RAM Sustainability reaffirms KLK’s sustainability rating

Published on 07 Oct 2021.

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RAM Sustainability Sdn Bhd (RAM Sustainability) has reaffirmed Kuala Lumpur Kepong Berhad’s (KLK or the Group) sustainability rating within the Gold category and concurrently assigned the Group a Gold2 (G2) rating on RAM Sustainability’s newly launched refined rating scale. The rating reflects KLK’s strong overall sustainability performance after taking into consideration its environment, social and governance (ESG) and positive impact attributes. The rating is also based on relevant international and domestic guidelines such as Bank Negara Malaysia’s Climate Change and Principle-based Taxonomy. 

The Group’s sustainability performance is driven by strong sustainability governance, led by the board of directors and supported by the Sustainability Steering Committee. This is seen to be consistent with Practice 4.1 of the Malaysian Code on Corporate Governance 2021, under which the board together with management takes responsibility for sustainability governance and as such sets the company’s sustainability strategies, priorities and targets. Further supporting the rating is KLK’s holistic Sustainability Policy, which addresses key sustainability obligations of the palm oil industry such as commitment to the No Deforestation, No Peat and No Exploitation (NDPE) policy, protection of High Conservation Value areas, net greenhouse gas reduction, and zero burning. The Group’s advocacy of sustainable palm oil production and the integration of smallholders into its supply chain are also viewed favourably.

KLK is dedicated to improving human rights measures at its operations, documenting its commitments on this front in the Group’s Sustainability Policy, NDPE policy and Code of Conduct. In August 2020, KLK engaged Business for Social Responsibility to conduct an independent Human Rights Assessment of its operations. 

KLK’s recent acquisition of IJM Plantations Berhad will proportionately reduce the Group’s oil palm planted area that is certified by the Roundtable on Sustainable Palm Oil (RSPO) as IJM Plantations, which is not currently an RSPO member, makes up approximately 29% of this area. We expect IJM Plantations to comply with KLK’s sustainability requirements in the near term. The Group targets full certification within three years of any new acquisition.

RAM Sustainability is a provider of sustainability services and ESG analytics. Incorporated on 31 May 2000, it is a wholly owned subsidiary of RAM Holdings Berhad (RAM Group). RAM Sustainability is the first ASEAN-based provider of sustainability ratings and second opinions, and has the distinction of being the first Registered Observer of the International Capital Market Associations’ (ICMA) Green Bond Principles (GBP), Social Bond Principles (SBP) and Sustainability Bond Guidelines in ASEAN. It is also a member of both ICMA’s 2019/2020 New Markets Taskforce and 2020/2021 Advisory Council to the GBP and SBP Executive Committee. On 12 August 2020, RAM Sustainability became an Approved Verifier for the certification of climate bonds under the Climate Bonds Standard & Certification Scheme after having been awarded the status by the Climate Bonds Standards Board. For further details, please refer to https://www.ram.com.my/sustainability.


Analytical contact
Syafi Sani
(603) 3385 2549

Publication Date Published Category
Kuala Lumpur Kepong Berhad Sustainability Rating Report 07-Oct-2021 Sustainability Ratings View PDF