FGV Annual Report 2017

FELDA GLOBAL VENTURES HOLDINGS BERHAD ENSURING OUR BUSINESS STANDS THE TEST OF TIME 60 OUR STAND ON SUSTAINABILITY Labour Shortage Affecting Yield Improvement Our FFB yield is highly contingent on labour availability, which was sub-optimal in the year under review. Though we had made efforts to raise our foreign guest workers quota, this process required substantially more time than expected, resulting in the insufficient supply of workers at our plantations. As such, FGV embarked on recruitment drives to encourage local workers, especially the new generation of settlers, to consider a career in the plantation industry and reduce our dependency on foreign guest workers. Although the initiative had started a few years ago, for 2017, in conjunction with Sambutan Hari Peneroka Kebangsaan , FGV featured a recruitment booth and campaign, which continued to a few regional levels. Environmental Stewardship Our continuous efforts in managing the environmental impacts are a reflection of how we take our responsibility to our Stakeholders seriously. One of the key concerns of our Stakeholders was our Group’s commitment to the development of peatland. To address this concern, in August 2017, we revised our GSP and reaffirmed our commitment to not planting on peatland, irrespective of size, depth and when the lands were purchased or owned by the Group. In the existing operations, we strive to reduce our environmental impact as much as possible, especially on waste generation, water management and Greenhouse Gas (GHG) emissions. As for the GHG emissions from our oil palm mills, we were able to reduce as much as 70% of GHG emission in 2017 as compared to our base year in 2014 . FGV is also committed to ensure all new developments do not encroach into areas that are environmentally sensitive or under protection, such as primary forests, wildlife reserves, peatlands, or land containing any High Conservation Value (HCV) elements. As such, we are proactively engaging in awareness and education programmes to disseminate our policies on the protection of natural habitats. We have organised collaborations with government agencies and non-governmental organisations (NGOs) through our partnerships with Borneo Conservation Trust (BCT) and SabahWildlife Department (SWD) for the Sabah Mega Biodiversity Project, The Sun Bear Conservation Project (SBCP) as well as The Rafflesia Conservation & Interpretive Centre (RCIC) Project. CONTRIBUTION TO THE OIL PALM INDUSTRY RSPO is the first non-profit organisation that has created a multi- stakeholder platformfor drivingsustainability in theoil palmtrade. The RSPO Principles and Criteria (P&C) are the most widely used sustainability standards with about 20% of palm oil globally certified to this standard. FGV has been involved actively in RSPO since its establishment in 2003. These include the development of its P&C in 2005, the first review in 2012 and the second review in 2017. Apart from that, our continued representation in the Emission Reduction Working Group (ERWG), Biodiversity and HCV Working Group (BHCV) and Labour Rights Task Force in 2017 enabled us to provide valuable information for the advancement of P&C standards directly and the oil palm industry indirectly. FGV is playing a vital role in the development of the oil palm industry in Malaysia through our participation in developing Malaysian Sustainable Palm Oil (MSPO), the national standards for oil palm. Apart from that, we actively participate in numerous committees, dialogues and consultative sessions with Malaysian Palm Oil Association (MPOA), Malaysian Palm Oil Board (MPOB), Malaysian Palm Oil Council (MPOC) and Malaysian Palm Oil Certification Council (MPOCC). MOVING FORWARD As FGV ventures forth into 2018 and beyond, we are committed to strengthen and expandour sustainability agendamuch further. With theSP20 (V2) andGSPas our guides,weareexcitedabout all that we can potentially achieve on the Economic, Environmental and Social fronts. STATEMENT BY THE BOARD This Statement is made in accordance with a resolution of the Board of Directors and approved at the Board meeting dated 28 March 2018. FGV embarked on recruitment drives to encourage local workers, especially the new generation of settlers, to consider a career in the plantation industry and reduce our dependency on foreign guest workers. Further information on Yield Improvement can be referred to ‘Our Performance by Sector: Plantation’ on pages 36-45. FGV’s sustainability initiatives and our progress can be found in the FGV Sustainability Report 2016/17, which is available on our website, www.feldaglobal.com/sustainability/stakeholders- engagement/reports/ EC GE