Sustainability Report 2021 - SML Group
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Sustainability Report 2021
About This Report
As part of our ongoing efforts to improve sustainability
throughout manufacturing processes and the supply chain, it’s
important that we remain transparent around our own
operations and performance. This is why we’ve released our
2021 Annual Sustainability Report.
This report contains and summarizes SML’s sustainability
performance in the year 2020. Content provided in this report,
to our understanding, is deemed sufficient and representative
to reflect the significant economic, environmental and social
impacts of our organization in the reporting period. The data
and information contained in this report is voluntarily disclosed
by SML and is not audited by a third-party organization.
For more information about this report or our sustainability
efforts, please contact sustainability@sml.com or visit
www.sml.com.
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© SML Group 2021
A Message from our CEO
Dear Stakeholders,
2020 was a difficult year for every business and person across the world. The global economy and our industry were hit
hard by the outbreak of COVID-19 and the tremendous disruption it had on each market. Amidst these challenges, SML
put our employees’ safety and health first, ensuring all necessary actions were implemented to help minimize the health-
related risks across our operations. Through our extensive global network, we were also fortunately able to continue
servicing our customers at the highest standard and without missing a beat when the pandemic hit.
Despite challenging times, we also successfully released our 2021 Annual Sustainability Report which recorded our
sustainability performance from 2018 to 2020. Establishing several ambitious goals, the report will further guide us and
our customers towards a more sustainable future and benchmark our ongoing efforts to minimize overall environmental
footprint and strengthened social performance.
In 2020, we recorded considerable drops in our energy consumption and greenhouse gas emissions. We also significantly
increased our use in sustainable materials including recycled yarn, recycled tape and FSCTM certified papers. In addition, I
am delighted to let you know that we have been making progress in promoting our use of non-solvent-based offset
Ignatius K.C. Lau printing ink, which is essential in lowering our atmospheric pollutants and reducing related-health concerns.
Vice Chairman and Chief We believe the future of the industry lies in our hands. And as such, we continue to keep our finger on the pulse of the
Executive Officer most impactful industry initiatives such as “the Fashion Pact”, —— a coalition of companies in the fashion and textile
SML Group industry who committed to environmental goals that make a difference. Similarly, we are always exploring our own
solutions to prepare for the rising sustainability standard, from development in renewable energy to sourcing recycled or
compostable materials for production.
Considering these achievements, I would like to express my sincerest gratitude to our SML employees for the effort in
supporting SML during this difficult chapter, and I am confident for the great results we are going to achieve in 2021 and
beyond.
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© SML Group 2021
Our Responses to
COVID-19
⚫ SML has quickly responded to the impacts and effects of
the pandemic to safeguard the health and safety of our
employees and other stakeholders. Upon the initial
outbreak of COVID-19, we promptly released our global
guidelines of “Preventive Measures against COVID-19 at
Factories and Enterprises.”
⚫ In various SML offices and production sites, we have
implemented preventive measures including work-from-
home arrangements, provision of masks and hand
sanitizers, encouraging telecommunicating for meetings,
and increasing the frequency our cleansing and disinfecting
measures.
⚫ With our effective preventive efforts against COVID-19 in
place, we managed to not cause any outbreak of infectious
disease in our sites and protected our employees’ health
and safety. We also significantly minimized our site closure
days and any drops in production volume.
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© SML Group 2021
2022 Sustainability Goals
We chose 2018 as our baseline performance year and will measure against these
goals as we move towards 2022
Materials Paper Chemicals
Increase our percentage use of Increase our use in Forest Achieve and Maintain 80% of
recycled yarn and tape by 80% Stewardship CouncilTM-certified chemicals procured to conform
in 2022 in each of these Paper by 80% by 2022 to our environmental and social
values
Greenhouse Gas Emission Waste Management Workforce
Reduce our absolute Achieve and Maintain 80% of Maintain the highest standards
greenhouse gas emissions in landfill-free waste and recycled of safe working environment and
CO2 equivalent for 3% each waste respectively ensure compliance to our ethical
year accumulative from 2018 trading policies
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© SML Group 2021
Sustainability Goals & Performance Highlights
Goal
Goal Target
Target Performance
Performance in
in 2020
2020 Status
Status
Greenhouse Gas
Greenhouse GasEmission
Emission
Reduce our absolute
Reduce our absolute greenhouse
greenhouse gas
gas emissions
emissions in
in CO
CO2 equivalent for Compared
Comparedto tothe
thebaseline
baselineyear 2018, our absolute greenhouse gas
2 equivalent for Annual year 2018, our absolute greenhouse gas Achieved
3% each year accumulative from 2018 Annual emission was reduced by 20% Achieved
3% each year accumulative from 2018 emission was reduced by 20%
Materials
Materials
Increase our
Increase our percentage
percentage use
use of
of recycled
recycled yarn
yarn by
by 80%
80% 2022
2022 Percentage use
Percentage use of
of recycled
recycled yarn
yarn increased
increased by
by 180%
180% Achieved
Achieved
Increase
Increase our
our percentage
percentage use
use of
of recycled
recycled tape
tape by
by 80%
80% 2022
2022 Percentage
Percentage use
use of
of recycled
recycled tape
tape increased
increased by
by 180%
180% Achieved
Achieved
Paper
Paper
Increase
Increase our
our use
use in
in Forest
Forest Stewardship
Stewardship Council
CouncilTM -certified
TM
-certified Paper
Paper by
by 2022
2022 150% rise
150% riseininpercentage
percentageuse
useof
ofFSC
FSCTMcertified
TM
-certifiedpaper
paper Achieved
Achieved
80%
80%
Waste
Waste Management
Management
Achieve and maintain 80% of landfill-free waste Annual Achieved 91.9% of landfill-free waste Achieved
Achieve and maintain 80% of landfill-free waste Annual Achieved 91.9% of landfill-free waste Achieved
Achieve and maintain 80% of recycled waste Annual 91.6% of our waste is recycled for use Achieved
Achieve and maintain 80% of recycled waste Annual 91.6% of our waste is recycled for use Achieved
Chemicals
Chemicals
Achieve and maintain 80% of chemicals procured to conform to our
Achieve and maintain 80% of chemicals procured to conform to our Annual 92.6% of chemicals conformance Achieved
environmental and social values Annual 92.6% of chemicals conformance Achieved
environmental and social values
Workforce
Workforce
Maintain a high standard of safe working environment and ensure
Maintain a high standard of safe working environment and ensure Annual Recorded an outstanding Total Recordable Incident Rate of 0.52 Continuous
compliance to our ethical trading policies Annual Recorded an outstanding Total Recordable Incident Rate of 0.52 Continuous
compliance to our ethical trading policies
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© SML Group 2021
Environmental and Social Compliance
In 2020, no cases of either environmental or social non-compliance were
recorded by SML and there were no significant fines and non-monetary
sanctions for non-compliance with environmental or social laws and/or
regulations. Conforming to our desired performance parameters highlights
SML’s ability in managing operations.
Supplier Environmental and Social Assessment
We believe an environmental and social assessment is a win-win
approach to motivate both SML employees and our suppliers to improve
our performances. In 2020, 96% of our suppliers were screened
accordingly.
Continuous Training
Our employee received trainings on environmental, safety and quality
assurance, 100+ internal, client and third-party audits were carried
out in our sites in 2020.
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© SML Group 2021
Material Use
®
Recycled Yarn and Tape
We have been purchasing an increasing amount of Our RFID item-level inventory management
recycled yarn and tape for production. Compared to our solution
baseline year of 2018, we recorded 180% in each of
Our Clarity® solution continues to provide
consumption of recycled yarn and recycled tape in 2020.
excellent inventory management to our customers.
Based on years of in-store RFID experience, we
Percentage use of Recycled Yarn collect accurate and timely inventory data that
2018 24%
Our Goal: 80%
increase
allows optimized inventories by producing less
goods, hence reducing materials and resource use.
2019
With Clarity® , one of our prominent customers
2020
managed to take 20 million units out of inventory
180% per year while increasing sales at the same time.
That is equivalent to a reduction of 400 shipping
Percentage use of Recycled Tape
containers worth of clothes unnecessarily
Our Goal: 80%
2018 80%
increase produced, shipped and distributed.
2019
2020
2022 Goal:
180% Increase our percentage use of recycled yarn and
tape by 80% in 2022
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© SML Group 2021
Material Use
FSCTM -Certified Paper Chemicals
Compared to our baseline year of 2018, there was a 150% SML takes product safety seriously. Our “Product Safety
increase in consumption of FSCTM -certified paper in 2020. Requirements – Best Practice Guide” is updated annually to
The amount of our FSCTM -certified paper consumption is maintain our highest standards in chemical use.
equivalent to saving 52,000 mature trees, 57,000 m3 of
water, and 9,000 MWh of electricity.
Our Goal: 80%
Percentage use of FSCTM -Certified Paper Chemical Conformance
2018 66% Our Goal: 80%
2018 72.5%
increase
2019 2019 72.6%
2020 2020 92.6%
150%
2022 Goal: 2022 Goal:
Increase our use in Forest Stewardship Council™-certified Achieve and maintain 80% of chemicals procured to
Paper by 80% by 2022 conform to our environmental and social values
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© SML Group 2021
Energy Consumption
From our baseline year of 2018, our energy consumption We expanded our Solar Energy Generation System in our production site
in 2020 dropped 30 percent due to our efforts in in Dongguan, China in 2020 from 1,700 pieces of solar panels to 2,900
energy saving. Our solar power production in Dongguan in pieces. Our solar power system contributed around 3% of total energy
2020 alone was equivalent to planting approximately 700 consumption at our Dongguan site before 2020 and increased to 10% in
trees for reducing CO2 levels. 2020 at this production site.
Energy Consumption
52
Kilowatt-hour (millions)
Baseline
48
9%
44 48
40 44 30%
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32
33
28
24 SML is working toward an expansion of this solar power system which
20 would raise the current solar energy production, as well as installing
2018 2019 2020 solar energy systems at our other production sites.
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© SML Group 2021Water Resource Management
From our baseline year of 2018, we recorded a reduction Wastewater Treatment
in global water consumption of 16% in 2020.
In 2020, we treated approximately 28,000 m³of industrial and
domestic wastewater through our in-house water treatment systems,
accounting for about 23% of our water consumption.
For sites without an in-house water treatment unit, all wastewater and
sludge produced on site would be collected by external wastewater
collectors for further treatment and disposal. We ensure that all of our
Water Consumption third-party collectors are licenced and recognised by local authorities.
Baseline
8.2%
Water Consumption m3 x 10000
14 15 8%
16% Global In-house Water Treating Capacity
13 15
x 10000 (m3)
15 In-house treating
12 10 13 capacity
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12 Annual Water
Consumption
5 3 3 2.8
10 0
2018 2019 2020 2018 2019 2020
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© SML Group 2021Greenhouse Gas Emissions 32
Absolute Greenhouse Gas
Emissions
Kilogram CO2 equivalent (millions)
30 Baseline
28 29
Compared to our baseline year of 2018, we had a 20% drop in our absolute 10%
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greenhouse gas emission in 2020, exceeding our 2022 goal of 3%. 26
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20%
22
20
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2022 Goal:
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Reduce our absolute greenhouse gas emissions in carbon
dioxide equivalent for 3% each year 16
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2018 2019 2020
Inks and Solvents Emission Fuel Emission Nitrogen Oxides and Sulphur
Dioxide Emissions
Kilogram CO2 equivalent x 100000
In two of our major production sites namely Our nitrogen oxides and sulphur 9.49 9.39
Dongguan, China and Vietnam, we recorded dioxide emissions from diesel and petrol
an almost 100% percentage use of non- consumption in 2020 was much lower
solvent-based inks for offset printing than that in previous years due to our 5.48
operations such as soy-based and vegetable- effort in reducing fuel use as well as
based. Our other major production sites will various lockdowns under the COVID-19 2018 2019 2020
soon follow in the use in non-solvent-based pandemic. 12
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©
inks in 2021.
SML Group 2021Carbon Footprint Verification
In 2020, SML carried out our first-ever product carbon footprint verification project to quantify carbon footprint of our selected RFID label
products, with the aim of comparing the carbon footprint of conventional PET RFID labels to that of our innovative EcoInspire™ RFID
Labels. In the EcoInspire™ RFID Labels, the PET inlay is replaced with a paper carrier. The replacement of Eco RFID inlays over
conventional PET inlays reduces the decomposition period of our labels from between five to ten years, to just six weeks.
The study was certified to be carried out in accordance with the requirements of ISO14067:2018 “Greenhouse gases — Carbon footprint of
products — Requirements and guidelines for quantification”.
Compared to the conventional PET RFID labels, our EcoInspire™
RFID Labels recorded a 10 – 16% decrease in product carbon
footprint, implying a less impact on the environment. It is our
vision to explore more innovative products to further reduce
adverse impacts on our environment.
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© SML Group 2021Waste Management
Waste Handling Strategies
Our major types of waste include excess paper and Landfill-free Waste Recycled Waste
cardboards, fabric selvedges and leftover fabric Our goal: 80%
scraps. Other municipal solid wastes involve food
waste, wastewater and printing inks-related chemical
waste. In 2020, we recorded our landfill-free waste
percentage and recycling percentage as 91.9% and 91.9% 91.6%
84.7% 84.1%
91.6% respectively. 74.5% 72.7%
2022 Goal:
Achieve and maintain 80% of landfill-free waste and
recycled waste respectively
2018 2019 2020
Hazardous Waste Control Accidental Spills
At SML sites, we record the quantities of each Standard Operation Procedures for Spillage Response are implemented
hazardous waste products produced and exported. in our sites. We record the types and amounts of all significant spill
All these hazardous wastes are collected by incidents, and their corresponding treatment methods to ensure that no
professional and qualified bodies for proper significant environmental impact is caused by any accidental spills. In 2020,
treatment prior to disposal. no significant spill was recorded at any of our sites.
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© SML Group 2021Age Diversity Gender Diversity
50.9%
Celebrating Diversity 58.8
%
41.2
%
45.6%
With our offices and production sites located in
30+ countries across the world, our employees 3.5%
comprise people of all different culture and
societies in where we operate. As a responsible 18-30 31-50 50+ Male Female
employer, SML believes that greater employee
cognitive diversity is an important resource for us
and correlates with better busines performance. Ethnic Diversity
32.7% 22.7% East Asians
South East Asians
South Asians
Hispanic/Black
9.3% Caucasian
28.1%
6.8%
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© SML Group 2021Employees’ Engagement Occupational Health and Safety
At SML, we create a working environment that encourages Our Total Recordable Incident Rate (TRIR) is at 0.52 in 2020, significantly
innovation, collaboration, and a feedback loop. We below the rate of Manufacturing Sector published by the U.S.
empower our employees to use their talents and skills to Occupational Safety and Health Administration [1].
contribute to work areas inside and outside of their
specific job description. We provide quality management, 2022 Goal:
Maintain a high standard of safe working environments and
supervision, as well fairness and equitable treatment to all ensure compliance to our ethical trading policies
our worldwide employees.
Total Recordable Incident Rates
Turnover Rate
+3.1%
Manufacturing Sector Average
in 2019: 3.3
-7.7%
0.48 0.55 0.52
2018 2019 2020
Note: percentage difference are calculated compared to our statistics in 2018 2018 2019 2020
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[1] Bureau of Labor Statistics, U.S. Department of Labor. (Nov 4, 2020). EMPLOYER-REPORTED WORKPLACE INJURIES AND ILLNESSES – 2019. 16
© SML Group 2021Occupational Health and Safety
SML is committed to providing workplace first aid and
emergency medical care to our employees who are ill or
injured at work. Apart from certified first-aiders and medical
personnel on-site from within the ranks of our employees, we
provide the finest health care facilities on-site. We have also
established clear policies and procedures of workplace
accidents handling to safeguard our employees’ health and
safety at SML.
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© SML Group 2021Ethical Business
We ensure that the working and living conditions for
all employees are in accordance with our ethical
trading policies and SML and our factories are
audited regularly to ensure compliance.
See our full ethical trading policies here:
http://www.sml.com/sustainability/social-compliance
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© SML Group 2021Ethical Business
The health and safety of our employees is our highest daily
priority. Every production site reviews and monitors its
effectiveness in providing a safe working environment by holding
regular Health & Safety Committee meetings on the following:
⚫ Complying with all national and local laws applicable to workplace
health and safety
⚫ Ensuring competence of all employees in performing their work
through adequate training and supervision
⚫ Ensuring safe handling, storage and use of chemicals through
adequate training and personal protective equipment
⚫ Ensuring all equipment is safe and well-maintained
⚫ Preventing accidents and cases of work-related health issues through
proper management of health and safety risks in the workplace
⚫ Preventing accidents due to fire by providing regular training and fire
evacuation drills, checking alarms and fire extinguishers regularly
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© SML Group 2021We work to make sure that our employees are safe, healthy, satisfied
and engaged at work. To maintain our employees’ attitudes and elevate
the enthusiasm in our workplace, we work towards a high working
morale in more aesthetically pleasing workplaces and accommodation,
which include everything from pleasant scenery, natural lighting
workplace, to recreational facilities.
We believe that high-quality workplace and employee accommodation
aesthetics could be a key factor in determining an organization's long-
term effectiveness, in addition to having a positive impact on our
employees’ health and well-being.
Workplace well-being relates to all aspects of working life
- from the quality and safety of the physical environment,
to how workers feel about their work, their working
environment, the climate at work and work organization.
- International Labor Organization
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© SML Group 2021Certificates and Accreditations
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© SML Group 2021Testing Center in
Dongguan, China
Our Testing Center in Dongguan, China has been accredited by
the China National Accreditation Service (CNAS) in accordance
Certificates with ISO/IEC 17025: 2017 General Requirements for the
Competence of Testing and Calibration Laboratories (CNAS-
and CL01 Accreditation criteria for the Competence of Testing and
Accreditations
Calibration Laboratories). Accredited since 2014, various tests for
textile products were carried out in our testing center under ISO
and ASTM standards.
Registration No. CNAS L6680
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© SML Group 2021SML Group www.sml.com sustainability@sml.com © SML Group 2021
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