Hop Lun specializes in the manufacturing of apparel for major brands and private labels. Based on our 2025 greenhouse gas inventory, we clearly see that 89% of our carbon emissions come from the upstream supply chain, namely Scope 3 purchased goods and services. For this reason, our decarbonization efforts are not limited to our own factories. Instead, we pursue full‑chain collaborative emission reduction, focusing on driving all suppliers to advance green transformation together and addressing the core challenges of supply chain decarbonization.
First, we help suppliers establish a transparent and standardized carbon data management system to lay a solid foundation for supply chain decarbonization. We guide our suppliers to regularly conduct carbon management using the IPE Blue Map carbon emission tool and the Higg FEM environmental tool. We have also established an annual data disclosure mechanism, requiring suppliers to disclose PRTR and carbon emission data on the IPE platform every year, and to complete self‑assessment and third‑party verification of Higg FEM environmental data on the Worldly platform. In 2025, 68 suppliers have completed data disclosure on the IPE Blue Map, with relevant violation records rectified and removed. Meanwhile, we have collected Higg FEM environmental data from 216 cooperating factories, of which 199 have completed third‑party verification—a verification rate of 92%—building a comprehensive and robust supply chain carbon data network to support targeted, data‑driven emission reduction.
On the one hand, we promote green energy substitution. Starting in 2026, we officially launched the Pilot Supplier Green Energy Upgrade Program, focusing on suppliers of core raw materials and core production processes. We are gradually promoting the application of photovoltaic systems and renewable energy Power Purchase Agreements (PPAs). We aim to raise the green energy usage rate of pilot suppliers to 60% by 2030, continuously increasing the proportion of green energy across the entire supply chain and reducing full‑chain carbon emissions at the source.
On the other hand, we are accelerating the phase‑out of traditional fossil fuels. We have been gradually eliminating coal‑fired boilers across our supply chain since 2021. By the end of 2025, CO₂equivalent emissions from coal consumption had been reduced by 52% compared with the 2021 baseline. We plan to fully phase out all coal‑fired boilers by 2030.
Notably, through Hop Lun's sustained efforts—combining policy guidance, multi‑stakeholder coordination, and order‑based incentives—we have successfully engaged a cooperating fabric mill in Fujian to completely phase out two coal‑fired boilers by the end of this year, switching to a combination of natural gas and photovoltaic clean energy. The mill previously consumed approximately 7,008 tons of coal per year; upon completion of the transformation, it is expected to reduce carbon emissions by approximately 19,300 tons of CO₂equivalent annually—equivalent to the annual emissions of roughly 4,200 passenger cars—setting a replicable benchmark for supply chain green upgrading.
Looking ahead, Hop Lun will continue to leverage the IPE platform. We have initiated the upgrading of our low‑carbon procurement standards, gradually incorporating core management indicators such as supplier carbon intensity and product carbon footprint into procurement requirements, and continuously empowering the green upgrading of the entire supply chain. We look forward to collaborating with all industry peers to advance green supply chain development, fulfill climate responsibilities, and drive the low‑carbon, high‑quality development of the textile industry.