Fraser & Neave Holdings Bhd Sustainability Report 2020

Sustainable Palm Oil Our target for ‘Sustainable Sourcing’ specifically relates to palm oil. Although this represents a relatively minor proportion of our expenditure (less than 3% of total expenditure on products and services), it has potentially major indirect impacts as irresponsible palm oil cultivation has caused—and continues to cause—significant environmental and social damage. We understand that our actions and business practices pertaining to the support of sustainable palm oil production is important and, having become an ordinary member of RSPO in August 2017, we reiterate our support for the use of Certified Sustainable Palm Oil (CSPO) in products. F&N’s approach has been through RSPO with a focus on credits, and we are currently exploring the mass balance approach. Sustainable Sugar Another key commodity F&N focuses its sustainable sourcing efforts on is sugar as it is a significant commodity used within F&N products. We are currently developing a sustainable sourcing approach for this specific commodity. This year, F&NHB has started procuring sustainable sugar under the guidance of VIVE sugar certification programme. F&N is also exploring the possibility of using BONSUCRO certified sugar products for our operations in Thailand. Our Approach In the past year, we have engaged with over 2,900 global and local suppliers across our supply chain, including manufacturers, wholesalers, retailers, importers/merchants, contractors and professional services providers. We recognise that sustainability in our own operations is futile unless we also work with these partners to ensure best practice across our supply chain. Hence, we look to understand our suppliers’ needs and establish mutually beneficial partnerships for circular economy solutions. For example, our organisation’s waste may end up becoming a valuable resource for another organisation. The Group works closely with our suppliers and conducts regular audits to ensure standards and practices for food safety and the environment are maintained throughout the value chain. F&NHB supports the UN Guiding Principles on Business and Human Rights and we are a member of the Supplier Ethical Data Exchange. Our Procurement Policy covers our full commitment to standard principles of ethical business practices throughout the supply chain. Our Target To purchase 100% of RSPO credits for palm oil usage by 2020 Our Performance in 2020 100%of RSPO credits for palmoil purchased in 2020 TOTAL RSPO CREDITS PURCHASED 106% RSPO credits of total actual palm oil usage) FY2018 FY2019 FY2020 Target for FY2020 FY2017 3,050 8,600 21,400 44,000 44,000 91% 9% 27 73% SUPPLIER PROPORTIONS BY TYPE OF MATERIALS IN FY2020 Direct Materials • Packaging materials • Ingredient raw ingredients • Auxiliary materials • Co-packing • Finished & trading goods Indirect Materials • Sales and marketing • Logistic and warehousing • Engineering and site services • Administration • Others GRI 204-1 Responsible Supply Chain SUSTAINABLE SOURCING 086 FRASER & NEAVE HOLDINGS BHD