Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Reliance on Customer A for a significant portion of revenue.
• Dependence on Customer A's business performance in Hong Kong.
• Reliance on Supplier A for warehousing space.
• Lack of ownership of properties used for business operations.
• Dependence on subcontractors for some services.
• Deteriorating revenue and net profit during the Track Record Period.
• Potential liquidity issues related to bank loans and accounts receivables financing.
• Inability to sustain net profit margin.
• Risk of system failure due to IT infrastructure vulnerabilities.
• Dependence on key management personnel.
• Potential disruption of major operational facilities.
• Possible failure to implement business plans successfully.
• High operating costs in Hong Kong (labor and rent).
• Competition from nearby ports (Shenzhen).

Mitigation Strategies

• Efforts to diversify customer base and attract new customers.
• Negotiations for lease renewal with Supplier A.
• Exploration of alternative sourcing strategies for services.
• Accounts receivables financing arrangement with a financial institution.
• Expansion of services to include cold chain logistics.
• Investment in information technology and systems.
• Focus on attracting and retaining talented personnel.
• Exploration of strategic mergers, acquisitions, or business collaborations.

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• Quality Assurance Pinnacle Award
• Distribution Service Centre of the Year
• Appreciation of Providing Excellence and Dedicated Services in the 20 Years of Partnership Award
• 100% QAC Award – Quality Assurance
• Third-level Pinnacle Award

Environmental Metrics

ESG Focus Areas

• Health and Safety
• Development and Training
• Anti-corruption

Environmental Achievements

• Reduced total non-hazardous waste disposal by about 37.3% from approximately 7.88 tonnes in 2017 to approximately 4.94 tonnes in 2018.
• Replaced energy-inefficient light bulbs with energy-efficient LED lighting by phases.
• All forklifts in our warehouses are electric-driven, which allow minimization of air pollutant discharge.

Social Achievements

• Established a “Human Resources Policy”, which is in line with our people-oriented management.
• Implemented a year-round Safety and Health Training Program.
• Provides subsidies to employees to enrol for job-related training courses based on actual needs (maximum HK$20,000 for professional qualification training and HK$5,000 for external training).

Governance Achievements

• Established a “Code of Conduct” which contains relevant regulations as set out under the “Prevention of Bribery Ordinance”.
• The Audit Committee of the Company has conducted continuous evaluation of the Group’s internal control effectiveness.

Climate Goals & Targets

Environmental Challenges

• Increase in total GHG emissions by about 24%, from approximately 740.00 tCO2e in 2017 to approximately 917.01 tCO2e in 2018 (due to expansion of cold chain business).
• Increase in total energy consumption by about 29% from approximately 1,488,000 kWh in 2017 to approximately 1,921,656 kWh in 2018 (due to expansion of cold chain business).
• Increase in total water consumption by about 90% from approximately 3,275.00 cubic meters in 2017 to approximately 6,216.00 cubic meters in 2018 (due to expansion of cold chain business and damage to water tower).

Mitigation Strategies

• Implementing measures that promote energy conservation, waste reduction and any other green initiatives.
• Actively adopts electricity conservation and energy saving measures.
• Strengthening water-saving promotion.

Supply Chain Management

Supplier Audits: 110 suppliers, all located in Hong Kong. All suppliers are evaluated carefully and are subjected to regular monitoring and assessment.

Responsible Procurement

• The Group will continue to require business partners to attach more importance to sustainable development performances

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: “Environmental, Social and Governance Reporting Guide” (Appendix 27 of the Main Board Listing Rules of the Stock Exchange of Hong Kong Limited)

Environmental Metrics

ESG Focus Areas

• Health and Safety
• Development and Training
• Anti-corruption

Environmental Achievements

• Reduced use of packaging materials by about 37.6% from approximately 643 tonnes in 2018 to approximately 401 tonnes in 2019.
• Implemented measures to reduce GHG emissions, including using electric forklifts and promoting teleconferences.
• Adopted measures for environmental protection, energy conservation, and water saving.

Social Achievements

• Established a “Human Resources Policy” aligned with a people-oriented management strategy.
• Implemented a year-round Safety and Health Training Program.
• Provided subsidies to employees for job-related training courses (up to HK$20,000 for professional qualifications and HK$5,000 for external training).

Governance Achievements

• Established an ESG working taskforce that reports to the Board of Directors.
• Implemented a “Code of Conduct” addressing conflict of interests, accepting advantages, and leakage of confidential information.
• The Audit Committee periodically evaluates the Group’s internal control effectiveness.

Climate Goals & Targets

Environmental Challenges

• Increase in GHG emissions (6.6%) due to increased vehicle use from rising demand for logistics services.
• Increase in total energy consumption (9.5%) due to increased business activities.
• Increase in total hazardous waste (39.9%) due to increased handling of customers' expired products.

Mitigation Strategies

• Phased out diesel vehicles and replaced them with less polluting vehicles whenever possible.
• Strengthened regular examination of exhaust gases from business vehicles.
• Implemented electricity conservation and energy-saving measures.
• Implemented waste sorting and recycling initiatives.
• Encouraged staff to use teleconferences and video conferences to reduce air travel emissions.

Supply Chain Management

Responsible Procurement

• All suppliers are evaluated carefully and are subjected to regular monitoring and assessment.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: “Environmental, Social and Governance Reporting Guide” (Appendix 27 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited)

Environmental Metrics

ESG Focus Areas

• Health and Safety
• Development and Training
• Anti-corruption

Environmental Achievements

• Decreased total GHG emissions by about 29.06%, from approximately 977.70 tCO2e in 2019 to approximately 693.54 tCO2e in 2020. This is due to the replacement of some retired vehicles with more environmental friendly model, leading to a decrease in direct GHG emissions (Scope 1). The decreasing business activities also lead to the reduce in purchased electricity consumption, resulting a decrease in energy indirect GHG emissions (Scope 2).
• Decreased total energy consumption by about 9.83% from approximately 2,104,205.33 kWh in 2019 to approximately 1,897,313.40 kWh in 2020.
• Decreased total hazardous waste discharged by about 7.66% from approximately 2,279.00 tonnes in 2019 to approximately 2,104.50 tonnes in 2020.
• Decreased use of packaging materials by about 77.49% from approximately 2,350 tonnes in 2019 to approximately 1,324 tonnes in 2020.

Social Achievements

• Established a “Human Resources Policy”, which is in line with our people-oriented management, to communicate values and expectations of the Group and document best practices that are appropriate to us.
• Implemented a year-round Safety and Health Training Program covering safety and health trainings for different areas.
• Provided subsidies to employees to enrol for job-related training courses based on actual needs. During each financial year, each employee can receive a maximum of HK$20,000 and HK$5,000 as an allowance for professional qualification training and external training respectively.
• Established a “Code of Conduct” which contains relevant regulations as set out under the “Prevention of Bribery Ordinance of Hong Kong”.

Governance Achievements

• Set up an ESG working taskforce to collect ESG data and compile the ESG Report. The Taskforce periodically reports to the Board of Directors.

Climate Goals & Targets

Environmental Challenges

• Diminishing demand of logistics services leading to a decrease in business activities.
• Increase in cleaning as a result of COVID-19 leading to increased water consumption.

Mitigation Strategies

• Replaced some retired vehicles with more environmentally friendly models.
• Adopted electricity conservation and energy saving measures.
• Implemented measures to handle non-hazardous wastes and launched different reduction initiatives.
• Strengthened water-saving promotion and guided employees to use water reasonably.

Supply Chain Management

Supplier Audits: Regular monitoring and assessment of 133 suppliers.

Responsible Procurement

• Embedded environmental and social consideration in the procurement process and supplier communication.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: “Environmental, Social and Governance Reporting Guide” (Appendix 27 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited)

Certifications: ISO9001:2015 Quality Management Systems, ISO22000:2018 Food Safety Management System

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced non-hazardous waste by approximately 15.58% from 9.63 tonnes in 2020 to 8.13 tonnes in 2021.
• Completed an energy saving project of auto press to save the electricity cost of air-conditioning in its warehouses.
• Largely replaced old lightings with LED in its warehouses.

Social Achievements

• Established a “Human Resources Policy” in line with a people-oriented management.
• Implemented a year-round Safety and Health Training Program.
• Provided subsidies to employees for job-related training courses (up to HK$20,000 for professional qualification training and HK$5,000 for external training).

Governance Achievements

• Established an ESG working taskforce to collect ESG data and compile the ESG report.
• Implemented a “Code of Conduct” addressing conflict of interests, accepting advantages, and leakage of confidential information.
• Provided anti-corruption training to directors and employees (6 directors received approximately 6 hours, and 191 employees received approximately 191 hours).

Climate Goals & Targets

Environmental Challenges

• Increased GHG emissions by about 15.90% due to increased business activities.
• Increased total energy consumption by about 11.46% due to increased business activities.
• Increased water consumption by about 12.20% due to increased cleaning as a result of COVID-19.

Mitigation Strategies

• Implementing measures to promote energy conservation, waste reduction, and other green initiatives.
• Adopting electricity conservation and energy-saving measures.
• Strengthening water-saving promotion and guiding employees to use water reasonably.

Supply Chain Management

Responsible Procurement

• Prioritising procurement from local and regional suppliers.
• Prioritising suppliers that use environmentally preferable products and services.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (extreme cold or extreme heat, storms, rainstorms and typhoons) leading to power shortages, supply chain interruptions, asset damage, and operational disruptions.

Transition Risks

• Increased compliance costs due to HKEX requirements for enhanced climate-related disclosures.
• Risks of claims and lawsuits due to failure to meet climate change compliance requirements.

Reporting Standards

Frameworks Used: HKEX’s “Environmental, Social and Governance Reporting Guide”

Certifications: ISO9001:2015 Quality Management Systems, ISO22000:2018 Food Safety Management System

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Workplace safety and health
• Diversity
• Sustainability

Environmental Achievements

• Implement green office practices to reduce the consumption of energy and natural resources. These practices include the use of energy-saving lightings and recycled paper, reduce energy consumption by switching off idle lightings, computers and electrical appliances and the use of environmentally friendly products whenever possible.

Social Achievements

• The Group acknowledges the importance to maintain good relationship with its employees and customers for the achievement of its short-term and long-term business objectives.
• The Group managed to maintain its logistic supply chain services to provide support to its valuable customers during the Pandemic.

Governance Achievements

• The Company has complied with all code provisions (except for the deviation from CG code provision C.2.1) as set out in the Corporate Governance Code contained in Appendix 14 of the Listing Rules throughout the year.
• The Group has established an on-going process for identifying, evaluating and managing the significant risks of the Group

Climate Goals & Targets

Environmental Challenges

• The adverse impact of the COVID-19 pandemic continued to affect the business of the Group.
• The global business environment has deteriorated due to high inflation and economic recession.
• Our growth in the distribution business has been seriously disrupted due to the outbreak of the Pandemic in Hong Kong and Macau.
• Our operations in Macau have almost been suspended due to the anti-pandemic policies adopted by both Governments.

Mitigation Strategies

• The Group managed to maintain its revenue level even during this difficult period.
• We have continued to provide our customers with quality supply chain management services during the 5th wave of the Pandemic in Hong Kong.
• The Group has successfully maintained our profit making position in the full service distribution segment in 2022 and we are ready to further expand our full service distribution segment in the coming years to maximise our synergy of logistics backbone and distribution networking.
• The Group will continue to devote its effort in preventing the spreading of the COVID-19 pandemic in its premises and to ensure the health and safety of our employees and customers.
• The Group will continue to optimize our services quality and IT systems to upgrade ourselves to cater for future development and growth and implement more stringent cost control measures to further improve our cost efficiency.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced water consumption intensity by about 59.1% from approximately 0.044 cubic meters/square feet in 2022 to approximately 0.018 cubic meters/square feet in 2023. This is due to the decrease in the number of repacking jobs in 2023.
• Implemented measures to handle hazardous and non-hazardous wastes and launched different reduction initiatives, focusing on the 4Rs principles (Reduce, Reuse, Recycle and Replace).

Social Achievements

• Established a “Human Resources Policy” in line with a people-oriented management approach.
• Implemented a year-round Safety and Health Training Program covering various safety and health training areas.
• Provided anti-corruption training and reading materials to directors and employees.

Governance Achievements

• The Board assumes full responsibility for overseeing the Group’s corporate governance as well as the overall ESG management approaches, strategies, priorities and targets.
• Established an ESG working taskforce to collect ESG data, compile the ESG report, and report to the Board annually.

Climate Goals & Targets

Environmental Challenges

• Increase in the Group’s exhaust gas emissions due to increased vehicle usage after the pandemic.
• Increase in the Group’s non-hazardous waste intensity by about 10.3% from approximately 0.58 kg/square feet in 2022 to approximately 0.64 kg/square feet in 2023 due to the difference in product mix.
• Increase in the Group’s total energy consumption intensity by about 2.9 % from approximately 6.12 kWh/square feet in 2022 to approximately 6.30 kWh/square feet in 2023.

Mitigation Strategies

• Formulated an “Emissions Policy” to address emissions from company vehicles and forklift trucks; phasing out diesel vehicles and replacing them with less polluting vehicles whenever possible.
• Implementing measures to handle non-hazardous wastes and launched different reduction initiatives, focusing on the 4Rs principles (Reduce, Reuse, Recycle and Replace).
• Streamlining operational procedures; utilizing higher energy-efficiency equipment; switching off lightings and electrical appliances when not in use; and replacing energy-inefficient light bulbs with energy-efficient LED lightings in the warehouses.

Supply Chain Management

Responsible Procurement

• Prioritizes procurement from local and regional suppliers to lower the carbon footprint during transportation.
• Prioritizes suppliers that use environmentally preferable products and services.

Climate-Related Risks & Opportunities

Physical Risks

• Increased risk of power shortages, supply chain interruption, asset damage, business disruption, reduced revenue, increased repair costs, employee work disruption, and casualties due to extreme weather events.

Transition Risks

• Increased compliance costs due to HKEX requirements for enhanced climate-related disclosures; risks of claims and lawsuits; and reputational risks due to delayed response to climate change trends.

Reporting Standards

Frameworks Used: HKEX’s “Environmental, Social and Governance Reporting Guide”

Certifications: ISO9001:2015 Quality Management Systems, ISO22000:2018 Food Safety Management System