Luzhou Laojiao: Environmental Initiatives Weigh on ESG Progress

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Luzhou Laojiao is a Chinese liquor company that distributes its products under the National Cellar 1573 and Luzhou Laojiao brand series. An analysis of the company's environmental, social, and governance policies are as follows:


Environment


From an environmental perspective, the company scores unfavorably, particularly outperforming on the Emissions Score front, but underperforming on the Resource Use Score front.


For instance, it has not implemented a resource reduction policy, which compares to the lack of a clear policy in the prior year. The company has not implemented a water efficiency policy, with a energy efficiency policy not implemented as well. This compares to the lack of a similar policy in the prior year.


Environmental policy areas where the company is currently lacking include Resource Reduction Targets and Environment Management Training.


The company has also not implemented renewable energy use, which compares to the lack of a clear policy in the prior year. The company has also notably not implemented green buildings as well, which compares to the lack of a defined policy in this regard in the prior year.


In terms of its carbon footprint, the company's Estimated CO2 Equivalents Emission Total stands at 85,104 in the latest fiscal year, which compares to 67,070 in the prior year based on a Median CO2 Estimation Method.


Social


From a social standpoint, the company scores reasonably, outperforming on the Workforce Score front, but underperforming on the Human Rights Score front.


For instance, it has implemented a health and safety policy, which compares to the presence of a clear policy in the prior year. The company has also implemented an Employee Health & Safety Policy, with a Supply Chain Health & Safety Policy not implemented as well. This compares to the lack of a similar policy in the prior year.


The company has produced a rise in Net Employment Creation. As of the latest fiscal year, there have not been Management Departures, while the prior year saw no departures. Meanwhile, the company experienced no strikes this year, which compares to no strikes in the prior year.


Governance


From a governance standpoint, the company scores reasonably, particularly outperforming on the Management Score front, but underperforming on the CSR Strategy Score front.


The company does not have a Corporate Governance Board Committee, a Nomination Board Committee, an Audit Board Committee, and a Compensation Board Committee. The company does have a Board Structure Policy and does have a Policy Board Independence in place. The Board has held ten meetings in the last fiscal year, which compares to 10 in the prior year. The Board size currently stands at 11 members based on the latest annual/ESG report.


The Board has an average tenure of 3.9 years, which compares to 5.35 in the prior year. Board diversity stands at 18.2% for gender diversity.


The company has not implemented a Policy Executive Compensation Performance and has not implemented a Policy for Executive Compensation ESG Performance. The company has not implemented a Policy for Executive Retention, or a Succession Plan, but has implemented an External Consultants policy.


The company has not implemented CEO-Chairman Separation and does have its CEO as a Board member. Its chairman is not an ex-CEO. Board member term duration stands at three years. In total, senior executives' compensation declined in the latest fiscal year. Notably, the CEO compensation is not linked to total shareholder return. Meanwhile, executive compensation is also not linked to long-term objectives. Sustainability compensation incentives have not been implemented. Thus far, there have not been any executive compensation controversies.


Sources:


https://www.csrhub.com/CSR_and_sustainability_information/Lu-Zhou-Lao-Jiao-CoLtd


https://database.globalreporting.org/organizations/12883/


http://file.finance.sina.com.cn/211.154.219.97:9494/MRGG/CNSESZ_STOCK/2019/2019-6/2019-06-06/5419877.PDF

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Business FinancePoliticsCorporate GovernanceUnited States Environmental Protection AgencyLuzhou LaojiaoChief Executive OfficerPolicyBoard Of Directors