Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental (Emissions, Use of resources)
• Social (Employment, Health & safety, Development and training, Labor standards, Supply chain management, Product responsibility, Anti-corruption, Community investment)
• Governance (Anti-corruption)

Environmental Achievements

• Adopted an ISO14001-compliant environmental management system.
• Installed a gas purifying system to control air pollutant emission.
• Established waste management guidelines and engaged a licensed chemical waste collector.
• Implemented energy saving measures to minimize energy resource consumption.

Social Achievements

• Maintained a working environment that complies with PRC labor laws.
• Published booklets on occupational health and safety.
• Established safety guidelines and procedures.
• Ensured employment practices comply with PRC labor laws.
• Incorporated green practices in procurement activities.
• Adopted internationally recognised quality control standards (ISO 9001:2015 and IATF 16949:2016).
• Implemented internal control measures to ensure data confidentiality.
• Established a Policy to govern the investigation and follow-up procedures of reported fraud incidents.
• Organized and participated in local community events.

Governance Achievements

• Established internal controls to mitigate the risk of fraud.
• Established a whistle-blowing channel for reporting violations.

Climate Goals & Targets

Environmental Challenges

• Adverse impact of the COVID-19 pandemic, leading to suppressed demand and delayed procurement plans from customers.
• Temporary disruption of business operations in February 2020 due to the pandemic.
• Extended disruption or suspension in the operations of customers and suppliers.
• Customers remained conservative in their purchases due to uncertainties associated with the pandemic.
• Reliance on the downstream LED lighting industry.
• Intense competition in the LED lighting industry.
• Rapid technological changes and advancements in the LED lighting industry.

Mitigation Strategies

• Exploring opportunities to diversify business risks.
• Entered into a Sale and Purchase Agreement to acquire GSR GO Group (engaged in fast charging solutions for battery systems).
• Continued dedication to research and development (submitted applications for 6 patents, 1 granted).
• Monitoring market situation and striving to mitigate adverse impacts.
• Continuously striving to broaden the client base.
• Maintaining competitiveness through price adjustments and new product introductions.

Supply Chain Management

Supplier Audits: Annual supplier appraisal

Responsible Procurement

• Green practices in procurement activities
• Suppliers’ environmental and social performances are considered in supplier selection.

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Emissions
• Use of resources
• Employment
• Health & safety
• Development and training
• Labor standards
• Supply chain management
• Product responsibility
• Anti-corruption
• Community investment
• Climate Change

Environmental Achievements

• Zhuhai HongGuang Production Plant accredited with ISO 14001:2015 certification
• Installed a gas purifying system to control air pollutant emission
• GHG emissions from Scope 1 dropped significantly due to switch from LPG to methane

Social Achievements

• Implemented a series of prevention and control measures in response to the COVID-19 pandemic
• Published booklets with occupational health and safety for employees
• Established a series of safety guidelines, rules and procedures for production activities
• Provided trainings across different operational functions

Governance Achievements

• Adopted a whistleblowing policy
• Adopted an anti-corruption policy
• 2 directors and 57 employees underwent 2 hours of anti-corruption training

Climate Goals & Targets

Environmental Challenges

• Sluggish real estate market and weak consumer demand for electronic products negatively impacted the LED lighting industry
• Intensified competition in the LED industry
• Weak real estate and consumer electronics markets in China affected the industrial chain of the Group’s LED bead business
• Intense competition for skilled and experienced workers and industry talents
• Potential unfavourable changes in relevant industrial policies
• Stringent compliance requirements

Mitigation Strategies

• Implemented price reduction strategy to secure sales from LED product segment
• Upgraded semiconductor factory in Xuzhou, installed two production lines for GaN-related products
• Introduced strategic shareholders to enrich financial resources for GaN business
• Adopted a share incentive scheme to attract and motivate high-tech talents
• Established contingency measures for weather-related events
• Integrated environmental measures within business operations
• Established an intellectual property management procedure
• Established an Anti-fraud Policy

Supply Chain Management

Supplier Audits: Annual supplier appraisal

Responsible Procurement

• Incorporate green practices in procurement activities
• Suppliers’ environmental and social performances are taken into account in supplier selection process

Climate-Related Risks & Opportunities

Physical Risks

• Storms, floods, fires or heatwaves that may damage production facilities and disrupt value chains

Transition Risks

• Policy and legal risk
• Technology Risk
• Market Risk
• Reputational risk