Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Energy Conservation
• Emission Reduction
• Employee Well-being
• Corporate Governance
• Social Responsibility
• Community Investment
• Supply Chain Management
• Anti-corruption

Environmental Achievements

• Reduced SO2 intensity by 6.2%, NOx intensity by 15.5%, and dust intensity by 16.7% year-on-year.
• Reduced total greenhouse gas emission by 0.9% and intensity by 3.9% year-on-year.
• Achieved desulfurization efficiency of over 95%, denitrification efficiency of over 85%, and dust removal efficiency of over 99.95%.
• Reduced COD intensity by 1.7% and SS intensity by 1.5% year-on-year.
• Reduced ammonia nitrogen intensity by 4.5% and total nitrogen intensity by 6.9% year-on-year.
• Reduced non-hazardous waste volume by 11.9% and intensity by 17.0% year-on-year.
• Water recycling rate maintained at over 97%.
• Reduced average water consumption by 7.6% year-on-year.

Social Achievements

• Reduced average overtime hours per employee by 70.6% year-on-year to 38 hours.
• Provided various benefits including meal allowance, shift allowance, high temperature allowance, subsidies for environment protection, phone bill allowance and business travel allowance.
• Built housing complexes to provide dormitories for all employees.
• Provided various living and entertainment facilities such as gym rooms, swimming pools, basketball courts, football fields and badminton courts.
• Conducted 18,000+ emergency drills during the year.
• Conducted 8,296 internal trainings with 218,843 participants, averaging 15.2 hours of training per employee.
• Conducted 2,529 external trainings with approximately RMB3.68 million in funding.

Governance Achievements

• Established a specialized “Group Audit Regulatory Department” to prevent and investigate corruption cases.
• Implemented SAP and OA systems to routinize and standardize businesses.
• Provided anti-corruption education and training for staff holding key positions.
• All purchasing, sales and supervision personnel signed a “Letter of Undertaking of Integrity”.
• Established communication channels for accepting opinions and processing complaints, both internally and externally.

Climate Goals & Targets

Environmental Challenges

• Increase in domestic recovered paper consumption due to narrowed quota of imported recovered paper.
• Increased total energy consumption due to new production capacities.

Mitigation Strategies

• Improved utilization rate of water recycling system.
• Implemented energy-saving and upgrading plans, including replacing less efficient motors with variable-frequency motors, upgrading drum pulpers and wind turbines and eliminating certain lightings and refrigerating equipment.

Supply Chain Management

Supplier Audits: 7,819 suppliers total (6,674 in China, 1,145 in Vietnam)

Responsible Procurement

• Rigorous selection criteria evaluating company qualification, entities, manufacturing capability, technical competence, after-sale service, ISO certification, quality management, awards, business relationships, reputation, and geographical advantages.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ESG Reporting Guide in Appendix 27 of the Main Board Listing Rules

Certifications: ISO 9001, ISO 14001, OHSAS 18001, FSC™, China Environmental Labelling Product, SA8000 (two mills)

Third-party Assurance: Not disclosed

Sustainable Products & Innovation

• Testlinerboard, lightweight high-performance corrugating medium, recycled printing and writing paper, recycled corrugating medium, unbleached linerboard, white top linerboard, coated duplex board, and coated white top linerboard.

Awards & Recognition

• National Poverty Alleviation Award
• China Charity Prize
• Chinese Merchants Contribution Award
• Guangdong Poverty Alleviation Cotton Tree Golden Cup

Environmental Metrics

ESG Focus Areas

• Environmental friendly production
• Waste treatment
• Greenhouse gas and wastewater emission
• Utilization of energy and water resources
• Staff development, salaries and benefits
• Talent training
• Supply chain management system
• Platform for consumer complaint
• Risk management
• Anti-corruption policy
• Governance structure and transparency
• Privacy protection
• Product safety and quality
• Production and fire safety
• Occupational health and safety
• Unexpected public health event
• Poverty alleviation in the community
• Poverty alleviation through industry development
• Disaster aid and relief

Environmental Achievements

• Reduced SO2 intensity by 3.2%, NOx intensity by 4.0%, and dust intensity by 12.5%
• Achieved desulfurization efficiency of over 95%, denitrification efficiency of over 85%, and dust removal efficiency of over 99.95%
• Reduced COD intensity by 2.6%, suspended solids intensity by 8.6%, and total nitrogen intensity by 7.7%
• Reduced hazardous waste intensity by 19.1% and non-hazardous waste intensity by 2.0%
• Recycled over 15 million tonnes of recovered paper
• Reduced coal consumption intensity by 4.7%, steam intensity by 0.3%, and electricity intensity by 0.4%
• Decreased average water consumption by 3.5% while maintaining a 97.2% wastewater recycling rate
• Recycled approximately 5,000m³ of rainwater per day

Social Achievements

• Provided competitive remuneration and benefits to employees
• Organized over 1,159 emergency drills
• Achieved a 98% COVID-19 vaccination rate among employees
• Conducted 282,508 hours of training with an average of 16.0 hours per employee
• Introduced SA8000 Social Responsibility Management System in two of its bases

Governance Achievements

• Established a Group Audit Regulatory Department to prevent corruption
• Implemented anti-corruption training for key personnel
• Maintained confidentiality of whistle-blowing on corruption and bribery
• No outstanding and concluded litigation in relation to corruption

Climate Goals & Targets

Environmental Challenges

• Shortage of raw material supply due to the "Waste Import Ban"
• Change in product demand due to the "Plastic Ban Order"
• Acceleration and tightening of national environmental policy
• Unexpected public health events
• Operational risks from natural disasters
• Financial risks associated with capital expenditure
• Exchange rate risks

Mitigation Strategies

• Increased the ratio of domestic recovered paper, beefed up recycled pulp and wood pulp capacity, and launched a new brand for low-end products
• Confirmed the building of new production capacity for bleached folding boxboard and sack kraft paper, and enhanced technology innovation and R&D
• Obtained environmental certifications (China Environmental Labelling Products, ISO 9001, ISO 14001, OHSAS 18001, FSC TM), and kept abreast of environmental policies
• Optimized emergency and safety management mechanism, established pandemic prevention mechanisms and safety measures, and offered special training
• Prepared for weather changes, activated emergency response mechanisms, and purchased work injury insurance
• Maintained sufficient cash flow and a healthy gearing ratio, and secured long-term loans
• Majority of operations in China with transactions settled in RMB, and balanced interest rate and exchange risk in bank loans

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Comprehensive supplier evaluation considering company qualification, manufacturing capability, technical competence, after-sales service, ISO certifications, quality management, corporate reputation, etc.
• Requirement for suppliers to provide reports on quality, environment, occupational health and safety, and social responsibilities
• Strict control of raw materials to meet environmental protection requirements (e.g., coal sulphur content)
• Prioritization of raw materials with environmental certificates (over 90% of wood pulp with FSC TM/PEFC)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather (high temperature, chilly conditions, typhoons, drought, flooding)
• Impact on procurement of recovered paper, power generation, production facilities, and pollution prevention and treatment facilities

Transition Risks

• Acceleration and tightening of national environmental policy

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: ESG Reporting Guide in Appendix 27 of the Main Board Listing Rules

Certifications: ISO 9001, ISO 14001, OHSAS 18001, FSC TM, SA8000 (two bases)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Testlinerboard, light weight high performance corrugating medium, recycled printing and writing paper, recycled corrugating medium, unbleached linerboard, white top linerboard, coated duplex board and coated white top linerboard

Awards & Recognition

• Advanced Energy Conservation Unit in Guangdong Province
• Energy Efficiency Benchmarking Leader in Guangdong Province
• Winner in the Energy Conservation and Discharge Reduction Contest for the National Paper-making Industry
• Efficiency Pace-setter in Major Energy-consuming Industries in Chongqing
• Green Factory (Ministry of Industry and Information Technology)
• Guangdong Poverty Alleviation Cotton Tree Golden Cup
• 2020 Excellent Case of Private Corporate Social Responsibility of China
• Outstanding Individual for Poverty Alleviation in Guangdong Province (Chairlady Cheung Yan)
• Individual with Outstanding Contributions and Donations in the Area of Charity — Poverty Alleviation (Chairlady Cheung Yan)
• Individual with Outstanding Contributions and Donations in the Area of Charity — Combating COVID-19 Pandemic (Chairlady Cheung Yan)

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Safety, security and health
• Operation management
• Talent and corporate governance
• Social issues

Environmental Achievements

• Reduced standard coal by 0.4 million tonnes per annum through utilization of solid waste as resources
• Maintained wastewater recycling rate at over 97.2%
• Recycled over 13 million tonnes of recovered paper
• SO2 intensity down by 2.2%, NOx intensity down by 1.9%, and dust intensity down by 7.1% year-on-year
• Total greenhouse gas emission and intensity decreased by 3.8% and 1.7% year-on-year respectively
• Total water consumption decreased by 10.5%, and average water consumption per tonne of paper decreased by 7.3%

Social Achievements

• Average overtime hours of employees decreased to 25 hours (from 35 hours in FY2021)
• Average training hours per employee increased by 37% year-on-year to 20.7 hours
• Reduced work-related incidents from 36 to 30 cases
• Reduced work-related fatalities from 2 to 1

Governance Achievements

• Established a “Group Audit Regulatory Department” to maintain objectivity and independence in its governance structure
• Implemented SAP and OA systems to standardize business processes
• Provided anti-corruption education and training for staff

Climate Goals & Targets

Environmental Challenges

• Shortage of raw material supply due to the "Waste Import Ban"
• Significant fluctuations in raw material and fuel prices
• Structural change in product demand due to the "Plastic Ban Order"
• Severe overcapacity in production
• Acceleration and tightening of national environmental policy
• Unexpected public health events
• Operational risks from natural disasters
• Financial risks from capital expenditure and global inflation
• Exchange risks

Mitigation Strategies

• Increased the ratio of domestic recovered paper and beefed up the capacity of recycled pulp
• Strengthened procurement network and built up capacity of recycled pulp, wood pulp and wood fibre
• Entered into contracts for fixed supply or prices with suppliers
• Confirmed the building of new production capacity for bleached folding boxboard and sack kraft paper
• Enhanced core technology for new low-carbon and green products
• Leveraging economies of scale and diversified product lines
• Obtained ISO 14001 certification and other international certifications
• Established environmental incinerators converting solid wastes into clean energy
• Prioritized raw materials with environmental certificates
• Optimized emergency and safety management mechanism
• Flexibly adjusted product mix
• Formulated emergency plans for natural disasters and conducted regular drills
• Purchased work injury insurance for all employees
• Maintained sufficient cash flow and a healthy gearing ratio
• Received AAA rating from a credit rating agency
• Entered into various syndicate loans
• Balanced interest and exchange risk in bank loans

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Comprehensive evaluation of suppliers based on various criteria
• Requirement for suppliers to provide reports on quality, environment, occupational health and safety, and social responsibilities
• Encouragement of suppliers to comply with IWAY Standards

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather (high temperature, chilly conditions, typhoons, drought, flooding)

Transition Risks

• Policies and regulations (carbon emission rights quota, carbon pricing, clean energy requirements)

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: ESG Reporting Guide in Appendix 27 of the Main Board Listing Rules

Certifications: ISO 14001, ISO 9001, ISO 45001, SA 8000, FSC™/PEFC

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Testlinerboard, lightweight high-performance corrugating medium, recycled printing and writing paper, recycled corrugating medium, unbleached linerboard, white top linerboard, coated duplex board, and coated white top linerboard

Awards & Recognition

• “Energy Efficiency Benchmarking Leader in Guangdong Province”
• Corporate winner in the “Energy Conservation and Discharge Reduction Contest for the National Paper-making Industry”
• “Environmental Credible Enterprise (Green Label)”
• “Efficiency Pace-setter in Major Energy-consuming Industries in Chongqing”
• “Green Factory”
• “Guangdong Poverty Alleviation Cotton Tree” Golden Cup

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Climate change
• Energy conservation
• Emission reduction
• Waste reduction and recycling
• Employee well-being
• Staff development
• Talent training
• Corporate governance
• Supply chain management
• Community investment
• Poverty alleviation

Environmental Achievements

• Reduced greenhouse gas intensity by 1.0% year-on-year
• Reduced SO2 intensity by 3.4% year-on-year
• Reduced dust intensity by 7.7% year-on-year
• Reduced total hazardous waste volume by 7.1% year-on-year
• Maintained wastewater recycling rate at over 97.2%
• Reduced standard coal consumption by 0.42 million tonnes per annum through solid waste utilization
• Reduced standard coal consumption by 0.18 million tonnes per annum through methane collection and treatment
• Reduced standard coal consumption by 4,800 tonnes per annum through rooftop photovoltaic power generation

Social Achievements

• Average overtime hours reduced to 10 hours (from 25 hours in FY2022)
• Reduced work-related incidents to 36 (from 30 in FY2022)
• Average training hours per employee: 17.1 hours
• Implemented SA 8000 Social Responsibility Management System in some bases
• Implemented IKEA IWAY Management System

Governance Achievements

• Established a “Group Audit Regulatory Department” for independent governance
• Implemented anti-corruption training for directors and staff
• Established various communication channels for complaints and suggestions

Climate Goals & Targets

Environmental Challenges

• Shortage of raw material supply due to the “Waste Import Ban”
• Significant fluctuations in raw material and fuel prices
• Structural change in product demand due to the “Plastic Ban Order”
• Severe overcapacity in production
• Unexpected public health events
• Natural disasters
• Financial risk due to capacity expansion and inflation
• Tightening of national environmental policy
• Climate change and extreme weather

Mitigation Strategies

• Increased the ratio of domestic recovered paper and expanded production capacity of recycled pulp, wood pulp, and wood fiber
• Expanded product mix to include premium products
• Strengthened procurement network and secured contracts with fixed supply or prices
• Expanded production capacity for bleached folding boxboard and sack kraft paper
• Enhanced technology innovation and R&D
• Optimized emergency and safety management mechanism
• Flexible adjustment of product mix
• Formulated emergency plans for natural disasters and conducted regular drills
• Purchased work injury insurance for all employees
• Maintained AAA credit rating and secured syndicate loans
• Balanced bank loans in RMB, USD, and EURO
• Obtained ISO 14001 certification and other environmental certifications
• Established environmental incinerators for waste conversion into clean energy
• Introduced gas-fired turbine units
• Implemented policies to address climate change risks

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Strict selection criteria for suppliers, including company qualification, manufacturing capability, technical competence, ISO certifications, quality management, price advantage, credit reputation, and social responsibility
• Requirement for suppliers to provide reports on quality, environment, occupational health and safety, and social responsibilities
• Encouragement of suppliers to comply with IWAY Standards

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather (high temperature, chilly conditions, typhoons, drought, flooding)
• Impact on supply chain, power generation, production facilities, and pollution prevention and treatment facilities

Transition Risks

• Regulatory risk from changes in policies and regulations (carbon trading, clean energy requirements)
• Legal and reputational risks from non-compliance

Opportunities

• Development of energy-efficient products and processes

Reporting Standards

Frameworks Used: ESG Reporting Guide in Appendix 27 of the Main Board Listing Rules on the Hong Kong Stock Exchange

Certifications: ISO 14001, ISO 9001, ISO 45001, SA 8000, FSC™

Third-party Assurance: Not disclosed

Sustainable Products & Innovation

• Testlinerboard, lightweight high-performance corrugating medium, recycled printing and writing paper, recycled corrugating medium, unbleached linerboard, white top linerboard, coated duplex board, and coated white top linerboard

Awards & Recognition

• Guangdong Poverty Alleviation Cotton Tree Golden Cup (12 consecutive years)
• Green Factory
• Environmental Management Demonstration Enterprise
• Energy Efficiency Benchmarking Leader in Guangdong Province
• Corporate winner in the Energy Conservation and Discharge Reduction Contest for the National Paper-making Industry
• Environmental Credible Enterprise (Green Label)
• Efficiency Pace-setter in Major Energy-consuming Industries in Chongqing