Accelerating Value Chain Decarbonization for Corporate Growth Perspectives from Asia 2025

CASE STUDY 2 SCG (Siam Cement Group): circular economy for low- carbon cement and materials As one of the largest building materials companies in South- East Asia, SCG (Siam Cement Group) connects upstream raw material and energy suppliers, and community and agricultural waste sources with downstream real estate developers, infrastructure contractors and packaging clients. Through circular economy practices, SCG transforms waste into production inputs, achieving both emissions reduction and cost optimization, while delivering lower-carbon and traceable cement and packaging products to its customers. Core initiative –SCG actively promotes the use of biomass, community waste and agricultural by-products processed into refuse- derived fuel (RDF) as a substitute for coal, reducing fossil carbon emissions in clinker production. –In collaboration with local governments and communities, SCG recycles construction and demolition waste as well as industrial by-products back into cement production, lowering natural limestone extraction and increasing clinker substitution rates. –Through SCG Green Packaging, the company promotes the collection and reuse of paper and plastic packaging materials, helping downstream customers reduce emissions associated with single-use packaging. –SCG builds regional circular economy platforms that channel agricultural residues and industrial waste into usable fuels or raw material substitutes for the construction sector, creating cross-industry value and emission reductions. Impact SCG’s circular economy initiatives not only lower the carbon intensity of cement production but also extend the life cycle of materials: –At multiple production sites, the share of alternative fuels has increased significantly, reducing reliance on coal –The reuse of construction waste and industrial by- products eases landfill pressure while reducing raw material procurement costs –Circular packaging creates new green revenue streams and strengthens customer loyalty in downstream markets –Importantly, SCG’s circular model provides waste management solutions for local communities, enhancing the company’s social license to operate and reinforcing its role in regional sustainable development. Areas to build the business case for corporate value chain decarbonization action TABLE 3 Growth lever Mechanism Core KPIs Common tools Addressing physical and transition risks –Traceability reduces compliance and brand risk –Data and localization improve shock resistanceTraceability coverage of key materials, compliance pass rate, days of disruption. –Scope 3 emissions reduction milestones and tracking –Supplier and material traceability systems –Digital monitoring, reporting and verification Enhancing efficiency and financial performance –Using green power and efficiency to lower unit cost and volatility –Optimizing processes and logistics to reduce waste –Including carbon performance in financing terms and ratings –Achieving lower funding costs and accessing broader capital poolsUnit emissions, unit energy cost, price volatility, on-time delivery rate, production yield, funding cost spread, ESG/climate scores, bond/loan approval rate, weighted average cost of capital –Power purchase agreements –Renewable energy certificates –Process and equipment efficiency improvements –Low-carbon materials –Green warehousing and transport –Waste reduction and circular systems –Sustainability-linked loans/sustainability- linked bonds –Audit and third-party verification Elevating competitiveness and unlocking new revenues –Incorporating low carbon and traceability into procurement –Low-carbon products and business models create new revenue –Linking carbon performance to market access and pricing via cross-border rulesWin rate, average selling price/premium, access to restricted markets, customer retention, share of revenue from new products –Product carbon footprint accounting and verification –Aligning supplier targets (including SBTi) –Product-level low-carbon labels –Scope 3 emissions disclosure coverage –Low-carbon product design and modular products Accelerating Value Chain Decarbonization for Corporate Growth: Perspectives from Asia 16