Governance & Sustainability

Sustainability Statement

RESPONDING TO THE COVID-19 PANDEMIC

The Covid-19 outbreak was declared a pandemic by the World Health Organisation in March 2020 and the Malaysian government imposed a nationwide lockdown known as the Movement Control Order (MCO) to prevent the spread of the disease. As infections continued to fluctuate, varying degrees of the restrictions were enforced for the remainder of 2020.

The disruptions from the pandemic and prolonged MCO have caused unprecedented challenges to the economy, businesses and the community.

Two of our business segments were severely impacted by the pandemic disruptions. The impact was felt most by our film exhibition and distribution segment, which saw its cinemas closed for more than 6 months nationwide as mandated by the authorities. As a result, the segment had to temporarily furlough its contract workers. Permanent workers were not affected and continued to undergo training whilst working from home during the MCO. The segment had also exited five of its cinema sites, which leases ended in the reporting year in order to consolidate its position with upcoming new sites. All full-time employees from these sites were absorbed by its other cinemas. During the closure, the segment continued to engage its customers on social media platforms and offered its cinema snacks via GrabFood. A GSC Facebook post “Hello. Cannot.” made in response to questions on cinema standard operating procedures (SOPs) resonated with many Malaysians, which lead to the offering of t-shirts with the popular “Hello. Cannot.” tagline. This provided an opening to start a series of merchandise, as well as accelerated the launch of GSC’s own e-commerce platform, Keepsake, which offers branded and movie-related collectibles.

Shopping malls saw significantly reduced foot traffic during the same period and our property division provided support to its tenants by offering rental reliefs and rental rebates to tenants who were prohibited to operate. The division additionally offered its tenants the flexibility to operate shorter hours to lower their operation cost, as well as allocated a designated pick-up point for customers to facilitate tenants who also operate their business online during the MCO.

Prior to the onset of the pandemic, the Group embarked on a Business Continuity Management (BCM) programme, which is being rolled out in phases. This programme equips the organisation with planning and execution capabilities to respond and continue to operate critical business functions across a wide range of interruptions arising from both internal and external events. One of the components of BCM is Business Continuity Plan, under which the Group has started practicing buffer stocks maintenance, alternate suppliers planning, ensuring technology readiness at all times, as well as drawing up emergency response plans for various scenarios, one of them being a pandemic outbreak involving segregation of work teams. As such, at the announcement of the MCO, we were able to respond quickly and switch to remote working efficiently, with minimal disruption to both the workplace and supply chain.

Ensuring the well-being of our people has always been one of our key priorities and the Group implemented stringent health and safety measures alongside the official standard operating procedures (SOPs) from the Ministry of Health to ensure the protection of our employees - please also see our 2020 Overview on Group Human Capital Management under the Working Environment section. Similar health and safety measures were also set up to protect the safety and wellbeing of our customers and other stakeholders, where enhanced cleaning and disinfection, and provision of sanitisers became part of the new norm.

Vulnerable communities and the frontline workers were not forgotten and the Group supported these communities with personal protective equipment (PPE) and other product contributions amounting to RM2.6 million – please see the Community Investment section.

(Note: The pandemic’s impact on workplace and marketplace engagements is covered under this Sustainability Statement whilst the impact on the Group’s businesses is captured in the Managing Director’s Review.)

 

As a diversified conglomerate, PPB Group Berhad (“PPB”) aspires to achieve excellence in sustainability by integrating sustainable practices into its business activities in line with the Group’s vision and core values.

The PPB Board (“the Board”) has oversight responsibility to deliver sustainable value to stakeholders through the principles, policies, objectives and strategies of PPB and its subsidiaries in Malaysia (“the Group”). To assist the Board in fulfilling its responsibilities, a Sustainability Steering Committee (“SSC”) was formed in 2017. The SSC is chaired by Mr Lim Soon Huat, PPB’s Managing Director and comprises PPB’s Head of Corporate Affairs as Group Chief Sustainability Officer, PPB’s Department Heads and the Sustainability Officers from across the business segments.

Grid 01

Developing and driving the implementation of sustainability policies and strategies, plans and project budgets.

Grid 02

Reviewing and reporting on progress against sustainability strategies, targets, plans and budgets.

Grid 03

Developing an annual Sustainability Statement.

Grid 04

Identifying, communicating and promoting best sustainability practices in the Group.

About this statement

This is our fifth Sustainability Statement based on the Bursa Malaysia Securities Berhad listing requirements and sustainability parameters aligned to international reporting guidelines and frameworks, such as the Global Reporting Initiative (GRI).

We started on our reporting journey in 2016 with a Board approved consolidated matrix of issues relating to the activities of the Group. To ensure that new developments within our businesses are taken into consideration, as well as to reflect wider changes to the sustainability agenda, we undertook another benchmark study and materiality assessment in 2019 for our key business divisions – flour and animal feed milling, cinemas, and bakery - to further improve on industry-related disclosures and performance. An updated materiality matrix with 23 prioritised issues approved by the Board forms the basis of an agreed set of key performance indicators that will be used for reporting on our sustainability performance.

For 2020, we have added to our Group Materiality Matrix the material issue “Pandemic impact and business continuity” which covers Covid-19 and its impact on business continuity. This refers largely to our marketplace engagement but also has reference to both our working environment and community investment pillars.

Our Sustainability Statement describes our performance based on key non-financial metrics, highlights areas where our sustainability management and processes can be strengthened and provides a basis for us to continually improve our reporting to better meet our stakeholders’ expectations.

The Group is committed to focusing on the most material challenges identified and achieving set targets. An overview of our achievements and progress for 2020, as well as our targets for 2021, are presented below:

2020 Achievements and Progress

Group
  • Commenced implementation of Group’s Human Rights Policy in our supply chain.
  • Implemented a Group Anti-Bribery and Corruption Framework and Policy.
  • Zero fatalities* in all business divisions.
Grains & Agribusiness
  • Feed & flour milling: Energy use intensity target was not achieved. Basis of measurement to be reviewed for more efficient tracking of energy usage.
  • Johor Bahru Flour Mill Sdn Bhd in Kota Kinabalu is the last of our mills to be FSSC22000 certified. Due to the pandemic, its application for certification has been postponed to 2022.
  • Breeder farm: Energy use intensity target of at least 16.21 parent stock/kWh was not met due to higher parent stock losses and lower parent stock intake to optimise parent stock performance, while water use intensity target to achieve at least 725 parent stock/m3 was not met due to leakages which have since been fixed.
  • Layer farm**: Energy use intensity target of at least 69.96 commercial layers/kWh was achieved, while water use intensity target of at least 3,430 commercial layers/m3 was not met due to leakages which have since been fixed.
  • Livestock farming: Conversion of all applicable chicken houses from fluorescent to energy-saving LED bulbs will be achieved when the fluorescent lamps in the remaining sections are replaced by Q2 2021.
Film Exhibition & Distribution
  • As the cinemas were closed for more than half the reporting year, measurement of energy use intensity by screen was no longer an accurate reflection of energy usage. Therefore, the measurement has been revised to kWh/show to be more reflective of the cinema business environment in 2020 - please see “Cinemas division” on page 42.
  • JTo continue progressively converting its cinemas to full LED lights.
  • Achieved target to obtain HACCP certification for 7 cinema concessions.
  • Established food product traceability list for items prepared in-house for cinema concessions.
  • Converted the majority of its cinema concessions’ plastic packaging to biodegradable options.
Property
  • Achieved energy and water use intensities of 6.8 kWh psf (exceeding target of 7.28 kWh psf by 6.9%) and 0.32 m3 psf respectively for all buildings under management and office spaces.
  • The Group’s oil palm entities have been certified MS2530-3:2013 by the Malaysian Sustainable Palm Oil in April 2020.

* Covers all fatalities (employees and non-employees) which occurs on the divisions’ premises.
** Targets for layer farm’s energy and water use intensities were restated in April 2020 due to a data error.

ALL SEGMENTS
2021 Targets Material Issues
Zero fatalities* in all business divisions.
  • Pandemic impact & business continuity
  • Health & safety
  • Working environment
  • Employee welfare & satisfaction
GRAINS & AGRIBUSINESS
2021 Targets Material Issues
Flour & animal feed milling division  

Energy use intensity (short-term reduction targets)

  • Flour mills: reduce energy use intensity in kWh/MT Wheat by 5% by 2025 based on 2020 baseline figures.
  • Feed mills: reduce energy use intensity in kWh/MT Feed by 5% by 2025 based on 2020 baseline figures.
  • Pandemic impact & business continuity
  • Climate change
  • Energy

Carbon emissions (short- & long-term reduction targets)
Feed & flour mills:

  • Short term: reduce 3% GHG by 2025 based on 2020 baseline figures.
  • Long term: reduce 5% GHG by 2031 based on 2020 baseline figures.
  • Pandemic impact & business continuity
  • Climate change
  • Energy
Livestock farming division  

Breeder farms
Energy and water use intensity to achieve at least 15.41 parent stock/kWh and at least 709 parent stock/m3 respectively.

  • Pandemic impact & business continuity
  • Climate change
  • Energy

Layer farm
Energy and water use intensity to achieve at least 69.96 commercial layers/kWh and at least 3,430 commercial layers/m3 respectively.

  • Pandemic impact & business continuity
  • Climate change
  • Energy
FILM EXHIBITION AND DISTRIBUTION
2021 Targets Material Issues
Cinemas division  

Energy use intensity to not exceed 55 kWh/show.

  • Pandemic impact & business continuity
  • Climate change
  • Energy

Implement Annual Vendor Performance Evaluation.

  • Product quality & safety
  • Supply chain
  • Brand & reputation
PROPERTY
2021 Targets Material Issues

Energy and water use intensities to not exceed 6.8 kWh psf and 0.32 m3
respectively for all buildings under management and office spaces.

  • Pandemic impact & business continuity
  • Climate change
  • Energy

* Covers all fatalities (employees and non-employees) which occurs on the divisions’ premises.
Note: Energy & water use intensities are calculated by dividing absolute use over an organisation-specific metric.

In the following sections, we report on our performance in greater detail based on the four pillars of our approach to sustainability - environmental impact, working environment, marketplace engagement and community investment.

  •  Environmental Impact
  • Environmental Impact

We recognise the importance of environmental protection for the long term sustainability of our businesses. Our materiality assessment in 2016 showed that the most immediate issues within our own operations relate to resource use and the impact of this use – particularly water and energy, and the waste generated from our operations. We mainly operate in industrialised zones and urban areas, primarily in the Klang Valley, Malaysia and our activities have relatively little direct impact on biodiversity. Our most significant action points therefore target the reduction of our climate impacts through minimising our carbon footprint and energy consumption, reducing our water impact and improving waste management.

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  • Working Environment
  • Working Environment

One of the major sustainability issues faced by all industry sectors in Malaysia today is the recruitment and retention of employees – from unskilled workers to highly skilled professionals. Our approach to this challenge includes focusing on creating and maintaining safe and enjoyable workplaces, and an engaging and supportive culture to empower talented individuals to succeed.

The Group employs slightly more than 6,000 people, of whom two thirds are permanent full-time employees. Our cinemas division accounts for the highest proportion of workers (38% of the Group’s total workforce), of which more than half are on a part-time basis.

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  • Marketplace Engagement
  • Marketplace Engagement

Marketplace impacts, including governance and ethics, are of high material importance to both the Group and its stakeholders.

Code of Conduct and Ethics
The Group is committed to conducting its businesses in compliance with local laws and regulations and with utmost integrity, transparency and accountability. A code of conduct and ethics, which is included in both our Group employee handbooks and on our website — www.ppbgroup.com — sets out the standards of conduct and personal behaviour our directors and employees are required to observe to ensure that the Group’s commitment is upheld.

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  • Community Investment
  • Community Investment

CSR Task Force
We see ourselves as a force for good in the communities where we operate. Local wealth creation is identified as an important material issue for the Group and we are committed to balancing our business needs with support for community growth and well-being. In this, we have taken a more strategic approach to planning and delivering community investment programmes that are closely linked to our businesses and areas of operation.

Our Sustainability Steering Committee (“SSC”) is responsible for overseeing the Group’s community investments. To assist the SSC in devising strategies and reviewing, managing, implementing and tracking our community investment programmes, a CSR Task Force comprising representatives from PPB’s Head Office and the subsidiaries was set up in 2017. Our Group community investment strategy which comprises three pillars – Social, Environmental, and Arts and Culture – supports youth education and development, living skills and standards enhancement, environmental awareness and health activities, amongst others. In 2019, the SSC and CSR Task Force each met twice. For the same period, the Group spent a total of RM1,006,272/- on community investment/CSR projects, of which RM541,770/- were contributions to registered NGOs. The various divisions under the Group also jointly contributed a total of RM20 million towards the establishment of the PPB50 Fund to alleviate poverty through education by carrying out education-related projects. During the same year, the PPB-KF Welfare Fund for Perlis and PPB50 Fund disbursed a combined total of RM1,030,029/-.

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