Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced A4 paper consumption by 4.9 tonnes (31%) compared to 2016 through paperless office initiatives.
• Consolidated warehouses to reduce product delivery distances and improve time-to-shop, thus reducing carbon footprint.
• Replaced 60% of shuttle bus fleet at Shanghai headquarters with electric vehicles (up from 50% in 2016).
• Forwarded over 19,000 kg of used paper boxes to recycling stations in Shanghai.

Social Achievements

• Implemented a zero-tolerance policy for discrimination and harassment.
• Provided over 93,000 hours of training to frontline and supporting staff.
• Launched a Sales Management Trainee program to develop future store managers.
• Maintained a zero fatality rate due to workplace accidents.

Governance Achievements

• Formulated and strictly enforced anti-corruption policies.
• Established a whistleblowing policy to enable employees to report misconduct.
• Took proactive actions to protect intellectual property rights, removing approximately 80,000 infringing merchandise links online.

Climate Goals & Targets

Environmental Challenges

• Indirect GHG emissions from electricity consumption in offices and stores.
• Waste generation from product packaging and domestic use.
• Potential supply chain risks related to environmental and social impacts of suppliers.

Mitigation Strategies

• Implemented energy efficiency initiatives in offices and stores (e.g., LED lighting, optimized air conditioning).
• Collected and sorted recyclable waste, forwarding it to recycling stations.
• Assessed suppliers' environmental and social impacts as part of the selection process.
• Maintained close communication with suppliers through regular meetings and factory inspections.

Supply Chain Management

Supplier Audits: Annual reviews and factory inspections

Responsible Procurement

• Careful screening process and comprehensive KPI assessment of suppliers, including environmental and social impact.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ESG Reporting Guide (Appendix 27 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Resource Consumption
• Supply Chain Sustainability
• Employee Well-being
• Brand Reputation
• Product Quality
• Ethical Business Conduct
• Community Engagement
• Women Empowerment

Environmental Achievements

• Reduced electricity usage by 55%
• Reduced total carbon emissions (Scope 1 and 2) by 54%
• Increased electricity generation by 1039%
• Reduced paper usage by 42%
• Reduced water usage by 41%
• Achieved 99% product authenticity rate on Alibaba's Taobao and Tmall, and 98% on Pinduoduo

Social Achievements

• Launched a mini series in preppy style
• Organized 15 community engagement events with over 460,000 views and 28,000 replies
• Organized a story-sharing event "Removing Stereotype Impression" with 43,200 views and 210 replies
• No work-related fatality or serious injury cases in the past three years

Governance Achievements

• Established an ESG Working Group
• Updated the Group’s Code of Conduct
• Implemented the Staff Attendance and Vacation Policy
• Implemented the Performance Management Programme
• Implemented the Provision on Business Travel Management
• No non-compliance cases in relation to bribery, corruption, or other forms of business crimes
• No non-compliance cases in relation to infringement of personal privacy
• No non-compliance cases in relation to workplace discrimination, harassment, or vilification
• No non-compliance cases in relation to the child and forced labour

Climate Goals & Targets

Environmental Challenges

• Post-pandemic economy and digital transformation
• Electricity shortage in Mainland China
• Climate change risks (physical and transition risks)

Mitigation Strategies

• Exploring new business opportunities through collaborations with various social platforms
• Widening the supply chain to cooperate with multiple manufacturers
• Monitoring electricity supply and adjusting production patterns
• Conducting climate-related risk analysis
• Developing alternative sourcing strategies
• Implementing special working arrangements under extreme weather conditions
• Improving information disclosure on climate-related issues
• Including climate-related issues in external materiality assessment
• Providing climate change training to the Board and management

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Selecting manufacturers in line with stringent environmental standards and social norms
• Collaborating with prestigious brands and well-known designers
• Encouraging suppliers to use environmentally friendly materials

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons
• Extreme precipitation
• Rising mean temperatures

Transition Risks

• Price adjustments and controls in fossil fuels
• Substitution of existing raw materials and production processes
• Tightening policies and regulations
• Increased stakeholders’ concerns

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards, TCFD Recommendations

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Products with casual elements infused in women’s dress shoes
• Athleisure products

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Business and Product
• Supply Chain and Partnership
• Nature and Resource
• People and Culture

Environmental Achievements

• 91% reduction in total carbon emissions (Scope 1 and Scope 2)
• 98% reduction in water usage
• 94% reduction in electricity usage
• 11% increase in electricity generation from solar power
• 18% reduction in paper usage

Social Achievements

• 61% of employees received training (up from 34% in 2021)
• 35% reduction in employee turnover rate

Governance Achievements

• Established an ESG Working Group to oversee ESG-related matters
• Engaged external ESG consultants to assist in formulating ESG strategies
• Implemented anti-corruption training for employees

Climate Goals & Targets

Environmental Challenges

• Coronavirus epidemic resulting in a two-month lockdown in Shanghai
• Increased risk of online counterfeit products

Mitigation Strategies

• Swiftly implemented work-from-home model and assigned personnel outside Shanghai to handle supply chain issues
• Embedded anti-counterfeit labels with dynamic QR codes on products
• Regular monitoring of infringements on e-commerce platforms and legal action against infringing sellers

Supply Chain Management

Supplier Audits: Approximately 210 supply chain partners assessed

Responsible Procurement

• Code of Conduct for Partners
• Contractual agreements with sustainability provisions
• Anti-commercial Bribery Agreement

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons
• Extreme precipitation
• Rising mean temperatures

Transition Risks

• Enhanced emissions-reporting regulations
• Price adjustments and controls in fossil fuels
• Substitution of existing raw materials and production processes
• Increased stakeholder concern

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 5: Gender equality
• Goal 12: Responsible consumption and production
• Goal 10: Reduced inequalities
• Goal 16: Peace, justice and strong institutions
• Goal 13: Climate action

Daphne's initiatives contribute to these goals through various programs and policies related to gender equality, sustainable production, reducing inequalities, promoting peace and justice, and mitigating climate change.

Sustainable Products & Innovation

• Bubblegum Collection

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Brand Reputation and Product Quality
• Anti-corruption
• Customer Service and Relationship
• Supply Chain Sustainability
• Resource Consumption
• Emissions and Waste Management
• Talent Attraction and Retention
• Employee Benefits and Remuneration
• Diversity and Equal Opportunity
• Occupational Health and Safety
• Community Engagement
• Climate Change

Environmental Achievements

• Zero work-related fatalities and injuries
• Installation of a solar power system generating approximately 419,749 kWh of electricity, offsetting approximately 326.4 tCO2e of GHG emissions.
• Decreased customer complaints to 65 cases (2022: 70 cases)

Social Achievements

• Female employees made up approximately 55% of the workforce in Mainland China.
• Organized 28 online community engagement events (2022: 7)
• Average training hours per employee increased to 7.8 hours (2022: 2.2 hours)
• Turnover rate decreased by 6 percentage points to 13% (2022: 19%)

Governance Achievements

• Established a top-down governance framework for ESG integration into business activities.
• Established an ESG Working Group to execute and monitor ESG-related matters.
• Conducted comprehensive intellectual property rights training for staff and franchisees.
• Filed a total of 50 lawsuits against counterfeiters (2022: 117).

Climate Goals & Targets

Environmental Challenges

• Counterfeit products
• Climate change (physical and transition risks)
• Supply chain disruptions

Mitigation Strategies

• Zero-tolerance stance on counterfeiting, including legal action and anti-counterfeiting labels.
• Incorporation of climate change into risk management system and future development plans.
• Implementation of a “Quick Response for Small Orders” strategy to streamline internal processes and establish an efficient supply chain.
• Regular assessment of franchisees and suppliers, ensuring compliance with regulations and ethical standards.

Supply Chain Management

Supplier Audits: 232 business partners evaluated (2022: ~210)

Responsible Procurement

• Local sourcing to support the domestic economy and reduce carbon footprint.
• Integration of environmental, social, and governance aspects into supplier policies and business development strategies.
• Implementation of a “Quick Response for Small Orders” strategy.
• Code of Conduct for Partners, including compliance with relevant laws and regulations, ethical business practices, and sustainable production processes.

Climate-Related Risks & Opportunities

Physical Risks

• Typhoon
• Extreme precipitation
• Rising mean temperatures

Transition Risks

• Enhanced emissions-reporting regulations
• Price adjustments and controls in fossil fuels
• Substitution of existing raw materials and production processes with lower emissions options
• Increased stakeholder concern or negative stakeholder feedback

Opportunities

• Adoption of solar energy and electric vehicles.

Reporting Standards

Frameworks Used: Listing Rules of The Stock Exchange of Hong Kong Limited

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 5: Gender Equality
• Goal 10: Reduced Inequalities
• Goal 11: Sustainable Cities and Communities
• Goal 7: Affordable and Clean Energy
• Goal 13: Climate Action
• Goal 16: Peace, Justice and Strong Institutions

Detailed in the report's SDG Alignment section.

Sustainable Products & Innovation

• 3D-printed shoes using recyclable materials.

Awards & Recognition

• Not disclosed