Risk Management
Importance and Mission
Effective risk management is essential for the real estate sector, serving a fundamental role in maintaining stakeholder confidence, including investors, employees, customers, and surrounding community.
Sansiri acknowledges that external factors such as economic and political volatility, natural disasters, and the effects of climate change can significantly influence the Company’s operations, the welfare of the residents, and environmental sustainability.
Sansiri has implemented a comprehensive risk management process that entails the identification and assessment of potential risks in advance, taking into account both internal operations and external influences such as economic, social, political, legal, and environmental factors. This proactive approach to risk preparation and mitigation enhances the company's credibility and supports sustained business growth in a dynamic landscape.
Supporting the Sustainable Development Goals
SDGs 10
SDGs 11
SDGs 13
SDGs 16
Goals and Performances
Management Approach
To manage all aspects of risk, including sustainability-related risks across all dimensions, the Company has established a comprehensive risk management policy to define risk management guidelines throughout the organisation. This policy is reviewed annually. Communication of this policy to stakeholders, including employees, business partners, and contractors, is carried out via the Company's website.
To conclude, the Company has established a Risk Management Committee tasked with evaluating and assessing organisational risks, which includes sustainability risks (ESG Risk) as part of its comprehensive risk portfolio. In addition, a Corporate Governance and Sustainability Committee, along with a Sustainability Risk Management Working Group, has been formed to oversee these risks and embed risk management into fundamental business decisions within the organisation's core activities and processes. The Board of Directors is responsible for supervising ESG risks to ensure the implementation of appropriate risk management strategies.
The Company has adopted the integrated Enterprise Risk Management (ERM) framework — Enterprise Risk Management – Integrating with Strategy and Performance — developed by COSO (The Committee of Sponsoring Organisations of the Treadway Commission) as its guiding approach to risk management. In this regard, Risk management is fully integrated into the organisation’s governance, planning, and reporting processes at both operational and strategic levels, rather than treated as a separate activity. To support this, the Company has established a Sub Risk Management Committee consisting of senior executives from various key business units, responsible for overseeing risk management and reporting directly to the Risk Management Committee. Crucially, to uphold the integrity of our internal control environment and facilitate unbiased evaluations, this designated risk executive's role is distinct from that of the Head of Audit function. This clear separation of responsibilities reinforces our dedication to effective governance, allowing for both proactive risk identification and independent assurance of our control systems.
The Company has adopted the COSO Enterprise Risk Management – Integrating with Strategy and Performance framework as a systematic approach to risk management, consisting of eight interrelated key components as follows:
Sansiri’s Risk Management Process
The Company consistently evaluates risk management outcomes and systematically monitors and reports on progress regarding risk issues and plans.
The risk management process involves collaboration between the Risk Management Department, executives, and risk owners across all departments. The risk mitigation plan encompasses both corporate and departmental risks.
The Company has appointed a risk owner for each department to enhance awareness and engagement in risk management among all employees, including the development of risk assessments and management plans. The Company provides updates on the progress of the risk management plan to the department head and collaborates with the organisation's risk management unit to evaluate and monitor quarterly outcomes.
In the management of risks that may affect business continuity, Sansiri has formulated a crisis response plan to ensure uninterrupted operations. A Risk Response Working Group has been established to oversee and determine emergency management plans, facilitating a swift return to normalcy.
To ensure the effectiveness of the Company's risk management process, Sansiri has established a Risk Management Committee, overseen by the Board of Directors, to regularly monitor, review, analyse, and evaluate the risk management plan, ensuring the Company's effective response to emerging risks and changes.
In addition to general operational risks, the Company has implemented specific guidelines for external audits to manage risks associated with the transparency and reliability of financial statements. This process incorporates auditor rotation as mandated by law, which assists in mitigating the risk of auditor independence and enhances the effectiveness of the audit process.
Sansiri's Risk Management Culture
A risk management culture is essential for fostering knowledge, understanding, and effective risk management behaviours, allowing employees to address various levels of risk encountered in daily operations.
Consequently, the Company has established a risk register at both corporate and departmental levels to facilitate the review of risks and enhance awareness of risk management's importance among employees and executives across all departments. The Company monitors and evaluates the effectiveness of risk management operations and consistently reports risk information to the Risk Management Committee, appointed by the Board of Directors and comprising both directors and independent directors.
To enhance knowledge and understanding of organisational risk management across all levels, the Company has implemented a requirement for all new employees to undergo risk management training via the Sansiri Learning Hub. Annual training and assessments on risk management are conducted for all employees. In 2025, a total of 4,971 employees participated in the training, which accounts for 100% of the total workforce. Among these participants, 4,673 successfully passed the assessments, representing a 94% success rate, thereby exceeding the target of 90%. Additionally, the Company actively encourages its directors, executives, and operational staff to engage in external training opportunities to further refine their knowledge and skills in effective risk management. More information on the 2025 annual training can be found under the relevant project headings.
Key Performances
The Company diligently monitors the evolution of various economic, social, political, and environmental situations that present risk factors capable of impacting the organisation.
This encompasses risks influencing current business operations as well as emerging risks anticipated over the next 3-5 years. The Company has defined an acceptable risk level and corresponding risk indicators, which receive approval from the Risk Management Committee. The outcomes of the risk factor assessment inform the formulation of a suitable risk management development plan.
To ensure effective risk management, The Company has established risk registers at both corporate and departmental levels, ensuring coverage for all key business units within its core and affiliated businesses. The risk register and risk indicators are reviewed quarterly, with key issues reported to the Risk Management Committee, which comprises representatives from the Board of Directors, for their acknowledgement and recommendations.
In 2025, in accordance with the risk assessment, The Company has fully implemented its mitigation plan. The Company continues to monitor risk issues arising from both internal and external factors to ensure that the majority of its risks are mitigated or maintained at acceptable levels.
Strategic Risk
Risk associated with land acquisition for project development
Risk Description
The risk of not being able to secure sufficient land for project development to meet targets is influenced by rapidly escalating land prices, a scarcity of land in commercial zones, and intensified competition among entrepreneurs.
Management Approach
Form joint ventures with partner groups to enhance land acquisition capabilities for project development. Additionally, a network of land brokers, both individual and corporate, has been established, incorporating information channels through the website and call center, along with public relations via social media channels, enabling brokers and other land sellers to contact the Company directly.
Financial Risk
Risk of increasing construction material costs
Risk Description
The increase in construction material prices is due to the demand for these materials in various government and business sector construction projects.
Management Approach
The Project Procurement Department closely monitors and controls changes in construction material prices to ensure timely measures are implemented to accommodate these fluctuations. Negotiations will be conducted with suppliers to re-evaluate delivery prices in the event of significant market price declines. Additionally, certain items will be purchased directly from manufacturers.
Risks associated with economic volatility and competition
Risk Description
The current volatile and potentially recessionary economic climate significantly affects consumer purchasing power. Additionally, real estate is a high-value asset necessitating a substantial financial investment. As a result, consumers may lack confidence in their future income, which can influence their purchasing decisions or prolong the decision-making process.
Management Approach
Monitor risks closely and adjust strategies in accordance with market conditions, including the ongoing assessment of changing consumer behaviour.
Risks associated with interest rate and exchange rate
Risk Description
The majority of the project's development funding consists of interest-bearing debt, and fluctuations in interest rates directly affect the project's performance. Additionally, the Company has investments in overseas businesses, making exchange rate fluctuations a significant factor that can influence the uncertainty of revenue and costs arising from investment transactions.
Management Approach
The Company leverages a diverse range of funding channels to select the most suitable option based on the prevailing economic conditions and anticipated interest rate movements. In terms of overseas investment, funding sources are secured in each respective country to ensure that the currency utilised for debt repayment corresponds with the currency of income. Additionally, various derivative instruments are employed to manage the risk associated with exchange rate fluctuations.
Regulatory Risk
Risks associated with personal data protection laws
Risk Description
The Personal Data Protection Act (PDPA) is designed to regulate the utilisation of customers' personal data by businesses associated with the Company. This regulation is essential in the real estate sector, which encompasses sales, rentals, resales, and management of diverse residential projects or buildings, as it necessitates the collection of customers' personal data.
Management Approach
Establish a personal data governance policy, train employees to adhere to the established policy, and appoint a Data Protection Officer (DPO). The officer has received training and updated information from external agencies.
Risk of condominium projects to fail in obtaining approval from the Environmental Impact Assessment Office
Risk Description
The development of real estate projects undertaken by the Company and its subsidiaries includes numerous initiatives that necessitate the preparation of Environmental Impact Assessment (EIA) reports to obtain approval from the Environmental Impact Assessment Office, Ministry of Natural Resources and Environment.
Management Approach
Engaging a consulting firm registered with the Ministry of Natural Resources and Environment to prepare an environmental impact assessment report in compliance with the Environmental Quality Promotion and Conservation Act B.E. 2535 (1992) and implement measures for the prevention and mitigation of social and environmental impacts appropriate to each project.
Operational Risk
Risk of Customer Complaints
Risk Description
In today’s market, customer demands are becoming increasingly diverse, and consumers have elevated their expectations for the products they choose to purchase. Real estate is regarded as a high-value asset, and social media is playing an increasingly significant role due to its accessibility and the rapid dissemination of information. Consequently, The Company continues to encounter the risk of customer complaints regarding various issues.
Management Approach
The Company maintains dedicated after-sales customer service units, which encompass a call centre, home care, and housing management units, all designed to facilitate and address customer concerns. Additionally, The Company welcomes complaints through multiple channels, including the Sansiri website (www.sansiri.com), the 1685 call center, and email at CS@SANSIRI.COM Standard timeframes have been established for handling complaints to ensure that all issues are addressed and resolved appropriately.
Risks associated with changes in information technology and cyber threats
Risk Description
The implementation of information technology across all work processes, encompassing both internal and external data communication, aims to enhance efficiency, agility, operational speed, and responsiveness to customer needs. However, this advancement also entails the risk of cyber threats. These threats are on the rise and continuously evolving, presenting increasingly sophisticated and diverse attack methods that could affect business continuity, result in the loss or leakage of critical data, and harm the company's reputation.
Management Approach
Developing information technology and information security policies to establish guidelines for usage and risk mitigation; conducting penetration testing; consistently enhancing and updating equipment, systems, and software; delivering cybersecurity training and awareness campaigns to employees to ensure adherence to established guidelines; and formulating response plans for cyber incidents, including IT disaster recovery plans.
ESG Risk
Risks Associated with Climate Change
Risk Description
The current issue of global warming is advancing at a rapid pace and has led to increased climate variability, significantly affecting the natural balance. Climate change influences business operations through events such as floods, droughts, tropical cyclones, and temperature fluctuations, which impact the construction process of projects. This also includes shortages of essential construction materials and the rise in operating costs in the event of a disaster.
Moreover, the potential for natural disasters, such as earthquakes, could affect customer confidence in the real estate sector, particularly concerning high-rise projects.
Management Approach
The Company employs a management approach that aligns with the guidelines set forth by the Task Force on Climate-Related Financial Disclosure (TCFD). This approach encompasses a thorough impact assessment, addressing policies and regulations, reputation, and physical risk impacts, including floods, storms, hail, drought, and temperature fluctuations. Mitigation measures have been implemented to address these risks, which include an annually reviewed business continuity management plan. Additionally, a Risk Response Team, composed of professionals with diverse expertise, is established to ensure prompt responses to emergencies or atypical situations.
Emerging Risks
Emerging Risk 1: Regulatory and Disclosure Risks in Environmental, Social, and Governance (ESG) Aspects
Impact:
Environmental, Social, and Governance (ESG) issues are increasingly integral to corporate operations. This development coincides with the escalating trend and rigour of international sustainability regulations, including the upcoming IFRS S1 and IFRS S2 sustainability disclosure standards, which will be implemented within the next two to three years, as well as various international reporting frameworks such as the GRI standard, the Natural Resources Financial Disclosure Framework (TNFD), and the FTSE Russell ESG Scores framework for evaluating financial data and stock indices.
Furthermore, regulatory scrutiny extends to government and regulatory oversight concerning the measurement and reporting of greenhouse gas emissions. This includes new requirements established by the Science Based Targets initiative (SBTi) for the real estate sector and adherence to the reporting guidelines of the Thailand Greenhouse Gas Management Organisation (Public Organisation). Concurrently, new legislation and policy frameworks, including the Climate Change Act and the Thailand Taxonomy, which serves as a central standard to classify environmentally sustainable economic activities in Thailand, are currently in development and pending enactment. These measures are projected to influence investment decisions and project development significantly. Additionally, the Company is assessing its future financing requirements in this evolving landscape. Societal expectations regarding human rights and the responsibility of supply chains are also on the rise, propelled by Human Rights and Environmental Due Diligence (HREDD) laws and practices, which are gaining prominence at both national and international levels.
Failure to prepare for these changes may expose the Company to risks that could jeopardise brand credibility and long-term competitiveness, including potential fines or penalties for non-compliance with disclosure standards, competitive disadvantages, or doubts surrounding ESG credibility. Such issues could adversely affect the confidence of customers, investors, and business partners.
Risk management approach:
The Company has developed a comprehensive strategy to address environmental, social, and governance (ESG) risks, beginning with its governance framework. A Sustainability Governance Committee and a dedicated working team have been established to advance organisational sustainability, which includes enhancing readiness in associated processes and systems to facilitate disclosure in accordance with IFRS S1 and S2. Additionally, to bolster data integrity, the Company is preparing for third-party audits and certifications to ensure the transparency, verifiability, and compliance of the organisation’s ESG reports with international standards, as well as obtaining green building certifications to meet the requirements and expectations of contemporary consumers.
Emerging Risk 2: Demographic Change Risk
Impact:
The World Health Organisation (WHO) forecasts that by 2050, the proportion of the global population aged 65 and older will double, indicative of the worldwide trend towards aging societies. This phenomenon is particularly evident in Thailand, which is projected to transition into a fully aging society in 2024, reaching its peak by 2033. Concurrently, there is a consistent decline in birth rates, reflecting the younger generation's inclination to have fewer children in favor of prioritising lifestyle and personal pursuits. Consequently, this shift has fostered the development of alternative markets, such as the pet industry. The working-age population is increasingly tasked with the responsibility of caring for the elderly, thereby complicating the ratio of working-age individuals to seniors. This evolving demographic structure has significant implications for the long-term demand for housing and related services, as well as the capacity to attract future talent if the labour force diminishes more rapidly than anticipated.
Risk management approach:
The Company acknowledges this risk and has proactively prepared by considering multiple dimensions, including the development of projects and services tailored to meet the diverse needs of residents, such as initiatives that facilitate multi-generational living and support pet ownership. The organisation is also engaged in ongoing research and design of products and services that resonate with the changing demographic landscape. Furthermore, the Company has instituted a policy to extend the retirement age for employees voluntarily from 60 to 65 beginning in November 2024, aiming to accommodate the needs of an aging society, align with government initiatives, and provide continued employment opportunities for those who remain capable of contributing effectively.
Relevant Stakeholders
Executives and Employees
Investors and Shareholders
Customers, Tenants and Residents
