Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainability
• Corporate Social Responsibility
• Human Rights
• Governance

Environmental Achievements

• Reduced carbon footprint to 222 MT from 205 MT in 2016/17
• Reduced direct energy consumption to 435 GJ from 414 GJ in 2016/17
• Renewed HACCP ISO 22000:2005 and OHSAS 18000:2007 certifications
• Implemented Plasticcycle pledge to reduce plastic pollution

Social Achievements

• 100% of employees received performance reviews
• Over 800 hours of training for employees
• Facilitated 1,204 Top Prices for Tea Factories
• Rs. 1.24 million contributed to John Keells Foundation for community development projects

Governance Achievements

• Full compliance with Companies Act No. 07 of 2007, Listing rules of the Colombo Stock Exchange, and Securities and Exchange Commission of Sri Lanka rules
• Compliance with Code of Best Practices on Corporate Governance
• Implementation of Forestpin to monitor discrepancies in control accounts
• Establishment of a Cybersecurity policy

Climate Goals & Targets

Environmental Challenges

• Intense market competition
• Changes in global market trends
• Inconsistent economic policies
• Institutional influences
• Digitization and disruptive innovation
• Geographical and demographical changes
• Natural disasters
• Increase in interest rates
• Overexposure on lending
• Fire at warehouse
• Human resources risk
• Information technology risk
• Unauthorized access to critical assets
• Macro-economic environment of exporting countries
• Trade rejection by Custodian Client of JKSB
• Miscommunication of buy or sell orders

Mitigation Strategies

• Effective communication on financial disciplines
• Employee-centered cost efficiencies and technological advancements
• Innovative solutions to attract new markets and retain customers
• Advice from Group Tax departments and adherence to tax regulations
• Consistent market oversight and updates to the supply chain
• Promote innovative and sustainable industry practices
• Regular interaction with regulators
• Continuous learning and development
• Educate suppliers on sustainable sourcing
• Proposed introduction of work-from-home and flexible time allocations
• Renewal of maintenance agreements and updating of policies
• Aligning with Group insurance policies
• Involve staff to assess capital assets and determine needs
• Maintaining service contracts with labour service providers
• Invest in renewable energy and promote recycling
• Raising awareness among employees
• Adhering to environmental compliance requirements
• Align with Group Initiatives
• Continuous training and proactive change management
• Continuous and ongoing career development
• Proactive identification of performance gaps and providing training
• Develop a learning culture
• Invest in systems that enable continuous assessment of employee performance
• Regular interaction with regulators
• Fully comply with all regulatory requirements
• Having a proper BCP in place
• Covering all possible risks through an insurance policy
• Carrying out quarterly reviews of BCP
• Making sure BCP is in place and reviewed on a quarterly basis
• John Keells Warehousing has installed fire smoke detectors and carries out annual compliance audits
• Obtained OHSAS & HACCP certification
• Encouraging continue education, providing relevant training and development opportunities
• Developing a formal succession plan for senior level
• Investing in a security infrastructure
• Having a fully-fledged disaster recovery location in place
• Constant monitoring of the environment
• Maintaining extra space in the warehouses
• Close follow up with client or foreign broker on affirmation
• Staff training, awareness and vigilance

Supply Chain Management

Responsible Procurement

• 100% purchases from local suppliers
• Financial assistance to suppliers
• Advice on manufacturing and financial support
• Sharing pre-catalogue and post-sale information with suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Natural Disasters
• Adverse weather conditions

Transition Risks

• Changes in global markets trends
• Influence on utilisation of renewable energy
• Government Institutional influences

Opportunities

• Invest in renewable energy

Reporting Standards

Frameworks Used: GRI Standards, International Integrated Reporting Council (IIRC) Framework, UN Global Compact Principles, United Nations Sustainable Development Goals

Certifications: OHSAS 18001:2007, ISO 22000:2005

Third-party Assurance: Messrs. Ernst & Young, Chartered Accountants

UN Sustainable Development Goals

• Goal 1: No Poverty
• Goal 4: Quality Education
• Goal 5: Gender Equality
• Goal 6: Clean Water and Sanitation
• Goal 7: Affordable and Clean Energy
• Goal 8: Decent Work and Economic Growth
• Goal 9: Industry Innovation and Infrastructure

Right Thinking corporate strategy

Awards & Recognition

• Bronze Award in the “Diversified Holdings (Groups up to 10 subsidiaries)” category at the 53rd Annual Report Award Competition

Environmental Metrics

ESG Focus Areas

• Good Governance
• Corporate Social Responsibility
• Environmental Sustainability

Environmental Achievements

• Completed installation of solar panels, reducing electricity costs by 86 percent.

Social Achievements

• Kala Pola 2020 provided opportunities for employee CSR engagement.
• Successful completion of the Annual Performance Management Cycle.
• Workshops on tea manufacturing, leadership, and people management skills were conducted.

Governance Achievements

• Introduction of the e-auction platform as a business continuity initiative during the COVID-19 outbreak.
• John Keells PLC was lauded with a Silver Award in the “Diversified Holdings (Groups up to 10 Subsidiaries)” category at the 54th Annual Report Award Competition conducted by the Institute of Chartered Accountants of Sri Lanka.

Climate Goals & Targets

Environmental Challenges

• Unfavorable weather conditions impacting tea quality and quantity.
• Reduced demand for lower-grade teas.
• Increasing production costs due to below-capacity operation of tea factories.
• Fluctuating demand from importers.
• Decline in Sri Lankan rubber production.
• Falling global rubber prices.
• Reduced competitiveness of Sri Lanka’s rubber industry.
• Subdued activity on the Colombo Stock Exchange.
• COVID-19 pandemic and resulting lockdown.

Mitigation Strategies

• Strategies to increase warehouse storage capacity utilization.
• Collaborative efforts to assist tea factory operators in managing working capital.
• Implementation of process efficiencies in back-office functions.
• Benefits from solar panel usage at the warehouse.
• Prudent financial measures to maintain overheads.
• Business continuity plans to maintain operations during lockdown.
• E-platform for online tea auctions.
• Cost-saving process implementations.
• Partnership with key suppliers and provision of technical assistance.

Supply Chain Management

Responsible Procurement

• Financial assistance to factory owners to manage working capital.
• Knowledge and best practice sharing.
• One-on-one interaction with customers.

Climate-Related Risks & Opportunities

Physical Risks

• Unfavorable weather conditions

Reporting Standards

Frameworks Used: Sri Lanka Accounting Standards (SLFRSs / LKASs), Global Reporting Initiative (GRI) G4 standard, International Integrated Reporting Council Framework

Certifications: ISO 22000:2005 Food and Safety Management Systems, OHSAS 18001:2007 Occupational Health and Safety

Awards & Recognition

• Silver Award at the 54th Annual Report Award Competition

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Successful completion of the solar energy project at the Warehousing Segment, generating additional rental income and contributing to increased other income.
• Initiatives to reduce paper usage, including the automation of the goods received note (GRN) process at the Warehousing Segment.
• Commitment to the John Keells Group’s plastic recycling initiative, Plastic-Cycle.

Social Achievements

• Continued investment in employee training and development, providing growth opportunities and competitive compensation and benefits.
• Revised objectives for workforce diversity, aiming to achieve 37% female participation and 32% female representation in leadership roles.
• Distribution of sanitary napkins to female employees to promote well-being and challenge gender stereotypes.

Governance Achievements

• No reported violations of the Group Code of Conduct and Code of Business Conduct and Ethics.
• Emphasis on ethical and legal dealings, zero tolerance for corruption, bribery, and harassment or discrimination.
• Adherence to the Integrated Reporting Framework and obtaining external validation from independent auditors.

Climate Goals & Targets

Environmental Challenges

• Adverse weather conditions affecting tea production.
• Appreciation of the Sri Lankan Rupee against the US dollar impacting tea prices.
• Disruptions in purchasing Ceylon Tea in global export markets.
• Escalation in freight and insurance expenses due to the Red Sea crisis.
• Declining tea and rubber production.
• Subdued performance of the Colombo Stock Exchange.
• Rising costs of raw materials, fuel, electricity, and other supplies.

Mitigation Strategies

• Implementation of various cost management initiatives to enhance operational efficiency.
• Streamlining processes and upholding a commitment to personalized services to producers.
• Continuing to offer value-added services to buyers.
• Enhanced fertilizer utilization to increase crop production and quality.
• Exploring strategies to improve segmental performance, including targeted strategies to increase participation and sales volume at auctions and exploring direct sales with importers.
• Implementing measures to encourage greater participation and higher sales volume at auctions, addressing fluctuations in the volume of rubber directed towards auctions to ensure a more consistent supply, and exploring the possibility of engaging in direct sales with importers to diversify sales channels.
• Prudent cost management and ongoing implementation of productivity-enhancing measures.

Supply Chain Management

Responsible Procurement

• Credit verification procedures for clients trading on credit terms.
• Close monitoring of green leaf intakes to factories and catalogued quantities.
• Thorough background investigations before accepting new business opportunities.
• Supporting factory owners in addressing working capital requirements and expansion initiatives.
• Disseminating knowledge, best practices, and industry insights among suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Adverse weather conditions impacting tea production.

Reporting Standards

Frameworks Used: GRI Standards, International Integrated Reporting Framework

Certifications: OHSAS & HACCP (Warehousing Segment)

Third-party Assurance: Ernst & Young