Our environmental impact

1.

ENVIRONMENTAL IMPACT: RESPONDING TO CLIMATE CHANGE AND MANAGING OUR GHG EMISSIONS

Climate change poses a material risk to the stability of societies, ecosystems, and the economy. While Blu Label operates in a low-emitting sector compared to the heavier industries, we recognise that we have an opportunity to play a role in climate change mitigation, both in terms of our carbon footprint efficiency and decarbonising our supply chain for products and services that are digitally distributed.

Our primary contribution to climate change lies in the energy used to power our offices, specifically through the use of computer and media equipment. We also have terminal devices at various locations that consume electricity. Our energy sources are dominated by grid-supplied electricity. With Eskom primarily generating electricity from coal-fired plants, our Scope 2 emissions will likely be significant. Overall, our activities do not result in material Scope 1 and Scope 2 emissions. However, we do recognise that when we start measuring our Scope 3 emissions, we may certainly note significant Scope 3 emissions, mainly from data centres providing data that enable our products and services. Scope 3 emissions are likely to be also driven by the manufacturing, distribution and the utilisation of equipment that allows our products and services.

Our energy sources and usage for FY24 – FY25 are provided below.

In line with our objectives, the closure of several regional offices and fleet reductions led to a reduction in the consumption of fuel. Electricity usage remained largely unaffected, however, costs increased in line with inflationary pricing. The reduction in load shedding experienced during the 2025 financial year contributed to the savings in generator diesel consumption.

While we have not yet conducted a formal Scope 3 emissions assessment, we intend to explore the relevance and materiality of Scope 3 categories in future reporting cycles. Our most significant indirect impacts occur in our downstream value chain. For example, our downstream suppliers supplying us with the data we sell produce significant emissions through the considering renewable energy sources for our electricity consumed in their data centres.

Our strategic responses to climate change and mitigating measures include:

• Integrating climate risks and opportunities into the risk management framework, including considering renewable energy sources for our operations.
• Digitally connecting consumers and businesses in the supply chain significantly reduces the carbon associated with travel and maintaining physical retail establishments. The more products and services transacted through our digitised distribution channels, the greater the positive impact made.

As our understanding of our emissions footprint evolves, we aim to incorporate emissions measurement tools and define clear reduction objectives aligned to our business model and environmental responsibilities.

2.

ENVIRONMENTAL IMPACT: WATER USAGE

While our activities are not water intensive, our operations are based in the Southern Africa region, which is prone to drought due to climate change impacts. We are therefore cognisant of the role we must play in ensuring that water is conserved and used responsibly, particularly given the increasing vulnerability to water scarcity and infrastructure challenges. As a responsible business, we aim to reduce unnecessary water consumption across our offices and encourage efficient use.

Our water consumption is limited to the usage at the head and regional offices. In FY25, our total water consumption for the period was 8 548 KL (FY24: 12 420 KL). The decrease was due to the closure of several regional offices around South Africa and the extensive head office renovations which resulted in several staff members working off-site.

3.

ENVIRONMENTAL IMPACT: POLLUTION AND E-WASTE

As a business that distributes, services, and facilitates the sale of electronic devices through various distribution channels, divisions and offerings via BLC, BLD, Cell C and CEC, Blu Label is mindful of the environmental risks associated with electronic and electrical waste (e-waste). Improper disposal of these products at end-of-life can have serious environmental and health consequences. E-waste is a growing global concern with toxic components capable of leaching into soil and water or emitting hazardous fumes if burned at landfill sites. Informal recycling and disposal practices risk human health, especially in vulnerable communities. Under the Extended Producer Responsibility Act, which is part of the National Environmental Management: Waste Act, we have concluded that we are not producers, as defined, and are thus not accountable for the lifecycle of our electronic gadgets from design and production to disposal. However, in terms of good corporate governance we are committed in FY26 to reaching out to our material suppliers to make them aware of these regulations and responsibilities.

Blu Label Technology is committed to technological innovation and sustainability, which is deeply intertwined with our responsibility to environmental stewardship. We recognise that the rapid evolution of technology brings with it a significant challenge: the growing global issue of electronic waste (carbon footprint). As an X-Tech company providing a virtual distribution marketplace, we are not merely addressing this challenge but are pioneering a strategic shift in how we manage our digital infrastructure to directly combat it.

Our digital transformation journey includes migrating our workloads to cloud-native architecture, a cornerstone initiative that marks a significant step in our sustainability journey. This strategic programme involves the meticulous phased transition of our applications and data from our legacy, on-premises physical data centre to a modern, scalable, and efficient cloud environment. This will follow a risk-based approach that will ensure continuity of our services during this transition. As part of this digital transformation journey, we have also initiated the planning for the responsible decommissioning of our physical data centre. This is not just an IT upgrade; but a fundamental reimagining of our operational footprint with profound positive implications for our carbon footprint. By decoupling our growth from physical hardware procurement, we prevent future e-waste generation before it occurs, creating a sustainable and scalable operational model.

4.

ENVIRONMENTAL IMPACT: SUPPLY CHAIN RESPONSIBILITY

We have an extensive supply chain which contributes to both our input and output. Our supply chain ecosystem encompasses both front-end distribution and back-end operations. Key aspects of supply chain include:

• Procurement of electronic vouchers, SIM cards from various suppliers and technology providers. Operations also depend on network operators, and data centres to ensure uptime and service continuity;
• An extensive distribution network in the form of banks, retailers, spaza shops, informal traders and petroleum forecourts;
• Prepaid focus – distribution of prepaid products and electronic merchandise;
• Value-added services such as bill payments;
• Digital platforms and technology to facilitate the electronic distribution of virtual merchandise and value-added services; and
• We have partnered with various stakeholders, including network operators, banks, municipalities and retailers.

To ensure supply chain responsibility we have reached out to material suppliers, via questionnaires, to gauge the extent of their environmental responsibilities, including:

• Greenhouse gas (GHG) emissions;
• Energy efficiency;
• Renewable energy;
• Water quality, consumption and management;
• Sustainable resources management;
• Waste reduction; and
• Reuse and recycling.

Feedback received in the current year indicated the following material impacts in the supply chain:

• Certain gaps in their sustainability standards were identified which we are currently assessing and considering engaging with such suppliers.

To ensure responsible supply chain practices, we will expand our engagement with material suppliers within the Group to understand their compliance with supply chain sustainability performance.

5.

BIODIVERSITY AND LAND USE

Our operations are in urban areas that are identified as ecologically sensitive or biodiversity rich. Furthermore, we do not undertake land development or extractive activities that materially and negatively impact ecosystems. However, biodiversity is critical to environmental resilience, particularly in the context of climate change and land degradation. Therefore, we remain committed to minimising the indirect effects of our operations on natural environments. This includes ensuring that any future expansion or infrastructure development meets environmental and land use regulations.