, such as MSCI, CDP, Sustainalytics, FTSE, Good Moody’s ESG, and Dow Jones Sustainability Indices (DJSI) for 2022. The Committee also monitored the overall ESG gap-closing plans and recommended studying sustainability evaluation criteria from other reliable institutions, together with investors’ perceptions on ESG activities. These efforts will contribute to enhancing PTTEP’s implementation plan to align with investors’ requirements in the future.
7. Supported the continuous arrangement of site visit activities for shareholders. The objectives are to build an understanding of PTTEP business, promote confidence in investment in the PTTEP, and foster long-term relationships between shareholders and the Company.

The Committee reported the resolution of every meeting to the Board of Directors for acknowledgement. In 2023, the Committee executed its assigned tasks in accordance with its charter with prudence, competence, and independence. The Committee properly provided straightforward opinions to elevate and enhance corporate governance and business ethics of the organization, ensuring the optimal benefit of PTTEP, our shareholders, and stakeholders.

Veerathai Santiprabhob
(Mr. Veerathai Santiprabhob)
Member of the Corporate Governance and Sustainability Committee

Ekniti Nitithanprapas
(Mr. Ekniti Nitithanprapas)
Member of the Corporate Governance and Sustainability Committee