Climate Change Data

Environmental Metrics

ESG Focus Areas

• Carbon
• Water
• Waste
• Materials
• Biodiversity
• Climate Resilience

Environmental Achievements

• Dilmah Headquarters achieved carbon neutrality in 2017.
• 8% decrease in water consumption.
• 10.6% decrease in electricity consumption.
• Installation of Firewood Pre-Heater saving 75m³ of firewood per month at Houpe Estate (equivalent to 35 trees).

Social Achievements

• Established Sri Lanka’s first urban arboretum.
• MJF Charitable Foundation contributed Rs. 70 million (USD 455,611) to humanitarian efforts.
• Dilmah Conservation received Rs. 39.1 million (USD 254,491) for environmental safeguarding.
• Supported 10,000 lives of underprivileged Sri Lankans to date.
• Provided 324 new Small Entrepreneurship livelihood (SEP) grants.

Governance Achievements

• Board comprises of Chairman, Deputy Chairman/CEO, three Executive Directors and three Non-Executive Directors.
• Three sub-committees: Audit Committee, Remuneration Committee and Related Party Transaction Review Committee.

Climate Goals & Targets

Environmental Challenges

• Heavy rains and landslides seriously affected tea plantations in Sri Lanka, resulting in a sharp drop in crops.
• Severe droughts reducing tea production by nearly 50%.
• Workplace accidents (11 reported).

Mitigation Strategies

• Absorbed adversities by retaining prices to support customers.
• Implemented machine and process modifications, replaced fluorescent lighting with LED technology, and inculcated a culture of energy conservation among staff.
• Identified workplace accidents as an area for improvement in 2017/18.

Supply Chain Management

Supplier Audits: Supplier capability assessment including environment, social and economic parameters.

Responsible Procurement

• Ethical production, environmental protection, respect for labor standards, human rights, equal opportunity, zero tolerance of corruption and anti-competitive behavior, and occupational safety.

Climate-Related Risks & Opportunities

Physical Risks

• Heavy rains and landslides
• Severe droughts

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 9001, ISO 14001, FSSC 22000, BRC

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Organic teas and infusions
• Biochar production

Awards & Recognition

• FIRST Award for Responsible Capitalism

Environmental Metrics

ESG Focus Areas

• Environmental Sustainability
• Social Responsibility
• Ethical Business Practices

Environmental Achievements

• Achieved 100% carbon neutrality for all products (up to Australian shelves)
• 90.34% of total waste recycled/repurposed
• 25% upcycling of waste packaging material
• 398 MWh renewable energy generation within premises

Social Achievements

• Rs. 260 Mn investment in community engagement initiatives
• 25,009 CSR beneficiaries supported
• 85% employee retention rate
• 21,584 total training hours
• 43% female representation in workforce

Governance Achievements

• Compliance with ISO 9001:2015, FSSC 22000, BRC Global Standard for Food Safety, ISO 17025, ISO 14001 certifications
• Strong corporate governance framework in place
• Compliance with Colombo Stock Exchange listing rules

Climate Goals & Targets

Environmental Challenges

• Fluctuations in tea prices
• Changing customer preferences
• Implications of climate change
• Geopolitical conditions in buying markets
• COVID-19 pandemic impact

Mitigation Strategies

• Tea buying strategy incorporating price fluctuations
• Proactive customer engagement
• Climate change research and adaptation
• Diversification of markets and products
• Business continuity plans and new business processes for COVID-19

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• Stringent evaluation process based on quality, business practices, ethics, and social & environmental practices

Climate-Related Risks & Opportunities

Physical Risks

• Adverse weather and natural disasters affecting tea quantity and quality

Reporting Standards

Frameworks Used: Integrated Reporting Framework (IIRC), GRI Standards (Core)

Certifications: ISO 9001:2015, FSSC 22000, BRC Global Standard for Food Safety, ISO 17025, ISO 14001:2015, Rainforest Alliance Chain of Custody

Third-party Assurance: Ernst & Young (financial statements only)

Sustainable Products & Innovation

• Dilmah’s Natural Infusions
• Carbon Neutral products

Awards & Recognition

• New Zealand Reader’s Digest Trusted Brand Awards 2020
• Deshamanaya title (Merrill J. Fernando)
• Australian Consumer Award for Product of the Year 2020 (Dilmah’s Natural Infusions)

Environmental Metrics

ESG Focus Areas

• People
• Partners
• Planet
• Sustainability
• Community Engagement
• Environmental Conservation
• Climate Change Adaptation

Environmental Achievements

• Achieved 100% carbon neutrality for all products and facilities up to destination ports of all overseas markets
• 5% reduction in total energy consumption
• 9% reduction in water consumption
• 96.3% of total waste recycled/repurposed
• Expanded renewable energy production (17% of total energy use)

Social Achievements

• No employee layoffs during the pandemic
• Rs. 20 million spent on safeguarding employees and their families from COVID-19
• Rs. 40 million donated in PCR testing kits to the government
• 87.1% employee retention rate
• 16,034 total training hours
• Launched disABILITY app for tele-therapy and tele-education for children with disabilities
• Rs. 255 million spent on community initiatives impacting over 47,000 beneficiaries

Governance Achievements

• Implemented stringent COVID-19 health and safety protocols
• Established a Health and Safety committee
• Revamped Business Continuity Plan
• Zero tolerance policy on bribery and corruption
• Compliance with ISO 9001:2015, FSSC 22000, BRC Global Standard for Food Safety, ISO 17025, ISO 14001:2015, SMETA, Rainforest Alliance certifications

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic related disruptions (supply chain, raw material costs, reduced demand)
• Geopolitical conditions in buying markets
• Fluctuations in tea prices
• Changing customer preferences
• Implications of climate change
• Product responsibility/quality risks
• Employee attraction and retention
• Credit risk
• Financial risk from interest rate fluctuations
• Exchange rate impacts

Mitigation Strategies

• Stringent COVID-19 health and safety protocols
• Business Continuity Plan
• Broad-based supply chain with increased reliance on local suppliers
• Focus on developing new channels (e-commerce), sustainable products, and value-added lines
• Tea buying strategy incorporating price fluctuations
• Product differentiation through innovation
• Proactive customer engagement
• Sourcing from diverse regions and elevations
• Climate Change Research Station
• Compliance with product quality certifications
• Internal audit program
• Training and development programs
• Above-average remuneration
• Careful customer profile evaluation before offering credit terms
• Secure payment terms
• Efficient treasury management procedures
• Hedging strategies

Supply Chain Management

Supplier Audits: Ongoing vendor reviews, regular dialogue and interactions, visits to ensure compliance

Responsible Procurement

• Supplier Code of Conduct
• Focus on local suppliers
• Emphasis on ethical business practices

Climate-Related Risks & Opportunities

Physical Risks

• Adverse weather and natural disasters affecting tea quantity and quality

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: Integrated Reporting Framework (IIRC), GRI Standards (Core)

Certifications: ISO 9001:2015, FSSC 22000, BRC Global Standard for Food Safety, ISO 17025, ISO 14001:2015, Rainforest Alliance CoC, Carbon Neutral Certification

Third-party Assurance: Messrs. Ernst & Young (Financial Statements only)

UN Sustainable Development Goals

• SDG 1
• SDG 3
• SDG 6
• SDG 8
• SDG 12
• SDG 13
• SDG 17

Dilmah's initiatives contribute to these goals through various programs and practices related to poverty alleviation, health and wellbeing, clean water and sanitation, decent work, responsible consumption and production, climate action, and partnerships

Sustainable Products & Innovation

• Paper canisters in Dilmah Inspirations range
• Paper enveloped tea bags in Café range
• PLA-based filter paper

Awards & Recognition

• Best Corporate Citizen Sustainability Awards 2020 (category B)
• Category awards for Customer Relations, Environment Beyond the Business
• Top 10 Corporate Citizens of Sri Lanka
• Australian Consumer Award for Product of the Year 2020 (Dilmah Infusions)
• Trusted Brand - New Zealand 2020
• Trusted Brands Australia 2020
• Marine Environmental Protection Authority (MEPA) award

Environmental Metrics

ESG Focus Areas

• Sustainable growth in earnings
• Managing our People
• Innovation
• Customer Satisfaction
• Managing our Distribution Network
• Geopolitical Conditions in Buying Markets
• Product Responsibility
• Managing our Supply Chain
• Exchange Rate Fluctuations
• Preserving the Environment
• Community Engagement
• Information System & Cyber Security
• Environmental & Socio-economic compliance
• Power and Energy
• Cost of production and logistics

Environmental Achievements

• 100% Carbon Neutral Facility and product
• 2% GHG Emission Reduction
• 798,854 kWh of Solar Energy produced
• 94.1% of the Total Waste is Recycled/Repurposed while 5.8% is Reused
• Zero Landfill

Social Achievements

• 243,359 Beneficiaries on community engagement
• Rs. 40 Mn Investment on enhancement of free, national healthcare facilities in Sri Lanka
• Equal Opportunity Employer with 44% female representation
• 174,671 training hours

Governance Achievements

• Dilmah Ranked 3rd in the Transparency in Corporate Reporting (TRAC) assessment
• Partnered with governmental, national and international organizations for technical expertise and guidance

Climate Goals & Targets

Environmental Challenges

• Macroeconomic and geopolitical environment
• Market and customer preferences
• Health and safety
• Supply chain, logistics and raising cost of production
• Product responsibility, quality, power and energy
• Financial – exchange rates, interest rate and credit risks
• Human resources and talent management
• Environment and climate change
• Information systems and Cyber security

Mitigation Strategies

• Focus and presence in diverse markets limit its dependence on a specific country / region / sector
• Monitoring political and economic trends on outlook on an ongoing basis and formulating strategic corporate plans to explore opportunities amidst the crisis
• Proactive and ongoing engagement with customers through numerous platforms and certifications and accreditations to drive brand value
• Implementation of stringent COVID 19 health and safety protocols across the organisation, exceeding regulatory requirements
• Planned to increase the inventory levels which enables to secure timely delivery to customers whilst monitoring emerging trends in the shipping industry
• Compliance on a range of product quality related certifications
• Maintain close relationship with employees, training & development programmes, remuneration in line or above the industry
• Sourcing from diverse regions and elevations
• Disaster Recovery plan is implemented with hardware infrastructure

Supply Chain Management

Supplier Audits: ongoing

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• adverse weather and natural disasters

Reporting Standards

Frameworks Used: GRI Standards, Framework

Certifications: ISO 9001:2015, ISO 14001:2015, FSSC 22000, BRC Global Standard for Food Safety, SMETA – SEDEX Members Ethical Trade Audit, Rainforest Alliance Chain of Custody Certification, Carbon Neutral Product Certification, Carbon Neutral Facility Certification, Organic Certification (USDA, AMS 7 CFR Part 205, National Organic Programme, Regulation (EC) No 834/2007 and Regulation (EC) No 889/2008, Japanese Agricultural Standard of Organic Agricultural Products (JAS)), ISO 17025

Third-party Assurance: Ernst & Young

UN Sustainable Development Goals

• SDG 17

Dilmah passionately advocates for and energetically seeks partnerships and collaborations that extend beyond its own sector to encompass various industries, institutional bodies, as well as governmental and non-governmental entities at both national and international levels.

Sustainable Products & Innovation

• Dilmah Sustainable Premium Ceylon Black Tea 80 Pack

Awards & Recognition

• Best Corporate Citizen Sustainability
• Best Performance in the Environment Beyond Business

Environmental Metrics

ESG Focus Areas

• Good Governance, Transparency and Business Ethics
• Sustainability at the Heart of Operations
• People
• Planet
• Product and Services
• Employee Empowerment
• Supply Chain Sustainability
• Responsible Operations
• Disclosure and Verification

Environmental Achievements

• 2.3% GHG Emission Reduction
• 548,104 kWh of Solar Energy produced equivalent to planting 6413 trees
• 99.96% of the Total Waste is Recycled/ Repurposed
• Endane Biodiversity Corridor, Wetland Conservation, Bee A Keeper and Elephant Conservation at ETH Uda Walawe

Social Achievements

• Rainbow Horizon Project – MJF Charitable Foundation providing holistic development for children with special needs
• Launch of Uda Walawe Information Centre: “Elephant Knowledge Walk” providing visitors with a more visually engaging and comprehensive experience
• Launch of "Sustainable Supply Chain Roadmap" to ensure supply chain sustainability
• Employee salaries raised by 24%

Governance Achievements

• Dilmah was among the top five companies tied for first place in the Transparency in Corporate Reporting (TRAC) assessment by Transparency International Sri Lanka (TISL)
• Board Refreshment in line with the new corporate Governance Rules issued by the CSE for listed entities
• Sub Committee Reconstitution in line with the new corporate Governance Rules issued by the CSE for listed entities
• Updates to the internal policy framework in line with the new corporate Governance Rules issued by the CSE for listed entities

Climate Goals & Targets

Environmental Challenges

• Global economic downturn, geopolitical instability, currency volatility, and rising costs
• Lingering pandemic impacts, magnified by local social, economic and political instability
• Accelerating commoditisation of tea
• Exodus of Sri Lankan tea exporters
• Challenges in the tea plantation sector (weak productivity, high production costs, labour shortages, climate change, pest and disease outbreaks)
• Strengthening of the Sri Lankan rupee against the US dollar and Australian dollar
• Disruptions in global shipping and logistics
• Rising input costs
• Exchange rate volatility

Mitigation Strategies

• Strengthening resilience, maintaining commitment to quality, integrity, and responsibility
• Investing in brand, product innovation, and consumer engagement
• Strengthening supply chain while sourcing ethically and sustainably
• Delivering significant social and environmental impact through MJF Charitable Foundation and Dilmah Conservation
• Launching new products and variants
• Research, development and introduction of compostable packaging
• Expanding presence and penetration in existing and new markets
• Strengthening distribution network and increasing marketing activities
• Leveraging online and digital platforms
• Enhancing operational efficiency and productivity
• Investing in new machinery and equipment
• Implementing initiatives to reduce energy consumption and carbon footprint
• Upholding social and environmental responsibility

Supply Chain Management

Supplier Audits: Ongoing

Responsible Procurement

• MJF Holdings Supplier Partner Code of Conduct
• Stronger Together platform
• Supplier self-assessment tool

Climate-Related Risks & Opportunities

Physical Risks

• Extreme Weather Events

Transition Risks

• Policy and Legal changes
• Market Changes

Opportunities

• Climate Adaptation
• Investments on Renewable energy
• New product developments with recycled/ biodegradable packaging
• Geographical diversification of operations

Reporting Standards

Frameworks Used: International Integrated Reporting Framework (IIRC), Global Reporting Initiative (GRI) standards, Sustainability Accounting Standards Board (SASB) Standards, Task Force on Climate-Related Financial Disclosures (TCFD)

Certifications: ISO 9001:2015, ISO 14001:2015, FSSC 22000, BRC Global Standard for Food Safety, Sedex Members Ethical Trade Audit (SMETA), Rainforest Alliance Sustainable Agriculture standards, Organic Standards for EU, USDA NOP, and JAS, ISO 17025, ISO 14064-1:2018

Third-party Assurance: EY (for financial statements)

UN Sustainable Development Goals

• SDG 17 (Partnerships for the Goals)

Utilises a range of inclusive collaborations to improve environmental, social, and governance outcomes

Sustainable Products & Innovation

• Compostable packaging
• Biodegradable tea bags
• Plant-based materials
• Elixir of Ceylon Tea

Awards & Recognition

• Top Ten Best Corporate Citizen (BCCS Awards 2023)
• Best Project Sustainability Award - Endane Biodiversity Corridor (BCCS Awards 2023)
• Best Project Sustainability Award - Rainbow Horizons (BCCS Awards 2023)
• Best Value-Added Exporter of the year 2021/22 (Presidential Export Awards)
• New Zealand’s Most Trusted Tea Brand (Reader’s Digest)