Crocodile Garments 2025 ESG Report: Key Insights for Investors

Overview

Crocodile Garments Limited (“the Company”, together with its subsidiaries, “the Group”) has published its 2025 Environmental, Social and Governance (ESG) Report, providing comprehensive disclosure on its sustainability practices, risk management, and operational performance for the period from 1 January 2025 to 31 December 2025.

Key Points of the Report

• Full ESG Code Compliance: The Group has complied with all “comply or explain” provisions of the ESG Reporting Code as set out by the Hong Kong Stock Exchange, demonstrating a strong commitment to regulatory adherence and transparency.
• Scope and Materiality: The report encompasses the Group’s principal operations in Hong Kong and Mainland China, including garment/accessories business and property investment and letting. Operations in Macau are excluded due to limited control.
• Board-Level ESG Oversight: The Board of Directors has direct responsibility for identifying and managing ESG risks and opportunities, integrating them into the Group’s governance framework. Materiality assessment is conducted annually to prioritize issues with the greatest impact on stakeholders and the business.
• Strong Track Record in ESG Recognition: Crocodile Garments continues to receive significant awards, such as the “Hong Kong Green Organisation” (18 consecutive years), “Caring Company” (17 consecutive years), and the “Quality Tourism Services Scheme” (over 19 years). These recognitions underscore the Group’s sustained leadership in sustainability and community engagement.
• Stakeholder Engagement and Materiality: Product/service quality, data protection, and customer service are identified as the most material issues by stakeholders. The Group actively engages with shareholders, clients, suppliers, and employees via surveys, meetings, and digital channels.

Environmental Initiatives and Performance

• Significant Reduction in Greenhouse Gas (GHG) Emissions: The Group reported a total GHG emission of 225.20 tonnes CO2eq in 2025, a substantial decrease from 350.56 tonnes in the previous period—a 43% reduction in emission intensity compared to the 2020/21 baseline. This outperforms the Group’s 5-year target of a 3% reduction.
• Emissions Mitigation Strategy: The Group has commenced replacing conventional vehicles with electric vehicles, optimizing transportation routes, and implementing energy efficiency programs in offices and warehouses. Non-hazardous waste production intensity reduced by 42% compared to baseline, with broad recycling and waste reduction initiatives in place.
• Resource Use Efficiency:
  • Total energy consumption for 2025 was 597.20 MWh (down from 893.04 MWh), with an energy intensity of 0.0065 MWh/HKD’000 revenue.
  • Water consumption was 59.60 m³, with a 99.6% decrease in water consumption intensity compared to baseline.
  • Packing material use (paper shopping bags and carton boxes) was 2.2 tonnes, with a focus on recyclable and reusable materials.
• Climate Change Risk Management:
  • The Board integrates climate risk into overall risk management.
  • Physical and transition risks identified (e.g., extreme weather, policy tightening, changing customer behavior) with corresponding mitigation strategies, such as diversifying product mix, supporting suppliers in transition, and expanding online sales channels.

Social Performance

• Employment Practices:
  • No non-compliance with employment-related laws and regulations was recorded.
  • The Group employed 94 staff (88% full-time), with comprehensive benefits including enhanced insurance, extended leave, and increased annual leave starting from 2024.
  • Turnover rate was 18.97%, with the highest turnover among employees aged 18–25.
  • The Group has committed to staff wellbeing with new overtime allowance frameworks for retail staff and increased medical benefits effective from 1 January 2026.
• Health and Safety:
  • No work-related fatalities or injuries in 2025.
  • Comprehensive safety measures, regular disinfection, insurance coverage, and staff health training are in place.
• Training and Development: 46% of employees received training in 2025, covering over 15,000 minutes and including topics such as cybersecurity, integrity, and AI adoption.
• Labour Standards: Strict prohibition of child and forced labour, with compliance checks for both the Group and its suppliers. No incidents were reported during the period.

Operating Practices

• Supply Chain Management:
  • Engagement with 92 suppliers across Hong Kong, Mainland China, Macau, and Singapore.
  • Emphasis on environmentally friendly materials, supplier assessments, and plans to introduce annual “Social Responsibility and Ethics Commitment Letter for Suppliers.”
• Product Responsibility:
  • Zero product recall rate for safety/health reasons.
  • 13 product complaints were resolved via inspection, repair, or exchange.
  • Strict compliance with advertising, labelling, and intellectual property laws; 449 active trademarks registered.
• Data Protection:
  • No reported cases of unauthorised use or access to personal data.
  • Implementation of two-factor authentication, daily data backups, and strict data destruction policies.
• Anti-Corruption:
  • No non-compliance incidents related to corruption, bribery, fraud, or money laundering.
  • Whistle-blowing policy in place; ICAC-led anti-corruption training provided for staff.
• Community Investment:
  • Financial and in-kind donations exceeding HKD 350,000 and RMB 20,000 to various charities, disaster relief, education, and welfare initiatives.
  • Active participation in environmental campaigns such as the “WWF Earth Hour 2025.”

Potentially Price-Sensitive Information for Shareholders

• Substantial Outperformance in Emissions and Resource Use Targets: The Group has significantly exceeded its 5-year reduction targets in GHG emissions, waste production, energy, and water consumption. This may enhance the Company’s attractiveness to ESG-focused investors and improve access to sustainable investment capital.
• Transition to Electric Vehicles and Digital Transformation: Ongoing investments in electric vehicles and automation systems may lower costs and environmental liabilities over time, further strengthening the Group’s competitive position.
• Enhanced Employee Welfare and Retention: Newly announced improvements in staff benefits, insurance, and overtime framework may boost morale and reduce turnover, potentially resulting in operational stability and lower recruitment/training costs.
• Continued Recognition with Prestigious ESG Awards: Ongoing recognition as a “Hong Kong Green Organisation,” “Caring Company,” and “Quality Tourism Services” merchant reinforces brand value and could positively influence consumer and investor sentiment.
• Strong Data Protection and Product Quality Track Record: Absence of any major data breach, product recall, or regulatory non-compliance reduces litigation and reputational risks, supporting long-term business resilience.
• Risk and Opportunity Management: Board-level integration of climate and ESG risks, with strategies to mitigate both physical and transition risks, positions the Group well for regulatory changes and evolving consumer preferences.

Conclusion

The 2025 ESG report demonstrates Crocodile Garments’ ongoing commitment to sustainability, operational excellence, and risk management. The Group’s outperformance on environmental targets, strong governance, and proactive stakeholder engagement could be viewed as value accretive by investors, especially those with an ESG focus. The transition to electric vehicles, improved employee benefits, and robust data protection further enhance its operational and reputational profile. Investors should monitor the implementation of these initiatives and their financial impact, as continued progress may have a positive effect on share value.

Disclaimer: This article is for informational purposes only and should not be considered as investment advice. Investors are advised to conduct their own research and consult professional advisors before making investment decisions. The information provided is based on the Crocodile Garments 2025 ESG Report and is accurate to the best of our knowledge at the time of publication.

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