Page 103 - BTSGroup ONE REPORT 2021/22_EN

BTS Group Holdings Public Company Limited 4.3 Risk Management Review 101
Annual Report 2021/22

BTSC obligation in making the payment under the Net Revenue Purchase and Other Risks
Transfer Agreement. Under the sponsorship and sponsor guarantee agreement,
BTSGIF may not enforce the Company guarantee obligation by any other means Environmental Risk
than enforcing all the BTSC shares pledged under the share pledge agreement The Group places great importance on environmental risk management.
for sales in a public auction or obliging the Company to transfer all the BTSC The BTS mass transit system is an environmentally friendly operator, emitting low
shares to BTSGIF under the share sales and purchase agreement. carbon emissions compared to other modes of transport, utilising electricity as
its primary source of energy.
The guarantee under the sponsorship and sponsor guarantee agreement,
however, is limited to the transfer of all the shares held in BTSC by the Company, However, the BTS mass transit system may emit more greenhouse gas emissions
but not including BTSC assets not purchased by BTSGIF, which shall be from the continuous expansion of the rail transport network. According to
transferred back to the Company or persons specified by the Company under the Group’s analysis and current expansion plans, the BTS mass transit system
the Net Revenue Purchase and Transfer Agreement and the sponsorship and will release more greenhouse gas emissions by approximately 1% per year starting
sponsor guarantee agreement. Even though the Company guarantee obligation from 2022. This is mainly due to the opening of Pink and Yellow Line along
shall cease after BTSGIF has utilised its right to enforce the pledged BTSC with other upcoming businesses. Therefore, the reduction plan on greenhouse
shares or force purchase the BTSC shares, the Company still loses its shares gas emissions is included in the Company’s long-term Climate Strategy –
in and control over BTSC and there will be a change of control over BTSC to retain Carbon Neutral status and to improve the proportion of electricity usage
from the Company to BTSGIF or any person acquiring the BTSC shares from from renewable energy sources to at least 10% of its total usage. Furthermore,
the public auction under the enforcement of the pledge under the share pledge the plan layouts the strategy to offset carbon emissions by participating in
agreement, or the person designated by BTSGIF as the transferee or purchaser the Carbon Credit program and improving the Group’s operating efficiency which
of the BTSC shares under the share sales and purchase agreement. includes studies in environmental management projects along with providing
Such an event may have a significant negative impact on the business, financial support and cooperation in various greenhouse gas emission reduction projects
position, earnings performance, and business prospects of BTSC and initiated by governmental agencies.
the Company.
At present, the Group operates its business in accordance with environmental
laws and the requirements of relevant environmental standards such as pollution
Nevertheless, in a case of a certain event of default specified in the Net Revenue control, environmental impact assessment (EIA) and environmental impact
Purchase and Transfer Agreement, BTSC may propose a remedy plan for its mitigation measures. In addition, policies and operating guidelines are formulated
default to BTSGIF, and if BTSGIF approves the remedy plan, it shall not utilise to respond to future changes in environmental laws.
its right to enforce the obligation thereunder, demand the performance from
the Company, as the sponsor under the sponsorship and sponsor guarantee Risks and opportunities are assessed in accordance with the Task Force on
agreement, or utilise any other rights. During the remedy period, the Company Climate-related Financial Disclosures to determine the organisation’s approach
shall grant the right to BTSGIF to vote through the BTSC shares and if there is in addressing the risks of climate change, and risks associated with government
a dividend paid from BTSC, the Company agrees to use the dividend to service legislation and regulations to address environmental issues.
the outstanding balance owed to BTSGIF, subject to the conditions specified in
the net revenue transfer agreement and the sponsorship and sponsor guarantee Further details can be considered under the Sustainability Report 2021/22 at
agreement. https://www.btsgroup.co.th/en/download/sustainability-report