Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change & Circular Economy
• Labour Practices & Human Rights
• Deforestation & Land Use
• Water & Wastewater Management
• Safety & Health
• Ethical Recruitment & Responsible Employment
• Supply Chain Management
• Traceability & Responsible Sourcing: Policy & Practices
• Transparent Grievance Resolution & Communication
• Regulatory & Third-Party Compliance

Environmental Achievements

• Launched net zero greenhouse gas emissions targets for its entire business operations by 2040; Improved Forest score from C (Awareness) to B (Management Awareness & Involvement); 100% of Malaysian plantations are Malaysian Sustainable Palm Oil (MSPO) certified; Committed to No Deforestation, No New Planting on Peat, No Social Exploitation (NDPE) since 2016 and to protection of High Conservation Value (HCV) and High Carbon Stock (HCS) areas; Implemented various energy efficiency projects and plans to replace natural gas supply with oil in downstream plants; Monitor and treat all palm oil mill effluent (POME) and wastewater, with treated POME reused for land application; Incorporating the use of recycled water through rainwater harvesting back into production processes.
• Commissioned a new hydrogenation plant at IOI Oleochemical Industries Berhad, Penang, Malaysia; Started construction of a 20-acre palm wood factory in Johor, Malaysia

Social Achievements

• Implemented e-wallet salary crediting system to 93% of plantation operating units; Introduced specific guidelines concerning the rights and protection of workforce, including a Code of Conduct on Ethical Recruitment and Responsible Employment, and implemented child education initiative; Undertook a third-party audit on compliance with governance and social aspects of International Labour Organization’s (ILO) Indicators of Forced Labour; Resolved the long-standing community issue in the IOI Pelita land dispute case; Awarded more than 316 students with university scholarships and adopted more than 1,500 students under Student Adoption Programme; Sponsors after-school STEM programmes; Bargain Basement social enterprise expanded to four outlets; IOI Pan-Century Oleochemicals Sdn Bhd completed SMETA audit with closure of all non-compliance

Governance Achievements

• Strengthened governance over sustainability matters at Board level with appointment of Dr Nesadurai Kalanithi; Enhanced Board’s oversight of financial reporting matters by appointing Dato’ Kong Sooi Lin; Board now has 38% female representation

Climate Goals & Targets

Environmental Challenges

• Volatility in demand & commodity price; High global energy price and inflation; Demand for sustainable products & certifications; Product regulatory requirements; Growing customer interest in ethical labour practices; Shortage of foreign workers impacting supply chain; Heavy rainfall and floods impacting crop productivity; Hike in production cost; Volatility of CPO price; Outbreak of insect pests, vertebrate pests and diseases; Significant portion of oil palm trees past prime age

Mitigation Strategies

• Fully integrated business model; Optimum fertiliser use and EFB replacement; Energy efficiency projects; Sustainable agricultural practices; RSPO, ISCC, and MSPO certifications; NDPE commitment; Supply chain monitoring and digital tools; Market intelligence team and technical task force; Audit programmes and action plans; Community well-being programmes; Mechanisation, automation, and digitalisation; Replanting programme with high-yielding materials; Alternative energy sources; Cost control initiatives; Crop diversification; Forward sales contracts; Integrated pest management; Accelerate replanting programme; Worker retention incentives; Develop alternative sourcing strategies; Implement new energy conservation project and management programme; Qualify additional suppliers; Include cost-related energy premium in sales price to customers; Develop and implement plan to replace natural gas supply with oil

Supply Chain Management

Responsible Procurement

• Code of Conduct, supplier sustainability requirements, RSPO Supply Chain Certification Systems, Palm Oil Dashboard for monitoring

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather, flooding

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: IIRC, GRI, ISSB, TCFD

Certifications: RSPO, MSPO, ISCC, ISO 9001, ISO 14001, ISO 50001, FSSC 22000, EU-GMP, FDA

Third-party Assurance: BDO PLT

Sustainable Products & Innovation

• High-performance palm wood boards and panels, low 3-MCPD and GE products, RSPO-certified products, MIGLYOL 8810 ECO, powder version of MCT

Awards & Recognition

• 2021 National Energy Award (NEA) in Renewable Energy Cogeneration category, 2022 ASEAN Tech for ESG Award, Industry Excellence in Plantation Management award at MIACA 2022

Environmental Metrics

ESG Focus Areas

• Climate Change
• Biodiversity
• Human Rights
• Labor Practices
• Community Engagement
• Circular Economy
• Governance

Environmental Achievements

• Reduced Group carbon intensity by 19.7% against 2015 baseline.
• Achieved 95% recycling rate of non-hazardous waste (13% increase from last year).
• Installed 10 methane capture facilities, generating 38 million m³ of biogas (with plans for 4 more).
• Repurposed oil palm trunks into premium palm-based wood products.
• No deforestation or development on peat reported.
• Protected 9,103.07 hectares of HCVs and other conservation areas.

Social Achievements

• Launched IOI Urban Garden initiative for HQ employees.
• Built 90 new houses and upgraded 12% of existing housing facilities for workers.
• Made several gratuity payments to migrant workers as part of the “Shared Prosperity” scheme.
• Conducted audits on recruitment agents in Indonesia and Nepal.
• Provided full-day, zero-cost education for 3728 workers' children in Sabah.
• Implemented the ‘Plant Your Own Food’ initiative in Indonesia, with 95% of harvested crops consumed by employees.

Governance Achievements

• Established a new Board Sustainability Committee.
• Strengthened sustainability governance framework.
• Introduced an IOI Climate Change Action Financial Disclosure Committee.
• Received the Gold Award for the Plantation Sector under The Edge’s ESG Awards 2022.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to climate events (El Niño).
• High energy prices.
• Malfunctioning of two large biogas plants.
• Reduced production volume in Resource-based manufacturing segments.
• Addressing Scope 3 emissions from supply chains.
• Compliance with EUDR and HRDD.

Mitigation Strategies

• Implemented regenerative and precision agriculture.
• Introduced electrical agriculture machines.
• Improved refinery operations to reduce GHG emissions.
• Optimised green electricity usage through solar panels and RPO-OM.
• Engaged with suppliers to share CCAi goals and address climate change collaboratively.
• Developed alternative sourcing strategies.
• Strengthened traceability to plantations.
• Developed NDPE Implementation Reporting Framework and Traceability to Plantations for 3rd party suppliers.

Supply Chain Management

Supplier Audits: Audits conducted on recruitment agents in Indonesia and Nepal; further audits planned.

Responsible Procurement

• Code of conduct
• Supplier sustainability requirements
• NDPE compliance monitoring
• T4T self-assessment
• MSPO and RSPO certifications

Climate-Related Risks & Opportunities

Physical Risks

• Heatwaves
• Water stress
• Sea level rise

Transition Risks

• Regulatory changes
• Market shifts
• Carbon taxes

Opportunities

• Development of energy-efficient products
• Participation in the voluntary carbon market

Reporting Standards

Frameworks Used: GRI Standards 2021, GRI 13: Agriculture Aquaculture and Fishing Sectors 2022, TCFD recommendations, ISSB standards, AFI

Certifications: RSPO, MSPO, ISCC, ISPO, ISO 45001:2018

Third-party Assurance: Internal Audit review; External auditors (BDO PLT) read other information in accordance with ISA 720 (revised)

UN Sustainable Development Goals

• SDG 2
• SDG 8
• SDG 12
• SDG 13
• SDG 15
• SDG 17

Initiatives contributing to these goals are detailed throughout the report.

Sustainable Products & Innovation

• OnCore palm-based wood products
• Organic palm oil

Awards & Recognition

• Gold Award (The Edge’s ESG Awards 2022)
• Industry Excellence in Plantation Management Award (Malaysia International Agricommodity Awards 2022)
• Conservation Partner Award (Sabah Forestry Department)
• 1st Runner-Up (ASEAN Energy Awards & National Energy Award 2022)
• Silver Award (10th Human Resource Excellence Awards 2022)
• Winner (Green Energy Generation in ASEAN Energy Awards 2022)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Biodiversity
• Circular Economy
• Human Rights
• Workforce Well-being
• Community Engagement

Environmental Achievements

• Reduced GHG emission intensity by 42% in FY2024 (compared to 2015 baseline), exceeding the 40% target for FY2025.
• Achieved 100% RSPO certification for IOI mills in Malaysia and Indonesia.
• Successfully certified 1,128 ha of organically grown oil palm.
• Repurposed oil palm trunks into palm-based wood products through IOI Palm Wood.
• Established a joint venture to produce paper pulp from EFB.

Social Achievements

• Established Women Empowerment Committees across the Group.
• Implemented an online pre-alert grievance system for workers.
• Completed third-party audits on recruitment agents in Indonesia, Nepal, and India.
• Provided training programs to upskill workers and promote a just transition.
• Launched IOI Cares, an employee wellness program.

Climate Goals & Targets

Environmental Challenges

• Climate change impacts (heatwaves, water stress).
• Supply chain emissions (Scope 3).
• Maintaining zero fatalities in plantations.
• Low response rate for worker well-being survey.

Mitigation Strategies

• Implementing nature-based and engineered solutions.
• Engaging suppliers on decarbonisation.
• Strengthening safety procedures and communication.
• Improving survey methodology and communication.

Supply Chain Management

Supplier Audits: Completed audits on recruitment agencies in Indonesia, Nepal, and India.

Responsible Procurement

• IOI Responsible Sourcing Guideline
• NDPE commitments
• T4T assessments

Climate-Related Risks & Opportunities

Physical Risks

• Heatwaves
• Water stress
• Sea level rise

Transition Risks

• Carbon pricing
• Policy and legal changes
• Technological shifts
• Market changes
• Reputational risks

Opportunities

• Development of climate-friendly products and technologies.
• Reduced fossil fuel dependency.
• Enhanced brand reputation.

Reporting Standards

Frameworks Used: GRI Standards 2021, GRI 13: Agriculture Aquaculture and Fishing Sectors 2022, Bursa Malaysia Sustainability Reporting Guide (3rd Edition), TCFD, AFI

Certifications: RSPO, MSPO, ISCC, ISO14064-1, ISO45001

Third-party Assurance: Internal Audit

UN Sustainable Development Goals

• SDG 2
• SDG 8
• SDG 12
• SDG 13
• SDG 15
• SDG 17

IOI's targets and contributions are aligned with these SDGs.

Sustainable Products & Innovation

• Organic palm oil
• Palm-based wood products
• Paper pulp from EFB

Awards & Recognition

• Gold Award at The Edge Malaysia ESG Awards 2023
• Gold Award at the 3rd Employee Experience Awards
• Best CR Initiatives Award at The Edge BRC Awards 2023
• Company of the Year at the Sustainability and CSR Malaysia Awards 2023
• 2023 AIPB Enterprise Innovation Award