Supply Chain Management

• PCG enforces robust third-party risk management to ensure all contractors, vendors, and joint venture partners meet our standards of integrity. This includes conducting risk assessments during tendering across key categories such as human rights, governance, and socio-economic factors.

• We apply the PETRONAS Contractors Code of Conduct on Human Rights (CoCHR) and Health, Safety & Environment (HSE) requirements during vendor selection, aligned with the eight core conventions of the International Labour Organization (ILO). Regular CoCHR assessments are carried out to identify gaps and drive continuous improvement in human rights compliance across our supply chain.

• Our Third Party Risk Assessment (TPRA) process incorporates due diligence tools such as KYC questionnaires, online screening, and compliance checks. These measures help mitigate legal, financial, and reputational risks while reinforcing ethical business practices.

• We embed environmental and social considerations into our supplier selection process, specifying environmental requirements as part of the criteria for contracts and arrangements.

• As part of our tendering process, we conduct risk assessments across multiple categories, including health and safety, environment, governance, legal/regulatory, integrity, socio-economic factors, supplier practices, and human rights.

• At PCG, we regularly conduct supplier audits on environmental management practices and controls, which includes on-site physical audits.

• Our international subsidiaries also apply systematic evaluation processes. At Perstorp, suppliers with significant spend or risk are assessed using a structured tool covering environmental management, human rights, labour standards, and anti-corruption. This approach covers 80% of spend and requires suppliers to sign the vendor policy. Audits focus on quality and environmental management systems.

• At BRB, suppliers undergo a structured assessment, and those with low scores are required to implement improvement plans, with audits conducted as needed.

We work closely with industry and trade associations to drive sustainability and address industry-specific topics affecting environmental performance within the supply chain. These include:

• Through our membership in the Chemicals Industry Council of Malaysia (CICM) Responsible Care programme, we engage with authorities on environmental concerns, such as enhancing hazardous waste recycling capability in the country.

• In collaboration with the Malaysian Plastics Manufacturers Association (MPMA), we launched Operation Clean Sweep (OCS), a global programme to reduce the accidental loss of plastic material to the environment. Upon becoming the first signatory to OCS in Malaysia, we are now driving its adoption by our customers and supply chain partners.

• Our commitment to collaboration extends globally through our international subsidiaries. Perstorp is a member of the Swedish Chemical Federation (IKEM), while BRB is a member of MVO Nederland (CSR Netherlands), a Dutch industry organisation aimed at improving the sustainability of the country's industries and supply chains.

• PCG is committed to strengthening local economies by enhancing participation in our procurement ecosystem. Through structured initiatives, we empower local contractors to succeed in an increasingly digital and competitive landscape. Our support extends to cultivating local vendors via the PETRONAS Vendor Development Programme (VDP), which equips them with essential business skills, technical capabilities, and a global outlook to drive long-term, sustainable growth.