8 FGV HOLDINGS BERHAD STATEMENT FROM THE GROUP CHIEF EXECUTIVE OFFICER As at December 2019, all of FGV’s CPO production is already 100% traceable to mills and about 90% is traceable to estates. FGV’s internal production is 100% traceable to our estates and our FELDA settlers are also 100% traceable to their estates. For independent smallholders, we have a target of full traceability by 2021. ENVIRONMENTAL STEWARDSHIP FGV adopted its ‘No Deforestation, No Peat, No Exploitation’ (NDPE) policy in 2016, a commitment that is important in recognising environmental protection and respect for human rights. The Group has also decided that it will not develop any greenfield areas of high conservation value, including peatlands, and where possible, will restore peatlands that were previously cleared after 25 August 2016, without causing social conflict among local communities expecting economic benefits from their land. In this regard, FGV has been working with the Indonesian government to implement a Peat Restoration Management Plan at PT Temila Agro Abadi plantation in Kalimantan, Indonesia. Most crucially, FGV has taken proactive measures to reduce our greenhouse gas (GHG) emissions by increasing our renewable energy efforts, such as establishing biogas capture plants and producing bio-CNG, among others. Thanks to our strategic investment in renewable energy technologies, we have reduced our carbon dioxide emissions by more than 100,000 tonnes by building biogas capture plants to capture methane at our palm oil mills. Currently, we have 30 biogas capture plants, which have helped to reduce our GHG emissions significantly. For instance, we monitored 12 biogas plants in 2019, which showed a reduction of 79,415 MT of CO2 emissions. These biogas plants have also benefitted local communities by providing them with electricity and further reducing their GHG emissions as they were previously depending on diesel power generators for electricity. The respective plants supplied electricity to rural communities in Umas, Baiduri Ayu in Sabah and Asian Plantations Limited (APL) in Sarawak. Moreover, we have reduced our GHGemissions through bio-compressed natural gas (bio-CNG) plants. Bio-CNG is a viable and sustainable alternative to diesel in vehicles and in the manufacturing industry. At the moment, we have one bio-CNG plant and we are currently working with key partners to build 35 more. When completed, we will own the most bio-CNG plants in the world for a plantation company. Our biogas and bio-CNG plants have also enabled us to sell renewable energy, which is part of our palm-based circular economy. Our circular economy has shown tremendous growth, such as in the production of animal feed using waste by-products from milling processes since 2015. Sales increased by over 100% from 10,182 MT in 2018 to 21,653 MT in 2019. We target to achieve 50,000 MT of feed production in 2020. The palm-based circular economy is part of FGV’s Business Plan 2021 and it includes dairy farming and alternative crops. In biodiversity conservation, we are committed to conserving and protecting the ecosystem and habitats of endangered, rare and threatened species. Our Sun Bear Conservation Programme (SBCP) is the first such programme in Peninsular Malaysia and we are extending it for another five years. We have invested close to RM2.3 million over the past five years to rescue and rehabilitate sun bears in Peninsular Malaysia. In 2019, 13 sun bears were rescued and provided with shelter, treatment and rehabilitation before being released into their natural habitat. In addition, FGV is part of the Mega Biodiversity Corridor Conservation Project, which is establishing a network of forest corridors to enable the safe migration of wildlife between key forest habitats. We contributed RM1.7 million to support the re-establishment, restoration and protection of key migratory routes, especially of Borneo pygmy elephants and orangutans, to allow safe migration within the Lower Kinabatangan Basin in Sabah. Developed in partnership with the Borneo Conservation Trust (BCT), the project has since conducted a number of activities such as organising the ‘Honorary Wildlife Warden’ (HWW) capacity building programme in November 2018. As part of our contribution to flora conservation, FGV is working with the Forest Research Institute of Malaysia (FRIM) to establish a Rafflesia Conservation & Interpretation Centre (RCIC) in Gerik, Perak. The RCIC will serve as a one-stop research, education and conservation centre for the endangered Rafflesia. GOING FORWARD 2018 and 2019 were not easy for us, with multiple challenges requiring the Management team to fire from all cylinders at the same time. As our Chairman frequently reminds us, in adversity we must find opportunity. Our strategic business shift is ongoing, at a rather opportune time. This shift will also force us to reinforce our commitment to sustainability as we identify new revenue streams. As strong proponents of consultation and engagement, we will continue to adopt a consultative approach, including materiality assessments every two years to ascertain issues of importance to our stakeholders. We will also continue to identify risks and opportunities in economic, environmental and social matters and strive to provide regular updates and share information with stakeholders in a transparent manner. We will continue to enhance our labour practices and will actively strive to contribute to climate action. FGV aspires to become a business organisation that goes beyond meeting minimum standards on sustainability and human rights. It is our goal to play an instrumental role in developing solutions for industry issues. ACKNOWLEDGEMENTS We would like to record our appreciation to our business partners and stakeholders, who have been supportive of FGV throughout these trying times. We thank you for your support and contributions and for moving forward together with us in our sustainability journey. I would also like to thank the Board for its direction and support during this time. FGV has taken bold steps to grow and move forward over the last two years. This would not have been achieved without their leadership and guidance.
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