Climate Change Data

Environmental Metrics

ESG Focus Areas

• Energy and Carbon
• Water and Waste
• Sustainable Building and Renovation
• Supply Chain Responsibility
• People
• Diversity and Sustainability
• Learning and Development

Environmental Achievements

• Reduced Scope 1 and 2 carbon emissions by 12% compared to 2009 in Hong Kong.
• Reduced carbon emissions by 2.8% per m² compared with 2009 in global operations.
• Reduced water consumption in Hong Kong operations by 5.5% compared to 2009.
• Reduced A4 paper consumption by 20.9% per colleague in global operations.
• Two US offices certified to LEED Silver standard.

Social Achievements

• Over 1,370 in-house learning programs organized in 34 offices, with 19,500 participants and 75,000 learning hours.
• Li & Fung Leadership Program developed in conjunction with MIT and University of Hong Kong (nearly 200 senior managers participated).
• Corporate Program for Management Development launched (over 40 Management Associates participated).
• Merchandising Skills Foundation Program (over 2,000 colleagues participated).

Governance Achievements

• Inclusion in the Dow Jones Sustainability Index, FTSE4Good, and Hang Seng Corporate Sustainability Index.
• Identified as a Caring Company under the Hong Kong Council of Social Service’s recognition scheme.
• Named one of four Hong Kong listed companies selected by SAM in its 7th annual Sustainability Yearbook 2011.

Climate Goals & Targets

Environmental Challenges

• Climate change risks
• Water scarcity
• Waste generation
• Maintaining high labor and environmental standards in global supply chain

Mitigation Strategies

• Partnership with Clinton Climate Initiative and Honeywell for energy efficiency audit and implementation.
• Energy conservation measures across global operations.
• Water reduction efforts in Hong Kong and planned for global operations.
• Waste reduction campaign focusing on paper consumption.
• Sustainable design for new offices and renovations.
• Collaboration with partners (BSR, Sedex, SFBC, NRDC, UN Global Compact) to improve supply chain sustainability.
• Vendor Code of Conduct with monitoring and compliance efforts.
• Rigorous internal processes for product safety, quality, and regulatory compliance.

Supply Chain Management

Responsible Procurement

• Vendor Code of Conduct based on ILO core conventions

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Carbon Disclosure Project

Certifications: Energywi$e Excellent (Hong Kong offices), Class of Good Energywi$e Label (Hong Kong offices), Class of Excellent Wastewi$e Label (Hong Kong)

Awards & Recognition

• Dow Jones Sustainability Index
• FTSE4Good
• Hang Seng Corporate Sustainability Index
• Caring Company (Hong Kong Council of Social Service)
• SAM Sustainability Yearbook 2011

Environmental Metrics

ESG Focus Areas

• Climate Change
• Resource Scarcity
• Economic Development
• Social Progress
• Human Rights
• Supply Chain Sustainability

Environmental Achievements

• Reduced carbon footprint by 18% per m² in global offices
• Reduced electricity consumption by 13% per m² in global offices
• Achieved LEED Gold certification for offices in Shatin, Hong Kong and Dhaka, Bangladesh
• Achieved LEED Silver for three office floors in Istanbul, Turkey, Hong Kong’s LiFung Tower and our LiFung Campus, and two floors of our New York Broadway offices
• One floor of our Marylebone Road office in London passed BREEAM 5

Social Achievements

• Launched first Employee Engagement Survey with 78% response rate
• Launched a series of Environmental, Health and Safety (EHS) initiatives in distribution centers
• Launched human rights statement on website and implemented internal awareness program
• Over 6,000 employees volunteered over 3,800 hours to support over 100 environmental and social initiatives
• Global employees raised over US$1.7 million to support communities

Governance Achievements

• Updated Code of Conduct for Suppliers and Supplier Compliance Manual
• Conducted over 9,800 audits of suppliers
• Developed new assessment tool for suppliers to identify gaps in meeting Code requirements

Climate Goals & Targets

Environmental Challenges

• Risks posed by climate change and resource scarcity
• Unpredictable and severe weather events impacting supply chain
• Supplier compliance
• Water scarcity

Mitigation Strategies

• Implementing energy-saving initiatives
• Retrofitting offices with energy-efficient lighting
• Developing tools and programs to improve working conditions and environmental performance in supply chain
• Updating Code of Conduct for Suppliers and Supplier Compliance Manual
• Developing new assessment tool for suppliers
• Water-efficient technology and employee conservation efforts

Supply Chain Management

Supplier Audits: Over 9,800

Responsible Procurement

• Code of Conduct for Suppliers
• Supplier Compliance Manual

Climate-Related Risks & Opportunities

Physical Risks

• Unpredictable and severe weather events

Transition Risks

• Increased cost of resources

Reporting Standards

Frameworks Used: UN Global Compact, Carbon Disclosure Project

Certifications: LEED, BREEAM

Awards & Recognition

• Energywi$e Excellent rating (Hong Kong offices)
• “Class of Good” Energywi$e Label (Hong Kong offices)
• “Class of Excellent” Wastewi$e Label (Hong Kong)

Environmental Metrics

ESG Focus Areas

• Supply Chain Sustainability
• Engaging Our People
• Engaging Our Communities
• Managing Our Footprint

Environmental Achievements

• Hybrid, solar thermal system at Bangkok manufacturing facility resulting in energy, water, and monetary savings, avoiding LPG consumption and reducing GHG emissions.

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Health, safety and wellbeing, climate change, resource scarcity and environmental degradation, increasing demands for transparency and accountability.

Mitigation Strategies

• Addressing challenges through Sustainability Strategy and reporting, and day-to-day activities. Opportunities for greater supply chain transparency, improving working and environmental conditions in factories, and building sustainable communities.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: UNGC

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• No Poverty
• Good Health and Wellbeing
• Gender Equality
• Decent Work and Economic Growth
• Climate Action

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Supply Chain Sustainability
• Engaging our People
• Our Communities
• Managing our Footprint

Social Achievements

• Launched a new Customer Satisfaction Program to enhance services by obtaining and measuring customer feedback.

Governance Achievements

• Received the Asset ESG Corporate Awards 2019 — Platinum Award, the Hong Kong Corporate Governance Excellence Award 2019 — Award for Sustainability Excellence, the Hong Kong Award for Environmental Excellence — Silver Award, and the Hong Kong Green Organization Certificate.

Climate Goals & Targets

Environmental Challenges

• Safeguarding the livelihoods, health, safety and wellbeing of people within our own organization and supply chains.
• Improving performance in a world of increasingly scarce resources with severe levels of pollution and environmental degradation.
• Impact of climate change.

Mitigation Strategies

• Increased transparency and action to improve working conditions and environmental performance in both our own operations and in factories, and to build sustainable communities along our supply chain.
• Greater transparency, accountability and industry cooperation.

Supply Chain Management

Responsible Procurement

• Updated Supplier Code of Conduct to drive responsible business practices

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UNGC, UN SDGs

UN Sustainable Development Goals

• No Poverty
• Good Health and Wellbeing
• Gender Equality
• Affordable and Clean Energy
• Decent Work and Economic Growth
• Responsible Production and Consumption

Awards & Recognition

• Asset ESG Corporate Awards 2019 — Platinum Award
• Hong Kong Corporate Governance Excellence Award 2019 — Award for Sustainability Excellence
• Hong Kong Award for Environmental Excellence — Silver Award
• Hong Kong Green Organization Certificate

Environmental Metrics

ESG Focus Areas

• Corporate governance and risk management
• Employee benefits and welfare
• Information security and personal data protection
• Health and safety
• Equal Opportunities

Environmental Achievements

• Global improvement of Higg FEM results across supported factories by 17.5%
• Reduced water consumption by an average of 20% since 2019 in selected factories
• Reduced water needed per denim by approximately 49% and energy by 55% since 2019

Social Achievements

• 10,567 interviews conducted using Apprise Audit tool for worker feedback
• 547 hours of ethics training completed by management and general staff
• 4,555 suppliers trained on the Supplier Code and various compliance topics
• 1,688 hours of voluntary work

Governance Achievements

• Established four board committees – Audit Committee, Risk Management and Sustainability Committee, Remuneration Committee and Nomination Committee
• Implemented a zero-tolerance approach to bribery and corruption
• No concluded legal cases regarding corrupt practices brought against the Company and the employees during the reporting period

Climate Goals & Targets

Environmental Challenges

• Logistics disruptions, pandemic lockdowns, manufacturing delays and natural disasters
• Uncertain economic outlook, rising inflation and depressed consumer sentiment
• Increasing natural hazards and extreme weather conditions
• Growing demands and stricter requirements on low carbon products and/or operations

Mitigation Strategies

• Helping customers, suppliers and other supply chain partners navigate crises and prioritize ESG
• Embedding sustainability into operations strategically and systematically
• Leveraging global network and working alongside industry partners to address challenges and build resilience
• Expanding risk assessment portfolio to include climate-related risk assessment
• Working with customers and industrial initiatives to explore innovative solutions to turn risks into opportunities

Supply Chain Management

Supplier Audits: 1,360 supplier audits conducted by 3rd party audit firms commissioned by customers in 2021; 7,349 industry audits accepted under audit recognition scheme; 511 spot checks

Responsible Procurement

• Supplier Code of Conduct, Responsible Recruitment Policy, Combatting Forced Labor Policy, audit rating system, worker-led due diligence, remediation and tailored capacity-building programs

Climate-Related Risks & Opportunities

Physical Risks

• Flooding, typhoons, strong winds

Transition Risks

• Growing demands and stricter requirements on low carbon products and/or operations

Opportunities

• Exploring innovative solutions to turn climate-related risks into opportunities

Reporting Standards

Frameworks Used: ESG Reporting Guide under Appendix 27 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Using recycled raw materials, sustainable packaging alternatives

Awards & Recognition

• Hong Kong Standard Chartered Marathon 2021 Corporate Sponsor
• EcoDrive Hong Kong Corporate Sponsor
• Corporate Donor for The Community Chest Water World Ocean Park Charity Day
• Silver Sponsor for EcoDrive Enough Plastic Campaign 2021
• HandsOn Hong Kong Community Supporter
• Silver Sponsor for The Women's Foundation Annual Gala Dinner
• Bronze Sponsor for Captivating International Foundation Annual Charity Auction 2021
• Hong Kong Council of Social Service Caring Company
• The Community Chest Silver Member
• WWF Hong Kong Silver Member

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced GHG emissions within operations by 26% compared to 2021
• Reduced water consumption by 33% compared to 2021
• Improved global average Higg total score by 5.2% compared to 2021

Social Achievements

• 100% of active suppliers accepted Li & Fung's Supplier Code of Conduct
• 409 training sessions on various compliance topics were held for 4,738 suppliers and 7,150 supplier representatives.
• Voluntary turnover rate reduced by 6% compared to 2021
• Average number of training hours per employee increased from 0.7 in 2021 to 4.2 in 2022

Governance Achievements

• 4,146 hours of ethics training completed by management and general employees
• Established a regional ESG champion network

Climate Goals & Targets

Environmental Challenges

• Industry headwinds and ongoing geopolitical tensions disrupting the global trading landscape

Mitigation Strategies

• Leveraging global presence and working with industry partners to address challenges

Supply Chain Management

Supplier Audits: 6,287 industry audits accepted in 2022

Responsible Procurement

• Li & Fung Supplier Code of Conduct
• Combatting Forced Labor Policy
• Responsible Recruitment Policy
• Certification Letter for Global Trade Regulations Compliance

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: HKEX ESG Reporting Guide, GRI Sustainability Reporting Standards, UN 2030 Sustainable Development Goals (SDGs)

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Greener Choices products

Awards & Recognition

• Ranked 3rd among 15 leading companies for Child Labour Remediation
• Founding member of SAC
• Rated B on CDP's Supplier Engagement Rating
• Gold medal for ESG rating by Ecovadis for Miles-Promocean

Environmental Metrics

ESG Focus Areas

• Governance
• Risk Management
• ESG Strategy
• Stakeholder Engagement
• Materiality Assessment
• Ethics and Integrity
• Responsible Sourcing
• Environmental Sustainability
• Growth and Empowerment
• Community Engagement

Environmental Achievements

• 38% reduction in Scope 1 and 2 greenhouse gas emissions compared to 2021 baseline
• 32% reduction in energy consumption compared to 2021 baseline
• 33% reduction in water consumption compared to 2022 figures
• Higg FEM score increased by 20% since 2018 (strategic suppliers)

Social Achievements

• Launched a new whistleblowing platform, FaceUp
• Updated Li & Fung Supplier Code of Conduct
• Ranked second among leading companies benchmarked for child labor remediation and implementation in 2023
• India office certified as a “Great Place to Work”
• 24,347 learning hours completed (37% increase from 2022), average 6.3 hours per employee
• Voluntary turnover rate reduced to 10.7% (2.3% lower than 2022)

Governance Achievements

• Established four board committees: Audit Committee, Risk Management and Sustainability Committee, Nomination Committee, and Remuneration Committee
• Launched updated Li & Fung Supplier Code of Conduct
• Achieved an A- score in the CDP Supplier Engagement Rating report and a B score in their Climate Change Disclosure

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Climate change impacts
• Maintaining high ESG standards across a global supply chain
• Ensuring data accuracy and consistency in ESG reporting

Mitigation Strategies

• Developed alternative sourcing strategies
• Implemented a robust risk management and internal control system
• Collaborated with industry partners and stakeholders
• Improved data collection and monitoring tools

Supply Chain Management

Supplier Audits: 76% of active factories approved by various industry audits

Responsible Procurement

• Supplier Code of Conduct
• Responsible Recruitment Policy
• Combatting Forced Labor Policy
• Child Labor Policy
• Certification Letter for Global Trade Regulations Compliance policy

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards, TCFD

Certifications: ISO 27001

Sustainable Products & Innovation

• Eco-designed packaging
• Products using recycled and certified content

Awards & Recognition

• A- score in CDP Supplier Engagement Rating
• B score in CDP Climate Change Disclosure
• Gold medal from Ecovadis for Miles-Promocean
• Great Place to Work® certification for India office