KUB Malaysia Berhad Annual Report 2021

MANAGING MATERIALITY A materiality study objectively prioritises sustainability issues from the double perspective of companies and stakeholders. Both parties contribute to identifying the present and emerging social and environmental risks and opportunities. Business model and climate Interconnectivity of sustainability issues Business strategies Stakeholders interests and concerns Materiality Assessment Figure 2 - Factors Affecting Materiality ECONOMIC With a diversified business portfolio, the Group continues to contribute to economic growth and nation-building. Economic sustainability is vital for business operations. The Group delivers sustainability for all stakeholders by focusing on returns to shareholders through its growth and expansion strategy. Sustainable Supply Chain The Group practises transparent procurement across its entire process. Vendor selection evaluation criteria include quality, experience, financial stability, quality systems and key personnel. Their adherence to social, ethical and environmental principles is also a factor in the selection process. All supply chain activities comply with relevant local laws and regulations and operate within the legal framework. The Group at its best ensures that its supply chain partners comply with the Group’s Vendor Code of Business Ethics Policy, which covers areas such as labour practices and business integrity. The Group prioritises the procurement of goods and services from local suppliers who meet its stipulated standards. This reflects the Group’s current tabulation where 99% of suppliers are local as below: LPG AGRO ICT KUB* Total Vendors 268 19 121 125 No. of Local Vendors 265 19 119 123 Percentage of Local Vendors 99% 100% 98% 98% * represents KUB Malaysia Berhad Ethical Conduct The Group’s commitment to integrity and transparency is clearly stated in its policies and procedures including Anti-Bribery and Corruption Policy, Vendor Code of Business Ethics Policy, Whistleblowing Policy and Employee Handbook. All forms of corruption are firmly opposed and the Group adheres to the highest ethical standards when doing business. The Board of Directors oversees the Group’s compliance with the above and has established an Integrity Committee, guided by its Terms of Reference. These policies apply to all internal and external parties such as vendors, contractors and consultants. Every individual is responsible for preventing and reporting instances of bribery, suspicious activity or wrongdoing, which may lead to bribery, using the whistleblowing channels. To ensure clearer understanding, KUB hosted training sessions on ethics attended by the Directors and the management personnel within the Group. The honourable speakers were invited from the Malaysian Institute of Corporate Governance (‘MICG’) and Zul Rafique & Partners, a law firm based in Kuala Lumpur. Figure 3 - KUB Group Sustainability Matrix HIGH MEDIUM LOW HIGH MEDIUM LOW Ethical conduct and compliance Regulatory compliance Sustainable supply chain Safety & health Dynamic & progressive workplace Resource & waste management Biodiversity & conservation Social development Relevance to KUB Level of Stakeholder Concern Economic Legend Environmental Social The Group conducted a detailed materiality study in 2019. Stakeholder interest was considered along with significant economic, environmental, social and governance impacts of the business. The result of the materiality exercise was reviewed in 2020 and the list of sustainability issues was further rationalised and refined. 27 ANNUAL REPORT 2021 PERFORMANCE REVIEW