Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Product Quality
• Customer Service
• Employee Well-being
• Community Engagement

Environmental Achievements

• Completed Phase I of Sinolife United Research and Development Centre, obtaining environmental protection completion acceptance.
• Implemented water-saving measures, including rainwater recycling system, reducing water consumption.
• Promoted paperless office and waste classification, reducing waste generation.

Social Achievements

• Launched 30 new products to meet diverse consumer demands.
• Provided competitive remuneration and benefits to employees, including additional benefits like nutrition soup for breastfeeding mothers and shuttle buses.
• Organized employee training sessions totaling 34,135.32 hours, with an average of 46 hours per employee.
• Maintained good working relations with staff, with no significant labor disputes or strikes.
• Actively engaged in community activities, including sponsoring sports events and donating products to charities.

Governance Achievements

• Established an ESG management structure led by the Board, with an ESG Management Committee and ESG Taskforce.
• Implemented anti-corruption regulations in procurement contracts and conducted regular anti-corruption training for employees.
• Established internal and external complaint and whistle-blowing policies to address integrity violations.

Climate Goals & Targets

Environmental Challenges

• Decrease in sales revenue of Zhongsheng, Hejian, and Cobayer series products due to reduced advertising and marketing.
• Relatively low profit in the early stages of new sales channels.
• Annual performance of Shanghai Hejian and Good Health Products below expectations, resulting in goodwill impairment.
• Inventory impairment due to macroeconomic factors and market competition.
• Increase in selling and distribution expenses due to increased marketing promotional expenses for Good Health brand.

Mitigation Strategies

• Strengthened marketing and promotion of the Good Health brand through multiple sales channels.
• Developed and launched 30 new products to meet evolving consumer demands.
• Focused on developing and cultivating maternity stores and distributor channels, increasing pharmacy channels and e-commerce platforms.
• Implemented measures to improve inventory turnover and reduce trade receivables.
• Implemented cost-saving measures to offset increased expenses.

Supply Chain Management

Supplier Audits: 259 suppliers of raw materials; conducted comprehensive evaluation and hierarchical management of suppliers.

Responsible Procurement

• Established a food safety practice mechanism for raw materials procurement.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Appendix 27 to the Listing Rules of The Stock Exchange of Hong Kong Limited

Certifications: HACCP, ISO 9001, ISO 22000

Environmental Metrics

ESG Focus Areas

• Environmental Management
• Supply Chain Management
• Employee Development
• Community Investment
• Product Quality
• Ethical Business Practices
• Anti-corruption

Environmental Achievements

• Successfully obtained approval and commenced operation of the R&D Centre project, meeting all environmental protection requirements.
• Living Nature obtained Toitu certification for environmental management.
• Energy-saving project in the underground parking lot, saving approximately 5,000 kWh annually.
• Implementation of water-saving practices, including scientific production planning, installation of water-saving devices, and centralized cleaning of uniforms.
• Rainwater recycling for greening and irrigation.
• Improved packaging material management, reducing waste through simple packaging and logistics system optimization.
• Living Nature uses cardboard from secondary forests and 100% recyclable packaging materials.

Social Achievements

• Provided various training programs for employees, with 2,495 attendees and 16,915 training hours.
• Established an employee hotline for psychological consultation.
• Organized recreational and team-building activities.
• Implemented flexible work schedules during special periods.
• Provided annual body checks, birthday celebrations, and other employee care initiatives.
• No work-related fatalities or lost workdays due to injuries.

Governance Achievements

• Established a robust ESG governance structure with Board oversight, an ESG Management Committee, and an ESG Taskforce.
• Implemented comprehensive supply assessment and grading management mechanism.
• Regular procurement meetings to mitigate procurement risks.
• Established advertising publication and approval mechanism to ensure compliance.
• No corruption or litigation incidents identified during the reporting period.

Climate Goals & Targets

Environmental Challenges

• Decreased sales revenue from offline retail shops and online call centers due to sales channel adjustments.
• Lower gross profit margins from distributors and TV shopping platforms compared to offline and online channels.
• Impairment of goodwill and intangible assets of Shanghai Hejian Nutritional Food Products Company Limited due to stricter government regulations and reduced sales.
• Fluctuations in raw material and packaging material prices.
• Foreign exchange risks due to transactions in Australian and New Zealand dollars.
• Changing consumer preferences and the need to introduce new products.

Mitigation Strategies

• Focus on the Good Health brand and sales promotion through distributors, TV shopping, and e-commerce.
• Development of new products (25 new products launched).
• Investment in research and development, market promotion, and channel construction.
• Adjustment of the number of offline retail shops and online call centers.
• Reduction of headcount and marketing expenses.
• Implementation of risk management and internal control systems.

Supply Chain Management

Supplier Audits: Paper and field audits performed on various suppliers.

Responsible Procurement

• Scrutinizing supplier qualifications and safety requirements.
• Regular supplier inspections and timely rectifications.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Appendix 27 to the Listing Rules of the Stock Exchange of Hong Kong Limited

Certifications: HACCP, ISO 9001, ISO 22000 (Zhongsheng Bio-Tech), Toitu (Living Nature)

Environmental Metrics

ESG Focus Areas

• Responsible and stable management
• Lean production, innovation, and service commitments
• Green operation to support the ecosystem
• Offering warm care and creating the future together
• Sincere dedication and giving back to the community

Environmental Achievements

• Reduced energy consumption by 22.53% in July and 51.76% in August through centralized production and other energy-saving measures.
• Launched a new packaging recycling program using recyclable PET plastic.
• Living Nature obtained Toitu certification for environmental management.

Social Achievements

• Held a number of activities to care for female employees.
• Conducted 5 safety drills with 242 participants and invested more than RMB180,000 in production safety. No work-related fatalities due to work injury.
• Living Nature implemented flexible work hours for employees.

Governance Achievements

• Established the ESG governance structure consisting of the Board, the ESG Management Committee and the ESG Task Force.
• Improved the compliance management system by integrating it into the whole process of production and operation management.
• No case involving corruption and litigation was identified during the Reporting Period.

Climate Goals & Targets

Environmental Challenges

• Decrease in sales revenue from TV shopping channels and online call centers due to the impact of COVID-19 and changes in sales strategy.
• High expenses as a percentage of revenue.
• Impairment loss of goodwill and other intangible assets due to the effect of COVID-19 and below-expectation performance of Living Nature.
• Increase in the price of raw materials and packaging materials.
• Failure to appropriately respond to changing consumer preferences and introduce new products.

Mitigation Strategies

• Focused resources on the development of Good Health brand, distributors and e-commerce channels.
• Accelerated innovation in the launch and marketing promotion of new products.
• Optimized supply chain management and improved operational efficiency.
• Reduced advertising and promotion expenses for Living Nature.
• Closed down domestic outlets with below-expectation performance and cut down the number of personnel in online call centers.
• Re-assessed the performance of Living Nature and recognised provision for impairment loss.

Supply Chain Management

Supplier Audits: Regular inspections and assessments of cooperative suppliers, including paper audits and field audits. 326 suppliers total (193 overseas, 133 Chinese)

Responsible Procurement

• Supplier access system
• Supplier assessment system
• Supplier control procedures
• Strict review on the qualification of suppliers
• Inclusion of local market regulation contact information in contracts

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Appendix 27 to the Listing Rules issued and amended by the Stock Exchange of Hong Kong Limited

Certifications: HACCP (Zhongsheng Bio-Tech), CTFA (Living Nature), Zero Plastic Inside (Living Nature)

Sustainable Products & Innovation

• Living Nature products are 100% free of microplastics.

Awards & Recognition

• Best Lip Product in the Health Post (Precious Lipstick)
• Gold in The Global Makeup Awards 2020 (Electric Coral)
• Silver in The Green Parent Natural Beauty Awards 2020 (Electric Coral)
• Silver and Bronze in The Global Green Beauty Awards 2020 (Electric Coral)
• Silver in the Free From Skincare Awards 2020 (Active Brightening Serum)
• Silver in the Global Makeup Awards 2020 (Active Brightening Serum)
• Winner in The Beauty Shortlist Awards 2020 (Summer Rain Lipstick)