FGV Annual Report 2018

53 REMAINED FOCUSED ON VALUE CREATION 01 02 05 03 07 06 04 08 09 ANNUAL INTEGRATED REPORT 2018 MANAGEMENT DISCUSSION & ANALYSIS OVERVIEW We remain committed to building our Social & Relationship Capital as we recognise the value of contributing to the development of sustainable communities. To this end, our initiatives during the year continued to focus on activities impacting key Stakeholders including our employees, communities and the environment. From our engagement with our Stakeholders, the key material matters identified for 2018 were Yield Improvement, Economic Performance, Governance, Ethics & Integrity, Human Rights & Labour Relations, and Roundtable on Sustainable Palm Oil (RSPO) Certification. These are important to build our customers’ confidence in our oil palm production and at the same time improve our competitive edge in the oil palm business. TRACEABILITY We work closely with our value chain partners to ensure they embed traceability and transparency in their operations in line with SDG 8: Decent Work and Economic Growth, as we seek to strengthen the sustainability of the value chain. Our traceability system, FGV-ToP, has enabled us to identify all our sources of FFB up to the plantation and smallholder level. We have completed the first phase of traceability until the mill level. The second phase involves traceability at FGV estates and FELDA settlers and the third phase will cover traceability to the outgrower and Independent Smallholder level. The two remaining phases are targeted for completion in 2025. MANAGING OUR SOCIAL AND RELATIONSHIP CAPITAL AND ITS OUTCOMES MALAYSIA SUSTAINABLE PALM OIL CERTIFICATION FOR SMALLHOLDERS As one of the largest supporters of Smallholders in the world, we seek to partner, support and sustain of 112,635 FELDA Settlers. Supporting the Smallholders provides a valuable opportunity to improve social outcomes, which we are committed to playing a role in and hence, contributing to SDG 2: Zero Hunger (Target 2.3 - Double the Agricultural Productivity and Incomes of Small-scale Food Producers). As part of the yield improvement programme, we are supporting and assisting FELDA in getting Scheme Smallholders Malaysia Sustainable Palm Oil (MSPO) certified, in line with the government’s call for all Scheme Smallholders to be MSPO-certified by end-2019. MSPO is the first Malaysian certification scheme that was launched in 2015. This scheme focuses on developing rural communities to contribute to the national socio-economic agenda. Being among the first few plantation companies to be MSPO-certified, we have gained an advantage and in-depth knowledge to assist Independent Smallholders (ISH) in this area. In supporting Independent Smallholders who supply FFB to our mills, we collaborated with the MPOB to assist in registering these ISH under MPOB Sustainable Palm Oil Cluster (SPOC). In addition, we have also trained 150 of our officers on the MSPO certification's requirements which is important to enable these officers to provide the necessary support to the ISH in pursuing their MSPO journey. 112,635 Support FELDA Settlers REDEFINING OUR IDENTITY The Group officially changed its name to FGV Holdings Berhad from Felda Global Ventures Holdings Berhad through an Extraordinary General Meeting (EGM) which took place on 29 June 2018. Subsequent to this, 13 of our subsidiaries changed their names in 2018, while another eight subsidiaries underwent their name-change exercise until March 2019. This exercise was undertaken to streamline our brand and to emphasise our position as an integrated and diversified business. For further details on FGV-ToP System, please refer to the Intellectual Capital in this MD&A. We align our Social & Relationship Capital with Sustainable Development Goals (SDGs): For further details on our Material Matters can be found in Assessing Our Material Matters on pages 14-18. SOCIAL & RELATIONSHIP CAPITAL