The Group also evaluates potential vendors’ company background from their financial report and / or annual report to identify their financial strength and capabilities. In addition, the Group conducts site visits to vendors’ premises as well as review vendors’ customer references, past project track records, business licensing including certification on quality, system and environmental from independent authority. These steps are undertaken to garner a more holistic view of their business operations. SUPPLIERS’ ESG PERFORMANCE MYEG ensures that its new and existing suppliers meet the Group’s standards of ESG compliance and performance. The Group ensures that its suppliers comply with its relevant human rights policies, such as policies on child labour, forced labour, ABAC Policy, OSH Policy, minimum wage, gender and racial non-discrimination, equal opportunity, labour laws on working hours, energy usage, waste management as well as other related social or environmental issues and policies. For FY2022, a total of 91 suppliers had been assessed under these social impacts. Other ESG factors such as energy usage, waste management or relevant environmental issues and policies also form part of the suppliers’ performance assessment. MYEG also makes sure that suppliers and vendors have or obtain relevant supporting documents and certifications for suppliers, which is also a key factor in determining our suppliers’ ESG performance. These relevant supporting documents and certifications involve valid licenses from professional bodies and local councils, as well as quality assurance certifications from regulators and authorities, including Standard and Industrial Research Institute of Malaysia (“SIRIM”), Material Safety Data Sheets (“MSDS”), Jabatan Kemajuan Islam Malaysia (“JAKIM”), Ministry of Finance (“MOF”), Ministry of Health, Medical Device Authority (“MDA”), Royal Malaysian Customs Department, Construction Industry Development Board (“CIDB”), Fire and Rescue Department of Malaysia, Department of Environment Malaysia (“DOE”). We also ensure suppliers have completed the relevant Companies Commission of Malaysia forms. PHYSICAL INSPECTION AUDITS We intend to carry out physical inspection audits when necessary on new and existing suppliers to ensure our suppliers’ continued reliability and capability to supply to the Group and comply with our requirements. Given that social restrictions have been lifted and many businesses have reopened due to the country entering the endemic phase of the pandemic in FY2022, we aim to conduct more physical audits in the near future. LOCAL PROCUREMENT AND SUPPLY CHAINS MYEG strongly supports local procurement whenever possible. Not only does sourcing locally contribute to the domestic pool of suppliers and consequently the national economy, but it also reduces our business operation’s environmental impact by minimising foreign import activities as well as create quicker response time. Local procurement for MYEG is defined as procuring from Malaysia-based suppliers or vendors. FY2020 FY2021 FY2022 Total Procurement Budget (RM) 7,512,500.32 10,936,336.79 8,983,989.23 Proportion of Spending on Local Procurement (%) 99.2% 99.1% 99.6% Proportion of Suppliers Who Are Local (%) 99.5% 99.2% 99.1% REGULATORY COMPLIANCE In FY2022, MYEG was not fined nor censured by regulatory authorities for any environmental non-compliance and social non-compliance. MYEG also did not incur fines, penalties or financial settlements related to corporate governance and anti-corruption non-compliance in FY2022. The number of complaints escalated to regulatory bodies such as Ministry of Domestic Trade, Co-operatives and Consumerism (KPDNKK) had reduced tremendously. For 2022, the seven cases received from May to December 2022, and all the escalated cases were concerns pertaining to the delivery, which were resolved within the time frame. SUSTAINABILITY GOVERNANCE (cont’d) 74
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