Climate Change Data

Environmental Metrics

ESG Focus Areas

• Economic Performance
• Energy and Emissions
• Water
• Effluent and Waste
• Environmental Compliance
• Biodiversity
• Supply Chain
• Employment
• Occupational Health and Safety
• Training
• Child Labour
• Forced Labour
• Local Communities
• Anti-Corruption
• Customer Health & Safety
• Marketing and Labelling
• Customer Privacy
• Socio Economic Compliance

Environmental Achievements

• Reduced energy consumption by 3.0%
• Reduced water intensity to 6.5m3 per Rs/Mn of revenue
• Zero significant environmental fines
• Reforestation of large areas of land in Welioya and Kotakanda Forest Reserve

Social Achievements

• Opened 8 new Piyawara pre-schools
• Continued Big Heart educational scholarship programme supporting 119 children
• Launched Ayubo.life, a health app
• Hemas’ employer supported childcare recognised as a case study by #SheWorks Sri Lanka
• Won Gold award at the Corporate Health and Productivity awards

Governance Achievements

• Initiated several improvements to Board effectiveness, including annual evaluation of all Subsidiary Boards
• Appointed Prof Nilanthi de Silva to the Board
• Revised Nomination and Governance Committee Charter approved

Climate Goals & Targets

Environmental Challenges

• Weak economic growth (3.2%), lowest in 18 years
• Significant currency devaluation (14%)
• Political crisis during Q3
• Pressure on Pharmaceutical margins due to price control regulations
• Unexpected commodity price sharpness amplified by Rupee depreciation
• Weakened consumer confidence impacting Consumer and Healthcare consumption
• Import tariff increases on raw materials

Mitigation Strategies

• Focus on execution and cost management
• Successful integration of Atlas
• Strengthened Sustainability Management Framework
• Set challenging 2025 targets (25% reduction in energy use, 25% renewable energy, 50% reduction in water consumption, zero waste to landfill)
• Operational improvement initiatives under “Future Ready Programme”
• Investment in an ambitious project to enhance route to market efficiency in Pharmaceutical Distribution
• Constructive engagement with regulator on pricing strategy

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier sustainability requirements
• Environmental Assessment and Social and Human Rights Assessment Checklist

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Integrated Reporting Framework of the International Integrated Reporting Council (IIRC), GRI Standards: Core Options

Certifications: ISO 9001:2015, ISO 14001:2015, ISO 18001:2007, OHSAS 18001, Australian Council on Healthcare Standards International Accreditation, ISO 15189:2012

Third-party Assurance: Messrs. Ernst & Young

UN Sustainable Development Goals

• Goal 4: Quality Education

Piyawara and AYATI initiatives contribute to quality education

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Corporate Health and Productivity Award
• Nagaaki Yamamoto KAIZEN Gold Award
• National Business Excellence Awards
• Best Employer Brands in Sri Lanka

Environmental Metrics

ESG Focus Areas

• Healthful Living
• Early Childhood Development
• Environmental Sustainability
• Social Responsibility
• Good Governance

Environmental Achievements

• Reduced carbon footprint by 14%
• Reduced water footprint by 25%
• Decreased emissions in Consumer sector by 7% and Healthcare sector by 9%

Social Achievements

• Opened Ayati, the National Centre of Excellence for Children with Disabilities
• Expanded Piyawara pre-schools to 56, impacting over 3,500 children annually
• Provided psychological assistance to Katuwapitiya community affected by Easter attacks

Governance Achievements

• Strengthened Health and Safety Policy and reintroduced Sexual Harassment Policy
• Completed 2019 Board evaluation and implemented recommendations
• Strengthened own evaluation processes and extended to subsidiaries

Climate Goals & Targets

Environmental Challenges

• Easter Sunday terror attacks and its aftermath
• COVID-19 pandemic
• Subdued economic growth
• Ethnically divisive attacks on Hemas brands
• Decline in tourism
• Government payment delays
• Depreciation of the rupee
• Intense competition in value-added hair oil segment
• Slowdown in global trade
• Supply chain disruptions

Mitigation Strategies

• Business recovery efforts
• Cost reduction and cash conservation measures
• Strengthening supply chains
• Scaling up production of hygiene products
• Implementing social distancing measures
• Encouraging work from home
• Donating products to Government facilities
• Innovation (e.g., Atlas AGV robots, mask production)
• Re-enforcing brand value through endorsements, certifications, and awareness sessions
• Engaging with stakeholders to restore confidence
• Developing B2B app for retailers
• Introducing mobile sample collection, online prescriptions, and home care services
• Expanding the range of specialized laboratory diagnostic tests

Supply Chain Management

Supplier Audits: Limited audits

Responsible Procurement

• Environmental criteria in procurement
• Assessment of environmental impacts

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards: Core Option

Certifications: ISO 14001, ISO 45001, OHSAS 18000, ISO 9001

Third-party Assurance: Ernst & Young

Sustainable Products & Innovation

• Shield soap and hand sanitizer
• Atlas AGV robots

Awards & Recognition

• Asia’s Most Socially Responsible Company of the Year (ACES Award)
• Listed amongst the Top 10 Most Respected Companies in Sri Lanka (LMD)
• Ranked No.16 by Business Today

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced total carbon footprint to 16,758 MT CO2e from 18,944 MT CO2e in 2019/20
• Reduced total water withdrawn to 253,675 m3 from 312,514 m3 in 2019/20
• Reforestation of 24+ acres of land
• 36% waste recycled, reused or recovered

Social Achievements

• Launched ‘Eka Se Salakamu’ (Treat All Alike), a social movement empowering children with Down Syndrome
• Added two new Piyawara pre-schools, expanding the network to 58 pre-schools
• Ayati center for children with disabilities served over 6,000 children
• Donated 500,000 face masks to the Sri Lanka Army
• Donated PCR machines to hospitals
• Provided essential hygienic products to COVID-19 wards

Governance Achievements

• Ranked among the top three most transparent listed entities in Sri Lanka by Transparency International Sri Lanka
• Strengthened governance structures and processes in response to the COVID-19 pandemic
• Implemented stringent health and safety protocols across all workplaces

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting various business units
• Supply chain disruptions
• Decline in disposable income
• School closures
• Exchange rate volatility
• Political instability in Myanmar

Mitigation Strategies

• Implemented cost optimization initiatives
• Developed alternative sourcing strategies
• Launched digital platforms for engagement and delivery
• Introduced lean management initiatives
• Focused on working capital efficiencies
• Consolidated logistics sector through rightsizing

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Comprehensive Supplier Code of Conduct
• New Supplier Engagement Policy

Climate-Related Risks & Opportunities

Physical Risks

• Changing rainfall patterns
• Prolonged drought

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards: Core Option, Framework 2021

Certifications: ISO 14001, ISO 45001, OHSAS 18000, ISO 9001

Third-party Assurance: Ernst & Young

UN Sustainable Development Goals

• UNSDG 3 (Good Health and Well-being)
• UNSDG 4 (Quality Education)
• UNSDG 12 (Responsible Consumption and Production)
• UNSDG 17 (Partnerships for the Goals)

Hemas' initiatives contribute to these goals through affordable healthcare, quality education, sustainable practices, and community engagement.

Sustainable Products & Innovation

• Shield Handwash
• Shield Hand Sanitizer
• Anti-bacterial stationery range

Awards & Recognition

• National Quality Award
• Global Performance Excellence Award
• AstraZeneca Asia Area Frontier Markets awards
• ICS Customer Service Awards

Environmental Metrics

ESG Focus Areas

• Climate Change
• Responsible Plastic Consumption
• Biodiversity Conservation
• Community Support
• Employee Well-being
• Governance

Environmental Achievements

• Increased focus on responsible manufacturing practices and tackling plastic waste; partnered with Clean Ocean Force and the Marine Environment Protection Authority.
• Increased utilisation of renewable energy; installed rooftop solar panels offsetting 25% of Group electricity consumption.
• Launched Environmental Agenda ‘Haritha Mehewara’ to protect and conserve Sri Lanka’s critically endangered endemic species.

Social Achievements

• Supported marginalized and vulnerable communities affected by the economic crisis through partnerships with UNICEF and UNDP.
• Launched ‘Fems Aya’ to tackle period poverty.
• Offered free dialysis treatment through ‘Upakara by Hemas Hospitals’.
• Piyawara celebrated 20 years of enhancing early childhood care and development.
• Launched ‘Baby Cheramy’ parental education program ‘Daru Patiyata Surakshitha Lowak’.
• ‘Say Yes to Life’ initiative carried out free diabetes testing.
• Launched ‘Diva Dathata Diriya’ for female entrepreneurial training.

Governance Achievements

• Constituted an Investment Committee to monitor investment strategy.
• Appointed Dr. Anura Ekanayake as Deputy Chairman.
• Appointed Mr. Ranil Pathirana as an Independent Non-Executive Director.

Climate Goals & Targets

Environmental Challenges

• Economic and political uncertainty in Sri Lanka, including currency devaluation, inflation, and import restrictions.
• Supply chain disruptions due to foreign exchange liquidity constraints.
• Rising cost of raw materials, energy, and other inputs.
• Demand contraction due to rising cost of living.
• Shortage of essential medicines and medical equipment.
• High migration rates of medical professionals.

Mitigation Strategies

• Adopted an agile business model.
• Implemented dynamic pricing strategies and cost optimization initiatives.
• Introduced value-for-money product alternatives.
• Leveraged strong business partnerships.
• Increased focus on local manufacturing of affordable medicines.
• Prioritized digitalization and efficiency improvement strategies.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct
• Supplier assessments on environmental and social compliances

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters

Transition Risks

• Energy security
• Delays in transitioning to renewable energy
• Disruptions to operations due to low availability of fossil fuels

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards, TCFD Recommendations, UN Sustainable Development Goals

Certifications: ISO 14001, ISO 45001, ISO 9001

Third-party Assurance: Ernst & Young

UN Sustainable Development Goals

• Not disclosed

Group’s sustainability, community and Hemas Outreach Foundation initiatives are aligned to the United Nations Sustainable Development Goals.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• SatynMag CIMA Women Friendly Workplace Awards 2022
• Numerous SLIM awards

Environmental Metrics

ESG Focus Areas

• Environmental Footprint Reduction
• Social Impact
• Corporate Governance

Environmental Achievements

• Reduced carbon footprint by 1% to 16,549 MT
• Increased renewable energy share to 5%
• 69.7% waste reduced, reused, recycled

Social Achievements

• Positively impacted over 390,000 families through various social projects
• Launched Hemas x Hatch Slingshot programme to nurture innovation
• Expanded the ‘Piyawara’ Pre School network by four preschools

Governance Achievements

• Reaffirmation of AAA (lka) Stable Outlook Rating by Fitch Ratings for the fifth consecutive year
• Implemented a comprehensive anti-corruption policy
• Established a whistleblowing policy

Climate Goals & Targets

Environmental Challenges

• Economic crisis in Sri Lanka impacting consumer spending and purchasing power
• NMRA mandated price reductions in pharmaceuticals
• High employee turnover due to economic conditions

Mitigation Strategies

• Implemented cost optimisation and efficiency improvement initiatives
• Introduced value-for-money product offerings
• Implemented targeted initiatives to retain critical talent, including competitive compensation and benefits packages and professional development programs

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct
• Supplier assessments on environmental and social compliances

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters
• Changing rainfall patterns
• Prolonged drought

Transition Risks

• Increased business costs due to transition to low-carbon operations

Opportunities

• Investment in renewable energy sources

Reporting Standards

Frameworks Used: GRI Standards, IFRS S1 and S2, TCFD Recommendations, UN Sustainable Development Goals

Certifications: ISO 14001, ISO 45001, ISO 9001, ACHSI Accreditation, GMP Certification

Third-party Assurance: Ernst & Young

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Kumarika Shampoo with redesigned bottle reducing plastic usage

Awards & Recognition

• Bronze Award for “Best Investor Relations” at the 10th Capital Market Awards 2023
• Most Loved Baby Brand in Sri Lanka
• Best Baby Care Brand – Sri Lanka
• Fems Aya awarded “Best Community Initiative Women-led Project of the Year”
• School Supply Brand of the Year
• UN Decade of Restoration flagship award for 2024