Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• complicated global economic situation
• repeated outbreaks of COVID-19
• continuous rise of the prices of staple commodities
• continuous appreciation of Renminbi
• periodic shortage of energy
• great shock on the global supply chain

Mitigation Strategies

• adopted more moderate business strategies
• actively promoted integrated development of informatization and industrialization
• improved our technical capabilities
• optimized out organization structure
• strictly controlled unnecessary capital expenditures
• enhanced budget management
• flexibly used hedging instruments to mitigate the adverse effect brought about by the fluctuations in foreign exchange rates and prices of maple commodities

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• “China ESG Golden Award 2021”, “2021 Model Enterprise for Industrial Internet Development of Jiangsu”, and “Specialized, Refinement, Characteristic and Novelty Little Giant Enterprise”

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Social responsibility
• Sustainable development

Environmental Achievements

• Reduced carbon emission and improved market competitiveness of relevant products through various R&D projects (details in Section III.4)
• Complied with applicable environmental protection laws and regulations, and implemented various pollution treatment measures (details in Section V.I)

Social Achievements

• Implemented 2022 employee stock ownership plan (ESOP) for key officers and technical personnel (details in Section IV.XI.2)
• Implemented a second ESOP in 2022 for certain employees (details in Section IV.XI.2)
• Awarded many special honors, including “Yins Award for Social Responsibility 2022”, “2022 Model Factory for Intelligent Manufacturing of Jiangsu” and “AAA Candidate Model Enterprise of Jiangsu in the Implementation of Integration of Informatization and Industrialization Management System” (details in Section III.IV.1)

Governance Achievements

• Continuously improved corporate governance structure, operated in compliance with regulations, and enhanced information disclosure (details in Section IV.I)
• Maintained effective internal control over financial reporting in all material respects (details in Section IV.XII.1)
• No material weakness in internal control over non-financial reporting (details in Section IV.XII.1)

Climate Goals & Targets

Environmental Challenges

• Risk of customer concentration (Section III.XI.III.1)
• Risks brought by rapid technology upgrading (Section III.XI.III.2)
• Risk of changes in the global trade environment (Section III.XI.III.3)
• Risk of market exploitation (Section III.XI.III.4)
• Environmental risks (Section III.XI.III.5)
• Foreign exchange risk (Section III.XI.III.6)

Mitigation Strategies

• Actively deploy in new energy and other emerging industries and strive to develop new customers (Section III.XI.III.1)
• Continuous and effective R&D investments to keep technologies and processes at the advanced level (Section III.XI.III.2)
• Follow up on the development of international trade disputes, enhance communication with customers, and continue to enhance competencies and customer adhesion (Section III.XI.III.3)
• Increase R&D investments, optimize product mix and process structure, enhance competencies, and actively cope with market competitions (Section III.XI.III.4)
• Set the building of an environment-friendly enterprise as a key goal, increase funding for environmental protection, respond to requirements of environmental protection laws and regulations, enhance environmental protection training, take control measures at source, and implement environmental safety requirements in key business activities (Section III.XI.III.5)
• Keep a close watch on changes in foreign exchange rates, strive to control exposure to foreign exchange risk at a reasonable level, and hedge or otherwise reduce exposure to such risk (Section III.XI.III.6)

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• Yins Award for Social Responsibility 2022
• 2022 Model Factory for Intelligent Manufacturing of Jiangsu
• AAA Candidate Model Enterprise of Jiangsu in the Implementation of Integration of Informatization and Industrialization Management System

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Business Ethics
• Digital Intelligence Transformation
• Supply Chain Sustainability
• Product Quality
• Environmental Management
• Climate Change
• Water Resources Management
• Waste Management
• Biodiversity Conservation
• Talent Development
• Community Engagement

Environmental Achievements

• Zero environmental accidents throughout the year.
• 100% compliance rate of “three wastes” emissions.
• Main production and operation entities passed ISO 14001 environmental management system certification.
• Mutto Optronics and MFLEX Electronics passed clean production audit certification.
• Dongshan Precision awarded the title of Green Factory (Provincial Level).
• MFLEX Suzhou recognized as a leading green development enterprise and a green factory in Jiangsu Province (Provincial Level).

Social Achievements

• 100% employment contract signing rate.
• Zero complaints related to employee discrimination or harassment.
• Zero significant labor and human rights risk events.
• Zero incidence rate of occupational diseases.
• Zero deaths from work-related injuries.
• All major production and operation entities passed ISO 45001 occupational health and safety management system certification.
• JDI Electronics awarded the title of the Occupational Disease Prevention and Control Demonstration Enterprise in Suzhou City.
• Public welfare investment amounted to RMB 3.43 million.

Governance Achievements

• Established a complete legal governance structure and modern organizational management system.
• 100% coverage of anti-corruption training for directors and employees.
• 100% customer complaint response rate and resolution rate.
• Multek and Mutto Optronics passed RBA VAP audits with full scores.

Climate Goals & Targets

Environmental Challenges

• Extreme weather events impacting business continuity.
• Transition risks related to increasingly stringent national policies and customer demands for carbon emission reduction.
• Market and technological risks associated with low-carbon transformation investments.

Mitigation Strategies

• Strict control of EHS risks and supply chain risks, development of emergency plans, and strengthened emergency drills.
• Improved production efficiency through energy-saving technological upgrades and energy structure optimization.
• Communication with local policy authorities, compliance management, and attention to carbon market development trends.
• Strengthened R&D of low-carbon technologies, development of low-carbon products, and industrial layout.
• Comprehensive assessment of the return on investment and feasibility before implementing low-carbon transformation projects.

Supply Chain Management

Responsible Procurement

• Supplier codes of conduct aligned with EICC, SA8000, and ILO standards.
• Supplier Commitment Letter for Social Responsibility.
• Green Product Guarantee Statement.
• Conflict Minerals Procurement Policy.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Policy and regulatory changes
• Customer demands for carbon emission reduction

Opportunities

• Development of energy-efficient products and entering green industries

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards, Shenzhen Stock Exchange Guideline No.17, GB/T36001-2015, UN SDGs

Certifications: ISO 14001, ISO 50001, ISO 9001, IATF 16949, ISO 45001, IECQ QC 080000, ISO 14064, ISO 27001, ISO 27701

Sustainable Products & Innovation

• Green products from Mutto Optronics

Awards & Recognition

• Green Factory (Provincial Level)
• Leading green development enterprise and green factory in Jiangsu Province (Provincial Level)
• National Intelligent Manufacturing Demonstration Factory (MFLEX Yancheng)
• Jiangsu Province 5G Factory (MFLEX Yancheng)
• Demonstration Enterprise for Implementing Management System for Integration of Informatization and Industrialization in Jiangsu Province (Yancheng Dongshan)
• Intelligent Manufacturing Demonstration Workshop in Jiangsu Province (JDI Electronics)