Environmental Sustainability

Science-Based Targets (SBT) and Reduction Pathway Planning

To achieve the global climate goals set by the Paris Agreement, controlling global average temperature rise to no more than 2°C and seeking to limit it to within 1.5°C, LAI YIH submitted a commitment to the Science Based Targets initiative (SBTi) in 2023, demonstrating determination to establish Science Based Targets, and submitted specific targets to SBTi by the end of 2023.

Currently, LAI YIH has adopted the absolute-based approach, establishing medium to long-term targets of a 42% reduction in Scope 1 and Scope 2 emissions by 2030 and a 90% reduction by 2050. The emission reduction pathway planning from 2022 to 2030 has been completed. Besides further allocating emission reduction targets for each major location under the overall reduction target, the main strategies and measures each location should adopt have also been planned. LAI YIH will further formulate emission reduction pathways from 2030 to 2050 to clarify long-term phased targets and strategic directions for each location.

Additionally, LAI YIH will continue planning Scope 3 carbon reduction pathways, incorporating greenhouse gas emissions from upstream and downstream supply chains into management scope, striving to work with suppliers and customers to achieve emission reduction targets. LAI YIH hopes to become a leading international green factory in the footwear industry, therefore will continue advancing toward net-zero carbon emissions as the goal, shouldering corporate responsibility for environmental sustainability.

Environmental Management & Certification

LAI YIH introduces ISO 14001 Environmental Management System, ISO 50001 Energy Management System, and gradually require all factories to complete the Sustainable Apparel Coalition (SAC) Higg Index Facility Environment Module (FEM) self-assessment and third-party verification. Higg Index FEM covers seven major items including environmental management, energy and greenhouse gases, air emissions, water use, wastewater, waste, and chemical management. Through various management systems and evaluation mechanisms, we quantify and systematize environmental data from each factory, continuously working on greenhouse gas emission reduction, energy and resource efficiency improvement, waste reduction, and water resource reuse.

▽ Environmental Certification Status of Production Sites

Greenhouse Gas Emission Status

LAI YIH conducts greenhouse gas self-inventory using GHG Protocol standards. Scope 1 greenhouse gas emissions are primarily derived from the use of forklifts, company vehicles, emergency generators, gas, refrigerants, and septic tank fugitive emissions. Scope 2 greenhouse gas emissions are derived from electricity consumption. In 2025, as the Group’s energy structure is predominantly electricity-based, Scope 2 emissions account for a higher proportion (86%) of organizational emissions compared to Scope 1 (14%). Total greenhouse gas emissions in 2025 were 111,425 tonCO₂e. The combined Scope 1 and Scope 2 emission intensity was 0.99 tonCO₂e per thousand pairs. Compared to 2024, the reduction was primarily attributable to the fact that while Scope 1 emissions increased due to additional production lines, Scope 2 emissions declined significantly as the proportion of green electricity use increased, driving the overall reduction in performance.

▽ Scope 1 and Scope 2 Greenhouse Gas Emissions over the Past Three Years

Water Resource Management

Water resources needed for LAI YIH’s daily operations and processes mainly come from tap water (92.6%) and surface water (6.8%). Tap water is primarily provided by third-party suppliers after strict water quality control to ensure quality standards meet process requirements. Surface water mainly comes from rivers and canals. Additionally, LAI YIH has internal mechanisms for water resource recycling and reuse, treating wastewater for reuse to reduce dependence on external water resources while reducing water resource waste and environmental burden. In 2024, LAI YIH had no incidents of causing major environmental impact due to poor discharge, nor did it discharge substandard wastewater.

▽ 2025 Water Withdrawal by Location (Unit: Million liters)

▽ Water Resource Recycling and Reuse Over the Past Three Years

Waste Management

LAI YIH has established qualified waste management strategies with local regulatory requirements, customer needs, and other stakeholder rights as primary considerations, hoping to practice effective management of various wastes to reduce possible environmental impacts from company operations and practice sustainable development for both the company and environment.

For waste already generated, LAI YIH ensures proper handling, adopting corresponding classification, collection, storage, and treatment measures based on different waste categories and properties. All waste collection work is commissioned to professional and qualified companies to ensure all waste treatment is compliant and legal；For hazardous waste, LAI YIH adopts stricter management measures. Internally, adopt the safest and most appropriate collection and storage methods based on waste categories; externally, use stricter standards to screen compliant waste collection companies with hazardous waste treatment permits；For chemical substances, the Group regularly sends them for third-party testing to review whether we comply with Zero Discharge of Hazardous Chemicals (ZDHC) regulations. In 2025, the Group complied with hazardous chemical substance zero discharge regulations and had no incidents of violating local waste-related regulations.

▽ Waste Generation Over the Past Three Years(Unit: Metric tons)

Energy Conservation and Carbon Reduction Actions

LAI YIH has achieved greenhouse gas emissions reductions by implementing multiple energy conservation and carbon reduction measures. The main strategic directions are improving energy use efficiency, reducing demand, and using green electricity. Over the past three years, the energy conservation and carbon reduction initiatives primarily implemented by LAI YIH are estimated to deliver approximately 6,188 GJ/year in energy savings and 4,036 tCO₂e/year in emission reductions in 2025.

▽ Performance of Main Energy Conservation and Carbon Reduction Solutions Implemented at Major Operating Locations Over the Past Three Years