Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Social Responsibility
• Governance

Environmental Achievements

• Reduced carbon dioxide emissions to 5,096.75 tonnes in 2022, a decrease of 1,576.7 tonnes compared to 2021. Reduced water consumption by 70.24% compared to 2021. Reduced electricity consumption by 440,956.31 kWh compared to 2021. Reduced office paper consumption by 65.07% compared to 2021. Reduced packaging materials by 399.41 tonnes compared to 2021.
• Implementing garbage classification and recycling at office spaces with a legal disposal rate of hazardous waste of 100%
• Ensuring that at production plants sewage and solid wastes generated in factories are discharged up to standards, major environmental pollution accidents are eliminated, and wastes are disposed of in accordance with the principles of recycling, harmlessness and reduction to avoid waste of resources
• Achieving zero major environmental incident, with waste water, exhaust gas, air pollutant emissions and noise control meeting local requirements.

Social Achievements

• Implemented practices and policies relating to recruitment and promotion; working hours; rest periods; equal opportunity; diversity; anti-discrimination; other welfare and benefits; and compensation and dismissal to protect the legitimate rights and interests of all employees.
• Provided competitive employee benefits and comprehensive training programs.
• Organized a wide array of recreational and sports activities to enrich employees’ work and life, and improve employees’ experience at work.
• No work-related fatalities in the past three years. Number of lost days due to work injury during the year was 189.

Governance Achievements

• Established a sound and rigorous ESG governance structure to assist the Board and the management of the Group in overseeing relevant issues and incorporating ESG considerations into the daily operations of the Group.
• Adopted a board diversity policy.
• Implemented rules and regulations regarding anti-commercial bribery, anti-corruption and whistleblowing to strictly regulate the behavior of employees and the Company.

Climate Goals & Targets

Environmental Challenges

• Relatively long period of production suspension at the Group’s manufacturing plant in Shanghai due to COVID-19 pandemic prevention policies. Prolonged suspension of operations of the Group’s automobile dealer stores in Hohhot, China due to COVID-19 pandemic prevention policies. Failure of two independent third parties to repay arrears as scheduled. Dispute with a customer and bankruptcy of another customer impacting net realisable value of certain customised products and related raw materials. Non-compliance with certain Listing Rules.
• The future development of China’s economy and China-US relations.
• The overall consumer demand was still significantly impacted by the continuous implementation of stringent lockdown and control measures of the Pandemic by the Government in 2022.

Mitigation Strategies

• Optimisation of customer structures and product structures. Strict control of costs and various expenditures. Transformation of some outlets with no brand license into comprehensive automobile maintenance plants. Lay-offs and wage reductions to reduce the cost of human resources. Actively applying for various government grants to replenish cash flows. Strengthening management and enhancing operating results. Expanding the domestic market for its manufacturing business to reduce reliance on the export market. Engaging an independent registered accountant to perform agreed-upon procedures in relation to specific accounts payable and receivable and transactions. Strengthening internal control procedures to prevent similar incidents in the future. Enhancing training provided to Directors and senior management to reinforce their understanding of compliance with the Listing Rules.

Supply Chain Management

Supplier Audits: On-site inspections and review of supplier information.

Responsible Procurement

• Review of supplier qualifications, including legal person qualifications, qualification level, registered capital, ISO certifications, production safety, financial conditions, and environmental impact.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions (e.g., typhoons)

Transition Risks

• Changes in procurement costs due to environmental changes

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Appendix 27 to the Listing Rules

Certifications: IATF 16949

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Environmentally friendly automotive lighting and automotive electronic power products

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Equal opportunity
• Development and training
• Occupational health and safety
• Employee benefits
• Prohibition of child labor and forced labor
• Anti-corruption and money laundering
• Complaint handling
• Community investment
• Product responsibility
• Supply chain management
• Exhaust emissions
• Greenhouse gas emissions
• Waste management
• Energy consumption
• Water consumption
• Paper consumption
• Climate change

Environmental Achievements

• Implementing garbage classification and recycling at office spaces with a legal disposal rate of hazardous waste of 100%
• Ensuring that sewage and solid wastes generated in factories are discharged up to standards, major environmental pollution accidents are eliminated, and wastes are disposed of in accordance with the principles of recycling, harmlessness and reduction to avoid waste of resources
• Achieving zero major environmental incident, with waste water, exhaust gas, air pollutant emissions and noise control meeting local requirements
• Reduced carbon dioxide emissions to 4,129.95 tonnes in 2023, a decrease of 966.8 tonnes compared to 2022.

Social Achievements

• Provides competitive employee benefits and comprehensive training programs
• Adopted practices and policies relating to recruitment and promotion; working hours; rest periods; equal opportunity; diversity; anti-discrimination; other welfare and benefits; and compensation and dismissal to protect the legitimate rights and interests of all employees.
• Organizes a wide array of recreational and sports activities to enrich employees’ work and life, and improve employees’ experience at work.
• No work-related fatalities for the past three years.

Governance Achievements

• Established a sound and rigorous ESG governance structure
• Established a code of conduct (including the Reporting System for Anti-corruption, Anti-bribery and Anti-misconduct) to combat and prevent the occurrence of bribery, corruption, extortion and other illegal activities within the Group.
• Implemented rules and regulations regarding anti-commercial bribery, anti-corruption and whistleblowing to strictly regulate the behavior of employees and the Company.

Climate Goals & Targets

Environmental Challenges

• Decline in export sales revenue resulting from the impact of Sino-US tariff policy
• Shrinking export market resulting in a decrease in the total number of orders of our export business
• Impact of weak consumption and inflation in North America
• Intensifying deterioration in Sino-US relations
• Worsening China-US relations affecting the results of the Group’s manufacturing business
• Material uncertainty which may cast significant doubt on the Group’s ability to continue as a going concern due to insufficient cash to repay short-term borrowings.

Mitigation Strategies

• Continuously identifying appropriate OEM manufacturers in Vietnam for its manufacturing business
• Streamlining staffing and reducing other expenses reasonably to cut costs
• Strive to expand the domestic market for its manufacturing business, so as to reduce the reliance on the export market
• Tightening cost control, obtaining new banking facilities, acceleration of construction progress
• Bond issuance

Supply Chain Management

Supplier Audits: Regular inspections by project managers and on-site inspections

Responsible Procurement

• Review of supplier qualifications including legal person, qualification level, registered capital, ISO certifications, production safety, financial conditions and environmental impact

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions (typhoons)

Transition Risks

• Changes in procurement costs due to environmental changes

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: ESG Guide (Appendix C2 of the Listing Rules)

Certifications: IATF16949

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Environmentally friendly automotive lighting and automotive electronic power products

Awards & Recognition

• Not disclosed