Central Retail conducts materiality assessment annually to ensure that material topics are being updated by considering global trends and context that undergo constant changes. Central Retail identifies key sustainability issues by assessing Environmental, Social, and Governance (ESG) factors, considering both the impact of ESG on the business (Financial Materiality) and the impact of business operations on the environment and society (Impact Materiality), in accordance with the Double Materiality principle. This approach aligns with international reporting standards including the European Sustainability Reporting Standards (ESRS) and the Global Reporting Initiative (GRI). This process enables the organization to effectively identify and manage ESG-related risks and opportunities, enhancing competitiveness and meeting the expectations of stakeholders. This allows Central Retail’s readiness for new regulations and drive business growth while upholding social and environmental responsibility.
Materiality Assessment Process
1. Understand the organization's context
Central Retail has analyzed the context of all activities throughout the value chain that connect with its stakeholders. It has also considered key sustainability issues based on international standards, global trends, and peer-benchmarking to gain a more comprehensive understanding of sustainability and business contexts.
2. Identify actual and potential impacts
Central Retail has identified both actual and potential positive and negative impacts on key sustainability issues. This assessment was conducted through data analysis gathered from interviews and surveys with stakeholders, including employees, business partners, customers, shareholders, creditors, government agencies, and the community and society. More importantly, as part of the materiality assessment, Central Retail has applied the frameworks of COSO Enterprise Risk Management 2017 (COSO ERM 2017), UN Guiding Principles on Business and Human Rights, and other international standards on human rights in analyzing the impact that covers human rights risks, which will be integrated into Central Retail’s regular enterprise risk management process.
3. Assess and prioritize the significance of the impacts
Central Retail has assessed the significance of identified impacts on each materiality topic by considering assessment criteria which includes the severity of the impact and the likelihood of occurrence. Additionally, it has assessed the risks and opportunities of these impacts on the business by evaluating the size of financial implication and the likelihood of occurrence. The assessment results are prioritized by classifying key topics for sustainability management and reporting approaches. The prioritization process considers alignment with relevant international standards and ESG expert opinions from external organizations.
4. Review and Approval of the Results
The Corporate Governance and Sustainability Committee reviews and approves the materiality assessment results and presents to the Board of Directors for endorsement. These key issues help to develop Central Retail's sustainability strategies and targets.
Climate Change
Impact
Long-term greenhouse gas emissions may result in climate change seen in intensified natural disasters such as floods, storms, or drought. The impact may become more severe to the point that it affects the surrounding businesses and communities as well as results in the loss of confidence among stakeholders.
Relevant Stakeholders
Employees, Suppliers, Creditors, Government, Communities
Boundary of Impacts
Internal, External
Resource Efficiency
Impact
Reducing resource consumption through eco-friendly packaging design or transforming plastic waste into environmentally friendly or value-added products can help lower both production costs and environmental impact. Additionally, it promotes sustainable consumption behavior and increases customer access to environmentally friendly products.
Relevant Stakeholders
Employees, Suppliers, Government, Communities
Boundary of Impacts
Internal, External
Responsible Sourcing
Impact
Responsible sourcing supports the production of goods and services that protect positively impact the environment and society, while also conserving biodiversity, preventing deforestations, and improving the well-being of local communities. It also promotes good health and needs customer expectations.
Relevant Stakeholders
Shareholders, Employees, Suppliers, Customers, Creditors, Government, Communities
Boundary of Impacts
Internal, External
Community Contribution
Impact
The Company promotes economic value creation for communities and analysis the value of local products through the exchange of experiences, sales skills, and distribution channels. This results in an increased community income and stronger relationship with the Company.
Relevant Stakeholders
Employees, Suppliers, Customers, Government, Communities
Boundary of Impacts
Internal, External
Customer Relationship and Brand Management
Impact
Efficient development of customer relationships and the brand by providing services that respond to the expectations of customers will lead to customer loyalty towards the brand and increase confidence among stakeholders.
Relevant Stakeholders
Shareholders, Employees, Suppliers, Customers, Creditors
Boundary of Impacts
Internal, External
Human Resource Management
Impact
Encouraging employees to continually develop new skills that are in line with business strategies to help increase the efficiency of the work and capabilities of employees, while promoting Diversity, Equity, and Inclusion (DEI). This enables the Company to foster innovation, improve employee retention, and better respond to customer needs.
Relevant Stakeholders
Shareholders, Employees, Suppliers, Customers, Creditors, Government, Communities
Boundary of Impacts
Internal, External
Human Rights
Impact
Human rights violations can expose the Company to the risk of lawsuits, negative publicity, and boycotts, leading to losses and profit and damage to the Company's reputation. However, adhering human rights fosters sustainable business through fair and respectful workplaces, resulting in more productive employees and increase customer trust.
Relevant Stakeholders
Shareholders, Employees, Suppliers, Customers, Creditors, Government, Communities
Boundary of Impacts
Internal, External
Occupational Health and Safety
Impact
Inefficient occupational health and safety management can increase the risks of accidents or danger in department stores, leading to obstruction and operations and loss of confidence among stakeholders.
Relevant Stakeholders
Employees, Suppliers, Customers, Government, Communities
Boundary of Impacts
Internal, External
Corporate Governance and Business Ethics
Impact
Ethical and transparent corporate governance throughout the business process to foster fairness and trust among stakeholders.
Relevant Stakeholders
Shareholders, Employees, Suppliers, Creditors, Government, Communities
Boundary of Impacts
Internal, External
Cybersecurity and Privacy Protection
Impact
Cybersecurity systems that are inefficient may open up the possibility of the Company being targeted for cyber-attacks which may in turn lead to suspension of business and personal data leakage, resulting in legal proceedings and loss of confidence among stakeholders.
Shareholders, Employees, Suppliers, Customers, Creditors, Government, Communities
Boundary of Impacts
Internal, External
Innovation and AI
Impact
Promoting innovation to apply technology in operations to enable systems to learn, analyze, and make autonomous decisions will help increase work and data efficiency, speed, and accuracy. This includes the appropriate and ethical use of Artificial Intelligence (AI) systems, which improves the quality of customer service and increase employee efficiency.
Relevant Stakeholders
Shareholders, Employees, Suppliers, Customers, Creditors, Government, Communities
Boundary of Impacts
Internal, External
Risk and Crisis Management
Impact
Inadequate risk management and communications, as well as training for employees on risk management, may lead to the Company being unable to cope with risks and crisis. As a result, there might be obstruction or suspension to the Company’s businesses and loss of confidence among stakeholders.
Relevant Stakeholders
Shareholders, Employees, Suppliers, Customers, Creditors, Government, Communities
Boundary of Impacts
Internal, External
Supply Chain Management
Impact
Establishing a responsible and resilient supply chain that considers environmental and social factors, while collaborating with suppliers to enhance their management capabilities for readiness, efficiency, and flexibility.
Relevant Stakeholders
Shareholders, Employees, Suppliers, Customers, Creditors, Government, Communities
Boundary of Impacts
Internal, External