Risks: OR CR SR Capitals: Material Matters: RE BL CL SO WU Stakeholders: Strategic Thrusts: What Happened The rapid advancement of digital technologies, artificial intelligence (AI), and automation is transforming industries, including agriculture. AI-driven analytics, precision farming, and automated processes are improving efficiency and sustainability. However, increased digital adoption also brings cybersecurity risks and regulatory scrutiny, particularly with Malaysia’s Cyber Security Act 2024 enforcing stricter compliance measures. DIGITAL TRANSFORMATION Potential Impact • AI and automation are enhancing productivity and operational efficiency across agriculture and supply chain management. • Increased reliance on digital platforms raises concerns about data security, privacy, and regulatory compliance. • Growing investment in digital infrastructure and cloud technologies presents new opportunities for industry-wide innovation. How We Responded • Partnered with industry leaders to implement AI-driven digital ecosystems, including image recognition technology to reduce dependency on human labour. • Enhanced cybersecurity measures to comply with the Cyber Security Act 2024. Outlook The rise of AI, automation, and cloud technologies is driving efficiency but also increasing cybersecurity risks and regulatory challenges. Investing in digital solutions will enhance productivity, strengthen risk management, and ensure compliance with Malaysia’s Cyber Security Act 2024. Advancements in AI-driven analytics, precision farming, and digital infrastructure will further improve competitiveness and operational agility in a rapidly evolving landscape. Capitals: Material Matters: Stakeholders: Strategic Thrusts: Risks: CSR LR What Happened Extreme weather events, shifting climate patterns and rising global temperatures continue to impact food security and agricultural productivity. Climate-related disruptions have intensified supply chain volatility, with floods and droughts reducing crop yields and increasing production costs. Regulatory pressure is also mounting, with Malaysia aiming to cut carbon intensity by 45% against Gross Domestic Product (GDP) by 2030, driving industries towards stricter sustainability practices and climate adaptation measures. CLIMATE CHANGE Potential Impact • More frequent and severe weather events, including floods and droughts, are affecting global agricultural supply chains. • Rising commodity prices due to supply constraints and increasing demand for climate-resilient agricultural practices. • Stricter climate policies and carbon reduction targets shaping industry regulations and sustainability commitments. How We Responded • Enhanced our sustainability framework to align with global commitments and regulatory requirements. • Strengthened GAP and increased crop diversity to improve resilience against climate shocks. Outlook Extreme weather, floods, and droughts continue to disrupt agricultural supply chains, lowering crop yields and raising costs. Strengthening GAP, diversifying crops, and investing in renewable energy will help stabilise costs and improve climate resilience. As regulations tighten, proactive climate strategies will reinforce our position in sustainable agriculture while ensuring compliance with Malaysia’s carbon reduction targets. DS CG TD 56 FGV Holdings Berhad | Annual Integrated Report 2024 Operating Landscape
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