Climate Change Data

Shanghai Turbo Enterprises Limited

Climate Impact & Sustainability Data (2018, 2019, 2020)

Reporting Period: 2018

Environmental Metrics

Total Carbon Emissions:3126 tCO2e/year
Total Energy Consumption:4,419,997 KWh/year
Waste Generated:70 tons/year (waste oil)
Carbon Intensity:0.055 MT/RMB’000 (2018)

ESG Focus Areas

  • Environmental
  • Social
  • Governance

Environmental Achievements

  • Reduced power consumption from RMB 5 million in 2016 to RMB 3.1 million in 2018 (partially due to reduced production).
  • ISO 14001:2004 certification for turbine blade production and related management activities.

Social Achievements

  • Implemented several policies to enhance employee benefits (social security, transport allowances, etc.).
  • Conducted over 50 recruitment activities during the year.
  • Maintained a stable employee union.

Governance Achievements

  • Implemented an effective control system to detect bribery or fraud.
  • Established whistle-blowing channels.
  • GB/T 19001-2208/ISO 9001:2008 and occupational health and safety assessment series (GB/T 28001-2011/OHSAS 18001:2007) certifications.

Climate Goals & Targets

Long-term Goals:
  • Become a qualified supplier of aviation blades and military products OEM.
Medium-term Goals:
  • Transform from a 100% single vane processing structure to 50% or less in the next 3 years.
Short-term Goals:
  • Reduce energy consumption by 10% in 2019.
  • Improve worker skills by at least one level.
  • Increase social connectivity by reaching out to local communities.
  • Raise awareness of risk management.

Environmental Challenges

  • Squeezed profit margins due to fierce competition and changes in procurement methods of turbine manufacturers.
  • Difficulty attracting younger workers, particularly to the polishing department.
  • Business disruption in the second half of 2017 impacting GTI score.
Mitigation Strategies
  • Upward business expansion to reduce material wastage and processing time.
  • Collaboration with local technical and vocational schools for recruitment.
  • Improved incentives and loyalty bonuses to reduce attrition rates.
  • Cost austerity measures to maintain productivity.

Supply Chain Management

Supplier Audits: More than 70% of new suppliers were screened with environmental criteria.

Responsible Procurement
  • Supplier evaluation procedure including business conduct, labor practices, safety and health, and environmental management.
  • Implementation of responsible procurement policies in the selection of construction vendors, material suppliers, and project partners.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards (Core Option)

Certifications: ISO 14001:2004, GB/T 19001-2208/ISO 9001:2008, GB/T 28001-2011/OHSAS 18001:2007

Reporting Period: 2019

Environmental Metrics

Governance Achievements

  • Established various self-regulating and monitoring mechanisms to ensure effective corporate governance.
  • Established several Board Committees (Audit Committee, Nominating Committee, and Remuneration Committee) with clearly defined terms of reference.

Climate Goals & Targets

Environmental Challenges

  • Sharp decline in replacement market for core vane or fin product due to China's shift to renewable energy and declining power consumption.
  • Sharp order declines in subsidiary Changzhou 3D Technology Complete Set Equipment Co., Ltd. (CZ3D) due to customer lack of confidence from ongoing legal cases.
  • Fierce competition leading to margin erosion and deterioration in customer debt collection.
  • Tight supplier credits.
  • Weakened internal structures including financial constraints.
  • Unprecedented loan repayment pressure.
  • Low worker morale.
  • Poor delivery schedules due to labor shortage of higher skillset operators, technical designers, and programmers.
Mitigation Strategies
  • Implemented a furlough program to save labor costs.
  • Seeking meaningful and justifiable ends to legal cases in China and Singapore.
  • Streamlining operations in China, including cost reduction, improved technical competencies, optimum factory utilization, better cash flow management, and purchasing cost reduction.
  • Exploring new non-vane or non-fin products (aviation, robotics, healthcare, medical industry).
  • Exploring export opportunities in Southeast Asian emerging economies.
  • Reviewing recapitalization needs.
  • Bringing back furloughed workers.
  • Exploring and bringing in more technical talents.
  • Improving cost competitiveness and converting successful tenders to contracts and sales.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Period: 2020

Environmental Metrics

Total Carbon Emissions:1885 tons (indirect CO2e)
Total Energy Consumption:3,897,930 KWh
Waste Generated:70 tons (waste lubricant oil)
Carbon Intensity:0.0550 MT/ RMB’000 (2019 and 2018); 0.0550 MT/ RMB’000 (2020)

ESG Focus Areas

  • Economic Performance
  • Environmental Management
  • Social Responsibility
  • Governance

Environmental Achievements

  • ISO 14001:2004 certification for turbine blade production and related management activities.
  • Systematic management and disposal of waste lubricant oil (70 tons/year).

Social Achievements

  • Implementation of several policies to enhance employee benefits (social security, allowances, leaves, medical check-ups).
  • More than 10 recruitment activities during the year.
  • In-house training and coaching for trainees.
  • Occupational health and safety assessment series (GB/T 28001-2011/OHSAS 18001:2007) certification.
  • No injury or fire hazards reported during the year.

Governance Achievements

  • Implementation of an effective control system to detect bribery or fraud.
  • Open whistle-blowing channels.
  • Quality Management System Certification (GB/T 19001-2208/ISO 9001:2008).
  • Improved Governance Transparency Index (GTI) score from 27 in 2019 to 49 in 2020.
  • Implementation of a Code of Ethics and Conduct.

Climate Goals & Targets

Long-term Goals:
  • Promote healthy lifestyle among the industrial zone with annual walk & jog campaign and charity contribution.
  • Set up a Scholarship scheme for staff children and selected schools.
Medium-term Goals:
  • Transform from a 100% single vane processing structure to 50% or less in the next 3 years.
Short-term Goals:
  • Reduce energy consumption in 2021.
  • Reduce attrition rates by 5% in the next reporting year.
  • Improve worker skills by at least one grade in 2021.
  • Renovate the Polishing department and improve the exhaust system by the third quarter of 2020 and in 2021.

Environmental Challenges

  • Near-term business-model disruptions and broader transition risks due to the COVID-19 pandemic.
  • Squeezed profit margins due to fierce competition.
  • Difficulty in attracting younger workers.
  • High attrition rate (36% in 2020).
Mitigation Strategies
  • Efforts to regain key clients' confidence.
  • Enhancement of sales and production processes to increase customer satisfaction.
  • Reinforcement of skilled workers and sourcing new talents through on-job training.
  • Implementation of cost austerity measures.
  • Recruitment of more R&D and higher-level technical staff.
  • Collaboration with local technical and vocational schools for recruitment.
  • Improved incentives and loyalty bonus schemes.

Supply Chain Management

Supplier Audits: More than 70% of new suppliers were screened with environmental criteria periodically.

Responsible Procurement
  • Implementation of responsible procurement policies in the selection of construction vendors, material suppliers and project partners.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards (Core Option)

Certifications: ISO 14001:2004, GB/T 28001-2011/OHSAS 18001:2007, GB/T 19001-2208/ISO 9001:2008