Fraser & Neave Holdings Bhd Sustainability Report 2020

New Supplier Code of Conduct This year, we have launched a new Supplier Code of Practice which covers all environmental and social impacts, including business ethics, environmental management, human rights and occupational health and safety. F&N is in the midst of communicating the Code of Practice to all suppliers and ensuring that they are compliant with the new terms. Upon understanding and signing of the Code of Practice, audits will be conducted tomonitor performance of key suppliers against defined criteria. Currently, about 30% of F&NHB suppliers have signed the new Code. We aim to get 100% of our suppliers accepting and complying to the new code by 2025. Read more about ‘Our Supply Chain’ for our supply chain flow on pages 16 to 17 of this SR Screening our suppliers At F&NHB, we have a systematic screening process for all new suppliers using environmental and social criteria. These criteria reflect the commitments towards the environment (such as reducing waste, pollution and water usage) and society (including human rights and labour practices). The environmental performance of their raw material and primary packaging suppliers are also assessed annually to verify if they have: 1. Implemented an environmental policy 2. Undertaken audits to monitor their environmental performance and compliance 3. Maintained an ISO14001 compliant environmental management system Addressing risks in our Supply Chain Cost and Availability – High or variable costs and uncertain availability of raw materials pose commercial risks to F&N. We therefore undertake risk assessments on our suppliers’ prices and capacity to deliver goods and services. For key risks, we have established Business Continuity Plans to proactively ensure product supply. Food Safety Standards – We conduct annual supplier audits to ensure compliance with food safety regulations and standards. We assess a range of quality assurance and food security criteria to safeguard the health of consumers and the safety of workers in our supply chain. Criteria include the implementation and monitoring of good manufacturing processes, use of protective clothing, food safety management systems, and chemical management. This year, all critical suppliers were audited on food safety regulations and standards, and none were found to be in non-compliance. Non-compliant or underperforming suppliers must demonstrate that they are committed to taking the necessary corrective actions within a predefined period, or risk having their contracts terminated. incident of non-compliance with food safety regulations and standards. 0 Halal Sourcing Partnership Programme As amajor producer of Halal products inMalaysia, F&NHB is in a position to facilitate the development of the nation’s Halal industry. This year, F&NHB continued to partner with Halal Industry Development Corporation (HDC) on the Halal Sourcing Partnership Programme (HSPP). Through this collaboration, we shared Halal industry best practices whilst providing technical advice and knowledge transfer to small and medium enterprises (SMEs), and further coached them to elevate their capability to be qualified as Halal vendors for multi-national corporations. Capacity Building for Our Suppliers Since 2013, we have been collaborating with local Thailand-based farmers in cooperatives which supply FNDT with fresh milk. We continue to introduce new technologies and equipment (for example, milk machine testers and automatic jet cleaning milking machines) to help them increase productivity, improve milk quality, and reduce wastes as part of a circular economy approach. Working closely with the cooperatives, we also organised seminars and produced quarterly educational newsletters for the farmers. This year, we continued to build the capability of over 2,000 farmers from 10 milk cooperatives, mainly in Nakhorn Ratchasima Province, through a Farming Excellence System, which consists of 3 key programmes: Beginning July 2019, we, together with Soonthorn Metal Can (our can supplier) and Thepsathit Milk Cooperative (one of our milk suppliers in Thailand), came together to tackle the water shortage problem during the annual dry seasons by providing a champagne tank and piping route to the Thepsathit community in Chaiyaphum Province. This programme is able to supply 1,680,000 liters of water every month for up to 180 households across communities in Chaiyaphum province. This also provides sufficient water supply for up to 24 farms, consisting of 955 cattle, to minimise disruption from drought and ensure farmers can continue their farming operations sustainably. Booklet and guidelines to share information about good farming practice to improve milk quality Mobile application to conduct assessment at farms: • Good Manufacturing Practice (GMP) assessment, focusing on cleaning, antibiotics’ drug usage and physical properties inspection of raw milk • Online COA assessment to monitor the waiting and delivery time to F&N, to ensure quality of raw milk Sustainable farming • Water champagne tank project to tackle the water shortage problem • Use of wastewater and cow’s dung in the plantation of feed such as napier grass and corn 1 2 3 087 SUSTAINABILITY REPORT 2020