Responsible Business TRACEBILITY IN OUR PLANTATION BUSINESS At FGV, we are committed to ensuring that our products are not linked to any risk of exploitation of workers and human rights, deforestation, planting on peat and open burning, in line with FGV’s GSP and our commitment to NDPE. Our traceability covers Traceability to Mills (TTM), Traceability to Plantations (TTP) and these information are communicated to the general public through company website and Traceability of Products (ToP) platform. In order to ensure our palm products are sourced from responsible suppliers, we started to trace our raw materials since 2017. Since 2019, FGV has been publishing the FGV traceability dashboard on the company website. The dashboard updates customers on the TTM and TTP status of FGV’s palm oil supply chain from plantations, palm oil mills, FGV Refineries Sdn Bhd, FGV Kernel Products Sdn Bhd, FGV Biotechnologies Sdn Bhd and Delima Oil Products Sdn Bhd. Traceability to Mills Traceability to Plantations Since 2017, we have been actively tracing the origin of our fresh fruit bunches (FFB). As at end 2021, we are very close to achieving the 100% target, having achieved 98% TTP which is a marked improvement compared to 82% in 2020. This includes all sources of FFB in our supply chain and we are committed to attaining 100% TTP in 2022. Most of our FFB supplies (around 46%) come from smallholders having land of about 10 acres (4 ha) per household. Our estates contribute about 29% while 3% are from private estates supplying directly to our mills. The remaining 22% are from dealers’ networks, mainly coming from smallholders’ farm. Considering the significant contribution from the smallholders, we are committed to assisting them on technical grounds to further improve their productivity. Our TTP data for 2020 has been externally verified by the Malaysian Institute of Supply Chain Innovation (MISI) and we are currently in the process of another external verification of the same for 2021 data by Asia School of Business (ASB). To assist us in tracing the origin of FFB in the dealers’ networks, we have established Traceability & Validation Task Force (TVTF) in association with CSS with the help of our value chain partners. Apart from tracing the source of FFB, the TVTF also provided training on NDPE and will be assessing suppliers’ compliance to FGV’s Group Sustainability Commitments. The compliance would be measured through a specific checklist that covers the relevant elements of NDPE, RSPO, MSPO and FGV’s GSP. Traceability to plantations is challenged by the complexity of the FFB dealers’ networks and our third-party suppliers. To address this challenge, FGV works closely with our value chain partners to ensure that traceability and transparency are embedded in their practices as well. As a regular practice, our sustainability team engages with our FFB suppliers and communicates with them on our sustainability commitments. Financial Year Target Our Performance FY2019 • 50% traceability of external suppliers • Sustainability risk mapping for all traceable suppliers • 68% are traceable to plantation • 100% sustainability risk mapping has been done on all traceable suppliers FY2020 • 75% traceability of external suppliers • Sustainability risk mapping for all traceable suppliers • 76% are traceable to plantation • 100% sustainability risk mapping has been done on all traceable suppliers FY2021 • 100% traceability of external suppliers • 98% are traceable to plantation • Sustainability risk mapping conducted on all traceable suppliers In 2021, we again successfully maintained 100% Traceability to Mills that was achieved in both 2020 and 2019. 98% TTP which is a marked improvement compared to 82% in 2020 62 FGV HOLDINGS BERHAD RESPONSIBLE BUSINESS ABOUT THIS REPORT RESPECTING HUMAN RIGHTS
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