Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Workplace Quality
• Sustainable Operating Practices
• Community Involvement
• Product Responsibility & Innovation

Environmental Achievements

• CO2 emission per production output in assembly factories and plastic plants decreased by 23.6% and 26.2% respectively compared with FY2014
• Electricity consumption per production output in assembly factories and plastic plants decreased by 16.9% and 28.3% respectively compared with FY2014
• Total water consumption and total water consumption per production output for assembly and plastic factories decreased by 37.7% and 46.3% respectively compared with FY2014
• Recycling rate of reusable materials is 80.4%
• Average loading capacity for each container shipment was 86.6%

Social Achievements

• Number of participants in staff activities increased by 5.5% compared with FY2018
• Average training hours per employee increased by 30.4% compared with FY2018
• Number of staff with years of service longer than five years increased by 8% compared with FY2018
• Maintained average staff turnover rate at or below 12%
• Zero work related fatality case

Governance Achievements

• Received a rating of AA in the MSCI ESG Ratings assessment
• Continue to be a constituent member of the Hang Seng Corporate Sustainability Benchmark Index with the score of AA- rating and is included in FTSE4Good Global Index
• Received the “Sustainability Excellence Award” from the Chamber of Hong Kong Listed Companies

Climate Goals & Targets

Environmental Challenges

• The Group’s TEL products business has been facing keen competition in the telephony industry and restructuring of the organization is underway in order to turn around the business.
• One of our major customers, Toys“R”Us, went bankrupt in the US last year.

Mitigation Strategies

• Restructuring of the TEL products business
• Strategic acquisition of the manufacturing facility from Pioneer Corporation in Malaysia

Supply Chain Management

Supplier Audits: 229

Responsible Procurement

• EICC
• International Labour Organisation Conventions on Labour Standards
• ISO 14001
• OHSAS 18001 or ISO 45001
• Conflict Minerals agreement

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards: Core option, Stock Exchange of Hong Kong Limited (the Stock Exchange) Environmental, Social and Governance (ESG) Reporting Guide

Third-party Assurance: VTech’s internal audit process and reviewed by the Company’s Audit Committee

Sustainable Products & Innovation

• VTech Amplified Big-Button Phone Series
• LeapBuilders®
• Myla the Magical UnicornTM
• Rocklt TwistTM
• Snom D717
• Smart temperature control device

Awards & Recognition

• Hang Seng Corporate Sustainability Benchmark Index (AA- rating)
• FTSE4Good Global Index
• MSCI ESG Ratings (AA)
• Sustainability Excellence Award (Chamber of Hong Kong Listed Companies)
• Industry Cares Company (Federation of Hong Kong Industries)
• Caring Company (The Hong Kong Council of Social Service)
• Heart to Heart Company (Hong Kong Federation of Youth Groups)
• Outstanding Caring Award (Federation of Hong Kong Industries)

Environmental Metrics

ESG Focus Areas

• Governance and Business Ethics
• Product Responsibilities and Value Chain Management
• Environment
• Our People
• Society

Environmental Achievements

• Increased renewable energy use by 191% compared with FY2023 (generating about 3,390 MWh of electricity)
• Waterborne paint used in about 90% of ELPs and 86% of TEL products, and in about 99% of ELP packaging and about 86% of TEL product packaging
• Over 96% of ELP packaging materials were recyclable, with about 86% made from recycled materials
• Blister eliminated in about 99% of ELP packaging
• 80% of baby monitors did not contain plastics in the packaging
• Established a new warehouse in France to shorten transportation distance for goods delivery to European customers

Social Achievements

• Global workforce consisted of 42% women, with 27% of management positions held by women
• Continued to grant scholarships to 14 students from five universities in Hong Kong
• Partnered with City University of Hong Kong and The Chinese University of Hong Kong to organise the “VTech Innovation & Sustainability Award”
• Collaborated with Save the Children to organise fundraising and toys donation events

Governance Achievements

• Bi-annual meeting of the Group’s RMSC to review the Group’s risk management and internal control system and their effectiveness
• Regular meetings with shareholders, investors and analysts were maintained
• Training was provided for our employees on the update of listing rules and requirements
• Code of Conduct training was provided for our employees
• Reports under the Whistleblowing Policy were reviewed biannually
• Anti-corruption training were provided for our directors and employees

Climate Goals & Targets

Environmental Challenges

• Extreme weather events
• Chronic heat waves
• Shortage of natural resources
• Rise of sea levels
• Shifts to low-carbon technology
• Increased carbon pricing
• Tightened climate-related regulations
• Tightened emissions reporting obligations
• Exposure to litigation
• Changing customer behaviour
• Changing investor preference
• Stigmatization of sector
• Workforce management

Mitigation Strategies

• Implementing and reviewing the Business Continuity Management (BCM) programme and other emergency measures
• Adopting energy-saving air conditioning systems and promoting efficient energy use
• Investing in R&D to develop alternative materials
• Keeping abreast of the carbon tax implementation and emissions trading market development
• Developing adaptive capability to handle updated policy and legal requirements
• Modifying data collection system according to relevant disclosure requirements
• Keeping abreast of the latest environmental laws and regulations
• Developing and/ or expansion of low GHG emission products and services
• Developing a green branding strategy
• Strengthening sustainability reporting and communication

Supply Chain Management

Supplier Audits: 182/year

Responsible Procurement

• Supplier Code of Conduct
• Conflict Mineral Policy
• CSR audits

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Chronic heat waves
• Shortage of natural resources
• Rise of sea levels

Transition Risks

• Shifts to low-carbon technology
• Increased carbon pricing
• Tightened climate-related regulations
• Tightened emissions reporting obligations
• Exposure to litigation
• Changing customer behaviour
• Changing investor preference
• Stigmatization of sector

Opportunities

• Switching to lower emission or renewable energy sources
• Transforming towards high automation and smart lean manufacturing
• Development and/ or expansion of low GHG emission products and services
• Developing a green branding strategy

Reporting Standards

Frameworks Used: GRI Standards, Stock Exchange of Hong Kong Limited (SEHK) Environmental, Social and Governance (ESG) Reporting Guide, TCFD Recommendations, IFRS S2 Climate-related Disclosures

Certifications: ISO 9001, ISO 14001, ISO 45001, SA 8000, ISO 17025, ESCP, BRC Global Standards, IATF 16949, QC 080000, Energy Star, Blue Angel

Third-party Assurance: Hong Kong Quality Assurance Agency (HKQAA)

UN Sustainable Development Goals

• Goal 1
• Goal 3
• Goal 4
• Goal 5
• Goal 6
• Goal 7
• Goal 8
• Goal 9
• Goal 10
• Goal 11
• Goal 12
• Goal 13
• Goal 16
• Goal 17

VTech's sustainability initiatives contribute to these SDGs through its five sustainability pillars

Sustainable Products & Innovation

• Snugglepillar with fabrics and stuffing made from recycled PET bottles
• LeapFrog ® Nest & Count Turtle Tower™ and LeapFrog® Build-a-Burger made from reclaimed plastics
• LeapFrog® Nature Walk Wooden Activity Walker and LeapFrog® Pound & Pop Truck with wooden materials sourced from responsibly managed forests certified by the Forest Stewardship Council ® (FSC)
• Snom branded desk telephones made from recycled acrylonitrile butadiene styrene (ABS) plastic
• Audio interface devices made from recycled aluminum and recycled ABS

Awards & Recognition

• Hang Seng Corporate Sustainability Benchmark Index (AA+)
• FTSE4Good Global Index
• MSCI ESG Ratings (AA)
• ESG Awards (Hong Kong Institute of Certified Public Accountants)
• Best in ESG Awards and Best in Reporting Awards (BDO Hong Kong)
• Special Categories – Crisis Management Award (Bloomberg Businessweek/Chinese Edition)
• Outstanding ESG Award, Best in ESG Practices and Best in ESG Report (TVB ESG Awards 2023)
• 8+ Year Award (Enterprise Group) (Federation of Hong Kong Industries)
• Caring Company (Hong Kong Council of Social Service)
• Equal Opportunity Employer Gold Award
• Mental Health Friendly Supreme Organisation
• Inclusive Organisation Logo
• Partner Employer Award