Climate Change Data

Environmental Metrics

Social Achievements

• Raised disaster-relief materials worth millions, including cotton clothes, down jackets, blankets, and other cold-proof materials to Shanxi Province after heavy rain caused severe waterlogging and floods.
• Launched the Children and Adolescent Peace of Mind Project at the Children and Adolescent Peach of Mind Station in Nancun Town, sponsoring children and youth peace of mind projects.

Climate Goals & Targets

Environmental Challenges

• Risks of production outsourcing: Potential for production processes not meeting quality requirements or production arrangements not meeting delivery schedules.
• Management risks brought by marketing network expansion: Challenges in talent reserve, HR management, store location selection, and performance management.
• Risks of large inventory balance: Potential for inventory backlog or impairment due to market changes or intensified competition.

Mitigation Strategies

• Established a factory selection, inspection, and evaluation system; strengthened product quality control through quality specialists, warehouse inspections, and third-party testing.
• Accumulated strong experience in channel expansion and management; established a sound talent cultivation mechanism and strong store replication capabilities.
• Kept inventories at a reasonable level for normal production and operation; maintained inventory aging mostly within 2 years.

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• Certificate of High-tech Enterprise (No. GR202144002604)

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Strengthened environmental management, including developing a leadership system and policies for investigating and governing environmental pollution events and risks.
• Increased investment in environmental protection and promoted clean and low-carbon development (distributed photovoltaic power generation, energy-saving lighting, etc.).
• Implemented comprehensive pollution prevention and control measures, promoted resource recycling and reuse, and strengthened biodiversity protection.

Social Achievements

• Launched the "China Merchants Silk Road Love Villages" program in Sri Lanka, providing supplies and technology to local communities.
• Promoted rural revitalization in China, providing targeted assistance to Dongshan Village.
• Vigorously offered volunteer services, including childcare, micro-assistance to migrant worker families, and community support (e.g., nucleic acid testing).

Governance Achievements

• Adjusted the exercise prices and numbers of awardees in the Stock Option Incentive Plan (Phase I).
• Completed the cancellation of some stock options in the Stock Option Incentive Plan (Phase I).
• Implemented the Smart Management Platform (SMP) for comprehensive digital management of business processes.

Climate Goals & Targets

Environmental Challenges

• Risk of macroeconomic fluctuations (global COVID-19 outbreaks, Russia-Ukraine conflict, inflation, debt crises).
• Policy risks (labor negotiations at busy ports, trade sanctions, cost-saving initiatives in logistics).
• Operational management risks (uncertainty in operating environments, exchange rate fluctuations, need for improved international operation management systems).

Mitigation Strategies

• Implementing the national "14th Five-Year Plan", promoting port transformation and upgrading, and participating in building a new national dual circulation development pattern.
• Strengthening policy research, responding to national strategies, improving quality and efficiency, and seeking new growth opportunities.
• Paying close attention to pandemic prevention and control, increasing customer loyalty, improving internal control and compliance systems, and optimizing risk warning systems.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environmental Management
• Compliance
• Research and Innovation
• Product Quality and Safety
• Employee Development and Training
• Employee Rights and Welfare
• Diversity and Equal Opportunity
• Occupational Health and Safety
• Sustainable Procurement
• Community Development
• Climate Change Response
• Supply Chain Management
• Stakeholder Engagement

Environmental Achievements

• Achieved a 4.72% year-on-year decrease in GHG emissions intensity per 10,000 yuan of industrial value added.
• Reduced GHG emissions by 6,564.16 tons through energy efficiency improvements (9,589.4 MWh reduction).
• 100% utilization rate of internal recyclable turnover boxes.
• Annual reduction in raw and auxiliary material consumption by approximately 1,800 tons.
• Annual reduction in defective products by 1,200 tons.
• Completed a 1.99 MW photovoltaic project in Chongqing Shuanghuan, providing approximately 1.7 million kWh of clean energy annually.
• Built a 1.5 MW/3 MWh energy storage project, achieving peak-shaving and valley-filling of about 1.8 million kWh annually.
• Reduced packaging materials through optimized consumable utilization.
• Reduced water usage through cooling tower equipment upgrades and water-saving promotion.
• Upgraded waste gas treatment process in Zhejiang Shuanghuan, significantly reducing dust.
• Implemented grinding sludge briquetting, recovering about 0.8 tons of oil daily.

Social Achievements

• Achieved an 80%+ employee satisfaction rate.
• Reduced employee turnover rate.
• Implemented the “Excellent Engineer Training Program”, training and retaining 25 students (20 employed).
• Provided various employee welfare benefits, including heat subsidies, labor protection benefits, statutory holidays, and paid leave.
• Established a comprehensive system for employee welfare and benefits, focusing on the “1+4” projects.
• Conducted various professional skills training sessions, technical exchange meetings, and specialized training seminars.
• Implemented equity incentives for employees through employee stock ownership plans.
• Employs 526 minority employees, 70 foreign employees, and 3 disabled employees.
• Organized various team-building activities for female employees.
• Established lactation rooms for female employees.
• Implemented the Special Collective Contract on the Protection of Female Employees’ Rights.
• Provided holiday gifts to minority and foreign employees.
• Arranged “halal dormitory” areas for Hui Minority and Sarta employees.

Governance Achievements

• 100% coverage rate of business ethics training.
• Established a governance structure consisting of the Shareholders' Meeting, Board of Directors, Board of Supervisors, and Executive Management.
• Implemented comprehensive risk management, promoting a compliance culture.
• Established an Internal Audit Department and a Legal Department.
• Obtained TISAX certification for its information security system.
• The D-MOM system passed the third-level security evaluation.
• No information security or customer privacy breach incidents occurred.
• No incidents violating relevant regulations on product and service information and labeling occurred.
• Established an ESG Committee at the board level, responsible for formulating ESG goals and development plans.
• Established an ESG Working Group to coordinate ESG efforts.
• Led or participated in the formulation of 23 national and industrial standards (5 national standards drafted in 2023).

Climate Goals & Targets

Environmental Challenges

• Risk of macroeconomic changes.
• Risk of fluctuations in raw material prices.
• Risk of exchange rate fluctuation.
• Information security risks.
• Environmental risks (pollution incidents).
• Climate-related risks (extreme weather, sea-level rise, energy demand increase).

Mitigation Strategies

• Enhanced internal control systems, targeted high-quality customers, explored new growth avenues.
• Implemented technological innovation, process optimization, supply chain management, and waste reduction.
• Closely monitored exchange rate fluctuations, strengthened exchange rate management practices.
• Established a multi-tiered security management organizational structure, implemented comprehensive network security management system.
• Formulated emergency plans for environmental emergencies, established emergency response teams.
• Integrated climate change into strategic plans, identified and assessed climate-related risks and opportunities, formulated response strategies.

Supply Chain Management

Supplier Audits: 100% for new suppliers

Responsible Procurement

• Social Responsibility Code of Conduct
• Integrity Cooperation Agreement
• Statement of Non-use for Hazardous Substances
• Conflict Minerals Due Diligence
• REACH, RoHS compliance

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Sea-level rise

Transition Risks

• Policy and legal risks
• Technological transition risks
• Market risks
• Reputational risks

Opportunities

• Demand for new technologies and environmentally friendly products
• Green design and manufacturing

Reporting Standards

Frameworks Used: GRI Standards, UN SDGs

Certifications: ISO 9001:2015, IATF 16949:2016, ISO 14001:2015, ISO 50001:2018, ISO 45001:2018

UN Sustainable Development Goals

• Goal 3
• Goal 4
• Goal 5
• Goal 7
• Goal 8
• Goal 12
• Goal 13
• Goal 16

The report aligns with these SDGs through various initiatives related to health and well-being, education, gender equality, clean energy, economic growth, responsible consumption and production, climate action, and peace, justice, and strong institutions.

Sustainable Products & Innovation

• High-precision gear reducer for industrial robots
• High-strength, lightweight, and low-noise gear shaft components and sub-assemblies

Awards & Recognition

• National Green Factory
• Provincial Green Factory
• Water-Saving Enterprise
• Waste-Free Factory
• Provincial Green Factory (Chongqing Shuanghuan)
• Municipal Green Benchmark Enterprise (Jiangsu Shuanghuan)
• Advanced Water-Saving Unit (Jiangsu Shuanghuan)
• Annual Water-Saving Enterprise (Jiangsu Shuanghuan)
• Taizhou Employment Poverty Alleviation Demonstration Base
• Advanced Enterprise in Charitable Donations
• Charity Model (Organization) Award
• Most Influential Employer in Zhejiang Province
• Happiness Enterprise Pilot Units (Jiangsu Shuanghuan)