Kuala Lumpur Kepong : Sustainability Report

SUSTAINABILITY STATEMENT AND REPORT

49	About This Report	55	Our Stakeholders and How We
50	A Message from Our CEO		Engage Them
	Sustainability in Everything We Do	57	Materiality Assessment and Matrix
50	Key Highlights for FY2022	59	Marketplace
52	Sustainability Governance	64	Environment
54	Sustainability Policy	72	Workplace
54	Identification and Management of	79	Community
	Sustainability Risks

55 United Nations Sustainable Development Goals

O U R O R G A N I S AT I O N

ANNUAL REPORT 2022

49

SUSTAINABILITY STATEMENT AND REPORT

About this Report

Sustainability has and always will be an integral part of KLK. We remain committed in our efforts to embed sustainability in all material areas of our operations and offer products that are made in a responsible manner. This Sustainability Report covers the activities carried out by the Company for the reporting period from 1 October 2021 to 30 September 2022 (unless stated otherwise) and as in previous years' reports, includes key sustainability data and narratives on our oil palm plantation and oleochemical business sectors only (excluding associate and joint venture companies) in all our locations. This year's report includes information on KLK Sawit Nusantara Berhad ("KSN") [formerly known as IJM Plantations Berhad ("IJMP")] and PT Pinang Witmas Sejati ("PWS"), new acquisitions at the end of the previous financial year.

LOCATION OF THE GROUP'S OPERATIONS

AS AT 30 SEPTEMBER 2022

Germany

Netherlands

Belgium

EUROPE

ASIA

Switzerland

			China
	AFRICA		Peninsular
			Malaysia, Malaysia
Liberia			Sabah,
		Malaysia
			Kalimantan,
			Indonesia
			Sumatra,
			Indonesia
			AUSTRALIA
			Western
			Australia,
PLANTATION	MANUFACTURING	PROPERTY	Australia
OTHERS
		DEVELOPMENT	(FARMING)

Our Environment, Social & Governance ("ESG") disclosures in this report were written with reference to the Global Reporting Initiative ("GRI") Standards - Core Option, and we have also made reference to Bursa Malaysia's Main Market Listing Requirements and Sustainability Reporting Guide. With each financial year, KLK strives for incremental improvement in the reach and effectiveness of our sustainability initiatives, and in the quality and comparability of our sustainability reports. We welcome suggestions and comments on how we can further improve our sustainability efforts. Please do write to us at [e-mail] with your feedback.

50 KUALA LUMPUR KEPONG BERHAD

SUSTAINABILITY STATEMENT AND REPORT

A Message from Our CEO

Sustainability in Everything We Do

Dear Shareholders,

Sustainability has been in our line of sight long before sustainability reporting was made mandatory for Malaysian public listed companies in 2016. In fact, KLK was among the pioneering members of the Roundtable on Sustainable Palm Oil ("RSPO") founded in 2004. RSPO is a global, non-profit,multi-stakeholder initiative on sustainable palm oil that unites more than 4,000 members worldwide who represent all links along the palm oil supply chain. In 2014, we established our Sustainability Policy, solidifying our commitments in various aspects under the Environment, Social, Traceability and Governance umbrellas and work hard to make a positive impact wherever we operate.

This year, we gave our sustainability governance structure (which was formalised in 2015) a makeover. Through Project SHIFT, an initiative to revamp our sustainability approach, we converted our 3-tiered reporting structure into a 4-tiered structure. The Sustainability Steering Committee which drives our sustainability efforts now reports to the Audit & Risk Committee, instead of directly to the Board. This change was made to ensure that sustainability matters are given the attention they deserve before being escalated to Board level.

The Sustainability Steering Committee and its supporting working committee take an interactive and collaborative approach in obtaining feedback from internal and external stakeholders so as to create meaningful sustainability programmes that contribute towards the achievement of the United Nations' Sustainable Development Goals ("SDGs").

As of FY2022, we have adopted 11 out of the 17 SDGs with the addition of SDG16 - Peace, Justice and Strong Institutions. The adoption of this new SDG comes on the back of our commitment to practising robust governance, our comprehensive policies and procedures as well as our stringent risk management and compliance processes. We also reaffirm our commitment to improving our performance in relation to the previously adopted 10 SDGs, placing firm emphasis on climate action (going net zero and low carbon), while making the workplace safe and conducive for our employees and also giving the local economies a boost, thereby empowering and enriching the lives of surrounding communities.

We are pleased to present below a snapshot of the key sustainability highlights for FY2022:

MARKETPLACE

Total CPO Produced

1,046,922 mt

MALAYSIA
CSPO	Uptake -	Uptake -
Production (mt)	RSPO (mt)	ISCC (mt)
320,616	307,832	13,140
INDONESIA
CSPO	Uptake -	Uptake -
Production (mt)	RSPO (mt)	ISCC (mt)
480,194	325,350	168,130
SPOTT Rank
23

Traceability

100%	100%	80%
Traceability	Traceability	Traceability to
to Plantations	to Palm Oil	Plantations for
for Palm Oil	Mills for	Refineries and
Mills	Refineries	KCPs
	and KCPs
Certification Status
Certification		Estates	Palm Oil Mills
RSPO		69%	75%
MSPO		100%	100%
ISPO		83%	88%
ISCC		N/A	21 no. of
			certifications

O U R O R G A N I S AT I O N

ANNUAL REPORT 2022

51

SUSTAINABILITY STATEMENT AND REPORT

ENVIRONMENT	WORKPLACE	COMMUNITY

Total HCV Area

14,288.44 hectares

Total Green Energy Generated from Biogas Plants

56.77 GWH,

where:

24.97 GWH

supplied to national grid

31.80 GHW

used for own operations

Water Usage Rate in Plantation

1.56 m3/mt FFB processed

Identified

12 new flora species and

33 new fauna species in our sites

Total workforce of

43,000 employees

in Malaysia, Indonesia, Liberia, Europe and China

Women account for

21.3% of total workforce (increased from 20.8% in FY2021)

Total of

9,724 employees

who are union members

2,830

Safety and Health Committee representatives across the entire Plantation segment and KLK Oleo

Zero tolerance policies

against human trafficking, forced labour, child labour, discrimination, bullying and harassment

No recruitment fee policy

Spent RM5.6 million

to manage 140 learning facilities for over 25,000 students across Malaysia, Indonesia and Liberia

Yayasan KLK Education Investment

for Young Malaysians

RM600,000

Flood Relief Aid

for KLK Employees

RM670,000

Investment in

Tiger Conservation

RM140,000

Investment in

National Sports Development

RM500,000

Awards & Recognition

The Edge Billion Ringgit Club 2022	Malaysia's	Export Excellence
• Value Creator: Malaysia's Outstanding CEO (Tan Sri Dato' Seri Lee	Best Managed	Award 2022
Oi Hian)	Companies 2022	Thriving in Adversity
• BIG CAP COMPANIES: Highest Growth in Profit After Tax Over	an initiative by
Award
Three Years	Deloitte Private
KLK OLEO

• PLANTATION: Highest Growth in Profit After Tax Over Three Years
The Global CSR & ESG Awards 2022	Sustainability & CSR Malaysia	Malaysia Developer
Excellence in Provision of Literacy &	Awards 2022	Awards 2022
Education Award (Companies with market	Company of the Year Award for	Special Awards -
capitalisation more than USD 1 Billion) -	Excellence in Sustainability and CSR	Rising Star
Silver	Initiatives (Plantation)	KLK Land

Asia's Outstanding Companies Poll 2022 by Asia Money	SPOTT	FTSE4Good Index Series
Most Outstanding Company in Malaysia - Plantation Sector	Ranked 23rd	• Certificate of Membership
		• Constituent company

Our ESG efforts in particular have been acknowledged at the Sustainability & CSR Malaysia Awards 2022 and the Global CSR & ESG Awards 2022. KLK's disclosures on our ESG practices are also screened yearly by Bursa Malaysia and FTSE Russell against the FTSE4Good Index criteria, and it is indeed gratifying that in FY2022 we remain a leading constituent of the Bursa Malaysia FTSE4Good Index. While we take incremental steps towards attaining groupwide commitment and establishing measurable sustainability targets through a pragmatic and realistic approach, these accolades give us the assurance that we are on the right path to making a positive difference.

52 KUALA LUMPUR KEPONG BERHAD

SUSTAINABILITY STATEMENT AND REPORT

Our Sustainability Journey in FY2022

Sustainability Governance

We conducted a review of our sustainability governance structure and introduced enhancements to the reporting framework.

ENHANCED SUSTAINABILITY GOVERNANCE STRUCTURE

PREVIOUS ENHANCED

StructureStructure

Board of

Directors

Chief

Executive

Officer

Sustainability

Steering

Committee

Sustainability

Working

Committee

Board of

Directors

Audit & Risk

Committee

Sustainability

Steering

Committee

Sustainability

Working

Committee

Sustainability

Taskforce

Chair

Chief Executive

Officer

Operations

Chief Operating

Officer

Secretariat

Sustainability

Department

								Legal &
Plantation		Manufacturing		Property		Sustainability		Company
								Secretary
• Group		• Deputy		• Managing		• Chief		• Company
Plantations		Chief		Director		Sustainability		Secretary
Director		Executive		• General		Officer
• Operations		Officer		Manager
Director		• CEO KLK
		Oleo Europe
		• Refinery
		Controller