Climate Change Data

Environmental Metrics

ESG Focus Areas

• Circular Economy
• Climate Action
• Responsible Consumption and Production
• Occupational Health & Safety
• Economic value generated
• Product Quality & Safety
• Anti-corruption
• Compliance
• Talent Management
• Anti-discrimination
• Resource recycling

Environmental Achievements

• Reduced energy consumption by 34% compared with 2019.
• Reduced total carbon emissions to 58,649 tCO2e in 2020.
• Achieved approximately 97% recovery rate for end-of-life vehicles in European operations.
• Enhanced fuel efficiency and higher emission standards for fleets in European and North American subsidiaries.
• Stopped purchasing high oil content hydraulic oil for vehicle operations in some European subsidiaries.
• Replaced traditional lighting with LED lights in most yards in Germany.
• Increased installation of photovoltaic systems across European operation sites.
• Entire water needs in Taizhou are now met through rainwater reservoirs.

Social Achievements

• Launched a safer, more efficient and more flexible recycling program for electric vehicle lithium batteries.
• Established mechanism in maintaining workplace health and safety in light of COVID-19 outbreak.
• Provided training with the help of online solutions with respect to employees’ needs.
• Improved on-site waste and residual management.

Governance Achievements

• Implemented stringent environmental management systems under ISO 14001 and ISO 50001 certifications.
• Overhauled supply chain selection, evaluation and management processes.
• Established a comprehensive environmental management system in compliance with all applicable environmental laws and regulations.
• Implemented a whistleblowing policy.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting global economy and operations.
• Import restrictions on non-ferrous metal scrap in China (until November 2020).
• Supply chain disruptions due to the pandemic.

Mitigation Strategies

• Adopted anti-pandemic measures, including increased use of protective gear and social distancing.
• Increased online safety trainings and regular safety inspections.
• Relocated scrap metal processing plants to South and Southeast Asian countries through joint ventures.
• Strengthened integrated footprint within China through collaborative arrangements.
• Implemented stringent cost controls and streamlined operations.
• Leveraged on local partners for domestic ferrous sales and exported recycled copper scrap to China.

Supply Chain Management

Supplier Audits: 30,934 suppliers engaged in 2020

Responsible Procurement

• Systematic supplier selection and evaluation processes.
• Prioritization of suppliers with internationally recognized management systems.
• Continuous communication and monitoring of suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes, market shifts related to carbon neutrality targets.

Opportunities

• Development of energy-efficient products and services; increased demand for recycled materials due to green initiatives.

Reporting Standards

Frameworks Used: GRI Core Option, HKEX ESG Reporting Guide

Certifications: ISO 14001, ISO 50001, OHSAS 18001, ISO 9001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 3 (Good Health and Well-being)
• Goal 8 (Decent Work and Economic Growth)
• Goal 10 (Reduced Inequalities)
• Goal 16 (Peace, Justice and Strong Institutions)

The report details how Chiho's initiatives contribute to these goals.

Sustainable Products & Innovation

• Recycled aluminium, steel, and aluminum-alloy ingots; high-quality lubricant oil from recycled waste lubricant oil.

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Circular Economy
• Climate Change
• Occupational Health & Safety
• Economic Value Generated
• Product Quality & Safety
• Anti-corruption
• Compliance
• Talent Management
• Anti-discrimination
• Resource Recycling

Environmental Achievements

• Recycled 3.4 million tonnes of scrap metal, equivalent to approximately a reduction of 9.7 million tonnes of carbon dioxide.
• Upgraded equipment to increase efficiency for green operation and adopted double-walled tanks for storage and internal distribution of exhaust reduction fluids.
• European operation replaced fossil fuel-dependent vehicles with electric vehicles, upgraded deducting equipment to reduce dust, reinforced the concrete base on storage yards to eliminate negative impact on soil, and regularly inspect and clean the chimney in facilities to reduce emission.
• European operational sites continued to replace traditional lighting with LED lights and install telemetry systems for fleets to lower energy consumption.
• Asia operations continued to implement green office initiatives through practice, such as turning off electrical appliances when not in use and setting up directional targets to propel performance in mitigating fossil fuel consumption and carbon reduction.
• Replaced business travel with digital meetings to avoid traveling.

Social Achievements

• Launched a global online employee survey Pulse Check to allow employees across the globe to express their opinion on the current change process and future development of Chiho group.
• Organised several regional “Ask Anything” online sharing and discussion forums.
• Established a thorough safety management system and disciplinary procedures.
• Implemented an Induction Training Program in Europe.
• Established the Scholz Academy to provide employees with further training opportunities and practical courses in various subject areas.

Governance Achievements

• Established a Climate Change Policy.
• Implemented strict age limits for employees, enforced by identity checks of new hires to eliminate the risk of child or forced labour.
• Implemented a strict whistleblowing mechanism.

Climate Goals & Targets

Environmental Challenges

• Tougher environmental regulations.
• Highly fluctuating environments leading to unpredictable natural catastrophes.
• Increasing temperatures conducive to infectious diseases.
• Extreme heat and changing rainfall patterns leading to natural resources scarcity.
• Rising sea levels and soil erosion.
• Carbon neutrality plans requiring industry emission reductions.
• Carbon taxes and regulatory changes.
• Inability to meet climate targets leading to negative perception from stakeholders.

Mitigation Strategies

• Adhering to sustainability roadmap and seeking value from implementing ESG-related practices.
• Detailed procedures for dealing with environmental emergencies.
• Ongoing environmental training for employees.
• Regular assessments of EMSs through environmental risk assessment procedures and EIAs for new facilities.
• Regular internal and external on-site audits.
• Implementation of various energy saving strategies.
• Increased use of renewable energy sources.
• Upgrading equipment to reduce air emissions.
• Replacing business travel with digital meetings.
• Implementation of robust human resources management to foster a culture of long-term employee retention.
• Detailed employment and recruitment policies to ensure equality and prevent discrimination.
• Prompt investigation of allegations of misconduct.
• Establishment of a safety management system and disciplinary procedures.
• Implementation of a Contractor Health and Safety Policy.
• Regular safety training for employees.
• Tests on Bionic Back technology for employee usage.
• Organisational protective measures to reduce the spread of viruses.
• Strict age limits for employees, enforced by identity checks of new hires.
• Compliance with relevant labour laws and regulations regarding overtime.
• Revision of existing cash regulations to limit cash payments and implement a strict four-eyes principle.

Supply Chain Management

Responsible Procurement

• Thorough evaluation of supplier operations
• Alignment with Group values (reliable, cooperative, valuable, compliant)
• Compliance with requirements around occupational health and safety, environmental impact, and energy efficiency initiatives
• Commitment to sustainability, product quality, and financial stability

Climate-Related Risks & Opportunities

Physical Risks

• Highly fluctuating environments leading to unpredictable natural catastrophes (wildfires, tornados)
• Extreme heat and changing rainfall patterns leading to natural resources scarcity
• Rising sea levels and soil erosion

Transition Risks

• Carbon neutrality plans requiring industry emission reductions
• Carbon taxes and regulatory changes

Opportunities

• Increased demand for scrap recycling services
• Growth in used car and battery recycling business

Reporting Standards

Frameworks Used: GRI Standards, HKEX ESG Reporting Guide

Certifications: ISO 14001, ISO 50001 (Europe and North America), ISO 45001 (China)

UN Sustainable Development Goals

• Goal 9: Industry, Innovation and Infrastructure
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action
• Goal 8: Decent Work and Economic Growth
• Goal 10: Reduced Inequalities

Recycling natural resources reduces the need for consumption of virgin resources, helping the world move towards a circular economy. Initiatives contribute to climate change mitigation, decent work, and reduced inequalities.

Awards & Recognition

• Green industry contributors (China Nonferrous Metals Industry Association Recycling Metal Branch)
• Green Event Pledge (Environment Protection Department)
• Hong Kong Q-Mark Product Scheme Certificate
• Hong Kong Q-Mark Service Scheme Certificate
• Hong Kong Green Mark Certification Scheme Certificate

Environmental Metrics

ESG Focus Areas

• Climate Change
• Supply Chain Management
• Product Responsibility
• Corporate Governance
• Compliance
• Commercial Risk Management

Environmental Achievements

• Reduced carbon emissions by 7.9% compared to 2022 emissions. Total emissions were 34,148 tCO2e.
• Processed and sold about 3.64 million tonnes of recycled products, equivalent to a reduction of carbon emissions by approximately 6.6 million tonnes.
• Invested in renewable sources of electricity, resulting in carbon reductions of around 7,112,057 kg CO2 compared to national German electricity mix.
• Reduced water consumption by 3.0% compared to the previous year.
• Reduced hazardous waste by 45.5% and non-hazardous waste by 12.8% compared to 2022.

Social Achievements

• Launched Scholz Academy, providing 17 advanced courses and 116 LMS courses to 1,370 employees.
• Reduced work-related injuries by 13% compared to 2022.
• Implemented an Induction Training Programme for new employees in European subsidiaries.
• Donated over 600 sets of relief supplies worth EUR23,782.53 to Turkey after the earthquake.
• Invested EUR28,370.00 in sports and EUR26,782.53 in social associations.

Governance Achievements

• Established a robust anti-corruption policy and implemented a rigorous internal reporting mechanism.
• No incidents of corruption or illegal activities reported in 2023.
• Implemented a Contractor Health and Safety Policy.

Climate Goals & Targets

Environmental Challenges

• Climate change related physical risks (extreme weather events), transition risks (technology and policy/regulation changes), and reputational risks.
• Supply chain disruptions (not explicitly stated, but implied through supplier engagement and assessment).

Mitigation Strategies

• Investing in more energy-efficient equipment and renewable energy.
• Strengthening the supervision and discharge of waste, emissions, and wastewater.
• Implementing a comprehensive waste reduction strategy.
• Conducting regular internal audits and site inspections.
• Developing and implementing corrective actions for supplier shortcomings.

Supply Chain Management

Supplier Audits: Regular internal audits and site inspections

Responsible Procurement

• Thorough assessment of suppliers
• Compliance with specific regulations on occupational health and safety, environmental impact, and energy efficiency measures.

Climate-Related Risks & Opportunities

Physical Risks

• More intense extreme weather events
• Rising temperatures and shifting rainfall patterns
• Rising sea levels and soil erosion

Transition Risks

• Technology risks (carbon neutrality plans)
• Policy/Regulation risks (carbon tax, CBAM policy)
• Reputation risks

Opportunities

• Increased demand for scrap recycling services
• Use of more efficient production processes
• Investing in renewable energy sources
• Diversification of Business Activities

Reporting Standards

Frameworks Used: GRI Standards, HKEX ESG Reporting Guide

Certifications: ISO 14001, ISO 45001, ISO 50001 (certain subsidiaries)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 9
• Goal 12
• Goal 13
• Goal 4
• Goal 8
• Goal 16

The report details how various initiatives contribute to these goals.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Hong Kong Q-Mark Service Scheme Certificate
• Hong Kong Green Mark Certification Scheme
• Key Import Platform of Zhejiang Province
• Recycling Industry-OSH Star Enterprise
• Zhejiang Province Ecological Environment Education Demonstration Base
• Taizhou City No Waste Factory