2024 UEM Edgenta Annual Report

WHAT VALUE WAS CREATED IN 2024? Throughout 2024, we focused on fortifying our supply chain capabilities through key initiatives such as the Vendor Development Programme (VDP), which included expanding training on ESG principles to equip vendors with the knowledge needed to meet evolving sustainability standards, governance and ethics. Recognising the importance of capacity building, we partnered with two training providers to offer free training for vendors. These sessions covered critical business areas, including Financial Management, Sales & Marketing, HR Management. By equipping vendors with essential skills, we aim to enhance their operational resilience and sustainability performance. We onboarded 9 new suppliers into our VDP and assessed 78 strategic and critical vendors through an ESG survey. This survey allowed us to classify vendors based on their ESG understanding and performance, providing critical input for the development of a Supply Chain Engagement Plan which we will develop in 2025. Our Syariah-compliant Supplier Financing Programme (SFP) developed in collaboration with HSBC Amanah saw a 30% increase in uptake compared to 2023, with G1 contractors making up the majority. This programme offers collateral-free financing to suppliers for better cash flow and reduced business costs, enabling the G1 contractors to accelerate their payments. SUPPLY CHAIN MANAGEMENT WHY IS IT IMPORTANT? Suppliers play a crucial role in UEM Edgenta’s pursuit of operational excellence. Their actions directly affect our product quality, cost efficiency, and sustainability goals. Identifying and managing ESG risks within our supply chain is vital for maintaining operational resilience and minimising potential disruptions. A well-managed supply chain allows us to remain agile in the face of unexpected challenges, ensuring consistent service delivery to our clients. Additionally, our influence extends beyond our own operations to include our suppliers. By aligning them with our sustainability objectives, we can strengthen our positive environmental and social impact, fostering industry-wide advancement and encouraging sustainable practices throughout the supply chain. Failing to effectively manage and address ESG risks within our supply chain could lead to significant disruptions, such as delays, increased costs, or compromised product quality. This could damage UEM Edgenta’s ability to meet client expectations, erode customer trust, and ultimately harm our competitive position in the market. Additionally, if we do not align our suppliers with our sustainability goals, we risk weakening our environmental and social impact, hindering our ability to drive industry-wide progress and potentially damaging our reputation. In the absence of a well-managed supply chain, UEM Edgenta may also become vulnerable to regulatory scrutiny and face legal or financial consequences for non-compliance with emerging sustainability standards. WHAT IS OUR APPROACH? Anchored by its Strategic Vendor Management Framework (SVMF), UEM Edgenta fostered strong partnerships with suppliers while ensuring alignment with its procurement standards. The company continued to emphasise responsible supply chain practices, prioritising ethical sourcing, local vendor development, and sustainability across its procurement decisions. Building on these efforts, we continue to prioritise robust supply chain management, emphasising ethical procurement practices, local vendor support, and sustainability in our sourcing decisions. This includes a series of initiatives aimed at improving governance, enhancing stakeholder engagement, and ensuring greater transparency in monitoring practices. In 2024, we established an ESG Management Framework designed to develop vendor potential and drive enhancements that will elevate ESG maturity levels. This framework will unlock further opportunities for value creation, strengthening our sustainability efforts across the supply chain. While we have yet to implement environmental and social criteria comprehensively, our business units (BUs) have started gathering relevant screening criteria for their suppliers, which became part of their ESG Key Performance Indicators (KPIs) for 2024. The input from these efforts will be provided to the Group Procurement and Contract Management (GPCM) department for further integration. Our first step in this process has been to engage with our suppliers and partners, raising awareness about our ESG goals. This year, we organised a total of 23 hours of ESG awareness engagements, including 6 hours specifically dedicated to emissions and data collection with our suppliers and partners. Internally, we developed an ESG Framework that allows us to assess and identify the maturity levels of our suppliers through a survey. The results of this survey will inform the development of a targeted supplier engagement plan, ensuring that our partners are aligned with our long-term ESG objectives. Sustainable Economic Growth UEM EDGENTA BERHAD 140 Integrated Annual Report 2024

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