Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Introduced several initiatives to improve energy efficiency, better waste management and enhance indoor environmental quality at headquarters in Shanghai, manufacturing plant in Dezhou, Shandong Province, retail points and warehouses.
• Implemented measures to minimise greenhouse gas emissions from electricity, natural gas and fuel consumption, including encouraging use of telephone/video conferences to reduce travel emissions and promoting energy saving measures in offices and plants.
• Adopted water saving measures and sought opportunities to recycle water for reuse, particularly in the manufacturing plant in Dezhou.
• Reduced paper consumption through office automation, electronic marketing materials, and encouraging staff to use electronic devices instead of printing hard copies.
• Improved fabric utilization rate in the manufacturing plant in Dezhou using automatic fabric-cutting machines and computer software, reducing scraps.

Social Achievements

• Provided training on safety education for employees to minimise workplace incidents.
• No serious injury of employee was recorded during the year.
• Provided training courses to employees including knowledge about the Group’s corporate culture, business ethics, production and logistics planning, customer service etc.
• Organised visits for designers to Venice for learning and training.
• Participated in the sponsorship of an animal protection program and a training program for village school teachers, donating approximately RMB0.5 million.

Governance Achievements

• Established an Audit Committee, Remuneration Committee, and Nomination Committee.
• All directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers.
• No incident of non-compliance of the Code of Conduct by the employees was noted.

Climate Goals & Targets

Environmental Challenges

• Decline in customer traffic flows in mainstream department stores in first to second tier cities, leading to a decrease in same store sales by 9.4%.
• Decrease in retail points operated by third-party retailers and more conservative ordering by third-party retailers under sluggish market conditions.
• Increased competition from e-commerce, impacting conventional retailers.
• Fluctuations in consumer spending caused by changes in macroeconomic conditions in the PRC.
• Intense competition in the retail and apparel industry in the PRC.

Mitigation Strategies

• Continued commitment to multi-channel strategy, with higher growth in sales from outlet stores.
• Increased investment in outlet stores (net increase of 39).
• Active organisation of sales fairs on online discount platforms, development of new online third-party retailers, and increased sales from self-operated e-shops.
• Continued implementation of a multi-brand strategy to capture more market segments and increase market share.
• Increased spending on marketing and promotion to enhance interaction with customers and raise brand awareness.

Supply Chain Management

Supplier Audits: Over 200 outsourcing suppliers, raw material suppliers and subcontract suppliers. On-site visits before commencement of business with suppliers. Annual evaluation of suppliers and contractors.

Responsible Procurement

• Compliance with the Environmental Protection Law of the People’s Republic of China.
• Discussions with suppliers on the use of environment-friendly materials.

Climate-Related Risks & Opportunities

Physical Risks

• Unexpected and abnormal changes in climate (e.g., warm winter affecting winter product sales, cool summer affecting summer product sales).

Reporting Standards

Frameworks Used: Appendix 27 of the Rules of Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Employment and Labour Practices
• Health and Safety
• Development and Training
• Labour Standards
• Supply Chain Management
• Product Responsibility
• Anti-Corruption
• Community Investment

Environmental Achievements

• Reduced NOx emissions by 12.12%, SOx emissions by 5.00%, and PM emissions by 10.70%
• Reduced total GHG emissions by 0.68%
• Reduced hazardous waste by 59.26%
• Reduced non-hazardous waste by 5.45%
• Reduced energy consumption by 18.37%
• Reduced plastic packaging material by 14.59%

Social Achievements

• No serious employee injuries reported
• Employee turnover rate decreased from 51% to 29%
• Increased employee training hours by 98.27%

Governance Achievements

• No legal cases regarding corrupt practices concluded
• Maintained compliance with relevant laws and regulations

Climate Goals & Targets

Environmental Challenges

• Fluctuations in consumer spending due to macroeconomic conditions in China
• Intense competition in the retail and apparel industry
• Changing consumer preferences and fashion trends
• Potential challenges in launching new brands or product lines
• Dependence on license agreements for international brands
• Reliance on third-party manufacturers and suppliers
• Susceptibility to unexpected climate changes and epidemics

Mitigation Strategies

• Investment in brand development, digital transformation, and business diversification
• Increased investment in digital marketing and VIP marketing
• Stringent policies to collect trade receivables
• Development of an O2O system
• Implementation of a multi-brand strategy
• Hedging policy to minimize foreign-exchange risks
• Continuous monitoring of ESG performance and establishment of quantitative targets

Supply Chain Management

Supplier Audits: Annual evaluation through day-to-day communication, business meetings, on-site visits, sampling, and product quality inspection

Responsible Procurement

• Preference for suppliers with ISO14000 standards
• On-site visits before commencement of business with suppliers
• Tender and quotation process for most procurements

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Reporting Standards

Frameworks Used: Appendix C2 of the Rules of Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited