Climate Change Data

Environmental Metrics

ESG Focus Areas

• Access to Medicine
• Drug Safety
• Patient Safety in Clinical Trials
• Employee Recruitment, Development & Retention
• Gender Diversity, Equity & Inclusion
• Environmental Sustainability
• Corporate Governance
• Ethical Marketing
• Fair Competition
• Supply Chain Integrity
• Pharmacovigilance
• Counterfeiting

Environmental Achievements

• Reduced Scope II GHG emissions per unit of product by 55% in 2020 compared to 2019
• Cambridge, Massachusetts office located in a LEED Gold certified building
• Suzhou facility (upon completion) will be GBEL 2-Star certified

Social Achievements

• 57% of workforce are women, 53.8% of management positions are held by women
• Established robust Clinical Quality Management System (Clinical QMS) for clinical trials
• No clinical trials terminated for failure to follow good clinical practice (GCP) standards

Governance Achievements

• Established Nominating and Governance Committee with oversight for ESG matters
• Appointed a Chief Sustainability Officer to develop ESG strategy
• Established a robust Legal and Compliance function with Code of Business Conduct and Ethics training for all employees

Climate Goals & Targets

Environmental Challenges

• Maintaining a robust ESG program in a culturally and geographically diverse organization
• Balancing the need for affordable access to medicines with the need for profitability
• Managing environmental risks associated with manufacturing and distribution of medicines
• Ensuring ethical marketing practices in a complex regulatory environment

Mitigation Strategies

• Implementing ISO 14001 framework for environmental management
• Developing patient assistance programs to improve access to medicines
• Establishing rigorous quality and safety protocols for clinical trials and commercial products
• Implementing a comprehensive Code of Conduct and Ethics program with robust compliance monitoring and investigation functions

Supply Chain Management

Responsible Procurement

• Compliance with GMP standards for suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Disruption to physical facilities, scientific experiments, clinical trials, manufacturing and distribution

Reporting Standards

Frameworks Used: SASB, UN Sustainable Development Goals (SDGs), Institutional Shareholders Services (ISS)

Certifications: LEED Gold (Cambridge office), GBEL 2-Star (Suzhou facility, planned)

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being

Mission to bring innovative medicines to people in need

Environmental Metrics

ESG Focus Areas

• Improve Human Health
• Create Better Outcomes
• Act Right Now

Environmental Achievements

• Completed a full Scope 1, Scope 2, and Upstream Scope 3 GHG inventory using 2022 as a baseline. This inventory was verified with limited assurance in July 2023.
• Established a Global Occupational Health and Safety (OHS) management system including an Environmental Health and Safety Policy and Global Environmental Health and Safety Standard.

Social Achievements

• Maintained gender equity in leadership and base pay.
• Launched three employee resource communities (Women’s Leadership Community, Culture Committee, DEI & Culture Community).
• Launched Employee Volunteerism program, providing eight hours of annual work time to volunteer; employees impacted over 210 beneficiaries.

Governance Achievements

• Improved transparency by aligning business and ESG disclosures with global and regulatory frameworks and participating with annual key raters and rankers.
• Hired first Global Head of Procurement to embed ESG priorities into functional ways of working, including supply chain management oversight.

Climate Goals & Targets

Environmental Challenges

• Climate change (recognized as a material ESG risk, though not an immediate material financial risk).
• Supply chain risks (addressed through a supply chain risk assessment and supplier management program).

Mitigation Strategies

• Conducting a climate risk assessment in 2023 to explore target-setting.
• Building out supplier management program, integrating ESG questions into procurement platform, and requesting top suppliers sign code of conduct.

Supply Chain Management

Supplier Audits: 30 tier-1 suppliers included in supplier management program; Top 40 Tier 1 suppliers engaged via Supplier Self-Assessment Questionnaire for human rights assessment.

Responsible Procurement

• Supplier Code of Conduct
• ESG questions integrated into procurement platform

Climate-Related Risks & Opportunities

Physical Risks

• Flood risks in Suzhou, China

Reporting Standards

Frameworks Used: GRI Standards, SASB, HKEx

Certifications: ISO 14001

Third-party Assurance: Limited assurance

UN Sustainable Development Goals

• SDG 3
• SDG 5
• SDG 9
• SDG 12
• SDG 13
• SDG 17

Detailed in Appendix: Our Alignment with the UN SDGs

Environmental Metrics

ESG Focus Areas

• Improve Human Health
• Create Better Outcomes
• Act Right Now

Environmental Achievements

• Reduced Scope 2 emissions by 25% at Suzhou facility
• Completed Scope 1, 2, and Upstream Scope 3 GHG inventory
• Issued first TCFD report

Social Achievements

• Maintained gender base pay equity at all levels
• 59% of workforce are women, 53% of management positions held by women
• Donated more than 5.98 million RMB (operations only), and $19.6M in-kind through Patient Assistance Programs
• Reached 806 in-need patients, with 6,065 cumulative patients accessing products
• 10,567 employee volunteer hours

Governance Achievements

• Completed annual Enterprise Risk Management (ERM) risk mitigation plans for top-tier risks
• Established a Supplier Code of Conduct
• Conducted multi-year Enterprise Risk Management assessments

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions (implied)
• Climate-related risks (identified but not specified)
• Managing Scope 3 emissions

Mitigation Strategies

• Science-Based Targets commitment letter signed (targets to be set by 2025)
• Supplier Code of Conduct implemented
• Supplier engagement and collaboration initiatives
• Climate risk assessment conducted

Supply Chain Management

Supplier Audits: 27 vendors ranked as top-tier suppliers

Responsible Procurement

• Responsible Procurement Code self-assessment
• Supplier Code of Conduct
• Supplier Assessment Questionnaire (SAQ)
• Responsible procurement training

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards, SASB, TCFD

Certifications: ISO 14001

UN Sustainable Development Goals

• SDG 3
• SDG 5
• SDG 8
• SDG 9
• SDG 12
• SDG 13
• SDG 17

Zai Lab's initiatives contribute to these goals through various programs and commitments detailed in the report.

Awards & Recognition

• Top-ranked Biotech Company in S&P Global Sustainability Yearbook (China Edition)
• Ranked “Prime” in Corporate ESG Performance by ISS

Environmental Metrics

ESG Focus Areas

• Climate Change
• Governance
• Environmental Stewardship

Environmental Achievements

• Reduced Scope 1 emissions by 30% (2022-2023)
• Reduced Scope 3 (Waste generated in operations) emissions by 33,120% (2022-2023)
• Reduced Scope 3 (Fuel and energy related activities) emissions by 44.7% (2022-2023)
• Reduced Scope 3 (Upstream transportation and distribution) emissions by 1,700% (2022-2023)
• Reduced Scope 3 (Capital goods) emissions by 264.4% (2022-2023)

Social Achievements

• Not disclosed

Governance Achievements

• Board-level oversight of ESG and climate-related issues through the Audit Committee and Nominating and Corporate Governance Committee
• Integration of sustainability considerations into the Company's enterprise risk management framework

Climate Goals & Targets

Environmental Challenges

• Potential for increased frequency and duration of heatwaves impacting facilities in Taipei, San Diego, and Suzhou.
• Increased cost of raw materials due to supply chain disruptions from climate change.
• Increased operating and compliance costs due to enhanced climate-related regulations and mandates.
• Reputational damage associated with non-compliance with climate-related regulations.

Mitigation Strategies

• Conducting climate and nature risk assessments, including scenario analysis for physical and transition risks.
• Implementing ERM process to assess likelihood, impact, and current risk management measures for each risk.
• Monitoring supply chain emissions to reduce carbon-related risk exposure.
• Investing in additional hiring needs and/or technology resources to meet emerging emission reporting requirements.
• Developing more sustainable products and/or processes to meet regulations.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Cyclones
• Wildfires
• Flooding
• Heatwaves

Transition Risks

• Enhanced emissions reporting regulations
• Increased cost of raw materials
• Climate- and nature-related mandates on products and services

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: TCFD

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed