Fraser & Neave Holdings Bhd Annual Report 2019

WWW . F N . C O M . M Y 060 F R A S E R & N E A V E H O L D I N G S B H D st rategic repor t > MATERIAL ISSUES The material issues are topics that are important to the sustainability of F&N Group, identified through a three steps: Identification; Prioritisation; and Validation materiality assessment process in 2017. The Group then selects 10 high priority material issues to establish medium-term performance sustainability goals to be achieved by 2020. Here are the 10 key material issues: INNOVATION Critical to maintaining leadership and competitive advantage in the marketplace. Customers’ needs and demands have evolved towards healthier lifestyles and convenience. Innovation is critical not only for long term business success but also in response to growing concerns on social and environmental issues. Invest in Product and Process Innovation to increase our product range and improve efficiency and productivity. i. Product Innovation • Continuous products improvement and refinement to meet the changing needs and preferences of consumers and deliver high-quality products, and with the right nutritional values and taste. • Develop new products to expand target consumer groups and usage occasions. • Collaborate with health authorities and the industry such as MoH, FMM and FDA to adhere to food safety regulations, and support national health priorities. • Collaborate with research institutes to access cutting-edge research and scientific studies. • Offer innovative packaging formats to reduce environmental footprint, as well as appeal to consumers’ demand for convenience and flexibility without compromising product quality and integrity. ii. Process Innovation • Investing in more advanced equipment and technology to expand innovation capability. • Adopt technical and scientific advances to improve eco-efficiency of our supply chain. • Inculcate employee-driven innovation initiatives to enhance productivity, quality and cost savings. To invest in product and process innovation to increase our product range, and improve efficiency and productivity. SUSTAINABLE SOURCING Our business sustainability hinges o n t h e i n t e r - d e p e n d e n c e relationship between our suppliers and us to create long lasting value. Therefore, it is imperative to ensure all our vendors and suppliers along our entire value chain abide by the same principles of sustainability that we do. Promote sustainable and responsible sourcing via risks management, conscientious supplier selection and local sourcing. • Procurement Policy is in place to ensure adherence to principles of ethical business practice and fair play. • Yearly audits to assess quality assurance, food safety standards, safety standards and environmental performance of critical suppliers. • Pre-qualifying new vendor checklist on environmental and ethical/responsible sourcing aspects, as well as anti-child labor policy. • Source materials that are certified by eco-credentials, such as Forest Stewardship Council (FSC) to certify paper use for all our products in tetra packaging. • Support local economy and minimise environmental impact from transportation by engaging local suppliers. • Commitment to using Certified Sustainable Palm Oil (CSPO) in our products. To purchase 100% of Roundtable on Sustainable Palm Oil (RSPO) credits for palm oil usage by 2020. MATERIAL ISSUES OUR RESPONSE TARGET