Climate Change Data

Environmental Metrics

ESG Focus Areas

• Employees
• Supply Chains
• Customers
• Communities
• Environment

Environmental Achievements

• Fully operational VOC treatment facilities in Zhongshan inks plant and installation of similar facilities in other plants.
• Gradual replacement of coal with natural gas in solvents plants.
• Six-month environmental campaign at Hong Kong headquarters to raise waste reduction awareness among staff.

Social Achievements

• Launched "Go! Camel!" project to enhance employee understanding of Camel Paint business.
• Yip’s Care Extension Foundation provided education subsidies to 155 employees’ children and retirement gratuities to 12 retirees.
• Held HSE annual meeting and four HSE technical forums for employees.
• Conducted 105,612 hours of HSE-related training.

Governance Achievements

• Held an "Integrity Management Seminar" for Hong Kong headquarters staff on bribery and corruption prevention.
• Established a whistleblowing mechanism to prevent violations of laws and regulations.
• No corruption reports received during the year.

Climate Goals & Targets

Environmental Challenges

• Unprecedented challenges in global economic activities, personnel flows, social conditions, and natural environment.
• COVID-19 pandemic in early 2020.

Mitigation Strategies

• Launched EUCA personal and household sanitization brand to meet community needs.
• Donated EUCA products and antiseptic alcohol to disadvantaged groups and institutions in Hong Kong and Mainland China.
• Implemented various preventive measures to safeguard employee safety and health in Hong Kong and Mainland offices and plants.

Supply Chain Management

Supplier Audits: 16 on-site assessments (coatings and inks divisions), annual assessments, periodic assessments, individual-item assessments.

Responsible Procurement

• Qualified supplier list
• Stricter requirements for raw material suppliers (e.g., evaluating protective measures during shipment)
• Direct cooperation with manufacturers whenever possible
• Periodic talks on hazardous substances for chemical raw material suppliers

Climate-Related Risks & Opportunities

Reporting Standards

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

Certifications: ISO 14001 (Huizhou, Zhongshan, Jinshan, Tongxiang plants), ISO 9001 (all subsidiaries), China Environmental Labelling Product Certification, China Compulsory Product Certification, China Classification Society Certification, American UL Product Safety Certification, French VOC A+ Certification, American GREENGUARD Gold Certification, QC 080000 Hazardous Substances Process Management system (inks business)

Sustainable Products & Innovation

• EUCA sanitizing products
• Bauhinia Youtuli S-series coatings
• Baby Care child-safe wall paint
• Bauhinia Extreme • Odourless Plus Series

Environmental Metrics

ESG Focus Areas

• Environment
• Communities
• Employees
• Supply Chains
• Customers

Environmental Achievements

• Minimised environmental impact during production and product use.
• Implemented measures to reduce steam and electricity consumption per intensity, and water consumption of certain plants.
• Launched environmentally friendly and long-lasting antimicrobial coating, “Nano En-core”.

Social Achievements

• Launched the “Home is” Craftsmen Impact Project to connect stakeholders and create shared values.
• Donated nearly 20,000 bottles of sanitising products to local under-resourced communities and over 230 tonnes of alcohol for antiseptic use in Mainland China.
• Provided free coating application service for schools and social welfare organizations using Nano En-core.

Governance Achievements

• Adheres to a high standard of sustainable development governance with a well-defined structure and clear roles and responsibilities.
• Implemented a zero-tolerance policy for all forms of corruption, bribery, extortion, fraud and money laundering.
• Obtained a sustainability-linked embedded syndicated loan of HK$600 million.

Climate Goals & Targets

Environmental Challenges

• Overall production volume increase leading to higher emissions, energy consumption, and packaging material usage.
• Increase in hazardous waste due to full operation of new production lines and increased production volume.

Mitigation Strategies

• Continued to adopt different measures to monitor and manage production processes to reduce environmental footprint.
• Improved waste classification and collection, with dedicated personnel to supervise waste classification to reduce mixing.
• Used reusable IBCs instead of traditional steel drums, reducing steel drum usage by nearly 20%.

Supply Chain Management

Supplier Audits: 11 supplier assessments for coatings and inks businesses

Responsible Procurement

• Suppliers must comply with strict standards (regulations, production, quality management, labour codes, environmental protection).

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Appendix 27 of the Main Board Listing Rules on the Stock Exchange

Certifications: ISO 14001, ISO 50001, China Environmental Labelling Product Certification, ISO 9001

Sustainable Products & Innovation

• Nano En-core long-lasting antimicrobial coating
• Eco.bottle® packaging

Environmental Metrics

ESG Focus Areas

• Environment
• Communities
• Employees
• Supply Chains
• Customers

Environmental Achievements

• Reduced greenhouse gas emissions in scope 1 by 37% and in scope 2 by 17% year-on-year. Reduced total energy consumption by approximately 19% year-on-year and total water consumption by 48% year-on-year.
• Decreased hazardous waste by 14% year-on-year.
• Particulates emission decreased by 96% compared to 2021.
• Achieved “green product” rating for some coatings products and Jinshan coatings plant was rated as a green plant.

Social Achievements

• Continued support for the “Home is” Craftsmen Impact Project, nurturing youth skills and experiences.
• Launched the “Be-A-Craftsman Experience” program in collaboration with Evangelical Lutheran Church Social Service – Hong Kong.
• Participation in the “Job Shadowing Mentorship Scheme” organized by the Federation of Hong Kong Industries.
• EUCA collaborated with local artists, university students, and Wai Ji Christian Service for product design and community engagement.

Governance Achievements

• Established a Whistleblowing Policy for employees, customers, and other external stakeholders.
• No concluded legal cases regarding corruption brought against the Group or its employees.
• Implemented ISO 9001 Quality Management System and an Enterprise Resource Planning system (ERP system).

Climate Goals & Targets

Environmental Challenges

• Recurring outbreaks of COVID-19 in Hong Kong and Mainland China and global geopolitical tensions led to uncertainties in the business environment.
• Road transport restrictions in Mainland China due to COVID-19 outbreaks.

Mitigation Strategies

• Enhanced health and safety measures in plants.
• Close coordination between plants to optimize production and logistics.
• Flexible work arrangements for employees in areas under lockdown.

Supply Chain Management

Supplier Audits: 68 supplier assessments for coatings and inks businesses

Responsible Procurement

• Strict standards on regulations, production and quality management, labour codes, and environmental protection.
• Supplier site audit assessment grading system.
• Supplier Assessment and Control Procedure.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions

Transition Risks

• Potential increase in crude oil and carbon prices

Reporting Standards

Frameworks Used: GRI Standards, UN SDGs

Certifications: ISO 14001, ISO 50001, ISO 45001, ISO 9001, China Environmental Labelling Product Certification, China Compulsory Product Certification, China Classification Society Certification, American UL Product Safety Certification, French VOC A+ Certification, American GREENGUARD Gold Certification

UN Sustainable Development Goals

• SDG 3
• SDG 9
• SDG 11
• SDG 12
• SDG 17

Various initiatives aligned with these goals are described in the report.

Sustainable Products & Innovation

• Benzene-free and ketone-free inks, water-based inks, UV/LED inks, and pure vegetable oil inks.
• Solvent-based wood paints to water-based wood paints
• Baby Care child-safe paints

Awards & Recognition

• Bauhinia Advanced Materials Group listed on the “2021 National Green Manufacturing List”

Environmental Metrics

ESG Focus Areas

• Environment
• Communities
• Employees
• Supply Chains
• Customers

Environmental Achievements

• Reduced greenhouse gas emissions intensity in Scope 1 by 12% and in Scope 2 by 14% per tonne of products compared to 2022.
• Reduced hazardous waste intensity by 11% per tonne of products compared to 2022.
• Reduced water use intensity by 15% per tonne of products compared to 2022.
• Reduced VOC emissions by 49%.
• Shanghai coatings subsidiary recognized as "Shanghai Green Supply Chain Management Enterprise" by the PRC Government.
• Huiyang coatings subsidiary awarded "Hong Kong–Guangdong Cleaner Production Partners" by the Environmental Protection Department of the HKSAR Government.
• Shanghai coatings subsidiary recognized as "Green Manufacturer" by the PRC Government.

Social Achievements

• Awarded the "15 Years Plus Caring Company Logo" by HK Council of Social Service.
• Awarded "Outstanding Caring Award" and "Most Devoted Award" under the Industry Cares Recognition Scheme 2023.
• Coatings brand "Bauhinia" became an Official Support Brand of the China Women’s National Football Team.
• Conducted 60,500 hours of HSE training across the Group.
• Awarded the "Happy Company" Logo by the Chinese Manufacturers' Association of Hong Kong.
• Awarded the “Eco-Healthy Workplace” Label by the World Green Organisation.
• Awarded the "Good MPF Employer 5 Years+" award.

Governance Achievements

• Joined the ESG Pledge Scheme.
• Implemented a Whistleblowing Policy.
• Established a robust governance structure focused on sustainable development.
• Completed a materiality assessment in accordance with GRI Universal Standards 2021.
• No concluded legal cases regarding corruption brought against the Group or its employees.

Climate Goals & Targets

Environmental Challenges

• Enduring effects of the COVID-19 pandemic on the economy.
• Global geopolitical tensions.
• Unprecedented flooding in Hong Kong.
• Potential increase in crude oil prices and carbon prices impacting the supply chain.
• Potential for extreme weather events to threaten plant facilities.

Mitigation Strategies

• Rolling out green and eco-friendly coatings and inks products.
• Working with suppliers to promote environmentally friendly practices.
• Contingency plans for extreme weather events.
• Identifying multiple suppliers for each raw material.
• Strengthening market position to address supply chain challenges.
• Implementing energy efficiency initiatives and research and development programs.
• Regular updates to the Board regarding operational feedback and industry best practices to adjust and advance the Group’s climate change risk management strategy.

Supply Chain Management

Supplier Audits: 68 audits/year

Responsible Procurement

• "Supplier Assessment and Control Procedure"
• Supplier site audit assessment grading system
• Environmental and Occupational Health and Safety Agreement (for inks business)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions (high temperatures and heavy rainfall)

Transition Risks

• Potential increase in crude oil prices and carbon prices

Opportunities

• Sustainable finance
• Green products

Reporting Standards

Frameworks Used: GRI Universal Standards 2021, TCFD

Certifications: ISO 14001, ISO 50001, ISO 45001, ISO 9001, UL Product Safety Certification, French VOC A+ Certification, GREENGUARD Gold Certification, USDA Certified Biobased Product Label, American Children’s Product Certificate (CPC), China Environmental Labelling Product Certification, China Classification Society Certification

UN Sustainable Development Goals

• SDG 3
• SDG 9
• SDG 11
• SDG 12
• SDG 17

The Group maps its key initiatives in accordance with the UN SDGs, taking into account its sustainable development model and the Practical Guide to Integrating SDGs in Corporate Reporting.

Sustainable Products & Innovation

• "Baby Care Bio-based Kids Paint Series"
• "Rose Paint Series"
• Eco-friendly coating solutions for toys using bio-based, biodegradable, or recyclable plastics
• "NV Pure Vegetable Oil Inks Series"
• "Low VOC Gravure Inks"

Awards & Recognition

• "15 Years Plus Caring Company"
• "Outstanding Caring Award"
• "Most Devoted Award"
• "Happy Company" Logo
• "Eco-Healthy Workplace" Label
• "Good MPF Employer 5 Years+"
• "ERB Manpower Developer Award Scheme – Manpower Developer"
• "Role Model Company for Green Development of Guangdong Coatings Industry"