Environmental
BIODIVERSITY
At Wang-Zheng Berhad, we recognise biodiversity as a critical component of sustainable development and environmental stewardship. We acknowledge that our operations, particularly those related to the sourcing of fibre-based raw materials and manufacturing activities, may potentially impact natural ecosystems. As such, we are committed to managing and minimising our biodiversity footprint throughout our operations and supply chain.
To address this, Wang-Zheng Berhad has adopted the following commitments:
Identification and Assessment
We will progressively identify and assess potential impacts of our operations on local biodiversity, particularly in areas of high ecological value or near sensitive ecosystems.
Impact Avoidance and Minimisation
We are committed to avoiding significant negative impacts on biodiversity wherever possible. Where avoidance is not feasible, we will implement measures to minimise, mitigate, or restore affected ecosystems.
Sustainable Sourcing
We are committed to procuring certified sustainable raw materials (e.g., FSC-certified), ensuring that our supply chain does not contribute to deforestation, habitat destruction, or illegal logging activities.
Compliance and Continuous Improvement
We will comply with all applicable biodiversity-related laws and regulations in our areas of operation and will seek to align with best practices and international standards.
Stakeholder Engagement
We will engage with suppliers, communities, and relevant stakeholders to support collaborative efforts in biodiversity conservation and sustainable land use management.
Monitoring and Reporting
We will work towards establishing measurable biodiversity-related targets and integrating biodiversity risk monitoring into our broader environmental management systems.
This commitment underscores our commitment to reducing biodiversity loss, maintaining ecosystem services, and supporting long-term environmental and business sustainability.
Our Commitment Progress
While a group-wide biodiversity commitment is currently being formalised, Wang-Zheng Berhad demonstrates its commitment through two main channels:
- Responsible sourcing via FSC certified subsidiaries and
- Indirect biodiversity benefits through investments in renewable energy infrastructure
1. Addressing the Issue Through Sustainable Sourcing
As of 2025, two key subsidiaries—Modern Alpine Sdn Bhd and New Top Win Corporation Sdn Bhd—have obtained Forest Stewardship Council (FSC) certifications. This ensures that the 100% of the virgin pulp used in our products originates from sustainably managed forests that protect high conservation value areas, prevent illegal logging, and respect indigenous rights. These certifications signal a clear alignment with global expectations on ecosystem preservation and responsible forestry.
2. Reducing Impact via Renewable Energy Integration
In parallel, our industrial arm, Quality Hero Corporation Sdn. Bhd. has taken significant steps to reduce its environmental footprint by investing in solar energy systems under Malaysia’s NEM NOVA scheme. The solar PV installations across multiple factory lots in Shah Alam with a combined installed capacity exceeding 1.467 MWp support self-consumption and lower dependence on fossil-based energy.
In recognition of these efforts, the company has been granted Investment Tax Allowance (ITA) under Malaysia’s Green Technology Incentive framework, further validating our strategic direction.
CLIMATE CHANGE
ESG REMUNERATION FRAMEWORK
Our ESG-Linked Remuneration Framework acts as a strategic driver in advancing sustainable development. By aligning incentive components with sustainability targets, it reinforces our steadfast commitment to stakeholders and drives catalytic change across the Group. The ESG Remuneration Framework supplements our existing remuneration policies by aligning the current remuneration of selected senior management personnel with the sustainability targets. These targets are assessed through a balanced scorecard and modifier approach, providing a structured and measurable basis for evaluation.
The ESG Remuneration Framework applies to selected members of Key Senior Management — including the Group CEO — as well as Key Operating Management and the Head of Group Sustainability. We intend to extend this remuneration structure to include our employees, considering the variability in their compensation and the level of accountability associated with their roles.
The ESG Remuneration Framework covers the following 4 ESG performance metrics as indicated below:
- GHG Emissions Performance
- Zero Workplace Fatalities
- Zero Workplace LTIR
- Average Training Hours per Employee
The company is working to decarbonise its future capital expenditures
At present, Wang-Zheng Berhad (WZB) has not publicly disclosed a formal policy or methodology to align all future capital expenditures with its long-term GHG targets or the Paris Agreement’s 1.5°C objective.
However, the Group has already demonstrated its intent to support decarbonisation through significant capital allocation towards renewable energy solutions, having contributed more than RM 6 million for solar implementation projects at its manufacturing facilities. These investments aim to reduce Scope 2 emissions, lower energy costs, and enhance energy security, and are aligned with Malaysia’s National Energy Transition Roadmap (NETR) objectives to accelerate the country’s shift towards a low-carbon economy.
WZB is currently reviewing its capital expenditure governance framework to embed science-based GHG reduction criteria into future investment decisions. The objective is to ensure that all major projects undertaken from FY2025 onwards are consistent with the Group’s decarbonisation roadmap, including the planned establishment of a Scope 1 & 2 baseline and emissions intensity reduction targets.
Pollution & Resources
Disclosure of three years of waste recycled (tonnes) - paper (Metric Tonnes)
Current Year waste recycled – until July
T minus 1 Year waste recycled
T minus 2 Year waste recycled
Total costs of environmental fines and penalties during financial year
Wang-Zheng Berhad (WZB) confirms that it has not incurred any environmental fines or penalties from FY2022 to FY2025. This reflects the Group’s ongoing commitment to regulatory compliance and adherence to environmental management standards across its operations.
Percentage of Sites Covered by Recognised Environmental Management Systems (ISO14001/EMAS/Other)
| Current Status | Coverage (%) |
|---|---|
| 100% (3/3) of manufacturing/processing sites hold recognised and valid certifications (ISO 14001). | 100% (3 out of 3 manufacturing sites) |
Water Security
Wang-Zheng Berhad (WZB) acknowledges the significance of water stewardship, particularly as all of its operations are located in Selangor, a region categorised as facing extremely high-water stress (Water Stress Index ≥0.8) according to the Development of Water Stress Index for Water Resources under Changing Climate in Klang Valley (Malaysia Water Research Journal, Vol. 10, 2020).
Effective from Q3 2025, the Group’s production facility transitioned from processing raw cotton to utilising imported semi-finished dry cotton rolls. This strategic change has removed the requirement for water use within WZB’s direct operations, thereby eliminating operational withdrawals and wastewater discharges. Consequently, WZB’s manufacturing activities are categorised as non-water intensive under current conditions, with no material direct dependency on water resources.
The Group recognises, however, that water dependency remains material in the upstream value chain, particularly in relation to cotton cultivation and pre-processing stages undertaken by suppliers. While such impacts fall outside WZB’s operational boundary, the Group remains committed to maintaining awareness of supplier practices and monitoring broader water-related risks where feasible.
By differentiating between direct operational impacts and upstream supply chain dependencies, WZB ensures clarity of disclosure and avoids overstating its role in water-intensive processes. This positioning enables the Group to remain accountable for its sphere of influence while protecting against the risk of misinterpretation regarding its operational water footprint.
Water Risk Management and Stakeholder Engagement
Although all of Wang-Zheng Berhad’s (WZB) facilities are located in Selangor, a region classified as facing extremely high water stress, the Group’s manufacturing operations are no longer water dependent. Since Q3 2025, the cotton factory has ceased raw cotton processing and transitioned to imported semi-finished dry cotton rolls, thereby removing the need for operational water withdrawals and wastewater treatment.
In this context, WZB’s water risk management is directed towards monitoring and indirect exposure rather than direct operational consumption. The Group’s approach includes:
- Evaluating supply chain dependencies, with particular attention to vendors engaged in water-intensive stages such as cotton cultivation and pre-processing.
- Maintaining open dialogue with vendors and stakeholders to remain aligned with regional water stewardship and resilience initiatives.
- Promoting water awareness among employees and communities, reinforcing responsible use in daily activities even where operations are categorised as non-water intensive.
Through these measures, WZB ensures transparency in communicating its limited direct operational footprint while acknowledging potential indirect risks within its value chain and external environment. This balanced approach aligns with international sustainability standards and reflects accountability without overstating control over upstream impacts.
Water Reduction Targets and Performance
Recognising the urgent need to reduce water use, WZB has established a quantified water reduction target as part of its broader environmental commitment:
- Baseline Year: FY2022 (Total freshwater withdrawal: 29,628 m³)
- Target Year: FY2030
- Reduction Goal: 10% reduction in total freshwater withdrawal by 2030
- Target Volume: ≤ 26,665 m³ by FY2030
- Scope: Manufacturing facilities in Selangor
Progress is measured annually to ensure consistent improvements toward the target.
Operational Performance and Water Intensity Trends
WZB has demonstrated consistent reductions in water withdrawal intensity, normalised against revenue, over the past three financial years:
Total Water Withdrawal (m³)
Water Intensity (m³ per RM million revenue)
This represents a ~20% reduction in water intensity since FY2022, achieved through operational optimisation, employee engagement, and efficiency-focused initiatives.
Regulatory Compliance and Environmental Safeguards
In FY2024, WZB recorded zero incidents of non-compliance with all applicable water-related permits, standards, and regulations. This includes:
- Adherence to water withdrawal limits and permits issued by local water authorities.
- Compliance with wastewater discharge standards, including key effluent parameters (e.g. BOD, COD, pH) regulated by the Department of Environment (DOE).
- Fulfilment of other statutory requirements under Malaysian environmental law.
WZB’s environmental compliance framework encompasses:
- Regular monitoring and testing of wastewater prior to discharge.
- Periodic audits and inspections for alignment with permit conditions.
- Prompt implementation of corrective measures in the event of deviations.
Wang-Zheng Berhad remains committed to enhancing its water stewardship and achieving its reduction targets under indicator EWT25. Progress will continue to be disclosed annually in the Group’s Sustainability Statements to ensure accountability, transparency, and continuous improvement.
Note:
Most of the data presented is as of July 2025 and may be updated upon the close of the fiscal year. For the latest ESG disclosures, please refer to our most recent Sustainability Statement and Corporate Governance Report.