Lanhey has embarked on a journey towards sustainability, a strategic decision that not only reflects the company's profound understanding of environmental protection and social responsibility but also signifies its commitment to shouldering responsibility for the future of the Earth while pursuing economic interests.

This year, we at LANHEY initiated a series of sustainability measures. We first focused on improving resource utilization efficiency in our production process, striving to reduce waste and energy consumption by 1% in every production link through optimizing our production flows and adopting eco-friendly materials and technologies. Additionally, we actively encouraged our employees to participate in sustainability practices, urging everyone to start from daily life, such as reducing paper usage, conserving water and electricity, and choosing public transportation for commuting, jointly contributing to the protection of the Earth's environment.

In 2018, as part of our commitment to sustainability, we at Milanka belt factory implemented a comprehensive environmental management system that encompassed various aspects of our operations. A key component of this system was the introduction of advanced machinery and equipment designed to enhance our sustainability efforts. In particular, we invested in state-of-the-art wastewater and gas treatment facilities to minimize the environmental impact of our production processes. These facilities are equipped with cutting-edge technologies that enable us to effectively treat and recycle wastewater, as well as capture and safely dispose of harmful gases emitted during production. Through these initiatives, we aim to reduce our carbon footprint and contribute to the preservation of the planet's natural resources.

In 2022, as a continuation of our dedication to sustainability, Milanka belt factory embarked on a significant initiative to reduce our environmental impact by installing PV panel solar panels across our facility. This strategic move was aimed at harnessing renewable energy sources to power our operations, thereby significantly reducing our reliance on fossil fuels. Our goal was ambitious: to achieve a 40% reduction in Scope 2 greenhouse gas (GHG) emissions relative to our 2017 baseline. By integrating solar energy into our energy mix, we not only contributed to the global efforts to mitigate climate change but also demonstrated our commitment to sustainable manufacturing practices. The installation of these solar panels marked a milestone in our journey towards becoming a more environmentally responsible and sustainable company.

In 2023, a remarkable milestone was achieved as 40% of our customers opted to utilize Sustainable materials for the production of bags and belts. This significant shift towards sustainability reflects a growing awareness and demand for eco-friendly products in the market. Our commitment to providing Sustainable material options has not only resonated with our customers but has also driven us to continuously source and develop innovative, environmentally responsible materials. By collaborating with our customers on this journey, we are collectively contributing to reducing the environmental footprint of the fashion industry and promoting a more sustainable

In 2023, Lanhey Handbag Factory made a pivotal decision to transition to Green Electricity as our primary source of power. This strategic move was a direct response to the global call for sustainable practices and our own commitment to reducing our carbon footprint. By harnessing renewable energy sources such as wind, solar, and hydroelectric power, we were able to significantly decrease our reliance on fossil fuels and contribute to the global efforts to mitigate climate change. The adoption of Green Electricity not only aligned with our sustainability goals but also enhanced our reputation as a responsible and environmentally conscious manufacturer in the handbag industry.

From 2025 to 2035, we have set ambitious goals to further our commitment to sustainability. A key objective is to allocate 20% of our profit share towards the development of sustainable materials, such as Biobased PU and other eco-friendly alternatives. This investment will not only drive innovation in sustainable material solutions but also accelerate their adoption within our industry.

In parallel, we have an unwavering ambition to work closely with our Tier 1 and Tier 2 suppliers to reduce carbon emissions across our supply chain. By collaborating on initiatives to optimize production processes, source renewable energy, and implement energy-efficient technologies, we aim to significantly lower our overall carbon footprint and contribute to the global efforts in combating climate change.