Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Energy saving
• Carbon reduction
• Circular economy
• Human rights
• Employee well-being
• Corporate governance

Environmental Achievements

• Reduced VOCs emissions by 37%
• Reduced TSP emissions by 98%
• Reduced SOx emissions by 97%
• Reduced NOx emissions by 81%
• Increased recycled water usage by 86%
• Reduced general business waste by 43%
• Reduced hazardous business waste by 27%
• Replaced heavy oil with natural gas in steam boilers to reduce GHG emissions
• Recycled acetone and butanone from water-based PU manufacturing processes

Social Achievements

• Established employee welfare committee in 1975
• Provided regular health checks and insurance to employees
• Offered various employee training programs (11,828 person-times, 12,023 hours in 2019)
• Established a harmonious labor relationship with a labor union
• Implemented policies in compliance with regulations and internationally recognized human rights principles

Governance Achievements

• Established Audit Committee and Remuneration Committee
• Established CSR Management Committee in 2020
• Implemented corporate governance practices in accordance with the Code of Practice for Corporate Governance of Listed Companies
• Purchased liability insurance for directors and managerial officers
• Appointed a Company Secretary in 2020

Climate Goals & Targets

Environmental Challenges

• Fluctuation in raw material costs
• Intense price competition
• Stricter environmental regulations
• Risks associated with purchase and sales concentration
• Climate change risks

Mitigation Strategies

• Maintain long-term cooperation with suppliers
• Adopt joint procurement for bulk materials
• Diversify the source of purchase
• Strengthen product R&D to lower costs
• Invest in overseas markets and set up production bases
• Improve services and maintain customer relationships
• Develop environmentally-friendly products
• Implement climate change response system
• Maintain two or more suppliers for key raw materials
• Develop new products and customers to lower sales concentration risk

Supply Chain Management

Responsible Procurement

• Requires suppliers to sign CSR statement and code of ethical conduct
• Assesses suppliers on environmental, labor, human rights, and social impacts
• Maintains two or more sources of supply for key raw materials

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters (fires, water resource instability)

Transition Risks

• Stricter environmental regulations

Opportunities

• Development of energy-efficient products
• Development of water-based and solvent-free products

Reporting Standards

Frameworks Used: GRI Standards Core Option

Certifications: ISO 9001, ISO 14001, OHSAS 18001 (to be converted to ISO 45001), ISO 50001, AS9100:D

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

Sustainable Products & Innovation

• Water-based products
• Solvent-free products
• Biomass materials
• Recycled polyester polyol
• Fluorine-free water repellent agent

Awards & Recognition

• Best Voted Glue Potion Supplier at Nike's WHQ Campus Global Chemical Conference (2019)
• China Top Brands
• China Well-known Trademark

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Energy saving
• Carbon reduction
• Occupational safety
• Human rights
• Corporate governance
• Circular economy

Environmental Achievements

• Reduced CO2e emissions by 4.89% (from 14,064 to 13,376 metric tons)
• Reduced water consumption by 11% (from 104,493 to 92,999 metric tons)
• Solvent recovery rate of acetone and methyl ethyl ketone reached 73%
• Replaced heavy oil with natural gas in all steam boilers in 2019, significantly reducing SOx, NOx, and TSP emissions
• Completed environmental footprint analysis of water-based PU dispersion using LCA technology and obtained ISO 14067 verification statement

Social Achievements

• Established a "Safety and Health Committee" and formulated an "Occupational Safety and Health Policy"
• Obtained Occupational Health and Safety Management System Certification (ISO45001)
• Provided 6,535 person-times of training with a total of 8,895 training hours (average 11.68 hours per person)
• Established an employee retirement method and a Labor Retirement Reserves Supervision Committee
• Maintained harmonious labor relations

Governance Achievements

• Established an Audit Committee and a Remuneration Committee
• Established a "Corporate Social Responsibility Management Committee"
• Appointed a corporate governance officer
• Purchased liability insurance for directors and managerial officers
• Implemented internal control mechanisms to ensure compliance with laws and regulations

Climate Goals & Targets

Environmental Challenges

• Cost inflation of raw materials
• Intense price competition
• Stricter environmental regulations
• COVID-19 pandemic impact on demand

Mitigation Strategies

• Maintain long-term cooperation with suppliers
• Adopt joint procurement
• Diversify sourcing
• Invest in R&D to lower costs
• Adjust selling prices
• Invest in overseas markets
• Improve services and customer relationships
• Develop water-based and eco-friendly products
• Expand market share and customer coverage

Supply Chain Management

Responsible Procurement

• Supplier Code of Ethical Conduct
• Environmental Protection Requirements Commitment
• RSL Restricted Substances List

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards, SASB

Certifications: ISO 14001, ISO 50001, ISO 45001, ISO 14067

Sustainable Products & Innovation

• Water-based resins
• Solvent-free resins
• Biomass materials
• Eco-friendly coatings
• Fluorine-free water repellent

Awards & Recognition

• China Top Brands
• China Well-known Trademark
• Nike's Best Adhesive Supplier Award

Environmental Metrics

ESG Focus Areas

• Climate Change
• Circular Economy
• Green Products
• Supplier Sustainability
• Employee Well-being

Environmental Achievements

• Achieved a 10% reduction in carbon intensity by 2025 (target)
• Recycled 6,511 metric tons of solvents in 2023 (an increase of 15.85% compared to 2022)
• Reduced CO2 emissions by 18,205 kilograms through solvent recycling
• Reduced total waste output by 21.45% in 2023 compared to 2022
• Reduced VOC emissions by 3.57% in 2023 compared to 2022
• Reduced non-renewable energy consumption by 10.09% in 2023 compared to 2022
• Completed ISO14001 environmental management system certification at head office and 11 production sites
• Obtained USDA bio-based certification for bio-based PU foam cushions
• Developed r-PET containing textile coating resins and hot stamping transfer resins, flooring coatings with recycled waste wafers, and textile coating resins containing oyster shell powder, reducing carbon emissions by up to 26%
• Recycled 6,511 metric tons of solvents in 2023

Social Achievements

• Established Nan Pao Social Welfare Foundation
• Held various employee wellbeing initiatives (e.g., community visits, chemical workplace experience, Dragon Boat Festival Concert, Loving Christmas, Beach Cleanup Family Day)
• Awarded the “2023 Happiness Enterprise Silver Award”
• 100% of new employees and contracted security personnel receive human rights education training
• Female employees account for 26.04% of the workforce, with female employees in management positions representing 12.50% of total managerial roles
• In 2023, a total of 16,735 participants attended training courses, accumulating 22,369 training hours (average 1.34 hours per employee)

Governance Achievements

• Established Audit Committee and Compensation Committee
• Established Corporate Sustainability Development Promotion Committee
• Passed liquidity tests, corporate governance evaluations, and various financial indicators in 2023 to become a constituent stock of the Corporate Governance 100 Index
• Improved ratings from international ESG rating agencies such as S&P Global, FTSE Russell and Sustainalytics
• Implemented ISO 27001 information security management system certification

Climate Goals & Targets

Environmental Challenges

• Weak global demand for end products due to high interest rates, inflation, and underperformance of the post-pandemic economy in mainland China
• Geopolitical tensions impacting economic development and social stability
• Gradual decrease in inventory levels of sportswear brand customers
• Sluggish global consumer market sentiment and economic activity
• Rising costs of raw materials
• Intense price competition
• Increasingly stringent environmental requirements
• Climate change risks (transition and physical)

Mitigation Strategies

• Focus on high-margin products and adjusting product structure
• Investment in R&D for advanced applications and actively seizing growth opportunities in new products and applications
• Implementation of product line simplification to enhance production efficiency
• Formulating energy-saving and emission-reduction strategies
• Collaboration with government initiatives promoting low-carbon projects
• Positioning for energy transformation and electrification
• Implementing a phased digital transformation process
• Maintaining long-term cooperation with excellent suppliers
• Adopting joint purchasing for bulk raw materials
• Diversifying sources of procurement
• Promptly reflecting reasonable increases in raw material costs to customers
• Localizing production
• Strengthening product research and development
• Adjusting product mix to focus on high-value-added products
• Providing integrated services
• Transforming product raw materials from solvent-based to water-based
• Actively developing bio-based materials or using recyclable materials
• Reducing the use of high-concern chemicals

Supply Chain Management

Supplier Audits: 7 key suppliers audited annually

Responsible Procurement

• Supplier Code of Conduct
• Emphasis on local sourcing (81.8% in 2023)
• Risk assessments for uninterrupted operations

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Meeting customers' value chain carbon reduction goals
• Product transformation using low-carbon materials
• Carbon fees or purchasing credits due to GHG emission regulations

Opportunities

• Meeting customer demand for low-carbon products
• Expanding into the carbon fiber lightweight market
• Developing products for extreme climate adaptation

Reporting Standards

Frameworks Used: GRI, TCFD

Certifications: ISO 14001, ISO 45001, ISO 27001, bluesign® SYSTEM PARTNER, ZDHC Level 3

Third-party Assurance: SGS, Ernst & Young

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

Sustainable Products & Innovation

• Water-based resins
• Solvent-free resins
• Bio-based materials
• Recycled materials
• Fluorine-free products
• Bio-based PU foam cushions
• Bio-polyols
• Bio-based shock-absorbing materials
• Bio-based spray resins and adhesives
• Bio-based functional coatings
• Bio-based PUR
• Bio-based hot-melt adhesives
• r-PET containing textile coating resins
• Floor coatings with recycled waste wafers
• Textile coating resins containing oyster shell powder
• Water-based non-plastic paper coating resins
• Powder coatings for potable water pipes

Awards & Recognition

• 2023 Happiness Enterprise Silver Award
• Best Voted Adhesive Supplier at the Nike Global Chemical Conference