SUSTAINABILITY REPORT 2024
Contents
About This Sustainability Report 2
CEO Message 4
About Crystal International 6
Our Sustainability Vision and Approach 10
Stakeholder Engagement 16
Regenerating Nature 22
Driving Innovative Manufacturing 44
Product Responsibility 50
Supply Chain Management 54
Resourcing People 60
Revitalising Community 76
Awards and Recognition 78
Glossary 81
ESG Reporting Code Index and GRI Content Index 84
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SUSTAINABILITY REPORT 2024 01
SUSTAINABILITY REPORT 2024 01
About This Sustainability Report
This Sustainability Report 2024 (the "Report") was prepared in compliance with the Environmental, Social and Governance ("ESG") Reporting Code set out in Appendix C2 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Stock Exchange"), and has been prepared with reference to the Global Reporting Initiative ("GRI") Standards. Our climate-related disclosures align with the framework of the Task Force on Climate-related Financial Disclosures ("TCFD"). This marks the sixteenth sustainability report published by Crystal International Group Limited ("Crystal" or "Crystal International" or the "Company" or "we" or "our" or "us") (Stock code: 2232), covering our sustainability performance for the calendar year from 1 January to 31 December 2024.
During the reporting year, Crystal sustained our operational growth and business expansion. The reporting boundary of this Report encompasses all 22 operational facilities across five countries - Vietnam, China, Cambodia, Bangladesh, and Sri Lanka - unless otherwise specified. This Report highlights the positive strides towards our transition to a net-zero fashion future, addressing material sustainability topics and navigating broader challenges.
The report cover features three characters each advocating a sustainability topic, reflecting our commitment to regenerating nature, resourcing people, and revitalising community. This embodies the core of our sustainability ambition, Crystal Sustainability Vision 2030 ("CSV2030"), which is a comprehensive set of environmental
and social indicators that underscores the growing importance of our sustainability focus. During the year, we embarked on this new journey, formulating strategies and action plans across all eight impact areas, with implementation details being developed for all operating facilities.
I would like to express my heartfelt appreciation for the unwavering support of our top management, whose confidence in our sustainability efforts continues to drive us forward. My sincere gratitude also extends to all our global factories and exceptional employees for their dedicated contributions, which have enabled us to achieve these significant milestones. The collaboration across all departments has not only strengthened our internal cohesion but has also bolstered the trust of our external stakeholders.
Looking ahead, we are determined to scale the realisation of our CSV2030 targets. We will accelerate our collaboration with all stakeholders to make continuous progress towards our vision in the years to come.
We welcome your valuable feedback on this Report regarding our sustainability performance, initiatives and policies. For any related enquiries, please contact us at sustainability@crystalgroup.com.
Catherine Chiu
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Vice President Corporate Quality and Sustainability
CEO Message
Looking back, 2024 was a time of gradual recovery. Amidst geopolitical and macroeconomic challenges, our business demonstrated greater operational resilience, achieving positive recovery and stable growth. Rooted in our purpose, sustainability remains an integral part of our strategic operations for almost two decades, enabling us to achieve business excellence. As our work continues, our long-term actions and steps aspire to drive meaningful change, making fashion sustainable for future generations and the planet.
During the year, we strategically made a decisive commitment to a course of action aimed at seizing market opportunities and maintaining competitiveness. Beyond achieving our business and operational targets, we proactively enhanced our operations to better respond to customer needs, drive efficiency and productivity, optimise capacity, and sustain business performance. I am grateful to our employees for embracing this mindset as a shared commitment to success, recognising the true value of their work and making meaningful contributions to both the Company and the world.
Gearing Up for Crystal Sustainability Vision 2030
Building on the significant achievements made since 2007, we formulated the Crystal Sustainability Vision 2030 ("CSV2030"), a key milestone of our sustainable development that guides our future ambitions. As our mid-term strategy, we are committed to addressing a broader scope of emerging ESG issues across eight impact areas that include both environmental and social aspects. During the reporting year, we embarked on the CSV2030 journey and are now taking full action to accelerate its implementation. To solicit support from internal and external stakeholders, we have been engaging them through a communication matrix across various channels. With our strong focus, all dedicated employees are diligently working towards realising our vision.
Leading with Net Zero 2050
Global climate threats such as extreme weather events continued to have a significant impact in 2024. For instance, the strongest typhoon in 30 years in the South China Sea brought severe destruction to our largest operating country, Vietnam. In view of the growing climate urgency, we have been relentlessly advancing our multi-pronged climate strategy and climate-related risk management under the Crystal Net Zero 2050 Vision. We have planned to adopt more than 200 short- and long-term energy efficiency measures identified from the net zero roadmap study, laying a robust foundation for an energy-efficient future. In terms of renewable energy, our solar installations have been expanded continually, raising our group-wide solar PV capacity to 20 MW - a five-fold growth since 2021. I am also heartened to see that our carbon intensity reduced by 6% compared with 2023. All these actions accentuate our environmental leadership and climate management in building net-zero resilience. We are well on our way to achieving this goal.
Powering Factory Governance
What stood out to us most in achieving success was our robust factory governance. During the year, we put unwavering focus on strengthening factory governance beyond mere compliance across different areas, including occupational health and safety, brand protection, business ethics, and anti-corruption. By building awareness, setting targets, conducting training, and monitoring progress, advancing factory governance enables an effective control mechanism that addresses critical gaps and establishes shared guidelines. I believe powering factory governance is indispensable to navigate the ever-changing business landscape successfully.
Embracing Future Challenges
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While we are greatly encouraged to be on the CDP A List for two consecutive years, we remain modest about our remarkable achievements recognised by esteemed organisations. Moving beyond, we will intensify strategic actions to drive towards CSV2030. To maintain our competitive edge and meet the rising expectations from stakeholders, we will gear up internally and externally to prepare for emerging legislations in the EU, the United States, and the United Kingdom that will shape circular economy and due diligence requirements. In light of growing concerns about achieving net zero, we will strengthen climate-related risk management, building resilience to address vulnerabilities in our business. In addition to climate action, fostering a circular economy remains a crucial priority for us. To catalyse wider change, we will continue partnering with customers to innovate green and sustainable materials for circularity, which they prioritise at the top of their agenda.
The journey might be arduous. While challenging circumstances will only strengthen us, I am optimistic about collaborating with our staunch employees, like-minded value chain partners, devoted suppliers, and passionate stakeholders to achieve the shared vision. I would like to profoundly thank my global teams for their conscientious efforts and contributions over the past year. An agile, innovative workforce will drive our business success as we transition to a sustainable future. Our ability to thrive and our commitment to the right values will continue to weave Crystal's sustainability story for many more impactful years to come.
Andrew Lo
Chief Executive Officer
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About Crystal International
Geographical Markets and Multi-country Production Facilities
As a global apparel manufacturer, Crystal International Group Limited has established itself as a sustainability pioneer. Founded in 1970 and headquartered in Hong Kong, the Company and its subsidiaries (collectively, the "Group") have a diverse product portfolio spanning six categories where the Group holds a leading position: Lifestyle wear, Sportswear and outdoor apparel, Denim, Intimate, Sweater, and Fabrics. The Group operates a multi-country manufacturing platform, with production facilities comprising garment factories and fabric mills spanning five countries: Vietnam, China, Cambodia, Bangladesh, and Sri Lanka.
Mission
To be the most profitable company in the industry, customer choice and employee choice.
Corporate Values
Integrity Delight our customer
US 38.2%
Europe 19.4%
Asia 39.8%
Respect for people
Embrace innovation
Live quality
Deliver bottom line results
Energise others Boundaryless enterprise
Product Categories
Others 2.6%
Production Facilities: Vietnam, China, Cambodia, Bangladesh, and Sri Lanka
Lifestyle wear
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Sportswear and outdoor apparel
Denim
Intimate
Sweater
Fabrics
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About Crystal International
Corporate Governance
Crystal International is the embodiment of exemplary corporate governance, with practices that are not only in compliance with all relevant rules and regulations, including the Corporate Governance Code ("CG Code"), but also intricately aligned with the organisation's goals and strategies. Crystal recognises the integral role that robust governance plays in achieving long-term success and is unequivocally committed to maintaining high standards that are crucial to the sustainable growth of the Group.
To ensure that its governance framework remains effective and responsive to the evolving needs of the business, Crystal's board of directors ("Board") undertakes regular reviews and is proactive in establishing relevant Board committees as necessary. This dynamic governance structure is designed to facilitate strategic objectives and enhance overall performance.
The composition of Crystal's Board is thoughtfully diversified, featuring a substantial number of female Board members as well as members with expertise in management of different industries, banking and finance, technology, and manufacturing. This diversity strategically reflects Crystal's commitment to staying at the forefront of manufacturing innovation and efficiency. Such a varied Board composition is instrumental in steering Crystal towards its vision of excellence in manufacturing capabilities.
Understanding the critical nature of board development, Crystal invests in the continuous development of our Board members. Seminars, forums and factory visits to our operational countries are organised, providing Board members with deeper insights into the Company's business environment, risk management and operations. These visits are more than informational excursions; they are integral to ensuring that Board members are well-informed and equipped to thoroughly understand the business landscape in which Crystal navigates.
Our consistent application of and adherence to advanced corporate governance standards underlines our belief that such practices are not mere formalities but are vital to driving forward Crystal's vision and long-term success.
During the reporting period, the Group was in compliance with all the provisions of the CG Code.
The Board, which comprises the Company's Chairman, Vice Chairman, Chief Executive Officer (the "CEO"), two executive Directors, two non-executive Directors and four independent non-executive Directors, has established the following committees to oversee particular aspects of Crystal's affairs and to assist in the execution of its responsibilities.
Sustainability Governance
Our sustainability efforts are led holistically through an aligned overall framework. The Board provides a high level of sustainability governance, retaining overall responsibility for Crystal's sustainability strategic direction, policies, and annual reporting. The role of the Board involves steering and supervising sustainability strategies to ensure their effectiveness and relevance in response to emerging issues.
Underpinned by a robust governance structure to manage our sustainability approach, the Board-level Sustainability Committee, which is comprised of our CEO and two Non-executive Directors, endorses our sustainability vision and commitments, oversees the formulation of strategies and management approach, and provides recommendations on the Group's sustainability framework and policies, to ensure their effectiveness and alignment with the Group's business strategies. The Sustainability Committee also reviews the annual reporting, group-wide sustainability performance, material ESG issues, and related risks and opportunities, in addition to making recommendations and reporting to the Board on a regular basis.
The sustainability performance and progress towards our targets are reported quarterly to the Executive Committee ("Execo") members and twice a year to the Sustainability Committee for review and evaluation.
ESG Risk Management
As part of an effective risk management system to identify, assess, manage, and mitigate sustainability and climate-related risks, an internal communication mechanism and a reporting model are in place to keep Sustainability Committee and Execo members informed in a timely manner. We referenced Task Force on Climate-related Financial Disclosures ("TCFD") to assess climate-related risks. All key sustainability and climate-related risks and opportunities, and their potential impact on the Group are reported to the Sustainability Committee on a half-yearly basis.
Authorised by the Board and led by an Executive Director, the Corporate Quality and Sustainability Department ("CQS") is delegated to develop sustainability strategies and policies, work with business units to embed sustainability into operations, implement relevant initiatives, assess the Group's sustainability performance, identify improvement areas, and lead sustainability reporting. The CQS and sustainability departments of our
Audit Committee
Corporate Development Committee (ceased on 1 January 2025)
Nomination Committee
Remuneration Committee
People Committee
(established on 1 January 2025)
Sustainability Committee
factories are responsible for executing projects, evaluating results, monitoring potential risks, and reporting on performance to senior management.
Please refer to the section "Stakeholder Engagement" for the process used to evaluate, prioritise and manage material sustainability-related issues.
The roles and responsibilities of each committee and details of our corporate governance framework are available in Crystal's Annual Report 2024.
The Board places significant emphasis on the oversight of the Group's risk management and internal control processes, delegating this responsibility to the Audit Committee. This ensures a focused approach to identifying and mitigating risks. The Audit Committee, supported by the Internal Audit Department, actively assesses the effectiveness of these processes, regularly monitors the status of risk mitigation, and provides updates to the Board.
Additionally, other board committees manage risks pertinent to their areas, ensuring alignment with the Group's overall strategy. To maintain high standards of corporate governance, the Board conducts regular evaluations of its performance, reinforcing its commitment to effective risk management and sustainable growth in a dynamic business environment.
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Our Sustainability Vision and ApproachOur Sustainability Framework
We established the Group-level sustainability framework in 2007, and sustainability has been deeply ingrained in our core operations since then. Serving as a guiding principle when formulating sustainability strategies, the five pillars of the framework and their highlighted initiatives are:
Environment
Crystal Net Zero 2050 Vision
UN Fashion Industry Charter for Climate Action ("UNFICCA")
Decarbonisation strategy and roadmap
Group-wide rooftop solar plan
CDP disclosure and TCFD
Global partnership for climate action and circularity
Sustainable materials and product development
Holistic water conservation
Zero landfill vision
United Nations Global Compact
Since 2021, we have joined the United Nations Global Compact and continued to support its 10 universal principles covering human rights, labour, environment, and anti-corruption. By joining hands with more than 23,000 other participating companies and organisations worldwide, we remain committed to integrating these principles into our strategy, culture, and daily operations and to engaging with our industry peers through partnerships that drive progress towards shared goals.
The Ten Principles of the United Nations Global Compact
Businesses should:
Innovation
Support and respect the protection of internationally proclaimed human rights.
Make sure that they are not complicit in human rights abuses.
Uphold the freedom of association and the effective recognition of the right to collective bargaining.
Uphold the elimination of all forms of forced and compulsory labour.
Uphold the effective abolition of child labour.
Uphold the elimination of discrimination in respect of employment and occupation.
Support a precautionary approach to environmental challenges.
Undertake initiatives to promote greater environmental responsibility.
Encourage the development and diffusion of environmentally friendly technologies.
10. Work against corruption in all its forms, including extortion and bribery.
Automation for operational efficiency and effectiveness
Process digitalisation
FLAP and FLOCK smart manufacturing models
Modernisation Centre to achieve manufacturing excellence and industry 4.0
Smart warehouse
System transformation and integration
Product Integrity
Quality Policy and corporate guidelines
Group-wide quality management system
Digitalising quality assurance processes and Quality Online System
Supply chain quality management
Quality belief and culture promotion
Brand protection guidelines and trainings
Employee Care
People-oriented culture
Gender equality engagement activities
Talent development and capacity building
CARE and P.A.C.E. for women empowerment
RISE Respect programme pilot
Promoting a health and safety culture
Employee wellness programmes
Community Engagement
Creating shared value with local communities
Employee volunteering to address social needs
Advancing collaboration for healthy and sustainable communities
Consistent support for community resilience
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Global tree planting
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Global NGO partnership
Provide aid to individuals living in poverty and projects partnered with global NGOs
Renewable electricity
Maximise the use of renewable electricity
Anti-poverty
Provide aid to individuals living in poverty and projects partnered with global NGOs
Science-aligned target
Achieve science-aligned target
•35% absolute reduction (base year 2022)
Employee communication
Climate-related risk management
Apply worker voice programmes to engage for
employee communication
Ensure climate-related risks are effectively managed and disclosed referencing to CDP and TCFD framework
Women empowerment
CSV2030
Impact for Better
Continue empowering our female employees
and advancing gender equity
Coal phase-out
No coal-fired units in
•Wholly-owned factories, mills, and new investments by 2025
•Core suppliers investments by 2030
Equal opportunities
Waste diversion
Embrace diversity and inclusion in employee recruitment, compensation, and promotion
Strive to divert 100% production waste from landfill
Freshwater intensity
Social wellness
Reduce freshwater intensity by 20% per production unit (base year 2022)
Engage our employees to participate in social services
Physical and mental health
Assessment and strategy
•Provide a workplace of excellent health and safety
•Launch wellness programmes to promote physical and mental heath
Identify material impacts on biodiversity, and implement focused strategies
Crystal Sustainability Vision 2030 - Impact for Better
Following the launch of our Crystal Sustainability Vision 2030 ("CSV2030") in 2023, we are committed to crafting a blueprint to take sustainable fashion to new heights, building on 17 years of persistent efforts in sustainability. Aligned with the UN SDGs, CSV2030 consists of eight impact areas across environmental, people, and community dimensions, as well as relevant goals associated with each impact area, aiming to tackle wider sustainability challenges and pressing threats. "Impact for better" accentuates our ambition and driving force behind CSV2030. It also illustrates our aspiration to create a positive impact for our nature, people, and communities to weave a better future.
During the past year, we devised the action agenda of CSV2030. Moving forward, we and all our factories will develop and implement tailored actionable items in detail and monitor progress towards achieving this vision.
Poster was one of our communication collaterals to raise internal awareness and garner support for CSV2030.
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Highlights in 2024
20MW
Group-wide solar PV
~US$500,000
contribution to communities
No coal-fired units in wholly-owned factories
Stakeholder Engagement
We are committed to fostering timely and meaningful communication with our stakeholders, aiming to address their concerns and build lasting trust. We identify relevant stakeholders affected by our decisions, activities, and outcomes, prioritising those with whom we frequently interact to gather feedback in alignment with the reporting principles of materiality and inclusiveness.
To maintain strong connections with our stakeholders, it is essential to leverage diverse communication channels and nurture robust relationships. We actively and openly engage with different stakeholder groups on a continuous basis, fostering transparent two-way communication to understand their expectations, interests, and needs. Our communication channels include:
Announcements • Press releases
Direct mails • Site visits
Focus groups • Sustainability reporting
Interviews • Surveys
Intranet and external websites • Social media
Meetings (virtual and in-person)
Stakeholder Groups
Double Materiality Assessment
It is crucial to regularly engage with internal and external stakeholders in order to balance their significant viewpoints and identify issues related to the environment, society, and the economy that are relevant to us and our stakeholders.
This year, we revamped the materiality assessment to communicate more effectively and analysed how sustainability megatrends impact business operation. We began to adopt our first-ever double materiality approach, referencing the European Sustainability Reporting Standards ("ESRS") by the European Financial Reporting Advisory Group.
In the first year of adopting the double materiality approach, we assessed business sustainability from both the financial and impact perspectives. In addition to assessing material topics that reflect positive or negative impacts on the environment, society, or economy, we evaluated the impact of material topics on our business. This up-to-date assessment enables us to better review the integration of sustainability within our business, ensuring our sustainability strategy is purpose-aligned and adaptable in an ever-changing business landscape.
Through survey analysis, interviews, and evaluation of the opinions we collected from internal and external stakeholders, such as senior management, employees, NGOs, and business partners, we built a materiality matrix.
Materiality Matrix 2024
8
5
18
7
17
10
15
13
4
14 1
11 16 3
12
9
2
6
Climate change
Circularity
Impact on Environment and Society
Sustainable materials and
~70,300
women empowered since 2016
3 factories achieved zero operational waste to landfill
Employee wellness programmes in all operating countries
New 2-million tree planting target by 2030
Follow Us on Social Media
Employees Governments Shareholders Media Institutions
Business Impact
Material Issues under Our Spotlight
The following topics were identified as material:
product development
Freshwater use
Chemical and wastewater management
Ecosystem and biodiversity
Health and safety
Employee wellness
Supply chain management
Community engagement
Product responsibility
Equity
Human rights
Business performance
Operational resilience
Market presence
Manufacturing excellence and innovation
Ethical business practices
Environment Social
Economic
~8,200
volunteering hours benefitting
~40,000
individuals
Net zero target validated by SBTi
Facebook Instagram YouTube LinkedIn
Climate change
Business performance
Manufacturing excellence and innovation
Health and safety
Sustainable materials and product development
These identified material topics were validated and endorsed by the Sustainability Committee and will be prioritised in our strategic planning for greater sustainability.
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Key Initiatives for Addressing Stakeholder Concerns
We strategised our course of action to actively respond to the material topics that our stakeholders are concerned about.
Global Partnerships on Sustainability
Climate Change
Disclosing Company (Climate Change)
Signatory
Net zero roadmap to 2050
Interim 2030 target of reducing absolute carbon emissions by 35%
Group-wide rooftop solar PV plan
Transparency of climate action and emissions - CDP
Climate-related risk management - TCFD
Member
Member
Industry collaboration with customers, institutions, and NGOs
Energy-efficient manufacturing process
Business Performance
Increasing green energy and energy reduction capital investment in our five-year plan
Setting key carbon-reduction initiatives in our balanced scorecard
Enhancing factory productivity to drive down carbon emissions and costs
Project Partner
(Enabling Systemic Circularity in Fashion)
Member
Increasing investment in green energy and energy reduction initiatives
Increasing research in energy-reduction initiatives
Manufacturing Excellence and Innovation
System transformation and integration
Digitalisation and automation
Smart factory, smart warehouse, smart laundry
Smart manufacturing models - FLAP and FLOCK
Silver Member
Participant
Modernisation Centre
Product and value-added process innovation
Roadmap for artificial intelligence
Health and Safety
Factory governance mechanism
Awareness and promotion
Operational control and tracking
Social Compliance Policy
Corporate Member
Founding Member
Factory health and safety preventive mechanism
ISO45001 Occupational Health and Safety Management System
Life and Building Safety ("LABS") Initiative
Programmes promoting physical and mental wellness
Sustainable Materials and Product Development
Sustainable material certifications (e.g. GRS, OCS, BCI)
Study of textile-to-textile recycling and material innovations
Sustainable product design and development e.g. closed-loop denim
Industry programmes and joint studies
Local recycling hub pilot in Vietnam
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Supporting "An Apparel Supplier's Guide 2.0" to Navigate Legislation
As we continue to pioneer in sustainability and join forces with the industry peers to drive systemic change, we also worked with them to prepare for regulatory risks. To ensure we stay well on track with upcoming regulations for the management of ESG topics and disclosures, we supported the development of the "An Apparel Supplier's Guide: Key Sustainability Legislations in the EU, US, and UK 2.0" led by Transformers Foundation, aiming to provide an overview of the most important sustainability-related legislative initiatives and their implications for suppliers in the apparel value chain.
As one of the eight apparel supplier partners, we provided insights and comments from the manufacturer's perspective. As the regulatory landscape continues to evolve, it is essential for suppliers to stay ahead of the curve.
Global Circular Fashion Forum
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Along with other industry players, we joined the Steering Committee of the Global Circular Fashion Forum ("GCFF") led by Global Fashion Agenda ("GFA") to bring about a fair, longterm and scalable transition to a circular fashion industry. We contributed to the Upstream Circularity Playbook and shared our closed-loop product development experience, for recycling post-industrial textile waste into new fabrics. The Playbook aims to inspire and motivate public and private sectors, to implement and encourage upstream circularity.
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Recognition from Customers
35+ Years of Service, by Gap Inc.
Supplier Recognition for Leadership in Sustainability 2024,
by Gap Inc.
Power of Partnerships Award,
by Levi Strauss & Co.
Vendor of the Year and Best On-time Delivery Performance, by Victoria's Secret & Co.
Partner Quality Management System ("PQMS") Award,
by Nike
Sustainability Award 2023, by PUMA
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Regenerating Nature
Our Environmental Policy and Management System Guidelines
Overseen by our Sustainability Committee, our Corporate Environmental Policy sets out comprehensive principles on climate change mitigation, natural resources conservation, pollutant discharge management, circular economy creation, global greening, and employee awareness. The Policy lays the foundation for our factories to establish and implement an effective and robust environmental management system. Based on our Environmental Management System Guidelines, 10 of our factories were certified to international standards: the ISO14001 Environmental Management System, ISO50001 Energy Management System, and/or the WWF-HK's Low Carbon Manufacturing Programme ("LCMP").
During the year, all of our factories operated in line with the principles laid out in the Corporate Environmental Policy and complied with all related legal requirements. At the Group level, the Corporate Quality and Sustainability Department ("CQS") oversees various types of environmental performance, including carbon emissions, water consumption, waste management, material consumption, and compliance status with legal and customer requirements.
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The environmental performance of all Crystal factories is reported to the Sustainability Committee twice a year and to senior management on a quarterly basis. The following sections show how we address potential environmental impacts.
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Crystal Net Zero 2050
Since 2022, our Group has committed to achieving net zero emissions by 2050, along with a science-aligned mid-term target of reducing absolute carbon emissions by 35% by 2030. We have been persistently working towards these goals, which encompass the operations of all our garment factories and fabric mills.
Science-based Net Zero Target
Our 2050 net zero target was validated by the Science Based Targets initiative ("SBTi"), affirming our steadfast commitment to this long-term climate goal.
Building on our Group's 2050 net zero vision and 2030 mid-term target,
we established SBTi-validated long-term targets to reduce absolute Scope 1, 2, and 3 greenhouse gas ("GHG") emissions by 90% by 2050, based on a 2022 baseline. The Scope 3 emissions include the categories of purchased goods and services, upstream transportation and distribution, and end-of-life treatment of sold products.
Customised Targets for Factories
In line with the Group's decarbonisation targets, and considering each factory's carbon reduction potential, production processes, energy mix characteristics, and local policies, we have set individual carbon intensity targets for our garment factories for 2025. These clear targets not only enhance each factory's accountability for its carbon reduction progress but also secure the implementation of tailored action plans to improve energy and operational efficiency.
Net Zero Strategy
We developed a net zero roadmap three years ago and began implementing the carbon reduction strategies outlined in the roadmap. Over the past few years, we have made encouraging progress.
Energy Efficiency
All factories have planned approximately 200 energy efficiency measures to be implemented by 2028, categorised into short-, medium-, and long-term based on their payback periods.
Factories are implementing their action plans according to a defined schedule. Currently, out of the approximately 200 planned measures, 120 have been completed, resulting in an annual carbon reduction of over 32,000 tonnes.
These measures comprehensively cover factory energy use, including:
Production equipment efficiency
Operation of associated facilities and utilities, e.g., chillers, air compressors
Waste heat recovery
Energy monitoring
The carbon intensity per standard allowed hours ("SAH") of our garment factories decreased from 1.77 tCO2e in 2023 to 1.55 tCO2e in 2024, reflecting progress in productivity enhancement and energy efficiency strategies.
Building Management System
Our intimate factory in Vietnam installed its first advanced building management system ("BMS"), along with 59 smart meters. The BMS provides 24/7 monitoring at three levels: building level (e.g., transformers), workshop level (including offices and canteens), and key equipment level.
This system not only offers real-time analysis of major energy-consuming units, but also records patterns, assists in energy use analysis, and remotely controls operational parameters and power allocation based on load to optimise energy efficiency and reduce maintenance costs. In addition, the BMS monitors and controls the wastewater treatment plant, minimising chemical usage through precise control of the treatment process.
Boiler Flue Gas Heat Recovery
Our fabric mill in Vietnam installed an economiser to fully recover the waste heat from boiler flue gas, which can reach temperatures of up to 200°C, before it is released into the atmosphere. The recovered waste heat is used to preheat the water and air entering the boiler, saving over 10% of fuel usage.
Innovative Electricity-free Cooling
In addition to factory energy efficiency and solar photovoltaic ("PV"), we actively explore the application of new energy-saving and carbon reduction technologies to maximise the reduction potential of our operations. Our lifestyle wear factory in China applied i2Cool Limited's electricity-free cooling technology, iPaint, to over 7,000m2 of rooftop area on two buildings.
The iPaint application exhibited over 95% solar reflectivity and mid-infrared emissivity, providing dual benefits. Firstly, iPaint reduces heat absorption and promotes heat dissipation, which is expected to lower indoor temperatures beneath the roof by around 4-5°C, saving approximately 200,000 kWh of electricity per year for cooling. Secondly, it is expected to increase solar power generation by around 8%.
Extended Drying Hanger System
The newly extended drying hanger system at our denim factory in Cambodia, with a total length of 1,720 metres, enhanced the capacity of the pre-drying process, reducing the dryer's operation time by 20 minutes on average. This system, which is the longest drying hanger track among our denim factories, saved around 22% of steam and 3% of electricity consumption, resulting in an annual reduction of around 350 tonnes of carbon emissions.
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Renewable Energy
Group-wide Solar PV
Since the optimisation and finalisation of our rooftop solar PV plan last year, our global factories have been progressively increasing PV installations according to the plan. From 2020 to the present, our rooftop solar PV capacity has surged from 0.6 MW to 20 MW, and will continue to grow in the coming years.
The existing rooftop PV systems at our factories produce approximately 13,300 MWh of renewable electricity annually, equivalent to 4.6% of carbon emissions in 2024.
Green Electricity Purchasing
Procuring traceable and certified green electricity from the market is a feasible way for factories to reduce carbon emissions while also supporting the development of regional renewable energy markets, such as solar power and wind farms.
Our lifestyle wear factory in China procured 2,500 MWh of green electricity in 2024. Including the factory's rooftop PV, the proportion of renewable electricity used by the factory reached approximately 24% in 2024.
20.0
12.2
9.7
4.5
0.6
2020 2021 2022 2023 2024
Growth of installed solar PV capacity MW (2020-2024)
Climate Recognition and Certifications
Two-time CDP A List | ISO14064-verified Carbon Inventory | ||
As a disclosing company in the CDP Climate Change questionnaire, we have been on the A List (leadership) for two consecutive years. The recognition showcased our commitment to environmental transparency, decarbonisation efforts, and climate risk management. | Our Group's carbon emissions inventory has been verified in accordance with ISO14064-1 for the third consecutive year. The verification scope includes Scope 1 and 2, and major Scope 3 categories, such as Category 1: "Purchased Goods and Services", which accounts for over 90% of our Scope 3 emissions. Reliable and credible emissions data formed a solid foundation for our carbon management and for measuring our decarbonisation progress. | ||
Climate Change Leadership Award by CDP China | HERA 2024 Carbon Neutral Award - Grand Award | ||
Certified Factories' Net Zero Champions
To effectively oversee on-site carbon reduction measures and promote low-carbon practices among factory employees, all our factories have designated Net Zero Champions. We arranged for these champions to take an online certified course, "Net Zero for Professionals," offered by the Energy Institute, a renowned chartered professional body.
The 20-hour intensive training enhanced the capabilities of our Net Zero Champions in net zero science and policy, developing a net zero strategy and targets, communicating net zero to stakeholders, and delivering net zero within factories.
8 MW solar PV new installations in China and Sri Lanka in 2024
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Type
Climate-related Risks
Potential Financial Impact on Crystal
Key Responses by Crystal
Task Force on Climate-related Financial Disclosures
Transition Risks | Policy and Legal | ||
Heightened policies and regulations |
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Technology | |||
Low-carbon technologies |
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Market | |||
Supply chain and logistics disruption |
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Offsite renewable energy instruments |
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Industry transition |
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Reputation | |||
Increased customer awareness | Reduced orders due to
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Rising investor concerns and stringent ESG rating |
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Since 2021, we have reported our climate-related disclosure in accordance with TCFD. We have incorporated the risks identified in the preliminary climate-related risk analysis into our CSV2030
strategy to reinforce our commitment to integrating climate considerations into our business and financial planning.
Recognising the evolving climate and market environment, we have integrated the identified risks into the Group's key risk management system and conducted regular reviews of our risk management approach to ensure necessary actions and controls are in place. Going forward, we are planning to conduct climate scenario analysis to devise a more strategic and resilient business plan for a range of plausible future situations, which would also enable us to fulfil the emerging climate-related reporting requirements.
The identified risks and their associated potential impacts on our operations are summarised together with our key responses in the following table. This framework will also serve as the foundation of our planned scenario analysis, characterised by probability and materiality.
Key Climate-related Risks and Our Key Responses
Type
Climate-related Risks
Potential Financial Impact on Crystal
Key Responses by Crystal
Physical Risks | Acute | ||
Extreme weather events (e.g. typhoons and floods) |
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Chronic | |||
Frequent and intense extreme heat |
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Rising sea levels |
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Increased salinity in freshwater |
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Persistent and severe drought |
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28 SUSTAINABILITY REPORT 2024 SUSTAINABILITY REPORT 2024 29
Industry Programmes
UN Fashion Industry Charter for Climate Action
We have been a signatory of the Fashion Industry Charter for Climate Action for nearly five years. Through participating in the Charter's initiatives, we collaborated with approximately 70 other signatories, including brands and suppliers, to collectively drive carbon reduction actions and industry progress.
We attended the Charter's annual meeting in Bonn, Germany in September to discuss future strategies and opportunities for addressing action areas that build on the Charter's focus and unique position.
Decarbonisation Programmes in Cambodia
Our sportswear factory in Cambodia, recommended by a customer, participated in the International Finance Corporation's ("IFC") Cambodia Decarbonization Project ("CaDP") and the German Agency for International Cooperation's ("GIZ") Project Development Programme ("PDP").
The CaDP project, lasting about 12 months, involved data collection, analysis, and in-depth Resource Efficiency Assessments, resulting in 15
preliminary recommendations related to energy and water. The factory is
details with the IFC team to develop a detailed report.
The PDP enhanced our factory's planning capabilities for solar PV and improved our understanding of the evolving solar policies and regulations in Cambodia.
Carbon Leadership Programme
Our sportswear factory in Bangladesh also participated in the Apparel Impact Institute's ("Aii") Carbon Tech Assessment programme as part of its Carbon Leadership Program ("CLP"). Through assessment and benchmarking, the factory gained a deeper understanding of its carbon performance, scalable measures, and reduction potential.
Crystal Climate Charity Foundation
The Crystal Climate Charity Foundation (the "Climate Foundation"), a Hong Kong charitable trust established in 2022 by our Chairman,
Mr. Kenneth Lo, is dedicated to advancing climate change education
and alleviating poverty caused by environmental changes. Working closely with Crystal, the Climate Foundation has spearheaded impactful sustainability and educational initiatives in affected regions, including Bangladesh, Cambodia, China, Sri Lanka, and Vietnam.
Installing Solar Streetlights in Cambodia and Vietnam
In 2024, our collaborative efforts led to the installation of 436 solar streetlights near our factories in Cambodia and Vietnam, lighting up 13.08 kilometres of roadway, enhancing local safety, and promoting sustainable energy. We also placed solar lights at key community centres, which serves as practical improvements and educational tools for sustainable living. Following this success, we planned to install solar streetlights in Bangladesh and China, as well as continuing our efforts in Vietnam and Cambodia in 2025. All 596 solar streetlights installed to date contributed to an annual carbon reduction of approximately 71.4 tonnes.
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Climate Education for Kindergarteners through Performing Arts
The Climate Foundation and Crystal sponsored the "Crystal Net Zero 2050" Kindergarten Tour Performance, titled "Carbon Reduction Alliance Saves Our Earth", in partnership with the Hong Kong Repertory Theatre. The objective was to educate kindergarten children about energy-saving living, climate change, and the importance of carbon reduction through an engaging and interactive educational drama. The tour ran from May 2024 to July 2024, reaching 20 kindergartens in Hong Kong and engaging over 1,500 kindergarten teachers and students.
Photo courtesy of Hong Kong Repertory Theatre
Sponsoring Mil Mill's New Textile Recycling System
The Climate Foundation sponsored the acquisition of a Hollander Beater for Mil Mill, a pulp mill promoting recycling in Hong Kong. This new machine, with a processing capacity of 500 kg per hour, will significantly enhance Mil Mill's ability to recycle textile waste and reduce landfill pressure. The sponsorship not only supported the recycling of approximately 1,650 tonnes of textile waste annually, but also promoted environmental education. The initiative included educational visits to Mil Mill's education centre where the public learns about textile recycling and climate change.
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Water Conservation
WWF Water Risk Filter
None of our factories are located in regions with the highest risk of water depletion, as indicated by the WWF Water Risk Filter. When planning to establish new factories, we also assess the relevant risks in the area, including water depletion, flooding, and drought.
Our factories obtained freshwater from locally available sources in line with regulations and permits concerning freshwater withdrawal.
Expanding Wastewater Treatment
As our production scale gradually increases, our denim factory in Vietnam has expanded its existing wastewater treatment plant by adding a new treatment unit.
Water recycling rate
60%
SUSTAINABILITY REPORT 2024 33
The new unit has a maximum treatment capacity of 5,400 m3 per day and is equipped with comprehensive physical and biochemical treatment processes. Currently, the factory is using up to 60% recycled water in its production processes.
Holistic Water Conservation
Efficient Freshwater Management of Our Denim Factory in Vietnam
Solar Heating
Dormitory
Flushing Greening
10%
MUNICIPAL WATER
Municipal Sewage System
Advanced eco-washing process, ozone bleaching, laser technologies and certified green chemicials
Smart Laundry & Production Use
45%
RECYCLED WATER
15%
REUSE
Wastewater Treatment
Phase1: 4,000m3/day Phase2: 5,400m3/day
SAVE 60%
Water Consumption
30%
RIVER WATER
40%
Discharge
River Water Treatment
Solar Heating
Full compliance with national standards and ZDHC Wastewater Guidelines
%: Percentage of water sources
Municipal River Recycled/ Waste Water Water Treated Water Water
Air Emissions Control
All of our factories regularly monitor and test air emissions sources, including boilers and generators, according to the local legal requirements. In 2024, all of our factories fully complied with the relevant legal standards.
Switching to Cleaner Fuels
We have promoted the adoption of cleaner fuels for combustion equipment, which is associated with a wide range of control measures for flue gas treatment and indoor air quality improvement. Our factories in China have been using natural gas boiler fuel. Our lifestyle wear and sweater factories in China purchased direct steam supply to replace onsite steam generation by the boiler to further minimise the impacts on the environment. All of these initiatives have served the purpose of achieving better air quality in local communities.
Our major emission sources are boilers, generators, kitchen facilities, printing facilities, vehicles, and forklifts. In 2024, our factories emitted about 356.1 tonnes of nitrogen oxide ("NOx"), 8.3 tonnes of sulphur dioxide ("SO2"), and 36.0 tonnes of particulate matter ("PM").
Patented Waterless Enzyme Washing
Our denim factory in China began exploring waterless enzyme washing in 2022 to achieve water conservation and enhance process efficiency. After years of collaborative development and optimisation with chemical suppliers, we successfully developed a waterless enzyme specifically suitable for our denim washing processes, which has been granted a national patent.
Compared to the EnzStone washing process, this new method reduces production time by half per denim product and offers multi-faceted environmental benefits:
Minimising freshwater use
Reducing carbon emissions with steam-free nature
No pumice stone waste
Reducing wastewater generation and treatment load
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Carbon, Energy, and Water Data 2024
Product Footprints
Waste Management
Corporate Waste Management Guidelines
Our Corporate Waste Management Guidelines provide a framework for our factories to establish waste
0.27
0.60 2.94
management systems that implement source reduction, efficient use of materials, waste classification, handling, monitoring, and reporting. In 2024, all factories complied with relevant local laws and regulations.
Notes:
Carbon Intensity
(kgCO2e/equivalent piece)
Energy Intensity
(kWh/equivalent piece)
Freshwater Intensity
3 Factories Achieved Zero Production Waste to Landfill
As part of our vision for 2030 - zero production waste to landfill - we have revamped our Corporate Waste Management Guidelines to enhance factory waste management in the following four areas:
Governance
Operations - onsite and waste contractor sourcing
Monitoring and reporting
Awareness and promotion
We strictly implement the waste management hierarchy, including source classification and collaboration with qualified waste contractors and recyclers, to realise the dual economic and environmental value of waste.
Currently, three of our factories have achieved zero production waste to landfill, serving as exemplary models for gradual expansion to other Crystal factories.
Total Waste Solutions with Qualified Waste Contractors at Our Sportswear Factory in Vietnam
Recycling, Waste to
Sorting & Segregation
Energy & Eco-friendly Treatment
Chemical containers & contaminated waste
Waste to energy
Hazardous waste
Other waste liquid
Waste to energy
Sludge
Bricks
Collected waste
Waste to energy
Fabric shreds
Recycling
Food waste
Feed
Non-hazardous waste
Plastic, metal, paper product
Recycling
Boiler ash
Brick
General refuse
Incineration
(L/equivalent piece)
The carbon intensity is calculated by dividing the total GHG emissions by total equivalent pieces of garments.
The scope of product footprint calculation only includes our garment factories.
Greenhouse Gas Emissions Energy Consumption
49,824
20.8%
Scope 1
(tCO2e)
731,938
36.0%
Purchased energy (GJ)
128,571
53.7%
Scope 2
(tCO2e)
664,305
32.7%
Renewable energy (GJ)
61,114
Biogenic emissions
635,271
25.5%
(tCO2)
31.3%
Direct energy (GJ)
Notes:
Scope 1 emissions include direct emissions from fuel combustion of stationary sources (e.g. boilers, generators, kitchens), motor vehicles, wastewater treatment facilities, and septic tanks.
Scope 2 emissions include indirect emissions from purchased energy.
GHG emissions are accounted for and reported with reference to the GHG Protocol Corporate Accounting and Reporting Standard issued by the World Resources Institute and the World Business Council for Sustainable Development, and other relevant guidelines where applicable. The GHG emission factors from the Institute
for Global Environmental Strategies and the International Energy Agency were applied.
Notes:
Purchased energy includes grid electricity and steam.
Direct energy includes the combustion of fossil fuels and non-renewable alternative fuels.
Renewable energy includes biogenic fuel combustion, onsite solar power facilities, and purchased green electricity.
Based on our factory records such as fuel purchases, electricity bills, and energy meters, the energy consumption was calculated using the conversion factors published by the UK Government's Department for Business, Energy & Industrial Strategy, and the Department for Environment, Food & Rural Affairs.
Water Consumption for Production Use
4,767,786
1,568,364
75.2%
Freshwater (m3)
24.8%
Recycled water (m3)
Notes:
Municipal water, river water, and groundwater accounted for 24%, 30%, and 46% of the total quantity of freshwater consumed, respectively.
Water was consumed in full compliance with water quality or quantity permits and standards.
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Waste Data 2024
30.5 kilotonnes
Non-hazardous waste
(Mainly fabric waste and domestic waste)
Total
36.6
kilotonnes
6.1 kilotonnesHazardous waste
(Mainly chemical waste from production processes and sludge from waste treatment)
Expanding Wastewater Sludge Compression
Our denim factory in Vietnam connected new sewage pipes to direct more sludge to the factory's sludge pressing machines. Through squeezing out wastewater concentrate from the sludge, this initiative reduced an additional 2.5 tonnes of hazardous waste annually and lowered related disposal costs.
Waste Recycling and Energy Recovery
19.3 kilotonnes
Waste recycled
7.6 kilotonnesWaste recovered to energy
Notes:
The disposal of hazardous waste was handled by licensed contractors.
Recyclable waste is sorted in factories and then collected by or delivered to various recyclers.
Apart from recycling and energy recovery, other non-hazardous waste was taken to local landfills and/or incineration facilities.
Packaging Materials 2024
Industry Waste Programmes
13.3 kilotonnesPaper products and carton boxes
3.9 kilotonnesPlastics
GIZ "Waste No More"
Our intimate and sportswear factories in Vietnam were nominated by customers to join GIZ's "Waste No More" programme. The programme provided online training, "Ask-to-expert" sessions, and peer workgroups to help
All-round Reduction for Production Waste
Replacing Adhesive Paper with Recycled Plastic Film
The printing process previously had to use glue adhesive paper on printing pallets, which was non-recyclable and needed replacement every two weeks due to damage.
38 SUSTAINABILITY REPORT 2024
Our lifestyle wear factory in Vietnam replaced glue adhesive paper with recycled PET materials, which can be used for 12 months without replacement, significantly reducing annual waste from 2.9 tonnes to 0.14 tonnes. This improvement also reduced electricity used for preheating and chemicals used for cleaning.
participating factories better understand Vietnam's waste management laws and regulations, data collection and reporting, and action plan development to divert waste to preferred disposal methods.
"Enabling Systemic Circularity in Fashion" by Forum for the Future
Envisioning a circular fashion industry, recognising the current situation, future hurdles, and methods to tackle them, were precisely why we participated in this study project with 12 leading brands, retailers, and manufacturers.
After a year of constructive discussions, the report "Reconfiguring Value Chains: Enabling Systemic Circularity in Fashion" was released, which dived into the barriers holding back innovation and proposed systemic solutions. The report also highlighted some non-technical innovations to unlock circularity, including the Cross-Functional Regulation Alliance and the Circular Fashion Hub.
SUSTAINABILITY REPORT 2024 39
Sustainable Materials
Over 90% of our factories have received sustainable material certifications such as the Global Recycled Standard ("GRS") and Organic Content Standard ("OCS"), offering an extensive array of recognised sustainable options tailored for different customers.
In our diverse range of product categories, we have showcased extensive application of sustainable materials. In 2024, for instance, 40% of our sportswear fabrics incorporated recycled polyester, while around 85% of our denim clothing was BCI cotton. Additionally, at our fabric mill in Vietnam, around 55% of the raw materials were certified with GRS or Recycled Claim Standard ("RCS") certification.
Local Recycling Hub in Vietnam
Connecting recyclers and upstream suppliers, we have established a local-to-local network considering Scope 3 emissions and logistics costs for joint recycling efforts. Our denim factory in Vietnam partnered with local upstream suppliers, serving as the vertical spinning and denim fabric mill with a recycling facility in this closed-loop and cotton waste recycling partnership.
The sorted cut waste was mechanically recycled to cotton fibre, which was then spun into recycled yarn and woven into recycled fabric. Our denim factory purchased these GRS- or RCS-certified recycled fabrics back for production, thereby closing the loop.
Chemical and Wastewater Management
Green Chemistry
Controlling inputs and procuring green chemicals is a crucial step in eliminating hazardous chemicals. We use online chemical inventory management ("CIM") tools and the Zero Discharge of Hazardous Chemicals ("ZDHC") Incheck Report to monitor, track, and report the conformance status of production chemicals, such as those used in washing and printing, against the ZDHC Manufacturing Restricted Substance List ("MRSL").
80% of chemicals conformed to the highest level 3 of the ZDHC MRSL.
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Corporate Chemical Management Guidelines
We are committed to eliminating the use of hazardous chemicals in our operations and products. Our Corporate Chemical Management Guidelines provide a comprehensive framework for chemical management, from input, process, to output control.
Crystal's Corporate Chemical Management Guidelines
Input Process Output
Higg Index
Full Adoption of FEM 4.0
All of our factories transitioned to the latest version of the industry environmental performance assessment tool, Facility Environmental Modules ("FEM") 4.0, during the 2024 cycle. To support factories in answering new and updated questions in FEM 4.0, we released a corporate toolkit that includes specific guidance and documentation samples tailored to Crystal's circumstances.
Despite the increased complexity and comprehensiveness of the FEM 4.0 question set, our factories achieved an average industry-leading score of 78.3, surpassing the industry median of 46.2.
Group MRSL
Green chemical procurement and screening
Chemical management system
Assessment and training
Regular testing according to ZDHC Wastewater Guidelines and legal requirements
ZDHC Wastewater Guidelines
Our factories conducted biannual tests in accordance with the industry standard, ZDHC Wastewater Guidelines.
The ZDHC Wastewater Guidelines, launched in September 2024, outline requirements for testing treated wastewater parameters, sludge leachate, and declaring sludge disposal pathways. We thoroughly studied the new requirements and prepared to transition to the new version in 2025.
In 2024, all of our factories regularly monitored and tested wastewater, and complied with relevant local legal standards and requirements. Our operations treated 6.9 million m³ of wastewater.
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Supplier Performance Tracking and Training
In addition to our own factories, we also used the Higg FEM to understand and track our suppliers' environmental performance, thereby identifying environmental risks in the supply chain and assisting in the calculation of Scope 3 emissions. In the last cycle, a total of 50 upstream suppliers shared their completed FEM with us.
Furthermore, to build supplier capacity and enhance resilience, our denim division's sustainability department visited six suppliers in Vietnam in June. The visit aimed to better prepare them for FEM 4.0, provided training and facilitated exchange on various sustainability topics, such as chemical safety, waste management, fire safety, and decarbonisation.
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Driving Innovative Manufacturing
We continuously streamline operations through process digitalisation and automation. Our pursuit of manufacturing excellence enables us to enhance efficiency and productivity, go beyond the evolving needs of customers, and improve environmental, health and safety performance. This approach gives us a winning edge, ensuring our continued success amidst fierce industry competition.
Smart Factories to Craft the Future
Our vision of transforming our facilities into smart factories began in 2018, with the ideation of digital manufacturing that is centred around a computer system and integrated with advanced technologies including robotics, as well as interconnected machinery and production management systems.
Following successful pilots in selected workshops, our knits division determined our production logic models (named FLAP1 for garment factories and FLOCK for fabric mills) in 2023. FLAP and FLOCK sketched out our blueprint to build smart factories, in which materials pass through the manufacturing process with the use of robotic arms, automated and rail-guided vehicles ("AGV", "RGV"), and a multitude of automated production machines. This automatic material flow is autonomously controlled by an integrated computer system consisting of several software applications.
Replicating the Successful FLAP Model
The pilot of FLAP continued to progress in our lifestyle wear factory in China where the system setup in the Assembly Centre and Finishing Centre was completed, realising the automated process from sewing, finishing, to needle detection. The Logistics Centre, which will house the automated cutting workshop and centralised warehouse for materials and finished goods, began construction in late 2024.
While revamping their own operations, the factory team also directed efforts towards the smart transition in their sister factories abroad. Colleagues from sister factories gathered in China to participate in months-long, in-depth training sessions. These sessions equipped them with the knowledge and experience needed to implement FLAP at their local factories upon their return.
During the reporting period, centralisation of cutting processes in the Logistics Centres of lifestyle wear factories in Vietnam and Bangladesh commenced. This will be followed by other sportswear and intimate factories in these countries in 2025.
1 FLAP stands for Finishing Centre, Logistics Centre, Assembly Centre, and Parts Manufacturing Centre, while FLOCK stands for Finishing Centre, Logistics Centre, Colouration Centre, and Knitting Centre. FLAP and FLOCK refer to our production logic models for garment factories and fabric mills respectively, in which materials are moved autonomously along the production process.
Massive Reconfiguration for FLOCK
Our fabric mill in Vietnam was undergoing an extensive re-layout to set the ground for the FLOCK manufacturing model. By the end of 2024, the mill saw its capacity increased year-on-year, attributing this improvement to the process flow-optimising reconfiguration project that involves substantial constructions, renovations, relocations, and setups of new automated systems. AGVs were first adopted at its dyeing plant, which will be extended to the finishing processes in 2025. Additionally, the mill is expecting the completion of its first automated storage and retrieval system ("AS/RS") in the greige warehouse.
Transforming Productivity with Automation and Analytics
Also in Vietnam, the Modernisation Centre of the knits division's Research and Development Department ("RDD") studied every operation and process for automation opportunities relentlessly. Tasked with expediting our factories' transition to automated solutions and machine manufacturing, the Centre has deployed over 300 automated machines and robots in our knits factories in Vietnam, Cambodia, and Bangladesh since 2023.
Apart from automation by self-developing, co-developing, or investing in machines, the RDD captured machinery data and collaborated with other factory functions to monitor overall equipment effectiveness (" OEE "). This initiative identified potential idle time reduction opportunities for maximising productivity.
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Digital Product Creation
In response to the rapidly growing demand for 3D virtual sampling services in the industry, our Vietnam denim factory's Digital Product Creation ("DPC") Centre expanded its capacity to digitally co-create products with brand customers.
Since the inception of the DPC team in Vietnam in 2022, the deployment of 3D fashion design software, fabric material digitalisation solutions, and the self-developed digital denim library has enabled the team to provide customers with well-rounded 3D virtual sampling services including new fit preview, design/finishing prototyping, line review, grading, and even visual merchandising support.
With advantages such as instant and realistic visualisation, not only did 3D virtual sampling significantly shorten the sample development time per style from days to just hours, it also contributed to a more environmental-friendly pre-production process by reducing the need for physical samples. The number of physical samples shipped by our denim division to key customers in 2024 decreased by more than 50% compared to 2018.
Supporting Open Lab
We have been a strategic partner of Open Lab, a collaboration programme between The Hong Kong Research Institute of Textiles and Apparel ("HKRITA") and H&M Foundation. Open Lab is a physical space and digital platform for industry partners to undertake research, scale solutions, and share knowledge. Through the partnership, we are committed to contributing our expertise and participating in the development of innovative solutions that will propel our industry towards a planet
positive future.
Denim Division's Full DPC Service
SUSTAINABILITY REPORT 2024 47
Vietnam Denim Factory's Smart Manufacturing Journey
Our denim factory in Vietnam is currently undergoing a significant transition to smart manufacturing. The blueprint of this transformation consists of four main components:
Smart Warehouse Management System
Smart AGV System
Smart Cutting System
Smart Production Lines
Smart Transformation Progress and Future Focus
Following another year of endeavour in 2024, the system setup in the cutting workshop and smart warehouse was nearing completion. RFID technology was also utilised to identify and track the movement of semi-finished and finished products along the production process. This advancement not only streamlined inventory management and reduced the risk of loss or misplacement, but also enhanced quality control by identifying issues swiftly. As a result, close to 50% of the transformation plan has been completed by the end of the reporting period.
Looking ahead to 2025, the factory will continue the transition, which is targeted for completion by mid-2026. Key focuses for the coming year include establishing a smart goods-to-person warehouse for accessories and extending the smart AGV system to cover inter-workshop transportation, in addition to its current intra-workshop applications.
Manufacturing Execution System Machinery Management System
Enterprise Resources Integration System Integrated Process Planning & Scheduling Kanban & Logistics System
Scan & Pack System RFID
Automatic Sewing Operation
Smart Marker System
Auto Planning System
Warehouse Management System Shade Blanket & Shrinkage System
Bracing for Capacity Doubling
Smart manufacturing is also integral to the factory's strategy for preparing for increased capacity, which is aimed at nearly doubling by 2029 compared to 2023. The denim team will continue to explore the application of artificial intelligence in the production processes, ensuring that we remain at the forefront of innovation in the industry.
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Product Responsibility
Digitalised Quality Management
We continued to digitalise the quality assurance process to further enhance efficiency and product quality, leveraging real-time data analytics for informed decision-making. Various initiatives were distinctly implemented at our factories in different countries. For example:
Quality online system - in the cutting section, all data is uploaded to the central data system for real-time monitoring of cutting accuracy
Digital traffic light system - provides automated visual management and identifies the real-time quality status on the shop floor
Machine vision inspection - utilises AI to analyse printing effects and detect defects
Automated garment pattern projection - aids measurement control and reduces manual operations in ironing
Quality Assurance Process
In accordance with our corporate mission and our value of "Live Quality", our Quality Policy contributes to sustainable and profitable growth by guiding the delivery of products and services that delight customers. We demonstrate this commitment by building quality management system based on legal compliance, customer requirements, universally acknowledged best practices, and requirements related to product labelling, safety, and environmental considerations.
Our concept of quality covers the totality of our operational activities, through which we aim to deliver the right goods and services to our customers at the right time and at the right cost.
To achieve the principles of "Right First Time" and "Quality Managed at Source", we take a holistic approach to our quality management system and implement quality standards throughout our business processes. From product design through the sourcing of raw materials, production and packaging, to inventory storage and delivery, we ensure compliance with the quality standards and specifications of our company, customers, and the supply chain.
Promoting "Right First Time" Culture
In line with one of our corporate values, "Live Quality", we continued to promote a quality culture and emphasised the importance of a "Right First Time" mindset throughout the Group. This was implemented from top management down to workers via:
Launching a new quality culture video and posters to strengthen our quality belief
Providing mandatory e-training for all management and staff
Conducting worker training on balancing "Right First Time" and productivity
Hosting quality workshops for executives to support their demonstration of quality leadership, enhancing everyone's quality ownership mindset across all divisions
We firmly believe that raising awareness of "Right First Time" does not only increase customer confidence but also boosts company revenue, efficiency, and reduce waste.
Our own quality management system is consistent with related international standards, applying the concept of PDCA - Plan, Do, Check, Act, focusing on prevention rather than detection or correction. This enables us to implement a comprehensive approach to drive process effectiveness and continuous improvement, and to allow a more systematic methodology to manage and deliver quality products.
Our lifestyle wear factory in Bangladesh and denim factory in Cambodia received ISO9001 Quality Management System certification this year, bringing our total to 12 certified factories. We are working to extend this globally recognised standard certification to more Group operations.
ISO9001 CERTIFIED FACTORIES
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Product Responsibility
Our Quality Performance
Customer Final Inspection Pass Rate ("CFIR")
Group target: ≥ 99.5% 2024 result: 99.9%
Observed Quality Level ("OQL")
Group target: ≤ 2.5% 2024 result: 0.9%
We have a corporate quality scorecard with targets to demonstrate our quality performance in achieving customers' expectations.
Quality Claim
Group target: ≤ 0.1% to sales turnover 2024 result: 0.09%
Product Safety
Our Product Safety Guidelines state our customer, legal, and safety requirements. The Guidelines include preventive measures applicable starting from product development and applying throughout the production processes, to ensure that our products are physically and chemically safe.
In addition, we review the Corporate Product Restricted Substances List ("RSL") annually and update it where appropriate, to ensure that our supply chain partners use safe chemicals during manufacturing processes and that only these safe chemicals are present in the final products.
In 2024, 441 million pieces of products were shipped, with no product being recalled due to safety or health reasons.
Handling Product Complaints
A complaint is defined as any written or verbal statement made by our customers that indicates their dissatisfaction with our product quality. The major types of product complaints are classified as follows:
Issues regarding product quality (e.g. product recalls)
Issues regarding product safety (e.g. needle contamination)
Potential lawsuit, breach of laws and regulations
Once a complaint is received, the recipient and the related parties handle the complaint according to Crystal's complaint handling procedure. The line management reviews and validates the complaint as the related factory and sales teams investigate the case, identify the root cause of the problem, and take appropriate corrective actions. While the CQS works with factory teams to monitor the correction, a designated department, e.g. sales or the factory quality assurance team, is responsible for reverting and communicating with the customer within a specified timeframe, until the case is closed and the customer is satisfied.
The CQS logs all valid complaints and reports them to the Execo twice a year as part of the key risk management process. In 2024, there was one valid product quality complaint.
Product Recall Procedure
A product recall is defined as a request to return, exchange, or replace a product by a customer when the product is found to have defects that may hinder performance, harm consumers, or lead to legal consequences.
In the case of a product recall from any customer, our sales team negotiates with the customer to resolve the product recall issues and work out solutions together. The solutions may include but not be limited to case investigation and root cause analysis, replenishment of the products, and improvement actions, whichever are applicable.
Whenever needed, the CQS provides support by liaising and following up with the related parties throughout the case. The CQS reports the number of recall cases to management at least biannually. In 2024, there were no product recall cases.
Intellectual Property Rights
We acknowledge the importance of intellectual property ("IP") rights, and work to protect and promote IP assets, such as patents, trademarks, and copyrights. We implement control measures including patent and trademark registration, as well as regular monitoring of IP registration. We promote awareness among employees of our responsibility to make IP an integral part of our daily operations.
By implementing the control measures, physical and information technology security management is adopted to protect IP rights and company equity. Our Execo is also informed of the status of IP registration monitoring and any infringement cases on a regular basis, as a part of our key risk management system.
Note:
Product advertising is not material to our garment and textile manufacturing business.
Advancing Brand Protection via Factory Governance Initiative
Steered by the CEO, the Corporate Factory Governance Committee initiated a series of actions to enhance the protection of our customers' brand equity. These included refining the Group's Brand Protection Guidelines, setting up factory brand protection committees, and strengthening relevant
training and audits.
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Supply Chain Management
Supply Chain Management Strategy
Supply chain management plays a significant role in our company's sustainability strategy. Sustainable and ethical practices across our supply chain are essential to achieving our long-term goals. We are committed to reducing the environmental impact of our operations by prioritising energy efficiency, sustainable sourcing, and waste reduction, while ensuring fair labour practices and ethical standards throughout our supplier network.
Through collaboration with suppliers, implementation of robust monitoring systems, and transparent reporting, we aim to build a resilient and responsible supply chain that aligns with our commitments.
At Crystal, the top priorities for supplier selection and retention are identified as follows:
Cost • Delivery
Quality performance • Social and environmental performance
In 2024, we sourced fabric and trims for our production from 18 major suppliers. Each major supplier contributed at least 1% of our total material purchased amount. Based on the locations of their headquarters, 100% of our suppliers were based in the Asia-Pacific region.
Material Traceability
We believe in the vital role we play in facilitating our customers' traceability programmes, which are essential for enhancing the authenticity, sustainability, and transparency of our products. As a tier one supplier, we act as a crucial intermediary who fosters communication and collaboration between our brand customers and upstream suppliers, contributing to a fully traceable value chain from raw materials to customers. Overseen by a dedicated corporate department, our traceability efforts to date include:
Maintaining material origins records
Auditing suppliers Monitoring regulatory and
market updates
Communications with stakeholders
Exploration and Pilot of Solutions
Blockchain Platforms and Tracer Technologies
We continued partnerships with customers to pilot both fibre-forward and garment-backward traceability programmes that leveraged varied solutions including blockchain platforms, tracer technologies, or DNA testing. While multiple trials were conducted to identify improvement opportunities, our colleagues also offered feedback with an aim to streamline operations.
DNA Testing
To verify the claimed origin of fabrics from customer-nominated and our own-sourced suppliers, we worked with product testing company Oritain, which tests and matches the DNA of the fibres in the fabric with the unique origin fingerprint in the database. This helped to ensure we procure from trustable sources, reduced our risk of unethical practices, and protected our reputation. We will continue assessing and deploying other viable advanced technologies.
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Proactive Stakeholder Communications
We constantly consult solution providers to learn about the latest traceability technologies and tools, in addition to monitoring customer requirements and related legislations in our markets and operating countries. These updates were communicated to suppliers during training sessions and audits, and were distributed internally to relevant colleagues, including the sales and merchandising teams. This exchange helped position us and our value chain favourably to prepare for the rapidly evolving traceability initiatives.
Governing Policies and Requirements for Suppliers
Suppliers are approved only if they meet the Group's minimum requirements, which include:
Prohibition of child labour
Prohibition of forced labour
Adherence to local minimum wage standards
Compliance with local environmental regulations
The Group has established agreements with key suppliers, committing to promoting sustainable practices across our supply chain. All suppliers are required to comply with local legal requirements, the corporate Supply Chain Management Procedure, and the following policies:
ERP for Traceability
Our fabric mill in Vietnam implemented an Enterprise Resource Planning ("ERP") system - SAP S/4HANA for fashion and vertical business in 2024, enabling more efficient management of our material records, such as purchasing records and shipment documents, thus facilitating implementation of
traceability programmes.
Code of Conduct
Social Compliance Policy
Environmental Policy
Anti-Corruption Policy
Restricted Substances List ("RSL")
Quality Policy
Brand Protection Policy
Customer-specific requirements
Corporate Supply Chain Management Procedure
To create a resilient, sustainable, and competitive supply chain that supports the company's long-term success, our Corporate Supply Chain Management Procedure outlines standardised processes and practices that all line companies and factories should follow to manage the supply chain efficiently and in compliance.
A dedicated department within each line company is tasked with implementing the procedure, including monitoring the social and environmental performance of our directly-sourced suppliers.
We continued to monitor and encourage our suppliers' performance in quality, social, and environmental compliance to ensure the sustainability and effectiveness of our supply chain. By fostering collaborative relationships with suppliers, we discussed new development directions aligned with customer expectations, market trends, and industry advancements.
To support and drive supplier performance, we conducted regular training, capacity-building initiatives, inspections, and risk assessments through virtual meetings or onsite visits. These efforts ensured that all requirements are properly implemented and upheld.
In 2024, we implemented these practices for all the aforementioned 18 major suppliers.
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Managing Environmental and Social Risks along Supply Chain
We define environmental and social risks in our supply chain as any practices that breach local legal requirements, our Code of Conduct, internal policies, or the minimum standards outlined in the Supply Chain Management Procedure. This also includes incidents that may compromise workers' human rights, health and safety, or lead to labour issues. To proactively identify and mitigate significant environmental and social risks, we regularly conduct risk monitoring and evaluation through the following methods:
Green Supply Chain
To build a sustainable and green supply chain, our Supply Chain Management Procedure provides a clear set of environmental criteria for supplier selection. Procurement priority is given to suppliers that minimise adverse environmental impacts through good practices such as:
Media monitoring
Stakeholder feedback
NGO platforms, e.g. the environmental supervision records of the Institute of Public and Environmental Affairs ("IPE")
Onsite visits
Questionnaires
Suppliers' self-assessments or third-party audit reports
We have established a robust system to identify, report, investigate, and address potential risks within our supply chain. Environmental and social performance, along with associated risks, are reported to management, and relevant stakeholders are promptly informed, particularly in cases of leading indicators such as work stoppages, injuries, or fatalities that could impact customer relationships or result in financial or reputational damage. The CQS and sustainability teams at our factories maintain regular communication with designated
Establishing carbon and water reduction targets
Obtaining certification for sustainable materials or products
Committing to low-carbon and energy-efficient manufacturing
Adopting green chemistry
Implementing water-efficient practices
Developing environmental management systems (e.g. ISO14001)
Diverting waste from landfill
Conducting regular wastewater testing in accordance with industry standard ZDHC, which exceeds legal standards
suppliers to drive continuous improvement and provide necessary support until risks are effectively resolved.
We employ a "Key Risk Management" mechanism to address potential risks within the supply chain. Risks are categorised and colour-coded based on their severity and are reported to the Execo twice annually. In cases where a supplier fails to comply with the Crystal Code of Conduct, our policies, or minimum requirements - or demonstrates insufficient progress within an agreed timeframe - we may terminate the business relationship to uphold our standards and commitments.
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The CQS, line companies, and factories are responsible for tracking and monitoring supplier performance according to the above criteria.
IPE Environmental Supervision for Suppliers
Based in China, the IPE is one of the key platforms for us to monitor the environmental compliance and performance of suppliers. By evaluating the disclosed information on the platform, we are able to identify environmental incidents in the supply chain in China. In the event of violations, we follow up with the concerned supplier immediately. In 2024, no environmental violations were reported.
Engagement with Subcontractors
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Leveraging our robust and comprehensive environmental data management, we shared our expertise and encourage suppliers to develop their own environmental databases. This enhanced their performance monitoring and tracking capabilities, enabling them to meet the diverse data platforms required by different customers, such as comMIT, cr360, and Enablon.
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Crystal International Group Ltd. published this content on April 28, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 28, 2025 at 12:49 UTC.
