As part of our plan to shift our fleet from diesel to electric vehicles, we applied for funding from the Hong Kong Government’s New Energy Transport Fund in 2023. The Fund subsidises testing and encourages wider use of green innovative transport technologies for a variety of commercial applications. In February 2024, Wellcome Hong Kong became the first retailer in Hong Kong to operate a 24-tonne electric truck when it joined our fleet.

While reducing our Scope 1 emissions, it is expected that each electric truck could save over 264,000 litres of diesel fuel, equivalent to around 538 tonnes of carbon emissions over a decade which is comparable to the annual carbon absorption of around 24,710 trees. In addition to lowering our carbon footprint, the electric trucks also create less noise and have a simpler mechanical structure requiring less repair and maintenance. The advanced engineering and technology also enhance road safety and driver comfort.

Wellcome Hong Kong: First retailer in Hong Kong to introduce a 24-tonne electric truck

Following the launch of our Own Brand Health and Beauty Plastic Reduction Strategy, our team has continued to find more ways to offer high-quality, good-value products that utilise less plastic.

To achieve this goal, DFI has formulated five workstreams to reduce plastic usage across our Own Brand product Health and Beauty lines:

<ul>
	<li>Refuse: Removing plastic shrink wrap.</li>
	<li>Replace: Replacing HDPE plastic with widely recycled PET plastic, or replacing virgin plastic with materials made with plant-based fibres.</li>
	<li>Reduce: Redesigning products to use less plastic.</li>
	<li>Reuse: Introducing refill pouches so bottles can be reused.</li>
	<li>Recycle: Using recycled materials in place of virgin raw materials. We are also working to maximise the recyclability of all our packaging.</li>
</ul>

Within our Own Brand Health and Beauty range, we continue to look for innovative ways of reducing plastic usage in all product lines following the five workstreams, including the following examples:

Refuse: 

Starting with body and hand wash products, we redesigned Mannings and Guardian’s Own Brand anti-bacterial and 24-hour moisturising body and hand wash bottles in 2022 and expanded to more product lines in 2023. By replacing the HDPE bottles with lighter-weight PET bottles that are more easily recyclable, we were also able to reduce the weight of plastic used by around 15%.

Replace: 

Mannings and Guardian stores in Hong Kong, Macau, Malaysia and Singapore launched the NUMBER eI8ht Moisturising Sheet Mask made of Veocel; a plant-based material that is biodegradable and compostable.

Meanwhile, during 2023, Mannings in Hong Kong and Macauand Guardian in Singapore and Malaysia introduced anti-bacterial, multi-surface cleansing wipes made from 100% natural plant-based fibres. By replacing polyester fibres with plant fibres, we expect to avoid 58 tonnes of plastic waste per year.

Reduce:

Mannings in Hong Kong and Macau has reduced the amount of plastic used in packaging across our Own Brand cotton products. The redesigned packaging was introduced to stores in late 2023, and the annual plastic reduction is forecast at 2.9 tonnes. The initiative will roll out to Guardian stores in 2024.

Reuse: 

In Malaysia, Guardian launched refill pouches for popular Own Brand body and hand wash products in late 2022. The refill pouches are available for up to 10 types of body and hand wash.

In 2023, Guardian stores in Singapore and Malaysia also introduced refill pouches for our Own Brand Kids Head to Toe Wash in Strawberry Yoghurt and Orange Yoghurt varieties.

For all these hand and body wash products, the refill pouches reduce the use of plastic by almost 80% compared to the original bottles.

Recycle:

Since 2022, we have used 50% recycled plastic for our Own　Brand dental care accessories, which were previously 100% virgin plastic. We have also reduced the amount of plastic outer packaging on dental care accessories by 23% to 45% through design innovations such as using paper packaging where possible. By using 50% recycled plastic for accessories, and switching to paper wrapping, we saved 50 tonnes of virgin plastic throughout 2023.

Through these initiatives, we reduced annual plastic usage by 110 Tonnes in 2023.

DFI Retail Group: Own Brand Health and Beauty reduce plastic across more lines

IKEA Taiwan welcomed the first electric truck in our fleet. In comparison to a 10.5-tonne diesel truck, the 26-tonne electric truck will reduce carbon emissions by 18%, which is equivalent to 5.38 tonnes of carbon dioxide every year.

The vehicle was also the first 26-tonne electric truck introduced in Taiwan. This achievement was made possible through our collaboration with Swedish truck manufacturer Scania, and Taiwan Transport &amp; Storage (TTS), a subsidiary of Taiwan Cement Corporation (TCC). The electric truck provides inventory replenishment services to stores from the new IKEA fulfilment centre.

We also collaborated with TCC Energy Storage Technology Corporation to install charging stations to support our transition to using the electric truck. Through the combined efforts of the three parties, we aim to promote zero-carbon and green logistics transportation development in Taiwan, and look forward to using more electric vehicles for inventory replenishment and home delivery services.

Taiwan’s first 26-tonne electric delivery truck

IKEA Taiwan: Taiwan’s first 26-tonne electric delivery truck

IKEA Taiwan has expanded its use of renewable energy solutions by installing solar panels on the 5,200-square-metre rooftop of our Hsin Chuang Store. The 2,500 individual solar panels have transformed the space into a clean energy generator. The store’s solar panel system is anticipated to reduce its greenhouse gas (GHG) emissions by about 4,400 tonnes of carbon dioxide annually. This installation is the latest in IKEA Taiwan’s efforts to reduce its GHG emissions through the use of solar energy. We have also installed solar power generation systems at four other stores and at the new IKEA fulfilment centre that opened in 2023. To date, IKEA Taiwan has six solar panel installations generating sustainable energy and reducing carbon emissions.

Similarly, the solar panel system installed on the Wellcome Fresh Food Centre rooftop in Hong Kong in 2022, expected to continue to generate over 1 million kWh of renewable energy each year, under CLP Power’s Renewable Energy Feed-in Tariff scheme.

IKEA Taiwan and Wellcome Hong Kong: Solar panel installation expansion

Our continued improvements in energy efficiency would not be possible without the support and hard work of our team members and partners. Change requires communication and throughout 2023, we continued to encourage behavioural changes across all our banners. We constantly engage with our operations team to monitor improvements through our technician network and ensure all our teams are empowered to adopt best practices. In addition, our Energy Champions, such as our store and regional managers, all have energy-saving targets and increased accountability for energy efficiency.

We hope our consistent action to monitor energy efficiency and increase energy savings will further reduce costs and minimise our environmental impact. These efforts have also resulted in recognition, including the Hong Kong Awards for Environmental Excellence - Super Gold Award, which we won for the sixth time in 2023. We are also the three times winner of the Joint Energy Saving CLP Smart Energy Award for Wellcome, 7-Eleven and Mannings.

i. Energy efficiency upgrades and technology installation

Throughout 2023 our energy teams often worked through the night to convert LED lighting in 716 stores across Hong Kong, Singapore and Malaysia. They also installed a significant amount of technology in our existing refrigeration systems, working on more than 1,700 projects in our convenience and food stores across Hong Kong and Singapore. These improvements were made to compressors and fans within the refrigeration systems that facilitate greater adaptability when dealing with varying ambient conditions. 
To optimise energy consumption and reduce energy waste, we installed electricity sub-meters to monitor the energy usage of refrigeration and air-conditioning systems in our stores in real-time. This allows team members to track consumption patterns and identify opportunities for improvements in energy saving, while also ensuring all the equipment is running at optimal levels and minimising energy waste. The sub-meters also provide visibility on exceptional events so our team can take action as needed.

We also installed motion detectors in low foot traffic areas at our stores, including back-of-house areas such as stock rooms. These detectors automatically control lighting, ensuring lights go off when there is no activity in the area, removing the need for manual intervention and helping to avoid wasting electricity. Wellcome has also installed smart air conditioning controls, utilising advanced technology that ensures the air conditioning operates at optimal levels.

ii. Switching to environmentally friendly equipment in 7-Eleven South China

Our 7-Eleven stores in South China have also been optimising equipment to reduce their energy consumption and environmental impact. Starting in September 2023, we have replaced traditional lighting with energy-saving LEDs and upgraded air-conditioning and refrigeration equipment in the region. More stores are now using refrigerants with lower global warming potential (GWP) values in the freezers and open chill display refrigerators. 
We have also been installing anti-condensation controls on open chill freezer equipment, upgrading large tabletop freezers and reducing the use of acrylic insulation panels.

iii. Minimising the use of electrical equipment at Lucky Cambodia

Meanwhile in Cambodia, DFI Lucky supermarkets have been developing and implementing strategies to minimise energy consumption and costs since late 2022. This energy conservation initiative, encompassing air conditioning, refrigerators and front lighting, was successfully implemented in all 84 Lucky supermarkets during 2023. 
To optimise air conditioner usage, we reduced the number of units in operation from eight to three or four, depending on factors such as size of store, location, outdoor temperature, and customer traffic. After analysing our refrigerator use, we reorganised display space to minimise energy consumption and costs. Additionally, we have moved items that can be stored at room temperature out of refrigerators. 
As well as identifying and reducing unnecessary lighting during the night, we installed automatic timers for front of store lighting, further optimising power consumption. As a result of these initiatives, we have achieved significant cost savings of up to US$30,000 per month in Cambodia.

&nbsp;

 DFI Retail Group: Energy saving initiatives across our businesses

Since 2022, as part of the Environmental Protection Department’s (EPD) food waste collection programme, several Wellcome supermarkets have started diverting food waste to OPark1, a facility that converts food waste into biogas. This renewable energy source is used to generate electricity that can be used at the facility or exported to the grid, while the remaining residue from the process is converted into compost suitable for horticultural or agricultural purposes. 
As of December 2023, we have implemented food waste separation and recycling processes at 53 Wellcome stores, resulting in the diversion of over 600 tonnes of food waste to OPark1 as of December 2023. 
Additionally, since WFFC joined the EPD’s Pilot Scheme on food waste collection we have successfully diverted about 96% of food waste generated at the centre.

Wellcome Hong Kong: Turning food waste into energy

Our Own Brand team introduced Mannings and Guardian Eco-Garden branded bath care, hair care, body and hand care products in Mannings and Guardian stores in Hong Kong, Macau, Malaysia and Singapore in Q4 2023. Designed to offer consumers affordable, eco-friendly health and beauty products, the Eco-Garden product line is made using 100% vegan formulas utilising over 90% natural-origin ingredients. 
Adding to its sustainability credentials, the Eco-Garden range comes in packaging that utilises post-consumer recycled (PCR) plastic with 100% PCR bottles and 40% PCR tubes.

Mannings and Guardian: Mannings and Guardian Eco-Garden offer affordable sustainable choices

Across the region, DFI has broadened the scope of our food donation initiatives to redirect surplus edible food to those in need. We collaborate with established local charities and organisations that are well-placed to distribute food to beneficiaries through various projects in our communities. Our food donation initiatives include the examples below by Hero Indonesia, Wellcome Hong Kong, and 7-Eleven Hong Kong, which donated more than 250 tonnes of non-perishable and soon-to-expire food items in 2023.&nbsp;

Wellcome, Hong Kong

In 2022, Wellcome Hong Kong initiated a programme to donate dry goods and fresh produce nearing the end of its shelf life to NGOs. Our stores work with several charities including Foodlink and Feeding HK that collect safe-to-eat surplus food and deliver it to organisations such as senior centres, crisis shelters, central kitchens, after-school programmes and food banks helping people in need. We donated 108 tonnes of food from January to December 2023 to Foodlink and close to 36 tonnes to Feeding Hong Kong.

7-Eleven, Hong Kong

Also in Hong Kong, 68 participating 7-Eleven stores work with Foodlink to donate various soon-to-expire products 
to multiple NGOs and their beneficiaries every month. Additionally, around 146 stores donate still-fresh bread and baked goods to NGOs such as Breadline that help distribute surplus bakery items to people in need. 
From January to December 2023, 7-Eleven Hong Kong donated around 146,000 pieces of non-perishable and soon-to-expire food items, preventing 108.9 tonnes of food from going to landfills. 
&nbsp;

DFI Retail Group: Donating soon-to-expire food to NGOs

IKEA Taiwan aims to be a circular economy enterprise by 2030. Recognising the challenge presented by the global generation of 92 million tonnes of textile waste annually, projected to escalate to 130 million tonnes by 2030, and 80% of the waste was not recycled or reused. IKEA joined Taiwan’s “Textile to Textile” Project to explore new solutions to extend the life of textiles.

IKEA Taiwan collaborates with local partners, Far Eastern New Century (formerly Far Eastern Textile) and textile manufacturer and research and development firm Yicheng Hsing to promote the circular economy of textiles in Taiwan. The project involves three key steps: waste collection and sorting, shredding and extrusion into recycled fibres, weaving, dyeing and manufacturing new products.

IKEA provides about one tonne of textiles not suitable for sale such as display items and customer returns that would previously have been discarded. After waste collection, Far Eastern New Century applies its “TOPGREEN®rTEX” recycling technology to process discarded polyester products, by shredding the textiles, melting them into granules, drawing fibres, and false twisting to yield recycled fibres. Yicheng Hsing helps coordinate the various stakeholders and navigate manufacturing technology challenges such as weaving and dyeing the recycled materials to produce innovative new fibre and products. Additionally, the IKEA Taiwan marketing team has introduced a point-based activity at stores, encouraging customers to earn and redeem points for tote bags crafted from the “Textile to Textile” Project’s recycled fabrics. This initiative promotes the concept of environmental protection and mindful purchases.

IKEA Taiwan: IKEA Taiwan joins circular “Textile to Textile” Project

7-Eleven South China, Hong Kong, Macau and Singapore have taken significant steps towards reducing plastic usage by introducing various sustainable materials for tableware and packaging and inspiring customers to adopt more sustainable habits. 
Starting in 2017, 7-Eleven South China has transitioned to using only degradable disposable bags and has introduced environmentally friendly utensils such as biodegradable beverage straws and wooden spoons. In 2022, we completely replaced plastic cups with paper cups for Slurpee drinks. We avoided using 24.9 tonnes of plastic in 2023. 
7-Eleven’s network of Tsat Jai Sik Dong (7-Eleven Food Stall) in Hong Kong and Macau introduced new tableware by replacing plastic with sustainable materials in September 2023. The environmentally friendly upgrades include cups for hot drinks made with FSC-certified paper, cup lids made from bagasse (sugar cane pulp), FSC-certified paper straws and bagasse cutlery. 
Covering more than 330 Tsat Jai Sik Dong in Hong Kong and Macau, 7-Eleven reported more than 2 tonnes of plastic was avoided in 2023 after the adoption of serving items made from sustainable materials. 
Concern has been growing about the single-use plastic tableware for takeaway food services in Hong Kong and Macau. According to Hong Kong Government figures, the use of plastic tableware has grown by 27% in the last decade and reached 225 tonnes of plastic per day in 2021 during the pandemic. In October 2023, the Hong Kong Government announced plans to ban disposable single-use plastics for tableware from April 2024. 7-Eleven Hong Kong’s adoption of sustainable tableware demonstrates some alternatives to single-use plastic for takeaway food services, and is a valuable step towards the community’s goal to reduce plastic usage. 
7-Eleven Singapore prioritised its sustainability journey, particularly focusing on food and cutlery practices. As part of this effort, we revamped our burger packaging system, transitioning from a two-component packaging to a more streamlined solution with just a wrapper and sticker label. Also, we have reduced the thickness of the plastic top seal of our meal boxes by 0.15mm. 
We believe in promoting an eco-friendly lifestyle from a young age. One of our key initiatives is to advocate for the use of reusable straws with our best-selling Slurpee. We encouraged all Slurpee fans, particularly young children, to adopt environmentally friendly behaviour while enjoying Slurpee. Therefore, we have introduced affordable and reusable pocket straws as a plastic straw replacement option. 
&nbsp;

7-Eleven: 7-Eleven South China, Hong Kong, Macau & Singapore leading the way with sustainable materials

In March 2023, GNC Hong Kong launched the GNC Recycling Reward Programme, which partnered with local social enterprise V Cycle to recycle GNC brand plastic bottles into new materials. 
To encourage customers to recycle, we provided a HK$10 GNC discount voucher for every GNC plastic bottle returned. 
These bottles are then processed at V Cycle’s recycling factory and turned into post-consumer recycled plastic pellets used for manufacturing new products. 
As of 31 December 2023, over 3,700 plastic bottles had been returned and recycled.

GNC Hong Kong: GNC Recycling Reward Programme

Maxim’s Group collaborates with Hung Yat Farm to reduce food waste and promote sustainable practices through “WeGen farming”. &nbsp;This initiative transforms pre-consumed food waste into enzymes. These enzymes are then used to grow crops without using pesticides and chemical fertilizers. The resulting high quality and healthy produce is supplied to nearly 70 of the Group’s restaurants, integrating circular economy practices into everyday customer experiences.

The enzymes are derived from a variety of pre-consumed food waste, including mango peels, soy pulp, salmon bones, coffee grounds, and eggshells collected from Maxim's Group.&nbsp; This innovative approach offers a green alternative that enhances soil nutrition, prevents pests, and produces farm goods free from pesticide and chemical fertilizers. &nbsp;

Hung Yat Farm employs crop rotation strategies that improve soil quality and carbon sequestration while also protecting biodiversity.&nbsp; This closed-loop system ensures that the produce served in the Group’s restaurants is not only of high-quality but also embodies the natural nutrition and flavours of WeGen crops.&nbsp; This practice significantly reduces carbon emissions associated with the production and transportation of food.

The supply of pre-consumed food waste is projected to reach 30 metric tons in 2024, alongside an anticipated crop yield of 20 metric tons within the same year, spanning over 10 different types of crops.

Wegen farming has been recognized as an industry best practice in the "A Practical Guidebook to a Circular Economy: Collaborating with Value Chain Partners for a Resilient Business", published by the HKU Centre for Civil Society and Governance in 2023.&nbsp; This guidebook serves as a critical resource, helping industry practitioners in advancing their sustainability efforts.

Maxim's Group: Maxim's Group Utilizes Pre-consumed Food Waste to Promotes Circular Economy and Healthy Dining 

Maxim’s Group has partnered with the food upcycling startup, Breer, to launch an innovative initiative aimed at reducing food waste. This collaboration has led to the creation of BOB, short for “Bottle of Bread”, a craft beer brewed entirely from surplus bread and crusts from Maxim’s facilities, furthering sustainability in their operations and promoting a circular economy.

Original BOB, a citrusy Pale Ale which incorporates 25g of surplus bread per bottle, launched in 2022. In 2023, the partnership expanded its product line Coffee BOB, a stout beer with a rich palate, crafted with a blend of 4g of coffee grounds and 15g of surplus bread and crusts per bottle. BOB has also given an innovative twist by transforming Coffee BOB into a delectable limited-time BOB cake, showcasing the vast potential of sustainable practices with flair and creativity.

BOB not only exemplifies Maxim’s Group's commitment to sustainability but also showcases the high standards of "Made in Hong Kong" craft beer. Both the Original and Coffee BOB have received accolades, securing the Gold Medal at the Asia Beer Challenge 2023, and a Bronze Award at the World Beer Awards. &nbsp;Notably, Original BOB also received a Certificate of Bronze (Pale Ale) at the Hong Kong International Beer Awards.

The innovative and excellent brand design of BOB has garnered significant recognition. It was honored with the prestigious iF DESIGN AWARD 2024 in Germany, in the “Communication / Promotion / Advertising” category, and received the highest accolade of “Best of the Best” at the Hong Kong "HKDA Brand Design Awards 2024".

Available in over 100 Maxim’s Group restaurants and outlets throughout Hong Kong, BOB has not only achieved commercial success but has also continue to inspire sustaining discussions and actions among staff, academics, and industry partners, setting a precedent for future initiatives.

Maxim's Group: Maxim's Group Promotes Circular Economy by Upcycling Surplus Bread and Coffee Grounds into Beer 

DFI has passed an important milestone on our sustainability journey. In 2023, we became one of the first retailers in Asia to have GHG emission reduction targets validated by the Science Based Targets initiative (SBTi), a global body that defines and promotes best practices in emission reductions and net-zero targets, in line with climate science.

Our SBTi-validated GHG emission reduction targets include committing to reduce absolute Scope 1 and Scope 2 emissions by 50% by 2030, from a 2021 base year.

We are also committed to reducing absolute Scope 3 GHG emissions, covering purchased goods and services, fuel- and energy-related activities, and waste generated in operations and as a result of our investments.

DFI Retail Group: SBTi validation for Group targets

As part of our commitment to reducing harmful GHG emissions, we have invested in developing and installing water loop refrigeration technology, which has increased the efficiency of our refrigeration systems, reduced our GHG emissions and reduced energy usage. 
Following the successful roll out of water loop refrigeration systems in our first Wellcome store in Hong Kong in 2022, we installed water loop refrigeration systems in nine more stores in 2023, with more to follow in 2024. 
We also set up the DFI Refrigeration System Research and Development Centre in Chung Hom Kok in collaboration with our facilities management partner, City FM. This dedicated research centre enables further engineering experiments and training for engineers to expand their knowledge of water loop technology in Hong Kong. Additionally, we have initiated meetings with stakeholders such as the Hong Kong Environment and Ecology Bureau, the Business Environment Council and banks, to demonstrate the water loop system and its applications in order to encourage more businesses and institutions to consider its adoption.

Wellcome Hong Kong: Pioneering water loop refrigeration system lowers emissions

We have also been working closely with refrigeration industry leaders to find ways to reduce the use of high GWP refrigerants for stores that are not suitable for installing water loop technology. In 2023, we have converted 11 stores to lower GWP refrigerants across Hong Kong and Singapore’s food business.

DFI Retail Group: Converting refrigerators to use lower GWP refrigerants

Adhering to our sustainability commitment, IKEA Hong Kong has been experimenting with selling display items and discontinued models and encourage customers to give IKEA furniture a second life on Carousell, a popular resale platform in Asia. The account is updated every week with 200 items at great bargains, including lightly used IKEA products from other customers, as well as a variety of discontinued or limited stock items and display items from the IKEA Kowloon Bay store’s special selection. The initiative has given lightly used furniture that is in good condition a second life, while raising public awareness of recycling and avoiding over-consumption.&nbsp;

IKEA Hong Kong: IKEA Giving Previously-Owned Furniture a Second Life

We want to do everything we can to protect the environment. That means reducing our use of plastic, food waste and the amount of energy we consume, as well as switching to more sustainable options for resources  such as refrigerants.

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