Ming Fai International Holdings Limited Releases Comprehensive 2025 Environmental, Social and Governance (ESG) Report

Key Highlights and Strategic Initiatives

Ming Fai International Holdings Limited (“Ming Fai” or the “Group”; HKEX: 03828) has published its 2025 Environmental, Social and Governance (ESG) Report, detailing significant sustainability advances, climate risk management strategies, and ambitious new targets. The report underscores the Group’s commitment to sustainable development across all facets of its operations, spanning six key regions: Shenzhen, Luoding, Hong Kong, Cambodia, Singapore, and Malaysia.

1. Enhanced Climate Change Management and New Emission Reduction Targets

• Ambitious Greenhouse Gas Targets: The Group has set a target to reduce absolute Scope 1 and Scope 2 greenhouse gas emissions by 63% by 2035 (using 2024 as the baseline) and to achieve net-zero emissions by 2050. These targets are mitigation-focused and apply across global operations. The Group prioritizes deep, absolute emissions reductions before considering carbon offsetting or neutralization measures.
• Significant Reduction Achieved in 2025: For the year ended 31 December 2025, total Scope 1 and Scope 2 emissions were reported at 18,978 tonnes CO₂e, reflecting a decrease from 20,185 tonnes CO₂e in 2024. The emission intensity per production unit held steady at 0.024 kg CO₂e, indicating improved operational efficiency.
• Operational Enhancements: Ming Fai has expanded alternative fuel usage at its Cambodia site, substituting fossil fuels with dry production offcuts and firewood for boiler operations. The Group is also preparing to expand on-site solar capacity in Cambodia, subject to regulatory approval, and has completed extensive energy efficiency upgrades, including LED lighting and operational improvements at Cambodia and Shenzhen sites.

2. Robust Climate Risk Assessment and Scenario Analysis

• First Group-wide Climate Risk Assessment: The Group conducted exhaustive scenario analyses covering both physical climate risks (e.g., tropical cyclones, flooding, heatwaves) and transition risks (e.g., regulatory changes, technology, consumer preferences) across all six operational locations.
• Physical Risks: All sites are currently classified as “Very Low” to “Low” risk for severe climate hazards through 2030. A limited number of assets may transition to “Low-Moderate” risk by 2050 under high-emissions scenarios, but no assets are considered “High” or “Very High” risk at present or in the medium term.
• Transition Risks: Under the IEA’s Net Zero Emissions by 2050 scenario, the Group’s overall transition risk is assessed as “Moderate,” mainly due to anticipated increases in regulatory requirements (carbon pricing, higher renewable energy content, electrification, and energy efficiency). Under the less ambitious Stated Policies Scenario, transition risk is “Very Low.”
• Financial Impact: The Group states that, based on current data, no climate-related risks or opportunities are expected to materially affect financial performance, cash flows, or asset resilience in the short to medium term.

3. Resource Management and Environmental Performance

• Material Reductions in Packaging Use: Packaging material consumption decreased from 13,224 tonnes in 2024 to 12,127 tonnes in 2025, with intensity per production unit also declining.
• Solid Waste Management: Non-hazardous waste generation decreased to 2,263 tonnes (from 2,364 tonnes), while hazardous waste remained low at 18 tonnes. All hazardous waste is handled by government-certified recyclers.
• Water and Energy: The Group continues to invest in water conservation, advanced wastewater treatment, and renewable energy. Direct natural gas usage and indirect electricity consumption both continued their downward trend, with broad adoption of energy-saving technologies.

4. Governance, Stakeholder Engagement, and Risk Management

• Board-Level Oversight: The Board maintains direct responsibility for ESG and climate issues, with the Executive Committee overseeing implementation and the Audit Committee monitoring risk management and internal controls.
• Stakeholder Engagement: The Group conducted comprehensive materiality assessments—identifying “Product Responsibility,” “Health and Safety,” and “Climate Change” as the most material ESG topics for stakeholders and the Group’s long-term resilience.
• Supply Chain Management: 100% of major suppliers have passed social and environmental assessments. The Group gives procurement preference to suppliers with ISO9001/ISO14001 certification and proximity to production sites to minimize transportation emissions.

5. Social Responsibility, Labour, and Product Quality

• Zero Work-Related Fatalities: The Group reported no work-related fatalities or major legal cases related to corruption or bribery in 2025. All Directors and staff received annual anti-corruption training.
• Product Quality and Recalls: The Group maintained a 100% resolution rate for product-related complaints (232 cases in 2025, up slightly from 222 in 2024) and reported zero product recalls for safety or health reasons.
• Intellectual Property and Data Protection: The Group continues to actively protect self-developed brands and customer data, with clear policies in place for confidentiality and compliance.
• Community Investment: Key community initiatives in Hong Kong, Shenzhen, and Cambodia included charitable donations, in-kind contributions, and volunteer programs targeting the elderly, education, and environmental causes.

Potential Share Price Impact and Issues of Interest to Shareholders

• Price-Sensitive Considerations:
  • Net-Zero Commitment and Science-Based Targets: The adoption of a 2050 net-zero target and the interim 2035 reduction target are significant. If successfully delivered, these could enhance Ming Fai’s profile with ESG-focused investors, potentially improving access to sustainable finance and attracting institutional capital.
  • Operational Efficiency Gains: The reduction in absolute emissions and energy use per unit may signal improved cost management and competitiveness, supporting margins and financial performance.
  • Strengthened Governance and Risk Management: The Group’s robust climate and ESG risk oversight, with Board-level accountability and scenario planning, positions it favorably for future regulatory changes and stakeholder expectations. This could reduce downside risk and enhance long-term resilience, a factor investors may reward.
  • Supply Chain and Product Integrity: Proactive supplier management and consistent product quality may mitigate operational and reputational risks, supporting long-term business continuity and brand value.
• No Material Financial Impact Expected in Short Term: The Group explicitly states that, under current scenarios, climate risks are not expected to have a material short- to medium-term financial effect. However, investors should monitor future disclosures as carbon markets, regulations, and consumer expectations evolve.
• Data Gaps: The Group does not yet quantify Scope 3 emissions, nor has it formally validated its targets with third parties. These areas will require future attention to align with best-in-class global ESG practices.

Conclusion

Ming Fai’s 2025 ESG Report signals a company positioning itself for long-term sustainability, with ambitious climate targets, robust governance, and a demonstrated commitment to operational improvements and stakeholder engagement. While no immediate financial impact is expected, these initiatives may enhance the Group’s valuation over time as ESG priorities increasingly shape investor sentiment and regulatory landscapes.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any securities. Investors should conduct their own due diligence and consult with professional advisors before making investment decisions. The information is based on the company’s published ESG report and may be subject to change.

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