We are delighted to present to you GCB’s fifth Sustainability Report in line with the Bursa Malaysia Requirements and our first Sustainability
4. Validation
•The idenfied material issues are then presented to the Chief Execuve Officer for
validaon, resulng in the finalisaon of key sustainability topics which are disclosed in this report
With 12 sustainability topics identified from the broader assessment process, the Materiality Matrix facilitated the prioritisation of six topics as High Priority, for which our impacts will be fully disclosed in this report. A further six topics were identified as Emerging Priority, and will be subject to continued monitoring with a view to inclusion in reports during future years in review.
MATERIALITY MATRIX
1. Economic Performance 2. Market Presence 4. Energy
5. Effluents and Waste 6. Environmental Compliance 7. Employment
8. Occupaonal Health & Safety
HIGH PRIORITY EMERGING PRIORITY
3. Procurement Pracces 9. Training & Educaon 10. Non-discriminaon 11. Local Communies 12. Customer Safety & Health
SUSTAINABILITY REPORT (CONT’D)
ECONOMIC PERFORMANCE
SUSTAINING GROWTH AND PROFITABILITY THROUGH ETHICAL AND RESPONSIBLE CONDUCT Why It Matters
In order to deliver value to our stakeholders and maintain their trust, GCB is committed to achieving robust, long-term economic growth. Our ability to achieve sustainable economic growth is underpinned by our determination to conduct ourselves responsibly whilst continually reinvesting into our business and our people. Through this approach, we are able to capture new business opportunities, enhance stakeholder confidence, maintain a highly motivated workforce and ensure full compliance with all applicable legislation – outcomes which ultimately accelerates our growth, garner stakeholder support and ensures the viability of our business.
How We Approach It
GCB endeavours to deliver and achieve our economic goals and targets whilst staying committed to sustainable business operations and the highest professional standards within the industry. Supported by a strong governance structure, we ensure that our business operations fully comply with all applicable regulations in areas where we operate, which include upholding compliant disclosures and ethical business conduct. With support from our Board, the Chief Financial Officer, the Finance and Administration Department to our executive-level managers, our governance structure enables the Group to effectively coordinate and monitor its business activities. Further, through measures such as our Code of Conduct and Anti-Corruption Policy, our Group is capable of promoting integrity throughout its business operations, thus ensuring the sustainability of our core business activities
From our pioneering years to our current role as market leader, we have emphasised and continuously strived at several key objectives for our Group’s core business, i.e., cocoa bean processing which includes high utilization of cocoa grinding facility, cost efficiency optimization, adaptable and agile response towards changes in the cocoa business, forward thinking in planning strategy, ethical and responsible business conduct.
This strategic and dynamic approach firmly applies to our products where we are deeply dedicated to creating high-quality and consumer safe products. Leading on such ambition, our Group has adopted various local and international standards to ensure this, which includes our adherence to various standards such as:
• Food Safety Scheme Certification (FSSC);
• International Food Standard (IFS);
• Good Manufacturing Practices (GMP);
• Hazard Analysis Critical Control Points (HACCP);
• ISO 9001: Quality Management System;
• UTZ and Rainforest Alliance Standards; and
• Halal and Kosher Certifications.
In addition to these accreditations, GCB is also keenly aware of its need to understand its risks and continually monitor its performance. As such, every year we conduct an enterprise risk assessment exercise, which helps us to accurately identify risks and implement mitigation actions across all our different business functions – from manufacturing, strategic, financial, legal and compliance related matters, among others. This annual risk assessment is complemented by other monitoring activities, such as our monthly operation meetings for key departments which are dedicated to specific aspect of our operations (such as on purchasing and storage strategy, trading and etc.) as well as weekly reviews for sales, marketing and production planning. GCB also utilises internal and external audits to provide an objective assessment of business performance and to identify areas for improvement, if applicable.
Our Performance
In 2020, GCB remained resilient despite the challenges and impact of COVID-19 on our business. We are proud of our performance in 2020 and are pleased with the positive economic outlook of our business moving forward. During the reporting period, GCB recorded revenue of RM 3.7 billion and Profit After Tax (PAT) of RM 222.7 million compared to RM 2.9 billion revenue and PAT of RM 217.9 million in the previous financial year. For further details, kindly refer to the economic performance of the Group in the Financial Highlights section of this report.
MARKET PRESENCE
DRIVING SUSTAINABILITY THROUGH INDIRECT ECONOMY CONTRIBUTION Why It Matters
In pursuit of sustainable economic growth, GCB strongly believes in the importance of generating positive effects for our people and society at large. We are therefore committed to providing wages above the threshold required by applicable legislation in order to benefit local communities and our employees. This is aligned with our view that wage is a key element in bringing a direct impact onto a society, which also ideally enable individuals to safeguard their well-being. In light of this, we take seriously our responsibility to provide wages that are fair and distributed without discrimination.
How We Approach It
GCB understands that people are the crux of our operation and therefore ensures a fairly compensated working environment, in so far as placing emphasis on the fulfilment of our people and by and large, ensuring a better future for the organisation.
As a Group with operations in multiple regions, we strongly adhere to minimum wage requirements as stipulated by local legislation in the jurisdictions where we operate, for e.g., adherence to the Employment Act (1955) in Malaysia and Indonesian Labour Laws.
As for day-to-day oversight, our Finance and Administration Department, with coordination and support of the Human Resources Department, manages all matters related to wages, helping to guarantee that our wages are consistent, standardised and fair. The Group determines its remuneration structure according to the latest market trends and practices, while continually seeking improved ways to align our remuneration structures with our values of equality and non-discrimination. In doing so, GCB’s designated management team will regularly participate in trainings and briefings in order to always stay ahead on the knowledge of current market requirements and needs. Base salaries for all our employees are regularly evaluated and adjusted according to various factors, such as job requirements, market conditions, educational qualifications and experience. In addition to prevailing regulations, our approach on this is constantly guided by the values as embodied in our Code of Conduct.
For the purpose of ascertaining that the aforesaid approach remained true and objective, we also maintain clear and effective grievance policies and procedures for employees to communicate their concerns in a safe and confidential manner. Furthermore, we also encourage open and transparent dialogue with our employees, for example, employees are able to share constructive feedback on matters related to remuneration through our annual employee appraisals or via Department Heads.
Our performance on this matter is assessed through the conduct of internal audits, providing assurance that we comply with all applicable minimum wage standards. If areas of improvement are identified, we work swiftly to address the issue and implement necessary improvements with all parties involved.
Our Performance
For FY2020, we are delighted to report complete compliance with minimum wage thresholds as determined by applicable laws within the regions which our reported entities operate. This means that no employees operating within our Group was compensated less than the required threshold (i.e., RM1,200 for Malaysia and IDR 4,130,279 for Indonesia) in FY2020, with the distribution of such entry level wages being similarly equal in terms of gender (i.e., for a ratio 1:1 between male and female). Moving forward, we will continue to uphold our values of maintaining and promoting equality throughout our operations, ensuring that our remuneration structure is equal and fair regardless of factors such as age, gender or race. In doing so, we believe that we will continue to maintain a strong and motivated workforce – a vital ingredient for sustainable economic growth.
SUSTAINABILITY REPORT (CONT’D)
ENERGY
ESTABLISHING RESPONSIBLE AND RENEWABLE ENERGY PRACTICES Why It Matters
Processing cocoa beans, which represents a significant portion of our business activities, uses a considerable amount of energy. We therefore remain ever mindful towards energy conservation within our operations and believe that responsible and sustainable energy usage should be a key undertaking for us in our journey towards sustainability.
Our approach in this matter is multipronged. We not only target a reduction in the current forms of energy that we consume, which are electricity, gas and steam, but we have also commenced a concerted effort to switch to renewable energy sources.
By continuing to preserve energy from our existing supply and increasing our production and utilisation of responsible energy over the coming years, we underline our commitment towards preserving the environment, reducing climate change and leaving behind a resource rich planet for future generations.
How We Approach It
Our mission at GCB to optimise our energy consumption has evolved over the years. Recognising that we consume a considerable amount of electricity in processing cocoa beans, we subsequently set up energy management and data collection systems in all relevant subsidiaries covered in this report and monitored our usage via the key indicator of kWh/
MT of cocoa beans processed. Our successful administration of this initiative in past years has enabled us to review and improve our energy efficiency to the point of stabilisation i.e., further meaningful reductions are not easily attainable.
This has led us to now focus our approach towards alternative energy sources and reduce our dependency on non-renewable energy. To this end, we are proud to have launched our solar energy pilot project in GCCM in FY2020. With 2800 solar panels installed, and each panel capable of generating 400W, we will now have access to a total installed capacity of 1,120 kilowatts peak (kWp) at our GCCM factory from 2021 onwards.
We aim to utilise the solar energy produced to power our building and its various machineries and equipment, with the excess being sold to Tenaga Nasional Berhad (TNB) through Malaysia’s Feed-in-Tariff (FiT) system implemented by Sustainable Energy Development Authority (SEDA) Malaysia. Similar solar energy initiatives are slated to be undertaken at other entities within the organization, with GCB Cocoa Malaysia set to install solar panels in FY2021.
In FY2020, we also have continued operating biomass boilers that use internally generated cocoa shells, which represent up to 90% of the fuel requirement for steam generation, as an in-house boiler fuel instead of natural gas to provide steam for heating and the running of our production machines. As such we create a very short cycle of energy recovery, converting bio-waste into sustainable energy used for further cocoa processing. The use of biomass-to-energy plants serves to decrease our dependence on natural gas, reduce CO2 emissions as well as provide an avenue for the recycling of cocoa processing by-products. With that, we ensure a carbon neutral process as the CO2 released into the atmosphere is re-assimilated for biomass growth closing the natural biogenic carbon cycle.
Each ton of shells used in our biomass boilers generates 5.5 tonnes per hour of self-made steam, abates 0.8 ton of C02 and replaces 350 m³ of natural gas. We have further enhanced the efficiency of our biomass boiler through the installation of an economiser, which both reduces energy consumption as well as allows for increased heat recovery from the exhaust flue gasses.
Our pilot project at GCCM has already had a significant impact, with 90% of the production machines now utilising such sustainably generated heat and only a further 10% still reliant on natural gases. Our success at GCCM has provided the impetus for similar biomass-to-energy plants to be installed at GCBCM in FY2021.
Governance of initiatives within the realm of energy conservation is undertaken by the Group’s Maintenance Department (Utilities Section), which holds responsibility for reporting on each entity’s gas, electricity and steam energy consumption during monthly management meetings.
SUSTAINABILITY REPORT (CONT’D)
TRANSFORMATION OF COCOA SHELLS TO ENERGY
PRODUCTION PROCESS OF COCOA PRODUCTS
Our Performance
We are pleased to have made noteworthy progress in FY2020 towards the reduction of our reliance on non-renewable energy sources. In the coming years, we will see meaningful improvement to our net energy consumption as we implement greater use of solar energy and biomass machines across all entities within the Group.
Looking ahead, we remain determined to further expand our efforts in harnessing renewable energy and improving our energy conservation as we continue to keep an eye on new methods and technologies that will enable us to reduce power consumption and increase energy efficiency.
GCB’S ENERGY CONSUMPTION BY ENTITY IN 2020 Energy Consumed (x105 kWh) /
Entity GCCM ACI GCBCM GCBCS Total
Electricity 313 338 208 0.048 859.048
Gas 209 542 325 N/A 1076
Steam 20 N/A N/A N/A 20
Solar energy 7 N/A N/A N/A 7
Steam generated from cocoa shells and saw dust
115 N/A N/A N/A 115
950 752
944
333 279
371
0
271
377
GCBCM ACI GCCM