36 FGV HOLDINGS BERHAD SUSTAINABILITY AT FGV SUSTAINABILITY AND OUR ESG IMPACT One of the ways we track our sustainability progress is through external rankings and ratings. These provide good indications of how the public perceives our sustainability performance as they are based on publicly available information. The ratings and rankings also give us an opportunity to reflect on how we can improve our governance and management of sustainability. In 2019, FGV was assessed by ZSL using the Sustainable Palm Oil Transparency Toolkit (SPOTT) and by Forest Heroes under its Green Cats report. In both assessments, FGV’s 2019 score improved significantly over the previous year. These results are not only a positive sign that we are on the right track but have also helped us identify areas where we can improve. One of these areas is assistance to our third party suppliers - mostly smallholder farms - in adopting sustainability practices and obtaining MSPO and RSPO certifications. To this end, we embarked on a traceability exercise in mid-2019 to identify and engage the smallholders in our supplier network. We intend to continue improving our performance through better governance and implementation of sustainability. Implementation of the EcoVadis Corporate Social Responsibility (CSR) Management System To further strengthen our governance around sustainability issues, FGV Rubber Industries Sdn. Bhd. has implemented the EcoVadis CSR Management System on a voluntary basis. The system helps companies evaluate and monitor how they are performing across four main themes: Environment, Labour Practices & Human Rights, Fair Business Practices and Sustainable Procurement. Conducting annual assessments will help identify gaps and potential opportunities across our operations to improve performance and reduce costs, besides ensuring we remain compliant with legal requirements. In 2019, based on 2018 data, we achieved a bronze award in the rubber industry and are targeting to achieve a gold award by 2021. FGV ranked 26th out of 99 companies in the SPOTT Assessment that measures the transparency of palm oil companies against a maximum of 181 environmental, social and governance indicators across 10 categories. In 2018, FGV ranked 27th out of 70 companies assessed and scored 65.6% (81/123.5 total marks), which was above the average score of 47.9% for the sector. In 2019, FGV scored 59.1% (117.5/199) which was substantially above the average score of 35.2% for the sector. The SPOTT methodology was revised in 2019, which makes it difficult to compare year-on-year scores. Overall, FGV’s 2019 rankings represented a marked improvement. FGV scored 71 out of 100 points in the Forest Heroes Green Tigers Index Rankings, where the average score was only 34, to move up to the Green Cat category. In 2018, FGV only scored 39 points and was placed in the Red Cat category. The report assesses companies’ efforts to adhere to deforestation standards and policies. 2019 59.1% 2018 65.6% SPOTT METHODOLOGY
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