The Zhitong Finance App learned that recently, Tiancai Holdings (03882) released the 2023 Environmental, Social and Governance Report, which covers several environmental and social responsibility aspects related to the Group's business operations in China and Vietnam for the fiscal year ended December 31, 2023.

As a global smart one-stop solution provider, the board of directors of Tiancai Holdings established an ESG governance mechanism and appointed the ESG Work Office to manage the Group's environmental, social and governance matters. At the same time, the Group attaches great importance to communication with key stakeholders, takes stakeholders' interest or influence in the Group's business as a factor, and takes this into account in the Group's operating decisions. In 2023, the group used a three-step process to conduct a criticality assessment, and finally determined 10 important topics and 10 topics of general importance.

On the environmental side, Tiancai Holdings' gas emissions are mainly due to (i) motor vehicles used to transport products and personnel and (ii) forklifts used for in-plant transportation and warehouse operations. Due to the nature of the business of Wuhan Xiusheng, which was newly included in the scope of the report, operating artificial intelligence vending machines, it is necessary to transport a large amount of goods. As a result, the Group's transportation demand and energy consumption increased dramatically in 2023, and air pollutants and greenhouse gas emissions also increased.

In fiscal year 2023, the Group's emissions intensity was 0.00063 tons/million HKD revenue (2022:0.00036 tons/HKD revenue), 479.98 tons of carbon dioxide equivalent (2022:77.84 tonnes of carbon dioxide equivalent) for the Group, and total greenhouse gas emissions (Scope 1 and Scope 2) were 3,460.03 tons of carbon dioxide equivalent.

The group develops products from an environmental perspective, searches for renewable materials that meet customers' environmental requirements, and also encourages frontline workers to reuse materials first. In order to use materials more effectively, the group expanded the scope of data collection to the volume of finished product packaging to help the group effectively manage resources and inspire the group to explore better packaging solutions. During the reporting period, the Group's use of packaging materials was 637 metric tons, a decrease of about 58.66% compared to 2022.

In terms of sustainable social development, Tiancai Holdings believes that employees are indispensable in achieving corporate success, and is committed to ensuring the health, safety and public welfare of employees. As of December 31, 2023, the Group's 797 employees were all full-time employees, of which 59% were male employees and 41% were female employees. The number of high school and below, junior college, bachelor's degree and above employees is 534, 151, and 112, respectively.

According to the ESG report, in addition to providing safety training for employees, Tiancai Holdings also regularly provides internal and external training courses to employees to improve the quality of employees' work and promote the personal development of employees. In fiscal year 2023, 73.39% of the Group's employees received training, with junior employees, middle management, and senior management accounting for 94.79%, 4.34%, and 0.78% respectively.

In terms of supply chain management, Tiancai Holdings' raw materials and product procurement policy is to select suppliers only from an approved list (they have passed the group's quality control tests and have reliable quality and on-time delivery records). The Group also carries out ethical procurement and is committed to procuring raw materials and products from its own socially responsible suppliers.

In addition to continuously monitoring the quality of products and materials procured under quality assurance agreements with suppliers, the Group also reviews the supplier's environmental and social responsibility practices on an annual basis through (for example) on-site inspections and visits. In 2023, the Group had 522 suppliers (2022:476), of which 97% were located in China.

In terms of product responsibility, Tiancai Holdings has established a sound quality management system, and has also obtained ISO9001:2015 quality control system, ISO 13485:2016 medical device quality control system, ISO 27001:2013 information security management system, and ISO 14001:2015 environmental management system certification. The Group has also formulated and implemented “Customer Complaints Practice Guidelines” to ensure that consumers' rights and interests are protected, and major customer satisfaction surveys are carried out on a regular basis.

In the future, Tiancai Holdings will continue to focus on achieving the core values of the Sustainable Development Goals, encouraging and creating conditions for employees to contribute to the community through donations or volunteers.

(Link ESG researcher Deng Shixia)