Fraser and Neave : Sustainability At F&N

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.

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.

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.

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.

BETTER Planet

Operational Eco-Efficiency

Greenhouse gas emissions intensity ratio reduced by 6%

even as energy intensity ratio increased by 2% from a 2020 baseline

Total solid waste generated reduced by 7%

however total solid waste sent to landfill increased by4% from a 2020 baseline

Water intensity ratio increased by 5%

from a 2020 baseline

Ground-up initiatives to improve water and energy efficiencies

including enhancing the efficiency of equipment, increasing renewable energy sourcing and implementing zero-discharge initiatives

All manufacturing plants

implemented energy, water and/or waste reduction initiatives

Value Chain Impacts

25% of beverage and dairy packaging

contains recycled materials

99% of total packaging

is recyclable

Committed to supporting conservation efforts and sustainable land management practices

to safeguard high biodiversity value areas

BETTER Community

Creating Value for Society

73% of beverage and dairy products1

qualify as healthier options

61% reduction in sugar index

(grams of sugar content per 100 ml) since 2004 for beverage products across Singapore and Malaysia

At least one healthier option

in 14 out of 15 product categories

Impactful annual community initiatives

across all markets

100% of the Group's operations

in Singapore, Malaysia and Thailand actively engaged with local communities, conducted impact assessments, and implemented development programmes

Human Rights Policy

was developed in accordance with related human rights principles under international standards. Human Rights Due Diligence and Risk Assessments were undertaken

Promoting human rights across our operations

100% of our key operations in Singapore, Malaysia and Thailand conducted Human Rights Risks Assessments

Empowering Our People

Over 7,200 employees

34% female

representation in total workforce

48% female

representation in managerial positions

1. training hours per employee
   in the executive category;

1. training hours per employee for the non-executive category

26% reduction

in Lost Time Injury Frequency Rate from a 2020 baseline

BETTER Business

Responsible Product Stewardship

Over 80% of manufacturing plants are Food Safety System Certification ("FSSC") 22000 and/or halal certified

30+ new products introduced

Portfolio of healthier products, including:

Low-sugar drinks

Zero-sugar drinks

Plant-based milk drinks

Micro-nutrients fortified drinks

Sustainability AT F&N

Climate-related disclosures

based on the recommendations of the TCFD, were enhanced to include quantification of material climate-related risks

External recognition

F&NHB remains a constituent member of the F4GBM Index for the fifth year, with improved rating to4.6 from

4.4 in 2022, for ESG practices. It is also a member of the F4GBMS Index for the third consecutive year

F&NHB has also been recognised for excellence in sustainability and strong ESG practices by being presented with the Platinum Award (for Best Sustainability Reporting) at the NACRA 2022

F&N Foods Pte Ltd ranked 63rd among over 1,700 employers in the Singapore's Best Employers 2023 study

Responsible Supply Chain

98% of active key suppliers

have accepted and are complying with F&N's Supplier Code of Practice

Attained 5% product innovation

for commercialised F&N products

Achieved interim target of purchasing physical Roundtable on Sustainable Palm Oil ("RSPO") Certified Sustainable Palm Oil ("CSPO") and credits for total palm oil consumption

60% physical RSPO CSPO 40% RSPO credits

Engages stakeholders to maintain high halal standards

F&NHB's partnership with the Halal Industry Development Corporation for the Halal Sourcing Partnership Programme enables us to provide technical advice and knowledge to SMEs

Successfully redirected vendors to supply F&N with specific products that adhere to stringent halal standards

Responsible Business Practice

Responsible Product Stewardship

Responsible Supply Chain

Creating Value for Society Empowering Our People

Operational Eco-efficiency Value Chain Impacts

The Report, best read together with the F&N 2023 Annual Report, provides a comprehensive picture of integrating F&N's financial goals with social and environmental imperatives. For specific references to our F&N 2023 Annual Report, refer to our GRI Index on pages 110 to 115. F&N appreciates this opportunity to share our commitments and progress in long-term value generation for our stakeholders.

REPORTING FRAMEWORK AND INDICES

F&N is proud to continue our sustainability journey and reporting in accordance with the GRI Universal Standards 2021 and SGX Listing Rules 711A and 711B. Building on last year's efforts, we have enhanced our climate-related disclosures, based on the recommendations by TCFD, by quantifying our key climate-related physical and transition risks. We look to address the gaps in our sustainability performance by referring to the DJSI criteria, amongst other international frameworks, and benchmarking against industry leaders, such as ThaiBev.

F&NHB, our subsidiary, continues to be included as a constituent member of the F4GBM and F4GBMS Indexes, for the fifth and third year running, respectively. Last year, F&NHB had once again been invited to submit a response to the S&P Global Corporate Sustainability Assessment for inclusion in the S&P ESG Index. They were ranked as one of the top 6 companies (out of 101 companies assessed) in the Beverages industry with a score of 74 (out of a possible 100).

REPORTING PERIOD AND BASIS OF SCOPE

This marks F&N's seventh annual stand-alone sustainability report, covering the period from 1 October 2022 to

30 September 2023, aligned with our financial reporting period. The report is published on 05 January 2024.

The Report covers the activities of the Group's operations in Singapore, Malaysia and Thailand. The environmental performance data covers 13 manufacturing sites in Singapore, Malaysia, and Thailand, excluding data from Yoke Food Industries Sdn. Bhd, Cocoaland and Sri Nona in Malaysia, and Print Lab Pte Ltd in Singapore. More information on F&N's operations and footprint is available in the 'About F&N' section of the Report.

Entities within the reporting scope present their sustainability performance on all our material topics. Sustainability data consolidated across all our operations are given equal weightage in the reporting.

Building on last year's efforts, we have enhanced our climate-related disclosures, based on the recommendations by TCFD, by quantifying our key climate-related physical and transition risks.

POINT OF CONTACT

F&N values and appreciates all feedback to help make future Reports more relevant to our stakeholders' needs. Any questions pertaining to our sustainability initiatives or reporting, or comments and feedback, can be directed to:

Department: Sustainability

Email: sustainability@fngroup.com.sg

Phone Number: +65 6318 9393

Mail: Sustainability Reporting Department

438 Alexandra Road, #07-00 Alexandra Point,

Singapore 119958

Fraser and Neave, Limited & Subsidiary Companies

ASSURANCE STATEMENT

F&N's policy is to align the reporting of non-financial information with the most up-to-date international standards and protocols available at the beginning of our FY. The Group believes in reporting reliable data and strives to continuously improve the quality of non-financial disclosures.

External assurance of the sustainability data disclosed in this Report serves to ensure accuracy and credibility of the reported data. Approved by the F&N SRMC, this year will be the fifth consecutive year of obtaining external assurance on the sustainability data disclosed in this report from the independent assurance provider, Lloyd's Register Quality Assurance ("LRQA"). The scope and outcome of the external assurance is reported at the respective F&N SRMC and SDC meetings to keep them constantly updated on the status.

LRQA's independent status is assured by legislation and professional ethics, and guided by their internal guidelines, LRQA had conducted a limited external assurance on selected F&N Health, Safety and Environment disclosures, based on the materiality of the professional judgement of the verifier, using the International Standard on Assurance Engagements 3000. Read more about LRQA's assurance statement on pages 108 and 109 of this Report.

FORWARD-LOOKING STATEMENT

Certain statements in this Report constitute "forward-looking statements" reflecting F&N's current views of future events, considering our present and future sustainability strategies, and the environment which F&N will operate in. These views involve risks, uncertainties and assumptions which may cause the actual performance or achievements of F&N

or the industry to be materially different from the future performance or achievements expressed or implied by such forward-looking statements and financial information.

F&N expressly disclaims any obligation to publicly release any updates or revisions to forward-looking statements to reflect changes in F&N's expectations when conditions or circumstances, upon which any such statement or information is based, have changed.

Approved by the F&N SRMC, this year will be the fifth consecutive year of obtaining external assurance on the sustainability data disclosed in this report from the independent assurance provider, Lloyd's Register Quality Assurance ("LRQA").

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