Located in the Port of Colombo, SAGT is one of four container terminal operators contributing to Sri Lanka’s growing prominence as a worldclass transshipment hub.

From its inception, SAGT has recognized the critical importance of sustaining and enhancing the competitive advantage derived from Sri Lanka’s strategic geographical location, along with its own unique strengths. Ensuring the well-being of its people, customers, business partners, and the environment is not only integral to SAGT’s sustainability but also to maintaining the profitability of the Company’s operations and Sri Lanka’s competitiveness as a transshipment hub.

As such, sustainability is embedded in SAGT’s corporate ethos and business strategy at the highest level. This is guided by its robust Sustainability Management Framework (SMF), which integrates sustainability objectives into the core of the Company’s strategic and long-term goals. The SMF comprises of a stage-wise process where impact materiality assessments are undertaken to identify the significant actual, potential negative and positive environmental, social and governance impacts on its key stakeholders. The impact materiality assessment are supported by the identification of Sustainability Related Risks and Opportunities (SRROs) and Climate Related Risks and Opportunities (CRROs) arising from the identified impact material topics. The subsequent stages of the SMF include the identification of policies, processes, SOPs and management approaches to manage such material topics; establishment of KPIs to track and monitor sustainability performance; establishment of targets for key material topics; undertaking sustainability interventions to mitigate and manage the identified material impact topics; and finally in reporting progress to the Company’s stakeholders. The policies, procedures and management approaches are founded in the Company’s core organizational values and thus the policies carry commitments to ensure operational excellence, providing exemplary service to its customers, and developing an integrated value chain ensuring sound corporate governance, compliance with all regulatory requirements and human rights considerations while also considering the precautionary principle in investment and operational decisions. The commitments are then embedded across the Company, by ensuring alignment of Policies, Management Approaches and Standard Operating Procedures (SOPs) at every division and operation via the Sustainability Management Framework.

The stages of SAGT’s Sustainability Management Framework (SMF) is supported by a Sustainability Performance Management System enabling the data capture, analysis and dashboarding on a quarterly basis, which in turn supports the reporting of sustainability performance to senior management teams for course corrective decision making. Internal and external assurance processes further support SAGT’s sustainability journey by ensuring accurate information for decision making, compliance with laws, regulations, benchmarking with best-in-class practices and enabling continuous improvement. By adhering to internationally recognized reporting standards and frameworks such as the Global Reporting Initiative (GRI) Standards, the United Nations Sustainable Development Goals (SDGs), and the United Nations Global Compact (UNGC), the Company enhances the management and transparency of its non-financial disclosures and its communication of progress.

Aligned with its business objectives, SAGT’s Sustainability Commitments are classified within three core pillars: Responsible Economic Contribution, Environmental Stewardship, and Labor Practices & Social Responsibility.

The determination of SAGT’s material topics involve obtaining an understanding of its significant stakeholder concerns. SAGT defines its significant stakeholders as stakeholders who may be impacted by the Company’s operations, and those stakeholders who possess the ability to influence the Company’s operations. As such, identification of the significant stakeholder concerns as well as the identification of internal stakeholder perceptions and risks of opportunities play an important role in the prioritisation of the material topics of SAGT. This engagement process is integrated with the Company’s daily business operations, to derive longterm value for the business and its stakeholders.

The following section outlines SAGT’s Sustainability Management Framework and demonstrates how sustainability is embedded across all levels of the Company’s business operations.

SAGT’S MATERIAL TOPICS

SAGT’s Material Topics are aligned with the four Sustainability pillars:

SUSTAINABILITY POLICY

SAGT's Sustainability Policy is anchored in ethical practices and principles of corporate responsibility. While complying with all applicable local and international regulatory requirements at a minimum, SAGT sets benchmarks in its operations, environmental stewardship and social responsibility. Operational impact is monitored and assessed while ensuring transparent communication on key ESG practices.

SAGT is committed to mitigating its environmental impact through energy conservation, decarbonising terminal operations, managing waste responsibly, efficient utilisation of materials, and water and effluent management ensuring that it complies with environmental regulations at all times.

From a social perspective, the Company is committed to fostering a safe, secure and non-discriminatory working environment, focused on diversity, equity and inclusion with a specific focus on female empowerment. As such all employees are offered equal opportunity for personal and professional development, which includes training, career performance reviews, parental leave whilst ensuring a zero-tolerance approach to its employee related policies and practices including child labour, forced and compulsory labour and freedom of association.

All SAGT staff are required to adhere to the Company’s employee Code of Conduct, and by complying with all applicable local and international labour laws and regulations and standards including adherence to minimum wages and the payment of statutory provisions in relation to its outsourced manpower. All SAGT suppliers are registered via the Company Supplier Portal and are required to adhere to the Company’s Supplier Code of Conduct.

SAGT’s process to engage with its suppliers on specific sustainability topics and include its supply chain partners and customers within the Company’s sustainability drive was reviewed and revised during the last year. As part of this process, the Company continues to identify significant suppliers and engage them through sustainability self-assessments, periodic reviews and supplier audits where applicable. As a part of the Company’s continuous improvements, a new updated process in this regard was put in place by the Supply Chain Division, with the reassessing and identification of significant suppliers followed by periodic engagement through self-assessments and audits.

SAGT considers customer health and safety, cyber security and customer privacy and emergency response as key material topics that may have impact on its customer groups. Whilst noting that SAGT’s location within the Port of Colombo creates relatively lesser opportunity for community engagements, SAGT nonetheless carries out numerous projects aimed at uplifting local communities contributing towards the development of livelihoods within the nation as part of its overall corporate responsibility efforts.

Key Elements of the SMF:

RESPONSIBILITY FOR DRIVING SUSTAINABILITY AT SAGT:

The organisational structure for sustainability, outlined below, supports the effective execution of SAGT’s sustainability agenda and the achievement of its sustainability goals. It ensures that performance related to key material topics is regularly assessed and managed by the Senior Management Team (SMT). The CEO, through the Management Committee, holds responsibility for ensuring the implementation of SAGT’s Sustainability Management Framework (SMF).

THE SUSTAINABILITY DIVISION

The Sustainability Division is responsible for overseeing the implementation of the Sustainability Management Framework (SMF) and executing its strategies through the following key roles and responsibilities.

• Collaborating with the nine Departments to ensure the timely capture of all Environmental, Social, and Governance (ESG) data, and managing the input of quarterly and monthly sustainability data through the Sustainability Performance Analyzer.
• Compiling the internal sustainability report for the CEO and Management Committee's review of the year's sustainability performance.
• Providing input to the CEO and Management Committee on sustainability impacts associated with new projects, to ensure that sustainability-related risks including climate change risks are mitigated and environmentally responsible principles and practices are incorporated at the planning stage.
• Facilitating the annual external assurance process and the periodic internal assurance audits to verify the completeness and accuracy of data as well as the adherence to relevant Standard Operating Procedures (SOP’s).
• Conducting research on industry best practices, performing benchmarking studies, and identifying gaps to set ambitious sustainability goals and targets for the Company.
• Identifying sustainability risks that may arise internally or along the value-chain and working with relevant departments to help suppliers mitigate their risks.
• Engaging with and sharing sustainability knowledge with suppliers to enhance their sustainability performance, fostering a culture of continuous improvement.
• Identifying new initiatives, process improvements and opportunities for cost savings in collaboration with the nine Departments to ensure effective implementation of these strategies.
• Raising awareness and sharing knowledge on Sustainability, best practices and emerging trends on sustainability through regular internal and external campaigns and engaging employees in sustainability initiatives.
• Compiling and delivering the Annual Sustainability Report, showcasing the Company's sustainability performance and progress towards goals.

Sustainability at Department level

A Sustainability Champion within each of the nine Departments is tasked with implementing the Company’s SMF based on the identified material topics and selected frameworks. Through the efforts of each designated Sustainability Champion, the Departments are responsible for:

• Recording and monitoring sustainability data as per the SOP, in a timely and accurate manner.
• Maintaining source documents to enable internal sustainability assurance.
• Collaborating with the Sustainability Team to implement sustainability initiatives and process improvements relevant to each Department.
• Finding ways to enhance sustainability performance across the value chain, by sharing knowledge and best practices in sustainability.

DEFINING REPORT CONTENT

This report details SAGT's sustainability strategy, corporate governance framework, risk management process, environmental and social responsibility efforts, and discloses the measures taken by SAGT to achieve an improved holistic sustainability performance.

While ensuring compliance as per all regulatory requirements at a minimum, SAGT’s operations are guided by the ‘Precautionary Principle’ resulting in responsible investment and operational decisions. This policy commitment ensures minimal impact on natural resources, the environment and reduces the Company’s carbon footprint while minimizing its effect towards climate change. SAGT’s Sustainability policy also commits towards ensuring the protection of human rights in its operations and its value chain as far as practicable, whilst also committing to ensuring a safe and productive work environment for all staff.

All methodologies, assumptions, indicators and estimations used in the compilation of this report follow the GRI standards and industry practices. Any restatements, along with underlying reasons, are clearly stated in the relevant sections of this report.

All data included in SAGT’s sustainability reports over the last six years have been validated internally through senior management review as well as externally, through an independent third-party assurance provider.

Stakeholder Engagement and Identification of Material Topics

As expectations continue to evolve among customers, regulators, investors, lenders and communities etc, SAGT remains committed to strengthening its economic, environmental and social response in line with global best practice and local priorities.

The identification of key stakeholders is driven by insights gathered through discussions with key business units and operational departments. Once identified, significant stakeholder groups are identified based on their potential impact and influence on the Company, and the impact of the Company’s operations on stakeholders. The impact-influence matrix for broader stakeholder groups forms the foundation for developing an effective engagement strategy, including determining the basis for engagement, setting the preferred frequency of interaction, and assigning responsibilities for engagement activities.

SAGT maintains an ongoing and comprehensive stakeholder engagement process, seamlessly integrated into its daily operations. This continuous approach ensures that the Company remains responsive to stakeholder concerns in real time, allowing for proactive and effective responses. Dialogue with stakeholders provides the foundation for identifying and prioritizing issues based on their significance to both the Company and external stakeholders. These issues are then mapped according to their potential impact on the Company and stakeholders.

SAGT has identified the following key stakeholders

SAGT continues to engage with all significant stakeholders mentioned above, that can impact, and that are impacted by the Company’s business operations. Multiple mechanisms are put in place to allow stakeholders to voice grievances and highlight potential concerns arising from terminal activities.

Close relations are maintained with Government Regulatory & Statutory bodies such as Central Environmental Authority (CEA), Marine Pollution Prevention Authority (MPPA) and the Marine Environmental Protection Authority (MEPA) to ensure that the Company at a minimum complies with regulatory requirements.

SAGT also partners with environmental conservation subject experts such as the Centre for Sustainability of the University of Sri Jayewardenepura to execute reforestation and conservation initiatives.

Similarly, employee feedback on related issues is actively encouraged through various channels, including trade unions, the organisational hierarchy, surveys and interviews, suggestion boxes, and intranet.

Robust data systems are central to effective environmental stewardship. SAGT continuously monitors resource consumption and environmental indicators through a combination of digital systems, equipment records, meter readings and operational data capture processes to identify potential areas of grievance prior to occurrence.

Materiality Assessment Process

A Materiality Assessment is conducted periodically to identify the organizational impacts on the Company’s significant stakeholders, and the sustainability related risks and opportunities faced by the Company. These organizational impacts along with the sustainability related risks and opportunities are considered as material topics that may have a actual or potential positive or negative effect on such significant stakeholders. Its assessment process follows the methodology outlined in the GRI 3 Standard augmented by the AA1000AS Standards Version 3 Guidance Document and seeks to identify the importance of a topic on internal stakeholders and the importance of a topic on its external stakeholders.

SAGT has also sought to identify key Sustainability Related Risks and Opportunities (SRROs) along with sustainability impact topics mentioned above.

These SRROs were identified by assessing the risks arising from the identified organizational impacts and assessing them based on the likelihood of occurrence and impact severity to the Company and Investors based on the COSO Risk Management Framework to determine an overall risk rating. This risk rating, along with the importance to internal and external stakeholders described above, serves as the foundation for prioritising material topics, which are then used to identify Key Sustainability Performance Indicators and relevant GRI disclosures reported in the GRI Content Index of this report.

As a result of this process, SAGT has prioritized 16 material topics and selected 44 GRI Standard topic-specific disclosures for both internal and external reporting, which are summarized in the table below. This section also outlines the strategies and management approaches implemented to address SAGT’s material topics.

MANAGEMENT OF MATERIAL TOPICS

The following section summarizes SAGT’s disclosure management approach (DMA) for Economic contribution, Environmental Stewardship and Labour Practices and Social Responsibility. The DMA can be viewed online at https://d3bo42cmohq4cn.cloudfront.net/2021/12/SAGT-DMA-Report-latest-3.pdf.

ENVIRONMENT STEWARDSHIP

During the reporting year, SAGT focused on decarbonization and digitization to minimize its carbon footprint and improve operational efficiencies. The Company also ensures its operations conform to the environmental regulations stipulated by the Central Environmental Authority and the Marine Pollution Prevention Authority.

SAGT recognises that its consumption of non-renewable fossil fuels is responsible for air pollutants and greenhouse gas (GHG) emissions and considers this to be its most significant environmental impact. The GHG emissions resulting from SAGT’s terminal operations are primarily attributable to its trucking and machinery operations. SAGT's strategy of energy conservation and hybridization of its RTG fleet and the electrifying of its fleet of Prime Movers is further described in the section environmental stewardship. Additionally, the Company considers water consumption, the generation of hazardous and non-hazardous waste and the segregation and treatment of effluents to be material to its operations. Therefore, the Company has established the following policies to mitigate and minimise the impact.

LABOUR PRACTICES AND SOCIAL RESPONSIBILITY

Being a labour-intensive industry, the Company’s employees and workforce remain at the core of SAGT’s business success. In 2024, the Company focussed on diversity, equality and inclusion with a specific focus on women, implementing a dynamic policy on paternity leave which enables and empowers mothers to return to work while giving fathers the opportunity to be more involved with their newborn.

SAGT prioritises fostering a conducive work environment within which employees are offered opportunities to grow and thrive, with equal opportunities for recruitment, selection and progress regardless of race, gender, nationality, religion, or any other status protected by law. A safe and secure working environment that is wholly focused on safeguarding the human rights of its workforce is available within the Company, while every employee can earn a fair, equitable income, while driving skill development to ensure career advancement in their field of choice. All employment-related legislation is adhered to, while SAGT seeks to continuously improve and develop upon these recruitment and selection practices by integrating new ideas and approaches to achieve industry and global best practices.

SAGT’s training and development programmes empower employees through the development of individual technical and soft skills that aid in the achievement of individual and organisational objectives.

The organisation’s inclusive approach is underscored by SAGT’s key priority to provide a safe and secure environment free from discrimination and any form of harassment. To this effect, the Company maintains a zero-tolerance policy for any form of sexual harassment in the workplace, with all allegations in this regard treated in the utmost confidence and with respect. The Company has all the necessary measures in place to ensure no individual will be victimised for lodging a complaint of this nature. All complaints are promptly investigated and addressed in accordance with the processes detailed within the Company’s policy against sexual harassment. Any person deemed guilty is subject to disciplinary action, with implications ranging up to and including dismissal from employment.

Additionally, no employee is forced to work against their will and is not required to engage in bonded/forced labour, nor are they subject to corporal punishment or coercion of any kind within the workplace.

Internally developed SOPs, guidelines, procedures and precautionary measures ensure that SAGT can uphold the health and safety of its stakeholders, including employees, subcontractors, clients, customers, and agents, in addition to the shipping lines that access its terminal premises.

These procedures and measures are built on the premise of proactive risk management, continuous quality improvement and contingency planning, thereby ensuring operations at the terminal are conducted in accordance with the highest safety standards to minimise avoidable injuries and mitigate the risk of occupational illnesses.

All employees are required to adhere to these SOPs without exception, and all third parties visiting the terminal must adhere to the Company’s health and safety policy.

SAGT is committed to projects aimed at uplifting local communities through dedicated programmes that promote gender equality and the empowerment of women, while engaging in partnerships with a range of local and international non- government organisations (NGOs) and government organisations, and sponsorships of academic projects, further supported by voluntary employee initiatives.