Aqila SD SR2011

Sime Darby Group Sustainability Report 2011
DEVELOPING
SUSTAINABLE
FUTURES
Contents
Pg 04 Pg 08
About this Report The Sime Darby Group
Plantation
Pg 06
Property
President and Group Chief
Industrial
Executive’s Message
Motors
Energy & Utilities
Healthcare
Financial summary
Corporate and Sustainability Milestones
Yayasan Sime Darby
Pg 22
Our Approach to Sustainability
Governing Sustainability
The Group Sustainability Committee
Our Sustainability Principles
Our Sustainability Strategy

Pg 32 Pg 80
Delivering Sustainable Economic Growth Respect for Society
Sustainability-led Innovation and New Business Ethics and Values
Stakeholder Engagement Health and Safety
Sustainability Risk Management Talent Management
Quality Management Enhancing Our Communities
Pg 64 Pg 102
Respecting Our Environment Metrics at a Glance
Proactive Environmental Management Systems
Pg 112
Energy and Climate Change
Global Reporting Initiative
Operational Eco-Efficiency
Content Index
Biodiversity Management
Developing Sustainable Futures

About this Report
“Accountability
and Transparency
to Stakeholders
means disclosing
relevant information
on our sustainability
strategies, objectives
The Sime Darby Group
Sustainability Report 2011 is our
first annual sustainability report
and performance in a and aims to provide stakeholders

with an overview of the Group’s
strategies, commitments and
timely manner” performance on sustainable

development.
This report should be read in

conjunction with the Sime Darby
Berhad Annual Report 2011, which
provides detailed information on
the Group’s financial and economic
performance. Similarly, further
information on Yayasan Sime
Darby, the Group’s foundation, is
available in the Yayasan Sime Darby
Annual Report 2011.

This report focuses on areas This sustainability report covers Feedback
related to our key strategic Sime Darby’s global operations
sustainability activities and for the calendar year 2011, unless We value all feedback on our
also provides an overview of stated otherwise. In this inaugural sustainability journey. Please
efforts to address sustainability report, we have also included email your comments to
issues considered material by selected noteworthy historical sustainability@simedarby.com.
Sime Darby. Material issues events. This report is prepared Further enquiries may also be
were identified via an internal in accordance with the Global directed to:
assessment and approved by the Reporting Initiative (GRI) G3.1
Group Sustainability Committee, Guidelines, with a self-declared Group Communications &
the main body dedicated to Application Level B. Corporate Affairs
oversee sustainable practices Sime Darby Berhad
within Sime Darby. For future We believe that a robust assurance (Company No. 752404-U)
reporting, we aim to further process provides comfort on 17th Floor, Wisma Sime Darby
engage stakeholders on our the quality and accuracy of Jalan Raja Laut
assessment of material issues and the information disclosed 50350 Kuala Lumpur, Malaysia
focus of our sustainability reports. to stakeholders reading our
sustainability report and for Sime T +(603) 2691 4122
Darby to use this information in F +(603) 2382 1075
management decisions. We plan W www.simedarby.com
to obtain external assurance for
future sustainability reports within
the next three years.

We believe that
the integration and
balance of economic,
environmental and
social issues in the way
we plan, execute and
monitor our various
businesses is critical
to the growth and
success of the Sime
Darby Group.
Dato’ Mohd Bakke Salleh

President and Group Chief Executive

President
and Group Chief
Executive’s Message
I am pleased to present our improve, both in performance of local communities before
inaugural sustainability report, and evolution of our overall development starts, including
which provides a window into approach to sustainability. efforts to ensure mutual growth.
how we are internalising our We are excited about a new
commitment to sustainability. The year 2011 also saw us multi-stakeholder partnership
reach some key sustainability that we initiated, called the
We believe that the integration milestones. The ongoing Smallholder Acceleration and
and balance of economic, progress of the Roundtable REDD+ Programme (SHARP),
environmental and social issues on Sustainable Palm Oil which is now working with
in the way we plan, execute certification makes us the the private sector to support
and monitor our various largest producer of Certified smallholders in the palm oil
businesses is critical to the Sustainable Palm Oil in the industry.
growth and success of the Sime world with an annual production
Darby Group. Our stakeholders capacity of 1.82 million tonnes To guide us in the day-to-day
expect it, market demand for of certified sustainable palm decisions we have defined
sustainable products (such as oil products. We target to have four key principles on how we
certified sustainable palm oil) our entire annual production intend to deliver sustainable
is growing, new sustainability capacity of 2.50 million futures, which includes the
related regulations on a range tonnes certified sustainable principle of “Accountability and
of issues are coming into force by the end of 2012. Research Transparency to Stakeholders”.
globally, and constraints on and development efforts in This report is a significant first
our operations from climate Property division have yielded step in embodying this principle.
change, energy security sustainability-led innovations
and resource scarcity are that we are starting to I look forward to sharing more
materialising. commercialise. In particular, key details on the business divisions’
learnings from the Sime Darby approach to sustainability in
In short, we focus on Idea House, a carbon neutral their respective industry sectors,
sustainability to conduct prototype building. Industrial including how we evaluate the
business responsibly, and as division has also grown the progress and success of our
a platform for innovation, remanufactured parts business sustainability journey in future
operational efficiency to 32% of total engine parts reports.
and to manage emerging sold.
sustainability risks.
We received some attention
Our efforts over the last year during the year on our practices
have centred on taking stock related to local communities.
of the sustainability practices Our success over the 100 years
in our various business in the plantation industry would
divisions, defining the way we not have been achieved without
manage sustainability, and the support of the communities
developing a holistic strategy in which we operate. In Dato’ Mohd Bakke Salleh
to coordinate and drive future this report, we provide an President and Group Chief
efforts. We have now set the overview of our approach and Executive 7
foundation from which to chart practice to obtain the Free,
our journey and continuously Prior and Informed Consent

The Sime Darby Group
The
Netherlands
United Germany
Kingdom
Canada
South Korea
United
States of Japan
America
China
Hong Kong
Macau
Thailand
Vietnam
Malaysia Nauru
Liberia
Singapore
Papua New Guinea
Indonesia
Solomon Islands
Australia New
Caledonia
South Africa
6 Divisions New Zealand
Over 20 Countries
Over 100,000 Employees
www.simedarby.com Global Business Presence

Sime Darby is a
Malaysia-based
diversified
multinational
corporation involved
in the plantation,
property, automotive,
industrial equipment,
energy & utilities and Founded in 1910 as a small
British company managing 202
hectares of rubber estates in
healthcare sectors. the Malayan state of Malacca,
we have since grown into one of
Malaysia’s largest multinational
corporations.
We have a market capitalisation

of RM55.28 billion as at 31st
December 2011, and employ
a workforce of over 100,000
employees in over 20 countries.

www.simedarbyplantation.com
Plantation
ONE OF THE WORLD’S

LARGEST PRODUCERS OF
CERTIFIED AND TRACEABLE
PALM PRODUCTS Key Activities
Upstream
• Oil palm plantations and mills
• Rubber plantations and factories
Sime Darby Plantation is the core started the development of our
agri-business division of the Sime new operations in Liberia with Downstream
Darby Group. We are one of the a 220,000 hectare concession.
world’s largest palm oil producers, In addition to oil palm, we also • Palm oil refineries
with an annual production capacity have 7,880 hectares of rubber • Production of edible oil products
of 2.50 million tonnes of Crude plantations and 2 factories in • Biodiesel production
Palm Oil (CPO), which represents Malaysia. • Oleochemicals
approximately 6% of the world’s • Nutrachemicals
annual CPO output. A founding As a vertically integrated palm oil
member of the Roundtable on company, we have 13 downstream Research and Development
Sustainable Palm Oil (RSPO), we refineries across 7 countries, • Genome research, plant breeding,
are also the largest producer of which are involved in the refining planting materials and agronomy
certified sustainable and traceable of CPO and the production of • Engineering technology and
palm oil with more than 73% of edible oil products, oleochemicals development
our CPO and Palm Kernel Oil (PKO) and biodiesel. • Accredited laboratories
production, certified sustainable. • Innovation centre and food nutrition
We also have a long history
Our current upstream operations, of research and development Key Countries of Operations
which consist predominantly focusing on yield improvements
oil palm cultivation, harvesting through the development of • Indonesia
and milling, are spread across improved planting materials and • Liberia
519,440 hectares of planted areas formulation of good agricultural • Malaysia
in Malaysia and Indonesia. This and sustainable practices. • Singapore
represents approximately 81% For downstream operations, • South Africa
of our total landbank in these research and development • Thailand
two countries. In Malaysia and efforts concentrate on producing • The Netherlands
Indonesia, we are organised into customer-centric oils and fats • Vietnam
62 Strategic Operating Units products which are healthier and
(SOUs). An SOU is made up of processed in an environmentally
a palm oil mill and one or more friendly way. Financial Summary*
feeder estates. In July 2010, we
Revenue
RM13,167.9 million
Profit before interest and tax

10 RM3,280.2 million
*Note: For Financial Year 2010/2011

and excluding discontinuing operations

www.simedarbyproperty.com
Property
A LEADING DEVELOPER
OF SUSTAINABLE
COMMUNITIES
Sime Darby Property is the Key Activities

leading township developer in
Malaysia. We currently have a • Property development
landbank of 16,800 acres. Over • Property investment
the years, our Property division • Property hospitality
has built 10 townships with
homes for approximately 85,000 Key Countries of Operations
families in Malaysia. In addition
to property development, we • Australia
operate several of Malaysia’s • Malaysia
leading commercial, hospitality • Singapore
and leisure assets. • United Kingdom
• Vietnam
We also have a significant
presence in the Asia-Pacific Financial Summary*
region with a variety of projects
and assets in Singapore, Vietnam Revenue
and Australia, as well as, the RM1,987.2 million
United Kingdom. We aspire
to be a leading developer of Profit before interest and tax
sustainable communities. Our RM456.0 million
development of products are
underpinned by innovation and *Note: For Financial Year 2010/2011
creativity. and excluding discontinuing operations
11

www.simedarbyindustrial.com
Industrial
ONE OF THE WORLD’S

LEADING CATERPILLAR
DEALERS
Sime Darby Industrial operates Key Activities

in over 10 countries across the
Asia Pacific region, with more Dealerships
than 100 Caterpillar dealership • Sales
branches. We are one of the • Product support
world’s leading Caterpillar
dealers. Used & Rental/Leasing
As a business entity, Sime Darby Key Countries of Operations

Industrial is involved in the sale
of new machines, engines and • Australia
used equipment. We also rent • Brunei
machines and provide the full • China
range of after sales, product • Christmas Island (Indian Ocean)
support and financing services. • Hong Kong
Our customers are in primary • Macau
markets such as plantation, • Malaysia
property, mining, marine, • Nauru
forestry, construction, ports • New Caledonia
and power generation. We also • Papua New Guinea
hold licensing and technical • Singapore
agreements with world class • The Maldives
principals to manufacture heavy • The Solomon Islands
equipment and attachments. • Vietnam
Our Industrial division Financial Summary*

distributes other brands besides
Caterpillar, such as Terberg, Revenue
Kubota, New Holland, Perkins, RM10,271.1 million
Atlas Copco, Jacobsen and
Omega, among others. Profit before interest and tax
RM1,068.0 million
*Note: For Financial Year

2010/2011 and excluding
12 discontinuing operations

www.simedarbymotors.com
Motors
A MAJOR AUTOMOTIVE
INDUSTRY & LUXURY
MARQUE PLAYER IN THE ASIA
PACIFIC REGION
Sime Darby Motors started 30 Key Activities

years ago with the distribution
of Ford vehicles. Today, we are • Import
a major automotive industry • Assembly
and luxury marque player in the • Distribution
Asia Pacific region, and one of • Retail
the world’s largest BMW dealer
groups. Key Countries of Operations
Other major brands represented • Australia

include Mini, Rolls-Royce, Ford, • China
Hyundai, Land Rover, Porsche and • Hong kong
Peugeot in passenger vehicles • Macau
as well as Hino, UD Nissan, • Malaysia
Mitsubishi Fuso, Mack and • New Zealand
Renault in commercial vehicles. • Singapore
• Thailand
Financial Summary*
Revenue
RM14,818.0 million
Profit before interest and tax

RM633.2 million
*Note: For Financial Year

2010/2011 and excluding
discontinuing operations
13

www.simedarbyenergyutilities.com
Energy & Utilities
CORE BUSINESSES IN POWER,

ENGINEERING SERVICES, PORTS
& LOGISTICS AND WATER
MANAGEMENT
Sime Darby Energy & Utilities’ The China Operations, based in Key Activities
core businesses are in Power, Shandong province, encompasses
Engineering Services, Ports & the Ports & Logistics and Water • Power
Logistics and Water management Management business units. Our • Engineering services
in Southeast Asia and China. four operational ports in both Jining • Ports & logistics
and Weifang cities have a collective • Water management
Our Non-China Operations annual throughput of 34.5 million
portfolio includes the Power and tonnes per annum, with a target Key Countries of Operations
Engineeering Services business to achieve over 60 million tonnes
units. The Power business unit has in the next five years. The Water • China
a combined capacity of 590MW. Management unit, represented • Malaysia
The Malaysian operations by Weifang Water, comprises two • Singapore
located in Negeri Sembilan has water treatment plants and flatland • Thailand
an installed capacity of 440MW reservoir with a capacity of 3.5
while the Thai operations located million cubic metres. Weifang Water Financial Summary*
in Laem Chabang comprises two currently has a daily treatment
power plants with an installed capacity of 140,000 cubic metres. Revenue
capacity of 100MW and 50MW RM1,085.4 million
respectively. The Engineering
Services business unit is Profit before interest and tax
represented by the Mecomb RM245.7 million
Group in Malaysia, Singapore
and Thailand, providing state- *Note: For Financial Year
of-the-art systems integration 2010/2011 and excluding
solutions for a wide spectrum discontinuing operations
of engineering and scientific
applications.
14

www.simedarbyhealthcare.com
Healthcare
AT THE FOREFRONT OF
MALAYSIA’S PRIVATE
HEALTHCARE INDUSTRY
Sime Darby Healthcare is at Key Activities

the forefront of Malaysia’s
private healthcare industry and • Tertiary care hospitals
is committed to the delivery of • Specialist outpatient and
comprehensive customer-focused day-care medical facilities
healthcare services with the best • Nursing and health sciences
clinical and business practices. college
We currently operate 3 healthcare
facilities, comprising 2 tertiary Key Countries of Operations
care hospitals with a combined
capacity of 613 beds, and a medical • Malaysia
and surgical day-care centre. Our
fourth healthcare facility, a 300- Financial Summary*
bed secondary care hospital, is
scheduled to be opened in 2013. Revenue
RM318.7 million
We also pioneered nursing
education in Malaysia with our Profit before interest and tax
Sime Darby Nursing and Health RM26.0 million
Sciences College. The college
has successfully achieved an *Note: For Financial Year
average passing rate of 98% for 2010/2011 and excluding
examinations conducted by the discontinuing operations
Malaysian Nursing Board.
15

Financial summary
We continuously strive to
deliver superior financial
returns through operational
excellence and high
performance standards.
Sime Darby Group headquater, Kuala Lumpur, Malaysia
16

Contribution By Division
0.8%
Healthcare
24.5%
Industrial
31.5%
Plantation
Group Revenue
RM41,858.8 million
4.7%
Property
0.5%
Others
2.6%
Energy
& Utilities
35.4%
Motors
4.3%
Energy
& Utilities
57.9%
11.2% Plantation
Motors
-0.7%
Others
Group Profit
Before Interest & Tax*
RM5,601.7 million
18.8%
Industrial
8.0%
0.5% Property
Healthcare
17
*Includes RM -65.4 million for Corporate and Elimination

Corporate and
Sustainability Milestones
Corporate
1910 • Founded in Malaysia
1917 • First commercial planting in Tennamaram Estate, Malaysia
1926 • Appointed as Caterpillar dealer in Malaysia
• Launched 1,200 acres of Subang Jaya, the first property township in

1976 Selangor, Malaysia
• Sime Darby Berhad commences trading on the Kuala Lumpur

1980 Stock Exchange, Malaysia
• Appointed as sole distributor for Land Rover and Range Rover

1981 vehicles and parts in Singapore
1982 • Inception of Yayasan Sime Darby
1986 • Acquired 20.62 million shares in Subang Jaya Medical Centre, Malaysia
1987 • Appointed as the sole importer and distributor of BMW products in Malaysia
• Acquired Caterpillar dealerships in the Australian states of Queensland

1992 and Northern Territory, Papua New Guinea, and Solomon Islands
• Awarded the Fiabci International Prix d’Excellence award for Subang
Jaya township in Selangor, Malaysia
1995 • Launched 2,000 acres of the award winning Bukit Jelutong township in
Selangor, Malaysia
• Port Dickson power plant commences operations in Malaysia
2001 • Acquired oil palm plantations in Indonesia
• Sime Darby listed on the Forbes 2000 list

2004 • Hyundai brand added to existing automotive marques
• Weifang Sime Darby Port Co. Ltd and Weifang Sime Darby Water
2005 Management Co. Ltd incorporated in China
2007 • Merger between Sime Darby, Golden Hope and Guthrie
2008 • Yayasan Sime Darby revamped and expanded to five pillars
2009 • Laem Chabang power plant commences operations in Thailand

18
2010 • Launch of Innovation Centre Europe for palm oil products in the Netherlands
• First planting of oil palm in Liberia

2011
Sustainability
• Adopts biological controls for Integrated Pest

1990
Management for plantation operations
• Elected to United Nations Environment Programme’s Global 500 roll of

honour for commercialisation of the Zero Burning Replanting Technique 1992
in 1989, for plantation operations
• Co-generation technology adopted for power and steam generation in

Industrial division’s Malaysian facility
1998
• Founding member of the Roundtable on Sustainable Palm Oil (RSPO) 2002
• Achieved first Global GAP certification in Plantation division 2004
• Achieved first RSPO certification in Plantation division

• Water recycling initiatives piloted in Industrial division’s Australian facilities 2008
• First Malaysian property developer to obtain certification for ISO 9001:2008,
ISO 14001:2004, OHSAS 18001:2007 and MS1722:Part 1 2005
• Co-generation technology adopted for power and steam generation in Energy
& Utilities’ power generation plant in Laem Chabang, Thailand 2009
• Joint Commission International accreditation obtained for Healthcare
division’s Sime Darby Medical Centre Subang Jaya
• First shipment of 3,500 tonnes traceable segregated Certified Sustainable Palm

Oil sent to Sime Darby Unimills in the Netherlands
• Achieved first certification of RSPO’s Supply Chain Certification System (SCCS) 2010
• Sime Darby Property’s prototype Idea House, the first carbon neutral residence
in Southeast Asia, built in Malaysia
• Water recycling initiatives piloted in Motors division’s New Zealand facilities
• 50 strategic operating units in Plantation division RSPO certified with an annual

production capacity of 1.82 million tonnes of certified sustainable palm oil
• Introduction of Smith Electric and i MiEV vehicles in Hong Kong and Macau and 2011
also Porsche Cayenne and Panamera Hybrid models in Malaysia
19
www.yayasansimedarby.com
Yayasan Sime Darby

Yayasan Sime Darby (YSD) is a Total expenditure in 2011, in Ringgit Malaysia (RM)
foundation established in 1982
and is Sime Darby’s philanthropic
7.2
arm. YSD is funded by annual
22.8
contributions of up to RM100
million from our core business
divisions and is guided by a
Governing Council comprising
MILLION MILLION
members of Sime Darby’s Board
of Directors and independent
parties.
YSD’s activities focuses purely

Education Youth, sports
on deserving philanthropic
causes in Malaysia while it gives and recreation
out scholarships in Indonesia,
22.0 1.5
Singapore and Hong Kong. YSD
will also be providing scholarships
in China and Liberia from 2012.
YSD’s philanthropy does not
benefit the Sime Darby Group in
any way but there is collaboration
in areas of mutual interest.
MILLION MILLION
The objectives of YSD are
supported by the following five Conservation of Community
pillars:
the environment development
• Education
• Conservation of the
and protection of
0.37
environment and protection of ecosystems
ecosystems
• Youth, sports and recreation
• Community development
MILLION
• Arts and culture
Only selected YSD projects are

featured in this report. These
projects have been selected on
the basis of common interest
Art and culture
to our Group’s sustainability
strategy and focus areas.
20

21

Our Approach to Sustainability
Sime Darby Liberia
22

At Sime Darby,
“Developing
Sustainable
Futures” means
the integration and
balance of economic,
environmental and
social issues in the way We hold a competitive edge to grow
we plan, execute and and protect our stakeholder value

by incorporating sustainability
into our core business strategy,
monitor our various risk management and operational
performance. Sustainability helps
businesses. us to conduct business responsibly

and provides a platform for
innovation, operational efficiency
and management of emerging
sustainability risks.
We are building a robust framework

to help address the wide range of
sector specific sustainability issues
of our six core businesses globally.
23

Governing
Sustainability
We have embedded sustainability A Snapshot of the Group’s Governance Structure

into the two-tier Board structure and
management reporting structure that
has been established to manage the
Group.
The Sime Darby Main Board is the Sime Darby

highest authority accountable for the Main Board
Group’s sustainability strategy and
performance. President & Group Chief
Executive, Dato’ Mohd Bakke Salleh,
has overall management responsibility Divisional
for sustainability. Our Group Chief Flagship
Operating Officer, Dato’ Abdul Wahab Subsidiary
Boards
Maskan, is primarily responsible for
the Group’s operational sustainability
performance.
The Group Sustainability Strategy and

President &
Blueprint is reviewed by the Main Board Group Chief
annually, and is updated on progress Executive
every quarter. The Main Board’s Risk
Management Committee also receives
reports on key sustainability issues
quarterly.
Flagship Subsidiary Boards have

been established for each division to
support Sime Darby’s Main Board.
The responsibilities for divisional
sustainability strategies and
performance are similarly held by Group Chief
the Flagship Subsidiary Boards and Operating
Officer
Divisional Executive Vice Presidents,
who each head key business divisions
and report on progress to the Flagship
Subsidiary Boards.
Division
The integration of sustainability into Executive Vice
Direct Reporting Presidents
our governance structure has been
formally incorporated into our Group
Administrative
Policies and Authorities, which governs
Reporting
all Sime Darby’s operations.
24

The Group
Sustainability
Committee
A cross functional approach is Sime Darby Group Sustainability Committee
required to coherently address
the many unique sustainability
issues arising from the diverse Plantation
set of businesses within the
Group and geographical spread.
Our Group Sustainability

Committee (GSC), which
oversees sustainability
operations within the Group, Healthcare
is chaired by our Group Chief Group
Operating Officer and comprise Sustainability & Quality Property
of Heads of Sustainability & Management
Quality Management from our
six core business divisions,
and representatives from
Group departments. The
Group Sustainability & Quality Yayasan Sime Group Strategy
Management department holds Darby & Business
the post of Secretariat and Group Development
submits reports to the Main Chief
Board and Main Board’s Risk Operating
Management Committee. Group Group
Corporate Social
Officer
Risk
Our GSC defines Group Responsibility Management
sustainability policies,
standards and procedures,
reviews and monitors business
sustainability practices
Group
and targets, tracks global
Energy Communications Industrial
sustainability trends and
& Utilities & Corporate Affairs
incorporates new developments
into the Group’s sustainability
management framework,
and addresses sustainability
risks, communications and
stakeholder management.
Motors
25

Our
Sustainability
Principles
Our commitment to sustainable development lies
in the adherence to four sustainability principles,
which balance good business with good corporate
sustainability, and guide our actions.
Respect
Delivering for Society
Economic Growth
Respect fundamental
Maximise opportunities for human rights and remediate
financial gain, generate and instances of adverse human
sustain profits, and continuously rights impacts within Sime
improve operational efficiency Darby’s direct operations,
without sacrificing long-term and endeavour to advance
economic value creation. respect for human rights
within the Group’s sphere
of influence.
Respect for the Accountability and

Environment Transparency to
Stakeholders
Proactively address
environmental challenges, Accountable and transparent to
promote environmental stakeholders on Sime Darby’s
responsibility, and encourage sustainability and quality
the development and use strategies, objectives and
of environmentally-friendly performance, which include
designs and technologies. disclosing relevant information
in a timely manner.
26

Our
Sustainability
Strategy
Sime Darby strives to be We have defined five strategic sustainability goals
a leading multinational that drive our sustainability strategy across the Group,
corporation delivering which support our Corporate vision and mission.
sustainable value to all
stakeholders. Our Sustainability Strategy at a Glance
As a conglomerate with
businesses in diverse industries
across the globe we recognise
the need and benefits of a
coordinated approach to meet
the sustainability challenges
that cut across the Group.
At the same time, we need
Corporate
to ensure that we develop a
Vision
framework that allows each To be a leading
of our business divisions to multinational corporation
address sustainability issues delivering sustainable
value to all stakeholders
which are both material and
peculiar to their industries and
countries of operations.
Corporate Mission
Committed to Subscribe to
developing a winning good corporate
portfolio of sustainable governance and high
businesses ethical values
Ou
es
Deliver superior financial returns Provide an environment

ipl
Su
through operational excellence for our people to realise

inc
sta
and high performance standards their full potential

Pr
ina
ity
bil
bil
ity
Strategic Sustainability Goals

ina
Pr
sta
inc
Su
Leverage on Effectively Develop Instill a Effective

ipl
sustainability to manage sustainability performance sustainability

es
r
Ou
create value sustainability Thought culture reporting

risks Leadership
Our Sustainability Principles

27

Strategic Sustainability Goals
Leverage on Effectively Develop

sustainability to manage sustainability
create value sustainability risks Thought Leadership
We believe that a truly sustainable Recent years has seen the rising We believe that the complexity and
organisation is one where the importance of global challenges inter-connectivity of sustainability
relevance of sustainability issues such as population growth issues benefit from a collaborative and
are understood, considered and pressures, climate change, resource multi-stakeholder approach to resolve.
addressed in all aspects of the scarcity, biodiversity loss, economic
business. This integration of inequality and human rights. These As the sustainability agenda
sustainability into the business global challenges coupled with an evolves in each of our key sectors
allows Sime Darby to effectively ever increasingly networked world of operations, we aim to be at the
leverage on the opportunities has led to changes in the corporate forefront, proactively promoting
presented by the sustainability landscape ranging from growing sustainability and developing sectorial
agenda. customer and investor expectations “best practices” and standards by
with regards to sustainability learning, sharing sector expertise and
Towards this end, in 2011 performance, emergence of new knowledge with global peers.
we focused on defining the sustainability regulations, to the
Group’s sustainability strategy physical constraints of climate
and worked together with each change impacts.
business division to develop and
align divisional sustainability We recognise the potential
strategies relevant to their impacts that these sustainability
industry sectors and countries of issues may have on our businesses
operations. and have worked to incorporate
sustainability into our enterprise
We aim to use the sustainability risk management framework. This
agenda as a platform to innovate provides a structured framework
new product and service to help us identify, assess, mitigate
offerings, and seek to realise and monitor the risks posed by
the benefits of cost reduction, sustainability issues and ensure that
operational efficiencies and these risks are managed as part of
energy security related to low- our core business practices.
carbon growth plans and the
adoption of green technology.
28

Instill a Effective
performance sustainability
culture reporting
The health and safety of our people We are convinced that an The increased awareness and
remains top priority. As such, we environmental management understanding of sustainability
have developed a health and safety framework that goes beyond issues has led to growing
framework that ensures regulatory compliance is essential for Sime expectations from key stakeholders
compliance, and more importantly, Darby to maintain a competitive on our sustainability practices and
drives a sectoral best-in-class edge in an increasingly resource performance. It is important for us
health and safety culture that we constrained world, manage the risks to consistently and transparently
continually seek to improve. of new environmental regulations engage investors, customers,
and effectively mitigate potential regulators and business partners, to
Similarly, an effective response to impacts to operations. better inform stakeholders on their
environmental challenges faced investments, buying and partnership
today requires an environmental Our ability to effectively implement decisions. This includes reporting
management framework designed to solutions to global challenges is on our sustainability performance
manage both regulatory compliance underpinned by our commitment and sharing our sustainability
and emerging environmental issues to operational excellence. We outlooks and perspectives. We
beyond compliance, such as climate have incorporated continuous also aim to further leverage on
change and biodiversity loss. improvement methodologies these engagements with input of
We believe that these emerging into our various businesses, in our product developments and
environmental issues will only be particular Lean Six Sigma, to continuously refine our approach to
intensified over time by the increase improve performance and establish sustainability.
in global population growth and leadership in core businesses.
increasing rates of urbanisation. A Group quality management We are continually improving
framework has also been developed processes which monitor and assess
to support sectorial best-in-class our sustainability performance to
quality management systems for our effectively support the internal
diverse businesses. business decision making process
and further grow the sustainability
cultural maturity within the Group.
We believe that a truly sustainable

organisation is one where the
relevance of sustainability issues are
understood, considered and addressed
in all aspects of the business. 29

Summary of our
Sustainability Performance
Strategic Key
Sustainability Objectives Results to Date Future Activities
Goals and Targets
Leverage on Develop • Largest producer of • Provide traceability of CSPO
sustainability to opportunities for Roundtable on Sustainable to customers
create value sustainability-led Palm Oil (RSPO) Certified • Continue research and
innovation and Sustainable Palm Oil development efforts,
new business (CSPO) including commercialisation
• Research and Development of products
initiatives for palm oil • Continue to promote cleaner
products and green technology in relevant
buildings implemented markets
• Cleaner technology in the
automotive and heavy
equipment industries
introduced to relevant
markets
Adopt low • Group-wide 2009 • Continue to monitor annual
carbon growth baseline carbon inventory carbon emissions
strategies and completed • Develop Group-wide carbon
green technology • Pilot carbon emissions strategy and set reduction
for operational reduction initiatives targets
efficiencies implemented • Develop programmatic
carbon emissions reduction
initiatives
Generate shared • Corporate Social • Continue to work with local
economic growth Responsibility projects communities
of communities in in key communities • Continue to develop palm
which we operate implemented oil smallholder development
• A new programme for programme with multi-
smallholder development stakeholder partners, and
in the palm oil sector conduct a pilot project
initiated
Effectively manage Embed • Sustainability risks • Continue to identify, assess
sustainability risks sustainability embedded in our and mitigate sustainability
risks into our Enterprise Risk risks across the Group
Enterprise Risk Management framework
Management
framework
Maintain high • Ethics and corporate • Continue to monitor and
ethical and values framework drive high standards of
corporate values developed, including ethics and corporate values
grievance mechanisms within the Group
• Continue to enhance our
ethics and corporate values
framework
30

Strategic Key
Sustainability Objectives Results to Date Future Activities
Goals and Targets
Develop Contribute to • Founding and Executive • Continue to actively
sustainability sectorial “best Board member of the progress sustainability
Thought practices” Roundtable on Sustainable practices in the palm oil
Leadership and standards Palm Oil (RSPO) industry
and progress • Actively involved in • Continue to actively evolve
development various RSPO working sustainability in Corporate
of Corporate groups Malaysia
Sustainability • President of the Business
Council for Sustainability
and Responsibility
Malaysia (BCSRM), a
network partner of the
World Business Council for
Sustainable Development
(WBCSD)
• Secretariat for the
Corporate Sustainability
Circle (CSC), a Malaysian
government-linked
company led business
sustainability group
Instill a Achieve savings • Completed 86 continuous • Continue to identify and
performance via continuous improvement projects implement improvement
culture improvement across the Group with total projects to achieve year-on-
initiatives savings valued at RM14.8 year increase in savings
million
Develop proactive • Progressed good • Effectively manage
Environmental agricultural practices compliance to
Management within the plantation environmental regulations
Systems to industry • Embed measures to address
comply with • Pilot eco-efficiency key environmental issues
regulations measures to reduce beyond compliance into
and address environmental impacts core systems
issues beyond and yield cost reduction • Develop programmatic eco-
compliance benefits implemented efficiency initiatives
Continuous • 7 fatalities • Address weaknesses in
reduction in • 14% increase in incident health and safety framework
Health and Safety rate from 2010 • Drive a proactive health and
incident rates and safety culture
zero fatalities
Effective Develop effective • Key stakeholder • Review and improve
sustainability platforms for engagement platforms community engagement
reporting stakeholder developed to engage framework in our Plantation
engagement to employees, local division to ensure Free, Prior
feed into strategy communities potentially and Informed Consent (FPIC)
development, impacted by palm oil is transparently obtained
risk management operations and to improve 31
and performance patient care
improvement

Delivering Sustainable
Economic Growth
Oil palm fruits
32

“Delivering
Economic Growth
means maximising
opportunities In this section of the report we
provide an overview of activities
for financial gain, and performance related to

the economic dimension of
sustainability. These are key
generating and sustainability activities that are
closely linked to our corporate
sustaining profits, and financial and economic

objectives, such as revenue,
profit and operational targets.
continuously improving We have grouped the economic
sustainability initiatives under
operational efficiency the following categories:
• Sustainability-led
without sacrificing Innovation and New
Business
long-term economic •
•
Stakeholder Engagement
Sustainability Risk
Management
value creation.” • Continuous Improvement
Detailed information on
our corporate financial and
economic activities may be
found in the Sime Darby Annual
Report 2011.
33

Sustainability-led
Innovation and New
Business
Strategic Link
Corporate Mission
Committed to
developing a
winning portfolio
of sustainable
businesses We have started to use existing certified sustainable palm oil and
assets, resources and strengths the potential to provide healthier
to capitalise on sustainability as a and more effective products.
Sustainability Goals source of competitive advantage and As a builder of communities and
to seize new sustainability-related homes our Property division is well
Leverage on business opportunities. The greatest placed to improve the operational
sustainability to scope is where we are able to reduce performance of our products.
the environmental, health, safety Typically between 88% - 98%
create value and social impacts throughout the of greenhouse gas emissions
lifecycle of our products. produced over the lifecycle of
buildings are from operational
Sustainability-led innovation energy requirements, and the initial
and new business are particularly design and construction strongly
relevant to our Plantation and influences the performance of
Property divisions, where our buildings throughout their lifespan.
position within and influence over
our value chains provide us with Our other divisions, such as
the potential to develop new or Industrial and Motors, are also
improved products. In our Plantation currently exploring opportunities
division these opportunities largely for innovation and new business
relate to filling a market need for within their respective value chains.
34

Sime Darby Plantation Research & Development
35

Plantation Case Study
Progressive Planting Materials:

CALIX 600 the Super Seed
Supported by over 90 years of research and development in breeding and selection activities, Sime Darby Seeds
and Agricultural Services is today Malaysia’s largest producer of hybrid oil palm planting materials, with an annual
production of approximately 26 million seeds or 30-40% of the country’s total production. Apart from local use, we
also export our planting materials to countries, such as Indonesia, India and Colombia.
The Origin of Sime Darby’s Deli Dura Collection Germplasm
Year
1850’s Botanical Gardens Bogor, Jaya (1848)
1860’s Banjar Mas, Bogor Tobacco estates Economic Garden

(1859) Maatschappy, Deli Sumatera Bogor
(1875-1876) (1878)
1870’s Avenues in tobacco

estate Sumatera
(1880-1990)
St. Cyr Tg. Morawa
1880’s (1884) (1890-1903)
Oil palm plantations Rantau Panjang Avenue Public Gardens

Sumatera Kuala Selangor Kuala Lumpur DOA
1900’s (Since 1911) (1911-1912) (1905)
Tennamaram Estate Experimental

1910’s Kuala Lumpur
(1917)
(1910)
Marihat Baris Mapoli Oil palm of Malaya Elmina Estate Experimental Serdang
1920’s
(1920) (1927) Ulu Remis (1920) Serdang Avenue
(1924-1929) (1922)
United Bangun Bandar
1930’s Plantations (U.P) Marihat Baris Elaeis Estate (1930)
(1927) (1933)
1940’s Cooperative Guthrie Chemara Serdang Field

Breeding Scheme Ulu Remis 4 and 3A
(1956) (1935-1941) (1937-1940)
1950’s Johore Sabah Breeding Harrisons & Crosfield

Labis Socfin Programme (Golden Hope) Banting
(1930-1948) (1964) (1957)
36

In August 2010, we introduced our latest Dura-Pisifera hybrid planting material known as Calix 600. It is produced by
crossing our elite Deli Dura parental palms with selected second generation BM119 (AVROS) Pisifera palms. The new
hybrid has made its name for its vigour and homogenous growth, high precocity and superb oil yield per unit area.
With a combination of good agronomic practices and management, and a favourable growing environment, Calix 600
has the potential of producing high early yields and more than 10 tonnes of oil per hectare per year. Calix 600 also
possesses desirable secondary fruit traits such as thin shells, thick mesocarp and centrally-placed kernels.
The Origin of Sime Darby’s AVROS Pisifera Germplasm
Year Djongo
(Eala, Congo)
1920’s SP 540 Bangun Bangun

489-57T 489-46T
Selfed. Pol 820 Pol 632
Polonia
1930’s 3468T 3572T 3601T 3148P (1931)
Aek Pancur
1940’s AP/78945-1107T AP9/019-1199T (1931)
1950’s AVROS Banting,

Malaysia, 1959
DXP
COMMERCIAL
PLANTING
37

Harnessing the Full Potential of Oil Palm

through Deciphering its Genetic Codes
The many challenges and a set of information (genes) that counter the effects of salt water
constraints in the oil palm are inscribed in the genome. When intrusion in productive alluvial
plantation today, such as the deciphered through the techniques coastal soils), and specific traits
limited availability of arable of molecular biology, these genes that enhance the speed and ease of
land, competition for palm oil for can be tracked and associated harvesting, with some attention to
food and non-food products, and with specific traits of interest, production of specialty oil fruits.
also the challenges brought by making it easier for breeders to
climate change, has led us to be select parental materials with To date, the project has completed
more innovative in improving oil higher confidence of superior the fingerprinting of the elite high
yield through precision selection offspring. With this in mind, yielding Calix 600 palms, a genetic
and hybridisation of the parental we initiated the sequencing and signature that authenticates high
breeding materials. Using such decoding of the oil palm genome quality seeds produced by us.
technology, the Oil Palm Genome in 2009, especially to decipher Furthermore, it has established a
Project aims to support this effort genetic codes which can be linked genome-wide map linking markers
to choose superior breeding to the phenotypes of interest from to chromosomes for Calix 600 that
materials through identification our pool of commercial oil palm will be useful in predicting the
of determinative genetic markers breeding population, the largest heritability of a trait of interest. The
that are associated with yield in the country. We were the first project has refined the assembly
traits, enabling breeders to fast- to sequence and assemble the of the genome sequence and
track their selection of parental genome using the latest sequencing analysed the phenotypic variability
materials. technology. in its large breeding population,
two prerequisites to the linking
The complex oil palm genome (an Since its initiation, the Genome of genetic codes to phenotypic
assemblage of chromosomes on Project has focused on seeking traits. Concomitantly, the project
genes) carries useful heritable genetic markers for traits that are has supported this research
genetic information that has been linked with high oil yield. However, with development and use of a
traditionally mapped by breeders the project has also outlined rigourous array of technologies,
through observation of desired strategies for identifying parental mining the genome data through
traits expressed (phenotypes) in materials with other desirable bioinformatics and the analysis of
the offspring (progeny) of a large traits such as disease resistance, genes, proteins and metabolites
population of specific crosses. drought resistance (typically useful expressed during oil biosynthesis in
Genetically, the expression of for Sime Darby oil palm plantations the oil palm fruits.
these phenotypes is controlled by in Liberia), salinity tolerance (to
38

Certified Sustainable Palm Oil
Roundtable on Sustainable of 1.82 million tonnes of CSPO and International Sustainability and
Palm Oil Certification 0.43 million tonnes of Certified Carbon Certification
Sustainable Palm Kernel Oil (CSPKO).
Sime Darby Plantation is one of This represents more than 73% of The International Sustainability
the founding members of the our crude palm oil and palm kernel oil and Carbon Certification (ISCC)
Roundtable on Sustainable Palm annual production capacities. is an independent certification
Oil (RSPO) and has a time bound system to assess and validate
plan to have all Strategic Operating Sime Darby Plantation has also the sustainable production of
Units (SOUs), which consist of a embarked on the RSPO Supply biomass and biofuels. The ISCC
palm oil mill and feeder estates, Chain Certification System (SCCS) is recognised by the European
RSPO assessed by the end of 2011. for downstream operations. A Commission and is often used to
We currently have 62 SOUs across continuation of the RSPO certification demonstrate compliance with
Malaysia and Indonesia. process for the trading and marketing the European Union’s Renewable
of CSPO, the SCCS is supported by Energy Directive (EU RED), which
As of 31st December 2011, we an internal RSPO IT Online System requires all biomass and biofuels
have succeeded in obtaining RSPO that enables CSPO traceability to be to be produced sustainably.
certification for 50 SOUs, 39 in conducted along the supply chain.
Malaysia and 11 in Indonesia. The As at the end of 2011, 4 out of 13 The ISCC provides another level
remaining 12 SOUs are located in downstream business units have been of comfort to our customers in
Indonesia and have undergone the certified under the SCCS. addition to the RSPO certification.
external certification assessment In 2011, Sime Darby Plantation
and are now within the RSPO’s Europe is currently the main market achieved ISCC certification for
internal certification process. for certified sustainable palm oil 4 palm oil mills , 1 refinery and 1
products. Sime Darby Unimills, our biodiesel plant, which brings the
The 50 certified SOUs position Sime refinery in the Netherlands, is the annual production capacity of
Darby Plantation as the largest main gateway to Europe for traceable ISCC certified crude palm oil to
producer of Certified Sustainable segregated CSPO. Starting with 66,755 tonnes.
Palm Oil (CSPO) in the world with a the first shipment of 3,500 tonnes
certified annual production capacity of traceable segregated CSPO
in July 2010, shipments to Sime
Darby Unimills have increased to
approximately 38,400 tonnes in the
year 2011.
39

Producing Value Added Products

from Oil Palm Biomass
The concept of an integrated A Bioethanol Demonstration Plant was

bio-industry for oil palm, offers installed at our Tennamaram Palm Oil
opportunities for oil palm biomass Mill in Malaysia in mid-2010 with the
to evolve from waste to wealth. objectives of studying the technical and
Today, the potential to produce fine financial feasibility of the project. The
and green chemicals from oil palm demonstration plant, with a capacity
biomass is not fully explored. The of 1.25 tonnes of wet EFB per day, is
Plantation division together with the first of its kind installed in Malaysia
Mitsui Engineering & Shipbuilding to process mainly oil palm cellulosic
Co. Ltd. and Mitsui & Co. Ltd. is residue as raw material for bioethanol
exploring the potential to produce production. Since the installation of
bioethanol from empty fruit bunches the demonstration plant, major process
(EFB) via hydrolysis-fermentation. conditions have been optimised and
production of bioethanol with 99.5%
The collaboration exploits the purity has been achieved.
hydrothermal pre-treatment and
continues with enzymatic hydrolysis
and fermentation to produce
bioethanol, C5 sugars and lignin
as its main products. Bioethanol is
an alternative bio-based chemical,
First in Malaysia to process
while C5 sugars and lignin can
be used as raw materials for the mainly oil palm cellulosic
production of biopolymer and fuel
respectively. C5 sugars can also residue as raw material for
be fermented to produce ethanol
with the utilisation of genetically
modified yeast.
bioethanol production.
40
Oil palm empty fruit bunches

Healthy Oils and Fats

Key Milestones for Enzymatic Rearrangement
2004 2005 2006 2007 2008 2009 2010 2011
Concept Generation & Development

Malaysia
Process Optimisation & Product Development

The Netherlands
Commercialisation
The Netherlands
Enzymatic Rearrangement Anti-Obesity Oils
Through a process called Enzymatic Diacylglycerol oils (DAG) are the

Rearrangement (ERA) we are latest enzymatically manufactured
working on a new generation of oils. Preliminary studies have
products that are healthier and shown that DAG oils prevent the
more environmentally friendly. accumulation of fat in the body,
which may help combat the growing
Enzymatic processes are milder, problem of obesity. We have
which means less energy is improved the production techniques
required, and cleaner, as no with minimum contaminants,
hazardous chemicals are generated i.e. glycidyl esters (GE) and
as waste and no chemical catalysts 3-monochloropropane-1,2-diol (3-
are required in the refining process. MCPD) esters, and in the process of
ERA manufactured oils are trans-fat conducting clinical and pre-clinical
free, therefore providing a healthier trials to further strengthen the
alternative to the conventional health benefits of DAG oils.
partially hydrogenated fats which
usually contain trans fats; a growing We are currently in the midst
concern when it comes to coronary of establishing a DAG pre-
heart disease. commercialisation plant in Malaysia
with the capacity of 5 tonnes/day.
Located in the Netherlands, the The pre- commercialisation plant
first commercial ERA plant was will allow us to test the scalability
commissioned in 2010 with an initial of the laboratory processes we have
production capacity of 20,000 developed and resolve any problems
tonnes per year. We target to arising from the increased scale of
increase the capacity of the plant to production. The optimisation of
60,000 tonnes per year by 2012. the pre-commercialisation plant is
expected to be completed by April
2012. We believe that the DAG oil
production technology will be ready
for commercial scaling by 2013.
41

Property Case Study
Building Sustainable
Communities
Our Sustainable Communities Framework Effectively
connect people
Effective Transport & Accessible to

& inclusive Connectivity private, public,
governance community
& voluntary
Governance Services services
Sime Darby
Active & safe
Social & Culture
Sustainable Environmental Environmentally
communities sensitive designs
Communities
Framework
Housing &
The Built Equity
Environment
Economy Inclusive and

Quality building socially unbiased
designs communities
Thriving local
economies
Sime Darby Property has Our Sustainable Communities Key sustainability features include
embedded sustainable principles in Practice • Connectivity with multiple
in its business and operations, modes of public transport, such
including the design of products. Sime Darby Vision Valley as trains, monorail and buses,
As a community developer, to ensure SDVV is a “networked
we have defined eight key Sime Darby Vision Valley (SDVV) city”.
planning dimensions that make is an integrated property • Design of strategic development
up our sustainable communities development spanning 80,000 clusters around 6 core
framework and guides the design acres across the Malaysian states areas: sports; healthcare &
of all large scale township of Selangor and Negeri Sembilan. wellness; education; tourism &
masterplans. SDVV is situated within the entertainment; aviation; green
Greater Kuala Lumpur area under technology.
the Malaysian government’s 10th • Emphasis in the master plan on
Malaysia Plan. It has a projected the creation of green spaces as
gross development value of breathing lungs for SDVV.
approximately RM 25 – 30 billion • Target to derive 20% of energy
and is expected to take 15 years to consumption by SDVV from
42 develop. renewable sources by 2020.

Property Case Study
Sime Darby Idea House: The First Carbon

Neutral Residence in Southeast Asia
Sime Darby Property’s Idea House living environment. All these are The house has since been used
was created as a carbon neutral important values that we will as a living laboratory where our
prototype building to model and incorporate progressively in our Property division’s Innovation,
assess our approach to sustainable planned products as these values Research & Development (IR&D)
housing and the built environment, are synonymous with our customers department has conducted research
a dimension under our Sustainable requirements. in the effectiveness of the solutions
Communities Framework. The installed. Data collected via
Idea House was designed to The inspiration was drawn from sensors installed throughout the
present solutions to create good the traditional Malaysian kampung house include readings on energy
architecture, sustainable design architecture which is known to be generation and consumption,
and construction efficiency. From functional and highly responsive to water collection and consumption,
this project, we have learned how the natural environment. Rather than temperature and humidity. These are
to decisively respond to design literally creating a kampung house, then transmitted to the IR&D team
challenges, develop key building we reinterpreted the qualities and for analysis. The findings are used to
systems that minimize waste solutions via a rigorous design determine the effectiveness of the
and enhance quality, effectively process that ensured the project solutions under varying conditions
manage energy consumption and brief and objectives were met. and to form the design solutions in
most importantly – create a passive launched products. The Sime Darby
design solution for a comfortable Idea House has been an effective
way of making our products
progressively more sustainable
through better design solutions,
more efficient construction methods
The inspiration was drawn and better material choices.
from the traditional Malaysian

kampung architecture which
is known to be functional and
43
highly responsive to the natural
environment.
207,290
litres of recycled rain water annually
22% 46%
less energy consumed reduction in cooling costs
compared to a conventional
bungalow
Sime Darby Property Idea House
44

Key features are: Water Management Applying the Ideas
Modern Methods of Construction
(MMC) The Idea House uses water primarily Ficus Peak, Denai Alam
sourced from a rainwater harvesting launched in May 2011, Ficus
The house is made up of system that is mostly collected Peak has enjoyed considerable
prefabricated components that from surface water run-off and roof success as one of the most sought
consist of lightweight floor- surface. The water consumed is after products in Denai Alam.
cassettes laid over a steel structural collected for the second time for The house comes with pre-
frame. The 1.2m x 4.8m floor- landscaping irrigation. wired broadband and allows the
cassettes were developed together resident to control the internal
by the IR&D and the design engineer Integrated Building environment of the house. The
to allow predesigned plumbing Management Systems spaces are modularised for
and wiring to be inserted in the efficiency with more functional
factory rather than done on-site. The house is monitored by a spaces for better interior
This allowed greater precision connectivity system with all sensors planning. The design mimics
and higher quality control. The in the house connected to a server the Idea House by arranging the
house also follows the principle of that converts data from power spaces along the width of the
Industrial, Flexible and Demountable sockets, air-conditioning systems house rather than the depth of
(IFC) construction method whereby and PV cells to an interface that the house. This allowed the
the house can be fully demounted reveals the performance of the key spaces such as the living area
for future relocation if required. house. The data is transmitted to enjoy the private open space
Through IFC, we have learned how to automatically to the IR&D team such as the garden at the back
increase construction productivity, for analysis. A purposely designed and the front of the house. Such
create possibilities for future interface developed by the IR&D simple solutions are in-line with
adjustments based on customer team, Cisco and Mesiniaga is used social sustainability dimensions
wishes and prolong the lifecycle of to provide active monitoring and for that promote Crime Prevention
the building. remote management of the house. Through Environmental Design
The system can be accessed by a (CPTED).
Energy Generation computer or mobile device anywhere
in the world. PR1MA, Bandar Ainsdale
125m2 of photovoltaic cells Projek Perumahan 1 Malaysia or
providing over 20,936kWh of Material Selection PR1MA was an initiative by the
electricity per year were installed government to provide quality
on the roof of the Idea House. This The materials are carefully selected affordable housing. Based on
is more than the 15,344kWh of to ensure they are sourced from the Idea House, the IR&D team
electricity which was recorded for a sustainable source such as IFC has developed 10 designs that
the first year of operations. This certified timber, recycled timber, cater to the specified target
means that the house is operating on quarry waste marble and fully markets that utilise a common
carbon neutral mode as it generates recyclable gypsum boards from construction platform that saves
more than 36% of energy that is Saint-Goban. Other than the material consumption, reduce
required to power the house. This sub-structure, no wet works are construction waste and provide
also means that the Idea House involved in building the house as an opportunity to tackle the
offsets the carbon emission by all components above ground are economic challenges of
3,758kg of CO2. mainly made of dry or prefabricated affordable housing with rising
components. The paint selection material costs and foreign labour
was made from a series of low VOC dependency.
(Volatile Organic Compounds) from
Nippon Paint which reduces the
emission of harmful chemicals in
the air. We have also applied a zero
adhesive policy on the materials
used in building the dry kitchen and
wall cabinets from Valcuccine. The
same was applied to the tongue and
groove timber floor installation by
Myzwood.
45

Industrial Case Study
Caterpillar Remanufacturing
Machines and Parts
Caterpillar’s remanufacturing
technology and processes, which see
our Industrial division’s customers
return a used core component in return
for remanufactured products, minimise
our products’ environmental footprint
by reducing the waste generated by
used products and the energy and raw
materials required to manufacture
new products. Rebuilds are efficient
solutions for extending the lives of
machine systems while reducing
energy consumption and carbon
emissions. These savings are primarily
from the high re-use rate of durable
components and systems.
Studies have shown that powertrain

and machine rebuilds are
approximately 50% less energy
intensive and re-use 95% or more
of the embodied virgin materials.
Similarly, engine and transmission
rebuilds are approximately 60% less
energy intensive and re-use 85% or
Rebuilds are efficient

more of the embodied virgin materials.
In 2011, our remanufactured parts

represented on average 32% of our
total engine parts sold.
solutions for extending
the lives of machine
systems while reducing
energy consumption and
carbon emissions.
Remanufactured parts as percentage of total engine parts sold in 2011, by region
Malaysia & China/

Industrial
Brunei
Australasia Singapore
Hong Kong Division’s Global
Average
Remanufactured
46
32%
Parts Sold as % of
total engine parts 41% 48% 31% 8%
sold

Motors Case Study
Promoting Cleaner Technology
Porsche Cayenne hybrid model
The products sold by our Motors division is one driven by the brands that we represent, such as BMW,
Hyundai and Hino. We have started to influence the sustainability of our customers’ purchasing
decisions by making cleaner technology available in certain markets. For example, we are currently
distributing the first hybrid trucks in New Zealand from Hino, which exceeds Euro 5 emissions
regulations and results in very low emissions and high fuel efficiency. We have also introduced Smith
Electric and i MiEV vehicles into Hong Kong and Macau, and distributing the Porsche Cayenne and
Panamera Hybrid models in Malaysia.
47
Lithium ion battery used in Porsche Cayenne

Stakeholder
Engagement
Strategic Link
Corporate Mission
Subscribe to good
corporate governance
and high ethical
values
Sustainability Goals
• Develop
sustainability
Thought Leadership
• Effective
sustainability
reporting Summary of our Key Stakeholders
We believe that proactive Externally, each of the divisions Stakeholder engagement also
stakeholder engagement is not just engages regularly with customers provides us with a platform to
about reporting to key stakeholders and business partners on our form strategic partnerships to
on our practices and performance, performance, such as Industrial address complex issues. Across the
but is also a key tool to assess division’s engagements with Group, we participate on various
performance. Internally, we Caterpillar and Motors division’s platforms to address both industry
conduct Group-wide engagements engagements with BMW. specific issues, such as sustainable
such as the annual Global Employee palm oil and patient care, and
Engagement Survey to understand Stakeholder engagement is crucial wider themes, such as progressing
employees’ views on a range of to manage risks to our business. Sustainable Development in
issues that include leadership This is particularly relevant to the Malaysia. We are also members of
attributes, rewards, talent Plantation division, where the global networks such as the World
development and retention. We potential impacts of plantation Business Council for Sustainable
also conduct an annual Internal operations on local communities Development (WBCSD) and a
Customer Satisfaction Survey present in our concession areas are signatory of the United Nations
that assesses the level of service managed via a robust community Global Compact (UNGC).
48 provided by functional departments
to operational units.
engagement framework that ensures
“Free, Prior and Informed Consent”
is obtained from these communities
before work begins.

Summary of Key Stakeholders Engaged and Key Sustainability Issues Discussed
Sime Darby
Healthcare
Plantation
Industrial
Energy &
Property
Utilities
Motors
Group
Key Stakeholder Groups
Business partners
Customers
Employees
Industry associations
Government and regulators
Non-governmental organisations
Investors
Local communities
Key Sustainability Topics Discussed

Talent development
Ethics and corporate values
Health and safety
Product and service quality
Biodiversity
Climate change
Labour rights
Social and community impacts
Product traceability
Research and development
Accountability and transparency
Corporate governance
Nation building
Sustainability in Corporate Malaysia
Sustainability risks and opportunities
Sustainability certification
Good agricultural practices
Smallholder development
Supply chain management
Community safety
Patient care
49

Group Case Study
Connecting with Our People
Global Employee The engagement score, which The Townhalls present opportunities
Engagement Survey measures employees’ overall for the President & Group
emotional and intellectual Chief Executive to discuss the
We conduct a Global Employee commitment to the Group, Group’s overall performance, the
Engagement Survey (GEES), to increased to 58% in 2011 compared performance of our individual
help us better understand the to 55% in 2010. There were also business divisions, and share future
drivers that motivate and engage marginal increases in engagement plans. In selected Townhalls, the
our employees. The GEES is behaviours related to employees leaders of the various divisions also
also used to provide insights consistently saying positive things address our employees.
for further action to increase about the Group, employees
engagement levels, which is a wanting to stay with the Group and The ‘Question & Answer’ session
factor contributing to the Group’s employees striving to achieve above is an integral part of any Townhall.
success. and beyond what is expected in Questions for the executive
their daily roles. leadership, which may be on any
In the financial year 2010/2011, subject, are received through
the GEES covered 26,557 While engagement scores increased numerous channels before the
employees across all 6 business in general, the GEES highlighted event, and on the day of the event
divisions and assessed work the need to focus on improving from the floor, on question sheets
drivers that fell within the the engagement of the executive provided and through the webcast.
following categories: category of employees that have Townhalls are also webcast to
been in the Group for less than 5 over 50 locations to facilitate the
Work years. participation of our employees

spread across the world. For those
People Townhalls unable to attend, a recording of the
Townhall is uploaded onto the Sime
Opportunities Our Group Townhalls are the
foremost channel of two-way
Darby Enterprise Portal and digital
video copies are distributed across
Total Rewards communication between the
employees and the executive
the Group.
Company Practices leadership of the company. It is

typically held twice a financial year,
After every Townhall, feedback is
obtained from the employees on the
Quality of Life after the mid-year and year-end
financial results.
content, usefulness and organisation
of the event. The feedback is
shared with the relevant parties to
ensure future Townhalls serve the
employees better.
50

Group Case Study Group Case Study
The President Progressing

and Group Chief Sustainability in
Executive’s Employee Corporate Malaysia
Engagement
Roadshow
The President and Group Chief Executive’s We have been actively involved in the evolution of
(PGCE) Employee Engagement Roadshows sustainability in Corporate Malaysia . In 2011, we
started in June 2011 and consist of a series of co-founded and managed the secretariat for the
roadshows where the PGCE visits offices and Corporate Sustainability Circle, a government-linked
operations across the Group to meet and speak company (GLC) led business sustainability group
with employees. As at end-December 2011, formed to harmonise the initiatives taken by the GLCs
roadshows had been organised in Malaysia, to manage climate change and sustainability impacts.
Thailand and Australia, and will be extended in
2012 to other countries of operations. We also held the Presidency of the Business Council
for Sustainability and Responsibility Malaysia
The roadshows are to enable the PGCE to (BCSRM), a national body of business leaders
share the Group’s performance and future committed to the development and promotion of
aspirations, and address queries employees responsible and sustainable practices in line with the
may have. The roadshows also aim to get global sustainability agenda. The BCSRM is a regional
employees, regardless of the division they work network partner of the World Business Council for
in, or their number of years of service, to rally Sustainable Development (WBCSD).
behind the Sime Darby brand.
Where a particular location has operations

of several divisions, roadshows present an
opportunity to bring together employees
from various divisions and encourages intra-
divisional interaction. Our rationale is simple:
there is more to be achieved both inside and
outside the office with a united workforce.
Our rationale is simple:

There is more to be
achieved both inside and
outside the office with a
united workforce.
51

Plantation Case Study Plantation Case Study
Roundtable Progressing the

on Sustainable Responsible Sourcing
Palm Oil of Palm Oil
As a co-founding member of the Achieving a healthy market for provides for a gradual transition
Roundtable on Sustainable Palm certified sustainable palm oil towards a target to procure 100%
Oil (RSPO), a multi-stakeholder requires supply and demand to be in segregated sustainable palm oil
initiative that aims to promote equilibrium. This responsibility falls products. This approach allows
the growth and use of sustainable on all the players in the sustainable existing supply chains to remain
palm oil, we continuously seek palm oil supply chain. intact and helps keep logistical
to advance the production, costs at a viable commercial level,
procurement and use of sustainable Sime Darby Unimills, our refinery while charting continued progress
palm oil products through the in the Netherlands, is actively towards the 100% segregated
development, implementation engaged with our customers to help target. This policy is largely
and verification of credible global them switch to sustainable palm oil acknowledged as a best practice
sustainable standards and the based specialty products. We are model for retailers in the German
engagement of stakeholders along encouraged to see that increasingly speaking market.
the supply chain. RSPO members more manufacturers understand the
include environmental and social importance of sustainability in the In February 2011, we also co-
NGOs, banks and investors, palm oil supply chain. This has led hosted a seminar on sourcing
growers, processors, manufacturers to the start of a fundamental shift in sustainable palm oil with the Food
and retailers of palm oil products. thinking from, “why is responsible Valley Foundation, at the World
sourcing important?” to “how can I Wildlife Fund for Nature’s (WWF)
We represent the Malaysian effectively implement responsible headquarters in the Netherlands.
Palm Oil Association on the RSPO sourcing?” The seminar focused on the steps
Executive Board and are involved in required to ensure the use of
various RSPO working groups, such We help guide manufacturers certified sustainable palm oil
as the Greenhouse Gas Working implement the Roundtable on throughout the entire supply chain,
Group tasked with addressing Sustainable Palm Oil (RSPO) chain and was a valuable platform for the
climate change impacts from the of custody standards in their industry to share success stories on
palm oil industry, and the Peatland factories, and to reformulate their implementing responsible sourcing
Working Group that aims to products to RSPO certified palm oil policies. Attendees comprised
develop good practice guidelines based alternatives. This includes representatives from the agrifood
for the management of existing successfully co-developing a industry, food processors, the
plantations on peatlands. sustainable palm oil policy with one Dutch government and Non-
of the leading retailers in Germany, governmental organisations, which
in February 2011. The policy gives included Ahold, FrieslandCampina
clear guidance to purchasers and (Dutch Lady), as well as the Dutch
suppliers to start buying sustainable Product Board Margarine, Fats and
palm oil based materials, and Oils (MVO).
52

Engaging Local Communities
We actively engage
community leaders and the
community itself before any
development commences in
our plantation estates.
Sime Darby Liberian estate
In line with our commitment to embedded within the Plantation development of land held
the Roundtable on Sustainable division’s policies, management by local communities under
Palm Oil’s (RSPO) Principles and systems and standard operating native customary rights. These
Criteria and our plans to be 100% procedures. are followed by a series of
RSPO certified, we have developed engagement sessions where
a robust community engagement In practice, this means that we compensation plans are actively
framework comprising of Social actively engage the community communicated to land owners
Impact Assessments, annual leaders and the community itself who choose to participate in
stakeholder consultations and RSPO before any development commences these development schemes,
certification audits. This framework in our plantation estates. Our action where relevant.
ensures that we obtain “Free, Prior plan for specific areas is shared
and Informed Consent” (FPIC) from in specially convened forums to We engage independent
communities potentially impacted obtain views and concerns before assessors to review our FPIC
by our operations, and it has been implementation. Specially designed processes periodically to ensure
awareness programmes are also that our practices continuously 53
carried out in our concession improve and remain effective.
areas on the option and processes
related to the compensation and

A Special Focus on Community

Issues in Indonesia and Liberia
Indonesia
Overview of the Indonesian

Government’s Smallholder Scheme
In September 2011, there were

claims made against our Plantation
division on alleged land grabs and Smallholder schemes in Indonesia started in the 1970s as a
failure to address the concerns of mechanism to incentivise land development and re-distribute the
local communities within 2 of our population under the Indonesian government’s transmigration
oil palm estates in Indonesia and programme. The transmigration programme aims to alleviate
Liberia. This special focus aims poverty and the overpopulation of the central Indonesian islands.
to provide stakeholders with an This is achieved by providing land to settlers, in provinces on less
understanding of the key issues in densely populated Indonesian islands, to generate income and new
both these areas, and how we have opportunities.
been and are continuing to work
together with local communities In general, the Indonesian government adopted a nucleus-plasma
to resolve these issues. We model for smallholder schemes, where plantation companies
respect the rule of law in all the developed smallholder oil palm plots (also known as Plasma) around
countries in which we operate, and the companies’ own nucleus plantations. Indonesian government
firmly committed to all standards policy requires 20% of oil palm plantations to be developed as
adopted, such as the Roundtable smallholder plots (i.e. a development ratio of 20:80 between
on Sustainable Palm Oil. plasma and nucleus).
The Perkebunan Inti Rakyat Lokal (PIR LOKAL) started in 1978,

and was the first in the series of PIR schemes that were adopted
until the mid-1990s. Under the PIR series of schemes, smallholders
were typically allocated 2 hectares of land for the cultivation of
oil palm and 1 hectare of land for the cultivation of food crops.
The 2 hectare blocks of land used for the cultivation of oil palm
are developed by plantation companies and transferred to the
smallholders to manage. PIR schemes also often required plantation
companies to develop infrastructure such as roads, schools and
medical facilities.
By 1995, a new type of smallholder scheme, called the Koperasi

Kredit Primer Anggota (KKPA), largely replaced the PIR schemes
for smallholder development. KKPA schemes are essentially
cooperative schemes, where land for the development of
smallholder oil palm plots are held by cooperatives and individual
smallholders are allocated share certificates for 2 hectares, instead
of actual blocks of land. Under the KKPA schemes, plantation
companies develop and manage these smallholder areas for a
management fee. Smallholders receive income via dividends issued
from the profits made by the cooperative and wages earned, if
employed by the plantation company.
54

We work together
with local communities
to resolve issues
The allegations made against our The change in smallholder schemes We obtain consent from
Indonesian operations centre from PIR TRANS to Pola Perkebunan participating families via a process
on our oil palm concession in Besar Swasta Kemitraan (Plasma called socialisation, where the
Sanggau district, West Kalimantan, Scheme) for our operations in provisions for participating in the
Indonesia. Originally a government Sanggau has been widely and Plasma scheme are clearly and
held and operated concession, we frequently communicated to transparently communicated. The
acquired control in April 1996 under the local communities by both smallholder land allocation is based
our subsidiary PT Mitral Austral Indonesian government officials on a regulatory partnership ratio
Sejahtera (PT MAS). Since acquiring and ourselves. This includes of 7.5:2 hectares and the entire
control, we have actively engaged highlighting the differences in the process of obtaining agreements
members of the local community elements to be provided under the for the rights to develop land
which have raised concerns over: Plasma scheme. We continue to is witnessed by local officials,
engage and clarify these points with documented, and notarised where
1. The development of members of the local communities required. This includes payment
infrastructure that was promised which are still unsure of what the of compensation to families for
by the original developer of the changes entail. existing crops and trees in the area.
concession. Where possible, we also help to
2. Land rights and tenure Although we are not obliged to engage the local authorities on the
agreements. provide infrastructure, we have issuance of land titles.
constructed housing, children’s
The issues related to promises on creches, clinics and religious houses Since acquiring control of the
the provision of infrastructure for our workers, and for members concession in 1996, we have worked
stem largely from a change in of the local community. We have tirelessly to resolve all issues raised
the Indonesian smallholder also developed key infrastructure, by members of the local community
development policy in the district. such as roads and bridges, which and will continue to do so. In
When first started, smallholder improved access in and around the early 2011, we commissioned an
development in Sanggau fell under concession area, for the mutual independent external consultant,
the Indonesian Government’s benefit of both the company and Lingkar Komunitas Sawit, to
Perkebunan Inti Rakyat local communities. engage local communities, assess
Transmigrasi (PIR TRANS) scheme, residual issues and provide
which included the construction The concerns regarding land recommendations on how to resolve
of infrastructure such as roads, rights and tenure agreements are these issues, as well as improve
bridges and schools as one of the more complex and mainly arise our approach to obtain Free, Prior
elements to be provided under the from the misunderstanding of the and Informed Consent (FPIC). The
scheme. Prior to our acquisition in Indonesian government’s land-use key findings of this assessment will
April 1996, the Local Authorities licensing terms and processes. be used to refine our approach of
of Sanggau district changed their A key point to note is that the working with local communities
smallholder development policy choice to participate in the PT on amicable resolutions for all the
to replace PIR TRANS schemes MAS Plasma scheme is voluntary. issues raised.
with Pola Perkebunan Besar Out of the 3000 families in the
Swasta Kemitraan schemes (Plasma area surrounding our operations,
scheme). This is a variation of the 1452 families have volunteered to
Koperasi Kredit Primer Anggota participate in the Plasma scheme.
(KKPA) cooperative schemes, which We do not develop areas where
only requires the development of voluntary consent from the local
plots used for smallholder palm oil communities is not obtained.
cultivation. 55

A Special Focus on Community Issues

in Indonesia and Liberia (cont’d)
Liberia As agreed, an independent party in Liberia. The independent

was engaged in March 2012 assessment commissioned for our
In September 2011, a complaint to conduct the independent FPIC process and our continuing
was lodged with the Roundtable assessment of our FPIC process and engagements with the local
on Sustainable Palm Oil (RSPO) procedures. Preliminary findings communities and government
against our Plantation division, of the assessment were shared agencies will provide a platform for
by the Forest Peoples Programme during a trilateral meeting held in us to refine our approach in Liberia.
(FPP) and the Green Advocates May 2012 between the affected
(GA) of Liberia, an international communities, Land Commission This requirement for a new
and Liberian non-governmental of Liberia and ourselves. Whilst approach is something that we have
organisation, respectively. The waiting for the independent always recognised. Towards this
complaint alleges that in our assessment to be completed, we end in June 2011, we commissioned
Matambo estate, local farmers have started work to resolve the an independent baseline social
were evicted from their customary key issues discussed during the and environmental assessment for
land without their consent, which trilateral meeting on: the 220 000 hectare concession in
is a violation of RSPO principles Liberia, to better understand the
and criteria. Food security conditions on the ground, identify
areas for further study and feed
Upon receipt of the complaint,
Water into macro development plans. This
we ceased all operations in Protection of sacred sites is outside the norm, where social
the affected area and initiated Grievance procedures and environmental assessments
measures to resolve the dispute Baseline population census are usually conducted on parcels
amicably. We met the affected of land earmarked for forthcoming
communities in December Land demarcation development.
2011 and it was agreed that an
independent assessment would be Liberia presents a very new We are firmly committed to be
commissioned to review our Free, environment for us to operate in. a responsible partner for the
Prior and Informed Consent (FPIC) Although we aim to leverage on development of a sustainable palm
process. The RSPO complaint was our vast experiences in Malaysia oil industry in Liberia.
consequently withdrawn by FPP and Indonesia, we recognise that
and GA in January 2012. our approach has to be adapted
to suit local conditions and needs
56

Healthcare Case Study
Improving Patient Care

Our Healthcare division’s The S.T.E.P. AWARD programme All our staff, including senior
commitment towards a culture of integrates classroom coaching management and department
customer-centric service excellence and role playing sessions where heads, have the accountability
and customer engagement is staff are required to demonstrate and ownership to adopt these
inculcated through our ExCITE the Healthcare ON-brand AWARD standards of behaviour into their
values and ON-brand AWARD behaviour for general processes as daily work culture. Leaders do roll
behaviour guidelines. well as department or job specific calls and briefings to effectively
processes. Staff are coached to communicate and recognise the
In 2011, as part of the Healthcare display professional behaviour and ON-brand behaviour as well as to
division’s Service Transformation use selected key words, phrases, track and audit performances to
initiative, the Standards of facial expressions and body sustain this cultural transformation
Behaviour and S.T.E.P. AWARD language for various scenarios. process. The Customer Satisfaction
(Service Transformation for While our team at Sime Darby Index (CSI) and Customer Loyalty
Excellent Performance) was Medical Centre Ara Damansara was indicators are surveyed on a daily
introduced to ensure consistent given the priority to complete the basis, reported on a monthly basis
delivery of our unique “point of programme by January 2012, key and captured as a key scorecard
experience” and engagement frontliners and department heads in item for executives and above.
with customers. It provides a Sime Darby Medical Centre Subang In the 2011 financial year, an
systematic platform for every Jaya and Sime Darby Specialist analysis based on 33,832 customers
employee to transform their Centre Megah are also progressing feedback indicated a high CSI score
values into actionable behaviours with the express programme. of 87.2 (previous year 86.3) whilst
by polishing and enhancing their Preparations are also being made an average 94% (previous year 93%)
skills in providing excellent service to groom the team for the opening indicated their willingness to return
through desired key behaviours of Sime Darby Medical Centre for future medical needs and to
(i.e. courteous, caring and ParkCity in 2013. recommend our services to others.
compassionate).
ON-Brand AWARD Behaviours
Always focus on customer

Customers FIRST! Politely give way for others
at the entrance/exit of lifts & door ways.
Ex.C.I.T.E. Values
Look up/out to offer help & way-finding.
Warmly greet with a smile

Courteously greet with eye contact, smile & Excel in Innovation for Ethical in
nod, “Good Morning, Sir.” everything Care continual Teamwork our practice
Answer phone calls within 3 rings. Greet with a we do & compassion improvement & respect for
smile, identify department & self. from the heart one another
Act before being asked

Anticipate customers’ needs and offer help,
“How may I help you, Sir?” A.W.A.R.D. Behaviours
Put customers at ease by helping them
understand what is going on at the moment.
Reassure, explain well & check for Always Act before Demonstrate
understanding focus on the being asked professionalism
Warmly greet Reassure,
Manage customer’s expectation on waiting customer at all times
with a smile explain &
time. Give regular feedback on the progress.
check for
Reconfirm customer’s request, “Mr___, may I
understanding
57
reconfirm your request for...”.
Demonstrate professionalism at all times

Maintain a clean & well-groomed appearance.
Keep work areas clean & well-organised.
Use the 10’ & 6’ to warmly engage others &
keep surroundings safe and clean.

Sustainability
Risk Management
Strategic Link
Corporate Mission
Subscribe to good
corporate governance We believe that our ability to Broadly, the key sources of
and high ethical manage emerging sustainability sustainability-related risks
values issues effectively, lies in identified by the Group as a whole
addressing the risks posed by fall within the following categories:
sustainability as part of our core
Sustainability Goals business practices. In 2011, we • Sustainability values
conducted an enterprise risk • Sustainability certification
Effectively manage assessment review that involved • Health and safety
sustainability risks both a review of the enterprise • Social impacts
risk register and risk management • Biodiversity
framework across the Group. As • Environmental management
part of the review, we incorporated • Terrorism and malicious acts
sustainability-related risks into • Quality management
our enterprise risk management • Natural events
framework, which falls under the
purview of the Main Board Risk We are now conducting detailed
Management Committee. risk assessments, implementing
appropriate mitigating actions and
monitoring the effectiveness of
controls.
58

Sime Darby Industrial Singaporean facility
59

Quality
Management
Strategic Link
Corporate Mission
Deliver superior
financial returns
To stay relevant and competitive in the global arena we
through operational have embedded Continuous Improvement (CI) throughout
excellence and our business units and work culture to enhance operational
efficiency. We leverage on Lean Six Sigma methodology, in
high performance particular. For the financial year 2010/2011 (1st July 2010 – 30th
standards June 2011) we completed 86 projects across the Group, and
achieved total savings valued at RM 14,546,000. The majority of
Sustainability Goals these projects and savings were from our Plantation division.
Instill a performance We have also adopted external certification systems to support

culture our operational efficiency and ensure continuous improvement
of our systems and processes, where relevant to the business.
Total Number of Lean Six Sigma Projects for Total Savings Achieved for Financial Year
Financial Year 2010/2011 by Divisions 2010/2011 by Divisions
3.49%
Healthcare
13.19%
Motors
17.44%
Industrial
2.24%
54.65% Industrial
Plantation
6.17%
Healthcare
86 RM14.546
Projects million
78.39%
Plantation
60 24.42%
Motors

Finding Optimising the

Alternative Fuel Transesterification
Sources for Process for Biodiesel
Refineries Production
Sime Darby Jomalina, a Malaysian
edible oils and fats refinery in our
Plantation division, conducted a Lean
Six Sigma (LSS) project aimed to
reduce the operating cost of the high
pressure boiler by 45%, in the financial
year 2010/2011 (1st July 2010 – 30th
June 2011). This project stemmed from
the refinery’s strategic objective of
being the lowest cost producer.
It was identified that the greatest

potential to achieve this target was
to change the boiler fuel source
from Medium Fuel Oil (MFO) to an
alternative fuel. Several alternatives
were considered, but in the end
natural gas was chosen due to its price,
volume of usage, safety, stability
during operation and better return on
investment.
Approximately RM950,000 was

invested to facilitate the changes
from MFO to natural gas. By the
end of the project in May 2011, the
operating cost for the high pressure
In 2009, we found that the median percentage yield for methyl
boiler exceeded original targets with a
ester (biodiesel) from our Malaysian biodiesel refinery’s
reduction of 58%. Between June 2010
transesterification process was 3.9% below the design yield. This
and June 2011, the project achieved a
variance from the design yield meant that more Refined Bleached
total gross savings of RM580,443.
and Deodorised Palm Oil (RBDPO) was needed in the production
process and represented an additional estimated cost of RM2.3
million, given the escalating price of RBDPO.
In the financial year 2010/2011 (1st July 2010 – 30th June 2011),
we conducted a Lean Six Sigma project focused on improving
the citric acid dosing rate, the centrifugal separator and the
blending process of catalyst to ensure the optimum set up for the
transesterification process in the refinery. This project achieved
savings of RM3.66 million by increasing the median percentage
yield for methyl ester (biodiesel) from 92.8% to 96.9%.
61

Healthcare Case Study
Improving prostate cancer patient

pathway by improving CT Simulation
and Tomotherapy treatment planning
40,000 Malaysians are diagnosed Unnecessary delays in completing CT

with cancer each year. Our simulations, result in patients feeling
Healthcare division’s Sime Darby distressed and being unprepared for
Medical Centre Subang Jaya, the overall Tomotherapy treatment
provides the latest treatment planning process. Delays also affect
modalities to enhance patient the hospital’s operations, service
outcomes and care. We strongly standards and productivity of staff
believe that by employing both and doctors.
science and compassion, we offer
new hope for our patients. Monitored results from January to
June 2011 showed that we have
We applied Lean Six Sigma successfully improved our ability
methodology to improve prostate to complete treatment planning
cancer patient pathways, by for patients within 1 hour, from
improving the turnaround time 63% to 92%. To ensure improved
for CT simulations and overall performance is sustained over time,
Tomotherapy treatment planning. a control plan has been developed,
which uses improved process flow
and a tracking system to support
performance monitoring. This
project has been replicated for
other types of cancers which utilise
CT Simulations and Tomotherapy
treatment planning.
62

Awards Received in 2011
Category Division Awards Received
Quality Plantation Occupational and Safety Excellence Award (Gold Class II) 2010
Anugerah Industri Sawit Malaysia 2010 Best Estate to West Estate in
Carey Island
Property Gold Award (Property Development) Putra Brand Awards 2011
BCI Asia Top 10 Malaysian Developers Award 2011
Gold Award - Readers’ Digest Trusted Brands 2011
SC Cheah Choice Awards 2011 - Best Township Developer category
Motors 2011 FUSO Award for Quick Product Quality Reporting – for Excellent
Dedication to Timely Product Quality Reporting (Hangzhou Sime Darby
Motor Sales and Services Co. Ltd.)
2011 FUSO Award for Service Training – for Excellent Execution of Service
Training (Sime Darby Motor Services Ltd.)
2010 Outstanding Apprentice And Trainee Award
(Hangzhou Sime Darby Motor Sales and Services Co. Ltd.)
Malaysian Productivity Corporation Northern Region ICC Convention 3
Gold Medals Award (INOKOM Corporation Sdn. Bhd.)
2011 Fleet Conquest (Universal Cars Ltd.)
Industrial PETRONAS Carigali Outstanding Vendor Awards
Healthcare Reader’s Digest Trusted Brands Gold Award 2011
Malaysia’s Business Ethics Excellence Recognition Award 2010-2011
Sustainability Property Platinum Building and Construction Authority (BCA)
Green Mark Award - BCA Awards 2011 (Idea House)
BCI FuturArc Green Leadership Awards 2011
Gold Rating - Green Building Index 2011 (Idea House)
Supply Chain/ Industrial China Construction Machinery Association Best Management Training
Dealership Organisation Award
Motors BMW Dealer Awards 2010: Best Overall CSI – Platinum (Auto Bavaria)
BMW Dealer Awards 2010: Platinum Category (Auto Bavaria)
BMW Dealer Awards 2010: Gold Category (Auto Bavaria)
BMW Vision Club Awards 2010: Platinum Category (Auto Bavaria)
Top Selling Dealer 2010 1st Runner-up 2010 Dealer Awards Greater China
(Shanghai Sime Darby Motor Commerce Co. Ltd.)
Global Distributor Of The Year 2010 Award
(Hyundai -Sime Darby Motors Malaysia)
After Sales Promotion Programme – 2010 Spirit Special Award for North
Asia Region (Sime Darby Motor Services Ltd. )
2nd Runner-up for Outstanding Sales Performance as Lamborghini Sales
Consultant 2010 (Hangzhou Sime Darby Motor Sales and Services Co.,Ltd.) 63

Respecting Our Environment
Barn Owl used for integrated pest management

in Sime Darby Plantation estates
64

“Respect for the
Environment
means proactively
addressing
environmental We believe that the
challenges, promoting importance of major

environmental issues such
environmental as climate change and

biodiversity loss requires an
responsibility, and approach to environmental

management that goes beyond
encouraging the regulatory compliance. In

this section of the report, we
development and use

provide an overview of our key
activities and performance
in the following areas of the
of environmentally- environmental dimension of
sustainability:
friendly designs and
• Proactive Environmental
technologies.” Management Systems
• Energy and Climate Change
• Operational Eco-Efficiency
• Biodiversity Management
65

Proactive Environmental
Management Systems
Strategic Link
Corporate Mission
Deliver superior
financial returns
We have developed a The emergence of major
through operational comprehensive environmental environmental issues beyond the
excellence and management framework scope of current environmental
across the Group, comprising legislation and regulations have
high performance policies, operating procedures, resulted in a need for us to adapt
standards performance monitoring our management system to address
and reporting, audits and these issues. Incorporating these
Sustainability Goals management reviews, to comply issues into our core management
with environmental regulations system ensures that we effectively
Instill a performance in the various countries in which mitigate associated risks and
culture we operate. Traditionally, benefit from opportunities
environmental management presented, in a structured manner.
frameworks are developed to deal These risks and opportunities
with conventional legislated and are particularly material to our
regulated environmental aspects, Plantation division, where the
such as emissions to air, water, development of good agricultural
land and the management of practices has provided both
hazardous wastes. environmental protection, as well
as, operational benefits.
66
Beneficial plants used for integrated pest management in Sime Darby Plantation estates

Pioneering Good
Agricultural Practices
Our Plantation division has a Integrated Pest Management Alternatives to Paraquat

rich agricultural heritage that
stretches back over a century. Major sources of pest and disease We adopted alternatives to
This heritage includes a strong in the palm oil industry in Southeast paraquat and stopped the use of
research and development culture Asia are leaf eating caterpillars, paraquat in all our operations in
that continually drives to improve rhinocerous beetles, ganoderma the early 2000’s. Although not a
our performance while reducing basal stem rot and rats. Integrated banned substance, we took this
the environmental impacts of our Pest Management (IPM) is the initiative due to the potentially
operations. Summarised below combined use of holistic and harmful effects of paraquat on the
are a selection of the agricultural compatible methods of pest environment and high health and
practices synonymous with and disease control that include safety risks, if used inappropriately.
sustainable palm oil that we helped ecological, cultural, physical,
to develop and pioneer. biological and chemical controls. Soil and Water Management
IPM has reduced the use of chemical
Zero Burning Replanting Technique pesticides and associated negative We plant leguminous cover crops
environmental and food-chain (LCC) during land preparation
First introduced commercially impacts. for replanting to assist in soil
in 1989 by Sime Darby, the zero conservation and moisture
burning technique has since Selected IPM techniques include: retention. LCC’s reduce soil erosion
been adopted as an industry best 1. The use of viruses, Cordyceps by surface run-off during periods of
practice standard. Zero burning fungus and natural predators, rainfall, improve soil aggregation
is the practice of felling and such as asopin, to control nettle and increase biological activity in
shredding old stands of old oil caterpillars. the soil. Vegetation is also planted
palms stands before leaving the 2. Planting of thick leguminous along river banks and on slopes
palms to decompose in situ. This cover over replants to hinder above 25 degrees to minimise
technique at replanting helps rhinocerous beetle breeding and surface run-off and soil erosion.
preserve and restore the chemical activities.
balance and fertility of the soil by 3. Pheromone trapping of Our water management practices
returning organic matter to it and rhinocerous beetles. aim to minimise the impact of
reduces associated greenhouse 4. Removal of boles of old oil palm droughts and floods, optimise
gas emissions and the risk of stands, and the shredding of utilisation of rainwater and
uncontrolled forest fires. boles, trunks and crowns for the surface water, maximise utilisation
control of ganoderma basal stem of effluents from the palm oil
Sime Darby was admitted into rot. mills, and minimise the impact of
the United Nations Environment 5. The establishment of barn owl saltwater incursion and acidity
Programme’s (UNEP) Global nucleus population in the oil levels. We capture rainwater in
500 Roll of Honour for palm estates, at an intensity silt pits or close-ended trenches
Environmental Achievement, of 1 nesting box for every 10 to conserve use of surface water
during the Rio Earth Summit in hectares, to control rats. sources.
1992 for the development and
commercialisation of the zero
burning replanting technique.
67

Energy and
Climate Change
Strategic Link
Corporate Mission
Committed to
developing a
2009 Baseline Carbon Inventory The Greenhouse Gas Protocol
winning portfolio of standard also stipulates that biogenic
sustainable business In 2011, we took the first step emissions, which are emissions
towards managing climate change related to the combustion of biomass
Sustainability Goals impacts by completing a baseline and biofuels, should be reported
carbon inventory, which establishes separately. Energy produced from
Leverage on a platform for us to monitor our the combustion of biomass and
sustainability to carbon emissions on an annual biofuels returns recently absorbed
basis. The 2009 calendar year was carbon to the atmosphere, which
create value selected as the baseline year and is considered a zero net release of
carbon inventory was prepared in carbon. In 2009, 67% of our energy
accordance with the Greenhouse consumption was derived from
Gas Protocol standard. The 2009 biomass and biofuels (i.e. renewable
baseline carbon inventory covered sources). As a result, the biogenic
all six of our business divisions in emissions were 7% more than
eight key countries of operations; total emissions from fossil fuels,
Malaysia, Indonesia, Singapore, purchased electricity and steam (i.e.
Thailand, Australia, China, Hong scope 1 and 2 emissions) for the year.
Kong and the Netherlands. This We use biomass predominantly to
constitutes over 90% of our global fuel boilers in palm oil mills.
operations and includes emissions
from 463 sites. Approach to Reducing Carbon
Emissions
The results of our baseline carbon
inventory showed that the majority We are now identifying strategic
of emissions come from our reduction opportunities and in the
Plantation division (82.58% of total process of setting carbon emission
emissions) and that the largest reduction targets for each division
source of emissions is from the and the Group as a whole. We aim
treatment of Palm Oil Mill Effluent to complete the exercise of setting
(57.74% of total emissions). The carbon emission reduction targets in
second largest source of emission 2012.
is from the generation of electricity
(15.14% of total emissions) and From the results of the 2009 baseline
is largely attributed by our power carbon inventory, we envisage that
68 business in Thailand, which supplies the greatest potential for emission
baseload electricity and steam to a reduction will be from the avoidance
neighbouring industrial estate. or capture of methane produced
during the treatment of Palm Oil Mill

Carbon Emissions by Division for Carbon Emissions by Scope for
2009 (Baseline Year)1 2009 (Baseline Year)1
0.37% 5.77%
14.23% Healthcare Scope 2
Energy & Utilities
0.55% 82.58%
Motors 94.23%
Plantation Scope 1
1.12%
Industrial
1.15%
Property
3,155,861 3,155,861
t CO2-e t CO2 -e
Carbon Emissions by Country for Biogenic vs Scope 1 & 2 emissions

Effluent. The potential for 2009 (Baseline Year)1 for 2009 (Baseline Year)1
reduction of emissions from
electricity generation and 54.35% tonnes CO2-e
boilers, the second and third Malaysia 27.86%
largest source of emission, Indonesia 3,450,000 -
is expected to be relatively 3,387,529
3,400,000 -
limited and will mainly centre
3,350,000 -
on efficiency measures which
have not been implemented. 3,300,000 -
3,155,861
We have already adopted t CO2 -e 3,250,000 -
highly efficient technology
3,200,000 - 3,155,861
in the form of co-generation
plants for power generation 3,150,000 -
and biomass boilers for palm 3,100,000 -
14.24%
oil mills. Although relatively Thailand
3,050,000 -
low, purchased electricity is
0.31%
a common source of emission Singapore
1.94% 3,000,000 -
The Netherlands
across the Group and lies 0.54%
Emissions from Biogenic carbon
0.77% fossil fuel, emissions
within the top 6 emission China &
purchased
Australia
sources for all divisions. Hong Kong
electricity and
Collectively, electricity steam (Scope 1
and 2)
consumption for both process
related activities and buildings
contributes 5.64% of total Top 5 Emissions Sources for 2009 (Baseline Year1)
emissions. This commonality
provides the potential to scale 2,000 - 1,822.22
tonnes CO2-e (‘000)
up reduction initiatives in this

1,500 -
area across the Group.
1,000 - 477.70
Whilst our holistic carbon 349.06 205.47

500 - 209.33
strategy is being developed, 92.08
0 -
there are various pilot carbon Effluent Electricity Boilers Synthetic Purchased Others
emission reduction initiatives treatment generation fertilisers electricity
already being implemented (process) for process
across the Group. These
efforts have been mainly 1. The 2009 baseline carbon inventory was prepared in accordance with the Greenhouse
69
focused in our Plantation Gas Protocol Standard. Carbon emissions calculations do not include emissions from land-
division, as our largest use conversion and carbon sequestration from growth of palm oil trees.
emitter, and centred around
energy efficiency for other
divisions.
Group Case Study Plantation Case Study
Building Piloting Carbon

Related Energy Emission Reduction
Efficiency Initiatives
Initiatives
In 2009, carbon emission from As the largest contributor of Composting
purchased electricity for buildings carbon emission within the
totalled 85,899 tonnes of CO2e Group, our Plantation division has Composting helps to avoid the
(2.72% of total emissions). been the most active in piloting generation of methane from the
Broadly, we have three categories emission reduction initiatives. treatment of Palm Oil Mill Effluent in
of buildings within the Group Summarised below is a selection lagoons, by using it as a feed source
comprising industrial facilities, of the initiatives which have been for the production of compost.
commercial offices and, hospitality implemented. Composting is a process of reducing
and leisure centres. Energy audits waste and creating value-added
conducted in 2011 highlighted that Peatland Planting Policy products from mill by-products,
the main consumer of electricity which are mainly Empty Fruit
within our buildings was from Peatland contains significant Bunches and Palm Oil Mill Effluent,
heating, ventilation and cooling amounts of organic matter and through the process of aerobic
(HVAC) systems (approximately the development of peatland has decomposition.
50% on average), followed by shown to contribute significantly
lighting (approximately 20% on to anthropogenic source of As of 31st December 2011, we have
average). carbon emission. Our Sustainable 5 composting plants in operation.
Plantation Management System We have plans to develop 17 more
In 2011, we conducted 3 pilot dictates that peatland be avoided composting plants. This has the
HVAC optimisation projects in for new plantings. In line with potential to reduce our carbon
Malaysia at Wisma Sime Darby, this, on plantations previously emission by up to 200,000 tonnes of
Sime Darby Convention Centre developed on peatland, we CO2-e annually.
and Kuala Lumpur Golf & Country have undertaken rigorous water
Club. These projects aimed to management measures to Biogas
achieve a minimum 10% reduction ensure the water table remains
in total energy usage at each of consistently at 60-75cm below Methane produced during the
these locations. Monitoring results the surface to minimise the treatment of Palm Oil Mill Effluent
to date, show that we are on track accelerated decomposition of not only represents a significant
to achieve this target and that dried peat and consequent carbon source of carbon emission from our
the payback period on capital emission and the risk of fires. operations but is also a potential
expenditure is forecasted to be less asset. We currently have a pilot
than two years. biogas plant situated in our West
Estate on Carey Island, Malaysia.
We plan to roll-out similar The pilot plant has been in operation
HVAC optimisation initiatives since 2009 and has the potential
throughout our buildings globally to generate 450kWh of electricity
by 2015. Since lighting also from biogas captured. We are
contributes significantly to the currently exploring the opportunity
energy consumed in our buildings, of expanding biogas plants to other
we are also starting to initiate operations.
pilot projects on the use of T5
fluorescent and light emitting
diode (LED) systems.
70

Yayasan Sime Darby Case Study
Universiti Kebangsaan
Malaysia – Yayasan Sime
Darby Climate Change Chair
Waste Heat Recovery Systems The University Kebangsaan Malaysia (UKM) – Yayasan Sime
Darby Climate Change Chair was established in 2010, to
Sime Darby Unimills, our refinery provide a research platform for climate change. Managed
in Zwijndrecht, the Netherlands, by UKM’s Research Centre for Tropical Climate Change
traditionally discharged waste heat System (IKLIM), the Chair has enabled UKM to take on a
from the refining process to a nearby leading role in regional climate research that focuses on the
river via a cooling water system. This effects of climate change on water resources, terrestrial
waste heat is now utilised to heat our ecosystems, health of people, marine ecosystems, and
Innovation Centre Europe (ICE), which specific sectors, such as fisheries and agriculture. UKM is
was launched in October 2010. The Malaysia’s national university.
ICE is a state-of-the-art facility, which
includes a research and development This research aims to deepen the understanding of
application kitchen, high tech the scientific aspects of climate change, including
laboratories and new food grade oil assessment of regional impacts, which will be input for the
processing pilot plant. development of mitigation and adaptation strategies. The
work of the UKM – Yayasan Sime Darby Climate Change
A dedicated hot water system was Chair consists of four key elements:
installed in the ICE to recover thermal
energy from the refinery’s deodorizer 1. Research
1, for use in room heating and hot water 2. Education and Training
tracing. Between 400kW (in winter) and 3. Input to National Malaysian Policy Development
50kW (in summer) of waste heat is used 4. Community Engagement at Local, National (Malaysian)
for heating of the ICE, depending on and International Levels
the ambient temperature. This avoids
the significant use of natural gas, which The current chairholder is Professor Dr Pak Sum Low, a
would otherwise be used for heating renowned expert on Climate Change who is the Adjunct
purposes. Further use, such as storage Professor at the School of Sustainable Development at
tank heating, is now being connected Bond University, Australia, a Fellow at the Academy of
to the hot water system to make even Sciences Malaysia and regular consultant for the United
better use of the available waste heat Nations Environment Programme (UNEP) and United
at the site. Nations Development Programme (UNDP). To date, two
research projects by Malaysian experts in the field have
been completed on Climate Change Impacts on Droughts in
Malaysia and Climate Change Impacts on Extreme Events
and Oceanic Conditions in Malaysian waters. Three public
lectures have also been organised by the Chair.
71

Operational
Eco-Efficiency
Strategic Link
Corporate Mission
Deliver superior
financial returns
Improved environmental in the natural nutrient cycle or as a
through operational performance not only reduces our fuel source. Our Property division
excellence and impact on the natural environment, has also adopted new approaches
but also results in cost benefits from to constructing buildings that
high performance operational efficiencies. helps reduce the consumption of
standards building materials and generation
Across the Group we have various of construction waste. We have also
Sustainability Goals initiatives to reduce, re-use and developed novel alternatives for
recycle the waste that we produce. packaging in our Industrial division.
Instill a performance As outlined in previous sections of
culture this report, our Plantation division Water is rapidly becoming a scarce
has a long history of creating value- resource. We are monitoring the
added products from waste, such water consumption across the Group
as compost, and re-using biomass and starting to focus in countries
which are water stressed.
Sime Darby Energy & Utilities’ natural gas

cogeneration plant in Laem Chabang, Thailand
72

Property Case Study
Improving Design Efficiency with

Building Information Modelling
BIM allows productivity to

be increased and wastage of
materials to be reduced.
Our Property division utilises specialists can reach 600 individual BIM allows productivity to be
Building Information Modelling drawings. Such magnitude requires increased, as less time is spent to
(BIM) in design and development great attention in managing manually create 2-dimensional
processes to benefit from the the information and can lead drawings. Wastage of materials
greater efficiencies in time, to oversights which are usually is also reduced by providing the
cost, quality and material use detected late in the process, i.e. on opportunity to rectify any design
that BIM has the potential to site. Rectifying such oversights on oversights on-screen rather than
provide.The US National Building site can be costly, time consuming on-site, and by creating the
Standards, defines BIM as “a and a source of wasted materials. opportunity to use more precisely
digital representation of physical engineered components, which
and functional characteristics of a A BIM model however represents are fabricated in factories. The
facility. A BIM (model) is a shared the design in 3-dimensional form. ability to pre-fabricate materials
knowledge resource for information Information contained in a BIM further reduces the risk of defects
about a facility forming a reliable model is also stored parametrically and improves the quantification
basis for decisions during its in each object, which means each of materials required to fabricate
lifecycle; defined as existing from object contains parameters that components, therefore reducing
earliest conception to demolition”. relate to other objects. If one the use and wastage of resources.
object is amended, other objects
Conventional computer-aided- that depend on it will also be
design (CAD) drawings rely on automatically amended. This is a
2-dimensional or 3-dimensional departure from 2-dimensional CAD
drawings to communicate the where each amendment needs to
design intent. These drawings are be independently inputted. BIM
individually generated and in a also has the capacity to include
typical project commissioned by dimensions for cost and time, and
the Property division, the number integrate with project management
of drawings generated by the software. This allows BIM
architect, engineers, vendors and designed buildings to be “built”
both virtually and physically. The
virtual model may be used for clash
detection, sequencing and phasing,
material quantifying and costing.
73

Industrial Case Study Industrial and Motors Case Study
Recycled Water Recycling

Packaging and Harvesting
Material
In 2005 our Industrial division Our Industrial and Motors divisions Similar initiatives have since been
started using shredded recycled have both embarked on rainwater implemented in our Industrial
paper to pack spare parts for harvesting and water recycling division’s operations in Singapore
Malaysian inter-branch transfers. initiatives in Australia, New and China. In Singapore, a
The use of recycled paper instead Zealand, China and Singapore. 1.36 million litre underground
of styrofoam has now become tank has been installed for
common place in Malaysian Three key Australian branches in the collection and storage of
operations. Brisbane, Mackay and Rockhampton rainwater. The rainwater is used
have been successfully piloting for our fire fighting system,
Spare parts warehouses generate water conservation measures in our washing of machines, as well
a considerable amount of waste Industrial division, since 2008. Key as, cooling water for dyno test
paper due to the numerous daily, water conservation initiatives that and load bank testing. Since
weekly and monthly reports that are have been undertaken include: September 2010, our operation
produced. Non-confidential reports in Foshan Shunde in China has
are shredded and used as packing 1. Use of closed-loop dyno cooling been using a water recycling
material. This alternative use, for systems, which recirculates system, which has reduced mains
what was once a waste product, cooling water instead of water consumption from the
has allowed us to decrease our continually running off the water workshop by approximately 70%,
dependence on styrofoam packing mains - this system has reduced helped control the treatment of
material, reduce our contribution to water consumption at our wastewater and provided a more
landfills and reduce packing costs. Brisbane branch from 20 million secure and effective water source.
litres a year to 11 million litres a
year. Our Motors division has also
2. Installation of rainwater adopted a similar approach
harvesting systems - rainwater to water conservation, by
harvested at our Brisbane implementing a high level water
branch has reduced mains water filtration system that captures
consumption by approximately both mud and coal dust when
30%. washing our mining rental vehicles
3. Installation of water recycling in Australia. The filtered water is
systems, which captures and then recycled for further use in the
treats wastewater from wash vehicle washing process. Rainwater
bays for reuse - water recycling is also harvested and used to wash
systems produce 7,000 – 8,000 cars at our Audi and Greenlane
litres of water per day at our Chrysler/Peugeot dealerships in
Mackay branch and produces up New Zealand.
to 100,000 litres of water at the
Rockhampton branch.
74

Energy & Utilities and Industrial Case Study Yayasan Sime Darby Case Study
Cogeneration UKM – YSD Sustainable

Plants Development Chair:
Zero Waste Technology
for the Palm Oil Industry
The heat produced during the generation of In 2010, Yayasan Sime Darby (YSD) provided a RM15
electricity by conventional power generation million endowment fund to Universiti Kebangsaan
systems is often released to the atmosphere. Malaysia (UKM) for a period of 10 years. This endowment
Cogeneration technology allows for this heat to be was provided for a Sustainable Development Chair, which
harnessed as a useful source of energy by means aims to expand research on a zero waste palm oil industry.
of a heat recovery system that produces steam for Founded in 1970, UKM is Malaysia’s national university.
further usage. This results in two sources of useful
energy for the same amount of fuel, for example The Sustainable Development Chair provides a platform
natural gas. for closer long term partnership between industry and
academia to develop and share technological expertise
Our Energy & Utilities division’s power plants towards zero waste in the palm oil industry. The current
located in Laem Chabang, Thailand are natural Chairholder is Dr Ir P.A.M Claassen, a senior scientist in
gas cogeneration plants that produce both group biomass and bioenergy at Wageningen University’s
baseline electricity and steam for factories in the Food and biobased Research Institute in the Netherlands.
neighbouring Laem Chabang Industrial Estate.
They have the capacity to produce 150MW of Key research is currently being conducted on efficient
electricity and 50 tonnes/hour of steam. process and bioreactor technology for the production
of hydrogen from Palm Oil Mill Effluent and biomass.
We have also installed a 1.27MW natural gas The hydrogen produced may then be used as a
cogeneration plant at our Industrial division’s main renewable fuel, and in the production of high value
facility in Malaysia. This produces electricity for bio-fertiliser and animal feed. Through the research,
the majority of the facility’s energy requirements, the Sustainable Development Chair aims to optimise
and steam that is produced by the heat recovery anaerobic fermentation on a large laboratory scale,
generator is used to drive the chiller, which in combine fermentation and fuel cell technology for power
turn produces chilled water for the facility’s generation and establish scale-up processes for palm oil
air-conditioning system. We estimate that the mills.
use of the cogeneration plant at our facility
reduces the carbon emission related to our power To date, Bio-H2 production has been achieved at UKM
requirements by 70%. Our Industrial division also in a 2 litre fermenter, using both batch and continuous
supplies cogeneration systems and has successfully cultures. Preparations to scale-up experiments to a 14 litre
installed systems in Malaysia, Turkey and Japan. fermenter are currently underway.
75

Biodiversity
Management
Strategic Link
Corporate Mission
Committed to
developing a
winning portfolio Biodiversity, the variety of living
organisms on our planet, are integral
of sustainable to the welfare and function of
businesses ecosystems. The business impacts
on biodiversity have increasingly
become an issue of concern in
Sustainability Goals recent years. We recognise the
• Effectively manage wide range of biodiversity risks and
opportunities associated with our
sustainability risks Plantation operations in particular,
• Develop and we are committed to managing
the biodiversity impacts. Although
sustainability mainly related to our Plantation
Thought Leadership division alone, we have included this
section on biodiversity due to the
amount of interest expressed by our
stakeholders on this issue.
76

We recognise the wide
range of biodiversity
risks and opportunities
associated with our
Plantation operations
in particular, and are
committed to managing
our biodiversity impacts.
Sime Darby Plantation’s mangrove replanting

programme at Carey Island, Malaysia
77

Plantation Case Study Yayasan Sime Darby Case Study
High The “Big 9”

Conservation Programme
Value Areas
In accordance with our commitment The “Big 9” programme is an initiative by Yayasan Sime Darby (YSD)
to the RSPO’s principles and criteria, to help conserve animal species which are classified as endangered or
we ensure that independent High vulnerable, in particular the Sumatran rhinoceros which is in danger of
Conservation Value (HCV) assessments going extinct without protection. The nine animals supported by YSD
are conducted at our plantation estates are mostly indigenous to Malaysia, and are listed below:
prior to new plantings or developments
to identify HCV that may be negatively • Sun bear
affected by our operations. The • Orang-utan
HCV assessments are conducted in • Asian elephant (Peninsular Malaysia) and
conjunction with independent Social Bornean pygmy elephant (Sabah)
and Environmental Impact Assessments • Clouded leopard
(SEIA) that are also carried out prior to • Hornbill
new developments. • Banteng
• Proboscis monkey
Management plans are consequently • Sumatran rhinoceros
developed to mitigate the potential • Malayan tiger
impacts on HCV identified, such as
setting aside appropriate buffer zones. YSD previously supported the Big 9 animals through the Tabin Wildlife
This holistic process of conducting Sanctuary programme as 8 of the 9 animals (except the Malayan Tiger)
SEIAs, assessment and identification of are found in Tabin, Sabah, Malaysia. The Malayan tiger is found only
HCV and the consequent management in Peninsular Malaysia. The programme includes efforts to ensure the
and mitigation actions are embedded protection and preservation of wildlife in Tabin. As at the end of 2011,
within our Plantation Division’s YSD has pledged RM33 million in support of the “Big 9” programme.
Sustainable Plantation Management
System.
We protect 32,000 hectares of HCV

across our Malaysian and Indonesian
operations, which typically comprise
natural forests, swamps, riparian
reserves, slopes greater than 25
degrees, areas with marginal soils and
water catchments.
78

Stability of Altered Forest The SAFE

Ecosystems (SAFE) Project project is the
world’s largest
ecological
experiment.
Yayasan Sime Darby (YSD) is plantations, areas of logged forest
collaborating with the South- in land belonging to Yayasan
East Asia Rainforest Research Sabah, and in undisturbed primary
Programme (SEARRP) , an forest in Maliau Basin.
overseas research programme
of the Royal Society (The UK This collaboration will benefit
and Commonwealth Academy of the plantation industry, by
Science), on a long-term study providing insights which will
and research project that aims allow minimisation of biodiversity
to understand how the impact impacts while maximising
of forest modification affects ecosystem services. It is envisaged
the functioning of the tropical that SAFE will make a major
rainforest, their ability to deliver contribution to sustainable
ecosystem services and their palm oil management and the
capacity to support biodiversity. conversion of biodiversity while
The SAFE project is the world’s providing a major industry-wide
largest ecological experiment. contribution to sustainable
YSD’s commitment for this plantation management, the
project is RM30 million for ten implementation of the Roundtable
years. on Sustainable Palm Oil
guidelines and the conservation
Centred in Sabah’s Maliau Basin of biodiversity in agricultural
in Malaysia, the SAFE project will landscapes.
study and track the ecological,
hydrological and micro-climatic The project now has more than
changes and their effects on flora 125 people directly involved,
and fauna, across a wide range including more than 50 scientists
of habitats and types of forest from around the world, 17 PhD
conversions. Land use and habitat students and 10 MSc students.
type studies will be conducted on The project has also published
newly-developed to mature oil 3 Postgraduate theses, 2 peer
palm plantations, small to large reviewed publications, 5 papers
forest patches and the primary and 2 posters which have been
rainforests of the Maliau Basin. presented in conferences, and
a publication on ant genera in
Central to the SAFE Project will Borneo. The project outputs are
be the creation of a number of important sources for further
clusters of forest patches within scientific research.
an oil palm plantation which are
currently being established by The SAFE Project has also Maliau Basin, Sabah, Malaysia
Yayasan Sabah. The individual attracted the attention of
forest patches will be in sizes the UK Government’s Natural
of 1 hectares, 10 hectares and Environment Research Council
100 hectares and will form (NERC), which is about to award a
the experimental core of the grant of £5 million (RM25 million)
project. The research plots will for additional research of focusing
be established in the surrounding on biodiversity and its links to 79
new oil palm plantation, in mature atmospheric chemistry.

Respect for Society
Children in Humana programme
80

“Respect for Society
means respecting
fundamental human
rights and remediating
instances of adverse
human rights impacts
within our direct
In this section of the
operations, and report we provide an
overview of our approach
endeavouring to to manage both the internal
and external aspects of
advance respect for the social dimension of
sustainability. Broadly,
human rights within our we have grouped our
social activities under the
sphere of influence.” following categories:
• Ethics and Values

• Health and Safety
• Talent Management
• Enhancing Our
Communities
81

Ethics and Values
Strategic Link
Corporate Mission
Subscribe to good
corporate governance
and high ethical values
• Effectively manage
sustainability risks Our people are our greatest asset. Regardless of our commitment to
sustainability, we can only deliver results to the business and provide
• Instill a value to stakeholders if our people believe and share in our aspirations.
performance Summarised below are the Core Values that we instill in employees and
the Business Principles that we adhere to.
culture
Our Core Values Our Business Principles
Integrity Health, Safety & Environment

Uphold high levels of personal and Health and safety are important for
professional values in all business our employees and communities
interactions and decisions. where we operate. Ensure business
operations are sustainable,
Excellence by proactively addressing
Stretch the horizons of growth for environmental challenges and
ourselves and the business through respecting fundamental human
unwavering ambition to achieve rights, without sacrificing long-
outstanding personal and business term economic value creation.
results.
Compliance
Enterprise Complying with all laws and
Seek and seize opportunities with regulations in countries that we
speed and agility, challenging the operate.
set boundaries.
Working With Local Communities
Respect and Responsibility Engaging with and contribute to
Respect for the individuals we local communities in a socially
interact with and the environment responsible manner wherever we
that we operate in (internally and operate, without compromising
externally), and committing to the benefits of any particular
being responsible in all our actions. stakeholder.
Fair Business Practices

Ensure that we promote fair
82 business practices and compete in
an ethical manner.

In 2011, we launched our Code of Business Conduct (COBC), which provides guidance on the standards of behaviour
expected of all directors, employees, and where applicable, counterparts and business partners. The COBC is available
in 9 languages - English, Bahasa Malaysia, Mandarin Traditional, Mandarin Simplified, Thai, Dutch, Bahasa Indonesia,
French and Vietnamese.
Selected examples of our Core Values and Business Principles in action are provided below.
Ethics and Values Case Study Ethics and Values Case Study
Grievance Procedures Bribery and Corruption

We have a commitment to ensure that any grievance We take a zero-tolerance approach towards bribery
arising between an employee and the Company, or a and corruption, and are committed to behaving
third party and the Company, is settled as equitably professionally, fairly and with integrity in all our
and as quickly as possible, at the lowest level and/ or business dealings and relationships wherever the
point of origin. We have a policy in place that informs Group operates. Our position on corruption is
employees how and where to channel their grievances expressly set-out in our Code of Business Conduct
accordingly. The policy also assists line managers, (COBC), including consequences for violations of the
Heads of Departments and Human Resources/ code, which may include termination of employment
Industrial Relations representatives, on how to handle or dismissal. Violation of the COBC that is related to
grievances brought to their attention by employees. criminal acts may result in prosecution after referral to
the appropriate authorities.
A secured whistleblowing channel is also available to
report complaints to management. Oversight of the In June 2011, we signed a Corporate Integrity Pledge,
whistleblowing function is under the purview of the which resulted in 1,135 of the Group’s Employees and
Senior Independent Director (SID) of our Main Board top 20 vendors being trained on Integrity Enhancement
who ensures that all reported violations are properly and Corruption Prevention, which was conducted by
investigated. The SID is also responsible to review the the Malaysian Anti-Corruption Academy (MACA). The
effectiveness of the actions taken in response to all process is continuing with the Group engaging both the
concerns raised. The identity of employees reporting Malaysian Anti-Corruption Commission (MACC) and
via the whistleblowing channel is kept confidential and MACA on various educational initiatives.
their consent is sought if there is a need to disclose the
identity for investigation purposes.
83

Ethics and Values Case Study
Gender Policy and

Pilot Programme
We are an equal opportunities

employer and our commitment
to be an equal opportunities and
anti-discriminatory employer is
outlined in our Human Resources
policies, which govern the way
we manage our people. The
Human Resources policies include
provisions for:
• Non discrimination on the

grounds of colour, race,
religion, ethnicity, national
origin or gender.
• Zero tolerance towards
physical or verbal
discriminatory harassment in
the workplace.
• Protecting the rights of
We currently employ more than a non-governmental organisation
employees to be treated with
8,000 women workers in our dedicated to protecting the rights
dignity and respect.
plantation estates and mills across of women and migrants. This
• Respecting the rights of
Malaysia. To further address the involved a series of workshops and
employees to freedom of
need for fair and equal gender engagement sessions with female
association.
policies in the work place, we employees across all plantations in
• Ensuring grievance channels
implemented the Gender Policy Malaysia. Social impact assessments
are available.
Programme in Sime Darby were also conducted to assess the
Plantations in 2008. The programme progress of Gender Committees set
However, there are large
aims to improve and uphold up and internal consultations were
differences between the ratio
women’s rights, working conditions, carried out to assist the programmes
of men and women employed
housing and amenities, wages, at site. To ensure optimum uptake
in some of our divisions. These
safety and security, gender-based and success, the workshops were
differences are mainly driven
discrimination, sexual harassment, conducted in three languages
by industry trends such as
domestic violence, reproductive – English, Bahasa Malaysia and
predominantly male employees in
health and child care. Tamil. 500 employees have since
the Plantation division and female
employees in the Healthcare participated in 14 engagement
In 2010, we commenced the pilot sessions and a manual has been
division.
phase of the programme in a developed to guide the plantation
collaborative effort between the managers and Strategic Operation
Plantation Division and Tenaganita, Unit Gender Committees.
84

Ethics and Values Case Study
Child Protection Policy
We do not employ children. After the launch of the corporate In 2011, Phase 2 of the CPP
However, children may be found policy in 2010, the programme programme was rolled-out across
living on our plantation estates is now being rolled out in stages the other divisions. A CPP train-the-
with their parents who are across the Group, starting with trainer workshop was conducted for
employees of the company. the Plantation Division. Various 20 trainers from across the Group
engagements have been carried to carry out awareness trainings
Our Child Protection Policy out such as working visits to the and disseminate information to
(CPP) programme was developed crèches in the estates, discussions employees. Trainers were key in
to raise awareness on issues with subject matter experts from conceptualising the CPP Handbook
pertaining to child safety, well- Government Ministries to local developed, as a guide to implement
being and protection within Non Governmental Organisations, the policy Group wide. Phase
the Group’s business context. CPP awareness workshops and 2 also included a workshop for
Through dialogues and interactive discussions with management and 60 plantation workers from the
workshops, employees are various levels of employees, as well Malaysian states of Malacca and
empowered and encouraged to as school holiday camps focusing Negeri Sembilan to empower and
be effective child protectors, on safety issues for children living educate Core Group Leaders to
influencing business operations within the company’s plantation understand child protection issues.
and extending beyond the work operations. Since its inception, 10 Additionally, 132 children living
environment. The programme engagements have been completed in plantations in the Malaysian
also looks into protocols and involving 300 participants state of Pahang were empowered
procedures to deal with reported and stakeholders from various and educated on how to protect
and/or suspected cases, as well as, backgrounds. themselves from harm and abuse.
provides support for children who
have survived reported cases of
abuse.
Children of Sime Darby Plantation employees in Liberia
85

Health and
Safety
Strategic Link
Corporate Mission
Provide an
environment for our
The welfare of our people are our Although our performance is
people to realise their primary concern. However, the last comparable to other industry
full potential few years have been challenging players, any fatality and major
with 12 fatalities in 2010 and 7 incident is unacceptable to us and
fatalities in 2011. The incident we are committed to addressing the
Sustainability Goals rate (the number of incidents that shortfalls in our safety performance.
Instill a performance resulted in a fatality, permanent At a Group level, this means:
disability, lost time and non -
culture lost time injuries per thousand 1. Promoting proactive and
employees) also increased from effective health and safety risk
38.96 to 44.22 between 2010 and management systems, with
2011. The majority of the health emphasis on legal compliance and
and safety incidents occur in our the adoption of both leading and
Plantation division and are largely lagging performance indicators.
transport related. We have also 2. Prioritising health and safety
identified mechanical hazards as via the setting of appropriate
a significant contributor to major key performance indicators and
health and safety incidents across development of a proactive health
the Group. and safety culture.
3. Developing health and safety
competencies among line
management, which supports line
responsibility and accountability.
Our business divisions are also

implementing key health and
safety initiatives targeted at
addressing specific issues within
their operations, such as safe tractor
handling in the Plantation division.
86

Health and Safety
Performance*
Fatalities Lost Time Injury Lost Days
No. of No. of No. of

fatalities cases days
3,682 83,671
14 - 4,000 - 90,000 -
12 80,000 -
12 - 3,500 -
70,000 -
3,000 - 2,506 56,838
10 -
60,000 -
7 2,500 -
8- 50,000 -
2,000 -
6- 40,000 -
1,500 -
30,000 -
4- 1,000 - 20,000 -
2- 500 - 10,000 -
0- Year 0 - Year 0- Year
2010 2011 2010 2011 2010 2011
Severity Rate Incident Rate Frequency Rate

No. of Lost No. of No.of
Days/ Incidents/ Incidents/
1,000,000 1,000 1,000,000
man-hours employees man-hours
450 - 45 - 18.5 - 18.27
413.42 44.22
400 - 44 - 18 -
350 - 43 - 17.5 -
300 - 42 -
17 -
250 - 205.99 41 -
16.5 -
200 - 40 - 15.94
38.96 16 -
150 - 39 -
15.5 -
100 - 38 -
15 -
50 - 37 -
0- Year 36 - Year 14.5 - Year

2010 2011 2010 2011 2010 2011
* Health and Safety performance does not include Energy &Utilities

China operations for January to June 2010.
87

Tractor Driver
Competency Course
In response to previous The TDCC is conducted in our The TDCC is now entering its
accidents occurring within training centre located in Sua second phase, which is to obtain
our Plantation division, we Betong, Negeri Sembilan, Malaysia, a National Occupational Skill
developed a programme to and has successfully produced Standard (NOSS) to be used
ensure that all tractor drivers approximately 200 competent at a Malaysian national level.
have the appropriate competency drivers, to date. We aim to produce To achieve this, our Plantation
to conduct their daily jobs a minimum of 2,000 competent division and the Ministry of
effectively and safely. The Tractor Malaysian drivers within the next 6 Human Resources’ Department of
Driver Competency Course (TDCC) years. In support of the initiative, Skills Development is conducting
was developed as a collaborative the training centre is continuously workshops with key stakeholders
effort between the Malaysian upgraded and our Plantation to develop the elements for
Ministry of Agriculture’s division is the first company within NOSS. The introduction of
Engineering agriculture Training the plantation industry to have a tractor driver related NOSS will
Centre and the Plantation dedicated training facility for its enable employers to evaluate
division. In addition to the machine operators. the competency of their tractor
development of the tractor drivers more systematically and
drivers’ competencies, the TDCC This competency programme is provide a standard measure to
programme also aims to reduce conducted by internal and external appraise competencies during job
the high dependency on foreign trainers, including representatives applications.
tractor drivers by producing from various departments within
skilled local Malaysian drivers. the Plantation division, such as
estate managers, mechanisation
department and occupational health
and safety, and has been designed
to include other relevant training
necessary for the tractor drivers.
This includes Occupational Safety
& Health, First Aid and Emergency
Response, and Basic Tractor
Maintenance. The programme
is conducted over a 14-day
period, which exceeds regulatory
requirements.

88

Occupational SIME Culture

Safety and
Health Dialogues
To foster a closer relationship between all The Plantation division has developed a behaviour based
levels of employees within our Plantation safety programme called SIME (Spot, Intervene, Modify,
division on health and safety, we started Execute), which aims to drive a work culture where every
an Occupational Safety and Health (OSH) individual plays an active role in preventing injury or ill health
Dialogues initiative. Although issues on OSH through positive interventions.
are communicated freely between workers
and management on a regular basis without The SIME programme reduces incidents in the workplace
any constraints, the OSH Dialogues are by inculcating safe work behaviour, improving safe working
distinctively carried out as a mini “OSH Fair” conditions and ensuring that employees participate to
at each operating unit, e.g. estate and mill. improve safety in operations. The main objective of the SIME
a programme is to train each member of the line organisation
During OSH Dialogues, representatives to eliminate incidents and injuries by skillfully observing
from our Plantation division’s central OSH people as they work, engaging with them to correct unsafe
team, regional OSH officers and managers of behaviour, and encouraging them to follow safe work
the relevant operating unit hold workshops practices.
with employees to listen and understand
the OSH issues and challenges faced in their
daily work. Potential solutions are then
brainstormed and resolutions agreed before The SIME observation cycle may be summarised as:
the end of the session. During the workshop,
the management representatives mainly act SPOT
as facilitators and moderators to encourage observe the
the employees to participate actively in the workplace
brainstorming and discussions. Relevant ideas
generated are also shared with other estates
facing the same challenges.
These events are also used as opportunities

to highlight issues and challenges faced by
our Plantation division as a whole, retrain EXECUTE INTERVENE
the employees on OSH related legislation, evaluate the listen to what is
and share best practices. While ensuring the possibility for SIME said and use your
anonymity of the victims, relevant case studies sharing judgment
are also shared during the dialogue sessions to
highlight key risks and learning points.
The OSH Dialogues have proven to be

successful in increasing the level of
understanding and relevance of Occupational
Safety & Health among our employees, which MODIFY
we believe is the first step to developing a
proactive health and safety culture. appreciate
and motivate
89

Talent
Management
Strategic Link
Corporate Mission
Provide an
environment for our
We focus on four key talent management areas: attracting talent, developing
people to realise their talent, helping employees to realise their potential, and retaining talent. This
full potential in turn is driven by our organisation’s business strategies and organisational
needs. Success will enable us to harness our people to deliver the results to the
business and provide value to the stakeholders.
Instill a performance
Talent Management Cycle
culture
RETAIN ATTRACT
• Rewards • Resourcing Strategy
• Global Engagement Survey • Manpower Planning
• Career Succession
Management
ATTRACT
BILITY
NSI •E
PO N
S
E
TE
R
RP
&
BUSINESS BUSINESS
PECT
RISING•
STRATEGY RETAIN DEVELOP RESULT

RES
•E
C
IT
X
EL R
LE G
NCE•INTE
PERFORM
PERFORM DEVELOP
• Key Performance Indicators • Talent Identification & Review
(KPIs) & Competencies • Career Coaching &
90 • Performance Calibration Management
• Performance Improvement • Job Experience
Process • Networking
• Learning & Development
• 360 Degree Feedback

Sime Darby Potential Model
One of the key objectives

of our talent management
framework is to ensure a ASPIRATION
strong leadership pipeline
for the Group’s succession
planning needs. Within
the framework, talented
individuals are identified,
assessed and nurtured to take
on critical positions across
the Group. At the heart of our
programme is the development
of these future leaders’
abilities, to foster aspirations ABILITY ENGAGEMENT
and to increase the levels of
engagement.
ABILITY ASPIRATION ENGAGEMENT
Cognitive ability Desire to grow/contribute at Discretionary Effort

Displays strong conceptual ability and is higher level Displays high engagement and
able to acquire and process information Demonstrates interest to take interest in the organisation.
effectively, using logical judgment and on more responsibility, deepen
problem solving technical skills and/or, expand job Shows understanding, dedication
scope and complexity and willingness to help the
Learning Agility organisation succeed by going
Displays a comfort with ambiguity. Overall Job Enjoyment above and beyond his/her role
Seeks and learns from new experiences, Enjoys what she/he does, feels
appilies these learning to achieve results challenged and involved Engaging Others
Is aligned with business
Propensity to lead - demonstrates ability objectives and perseveres to
Mobility
and inclination to lead others/teams produce results. Acts in ways that
WIlling to relocate to different
division, city or country encourages higher engagement
Tenacity of his/her team and those around
Persistence and perseverance in them
archieving success and delivering results
in the face of adversity Retention Risk
Demonstrates signs of rational/
Demonstrate Leadership
emotional commitment and
intention to stay
Competencies
Knowledge, skills and behaviours of a
leader
Demonstrate SD Core values

The standards of behaviour expected of 91
a leader (these values refer to Integrity,
Excellence, Enterprising & Respect and
Responsibility)

Talent Management Case Study
Building Critical Skills
Sime Darby Business School Estate Assistant Programme Sime Darby Industrial Academy
(SDIA)
The Sime Darby Business School The shortage of talent in the
is located in Malaysia and is Malaysian plantation industry is a SDIA was set up in Malaysia in 2002
managed by the Group Corporate challenge readily acknowledged by to cater to the heavy equipment
Education department, which industry players. Most Malaysians and automotive training needs of
is the education arm of Group now appear to shy away from customers and staff. It operates
Human Resources. Its key role the opportunity of working in a as a development centre for
is to provide a holistic view on plantation estate environment. As technical and management skills.
the learning needs of the entire the world’s largest producer of palm The Academy is an approved
organisation by taking the needs oil, our Plantation division has taken national vocational training
of all Divisions into consideration proactive measures to fill this skill centre, recognised by the Skills
and providing corporate learning gap and seeks to dispel the negative Development Department of the
interventions and courses that misconceptions among the public Ministry of Human Resources
are aligned to our Competency over plantation jobs. Malaysia.
Framework. This integrates with
our Talent and Performance To achieve this, we developed a Hastings Deering Institute of
Management Framework to Building Estates’ Sustainability & Technology (HDIT)
ensure highly effective learning Transformation (BEST) programme,
is delivered in an integrated, which aims to nurture a continuous The HDIT is a registered Australian
consistent and sustainable pool of skilled plantation workers. training organisation delivering
manner, creating value for the The BEST programme features high quality training and assessment
business and our people to drive specifically designed training services. HDIT operates from
business outcomes. courses for potential and existing permanent campuses in Brisbane,
estate staff. Most notably, the Mackay, Rockhampton and
Sime Darby Plantation Academy three-year Estate Assistants Port Moresby. HDIT is building
(SDPA) Structured Training (EAST) course, Hastings Deering’s competence
which ensures a well-rounded so that Hastings Deering staff are
Established to drive the resource pool of assistant managers recognised by customers as the best
Plantation division’s needs for Malaysian oil palm estates. trained in the markets we serve. Our
by nurturing a pool of highly- team is on target to deliver training
skilled individuals for the palm to 4,500 participants throughout the
oil industry, SDPA boasts strong year ahead. As leaders for service
academic collaborations with and operator training standards,
selected public local Malaysian best practices and training delivery,
universities. Specialised diploma we develop, implement and
courses offered include Diplomas manage learning and development
in Agriculture and Diplomas in strategies, curriculum, programmes
Mechanical Engineering. and processes that enable us to
deliver best practice capability and
capacity building for customers.
92

China Engineers Limited Tractors Singapore Limited Training
Industrial Equipment Training Centre Centre (TSL Training Centre)
(CEL IETC)
TSL training centre is a certified 3
Established in 2008, CEL IETC has star training centre by Caterpillar.
joint collaborations with Shunde Recently, we have expanded the
Polytechnic in Guangdong and training facility by an additional
with Urumqi Mining Technician 5500 sq ft to meet the increase
School in Xinjiang to provide strong in our business and high demand
foundational skills training in heavy in training needs. The centre has
equipment for the needs of CEL 3 classrooms and one machine
business and its customers. It is also simulator room fully equipped with
a development centre for technical training aids and learning facilities
and management skills through its to service the full range of technical
in-house career progression and training needs. Training covers all
skills upgrading programmes. CAT engines as well as MaK engines.
CEL IETC is an approved certification Our training aids include various
centre of skilled technicians and models of engines ranging from
machine operators by the China 3126 to 3516. We have the Applied
Association of Construction Failure Analysis Training aid to
Education (CACE) and the China enhance hands on training for higher
Construction Machinery Association competency in Failure Analysis. The
(CCMA). In year 2011, CCMA has machine simulator also caters for
awarded CEL IETC as the best more realistic hands on operation
management training organisation in of the machines. We design training
construction machinery in China. programmes and curriculum to meet
new training needs and demands for
both our technicians and customers.
Sime Darby Nursing and Health

Sciences College (SDNHSC)
One of the pioneers in nursing

education in Malaysia, SDNHSC
offers opportunities to experience
quality nursing education. Training
is carried out primarily at our
award-winning Sime Darby Medical
Centre Subang Jaya and Sime
Darby Specialist Centre Megah.
Courses offered by SDNHSC include
Diplomas in Nursing and Diplomas in
Medical Laboratory.
93

Enhancing Our
Communities
Strategic Link
Corporate Mission
Committed to
developing a portfolio
With a heritage that exceeds a Under the excellence category,
of sustainable century, we recognise that our Yayasan Sime Darby offers bonded
businesses long term success depends on the scholarships to young individuals
mutual growth of the communities in who possess outstanding academic
which we operate. As such, we view achievements and strong leadership
Sustainability Goals communities as long term partners qualities. The selected candidates
Leverage on and we are dedicated to supporting are sponsored to pursue pre-
sustainability to their development. university, undergraduate and
postgraduate studies at top notch
create value We believe that a cornerstone to universities in the United Kingdom,
the growth of communities is the United States, Australia and
development of high calibre future Malaysia.
leaders. Towards this end, Yayasan
Sime Darby extends educational The enrichment category, provides
assistance in Malaysia and other assistance to students from low
selected countries where Sime income families to pursue vocational
Darby operates, namely Indonesia, courses at diploma and certificate
Singapore, Hong Kong. Yayasan levels at Sime Darby Plantation
Sime Darby plans to extend Academy, Sime Darby Nursing and
educational assistance in China and Health Sciences College or Sime
Liberia, in 2012. Darby Industrial Academy. Yayasan
Sime Darby also offers bursaries to
Every year, more than 200 study in local universities, which
scholarships are awarded by Yayasan cover tuition fees, board and
Sime Darby. Since its inception in lodging.
1982 until 31st December 2011,
1,436 scholarships worth over
RM130 million have been given
out. Scholarships fall under three
scholarship categories, which are
the excellence, skills enrichment and
bursary programmes.
94

Group Case Study Group Case Study
Sime Darby Jalinan Ikhtiar

Volunteers Programme
Programme
577 volunteers
In tandem with our efforts to contribute towards
developing sustainable futures, we have
collaborated with the MyKasih Foundation on the
9 projects ‘Jalinan Ikhtiar Programme’, in Malaysia. The Jalinan
Ikhtiar Programme aims to assist and transform
3,822 hours economically disadvantaged families through
awareness, skills training and education.
It is designed to eventually help them break free

We encourage and provide opportunities for
from the poverty cycle and give them hope for
employees to volunteer their time and actively
a better future. It also comprises community
participate in Corporate Social Responsibility (CSR)
development and socio-economic rehabilitation
initiatives, through our volunteer programme. This
initiatives for the families. In addition to food aid,
contributes to an environment that both supports
the programme looks to empower and educate
and promotes the desired socially responsible
through supplementary programmes such as English
behaviour across the Group, in addition to making
and Computer literacy, Financial Literacy, Health
it possible for all employees to live the Sime Darby
Awareness workshops and Skills based training.
CSR philosophy and embrace its CSR principles.
200 families have been engaged through the “Jalinan
The volunteer programme is communicated and
Ikhtiar” Programme. This comprises:
managed through an online system. The list of
• 50 families living within the area of Jalan Ipoh,
projects conducted in 2011 are summarised below:
Kuala Lumpur, Malaysia.
• 50 families living in Keramat, Kuala Lumpur,
1. School Holiday Camp for Children
Malaysia.
(10 -12 years old)
• 100 families living within the area of Semenyih
2. School Holiday Camp for Teen Boys
and Hulu Langat, Selangor, Malaysia
(13 – 17 years old)
3. School Holiday Camp for Teen Girls
In 2011, 100 families in Jalan Ipoh and Keramat
(13 – 17 years old)
attended development programmes focusing
4. Project Rhizo : Mangrove Reforestation Initiative
on Financial Literacy and Health Awareness, and
in Port Dickson, Negeri Sembilan, Malaysia
3 children obtained good results in the 2011
5. PC Donation Initiative, Johor, Malaysia
Sijil Pelajaran Malaysia (SPM) examinations.
6. Cycling for a Cure : Cycling Charity Drive to raise
SPM is Malaysia’s national secondary education
fund for Tabung Leukemia Yayasan Sime Darby,
certification.
Putrajaya, Malaysia
7. Sime Darby Masuk Kampung : Community
Engagement Initiative with the villagers of Kg.
Weng Luar, Baling, Kedah, Malaysia
8. River & Trees for Life : Tree Planting Initiative,
Shah Alam, Selangor, Malaysia
9. Save Our Waterfalls : Waterfalls Clean-up
Initiative, Sungai Tua Recreational Forest, Ulu
Yam, Selangor, Malaysia
95

Smallholder Acceleration
and REDD+ Programme
SHARP Objectives
Provide secure, Increase yields Deliver Empower smallholders Integrate smallholders

sustainable livelihood from smallholder environmental and reduce conflicts into global markets
for smallholders production through benefits by improving their through linking the
and workers planting of better including reduced organisation and market to sustainable
within smallholder quality palms deforestation and management, building smallholders and
landscape. and improved GHG emissions and on the Free, Prior and facilitating RSPO
agricultural practice. better protection of Informed Consent certification of
biodiversity. (FPIC) approach smallholders.
and enhancing their
bargaining position.
We believe that smallholders SHARP has brought together the into the development process via
are a key part of the response to whole spectrum of stakeholders 3 workshops held during the year.
three major challenges facing the from financial institutions and The SHARP concept and model was
agricultural industry today, i.e. donors to oil palm companies, supply finalised in December 2011. SHARP
the need for less deforestation, chain actors, Non Governmental has since been entrusted to the
better rural livelihoods and Organisations and smallholders. Proforest Initiative, as the interim
more food globally. In 2011, The various strengths, experiences host organisation for 2012, which
we initiated the Smallholder and resources from these different will be focusing on fundraising,
Acceleration and REDD+ groups will be coordinated by development of governance
Programme (SHARP), which is a SHARP to support smallholders to structures and implementation of
multi-stakeholder partnership improve their livelihoods, reduce pilot projects. We aim to be in the
working with the private sector to their environmental impacts and first series of pilot projects to be
support smallholders in the palm increase their yields. implemented.
oil industry.
We worked with the Proforest For further information please visit
Initiative, Solidaridad, and The www.sharp-partnership.org
Forest Trust to establish the
SHARP concept and develop
the SHARP model. Input from a
growing number of partners and
supporters were collated and fed
96

Plantation Case Study Plantation Case Study Plantation Case Study
Supporting Corporate Estate

Local Social Assistant
Communities Responsibility Programme
in Indonesia Initiatives in
Liberia
In 2011, we provided various forms In Liberia, we have carried The shortage of talent in
of assistance to local communities in out various Corporate Social the Malaysian plantation
and around our Indonesian estates. Responsibility initiatives which aim industry is a challenge readily
Selected projects include: to assist the communities within and acknowledged by industry
in the vicinity of our project area. players. Most Malaysians now
1. Sumatra - Provided assistance The projects implemented in 2011 appear to shy away from the
to local communities to access include: opportunity of working in a
clean and treated water through plantation estate environment.
the development of wells in 1. Free medical treatment services As the world’s largest producer
12 locations in our estates and and medication for communities, of palm oil, our Plantation
surrounding smallholder areas. with 22,622 patients in division has taken proactive
2. Sebamban Baru, South Kalimantan surrounding towns receiving measures to fill this skill gap
– Supported rural communities treatment in 2011. and seeks to dispel the negative
by providing building materials 2. Construction and restoration of misconceptions among the
for the construction of a four bridges. public over plantation jobs.
multipurpose hall. 3. Rice contribution for the
3. Batu Menang, West Kalimantan – communities within the vicinity of To achieve this, we developed a
Provided a generator set for the our project area. Building Estates’ Sustainability
Batu Menang rural community. 4. Construction of new football & Transformation (BEST)
4. Tanah Bumbu, South Kalimantan - fields in three towns. programme, which aims to
Constructed the main access road 5. Road grading, road systems nurture a continuous pool of
in Pantai Bonati Estate, which and leveling of Gbah town skilled plantation workers.
leads to Pantai Angsana seaside communities site. The BEST programme features
area. 6. Free primary and secondary specifically designed training
5. Marau, West Kalimantan - education. courses for potential and
Donated dictionaries, schoolbags, 7. Contribution to Sinje College, existing estate staff. Most
and stationery to local school University of Liberia. notably, the three-year Estate
students. 8. Construction of a water well for Assistants Structured Training
6. Regional - Organised a series the communities living within our (EAST) course, which ensures a
of Educational Competitions or project area. well-rounded resource pool of
Cerdas Cermat Competitions at 9. Construction of latrines for assistant managers for Malaysian
3 of our regional offices with the communities within the proximity oil palm estates.
aim of promoting positive and fair of our project area.
competition among students. The
participants came from schools in
our estates.
97

Plantation Case Study Property Case Study
Humana Safe City Initiative

Learning Centre
Realising the importance of Our Property division launched a The RM1.1 million Ara Damansara
education for children, our Plantation comprehensive “Safe City” agenda Police Station was built by the
division collaborated with the for our Ara Damansara township in Property division and serves as
Humana Child Aid Society Sabah, Malaysia, in 2009. This marked the the nerve centre of the township’s
Malaysia to provide formal education start of our continuous efforts to sophisticated CCTV surveillance
for children of our migrant workers create a safer living environment system. The RM2.3 million CCTV
residing in our plantation estates. for all our townships. The “Safe surveillance system is backed by
We have funded the construction City Initiative” is the result of a a highly-trained security force
and establishment of a number of collaboration between our Property which includes members of the
Humana learning centres, as well as, division, the Royal Malaysian Royal Malaysian Police, who patrol
the enrolment of the children and Police, Malaysian Crime Prevention the streets of the township in the
the management of the teachers and Foundation (MCPF), Selangor State three police cars contributed by our
school facilities. Government and the Ara Damansara Property division. Manned guard
Residents’ Association. The initiative houses at each entry point provide
From humble beginnings with aims to reduce crime while fostering on ground monitoring and act as an
one Humana learning centre in a community spirit. additional layer of protection for the
Imam Estate, Tawau in 2008 that community.
provided primary school education The “Safe City” initiative
to 157 children, the programme has implemented in the Ara Damansara The transformation of Ara
expanded to 11 Humana learning Township is based on the “Safe City” Damansara into one of the safest
centres with 991 enrolled students criteria set by the Malaysian Federal townships in Malaysia through the
in various localities across Sabah. Department of Town and Country “Safe City Initiative” started in 2007
Sime Darby Humana learning centres Planning, Ministry of Housing and with the Ara Damansara Residents’
are now in the Andrassy Division, Local Government and supported Association closely involved in
Binuang Estate, Giram Estate (2 by our own sustainable communities the planning of the initiative. This
centres), Imama Estate, Jeleta Bumi framework. Ara Damansara’s “Safe was done to ensure that a positive
Estate, Merotai Estate, Mostyn City” initiative includes 24-hour partnership is developed between
Estate, Segaliud Estate, Sungang surveillance by a network of 22 the government, private sector and
Estate and Tingkayu Estate. Apart strategically located solar powered the citizens to prevent crime through
from constructing the learning CCTV cameras which are linked law enforcement, environmental
centres and furnishing the schools to the township’s own police design and preventive education.
with the necessary amenities, we station as well as the police district
also bear the utility costs in several headquarters located nearby in
remote locations and provide Petaling Jaya.
accommodation for the teachers.
98

Industrial Case Study
Australian Indigenous
Community Programme
We conduct Indigenous Community To date all 4 selected trainees

Pre Vocation Schools that run from the 2011 pilot programme
for 20 weeks. The course outline are successfully employed by our
includes 1 week at Salvation Industrial division, as follows:
Army Life Skills Camp, Life/work • Two trainees were placed as
skills, career pathways, Team Apprentice Diesel Fitters in our
building exercises (e.g. camping, Cairns Branch
cooking and life lessons), Basic • One trainee was employed
Numeracy and Literacy lessons, as a Trades Assistant in our
and Work Preparation courses. Rockhampton Branch
At the end of the course, our • One trainee was employed in our
trainees receive a Certificate II in Group Equipment Assembly area
Resources and Infrastructure Work in Brisbane and has aspirations
Preparation, Nationally recognised of living and working in Mt Isa
qualification in Maths and English, Branch in the future.
and Forklift Licence and Working
at Heights ticket. Trainees also All training is conducted in Brisbane.
undertake our rigorous Hastings Trainees are flown from their home
Deering Apprenticeship Testing base to Brisbane and reside in a
Assessments following completion house provided by our Industrial
of the programme. division with an indigenous
community house mentor during
their stay. We provide a vehicle
for the house mentor to drive
the trainees to and from training
locations. All food is supplied and
trainees are expected to participate
in house duties and house meetings.
Each trainee is given a minimum
of two return flights home during
the course of the training so they
can visit family and friends. Some
trainees have children and this is a
large commitment for an 18 week
period by trainees and their families.
99

Women’s Aid Organisation:

Refuge for Battered Women
and Their Children
Yayasan Sime Darby’s Summary of assistance provided by WAO in 2011

contribution has helped to
ensure continuity of the
Malaysian Women’s Aid
Organisation’s (WAO) core
219 131
services and work, and has
created a sense of security
for its social workers who
counsel women at the refuge,
handle telephone and face-
PEOPLE PEOPLE
to-face counselling and email
enquiries, even accompanying
the residents for court cases. In
2011, WAO provided support for Provided with refuge Provided with face
16 court cases, 6 of which were shelter/services to face counselling
criminal cases and 10 civil cases.
1,347
Responded to
356
The work performed at the
refuge centre not only provides
the much needed relief for
women seeking shelter from
PEOPLE
abuse, it also helps WAO to
EMAIL
push for policy and legislation
changes through its accurate
and consistent monitoring of Provided with
cases recorded at the centre.
The programme has reached out
to over 2,000 women directly
telephone counselling
ENQUIRIES
and through its public education
2,053
series, to over 1 million people.
People in total
received help in 2011
100

Donation to Cancer Research Initiatives

Foundation (CARIF) through the Sime
Darby LPGA Malaysia 2011
Yayasan Sime Darby donated The PNP has developed tools such as
RM581,262 to CARIF in 2011, in the Patient Decision Aid and the Patient
support of CARIF’s objective to Navigation Video, which is now available
achieve higher remission rates for in English, Mandarin and Tamil while
breast cancer patients. CARIF works work is ongoing for the Malay version.
to achieve this through a three Translation work is also being done to
pronged approach, which addresses: produce tools in other Chinese dialects
such as Hokkien and Cantonese and other
1. Patients’ needs via the Patient Malaysian languages such as Kadazan and
Navigation Programme (PNP); Iban to ensure maximum outreach.
2. Late presentation and low
uptake of screening in Malaysia’s The “More than a Mammo” programme
population through the “More was launched in October 2011 enabling
than a Mammo” programme; and women to undertake a mammogram
3. Identifying those who are more at a subsidised fee of RM50. Since the
at risk through the genetics launch, more than 900 women have
programme. already undergone mammogram checks.
In normal circumstances, less than 50% of
this number would have been checked.
Donated, in 2011
RM581,262
101

Metrics at
a Glance
102

Financial Performance
2009 2010 2011 Remarks
Revenue
28,291.00 32,506.20 41,858.80
(RM Million)
Plantation 10,657.90 10,875.70 13,167.90
Property 1,407.50 1,784.50 1,987.20
Industrial 7,870.10 8,312.60 10,271.10
1. Performance metrics for
Motors 7,510.30 10,098.20 14,818.00 Financial Year (1st July - 30th June)
Energy & Utilities 846.50 953.30 1,085.40
Healthcare 265.10 288.70 318.70
Group Head Office
and Allied Products 210.50 211.11 363.60
and Services
2009 2010 2011 Remarks
Profit before
interest and tax 3,216.10 2,976.10 5,601.70
(RM Million)
Plantation 1,719.00 2,113.20 3,280.20
1. Performance metrics for
Property 461.90 493.00 456.00 Financial Year (1st July - 30th June)
Industrial 862.10 758.00 1,068.00 2. Total PBIT includes Corporate and
Elimination:
Motors 178.50 386.30 633.20 2008/2009 = RM (68.70) million
Energy & Utilities 91.40 (687.20) 245.70 2009/2010 = RM (121.1) million
2010/2011 = RM (65.40) million
Healthcare 13.9 21.9 26.00
Group Head Office
and Allied Products (42.00) 12.00 (4.00)
and Services
103

Environmental Performance
Climate Change
Carbon Emission by Divisions for Carbon Emission by Scope for

2009 (Baseline Year)1 2009 (Baseline Year)1
0.37% 5.77%
14.23% Healthcare Scope 2
Energy & Utilities
0.55% 82.58%
Motors 94.23%
Plantation Scope 1
1.12%
Industrial
1.15%
Property
3,155,861 3,155,861
t CO2 -e t CO2 -e
Carbon Emission by Country for Biogenic vs Scope 1 & 2 emissions

2009 (Baseline Year)1 for 2009 (Baseline Year)1
54.35% tonnes Co2 -e

Malaysia
27.86% 3,450,000 -
Indonesia 3,387,529
3,400,000 -
3,350,000 -
3,300,000 -
3,155,861
t CO2 -e 3,250,000 -
3,200,000 - 3,155,861
3,150,000 -
14.24% -
3,100,000
Thailand
3,050,000 -
0.31% 1.94% 3,000,000 -
Singapore The Netherlands Emission from Biogenic carbon
0.54%
0.77% fossil fuel, emission
China &
Australia purchased
Hong Kong
electricity and
steam (Scope 1
and 2)
Top 5 Emission Sources for 2009 (Baseline Year1)
1,822.22
2,000 -
tonnes CO2-e (‘000)
1,500 -
1. The 2009 baseline carbon
1,000 - 477.70
inventory was prepared in
349.06 205.47 accordance to the Greenhouse
500 - 209.33
92.08 Gas Protocol Standard.
Carbon emission calculations
0 -
104
do not include emissions
Effluent Electricity Boilers Synthetic Purchased Others from land-use conversion and
treatment generation fertilisers electricity carbon sequestration from
(process) for process growth of oil palm trees.

Carbon emission intensity ratios 2009 (Baseline Year)
Plantation 0.03 tonnes of CO2-e per tonne Fresh Fruit Bunches (estates)
0.92 tonnes CO2-e per tonne Crude Palm Oil (mills)
0.09 tonnes of CO2-e per tonne of refined palm oil products (downstream
refineries)
0.29 tonnes of CO2-e per tonne of fresh rubber latex (rubber mills)
0.26 tonnes of CO2-e per tonne of dry rubber products (rubber factories)
Property 0.01 tonnes CO2-e per square metre of built up area (property development
and management)
Industrial 2.86 tonnes of CO2-e per thousand work hours (dealerships)
Motors 0.31 tonnes of CO2-e per vehicle assembled (assembly)
0.46 tonnes of CO2-e per vehicle unit sale (dealerships)
Energy & Utilities 550.99 tonnes of CO2-e per GWH (power generation)
0.53 tonnes of CO2-e per kilo tonne of throughput (ports)
1.28 tonnes of CO2-e per thousand work hours (engineering services)
0.09 tonnes of CO2-e per squared metre of built up area (head office)
Healthcare 0.06 tonnes of CO2-e per adjusted patient days (hospital)
0.02 tonnes of CO2-e per outpatient visits (hospital)
0.10 tonnes of CO2-e per inpatient days (hospital)
0.007 tonnes of CO2-e per outpatient visits (out-patient medical centre)
0.41 tonnes of CO2-e per student (college)
105

Energy Consumption
Energy Consumption for 2009 Breakdown of Energy Consumption
(Baseline Year) for 2009 (Baseline Year)
77.02% 3.65%
Plantation Indirect
96.35%
37,378,475 37,378,475 Direct
GJ GJ
0.69%
0.19% Property
Healthcare 0.36% 0.72%
Motors Industrial
21.01%
Energy & Utilities
Breakdown of Energy Consumption by Breakdown of Energy Consumption by

Division for 2009 ( Baseline Year) Fuel Type for 2009 (Baseline Year)
% 1.02%
Percentage Remaining
Divisions 23.93%
100.00 - Natural gas
4.15 Healthcare
3.37 Energy & Utilities
90.00 - 21.68% 4.41 Motors
Energy
& Utilities 7.17 Industrial
80.00 -
11.59 Property
70.00 -
60.00 - 37,378,475 5.11%

GJ Diesel
50.00 - 77.31% 66.96% 2.57%
69.31 Plantation
Plantation Biomass Purchased
40.00 -
electricity
30.00 - 0.94%
Medium fuel oil
20.00 - 0.37%
Petrol
10.00 - 0.0013% 0.10%
Compressed Biofuel
0 - natural gas
Direct Indirect 0.02%
Liquified petroleum
gas
Waste Management Water

Breakdown of Scheduled Waste Breakdown of Water Consumption
by Division for 2011 by Division for 2011
0.01%
Property
85.42%
Plantation 91.35%
12.16% Plantation
Industrial
1.63%
1.32% Property 0.29%
Motors
0.69% 4.46% Industrial
Energy & Utilities Motors
0.40% 1.98%
38,457 Healthcare
95,565,397 Energy &
tonnes m3 Utilities
106
0.29%
Healthcare

Social Performance
Health and Safety*
Fatalities Lost Time Injury Lost Days
No. of No. of No. of

fatalities cases days
3,682 83,671
14 - 4,000 - 90,000 -
12 80,000 -
12 - 3,500 -
70,000 -
3,000 - 2,506 56,838
10 -
60,000 -
7 2,500 -
8- 50,000 -
2,000 -
6- 40,000 -
1,500 -
30,000 -
4- 1,000 - 20,000 -
2- 500 - 10,000 -
0- Year 0 - Year 0- Year
2010 2011 2010 2011 2010 2011
Severity Rate Incident Rate Frequency Rate

No. of Lost No. of No. of
Days/ Incidents/ Incidents/
1,000,000 1,000 1,000,000
man-hours employees man-hours
450 - 45 - 18.5 - 18.27
413.42 44.22
400 - 44 - 18 -
350 - 43 - 17.5 -
300 - 42 -
17 -
250 - 205.99 41 -
16.5 -
200 - 40 - 15.94
38.96 16 -
150 - 39 -
15.5 -
100 - 38 -
15 -
50 - 37 -
0- Year 36 - Year 14.5 - Year

2010 2011 2010 2011 2010 2011

China operations for January to June 2010.
107

Breakdown of Health and Safety Performance by Divisions*
2010 2011 2010 2011
Fatalities Severity Rate

(No. of fatalities) 12 7 (No. of Lost Days / 413.42 205.99
million man hours)
Plantation 7 6 Plantation 362.10 246.03
Property 5 0 Property 1,482.53 4.22
Industrial 0 0 Industrial 95.07 67.74
Motors 0 0 Motors 52.73 29.91
Energy & Utilities 0 1 Energy & Utilities 12.92 451.16
Healthcare 0 0 Healthcare 4.26 1.02
2010 2011 2010 2011
Lost time injury Incident Rate

(No. of cases) 2,506 3,682 (No. of Incidents / 38.96 44.22
1,000 employees)
Plantation 2,336 3,563 Plantation 49.36 53.80
Property 14 3 Property 5.18 0.88
Industrial 88 72 Industrial 33.66 26.29
Motors 50 35 Motors 16.40 7.64
Energy & Utilities 9 6 Energy & Utilities 2.70 1.97
2010 2011 2010 2011
Lost days Frequency Rate

(No. of days) 83,671 56,838 (No. of Incidents/ 15.94 18.27
million man hours)
Plantation 51,671 49,294 Plantation 20.08 23.51
Property 30,116 66 Property 1.82 0.32
Industrial 1,337 1,068 Industrial 15.79 12.75
Motors 362 352 Motors 7.44 4.59
Energy & Utilities 166 6,053 Energy & Utilities 0.86 0.52

108 China operations for January to June 2010.

Talent Management
Total Number of Employees
104,492
2010
2011
109,629
Breakdown of Employees by Gender for 2011
33%
67% 109

Breakdown of Employees by Breakdown of Employees by
Division for 2011 Employment Category for 2011
7.66%
Executive
78.00%
Plantation
1.53%
Property
7.66%
Industrial
1.58%
Group Head Office & 6.71%
Allied Products and Motors
2.55% 92.34%
Services
Energy &Utilities Non-Executive
1.97%
Healthcare
2010 2011
Employee Turnover by Non-Executive

Employment Category for 2011 employees covered by
27,742 37,007
collective bargaining
(No. of employee)
Remarks: Malaysian operations only
%
Percentage Executive
Non- Executive Average hours of
40 -
training/year/employee 23.2 22.8
35 - (hours)
Remarks: Performance metrics for Financial Year
30 -
(1st July - 30th June)
25 -
20.46
20 -
Ratio of basic salary of women to men
15 -
Executive 1.20:1 0.76:1
10 -
13.98 Non-Executive 1.02:1 1.24:1
5- Remarks:
0- 1. Performance metrics for Financial Year
(1st July - 30th June)
2. For Malaysian employees only
110

Sime Darby Motors
111

Global
Reporting
Initiative
Content Index
112

Our Sustainability Report 2011
applies a self-declared Global
Reporting Initiative (GRI) Application
Level B. This application level refers
to the level of our reporting against
the GRI G3.1 guidelines.
For more information on the

GRI sustainability reporting
framework and the G3.1 Guidelines,
visit www.globalreporting.org.
113

GRI Indicator Page
Strategy and Analysis

1.1 Statement from senior decision-maker of the organisation about the relevance of
6-7
sustainability to the organisation and its strategy.
1.2 Description of key impacts, risks, and opportunities. 27,58
Organisational Profile
2.1 Name of the organisation. 8-20
2.2 Primary brands, products, and/or services. 8-20
2.3 Operational structure of the organisation, including main divisions, operating
8-20
companies, subsidiaries, and joint ventures.
2.4 Location of organisation’s headquarters. 8-20
2.5 Number of countries where the organisation operates, and name of countries with
either major operations or that are specifically relevant to the sustainability issues 8-20
covered in the report.
2.6 Nature of ownership and legal form. 8-20
2.7 Markets served (including geographic breakdown, sectors served, and types of
8-20
customers/beneficiaries).
2.8 Scale of the reporting organisation. 8-20
2.9 Significant changes during the reporting period regarding size, structure, or ownership. 8-20
2.10 Awards received in the reporting period. 63
Report Parameters
3.1 Reporting period (e.g., fiscal/calendar year) for information provided. 4-5
3.2 Date of most recent previous report (if any). Not
applicable
3.3 Reporting cycle (annual, biennial, etc.) 4-5
3.4 Contact point for questions regarding the report or its contents. 4-5
3.5 Process for defining report content. 4-5
3.6 Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint
4-5
ventures, suppliers).
3.7 State any specific limitations on the scope or boundary of the report. 4-5
3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced
operations, and other entities that can significantly affect comparability from period to 4-5
period and/or between organisations.
3.9 Data measurement techniques and the bases of calculations, including assumptions
and techniques underlying estimations applied to the compilation of the Indicators and 4-5
other information in the report.
3.10 Explanation of the effect of any re-statements of information provided in earlier
Not
reports, and the reasons for such re-statement (e.g., mergers/acquisitions, change of
applicable
base years/periods, nature of business, measurement methods).
3.11 Significant changes from previous reporting periods in the scope, boundary, or Not
measurement methods applied in the report. applicable
3.12 Table identifying the location of the Standard Disclosures in the report. 112-117
3.13 Policy and current practice with regard to seeking external assurance for the report. If
not included in the assurance report accompanying the sustainability report, explain
4-5
the scope and basis of any external assurance provided. Also explain the relationship
between the reporting organisation and the assurance provider(s).
114

GRI Indicator Page
Governance, Commitments, and Engagement

4.1 Governance structure of the organisation, including committees under the highest
governance body responsible for specific tasks, such as setting strategy or organisational 24
oversight.
4.2 Indicate whether the Chair of the highest governance body is also an executive officer
(and, if so, their function within the organisation’s management and the reasons for this 24
arrangement).
4.3 For organisations that have a unitary board structure, state the number and gender of 4-5,
members of the highest governance body that are independent and/or non-executive Annual
members. Report
4.4 Mechanisms for shareholders and employees to provide recommendations or direction to 4-5,
the highest governance body. Annual
Report
4.5 Linkage between compensation for members of the highest governance body, senior 4-5,
managers, and executives (including departure arrangements), and the organisation’s Annual
performance (including social and environmental performance). Report
4.6 Processes in place for the highest governance body to ensure conflicts of interest are 4-5,
avoided. Annual
Report
4.7 Process for determining the qualifications and expertise of the members of the highest
governance body for guiding the organisation’s strategy on economic, environmental, and 24
social topics.
4.8 Internally developed statements of mission or values, codes of conduct, and principles
26,
relevant to economic, environmental, and social performance and the status of their
82-85
implementation.
4.9 Procedures of the highest governance body for overseeing the organisation’s
identification and management of economic, environmental, and social performance,
24,58
including relevant risks and opportunities, and adherence or compliance with
internationally agreed standards, codes of conduct, and principles.
4.10 Processes for evaluating the highest governance body’s own performance, particularly 4-5,
with respect to economic, environmental, and social performance. Annual
Report
4.11 Explanation of whether and how the precautionary approach or principle is addressed by
58
the organisation.
4.12 Externally developed economic, environmental, and social charters, principles, or other
48-57
initiatives to which the organisation subscribes or endorses.
4.13 Memberships in associations (such as industry associations) and/or national/international
48-57
advocacy organisations.
4.14 List of stakeholder groups engaged by the organisation. 48-57
4.15 Basis for identification and selection of stakeholders with whom to engage. 48-57
4.16 Approaches to stakeholder engagement, including frequency of engagement by type and
48-57
by stakeholder group.
4.17 Key topics and concerns that have been raised through stakeholder engagement, and how
the organisation has responded to those key topics and concerns, including through its 48-57
reporting.
115

GRI Indicator Page
Economic
EC1 Direct economic value generated and distributed including revenues, operating costs,
employee compensation, donations and other community investments retained earnings 8-20
and payments to capital providers and governments.
EC2 Financial implications and other risks and opportunities for the organisation’s activities 27,
due to climate change. 68-71
Not reported: EC3, EC4, EC5, EC6, EC7, EC8, EC9
Environmental
EN2 Percentage of materials used that are recycled input materials. 72-75
EN3 Direct energy consumption by primary energy source. 102-110
EN4 Indirect energy consumption by primary source. 102-110
EN5 Energy saved due to conservation and efficiency improvements. 102-110
EN6 Initiatives to provide energy-efficient or renewable energy-based products and services
34-47
and reductions in energy requirements as a result of these initiatives.
EN8 Total water withdrawal by source. 102-110
EN10 Percentage and total volume of water recycled and reused. 72-75
EN11 Location and size of land owned, leased, managed in or adjacent to protected areas and
76-79
areas of high biodiversity value outside protected areas.
EN12 Description of significant impacts of activities, products and services on biodiversity in
76-79
protected areas and areas of high biodiversity value outside protected areas.
EN13 Habitats protected or restored. 76-79
EN14 Strategies, current actions and future plans for managing impacts on biodiversity. 76-79
EN16 Total direct and indirect greenhouse gas emissions by weight. 68-71,
102-110
EN17 Other relevant indirect greenhouse gas emissions by weight. 68-71,
102-110
EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved. 68-71,
102-110
EN22 Total weight of waste by type and disposal method. 102-110
EN26 Initiatives to mitigate environmental impacts of products and services and extent of 34-47,
impact mitigation. 72-75
EN30 Total environmental protection expenditures and investments by type. 8-20
Not reported: EN1, EN7, EN9, EN15, EN19, EN20, EN21, EN23, EN24, EN25, EN27, EN28, EN29
116

GRI Indicator Page
Labour Practices and Decent Work

LA1 Total workforce by employment type, employment contract, and region, broken down by
102-110
gender.
LA2 Total number and rate of new employee hires and employee turnover by age group,
102-110
gender, and region.
LA4 Percentage of employees covered by collective bargaining agreements. 102-110
LA7 Rate of injury, occupational diseases, lost days and absenteeism, and number of work- 86-89,
related fatalities by region. 102-110
LA10 Average hours of training per year per employee by gender, and by employee
102-110
category.
LA11 Programs for skills management and lifelong learning that support the continued
90-93
employability of employees and assist them in managing career endings.
LA13 Composition of governance bodies and breakdown of employees per category according
102-110
to gender, age group, minority group membership and other indicators of diversity.
LA14 Ratio of basic salary and remuneration of women to men by employee category, by
102-110
significant locations of operation.
Not reported: LA3, LA5, LA6, LA8, LA9, LA12, LA15
Human Rights
HR3 Total hours of employee training on policies and procedures concerning aspects of human 82-85,
rights that are relevant to operations, including the percentage of employees trained. 102-110
HR4 Total number of incidents of discrimination and corrective actions taken. 82-85,
102-110
HR6 Operations and significant suppliers identified as having significant risk for incidents of
82-85
child labor, and measures taken to contribute to the effective abolition of child labor.
HR9 Total number of incidents of violations involving rights of indigenous people and actions
48-57
taken.
HR11 Number of grievances related to human rights filed, addressed and resolved through 82-85,
formal grievance mechanisms. 102-110
Not reported: HR1, HR2, HR5, HR7, HR8, HR10
Society
SO1 Percentage of operations with implemented local community engagement, impact
48-57
assessments, and development programs.
SO3 Percentage of employees trained in organisation’s anti-corruption policies and 82-85,
procedures. 102-110
SO4 Actions taken in response to incidents of corruption. 102-110
SO9 Operations with significant potential or actual negative impacts on local communities. 48-57
SO10 Prevention and mitigation measures implemented in operations with significant potential
48-57
or actual negative impacts on local communities.
Not reported: SO2, SO5, SO6, SO7, SO8
Product Responsibility
PR1 Life cycle stages in which health and safety impacts of products and services are assessed
for improvement and percentage of significant products and services categories subject 34-47
to such procedures.
PR5 Practices related to customer satisfaction including results of surveys measuring customer
48-57
satisfaction.
117
Not reported: PR2, PR3, PR4, PR6, PR7, PR8, PR9

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Sime Darby Group Sustainability Report 2011

Sime Darby Group Sustainability Report 2011

Developing Sustainable Futures

and performance in a and aims to provide stakeholders

timely manner” performance on sustainable

This report should be read in

Sime Darby Group Sustainability Report 2011

Developing Sustainable Futures

Dato’ Mohd Bakke Salleh

Sime Darby Group Sustainability Report 2011

Developing Sustainable Futures

6 Divisions New Zealand

Sime Darby Group Sustainability Report 2011

We have a market capitalisation

Developing Sustainable Futures

ONE OF THE WORLD’S

Profit before interest and tax

*Note: For Financial Year 2010/2011

Sime Darby Group Sustainability Report 2011

Sime Darby Property is the Key Activities

Developing Sustainable Futures

ONE OF THE WORLD’S

Sime Darby Industrial operates Key Activities

As a business entity, Sime Darby Key Countries of Operations

Our Industrial division Financial Summary*

*Note: For Financial Year

Sime Darby Group Sustainability Report 2011

Sime Darby Motors started 30 Key Activities

Other major brands represented • Australia

Profit before interest and tax

*Note: For Financial Year

Developing Sustainable Futures

Energy & Utilities

CORE BUSINESSES IN POWER,

Sime Darby Group Sustainability Report 2011

Sime Darby Healthcare is at Key Activities

Developing Sustainable Futures

Sime Darby Group headquater, Kuala Lumpur, Malaysia

Sime Darby Group Sustainability Report 2011

Developing Sustainable Futures

1910 • Founded in Malaysia

1917 • First commercial planting in Tennamaram Estate, Malaysia

1926 • Appointed as Caterpillar dealer in Malaysia

• Launched 1,200 acres of Subang Jaya, the first property township in

• Sime Darby Berhad commences trading on the Kuala Lumpur

• Appointed as sole distributor for Land Rover and Range Rover

1982 • Inception of Yayasan Sime Darby

• Acquired Caterpillar dealerships in the Australian states of Queensland

2001 • Acquired oil palm plantations in Indonesia

• Sime Darby listed on the Forbes 2000 list

2007 • Merger between Sime Darby, Golden Hope and Guthrie

2008 • Yayasan Sime Darby revamped and expanded to five pillars

2009 • Laem Chabang power plant commences operations in Thailand

• First planting of oil palm in Liberia

• Adopts biological controls for Integrated Pest

• Elected to United Nations Environment Programme’s Global 500 roll of

• Co-generation technology adopted for power and steam generation in

• Founding member of the Roundtable on Sustainable Palm Oil (RSPO) 2002

• Achieved first Global GAP certification in Plantation division 2004

• Achieved first RSPO certification in Plantation division

• First shipment of 3,500 tonnes traceable segregated Certified Sustainable Palm

• 50 strategic operating units in Plantation division RSPO certified with an annual

Yayasan Sime Darby

YSD’s activities focuses purely