FGV Annual Report 2016

ANNUAL INTEGRATED REPORT 2016 61 REPORTING ON WHAT MATTERS SUSTAINABILITY STATEMENT OUR COMMITMENT AND APPROACH FGV understands that embedding sustainability in our business is only possible with a supportive culture and strong leadership. Our leader, the GP/CEO, provides strong stewardship towards incorporating sustainability into our business practices and puts focus on sustainability beyond compliance. FGV had produced a video from the GP/CEO which was released in the public domain to reiterate FGV's strong stand to commit to sustainability and RSPO certification after FGV's decision to voluntarily withdraw the RSPO certificates of our 58 mill complexes on 3 rd of May 2016. The RSPO withdrawal decision was taken because we acknowledge that there are labour and social issues along our supply chain that need to be addressed. We remain committed to RSPO certification and in demonstrating our commitment to RSPO, we have intensified our training and awareness development programmes throughout the organisation, as well as our supply chain business partners and FELDA settlers. Topics covered in the development programmes range from the importance of sustainability to the implementation of GAP. We expect this will allow for a more inclusive certification between commercially-managed plantations by FGV and FELDA settlers. We have established a new time-bound plan to certify all 72 mills complexes to RSPO requirements within five (5) years from 2017 to2021. The re-certification initiativewill cost FGV approximately up to RM34 million over the next five-year period. The ultimate objective is to align our efforts to become a socially responsible global agribusiness, ensuring no FELDA settlers are left out. We want to engage, experience and understand the problems faced by our smallholders so that we can bring meaningful improvements in the quality of their lives. SUSTAINABILITY INTEGRATION INTO FGV STRATEGIES FGV has reviewed its long-term plans, targets, businesses and strategies in moving towards the year 2020, by embedding sustainability initiatives into its Strategic Plan. When approaching the company's Strategic Plans for 2020, the basic rule of our business planning process is to ensure that for each Cluster (palm, sugar, rubber, and related businesses in transportation, etc.), sustainability initiatives are embedded and internalised by key management and employees. FGV is embedding sustainability using the balance scorecard method. The balance scorecard method is a strategic management approach that encompasses finance, business processes, consumers, and organisational capacity. In simple terms, the basic principle of 'doing more with less', such as using less water in the system which reduces the impact on the environment, right down to producing high-yielding crops and assuring our customers with green certification, will translate into risk reduction and an increase in revenue. From FELDA settler's son to GP/CEO.