Responsible Supply Chain Management and Responsible Sourcing

RESPONSIBLE SUPPLY CHAIN MANAGEMENT AND RESPONSIBLE SOURCING

We advance ethical supply chain management by integrating responsible sourcing into our operations, minimising environmental impact and fostering sustainable outcomes across our value chain.

       8.7, 8.8                12.6             17.16, 17.17

Stakeholder Groups Most Concerned

Suppliers and Vendors; Industry Groups; Investors; Government Agencies and Regulators

Why It Is Important

Responsible business remains a core aspect of our strategic priorities. We remain dedicated to upholding high standards, openness and transparency in areas such as labour practices, ethics, environmental impact and health and safety through our responsible sourcing programme.

By prioritising partnerships with reliable and ethical business partners, we focus our efforts and resources on three material matters: employee safety, health and wellness, sustainable packaging and materials and human rights and labour standards.

Our Approach

We are committed to maintaining ethical and sustainable business practices in line with our Supplier and Licensee Code of Conduct. Our code defines key principles that all suppliers and licensees must adhere to, such as labour and human rights, health and safety, environmental sustainability, business ethics, competition and fair trade and data protection.

By embedding these standards into our procurement processes, we ensure that all suppliers and licensees operate in alignment with our values.

The Supplier and Licensee Code of Conduct is a mandatory requirement for all suppliers and vendors. We further ensure adherence through comprehensive guidelines in our purchase orders, including compliance with our policy on gifts and gratuities. Our vendors are subjected to stringent screening via our Third-Party Screening Tool.

We recognise the importance of engaging local suppliers to foster community development and stimulate local economic growth.

In 2024, we spent 75% of our procurement on products and services from local suppliers, including those sourced from Malaysia by our Singapore operations.

As part of our responsible sourcing practices, we assessed 100% of new suppliers in FY2024 against our environmental and social criteria.

Progress/Achievements

We implement the following initiatives annually to ensure responsible sourcing and manage our supply chain effectively:

1. Monitoring our supplier performance: We are committed to working closely with our suppliers to ensure they uphold high ethical and environmental standards throughout the value chain. Through rigorous evaluations, we prioritise quality, environmental responsibility and social impact, requiring their compliance with sustainability standards. In FY2024, we focused on supplier engagement and audits.
2. Lowering our Greenhouse Gas (GHG) emissions: Our ongoing collaboration with suppliers is central to our efforts to reduce GHG emissions by streamlining transport and logistics. In FY2024, we focused on key activities such as streamlining processes and eliminating losses to lower carbon emissions.
3. Upholding our health and safety standards: Building on our progress in 2023, we continued to maintain stringent health and safety standards across our supply chain, reinforcing our commitment to the ZERO Accidents Culture. In FY2024, we dedicated our efforts to reducing overall traffic risks by enhancing pedestrian safety.
4. Ensuring our standards are met by suppliers: As part of our commitment to upholding high-quality materials and ethical practices, we conduct regular audits of our suppliers. In the reporting year, seven vendors, including three new ones, were audited, all of whom met our stringent standards for raw materials, packaging and environmental and social responsibility. We addressed all the audit findings in full.

Going Forward

We aim to identify cost-effective alternatives for material supply. Additionally, we plan to implement control measures to mitigate the impact of added complexities on our operational efficiency.

• 64 suppliers attended the Supplier Day
• Participants represented 25 companies
• 13 suppliers signed up as Sedex members
• 17 suppliers signed up for the SEDG

During the event, we emphasised the importance of responsible sourcing and human rights compliance, reminding suppliers to adhere to the Supplier and Licensee Code of Conduct. They were also encouraged to stay abreast of evolving local and international laws concerning labour and environmental issues.

The event featured knowledge-sharing sessions which included a presentation by Janna Dietrich, Senior Manager of Responsible Sourcing at Carlsberg Group, who highlighted responsible sourcing mechanisms and ESG disclosure standards. There were also case study presentations by the UN Global Compact Network Academy, demonstrating sustainable practices and highlighting the critical role of collaboration between companies and their supply chains in achieving common sustainability goals. Additionally, as a member of Sedex and an early adopter of the Securities Commission's CMM's Simplified ESG Disclosure Guide (SEDG), we encouraged the participating suppliers to enhance their ESG performance and sign up as Sedex members and adopt SEDG.

The participants responded with positive feedback about the event, describing it as an insightful learning experience about Carlsberg’s sustainability framework and the Sedex initiative.

In 2024, our Malaysia operations made a significant stride towards building a sustainable supply chain by being the first Carlsberg Group entity to host an inaugural Supplier Day. The event fostered effective knowledge-sharing between us and our suppliers, enabling suppliers to better understand our sustainability goals.

Key Highlights:

• Group discussions on Responsible Sourcing and Human Rights
• Sharing of insights by key speakers from UN Global Compact Network Academy, Capital Markets Malaysia (CMM), Sedex and Group Procurement
•   A guided Brewery Tour, TTZAB showcase and networking dinner