This article first appeared in The Edge Malaysia Weekly on December 12, 2022 - December 18, 2022

Fraser & Neave Holdings Bhd (F&N) won gold at The Edge Malaysia ESG Awards 2022 in the consumer products and services sector and another award for being one of the top three performers in Asean. This success is due to its solid governance structure and implementation framework, says Karen Tan, director of communications, corporate affairs and sustainability. 

“Since conducting our first materiality assessment exercise in 2016 to identify sustainability issues that are important to our business and stakeholders, we have established a solid governance structure and implementation framework, and set several targets to drive progress in core areas,” she says.

The company successfully reached its goal to use 100% sustainable palm oil by initially using Roundtable on Sustainable Palm Oil (RSPO) credits in 2020. “We are now using physical certified palm oil, thereby increasing the proportion of mass balance approach to achieve 100% physical RSPO-certified palm oil by 2025,” says Tan. 

Furthermore, F&N’s capital expenditure is intended to achieve its environmental objectives. For instance, its strategic decision to localise manufacturing in Sabah and Sarawak has made it the producer with the lowest carbon footprint in those states, she says. 

Its solar rooftop installations will further reduce its carbon emissions by replacing 20% of the company’s electricity consumption from the grid.

At F&N, sustainability topics that are material to the business are mapped into seven core areas in the company’s sustainability framework: responsible business practice, responsible product stewardship, responsible supply chain, creating value for society, empowering people, operational eco-efficiency and value chain impact mitigation. 

“We are driven by our vision to create a financially, environmentally and socially sustainable future for our business. Thus, ESG matters are considered at the highest level of the F&N group,” says Tan. 

“We are fortunate that our board and sustainability and risk management committee take an active role in ensuring that the company’s strategic decisions are guided by sustainability.”

F&N is working towards achieving the 12 sustainability targets that it has set for 2025. These include healthier options in its beverage and dairy portfolio; reducing water, energy and greenhouse gas emission ratios; reducing waste to landfill; increasing recycled content in packaging and achieving zero lost time to injury.

In the longer term, F&N will invest in sustainable farming in its upstream fresh milk business in Ladang Permai Damai, significantly reducing its carbon footprint. The company has also begun a phased implementation of climate-related disclosures in line with the recommendations of the Task Force for Climate-related Financial Disclosures.

“For businesses to thrive today and in the future, it is essential that they meet the growing expectations of various stakeholders in the areas of ESG. This includes dealing with tighter regulations, increased requirements in ESG disclosures, more intense scrutiny from investors and greater expectations from consumers to deliver rapid improvement in sustainability issues they care about,” says Tan.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.