Climate Change Data

Environmental Metrics

ESG Focus Areas

• Waste Management
• Gas Emission Management
• Water Resource Conservation and Wastewater Treatment
• Resource Usage Management
• Utilization of Environmentally-Friendly Materials
• Climate Change Risk
• Employment Practices
• Employees’ Rights and Benefits
• Employees’ Health and Safety
• Prohibition of Child Labor and Forced Labour
• Sustainable Procurement and Supply Chain Management
• Product and Service Quality
• Technological Advancement
• Advertising and Labeling
• Anti-Corruption
• Social Welfare and Charity

Environmental Achievements

• Reduced GHG emissions from 17,886.10 tonnes CO2e to 19,230.09 tonnes CO2e (increase due to updated calculation model and increased activity)
• Reduced energy consumption from 42,270 MWh to 41,111 MWh
• Reduced water consumption from 596,329 m3 to 331,414 m3
• Planted 167 trees (82 over 5 meters) contributing to GHG removal
• Zero product recalls due to safety and health reasons for 3 consecutive years

Social Achievements

• Implemented various employee training programs, resulting in 36% of employees receiving training (317,322 total training hours)
• Established policies and procedures to prevent child and forced labor
• Implemented green procurement practices prioritizing local and environmentally friendly suppliers
• Donated approximately HK$540,000 to community development initiatives

Governance Achievements

• Established an ESG Working Group to manage ESG issues and report to the Board
• Provided 228 hours of anti-corruption training to employees
• Implemented a whistleblowing policy to encourage reporting of misconduct

Climate Goals & Targets

Environmental Challenges

• Global economic slowdown impacting market demand for wigs
• Highly competitive industry with pressure on profit margins
• Significant reliance on sales in the United States
• Risks associated with labor supply, increased labor costs, and other factors affecting labor supply for the Group’s production
• Risks with regard to any disruption in suppliers’ supply that could have an adverse effect on the Group’s business, results of operations, financial condition and prospects
• Potential financial difficulties if the Group fails to maintain sufficient working capital
• Risks with regard to conducting business in Bangladesh
• Risks with regard to conducting business in the PRC
• Interest rate risks
• Currency risks

Mitigation Strategies

• Implementing policies on inventory control and credit control management
• Optimizing production process and adjusting product mix
• Enhancing financial performance improvement initiatives (inventory control, cost optimization, refining bank borrowing costs)
• Building up more online stores on cross-border e-commerce platforms
• Increasing resources in research and development of new products
• Enlarging the sales team to explore new market opportunities
• Improving bank loan portfolio to reinforce the balance sheet
• Optimizing production costs to improve profitability and enhance liquidity
• Closely monitoring market conditions and adjusting business strategies
• Set insurance coverage to minimise financial loss caused by climate-related accidents
• Implemented contingency plan to report emergency and offer guidance for evacuation drills to protect employees’ safety
• Issued Environmental Impact Assessment (EIA) for the construction of manufacturing factories in Mainland China and obtained the Environmental Clearance Certificate (ECC) from the Department of Environment at Bangladesh to meet the regulatory requirement
• Set ESG goals regarding reduction in GHG Emissions by FY2031 with FY2021 as base year for comparison
• Work on the transitional plan of business model with the shift from fossil fuel to renewable energy such as solar panel
• Regular license renewal to ensure the factories meet the pollution ordinance in corresponding jurisdictions and to avoid legal liabilities and disruption of operation

Supply Chain Management

Supplier Audits: Annual review and evaluation of 10 major hair products suppliers.

Responsible Procurement

• Supplier screening and rating
• Prioritizing local and environmentally friendly suppliers
• Requiring suppliers to provide raw material test reports complying with international standards

Climate-Related Risks & Opportunities

Physical Risks

• Flooding, extreme weather events

Transition Risks

• Stricter environmental policies, higher costs for environmental protection, phasing out of fossil fuels

Opportunities

• Development of energy-efficient products, shifting to renewable energy

Reporting Standards

Frameworks Used: ESG Reporting Guide (Appendix C2 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited)

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed