Fraser & Neave Holdings Bhd Annual Report 2020

2 SUSTAINABLE SOURCING 070 FRASER & NEAVE HOLDINGS BHD WHY IT IS IMPORTANT TO US Our business sustainability hinges on the inter-dependence relationship between our suppliers and us to create long lasting value. Therefore, it is imperative to ensure all our vendors and suppliers along our supply chain abide by the same principles of sustainability that we do. STRATEGIC REPORT: Material Matters (Cont’d.) RISKS • Unethical practice within the supply chain leads to regulatory violations, monetary fines and reputational risk. • Price fluctuation as a result of global economic performance and foreign exchange exposure. • Ability of local suppliers to deliver and meet growing demands. OPPORTUNITIES • Establish robust policies and systems to ensure competitive pricing and safeguard vendors from corruption and malpractice. • Supply chain stewardship helps elevate vendors’ productivity and performance in sustainability practices and compliance with food safety standards. • Create local employment and support local economy by prioritising local suppliers. OUR RESPONSE Promote sustainable and responsible sourcing via risks management, conscientious supplier selection and local sourcing. • Established a transparent and fair procurement management system that protects the rights of our vendors. • Yearly audits to assess quality assurance, food safety and SHE standards, and environmental performance of critical suppliers. • Pre-qualifying new vendor checklist and Supplier Code of Practice cover all environmental and social impacts. • Commit to using Certified Sustainable Palm Oil (CSPO) in our products by 2025. • Source materials that are certified by eco-credentials, such as Forest Stewardship Council (FSC). • Support local economy and minimise environmental impact from transportation by engaging local suppliers. Refer to the ‘Sustainability Statement’ section on pages 133 to 139 in this AR, or read more in the F&NHB Sustainability Report 2020.