Link ESG researchers learned that recently, Natural Beauty (00157) released the “2023 Environmental, Social and Governance Report”, which explains its vision and contributions to the environment and society from the dimensions of the environment, society, and governance.

Natural Beauty is a company based in Shanghai, China. It is mainly engaged in the production and sale of skin care products, beauty products, essential oil products, health food and cosmetics. It has always adhered to the business philosophy of “nature is beauty” and is committed to providing a full range of beauty products and services for women. The Group considers major environmental, social and governance issues in its daily operations and essentially links its long-term success to the effectiveness of corporate ESG management and sustainable development to ensure that its business model is viable and creates socioeconomic value for all stakeholders.

According to the ESG report, Natural Beauty has established an ESG management system with the board of directors as the most responsible and decision maker for ESG matters. The board of directors leads and participates in the consideration and decision-making of important ESG matters, including identifying ESG risks, setting management plans and management policies, formulating ESG strategies and policies, and reviewing annual ESG reports. At the same time, the Group maintains good relationships with its stakeholders and strives to deepen the understanding of how risks and opportunities will affect the Group's business development from stakeholders' concerns. The group communicated regularly and irregularly with various stakeholders through multiple channels during the reporting period, actively listened to their opinions and suggestions, understood stakeholders' concerns and demands, and adjusted and implemented relevant measures in this regard.

At the environmental level, in 2023, Natural Beauty has achieved the overall environmental goal of no major environmental pollution incidents. All wastewater and exhaust gas will be properly disposed of and discharged in compliance with the standards, and all harmful and harmless waste will be handled by qualified institutions. Natural Beauty actively implements the green office concept and accelerates the implementation of energy saving measures in its business operations; it also strictly manages its factory exhaust gas, wastewater and waste emissions, and treats exhaust gas, sewage and solid waste to ensure that emissions meet standards and reduce environmental pollution, and achieve emission reduction goals at the source.

Given the nature of the Group's business in the light chemical industry, natural beauty mainly produces exhaust gas pollutants from manufacturing processes, including nitrogen oxides, sulfur oxides, and particulate matter. The Group's direct greenhouse gas emissions (scope 1) mainly come from fossil fuel consumption during manufacturing and transportation, while indirect greenhouse gas emissions (scope 2) mainly come from offices, factories and other workplaces. Total greenhouse gas emissions during the reporting period increased by about 4% compared to fiscal year 2022, and Scope 2 emissions from electricity use still dominate. This increase is due to the return to normal business operations during the reporting period, which led to an increase in total electricity consumption this year. Also, as the Group's overall vehicle usage declined compared to 2022, this year's Scope 1 emissions were reduced by about 10% compared to 2022.

At the social level, Natural Beauty has always been committed to promoting anti-discrimination and equal opportunity in human resources and employment decisions, thereby creating a fair competition, mutual respect, and diverse work environment. There were no incidents of employee discrimination during the reporting period. As of December 31, 2023, the company employed a total of 479 employees, including 473 full time employees and 6 part-time employees. The company employs 123 male employees and 356 female employees, including 45 female managers, accounting for 70.31% of the total number of managers. Furthermore, through cooperation with the Disabled Persons' Federation, Natural Beauty has recruited some disabled employees. As of 2023, it has recruited a total of 5 disabled employees.

During the reporting period, Natural Beauty adopted a combined online and offline training model to provide employees with continuous training in different course categories, such as professional skills training, functional training, sales skills training, team building and talent management training. In 2023, the total number of training hours for employees was 5,291 hours, and the number of training hours per employee was 11.05 hours, of which the average number of training hours per female reached 10.97 hours. The overall percentage of employees trained was 60.96%, of which 61.24% were women and 60.16% were men.

In terms of supply chain management, Natural Beauty has a strong supply base. Through effective communication and participation, it has maintained good cooperative relationships with suppliers over the years; it has also insisted on building a competitive supply chain guarantee system to enhance its own environmental and social governance capabilities while driving healthy development of suppliers and promoting cooperation and win-win cooperation between the two parties. Furthermore, as a socially and environmentally responsible company, Natural Beauty is committed to optimizing its procurement practices to control social risks and taking environmental concepts into account in its supply chain management.

In the future, natural beauty will continue to use “health and nature” as the guiding principles for the company's development, continuously strengthening its capabilities in product quality, service systems, social responsibility, corporate governance, and low-carbon development, to provide customers with better products and services, and make more contributions to society.