Managing NDPE risks of indirect FFB suppliers FFB from the dealers network may carry high risk towards FGV’s NDPE commitments. All suppliers are required to abide, without exceptions, by FGV’s Supplier Code of Conduct (SCOC) which contains environmental protection requirements, including NDPE. Additionally, the SCOC also require suppliers to adopt responsible practices, at minimum in line with FGV’s Group Sustainability Policy in their operations. We conduct supplier assessments to ensure compliance to our NDPE commitments. In 2020 FGV assessed the NDPE risk level within a 50km radius of 72 FFB collection centres that account for 50% of supplies from the FFB dealer network. This assessment was conducted through the Global Forest Watch Pro platform. With the increased TTP in 2021, we have analysed 105 FFB collection centres that account for 41% of supplies from our FFB dealers’ networks. Overall, our findings showed that none of these collection centres posed high NDPE risks. However, on the specific aspects of sustainability risk, we identified four (4) collection centres, which accounted for less than 1% of supply from our dealers’ networks, as being exposed to the risk of deforestation in their surroundings. Another 30 collection centres were exposed to peatland risk. FGV will notify the findings to the concerned parties and remind them to be mindful so that they do not source their FFB from suppliers exposed to the identified risk(s). To ensure this, FGV has established a system to collect relevant details of sources of FFB in Tier 2 from the Tier 1 suppliers since Q3 2021. Traceability is an essential element of our business and is instrumental to fulfilling our commitment to responsible sourcing. In 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. Towards this end, we have rolled out a new set of supplier agreement for our suppliers to disclose all their sources of FFB. Our Trading team will verify the sources for their compliance to FGV’s commitment and will only accept those sources/suppliers when they are found to be in compliance. Traceability-of-Products (FGV ToP) While we are able to trace all our FFB and PK up to supplying mills, tracing FFB to the plantations of origin has been challenging for external crops. To facilitate better traceability of our products, we are working with our business partners to develop a system to identify and disclose sustainability risks associated with specific geographical areas. In promoting greater traceability, we have developed a computerised traceability system called Traceability of Product (FGV-ToP), which is part of an overall sustainable palm oil management system that also includes Audit Integrated System (FGV-AIMS). FGV-ToP System which provides comprehensive information of FFB/CPO/PK/PKO movements together with instant traceability compliance status and attributes such as the certification, geo-location and production per month at a FGV mill in a user-friendly and interactive manner. This system covers all palm oil related products from FGV subsidiaries with some information being accessible to customers and suppliers. 63 CLIMATE ACTION & ENVIRONMENT PROTECTION ADDITIONAL INFORMATION SUSTAINABILITY REPORT 2020/2021
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