Fraser and Neave : F&N Sustainability Report 2023

Sustainable

TOGETHER

SUSTAINABILITY REPORT

ABOUT US

Established in 1883, F&N is a leading Southeast Asian consumer group with expertise and prominent standing in the Food & Beverage and Publishing & Printing industries. Leveraging its strengths in marketing and distribution, research and development, brands and financial management, F&N provides key resources and sets strategic directions and objectives for its subsidiaries.

Listed on the Singapore Stock Exchange, F&N ranks as one of the most established and successful companies in the region with an impressive array of renowned brands that enjoy strong market leadership. F&N is present in 11 countries spanning Asia and the Americas, and employs over 7,200 people worldwide.

OUR REPORTING SUITE

Our annual reporting suite comprises two reports - the Annual Report 2023 and Sustainability Report 2023. Each includes content tailored to its specific audience and cross-references to the other reports where relevant.

F&N Annual Report 2023 is the primary report to our stakeholders, detailing our strategies and business activities, as well as initiatives toward sustainable value creation.

The Sustainability Report 2023 carries an assurance statement by LRQA on selected indicators. Prepared in accordance with the GRI Universal Standards 2021, it details F&N's efforts and commitment toward creating a sustainable business, and positioning F&N for long-term success.

F&N Sustainability Report 2023 can be downloaded at www.fraserandneave.com/investor-relations/ corporate-sustainability.

#GOPAPERLESS

1. In line with the Group's efforts towards greater environmental conservation, we have elected for electronic transmission of our Annual Report and Sustainability Report. The electronic version of our Annual Report 2023 is available on Fraser and Neave, Limited's website (www.fraserandneave.com/investor-relations/annual-reports). Shareholders and other interested parties who wish to receive a printed copy may order it through the website (www.fraserandneave.com/contact-us/request-annual-report),e-mail ([e-mail]) or telephone ((65) 6318 9393).
   Our Sustainability Report 2023 is only available in electronic version, and can be downloaded at www.fraserandneave.com/investor-relations/corporate-sustainability.
2. These reports cover the period from 01 October 2022 to 30 September 2023, unless otherwise stated.
3. Unless specifically stated otherwise, all figures in these reports are quoted in Singapore Dollars.
4. Due to rounding, numbers and percentages in these documents may not always add up precisely to the totals or absolute figures stated.

SUSTAINABILITY AT F&N

BOARD STATEMENT	04
CHIEF EXECUTIVE OFFICER'S MESSAGE	06
SUSTAINABILITY HIGHLIGHTS	10
ABOUT THIS REPORT	12
THIS IS F&N	14
OUR SUSTAINABILITY APPROACH	20
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
AND CLIMATE RISK MANAGEMENT	35

INTRODUCTION TO ECONOMIC PILLAR:
RESPONSIBLE BUSINESS FUNDAMENTALS	46
RESPONSIBLE BUSINESS PRACTICE	47
• GOVERNANCE AND ETHICS	47
• POLICY AND REGULATION	49
• ECONOMIC PERFORMANCE	51
RESPONSIBLE PRODUCT STEWARDSHIP	52
• PRODUCT QUALITY AND SAFETY	52
• PRODUCT AND SERVICE LABELLING	53
• INNOVATION	54
RESPONSIBLE SUPPLY CHAIN	59
• SUPPLY CHAIN STEWARDSHIP	59
INTRODUCTION TO SOCIAL PILLAR:
WELL-BEING OF OUR PEOPLE,
COMMUNITIES AND SOCIETIES	62
CREATING VALUE FOR SOCIETY	63
• NUTRITION	63
• COMMUNITY DEVELOPMENT AND INCLUSIVE GROWTH	66
• HUMAN RIGHTS	68
EMPOWERING OUR PEOPLE	73
• HUMAN CAPITAL DEVELOPMENT	73
• EMPLOYEE SAFETY, HEALTH AND WELL-BEING	79
INTRODUCTION TO ENVIRONMENT PILLAR:
CIRCULARITY AND ENVIRONMENTAL PROTECTION	82
OPERATIONAL ECO-EFFICIENCY	83
• ENERGY AND CLIMATE CHANGE	84
• WATER STEWARDSHIP	88
• WASTE MANAGEMENT	90
VALUE CHAIN IMPACTS	93
• PACKAGING	93
• BIODIVERSITY	94
APPENDIX
PERFORMANCE SUMMARY	96
INDEPENDENT ASSURANCE STATEMENT	108
GRI STANDARDS 2021 CONTENT INDEX	110
UN GLOBAL COMPACT CONTENT INDEX	116
TCFD CONTENT INDEX	117
SGX METRIC INDEX	118

'PURE

ENJOYMENT. PURE GOODNESS'

Vision

To be a stable, sustainable and profitable Food & Beverage leader in the ASEAN region.

Mission

To be ASEAN's leading owner and provider of quality and innovative products that consumers choose and trust. To support our mission, we are guided firmly by our commitment to create value, the community, diversity and the environment.

Values

Collaboration • Creating Value • Caring for Stakeholders

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SUSTAINABLE TOGETHER

Fraser and Neave, Limited & Subsidiary Companies

Every great journey begins with a single step, as ours started more than a century ago. As we celebrate this significant milestone in our illustrious history of

140 years, we extend gratitude to the visionaries, leaders, and partners who have played pivotal roles in shaping our humble beginnings into the formidable entity we are today. The enduring strength and innovative spirit of our people, along with their dedication to building a sustainable business, form the bedrock of our continued success. Nurtured by our rich heritage and propelled by a forward-looking vision, our commitment remains steadfast -

to strive for excellence and foster growth. This is our pledge as we foster unity and continue to work collaboratively towards being 'Sustainable Together'.

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Sustainability Report 2023

01 - SUSTAINABILITY AT F&N

BOARD STATEMENT

INTRODUCTION

The Board is pleased to present Fraser and Neave, Limited's ("F&N" or the "Group") Sustainability Report ("Report") for the fiscal year ("FY") covering the period from 1 October 2022 to 30 September 2023. This Report offers an extensive overview of the Group's performance on key Environmental, Social, and Governance ("ESG") topics.

REPORT COMPLIANCE

This Report was prepared in accordance with the globally recognised Global Reporting Initiative ("GRI") Universal Standards 2021. Furthermore, it aligns with the Singapore Exchange's ("SGX") Listing Rules 711A and 711B and was mapped to the SGX's core ESG metrics. In addition to these compliance standards, we have incorporated SGX-mandated climate reporting, guided by the recommendations of the Task Force on Climate-Related Financial Disclosures ("TCFD").

The Report encompasses the Group's operations, including 13 manufacturing sites in Singapore, Malaysia, and Thailand.

SUSTAINABILITY GOVERNANCE

The Board holds overarching responsibility for shaping the Group's sustainability strategy and initiatives. This encompasses identifying critical ESG topics integral to the F&N Group's strategy, overseeing their implementation, and monitoring sustainability performance, and has been closely involved in the development of this Report. The Sustainability

and Risk Management Committee ("SRMC"), which reports directly to the Board, is entrusted with steering the Group's sustainability endeavours. The SRMC receives support from the Sustainability Development Committee ("SDC"), chaired by Mr. Hui Choon Kit, the Company's Chief Executive Officer. The SDC is tasked with monitoring the Group's sustainability priorities and initiatives and ensuring their effective execution to attain the 2025 targets.

To ensure a comprehensive, organisation-wide approach to managing sustainability across material ESG topics, the SDC is represented by management from various divisions within F&N, encompassing Finance, Operations, Human Capital, Research and Development, Marketing, Communications, and Risk Management.

FOCUSING ON OUR SUSTAINABILITY EFFORTS

We have reviewed and, where necessary, refined our

2021 materiality matrix and 2025 sustainability targets to reflect shifts in the external sustainability landscape. Four key material topics have been identified as increasingly important to our stakeholders and as having a greater impact on our businesses: Climate Change, Energy, Policy and Regulations, and Governance and Ethics.

F&N continues to make progress along our sustainability roadmap to achieve our 2025 sustainability targets. These targets have been reviewed by the SDC, endorsed by the SRMC, and approved by the Board. Detailed information on the 2025 sustainability targets can be found on pages 26 to 27 of this Report.

We take pride in our unwavering commitment to sustainability and the progress we've made in integrating it across our diverse businesses. While we have achieved success in certain areas, we are acutely aware of the pressing need to accelerate climate action and ensure the enduring sustainability of

F&N. Our sustainability and climate strategy will continue to evolve, creating lasting value for people, the planet, and

the future of our businesses.

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ENHANCING CLIMATE-RELATED DISCLOSURES

The escalating incidence of extreme weather events worldwide, exacerbated by climate change, underscores the urgency of prioritising efforts to mitigate climate-related risks. SGX recognised this imperative and mandated climate reporting by 2023, following the recommendations of the TCFD, on a 'comply or explain' basis. In advance of the SGX stipulated timeline, we included a qualitative TCFD narrative in our sustainability report last year. Building upon this foundation, the Group has now quantified three of

our material climate-related physical and transition risks. Comprehensive details can be found in the TCFD narrative on pages 35 to 45 of this Report.

In our pursuit of a robust climate strategy, F&N has embarked on a journey to explore decarbonisation pathways for our businesses. By gaining a deeper understanding of available green technologies, their associated costs and benefits, and the potential for reducing greenhouse gas ("GHG") emissions, F&N is better equipped to make informed decisions and determine the most suitable approach to achieving our 2040 net-zero Scope 1 and 2 GHG emissions target.

CELEBRATING SUSTAINABILITY ACHIEVEMENTS

We are delighted to share that our subsidiary, F&N Foods Pte Ltd ("FNFS"), was ranked 63rd out of over 1,700 employers in Singapore's Best Employers 2023 study conducted

by Statista. Additionally, F&N Holdings Bhd ("F&NHB"), a subsidiary of F&N, continues to receive recognition for its excellence in sustainability and strong ESG practices. F&NHB was honoured with the Platinum Award for Best Sustainability Reporting at the National Annual Corporate Report Awards 2022 and received the Gold Award for the Consumer Goods and Services Sector, along with the Top Three Performers in ASEAN award at The Edge ESG Awards 2022. These awards and accolades serve as a testament to F&N's ongoing commitment to sustainability and inspire us to persevere on our sustainability journey.

CLOSING REMARKS

We take pride in our unwavering commitment to sustainability and the progress we've made in integrating it across our diverse businesses. While we have achieved success in certain areas, we are acutely aware of the pressing need

to accelerate climate action and ensure the enduring sustainability of F&N. Our sustainability and climate strategy will continue to evolve, creating lasting value for people, the planet, and the future of our businesses.

Fraser and Neave, Limited & Subsidiary Companies

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Sustainability Report 2023

Sustainability at F&N is more than just a commitment; it is a fundamental philosophy that guides our operations and shapes our vision for the future. With great pride, we present F&N's Sustainability Report for 2023, encapsulating our steadfast dedication to sustainable growth and transformation.

01 - SUSTAINABILITY AT F&N

CHIEF EXECUTIVE

OFFICER'S

MESSAGE

HUI CHOON KIT

OUR F&N SUSTAINABILITY REPORT 2023

Sustainability at F&N is more than just a commitment;

it is a fundamental philosophy that guides our operations and shapes our vision for the future. With great pride, we present F&N's Sustainability Report for 2023, encapsulating our steadfast dedication to sustainable growth and transformation. This year, our strategic focus has revolved around reinforcing our sustainability commitment through a series of key initiatives. These initiatives embody our ongoing journey towards creating lasting value for our stakeholders, with a spotlight not only on environmental performance but also on the well-being of our people and the communities we serve. As we navigate the ever-evolving sustainability landscape, let's delve into the strategic highlights of the year and our resolute commitment to a sustainable future.

This Report, prepared in accordance with the GRI Universal Standards 2021, provides useful information on our sustainability performance to our stakeholders and demonstrates our progress towards achieving our targets over time. Since last year, in line with the SGX updated sustainability reporting guidelines, our climate reporting has been made more robust by aligning it with the recommendations of the TCFD.

Our sustainability performance has been benchmarked against industry leaders, such as Thai Beverage Public Company Limited ("ThaiBev"), our strategic partner, to ensure improvements through best practice sharing and knowledge transfer. ThaiBev had demonstrated their sustainability excellence by being featured in the S&P Global Sustainability Yearbook 2023 for obtaining the top 1% S&P Global ESG Score in the Beverages industry in the S&P Global 2022 Corporate Sustainability Assessment. As such, ThaiBev's well-developed and systematic reporting parameters were chosen for alignment and integration into our data collection processes to leverage on their expertise.

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Sustainable

TGETHER

THE YEAR IN REVIEW:

Economic

1. Reporting on Climate-Related Disclosures: F&N commenced phased implementation of climate reporting ahead of SGX's stipulated 2023 timeline. Our efforts include conducting a qualitative climate-relatedrisks and opportunities assessment last year, with findings detailed in a TCFD narrative included in last year's sustainability report. This year, we took further steps by quantifying the business impact of three key climate-relatedphysical and transition risks: Flooding, Water Scarcity, and Carbon Pricing. This assessment enables us to evaluate the cost to our business and assess the effectiveness of mitigating measures. The updated TCFD narrative, inclusive of these outcomes, can be found in this Report.
2. Refreshed 2023 Materiality Matrix and 2025 Sustainability Targets: Our 2021 materiality matrix and 2025 sustainability targets were subject to review and updates in response to shifts in the sustainability

landscape. These refreshed targets, endorsed by the SRMC and approved by the Board, guide our sustainability efforts, addressing material sustainability issues with significant long-term financial and non-financial impacts on the Group's performance.

1. Collaborations with Stakeholders in Our Supply Chain: F&N maintains ongoing collaborations with our business partners, suppliers, and vendors, to understand their needs, provide sustainable solutions and advance sustainability together. For instance, in Thailand, F&NDT collaborated with the KhaoYai Milk Cooperative to support farmers by constructing a new Milk Collection Centre to improve their dairy facilities. This initiative benefitted the farmers, who were our key stakeholders, with an improved quality and quantity of fresh milk yield and allows F&N to continue to procure good quality fresh milk that meets our operational needs.

Note:

THE YEAR IN REVIEW:

Environment

1. Renewable Energy in Operations: Recognising the global need to limit global warming, F&N has embraced renewable energy by installing solar panels in our plants in Singapore, Malaysia, and Thailand. Completion of the second phase of solar panels at our Thailand plants this year is estimated to improve our Group's GHG emissions avoided to over 13,000 MT CO2e annually. This is an equivalent to the average annual GHG emissions emitted by over 87,000 households living in four-roomHDB flats in Singapore1.
2. Energy Efficiency in Operations:To support the global initiative to achieve net zero by 2050, to limit global warming to between 1.5ºC and 2ºC above pre-industriallevels, F&N is also exploring innovative ways to reduce the GHG emissions generated from our operations. One such initiative is the Innovative Heat Recovery System by F&N Dairies Thailand ("F&NDT"), where heat waste from the cooling water of sterilisers is recovered and reused. This would result in GHG emissions reductions of around 650 MT CO2e per year. More information on similar initiatives can be found in pages 85 to 87 of this Report.
3. Environmental-friendlyPackaging: To support our move toward a circular economy, F&N actively reduces virgin packaging material usage and packaging waste. This includes lightweighting and increasing the use of recycled materials. Collaborations with suppliers have resulted in 25% of recycled content in our packaging, marking a 3% increase from 2020. The launch of our eco-solutionsmanufacturing plant, Green Lab, which provides sustainable packaging solutions to businesses, has facilitated collaborations with over 10 companies across various industries to promote a circular economy.

1 Calculated based on the average annual electricity consumption of 353.3 kWh for a household staying in a four-room HDB flat in 2023, as per the EMA website.

Fraser and Neave, Limited & Subsidiary Companies

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Sustainability Report 2023

01 - SUSTAINABILITY AT F&N

CHIEF EXECUTIVE OFFICER'S MESSAGE

THE YEAR IN REVIEW:

Social

1. Healthier Products for Consumers: In response to feedback from internal and external stakeholders,
   we have identified "Nutrition" as one of our most critical sustainability issues, aligning with our commitment to "PURE ENJOYMENT. PURE GOODNESS.". We continuously enhance the nutrient profile of our products and innovate to offer nutritious options to our customers. This year,
   we launched healthy beverages, such as ÖMilk and 100PLUS Pro High Protein, designed to provide nutritional value. Notably, 100PLUS Pro High Protein, which contains protein, vitamins B3, B6 and B12, branched-chain amino acids and electrolytes for energy, muscle repair and hydration, received the Healthier Choice Symbol recognition from the Singapore Health Promotion Board and the Healthier Choice Logo from the Malaysia Ministry of Health. We have also taken further steps to reduce high sugar content in our ready-to-drink ("RTD") products, with over 73% containing less than 5g of sugar per 100ml in Singapore and Malaysia.
   Due to global warming, projected further increases in future temperatures is expected to cause elevated heat stress risk for outdoor workers subject to prolonged exposure to the sun. To contribute to the solution
   to mitigate heat stress faced by outdoor workers,
   F&N had conducted a two-week trial using our 100PLUS Slushy, in collaboration with the Singapore Workplace Safety and Health Institute, Simplex, Project HeatSafe, Teambuild Construction Group, with support from The Singapore Contractors Association Ltd. Over 200 workers participated in the trial, with more than 900 liters of 100PLUS Slushy consumed. While consuming ice slurry had been ascertained to significantly reduce the workers' heat injury risk, most of them found that it had the added benefit of also improving their work efficiency.
2. Safeguarding Our People: The health and safety of our employees remain our top priority. Despite COVID-19 being largely under control, F&N continues to prioritise

the well-being of our workforce. The Group continues to support employees navigate remote working environments through increased adoption of digital tools, such as videoconferencing software like Zoom and Microsoft Teams, in place of in-person meetings. We have also reviewed medical benefits coverage and appointed a new provider with a more comprehensive plan to safeguard our employees' welfare. The medical benefits were updated to also include coverage for mental wellness and alternative medicine, such as Traditional Chinese Medicine. This extends to not only physical health of employees but also their mental well-being. F&N had in November last year joined as a founding member of MindForward Alliance Singapore - a not-for-profit membership organisation transforming workplace culture into one that supports the mental health of its employees - and had begun

the phased implementation of its MindForward Alliance Singapore Localised Mental Health Framework.

1. Human Rights Training: F&N conducted a comprehensive Human Rights assessment in 2021, identifying and mitigating risks along our value chain in Singapore, Malaysia, and Thailand. Following the rollout of the
   F&N Human Rights Policy last year, we further drive the understanding of Human Rights and its relevance by providing our executives with a virtual interactive Human Rights Awareness Training session. This training covered international standards established by the United Nations, recent developments in business and Human Rights, and the governing principles in the United Nations Guiding Principles on Business and Human Rights. Over 350 employees benefited from this initiative.

TOWARDS F&N'S 2025 SUSTAINABILITY AMBITIONS

As F&N progresses on its sustainability journey, we continue to identify areas where we can make a positive impact and contribute to our sustainable transformation.

The 2025 sustainability targets will guide our efforts and uphold our commitment to create lasting value for F&N stakeholders. We eagerly anticipate sharing our progress and achievements with you in the coming year.

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