SIPEF : 7c. Annual report 2020 - Part 3 - Sustainability report ( EN NL )

Annual Report 2020

PART 3 - SUSTAINABILITY REPORT

Intro

About this report

SIPEF's 2020 Sustainability Report covers the environmental, economic and social performance across all the operational and management activities within the Group. This includes the oil palm, rubber, tea and banana operations in Indonesia, Papua New Guinea and Ivory Coast, as well as the activities of the Head Office in Belgium. The purpose of this report is to reiterate the commitments SIPEF has made, and which are entrenched in the Responsible Plantations Policy1(RPP) of the Company.

The Sustainability Report was integrated for the first time into the 2019 Annual Report, in accordance with the legal requirement to report on non-financial information. It covered the performances of the Group in 2018 and 2019, and was the transition from the last bi-annual sustainability report of SIPEF published on its website, to today's Annual Report. From the 2020 Annual Report on, the Sustainability Report will focus on the annual performances of the Group in the financial year covered.

The structure and content of this report are based on legal compliance with Belgian law regarding non-financial information, the Sustainable Development Goals (SDG) of the United Nations, and are further inspired by the Global Reporting Initiative (GRI) Index.

SIPEF has not engaged third-party assurance for the content of this report, but the Group is reviewing the need for such assurance on an ongoing basis, built on the collated feedback from its stakeholders. The Group believes, however, that multiple certifications provide adequate assurance on its performance for the stakeholders.

Throughout the report an appropriate context for the performance of the Group is provided, particularly in relation to the unique environmental and social landscapes in Indonesia, Papua New Guinea and Ivory Coast.

1 www.sipef.com/hq/sustainability/policies/ responsible-plantations-policy/

SIPEF Sustainability Report 2020

3

Contents

About this report . . . . . . . . . . . .	. . . . . .	2
Materiality matrix . . . . . . . . . .	. . . . . .	4
Message from the managing director . .	. . . . .	6
Achievements and targets		14

SIPEF's approach to sustainability . . . . . . . . 18

1. Responsible Plantations Policy . . . . . . . . . . 21
2. Responsible Purchasing Policy . . . . . . . . . . 22

3. Best management practices	22
4. Certifications . . . . . .	. . . . . . . . . . . . 22
5. Traceability	34
6. Governance structure	35
7. Reference model: UNSDGs	. . . . . . . . . . . . . . . . . . 37

Environmental topics	39
1. Greenhouse gas emissions	41

1. No deforestation and no peat . . . . . . . . . 42
2. Greenhouse gas emissions

from palm oil mill effluent

46

3. Greenhouse gas emissions from fossil fuel use . 48

2. Protection, conservation and restoration of terrestrial

ecosystems and biodiversity

49

1. HCV/HCSA . . . . . . . . . . . . . . . . . 50
2. Conservation of the environment . . . . . . . 50

3. Reforestation program (Ivory Coast)	54
4. Reduction of firewood consumption
(Ivory Coast) . . . . . . . . . . . . . . . .	. 56
5. Wildfire prevention	56
3. Use of chemicals	58
1. Fertiliser . . . . . . . . . . . . . . . . . .	. 58
2. Pesticides	59
3. Compost . . . . . . . . . . . . . . . . . .	. 60

4. Water footprint . . . . . . . . . . . . . . . .	. 60
1. Reduction of water use	61
2. Wastewater discharge . . . . . . . . . . . .	. 62
5. Yield increase . . . . . . . . . . . . . . . . .	63
1. Product quality and productivity	64
2. Verdant Bioscience Pte Ltd . . . . . . . . . .	66
Responsible social topics . . . . . . . . . . . .	.68
1. Fair labour practices	70
2. Impact on communities	74
3. Smallholders	77
Respect for human rights . . . . . . . . . . . .	.80
1. Child labour . . . . . . . . . . . . . . . . . .	. 82
2. Decent living wage	82
3. Unions . . . . . . . . . . . . . . . . . . . . .	82
Ethics policy	83
1. Code of conduct . . . . . . . . . . . . . . . . .	83
2. General privacy Policy . . . . . . . . . . . . . .	86
Annex . . . . . . . . . . . . . . . . . . . . . .	. 87
For further information . . . . . . . . . . . . . .	93
Responsible persons	94

4	The connection to the world of sustainable tropical agriculture

Materiality matrix

SIPEF's business model is characterised by strong stakeholder engagement in the sustainable development of its activities. Only through cooperation with customers, social and environmental non-governmental organisations (NGOs), produ- cers, researchers and other willing stakeholders, from both the private and public sectors, can the introduction of safe, responsible and sustainable standards and practices be achieved and promoted for the industry.

In March and April 2017, the senior management of SIPEF, through three intensive workshops, classified the different items based on their importance for the Group. Every year, all items of the materiality matrix are reviewed, amended, reclassified or completed, if necessary, depending on the latest insights on the sustainability front. As progress has been achieved over the years, the focus in the sustainability arena has drifted towards new areas where improvement can be achieved. The Group is embracing this, as it allows the recalibration of its efforts in improving its operations.

When preparing the 2020 Sustainability Report, the SIPEF sustainability team, guided by PricewaterhouseCoopers consultancy, jointly benchmarked customers, social and environmental NGOs, as well as peer plantation companies. Amongst others, SIPEF has reviewed multi-stakeholder initiatives such as the Roundtable on Sustainable Palm Oil (RSPO), the Palm Oil Innovation Group (POIG), as well as benchmarks, more precisely those in the Sustainable Palm Oil Transparency Toolkit (SPOTT) published by the Zoological Society of London.

Due to this critical screening, the material aspects of the business could be determined for the stakeholders and the Company. SIPEF is aware that the analysis of its different stakeholders and continuous dialogue with them is of the utmost importance for the continuation of the activities of the Group.

The Company is of the opinion that the materiality of the different topics of this matrix has not changed since 2019 and still applies to 2020.

SIPEF Sustainability Report 2020

5

MATERIALITY MATRIX SIPEF

HIGH

IMPORTANCE TO STAKEHOLDERS

MEDIUM

Fair Labour Practices*

	Deforestation	Traceability
Community Development	GHG Emissions
Wildfire
Smallholder Inclusion	FPIC/Land Use
Biodiversity	Certifications

Health and Safety

Water Management

Peat Management

	Fertilisers and Pesticides Use
					Grievance Mechanism
	Anti-Bribery and Anti-Corruption	Productivity
	Protection		of Species
MEDIUM					IMPORTANCE TO SIPEF		HIGH

Social (people)

Environmental (planet)

Economic (product)

* including Child Labour Prevention, Equal Treatment and Workers' Welfare