Climate Change and Greenhouse Gas Management

Climate Change and Greenhouse Gas Management

Climate Change Governance

Commitment and Goals

The Company places the highest priority on risks and opportunities arising from climate change. The Corporate Governance and Sustainable Development Committee (CG & SD Committee) is designated as the primary body responsible for defining directions and overseeing environmental operations as follows:

• Strategic Policy Approval: The Committee has considered and approved the roadmap toward Carbon Neutrality by 2050 and short-to-medium-term GHG reduction targets to align with international standards and business directions.
• Systematic Performance Monitoring: An environmental KPI tracking mechanism is in place, with performance reviews conducted twice in 2025 (February and July).
• Board-Level Responsibility: The Chairman of the CG & SD Committee is responsible for reporting climate-related issues to the Board of Directors, ensuring that ESG factors are genuinely integrated into the business decision-making process.

Modernform is committed to sustainable business operations with environmental responsibility and climate change management. We aim to support the global effort to limit the average temperature increase to 1.5 degrees Celsius, in accordance with the Paris Agreement. The Company recognizes that climate change is the most significant risk to business sustainability. Therefore, we have established a proactive strategy aiming for Carbon Neutrality by 2050 and a target to reduce greenhouse gas emissions (GHG Scope 1 & 2) by 20% by 2030 (compared to the 2023 base year). This is achieved through systematic emission reduction and offset activities, covering efficiency improvements, reducing energy consumption in all processes, increasing the proportion of clean energy, reducing energy waste, and minimizing refrigerant leakage. Furthermore, we develop and promote product designs that can be reused or recycled.

GHG Reduction Roadmap

Operational Guidelines

The Company manages its climate impact through the following mechanisms:

1. Strategy and Goal Setting: Define short-term (Target 2025) and long-term (Target 2030/2050) plans and targets aligned with international standards, including GHG reduction and Net Zero.
2. Value Chain Integration: Apply carbon reduction concepts throughout the value chain, from upstream to downstream, including supplier management (Scope 3) and Eco-Design.
3. Assessment and Reporting: Conduct Carbon Footprint for Organization (CFO) assessments and prepare for reporting under new criteria (SET Carbon) to ensure data quality assurance.

Performance Results

The Company has implemented plans to manage and report Greenhouse Gas (GHG) emissions, with the 2025 results compared in the table below:

Scope 3 Greenhouse Gas Disclosure

The Company adheres to a sustainability disclosure policy based on accuracy, precision, and verifiability. For the 2025 Scope 3 GHG report, the Company focuses on reporting categories with clear activity data that have been verified by an independent external agency as follows:

• Reported Categories (Category 3): The Company has gathered and disclosed other indirect GHG emissions significant to operations, verified by external experts, totaling 240 tCO2e. This continuous reporting demonstrates the development of the organization's environmental impact management.
• Data Constraints Management: For categories such as freight transport and Purchased Goods and Services, the Company has identified these as exceptions in the current report due to being in the process of developing activity data collection systems in collaboration with supply chain partners to ensure future disclosures are reliable.
• Future Operational Plans: The Company is committed to expanding the reporting scope to cover all material categories based on recommendations from the latest corporate carbon footprint verification to elevate sustainability reporting standards to international levels.

Transparency in Measurement and Verification

Commitment and Goals

Modernform is committed to elevating the standards of Greenhouse Gas (GHG) emission measurement to ensure accuracy and transparency in accordance with international principles. This reflects our actual operational performance and builds confidence among all stakeholder groups.

Operational Guidelines

1. Carbon Footprint for Organization (CFO) Registration: The Company successfully passed the verification of its Greenhouse Gas emissions (covering Scope 1, Scope 2, and partial Scope 3) by an external verifier and has maintained continuous CFO certification. Furthermore, the Company has initiated data collection and verification for other indirect GHG emissions in Scope 3 to prepare for comprehensive carbon management according to international standards.
2. Carbon Footprint for Organization (CFO) Verification: The Company undergoes continuous verification of its GHG emissions (Scope 1 and 2) by external parties to ensure that the emission data complies with the standards defined by the Thailand Greenhouse Gas Management Organization (Public Organization) or TGO.
3. Preparation for New Reporting Standards (SET Carbon): The working team has begun piloting the SET Carbon system for recording and processing GHG data to ensure a systematic accounting process, ready for future international-level verification.

Performance Results

The Company successfully passed the verification and received the Carbon Footprint for Organization (CFO) certificate officially in April 2026 (referencing the 2025 database). This achievement from 2023 to 2025 is a significant milestone reflecting a data collection system that is accurate, precise, and meets international standards. This enhances confidence among all stakeholder groups regarding the Company’s commitment to driving the organization toward Carbon Neutrality.

Strategic Greenhouse Gas (GHG) Reduction Measures

Modernform drives GHG reduction through the Operational Excellence concept, focusing on increasing energy efficiency in production processes and sustainable resource management.

Note: GHG reduction amounts are calculated referencing the emission factor of 0.4999 kgCO2e/kWh from the Thailand Greenhouse Gas Management Organization (Public Organization).

• Measure No. 1 focuses on qualitative adjustment to reduce atmospheric and climate impacts according to maintenance cycles.

GHG Reduction Measures in Production Processes (Scope 1 & 2 Reduction)

Climate Scenario Analysis and Risk Management

Commitment and Goals

Modernform is committed to enhancing strategic resilience through integrated impact assessments of future climate conditions. The Company aims to utilize scenario analysis as a core framework for investment decision-making and enterprise risk management to mitigate negative impacts across the value chain and seek opportunities amidst the transition to a low-carbon economy.

Operational Guidelines

The Company conducts analysis in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), referencing two global scenarios:

1. Transition Scenario (IEA NZE): Analyzes policies to limit global temperature rise to no more than 1.5 degrees Celsius, focusing on adaptation to carbon taxes and global trade regulations.
2. Physical Risk Scenario (IPCC RCP 8.5): Analyzes the impacts of a temperature rise exceeding 2 degrees Celsius, focusing on responding to severe natural disasters and ensuring Business Continuity (BCP).

Performance Results

Based on the 2025 impact assessment, the Company has defined clear risk and opportunity management measures as follows:

• Transition Risk Management: Recognizing challenges from stringent disclosure requirements, the Company has accelerated its Decarbonization strategy through investment in Green Infrastructure and the development of circular product innovations, such as the ORBIX collection, to transform regulatory constraints into opportunities to serve Green Procurement customer segments.
• Physical Risk Adaptation: Integrated business continuity plans with supply chain management by establishing backup supplier systems for key material groups and installing high-efficiency cooling systems (Big Fan) to maintain productivity and employee hygiene during extreme heatwave conditions.

Adaptation Strategy and Impact on Financial Planning

Commitment and Goals

Modernform is committed to managing its budget in alignment with a low-carbon business direction. We have integrated climate change risks and opportunities into our Capital Expenditure (CAPEX) and Operational Expenditure (OPEX) planning processes. Our focus is on enhancing resource efficiency, developing eco-friendly products, and transferring financial risks to maintain business stability amidst climate-related crises.

Operational Guidelines

The Company integrates climate change factors into its financial planning through the following approaches:

1. Integrated Value Consideration: In CAPEX planning, the Company considers energy efficiency and GHG reduction as key criteria for selecting technology and machinery, focusing on investments that reduce resource consumption at the source and provide long-term energy cost savings.
2. R&D for Business Opportunities: Allocate OPEX to support research and development of innovative eco-friendly products, focusing on Circular Economy designs to transform environmental regulatory risks into competitive advantages.
3. Data Standards and Transparency: Allocate budget for GHG measurement and third-party verification by international standard bodies to ensure accurate financial and environmental data for strategic low-carbon transition planning.
4. Risk Management for Financial Stability: Execute risk transfers through insurance policies covering property damage from climate-related natural disasters, such as floods and storms, to minimize impact on cash flow and ensure business continuity.

Performance Results

The Company has allocated budget to support its sustainability strategy as follows:

1. Capital Expenditure (CAPEX) for Low-Carbon Infrastructure:

• Production Consolidation: Consolidating production bases at Bang Phli to reduce redundancy and increase overall energy efficiency.
• Energy & Resource Efficiency: Investing in Solar Rooftop systems and upgrading machinery through standardized part development to reduce wood scrap generation.

2. Operational Expenditure (OPEX) for R&D and Innovation:

• Product R&D & Innovation: Budgeting for the development of the ORBIX collection, a new product line designed under circular concepts, emphasizing recycled materials and carbon-reducing designs for transportation.
• Transparency & Verification: Expenses for GHG measurement and verification by an independent external agency (BSI) to ensure data accuracy and transparency according to international standards.

3. Risk Management and Financial Stability:

• Risk Transfer: Executing financial risk transfers through property insurance policies covering natural disasters (e.g., floods, storms) to reduce business interruption impacts and maintain financial strength.

Participation in Climate Change Networks

Commitment and Goals

Modernform believes that solving climate change issues requires collaboration from all sectors. The Company is committed to building partnerships with leading organizations at both national and international levels. Our goal is to elevate the Company’s GHG management standards to align with international best practices and collectively drive the Thai furniture industry toward a sustainable low-carbon society.

Operational Guidelines

The Company has defined guidelines for collaborating with climate-related organizations through active membership in various networks as follows:

• Elevating Supply Chain Standards through Networks: Joined the Thailand Supply Chain Network (TSCN) to exchange sustainability knowledge, monitor new regulatory trends, and use them as guidelines to develop organizational capabilities aligned with the standards of leading national partners.
• Supporting National Databases: Collaborated with GHG regulatory bodies to submit the Company’s performance data into transparent and internationally verifiable reporting systems.

Performance Results

In 2025, the Company demonstrated significant progress in working with various organizations as follows:

1. Thailand Supply Chain Network (TSCN):

• Membership Status: The Company holds ordinary membership in the TSCN, a group of leading private sector partners.
• Engagement Role: The Company plays a vital role in integrating best practices by applying the network’s framework to evaluate and develop supply chain partners, preparing for a collective transition to a low-carbon business. Additionally, the Company regularly participates in meetings and Circular Economy knowledge exchange activities.
• Success from Collaboration: In 2025, the Company was selected to receive the SX TSCN Sustainability Award 2025 from a regional sustainability competition. This reflects Modernform’s commitment to elevating ESG operations to align with the standards of business partners and marks a significant step in developing a sustainable supply chain system for the future.

2. Thailand Greenhouse Gas Management Organization (Public Organization) (TGO):

• Membership Status: The Company is registered and has received verification for its Carbon Footprint for Organization (CFO) report under TGO standards.
• Engagement Role: The Company supports the national GHG database through continuous annual reporting and verification for the second consecutive year, serving as a key mechanism for driving Thailand’s Net Zero target. Furthermore, the Company utilizes TGO’s knowledge and learning resources to develop employee skills for accurate GHG calculation and reporting.

Consistency of Climate Policy and Trade Association Positions

Commitment and Goals

Modernform is committed to ensuring that its policy engagement through trade associations aligns with the Company’s sustainability pledges. We aim to demonstrate a positive stance in supporting progressive climate policies and prevent risks where association policies might conflict with the Company’s goal of becoming a low-carbon business.

Operational Guidelines

The Company has established a process to monitor and evaluate policy alignment through the trade associations it belongs to, emphasizing constructive relationships as follows:

• Alignment Assessment: Assign relevant departments to monitor the policies, statements, and activities of trade associations to evaluate whether they support sustainable directions consistent with the Company’s GHG reduction targets.
• Management of Divergent Opinions: If a trade association’s position significantly conflicts with the Company’s sustainability policy, the Company will prioritize its own standards and goals while using its membership channels to present best practices to help elevate the industry’s standards.

Performance Results

In 2025, the Company implemented and monitored policy alignment as follows:

1. Policy Alignment Assessment: From reviewing the positions of key trade associations, specifically The Federation of Thai Industries (FTI), it was found that the association has clear policies supporting the BCG Economic Model and the country’s Carbon Neutrality target, which are consistent with the Company’s sustainability strategy.
2. Measures for Non-alignment: Modernform remains steadfast in constructive and sincere communication. In cases where an association’s position differs from the Company’s climate targets, the Company follows these guidelines:

• Support through Experience Sharing: The Company uses its membership role to present its successful practices as case studies for the association to consider in elevating standards for the overall industry.
• Maintaining Organizational Policy Independence: The Company affirms its commitment to its own GHG reduction targets, even if general association standards have not yet reached that level, to maintain its pledge to stakeholders.
• Proactive Management of Differences: In cases of divergent positions, the Company takes a proactive role in communicating data and best practices to build mutual understanding, using sustainable development as the core to ensure its engagement creates a positive long-term impact on the industry.

3.2.7 TCFD Content Index

Commitment and Goals

Modernform recognizes the importance of transparent, consistent, and internationally comparable sustainability disclosure to enable stakeholders to accurately assess business resilience against climate-related risks and opportunities. The Company is committed to elevating its climate-related disclosures in alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) to systematically link environmental factors with the Company’s financial impacts.

Operational Guidelines

The Company has integrated the four core pillars of TCFD into its sustainability reporting process. A summary of the locations of key information is provided to facilitate stakeholder access to data as follows:

TCFD Disclosure Index Table