Climate Change Data

Environmental Metrics

ESG Focus Areas

• Occupational Health and Safety
• Quality and Customer Satisfaction
• Business Growth and Performance
• Business Ethics and Compliance
• Fair Employment Practices
• Technology and Innovation
• Employee Training and Development
• Data Privacy and Security
• Waste and Effluents Management
• Community Contributions and Development
• Energy and Carbon Management
• Water Management

Environmental Achievements

• All three Divisions introduced more energy saving and environmentally-efficient programmes into operations: Solar Panel Installation, LED Lighting, Emission Reduction at Logistics Jining Port.
• The new Sime Darby Motors headquarters achieved a provisional Green Building Index certification.
• Sime Darby Logistics’ three river ports in Jining were awarded Green Port status.

Social Achievements

• Continued work on Talent Development through the design of external training courses and tailored programmes.
• Initiatives such as the integration of knowledge and experience across Divisions and subsidiaries, as well as the implementation of recruitment practices that promote integration of local talents.
• Monetary and non-monetary contributions to local communities through Yayasan Sime Darby or various initiatives by Divisions.
• Trained 370 graduates under the Skim Latihan 1Malaysia (SL1M) programme.

Governance Achievements

• Developed a five-year Risk Management Blueprint.
• Established a Risk Appetite Framework.
• Revised Sime Darby Berhad’s ERM Framework.
• Improved the governance of risk and compliance aspects of the Group’s operations in China, oversight of joint venture companies and associates, as well as additional reporting by the Divisional and country company secretaries and legal counsels to Group Head Office.

Climate Goals & Targets

Environmental Challenges

• Two fatalities during the year, one at Inokom and another at Weifang Port.
• Challenging industry landscape in the automotive space (move to electric vehicles, shared mobility, e-commerce).
• Slowdown of China’s economy.
• Declines in vehicle sales in China.
• Intense competition across all businesses.
• Risk of technology disruption leading to disintermediation.
• Dependence on key principals (Caterpillar and BMW).
• Risk of not generating adequate cash flow.
• Risk of IT security breach.
• Changes in regulatory regime.
• Ongoing US-China trade conflict.
• Lower throughput at Weifang Port due to trade tensions and port consolidation.

Mitigation Strategies

• Enhanced safety practices to meet the increasingly stringent requirements of our operations.
• Developing new competencies, engaging with potential mobility partners, and increasing online presence.
• Diversification strategies to alleviate concentration on individual brands or products.
• Digitalisation strategy and cost optimisation initiatives.
• Business transformation initiatives and digital proofing strategies.
• Mergers and acquisition opportunities with digital partners.
• Diversification of business to spread the risk of concentration on key principals.
• Strategic plans to diversify business to mitigate over-concentration on one single country or industry.
• Hedging mechanisms to mitigate forex exposure.
• Comprehensive human resources plan to recruit critical and strategic positions.
• Succession planning.
• Continuous training and development programmes.
• IT security tools (firewall, antivirus software).
• Regulatory compliance programme.
• Focus on operational improvements and developing services that match domestic logistics demand.
• Providing reasonably priced, high quality port handling services and extending value proposition by offering end-to-end logistics services.
• Upgrading port facilities to comply with environmental protection regulations.

Supply Chain Management

Responsible Procurement

• Vendor Code of Business Conduct
• Vendor Letter of Declaration

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: International Integrated Reporting Council (IIRC), Malaysian Code on Corporate Governance 2017 (MCCG 2017), Main Market Listing Requirements (MMLR) of Bursa Malaysia Securities Berhad, Companies Act 2016, Malaysian Financial Reporting Standards, International Financial Reporting Standards, UN SDGs, GRI, DJSI

Third-party Assurance: Third-party assurance for LTIFR data (page 302)

Awards & Recognition

• Caltrac operations in New Caledonia recognised for safety commitment.
• SDI’s operations in Kuantan, Ipoh and Klang Valley awarded Gold Class 1 by MSOSH.
• Sime Darby Motors’ Rolls-Royce dealerships named Dealer of the Year and Service Dealer of the Year for APAC.
• Auto Bavaria Sungai Besi received recognition for highest Growth Rate for the BMW 7 Series.
• Continental Cars named Top Ferrari Showroom.
• Hastings Deering received Caterpillar Recognition for excellence in Technician Development.

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance
• Responsible Supply Chain
• Community Development

Environmental Achievements

• 13% reduction in Scope 1 emissions from 2020 levels
• 4% reduction in Scope 2 emissions from 2020 levels
• Installation of 1.2MW solar PV system at Inokom assembly facility
• Terra Cat facilities in New Zealand 100% renewables powered
• 300kW combined solar PV systems in Australia producing 220 MWh of solar energy

Social Achievements

• Total Recordable Injury Rate improved by 22% to 3.30
• 480,000 hours of employee training and development
• RM80 million contributed to Yayasan Sime Darby for CSR programs
• Launched Leadership Coaching Programme at Sime Darby Industrial and Sime Darby Motors
• 100% of staff at Porsche assembly facility in Inokom are locals

Governance Achievements

• Revisions to Group Policies and Authorities (GPA) to empower management
• Development of Gifts, Hospitality and Donations (GHD) registry (yourTrust)
• Enhanced anti-bribery standards across operations
• Strengthened internal control processes

Climate Goals & Targets

Environmental Challenges

• Slowdown in key markets (China)
• Inventory shortages
• COVID-19 related disruptions
• Supply chain disruptions
• Rising inflation
• Increased cost of borrowings
• Agency model gaining traction in automotive market
• Shift to electric vehicles
• Climate change impacts

Mitigation Strategies

• Geographical diversification
• Strong financial position
• Operational excellence
• Productivity improvement
• Cost optimisation
• Strategic acquisitions
• Divestment of non-core assets
• Investment in EV infrastructure and technology
• Sustainability Blueprint
• Improved inventory management
• Focus on higher margin segments
• Digitalisation initiatives
• Employee training and development
• Strengthened risk management processes

Supply Chain Management

Responsible Procurement

• Rigorous supplier selection criteria
• Compliance with regulatory requirements
• Vendor Management Programme
• Vendor Code of Conduct
• Anti-bribery due diligence

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Decarbonisation of customers’ operations
• Shift to zero-emission vehicles
• Transition to self-driving vehicles

Opportunities

• Growth in decarbonisation solutions
• Demand for battery metals
• Investment in clean technology

Reporting Standards

Frameworks Used: Integrated Reporting (IR), United Nations Sustainable Development Goals (UN SDG)

Sustainable Products & Innovation

• Electric forklifts
• Autonomous vehicles and machinery
• Water-based paint
• Mine Energy Solutions

Awards & Recognition

• Hastings Deering: 2022 Queensland Resource Council’s (QRC) International Women’s Day Awards, 2022 QRC Indigenous Awards, 2022 Queensland Training Awards
• Various awards for Ramsay Sime Darby Health Care hospitals

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy and Emissions Management
• Water Management
• Waste and Effluent Management
• Health and Safety
• Labour Practices
• Diversity
• ESG Oversight, Measurement & Reporting
• Employee Training and Development
• Community Contributions and Development
• Customer Satisfaction
• Business Continuity
• Business Ethics and Compliance
• Responsible Supply Chain
• Sustainable Product Offering
• Technology and Innovation
• Data Privacy and Security

Environmental Achievements

• Increased solar energy generation to 2,812,555 kWh (FY2022: 986,962 kWh)
• 100% renewable-powered facilities at Terra Cat in New Zealand
• Porsche Centre Penang installed an 82kW solar PV carport to power EV charging stations
• Total GHG avoided 1,482 tCO2-e
• Terra Cat New Zealand utilises 100% renewable electricity
• Reduced carbon emissions by 563 tonnes through the installation of solar photovoltaic (PV) systems.
• Reduced carbon emissions by 919 tonnes through the installation of solar photovoltaic (PV) systems.

Social Achievements

• Contributed RM25 million to Yayasan Sime Darby for philanthropic activities
• Invested RM17.1 million in employee training and development
• All Porsche assembly employees at Inokom are local residents
• Improved Total Recordable Injury Frequency Rate (TRIFR) to 2.99 from 3.30 in FY2022
• Trained 18,027 employees on anti-corruption practices (FY22: 6,872)
• 432,002 total hours of training

Governance Achievements

• Trained 18,027 employees on anti-corruption practices (FY22: 6,872)
• Enhanced the Group Policies & Authority (GPA) to integrate sustainability into our existing policies
• Initiated the limited assurance of our environmental data this year

Climate Goals & Targets

Environmental Challenges

• Rising interest rates impacting consumer demand and profit margins
• Automotive price war in China affecting margins
• Suppressed infrastructure spend contracting the heavy equipment market
• Supply chain disruptions
• Labour shortages and higher manpower costs
• Climate-related events impacting operations (e.g., Auckland floods)
• Shift to agency model in automotive sector
• Transition to EVs impacting after-sales revenue
• Stringent energy-efficient regulations limiting vehicle emissions
• Increased emphasis on human rights and responsible supply chain safeguards
• Heightened focus on ESG metrics by stakeholders
• Cybersecurity threats
• Data privacy regulations

Mitigation Strategies

• Diversified portfolio of businesses in different countries
• Strategic acquisitions (Gough Group, Salmon Earthmoving, Onsite Rental Group, Cavpower)
• Expansion into new markets (Indonesia)
• Introduction of multiple EV models
• Launch of KINETA (EV charging products and solutions)
• Cost-reduction measures in China
• Strategic measures to mitigate risks and diversify market exposure
• Climate scenario analysis (TCFD alignment)
• Development of detailed plans to reduce CO2 emissions
• Development of Human Rights Charter
• Implementation of responsible sourcing programme
• Enhanced whistleblowing procedures
• BCM Testing
• Regular communication with principals for better inventory management
• Negotiation of force majeure clauses in sales agreements
• Development of a parts inventory strategy
• Standardised processes for managing health and safety risks
• Comprehensive safety programme (SELF)
• Health and safety audits
• Full-scale IT Disaster Recovery test
• Cyber Incident Response Plan
• IT security awareness programmes
• Project Oversight Committee
• Strategies to improve talent management and succession planning
• Continuous training and development programmes
• Regulatory compliance programme
• Training and awareness programmes on relevant regulations

Supply Chain Management

Responsible Procurement

• Vendor Code of Business Conduct
• Responsible Sourcing Programme (under development)

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Heat stress
• Sea level rise

Transition Risks

• Policy risks (e.g., government mandated coal mine closures, carbon taxes)
• Technology risks (e.g., stringent energy-efficient regulations, growth of EVs)
• Market and other transition risks (e.g., shift to cleaner fuels)

Opportunities

• Increased demand for mining equipment for mineral exploration and renewable energy equipment
• Development of energy-efficient products
• Venture into new business segments that are less carbon intensive

Reporting Standards

Frameworks Used: GRI, MCCG 2021, MMLR, MFRS, IFRS, UN SDGs, IR

Certifications: LEED

Third-party Assurance: PricewaterhouseCoopers PLT Malaysia

Sustainable Products & Innovation

• EVs
• Alternative fuel solutions
• Energy-efficient products
• RockAware™ (AI-based hazard detection system)

Awards & Recognition

• The Edge Malaysia’s Best CSR Initiatives award
• Best CR Initiatives award under the Big Cap category at The Edge Billion Ringgit Club 2022 awards
• BMW Green Star Reward Group Dealer Sustainability Award

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy and Emissions Management
• Water Management
• Waste and Effluent Management
• Labour Practices
• Health and Safety
• Diversity
• Customer Satisfaction
• Business Continuity
• Business Ethics and Compliance
• Responsible Supply Chain
• Sustainable Product Offering
• Technology and Innovation
• Data Privacy and Security

Environmental Achievements

• Increased solar capacity, producing 7.1 GWh of renewable energy and avoiding approximately 3,900 tCO2-e emissions
• Achieved 50% recycling rates across various Motors and Industrial sites
• Procured green energy in China, Malaysia, Singapore and New Zealand
• Annual reduction of approximately 23,000 tonnes carbon dioxide equivalent

Social Achievements

• Launched comprehensive programmes across our portfolio including ‘Together as One’, ‘24/7 Respect’, cultural celebrations, International Women’s Day initiatives, Women in Leadership programmes, Pink Shirt Day and financial and mental wellbeing support
• Motors Australia raised AU$62,000 for the Sydney Children’s Hospital Foundation
• Motors New Zealand raised NZ$46,000 for the Mental Health Foundation NZ
• Tractors Singapore Limited awarded bursaries valued at SG$10,000 each to two underprivileged students
• Deployed the Driving Our Achievement (DA) Performance Management Framework

Governance Achievements

• Developed and operationalised Conflict of Interest (COI) Guideline
• Ran ABC awareness campaigns
• Conducted GHD training in China with 2,764 participants
• Facilitated mandatory annual e-learning on the Code of Business Conduct and ABC for all employees
• Launched the Responsible Sourcing Policy

Climate Goals & Targets

Environmental Challenges

• Challenging economic conditions in China
• Increased competition
• Rising cost pressures
• Discounting in China due to an oversupply of New Energy Vehicles (NEV)
• Shift in consumer preferences towards PHEV and HEV
• Implementation of agency sales model
• Customer acceptance of autonomous vehicles
• Water scarcity and supply disruptions
• Improper storage, treatment and disposal of hazardous waste
• Cyberattacks
• Talent shortage
• Changes in the regulatory landscape

Mitigation Strategies

• Cost optimisation measures
• Active customer engagement
• Provide low-capital alternatives
• Deliver increasingly productive, energy-efficient and fuel-efficient offerings
• Provide autonomous haulage solutions
• Develop equipment life cycle solutions
• Provide customers with digital tools
• Articulate and convey superior product value proposition
• Ensure strong and reliable product support capabilities
• Leverage advanced digital capabilities
• Closely monitor macroeconomic factors and customer requirements
• Collaborate with suppliers
• Extend capabilities in distribution, product support and digital
• Identify and deliver growth initiatives across Asia Pacific
• Offer hybrid and electric solutions
• Promote existing offerings such as cogeneration, dual-fuel engine, transitionary and alternative fuel solutions
• Explore and pursue low-carbon opportunities
• Capitalise on the extensive battery metal development pipeline
• Offer construction equipment and support solutions
• Provide integrated solutions
• Leverage the acquisition of Onsite
• Engage in dialogues with OEMs
• Optimise operations to reduce costs
• Initiate conversations with our OEMs
• Explore opportunities with new brands
• Continue dialogues with OEMs
• Align operating structures
• Continue to diversify brand portfolio
• Monitor developments in VTOL vehicles and autonomous driving technology
• Seek partnerships with OEMs
• Provide a balanced powertrain offering
• Secured distributorship rights for XPENG in Hong Kong
• Launched Drivecare
• Progress from strategy development to implementation of water conservation projects
• Target water-intensive areas
• Enhance our reporting accuracy
• Improve waste management practices
• Reduce operating costs through waste repurposing, reselling and recycling
• Enhance data accuracy
• Conduct ongoing region-specific risk assessments
• Support employee wellbeing
• Promote diversity, equity and inclusion (DEI)
• Address grievances and complaints
• Implement standardised HSE management processes
• Establish a comprehensive safety programme
• Regular health and safety assessments
• Implement key cybersecurity measures
• Conduct annual tests of the Disaster Recovery Centre
• Organise IT security training
• Implement comprehensive talent management strategies
• Conduct ongoing training and development programmes
• Use targeted apprenticeship programmes
• Implement a comprehensive regulatory compliance programme
• Conduct training and awareness initiatives

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Responsible Sourcing Policy
• Vendor Code of Business Conduct
• Human Rights Charter

Climate-Related Risks & Opportunities

Physical Risks

• Increase in damages, losses and costs due to sudden extreme weather and gradual climate shifts

Transition Risks

• Potential operational disruptions due to the shift towards a low-carbon economy

Opportunities

• Supporting the responsible mining of energy transition minerals
• Transitioning vehicle fleets to low-emission options

Reporting Standards

Frameworks Used: Integrated Reporting Framework, Malaysian Code on Corporate Governance 2021, Main Market Listing Requirements of Bursa Malaysia Securities Berhad, Malaysian Financial Reporting Standards, International Financial Reporting Standards, Global Reporting Initiative (GRI) Standards, United Nations Sustainable Development Goals (UN SDGs), IFRS S1 and S2

Certifications: GreenRE

Third-party Assurance: Group Corporate Assurance (GCA)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Energy-efficient Caterpillar products
• Biodegradable hydraulic lubricants
• Electric vehicles

Awards & Recognition

• Not disclosed