Ausnutria Dairy's 2025 Sustainability Report Highlights Lower Emissions, Renewable Energy and Supply Chain Challenges

Ausnutria Dairy Corporation Ltd has published its tenth Sustainability Report, outlining its environmental, social and governance performance for the year ended 31 December 2025. The Hong Kong-listed dairy and nutrition group operates 11 manufacturing facilities across China, the Netherlands and Australia, supplying infant formula, nutritional supplements and specialised nutrition products to more than 60 countries and regions.

Prepared in accordance with the Hong Kong Stock Exchange's Appendix C2 ESG Reporting Code, the report covers operations representing more than 90% of the Group's non-current assets. It presents Ausnutria's sustainability strategy through three pillars: Better Life, Better Nutrition and Better Environment. The disclosure is particularly relevant as the company navigates declining birth rates in China, intensifying competition and increasing expectations for responsible manufacturing and transparent climate reporting.

Key Sustainability Themes and Disclosures

Environmental performance represents one of the report's most measurable developments. Ausnutria disclosed Scope 1 greenhouse gas emissions of 11,918 tonnes of CO₂ equivalent in 2025, compared with 16,878 tonnes in 2024, representing a reduction of approximately 29.4%. Market-based Scope 2 emissions increased from 8,441 to 9,451 tonnes, while combined Scope 1 and 2 emissions intensity declined from 3.4 to 2.9 tonnes of CO₂ equivalent per RMB million in revenue.

The emissions trend illustrates the importance of examining individual sources rather than relying exclusively on aggregate performance. Ausnutria reported that 100% of electricity consumed by its Netherlands operations came from renewable sources, while new facilities in Heerenveen introduced processes described as nitrogen-free and carbon-free. However, the company has not yet disclosed Scope 3 emissions, citing value-chain data availability and calculation challenges, leaving a significant area for future reporting development.

Resource efficiency indicators also showed progress. Total energy consumption decreased from approximately 129.2 million kWh in 2024 to 111.4 million kWh in 2025, while water consumption fell from 639,417 to 506,495 cubic metres. Electricity purchases increased, partly reflecting business expansion and the transition away from natural gas, highlighting how electrification may alter operational energy profiles even as decarbonisation initiatives advance.

In waste management, the company reported a 99% recycling rate for plastics and 100% recycling rates for specified paper, wood and surplus dairy materials within its production-related waste programme. It also described the use of FSC-certified packaging materials and initiatives to reduce packaging waste. These disclosures suggest increasing attention to material efficiency, although the environmental target boundary excludes certain operations and should be considered when interpreting progress.

Workforce, Product Responsibility and Social Impact

Employee development and occupational safety remain important elements of Ausnutria's social performance. The company reported zero work-related fatalities in 2025, while the proportion of employees receiving training increased from 91% in 2024 to 97%. However, occupational injury-related lost days rose from 28 to 108, indicating an area requiring continued management attention despite the absence of fatalities.

Ausnutria expanded structured learning programmes through its corporate academies and leadership development initiatives across China and the Netherlands. Employee turnover rates declined across the geographic regions disclosed, suggesting improved workforce stability. Continued monitoring of retention, employee wellbeing and safety outcomes will help stakeholders assess whether these initiatives translate into sustained organisational performance.

Product responsibility is particularly significant given Ausnutria's exposure to infant nutrition and food safety requirements. The Group reported investment of more than RMB100 million in product development and the launch of 48 new products during 2025. Its disclosures also describe food safety management certifications, product traceability systems and supplier quality controls, alongside cooperation with research institutions.

Supply chain engagement extends to the Dutch dairy farming sector, where Ausnutria reported 100% participation among affiliated goat farms in an industry sustainability programme. Community initiatives included more than RMB340,000 in infant formula donations to earthquake-affected families in Tibet. These activities demonstrate practical engagement, although longer-term social outcomes require evaluation beyond programme participation and donation values.

Governance and Strategic Signals

Ausnutria describes a sustainability governance structure led by its nine-member Board of Directors, supported by a Sustainability Committee and regional Sustainability Workgroup. The Committee monitors sustainability risks, evaluates targets and oversees implementation, while local operational teams manage responsibilities relating to environmental protection, employee welfare and product quality. The company also reports anti-corruption training, whistleblowing arrangements and a risk management framework referencing COSO ERM and ISO 31000.

The integration of climate scenario analysis into risk identification in 2025 represents another step towards more forward-looking sustainability management. Nevertheless, the effectiveness of these arrangements will increasingly depend on measurable risk responses, consistent implementation across regions and clearer connections between sustainability performance and business decisions.

What This Report Suggests About Future Direction

Ausnutria's disclosures suggest a direction of travel towards lower-carbon manufacturing, greater resource efficiency and closer integration of sustainability into product and supply chain management. The transition towards electrified manufacturing in the Netherlands may provide useful experience for other operations, although opportunities will depend on local energy infrastructure and commercial feasibility.

For investors and business partners, two priorities merit attention: the development of Scope 3 emissions accounting and the translation of climate-related risk assessments into measurable financial and operational outcomes. Greater disclosure of agricultural supply chain impacts, supplier performance and progress against environmental targets could strengthen comparability and stakeholder confidence in future reporting cycles.

Pacifica ESG View

Ausnutria's 2025 Sustainability Report provides evidence of operational environmental progress, particularly in direct emissions, energy efficiency and water consumption. Its sustainability governance arrangements and investment in product innovation indicate growing integration between ESG management and business priorities. However, the absence of quantified Scope 3 emissions and the increase in occupational injury-related lost days warrant attention. Future reports should demonstrate broader value-chain transparency, improved safety outcomes and clearer links between climate-related risks, financial implications and strategic investment decisions.