Climate Change Data

Environmental Metrics

ESG Focus Areas

• Emissions
• Waste Reduction
• Resource Utilization
• Employment
• Health and Safety
• Training and Development
• Labor Standards
• Supply Chain Management
• Product Responsibility
• Anti-Corruption
• Community Investment
• Climate Change Response

Environmental Achievements

• Reduced volatile organic compound emissions by approximately 3.75 tonnes annually through the adoption of powder-spraying technology.
• Achieved annual savings of 3,000 kilograms in steel waste recycling and 300 kilograms in scrap carton reuse.
• Annual electricity savings of 15,880 kWh and annual natural gas savings of 11,281 cubic meters through energy efficiency measures.
• Annual savings of 1,500 cubic meters of water through wastewater recycling and 3,000 cubic meters through rainwater harvesting.
• Reduced standard coal emission by 74 tonnes annually by using natural gas in paint-drying room.

Social Achievements

• Provided equal opportunities in recruitment and promotion, based solely on job requirements.
• Implemented occupational health and safety management system, resulting in only one case of occupational disease.
• Provided comprehensive training programs, with 5,050 employees trained for a total of 9,574 training hours.
• Established whistle-blowing mechanism and channel for employees to report misconduct.
• Partnered with community organizations for various public welfare projects, including support for education.

Governance Achievements

• Established a comprehensive internal control infrastructure and strict policies to prevent corruption and unethical business practices.
• Engaged an independent third-party auditor to audit the Group's financial accounts.
• Implemented a supplier management policy outlining expectations and requirements for suppliers.

Climate Goals & Targets

Environmental Challenges

• High employee turnover rate due to factory relocation.
• Potential disruptions to operations from extreme weather events (typhoons, rainstorms, flooding).
• Supply chain disruptions due to extreme weather events.

Mitigation Strategies

• Developed preparedness plans for typhoons, rainstorms, flooding, and heat waves.
• Implemented contingency measures to ensure supply of raw materials and on-time shipments.
• Assessed the impact of climate change on procurement of raw materials.
• Developed policies to reduce greenhouse gas emissions and enhance energy efficiency.
• Prioritized green procurement and local sourcing to minimize transportation emissions.

Supply Chain Management

Supplier Audits: 370 existing suppliers evaluated

Responsible Procurement

• Supplier management policy covering product quality, social responsibility, and business ethics.
• Prioritization of suppliers with low environmental impact and relevant certifications (e.g., ISO 14001, ISO 50001).

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons
• Rainstorms
• Flooding
• Heat waves

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Appendix 27 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

Certifications: ISO 9001 (Quality Management System), ISO 50001 (Energy Management System - for stainless steel casting products)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Energy-saving stentering machine with internal heat recycling device.

Awards & Recognition

• Community Leap awards for environmental protection activities.

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Employment and Labour Management
• Operating Practices
• Community Investment

Environmental Achievements

• Reduced emission of volatile organic compounds through application of powder-spraying line and use of water-based paint.
• Increased dust removal facilities and installed water curtain collection system, cleaning towers, ultra-violet photolysis and activated carbon absorption equipment in paint-spraying room.
• Increased use of clean energy (natural gas) replacing coal-fired power generation and electricity in heating furnaces.
• Introduced 2 new electric forklifts reducing emission of exhaust gases.
• Re-use of raw materials along production processes (casting sands, wax, scrap steel, scrap cartons).
• Adoption of energy-saving equipment (welding equipment, boilers, inverter for temperature control).
• Process improvement for reducing energy consumption in tube and plate welding.
• Reuse of treated wastewater for non-production usage.
• Adoption of water recycling equipment.
• Implemented electronic management and paper saving measures in the office.
• Used energy-efficient LED lighting and electrical ballasts in the Hong Kong office.
• Reduced business trips and promoted alternative communication methods.
• Implemented waste recycling measures in the Hong Kong office.

Social Achievements

• Established occupational health and safety management system.
• Provided suitable personal protective equipment and regular inspection of operating equipment.
• Arranged occupational health and safety training for 8,381 participants (29,155 hours).
• Provided annual occupational health examination to employees.
• Implemented measures to prevent forced labor and child labor.
• Developed supplier management policy and evaluation system.
• Conducted in-depth evaluation on 318 suppliers.
• Prioritized suppliers with environmental and energy management system certifications (ISO 14001 and ISO 50001).
• Implemented green procurement practices.
• Established comprehensive training system (17,728 participants, 57,491 training hours).
• Established whistle-blowing mechanism.
• Arranged anti-corruption training for 2,296 participants (7,233 hours).

Governance Achievements

• Board oversees ESG aspects and ensures compliance with local laws and regulations.
• Regularly collects, analyzes, and discloses ESG performance.
• Board reviews ESG performance annually and adjusts strategies as needed.
• Established a supplier management policy.
• Implemented a supplier evaluation system.

Climate Goals & Targets

Environmental Challenges

• Geopolitical disputes, global economic downturn, and supply chain strain.
• Extreme weather events (typhoons, rainstorms, flooding) impacting operations and supply chain.
• Potential heat waves impacting production processes and employee health.

Mitigation Strategies

• Raising product competitiveness, focusing on environmental protection and energy efficiency.
• Reinforcing partnerships with core material suppliers for reliable supply.
• Developing preparedness plans for extreme weather events (reinforcing factory structures, securing equipment, employee training, insurance).
• Developing contingency measures to ensure supply of raw materials and on-time shipments.
• Assessing climate change impact on raw material procurement.
• Developing appropriate production plans to avoid heat stroke and mitigate health and safety risks to employees.
• Developing guidelines for working arrangements during adverse weather.

Supply Chain Management

Supplier Audits: 318 suppliers audited

Responsible Procurement

• Supplier management policy covering product quality, social responsibility, and business ethics.
• Prioritization of local suppliers to minimize transportation emissions.
• Preference for suppliers with environmental and energy management system certifications.
• Evaluation of suppliers' environmental and social risks.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather (typhoons, rainstorms, flooding), heat waves

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Appendix 27 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

Certifications: ISO 9001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Energy-saving stentering machine

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Employment and Labour Management
• Operating Practices
• Community Investment
• Safety
• Quality Customer Service
• Intellectual Property Right Protection

Environmental Achievements

• Reduced emission of volatile organic compounds (VOC) through application of powder-spraying line and use of water-based paint.
• Enhanced filtration and treatment system for exhaust gases/dust.
• Increased use of clean energy (natural gas) reducing pollution from coal-fired power generation.
• Gradual replacement of diesel forklifts with electric forklifts.
• Re-use of raw materials along production processes reducing industrial wastes.
• Upcycling of raw materials from nonconforming products or wastes.
• Application of devices which could achieve waste reduction.
• Re-use of paper-based resources.
• Application of heat recovery technology for reducing energy consumption.
• Increased use of energy-saving equipment.
• Enhancement in technology for reducing energy consumption.
• Increased use of renewable energy for process/equipment deployment (solar energy streetlights).
• Reuse of treated wastewater for non-production usage.
• Adoption of water recycling equipment.
• Reduced natural gas consumption through energy-saving devices and heat recovery.

Social Achievements

• Established occupational health and safety management system.
• Formulated operating rules to manage health and safety hazards.
• Provided suitable personal protective equipment.
• Installed essential protective devices on equipment.
• Provided cooling facilities for high-temperature environments.
• Arranged employee safety training (14,370 participants).
• Provided annual occupational health examination.
• Established comprehensive training system (17,801 participants, 23,525 training hours).
• Implemented measures to prevent child labor and forced labor.
• Formulated supplier management policy.
• Established supplier selection and evaluation system.
• Conducted social responsibility assessments of suppliers.
• Prioritized suppliers with low environmental impact.
• Pursued local procurement policy to reduce transportation emissions.
• Implemented product recall/return procedure.
• Established whistle-blowing mechanism.
• Arranged anti-corruption training (289 participants).

Governance Achievements

• Established comprehensive infrastructure for internal control and formulated policies to prevent malpractices.
• Formulated employee’s “Code of Integrity” including “Declaration Form for Receipt of Gift”.
• Implemented declaration for conflict of interest.
• Implemented procurement approval management.
• Engaged an independent third-party auditor to audit financial accounts.

Climate Goals & Targets

Environmental Challenges

• Adverse effects of the pandemic on the global economy.
• Conflict between Russia and Ukraine causing energy supply tensions and rising raw material costs.
• Decline in business demand and delayed deliveries due to unfavorable macroeconomic conditions.
• Supply chain disruptions due to pandemic control measures.
• Extreme weather events (typhoons, rainstorms, flooding) posing operational risks.

Mitigation Strategies

• Product design addressing customer problems and environmental requirements.
• Proper raw material inventory control to reduce impact of price fluctuations.
• Intelligent manufacturing process to promote digitalized factories.
• Streamlining manufacturing processes for enhanced operational and energy efficiency.
• Optimized production processes and quality control to reduce waste.
• Strengthened supply chain management capabilities.
• Preparedness plans for typhoons, rainstorms, flooding, and heat waves.
• Contingency measures to ensure supply of raw materials and on-time shipments.
• Assessment of climate change impact on raw material procurement.
• Appropriate production plans to avoid heat stroke and mitigate health and safety risks to employees.
• Guidelines for working arrangements during adverse weather.

Supply Chain Management

Supplier Audits: Regular evaluation on all existing suppliers and in-depth evaluation on no less than 321 suppliers of important components.

Responsible Procurement

• Supplier management policy covering product quality, social responsibility, and business ethics.
• Prioritization of suppliers with low environmental impact and relevant certifications (ISO 14001, ISO 50001).
• Environmental testing of materials with potential hazards.
• Local procurement policy.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather (typhoons, rainstorms, flooding)

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Appendix 27 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

Certifications: ISO 9001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Energy-saving stentering machine with internal heat recycling device.

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Employment and Labor Management
• Operating Practices
• Community Investment
• Product Quality
• Customer Service
• Safety
• Information Security and Personal Data Protection
• Water Conservation
• Corporate Governance

Environmental Achievements

• Reduced natural gas consumption by approximately 5,600 cubic meters through installation of energy-saving device for recovery of heats from exhaust gases of boilers
• Reduced electricity consumption by about 120,000 kWh throughout the year by using energy-efficient welding machines
• Reduced annual emission reduction of around 74 tonnes of coal equivalent by using natural gas in paint-drying room instead of municipal electricity supplied by coal combustion
• Reduced water consumption by approximately 5,500 cubic meters of fresh water supply through water recycling facilities
• Saved approximately 120 tonnes of steel and approximately 3% of the annual steel consumption through reuse of scrap casting products in stainless-steel casting production factory
• Saved approximately 80 tonnes of steel materials throughout the year by reusing steels from scrap products for the factory’s internal engineering in dyeing and finishing machine manufacturing factory

Social Achievements

• Organized various activities such as calligraphy exhibitions, essay contests, and ball games for employees on the occasion of the 60th anniversary of the Group’s founding
• Benefited from the “SINOMACH Love Day Donation Event” supporting employees who met the hardship relief standard
• Monforts Fong’s Textile Machinery (Zhongshan) Co., Ltd. was awarded the “Advanced Unit of the Smallest Emergency Unit” by the “Linhai Police Station of Cuiheng New District in Zhongshan” for robust emergency management system
• Arranged a total of 21,029 counts of participation in employees’ training during the reporting period, which totally amounted to 25,376 training hours

Governance Achievements

• Established comprehensive infrastructure for internal control and formulated a set of strict policies to prevent malpractices and unethical business practices
• Engaged an independent third-party auditor to audit the Group's financial accounts
• Established whistle-blowing mechanism and channel for employees to freely report incidents of misconduct or suspected illegality

Climate Goals & Targets

Environmental Challenges

• Ongoing challenges in the global economic environment and relatively weak rebound resulted in cautious customer investment intentions in new dyeing and finishing machines and expansion projects
• Unstable external environment and cautious customer purchasing intentions slowed down the pace of sales in stainless steel casting products business
• Extreme weather posing risks of damage caused by typhoons and rainstorms

Mitigation Strategies

• Implemented cost control initiatives throughout the entire operating structure
• Allocated resources for enhanced trainings of skilled workers and utilized high-quality subcontracted labor to meet customer needs for urgent orders
• Carried out thorough and in-depth reform of the manufacturing process to enhance efficiency and improve lean manufacturing
• Actively broadening new customer base and focusing on developing unique and high-end casting products
• Adopted a prudent plan for capacity expansion, upgrade of facilities and replacement of old machinery
• Developed preparedness plans to cope with operational disruptions or other adverse effects resulting from extreme weather
• Updated response strategies and enhanced the resilience of operating facilities against extreme weather conditions
• Developed contingency measures to ensure the supply of raw materials and on-time shipments to customers
• Developed appropriate production plans to avoid heat stroke and mitigate health and safety risks to employees
• Developed guidelines for working arrangement during adverse weather and arranged appropriate trainings or drills for employees on disaster preparedness

Supply Chain Management

Supplier Audits: 288 suppliers underwent in-depth evaluations

Responsible Procurement

• Supplier management policy communicating expectations and requirements
• Supplier selection and evaluation system
• Prioritization of suppliers with low environmental impacts
• Preference for suppliers with ISO 14001 and ISO 50001 certifications
• Review of environmental testing results (e.g., RoHS compliance)

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons and rainstorms
• Flooding
• Heat waves

Reporting Standards

Frameworks Used: Appendix C2 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

Certifications: ISO 9001

Awards & Recognition

• Advanced Unit of the Smallest Emergency Unit