Climate Change Data

Environmental Metrics

ESG Focus Areas

• Economic Sustainability
• Product Safety and Quality
• Corporate Governance and Ethics
• Responsible Sourcing
• Product Innovation
• Diversity and Inclusion
• Training and Development
• Occupational Health and Safety
• Community Investment
• Climate Change and Environmental Management

Environmental Achievements

• Reduced electricity consumption by 33.3% to 0.80kWh/kg in 2019.
• Reduced water consumption by 57.1% to 0.003 m3/kg in 2019.
• Obtained approval for a rooftop solar project (to be implemented in 2020).

Social Achievements

• Organised a health and safety week for employees.
• Organised talks on health and safety, including a chemical register workshop and personal protective equipment training.
• Conducted an emergency response training for the emergency response team.
• Provided a gym for employees.
• Organised various charitable and volunteering activities.
• Decreased lost time injuries to 3 incidents in 2019 compared to 5 in 2018.
• 55 employees received long service awards.

Governance Achievements

• Successfully obtained the more stringent BRC Issue 8 certification.
• Established a whistleblowing policy.
• Implemented a Code of Conduct and Ethics applicable to all employees and third parties.
• Annual review of Board performance and effectiveness.
• Annual review of Executive Directors’ remuneration.

Climate Goals & Targets

Environmental Challenges

• Generally weaker growth amid uncertainties in the global economic environment.
• Challenging operating conditions in Malaysia due to the consolidation of operations.
• Significant impact on profit due to depreciation and higher wages.
• Weak consumer sentiment in the Malaysian market.
• Reduced discretionary spending by consumers due to global economic uncertainties.
• COVID-19 pandemic and resulting global economic uncertainties.

Mitigation Strategies

• Optimising human resources.
• Investing in automated production lines and technologies.
• Improving operational efficiency and developing new capabilities.
• Investing in new production lines and upgrading existing machines.
• Introducing new innovative products, including low GI products.
• Developing business continuity planning.
• Implementing a succession plan for employees.
• Streamlining operations to enhance production capacity and productivity.

Supply Chain Management

Supplier Audits: All suppliers assessed in 2019

Responsible Procurement

• Kawan purchasing policy sets out clear requirements for all suppliers.
• Focus on local sourcing (90% of ingredients sourced locally).
• Supports Roundtable on Sustainable Palm Oil (RSPO).

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Bursa Malaysia Main Market Securities Berhad Sustainability Reporting Guide

Certifications: BRC (Issue 8) Global Standard for Food Safety, HACCP Certification (MS1480:2007), Good Manufacturing Practice Certification, MS1500:2019 - Halal Food General requirements

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 9 (Industry, innovation, and infrastructure)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)
• Goal 2 (Zero hunger)
• Goal 3 (Good health and well-being)

The report details how Kawan's initiatives contribute to these goals.

Sustainable Products & Innovation

• Low GI paratha and chapatti
• Jia You Liang Yuan product range

Awards & Recognition

• MIFT Product Innovation Platinum Award 2019 for Cheesy Italian Rice Bites
• MIFT Product Innovation Gold Award for Multigrain Mantou

Environmental Metrics

ESG Focus Areas

• Occupational Health & Safety
• Ethical Business Practice
• Environmental Stewardship
• Nurturing and Empowering People
• Trusted Enterprise

Environmental Achievements

• Installed a solar photovoltaic system, resulting in a 25.6% reduction in energy consumption and emissions at Pulau Indah.
• Implemented an Energy Recovery System (ERS), estimated to save RM70,000 per year on electricity.

Social Achievements

• 100% of employees completed 2 doses of COVID-19 vaccination.
• Launched a “buy two free one” food donation initiative, donating approximately RM20,000.
• Supported community-based programs with contributions totaling RM118,250.

Governance Achievements

• Initiated a materiality assessment exercise.
• Appointed the Executive Director of Marketing to drive sustainability at the Board level.
• Adopted a Sustainability Strategy Framework and the UN Global Compact.
• Established a Sustainability Steering Committee (SSC) and Sustainability Working Committee (SWC).

Climate Goals & Targets

Environmental Challenges

• Resurgence of COVID-19 cases and movement restrictions impacted supply chain and employee capacity.
• Worldwide container shortage constrained exports.
• Rise in raw material and freight costs, labor shortage, and supply chain challenges.
• Heightened ESG focus from stakeholders.

Mitigation Strategies

• Implemented business continuity plans.
• Implemented stringent infection prevention measures, including mandatory bi-weekly COVID-19 self-tests (cost borne by Kawan).
• Paid for employee quarantine needs and provided PPE.
• Encouraged employee vaccinations.
• Engaged closely with logistics partners to minimize supply disruption.
• Rationalized product range and updated strategies.
• Implemented cost-saving initiatives.
• Worked with major suppliers to identify and mitigate risks.
• Reviewed and updated material sustainability matters.
• Established the SSC and SWC to drive the Group’s sustainability agenda.

Supply Chain Management

Supplier Audits: Compliance audits performed on key suppliers; expansion of due diligence to include Human Rights and environmental matters planned.

Responsible Procurement

• Ethical Sourcing strategy planned, with a target of procuring sustainably produced components by the end of 2023.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards: Core Option, Bursa Malaysia Sustainability Reporting Guide (Second Edition), UN Global Compact

Certifications: BRC certification, HALAL certification, ISO/IEC 17025 laboratory accreditation

UN Sustainable Development Goals

• 1.2
• 2.2
• 4.4
• 6.3
• 6.4
• 7.2
• 7.3
• 8.1
• 8.2
• 8.3
• 8.7
• 8.8
• 9.1
• 9.2
• 10.2
• 10.3
• 10.4
• 12.5
• 12.6
• 13.1
• 13.2
• 14.1
• 16.5
• 16.6
• 16.7
• 17.17

The report mentions alignment with several UNSDGs throughout the Sustainability Statement, but does not provide a detailed explanation of how specific initiatives contribute to each goal.

Sustainable Products & Innovation

• Plant-based products planned for launch in 2022

Environmental Metrics

ESG Focus Areas

• Trusted Enterprise
• Nurturing & Empowering People
• Environmental Stewardship

Environmental Achievements

• Installed a solar photovoltaic system, generating 3.22 GWh of solar energy, resulting in cost savings of RM1,143,298 and avoiding 1,884 tonnes of CO2 and 277 tonnes of fossil fuel
• Commissioned a heat recovery system, reducing energy and fuel consumption
• Diverted 83.0% of its total waste volume towards other productive uses
• Diverted 559.56 metric tonnes of waste from landfills through recycling
• Reduced water consumption by almost 10% compared to the previous year

Social Achievements

• Relaunched the “buy two free one” food donation campaign, donating to What A Waste or Great Heart Charity
• Provided support to community-based programmes, contributing RM125,000
• Provided team leaders with a leadership development programme
• Made important appointments and promotions within the company
• Introduced a formal Grievance Policy
• Hosted various employee engagement events
• Donated RM206,700 to non-profit organisations

Governance Achievements

• Implemented a sound sustainability governance model
• Established an Anti-Bribery and Anti-Corruption Policy and provided training
• Revised Whistleblowing Policy
• Adopted a Directors’ Fit and Proper Policy
• Undertook an annual review of the performance and effectiveness of the Board and Board Committees

Climate Goals & Targets

Environmental Challenges

• Rising raw material costs and inflation leading to supply chain disruptions
• Heightened sustainability focus from stakeholders
• Post-pandemic macro uncertainty, including political crisis, forex fluctuations, and inflation
• Aggressive expansion by competitors and intense price competition
• Weakening demand in China due to recurring outbreaks and downturn in the property market

Mitigation Strategies

• Maintaining supply chain resilience, closely monitoring market developments, diversifying suppliers, leveraging data analytics
• Rolling out a sustainability roadmap (2022-2030)
• Monitoring cash flow and financial position, focusing on revenue and PBT growth, investing in innovation and Industry 4.0, expanding product portfolio
• Working closely with customers and suppliers to mitigate challenges, simplifying operations, focusing on cost management

Supply Chain Management

Supplier Audits: 17 audits in 2022

Responsible Procurement

• Prioritising local suppliers (91%)
• Developing a sustainable sourcing strategy
• Integrating environmental and social policies into the supply chain
• Communicating expectations to major suppliers through regular communication, best practices, and training
• Integrating ESG commitment into procurement policy
• Performing compliance audits on key suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Universal Standard, Bursa Malaysia Sustainability Reporting Guide, UN SDGs, ISO 26000

Certifications: BRCGS Food Safety, MS1480 HACCP, MS1514 GMP, ISO 14001 (in progress), ISO 45001 (in progress)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Plant-based products (vadai, purple sweet potato fingers, falafel, meat-free nuggets, meat-free chicken fingers)

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Economic
• Environmental
• Social
• Governance

Environmental Achievements

• Installed solar panels at Pulau Indah facility, avoiding 1,649 tonnes of CO2
• Obtained ISO 14001 certification
• Increased waste diverted from landfill compared to previous year

Social Achievements

• Contributed RM268.68k to non-profit organizations
• Increased total training hours from 5,604 hours in FY2022 to 8,532 hours in FY2023
• Decreased lost time injury rate from 8.2 to 2.67
• Obtained ISO 45001 certification

Governance Achievements

• Zero incidents of corruption reported
• Established various ESG-related policies (Health & Nutrition, Sustainable Supply Chain, Responsible Marketing, Human Rights, etc.)
• Admitted to FTSE4Good Bursa Malaysia Index and FTSE4Good Bursa Malaysia Shariah Index

Climate Goals & Targets

Environmental Challenges

• Rising costs and inflation
• Risk of losing competent employees
• Selection and procurement of materials from unsustainable sources
• Poor OHS management
• Not making healthy and nutritious products
• Poor sales and low profits
• Poor quality & safety affects consumer health and safety
• Poor management of employee learning & growth
• Corruption and other unethical governance issues
• Greenhouse gas emissions
• Poor performance in the supply chain
• Not maintaining engaged communities
• False labeling or inaccurate product information
• Dependence on energy from non-renewable sources
• Not managing effluents & waste
• Over consumption of water

Mitigation Strategies

• Annual strategy and budget setting exercises
• Transformation oversight
• Training programs
• Succession planning
• Compensation and benefits review
• Sourcing sustainable raw materials
• Focus on environmentally sound supplies
• Collaboration with local universities
• Safe and healthy work environment
• Initiate plant-based and more nutritious product offerings
• Growing the business in line with changing market sentiment
• Strengthening operational controls
• Providing training to production staff
• Enhancing monitoring procedures
• Closer collaboration with distributors
• Promoting sustainable practices in the supply chain network
• Staying engaged with the community
• Accurate product information
• Embracing renewable energy sources
• Improving efficiency across all operations
• Identifying alternative water sources

Supply Chain Management

Supplier Audits: 18 audits in FY2023

Responsible Procurement

• Procurement Policy (since 2023)
• Regular supplier audits and reviews
• Assessment of environmental risks of potential and existing suppliers

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI 2021, UN SDGs, FTSE4Good Bursa Malaysia Index, Bursa Malaysia Sustainability Reporting Guide

Certifications: BRCGS Food Safety, MS1480 HACCP, MS1514 GMP, HALAL, ISO 45001, ISO 14001

Third-party Assurance: Internal Audit Department

Sustainable Products & Innovation

• Plant-based products (vadai, purple sweet potato fingers, falafel)

Awards & Recognition

• FTSE4Good Bursa Malaysia Index constituent
• FTSE4Good Bursa Malaysia Shariah Index constituent