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Supply Chain ESG Management System

Supply Chain ESG Management System

1. Introduction:

This Manual specifies the structure and requirements for implementing and maintaining the supply chain ESG management system in our company, aiming to guide the practice of actively promoting environmental, social, and governance sustainability in supply chain management.

2. Supply chain ESG management framework:

We integrate our ESG management standards and principles into our supply chain management, with our top management level overseeing supplier ESG to achieve sustainable business operations.

Our management level promises to:

1) Integrate supply chain ESG management requirements into our business processes;

2) Provide necessary resources for our supply chain ESG management;

3) Regularly review our supply chain ESG management results; and

4) Promote continuous improvement of our supply chain ESG management.

3. Supply chain evaluation methods:

We conduct ESG audits on first-tier suppliers and key sub-suppliers on an annual basis in accordance with the Supplier Code of Conduct and relevant regulations. To be specific, we evaluate their environmental performance, labor conditions, and social responsibility commitments. By adding the ESG audit results of suppliers to the scoring factors of their operational business, with a total weight of not less than 1%, we implement monitoring and management of suppliers.

4. Environmental management:

We are committed to reducing carbon emissions, waste, and resource consumption. We encourage suppliers to adopt environmentally friendly materials and production methods, and require them to comply with relevant environmental regulations and standards.

Environmental objectives:

- Require supply chain activities to comply with environmental regulations and standards;

- Reduce energy consumption and greenhouse gas emissions; and

- Optimize resource utilization to reduce the generation of waste and pollutants.

5. Social responsibility:

We are committed to ensuring the protection of labor rights and respect for human rights in the supply chain. We require suppliers to provide reasonable working conditions, prohibit child labor and forced labor, and ensure the health and safety of employees.

Social objectives:

- Respect labor rights, and ensure that labors in the supply chain enjoy reasonable working hours, a safe working environment, and appropriate remuneration;

- Encourage and support diverse, inclusive, and fair labors in the supply chain; and

- Actively participate in and support the development and welfare of local communities.

6. Supply chain governance:

Advocating transparency and compliance in the supply chain, we effectively transmit our anti-corruption compliance requirements to suppliers, and urge them to actively comply with such requirements, and establish good partnerships with those who are ethically and socially responsible.

Governance objectives:

- Establish fair, honest, and transparent supply chain partnerships;

- Encourage suppliers to comply with our ethical standards and anti-corruption policies; and

- Promote corporate governance and sustainable operations for suppliers.

7. Risk management:

We identify potential ESG risks through regular supply chain risk assessments and take necessary measures to manage such risks. For high-risk suppliers, we conduct on-site audits at least once every three years, disclose the audit results, and provide corresponding training for those who are unqualified.

We collaborate with suppliers to assist them in developing appropriate risk management capabilities.

Risk management objectives:

- Identify and evaluate ESG risks in the supply chain, and establish risk management measures and response mechanisms; and

- Establish close partnerships with suppliers to jointly reduce potential risks and crises.

8. Monitoring and reporting:

We regularly collect and analyze supply chain ESG data, prepare reports, and share them with stakeholders through transparent channels to showcase our ESG performance.

9. Continuous improvement:

We establish specific scoring standards and take corresponding measures for ESG audits, and strive to continuously improve our supply chain management practices. We provide training programs to help suppliers improve their ESG performance, so as to achieve joint development with them.

Scoring standards and measures for audits are as follows:


Low risk



The score of ESG assessment for the  supplier's quarterly rating is 1. All audit non-conformities must be closed within the time frame of communication between both parties.

Medium risk


Conditionally accepted

The score of ESG assessment for the supplier's quarterly rating is 0. Reasonable improvement plans must be provided within 6 months, otherwise the above score will be -1.

High risk



The score of ESG assessment for the supplier's quarterly rating is -1. Reasonable improvement plans must be provided within 3 months for all audit non-conformities, otherwise, the order will be terminated.

10. This manual for supply chain ESG management system aims to guide our supply chain management practices and promote sustainable development. We believe that we can create positive social and environmental impacts through our joint efforts.