REFLECTIONS FROM THE TOP SEC 3 20 CHAIRMAN’S STATEMENT We are realigning, adjusting, and advancing our operations to embrace the circular economy. Our waste-to-wealth initiatives, which includes converting palm oil mill effluent into biogas and selling used materials as feedstock, demonstrate this aim. In our drive towards carbon neutrality, we conducted a Greenhouse Gas (GHG) emissions inventory exercise to establish our baseline, set reduction targets and form a reduction strategy. Having completed our Scope 1 and Scope 2 emissions inventory, we are now focused on the more complex Scope 3, which involves numerous suppliers. The inventory exercise extends to waste and water conservation. To facilitate the transition to a low-carbon economy, we are installing grid-connected photovoltaic systems on the rooftops of selected business operations. We have also conducted a tree planting event in Gerik, Perak, covering a 300 Ha High Conservation Value (HCV) area to promote sustainable land management practices. This initiative aligns with our efforts to enhance environmental stewardship and biodiversity conservation, demonstrating our commitment to corporate social responsibility and sustainable development goals. Environment Stakeholder engagement has been crucial in aligning our business with social expectations. In 2023, we have conducted nine series of Independent Smallholders Consultation Programmes to communicate FGV’s sustainability commitments and gather insights from this stakeholder group. The interactions has proven particularly insightful in highlighting the need for technical support, estate management training and financial assistance for certification costs. To strengthen our efforts in promoting ethical sourcing across our value chain and mitigate negative impacts across our operations, we have enhanced our end-to-end Responsible Recruitment Programme to ensure ethical practices are upheld from pre-sourcing assessments to ongoing monitoring. Recruitment processes for migrant workers have also been improved by reinforcing the principle of no recruitment fee and strengthening recruitment agencies’ due diligence and selection process. We do not tolerate unethical practices and we have demonstrated this by suspending recruitment agencies for not meeting our sustainability standards. As part of our initiative to promote diversity and inclusion in the workplace, we collaborated with organisations, including LeadWomen and the Malaysian Palm Oil Council (MPOC) to organise various workshops and panel sessions on Women’s Empowerment and Gender Equality in the Palm Oil Sector. This initiative reflects our commitment to fostering a more equitable and inclusive work environment, where all individuals have equal opportunities for growth and advancement. Social In 2023, we implemented several governance initiatives to enhance transparency, accountability and operational efficiency. Key measures included establishing formal procedures for addressing breaches of the Directors’ Code of Ethics and Conduct (COEC), Directors’ Code of Business Practice (COBP), and a comprehensive Group Grievance Management Policy. A new Grievance Channel was introduced to allow migrant workers to have their concerns and grievances addressed promptly and effectively by the Company. We established a Tax Corporate Governance Framework (TCGF), comprising a comprehensive set of technical guidelines and associated documents governing tax management and processes within the Group. FGV is pleased to be among the early adopters of the TCGF internally, as recommended by the Inland Revenue Board of Malaysia. We strengthened compliance and monitoring functions, and deliberated on strategic issues such as whistleblowing and anti-bribery strategies at the board level. We also collaborated with the Malaysian Anti-Corruption Commission (MACC) and conducted sessions with Senior Management to reinforce our anti-corruption stance. We are addressing our public shareholding spread to meet the minimum requirements and are committed to transparently communicating our efforts to comply with the listing requirements. In promoting fair labour practices, we are working together with LRQA (formerly known as ELEVATE), an independent third-party assessor, to execute a remediation plan necessary under the WRO that focuses on 12 key areas. This includes improving recruitment processes and enhancing agency selection. In 2023, we spent around 1.08 million man-hours to these activities. Additionally, we have reimbursed RM72.2 million in recruitment costs to 20,153 active migrant workers and initiated a three-year project valued at RM605.0 million to improve worker accommodation. To date, we have invested around RM392.6 million in constructing new housing, renovating facilities, and ensuring uninterrupted electricity and water supplies for our migrant workers; developing an energy management system, and facilitating sustainability certifications and initiatives, among others. We aim to ensure our workers are not forced into debt bondage or exposed to poor living conditions. These actions target all 11 indicators of forced labour identified in the WRO and will be part of our submission to the US CBP. Governance More information on Corporate Governance Overview Statement can be found on page 107. More information on sustainability initiatives can be found in the Sustainability Report 2022/2023.
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