FGV HOLDINGS BERHAD | SUSTAINABILITY REPORT 2022/2023 31 PROMOTING ECONOMIC GROWTH FGV is committed to ensuring all raw materials are procured from responsible sources aligned with our GSP commitment. Traceability is instrumental in fulfilling this commitment to responsible sourcing as it provides an in-depth view of the origins of our raw materials. This information enhances transparency and is integral to direct sustainability efforts across our supply chain as well as facilitating the identification of our sources of supply and the associated suppliers. The first crucial step to responsible sourcing is the first line of defence, which is the pre-qualification exercise to ascertain the suppliers’ credentials, suitability and alignment to our commitment to sustainability. Suppliers are required to comply with FGV’s SCOC that is in line with FGV’s sustainability requirements and expectations. Through our traceability efforts, we are able to foster deeper collaborations with all strategic partners to trace the origin and chain of custody of all materials used for our operations and assess their sustainability risks. In addition, we continually improve and intensify information dissemination and communication with suppliers for proper end-to-end traceability. Traceability in Our Plantation Business We are committed to the NDPE policy and remain guided by the FGV GSP in ensuring that our products are not associated with any risks of workers’ exploitation. We share information on our traceability which covers Traceability to Mills (TTM) and Traceability to Plantations (TTP) with the general public via our company website and Traceability of Products (ToP) platforms. In order to ensure our palm products are sourced from responsible suppliers, we started to trace our raw materials since 2017. Our stakeholders can access the FGV traceability dashboard on our company website and obtain updates on the TTM and TTP PROGRESS AND ACHIEVEMENTS As one of the largest conglomerates in the country, we have a responsibility to support local industries and contribute to local economic growth. In 2023, 9% or 106 existing and new suppliers were screened for their environmental impacts. Additionally, 70% of procurement spend were for local suppliers. Supporting Local Industries Successfully maintained 100% TTM, achieved throughout FY2019 to FY2023 Traceability to Mills (TTM) Tracing of Fresh Fruit Bunches (FFB) • Our estates contributed about 28% of FFB supplies while 42% are from FELDA, and the remaining 30% are from other external sources including dealers network and independent smallholders with an approximate land size of 10 acres (four hectares) per household • Committed to assisting smallholders on technical grounds to further improve their productivity • Our TTP data for 2022 which was 99% was externally verified by the Control Union Certifications Malaysia during Archer Daniels Midland (ADM) Traceability Protocol Verification on 18, 19 and 21 July 2023 Traceability to Plantations (TTP) • Provided 20 training sessions on NDPE and assessed suppliers’ compliance with FGV’s Group Sustainability Commitments • To conduct supplier compliance assessment for all FFB suppliers towards FGV’s Group Sustainability Commitments which evaluates adherence to key elements of NDPE, RSPO, MSPO, and FGV’s GSP, tailored to suit suppliers in our upstream sector. The External Sourcing Supplier Checklist (ESSC) serves as a platform to determine the initial compliance status, providing a baseline for comparison with future years. This comprehensive approach ensures that suppliers are evaluated against established sustainability standards and can track their progress over time • Collaborated with our value chain partners to ensure traceability and transparency are incorporated into their practices • Our sustainability team engaged with our FFB suppliers to communicate our sustainability commitments Traceability Validation status of our palm oil supply chain. In addition, we also update the traceability status of our subsidiaries including FGV Refineries Sdn Bhd, FGV Kernel Products Sdn Bhd, FGV Biotechnologies Sdn Bhd and Delima Oil Products Sdn Bhd.
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