Letter from the Group Managing Director
This Report outlines our efforts to meet our environmental and social commitments worldwide to engage in responsible and sustainable agriculture; promote human rights across our operations; implement industry-leading science-based strategies to fight climate change; and transform the oil palm sector through innovation.
Group Managing Director
As we mark our second centennial, a significant milestone by any measure, we are taking the opportunity to reflect on our history, our future, and that of our people. Over the past 200 years, we survived wars, pandemics, and financial crises by remaining resilient and adapting to ever-changing social, market, and industry conditions. We have come to embrace sustainability in our strategies. SDP was a founding member of the Roundtable on Sustainable Palm Oil (RSPO) in 2004. We started working towards 100% RSPO certification across our operations in 2008, making sustainable, ethically-sourced palm oil our rallying cry. We have since embraced other leading certification schemes and adopted industry best practices and increasingly stringent standards on No Deforestation, No Peat, and No Exploitation (NDPE).
Today, we are the world’s largest producer of Certified Sustainable Palm Oil (CSPO) and continue to unlock value for our shareholders and stakeholders, building an equitable and sustainable palm oil industry. In pushing ourselves harder and adopting higher standards, we hope to lead by example and uplift the entire palm oil industry and everyone in our supply chain at the local, national, and international levels.
We pride ourselves on leading the fight against climate change. When other oil palm plantations were beginning their sustainability journeys, SDP had already announced that we were reducing our carbon footprint by 40% by 2030 at our upstream operations. Technology has caught up with our vision and thus in realising this commitment, we have built 12 biogas plants to date. However, more needs to be done. SDP is ramping up our capabilities with a blueprint to operationalise over 60 biogas plants by 2030. Our new target is an ambitious 50% reduction in CO2e emissions by 2030 at our upstream operations.
Achieving this new target will be a monumental achievement, but our ambitions cannot stop there if we truly want to be an accelerator of change. We will develop a roadmap and find ways to meet our net zero aspirations. Echoing our membership charter in the RSPO, we have made safeguarding our future our rallying cry again.
We firmly believe in sharing prosperity with the countries and communities where we operate, to ensure the livelihoods and welfare of our people around the world. Our charitable foundations support national and local humanitarian projects, and the need has never been greater than in the last two years.
The unprecedented COVID-19 pandemic severely impacted people linked to our operations in 2020 and 2021, and continues to do so at the time of writing. The devastating flash floods in eight Malaysian states in December 2021 further tested our mettle. We mobilised resources to ensure the health, safety, and well-being of the people and communities at our operations and in the surrounding areas. We continue to work with local, regional, and national authorities to offer assistance during these ongoing crises.
SDP has always adopted a positive and proactive approach in all the situations we are working on, and this includes responding to the United States government’s ban on the importation of palm oil and related products produced by SDP’s Malaysia operations. To address the situation, we are working with an independent ethical trade specialist to support a thorough review of our operations. At the same time, we assessed our Malaysian upstream operations against the 11 International Labour Organization (ILO) Indicators of Forced Labour to understand any gaps or areas for improvement that may be present. Following this, during the second half of 2021, with an aim to continuously improve in a landscape that is rapidly evolving, we launched a wide-ranging Continuous Improvement Plan with a focus on labour rights.
Protecting the rights of local and migrant workers is a top priority. We are cooperating with the USCBP to resolve this matter and taking proactive measures to keep our operations free of forced labour and other forms of exploitation. This is key to our 2022 strategies in Malaysia.
In Malaysia, we are facing a labour crisis. Growing and harvesting oil palm remains labour intensive. We rely heavily on foreign labour as Malaysians have shown a preference to work in cities and see plantation work as dirty, dangerous, and difficult. Faced with the lack of local labour and COVID-19 restrictions preventing the recruitment of foreign workers, SDP is accelerating our recently launched Project Infinity - a plantation-level automation initiative.
Project Infinity is a company-wide collaborative effort to develop technology that automates labour-intensive processes, including harvesting. It aims to eliminate repetitive jobs and will ultimately allow us to manage increased hectarage with fewer workers. We have already made great strides by introducing drones for pest and disease control, nursery maintenance and mechanised fertiliser application. Our goal is to pave the way for a more skilled and educated workforce at estate level. We cannot eliminate entirely the need for manual labour, but we can reduce our dependence and pioneer initiatives to support upskilling. SDP will become an employer of the future and push the industry in exciting new directions.
Hand-in-hand with our carbon minimising strategies, we must prepare for the impact of climate change and increase yields to feed a growing world population. SDP has always been at the forefront of research on high-yielding seeds, and our scientists continue to push the envelope. Our RM150 million investment and a 200-strong R&D team have developed our best planting material yet. Our GenomeSelect™ seeds will nearly double crop yields by 2050 and grow into oil palm trees that can better resist seasonal changes and extreme weather caused by climate change. We firmly believe our research will benefit the wider agricultural industry and have made our oil palm genome sequence public for all to use.
In conclusion, I would like to thank all our people worldwide and our partners and stakeholders across our supply chain. Together, we have weathered these uncertain times and will move forward to build a better future for the industry and the planet. Many challenges lie ahead, but we have the integrity, capacity and ingenuity to tackle climate change, fight deforestation, create sustainable work, and ensure the welfare and livelihood of communities where we operate.
I wish you a healthy and prosperous 2022 and look forward to innovations that will serve us for the next 200 years to come, and beyond.