Climate Change Data

Environmental Metrics

ESG Focus Areas

• Governance
• Sustainability
• Diversity & Inclusion
• Community Development
• Environmental Stewardship

Environmental Achievements

• 7% reduction in carbon footprint per million rupees of revenue
• 3% reduction in water withdrawn per million rupees of revenue
• 15% reduction in absolute carbon footprint to 82,009 MT
• 12% reduction in absolute water withdrawal to 1,677,672 cubic meters
• 13% reduction in waste generation to 6,763 MT
• 19% of the Group's energy is from renewable sources.
• 1,113 GJ of energy saved through energy efficiency initiatives.

Social Achievements

• Launched 'ONE JKH' brand with initiatives aimed at increasing gender parity and inclusion.
• Goal to increase the number of women in the workforce to 40% by 2025/26.
• 23 hours average training per employee.
• 756,153 persons impacted by community engagements.
• 85% of purchases from suppliers within Sri Lanka.

Governance Achievements

• No departures from the Code of Business Conduct and Ethics.
• Strengthened governance framework and controls.
• Appointed a new Ombudsperson.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting business activity and consumer sentiment.
• Supply chain disruptions.
• Reduced tourist arrivals.
• Fluctuating oil prices.
• Import restrictions.
• Economic slowdown in Sri Lanka.

Mitigation Strategies

• Implemented cost containment and productivity measures.
• Developed alternative sourcing strategies.
• Secured financing agreements (e.g., USD 175 million from IFC).
• Adopted weekly dashboards and cash management strategies.
• Implemented agile working policies.
• Introduced various COVID-19 safety protocols.

Supply Chain Management

Supplier Audits: 74/year

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: International Integrated Reporting Framework (IIRC), GRI Standards: Core option

Certifications: ISO 9001, ISO 14001, OHSAS 18001/ISO 45001, SLSI 1672

Third-party Assurance: Independent auditor

UN Sustainable Development Goals

• Goal 7
• Goal 12
• Goal 13
• Goal 14
• Goal 15
• Goal 1
• Goal 3
• Goal 4
• Goal 5
• Goal 6
• Goal 8
• Goal 11
• Goal 16
• Goal 9
• Goal 17

The report details how initiatives contribute to these goals.

Sustainable Products & Innovation

• Keells private label products
• Ezy rice

Awards & Recognition

• LMD's Most Respected Entity
• LMD Top 100 Entities
• World Retail Awards (shortlisted)
• National Chamber of Exporters (NCE) Export Awards
• CMO Asia/CMO Global awards
• Insurance Asia Awards
• SLIM Nielsen People's Choice Awards
• World Travel Awards
• SATA awards
• HSMAI Adrian Awards

Environmental Metrics

ESG Focus Areas

• Economic performance
• Ethics
• Human capital
• Environmental responsibility
• Product stewardship
• Supply chain management
• Social responsibility

Environmental Achievements

• Not disclosed

Social Achievements

• Increased Maternity and Adoption leave to 100 days, Paternity leave to 5 days, and introduced an additional 7 days of Sick leave to improve retention among working parents and boost employee morale.
• Introduced parental cover within the current insurance schemes.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Annual

Responsible Procurement

• Supplier Code of Conduct
• Supplier Management Framework
• Annual Supplier fora

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 9001, ISO 22000, OHSAS 18001/ISO 45001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Sustainable Growth
• Fulfilling the Customer Promise
• Empowered Team
• Managing the Value Chain
• Sustainable and Responsible Organisation

Environmental Achievements

• 311 MT of plastic recycled (1006% increase over previous year)
• 35% reduction in single-use plastics at prepared food counters (against 2019 baseline)
• 45,725 GJ solar power generated
• 5% decline in carbon footprint due to higher solar power generation and energy efficiencies

Social Achievements

• Launched 3 Concept stores with cutting-edge retail technologies
• Expanded private label range to offer more affordable products
• Implemented parental leave policy extending 100 days of leave to both parents
• Over 1.1 million beneficiaries through CSR programs
• Employee satisfaction score improved significantly in both Manufacturing and Supermarkets

Governance Achievements

• No reported violations of the Group Code of Conduct
• Increased Board vigilance in response to operating environment volatility
• Implemented a landmark parental leave policy

Climate Goals & Targets

Environmental Challenges

• Cashflow and working capital management challenges due to foreign exchange scarcity, import restrictions, increased fuel and electricity rates, and high inflation
• Decreased consumer spending power due to inflation and economic downturn
• Supply chain disruptions due to foreign exchange crisis and reduced harvests
• Escalation of raw and packing material prices
• Increased interest rates impacting borrowing costs
• Talent migration due to economic hardship

Mitigation Strategies

• Focused on cashflow and working capital management to reduce financing costs
• Continued focus on customer affordability and value-for-money products (smaller pack sizes)
• Implemented cost reduction initiatives and efficiency improvements
• Enhanced customer service in Supermarket Sector
• Leveraged advanced data analytics for informed decision-making
• Extended financial and other relief measures to employees
• Strengthened relationships with value chain partners

Supply Chain Management

Supplier Audits: 133/year

Responsible Procurement

• Fair business practices
• Capacity building initiatives
• Direct sourcing of raw materials
• Expanding local supplier base

Climate-Related Risks & Opportunities

Physical Risks

• Vagaries in weather patterns affecting agricultural inputs and fresh produce availability

Transition Risks

• Regulatory changes surrounding single-use plastics

Opportunities

• Investing in minimizing environmental footprint
• Building supply chain resilience

Reporting Standards

Frameworks Used: GRI Standards (Core option), International Integrated Reporting Council Framework, Sustainable Development Goals Reporting, Gender Parity Reporting Framework of CA Sri Lanka

Certifications: ISO 9001:2015, ISO 22000:2018, ISO 45001:2018

Third-party Assurance: Messrs. Ernst & Young Chartered Accountants (financial statements only)

Sustainable Products & Innovation

• Private label products
• Compostable bags
• Paper straws

Awards & Recognition

• Keells: Strongest Brand and Most Valuable Supermarket Brand (Brand Finance)
• Elephant House: 13th most valuable brand (Brand Finance)
• Numerous other awards listed in the report

Environmental Metrics

ESG Focus Areas

• Sustainable Finance
• Responsible Organisation
• Sustainable Culture

Environmental Achievements

• Reduced carbon footprint to 4,271 MTCO2e
• 65% of loans and advances screened for social and environmental impacts
• Reduced paper consumption through digitization

Social Achievements

• 48.2% female employee representation
• 64,425 training hours provided
• LKR 19.3 Mn invested in CSR initiatives

Governance Achievements

• Implementation of a board-approved ESG strategy
• Appointment of a Senior Independent Director
• Regular review of policies and procedures

Climate Goals & Targets

Environmental Challenges

• Challenging macroeconomic conditions in Sri Lanka
• Uncertainty surrounding debt restructuring
• High interest rates and inflation

Mitigation Strategies

• Agile strategy and digitalization
• Selective lending strategy
• Effective management of funding costs and asset quality

Supply Chain Management

Responsible Procurement

• Review and update of ESMS procedure and processes

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards, Integrated Reporting Framework, UN Sustainable Development Goals

Certifications: ISO 27001:2013

Third-party Assurance: Ernst & Young

Awards & Recognition

• Five awards at FITIS Digital Excellence Awards 2023
• FriMi ranked among top 3 Most Loved Fintech Brands

Environmental Metrics

ESG Focus Areas

• GHG emissions and energy management
• Water management
• Waste management
• Human rights
• Health and safety
• Diversity and Equal opportunity
• Talent attraction and retention
• Community relations and empowerment
• Privacy and data security
• Business conduct and ethics
• Corporate governance
• Sustainable tourism
• Guest health and safety
• Risk management
• Supply chain management
• Product safety and quality
• Supplier assessment
• Stakeholder relationship management
• Tax strategy

Environmental Achievements

• 5.41% YoY reduction in carbon footprint per guest night
• 5.81% reduction in water withdrawn (base year 2018)
• 37.15% reduction in single use plastic per guest night (base year 2021/2022)
• Replanted 20,000 native plants in the buffer zone of Sinharaja Forest
• Made steady progress towards our medium-term goal of achieving a 50% reduction in single use, guest-facing plastic by 2025

Social Achievements

• Rolled out projects to encourage female participation in non-traditional roles and leadership positions
• Implemented several initiatives to create an inclusive working environment
• Ensuring the safety and security of our employees, guests and suppliers remains a top priority, with robust health and safety measures implemented across our properties
• Introduction of the Cinnamon Online Academy
• 485.5% volunteer hours focused on women children
• 1.3% points increase in female participation in the work force
• 1% points increase in female participation in leadership
• 0.13% differently abled representation in the work force

Governance Achievements

• No reported violations of the Group Code of Conduct and Code of Business Conduct and Ethics of the Code of Best Practice of Corporate Governance 2017
• Commitment to upholding Group policies, where emphasis is placed on ethical and legal dealings, zero tolerance for corruption, bribery and any form of harassment or discrimination in our workplace and any work-related situations
• 1.07% suppliers assessed under the Supplier Impact Assessments carried out for all contracted suppliers in top 10 purchase categories

Climate Goals & Targets

Environmental Challenges

• High input costs, particularly during the first half of the year, stemming from import restrictions
• Significant rise in electricity costs due to the increase in electricity tariffs negatively impacted margins
• Staff shortages
• Evolving employee expectations (job security, financial wellbeing, mental wellbeing)
• Evolving customer expectations (environmental and social consciousness, value for money, technology)
• Climate change (physical risks, supply chain disruptions)
• Higher taxes having an impact on profitability
• Increased competitiveness in the industry
• Cost increases due to continuously improving product quality standards in line with competitors
• Cyber security
• Supply chain issues/Supply chain shortages
• Brand and reputation risk
• Food Safety
• Equipment/Machinery breakdown
• Labour Disputes
• Employee Risks
• Corruption and Fraud
• Sexual harassment at workplace
• Non compliance of the minimum public holding requirement of the Listing Rules of the Colombo Stock Exchange

Mitigation Strategies

• Offering competitive pricing while ensuring the retention of our loyal customer base
• Implementation of minimum room rates (MRR)
• Effective cost management practices
• Assuring job security of all employees, together with timely payment of salaries and benefits
• Ensuring employee mental wellbeing through various initiatives
• Continued environmental and social initiatives under the strong ESG agenda of the John Keells Group with key targets set
• Investments in IT capabilities leading to enhanced and speedier guest experience
• Focus on avenues for profitability enhancement such as cost rationalisation and selling price revisions
• Strategising towards more business volumes amidst recovering economic conditions
• Enhancements to the value proposition of the Company
• Driving value for money
• Greater liaison with our global sales partners and other travel partners in driving Colombo as a preferred and an attractive destination
• Pricing strategies are scrutinised with competitor pricing and other available offers
• Implementation of latest technological developments
• Updating of firewalls, service contracts, infrastructure and disaster recovery plans
• Immediate measures taken to correct identified deficiencies and gaps
• Review supplier standards, maintenance of agreements, supplier forums and continuous monitoring
• Modifying the menus and ordering process accordingly, robust supplier engagement
• Maintaining brand standards, health and safety standards and high guest & associate satisfaction levels
• Responding immediately to guest concerns and addressing any areas of weaknesses
• Regular preventative maintenance programmes
• Regular inspections, supervision and monthly maintenance
• Maintenance is done on a needs basis upon identification of issues
• Operational management supervision
• Regular discussions with employees on grievances
• Increased employee engagement
• Great Place to Work certification, staff welfare, building loyalty, review of remuneration packages
• Continuous training of staff, regular review of policies, whistle blowing mechanisms
• Staff training and Internal audit and loss recovery process including insurance
• Staff awareness and training sessions, robust policies
• Transparent and confidential channels of communication
• Robust disciplinary procedures
• Aggressive pursuit of business strategies to capitalize on opportunities and maximize stakeholder value creation
• Monitoring the situation towards ensuring compliance with the required Public Holding threshold

Supply Chain Management

Supplier Audits: 7 suppliers

Responsible Procurement

• Supplier Code of Conduct
• Prioritising the sourcing of sustainable products
• Supporting local, small and medium sized enterprises
• Transparent, impartial tender process

Climate-Related Risks & Opportunities

Physical Risks

• Increased frequency and intensity of floods, storms and other extreme weather events
• Changes in precipitation patterns, resulting in water scarcity
• Threats to local ecosystems and biodiversity
• Increased spread of diseases and heat-related illnesses

Opportunities

• Capturing scope 1 and 2 emissions and extending the process to include capturing scope 3 emissions
• Partnering with local environmental organisations
• Educating staff and guests about climate change
• Incorporating green building practices
• Supporting and investing in community-based climate change adaptation and mitigation initiative

Reporting Standards

Frameworks Used: SLFRS, International Integrated Reporting Framework, GRI Standards, SASB Standards – Hotels & Lodging Sustainability Accounting Standard, Sustainable Development Goals (SDGs)

Certifications: ISO 22000:2018, ISO 45001:2018, ISO 14001:2015, Travelife gold certification

Third-party Assurance: Messrs. KPMG - Chartered Accountants

Awards & Recognition

• Gold certification by Travelife for Accommodation Sustainability
• 10th in the Transparency in Corporate Reporting (TRAC) Assessment by Transparency International Sri Lanka (TISL)