Climate Change Data

Khong Guan Limited

Climate Impact & Sustainability Data (2018, 2020-08 to 2021-07, 2021-08 to 2022-07, 2022-08 to 2023-07, 2023-08 to 2024-07)

Reporting Period: 2018

Environmental Metrics

ESG Focus Areas

  • Environmental
  • Social
  • Governance

Social Achievements

  • Maintained a loyal workforce with many employees having long tenures.
  • FOM (subsidiary) donated over 50,000 Ringgit Malaysia to the National Heart Institute and provided free oatmeal products.

Governance Achievements

  • Continued compliance with the Code of Corporate Governance.

Climate Goals & Targets

Environmental Challenges

  • Legacy imbalances in workforce diversity.
Mitigation Strategies
  • Continuing monitoring of workforce diversity imbalances.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI (Core level)

Reporting Period: 2020-08 to 2021-07

Environmental Metrics

ESG Focus Areas

  • Occupational Health and Safety
  • Energy
  • Environmental
  • Social
  • Governance

Environmental Achievements

  • KGVO implemented solar energy, reducing reliance on Tenaga Nasional power.

Social Achievements

  • Maintained a loyal workforce with many long-term employees.
  • Implemented COVID-19 safety protocols to safeguard employee health.

Governance Achievements

  • Maintained near 100% compliance with laws and regulations (with one minor incident at UMF).

Climate Goals & Targets

Medium-term Goals:
  • Minimize carbon footprint by replacing traditional energy with sustainable sources.

Environmental Challenges

  • COVID-19 pandemic impacting operations and supply chain.
  • Need to find sustainable energy sources for energy-intensive entities.
Mitigation Strategies
  • Implemented COVID-19 safety protocols.
  • Initiated a measured approach to adopting sustainable energy sources, starting with a trial at KGVO.

Supply Chain Management

Responsible Procurement
  • Zero tolerance for child labor and corruption; expectation of same from business partners.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI (Core option)

Third-party Assurance: None

Reporting Period: 2021-08 to 2022-07

Environmental Metrics

Renewable Energy Share:46% at KGVO in FY2022
Total Energy Consumption:12,048,731 kWh/year
Water Consumption:36,688 m3/year

ESG Focus Areas

  • Energy Management
  • Water Management
  • Employment and Labour Practices
  • Diversity and Equal Opportunities
  • Training and Development
  • Occupational Health and Safety
  • Economic Performance
  • Procurement Practices
  • Product Quality
  • Local Communities
  • Ethical Business Practices
  • Corporate Governance

Environmental Achievements

  • Commissioned solar panels at KGVO, resulting in a reduction of grid electricity usage from 79% to 54% between FY2021 and FY2022. Plans to install solar panels at other facilities.
  • Zero environmental fines or penalties in FY2022.

Social Achievements

  • Zero fatalities in work-related injuries or ill health from FY2020 to FY2022.
  • Implementation of an Emergency Response Team (ERT) at FOM and UMF, certified by BOMBA.
  • Various employee engagement activities including virtual town halls, induction programs, and yoga classes.
  • Significant increase in training hours from 95 in FY2021 to 1063 in FY2022.

Governance Achievements

  • Adoption of adequate procedures to defend against corporate liabilities for corruption offences under Section 17A of the Malaysian Anti-Corruption Commission Act 2009 (MACC Act) by TGF, SHC, and UMF Group.
  • Establishment of UMF Group Anti-Bribery and Corruption Policy and Whistleblowing Policy.
  • No reports of bribery or corruption in FY2022.

Climate Goals & Targets

Long-term Goals:
  • Develop a more comprehensive climate action strategy aligned with TCFD recommendations.
Medium-term Goals:
  • Install solar panels at SHC and FOM to replace part of purchased electricity consumption.
Short-term Goals:
  • Improve overall electricity consumption
  • Increase awareness on water conservation initiatives
  • Strengthen existing policies on Diversity and Equal Opportunities, and Human Rights and other labour practices in line with international standards
  • Organise and increase the number of internal training programmes
  • Maintain customers’ complaints at acceptable levels
  • Strengthen procurement practices with responsible sustainable practices in conducting business with third parties
  • Screen, evaluate and assess suppliers based on ESG criteria
  • Increase number of training or campaigns to create awareness on health and safety and to maintain high safety standards
  • Maintain zero fatalities track record
  • Strengthen corporate social responsibility framework with targeted programmes and focus areas to adopt and support

Environmental Challenges

  • COVID-19 pandemic
  • Increased supply chain and logistics costs due to geopolitical tensions
  • Container shortages, port congestion, and other logistics issues
Mitigation Strategies
  • Continued efforts to be resilient and create value for stakeholders.
  • Internal review of sustainability practices for a more systematic approach.
  • Diversification of supplier pool for raw materials (UMF).

Supply Chain Management

Responsible Procurement
  • Supplier assessment
  • Integrity Pledge
  • Due diligence on company’s reputation and financial standing
  • Sourcing of raw materials from ISCC Plus certified supplier (FOM)

Climate-Related Risks & Opportunities

Opportunities
  • Use of renewable energy sources (solar panels)

Reporting Standards

Frameworks Used: GRI, UN SDGs, TCFD

Certifications: ISO 22000:2018, MS1480:2019, Halal, SIRIM, MeSTI, FSSC 22000, SGS Non-GMO

UN Sustainable Development Goals

  • Goal 7: Affordable and Clean Energy
  • Goal 8: Decent Work and Economic Growth
  • Goal 16: Peace, Justice and Strong Institutions

KGL's initiatives contribute to these goals through energy management, employment practices, and ethical business conduct.

Reporting Period: 2022-08 to 2023-07

Environmental Metrics

Total Carbon Emissions:10,432 tonnes CO2e/year
Scope 1 Emissions:1,288 tonnes CO2e/year
Scope 2 Emissions:9,144 tonnes CO2e/year
Renewable Energy Share:40% at KGVO
Total Energy Consumption:60,967 GJ/year
Water Consumption:40,982 m3/year
Waste Generated:291.90 tons/year
Carbon Intensity:8.05 tonnes CO2e/mil SGD revenue (KGL Group); 89.99 tonnes CO2e/kt raw input volume (UMF Group)

ESG Focus Areas

  • Environment
  • Social
  • Governance

Environmental Achievements

  • Achieved substantial energy savings for two consecutive financial years at KGVO through solar power expansion.
  • Initiated solar panel installations at KGVO, expanding to FOM and SHC in FY2024.
  • Replaced some diesel forklifts with electric ones, evaluating full conversion feasibility.

Social Achievements

  • Maintained zero fatalities across the Group for another year.
  • Successfully filled a crucial leadership position at TGF to address succession planning challenges.
  • Increased Board diversity by appointing a new female Board member and establishing a Board Diversity Policy.

Governance Achievements

  • Strengthened governance efforts to combat anti-corruption and bribery.
  • All Board members attended mandated ESG training.

Climate Goals & Targets

Short-term Goals:
  • Reduce GHG emissions
  • Set baseline targets and short and long-term goals on GHG emissions
  • Implement climate-related disclosures based on TCFD recommendations
  • Reduce, reuse, and recycle waste
  • Increase awareness on water conservation initiatives

Environmental Challenges

  • Inflationary pressures, geopolitical events, growing environmental concerns, supply chain disruptions, technological changes, and increased competition.
  • Succession planning challenges at TGF.
  • Manpower shortage, supply chain disruptions, and health risks related to food safety hazards.
  • Irregular billing practices from utility providers in Sabah (TGF) and Penang (KGVO).
  • Faulty water tank float and pipe leaks at UMF.
  • Weevil infestation in flour products at FOM.
Mitigation Strategies
  • Progressive approach to establish mechanisms to measure and monitor ESG data.
  • Broadened access to diverse perspectives and resources to embed sustainability across operations.
  • Fostering closer cross-functional collaboration within teams.
  • Implementing energy-saving measures (LED lights, electric forklifts).
  • Exploring alternative renewable energy sources (solar power).
  • Improved water consumption monitoring methodology at TGF.
  • Rectification of faulty float and aging pipes at UMF.
  • Addressing weevil infestation through sanitation and pest control initiatives at FOM.
  • Appointing a new senior manager at TGF.

Supply Chain Management

Responsible Procurement
  • Due diligence on supplier’s reputation and financial standing
  • Integrity Pledge from suppliers
  • Annual audits at suppliers' sites (FOM)

Climate-Related Risks & Opportunities

Opportunities
  • Expansion of renewable energy sources

Reporting Standards

Frameworks Used: GRI Universal Standards 2021, SGX ESG Core Metrics

Certifications: ISO 22000:2018, MS1480:2019, Halal, SGS Non-GMO, FSSC 22000, ISCC Plus, MeSTI

UN Sustainable Development Goals

  • Goal 7
  • Goal 8
  • Goal 13

Energy management, employment and labour practices, and climate change initiatives.

Reporting Period: 2023-08 to 2024-07

Environmental Metrics

Total Carbon Emissions:9904 tCO2e/year
Scope 1 Emissions:1306 tCO2e/year
Scope 2 Emissions:8598 tCO2e/year
Renewable Energy Share:6%
Total Energy Consumption:12167931 kWh/year
Water Consumption:33565 m3/year
Waste Generated:384.4 tons/year

ESG Focus Areas

  • Environment
  • Social
  • Governance

Environmental Achievements

  • 5% Reduction in Scope 1 and Scope 2 GHG Emissions from FY2023 Baseline
  • 22% Reduction in Water Consumption
  • 47% Waste Diverted from Landfill
  • Installation of on-site solar projects at two additional sites (580kWp)

Social Achievements

  • 29% Reduction in Customer Complaints
  • Zero Violations of Labour Practices and Standards
  • Zero Cases of Work-related fatalities
  • Zero Cases of Reported Whistleblowing, Bribery and Corruption
  • 90% of Suppliers Signed Integrity Pledge
  • 80% of Employees Trained on Anti-Bribery and Corruption Risk

Governance Achievements

  • 100% of Entities Assessed for Anti-Bribery and Corruption Risk

Climate Goals & Targets

Medium-term Goals:
  • Expand climate-related disclosures progressively based on the TCFD recommendations, in alignment with the IFRS S2
Short-term Goals:
  • Explore ways to reduce GHG emissions
  • Set baseline targets and short and long-term goals on GHG emissions

Environmental Challenges

  • Volatility in foreign exchange rates
  • Diesel subsidy adjustments
  • Increased compliance requirements (climate change)
  • Waste disposal rate hikes in Penang
  • Amendments to the Malaysian Occupational Safety and Health Act 1994
  • Complex global ESG disclosure requirements (ISSB)
Mitigation Strategies
  • Updates to operating protocols to balance operational needs with compliance obligations
  • Intensified sustainability efforts to streamline ESG practices
  • More frequent engagements via the Joint Sustainability Working Group
  • Employees seeking cost-effective ways to manage risks and ensure compliance

Supply Chain Management

Supplier Audits: Annual audits at suppliers' sites (UMF and FOM)

Responsible Procurement
  • Integrity Pledge from suppliers
  • Due diligence on supplier's reputation and financial standing
  • ESG assessment for suppliers (future plan)

Climate-Related Risks & Opportunities

Physical Risks
  • Extreme weather (flood, drought, storm)
  • Increasing temperature
Transition Risks
  • Policy and legal risks (high level of policy and regulatory reforms)
  • Market risk (low carbon preference)
  • Technology risk (decarbonisation technology's maturity and cost-effectiveness)
Opportunities
  • Waste reduction and management
  • Adoption of renewable energy and energy efficiency
  • Usage of sustainable packaging
  • Potential market expansion to capture low carbon trend

Reporting Standards

Frameworks Used: GRI Standards, TCFD

Third-party Assurance: Internal audit

UN Sustainable Development Goals

  • Goal 7 (Affordable and clean energy)
  • Goal 12 (Responsible consumption and production)
  • Goal 6 (Clean water and sanitation)
  • Goal 8 (Decent work and economic growth)
  • Goal 13 (Climate action)
  • Goal 17 (Partnerships for the goals)

Details in report

Awards & Recognition

  • Committed Badge from EcoVadis (FOM)