Natural Beauty Bio-Technology Limited 2025 ESG Report: Key Investor Highlights

Overview

Natural Beauty Bio-Technology Limited (“Natural Beauty” or “the Group”) has released its 2025 Environmental, Social and Governance (ESG) Report, marking the tenth annual disclosure of its sustainability-related practices. This report comes as a response to the new Hong Kong Stock Exchange (HKEX) requirements and demonstrates the company’s ongoing commitment to transparency, operational resilience, and sustainable value creation.

Key Highlights and Potentially Price-Sensitive Information

• Strengthened ESG Governance Structure: The company has implemented a comprehensive ESG governance framework, with the Board of Directors assuming direct responsibility for ESG strategy and climate-related risks and opportunities. The Audit Committee, management, and functional departments are now systematically involved in identifying, managing, and reporting ESG issues, including climate risks—an important move for regulatory compliance and investor confidence.
• Expansion & Strategic Adjustments:
  • Newly added: Dongsen Natural Beauty Health Technology (Shanghai) Co., Ltd. in 2025, expanding the environmental data scope in Mainland China.
  • Strategic withdrawal: Dissolution of “Billion Synergy Sdn. Bhd.” in Malaysia; Malaysian operations now limited to a holding company (Belem Holdings Sdn. Bhd.), with Malaysia region excluded from the ESG reporting scope. Such changes may affect the Group’s revenue mix and geographical risk profile.
• Climate Commitment and Scenario Analysis:
  • Natural Beauty engaged third-party experts to conduct a group-wide climate risk assessment, including scenario analysis for short-term (2030), medium-term (2050), and long-term (2080) horizons. Both physical (e.g., floods, heatwaves) and transition (e.g., regulatory, market) risks were analyzed, with strategic responses developed for resilience and adaptation.
  • The Group has set a science-based target to achieve carbon neutrality by 2050, referencing the Science Based Targets initiative (SBTi). Emission reduction pathways are now being formulated, and annual review processes are established for continual alignment with the latest climate science and regulations.
• Planned Capital Expenditure on ESG/Climate Initiatives:
  • Approximately HKD 300,000 was invested in ESG and climate-related initiatives in 2025.
  • The Group plans to allocate HKD 5 million over the next five years for climate adaptation and mitigation, including ESG consultancy, equipment upgrades, and procurement of electric vehicles. This signals a significant commitment to operational transformation, which may impact future margins but potentially enhance long-term competitiveness and reduce regulatory risk.
• Operational Transformation and Resource Optimization:
  • Implementation of AI-driven recommendations and industry best practices to drive lean, automated, digital, and intelligent manufacturing processes.
  • Large-scale energy-saving measures (e.g., LED lighting, transitioning factory boilers from diesel to natural gas, routine equipment upgrades) have been enacted, with the aim of reducing total energy consumption and emissions intensity.
  • ISO14064, ISO14067, ISO50001, and GB/T36132 certifications are in progress or have been obtained, supporting the Group’s “Green Factory” transformation.
• Material ESG Topics Identified:
  • Through a stakeholder-based materiality assessment (including board, management, employees, investors, customers, suppliers, NGOs, and public), the Group prioritized topics such as anti-discrimination, occupational health and safety, employee development, prohibition of child/forced labour, compliance in marketing and labeling, information security and privacy, customer satisfaction, product safety and quality, chemical management, business ethics, and anti-corruption.
• Energy and Emissions Performance:
  • Total energy consumption in 2025: 4,474.41 MWh, down from 5,055.05 MWh in 2024.
  • Energy consumption intensity: 0.08 MWh/10k HKD revenue in 2025, improved from 0.14 in 2024. This is driven by both operational efficiency measures and significant revenue growth (FY2025 revenue: HKD 540.5 million vs. HKD 353.7 million in FY2024).
  • Water consumption, paper use, and packaging material use are all disclosed, with reductions and efficiency gains noted. Notably, 3.1 tonnes of paper/cardboard were recycled, and an e-signature system reduced paper contracts by 5,676 copies.
• Anti-Corruption and Compliance:
  • No reported or concluded cases of corruption or fraud in 2025. 11 anti-corruption training sessions were conducted, and all new employees completed induction training covering anti-corruption and anti-fraud topics.
  • Supplier Integrity and Confidentiality Commitments are now standard, strengthening the integrity of procurement processes.
• ESG Reporting and Transparency:
  • The report follows the HKEX ESG Code (Appendix C2), with full compliance to the “comply or explain” requirements. The Board formally reviewed and approved the report on March 9, 2026.
  • Stakeholder engagement and feedback mechanisms are robust, with multiple communication channels established for regulators, investors, employees, customers, suppliers, community, and NGOs.
• Potential Financial Impacts and Risks:
  • Physical risks (e.g., damage to assets, increased maintenance costs) and transition risks (e.g., higher compliance costs, capital investment, market shifts) have been qualitatively analyzed. While short-term cost increases are expected due to ESG investments, the Group anticipates enhanced long-term resilience, potential revenue growth from green products, and increased attractiveness to investors and business partners focused on sustainability.
  • The Group has not yet disclosed quantitative financial impact estimates for climate risks/opportunities (including asset exposure and segmental analysis) but has committed to working with ESG experts to develop these disclosures in future reports.

Key Issues for Shareholders

• Strategic Repositioning: The withdrawal from operational activities in Malaysia and the addition of new assets in Mainland China may affect the revenue stream, risk profile, and regional exposure of the Group.
• ESG Investment and Capital Expenditure: The planned HKD 5 million investment in climate-related initiatives over the next five years could influence margin profiles, but positions the Group for leadership in sustainable beauty and biotechnologies.
• Regulatory Readiness: Full alignment with the new HKEX ESG reporting requirements enhances Natural Beauty’s reputation and reduces regulatory risk, which may improve investor sentiment and access to capital.
• Climate Neutrality Pledge: The target of achieving carbon neutrality by 2050, with third-party validation and scenario analysis, is a bold commitment that could fundamentally transform the Group’s operations, supply chain, and product offerings. This positions the Group to capture emerging market opportunities as consumer and regulatory demand for low-carbon solutions accelerates.
• Operational Efficiency: Significant improvements in energy and resource intensity metrics, supported by digitalization and AI-driven process optimization, may drive long-term cost savings and profitability enhancements.
• Reputational and Market Opportunities: The Group’s proactive ESG strategy and risk management may attract new investors, customers, and business partners, especially those with a focus on green finance and responsible consumption.

Conclusion

Natural Beauty Bio-Technology Limited’s 2025 ESG Report contains multiple disclosures and strategic developments that could influence the Company’s long-term value and share price. In particular, its strengthened ESG governance, ambitious climate commitments, planned capital expenditures, and operational transformation initiatives are likely to be closely watched by investors, analysts, and regulators. Stakeholders are advised to monitor further ESG and financial disclosures, especially quantitative scenario analyses and climate risk exposures, as these will provide greater insight into the Group’s future prospects and risk-adjusted returns.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. All forward-looking statements are subject to risks and uncertainties. Investors should conduct their own due diligence or consult with a professional advisor before making investment decisions.

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