Delivering Sustainable Value For Our Stakeholders Delivering Sustainable Value For Our Stakeholders Press Metal Aluminium Holdings Berhad 94 95 Integrated Annual Report 2023 OUR APPROACH TO SUSTAINABILITY We have established a robust and systematic approach to sustainability that encourages communications and involvement at all levels of the Group, incentivises progress made against sustainability objectives and unites our people at the backdrop of a common vision of our sustainable future. At its core, our approach strives to integrate sustainability at the heart of our business, driving cohesive and purposeful action that maximises positive outcomes. SUSTAINABILITY GOVERNANCE STRUCTURE Our sustainability governance, which is led by the Board of Directors (“Board”), has been refined to enhance efficiency, entrusting the oversight of sustainability risks and opportunities, including those related to climate change and human rights, to the Board’s Risk Management Committee (“RMC”). Chaired by an Independent Non-Executive Director and comprising the Executive Vice Chairman and two (2) Independent Non-Executive Director, the RMC integrates ESG considerations into risk management framework and provides quarterly updates to the Board. The RMC is supported in its work by the Risk Management Team (“RMT”), which is responsible for developing and identifying risk management policies, as well as reporting on risk profiles. The Sustainability Committee (“SC”), led by the Group CEO, takes the lead in formulating comprehensive sustainability strategies, policies and approaches. The SC also reviews our sustainability-related performance and reports to both the Board and the RMC on a quarterly basis. Bolstering the SC’s efforts are the Corporate Sustainability Development (“CSD”) Team and various Sustainability Working Groups (“SWG”). As subject matter specialists for the SWG, the CSD Team, comprising personnel from corporate headquarters furnishes monthly sustainability performance reports to the Group CEO. Our SWGs play a pivotal role in implementing, monitoring and reporting each entity’s sustainability performance. They also propose targets to the CSD Team, which are duly considered in the process of developing our overall sustainability strategic objectives. Risk Management Committee Sustainability Committee Board of Directors Risk Management Team Corporate Sustainability Development Team Division Sustainability Working Group Midstream Sustainability Working Group PMBtu PMS PMAR Downstream Sustainability Working Group PMI PMIT PMBA • Establishing strategy for Groupwide implementation. Sustainability Strategy Governance • Enhancement of sustainability governance. • Environmental management. • Occupational health and safety management. • Sustainable supply chain management. • Human rights management and due diligence. • Human resource management. • Information technology management. Operations • ESG performance monitoring. Performance Monitoring • ESG risk integration (including materiality assessment and stakeholder engagement). Integrated Risk Management Our Approach to Sustainability LINKING ESG TO REMUNERATION Our ESG Remuneration Framework aligns the interests of management and business objective, making sustainability performance essential to achieve measurable progress and contributing to a sustainable future. ESG Remuneration Framework covers seven (7) performance metrics as indicated below: Workplace injuries Water security GHG emissions intensity performance Zero (0) workplace fatalities Total women in the workforce Waste diversion rate Participation of women in managerial roles In line with the framework, remuneration policies and procedures of the specific senior management, key operating management and management team are integrated with the ESG performance metrics, which are measured through a combination of the balanced scorecard and modifier approaches. Notably, the compensation of the Group CEO, as a member of the designated Senior Management, is directly influenced by the framework. Moving forward, we plan to extend this remuneration structure to include employees, taking into account the variability in their compensation and the level of accountability associated with their roles. SUSTAINABILITY ROADMAP Sustainability lies at the heart of our core values, underpinning our commitment to long-term profitability and the well-being of both people and planet. Our approach encompasses minimising environmental impact, fostering strong relationships with stakeholders, mitigating operational effects, enhancing resource efficiency and exploring new market opportunities. With ambitious and measurable goals set for 2030 and 2050, we are dedicated to driving progress in climate action, environmental stewardship and social responsibility. Our Sustainability Roadmap was developed following a comprehensive evaluation of our current practices that delineates strategic steps and plans to realise these objectives. As illustrated below, the roadmap spans across five (5) key focus areas.
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