3 SUSTAINABILITY REPORT 2018/2019 STATEMENT FROM THE CHAIRMAN THE YEAR 2020 STARTED WITH PROMISE. CRUDE PALM OIL (CPO) PRICES HAD RISEN FROM THE DOLDRUMS AND FGV HOLDINGS BERHAD WAS ON TRACK WITH ITS CAREFULLY STRATEGISED AND MUCH DISCUSSED OPERATIONAL TRANSFORMATION STARTING TO BEAR FRUIT. THE NUMBERS WERE COMING IN AND ALL INDICATORS POINTED TO A MUCH BETTER 2020. This time, there were seven non-compliances cited for the resuspension, compared to the 42 non-compliances with the RSPO’s principles & criteria that had been identified in November 2018. This, to my mind, showed improvement, but obviously it was not enough. A non-compliance is what it is, grievous or not, and it must be corrected. FGV continues to intensify its efforts to address and resolve the concerns raised, and these efforts are elaborated upon throughout the report. The Board has a vision for FGV and that vision translates simply to running our business well and doing it the right way. For me personally, the resuspension was a wakeup call. It was time to make sure that our commitments to sustainability are embedded in our strategies, operationalised and embraced by our people. FGV must balance the quest for profits against the needs of the planet and its people. Then came the COVID-19 pandemic. Its onset was unforeseen, the speed of its spread was shocking, and its impact is still reverberating with no clear end in sight yet. As a multinational company with customers in several countries, the Group has been and will continue to be impacted by the pandemic, even as nations cautiously emerge from lockdowns. Demand has whittled down, driving prices down, as supply chains worldwide struggle to maintain the links of global commerce. What remains unclear at the time of writing is the degree of the impact we are facing and how long it will continue, especially considering reduced purchasing power in economies ravaged by increasing unemployment. Having said that, despite the prevailing challenges, I believe there are opportunities for an organisation like FGV, with its network of nearly 200,000 small farmers and a logistics business that is one of the largest in the country, linking us, our supply chain and our domestic markets seamlessly. As we redirect FGV towards a more sustainable business model, my colleagues and I on the Board are committed to all the best principles of governance and sustainability, across the Group, in all our businesses. DRIVING GOVERNANCE AND SUSTAINABILITY An organisation with a stakeholder base as large and diverse as FGV’s faces the persistent challenge of balancing the interests of many to achieve desirable outcomes for all. However, we are clear that good governance, ethics and integrity can never be compromised, under any circumstances. Driven by the Board, FGV has taken steps to bring about important changes that we are embedding in the Group, at all levels. If there was one blip in January 2020, it was the resuspension of FGV’s Serting Mill Complex by the Roundtable on Sustainable Palm Oil (RSPO). DATUK WIRA AZHAR ABDUL HAMID Chairman For more information on FGV’s new business model, please refer to Our Business Plan in FGV’s Annual Integrated Report 2019 on pages 24 and 25. For more information about FGV’s governance, please refer to the Group’s Corporate Governance Overview Statement in FGV’s Annual Integrated Report 2019 on pages 82 to 116.
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