TCFD Analysis

Climate change presents both risks and opportunities across Indorama Ventures' global operations, spanning our Combined PET, Indovida, Fibers, and Indovinya business segments. This section discloses the actual and potential impacts of climate-related risks and opportunities on our business, strategy, and financial planning, assessed across short-term (0-5 years), medium-term (5-10 years), and long-term (>10 years) time horizons in line with our business planning cycles. Risks and opportunities are identified through a structured process combining internal risk inputs across business units with external expert review, and are prioritized based on materiality and potential financial impact. The following sections outline the physical and transition risks, and the opportunities, identified as most material to our business.

Climate-related risks and opportunities

The climate-related risks and opportunities presented below were selected based on the Double Materiality Assessment (DMA) results and their potential financial impact.

Impact on business, strategy, financial planning

1. Physical Risk: Water Stress

Water is essential to our manufacturing operations, supporting processes including polymerization cooling and recycling. Water stress, exacerbated by climate change, is a physical risk that could disrupt production continuity, increase the cost of securing water supply, and create competition for shared water resources with local communities and other water users in the basins where we operate.

Water Risk Analysis

We assess water risk annually using the AQUEDUCT 4.0 Water Risk Tool developed by the World Resources Institute, which evaluates changes in water demand and water supply under current and projected future conditions for 2030, 2050 and 2080 under three future scenarios: Optimistic (SSP1-RCP2.6), Business as Usual (SSP3-RCP7.0), and Pessimistic (SSP5-RCP8.5). This is supplemented by the ENCORE tool for water dependency mapping and the WWF Water Risk Filter for water quality risk assessment. The FY2025 assessment covers 142 manufacturing sites, as shown below.

Financial impact estimation of plant shutdown due to water stress

This financial modeling focuses on 64 of the 142 sites located in the two highest water stress categories, Extremely High and High, while sites in the Medium-High and lower stress categories continue to be monitored through the annual water risk assessment but are not currently included in the shutdown cost model. To quantify the potential financial impact of water stress, the analysis estimates the EBITDA loss associated with 30, 60, and 90-day plant shutdown scenarios at these high-risk sites using 2025 production and EBITDA data.

Note: The financial impact represents the estimated loss of EBITDA from plant shutdowns due to water shortages. The amount was converted from US dollars using [FX rate/methodology]. For further details, please refer to Indorama Ventures’ 2025 Water Stress Assessment Report, available here.

Mitigation Measures for Water Stress

• The risk management committees of plants and business segments regularly monitor potential regulatory changes and evaluate water risks and opportunities through scenario analysis.
• We conduct natural disaster risk assessments of our plants and sites to determine risk level, mitigation needs, and required intervention, developed in collaboration with Environmental, Health & Safety, and Group Insurance.
• We have established minimum expectations for assessment, preparedness, and emergency response planning covering natural disasters including hurricanes, winter freeze, and flooding.
• Water risk findings from the AQUEDUCT assessment (methodology described above) are analyzed by the SRMC to identify mitigation measures and initiatives, with priority given to plants in high and extremely high water stress areas.
• We evaluate options to reduce water consumption, increase the recycling and reuse of wastewater, and collect rainwater, working toward zero liquid discharge at as many sites as possible, with targets set at entity and group level. Six sites have achieved Zero Liquid Discharge to date, including Avgol Nonwovens India (Halol site), IVL Dhunseri Petrochem Industries (Karnal site), PT. Indorama Ventures Indonesia (PET), PT. Indorama Ventures Indonesia (Fibers), Schoeller Kresice s.r.o, and TPT Petrochemicals (Branch 3).
• We are committed to sustainable water management, including ensuring that 100% of wastewater is treated to meet or exceed applicable regulatory quality standards before being discharged into the environment, in compliance with applicable environmental laws across our countries of operation.
• These measures sit within our Climate Mitigation and Adaptation Plan (2024-2027), the Group's structured framework for physical climate risk resilience, described further in the Risk Management section.

2. Transition Risk: Carbon Pricing

As a global chemical manufacturer with operations spanning Asia, Europe, Africa, and the Americas, Indorama Ventures is exposed to transition risk from the introduction of new carbon pricing mechanisms and the tightening of existing ones across our operating jurisdictions.

Scenario analysis

Carbon pricing is a core policy instrument used by governments to drive emissions reductions consistent with their Nationally Determined Contributions (NDCs) under the Paris Agreement. Given the pace at which carbon pricing regimes are expanding globally, we have broadened our assessment methodology to capture schemes currently in force as well as those announced or under development.

Emissions forecasts to 2030 are derived from internal business plans, which incorporate anticipated production growth over the period. Our current financial modeling horizon extends to 2030. Carbon cost exposure was quantified using regional carbon price assumptions from the IEA World Energy Outlook 2025 (Table B.6), applied across three scenarios reflecting a range of policy ambition.

Note: Indorama Ventures paid approximately THB 69 million (US$2.11 million) in carbon pricing costs, including carbon taxes and ETS-related payments, in 2025. The amount was converted from US dollars using [FX rate/methodology].

Our carbon cost exposure covers Scope 1 emissions and Scope 2 market-based emissions, the boundary most directly subject to compliance carbon pricing and most relevant to our electricity procurement. Most carbon regulation is expected to take the form of emissions trading schemes under which a portion of emissions is covered by free allocation, so our model applies carbon pricing to approximately 50% of total emissions in scope. This is a simplifying assumption rather than a jurisdiction-specific calculation, since free allocation varies by sector and ETS phase and is set to decline under the EU ETS Fit for 55 revisions, while non-EU jurisdictions apply different mechanisms or none. We are working to refine this to a site-level basis as our methodology matures.

Mitigation Measures for Carbon Pricing Risk

Carbon pricing is a material transition risk for Indorama Ventures, reflecting the carbon intensity of petrochemical production and the trajectory of carbon regulation across our countries of operation. We test the resilience of our decarbonization strategy against the same IEA World Energy Outlook 2025 CPS, STEPS, and NZE scenarios used to quantify this exposure. Under the Current Policies Scenario, projected 2030 carbon costs increase materially from 2025 actual payments. Under the Net Zero Emissions by 2050 scenario, consistent with limiting warming to 1.5°C, projected exposure rises substantially, reflecting the pace and scope of carbon pricing expansion required under that pathway. This spread informs how we prioritize investment across our decarbonization pathways: efficiency and optimization projects and recycling capacity, which reduce emissions intensity regardless of the policy scenario that materializes, are weighted more heavily than pathways whose value depends on a specific carbon price trajectory. Our mitigation approach is anchored in our Group target of reducing Scope 1 and 2 GHG intensity by 30% by 2030, supported by decarbonization pathways across three categories and by sustainability-linked financing design to support this transition across a range of policy outcomes rather than a single assumed scenario.

A) Decarbonization pathways

We pursue decarbonization through a structured set of pathways, grouped by maturity and role in our transition strategy:

Conventional pathways

• Efficiency and optimization: green projects addressing resource intensity are classified as approved, promising, or aspirational based on payback period and cost efficiency, with new projects approved centrally.
• Energy transition: solar rooftop deployment and exploration of the transition from coal to lower-carbon energy sources, supported by renewable energy procurement through Renewable Electricity Certificates (RECs) and Virtual Power Purchase Agreements (VPPAs).
• Natural capital solutions: offsetting residual emissions through renewable energy, forestry, and wetland restoration projects, with exploration of plastic and carbon credit issuance within recycling facilities.
• Recycling: recycled PET (rPET) reduces both lifecycle carbon emissions and plastic pollution relative to virgin PET production.
• Renewable materials: use of renewable oxygen in ethylene oxide production.

Supporting activities

• Supplier engagement: the Sustainable Supply Chain program (launched 2021) supports Scope 3 emissions measurement and the evaluation of potential Scope 3 reduction targets through supplier ESG risk management and carbon footprint data sharing.
• Internal carbon pricing policy: used to inform project finance assessments at selected sites.

New technologies

• Carbon capture, utilization, and storage (CCUS): under monitoring for applicability to high-intensity sites.
• Renewable natural gas (RNG): offers significantly lower emissions than conventional natural gas.
• Green hydrogen: identified as a potential decarbonization lever for hard-to-electrify processes.

Further decarbonization case studies are available in the following sections of our website.

• GHG management
• Energy management
• Renewable energy management
• Water management
• Waste management

B) Sustainable Finance

Sustainable finance is integral to how we fund our decarbonization pathways and manage transition risk exposure, including carbon pricing. Since 2018, we have raised a total of THB 125 billion (equivalent to USD 3.7 billion) through sustainability-linked and green and blue financing instruments, including sustainability-linked loans, bonds, revolving facilities, term loans, and factoring programs arranged with international and regional banking partners. These instruments are linked to sustainability performance targets (SPTs) and, in several cases, ESG ratings with performance against relevant targets, including climate-related targets where applicable, potentially influencing financing terms.

3. Opportunity: Recycled/Renewable Feedstock

Indorama Ventures is the world's largest PET producer and the largest producer of recycled resin used for PET beverage bottles, giving the company proprietary operating knowledge in mechanical recycling built over more than a decade of operating experience. As global demand for recycled and bio-based content grows, driven by extended producer responsibility schemes, recycled content mandates, and brand owner commitments, the company is well positioned to capture a significant share of this demand.

A) Investing in Low-Carbon Product Development for Business Resilience

Under Vision 2030, the company has set targets to raise recycled feedstock (post-consumer PET bale input) to 23% of PET feedstock and bio-based feedstock to 16% of external feedstock by 2030. 2025 progress against these targets was recycled feedstock at 5.51% of CPET and Indovida feedstocks, and bio-based feedstock at 1.58% of external feedstock. Circular and low-carbon innovation is being advanced through Indorama Ventures Investments & Holding (IVIH), which has identified more than 70 circularity opportunities (including drop-in recycled feedstocks from hard-to-recycle polyester waste) and more than 40 low-carbon opportunities (including bio-based and CO2-based polyester precursors). Since 2024, Indorama Ventures has been supplying ISCC PLUS-certified, mass-balanced bio-based polyester to the market, with 11 sites certified as of the end of 2025. In 2025, IVIH supported four pilot projects for low-carbon PET fibers in automotive and apparel applications.

B) Recycling Capacity Expansion

Indorama Ventures operates 20 recycling facilities as part of its 114 manufacturing locations across 31 countries. Since 2011, the company has recycled 3.1 million tons of post-consumer PET bale input, equivalent to 166 billion post-consumer PET bottles, reducing its carbon footprint by an estimated 4.0 million tons over the product lifecycle. In 2025, post-consumer PET bale input (direct and indirect) reached 458,500 tons against a 2025 target of 750,000 tons, with installed bale input capacity of 837,000 tons. The company recycled 30.57 billion post-consumer bottles in 2025 against a 50 billion annual target. The 2030 targets remain 1.5 million tons of annual bale input and 100 billion bottles recycled per year.

Indorama Ventures has continued to expand its investment in recycling infrastructure since first entering the segment in 2011, having committed $1.5 billion toward building a closed-loop recycling system that supports circularity in beverage packaging. This is being pursued in partnership with multiple value chain participants to advance a circular economy for sustainable plastics. The company has stated an intention to expand from 20 recycling sites in 11 countries to 24 sites, including three new greenfield facilities in India and one in Nigeria targeted for commissioning by 2027, in support of the 1.5-million-ton annual recycling target for 2030.

Taken together, our strategy is designed to remain viable across the range of physical and transition climate outcomes assessed in this disclosure. On the physical risk side, our water risk assessment tests site exposure under three SSP pathways (SSP1-2.6, SSP3-7.0, and SSP5-8.5) to 2030, 2050, and 2080, and our mitigation measures, including consumption reduction, water reuse, and Zero Liquid Discharge, are applied irrespective of which of these pathways materializes, reducing site-level vulnerability under both moderate and severe water stress conditions. On the transition risk side, we test our decarbonization strategy against the IEA CPS, STEPS, and NZE scenarios used to quantify our carbon cost exposure. Our decarbonization pathways and recycled and renewable feedstock investments are structured to deliver value whether the slower transition reflected in the CPS and STEPS or the more rapid transition of the NZE scenario materializes, supporting the resilience of our strategy and financial planning over the short, medium, and long term.

Processes for identifying and assessing climate-related risks

Indorama Ventures identifies climate-related risks through two complementary channels. On an ongoing basis, business functions submit climate risk items, covering both physical risks (acute and chronic) and transition risks (policy and legal, market, technology, and reputation), through a central risk portal, in line with the Group's Enterprise Risk Management (ERM) Framework. Periodically, climate risks are also identified through double materiality assessment (DMA) workshops, a biennial process reviewed annually and independently assured by a third party, in which stakeholder interviews and site-level surveys identify climate-related risk items, which are then mapped to the relevant material topic and cross-checked against the risk portal to avoid duplication. External inputs, including climate policy monitoring, industry-specific transition scenarios, and engagement with external climate risk specialists, supplement both channels to reduce the likelihood of omitted risk items.

Each identified climate risk is assessed by a risk owner using the Group's 8x8 risk matrix, scoring severity (financial, reputational, operational, and compliance impact of the climate hazard or transition driver) and likelihood on an eight-point scale, consistent with the severity criteria applied in the Group's Double Materiality Assessment. Using the same matrix applied to the Group's other enterprise risk categories ensures climate risk is prioritized on a basis consistent with, and comparable to, non-climate risks, rather than assessed in isolation. This represents an evolution from the 5x5 risk matrix and standalone impact assessment methodology used previously, reflecting the Group's move toward an 8x8 matrix and a double materiality approach that jointly evaluates financial materiality alongside impact materiality.

Climate risks scored high or very high proceed to an adaptive capacity assessment. This evaluates the effectiveness of the prevention and mitigation controls a site or business unit relies on to withstand a specific climate stress event, such as drought-driven water scarcity or extreme weather disruption to logistics. The effectiveness of these controls is rated across four tiers, ranging from no meaningful controls in place to controls fully implemented and demonstrated to work under stress. This step determines the Group's vulnerability to a given climate hazard, distinct from the raw risk level, and reflects IPCC-aligned vulnerability assessment principles. Time horizons applied to climate risk are short term (0–5 years), medium term (5–10 years), and long term (>10 years).

Processes for managing climate-related risks

Subject matter experts evaluate climate risks assessed as high severity and high likelihood, together with their adaptive capacity rating, to develop a risk management strategy specific to the physical or transition driver involved. Where adaptive capacity is rated as limited or not effective against a climate stress event, the strategy prioritizes closing that control gap, for example through site-level flood or water resilience measures, alternative sourcing or logistics arrangements, or capital investment directed at physical asset resilience. This work is carried out under our Climate Mitigation and Adaptation Plan (2024-2027), implemented in three phases. The readiness and capacity building phase (2024-2025) prioritized 12 sites for assessment based on risk software and historical disaster records and introduced a Vulnerability Assessment SOP and Climate Adaptation Academy training. The planning phase (2026) extends the Vulnerability Analysis to all Indorama Ventures sites and includes collaboration with site heads to formulate site-level adaptation plans for high-risk sites. The implementation phase (2027) focuses on resilience-building initiatives with ongoing monitoring. Several sites have already implemented resilience measures identified through this process, including tornado preparedness in the United States, wildfire management in Brazil, flood protection in Thailand, and water optimization systems in Egypt. Strategies are submitted to the Sustainability and Risk Management Committee (SRMC) for approval, and associated climate programs are discussed at the relevant management forums.

Climate risk items are monitored on an ongoing basis through a five-stage cycle, shown in the figure below. Risk Identification captures new and emerging climate risk items through the risk portal and DMA workshops. Risk Assessment scores each item using the 8x8 matrix to determine climate risk level, with an adaptive capacity evaluation carried out at this stage for risks assessed as high or very high, rating the effectiveness of existing controls against the specific climate hazard. This informs the Mitigation Plan, where the climate risk management strategy described above is developed. Risk Treatment follows once the strategy is approved by the SRMC and implemented by the relevant business function or council. The cycle closes with Risk Monitoring and Evaluation, where climate risk levels and adaptive capacity ratings are reviewed at least annually, and more frequently following an actual climate stress event or when new climate science, regulation, or scenario data materially changes a risk's likelihood or severity, feeding back into the next round of Risk Identification.

Climate-related Risk Identification and Management Process

Integration into the overall risk management process

Climate-related risk is not managed as a standalone category. It is assessed using the same 8x8 risk matrix, risk portal, and governance escalation path applied to the Group's other enterprise risks, allowing climate risk to be prioritized alongside operational, financial, and other risk categories on a common basis rather than through a parallel or lower-priority process. Cross-functional councils and committees, each with defined oversight of climate strategy, policy, and execution, allow climate risks to be escalated from individual sites and business functions to Group-level governance bodies.

During 2025, the ERM framework continued to mature, with Combined PET, Indovida, Fibers, and Indovinya completing segment-level risk reviews using this standardized methodology, updating risk profiles, including climate-related items, and reinforcing risk ownership and governance arrangements at the segment level. This provides the basis for climate risks identified through the DMA process to be reconciled with, and where material, incorporated into, segment-level ERM risk registers going forward, closing the gap between our sustainability materiality process and our enterprise risk process for climate specifically.

Climate-related physical risk resilience is also supported by our Business Continuity Management Program, aligned with ISO 22301:2019, which includes strategies for alternate sourcing, transportation flexibility, inter-regional production transfer, and business continuity plan development and exercising. Further detail on WEF Climate Governance Principles and our Business Continuity Program is available in the Climate-Related Risk Management Report 2024.

Climate-related metrics and targets are central to how Indorama Ventures governs its transition to a lower-carbon business and tracks the resilience of its operations against physical and transition risks. These metrics also reflect the Company's contribution to the Sustainable Development Goals (SDGs, a separate SDGs Report is available here) and its progress in advancing a circular economy, particularly through recycled and bio-based feedstocks. The Company monitors ten sustainability metrics spanning GHG emissions intensity, energy, water, waste, renewable electricity, circular feedstocks, and recycling, each linked to material climate risks and opportunities, with targets for 2025 and 2030 and a baseline applied to key intensity metrics where relevant. Details on recycled/renewable feedstock performance are provided in the Strategy section.

Progress against our 2025 targets has been uneven across the group. We are advancing in renewable electricity adoption and improving water intensity, while further progress is needed to reduce Scope 1 and Scope 2 GHG emissions intensity and overall energy use, primarily due to the cost and scalability of decarbonization technologies, capital constraints, production dynamics at carbon-intensive sites, and a dynamic geopolitical landscape. In 2025, employees completed 40,447 hours of mandatory environmental training, covering greenhouse gas reduction, energy and water efficiency, and waste management and reduction. Achieving our 2030 goals will require sharper prioritization and targeted investment, including adoption of innovative technologies, further asset optimization, and a gradual transition away from coal. Maintaining credible and transparent sustainability commitments through this period of economic and market uncertainty remains a Board-level priority. Performance against each metric as of 2025 is presented in the figure below, with detailed commentary on GHG emissions, energy, water, and waste provided in the sections that follow.

Greenhouse Gas Emissions

Understanding GHG emissions across our operations is fundamental to meeting our reduction targets, satisfying customer requirements, and managing climate transition risk. Our 2025 GHG inventory covers 142 manufacturing sites and 2 offices globally, calculated in accordance with the GHG Protocol for Scope 1, Scope 2, and Scope 3 emissions, with Scope 3 reporting covering 9 categories relevant to our business. In 2025, combined Scope 1 and Scope 2 GHG intensity (market-based) was 0.5666 tCO2e per ton of production, a 7.56% reduction against our 2020 baseline, against a target of 10% by 2025 and 30% by 2030. All emissions data is independently verified, with 100% of our Scope 1, 2, and 3 inventory assured to ISO 14064-1 and ISO 14064-3 standards.

Total investment in GHG-related projects, including capital expenditure and operational expenditure, amounted to THB 80.24 million in 2025. Scope 3 emissions represent the majority of our total GHG footprint, and reducing them requires close collaboration with our supply chain. We are strengthening Scope 3 management through a structured supplier engagement program, building on ESG assessments conducted via EcoVadis and our membership in Together for Sustainability (TfS). This work is progressing toward product-level carbon footprint data and is informing the development of a dedicated Scope 3 reduction target. Priority activities include supplier prioritization, training for suppliers and internal procurement teams, and integration of sustainability criteria into procurement processes. Performance against GHG reduction targets is monitored quarterly by the Sustainability and Risk Management Committee (SRMC), while efforts continue to improve energy efficiency and strengthen regulatory preparedness, including alignment with emerging requirements such as the EU Carbon Border Adjustment Mechanism (CBAM). Further detail on our GHG performance and methodology is available in the GHG Management section.

Energy Consumption Reduction

Energy management is central to Indorama Ventures' decarbonization strategy, given the direct link between energy consumption and Scope 1 and Scope 2 emissions. We manage energy consumption and efficiency across all business segments, supported by defined targets, an active efficiency improvement program, and technology transition initiatives including coal phase-out at select sites. Renewable electricity consumption reached 7.68% of total electricity consumption in 2025, up from 2.86% in 2024, against targets of 10% by 2025 and 25% by 2030.

In 2025, total investment in energy-related projects, including capital expenditure (CapEx) and operational expenditure (OpEx), amounted to THB 80.24 million (reflecting the same capital program that supports both GHG and energy-efficiency outcomes). These investments supported energy reduction initiatives, including process innovations, equipment upgrades, and transitions to cleaner energy sources. Our energy data is independently verified annually by an external third party. Further detail on performance and methodology is available in the Energy Management and Renewable Energy sections.

Water Management

Water stewardship is governed by our Water Management Policy, which covers water withdrawal, discharge, and consumption across our value chain, with the aim of reducing water intensity, managing water-related risk, and maintaining strong relationships with communities in areas where we operate. We apply the 3Rs (Reduce, Reuse, Recycle) and circular economy principles to improve water efficiency and progress toward our reduction targets. We are committed to ensuring 100% of our water discharge is treated to a quality below applicable regulatory limits before release. Six sites achieved Zero Liquid Discharge in 2025. In 2025, water withdrawal intensity was 5.01 m³ per ton of production, a 4.93% reduction against our 2020 baseline, against a target of 10% by 2025 and 20% by 2030. In 2025, total investment in water-related projects, including capital expenditure (CapEx) and operational expenditure (OpEx), amounted to THB 7.55 million, supporting 5 water consumption reduction projects. Further detail on performance, water risk assessment, and site-level initiatives is available in the Water Management section.

Waste Management

Waste management is a material part of how we reduce our environmental footprint, guided by applicable regulations and global standards. Our waste management program supports operational efficiency and reduction in waste generation, in line with circular economy principles. Waste management plans are developed for each site, covering collection, segregation, transportation, reprocessing, recycling, and disposal, in compliance with health, safety, and environmental requirements. We prioritize the reduction of hazardous waste, expansion of recycling and reuse programs, and disposal exclusively through approved vendors. In 2025, 68% of total waste generated (0.36 million tons) was diverted from landfill, including waste treated through energy recovery, against a target of 90% diverted by 2025 and 2030. Further detail on performance and site-level initiatives is available in the Waste Management section.