SUSTAINABLE PROCUREMENT Objective To contribute towards achieving a common vision of sustainable procurement within the chemical industry ecosystem. To minimize negative impacts on human health and the environment while supporting a diverse, equitable, and vibrant community and economy. Approach Our Sustainable Procurement Policy is intended to: - communicate the Megachem’s commitment to sustainable purchasing to its employees, vendors and community - complement and support implementation of Megachem’s sustainability goals and policies - provide responsible sourcing and procurement guidance and - empower employees to demonstrate leadership by considering sustainability benefits when making purchasing decisions Our Sustainable Procurement Policy also sets out the following principles: - adopts internationally recognised standards of health and safety measures - protects our environment by minimising impact of our business on environment and - conduct our business in a socially responsible and ethical manner This policy applies to all Megachem employees, vendors, contractors and providers of products and services to Megachem. • Supplier Pre-Qualification Assessment and Post Assessment Megachem evaluates and selects suppliers based on criteria such as quality, consistency of quality management, compliance to local regulations, and their commitment to environmental, social and corporate governance (ESG) activities and sustainable procurement. New suppliers are assessed through a self-audit pre-qualification questionnaire that consists of 5 categories, i.e. management responsibility, resource management, quality management system, health, safety & environment (HSE) management system and corporate social responsibility (CSR). Post assessment processes were enhanced to check and ensure that our existing/high spend vendors’ consistently meets our quality standards and to review their progress with ESG implementations. This post assessment is conducted across the entirety of the group. • Supplier Audits Megachem has assembled a team of auditors to conduct site visits of key suppliers to verify pre-qualification questionnaire findings and ensure Megachem’s expectations on quality and HSE management are met. • Supplier Code of Conduct Megachem expect our suppliers to comply with our Supplier Code of Conduct which includes among others adhering to applicable laws and regulations as well as internationally recognized environmental, social and corporate governance standards (ESG standards). Megachem also expect our suppliers to implement these standards with their suppliers and subcontractors. The Supplier Code of Conduct is sent to suppliers and is also available at our Company’s website. Performance Highlight 2025 Score % of Top 80% Spend Vendors who achieved min 80% score in CSR evaluation 65% % of Group Spending for Top 80% that achieved min 80% score in CSR evaluation 49% Total Group Spending for Vendors that achieved min 80% score in CSR evaluation 57% % of Group Spending Top 80% Spend Vendors who achieved min 80% score in HSE evaluation 81% % of Group Spending for Top 80% that achieved min 80% score in HSE evaluation 61% Total Group Spending for Vendors that achieved min 80% score in HSE evaluation 70% % of new suppliers that scored A & B 65% of respondents scored A & B. % of new suppliers that contributed to Top 80% of total chemical spend and scored A & B 77% MEGACHEM LIMITED ANNUAL REPORT 2025 98 SUSTAINABILITY REPORT
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