Hengan International

Stakeholder engagement
The company discloses an overview of the issues raised in stakeholder engagement activities, as well as its engagement process, and its stakeholder engagement covers nature and social issues.

Sustainability strategy and accountability
The company discloses its process for identifying and prioritising its most relevant sustainability impacts in relation to its sustainability strategy.

Ecosystem conversion and restoration
The company discloses some activities to achieve conversion-free supply chains.

Solid and air pollution
The company discloses its process to phase out hazardous chemicals, and discloses quantitative reductions in hazardous waste. The company also discloses a quantitative reduction in its plastic use.

Water
The company reports a decrease in water pollution and discloses its processes for managing and monitoring discharge water quality.

No leading practices were identified in the social inclusion and community impact area.

Act ethically
The company maintains a publicly available anti-corruption policy that prohibits all forms of bribery and corruption, with a commitment to high standards of business integrity. It enforces measures for the prevention, deterrence, detection, reporting, and investigation of such acts. Additionally, the company has established a grievance mechanism, detailed in its whistleblowing policy, that is accessible to all stakeholders, including employees and business counterparts, to raise concerns about potential improprieties. This policy supports confidential and anonymous reporting, with protections in place against discrimination or retaliation towards whistle-blowers.

Provide and promote decent work
The company discloses comprehensive evaluations of its suppliers, including health and safety risks, through various methods such as monthly performance evaluations, annual hierarchical management, and on-site audits that incorporate environmental and social factors. It highlights the sustainable development risks of suppliers, with specific attention to health and safety. In 2022, the company conducted ESG on-site audits on 31 key suppliers and mandated remediation measures for 5, leading to improved ESG performance in 3 suppliers after rectification. These practices are supported by assessments aligning with third-party environmental and social responsibility audits.

Respect human rights
No leading practices were identified in the core social indicators area.

Lobbying
The company does not report on its lobbying and advocacy practices on nature-related issues, nor whether these activities align with its sustainability strategy.

Sustainability strategy and accountability
The company has an opportunity to disclose group wide targets on key sustainability topics for the most material parts of its value chain and link performance criteria in senior executives’ remuneration policies to targets and objectives which cover nature, including biodiversity, and social issues.

Ecosystem conversion and restoration
The company lacks a commitment to ensuring zero conversion and does not have time-bound targets for achieving conversion-free supply chains. Additionally, it does not disclose a commitment to minimize ecosystem conversion, nor does it disclose any activities aimed at minimizing ecosystem conversion. Moreover, the company is not committed to restoring ecosystems, as it does not disclose details or outcomes of ecosystem restoration projects in areas affected by its own operations or by its suppliers.

GHG emissions
The company should set time-bound targets to reduce its scope 1, 2 and 3 greenhouse gas emissions as well as report progress against them. Crucially, the company needs to reduce its scope 1,2 and 3 emissions and its targets need to align with a 1.5-degree trajectory.

Impact and dependencies assessment
The company has not holistically assessed its impacts or how it depends on nature, including biodiversity. It has an opportunity to start such an assessment across its value chains, focused on quantification of its impacts or dependencies.

Invasive species
The company has not identified any activities that could lead to the introduction of invasive alien species in its own operations.

Key areas and species
The company does not disclose key species or areas important for biodiversity affected by its operations or suppliers. It has an opportunity to increase its transparency.

Resource exploitation and circularity performance
No evidence was found regarding the company’s efforts to work towards a circular economy or which organisms it exploits. The company has an opportunity to develop a strategy and publicly report on specific, time-bound targets.

Solid and air pollution
The company does not commit to avoid developing or marketing new chemicals or products with SVHC (substance of very high concern) properties. The company does not report on the amount of plastic waste generated and proportions directed from or to disposal. It also does not report metrics on air pollutants, nor set time-bound targets to reduce them.

Water
The company reports an increase in water use. Additionally, its water target is intensity based, and does not necessarily result in absolute reduction of water withdrawal. The company does not report how much water is withdrawn for its own operations in water-stressed areas, nor does it engage with suppliers to reduce water withdrawal. The company does not regularly report on water pollution metrics. The company has an opportunity to publicly commit to the right to water and to provide its processes for implementing preventive and corrective action plans for identified specific risks to the right to water and sanitation in its own operations.

Indigenous Peoples’ and land rights
The company does not show if it is committed to respecting Indigenous Peoples’ rights or land rights of local communities.

Safe, clean, healthy and sustainable environment
The company has an opportunity to commit to respecting local communities’ right to a safe, clean, healthy and sustainable environment, and to zero tolerance for acts of violence, threats, intimidation or judicial harassment committed against land and environmental rights defenders. Moreover, it should track its actual or potential negative impacts on the health of local communities.

Act ethically
The company has entered an Integrity Agreement with suppliers but does not include anti-bribery clauses in contracts. The company has an opportunity to disclose its approach to lobbying and political engagement and ensure compliance of third-party lobbyists with its policies.

Provide and promote decent work
The company’s safety management policy, although comprehensive, is not publicly accessible. It also does not detail its approach to monitoring health and safety in its supply chain or disclose whether its wage practices meet living wage standards. Despite initiatives supporting women’s empowerment, it lacks a broader commitment to gender equality. The company has an opportunity to publicise its safety management policy, describe how it ensures living wages for its employees and suppliers, and to make explicit commitments towards gender equality and increasing female board representation.

Respect human rights
The company articulates support for the Universal Declaration of Human Rights and conducts materiality and ESG risk assessments, including on human rights. However, its commitment through these statements and assessments lacks the robustness needed for effective human rights due diligence. Furthermore, there is no evidence of a formal policy approved by the highest governance body or a comprehensive description of how human rights risks are identified and managed. The company has an opportunity to establish a formal, comprehensive human rights policy, and to describe and implement a detailed process for identifying, assessing, and managing human rights risks across all areas of operation and in relations with business partners.