We are committed to operate our business in an environmentally and socially responsible manner. The Board has overall responsibility for the long term sustainability and environmental, social and governance strategies which support growth and enhance value for the business and our stakeholders, as well as contribution to the environment and the community growing. To achieve this, we strive to comply with all applicable rules and regulations with our best efforts in shipping operation as well as in our daily working environment to minimize any adverse impact to the environment.

CO2 and GHG Emissions

The International Maritime Organization (“IMO”) Initial Strategy on the reduction of Carbon Dioxide (“CO2”) and greenhouse gas (“GHG”) emissions from ships, is the framework through which the IMO aims to reduce GHG emissions from international maritime shipping. The strategy incorporates quantitative carbon intensity reduction targets for the international shipping sector by at least 40% reduction in carbon intensity by 2030 and pursuing efforts towards a 70% reduction by 2050 compared to 2008. For GHG emissions from international shipping, the target should be reduced by at least 50% by 2050 compared to 2008.

We support the IMO’s targets as our short term and long term targets of decarbonization.

Starting from January 2024, the European Union’s (“EU”) Emissions Trading System (“ETS”) extended to cover CO2 emissions from maritime transport entering EU ports. Shipping companies have to purchase and use EU ETS emission allowances for each tonne of reported CO2 emissions. We believe ETS inclusion of maritime transport will drive a faster reduction of emissions among the industry. The Group will strive as much as possible to reduce emissions to enjoy the lowest carbon price.

Acting as a participant in the marine market, the Group always concerns the issue of increasing GHG and consumption of fossil fuels. We own a modern and high-quality fleet of dry bulk carriers and as at 31 December 2023, the Group had twenty three owned vessels. We ensure our owned fleet be equipped with proven green and energy efficient equipment and technologies to minimize the emission of toxic pollutants.

In 2023, fuel oil consumption was 112,375 tonnes and corresponding CO2 emission was 350,179 tonnes, while the fuel oil consumption was 105,910 tonnes and corresponding CO2 emission was 330,551 tonnes in 2022. As the Group continued to seek to fine tune the quality of our fleet during the year, fuel oil consumption increased slightly under the fleet changes.

Energy Efficiency Operational Indicator (“EEOI”) is an index showing the amount of CO2 emission per tonne of cargo carried per mile of sea voyage. In 2023, the average EEOI of the fleet is about 10.0 grammes CO2 / MT.Mile, representing a decrease of 22% as compared to 2022.

Achieve decarbonization

In order to meet the short term and long term target of decarbonization, a mix of design, technical, operational measures and innovative measures are through below (i) to (v):

(i) Energy Efficiency Existing Ship Index

(ii) Energy Efficiency Design Index
The IMO's Marine Environment Protection Committee (“MEPC”) has published a review on the quality of marine fuels supplied (“MEPC 76”). Subject to the adoption of MEPC 76 in June 2021, the attained Energy Efficiency Existing Ship Index (“EEXI”) is required to be calculated and verified by Class American Bureau of Shipping for every vessel and the requirement has been in force since the start of 2023. Ships are required to meet a specific required EEXI, which is based on a required reduction factor expressed as a percentage relative to the Energy Efficiency Design Index (“EEDI”) baseline.

The process of evaluation of our fleet by Class American Bureau of Shipping has started. Although the result is yet to be released, a gap between the existing EEXI and the required EEXI is expected. In order to fill this gap, a series of modifications and improvements are scheduled for our fleet to meet the EEXI requirement accordingly.

The Group believes our fleet could achieve CO2 and GHG vessel emissions reduction by implementing a combination of hardware improvements and operational performance techniques.

In 2023, the Group acquired a vessel which is already in compliance with EEDI.

(iii) Carbon Intensity Indicator
Carbon Intensity Indicator (“CII”) gives vessels an annual rating on scale of A to E, with A being the least carbon intensive. The rating measures how efficiently a vessel transports goods and is given in grams of CO2 emitted per cargo-carrying capacity and nautical mile. A vessel rated D for three consecutive years, or rated E for a particular year, will need to develop a work plan of corrective actions.

On 1 January 2023, it became mandatory for vessels to establish their CII rating. Our fleet has joined the Data Collection and Reporting System since 2019 which enables data to be analyzed and verified by American Bureau of Shipping. The official evaluation results of our fleet were yet to be released, however, under our estimation, a number of our vessels will be getting rated D or below on CII. These vessels will be put through a series of planned works as mentioned to improve the CII rating. We aim to achieve rating C or above for all of our vessels on CII.

(iv) Ship Energy Efficiency Management Plan
The vessels’ Ship Energy Efficiency Management Plan (“SEEMP”) plans are approved by American Bureau of Shipping certified in compliance to IMO Resolutions. Our vessels adopted IMO Data Collection System on fuel consumption to allow us monitor and improve fuel efficiency and to mitigate emissions. The Group implemented initial SEEMP in 2013, adopted SEEMP Part II in 2021 and SEEMP Part III in 2022.

(v) For newbuilding projects, we may choose the most energy efficient design and will include the possibility of using dual fuel engines.

Climate change

We understand climate change affects our business and operations, hence it is crucial for the Group to react to prevent the risks associated with the climate change. To enable a comprehensive review of the climate risks and opportunities, the Group conducted a climate risk assessment and scenario analysis. We diversified climate-related risks into physical risks and transition risks.

Physical risks
Acute risk – long term The increased frequency and severity of extreme weather such as typhoons, floods, sea level rise and tropical cyclones can disrupt the Group’s operations by damaging the fleet, ports and communication infrastructures, causing power failure and injuring employees during their work, leading to reduced capacity and decrease in productivity, or expose the Group to risks associated with non-performance and delayed performance. These risks affect the operational ability of the organization resulting in reputational damage, direct loss of revenue and increase operating cost.

Transition risks
Laws and regulation risk – short to medium term The Group anticipates that there will be more stringent climate legislations and regulations to support the global vision of carbon neutrality. From a listed company’s perspective, the Group acknowledges the increasing requirements of climate-related information disclosures.

The Group commits to environmental protection and strives to comply with disclosure requirements, however, this may increase the risk of higher operating costs and maintenance costs.

Market and reputational risk – short to medium term The shipping market is constantly changing, and the increasing attention by the public towards environmental protection led to the change in customer behavior and preference. This change in market pattern led to a change in the demand of the shipping industry – increased demand for green transportation represents an increase in demand for low-sulphur oil with constant performance thus resulting a higher running cost.

In order to attract and retain the best people for the sustainable growth of the Company, we place emphasis on a healthy and safe workplace on board in our vessels and ashore at our office and support all kinds of community activities that contribute to our community.

Employment

The Group pursues a policy of gender equality. Workload and working hours depend on positions while promotion and recruitment depend on performance and experience. To promote a high-quality and diverse workforce, the Group provided equal opportunities to its employees in respect of recruitment, training and development, job advancement, and remuneration and benefits. The Group’s staff handbook is designed to communicate important laws and work ethics surrounding employment, benefits and welfare, training and development, occupational health and safety, and code of conduct guidelines. It is an essential tool in helping to define the expectations of both the management and the employees, and to protect employees from unfair or inconsistent treatment and discrimination at work.

We provide fringe benefits and welfare to our people including but not limited to medical and life insurance, pension schemes, paid leave for various purposes, travel or meals for business-related work, and other benefits to improve employees’ well-being.

All employment of the Group is complied with particular local labour legislations and there was no reported incident of non-compliance or grievances in relation to human rights or labour practices standards and regulations that would have a material or significant impact on the Group during the reporting period.

Health and safety

We put safety as our top priority in business operation. Accident preventions and efforts for improvement in working environment are given high priority in the business management, conventions and all parts of operations. We strive to comply with applicable safety and environmental laws and regulations to which seafarers of all ranks must be trained and certificated in order to be able to carry out their respective duties on board in our vessels. We ensure all seafarers on board are trained and certificated in accordance with The International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (“STCW Convention”).

In order to foster the environmentally friendly practices in our vessels, we follow an internal safety management manual, which defines our objectives and commitments in complying with all applicable national and international rules and regulations, code and guidelines and standards recommended by IMO, flag states and other maritime industry organizations. These codes and guidelines and standards, together with our safety manual have been kept ashore and on our fleet and strictly followed by our team.

The Group is committed to preventing any work-related injury to its employees, and has complied with relevant laws and regulations to provide a safe working environment and protecting employees from occupational hazards.

Development and training

The Group recognizes the importance of skilled and professionally trained employees to its business growth and future success. We encourage and support all employees taking training courses and workshops that are relevant to their job duties to enrich their knowledge and perspective in discharging their duties.

Management and senior staff had access to a variety of training activities, including attending seminars, workshops and conferences and receiving regulatory updates relevant to their business and duties, anti-corruption practices as well as their directors’ duties and responsibilities when acting as directors. They received sufficient internal and external training to better equip themselves to fulfil their roles in supporting the Group.

We ensure all seafarers on board are trained and certificated in accordance with STCW Convention. Our owned vessels are also subject to the laws, regulations and rules of each country and port they visit. We have developed policies and procedures intended to ensure our compliance with these laws, regulations and rules. In order to reduce the number of incidents that may happen or minimize the level of accident on vessel, we arranged emergency drill for seafarers to deal with unexpected situations. We also hold emergency personnel training. Anti-piracy drill will also be performed periodically for our seafarers for the proper procedure when there is pirate attack happened.