Climate Change Data

Environmental Metrics

ESG Focus Areas

• Society
• Environmental protection
• Governance

Environmental Achievements

• Replaced the original non-degradable plastic sticks in cotton buds with biodegradable bamboo and paper materials
• Upgraded product packaging from non-degradable PE bags to completely degradable paper bags
• Applied pure cotton non-woven fabric technology to the inner layer of masks, replacing the non-degradable spun-bonded fabric layer with a degradable pure cotton non-woven fabric layer

Social Achievements

• Supplied nearly 4 billion masks, 9.39 million protective clothing, 56.9 million isolation gowns and 20.19 million surgical gowns to fight COVID-19
• Donated medical materials valuing RMB 13 million to domestic and overseas medical institutions and governmental prevention and control headquarters
• Launched an equity incentive plan, granting 5,833,000 restricted shares to 1,036 eligible middle and senior managements and core employees

Governance Achievements

• Established a sound, clear and effective organizational structure composed of Shareholders' General Meeting, Board of Directors, Board of Supervisors and Managers
• Established a sound risk control system through the joint construction of internal control, internal audit, and anti-corruption functions
• Revised the “Management Measures for the Integrity Supervision of the Group” to improve the efficiency of the integrity supervision

Climate Goals & Targets

Environmental Challenges

• Raw material shortage and price rise during the COVID-19 pandemic
• Maintaining production capacity to meet market demand during the pandemic

Mitigation Strategies

• Increased raw material reserves through various channels
• Continuously increased manpower investment in existing factories to improve production efficiency
• Purchased protective equipment testing instruments valued at over RMB 2 million

Supply Chain Management

Responsible Procurement

• Signed integrity and honesty agreement with suppliers
• Encouraged suppliers to obtain ISO 14001 and other management system certifications
• Required suppliers involved in sewage discharge to provide relevant department approval and the valid sewage discharge permit

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Shenzhen Stock Exchange on Environmental, Social Responsibility and Governance Information Disclosure of Listed Companies (RFC), Appendix XXVII "Environmental, Social and Governance Reporting Guide" of the "Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong", GRI Standards

Certifications: EU CE certification, US FDA certification, Japanese Ministry of Health, Labour, and Welfare certification, ISO 13485, ISO 11135, ISO 17665-1, ISO 9001:2015

Sustainable Products & Innovation

• Pure cotton non-woven medical protective materials
• Zero Preservative Multi-Piece Wipes

Awards & Recognition

• National Advanced Collective in Fighting the COVID-19
• Top 30 Shenzhen Chain Store in 2019
• Excellent Retailer
• First Advanced Organization in the Prevention and Control of COVID-19 in the National Textile Industry
• Top 30 Competitive Enterprise in China's Industrial Textiles Industry
• Guangdong Functional Cotton Products Engineering Technology Research Center
• Outstanding Enterprise in Fulfilling Social Responsibility
• Advanced Certified Enterprise
• 2020 Innovation Design Award in the Safety Care Category
• Advantageous Organization of Intellectual Property in Shenzhen
• Enterprise with Intellectual Property Advantages in Longhua New Area
• Guangdong Patent Excellence Award
• 10 Years Plus Caring Company Logo

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Social responsibility
• Governance

Environmental Achievements

• Completed Phase I of Wuhan Winner Water Reuse Project, reusing treated wastewater in the de-bleaching process.
• Purcotton sold 31.5 billion sheets of cotton soft tissues, equivalent to saving 1.2 million 20-year-old trees; distributed non-woven shopping bags, equivalent to reducing the use of 11.92 million plastic bags; and sold pure cotton garments and bedding products, equivalent to reducing the pollution of over 31 million chemical fiber products.
• Developed innovative waterless and gauze atomization washing processes, achieving zero discharge of washing products.

Social Achievements

• Launched WN-N95 protective face masks for medical use.
• Participated in the production and release of "My White Coat 2" and "Chinese Doctors" films.
• Purcotton opened 81 new offline stores and added distribution channels.

Governance Achievements

• Completed special governance tasks of risk diagnosis and securities compliance, procurement, information security, stores, R&D, investment, human resources, brand reputation and funds.
• Implemented five major digitalization strategies.
• Established a complete membership management mechanism for PureH2B.

Climate Goals & Targets

Environmental Challenges

• Recurring epidemics, energy crunch, and blocked logistics.
• Competition in the medical consumables and consumer health products industry.

Mitigation Strategies

• Implemented risk control system.
• Developed new sterilization method to shorten the delivery cycle of protective clothing products.
• Implemented five major digitalization strategies to increase operational efficiency and improve market response.

Supply Chain Management

Supplier Audits: 560 on-site audits and exchanges

Responsible Procurement

• Medical qualifications for medical-related product manufacturers.
• ISO 9001 and ISO 14001 certifications for ancillary suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards, CASS-CSR4.0, UN Global Compact, ISO 26000:2010, GB/T36001-2015

Certifications: ISO 9001, ISO 13485, ISO 22716, ISO 14001, ISO 45001, CE, FDA, Japanese Ministry of Health, Labor, and Welfare, OEKO-TEX® Standard 100, CNAS

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Pure cotton spunlace non-woven fabric
• Herbal cotton antibacterial products
• Silicone gel foam dressings

Awards & Recognition

• 2021 Corporate Best Practices (Sustainable Production and Consumption) for Achieving Sustainable Development Goals
• 2021 Social Responsibility Award for Listed Companies
• Investor Relations Gold Award of p5w.net (2021) - Innovation Award of Performance Presentation
• Investor Relations Gold Award of p5w.net (2021) - Diligence Award of Performance Presentation
• Best Investor Relations Case Award for Listed Companies in China