Paper product company puts ESG first

King Lai, Chief Financial Officer and Group Director of Leo Paper, said the printer and paper products manufacturer positions itself as a global printing communications group.

“We are not simply communicating or creating products, but through creative greeting cards and other paper products we convey surprises, personal messages and emotions, strengthening the communications and connections between people. In the digital age, sales of physical greeting cards may be on the decline but we still have a price and a market.”

Over its 40 years, Leo Paper has grown from a micro-enterprise to a group employing 13,000 people with five factories. Its three longest-established factories are all in Heshan, which is within the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) city of Jiangmen. Among them, Heshan Astros Factory is the largest and the first to be built. A fourth plant has been set up in Hunan province, north of Guangdong, while its newest plant is in Vietnam.

The products from the Vietnam plant mainly go to the United States while those from Hunan are for domestic sales. Products from the Jiangmen plant, meanwhile, are exported to overseas markets that do not attract import tariffs, such as Europe, the United Kingdom, Australia and Japan.

Leo Paper's factories aim to cut waste with the goal of "zero waste" in mind and will also cut carbon dioxide emissions by using solar energy to generate electricity, as well as planting trees for mitigation. The group's agricultural and forestry area in Shaoguan City, Guangdong Province covers more than 6,000 mu (400 hectares)with more than 100,000 trees planted.

Mr Lai said solar power has been generated in the Vietnam factory since December 2020. The factory has six independent buildings with solar power panels on the roofs, creating a solar-power generating surface of more than 3 hectares. Strong sunlight in the country means power generation capacity is high and the firm expects to generate 2,900 megawatt-hours of electricity per year. “In industry, it is difficult to be self-sufficient in electricity because factories consume a lot, but we will try our best.”

He added that Leo Paper plans to install solar power panels on the roof of the largest factory in Heshan. The first phase will be piloted in multi-storey buildings and is expected to be complete this year, while the second phase will be in low-rise buildings. Further phases will be implemented in other factories.

The group uses independent research and development (R&D) and innovative technologies to upgrade and transform its operations, which also helps the firm adhere to its ESG commitment.

The group applies robotic arms to the production process of the printing industry, and cooperates with the application of innovative technologies in such areas as new materials, technologies, production lines and software to further achieve upgrading and transformation. The reduction in labour demand will also help reduce carbon emissions in disguise, because carbon emission is involved in all aspects of clothing, food, housing and transportation.

Mr Lai said he believes there is a trend towards transformation and the adoption of ESG and that companies need to keep this in focus.

Leo Paper has published corporate social responsibility/ESG reports for 12 consecutive years, since 2009, which can be described as leader in the industry. Mr Lai said ESG reports collects and analyses data on water consumption, electricity use, gas, solid and water waste output, so that the group can formulate strategies and measures according to the actual situation and make systematic management and improvement, as well as achieve long-term goals of sustainable development.

To support the green development of the GBA, HSBC has recently launched the GBA Sustainability Fund, allocating US$5 billion to back GBA enterprises that implement a net-zero carbon dioxide transformation and sustainable development business model.

The 18-month credit fund programme is designed for GBA enterprises and there is no size limit. It applies to manufacturers and property builders that plan to reduce carbon emissions, or businesses related to combating climate change and reducing pollution, and green industries such as transport, energy, water resources and wastewater management.

Speaking at an ESG seminar co-organised by the HKTDC and HSBC, Mr Lai said: "I think the HKTDC has done a good job, such as holding seminars to explain such issues as ESG and green financing to SMEs. I have also registered with the HKTDC's GoGBA app, which provides information about doing business in the GBA. The HKTDC also has offices in different provinces and cities in the mainland to assist SMEs, which is very convenient.”