SUSTAINABILITY
OUR SUSTAINABILITY APPROACH
The Group is committed to advancing the United Nations (“UN”) Sustainable Development Goals (“SDGs”) to build a sustainable future. We identify relevant and material sustainability matters through the SDGs and strive to fulfil six (6) ESG core themes to drive SDGs through our business. The information disclosed within this SS covers our primary operations in Malaysia. This SS excludes the performance information of QES’s foreign subsidiaries and our associates.
This SS demonstrates that we have considered and reviewed the material matters relating to the three (3) pillars – environmental, social and governance. We identify our material sustainability matters through a materiality assessment
that focuses on ESG and consider our stakeholders’ interests through regular engagement. Please refer to our “Stakeholder Engagement” on the Group’s ESG approach.
Sustainability Governance
We firmly believe that a robust governance structure is vital to implement our sustainability strategy across the Group and to strengthen relationships with stakeholders and enhance overall accountability in our business operations. The Group’s Sustainability Steering Committee (“SSC”) was established and chaired by the Group Managing Director since 2019 to continuously drive sustainability measures and initiatives. He is supported by a team of key management personnel in implementing strategies towards achieving sustainable performance for the Group. Thereupon, the key material matters are reviewed by our Board of Directors (“Board”) and the SSC will ensure that the material matters are aligned with our sustainability ambition.
Stakeholder Engagement
At QES, we believe that consistent communication and understanding with all internal and external stakeholders is critical in our journey to become a reputable, long-term company with good corporate governance. The Group maintains ongoing dialogues with pertinent stakeholders and shares information in a timely, effective, and transparent way. The invaluable input from our stakeholders guides our company as we strive to become a responsible corporate citizen. To accomplish meaningful engagements that meet the requirements of our stakeholders, we empower and make it our mission for the respective business units to assess the best approach to engage with our stakeholders. We communicate with our stakeholders through a variety of platforms and at varying frequencies, ranging from daily communications to weekly updates to quarterly follow-ups and annual meetings.
| Key Stakeholders | Areas of Interests | Platforms Used |
|---|---|---|
| Directors | Financial Performance Corporate Governance Practices Business Strategy | Quarterly Board Meetings On-Going Interactions |
| Management | Financial Performance Corporate Governance Practices Business Strategy Human Capital Management | Monthly Management Meetings Quarterly Key Management Meetings Half Yearly Key Management Meetings On-Going Interactions |
| Employees | Employee Health & Well-Being Occupational Health & Safety Compensation & Benefits Career Development | Employee Corporate Handbook Memorandum Intranet Performance Appraisal Learning & Development Programmes Virtual Townhall Meetings |
| Shareholders/ Investors | Financial Performance Corporate Governance Practices Business Strategy Transparency in financial reporting Risk management | Annual General Meetings Quarterly Financial Reports Investors Briefings Annual Reports Analyst Briefings Corporate Website |
| Customers | Technologies & Innovation Product Reliability & Quality Technical Support Services Competitive Pricing Manufacturing Capacity On – Time Delivery Compliance with Regulations Corporate Governance Practices | Technologies & Innovation Product Reliability & Quality Technical Support Services Competitive Pricing Manufacturing Capacity On – Time Delivery Compliance with Regulations Corporate Governance Practices |
| Suppliers/Vendors | Compliance with Regulations Corporate Governance Practices Agreeable Contracts Terms of Payment | Email Correspondence On - Site Visit Daily Interactions Vendor Assessment & Evaluation Procedure Annual Performance Evaluation |
| Communities/ Societies | Corporate Governance Practices Community Involvement Environmental Management | Community Involvement Programmes Career Fairs Corporate Website Social Media (LinkedIn) |
| Media | Regulatory Compliance Community Involvement | Corporate Website Social Media (LinkedIn) |
Environmental
The Group is committed to protecting the environment in line with the United Nations’ 2030 Agenda. The Group aims to substantially reduce waste generation through prevention, reduction, recycling, and reuse, in alignment with SDG 12.5 on responsible consumption and production. The Group conducts its business sustainably with minimal adverse impact on the environment and in compliance with all applicable environmental laws and regulations. The Group also adopts the best industry practices through the management of its subcontractors.
All scheduled waste is properly disposed of by registered contractors to the approved treatment premises and disposal facilities. In the daily operations of the Group, there is a commitment and awareness to recycling, energy-saving practices, and measures to reduce wastage, pollution, and harmful emissions. The Group encourages its employees to recycle old documents, distribute all memos digitally, disseminate all company information using internal electronic networks, reuse delivery boxes, shipping and packing materials when necessary, and switch off all the electricity when not in use.
In 2022, the Group managed to recycle 2105 kg of recycled papers and stationaries, 100 kg of scrap metal and 155 kg of plastics. During the reporting period, the Group did not incur any incidents of non–compliance or penalties related to environmental issues. To maintain the highest standard of environmental compliance and prevent future incidents, the Management will continue to review and improve current environmental management systems and practices, ensuring that all activities and operations comply with existing regulatory requirements.
Lowering one’s carbon footprint is an unavoidable development tendency in the twenty-first century. At QES, we are constantly monitoring and optimising energy usage to ensure that our facilities and production processes use energy as efficiently as possible in order to reduce the impact of global warming. We have implemented several energy efficiency measures to accomplish our goals of reducing the environmental impact of energy use and improving energy efficiency:
- Installation of only inverter air conditioners for new Corporate HQ
Inverter air conditioners are important in energy management because they adjust their compressor speed based on the desired temperature, leading to lower energy consumption and reduced electricity bills. They also reduce peak demand on the electrical grid, come with energy-saving features, and help to minimize environmental impact. Using inverter air conditioners is a practical way to manage energy consumption and promote sustainability while saving money.
- Installation of only LED lighting for new Corporate HQ
LED lighting uses significantly less energy than traditional lighting, such as incandescent and fluorescent bulbs, while still providing the same level of brightness. LED lighting is also highly efficient, converting a higher percentage of its energy into light compared to traditional lighting. This means that less energy is wasted as heat, resulting in lower electricity bills and reduced energy consumption.
- Staff awareness in energy management
In FYE 2021, the Group made it a goal to reduce our paper consumption by 50% out of the 1,626 reems of papers, once we embarked on our full digitalisation processes. For FYE 2022, we are pleased to announce that the Group only used 598 reems of paper hence reducing our paper consumption by 63.3%. We also ensure that our staff remained discipline in switching off all electricity points when unused.
The installation of new solar panel roofs at our new Corporate HQ has been delayed to 2023 due to unforeseen circumstances but however, the Group is confident once the solar panels have been installed, we will be looking to offset 237 tonnes of carbon dioxide, which is also saving the equivalent of:-
We understand that our operation has a huge impact on the environment, and we strive to minimize this impact through responsible resources management and protection of our environment. The Group has since adopted rainwater harvesting once we moved into our new Corporate HQ in March 2022. By adopting the rainwater harvesting system, we have in turn reduced our strain on local water resources and the environment which help us to become more self-sufficient and reduced our reliance on municipal water suppliers. The Group has demonstrated a commitment towards the Group’s ESG strategy through our commitment to sustainable water management, reducing our environmental impact, contributing to the well-being of the communities in which we operate.
Social
To attract and keep the finest talent, QES offers competitive compensation and benefits. In terms of wages and benefits, QES abides by all relevant local and national laws and regulations, as well as the national minimum wage in Malaysia or the country of employment, as applicable. We practice equal pay for equal labor, which means paying men and women fairly for work that requires equal skills and responsibilities and is done under comparable conditions. Our compensation equity which includes both fixed and variable compensation, has become a competitive advantage in terms of retaining employees and attracting prospective talent. To attract and retain talent, QES believes that a successful business should offer multiple variable compensation packages.
| FIXED COMPENSATION | VARIABLE COMPENSATION |
| Annual Leave Medical Leave Hospitalisation Leave Compassionate Leave Maternity Leave Paternity Leave Emergency Leave Special Leave Vaccination Leave Hospitalisation and surgical insurance Personal accident insurance Employees’ Share Option Scheme (“ESOS”) Replacement Public Holiday Medical Check-up subsidy Dental Subsidy Flexible Working Hours Mobile Phone & Monthly Data subsidy | Relocation allowance |
Training and career development are integral to the social aspect of Environmental, Social, and Governance (ESG) considerations for the Group. Socially, providing training and career development opportunities to employees can lead to increased job satisfaction, motivation, and retention. This can help to create a positive workplace culture and promote employees well-beings. In FYE 2022, the Group conducted a total of 166 trainings to all our employees.
As part of our commitment to upholding the highest standards of safety, we rely on comprehensive preventive measures, and the cooperation of our employees to adhere to the best practices in their day-to-day operations. We inspect emergency preparedness equipment such as the firefighting system, fire extinguisher, medical equipment and facility, emergency exit signage and light to ensure they are available, well maintained and functioning in the event of emergencies on a monthly and quarterly basis. In conducting these inspections, we aim to eliminate incidents and injuries arising from emergencies, accidents, unsafe or unhealthy work conditions and processes. Our emphasis on employee’s health and safety well-being can be witnessed through the establishment of our in-house Occupational Health, Safety & Environment Policy which comprises of: –
- Atomic Energy Licensing Board (AELB) Emergency Response Team
- Monthly Fire System Maintenance
- Health & Safety Committee
The aim of these teams is to ensure that we provide an accident-free workplace environment across our workstations to all our employees. We ensure all employees are familiar and well-versed with the procedures to minimize safety incidents in the event of emergencies. Our Emergency Response Team (“ERT”) is always ready to respond to emergencies. In FYE 2022, QES’s ERT had approximately 41 people. An updated list was required after we moved into our new 5-storey Corporate HQ. They are trained to respond to emergencies such as first aid, firefighting and building evacuation. The Group had no reported work-related ill-health incidents from FYE 2021 to FYE 2022.
Governance
From a governance perspective, ensuring product reliability and quality can help to establish trust and credibility with customers, investors, and other stakeholders. It can also help to minimize risks related to product liability and recalls, which can have significant financial and reputational consequences for a company. A robust product reliability and quality assurance program can help to mitigate these risks by ensuring that our products meet or exceed established quality standards and comply with relevant regulations. The Group had placed a significant importance to obtain International Organization for Standardization (“ISO”) accreditation for all our relevant Business Units and ASEAN subsidiaries for FYE 2022. The ISO 17025 Accreditation verifies that the laboratory has an acceptable quality management system in place, and it has the ability and competence to provide testing and calibration results. As the Group maintains a consistent recurring annual income of approximately 20% to 25% of the Group’s total revenue through the maintenance and service of our large equipment installed base, the ISO accreditation will allow us to leverage and provide confidence to our customers that we have the right skills, precision, accuracy, and repeatability of quality service. We are pleased to announce that our subsidiaries, QES (Vietnam) Co., Ltd, QES (Asia-Pacific) Sdn Bhd and QS Instruments Sdn Bhd were all successful in obtaining their ISO/IEC 17025 Accreditation in FYE 2022. In most countries, ISO/IEC 17025 is the standard for which most labs must hold accreditation in order to be deemed technically competent. Other than that, other subsidiaries under the Group have also been accredited with ISO 9001:2008 and ISO 9001:2015 in regards to our supply and services of distribution and manufactured equipment.
In FYE 2022, the Group also partners with Einnosys SECS/GEM system, which can assist equipment makers and semiconductor companies in bringing their products to market quicker by simplifying the integration of new equipment into existing production lines. SECS/GEM (SEMI Equipment Communications Standard/Generic Equipment Model) is an essential component of Industry 4.0, by incorporating advanced digital technologies into the manufacturing processes. The ability to gather, analyze, and share data in real time is essential for optimizing manufacturing processes and increasing efficiency in Industry 4.0. SECS/GEM is a communication protocol that allows equipment and host systems to share information in real time, making it an essential Industry 4.0 enabler. SECS/GEM also allows the equipment to transmit real-time data, such as production data, equipment status, and alarm notifications, to the host system. This real-time data exchange enables quicker decision-making and reaction times, which are critical for optimizing manufacturing processes and increasing efficiency. SECS/GEM also offers a framework for monitoring and tracing product and process data, which is critical for quality control and regulatory compliance.
The Group recognizes that corporate governance is fundamental to its long-term business and is unreservedly committed to applying the practices necessary to ensure corporate transparency, accountability, performance, and integrity which are vital for stakeholder’s trust and confidence. The Group will continue to observe high standards of corporate governance which is stated in the Corporate Governances Overview Statement in this Annual Report. The Group has also formalized and incorporated the following:
- Code of Ethics and Conduct
- Anti-Corruption and Bribery Policy
- Whistleblowing Policy
- Corporate Governance Report
- Board Charter
- Directors’ Fit & Proper Policy
For further information, documents on our policies are published on our corporate website at https://www.qesnet. com/investor-relations/corporate-governance/
