Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Greenhouse gas emissions
• Water resource management
• Waste management
• Energy management
• Climate change
• Employee remuneration and welfare
• Employee training and development
• Employee health and safety
• Supply chain management
• Corporate governance

Environmental Achievements

• Obtained ISO 14001 Environmental Management System Certification for some operations
• Implemented various environmental initiatives for decarbonization, including adopting green energy and introducing high-energy efficiency equipment
• Promotes sustainable waste management, waste reduction, waste recycling, and harmless treatment
• Carried out water-saving projects to optimize cleaning processes and recycle wastewater

Social Achievements

• Some operations passed the certification of ISO 45001 on occupational health and safety management system
• Formulated a series of policies and standards to provide employees with various methods for learning and improving
• Established a development and training system covering all employees
• Promotes board diversity

Governance Achievements

• Established a three-level ESG management structure composed of the Board, the Audit Committee, and the ESG management and promotion team

Climate Goals & Targets

Environmental Challenges

• Scope 3 emissions
• Supply chain disruptions
• Rapidly changing technology in the optical component industry
• Highly competitive markets
• Intellectual property rights disputes
• Dependence on a limited number of customers
• Dependence on PRC markets
• Limited number of suppliers for key components and raw materials
• Price fluctuations, inflation, and supply shortages of raw materials or utilities
• Reliance on key management
• Natural disasters, outbreaks of contagious diseases, power shortages, acts of war, and terrorist attacks
• Compliance with environmental, safety, and health laws and regulations
• Maintaining effective quality control systems
• Maintaining effective internal controls
• Potential product liability
• Expanding production capability and capacity
• Seasonality in some parts of the business
• Global economic and political conditions
• Preferential tax rate and government grants
• General tax environments
• Implementing business strategies
• International marketing, distribution, and sales
• Liquidity dependence on PRC operating subsidiaries
• Short life cycles of optical products
• PRC economic, political, and social conditions
• PRC foreign currency conversion control
• Force majeure events in the PRC
• Increasing labor costs
• PRC legal system uncertainties
• Difficulty enforcing judgments against the Group in the PRC

Mitigation Strategies

• Exploring the feasibility of formulating a plan to quantify and mitigate Scope 3 footprint
• Promoting suppliers to use green energy
• Continuous improvement of existing products and services and introduction of new products
• Expanding product portfolio, maintaining and improving product quality, and maintaining competitive prices
• Implementing preventive measures to protect intellectual property rights
• Broadening customer base and reducing dependence on a limited number of customers
• Diversifying markets
• Expanding resource channels to explore various and complementary supply resources
• Implementing prudent financial policies and effective financial management
• Maintaining competitive remuneration packages and training programmes
• Formulating the ‘Procedures on Emergency Preparation, Response and Control’
• Implementing a comprehensive quality control system
• Implementing measures to enhance internal controls
• Expanding production capability and capacity
• Managing seasonal declines in revenue
• Managing risks associated with international marketing, distribution, and sales
• Maintaining long-term relationships with a large number of domestic and international banks
• Developing and marketing products that meet changing customer needs
• Reinforcing and diversifying its supplier network

Supply Chain Management

Responsible Procurement

• Supplier certification programme

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons, floods

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: SLBP 2020, SLLP 2022, TCFD

Certifications: ISO 14001, ISO 45001, ISO 9001

Third-party Assurance: S&P Global Ratings

UN Sustainable Development Goals

• SDG 7
• SDG 9
• SDG 11
• SDG 13

Initiatives contribute to affordable and clean energy, industry, innovation and infrastructure, sustainable cities and communities, and climate action.

Sustainable Products & Innovation

• Heat dissipation lamp bead on projection display
• Laser heat sink
• Low voltage chip
• Graphene gimbal back cover

Awards & Recognition

• FTSE4Good Index Series constituent
• Hang Seng ESG 50 Index constituent
• Hang Seng Corporate Sustainability Index constituent
• Hang Seng Index ESG Screened Index constituent
• Hang Seng Index Low Carbon Index constituent
• 2021 Hurun China Private Companies SDG Readiness 100
• Fortune China Top 500 list
• Best TMT Company at the 5th Golden Hong Kong Stocks Awards
• Best Tech Constituent Stock at the Hong Kong Outstanding Listed Enterprises Awards 2021
• The Most Remarkable Investor Relations Recognition-Hong Kong Index Constituent (Hang Seng Index) Category at Quam IR Award 2021

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Greenhouse gas emissions
• Water resource management
• Waste management
• Energy management
• Climate change
• Employee remuneration and welfare
• Employee training and development
• Employee health and safety
• Corporate governance
• Supply chain management

Environmental Achievements

• Achieved ISO 14001 Environmental Management System Certification for some operations
• Implemented water saving projects to optimize cleaning processes and recycle wastewater
• Formulated management policies such as the ‘Administrative Policies on Greenhouse Gases’ and the ‘Regulations on the Administration of Energy and Resources’
• Implemented various measures to combat climate change, such as increasing consumption ratio of green energy and enhancing energy efficiency

Social Achievements

• Some operations passed the certification of ISO 45001 on occupational health and safety management system
• Established a development and training system covering all employees
• Promotes board diversity

Governance Achievements

• Established a three-level ESG management structure composed of the Board, the Audit Committee, and the ESG management and promotion team
• Issued the Board Diversity Policy

Climate Goals & Targets

Environmental Challenges

• Scope 3 emissions
• Climate change physical risks (e.g., typhoons)

Mitigation Strategies

• Exploring the feasibility of formulating a plan to quantify and mitigate Scope 3 footprint
• Promoting suppliers to use green energy
• Formulated the ‘Procedures on Emergency Preparation, Response and Control’
• Implemented the ‘Working Handbook on Preventing Flood and Typhoon’ and the ‘Typhoon Emergency Plan’

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons
• Flooding

Reporting Standards

Frameworks Used: SLBP 2020, SLLP 2022

Certifications: ISO 14001, ISO 45001, ISO 9001

Third-party Assurance: S&P Global Ratings

UN Sustainable Development Goals

• SDG 7
• SDG 9
• SDG 11
• SDG 13

Sustainable Products & Innovation

• Heat dissipation lamp bead on projection display
• Laser heat sink
• Low voltage chip
• Graphene gimbal back cover

Environmental Metrics

ESG Focus Areas

• Environmental Management
• Climate Change Response
• Resource Utilization Improvement
• Emission Management
• Green Operation
• Supply Chain Management
• Human Rights
• Employee Rights and Interests
• Development and Training of Employees
• Employee Care
• Occupational Health and Safety
• Corporate Governance
• Risk Management
• Business Ethics
• Community Welfare
• Public Welfare
• Product Quality Control
• Information Security Management
• Customer Rights and Interests Protection

Environmental Achievements

• Increased proportion of clean energy use to 15.9% in FY2023.
• Implemented 9 energy-saving projects, saving 3,319.9 MWh of electricity and reducing 2,335 tonnes of carbon dioxide emissions.
• Implemented 4 water-saving projects, saving 270,000 tonnes of water.
• Sunny Opotech and Sunny Optical Intelligence (Yuyao) established an energy management system and passed ISO 50001 certification.
• Sunny Optical Intelligence (Yuyao) achieved “National Green Factory” title.
• Sunny Zhejiang Optics and Sunny Opotech awarded “Provincial Green and Low Carbon Factory of Zhejiang” title.
• Sunny Automotive Optech won the “Ningbo Green Factory” title.
• Reduced carbon emissions through green electricity purchase (71,710.1 tonnes).

Social Achievements

• Appointed a new female independent non-executive director to improve board diversity.
• Selected for the “Pilot Scheme for Improving the Quality of Life of Employees” by the All-China Federation of Trade Unions.
• Implemented various talent retention initiatives and employee care activities.
• Achieved nearly 100% employee participation rate in the Trade Union.
• Successfully approved 113 employees for interest-free housing loans (RMB 35,535,000).

Governance Achievements

• Established a sound corporate governance structure with four specific committees.
• MSCI ESG rating upgraded from “A” to “AA”.
• CDP rating on climate change mitigation raised.
• Awarded “Sustainable Development Model of 2023” and “Top 100 Chinese ESG and Low-carbon Companies Listed Overseas of 2023”.
• Implemented a systematic trade control compliance management structure.
• Defined qualifications and code of conduct for compliance management officers.
• Conducted anti-corruption training for all employees, including board members.

Climate Goals & Targets

Environmental Challenges

• Sluggish global economic recovery.
• Insufficient consumer demand.
• Continuous international geopolitical conflicts.
• Global supply chain restructuring.
• Intensified industry competition.
• Climate-related risks (extreme weather, floods, increased temperatures, tightening regulations).

Mitigation Strategies

• Strategic focus on new revenue sources and expenditure cuts.
• Increased sales ratio to existing customers.
• Incorporated climate-related risks into enterprise risk management system.
• Implemented “dual carbon” strategy.
• Developed emergency response plans for extreme weather.
• Decentralized supply chain of key materials.
• Developed low-carbon and energy-efficient products.
• Introduced energy management systems.
• Established ISO 50001 Energy Management System.
• Formulated Emergency Management Measures for Public Safety Emergencies.
• Formulated Typhoon Emergency Plan.

Supply Chain Management

Supplier Audits: Annual audits conducted on Class I suppliers.

Responsible Procurement

• Code of Conduct for corporate social responsibilities.
• Supplier sustainability requirements (environmental products, green energy, waste reduction, etc.).
• Undertakings for operating with integrity.
• Requirements on labor interests, environmental protection, occupational health and safety, business ethics.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (typhoons, floods)
• Increased temperatures

Transition Risks

• Tightening laws and regulations related to climate change

Opportunities

• Development of low-carbon and energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards, Hong Kong Stock Exchange's Environmental, Social and Governance Reporting Guide

Certifications: ISO 14001 (four subsidiaries), ISO 50001 (Sunny Opotech and Sunny Optical Intelligence (Yuyao)), ISO 9001 (four subsidiaries), IATF 16949 (Sunny Automotive Optech and Sunny Optical Intelligence (Yuyao)), ISO 27001 (Sunny Optical Technology, Sunny Zhejiang Optics, and Sunny Opotech), TISAX (Sunny Automotive Optech)

Third-party Assurance: Deloitte Touche Tohmatsu

Sustainable Products & Innovation

• Low-power chips (Sunny Opotech)
• Graphene application (Sunny Opotech)
• Multi-zone addressable chips (Sunny Opotech)
• High heat dissipation PCBs (Sunny Opotech)

Awards & Recognition

• MSCI ESG rating upgrade to AA
• CDP rating on climate change mitigation raised
• Sustainable Development Model of 2023
• Top 100 Chinese ESG and Low-carbon Companies Listed Overseas of 2023
• Outstanding Performer in Zhejiang Integrity Building
• 2024 Most Influential Employer by Haitou.cc
• Outstanding Post-doctoral Workstation in Ningbo
• Most Popular Employer among Graduates by the Graduate Employer Branding Alliance of Zhejiang University of Technology
• Best Practice in Human Resource Digitalization by Moka