RAM Sustainability upgrades KLK’s overall Sustainability Rating to Gold1 from Gold2

Published on 17 Jun 2025.

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RAM Sustainability has upgraded Kuala Lumpur Kepong Berhad’s (KLK or the Group) overall Sustainability Rating to Gold₁ (G₁) from Gold₂ (G₂). The Group’s Environmental (E), Social (S) and Governance (G) ratings have also been upgraded to G₁. These upgrades reflect continued improvement in KLK’s overall ESG management, even with the more stringent methodology under our enhanced Sustainability Rating assessment. The Gold rating awarded to KLK indicates that it follows best practices in sustainability and displays outstanding sustainability performance.

The E rating upgrade is mainly driven by the Group’s progress in climate change reporting as well as its strong implementation of greenhouse gas (GHG) emissions reduction initiatives that contributed to absolute GHG reductions in FY 2024. KLK is also committed to No Deforestation, No New Peat Development and No Exploitation (NDPE), adhering to the Principles and Criteria of the Roundtable of Sustainable Palm Oil (RSPO) and local standards like the Malaysian Standard on Sustainable Palm Oil and the Indonesia Sustainable Palm Oil standard. While acknowledging the Group’s progress in these respects, there is still room for improvement in carbon accounting, RSPO certification levels for its estates and mills, and the management of exposure and impact in water-stressed areas, particularly in comparison to industry peers.

The S rating upgrade is underscored by KLK’s robust measures to uphold human rights. Recognising the palm oil industry’s historical association with persistent human rights violations, KLK has proactively implemented a comprehensive measure to prevent such infringements through the Group’s Sustainability Policy, No Recruitment Fee Policy, NDPE commitment, Code of Conduct and Ethics, Supplier Code of Conduct and Non-Compliance Protocol. Having completed an independent human rights risk assessment for its estates and mills in Peninsular Malaysia, KLK is currently conducting a similar assessment in Sabah, planning to expand this to Indonesia next year.

The Group’s sustainability governance, too, has shown notable improvement, with its Sustainability Policy updated in 2025 for further comprehensiveness. In FY 2024, KLK for the first time obtained limited assurance on selected Global Reporting Initiative indicators and the Zoological Society of London’s Sustainable Palm Oil Transparency Toolkit indicators. On the corporate governance front, the majority of KLK’s board members are independent directors as of June 2025.

 

Analytical contacts
Raz Amira Razlan
(603) 2708 8295
raz@ram.com.my

Cynthia Lim Sin Lu
(603) 2708 8293
cynthia@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my

 

This external review or second opinion is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for an investor, nor does it involve any audit by RAM Sustainability. It is also not a credit assessment on the proposed Green, Social or Sustainability Bonds/Sukuk.

About RAM Sustainability

RAM Sustainability Sdn Bhd (RAM Sustainability) is a provider of sustainability services and ESG analytics. Incorporated on 31 May 2000, RAM Sustainability is a wholly owned subsidiary of RAM Holdings Berhad (RAM Group). RAM Sustainability is the first ASEAN-based provider of ESG ratings and second opinions and has the distinction of being the first Registered Observer of ICMA’s Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines and Sustainability-Linked Bond Principles in ASEAN. It was a member of ICMA’s Advisory Council to the Green Bond Principle and Social Bond Principle Executive Committee for three consecutive terms. 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.

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