AS our planet struggles under the weight of climate change and environmental degradation, responsible companies across the globe are doubling down on efforts to reduce their carbon footprint, recognising the urgent need for immediate action.
One such company is FGV Holdings Berhad, a global and diversified agri-business focused primarily on three sectors: plantation, sugar and logistics.
Based in Malaysia, it is one of the world’s largest producers of crude palm oil and a contributor to the country’s total annual output of this commodity by up to 15%.
Listed on the main market of Bursa Malaysia, FGV has 50 years of industry expertise and operations in nine countries across Asia, the Middle East, North America, and Europe.
The company is supported by a strong workforce of more than 45,000 people and is committed to delivering sustainable food and agri-products to the world while tapping into new revenue streams from the circular economy.
Commitment to sustainability
To further position itself as a leader in sustainable agriculture, the company has made a bold commitment to no deforestation, no development on peatland, and no exploitation (NDPE) as well as to contribute to the UN Sustainable Development Goals (SDGs).
FGV has a dedicated sustainability programme that addresses environmental, social and governance (ESG) issues and has received several certifications for its sustainable practices, including the Malaysian Palm Oil Certification scheme and the Roundtable on Sustainable Palm Oil (RSPO) certification.
“Championing sustainable practices and promoting transparency is crucial for companies in the agriculture sector, due to the nature of our business in utilising land for crops,” says FGV Holdings Berhad group chief executive officer Datuk Nazrul Mansor.
“Under the ESG framework, such companies face greater scrutiny, which is why we at FGV work tirelessly to exceed expectations and set industry standards.
“We acknowledge the potential adverse environmental and social impacts linked to any business activities, including deforestation, carbon emissions, and labour issues.
“Therefore, we are collaborating with stakeholders to promote sustainable forest management and develop sustainable production systems that contribute to poverty reduction, economic development, whilst protecting the environment and conserving biodiversity,” says Nazrul.
Climate action plan
FGV is the first food and agriculture company in Malaysia to affirm its commitment to address climate change by signing the Science Based Targets initiative Business Ambition for 1.5°C pledge.
Through its climate action plan, the company is taking tangible steps towards becoming a net-zero emission business by 2050.
To reduce energy consumption, FGV employs various energy-saving practices across its operations, such as using self-generated biogas, LED lights, and digital tools like the eDO mobile app and smart fuel card to reduce fuel consumption and carbon emissions.
The company invests in Euro 5 emission-compliant trucks for its logistics sector and recommends retiring fleet vehicles after 10 years.
FGV implements various zero-waste initiatives and adopts responsible waste management practices, including usage of empty fruit bunches as mulch and introduced fortified organic fertiliser to reduce cost and carbon emissions.
Subsidiaries and business sectors also undertake initiatives to improve energy efficiency, such as installing solar photovoltaic systems.
FGV generates clean energy for internal consumption and sale to the grid, with some mills relying on renewable energy as their primary power source. The company recently commissioned a biogas power plant and is exploring alternative sources of energy, such as converting biomass from palm oil production into renewable energy.
Biodiversity, wildlife protection
FGV gives priority to the protection of biodiversity and wildlife, and has put in place several programmes on the conservation of certain endangered, rare and threatened species namely the Malayan sun bear, pygmy elephant, gibbon, and pangolin.
FGV aims to protect prime forest areas by planting 50,000 indigenous trees and wild fruit trees on its plantations.
Digitalisation and technology
FGV’s research and development arm provides innovations and technologies to improve efficiency and productivity – focusing on estate and mill modernisation, high-quality planting materials, crop diversification, and sustainable initiatives like using renewable energy and slow-release fertiliser.
The company formed partnerships with educational institutions to upskill and reskill employees, and plans to incorporate advanced technologies and sustainable processes to address labour shortages.
Traceability and transparency
Traceability and transparency are essential components of FGV’s sustainable value chain.
The company has implemented a robust traceability system – enabling the identification of potential risks and prompt resolution through continuous improvements.
By adopting traceability and responsible sourcing practices, the company can fulfil its obligations to environmental protection and human rights.
FGV launched the Independent Smallholders Consultation Programme in support of government directives for all smallholders to comply with the Malaysian Sustainable Palm Oil (MSPO) certification scheme.
About 70% of FGV’s fresh fruit bunches supply are from smallholders. As of 2022, FGV managed to achieve 100% traceability to mills and 99% traceability to palm oil plantations.
FGV respects human rights and is committed to complying with international human rights standards.
The company has implemented various programmes to strengthen its labour practices, including aligning its policies and recruitment practices with international labour standards.
FGV workers’ rights to freedom of movement, freedom to association and collective bargaining, and decent wage are embedded in FGV’s group sustainability policy.
To improve living conditions, from 2018 to 2022 FGV spent RM412mil on the construction of new accommodation facilities, repair works on housing facilities as well as equipment upgrade.
One of the main standards adopted by FGV is the no recruitment fee policy for hiring migrant workers. FGV has taken several measures, including setting aside RM112mil to reimburse recruitment fees to current and former FGV migrant workers.
The company is a participant in the National Pledge against Child Labour Campaign in Malaysia and is committed to prevent and address child labour issues.
As part of FGV’s commitment to diversity, equity and inclusion, the company became a signatory of the Women’s Empowerment Principles (WEPs) in April 2022 – a set of guidelines developed by UN Global Compact and UN Women to guide businesses on advancing gender equality and women’s empowerment in the workplace, marketplace and the community.
FGV established a Gender Equality and Women’s Empowerment Committee in 2021 to operationalise its commitment to gender equality, and introduced the Women in Leadership Programme to nurture female employees for leadership positions.
In addition to its support for human rights, FGV invests in various corporate social responsibility initiatives to assist communities in need.
Last year, the company contributed to the National Disaster Assistance Fund and supported vocational courses at colleges.
FGV’s contributions to society are crucial for community empowerment, and a reflection of the company’s values and commitment to making a positive impact on the world.
These actions position FGV as a leader in sustainable business practices – setting an example for the industry and demonstrating that a commitment to sustainability is not only vital for the environment, but also for long-term business success.