SUSTAINABLE PROCUREMENT/PURCHASING POLICY

Responsible spending, ethical sourcing, and environmental stewardship across all Group operations

Document Reference	BAC-EG-SPP-V1.0
Policy Type	Mandatory – Group-wide
Version	1.0
Effective Date	1 July 2025
Policy Owner	Group General Counsel in consultation with Group Chief Operating Officer
Approved By	Academic Board / Board of Directors, BAC Education Group
Malaysian Legal Basis	Procurement Act 2023 (Act 849) | Environmental Quality Act 1974 (Act 127) | Solid Waste and Public Cleansing Management Act 2007 (Act 672) | Energy Commission Act 2001 | PDPA 2010 | Employment Act 1955 | Anti-Trafficking in Persons and Anti-Smuggling of Migrants Act 2007 (ATIPSOM) (as amended 2022)
Key Frameworks	UN Sustainable Development Goals (SDGs) 2030 | ISO 20400:2017 Sustainable Procurement | ISO 14001:2015 Environmental Management | GreenPurchasing Malaysia (MGTC) | Malaysia Green Technology Master Plan 2017–2030 | Suruhanjaya Tenaga (Energy Commission) Green Building Index | UN Guiding Principles on Business and Human Rights
Review Cycle	Annual (mandatory); or earlier upon material change in Malaysian law or government green procurement policy
Next Review Due	1 July 2026 (1 year)
Classification	Internal – summary to be published on Group website

1. PURPOSE

This Policy establishes BAC Education Group’s (“the Group”) framework for sustainable, ethical, and value-for-money procurement across all five Institutions: Brickfields Asia College (BAC), IACT College (IACT), Veritas University College (Veritas), UNIMY, and Reliance College (Reliance).

Sustainable procurement means acquiring goods, services, and works in a manner that achieves value for money on a whole-life basis and generates benefits not only for the Group, but also for society and the economy, whilst minimising damage to the environment. It integrates three interdependent dimensions:

ENVIRONMENT Environmental Stewardship	Reducing the Group’s environmental footprint through procurement decisions: energy efficiency, carbon reduction, waste minimisation, sustainable materials, and circular economy principles.
SOCIAL Social Responsibility	Ensuring procurement supports decent work, fair wages, safe conditions, human rights, and the prohibition of modern slavery, child labour, and discrimination across the supply chain.
ECONOMIC Economic Value	Achieving genuine value for money on a whole-life cost basis; supporting local and SME suppliers; promoting economic development in the communities in which the Group operates.

2. SCOPE

This Policy applies to:

• All procurement activities of the Group and each Institution, including the purchase of goods, services, works, and utilities, regardless of value.
• All staff with purchasing authority, including procurement officers, finance staff, heads of department, facility managers, and any staff authorised to commit Group expenditure.
• All suppliers, vendors, contractors, and service providers engaged by the Group, directly or through frameworks.
• All contracts and purchase orders issued by the Group or any Institution, whether single-purchase or multi-year.
• Capital projects and construction works, including campus renovations, fit-outs, and infrastructure upgrades.

Coverage by Spend Category

This Policy applies to all spend categories including but not limited to: facilities services (cleaning, maintenance, security, catering); IT hardware and software; office supplies and stationery; printing and branded materials; utilities (electricity, water, gas); travel and accommodation; professional services (legal, consulting, audit); construction and renovation; food and beverage; laboratory and educational supplies; uniforms and personal protective equipment; and student recruitment services.

3. DEFINITIONS

Term	Definition
Sustainable Procurement	The process of meeting an organisation’s needs for goods, services, works, and utilities in a way that achieves value for money on a whole-life basis and generates benefits for the organisation, society, and the economy, while minimising damage to the environment. (ISO 20400:2017)
Whole-Life Cost (WLC)	The total cost of acquiring, operating, maintaining, and disposing of a product or service over its full lifespan, including environmental and social externalities where quantifiable.
Circular Economy	An economic model aimed at eliminating waste by keeping products and materials in use for as long as possible through reuse, repair, remanufacturing, and recycling.
Green Procurement	Procurement that gives preference to products and services with reduced environmental impact over their lifecycle, consistent with Malaysian Government Green Procurement Policy (Dasar Perolehan Hijau Kerajaan) and the Green Technology Master Plan 2017–2030.
Ethical Procurement	Procurement that ensures the supply chain meets defined standards for human rights, labour rights, and anti-corruption, aligned with the Group’s Modern Slavery Policy (BAC-EG-MSP-V1.0) and applicable law.
SME	Small and Medium Enterprise as defined under the SME Corporation Malaysia criteria in force from time to time.
Bumiputera Supplier	A supplier that qualifies as a Bumiputera enterprise under applicable Malaysian government definitions, relevant where the Group chooses to apply supplier diversity considerations.
Tier 1 Supplier	A supplier or contractor in a direct contractual relationship with the Group.
Supply Chain	All external organisations and individuals that provide goods, services, or works to the Group directly or indirectly, at any tier.
Procurement Threshold	The expenditure thresholds set out in Section 7, which determine the required procurement process and approval authority.
Sustainable Supplier	A supplier that meets the Group’s Supplier Sustainability Standards (Annex A) as assessed through the pre-qualification and ongoing review processes in this Policy.
Greenwashing	Making misleading, unsubstantiated, or exaggerated environmental claims about a product, service, or organisation.

4. LEGAL AND REGULATORY FRAMEWORK

This Policy is designed to comply with and operate within the following legal and policy frameworks:

Instrument	Relevance to This Policy	Pillar
Procurement Act 2023 (Act 849)	Governs public procurement in Malaysia; the Group applies equivalent principles of transparency, value for money, and fair competition to its private procurement.	All
Environmental Quality Act 1974 (Act 127)	Environmental licences and standards applicable to waste disposal and hazardous materials; supplier compliance required.	E
Solid Waste and Public Cleansing Management Act 2007 (Act 672)	Governs solid waste management; the Group’s waste reduction and recycling commitments.	E
Energy Commission Act 2001	Energy efficiency obligations; relevant to utilities procurement and building management.	E
Factories and Machinery Act 1967 / Occupational Safety and Health Act 1994	Safety standards for contractors and suppliers working on Group premises.	S
Employment Act 1955 (as amended 2023)	Minimum labour standards applicable to all suppliers’ workers; forced labour criminalisation.	S
ATIPSOM 2007 (as amended 2022)	Anti-trafficking and modern slavery obligations; read alongside BAC-EG-MSP-V1.0.	S
PDPA 2010	Data protection in procurement processes (supplier data, RFQ/tender data).	All
Anti-Corruption Commission Act 2009 (MACC Act)	Anti-bribery and corruption obligations in procurement; conflicts of interest.	All
Customs Act 1967 / Import/Export regulations	Applicable to procurement of goods from overseas suppliers.	All
ISO 20400:2017 Sustainable Procurement	International standard for integrating sustainability into procurement; adopted as normative framework.	All
Malaysia Green Technology Master Plan 2017–2030	National green technology strategy; the Group supports and aligns with its objectives.	E
UN SDGs 2030	SDG 12 (Responsible Consumption and Production); SDG 8 (Decent Work); SDG 13 (Climate Action); SDG 17 (Partnerships).	All

E = Environmental | S = Social | All = All three pillars

5. SUSTAINABLE PROCUREMENT PRINCIPLES

All procurement decisions shall be guided by the following principles. These apply regardless of the value or category of the purchase.

5.1 Value for Money on a Whole-Life Basis

Value for money is not synonymous with lowest price. The Group evaluates procurement on the basis of whole-life cost, which includes acquisition cost, operating and maintenance costs, end-of-life disposal costs, and, where quantifiable, the cost of environmental and social externalities. A higher-priced product with lower running costs, longer life, and fewer environmental impacts may represent better value than a cheaper alternative.

5.2 Environmental Preference

Where two or more options offer comparable functionality and whole-life cost, the Group shall prefer the option with the lower environmental impact. Environmental criteria that shall be considered include:

• Energy efficiency and energy consumption over product life.
• Carbon footprint and embodied carbon.
• Recyclability, recycled content, and end-of-life disposal pathway.
• Hazardous substance content (preference for products free of restricted hazardous substances under applicable law).
• Water consumption during production and use.
• Biodiversity impact of material sourcing.
• Packaging: preference for minimal, recyclable, or reusable packaging.

5.3 Social and Ethical Standards

The Group shall not knowingly procure from suppliers who engage in or permit modern slavery, child labour, unsafe working conditions, wage theft, discrimination, or any other violation of fundamental labour rights. All suppliers are required to meet the minimum standards in Annex A of this Policy and to comply with the Group’s Modern Slavery and Human Trafficking Policy (BAC-EG-MSP-V1.0).

5.4 Transparency and Integrity

Procurement processes shall be conducted with integrity, transparency, and fairness. Staff with purchasing authority shall declare and manage conflicts of interest. Procurement decisions shall be documented and auditable. Corruption, bribery, kickbacks, and improper gifts in connection with procurement are strictly prohibited under the Anti-Corruption Commission Act 2009 and the Group’s Code of Conduct.

5.5 Supporting Local and Diverse Suppliers

Subject to meeting quality and sustainability requirements, the Group shall:

• Give fair consideration to Malaysian SME suppliers in all procurement categories.
• Support the development of the local supplier ecosystem, including through capacity-building where practicable.
• Consider Bumiputera supplier participation in procurement consistent with applicable government policies and the Group’s obligations under relevant licensing conditions.
• Avoid unnecessarily restrictive qualification criteria that exclude capable smaller suppliers.

5.6 Continuous Improvement

The Group’s sustainable procurement practices shall improve year-on-year. The Group commits to setting, measuring, and reporting on sustainable procurement targets, and to progressively raising standards as the market, technology, and the Group’s capacity develop.

5.7 Avoiding Greenwashing

The Group shall critically evaluate all environmental claims made by suppliers. Unsubstantiated or vague environmental claims (e.g. “eco-friendly”, “green”, “sustainable” without certification or evidence) shall not be accepted as meeting the Group’s environmental criteria. Where possible, the Group shall require third-party verified environmental certifications.

6. GOVERNANCE AND ACCOUNTABILITY

6.1 Policy Owner

The Group General Counsel (“GGC”) in consultation with the Group Chief Operating Officer (“COO”) is the Policy Owner, responsible for maintaining this Policy, monitoring compliance, and reporting to the Academic Board / Board of Directors.

6.2 Group Sustainable Procurement Committee (GSPC)

The Group shall establish a Group Sustainable Procurement Committee (“GSPC”) with the following composition:

• Group COO (Chair)
• GGC
• Group Head of Finance
• Group Head of Operations / Facilities
• Group Head of IT
• One Institutional Operations Representative (rotating annually)
• One independent sustainability advisor (external, non-executive, appointed by the Board for a two-year term)

Responsibilities of the GSPC:

1. Develop, review, and update the Group Supplier Sustainability Standards (Annex A) and Approved Supplier List.
2. Set annual sustainable procurement targets and KPIs (Section 14).
3. Review and approve exceptions to this Policy above the threshold set in Section 7.3.
4. Receive and review annual supplier sustainability assessments.
5. Commission and review sustainable procurement audits.
6. Report to the Board annually on sustainable procurement performance.

6.3 Institutional Procurement Officers

Each Institution shall designate a Procurement Officer responsible for:

• Implementing this Policy at the institutional level.
• Maintaining the institutional supplier register and due diligence records.
• Ensuring all purchasing staff receive required training.
• Processing and documenting procurement decisions in accordance with the thresholds and procedures in Section 7.
• Reporting to the GSPC quarterly on procurement activities and any sustainability concerns.

6.4 Conflict of Interest

Any staff member involved in a procurement process who has a personal, financial, or professional relationship with a potential supplier must declare that interest to the Procurement Officer before the process commences and must be recused from that procurement decision. Declaration of a conflict of interest shall be recorded in writing. Failure to declare a conflict of interest is a disciplinary offence and may constitute a criminal offence under the Anti-Corruption Commission Act 2009.

7. PROCUREMENT THRESHOLDS, PROCESSES AND APPROVAL AUTHORITY

7.1 Procurement Thresholds

The following thresholds apply to all procurement by the Group and its Institutions. Sustainability criteria are integrated into each tier.

Tier	Spend Threshold	Required Process	Approval Authority
Tier 1 Micro	Up to RM5,000	Direct purchase. Obtain one quotation. Record purchase and supplier details. Apply sustainability preference where readily available.	Head of Department.
Tier 2 Small	RM5,001 – RM25,000	Request for Quotation (RFQ). Obtain minimum three (3) written quotations. Apply Sustainable Supplier Pre-Qualification Checklist (Annex B). Select on best whole-life value.	Institutional Procurement Officer + Finance Head.
Tier 3 Medium	RM25,001 – RM100,000	Formal RFQ or restricted tender. Minimum three (3) qualified suppliers. Full Supplier Sustainability Assessment (Annex A criteria). Evaluation matrix including sustainability weighting (min 20%).	Institutional Principal + Finance Head.
Tier 4 Large	RM100,001 – RM500,000	Open or selective tender. Publish tender specifications including sustainability requirements. Tender evaluation panel (minimum three members including one sustainability representative). Full due diligence.	Group COO + GGC.
Tier 5 Major	Above RM500,000	Open tender with pre-qualification stage. Full sustainability and social impact assessment. Board approval required. Post-award contract management plan.	Board of Directors.

7.2 Sustainability Weighting in Tender Evaluation

For Tier 3 and above procurement, the evaluation matrix shall include sustainability criteria with a minimum weighting as follows:

Criterion	Tier 3 (min weight)	Tier 4 (min weight)	Tier 5 (min weight)
Price / Whole-Life Cost	40%	35%	30%
Technical quality / fitness for purpose	30%	25%	25%
Environmental sustainability	15%	20%	20%
Social / ethical standards	10%	15%	15%
Local / SME / diversity	5%	5%	10%

Minimum weightings may be increased but not reduced without GSPC approval.

7.3 Exceptions and Emergency Procurement

Exceptions to the standard procurement process (e.g. sole-source procurement, emergency procurement, framework agreements with preferred suppliers) may be approved by:

• Institutional Principal: exceptions up to RM100,000.
• Group COO: exceptions up to RM500,000.
• Board of Directors: all exceptions above RM500,000.

All exceptions must be documented in writing with reasons, and recorded in the institutional procurement log. Sustainability considerations shall still be applied even in emergency procurement where time permits.

8. SUPPLIER SUSTAINABILITY STANDARDS AND DUE DILIGENCE

8.1 Minimum Sustainability Standards for All Suppliers

All suppliers engaged by the Group must meet the minimum standards set out in Annex A of this Policy (the Group Supplier Sustainability Standards). These standards are non-negotiable minimum requirements, not aspirational targets. Failure to meet minimum standards is grounds for disqualification from procurement.

The minimum standards cover five dimensions:

Dimension	Minimum Standard	Evidence Required
Environmental Compliance	Full compliance with all applicable Malaysian environmental law (Environmental Quality Act 1974 and subsidiary regulations).	Declaration of compliance. Copies of applicable environmental licences or permits on request.
Labour Rights	Compliance with Employment Act 1955, minimum wage legislation, and Working Hours Regulations. No forced labour, debt bondage, or passport retention. No child labour.	Signed Supplier Code of Conduct. Evidence of wage payment compliance on request.
Modern Slavery	Compliance with ATIPSOM 2007 (as amended) and the Group’s Modern Slavery Policy (BAC-EG-MSP-V1.0).	Signed Modern Slavery compliance declaration. Published modern slavery statement (where applicable).
Health and Safety	Compliance with OSHA 1994 and all applicable safety legislation for workers operating on Group premises.	Valid CIDB registration (construction suppliers). HIRARC documentation on request.
Anti-Corruption	Compliance with Anti-Corruption Commission Act 2009. No convictions for corruption, fraud, or bribery in preceding five years.	Signed anti-corruption declaration. Statutory declaration where required.

8.2 Enhanced Sustainability Standards for Preferred Suppliers

Suppliers who meet the following enhanced standards are recognised as Preferred Sustainable Suppliers and receive priority consideration in procurement decisions:

Enhanced Standard	Recognition / Evidence
ISO 14001 Environmental Management System certification	Third-party certified. Current certificate required.
ISO 45001 / OHSAS 18001 Health and Safety Management	Third-party certified. Current certificate required.
SA8000 Social Accountability certification	Third-party certified. Current certificate required.
Sedex SMETA audit (2-pillar or 4-pillar)	Current Sedex membership and audit report.
Green Label certification (SIRIM Eco-Label, ENERGY STAR, EU Ecolabel, or equivalent)	Valid certification for relevant products.
GreenRE or Green Building Index (GBI) certification (construction/facilities)	Valid certification for relevant works.
Carbon reduction target / net-zero commitment with published roadmap	Published target and progress report.
Fair recruitment policy (ILO principles; no worker-paid recruitment fees)	Signed declaration; third-party audit on request.
Living wage employer (pays above statutory minimum)	Payroll evidence on request.
Local SME or Bumiputera enterprise	SME Corp registration; applicable government certification.

8.3 Pre-Qualification Due Diligence

Before being added to the Group’s Approved Supplier List, all Tier 2 and above suppliers shall complete:

7. The Group Supplier Sustainability Pre-Qualification Questionnaire (Annex B), covering all five minimum standard dimensions.
8. Submission of required supporting documents (certificates, declarations, licences).
9. For higher-risk categories (facilities services, construction, IT hardware, printed goods, catering): a Supplier Sustainability Site Assessment or third-party audit report.
10. For any supplier with a Modern Slavery pre-engagement requirement under the Modern Slavery Policy: completion of the Modern Slavery Pre-Engagement process as set out in that Policy.

8.4 Ongoing Supplier Monitoring

• Annual re-assessment of all Tier 1 suppliers against the Supplier Sustainability Standards.
• Bi-annual review of all higher-risk category suppliers (facilities, construction, IT supply chain, catering).
• Immediate review triggered by: a supplier incident involving labour, environmental, or ethical violations; negative media coverage; supply chain intelligence; or a complaint from a worker, student, or third party.
• The Group reserves the right to conduct or commission unannounced on-site audits of suppliers whose risk profile warrants it.

8.5 Supplier Development and Capacity Building

Where a supplier falls short of the Group’s preferred standards but meets minimum standards and demonstrates commitment to improvement, the Group shall, where practicable:

• Share the Group’s Supplier Sustainability Standards and improvement resources.
• Set time-bound improvement targets with agreed milestones.
• Offer access to the Group’s training resources on relevant sustainability topics.
• Provide constructive feedback from sustainability assessments.

Disengagement from a supplier for sustainability reasons shall be a last resort where the supplier is unwilling or unable to improve. Abrupt disengagement that harms workers is itself inconsistent with responsible procurement.

9. ENVIRONMENTAL PURCHASING STANDARDS BY CATEGORY

9.1 Energy and Utilities

• The Group shall procure electricity from licensed suppliers and shall, where available and economically viable, source renewable energy or purchase Renewable Energy Certificates (RECs) or Renewable Energy Certificates Malaysia (RECMy).
• Energy performance shall be a mandatory evaluation criterion in all procurement of electrical equipment, HVAC systems, lighting, and building management systems.
• ENERGY STAR, SIRIM Eco-Label, or equivalent energy efficiency certification shall be required or strongly preferred for all major electrical equipment purchases.
• The Group shall benchmark and track energy consumption annually and shall set energy reduction targets as part of its sustainable procurement KPIs.

9.2 IT Hardware and Technology

• The Group shall prefer IT hardware certified under ENERGY STAR, EPEAT (Electronic Product Environmental Assessment Tool), or equivalent environmental standards.
• The Group shall procure IT equipment with the longest practical useful life and shall implement IT asset lifecycle management to maximise equipment lifespan before disposal.
• IT hardware disposal shall be through certified e-waste recyclers licensed under the Environmental Quality Act 1974. Data shall be securely wiped before disposal. No IT equipment shall be disposed of in general waste.
• The Group shall consider the supply chain sustainability of IT hardware procurement, with particular attention to responsible sourcing of minerals and labour conditions in manufacturing.

9.3 Paper, Printing and Stationery

• The Group shall progressively reduce paper consumption through digital workflows, double-sided printing defaults, and print-on-demand policies.
• Where paper is purchased, the Group shall require Forest Stewardship Council (FSC) or Programme for the Endorsement of Forest Certification (PEFC) certified paper.
• Recycled content paper shall be preferred where FSC/PEFC certified paper is unavailable or cost-prohibitive.
• Single-use plastic stationery and packaging shall be minimised and replaced with sustainable alternatives where available.
• Annual paper consumption shall be tracked and reported as a KPI.

9.4 Food and Catering

• Catering contractors and food suppliers shall be required to demonstrate compliance with all Malaysian food safety legislation and the relevant provisions of the Group’s Modern Slavery Policy.
• The Group shall prefer caterers who source food locally and seasonally, reducing food miles and supporting local food producers.
• The Group shall require catering contractors to implement food waste reduction programmes, targeting at minimum a 20% reduction in food waste over the contract term.
• Single-use plastic food and beverage packaging shall be phased out progressively, starting with single-use plastic bottles and bags, in line with Malaysia’s single-use plastics reduction policy.
• Certified sustainable seafood (MSC) and certified sustainable palm oil (RSPO) shall be preferred where available and competitively priced.

9.5 Facilities Services (Cleaning, Maintenance, Security)

• Cleaning contractors shall demonstrate compliance with labour standards, including minimum wage, working hours, and prohibition of passport retention for migrant workers.
• The Group shall prefer cleaning contractors who use environmentally certified cleaning products and implement water and chemical reduction programmes.
• Chemical suppliers and cleaning product suppliers shall disclose Safety Data Sheets (SDS) for all products. Hazardous chemicals shall be substituted with safer alternatives where technically feasible.
• Maintenance contractors shall comply with OSHA 1994 requirements and shall demonstrate a current health and safety management system.
• Pest control shall use integrated pest management (IPM) approaches minimising pesticide use.

9.6 Construction, Renovation and Fit-Out

• All construction contracts shall include a sustainability specification requiring: minimisation of construction waste; use of locally sourced materials where available; preference for materials with recycled content or certified sustainable sourcing; and compliance with Green Building Index (GBI) or GreenRE standards where applicable.
• Contractors shall submit a Construction Environmental Management Plan (CEMP) for any project above RM100,000.
• Construction waste shall be diverted from landfill to the maximum extent practicable, with a target of at least 50% diversion for contracts above RM500,000.
• All construction contractors must hold valid CIDB (Construction Industry Development Board Malaysia) registration and comply with OSHA 1994 and all applicable construction safety regulations.
• The Group shall assess embodied carbon for major construction and renovation projects and shall consider low-carbon materials and construction methods.

9.7 Travel and Accommodation

• The Group shall apply a “avoid, reduce, substitute” hierarchy to business travel: avoid travel where the meeting can be conducted virtually; reduce the frequency and distance of necessary travel; substitute air travel with lower-carbon alternatives where practicable.
• Where air travel is necessary, economy class shall be the default for all domestic and short-haul flights. Business class requires Institutional Principal or COO approval.
• Accommodation shall be sourced from hotels with recognised environmental certifications (Green Key, EarthCheck, or equivalent) where available at comparable cost.
• The Group shall track and report on business travel carbon emissions annually.

9.8 Uniforms, Branded Merchandise and PPE

• Uniforms and branded merchandise suppliers shall be required to demonstrate compliance with labour standards, including no use of forced labour in their supply chain.
• The Group shall prefer suppliers who use certified sustainable textiles (GOTS, Oeko-Tex, or equivalent) and who manufacture in facilities with documented labour compliance.
• Personal protective equipment (PPE) shall meet all applicable Malaysian safety standards and shall be sourced from reputable, audited suppliers.

10. SOCIAL AND ETHICAL PROCUREMENT STANDARDS

10.1 Integration with Modern Slavery Policy

This Policy is to be read and implemented alongside the Group’s Modern Slavery and Human Trafficking Policy (BAC-EG-MSP-V1.0). The due diligence processes, supplier standards, reporting obligations, and remediation procedures in that Policy apply in full to all supply chain relationships. For specific modern slavery due diligence requirements, refer to sections 5–7 of BAC-EG-MSP-V1.0.

10.2 Fair Wages and Living Wage Aspiration

All suppliers must pay at minimum the applicable Malaysian statutory minimum wage to all workers involved in Group contracts. The Group aspires to progress over time towards requiring that suppliers pay a living wage. The Group shall:

• Include living wage as a preferred (not minimum) criterion in the Supplier Sustainability Standards from 2025/2026.
• Track the proportion of Tier 1 suppliers paying above minimum wage annually.
• Recognise and preferentially engage suppliers who are certified or verified living wage employers.

10.3 Safe and Healthy Working Conditions

All suppliers shall:

• Comply with OSHA 1994 and all applicable health and safety legislation.
• Provide appropriate PPE and safety training to workers operating on Group premises.
• Report any workplace accident or near-miss occurring on Group premises to the relevant Institutional Procurement Officer immediately.
• Comply with the Group’s site induction and safety requirements for contractors working on campus.

10.4 Diversity and Inclusion in Procurement

The Group shall:

• Actively identify and engage diverse suppliers, including women-owned businesses, SMEs, Bumiputera enterprises, and social enterprises.
• Ensure procurement processes do not contain unnecessarily restrictive requirements that disadvantage diverse suppliers.
• Report annually on supplier diversity metrics as part of the sustainable procurement KPI dashboard.

10.5 Community and Social Value

For higher-value contracts (Tier 4 and 5), the Group shall consider the broader social value generated by suppliers, including:

• Employment of local community members in Group-related contracts.
• Training and apprenticeship opportunities offered to the Group’s students or graduates.
• Contribution to community development initiatives in the areas where the Group operates.
• Support for social enterprises or businesses with a mission-driven social purpose.

11. WASTE, CIRCULAR ECONOMY AND RESOURCE MANAGEMENT

11.1 Waste Hierarchy

The Group shall apply the following waste hierarchy to all procurement and operational decisions, in order of priority:

Priority	Action	Application to Procurement
1	PREVENT	Avoid purchasing goods or services that will generate unnecessary waste. Question whether the purchase is necessary at all.
2	REDUCE	Where purchase is necessary, buy only what is needed. Prefer products with longer useful lives. Consolidate orders to reduce packaging waste.
3	REUSE	Prefer products designed for reuse. Procure refurbished or second-hand equipment where quality and safety permit (e.g. IT equipment, furniture).
4	RECYCLE	Prefer products with high recycled content and/or high recyclability at end of life. Require suppliers to take back packaging.
5	RECOVER	Where recycling is not possible, prefer energy recovery options over landfill disposal.
6	DISPOSE	Disposal to landfill is the last resort. Where required, comply with all applicable Malaysian waste disposal regulations.

11.2 Producer Responsibility and Takeback Schemes

Where suppliers offer product takeback, end-of-life recycling, or extended producer responsibility schemes, the Group shall:

• Preferentially engage with suppliers who offer such schemes.
• Include takeback obligations in contracts for higher-waste categories (IT hardware, toner cartridges, batteries, furniture).
• Track volumes of goods returned through takeback schemes as a KPI.

11.3 Packaging Standards

Suppliers shall be required to:

• Minimise packaging to the minimum necessary for product protection.
• Use recyclable, compostable, or reusable packaging materials.
• Eliminate unnecessary single-use plastic packaging progressively, consistent with Malaysia’s single-use plastic reduction targets.
• Label packaging clearly to facilitate correct sorting and recycling by end users.

12. CONTRACTUAL SUSTAINABILITY OBLIGATIONS

12.1 Standard Sustainability Contract Clauses

All supply contracts, service agreements, and purchase orders for Tier 2 and above shall include the following provisions as standard:

11. A sustainability compliance warranty: the supplier warrants that it meets, and will continue to meet throughout the contract term, the Group Supplier Sustainability Standards (Annex A).
12. A right of audit: the Group reserves the right to conduct or commission a sustainability audit of the supplier’s relevant operations on reasonable notice (not less than 14 days for routine audits; immediately for suspected serious violations).
13. A sustainability reporting obligation: for contracts above RM100,000, the supplier shall provide an annual sustainability performance report covering energy use, waste, labour conditions, and any incidents.
14. An obligation to notify: the supplier must notify the Group within 14 days of becoming aware of any material environmental incident, labour rights violation, or modern slavery concern in its operations or supply chain affecting the Group contract.
15. A right to terminate: the Group may terminate the contract immediately without liability if the supplier commits a material and unremedied breach of its sustainability obligations.
16. A remediation clause: for non-material breaches, the supplier shall implement a time-bound remediation plan approved by the Group, failing which the Group may terminate.
17. A sub-contractor cascade: the supplier must impose equivalent sustainability obligations on all sub-contractors engaged in the Group contract.

12.2 Long-Term and Framework Agreements

For multi-year and framework agreements:

• Sustainability performance shall be formally reviewed at least annually.
• Improvement targets shall be set and tracked over the contract term.
• Contracts shall include a sustainability improvement clause allowing the Group to raise the required standard at contract renewal in line with this Policy’s evolving standards.
• Failure to improve against agreed sustainability targets over consecutive review periods shall be a factor in contract renewal decisions.

13. TRAINING AND AWARENESS

Audience	Required Training	Frequency
All staff with any purchasing authority	Sustainable Procurement Principles: this Policy, sustainability criteria, threshold rules, conflict of interest, anti-corruption obligations.	At appointment; refresher every 2 years.
Procurement Officers and Finance staff	Enhanced: supplier assessment tools, tender evaluation weighting, contract sustainability clauses, supplier audit process, Annex A/B.	Annual; and on any material policy update.
Facilities and Operations Managers	Category-specific: energy, waste, construction, catering, cleaning sustainability standards.	Annual.
Senior Management and GSPC members	Strategic: sustainability reporting, KPI review, regulatory developments, emerging sustainability standards.	Biannual.
All new staff (induction)	Overview of sustainable procurement and the Group’s commitments.	Within 30 days of start date.

Training completion rates shall be monitored and reported annually as part of the sustainable procurement KPI dashboard. The target completion rate is 95% of all eligible staff.

14. KEY PERFORMANCE INDICATORS, MONITORING AND REPORTING

14.1 Annual KPI Dashboard

The GSPC shall establish and publish an annual Sustainable Procurement KPI Dashboard, covering the following metrics:

KPI	Target	Measurement Method
% of Tier 2+ suppliers completing Sustainability Pre-Qualification	100% of new suppliers	Procurement records
% of Tier 2+ contracts including standard sustainability clauses	100% of new and renewed contracts	Legal / procurement review
% of Tier 1 suppliers assessed annually against Sustainability Standards	100%	Supplier register
% of tender evaluations applying sustainability weighting per Policy s.7.2	100% of Tier 3+ tenders	Tender records
Energy consumption per campus (kWh per student)	Year-on-year reduction target set annually by GSPC	Utilities data
Paper consumption (reams per campus per year)	10% reduction year-on-year	Purchasing records
% of IT equipment disposal through certified e-waste channels	100%	Asset disposal records
% of catering spend with local/seasonal suppliers	Increasing year-on-year; baseline set in Year 1	Catering contract data
Construction waste diversion rate (for contracts above RM500k)	At least 50%	Contractor CEMP reports
% of procurement staff completing required training	95%	HR training records
Number of supplier sustainability incidents reported	Report all; trend analysis	Incident log
% of Approved Suppliers with enhanced sustainability credentials	Increasing year-on-year	Approved Supplier List

14.2 Annual Report

The GSPC shall produce an Annual Sustainable Procurement Report for the Board, covering:

• KPI performance against targets, with year-on-year comparison.
• Significant procurement decisions and their sustainability rationale.
• Supplier sustainability incidents and remediation outcomes.
• Progress on supplier development and capacity-building initiatives.
• Changes in the regulatory and market environment relevant to sustainable procurement.
• Updated targets for the coming year.

14.3 External Reporting and Disclosure

A summary of the Group’s sustainable procurement performance and commitments shall be published on the Group’s website annually, consistent with the Group’s transparency commitments and aligned with applicable elements of GRI Standards (GRI 204: Procurement Practices) where the Group chooses to report against GRI. This also supports the Group’s compliance with the Modern Slavery Annual Transparency Statement (BAC-EG-MSP-V1.0) supply chain disclosure requirements.

15. ENFORCEMENT AND CONSEQUENCES OF BREACH

15.1 Staff

• Minor breach (e.g. failure to obtain required quotations; failure to complete sustainability checklist for a Tier 2 purchase): Written warning; corrective action required; additional training.
• Moderate breach (e.g. failure to apply sustainability weighting in a Tier 3+ evaluation; failure to declare a conflict of interest): Formal disciplinary action; potential recovery of any loss suffered by the Group.
• Serious breach (e.g. split transactions to avoid thresholds; deliberate circumvention of procurement rules; corruption or bribery in procurement): Immediate suspension pending investigation; termination for cause; referral to law enforcement where conduct constitutes a criminal offence under the MACC Act 2009.

15.2 Suppliers

• Minor non-compliance with Supplier Sustainability Standards: Formal notice; 30-day cure period; re-assessment.
• Moderate non-compliance: Suspension from Approved Supplier List pending remediation; formal remediation plan required.
• Material breach (e.g. confirmed use of forced labour, child labour, major environmental violation): Immediate contract termination; removal from Approved Supplier List; referral to competent authority where appropriate; notification to the Group’s Modern Slavery Contact.

16. POLICY REVIEW AND AMENDMENT

This Policy shall be reviewed annually by the GSPC. An extraordinary review shall be triggered by:

• Any material change in Malaysian law relevant to procurement, environmental management, or labour standards.
• Material updates to government Green Procurement Policy or the Malaysia Green Technology Master Plan.
• A significant supplier sustainability incident affecting the Group.
• Significant developments in international sustainability standards (ISO 20400, GRI, TCFD) that materially affect the Group’s obligations or commitments.

Material amendments require Board / Academic Board approval. Minor amendments may be made by the GGC with COO concurrence.

17. RELATED DOCUMENTS

Document	Relationship
Modern Slavery and Human Trafficking Policy (BAC-EG-MSP-V1.0)	Governs social and ethical supply chain obligations; fully integrated with this Policy.
BAC Education Group AI Policy Framework (BAC-EG-AI-POLICY-FRAMEWORK-V1.0)	AI Procurement Policy (Policy 5) governs AI system procurement; read alongside this Policy.
Group Supplier Sustainability Standards (Annex A to this Policy)	Minimum and preferred standards for all suppliers.
Supplier Sustainability Pre-Qualification Questionnaire (Annex B)	Operational due diligence tool for supplier on-boarding.
Annual Sustainable Procurement KPI Dashboard	Maintained by GSPC; reported to Board annually.
Approved Supplier List	Maintained by each Institutional Procurement Officer; reviewed by GSPC annually.
Sustainable Procurement Training Materials	Developed and maintained by GSPC; delivered through HR / L&D.
Code of Conduct and Anti-Corruption Policy	Governs staff conduct in procurement; conflict of interest declaration requirements.
Research Independence and Academic Freedom Policy (BAC-EG-RIAF-V1.0)	Governs external funding and partnership agreements; read alongside Sections 8 and 12 of this Policy where research-related procurement is involved.

ANNEX A: GROUP SUPPLIER SUSTAINABILITY STANDARDS

These standards apply to all suppliers engaged by BAC Education Group and its Institutions. Minimum Standards must be met by all suppliers. Preferred Standards are used to distinguish Preferred Sustainable Suppliers who receive priority consideration in procurement.

A1. ENVIRONMENTAL STANDARDS

Ref	Standard	Level
E1	Compliance with all applicable Malaysian environmental law and regulations.	MINIMUM
E2	Holds all required environmental licences and permits for operations relevant to the Group contract.	MINIMUM
E3	Implements a documented waste management programme.	MINIMUM
E4	Has a published environmental policy or commitment statement.	PREFERRED
E5	Holds ISO 14001 Environmental Management System certification or equivalent.	PREFERRED
E6	Has set a carbon reduction target with a published roadmap.	PREFERRED
E7	Uses renewable energy for a material portion of operations.	PREFERRED
E8	Offers product takeback / end-of-life recycling programme.	PREFERRED

A2. LABOUR AND SOCIAL STANDARDS

Ref	Standard	Level
S1	Complies with Employment Act 1955, minimum wage, and Working Hours Regulations.	MINIMUM
S2	Does not use forced labour, debt bondage, or retain workers’ passports.	MINIMUM
S3	Does not use child labour (under 18 for hazardous work; complies with Children and Young Persons (Employment) Act 1966).	MINIMUM
S4	Complies with OSHA 1994 and provides safe working conditions.	MINIMUM
S5	Complies with ATIPSOM 2007 (as amended) and the Group’s Modern Slavery Policy.	MINIMUM
S6	Pays above statutory minimum wage (living wage aspiration).	PREFERRED
S7	Holds SA8000 Social Accountability certification or has undergone a Sedex SMETA audit.	PREFERRED
S8	Operates a formal worker grievance mechanism accessible to all workers.	PREFERRED
S9	Applies fair recruitment principles (ILO standards; no worker-paid recruitment fees).	PREFERRED
S10	Has a published diversity and inclusion policy.	PREFERRED

A3. GOVERNANCE AND ETHICS STANDARDS

Ref	Standard	Level
G1	Complies with Anti-Corruption Commission Act 2009. No convictions for corruption, fraud, or bribery in preceding 5 years.	MINIMUM
G2	Has a written anti-corruption or anti-bribery policy.	MINIMUM
G3	Has an internal whistleblowing or speak-up mechanism.	PREFERRED
G4	Publishes an annual sustainability or ESG report.	PREFERRED
G5	Certified to ISO 37001 Anti-Bribery Management System.	PREFERRED

ANNEX B: SUPPLIER SUSTAINABILITY PRE-QUALIFICATION QUESTIONNAIRE

This questionnaire must be completed by all Tier 2 and above suppliers before being added to the Group Approved Supplier List. Responses will be used to assess compliance with the Group Supplier Sustainability Standards (Annex A) and inform procurement decisions.

Supplier / Company Name
Registration Number (SSM / equivalent)
Registered Address
Contact Person
Email
Date of Completion	DD / MM / YYYY
Supply Category
Submitting to (Institution / Group)

SECTION 1 — ENVIRONMENTAL

Question	Response	Evidence (if yes)
Do you hold all required environmental licences and permits for your operations?	YES / NO
Have you had any environmental regulatory violations, fines, or enforcement actions in the past 3 years?	YES / NO	If yes, provide details
Do you hold ISO 14001 or equivalent EMS certification?	YES / NO	Certificate number and expiry
Do you track and report your carbon / GHG emissions?	YES / NO	Report reference
Do you operate a product takeback or end-of-life recycling scheme?	YES / NO	Scheme details
Do you have a published environmental policy?	YES / NO	Link or attach

SECTION 2 — LABOUR AND SOCIAL

Question	Response	Evidence (if yes)
Do you pay all workers at least the statutory minimum wage?	YES / NO
Do you retain workers’ passports or identity documents?	YES / NO	If yes, explain
Do you employ workers under the age of 15?	YES / NO	If yes, explain
Have you had any labour law violations, prosecutions, or enforcement actions in the past 3 years?	YES / NO	If yes, provide details
Do you use any third-party labour or recruitment agencies? If yes, do those agencies charge workers recruitment fees?	YES / NO / N/A	Agency names
Do you hold SA8000 certification or have you undergone a Sedex SMETA audit?	YES / NO	Certificate / audit report
Do you have a documented worker grievance mechanism?	YES / NO	Describe
Do you have a published modern slavery policy or statement?	YES / NO	Link or attach

SECTION 3 — GOVERNANCE AND ETHICS

Question	Response	Evidence (if yes)
Has your company, or any director/officer, been convicted of corruption, fraud, or bribery in the past 5 years?	YES / NO	If yes, provide details
Do you have a written anti-corruption or anti-bribery policy?	YES / NO	Link or attach
Do you have an internal whistleblowing mechanism?	YES / NO	Describe
Do you publish an annual sustainability or ESG report?	YES / NO	Link or attach

SECTION 4 — DECLARATION

I/We declare that:

1. The information provided in this questionnaire is accurate and complete to the best of our knowledge.
2. We meet, and will continue to meet throughout any contract with BAC Education Group, the Minimum Sustainability Standards in Annex A of the Group’s Sustainable Procurement and Purchasing Policy.
3. We will notify BAC Education Group promptly of any material change in our compliance status in relation to any of the standards covered in this questionnaire.
4. We understand that providing false or misleading information is grounds for disqualification from procurement and termination of any existing contract.

Authorised Signatory: _________________________________ Designation: _______________________

Full Name (print): _________________________________ Date: ____________________

APPROVAL AND SIGN-OFF

This Sustainable Procurement And Purchasing Policy was reviewed, approved and adopted by the Board of Directors of BAC Education Group as well as all related Public Higher Education Institution (PHEI) and shall be open for review on 1 July 2026

BAC Education Group • Sustainable Procurement and Purchasing Policy • Version 1.0 • Effective 1 July 2025 • Internal