Climate Change Data

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Stakeholder Satisfaction
• Collaboration with Partners
• Product Innovation
• Employee Care
• Charity
• Environmental Sustainability

Environmental Achievements

• Successfully acquired Axus Stationery (Shanghai) Company Ltd., a company known for its environmentally friendly wooden pencil production.
• Implemented green production practices including simplified design, use of color-free plastics, and development of fully edible colored ink.
• Recycled plastic and paperboard waste during production.
• Disposed of wastewater according to local government regulations.

Social Achievements

• Distributed over 11,000 stationery kits and established creative classrooms in 10 village schools through the “Gold Seeds Plan”.
• Provided financial aid to underprivileged teachers and students.
• Supported employees through the “M&G Heart Plan”, providing financial aid and healthcare services.
• Participated in various charitable activities, including a charitable walk and donation drives.
• Consistently paid dividends to shareholders, exceeding 34% of net profit in the past three years.

Governance Achievements

• Optimized corporate governance structure in compliance with relevant laws and regulations.
• Held regular board and shareholder meetings.
• Established sound internal control systems with no significant deficiencies detected.
• Conducted regular legal compliance training for employees.
• Implemented anti-fraud policies and encouraged whistle-blowing.
• Entered into “Procurement Integrity Agreement” with all suppliers.

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Scientific supplier evaluation and grading system
• Professional supplier management team
• Procurement Integrity Agreement

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GB/T 36001-2015, CASS-CSR 3.0, GRI G4

Certifications: ISO9001:2008 (mentioned in quality control section)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Environmentally friendly pens using lead-free materials and edible ink
• MARCO wooden pencils made with sustainable forestry practices

Awards & Recognition

• Model corporate for safety operation
• Fortune top one hundred entities within Fengxian District
• Outstanding Employment Enabler
• Top Ten Taxpayer awards
• Social Charity Award
• Extraordinary Innovation Award
• State Science and Technology Progress Award (Second and Third Prizes)
• Top one hundred enterprises in China’s light industry
• Top ten enterprises in cultural and education supplies
• Top ten pen manufacturers
• Gold Medal for China International Stationery Exhibition
• 2019 German iF Product Design Award
• Good Design Award (G-Mark)
• German Red Point Medal

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced carbon emissions by 5% to 55,528 tons in 2020 from 57,773 tons in 2019. This was achieved through initiatives such as photovoltaic power generation, waste heat recovery, and compressed air leakage improvements.
• Constructed photovoltaic power generation projects in Guangming Park and Qingcun Park with a total capacity of 8MW.

Social Achievements

• Donated RMB6 million worth of stationery and cash for public welfare undertakings.
• Established the Shanghai M&G Charity Foundation with a RMB3 million donation.
• Launched various public welfare programs such as the Gold Seeds Plan, Rainbow Creative Classroom, and Kids of the Stars.

Governance Achievements

• Established a strict three-board operation system and a clear decision-making authorization system.
• Implemented a sound anti-fraud system with dedicated reporting channels.
• Maintained a sound internal control system with no significant defects.

Climate Goals & Targets

Environmental Challenges

• Increased energy consumption due to company growth and the impact of the pandemic in the first half of the year.

Mitigation Strategies

• Implemented energy-saving measures such as photovoltaic power generation, waste heat recovery, and compressed air leakage improvements.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Requires suppliers to pass ISO 9001, ISO 14001, and ISO 45001 certifications; encourages suppliers to enhance their awareness of social responsibility.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards, CASS-CSR 4.0

Certifications: CNAS

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Environmentally-friendly pens using lead-free materials and food-grade watercolor inks

Awards & Recognition

• Shanghai Brand First Grade Prize
• Two First Grade Prizes for State Science and Technology Progress Award from China National Light Industry Council
• Contract Credit Rating Certification (AAA)
• Top 100 Private Manufacturing Enterprises in Shanghai
• Top 100 Manufacturing Enterprises in Shanghai
• Top 100 Private Enterprises in Shanghai
• Company with Outstanding Contribution to Pandemic Prevention and Control and Work Resumption
• Golden Bee Enterprise Award
• Charity Brand Project Award

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Social responsibility
• Corporate governance

Environmental Achievements

• Completed construction of photovoltaic power generation projects, reducing carbon emissions by more than 4,300 tons per year
• Reduced the use of about 1.6 million cardboard boxes
• Replaced PVC packaging with PET or paper packaging
• Successfully used plant residues as fillers to synthesize degradable polylactic acid in pen holders
• Used eco-friendly plastics to replace traditional plastics

Social Achievements

• Launched the M&G Heart Project for special employees, including M&G Rainbow Creative Classroom, Rainbow Book Bar, and M&G Scholarship
• Provided training for 2,096 employees, each for 5.9 hours on average
• Total donation of cash and materials in the reporting period: RMB 8.6 million
• Investment in labor protection in the reporting period: RMB 2.53 million
• Zero work-related deaths

Governance Achievements

• Established a complete corporate governance structure
• Officially promulgated the Anti-Fraud Management System
• Improved the Code of Conduct for Suppliers
• Formulated the Code of Conduct for Information Security

Climate Goals & Targets

Environmental Challenges

• Increasing challenges and risks brought by climate change
• Packaging waste
• Excessive specifications and colors of accessories in the production of liquid ink pens
• Potential safety hazards to consumers and the negative impact on the environment caused by chemicals in products

Mitigation Strategies

• Developing sustainability plans and innovative solutions
• Exploring plastic reduction in product design, gradually reducing until eliminating the use of PVC materials
• Simplifying the specifications and colors of liquid ink pen accessories
• Developing food-grade colored clay and oil painting sticks
• Using bio-based degradable materials

Supply Chain Management

Responsible Procurement

• Require suppliers to pass ISO 9001, ISO 14001, and ISO 45001 certifications
• Regular field visits and work-site supervision and inspection on suppliers
• Urging suppliers to enhance social responsibility awareness

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards (Core option), UN Sustainable Development Goals (SDGs)

Certifications: ISO 14001, ISO 45001, ISO 9001, CNAS

Sustainable Products & Innovation

• Plant-based degradable and environmentally friendly press gel pens
• Food-grade colored clay and oil painting sticks
• Refillable markers

Awards & Recognition

• 2021 "Shanghai Brand" Certification
• 2021 Top 500 Most Valuable Brands in China (Ranked 382nd)
• 2021 Top 100 Enterprises in Shanghai (Ranked 79th)
• 2021 Top 100 Manufacturing Enterprises in Shanghai (Ranked 25th)
• 2021 Top 100 Private Enterprises in Shanghai (Ranked 35th)
• 2021 Top 100 Private Manufacturing Enterprises in Shanghai (Ranked 9th)
• 2021 China Brand Annual Award Stationery No.1
• Best Social Responsibility Award in the Employer Brand Creative Competition
• China Light Industry Council Science and Technology Progress Award
• Leading company of scientific and technological innovation in light industry during “13th Five -Year Plan”

Environmental Metrics

ESG Focus Areas

• Sustainable products
• Response to climate change
• Sustainable supply chain
• Empowering employees and communities

Environmental Achievements

• Annual photovoltaic power generation in production bases exceeded 8.8 million kWh in 2022
• Improved recycling and utilization rate of surplus materials, recycling 7,200 tons of waste plastic for reuse
• Launched the "M&G Low-Carbon Office Initiative"
• Launched China's first carbon-neutral stationery series using recycled takeaway boxes
• Launched the "Endangered Animals" marine series stationery to raise biodiversity awareness
• Conducted REACH testing on 8 gel ink products and improved management of chemicals of concern

Social Achievements

• Female employees accounted for 48.3% of the workforce
• Launched "M&G Management Scenario Learning Map" for middle-level managers
• Linked ESG performance to executive compensation for 14 department heads
• Charitable donations totaling 5.33 million RMB
• Shanghai M&G Charity Foundation carried out educational public welfare initiatives benefiting nearly 500,000 students and 2,000 teachers

Governance Achievements

• Established the Sustainability Office and improved the ESG governance system
• Formulated the "M&G Code of Business Conduct"
• Launched the "Management System Against Fraudulence", with 100% coverage in corruption risk auditing
• Conducted 3 information security training sessions for approximately 400 employees

Climate Goals & Targets

Environmental Challenges

• Complex and ever-changing external environment
• Supply chain disruptions (implied)
• Climate change risks

Mitigation Strategies

• Building and improving supply chain management and risk control systems
• Exploring greener and low-carbon production and operation methods
• Adopting lower-carbon and energy-saving technologies and processes
• Increasing the proportion of renewable energy
• Promoting low-carbon office initiatives
• Establishing an ESG assessment system for suppliers and conducting ESG audits

Supply Chain Management

Supplier Audits: Nearly 70 suppliers in 2022

Responsible Procurement

• ESG assessment system
• Supplier Code of Conduct
• Transparent Procurement & Integrity Convention
• Promoting safer and more environmentally friendly raw material substitutes
• Encouraging suppliers to adopt circular packaging
• Promoting Environmental Certifications (FSC)

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards

Sustainable Products & Innovation

• Carbon-neutral stationery series
• Wood-free pencils
• Correction tape with PET packaging
• Metal roller guiding spout for correction tape
• MG001 new needle-point pen tip

Awards & Recognition

• APEC "Sustainable China Industrial Development Initiative" 2022 Annual Industry Case
• 2022 Yicai The Corporate Social Responsibility Ranking in China Environmental Ecology Contribution Award
• 2023 Annual Caijing Evergreen Award GoldenKey—Sustainable Development Solutions Winner Award
• APEC China Business Council 2022 Best Employer Practice Pioneer Award
• WRE(World Retail Elite) Top 100 Private Enterprises in Shanghai in 2022
• 2022 Best Employer Practice Pioneer Award
• Sustainable Development Benefit Award at the 5th Caijing Evergreen Award

Environmental Metrics

ESG Focus Areas

• Sustainable products
• Response to climate change
• Sustainable supply chain
• Empowering employees and communities
• Corporate Governance

Environmental Achievements

• Eliminated PVC plastic from over 1,700 products and/or packaging cumulatively
• Increased the total installed capacity of photovoltaics to 15,700 kilowatts
• Reduced 48,840 kilograms of carbon dioxide equivalent in 2023 through electricity, water, and paper conservation campaigns in the M&G headquarters office building
• Achieved significant energy-saving results through a series of energy-saving projects at the Shanghai base.
• Promoted greener packaging options and packaging reduction for the logistics process, with 330,000 cardboard boxes saved and 640,000 cardboard boxes recycled cumulatively
• Completed company-level Scope 1 and Scope 2 GHG emissions accounting, and conducted preliminary calculation of Scope 3 emissions

Social Achievements

• Revised the Employee Handbook in accordance with international human rights conventions
• Optimized the remuneration system, providing all employees with performance-based variable compensation
• Introduced comprehensive health insurance for all employees
• Average training time per employee increased to 11.8 hours, with an employee training coverage rate of 93%
• Charitable donations totaling RMB6.08 million
• M&G Charity carried out educational public welfare initiatives in 42 cities in 19 provinces, benefiting nearly 1 million students and over 3,000 teachers
• Launched the M&G online learning platform, offering 85 courses

Governance Achievements

• Established the Risk Management and Compliance Committee
• Launched an online training course on the M&G Code of Business Conduct as a mandatory course for all employees
• Conducted internal control audits against non-compliance with business ethics, covering 22 operating locations
• Linking ESG performance to executive compensation

Climate Goals & Targets

Environmental Challenges

• Frequent extreme weather events may result in risks such as damage to Company's production equipment, logistics disruptions, and damage to product inventories
• Extreme weather events may pose risks to the health and safety of employees
• Rising sea levels may lead to greater instability in the operation of the Company's facilities located in coastal areas
• Climate change may exacerbate the vulnerability of ecosystems
• Under the context of the carbon peaking and carbon neutrality policy, companies face increasingly stringent energy-saving and carbon reduction regulatory requirements

Mitigation Strategies

• Upgrade equipment performance and extend equipment service life
• Strengthen the prevention and control of forest risks
• Closely follow the physical risks caused by climate change, and continuously improve employee health, safety, and benefits
• Establish training and sharing mechanisms
• Continuously improve carbon management capabilities, and promote the energy transformation
• Actively explore carbon reduction potential and implement energy conservation and carbon reduction projects
• Regularly inspect and upgrade production, operation, and storage facilities to enhance the level of protection against natural disasters

Supply Chain Management

Supplier Audits: 27/year

Responsible Procurement

• Supplier Code of Conduct
• ESG indicators into the annual performance evaluation for key suppliers
• ESG assessment ahead of the formulation of partnership

Climate-Related Risks & Opportunities

Physical Risks

• Frequent extreme weather events
• Extreme weather events posing risks to employee health and safety
• Rising sea levels
• Climate change exacerbating ecosystem vulnerability

Transition Risks

• Stringent energy-saving and carbon reduction regulatory requirements
• Expansion of the national carbon trading market
• EU's carbon border tax policy

Opportunities

• Opportunities for green product innovation
• Opportunities for energy and resource efficiency
• Growing consumer demand for quality sustainable products

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards (GSSB), Sustainable Development Goals (SDGs)

Certifications: ISO 14001, ISO 45001, ISO 50001, ISO 9001:2015, ISO 14064-1:2018

Sustainable Products & Innovation

• Carbon-neutral stationery series
• “Carbon Emission Reduction Plan” gel pen series
• “Endangered Animals: Wetland” stationery series

Awards & Recognition

• Shanghai Five-Star Green Factory
• “2023 Stationery · China Culture and Education Office Supplies Innovation Award (Student Stationery)”—Green Award
• “Top Human Resources Management Awards—Outstanding Employer” by 51job
• “Digital Intelligence Organization Development Award” at the 16th Management Action Force by the Business Review
• MSCI ESG rating upgraded from BB to BBB
• “Social Value 99” ranking improved from 42nd to 17th
• “ESG Best Practice Case for Listed Companies in 2023” by China Association for Public Companies 2023
• “China Green Point” Case of the Year by China Business Network (Yicai)
• “GoldenKey—SDG Forerunner” by China Sustainability Tribune Magazine 2023
• GoldenBee CSR China Honor Roll—ESG Competitiveness · Sustainable Product & Service Award
• The 8th “Value Co-creation” 2023 Sustainability Case of Chinese Enterprises —Sustainable Product Award
• The 18th “People's Corporate Social Responsibility Award” by People.cn
• Axus Stationery was awarded the title of “Shanghai Industrial Product Green Design Demonstration Enterprise”
• M&G Colipu achieved “2022 Social Responsibility Award” from Shanghai Federation of Industry and Commerce
• “2023 China National Light Industry Council Science and Technological Innovation Award—First Prize”