Dear Shareholders and Stakeholders,
In our continued efforts to provide 'Pure Enjoyment. Pure Goodness' to our stakeholders, we continue to sharpen our focus on creating value for our stakeholders by becoming a 'better business' and contributing to a 'better planet' and a 'better society'.
As such, we are pleased to share our 6th Sustainability Report, covering the period from 1st October 2021 to 30th September 2022 (FY2022).This report aims to provide insight into how Fraser & Neave Holdings Bhd (F&NHB) is confronting important economic, environmental and social sustainability issues. We will also share the progress of our targets and on-going and new initiatives implemented this year to meet our sustainability goals.
We continue to be guided by the Global Reporting Initiative (GRI) standards to ensure the relevance and comprehensiveness of this report. Additionally, selected Safety, Health, and Environment (SHE) practices have been externally validated by Lloyd's Register Quality Assurance (LRQA).
Sustainability Priorities for F&N
Society is evolving rapidly; hence, we benchmark our materiality matrix regularly with various industry and reporting standards to ensure relevance with our organisation's growth and stakeholders' developing interests. As part of our review this year facilitated by an external consultant, “Human Rights”, “Product & Service Labelling”, “Governance & Ethics”, “Human Capital Development”, and “Employee Safety, Health & Well-being” were material issues that shifted upward to reflect the increased importance to our external stakeholders. Moving forward, our working teams will focus on delivering positive outcomes for these parameters.
We continue to progress towards achieving our 2025 sustainability goals that were set in 2021. We are making good strides on seven of the 12 goals while undertaking various initiatives to accelerate our performance in the other five areas to ensure we are on track for all targets.
Assessing our Climate-related Risks & Opportunities
As an organisation whose core business revolves around raw materials, we are cognisant of the effect climate change has on our products and supply chain. F&N had begun a phased implementation of climate-related disclosures in relation to the Task Force on Climate-related Financial Disclosures (TCFD) recommendations this year, ahead of Bursa Malaysia's stipulated timeline. This is part of our commitment to manage climate-related impacts and stay accountable to our stakeholders.
Through our inaugural climate-related impact assessment this year, we have identified material transition drivers and physical climate-related risks on our operations and supply chain through scenario analyses of transition and physical risks. In subsequent years, we aim to deepen our understanding of climate-related risks by further quantifying risks and opportunities to positively direct the development of our climate strategy.
Sustainability Excellence
In 2022, F&NHB emerged as one of the top decile companies in our second S&P Global Corporate Sustainability Assessment (S&P CSA) and ranked among the top ten companies out of 89 companies assessed in the beverages industry. Our company scored 71 (out of 100). Notably, F&NHB achieved the forth-highest score for the Social dimension. (Score date: Nov 18, 2022)
Recent Awards & Recognition
Our efforts towards excellence in Environmental, Social, and Governance (ESG) practices continue to receive external validation.
Retained Position in ESG Indexes
We remained a constituent of the FTSE4Good Bursa Malaysia Index (F4GBM) for the fourth year running, with an improved rating to 4.4 out of 5.0 this year from 4.1 in June 2021 and improved percentile rank of 97 out of 100 from 89 in June 2021. We are also a constituent of the FTSE4Good Bursa Malaysia Shariah (F4GBMS) Index for the second consecutive year.
The year in review
Directors & Employees: Building Internal Capacity in ESG
We recognise that awareness and education are essential in embedding ESG practices into business. Our Board of Directors and Senior Management underwent training on four ESG modules this year. The training was conducted by an external ESG consultant and covered topics that our stakeholders have increasingly prioritised: Human Rights, Climate Change, Biodiversity and the ESG Ecosystem. At the same time, 85% of our employees underwent ESG-related training in 2022. We aim to have all our employees trained in ESG annually by 2025.
Suppliers & Business Partners: Business Partner Award Programme
This year, we embarked on an F&N Business Partner Award Programme to strengthen our partnership with our suppliers and collaborate with them to elevate the quality of their services and align them with our values, including sustainability. Through this programme, we are working to empower our local suppliers to grow with F&N and become regional suppliers with an expanded business horizon.
Consumers: Consumer-centric Innovation
Among the 11 new products introduced in 2022, new healthier additions include reduced-sugar options for our Condensed Milk, a new range of nutritious milk products and a re-introduction of F&N SEASONS Soya Rose endorsed with the Healthier Choice Logo (HCL).
With that, more than half of our beverage and dairy product portfolio today is endorsed with the Healthier Choice Logo, totalling 68 products. We are also well on track to achieve our 2025 target of having healthier options comprise two-thirds of our portfolio.
Catering to the different needs of consumers, we have expanded our packaging size options. In Thailand, we introduced evaporated milk and sweetened evaporated milk in a 1L paper carton format for more convenient usage while ensuring the product's hygiene.
Complementing our healthier options for consumers, we also spread hydration awareness to over 100,000 Malaysians and encouraged the pursuit of an active lifestyle through 100PLUS World Hydration Day. This is part of our consumer education programme to raise awareness of the importance of hydration to the community.
Halal Industry: Supporting the Halal Ecosystem
As a leading manufacturer of Halal products, we are supportive of the Malaysian government's efforts to develop the Halal ecosystem and we do our part in ensuring that our products strictly adhere to Halal compliance along our entire supply chain.
This year, F&NHB continued to partner with Halal Development Corporation Berhad (HDC) on the Halal Sourcing Partnership Programme, sharing best practices within the Halal industry whilst coaching Small Medium Enterprises (SMEs) to qualify as Halal vendors for multi-national companies (MNCs). In 2021, our programme successfully onboarded one SME as our ingredient supplier for F&N Kurma Madu Cordial.
F&NHB also participated in knowledge-sharing forums during the World Halal Business Conference Australia 2022, focusing on topics related to Halal requirements and sustainability.
Society: Serving the Local Community
The flood in December 2021 was one of the worst in years, affecting many parts of Peninsular Malaysia, with Selangor being hit the hardest. Our team distributed over 600 cartons of drinking water to flood victims and affected areas via non-profit organisations. We also took care of our affected employees by distributing RM400,000 in crisis assistance funds to 224 F&N staff.
In each market we operate in, we continue to create greater social equity through our community programmes in five main thematic areas.
Managing Value Chain Impacts
We have taken a firmer stance on reducing our carbon footprint through our implementation of more sustainable measures in our business practice.
In 2022, we purchased 23% of RSPO's physical certified palm oil for our palm oil usage and balanced it with 77% RSPO credits. We have since moved forward with the RSPO roadmap to increase the proportion of the mass balance approach in the upcoming years to achieve 100% of RSPO's physical certified palm oil by 2025.
The Solar Photovoltaic (PV) systems at three plants in Malaysia (Shah Alam, Pulau Indah and Bentong) have started to generate renewable energy progressively since August. By the end of the calendar year, this project will enable us to achieve carbon avoidance of about 9,000 tonnes of CO2e per year, equivalent to approximately 200 cars driven annually.
After a two-year break due to the pandemic, we are delighted to be able to resume our annual nationwide School Recycling Programme. Promoting the 5R philosophy of Reduce, Reuse, Recycle, Rethink and Reinvent, F&NHB's school recycling initiative aims to instil good recycling habits amongst students from kindergartens to primary and secondary schools.
F&NHB also organised a 'How to Keep Malaysia Green with R-Boy' poster competition from 15 June to 19 July 2022, as a supplementary programme to generate students' interest in recycling.
Further underlining our commitment to managing climate-related impacts across our supply chain, we conducted a study on our milk farmers in Thailand to understand their GHG emissions impact. By identifying the key sources of their GHG emissions, we will work with them to develop a long-term roadmap to reduce the climate impact together.
Closing Remarks
On behalf of the Board and management, we would like to express our gratitude and acknowledgement of the great efforts by the F&N team and all stakeholders involved in driving the sustainability agenda for the past year. While there were challenges, we take pride that we were able to attain new milestones in our journey to becoming a more sustainable company.
Sustainability is an on-going commitment. As we drive profitable growth for the Group, we are cognisant that our goals are reached in the most sustainable manner. We recognise that the journey ahead will be even more challenging given the nature of our new business venture. Therefore, we will explore the latest best-in-class technology and practices to create the most sustainable possible dairy farm. We are excited about the economic, environmental and social opportunities that this project can potentially unlock.
We look forward to another exciting year in which we continue to create value for our stakeholders by creating a better business, society, and planet together.
Y.A.M. Tengku Syarif Bendahara Perlis Syed Badarudin Jamalullail Ibni Almarhum Tuanku Syed Putra Jamalullail
Chairman
Lim Yew Hoe
Chief Executive Officer
Dear Shareholders and Stakeholders,
In our continued efforts to provide 'Pure Enjoyment. Pure Goodness' to our stakeholders, we continue to sharpen our focus on creating value for our stakeholders by becoming a 'better business' and contributing to a 'better planet' and a 'better society'.
As such, we are pleased to share our 6th Sustainability Report, covering the period from 1st October 2021 to 30th September 2022 (FY2022).This report aims to provide insight into how Fraser & Neave Holdings Bhd (F&NHB) is confronting important economic, environmental and social sustainability issues. We will also share the progress of our targets and on-going and new initiatives implemented this year to meet our sustainability goals.
We continue to be guided by the Global Reporting Initiative (GRI) standards to ensure the relevance and comprehensiveness of this report. Additionally, selected Safety, Health, and Environment (SHE) practices have been externally validated by Lloyd's Register Quality Assurance (LRQA).
Sustainability Priorities for F&N
Society is evolving rapidly; hence, we benchmark our materiality matrix regularly with various industry and reporting standards to ensure relevance with our organisation's growth and stakeholders' developing interests. As part of our review this year facilitated by an external consultant, "Human Rights", "Product & Service Labelling", "Governance & Ethics", "Human Capital Development", and "Employee Safety, Health & Well-being" were material issues that shifted upward to reflect the increased importance to our external stakeholders. Moving forward, our working teams will focus on delivering positive outcomes for these parameters.
We continue to progress towards achieving our 2025 sustainability goals that were set in 2021. We are making good strides on seven of the 12 goals while undertaking various initiatives to accelerate our performance in the other five areas to ensure we are on track for all targets.
Assessing our Climate-related Risks & Opportunities
As an organisation whose core business revolves around raw materials, we are cognisant of the effect climate change has on our products and supply chain. F&N had begun a phased implementation of climate-related disclosures in relation to the Task Force on Climate-related Financial Disclosures (TCFD) recommendations this year, ahead of Bursa Malaysia's stipulated timeline. This is part of our commitment to manage climate-related impacts and stay accountable to our stakeholders.
Through our inaugural climate-related impact assessment this year, we have identified material transition drivers and physical climate-related risks on our operations and supply chain through scenario analyses of transition and physical risks. In subsequent years, we aim to deepen our understanding of climate-related risks by further quantifying risks and opportunities to positively direct the development of our climate strategy.
Sustainability Excellence
In 2022, F&NHB emerged as one of the top decile companies in our second S&P Global Corporate Sustainability Assessment (S&P CSA) and ranked among the top ten companies out of 89 companies assessed in the beverages industry. Our company scored 71 (out of 100). Notably, F&NHB achieved the forth-highest score for the Social dimension. (Score date: Nov 18, 2022)
Recent Awards & Recognition
Our efforts towards excellence in Environmental, Social, and Governance (ESG) practices continue to receive external validation.
Retained Position in ESG Indexes
We remained a constituent of the FTSE4Good Bursa Malaysia Index (F4GBM) for the fourth year running, with an improved rating to 4.4 out of 5.0 this year from 4.1 in June 2021 and improved percentile rank of 97 out of 100 from 89 in June 2021. We are also a constituent of the FTSE4Good Bursa Malaysia Shariah (F4GBMS) Index for the second consecutive year.
The year in review
Directors & Employees: Building Internal Capacity in ESG
We recognise that awareness and education are essential in embedding ESG practices into business. Our Board of Directors and Senior Management underwent training on four ESG modules this year. The training was conducted by an external ESG consultant and covered topics that our stakeholders have increasingly prioritised: Human Rights, Climate Change, Biodiversity and the ESG Ecosystem. At the same time, 85% of our employees underwent ESG-related training in 2022. We aim to have all our employees trained in ESG annually by 2025.
Suppliers & Business Partners: Business Partner Award Programme
This year, we embarked on an F&N Business Partner Award Programme to strengthen our partnership with our suppliers and collaborate with them to elevate the quality of their services and align them with our values, including sustainability. Through this programme, we are working to empower our local suppliers to grow with F&N and become regional suppliers with an expanded business horizon.
Consumers: Consumer-centric Innovation
Among the 11 new products introduced in 2022, new healthier additions include reduced-sugar options for our Condensed Milk, a new range of nutritious milk products and a re-introduction of F&N SEASONS Soya Rose endorsed with the Healthier Choice Logo (HCL).
With that, more than half of our beverage and dairy product portfolio today is endorsed with the Healthier Choice Logo, totalling 68 products. We are also well on track to achieve our 2025 target of having healthier options comprise two-thirds of our portfolio.
Catering to the different needs of consumers, we have expanded our packaging size options. In Thailand, we introduced evaporated milk and sweetened evaporated milk in a 1L paper carton format for more convenient usage while ensuring the product's hygiene.
Complementing our healthier options for consumers, we also spread hydration awareness to over 100,000 Malaysians and encouraged the pursuit of an active lifestyle through 100PLUS World Hydration Day. This is part of our consumer education programme to raise awareness of the importance of hydration to the community.
Halal Industry: Supporting the Halal Ecosystem
As a leading manufacturer of Halal products, we are supportive of the Malaysian government's efforts to develop the Halal ecosystem and we do our part in ensuring that our products strictly adhere to Halal compliance along our entire supply chain.
This year, F&NHB continued to partner with Halal Development Corporation Berhad (HDC) on the Halal Sourcing Partnership Programme, sharing best practices within the Halal industry whilst coaching Small Medium Enterprises (SMEs) to qualify as Halal vendors for multi-national companies (MNCs). In 2021, our programme successfully onboarded one SME as our ingredient supplier for F&N Kurma Madu Cordial.
F&NHB also participated in knowledge-sharing forums during the World Halal Business Conference Australia 2022, focusing on topics related to Halal requirements and sustainability.
Society: Serving the Local Community
The flood in December 2021 was one of the worst in years, affecting many parts of Peninsular Malaysia, with Selangor being hit the hardest. Our team distributed over 600 cartons of drinking water to flood victims and affected areas via non-profit organisations. We also took care of our affected employees by distributing RM400,000 in crisis assistance funds to 224 F&N staff.
In each market we operate in, we continue to create greater social equity through our community programmes in five main thematic areas.
Managing Value Chain Impacts
We have taken a firmer stance on reducing our carbon footprint through our implementation of more sustainable measures in our business practice.
In 2022, we purchased 23% of RSPO's physical certified palm oil for our palm oil usage and balanced it with 77% RSPO credits. We have since moved forward with the RSPO roadmap to increase the proportion of the mass balance approach in the upcoming years to achieve 100% of RSPO's physical certified palm oil by 2025.
The Solar Photovoltaic (PV) systems at three plants in Malaysia (Shah Alam, Pulau Indah and Bentong) have started to generate renewable energy progressively since August. By the end of the calendar year, this project will enable us to achieve carbon avoidance of about 9,000 tonnes of CO2e per year, equivalent to approximately 200 cars driven annually.
After a two-year break due to the pandemic, we are delighted to be able to resume our annual nationwide School Recycling Programme. Promoting the 5R philosophy of Reduce, Reuse, Recycle, Rethink and Reinvent, F&NHB's school recycling initiative aims to instil good recycling habits amongst students from kindergartens to primary and secondary schools.
F&NHB also organised a 'How to Keep Malaysia Green with R-Boy' poster competition from 15 June to 19 July 2022, as a supplementary programme to generate students' interest in recycling.
Further underlining our commitment to managing climate-related impacts across our supply chain, we conducted a study on our milk farmers in Thailand to understand their GHG emissions impact. By identifying the key sources of their GHG emissions, we will work with them to develop a long-term roadmap to reduce the climate impact together.
Closing Remarks
On behalf of the Board and management, we would like to express our gratitude and acknowledgement of the great efforts by the F&N team and all stakeholders involved in driving the sustainability agenda for the past year. While there were challenges, we take pride that we were able to attain new milestones in our journey to becoming a more sustainable company.
Sustainability is an on-going commitment. As we drive profitable growth for the Group, we are cognisant that our goals are reached in the most sustainable manner. We recognise that the journey ahead will be even more challenging given the nature of our new business venture. Therefore, we will explore the latest best-in-class technology and practices to create the most sustainable possible dairy farm. We are excited about the economic, environmental and social opportunities that this project can potentially unlock.
We look forward to another exciting year in which we continue to create value for our stakeholders by creating a better business, society, and planet together.
Y.A.M. Tengku Syarif Bendahara Perlis Syed Badarudin Jamalullail Ibni Almarhum Tuanku Syed Putra Jamalullail
Chairman
Lim Yew Hoe
Chief Executive Officer
