FY2023 SUSTAINABILITY HIGHLIGHTS

Building Internal Capacity in ESG
From boots to boardroom, awareness and education are vital in embedding ESG practices into business. This year, our Board of Directors and Senior Management underwent training on sustainable agriculture in alignment with our broader mission to establish one of the most sustainable dairy farms in the country.

At our CEO Townhall held in June this year, we emphasised our three core sustainability pillars: fostering a better business, contributing to a better society, and nurturing a better planet. The session was made interactive and engaging through a series of games and activities, building up internal capacity on ESG.

Meanwhile, 100% of our executives received training to equip them with a broader understanding of ESG and environmental issues. Following this, we aim to provide topical ESG training for employees situated in different business functions in key topics to increase the applicability of ESG in their everyday work routines. We aim for all our employees to receive ESG training at least once annually by 2025.

Safeguarding the Health & Well-being of our People
At F&NHB, the well-being and safety of our employees take top priority. During the year, we introduced a range of initiatives designed to safeguard their health and safety, including comprehensive safety training programmes, sports programmes, and influenza vaccinations. Partly thanks to these initiatives, we are pleased to share that we have maintained a healthy workplace free from accidents throughout the year.

Capacity Building Programme with Our Business Partners
Last year, we established the F&N Business Partner Award Programme to strengthen our partnership with our suppliers. This is a collaborative effort to enable them to elevate the quality of their services and align them with our values and sustainability goals. Through this one-year programme, we have empowered 38 local suppliers in Malaysia to grow with F&NHB and become regional suppliers with an expanded business horizon.

To address the logistic challenges of our fresh milk farmers in Thailand, we extended THB1.1 million assistance into building a milk collection centre (MCC) in Nakhon Rachasima this year to support the farmers of Khao Yai Milk Cooperative from the Northeast area. The MCC commenced operations in August 2023, enabling the Khao Yai Milk Cooperative to ease the logistic issues in supplying fresh milk to us. In the process, F&N also secured a partner supplier.

Driving Consumer-centric Innovation
This year, we continue to grow our portfolio of healthier options, with 64% of our total ready-to-drink beverage and dairy portfolio endorsed with the Healthier Choice Logo (HCL). This is well on track to achieve our 2025 target of having healthier options making up two-thirds of our portfolio.

Alongside developing healthier options for consumers, we also promote hydration awareness and active lifestyles to Malaysians through 100PLUS World Hydration Day as part of our consumer education programme to raise awareness of the importance of hydration to the community.

Supporting the Halal Ecosystem
Our commitment to supporting the Halal ecosystem is multi-faceted, involving both mentorship and thought leadership. F&NHB continued to partner with Halal Development Corporation Berhad (HDC) on a Halal Sourcing Partnership Programme, imparting crucial knowledge on the best practices of the Halal industry. Our efforts have been focused on coaching Small and Medium-sized Enterprises (SMEs) to become qualified Halal vendors for large and multi-national companies through a three-stage programme. Thus far, F&NHB has provided mentorship to 16 SMEs who have high potential to elevate their business capacity.

F&NHB also participated in knowledge-sharing forums such as the World Halal Business Conference Australia 2022 and Halal Sector Forum 2023, focusing on topics related to Halal requirements and sustainability. Such forums validate our efforts to build up the Halal industry, besides establishing our credibility as a thought leader in this field.

Serving the Local Community
In each market we operate in, we continue to create greater social equity through community programmes in four main thematic areas, including strengthening vulnerable groups. As part of our commitment, we have taken steps to support Sekolah Kebangsaan Tobobon, Kota Kinabalu in upgrading the facilities of its school library to foster a more enriching learning experience for the students.

As a heritage brand, F&NHB an integral part of festive celebrations for generations of Malaysians. We were able to resume spreading cheer among the less fortunate during the festive seasons post-pandemic. Over Chinese New Year, the holy month of Ramadhan and Deepavali, we reached out to more than 500 beneficiaries across the nation including the children at Pertubuhan Rumah Anak Yatim Dan Asnaf Kampung Sijangkang in Selangor, and children and senior citizens at Pertubuhan Kebajikan Thangam Illam, Pandan Indah.

Through 100PLUS, we support the Football Association of Malaysia (FAM), Badminton Association of Malaysia (BAM), Malaysian Hockey Confederation and the National Sports Council. 100PLUS is also the official beverage partner of the Johor Darul Takzim and Selangor Football Club. In addition, 100PLUS works closely with the Sportswriters Association of Malaysia (SAM) and is the primary sponsor for the annual SAM-100PLUS Awards.

Building a Sustainable, Greener Future
At our integrated farm, we are innovating a complete “farm-to-bottle” model, growing animal feed and housing a milk processing facility within the same locality as the dairy barns. This holistic approach enables us to produce not just the freshest milk, but also in the most sustainable way possible. By reducing the need to import milk, the Group will also be able to reduce its overall carbon footprint. The farm will be designed around sustainable farming and circular economy practices, employing green technology throughout the farm’s processes. The Group is looking to invest at least RM1.5 billion into developing Phase 1 of the farm. Following the groundbreaking ceremony in June 2023, we have begun our social impact study and will soon commence actual land development.

Since 2020, we have made significant strides in reducing our reliance on fossil fuels by installing one of Malaysia’s largest rooftops solar photovoltaic (PV) systems at our facilities. The 11,000 solar panels installed at our Shah Alam plant, harness enough solar energy to generate more than half of the electricity needed to produce 100PLUS, Malaysia’s No. 1 Isotonic beverage. Supported by external validation of our solar energy generation, 100PLUS now features the “Solar” emblem across its packaging to signify our ongoing commitment to renewable energy sources. By next year, more of our products will carry the “Solar” emblem following our plan to extend solar roof systems to more facilities - Shah Alam, Pulau Indah and Rawang. Solar PV systems have also been invested for our plants in Thailand, with the same strategy towards increasing the proportion of green energy source.

The 2023 edition of the F&N School Recycling Programme continues the Group’s efforts to raise awareness about the importance of recycling among school children. The five-month campaign involved more than 1,400 primary and secondary schools across Malaysia in partnership with Solid Waste and Public Cleansing Management Corporation (SWCorp) Malaysia, an agency under the Malaysian Ministry of Local Government Development. To further drive sustainable change and encourage recycling among the community at large, we have partnered with industry leaders like GRAB, KLEAN and Malaysian Research Accelerator for Technology and Innovation (MRANTI) to launch 18 AI-driven Reverse Vending Machines in strategic locations across Klang Valley.

In Thailand, our team initiated a water conservation programme at Wang Muang, Saraburi province. This programme saw 81 employees building a check dam at the Chet Sao Noi Waterfall – a crucial water source of our Wang Muang plant. This initiative helps to safeguard against soil erosion and preserve water supply during dry seasons to mitigate the risks of forest fires.

Since 2020, 100% of the palm oil used by F&NHB is RSPO certified through RSPO credits. By 2025, we aim to achieve 100% RSPO physical certified palm oil for our palm oil usage. For 2023, the Group used 60% Certified Sustainable Palm Oil and the remaining 40% with RSPO credits.