As global regulations tighten and sustainability expectations rise, full visibility across our supply chain is critical to preventing environmental and social violations. We endeavour to track our raw materials to ensure compliance with the European Regulation on Deforestation-free Products (EUDR), Malaysian Sustainable Palm Oil (MSPO), and Roundtable on Sustainable Palm Oil (RSPO) standards among others. WHY IS IT IMPORTANT? Building a responsible supply chain requires real-time traceability, rigorous supplier assessments, and proactive risk management. Through this approach, we have undertaken the following measures: 1. STRENGTHENING TRACEABILITY FOR SUPPLY CHAIN TRANSPARENCY We ensure full traceability to mills (TTM) and plantations (TTP) through supply chain mapping, supplier engagement, digital tools such as FGV-ToP (Traceability-of-Product). In 2024, we accomplished 100% TTM and 80% TTP. FGV-ToP is a centralised platform that consolidates supplier data, enhancing traceability monitoring at mills and plantations. External users, including crude palm oil (CPO) buyers, can access key information, ensuring alignment with MSPO and EUDR standards. We also use third-party platforms such as the Earthqualizer to assess supplier risks, focusing on deforestation and land use changes to ensure supplier’s compliance with EUDR standards before integration into our supply chain. 2. ENFORCING RESPONSIBLE SOURCING COMMITMENTS Responsible sourcing is central to our supply chain strategy. We ensure that all Fresh Fruit Bunch (FFB) suppliers align with our responsible sourcing policies through structured suppliers onboarding process including site visits, assessments based on our sourcing checklist. In addition, all FFB suppliers are assessed through third party assurance mechanism tied to standards such as MSPO and RSPO. Should there be any compliance issues identified, we will engage with the suppliers through site visits and discussions to address the concerns. The suppliers will need to submit a remediation plan and this will be closely monitored. If issues persist despite corrective actions, we will implement measures which may include temporary suspension of purchasing arrangements pending compliance, or full removal from our supply chain in cases of repeated or severe violations. WHAT IS OUR APPROACH? Traceability, Responsible Sourcing and Supply Chain Management We will build on our advancements in supply chain management by further enhancing supplier compliance and monitoring. This will involve utilising Global Positioning System (GPS)-enabled geolocation data, increasing our supplier capacity-building initiatives, and strategically collaborating with regulatory bodies, industry leaders, and certification agencies. Our approach will shift from reactive compliance tracking to predictive risk management, ensuring a resilient and sustainable supply chain that aligns with global standards. WHAT IS OUR OUTLOOK? We have trained 34 field staff in using satellite-based navigation to enhance the accuracy of the data collected for traceability purposes. We have also conducted 29 sessions with the suppliers to raise their awareness on the sustainability standards and the importance of adopting sustainable practices. In addition, we support local communities and contribute to national economic growth – 100% of our FFB procurement spending was directed to local suppliers. 2023* 2024* Percentage of spending on local suppliers* 100% 100% *The data disclosed is based on FGV’s FFB procurement spending. * FGV’s current definition of local suppliers refer to all suppliers operating in Malaysia. Based on this definition, the 2023 percentage is restated as 100% as FGV sources its FFB solely from suppliers in Malaysia. WHAT VALUE WAS CREATED IN 2024? 125 Sec 05 DRIVING VALUE THROUGH BUSINESS GROWTH (SUSTAINABILITY REVIEW)
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