Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainability
• Employee well-being
• Community engagement
• Ethical sourcing
• Environmental responsibility

Environmental Achievements

• Reduced energy consumption per pair of gloves by 11%
• Kottawa and Biyagama factories entirely powered by renewable energy sources
• Reduced energy consumption by 6%
• Reduced water intensity by 7%
• Renewable energy accounts for 79% of total power consumption

Social Achievements

• Launched flagship supplier development program 'Firstlight', supporting over 2,000 farmers
• Completed CSR project in Horowpathana providing clean water
• Improved customer satisfaction
• Employee retention rate of 71%
• Female representation of 34%
• Reduced workplace injuries by 63%

Governance Achievements

• Adherence to the Code of Best Practice on Corporate Governance
• Establishment of Audit Committee and Related Party Transactions Review Committee
• Annual appraisal of Board and Sub-Committees performance

Climate Goals & Targets

Environmental Challenges

• Relatively slow economic growth in key markets
• Sharp increase in rubber price
• Adverse weather conditions affecting tea plantations
• Delays in commencing commercial operations of new facility
• Currency fluctuations
• Fluctuations in commodity prices
• Availability of raw materials
• Risk of non-availability of labour

Mitigation Strategies

• Supply chain cost reduction
• Improved production efficiencies
• Reduction in staff attrition rates
• Cross-functional teamwork
• Investment in ICOGUANTI S.p.A.
• Cost leadership initiatives
• Increased reliance on renewable energy
• Strengthening relationships with rubber smallholders through Firstlight
• Robust talent attraction and management mechanisms

Supply Chain Management

Responsible Procurement

• Close collaboration with suppliers
• Fair trade principles in rubber latex sourcing
• Firstlight initiative for supplier development

Climate-Related Risks & Opportunities

Physical Risks

• Erratic weather conditions
• Natural disasters

Reporting Standards

Frameworks Used: Integrated Reporting Framework (IIRC), GRI G4 guidelines (Core)

Certifications: ISO 9001:2008, ISO 13485:2003, ISO 14001:2004, ISO 17025:2005, BRC Global Standard, Forest Stewardship Council Certification

UN Sustainable Development Goals

• Goal 1: No Poverty
• Goal 3: Good Health and Well-being
• Goal 6: Clean Water and Sanitation
• Goal 7: Affordable and Clean Energy
• Goal 8: Decent Work and Economic Growth

Initiatives contributing to poverty alleviation, improved health and hygiene, access to clean water, renewable energy use, and decent work opportunities

Sustainable Products & Innovation

• Bio-degradable nitrile gloves

Awards & Recognition

• Plastics and Rubber Institute of Sri Lanka Merit Award
• Presidential Export Awards
• JASTECA Gold Award CSR Sustainability

Environmental Metrics

ESG Focus Areas

• Environmental Compliance
• Employee management
• Customer satisfaction
• Product Quality
• Customer health and safety
• Manufacturing capabilities
• Commodity prices
• Operational efficiency
• Energy
• Procurement practices
• Materials
• Innovation
• Effluents and waste
• Socio economic compliance
• Government policy
• Training and education
• Local communities
• Indirect economic impacts
• Exchange rate fluctuations
• Water

Environmental Achievements

• Achieved 91% reliance on renewable energy by converting all boilers to biomass
• Reduced carbon intensity by 14% per pair
• 5% water recycled and reused

Social Achievements

• Launched and expanded the DPL Firstlight initiative, supporting 1200 farmers
• Improved customer satisfaction to 81%
• Reduced customer complaints by 40%
• Increased payments to employees by 10.75%
• Investment in training increased by 17.85%
• Zero lost time injury frequency rate
• Successfully negotiated collective agreements with trade unions

Governance Achievements

• External assurance on sustainability reporting obtained for the first time
• Comprehensive 7-part materiality test conducted to determine material topics
• Improved reporting structure to reflect performance outcomes

Climate Goals & Targets

Environmental Challenges

• Availability and price fluctuations of raw materials (especially latex)
• Implications of climate change impacting rubber production
• Intensifying price competition from regional manufacturers
• Labour shortages
• Geopolitical and socioeconomic factors in key buying markets
• Risks stemming from manufacturing operations
• Evolution in customer preferences and satisfaction
• Regulatory and compliance risks

Mitigation Strategies

• Diversification of source markets and alternative raw materials
• Expansion of the DPL Firstlight program
• Focus on premium, specialized gloves and new market segments
• Emphasis on increasing permanent employees and automation
• Cost optimization and process efficiencies
• Ongoing investments in R&D and new product development
• Compliance reporting and monitoring of environmental performance
• Total Productivity Maintenance (TPM) implementation generating Rs. 170 million in savings

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• DPL Firstlight initiative

Climate-Related Risks & Opportunities

Physical Risks

• Erratic weather conditions, natural disasters

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

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

Certifications: ISO 9001:2008, ISO 13485:2003, ISO 14001:2004, ISO 17025:2005, OHSAS 18001, BRC, UN Global Compact, FSC, ISO 22000:2005, HACCP & TASL-SGS, Global G.A.P, Rainforest Alliance, Ethical Tea Partnership

Third-party Assurance: Messrs. Ernst and Young

Sustainable Products & Innovation

• Water-based coagulant for nitrile gloves

Awards & Recognition

• SAFA - Best Presented Annual Report Awards
• SAARC Anniversary Awards for Corporate Governance Disclosures
• CA Sri Lanka - Annual Report Awards 2018 Gold Award

Environmental Metrics

ESG Focus Areas

• environmental sustainability
• social responsibility
• community empowerment
• employee well-being
• supply chain sustainability

Environmental Achievements

• 91% of energy requirements met through renewable sources
• Reduced carbon footprint by 2% to 1.32 tCO2e
• Increased water recycling in operations

Social Achievements

• Empowered over 4,000+ latex rubber farmers through DPL Firstlight
• Improved customer satisfaction to 87%
• Increased employee retention rate to 81%
• 33 promotions within the Hand Protection sector
• 28,496 total training hours in the Hand Protection sector

Governance Achievements

• Board focused on evaluating market trends, refining strategy, people development, automation, and digitization
• Compliance with Sri Lanka Financial Reporting Standards, Colombo Stock Exchange Listing Requirements, and Code of Best Practice on Corporate Governance

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic disruptions
• Adverse weather conditions affecting plantations
• Decline in global tea and rubber prices
• Escalating cost of production in plantations
• Shortage of manual labor in Sri Lanka
• Supply chain disruptions due to COVID-19

Mitigation Strategies

• Implemented Haysmart Initiatives for cost rationalisation and exploring new opportunities
• Implemented social distancing and safety measures
• Facilitated work-from-home measures
• Installed sanitizing facilities
• Implemented preventive/curative measures in plantations
• Focus on capacity expansion in rubber gloves, productivity improvements, product development, and new markets in the Hand Protection sector
• Investments in replanting, employee skill development, and product diversification in the Plantations sector

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• DPL Firstlight initiative

Climate-Related Risks & Opportunities

Physical Risks

• Adverse weather conditions affecting plantations
• Water scarcity

Transition Risks

• Fluctuations in commodity prices

Opportunities

• Increased demand for personal protective equipment

Reporting Standards

Frameworks Used: Sri Lanka Financial Reporting Standards, Colombo Stock Exchange Listing Rules, Code of Best Practice on Corporate Governance

Certifications: ISO 9001:2008, Forest Stewardship Council Certification, British Retail Consortium Certification, OHSAS 18001, ISO 17025:2005

Third-party Assurance: Ernst & Young

Sustainable Products & Innovation

• Eco-friendly, DMF-free PU coated glove

Awards & Recognition

• Numerous awards for leadership in sustainability and operational excellence
• Overall winner at the National Business Excellence Awards 2019 (Kelani Valley Plantations PLC)

Environmental Metrics

ESG Focus Areas

• Climate action
• Value chain and community development
• Employee well-being
• Product quality and safety
• Environmental compliance

Environmental Achievements

• 93% reliance on renewable energy through conversion to biomass boilers
• 5% reduction in carbon footprint per pair of gloves
• 80% YoY growth in sustainable water sourcing
• 9% of total water withdrawn was recycled

Social Achievements

• Launched DPL Firstlight program, adding 1,418 new farmers
• Maintained 74% employee retention rate in Hand Protection and 90% in Plantations
• Achieved 80% customer satisfaction in Hand Protection
• Invested Rs. 10 Mn in CSR initiatives
• No reported cases of discrimination

Governance Achievements

• Implemented stringent health and safety protocols during the pandemic
• Shifted Board and Sub-Committee meetings to digital platforms
• Complied with all government regulations and guidelines
• Maintained open and transparent communication on the implications of the pandemic

Climate Goals & Targets

Environmental Challenges

• Challenges in securing raw materials due to supply chain disruptions
• Logistical challenges arising from shipping delays and increase in freight rates
• Sharp increase in demand for disposable gloves, leading to escalation in raw material prices
• 16% increase in tea prices during the year
• Disruptions to supply chains due to limited availability of shipping facilities and cargo space
• Surge in demand for disposable gloves and resultant increase in prices of raw materials
• Increase in operational costs stemming from health and safety protocols and distancing measures
• Labour shortages in both Hand Protection and Plantation sectors
• Erratic weather conditions and natural disasters impacting supply chains and agricultural outputs
• Increased price pressures due to increased supply from competitors
• Mandatory wage hike for estate sector employees impacting Plantation sector profitability

Mitigation Strategies

• Increased local procurement through DPL Firstlight
• New product development and focus on specialized gloves
• Proactive customer engagement through social media and online platforms
• Stringent health and safety measures to ensure employee safety
• Focus on preserving liquidity through driving efficiencies and curtailing non-essential expenses
• Expanding farmer base under DPL Firstlight program
• Proactive engagement with customers to negotiate price increases
• Building a resilient supply chain through diversifying supplier base
• Capacity expansions in product segments with continued demand growth
• Driving operational efficiencies to address expected cost increases
• Increased reliance on renewable energy, water recycling, and sustainable sourcing of firewood
• Focus on premium, specialized gloves
• Strengthening customer relationships
• Continued investment in R&D to drive innovation
• Increased focus on automation and digitization
• Crop diversification in the Plantation Sector
• Adoption of sustainable agriculture and manufacturing practices
• Engagement with industry counterparts to lobby for conducive policies
• Entering forward-exchange rate contracts
• Expanding supplier base to diversify risks
• Stringent health and safety protocols including regular PCR testing
• Facilitating work from home arrangements for office employees
• Expansion into new markets and segments

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• DPL Firstlight program
• Ethical procurement
• Supplier development
• Community engagement initiatives
• Fair pricing mechanisms
• Capacity building

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters
• Extreme weather conditions
• Rising temperatures impacting agricultural outputs

Transition Risks

• Changes in government policy
• Increased price pressures from competitors

Opportunities

• Development of energy-efficient products
• Increased demand for sustainable products

Reporting Standards

Frameworks Used: GRI, International Integrated Reporting Framework

Certifications: ISO 9001:2015, ISO 13485:2003, ISO 14001:2015, ISO 17025:2005, BRC, Rainforest Alliance, FSC, OHSAS 18001, ISO 45001:2018, ISO 22000:2005, HACCP, TASL-SGS, Global G.A.P

Third-party Assurance: Messrs. Ernst and Young

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Biodegradable nitrile glove
• Xtralight Prime Interface Eco Interface Prime glove made from recycled PET yarn
• Biodegradable Supported Glove
• NR Double Dipped, Cut Resistant Acrylic Brushed Glove
• Impact HD/Impact HC Glove
• Xtraflex Prime glove

Awards & Recognition

• Great Place to Work certification for Plantation Sector

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance
• Supplier Sustainability
• Community Development

Environmental Achievements

• 4.3% reduction in carbon footprint (Hand Protection)
• 93.3% reliance on renewable energy (Hand Protection)
• Increased rainwater harvesting capacity by 265%
• Installed rooftop solar in 5 factories increasing the installed capacity to 4,805 kWp

Social Achievements

• Launched employee well-being program including mental wellness programs
• Launched Female Supervisor Programme in Talawakelle Plantations
• 84% employee retention rate (Hand Protection)
• Rs. 382 Mn invested in Community Development (Plantation)
• 10,000+ CSR beneficiaries (Hand Protection)
• 573,257 CSR beneficiaries (Plantation)

Governance Achievements

• Appointment of three new Independent Non-Executive Directors
• Established a Remuneration Committee, Related Party Transactions Review Committee and a Nominations & Governance Committee
• Adopted Hayleys Group’s Bribery and Anti-Corruption policy
• Compliance with CSE Listing Rule Number 9

Climate Goals & Targets

Environmental Challenges

• Softening demand for gloves impacting financial performance
• Appreciation of the Sri Lankan Rupee negatively impacting revenue
• Post-COVID glove price correction
• Exchange rate volatility
• Inflationary pressures
• Competitive threats
• Global economic uncertainty
• Labour shortages
• Climate change impacts on crop yields (Plantation)

Mitigation Strategies

• Transitioning product line to high-value premium offerings
• Developing sustainability-focused products
• Setting up a dedicated Sports Glove manufacturing facility
• Expanding global reach with new marketing offices
• Investing in cutting-edge technology
• Prioritising employee well-being
• Launching DPL Pulse ESG roadmap
• Implementing a transformative “plantation agribusiness” model
• Investing in infrastructure, training, and resources to achieve Zero workplace injuries/diseases by 2030
• Implementing cost-saving measures
• Market diversification
• Strategic partnerships with shipping lines
• Proactive demand planning
• Maintaining an optimal mix of borrowings
• Initiated forward exchange contracts
• Crop diversification (Plantation)
• Adoption of sustainable agricultural practices (Plantation)

Supply Chain Management

Supplier Audits: 25% of suppliers screened for social and environmental compliance

Responsible Procurement

• Firstlight Programme for local natural latex sourcing
• ESG requirements for suppliers
• Supplier development programmes

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Floods
• Landslides

Transition Risks

• Increased customer demand for sustainable products
• New policies and regulations for low-carbon economy

Opportunities

• Development of energy-efficient products
• Expansion into new markets
• Increased focus on high-value industrial glove sector

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, IFRS S1 & S2

Certifications: ISO 9001, ISO 14001, ISO 45001, Rainforest Alliance (Plantation), LEED Platinum (Sports Glove Facility)

Third-party Assurance: Messrs. Ernst and Young

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 8 (Decent Work and Economic Growth)
• Goal 17 (Partnerships for the Goals)

Initiatives contribute to these goals through renewable energy adoption, waste reduction, emission reductions, employee well-being, and community development

Sustainable Products & Innovation

• Biodegradable gloves
• Gloves incorporating recycled materials
• Recyclable packaging

Awards & Recognition

• Best Exporter of Rubber Products
• Best Integrated Report for the Manufacturing Sector
• National Business Excellence Awards
• National Project Management Excellence Award
• Annual Export Awards
• SAFA BPA Award
• CNCI Achiever Awards
• National Industry Excellence Awards
• CA Sri Lanka Annual Report Award