And ESG (Environmental, Social
CONTENTS
Care Employee Growth 39
Management 09
Protecting Employees’ Rights and
Interests, Guaranteeing Compliant
and Equal Employment 41
Sharing Achievements of Devel-
opment, Boosting Grow of Talents 47
Fulfilling the Primary Responsibil-
ity, Ensuring Occupational Health
【Topic I】Zhende Makes and Safety
Stimulate Organizational
Vitality 19
About This Report 01 Promote Green Development 51
About Zhende Medical 02
Green Operations: Protecting Our
Message from the Chairman: Working To-
Beautiful Home 53
gether for a Sustainable Future 05
Resource Conservation: Advanc-
Key Performance on Sustainability in 2023 07
【Topic II】Zhende Makes ing Sustainable Development 58
Climate Change 65
Development with Lean
Production 25
To Be a Reliable Partner 69
Innovation Leadership: Providing Zhende
Solutions for Health Management 71
Improve Governance
Quality Service: Contributing Zhende
Strength to Customer Success 77
Governance-First Principle: Protect- Win-Win Cooperation: Sharing Zhende
ing Investors’ Rights and Interests 33 Experience for Industry Development 81
ESG Performance Tables 87
Compliance-Oriented Principle: Community Engagement: Fulfilling
Report Benchmarking Index Table 100
Creating a Clean and Clear Corporate Zhende Responsibilities for a Better
Assurance Statement 115 Environment 36 Society 85
And ESG (Environmental, Social
and Governance) Report
About This Report About Zhende Medical
This report is the second Sustainability Report and ESG Report of Zhende Medical Co., Ltd., which discloses to Company Profile
investors and other stakeholders our philosophy, established management methods, implemented work, and
Zhende Medical, established in 1994, is an A-share listed company in China (stock code: 603301. SH). It is
achieved results in terms of sustainable development issues in its operations.
headquartered in Shaoxing City, Zhejiang Province. Zhende is now one of China's leading manufacturers of products
including medical dressing, infection site control and infection protection, while ranking among the top 50 Chinese
Report Scope Data Description medial device manufactuers.Our business operations span all 34 provinces of China and extend to over 70 countries
The scope of this report covers Zhende Medical Co., Ltd. The data and cases in the report come from real records and regions worldwide..
and its subsidiaries (referred to as “Zhende Medical”, of Zhende’s actual operations. Zhende’s products have been certified by the Food and Drug Administration (FDA), the Communate Europpene (CE), ISO
“Zhende” or “we”). Unless otherwise specified, the scope
The financial data in the report are all in RMB. If the 13485 Quality Management for Medical Devices, and the National Medical Products Administration (NMPA) of China.
of this report is consistent with that of consolidated
financial data is inconsistent with the Zhende’s annual Our product line covers different usage scenarios such as compression treatment & fixation, traditional wound care,
financial statements for the same period of Zhende
financial report, the annual financial report shall prevail. operating room infection control, basic care, isolation protection, pressure therapy and venous thromboembolism (VTE)
Medical (stock code: 603301.SH）.
prevention, stoma care, advanced wound care, personal healthcare, rehabilitation care, and intravenous therapy.
Report Acquisition
Report Period
This report is released in electronic form on information
This report covers the period from January 1, 2023 to
December 31, 2023. Unless otherwise specified, the disclosure platforms designated by the stock exchange,
data in this report come from this period. and can be viewed on or downloaded from our official
website (http://www.zhende.com).
Preparation Basis
Contact Us
This report is based on the Guideline No. 1 for the
Application of Self-regulatory Rules for Companies Listed If you have any suggestions for the report, you can
on the STAR Market of the Shanghai Stock Exchange reach us through the following ways:
– Standardized Operation, and has been prepared
Address: No. 55 Xiangji Road, Gaobu Town, Yuecheng
with reference to the United Nations Sustainable
District, Shaoxing City, Zhejiang Province
Development Goals (SDGs). The preparation process
conforms to the GRI Standards (2021). Email: dsh@zhende.com
Report Preparation Principles
This report is prepared in accordance with the principles
of importance, accuracy, balance, clarity, quantification
and consistenc y, completeness, timeliness, and
verifiability. It is approved for release by Zhende’s Board
of Directors on August 29, 2024. The Board of Directors
guarantees that the content of the report is free from false
records, misleading statements, or significant omissions.
This report is published in Simplified Chinese and English.
Any inconsistency between the Chinese and English
expressions shall be subject to the Chinese version.
And ESG (Environmental, Social
and Governance) Report
Company Events in 2023
Investment in the factory in Kenya Expansion of business lines Lightweight packaging
To better align with the demands of In April 2023, Zhende Medical acquired Zhende has established goals and
global supply chains, we have invested Jiangsu Embrace Science & Technology action plans to implement lightweight
in the first phase of a project in Kenya, Development Co., Ltd. whose primary packaging for its products, aiming to
which encompasses the establishment products include prefilled flush syringes. reduce unnecessary packaging and
of production facilities for surgical
This acquisition effectively complements minimize waste of packaging materials.
gowns, surgical packs, and other related
our existing product portfolio and aligns
products.
closely with the use scenarios of its Products certified by ISCC
current intravenous therapy products.
Product carbon footprint certification PLUS
In 2023, we conducted the carbon footprint
certification for four products, namely sur-
Use of more renewable Its surgical gowns have been certified
by ISCC PLUS and are produced using
gical drapes, surgical gowns, non-woven electricity
retention adhesive tape and sterile gauze circular value chains and certified raw
swabs. We have continuously optimized Zhende continued to promote solar materials, in accordance with ISCC
the efficiency of our production process, power generation projects in Anhui PLUS standards.
from the acquisition of raw cotton to manufacturing base and Jiangsu
manufacturing and waste disposal. Our manufacturing base, increasing the use
efforts include enhancing the use of green of green energy.
energy and broadening the scope of green
production practices, thereby increasing the
sustainability of our low-carbon products.
Commitment to joining SBTi Efficient wound care Long-term financing
Zhende Medical has proactively Zhende has developed super-absorptive
support
addressed the challenge of global p o l y u re t h a n e f o a m to o f fe r m o re Zhende collaborates with the
w a r m i n g by d eve l o p i n g a c l i m a t e gentle protection for patients' wounds, World Bank to expand its financing
transformation strategy aligned with enhancing healing efficiency and patient channels, a significant step in
the 1.5°C temperature goal of the Paris comfort. Additionally, this innovation advancing its international business
Agreement. We have committed to suppor ts clinical medical staff by development and strengthening its
setting its emission reduction targets in reducing nursing workload, decreasing global operational capabilities. This
accordance with the standards of the dressing change frequency, and lowering par tnership has provided crucial
Science Based Targets initiative (SBTi), medical costs, ultimately minimizing the support for our strategic adjustments
fostering the creation of a new green and waste of medical resources. and accelerated the establishment of
low-carbon ecosystem in collaboration its international platform.
with its value chain partners.
New Product Inclusive
Healthcare
Joined UNGC Its waste liquid collection system has
Zhende Medical joined the United significantly reduced the risk of cross-
Nations Global Compact (UNGC) to i n fe c t i o n d u r i n g s u rg e r y, o f fe r i n g
fulfill its commitment to sustainable advanced and efficient infection control
development. for medical workers.
Honors and External Recognitions of Zhende Medical in 2023
Top 500 Chinese Manufacturing Enterprises “Outstanding Contribution Award” by Medical Device A Collective with Outstanding Donations to Red A Waste-Free Factory, Intelligent Factory, Waste-Free
in Charity and Public Welfare in 2023 Industry Association of Zhejiang Province Cross Society in Zhejiang Province City Cell in Shaoxing
The 17th Place among Top 20 “Gold Award” of CPEO Summit in Top 500 Chinese Private The 93rd Place A Wasted-Free Factory, Green Factory in
Chinese Medical Device 2023 Enterprises in Charity and Public on 2023 Global MedTech Top 100 Henan Province
Companies during 2022-2023 Welfare in 2023
And ESG (Environmental, Social
and Governance) Report
Message from the Chairman:
Working Together for a Sustainable Future
Sustainable Development Goals (SDGs). Responsible investment, a dynamic organizational culture, continuously empowering and benefits. Continuous investment in ESG will reflect Zhende’s
procurement, and production have become widely accepted at both employees with diverse skills to help them realize their full potential. responsibility to society and the environment, while supporting the
national and corporate levels, presenting a significant opportunity In addition, we actively contribute to the communities where transformation towards a long-term, sustainable profit model.
amid the restructuring of global supply chains. we operate by leveraging our resources and expertise. Through
Zhende Medical expects to connect with more stakeholders
building academic exchange platforms and participating in industry
As a transnational company integrated into global supply chains, through ESG, providing more efficient and safer products and
events, we have strengthened our market influence, contributed
Zhende Medical has also faced the same challenges and services to the society. We aspire to become a benchmark in
to industry advancements, promoted the development of industry
opportunities. actively supporting the national dual-carbon strategy and to make
standards, and improved quality and efficiency across the sector. By
greater contributions to public health and the development of social
According to the Paris Agreement and the national dual-carbon1 developing innovative and practical healthcare products, we aim to
healthcare ecosystems. Unified as a team, we will remain focused
strategy, Zhende Medical has developed carbon reduction goals make healthcare more efficient and convenient, providing patients
on driving innovation, sustainability, and excellence in all aspects of
and a clear implementation pathway. We have planned to conduct with safer, more portable solutions. We remain dedicated to social
our operations.
the carbon inventory verification every year. In 2023, we completed welfare initiatives, seeking to spread care and compassion through
our first carbon inventory verification for 2022, covering Scope 1 our contributions and to help protect our shared environment. I extend my heartfelt gratitude to every partner, medical
and Scope 2 emissions. Currently, we are conducting the 2023 professional, and consumer for their continued support and trust.
In terms of governance, we remain committed to compliance and
carbon inventory, which will include Scope 3 emissions. In terms of Zhende Medical remains committed to being the most reliable
standardization, continuously improving our corporate governance
emission reduction, we have actively pursued innovative strategies, partner in healthcare. In this evolving social environment, we will
structure to enhance transparency through regular communication
significantly replacing traditional fossil fuels with renewable energy continue to strengthen our ESG practices by advancing business
with stakeholders. We have strengthened our internal oversight
In August 2023, Zhende Medical released its first Sustainable sources. We are also engaged in the research and development of initiatives and expanding our capabilities. Leveraging science
mechanisms to prevent corruption and management malpractices,
Development and ESG Report to develop a sustainable development low- and zero-carbon products, staying firmly on a path of energy- and technology, Zhende Medical will deliver safer, more efficient
ensuring that business decisions are both scientifically sound and
strategy of “We Care”, which guided us from following the efficient, green, and low-carbon development. Key initiatives include products to enhance medical efficiency and ensure patient safety.
compliant with regulations. Additionally, we have deeply integrated
sustainable development policy of “care employee growth, promote the installation of solar photovoltaic system on the factory roof, Together, let us work to safeguard medical safety, reduce healthcare
ESG principles into our daily operations and management practices,
Green Development, being a reliable partner” to walking on the path the active use of biomass steam, and the adoption of geothermal costs, and make healthy life more accessible for all in the near
incorporating them into the performance evaluations of senior
of more sustainable and responsible development. renewable energy at our Kenya facility.Additionally, we have future.
executives.
consistently increased investments in environmental protection,
In the era of severe challenges and changes in global supply chains,
raised sustainability awareness across the workforce, and remain In the future, we will further strengthen our commitment to
geopolitics, energy crisis and unbalanced regional development
dedicated to protecting the environment through ongoing efforts. ESG, positioning ESG investments as a strategic priority and
have become increasingly prominent. Meanwhile, due to the
resource focus, rather than simply additional human and financial
impact of trade protectionism and other factors, global economic In terms of social responsibility, we uphold a positive attitude, ——Lu Jianguo, chairman of Zhende Medical
investments. We aim to make ESG an integral growth driver for
development has been hit heavily, and global supply chains have support public welfare programs wholeheartedly, and develop
our sustainable development, embedding its principles into our
been being restructured and challenged. corporate social responsibility plans, consistently giving back to
business processes and management. Our focus will shift from
society through meaningful and practical actions. We focuse on
However, it is important to note that despite international risk management to compliance management, ensuring the
finding values from our employees and improving their skills, while
differences, there is broad consensus among governments, organization's healthy growth.Additionally, we will transform ESG
fostering a family-friendly workplace that promotes a healthy
businesses, and social organizations on addressing environmental, from a non-financial performance metric into a long-term financial
work-life balance through various initiatives. We strive to create
social, and governance (ESG) issues, as well as the United Nations' performance indicator, striking a balance between ESG costs
Note 1: Dual-carbon refers to the abbreviation for Carbon Peak and Carbon Neutral. Carbon peak refers to the point in time when a country or
region's carbon dioxide emissions reach their historical highest level and then gradually begin to decline. Carbon neutrality refers to achieving "net
zero emissions" by reducing carbon emissions, increasing carbon absorption (such as through afforestation, carbon capture technology, etc.), or
purchasing carbon credits to offset the carbon dioxide emissions produced.
And ESG (Environmental, Social
and Governance) Report
Key Performance on Sustainability
in 2023
Reform and Innovation Promote Green Development
Whole-process improvement of supply chains:
The annual expenditure on environmental protection investment reached RMB million
frontline proposals were improved, and standard formulas were developed
The use proportion of renewable electricity was
Circulating water usage accounted for
The proportion of environmentally friendly packaging materials used in finished products reached
Improvement of process management proposals:
The total amount of waste recycled was tons
A total of 178 proposals were collected
Total greenhouse gas emissions (Scope 1 + Scope 2) was 76,262.92 tons of CO2 equivalent
The estimated tangible earnings were RMB 1.5492 million
Total emissions decreased by compared with 2022
Care Employee Growth To Be a Reliable Partner
Female employees accounted for 68.96% Annual R&D investment was RMB 138.95 million
New employee satisfaction rate reached 93.3% , and employee net promoter score (E-NPS) was 69.33% Zhende was granted 20 Class II medical device product registration certificates and 12 patents for invention
The coverage of employees receiving training was Domestic market customer net promoter score was 83.89%
The average training time per employee was hours Foreign market customer net promoter score was 52.80%
The work-related injury rate per one thousand employees was , and working days lost due to work-related injuries Zhende completed the formulation (revision) of 12 group standards
A total of 43 216,000
employees were sponsored, with a subsidy amount of RMB Environmental and social risk survey was conducted on 653 suppliers
Scholarships were granted to a total of employees’ children 320 employees participated in voluntary activities
The total duration of employee volunteer service was 1,953 hours
Total amount donated: RMB 3.2457 million
W e C are In 2023:
Care Employee Growth, Promote Green Development,
and To Be a Reliable Partner
Zhende incorporated the ESG work into the company-level key tasks
Upgraded risk management to compliance management
Care Shifted the ESG work from a non-financial performance indicator to a long-term financial performance indicator
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Sustainable Development Management Sustainable Management Architecture
Strategy——We Care and Responsibilities
The philosophy of sustainable development of Zhende Medical originated from its mission and vision. We believe that integrating To promote the integration of ESG policies into our strategy, we formed a top-down ESG management organizational structure
the philosophy of sustainable development into Zhende’s operations will help us grow steadily and constantly into the future. In 2022, in 2022, further optimizing relevant management processes. With the Board of Directors as the highest governing body, the
based on the company business, the SDGs and the global governance philosophy proposed by the Chinese government, Zhende construction of the ESG management system is promoted by the ESG Management Committee; the ESG Office serves as the
Medical developed an ESG policy that included three major strategies: “Care employee growth,” “Promote green development,” and “To executive office to coordinate relevant management, communication, and disclosure. A long-term management mechanism has
be a reliable partner”. been put in place. The ESG Office regularly reports on work progress to the ESG Management Committee and receives guidance.
We continue to incorporate SDGs into our long-term operation plans. In 2023, we will focus on We Care model, introducing the
The Board of Directors serves as the highest ESG governance body of Zhende and the Strategy
sustainable development concept into our development, leading future development from a forward-looking perspective. The highest governing body Committee of the Board of Directors is responsible for ESG management resolutions on behalf
Board of Directors of the Board of Directors, deliberating on the strategic plan for sustainable development, making
Upgraded Sustainable Development-Related Strategies of Zhende Medical in 2023 decisions on ESG risks, and reviewing information disclosed to the public.
Before upgrading After upgrading Upgrading content
The ESG Management Committee is chaired by the CEO, participates in the deliberation and
Strengthening the internal control system, taking initiative in management, Decision-making body
Compliance decision-making of major ESG issues, and provides decision-making support for ESG related
Risk management actively meeting ESG standards, further standardizing corporate behaviors in ESG Management Committee matters.
management
addition to risk avoidance, in order to enhance its market trust.
Incorporating the cutting-edge concept of global sustainable development, paying
attention to the correlation between sustainable development performance and Executive office The ESG Office includes relevant leaders of the Group with the Vice President of the Group acts as
Non-financial Long-term financial ESG Office the Executive Director, and is responsible for planning, executing, and monitoring ESG work.
financial performance, trying to optimize the long-term financial performance
performance performance
of Zhende by upgrading its sustainable development capability, which highly
coincide with SDGs and help achieve both economic and social benefits.
Executing agency
Implement relevant ESG management measures in accordance with the requirements
W e C are Each department and
production base
of the ESG Office.
Care Employee Growth, Promote Green Development,
and To Be a Reliable Partner The long-term sustainable development of Zhende is closely linked with its social responsibilities. Zhende Medical profoundly
realizes that only by deeply integrating the ESG concept into its corporate strategies and daily operations can it achieve both
economic and social benefits. During the reporting period, we conformed to the trend of the times and took initiative in making
reforms. Specifically, we developed and issued the Management Manual for Social Responsibilities for all factories around the world
as a profound practice and specific action guideline for our commitment to sustainable development, demonstrating our forward-
looking vision and management initiative as an industry leader, and responding to social expectations with our practical actions.
Care
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Progress in Sustainable Development Management
Progress in achieving ESG management goals in 2023
ESG Strategy ESG Strategy
Key 2030 Goals Key 2030 Goals
and Responses Key Actions in 2023 Progress in 2023 and Responses Key Actions in 2023 Progress in 2023
dimensions Committed dimensions Committed
to SDGs to SDGs
In 2023, Zhende Total greenhouse
factories management system. As of the end of the reporting period, iaries passed the Green was trying to join system and formed a top-down management mechanism.
maintained ISO three new subsidiaries obtained ISO 45001 occupational IS0 45001 occupa- gas emission
Development the SBTi, and will Analyzed climate risks and opportunities, and actively
set target values implemented response measures.
certification. The Board of Directors act as the highest decision-making safety certification Climate as confirmed by 2) reduced by 27%
Safety and Reduced greenhouse gas emissions through measures
health body for our EHS management. change the SBTi. than last year
The work-related such as policy development, investment in energy-saving
Formulated the Management Rules for Hazard Identification, mitigation
injury rate per equipment and green office.
Assessment, and Control for comprehensive hazard and
one thousand 0.45 Renewable
adaptation Installed photovoltaic power generation facilities in the
identification, assessment, control and updating. electricity
employees was factory area, and planned to use geothermal energy in the
accounts for
Care less than 0.5. Regularly conducted EHS themed training for all employees. factory in Kenya to reinforce the use of clean energy. 14.33%
over 30% of total
Employee electricity Conducted factory carbon inventory verification based on
The proportion Continued to implement the talent introduction strategy.
Growth of female senior Implemented employee stock ownership plans to retain talents. consumption. ISO 14064 standards.
executives Established communication channels for employees, such as
(above the level trade unions, general meeting of worker representatives, and
of director) general manager’s mailbox. ISO13485
Employee reaches 20%. Cared for female employees, increased the proportion of female system
rights managers, and support special demands of female employees. certification 100%
and benefits Cared for employees with difficulties; subsidized 585 employees Passed CE/FDA
Customer certification as The products passed multiple domestic and foreign system
with mutual aid and poverty alleviation foundations by the end of
Employee NPS and product required. certifications such as ISO 13485, CE and GMP.
the reporting period.
is greater than 69.33 responsibility
Conducted the remuneration analysis, evaluated the Completed many process improvements under “I CARE”.
competitiveness level to attract and retain talents. Customer net
Conducted surveys on employee satisfaction and engagement.
To Be a promoter score
Reliable (International 52.8/83.9
Established a panoramic scheme for talent training and development. Partner >60 / Domestic
>80).
Established a job qualification system and conducted talent
The average inspection. Participated in industry exchange activities such as the
training time of Encouraged cross-functional, interdisciplinary job rotation among 87 th/88 th China International Medical Equipment Fair;
Growing
employees is employees, formulated job rotation plans for key positions, and carry 64.77 rolled out school-enterprise cooperation with Shaoxing
together Environmental
greater than 60 out rotation practices. Assisting Vocational & Technical College.
hours. and social risk
Supported employee to pursue higher education and skill certification industry Participated in the formulation of 3 national standards, 80.00%
research covers
Established a clear, transparent, unobstructed dual-channel for career development completed the formulation of 19 industry standards and
all key suppliers.
development. 12 group standards.
Investigated environmental and social risks for 653
Established an ISO 14001 environmental management system. suppliers by such means as questionnaires.
Environmen-
Promote All factories Performed up-to-standard wastewater discharge and gas emission.
tal respon-
are certified by 66.67%
Green sibility man-
ISO14001 Performed compliant disposal of waste. Developed efficient and intelligent medical management
Development agement systems and auxiliary instruments to benefit patients and
Conducted emergency exercises for environmental emergencies.
care, and improve the medical quality.
Achieved remarkable results in the operation of the IPD process, Created jobs in the operating location and assisted in local
and formed a scientific decision-making system. economic development; developed management systems
The proportion of
Improved resource utilization efficiency through measures such External on public welfare and charity; established mutual aid and
environmentally Social RMB 3.245
Innovation as waste heat and energy reuse, replacement of energy-saving donations are poverty alleviation foundations, talent scholarships, and
friendly contribution million
and equipment, optimization of production process and wastewater made annually. volunteer teams; carried out public welfare and charity
packaging
green prod- recycling. 65% projects and volunteer services with awards granted.
materials used
uct Improved local medical service accessibility by building
in finished The self-developed surgical gowns obtained the ISCC PLUS
development factories overseas.
products certification.
exceeds 80%. Four products passed the ISO 14067 carbon footprint certification. Actively donated，a total of RMB 3.245 million during the
reporting period.
Achieved lightweight and green packaging upgrade.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Participation of Stakeholders
ESG implementation strategy
The UN: SDGS、UNGC...
ESG Stakeholder Communication
commission ESG strategy
opportunity Dual-carbon goals Zhende Medical expects to establish a long-term mutual-trust relationships with its stakeholders. With a regular communication
mechanism with stakeholders, We aim to gain a deeper understanding of their opinions, needs, and expectations. We maintain
GRI/ISSB… Supply chain two-way communication with relevant parties and respond to their focuses in the field of sustainable development.
ISO37301/37001/27001 collaboration EcoVadis/CDP/SBTi…
ISO14064/14067 opportunity
Main Stakeholders Topics of Concern Communication Methods/Channels
Responsible sourcing: Regional trade agreements such as EU/ASEAN/
Legal operation
RBA/Sedex/WRAP/Amfori… Trade risk RCEP/AU
Compliant operations Compliant tax payment
Relevant acts of the US/UK/Germany and the EU
Anti-corruption and business ethics Anti-corruption mechanism
Responsible Production: Government and Emissions and waste Inspection by leaders and supervision authorities
EHSS risk Social audits: regulatory Environmental management system Responding to government policies
ISO45001/14001/
BSCI/SMETA… agencies Participation in government projects
SA8000
Exchanges’ information disclosure platform
System and standard Regulations and customer requirements Protection of investors’ rights and Disclosure of periodical reports and official website
interests information
Corporate governance Investors exchange conference
Institutional investors
R&D and innovation Investors hotline
and individual
Intellectual property protection Company visit
shareholders
General Meeting of Shareholders
Product quality and safety
Customer service Customer satisfaction survey
Data security and privacy protection Professional customer service team
Anti-unfair competition Email and service hotline
Customers and Climate change mitigation and adaptation Customer complaint channels
consumers Resource utilization Customer visit
Green packaging
Compliant operations
Anti-corruption and business ethics Industry events (exhibitions, seminars, etc.)
Supply chain management Industry-university-research cooperation
Industry exchange and Supplier conference
Partners
cooperation
Internal mail
Internal communication platform
Employee recruitment and hiring
Employee complaint channels
Employee training and development
Employee training
Employee rights and benefits
General meeting of worker representatives
Employees Occupational health and safety
Employee care mechanism
(Mutual Aid Foundation, Talent Scholarship, etc.)
Community communication and
Volunteer service activities
development
Public welfare projects
Medical accessibility
Company website and self-media
Community and the Emissions and waste
Inclusive products
public Green packaging
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Analysis of Material Topics Dimensions No Material Topics Dimensions No Material Topics
Zhende Medical has taken the identification and management of material topics as the basic reference of our ESG
management. We have conducted an analysis on material topics every year and a stakeholder questionnaire survey
every two years, with special communications and surveys on multiple stakeholders to confirm the importance of 11 Intellectual property protection 18 Employee rights and benefits
material topics. In 2023, based on the results of the stakeholder survey and the importance evaluation of topics of last
year, we conducted analysis on domestic and foreign industry policies and standards. This has allowed us to identify 12 Industry exchange and cooperation 19 Occupational health and safety
current policy hotspots, conduct material topic that benchmarks with peer ESG topics, summarize ESG rating concerns,
and establish an ESG topic library suitable for ourselves. In addition, we incorporated external expert opinions to review
and confirm the identification and prioritization of material topics. The final material topics for 2023 were determined Society 14 Customer service 21 Supply chain management
Society
and subsequently reported to the Board of Directors for confirmation.
Identification Process for Material Topics development
Establishment of ESG Participation of Formation of material topic
topic library stakeholder matrix
An ESG topic library that is appro- The topics are optimized and ad- The analysis matrix of material top-
priate to Zhende is established justed based on expert opinions. ics is built based on the evaluation
based on Zhende’s development results.
strategies, industry policies, peer A materiality assessment is con-
ducted from two dimensions: “the The Board of Directors reviews
benchmarking and rating topic them and makes the final approval,
comparisons. impact on stakeholder sustain-
and respond to highlighted materi-
ability” and “the impact on Zhende
al topics in the report.
Medical’s sustainable develop- High
ment”, and the prioritization of top-
ics is then adjusted accordingly.
After analysis and identification of this year’s topics, we added a new topic of concern to the industry, capital market and
stakeholders. Additionally, we have adjusted one existing material topic to better align with Zhende’s actual business
operation, including:
Impacts on stakeholders’ sustainable development
According to the focus of the capital market and the industry, we added the topic of "green packaging"; Environmental
friendly materials, either recyclable or degradable, are used in our packaging solutions to reduce environmental 21 1
pollution, promote novel packaging concept, and encourage practices of resource conservation and recycling. This 13
topic addition demonstrates Zhende’s innovative initiative in the entire eco-friendly packaging field.
Zhende adjusted the “responsible marketing” to the “anti-unfair competition” to disclose its anti-unfair competition,
antitrust or anti-monopoly practices, which are more in line with Zhende’s current business characteristics.
Dimensions No Material Topics 14 18
Dimensions No Material Topics
Governance topics 22
Governance
Protection of investors’ rights and Environment 8
Climate change mitigation and 15
interests adaptation
Environmental topics
Social topics Low Impacts on Zhende Medical’s sustainable development High
to Stimulate Organizational Vitality
Zhende established BPIT in 2023 to improve its core organizational competitiveness through process innovation for the first time.
In 2023:
improved by 38%
management and technical personnel reduced by 70% synchronously
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
In this era of rapid development, ?process governance requires continuous innovations to adapt to market changes and Zhende Medical’s process digitalization governance model demonstrates the three main aspects of TPI - TEAM, Process
corporate strategies. By improving processes, optimizing designs, strengthening the implementation and monitoring, and IT. With customers at the center, all improvements are made around them. The TPI model shows the team’s continuous
and cultivating the process management culture, we have guaranteed a swift response, promoted efficient internal process improvement on the left, the process standardization construction under the support of IT technology on the right,
operation, reduced staff workload, and improved their satisfaction, enhancing our sustainable development capability. and the reform culture for support on the bottom; the three integral parts are complementary to each other.
Leveraging digital and information technology, Zhende Medical has upgraded process governance, driven customer-
Director of BPIT
centric reforms, made constant optimizations. We have strengthened cross-departmental collaboration to uphold our
core values of customer orientation, innovation, and shared success, achieving efficient internal operations through
process improvement and standardization. Additionally, our process digitization governance emphasizes full employee BPIT Office
involvement and focuses on capacity building to alleviate employee workloads and enhance job satisfaction.
Process 1 Process 2 Process 3 Process 4 Process 5 Process 6 Process 7 Process 8 ......
In 2023, the BPIT (the Board of Process Information Technology) determined the process construction strategy of Zhende:
a comprehensive process management system was established through four-class projects based on Zhende's strategies
and its employees’ opinions. Among the four-class projects, class A refers to strategic projects derived from end-to-end
strategic demands, namely VOB, VOC for customer demands and VOP for key process pain points; class B refers to quick-
win projects sourced from first-level process leaders’ internal & I CARE upgrading demands; class C refers to process analysis
projects based on the process framework analysis demands and the urgency for building the business capability; and class
D refers to “I CARE”, namely all-staff proposal improvement projects with the aim to focus on small optimizations in current
businesses through bottom-up improvements, enhancing employees’ awareness of independent optimization, and creating an
atmosphere which employees can make improvements.
A
— Strategic projects
B
End-to-end
Derived from VOB for strategic demands, VOC for
customer demands and VOP for key process pain points
C
— Quick-win projects
Sourced from first-level process leaders’
internal & I CARE upgrading demands
— Process analysis projects
D
based on the process
Customer-centric framework analysis demands
— I CARE and the urgency for building
T: P: I:
the business capability
All-staff improvement,
the internal income of
Team Based Process Optimization IT Driven departments was above
RMB5,000, with allocation-
People-oriented approach, organization and Data basis, realistic basis, system thinking Business-driven approach, integration of business based incentives
coordination, capability cultivation and finance, digital transformation
Talk: sincerity, personnel-affairs separation BPM process management AI artificial intelligence
In August 2023, we formulated an overall plan for I CARE projects. From September to November, we enhanced the awareness
Evaluate: accurate evaluation of current situations
and capabilities, determination of roles and goals, LEAN management RPA robot of our employees by various means, such as promoting employee advocacy, holding online E-Learning lectures and arranging
excellent and efficient delivery posters for on-site activities. During the activities, all departments took an active part, and submitted a total of 178 proposals.
Six sigma management BI business intelligence After rounds of proposal screening and counseling, a total of 30 outstanding proposals were selected, in which 8 proposals
Assist: collaboration, removing the barriers among
were shared and 22 proposals were commended. The above 8 outstanding proposals, such as the Proposal for Refined
IT process information technology
departments, leadership, helping others succeed
Continuous improvement
Motivate: timely and effective incentives Management over Packaging Materials, the Proposal for Energy Conservation and Consumption Reduction in The Office Area in
(materials, appreciation, gratitude) Shaoxing, and the Proposal for Optimization of Product Variety Record of Xuchang Zhengde, produced a total of 33 quick-win
projects, covering 4 improvements in implementation and 11 improvements in planning. Some of the improvement proposals
The only thing never changed is change.
have made achievements in terms of quality, cost, efficiency and customer satisfaction, while the remaining proposals have
been still in continuous improvement.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Improving Batch Recording Optimization Process Optimizing Processes for Reducing Staff Labor Intensity
Xuchang Zhengde is capable of manufacturing a variety of products with complicated processes. Some product batch records In response to the increasing data and processes need to be processed in various business environments, as well as a great
extend to over 100 pages, making organization and management challenging. With the introduction of AGV line-side warehouses deal of repetitive and mechanical work, Zhende Medical improved the work efficiency of employees and reduce their workload
and automated equipment, the production model changed, making the batch record process more complex. Consequently using digitalization process tools. The international sales division took the lead in introducing the digital intelligent model through
organizing these records became labor-intensive. For instance, from July to September 2023, there were approximately 120,000 the automation process, which simulates human business operations, completes target-specific, and regular and repetitive
records from the initial production to the final product inspection. During this period, the time spent organizing batch records operations automatically, in order to free workers from daily repetitive work effectively, reduce their labor intensity, optimize
accounted for about 30-40% of the production supervisors' and 20% of the QC personnel's daily work hours, which has impacted work processes, and improve work efficiency. Based on the demands of actual business scenarios, the model replaced manual
the effective execution of key on-site management tasks. statement adjustment with software, substituted employee operations with processes and data, adjusted work allocation
The Quality Control Department of the factory analyzed and recorded the reasons for the complexity in five aspects, namely reference points, balanced staff workload, optimized process and system nodes, and shortened the review and approval flow.
production mode, form design, product structure, regulatory requirements and process, as to sort out the processes and find out After the process optimization, the number of per capita SKUs undertaken by employees of the Operation Department increased
the way to make improvements. By means of process optimization, form integration, cancellation and consolidation, and record by 21%, and the efficiency enhanced by 38%, which further reduced the repetitive workload of grassroots employees and helped
work streamlining, they finally saved 87,527 pieces of report paper or 73% of paper consumption, while the recording working Zhende improve its quality and efficiency, achieving sustainable development.
hours of production shift leaders and QC workers were also reduced by 70%. The batch recording optimization process was
improved to increase the work efficiency of workers and save the paper consumption.
Optimizing Material Control Integration Process for Purchase Work
As Zhende Medical continues to expand, integrating newly acquired companies, we discovered significant disparities in
procurement efficiency across different factories and among employees within the same factory. Variations in procurement
processes and standards between the headquarters and individual factories have led to uneven workload distribution and
insufficient material expertise among staff. Additionally, multiple employees interfacing with the same supplier have resulted in
inefficient communication.
To address these issues, we have implemented process improvements as a corrective measure. We introduced the Rule for
Standardized Material Purchasing Delivery Management, achieving an 88.2% rate of orders, with JIT materials also exempted
from review. We have refined our process management system by releasing documents such as the Rules for Material Demand
Management, the Standardized Material Purchasing Cycle Management, and the Regulations for Order Execution Management.
These measures have established a standardized procurement workflow. During the reporting period, process improvements
reduced material control workload by 0.5 hours per day and accelerated order reviews by 0.5 hours, allowing procurement staff to
focus on advance delivery management and optimize product delivery times. As a result, the procurement department efficiency
has nearly doubled.
A total of The estimated tangible earnings were
I CARE Process Improvement Sharing Conference
Green Development with Lean Production
Zhende started the lean process innovation in 2019 to promote production efficiency and production quality assurance.
From 2021 to 2023:
Improvement of labor efficiency: production labor efficiency increased by 28%
Saving of raw materials: Through technical transformation and staff quality improvement, a total of 1,385 tons of
non-woven fabrics were saved, which was equivalent to about 2.01 million general-purpose disposable surgical
bags that can be used by about50 medium-sized Chinese hospitals for one year
Saving of energy consumption: 3,655.56 MWH of electricity was saved over three years, which was equivalent
to 157,188 new saplings
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
“Rooting out all ineffective work and waste”
Our spirit: Pursuing reforms and innovations
Reforms and innovations, as part of Zhende Medical’s core values, are spiritual elements that guide common behaviors
throughout the company. The spirit of changes and innovations inspires and guides every employee of Zhende to improve
production technology, on-site management, production efficiency and production quality through innovations, allowing Zhende
to better adapt to modern competitions with other enterprises, and to lay a solid foundation for sustainable development.
Our action path: TPI Lean improvement During the reporting period, our TPI projects achieved a series of fruitful results:
In pursuit of continuous improvements and innovations, we carried out the TPI (Total Production Improvement) Project in all
Completed
fronts in 2023. In the rectification of safety hazards, the adjustment of employees’ work intensity, and the improvement of their
work environment, we constantly looked for opportunities for improvements and took actions. 4,976
TPI project implementation process
Identification Improvement Consolidation
Formulated
Established the methodol-
ogy for lean improvement
Developed concrete im-
provement plans for wastes
Provided relevant training
for employees, so that they 6,654 standard working hours participated in proposal improvements
activities, identified waste identified, such as optimiza- can understand and mas-
links in the processes by tion of processes, introduc- ter new work styles and
means of value flow map- tion of new tools or change methods to consolidate Introduced the man-machine integration line for surgical drapes to tackle the technical difficulty in no automated
ping, process analysis and of operation modes. the achievements of lean production in the industry, greatly improving production efficiency and quality stability
on-site observation. improvement activities, and
improve work efficiency Introduced automatic lean line-side warehouses to shorten the delivery cycle by 50%, greatly improving the
and quality assurance. customer service capability
We expect to eliminate all ineffective labors and wastes by implementing the TPI project, and set the goals for excellence. We will
guarantee our core advantages in market competitions by continuously reducing costs, improving quality and making production
more flexible.
Through 3 years of technical reforms:
Improvement of labor efficiency:
Our implementation scope: whole-process coverage and all-staff participation Production labor efficiency increased by
We have encouraged all-staff participation from senior executives to grassroots employees. In order to fully mobilize the enthusiasm
Saving of raw materials: Through technical transformation and staff quality improvement
and wisdom of all employees, we have delegated power to all levels of the organizational structure through teamwork, eliminating
defects and wastes in every position in a timely manner. A total of 1,385 tons of non-woven fabrics were saved
We have encouraged various improvements in any processes and links, including techniques, methods, equipment, processes, layout,
work fixtures, molds, alternative materials or other daily or strategic improvements in cost control, efficiency, safety, and quality. A total of Which was equivalent to about And can be used by about
disposable surgical bags
fabrics were saved hospitals for one year
Throughout the year, the lean improvement project made remarkable achievements in improving production
efficiency, reducing costs and optimizing product quality. For one thing, it reduced resource consumption and Saving of energy consumption:
environmental pollution, and promoted sustainable development of Zhende. For another, it achieved significant
results in deepening the understanding of customer demands, and improving the service process, work efficiency, 3,655.56 MWH
Which was equivalent to
and customer satisfaction. of electricity was saved over three years 157,188 new saplings
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Introducing Human-machine Integration Line for Energy Conservation Introducing Automatic Sewing Equipment for Improving Efficiency and Reducing Staff Work Intensity
In the medical dressing industry, surgical drapes have high requirements in equipment accuracy and compatibility due to their In the link of product sewing, there were a lot of breakpoints, wastes and management work in the manual sewing production
purpose, features and order structure, which causes a big technical bottleneck for the research and development of equipment. process. The average speed of the manual product sewing was 100 pieces/hour, with a low production efficiency. In manual
In 2021, Zhende independently developed and designed the human-machine integration line for surgical drapes. After sewing, employees had to bend over for a long time and sew products by hands with a high concentration. The high labor
discussions, attempts and verifications of technical solutions, we successfully solved technical difficulties in large-width cutting, intensity made them easy to get tired. Besides, new employees had to spend as long as 3-6 months to learn the skills.
punching for removing waste scraps, online pre-folding in various ways, zero-distance edge spraying, automatic pasting of After introducing the automatic sewing equipment, we achieved the continuous production mode, shortening production cycle
strengthening sheets and online hot pressing. to about 2 days, increasing the average speed of product sewing to 800 pieces/hour, and enhanced production efficiency by
Through systematic production planning and designs, such as staff position design, process optimization and layout 7 times. Moreover, the automatic sewing equipment greatly lowered staff labor intensity and professional skill requirements.
optimization, the human-machine integration line successfully replaced some processes, like manual cutting, cut-parts material Employees only needed to handle small equipment exceptions, such as broken lines, threading and replacement of bottom
handling, manual pre-folding, manual adhesive spraying and punching, improving production efficiency, reducing manufacturing shuttles. The labor intensity was significantly reduced, and new employees only spent 6 days to become skilled workers.
costs, and saving energy consumption of workshops. After put into operation, it reduced 18% of electricity consumption, saved In the meantime, the improvement in automation was accompanied by the adjustment of the production process. We
lowered the energy consumption per unit output by 19%.
Introducing Automatic Lean Line-side Warehouses
Based on the cyber-physical system, Zhende Medical’s AGV smart logistics system connects supply chains, production process
and warehousing logistics intelligently through Industrial Internet, thereby minimizing production, warehousing, operation and
maintenance costs, automating the production process, giving a quick response to demands, making products flexible, ensuring
production safety, and improving production efficiency.
Flexible AGV solved Zhende Medical’s problems in multi-
variety and small-batch production (of customized products).
It lowered logistics costs by reducing manpower and forklift
equipment, realized the unmanned operation process to
increase operation efficiency and distribution accuracy rate,
and improved storage space for systematic management and
control, playing a significant role in enhancing both operation
accuracy and production efficiency.
Improving Governance System
Governance-First Principle: Protecting Investors’ Rights and Interests
Female directors accounted for 33.33%
Compliance-Oriented Principle: Creating a Clean and Clear Corporate Environment
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Governance-First Principle: Protecting Protection of Investors’ rights and interests
In strict accordance with the provisions of the Company Law of the People’s Republic of China, the Securities Law of the People’s
Investors’ Rights and Interests Republic of China and other relevant laws and regulations, Zhende has formulated the Investor Relations Management System, the
Information Disclosure Management System, the Internal Reporting System for Major Information and other systems to manage
investor relations, ensure truthful and complete information disclosure, and safeguard the rights and interests of small and medium-
Corporate Governance Structure sized investors.
Zhende Medical has formulated the Articles of Association to continuously improve the corporate governance structure and In equal treatment of small and medium-sized shareholders, Zhende has followed the principle of equality when carrying out investor
standardize its operations. Zhende has established a corporate governance structure consisting of the General Meeting of relation management activities, and treated all investors equally, creating opportunities and providing convenience particularly for small
Shareholders, Board of Directors, and Board of Supervisors. We have formulated systems such as the Rules of Procedure and medium-sized investors to participate in activities, and organizing on-site visits and communication meetings.
for Shareholders’ General Meeting, Rules of Procedure for Board of Directors, and Rules of Procedure for Board of Supervisors, In related party transactions, Zhende not only established effective operation and supervision mechanisms for related party
ensuring that the General Meeting of Shareholders, the Board of Directors and the Board of Supervisors exercise decision- transactions, but confirmed and implemented the expected annual related-party transactions. These measures considered the
making and supervisory power, with an increasing level of independent operation. independent directions' careful decision, the General Meeting of Shareholders' deliberation, and the Board of Directors' majority vote,
The Board of Directors consists of four specialized committees: Strategy Committee, Audit Committee, Nomination ensuring that all daily related party transactions were required by Zhende’s daily production and operation, with fair transaction pricing,
Committee, and Compensation and Assessment Committee. All members of the specialized committees are directors. no adverse impacts on Zhende’s financial condition and operation results, no impacts on Zhende’s independence and no harm to the
Independent directors hold the majority and serve as the chairmen of the Audit Committee, Nomination Committee, and rights and interests of Zhende and its shareholders, especially small and medium-sized shareholders.
Compensation and Assessment Committee. To improve the scientific decision-making of the Board of Directors, each
Zhende Medical has formulated systems, such as the Investor Relations Management System. During the reporting
committee strictly fulfills its responsibilities in accordance with relevant regulations, and fully utilizes its professional
Multiple channels have been set up for investor communication in order to maintain the legitimate period, Zhende held
advantages.
Corporate Governance Structure rights and interests of investors, especially small and medium-sized investors, and enhance their
General Meeting of Shareholders
understanding and identification with Zhende. We listen to investors’ opinions and suggestions to 3 investor exchange
improve our corporate governance. conferences
Board of Supervisors
Board of Directors
Investor Communication Channels
Remuneration and
Strategy Committee Audit Committee Nomination Committee
Assessment Committee
During the reporting period, Zhende held the General Meeting of Shareholders and meetings of the Board of Directors and
Board of Supervisors in accordance with legal procedures. Each specialized committee of the Board of Directors performed
their responsibilities and improved the level of enterprise management and risk prevention capabilities. The maximum
interests of Zhende and all its shareholders were safeguarded. 0575-88751963 dsh@zhende.com
Composition of the Board of Directors and Board of Supervisors and Operation of Shareholders’ General Meeting
and Meetings of the Board of Directors and Board of Supervisors in 2023
Composition of the
Board of Directors including 3 female directors and 3 Convening of the
independent directors General Meeting of 6 Board of Directors meetings, with
Shareholders and
a total of 34 proposals deliberated,
Meetings of the
Board of Directors including 6 meetings of specialized Official website of Zhende, website of Shanghai General Meeting of Shareholders, investor
and Board of committees of the Board of Directors Stock Exchange, e-interaction platform of the exchange conferences, roadshows, etc.
Composition 3 supervisors Supervisors
Shanghai Stock Exchange, etc.
of the Board of
Supervisors including 1 employee supervisor 6 Board of Supervisors meetings, with
a total of 24 proposals deliberated
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Compliance-Oriented Principle: Creating a
Zhende Medical has formulated systems such as the Information Disclosure Management System and the Internal Reporting
System for Major Information to truthfully, accurately, completely, and timely fulfill information disclosure obligations, making sure
the information is kept confidential before disclosure to ensure the openness, fairness, and impartiality of information disclosure.
Zhende designates Shanghai Securities News, Securities Times, Securities Daily, China During the reporting Clean and Clear Corporate Environment
Securities Journal, and the website of the Shanghai Stock Exchange as the newspapers period, Zhende released
and website for information disclosure. During the reporting period, we did not keep any a total of Compliant Operations
information that should have been disclosed, and there was no selective information
disclosure behavior. We have properly fulfilled the information disclosure obligations of
an A-share listed company and effectively protected the legitimate rights and interests of
Zhende Medical has formulated systems such as the Internal Audit Regulations and the Implementation Rules for Contract
Approval Management. Under the guidance of the Audit Committee of the Board of Directors, the Internal Audit and Risk
and documents
Control Department of the headquarters are responsible for internal audit, risk management, and other related work. The
investors.
Internal Audit Risk Control Department has conducted routine audits and special audits, regularly identified and evaluated
various risks in daily work, collected risk management opinions, and reported risk control to the Board of Directors.
Zhende Medical has established and improved its sustainable and stable dividend policy and supervision mechanism, effectively
During the reporting period, we conducted 9 routine audits and 2 special audits, including audits of procurement, cost,
safeguarded the legitimate rights and interests of investors and distributed dividends to all shareholders according to the dividend
assets, engineering, remuneration, and safety production modules. Through the “audit + rectification” model, Zhende made
return plan.
continuous improvement in its business processes and operational mechanisms.
Cash Dividend Distribution of Zhende Medical over the Past Three Years Routine and Special Audits of Zhende Medical in 2023
Year Dividend distributed per 10 shares (RMB) (tax inclusive) Category Audit Module Audit Scope Audit Results
assessment (1 item)
Routine Audit Key systems, process construction and implementation evaluation, routine and special
costs, procurement, assets, labor, engineering, safety production, etc.
completed, items
Note: The table above is based on the actual distribution time Sales (1 item) Freight management, sales management, expense verification, etc. to be improved
were identified
Compliance (1 item) Internal audits based on AEO standards and subsequently
Special Audit rectified as planned.
Cost information, cost management, cost input and output,
Costs (1 item)
systems and processes, etc.
During the reporting period, we conducted an internal control effectiveness assessment, finding no significant defects in its
internal control over financial reports.
We has attached great importance to improving employees’ legal awareness and During the reporting
designed targeted training courses covering “all employees”, “professional positions”, period, a total of
and “management” on the E-learning platform based on the unique natures of
different positions. 1,287 people
participated in the training
Anti-corruption and Business Ethics
Anti-corruption policy
Zhende Medical puts in effort to not only establish a comprehensive anti-corruption management system but shape
a clean and honest corporate culture. The Board of Directors of Zhende has an Audit Committee responsible for
managing and making decisions on anti-corruption and business ethics. Zhende’s Internal Audit and Risk Control
Department is designated as a standing institution for audit and supervision, whose responsibilities is to organize
and implement daily anti-fraud work throughout Zhende.
Zhende has continued to improve anti-corruption and business ethics management systems and consolidated anti-
corruption management achievements through various measures, such as system construction, audit supervision,
due diligence , and training.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Anti-corruption management measures and progress of Zhende Medical Anti-Unfair Competition
Measures Achievements Zhende Medical strictly observes the Anti-Monopoly Law of the People’s Republic of China, the Anti-Unfair Competition
Law of the People’s Republic of China, the Price Law of the People’s Republic of China, the Advertising Law of the People’s
Zhende has signed the Commitment Letter for Professional Republic of China and other relevant laws and regulations. Guided by these principles, Zhende has standardized the
Ethics and the Commitment Letter for Honest and Clean Practice
employee confidentiality system in the Employee Handbook, and refused to seek competitive advantages through
with employees. Employees have the duty to prevent corrupt
behaviors, such as accepting bribes, organizing or participating in unethical and illegal business practices.
entertainment and consumption activities, and soliciting bribes. We have established a reporting mechanism to encourage employees to report acts of unfair competitions, handled in
The signing rate of the Commitment Letter for
All employees are expected to strictly keep business secrets, accordance with relevant laws and regulations and Zhende’s internal regulations after investigations and verifications, and
Professional Ethics with employees was 100%,
observe professional ethics, enhance the awareness of integrity
and self-discipline, and safeguard the legitimate rights and
and the signing rate of the Commitment Letter for strictly protected the information of whistleblowers to avoid retaliations.
System Honest and Clean Practice with employees was
construction interests of Zhende.
By establishing anti-unfair competition systems and organizing awareness campaigns and training, we have built a
Zhende has formulated the Management System for Bidding robust anti-unfair competition management framework and strengthened its corporate culture. In 2023, we held 6 online
The signing rate of the Integrity Agreement with and on-site lectures and training courses, involving legal education on the Anti-Unfair Competition Law, common acts of
and other systems for external parties. It has issued the “Anti-
suppliers and distributors was 100%.
Commercial Bribery, Adherence to Integrity” proposal for suppliers unfair competition, and how to avoid unfair competition, attracting more than 2,000 participants, effectively strengthening
and distributors, and signed the Integrity Agreement with them to Zhende’s self-prevention capability.
prevent money exchanges with employees, payment of kickbacks,
pursuit of private interests and other corrupt behaviors, and
establish honest, trustworthy, reciprocal and win-win cooperation.
Intellectual Property Protection
Zhende Medical has attached significant importance to the protection of independent intellectual property rights and respected the
Internal review
Zhende has established channels and published telephone numbers intellectual property rights of others. We have established a sound intellectual property management system and passed the intellectual
for monitoring and reporting, while also conducting internal property management system certification of the China National Intellectual Property Administration for the first time in 2016.
supervision and audits at each factory and marketing center. All factories of Zhende conducted annual
Zhende has initiated a top-down organizational structure for intellectual property management. We have formulated systems such
Supervision External audit internal audits and accepted regular audits from
and review Every year, Zhende has accepted audits from independent third independent third parties, finding no problems in as Intellectual Property Management Regulations, Patent Value Evaluation Rules, and Patent Application Management Rules for
parties at the request of customers, demonstrating its transparency business ethics. New Products. We also engage in planning, implementation, inspection, and improvement of intellectual property management ,
and compliance. In addition to financial audits, Zhende has also
guaranteeing Zhende’s technological innovations and sustainable development.
accepted ethic reviews from independent third parties every year,
with business ethics as one of the main topics.
In 2023, Zhende obtained
Zhende provided anti-fraud case training, and analyzed
fraud cases, including duty-related misappropriation,
embezzlement of funds, and briberies of non-
registration certificates registration certificates
government workers to enhance the vigilance of
Zhende has continued to provide customized business ethics employees. A total of 3,102 people participated through
training courses, covering employees in all key positions. The the E-learning platform. As of the end of 2023, Zhende has had
Awareness
training has recorded and tracked the training effect through
training
the E-learning platform, improving employees’ awareness of
business ethics.
During the reporting period, Zhende organized 20 anti-
corruption themed training sessions. The coverage
Class II medical device 11
Class III medical device
rate of anti-corruption related training for directors was registration certificates registration certificates
rate of anti-corruption related training for employees
was 46%, with an average duration of 1.85 hours.
Meanwhile, Zhende has held intellectual property publicity and training activities for employees. In 2023, we launched the “Intellectual
Zhende maintains a zero-tolerance policy towards corruption, fraud, Property Rights Bring Innovations and Wealth” themed activity on our Intellectual Property Day. In order to protect our own intellectual
and money laundering. It has implemented the Regulations on Anti- property rights without infringing others', Zhende strengthens employees' understanding of these concepts through on-site activities, online
Commercial Bribery, Complaints, and Reporting and established a
dedicated reporting hotline and email to ensure transparent and and on-site classes, science training, fun games, and other forms of activities. In 2023, we held 7 relevant training sessions with a total of
accessible reporting channel. At the same time, Zhende takes protective 1,050 participants.
measures for complainants and whistleblowers. Those who violate the
regulations by disclosing information about whistleblowers or retaliating In addition, Zhende has endeavored to protect our core competitiveness, strictly
Supervision against whistleblowers will be dismissed with their labor contracts
and
During the reporting period, the number of corruption inspected counterfeits of our brands, regularly monitored trademark infringement. We
terminated. In case of violations against the law, related personnel will reports received by Zhende was 0.
reporting be transferred to the judicial authorities. closely monitor our trademark registration information in the market, search engines,
Reporting channels professional trademark databases, official trademark announcements and other
Hotline: 18658516729 channels to determine whether there is unauthorized use of our trademarks. In 2023's
Email: tousu@zhende.com reporting period, many companies registered similar products with the trademark
Mailing address: Zhende Medical Headquarters (Internal Audit and "Zhende", while no violations relation to intellectual property rights were reported. To
Risk Control Department), Yuecheng District, Shaoxing City, Zhejiang
Province
resolve these transgression, we filed complaints about these trademarks relating our
main product in order to maintain the reputation of the trademark “Zhende”.
Care Employee Growth
Protecting Employees’ Rights and Interests, Guaranteeing Compliant and Equal Employment Target value for Actual value Actual value
KPI and target value by 2030 Progress
Sharing Achievements of Development, Boosting Grow of Talents
<0.5 0.59 0.45
The work-related injury rate per one
Fulfilling the Primary Responsibility, Ensuring Occupational Health and Safety thousand employees is less than 0.5
>20% 16% 23.8%
The proportion of female senior executives
Contribution to the SDGs (above the level of director) reaches 20%
>64 62.85 69.33
The employee net promoter score (E-NPS)
exceeds 70%
>56 66.10 64.77
The average training time of employees is
greater than 60 hours
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Protecting Employees’ Rights and Interests,
Employee Equality and Diversity Measures of Zhende Medical
Guaranteeing Compliant and Equal Employment Employee diversity
Employee Recruitment and Hiring
Zhende Medical has adhered to legal employment, committed to building an equal, diverse, and inclusive workplace Zhende has treated employees of various nations. Currently, it has employees from the US, Kenya, Brazil,
culture. We have observed the Labor Law of the People’s Republic of China, Labor Contract Law of the People’s Malaysia and the UK, with 7.92% of non-Chinese employees.
Republic of China, and other laws and regulations. Abided by these legal guidance, we formulated regulations such
as the Management Rules for Signing Labor Contracts and the Recruitment Management Rules for General Workers,
defined relevant provisions in the Corporate Social Responsibility Management Handbook, clearly prohibited child
labor and forced labor, and prevented workplace discrimination and harassment.
Zhende’s employee types include contract employees, rehired employees who have retired, and interns. In recent
years, we have implemented a talent introduction strategy. Talents are reserved through targeted recruitment from Protection of women’s rights and interests
universities and cooperation with universities.
Employee Recruitment and Hiring of Zhende Medical Zhende has paid great attention to the proportion of female employees in various positions, board members,
senior executives, research and development personnel and new female employees, to ensure that female
Prohibition of child labor employees are treated equally in recruitment and work.
Strictly implement the ID card-based assessment system before employment;
If child labor is found to be recruited by mistake, we will notify their parents to take them back, bear their travel expenses
for returning home , and all fees for them to finish the compulsory education.
Outstanding Female Employees of Zhende Medical
Prohibition of forced labor
If forced labor is found, employee representatives should investigate into the matter and ask for opinions from the forced
workers. Within a week, a meeting with the management will be set to seek solutions together or report to the relevant
government department.
Prevention of workplace discrimination and harassment
Make it clear that we shall not engage in any discriminatory behavior against employees due to their race, social class,
nationality, religion, disability, gender, or gender orientation, etc.;
Establish a multi-channel complaint mechanism consisting of the complaint box, internal email, hotline (0575-88082530)
and union representatives, through which employees can have their complaints heard; Meng Hongjuan, Director of a Shen Zhenfang, Vice Li Yuhong, an employee of
After receiving the complaint, we will respond by investigating into and verifying the matter as soon as possible with workshop of Shaoxing Zhende, Chairwoman, was elected as Zhende Medical, entered the
proper progress updates and disclosures for the complainant. If the case is true, we will handle it in accordance with the was elected as a deputy to the a deputy to the 13th National “Agricultural Business Cup”
system and publicize the treatment; in serious cases, we will assist employees who have been discriminated against or th
harassed to report to the relevant government department. If the case is not true, or if it is a misunderstanding, we shall
of the People’s Republic of China. Entrepreneurship Competition
intervene for mediation.
sponsored by the provincial
women’s federation on behalf of
Zhende adheres to the principles of equality and diversity, complies with local policies, develops a diversity system, Zhende Medical Co., Ltd.
and conducts management.
In 2023, Zhende has been conducted 15 second-party and third-party social audits, all of which were passed.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Employee Rights and Benefits During the reporting period, Zhende conducted a comprehensive comparative analysis on renumeration in the market to
assess the competitiveness of our renumeration system and put forward suggestions to effectively optimize the attraction
Zhende Medical has adhered to the management principle of “caring employee”. A comprehensive remuneration system,
and retention of key talents. Meanwhile, we the relevant government department to market changes, which significantly
the Employee Handbook, the Welfare Management Rules, and the Regulations for Medical Assistance Foundation have been
reduced unnecessary brain drains, building a solid talent base for Zhende’s long-term development.
established to safeguard the legitimate rights and interests of every employee. In addition, Zhende has also set up internal
In the management principle of “caring employees”, Zhende Medical has established a comprehensive employee welfare
honors and awards to recognize employees with outstanding performance and contributions.
system, including mandated benefits, living allowances, health plans, and other benefits.
Comprehensive Remuneration System of Zhende Medical Employee Welfare System of Zhende Medical
Mandated benefits Living subsidies Health plan Other benefits
Basic Guarantees Inclusive Policies Care Plan Short-term Incentives
Staff dormitory Subsidies for festivals
Social insurance Staff health examination
Staff canteen Group tour
Medium-term Long-term Spiritual
Incentives Incentives Motivation
Food subsidies Annual vacation
Housing provident fund Commercial insurance Visits for employees with
marriage, funeral, injury and
Regular buses
illness, childbirth, or major
family accidents
Zhende values humanistic care for every employee and helps those in need. We have set up a mutual assistance
Comprehensive Reward System of Zhende Medical
fund to give support to employees in difficulties and their families. In addition, we have also provided various forms
of support and help for employees in their work and life.
Zhende Medical Provided Child Care Services for Employees to Create a Family-Friendly Workplace
To solve the difficulty of taking care of employees’ children during holidays, enriching children’s lives, and promoting their
development, we have offered winter (summer) vacation care services six times. We provide homework assistance and a
A Training System Based Challenging Work Tasks Core Competency series of interest-based courses, such as painting, poetry appreciation, clay modeling, and cupcake making, strengthening and
on Learning Paths Based on Employee Building Based on the
enhancing the understanding and friendships among children through interactive games.
Development Strategy
In 2022, a total of 70 children received such services. In the future, we will continue to work hard in caring for the families of our
employees, building a “harmonious and beautiful” home of Zhende.
Safety and Health Performance Management Internal Improvement Authorization System
Environment System Based Based on Strategic Plan Based on Employee Based on Trust and
on Work Environment Collaboration Dedication and Cultural Respect
Improvement Identity
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Zhende Medical Set Up a “Love Mother-Baby Room” to Meet Special Demands of Female Employees
Zhende Medical’s Labor Union has established the “Love Mother-
Baby Room", significantly alleviating the challenges new mothers
face with breastfeeding in the workplace. The room is thoughtfully
designed with human-centered details and equipped with facilities
such as baby beds, crawling mats, baby wipes, back cushions,
dolls, and storage boxes. This warm, comfortable, tidy, and private
space not only ensures privacy for breastfeeding mothers but also
provides convenience for those needing to express milk, allowing
them to focus on their work with peace of mind. In addition, we have
provided books on parenting experience for the mothers and toys Zhende listens to the voices of employees, accepts their supervision, and takes their suggestions into consideration.
for children. We further safeguard their rights and interests through coordinating organization, mechanisms, and measures. We will
continue to implement improvement measures to enhance employee satisfaction and work efficiency.
During the reporting
Zhende Medical Established the Talent Scholarship to Assist in the Study and Development of Employees’ Children Organizational Support
period
To care for employees and their families, we established the Talent the satisfaction towards
Zhende’s headquarters and each subsidiary establish separate trade unions covering
administrative services of
Scholarship Foundation into being in 2019 to help employees’ all employees.
Zhende exceeded
children further their studies and develop. Our core value of “sharing
success” was therefore put into practice. In 2023, we distributed
the Talent Scholarship to 45 students for the fifth time, with a
total amount of RMB135,000. As of the end of 2023, we have
Mechanism Support
and that with the trade
accumulatively awarded scholarships to 169 employees’ children, union’s performance was
with a total amount of RMB507,000.
A group photo of the children with the Talent Scholarship
The Regulations on General meeting of worker representatives is formed with a
general meeting of worker representatives held every year. During the reporting
period, one general meeting of worker representatives was held, with a total of the new employee
of worker representatives system and discussed the proposals put forward by
Expressing Attitudes and Conveying Energy the workers’ representatives, guarantying the assessment rights of the workers’
representatives.
A collective contract is signed with all employees every year, in which the minimum and the employee NPS
We have continued to organize TED sharing activities in the principle of “expressing attitudes and conveying energy”, inviting four of our own
employees from different positions as guests to share their personal experiences around the theme.
salary standards, payment dates, and other related matters are negotiated.
reached 69.33%
In 2023, we held three sessions themed "Spring Days", "Midsummer" and "Metamorphosis". There were about 80 on-site guests in each
activity. The recordings were pushed to all employees, with over 2,000 views for of each session. Supportive Measures 1 meet of general meeting
of worker representatives
was held
With the excellent amenities in place, Zhende organizes cultural and sports activities as well as holiday celebrations Factory affairs are made public. Hot issues of concern to employees, such as company
regulations and employee benefits, are publicized on the OA intranet.
a total of103 effective
to enrich employees' lives, foster organizational unity, and showcase Zhende's strength. We held a total of 20 proposals were collected
recreational and sports activies, including cultural, sports, and volunteer events, enhancing employees' cultural We widely solicit employee opinions and needs through meetings, CEO suggestion
experiences and physical fitness. Additionally, Zhende encourages employee participation in various clubs, such as
Yoga, Badminton, Table Tennis, and Reading. In 2023, these associations organized 68 events with approximately
boxes, satisfaction surveys, and other channels. Feasible measures therefrom are
put into practice. For those that cannot be adopted or are difficult to implement, we and 86 of them were
closed in the year
promptly explain the reasons to employees to obtain their understanding.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Sharing Achievements of Development,
In addition to internal training and learning activities, we strongly supports employees to participate in external training
and pursue higher education. Through measures such as introducing external resources and subsidizing tuition fees,
we further enhances employees’ skills and abilities. As of the end of the reporting period, more than 60 employees took
Boosting Grow of Talents exams for a higher education degree.
In 2023, we implemented a talent introduction strategy. Through plans for targeted recruitment from universities and
cooperations with universities, we work with many universities on campus recruitment and internship recruitment. Besides,
A Comprehensive Talent Development System we have established a post-doctoral research workstation in collaboration with key provincial research institutes, continually
Zhende Medical adheres to the "We Care" philosophy. Based on the self-developed E-learning platform and supported expanding and optimizing our talent pool. This ongoing effort enhances our core competencies in technological innovation,
by the internal trainer system and curriculum structure, we have established a talent development system that covers all ensuring our leading position in market competition.
employees. This can comprehensively improve their know-how skills, and boost every employee to achieve success. In the fourth quarter of 2023, we planned the construction of staff job qualification system. This initiative involves all
Zhende has continuously improved the Training Management Regulations, set up a series of supporting systems which staff members and includes the creation of a job map, identification and evaluation of competencies for each position,
cover the management of lecturers management, courses, expenses, external training, new employee, and job transfer and establishment of evaluation methods and organization. The process will produce annual competency scores for all
training, learning credits, and training administrators. These systems ensure the effective implementation of training and employees. Additionally, based on the talent review process, it will determine promotions for eligible staff members for
the realization of Zhende’s talent development strategy. the year.
Zhende has paid attention to cultivating inter-disciplinary talents and encouraged cross-functional, interdisciplinary job
rotation among employees. During the reporting period, we have revised the Job Rotation Management Rules, proposed
Internal Trainer System Curriculum Structure
key positions for the job rotation plan, and tracked the process. This project is focused on job rotation for three types
of people, namely university graduates, employees in key positions, and senior executives. Then job rotation sharing
meetings are then organized according to the actual situation.
Develop the Management Rules for Part-time Internal Develop the Detailed Rules for Curriculum Development
Trainers; and Curriculum Structure Management; Meanwhile, in order to encourage employees in active self-learning and improvement, we took Xuchang Zhende No.1
Each September, we hold an annual internal trainer Fabricate the annual course development plan through Factory as a pilot unit, and cultivated multi-skilled workers in 11 key positions to improve their overall level, optimize post
conference to review the achievements of the training annual training research, develop the curriculum allocation, and enhance their work efficiency, aiming to meet our employment demands and realize the strategic talent
system over the past year, recognize the contributions according to the plan, and invite high-level lecturers reserved for development.
of trainers in teaching and course development, and and executives to participate in course reviews every
present awards to outstanding internal trainers; quarter;
So far, the internal trainer team has developed to over Based on the empowerment needs of business
Second Young Master-Hand Rating in 2013
senior lecturers. structure through the E-Learning platform, and use it as
the foundation to build
To carry forward the spirits of dedication, innovation, contribution and persistent improvement, discover and cultivate excellent
young skills talents within Zhende and cultivate knowledgeable, innovative and inter-disciplinary young skilled talents, we selected
In 2023, we launched a process governance project to sort out all processes, including business and support processes. In
cooperation with Sequoia System, we have built a process-based pilot course system. The project has come to completion
by the end of the year with 22 process based courses for the DEFS product line in domestic marketing centers. In addition,
we have launched a number of training camp programs oriented to middle and senior management cadres and grassroots
managers respectively, empowering and training reserve talents.
We continues to spontaneously mentor and train new employees, reserve cadres and college students in various areas Smooth Career Development Channels
and departments. The Human Resources Department determines mentor selection dimensions and requirements based
on the situations of systems and mentors and organizes annual appraisal for excellent mentors. Furthermore, we plan to Zhende Medical adheres to the "We Care" philosophy. Based on the self-developed E-learning platform, supported by the
collect key behaviors of the selected excellent mentors based on the mentor appraisal, extracting their behaviors and traits internal trainer system and curriculum structure, we have made available a transparent and smooth career development
with Zhende’s genes, forming a portrait of Zhende’s mentors, and improving the mentor management mechanism. channel, including development paths for management and profession. On top of that, we support, encourage, and guide
employees to continue their upward development by establishing a comprehensive reward system.
To attract and retain core talents and promote the common growth of the company and employees, we have put incentive
During the reporting period measures in place.
Zhende provided training for 6,717 employees With a training coverage rate of 100% In 2023, we have conducted an assessment for all employees in dimensions of capability, performance and value. The
assessment conclusion were then presented through a grid-view tool in calibration meetings. The result determines the
SABCD talent pool for 2024 (reserves for general manager, directors, senior managers/functional managers, manager
The total training duration was 435,076 hours With an average training duration of 64.77 hours per assistants/sales managers, supervisors/workshop directors), covering more than 300 employees in total.
person
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Staff incentives measures of Zhende Medical
Regular inspections and hazard rectifications
Equity incentive Conduct quarterly, monthly, and daily inspections.
Relevant personnel carry out daily inspections, regular inspections, special inspections, comprehensive inspections, and
As of the end of the reporting period, Zhende implemented two phases of employee stock ownership plan. The first phase require to make rectifications for the hazards within a fixed period of time.
of the employee stock ownership plan met the unlocking conditions in July 2023, with a company level unlocking ratio of
company level unlocking ratio of 20%.
Safety production month activities
Organize safety production month activities every year.
Other cash incentives
During the reporting period, Zhende granted RMB 12.89 million of incentives to employees, including RMB 6 million of To enhance employees’ safety awareness and improve their relevant skills, we provide occupational health and safety
strategic coordination mechanism rewards, RMB 3 million of project rewards, and RMB 3.89 million of research and themed training, covering all employees, especially those in specific positions. During the reporting period, we have
development rewards. organized 186 training sessions themed on occupational health and safety, with a total of 7,680 participants and 5,120
training hours. In addition, we also hold fire-fighting competitions, skill competitions, and other activities which further
stimulate employees’ interest in learning and increase their sense of participation.
Fulfilling the Primary Responsibility, Occupational Health and Safety Themed Training of Zhende Medical
Ensuring Occupational Health and Safety
New employee Employees in specific positions All employees
Safety education and training Certification training for Festival safety, mechanical safety,
Zhende Medical places high value on the safety and health of our employees. We have established a sound occupational at three levels (factory level, special operation personnel, electrical safety, fire safety, traffic
health and safety management system and formulated the EHS Incident Management Rules, the EHS Change Management workshop level, team level) safety management personnel safety, hazardous chemicals,
Rules, the EHS Supervision, Inspection and Hazard Rectification Management System, the EHS Training and Education and responsible persons, special equipment, etc.
Management Rules and other internal systems. We have initiated an occupational health and safety management occupational health training
organizational structure that covers the headquarters and all subsidiaries. The President’s Office of Zhende has an EHS
Management and Decision-Making Committee, which shoulders the ultimate responsibility; the Management Committee Zhende has reduced work risks by means of technological innovations to ensure employees’ safety and health. We
has a EHS Office, which is responsible for the construction and operation of Zhende’s EHS management system. Each carry out the lean logistics project, the robot arm project and the FB001 project to build an automated production
department of Zhende’s headquarters has assigned EHS contacts. Each subsidiary has also instituted relevant departments process and liberate labor forces.
responsible for the implementation of Zhende’s EHS related systems and policies.
Technical Upgrading for Occupational Health and Safety of Zhende Medical
Major Measures for Occupational Health and Safety Protection of Zhende Medical
Lean logistics project Robot arm FB001 automatic
Hierarchical security control sewing equipment
Develop 1-5 classes of accident control indicators and cascade the objectives at all levels in the form of signing EHS AGV unmanned self-driving Robot arms were used to replace FB001 automatic sewing
responsibility letters. vehicles were used to replace workers to perform some high- e q u i p m e n t w a s i n t ro d u c e d
manual operations, reducing the risk and repetitive production to achieve the continuous
work intensity of sorting and tasks, improving production production mode, reducing
Hazard identification, assessment and control picking workers. Meanwhile, the safety, reducing fences and other labor intensity, and preventing
Formulate the Management Rules for Hazard Identification, Assessment and Control to comprehensively identify, assess, AGV driving area and the staff safety facilities, and enhancing employees from bending over
control and update hazards in production activities and daily management of Zhende. walking area were separated to the utilization efficiency of for a long time.
ensure personnel safety. production space.
Detection and prevention of occupational hazards
Regularly conduct occupational hazard factor testing to determine the affected positions and employees; As of the end of the reporting period, Zhende’s 3 new subsidiaries have been certified by ISO 45001 occupational
health and safety management system.
Formulate the Occupational Health Examination Management System, conduct regular occupational health examinations;
During the reporting period
Formulate the Labor Protection Equipment Management System, distribute labor protection equipment to employees in
specific positions;
Zhende had a work-related injury rate of 0.45 per one
resulting in 78 lost working days due to work-related injuries
Establish a special archive for every employee of occupational hazard positions. thousand
Green Operations: Protecting Our Beautiful Home KPI and Targets for 2030 Targets for 2024 2022 2023 Progress
Resource Conservation: Advancing Sustainable Development 1.Maintain 100% compliance of existing certification
Zero Carbon Driven: Addressing Climate Change 14001 certification certification
Over 80% of finished products
Contribution to the SDGs 68% 55% 65%
use eco-friendly packaging
Zhende is joining SBTi in 2023
Down by 10%
and will set targets based on 104,743.61tCO2e 76,262.92tCO2e
Submit the SBTi commitment
SBTi’s goals
Renewable electricity accounts
for over 30% of total electricity >15% 1.32% 14.33%
consumption
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Green Operations: Protecting Our Beautiful Home Sharing Sessions on Environmental Protection
Zhende organized internal sharing sessions on environmental protection to enhance employee understanding and awareness of
Environmental Management System
environmental protection and promote environmental protection practices through examples of corporate and individual efforts
Institutional Structure in this regard. Held at all production bases and workplaces of Zhende the sharing sessions helped participating employees to
Zhende Medical holds fast to the concept of green development and establishes a sound environmental realize the significance of environmental protection for Zhende, themselves, and the society, and encouraged them to incorporate
management system. Zhende institutes an environmental management organizational structure covering the environmental protection into their daily work and life. As a result, our employees demonstrated increased awareness and
headquarters and all subsidiaries, with the EHS Department as the top authority for environmental management. We eagerness towards office 5S management. They would turn off lights and air-conditioning when leaving and sort office waste
have formulated systems such as the Environmental Protection Facility Management System, providing regulations into appropriate bins.
for waste gas emission, wastewater discharge, and waste management. We also conducted environmental
supervision and management on the headquarters and subsidiaries through statements and other forms. In 2023,
we invested RMB 10.4814 million in environmental protection. Zhende requires every workplace to conduct at least one type of routine safety drill each year, covering common
scenarios such as fire, major safety incidents, and chemical spills. These drills provide employees with hands-on
During the reporting period, all environmental protection facilities operated normally. New investment projects experience in real-life situations, thereby enhancing their ability to respond to various emergencies and improving
adhered to local laws, regulations, and policy standards regarding environmental management at their operational their first aid skills and adaptability.
sites. There were no incidents of violating environmental protection laws or regulations.
Number of
Environmental Protection Approach No. Drill Unit Drill Type Content
Participants
Photo
To implement the environmental management system, Zhende has established a comprehensive and multi-
dimensional environmental protection approach, which covers various aspects, including environmental protection
training, 5S inspections to standardize electricity usage across all modules, and the development of environmental
Zhende 1. Evacuation
emergency response mechanisms. Through meticulous management practices, we aim to continuously enhance
our environmental awareness and environmental management capabilities. 1 Medical’s Fire drill 2. Use of fire 300
headquarters extinguishing equipment
Environmental Training
We actively organize environmental training covering topics such as relevant laws and regulations, emission standards,
analysis of key provisions, standardized environmental management, and case studies. During the reporting period, we
Drill on routes
offered 12 online and offline environmental training sessions for all employees, with 2,678 participants. Xuchang
Zhengde
incidents in the event of an
accident
We analyze current environmental pain points based on proposals for improvements. With the initial focus on energy As of the end of the reporting period, 66.67% of Zhende and its subsidiaries have been certified by ISO 14001
conservation and consumption reduction, we continue to standardize electricity usage in offices and factory areas environmental management system review and received the certificate. Additionally, two subsidiaries have been
and conduct 5S (Sort, Set in Order, Shine, Standardize, Sustain) inspections of energy consumption to enhance all honored with provincial-level "Green Factory" and municipal-level "Zero-Waste Factory" titles.
employees’ water and electricity conservation awareness.
Provincial and Municipal-level Honors for Zhende Subsidiaries
Emergency Plans and Drills
Company Honor
We have developed the Environmental Emergency Response Plan and the Comprehensive Emergency Rescue Plan for
Xuchang Zhende Surgical Dressing Co., Ltd. Provincial-level “Green Factory” of Henan Province
Safety Production Accidents, along with specialized emergency plans. These plans detail management measures and
handling procedures for environmental emergencies, based on environmental risk assessments and internal emergency Xuchang Zhengde Environstar Medical Provincial-level “Green Factory” of Henan Province
supply investigations. Additionally, we conduct annual emergency training and drills for various environmental incidents, Products Co., Ltd. “Zero-Waste Factory” of Xuchang
which effectively enhance our emergency response capabilities. During the reporting period, we carried out 10
Zhende Medical Co., Ltd. “Zero-Waste Factory” of Shaoxing
environmental emergency drills.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Emissions and Waste Management Waste Gas Management
Zhende Medical has developed systems such as the Water Pollution Prevention and Control Management System, Zhende's operational activities mainly generate waste gas from processes such as printing, coating, sterilization,
Air Pollution Prevention and Control Management System, and Solid Waste Pollution Prevention and Control and boiler combustion. Zhende adopts washing, purification, and activated carbon adsorption purification facilities,
Management System. These can manage the entire process of Zhende's pollutant discharge and waste treatment. multi-level (sulfuric acid) washing tower purification facilities, etc. to treat different types of waste gas. For certain
During the reporting period, the headquarters and all subsidiaries adhered to discharge standards for wastewate, cotton dust-containing waste gas, Zhende uses dust removal units to eliminate the cotton dust.
waste gas, and waste disposal. Moreover, a third-party testing agency was commissioned to test pollution sources
Waste Gas Discharge Standards and Key Control Indicators
including wastewater, waste gas and boundary noise. The testing results showed that all metrics met relevant
discharge standards and there was no significant impact on the surrounding environment. Category Applicable Standards Key Control Indicators
Wastewater Management Comprehensive Emission Standard for Air
Zhende’s wastewater mainly comes from production and domestic sources. Production wastewater mainly comes Pollutants (GB 16297-1996) Non-methane total hydrocarbons, nitrogen oxides,
Waste gas
from the bleaching process, while domestic wastewater arises from office activities, cafeteria cooking, and other Emission Standard for Boiler Air Pollutants (GB particulate matter, sulfur dioxide, ethylene oxide, and odor
similar sources. All wastewater enters the sewage treatment station in the factory area, undergoes physicochemical 13271-2014)
and biochemical treatment processes, and is then discharged into the municipal sewage pipeline network.
Wastewater Discharge Standards and Key Control Indicators Examples of Waste Gas Handling Measures
Category Applicable Standards Key Control Indicators
Comprehensive Wastewater Discharge Standard
(GB 8978-1996) Ethylene oxide waste gas Ammonia gas recovery RTO system Cotton dust treatment
pH, ammonia nitrogen, suspended solids, chemical oxygen treatment and treatment
Wastewater Indirect Emission Limits of Nitrogen and Phosphorus demand (COD), five-day biochemical oxygen demand (BOD5)
Pollutants in Industrial Enterprise Wastewater (GB Ethylene oxide waste Ammonia gas recovery RT O ( R e g e n e ra t i v e Dust removal units are
are introduced to the are introduced to en- adopted for industrial ant discharge of waste
sterilization workshop, sure that non-methane waste gas treatment, gas containing cotton
ensuring that ethylene hydrocarbons, nitrogen offering efficient, en- dust.
oxide from the steriliza- ox i d e s , a n d s m o ke ergy-saving, and en-
tion cabinets is filtered opacity in the waste vironmentally friendly
and treated before dis- gas meet discharge performance.
charge. standards.
Wastewater Treatment Facilities in Some Factory Areas of Zhende Medical Cotton Dust Treatment Facilities
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Resource Conservation: Advancing
Medical Waste Disposal Measures
Category Disposal Measures
Hazardous waste is handled by a qualified third-party hazardous waste disposal unit Sustainable Development
Hazardous waste in accordance with the National Catalogue of Hazardous Wastes, the Measures on the
Management of Hazardous Waste Manifests and other related regulations. Water Resources Management
Recyclable materials such as waste cardboard are sent to a third-party recycling unit for reuse. The water resources used in Zhende's operation process include municipal water supply, surface water, and recycled
General solid waste
Leftovers and defective products are handled by a third-party general solid waste disposal unit.
water. For the use of surface water, Zhende applies for a water intake permit in accordance with regulations. We pay
water fees on time and have no significant impact on the environment in terms of obtaining water sources.
Water conservation is integrated into every aspect of production and operations. We implement measures across
production, office, and residential areas to conserve water at the source. Meanwhile, we promote water recycling
Waste Management through rainwater collection, river water utilization, and wastewater treatment and reuse, thereby improving the
utilization of water resources.
Zhende's operational activities generate hazardous waste and general solid waste. Hazardous waste mainly includes
waste acrylic adhesive generated during the coating process, waste activated carbon generated during the waste gas Water Conservation Measures and Results (Major)
purification process, and chemical packaging barrels generated during the use of chemicals. General solid waste, including
recyclable materials, leftovers, and unqualified products, mainly comes from production, office, and other processes.
To comprehensively standardize the management process for solid waste, we have established the Solid Waste Pollution Green office Rainwater recycling Wastewater recycling Optimizing production
process
Prevention and Control Management System, which defines the responsible departments and work procedures. We have
also set up a disposal management ledger system. These efforts ensure that solid waste is handled safely, environmental-
Advocate for water Plan and construct Through a wastewa- Collect and store the
friendly and efficiently, providing strong support for environmental management and compliance audits. conservation among rainwater recycling ter recycling treat- remaining conden-
employees and re- facilities to promote ment system, water sate water from the
resource recycling bleaching process,
quire them to turn off the sustainable use of
is achieved. The and use a water pump
Waste Reduction and Resource Recovery Initiatives the faucet immediate- water resources. purified regenerated to channel the water
ly after use. water is used for toilet to the living area of
Henan Zhende - PE Glove Xuchang Zhengde - Cast Film Shaoxing Zhende - Bleached
Trimmings Recycling Project Fabric Edge Cutting Project
flushing, water tanks the new base. This
Scraps Recycling Project
for fire protection, can save about 2,000
and other purposes, tons of hot water per
saving 5,000 tons of month.
The production of PE gloves Cast film is a non-toxic, colorless, Originally, both edges of the
water per month.
may generate a significant and odorless green material. The degreased fabric were cut off,
a m o u n t o f s c ra p s . T h i s recycling project converts cast which resulted in significant
project involves recycling and film trimmings into high-quality waste of raw materials and
granulating these scraps, regenerated plastic pellets, generated a lot of waste. After
turning potential waste into which are then used to produce the improvement project is
reusable plastic pellets. These new film products. This process implemented, one edge of the
pellets can then be used to re d u c e s w a s t e , p ro m o t e s bleached fabric is folded instead
produce new PE gloves and resource recovery, and ensures of being cut off. This increases
other plastic products, thereby effective resource circulation the utilization of raw materials
increasing resource utilization and reuse. and reduces waste. Moreover,
and reducing waste. the new method minimizes
problems such as loose threads
and small fabric fragments,
thereby enhancing the final
product quality. Water Recycling Facilities
The proportion of recycled water in use reached 56.40% at Zhende . 1
Note 1: The data involves all operational sites in China.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Energy Management Adopting energy-saving equipment
The energy sources expended in Zhende's operation include natural gas, gasoline and During the reporting
diesel, consumed by company-owned vehicles, electricity and steam, wherein, electricity period，electricity Horizontal steam boilers are upgraded to vertical boilers, reducing the average natural gas consumption per ton of steam from approximately
includes those come from municipal facilities, self-built solar panels, and purchased from renewable energy 87 m? to about 75 m?, improving energy efficiency by 16%. Each machine could save about 200,000 m? of natural gas annually.
renewable electricity. We adhere to relevant regulations for energy management and have sources accounted for Technological modification of the cooling pump system significantly
established procedural documents, such as the Energy Management System, the Power
Management System, the Resource and Energy Management, and the Energy Management 14.33% reduces its energy consumption. After implementation of the project
in 2023, a total of 53.79 MWh of electricity was saved.
Assessment System, to standardize the construction of our energy management system. of Zhende’s total energy For the spunlaced nonwoven fabric drying system, a drum
use1 dryer is selected to enhance both energy efficiency and the
Zhende has comprehensively reviewed its energy structure and implemented measures,
physical properties of the product. Additionally, the existing
such as using clean energy, adopting energy-saving equipment, and recovering waste heat Note 1: The data involves all drying exhaust pipes are rerouted to utilize residual heat for
and energy, to optimize the energy structure and enhance overall energy efficiency. operational sites in China. progressive drying, which not only improves product quality
but also achieves energy saving and emission reduction.
Energy Conservation and Carbon Reduction Measures and Results(part) All equipment whose electric power exceeds 11 KW are
equipped with variable frequency motors. Adjusting the
frequency of the motor can reduce the operating speed of
Promoting green office
the equipment, with more than 20% of the electricity saved.
A humidifier is used instead of a steamer, which saves electricity and steam required for boiling water. Approximately 105.18
Through the "I Suggest" energy-saving and consumption reduction proposal program, Zhende continuously optimizes electricity
MWh of electricity can be saved per month.
consumption control and resource integration in office areas, canteens, dormitories, and factories. By adopting sensor lights,
setting timers for electrical appliances, reducing streetlights, and consolidating scattered offices and dormitories, we saved Replacing fluorescent lights with LED energy-saving ones saves approximately 2.875 MWh of electricity per month at the
We promote energy conservation among employees, requiring that the lights and energy consuming equipment such as air
conditioners in the office area to be turned off when people leave the area.
Recovering waste heat and energy
Using clean energy1
Collecting the steam water generated by pressurized steam boilers for thermal energy recovery achieves energy savings of
Use of renewable electricity: In 2023, the Anhui facility over 20% and water conservation of over 50%.
completed a new 1,599.4 KWP photovoltaic power project,
and the first phase of the factory in Kenya newly built a
currently underway for photovoltaic power projects at the
Shaoxing Phase II facility and the Jiangsu base, as well as
a renewable energy project at the Kenya base.
To date, photovoltaic power projects have been completed with capacities of 6.9 MWP at the Shaoxing base, 11.66 MWP at the
Xuchang base, and 498.945 KWP at the Yiwu base.
Natural gas is used to heat pressurized steam boilers. In 2023, a total1 of 1,252,191 m? of natural gas was used.
In 2023, Xuchang Zhende procured 121,872 tons of biomass
energy steam, primarily used for production processes such
as steam sterilization and gauze bleaching. Biomass energy Steam waste heat recovery facilities
steam, derived from agricultural waste like crop straw and
livestock manure, is a renewable resource. Its use helps
alleviate the pressure on traditional fossil fuels and aligns with
sustainable energy development goals. Additionally, biomass
Optimizing production process
energy steam produces relatively low emissions of carbon
dioxide and other pollutants, reducing environmental impact
and carbon emissions. As a sustainable, eco-friendly, and Optimizing spunlace process parameters, such as pressure and water jet configuration, ensures product quality while achieving
efficient energy form, the application and study of biomass energy savings.
energy steam will contribute to global sustainable energy
development and the transformation of energy structures. Upgrading the weaving loom from a single layer to a double layer saves over 160 MWh of electricity annually.
Note 1: The data involves all operational sites in China.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Green building Achieving ISCC PLUS1 Certification
The Shaoxing high-performance medical device production base innovatively employs modular construction, shortening the
Zhende Medical actively explores new ways towards energy conservation, efficiency enhancement and environmental protection.
construction period by 25%-30%, reducing water usage by approximately 50%, and saving up to 80% of timber. The project
In 2023, our Xuchang facility received ISCC PLUS certification. Its surgical gown products use a circular value chain and certified
also significantly decreases construction waste by over 70% and effectively controls dust and noise pollution. Additionally, the
materials to ensure a sustainable production process and minimize environmental impact. This certification underscores our
thermal performance of the building envelope exceeds national standards by 20%, providing effective insulation in summer
commitment to environmental and social responsibility. Looking ahead, we will further our dedication to product circularity
and winter, thus significantly enhancing energy efficiency and reducing energy consumption for heating and cooling.
and traceability by promoting sustainable materials, advancing low-carbon production, and leading the industry in value chain
sustainability. We are also committed to providing global sustainable solutions to help our customers achieve their green goals.
Awareness training
“As an industry leader, we are duty-bound to
Zhende actively promotes energy-saving practices through comprehensive training and awareness programs. Energy advance our sustainability goals and ensure our
conservation and emission reduction topics are incorporated into onboarding training, and specialized sessions are regularly
organized for all employees. Zhende also standardizes electricity usage habits in both factories and offices and encourages
product solutions can help our customers achieve
energy-saving and consumption reduction practices across all roles. These initiatives have enhanced employee competency, their own sustainability objectives.”
raising their awareness and practical skills in energy conservation and consumption reduction.
"To fulfill this commitment, we will continuously
enhance our efforts and work closely with our
suppliers to develop innovative and sustainable
solutions that align with the 'dual carbon' and
Raw Material and Packaging Management
circular economy strategic goals. Certifications
The raw materials used in Zhende's production chiefly include non-woven fabrics, cotton fabrics, and melt-blown like ISCC PLUS will strengthen our commitment
fabrics. The packaging materials mainly include plastic and cardboard. Zhende standardizes the transportation
to customers by providing crucial third-party
and use of raw materials and packaging materials. We continue to reduce the loss and waste of raw materials and
verification, ensuring the integrity and high
packaging materials and improve resource utilization through measures such as lean management and upgrading
【 Dasen Xu, CEO of Zhende Medical】
performance of our global supply chain."
warehouse management systems.
In addition, driven by the concept of green development, Zhende promotes the development of low-carbon products,
selects green and environmental friendly production raw materials and packaging materials. These reduce the
Note 1: ISCC is an independent multi-stakeholder initiative and a leading certification system that supports sustainable, fully traceable,
impact of material use on the environment. deforestation-free, and climate-friendly supply chains. It covers all sustainable raw materials, making it one of the largest certification
systems in the world.
Pathway to Green Packaging
Development of Eco-Friendly Packaging Actively Developing Eco-Friendly Alternatives to PFAS
In response to customer demands for
environmental sustainability, we continuously Packaging Lightweighting In response to the environmental challenges posed
innovate eco-friendly packaging materials, focusing
by per- and polyfluoroalkyl substances (PFAS) and the
on aspects such as high temperature resistance
and biodegradability. We optimize the design of paper boxes and increasingly stringent global scrutiny on PFAS, Zhende
cartons with the goal of reducing packaging weight Medical is actively developing eco-friendly PFAS-free
By conducting in-depth analyses of material
by 5%, achieving both energy savings and cost
performance, we ensure a balance between products. We are systematically reducing chemicals
optimization.
environmental benefits and practicality. We also in the supply chain that could pose potential risks to
rigorously monitor testing progress to ensure the The project will involve multiple types of testing
to ensure quality and promote new standards for the environment and human health, aiming to achieve
project advances efficiently.
green packaging. zero use and zero discharge of hazardous chemicals
in our supply chain. Through technological innovation
and R&D, we are exploring environmentally friendly
In its exploration and practice of recyclable and eco-friendly materials and packaging, Zhende is committed to and health-conscious alternatives, such as bio-based
leading the industry's green transformation. Progress has been made in reducing carbon emissions across the compounds and silane compounds.
entire life-cycle of our products through continuous breakthroughs and innovations.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Using FSC-Certified1 Packaging and Labels to Support Carbon Reduction throughout the Product Lifecycle Lightweighting of Surgical Gown Hang Tag
Zhende sources cartons, labels, and inner box packaging from FSC-certified suppliers. In 2023, we utilized 13.05 million FSC- Surgical gown hang tag is an essential component of surgical gowns. Zhende
certified packaging and labels, contributing to carbon reduction across the entire product life-cycle.
Medical's R&D team reduced the weight of the white cardstock used for surgical gown
Note 1: As the leader in sustainable forestry, FSC is trusted by NGOs, businesses, and consumers worldwide. Its purpose is to promote
hang tags by 14.3%, achieving a reduction in weight without affecting production
responsible forestry so forests and people can thrive together. It is guided by a vision for a world where the true value of forests is recognized
by all. FSC is the leader in sustainable forest management, operating the world's most rigorous and trusted forest certification system. efficiency or the wearing experience for medical staff, while ensuring no impact on the
functionality of the product. This optimization saves about 3 tons of white cardstock
annually, reducing resource consumption at the source and effectively lowering
carbon emissions. It not only cuts production costs but also demonstrates our
commitment to embracing low-carbon and environmentally friendly principles from
the early stage of product design. It is a tangible example of our efforts to promote
green healthcare and achieve sustainable development.
Green Upgrade of Mask Packaging Composite Film
Photo of Inner Box Packaging FSC Certificate
For the widely used disposable masks in 10-mask packs, Zhende Medical has implemented a green upgrade of the packaging
material.We have reduced the thickness of packaging film by 12% while maintaining packaging strength, product safety, and
During the reporting period Target for 2024
quality. This initiative not only conserves material usage from the source but also decreases waste generation, improving both
recyclable packaging materials. reduction of resource consumption and environmental pollution.
Note 2: The data involves all operational sites in China.
In packaging lightweighting, Zhende has promoted a green upgrade of product packaging through detailed design
and material optimization. This effort has enabled a reduction in packaging weight and contributed significantly to
the development of a green supply chain in the medical field.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Zero Carbon Driven: Addressing Climate
Major Climate Risks and Opportunities for Zhende
Potential Impact
Climate Risks and
Change
Description
Opportunities Duration Financial Impact
Extreme weather events triggered by climate change, such as frequent Operating
hurricanes and floods, may lead to severe consequences for Zhende,
Risk: Acute revenue ↓
Short-mid
Zhende Medical has made constant and proactive efforts to improve its climate change response mechanisms including asset damage, casualties, and disruptions to business operations,
physical risk forcing Zhende to take immediate response measures and invest substantial term
in alignment with relevant policies and guidelines. In 2023, Zhende enhanced its climate change response
resources to restore normal R&D and production as quickly as possible. Operating costs ↑
mechanisms in the dimensions of governance, strategy, risk management, and metrics and targets by referencing
With the release of China's 'dual carbon' goals and growing focus on low-
the requirements of the International Financial Reporting Standard for Sustainability Disclosure No. 2—Climate-related
Risk: Reputational carbon transformation both domestically and internationally, Zhende risks Short-mid Operating
Disclosures (IFRS S2). reputation damage if we do not take proactive and effective climate actions
risk and timely disclose relevant information to meet external stakeholder term revenue ↓
demands.
Climate Governance
Long-term climate changes, including persistent high temperatures, may
Climate change is incorporated into our ESG management system. The Board of Directors, as the highest authority Risk: Chronic impact Zhende’s daily operations and lead to rising sea levels or ongoing
for climate governance, formulates and coordinates climate change response strategies, reviews climate- heatwaves. For facilities near coastal areas, these changes could result in Long term Operating costs ↑
physical risk asset damage and may force Zhende to consider relocating or adjusting work
related management targets, such as greenhouse gas emissions, and assesses progress. The ESG Management
hours to adapt to changes in the coastline and sustained high temperatures.
Committee, as the decision-making and supervisory body in ESG management, identifies, prioritizes, analyzes, and
Domestic and international climate policies and regulations are increasingly
manages climate risks and opportunities, sets climate-related goals, and oversees and supports specific initiatives. focused on encouraging companies to take proactive measures to address
The Committee regularly reports on climate change response activities to the Board. The ESG Office, as the Risk: Policies and climate change and imposing restrictions on activities that may worsen Short-mid Operating costs ↑
executive body of ESG management, implements and advances climate-related management tasks. It collaborates it. To adapt, Zhende must promptly adjust its strategies related to energy
laws consumption, emissions, and climate information disclosure; otherwise, term Operating
with relevant functional and business departments to integrate climate management into daily operations. Through we may face legal action and liability for failing to meet environmental revenue ↓
energy-saving technological upgrades, transition to clean energy, and awareness training, the office aims to enhance management standards.
climate management performance and achieve climate change management goals. With advancements in green energy technologies and the introduction of
supportive policies, renewable energy sources are becoming more accessible
Besides, Zhende integrates greenhouse gas emissions performance into the long-term incentive plans for senior Opportunity: Mid-long
Operating costs ↓
and their prices are expected to steadily decrease. Proactively adjusting the
executives to encourage sustained economic and shareholder value creation. Energy transition energy consumption structure will not only help Zhende reduce energy costs term
but also effectively address the low-carbon challenges posed by regulatory
Strategy requirements and end-market demands.
With growing global attention to climate issues and the release of the "dual
Analysis of Climate Risks and Opportunities carbon" goals, green and sustainable products and services will be increasingly
Opportunity: Mid-long Operating
expected by the market and the public. Therefore, focusing on developing
Climate Risk and Opportunity Matrix of Zhende Market opportunity and providing climate and environmental-friendly products will inject new term revenue ↑
High momentum into Zhende's business development and revenue growth.
Opportunity: By improving the efficiency of energy, water, and raw material usage, vigorously
Mid-long
Operating costs ↓
implementing green production practices, and establishing a comprehensive
Resource
resource management system, Zhende can effectively reduce resource waste, term
efficiency lower operational costs, and achieve steady low-carbon development.
Risk: Acute risk Opportunity: Energy
Impact level of risks and opportunities
transition By selecting environmentally friendly suppliers and strengthening carbon
Risk: Reputational risk emissions measurement and control capabilities, we can adapt more quickly
Opportunity:
Operating costs ↓
Opportunity: Market to climate change. This will lay a solid foundation for us to seize climate-related
Long term
Climate resilience business opportunities and further enhance the stability of our assets and
opportunity daily operations, thereby positioning Zhende advantageously in future industry
competition.
Risk: Policies and laws Risk: Chronic risk
Opportunity: Resource Climate Risk and Opportunity Management
efficiency
Zhende Medical incorporates climate risk and opportunity management into its corporate strategy and decision-
Opportunity: Climate making. We are committed to achieving carbon neutrality in our operations and value chain through measures such as
resilience low-carbon product development, clean energy use, equipment and process optimization, and green office practices,
while seizing new market opportunities. Responding actively to global climate change challenges, Zhende has initiated
Low Probability of risks and opportunities High the SBTi process and reports value chain greenhouse gas emissions in accordance with the Greenhouse Gas Protocol.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Actions to Address Climate Change
Promotion of Carbon Reduction Awareness
Green Products
We utilizes National Energy Conservation Week, National Low-Carbon Day, and other key events to promote carbon reduction
Zhende actively develops environmental-friendly products and engages third-party organizations to calculate the carbon awareness by various means.
footprint of our products based on international standards, thus providing customers with comprehensive product information, We conduct internal and external training on energy conservation, carbon reduction, and climate change response, and
including carbon footprints. As of the end of the reporting period, we have achieved ISO 14067 certification for four products. encourage our supply chain partners to transition towards a low-carbon economy.
Zhende also develops smart products to address the growing demand for carbon reduction. We optimize the environmental We post signs and slogans promoting the conservation of food, electricity, and water to create an atmosphere of practising
frugality and opposing wastefulness.
footprint of our products to help customers reduce carbon emissions during use.
Clean Energy
We actively work to increase our use of clean energy by purchasing green power and utilizing self-built solar panels, geothermal Risk Management
energy, and other methods, thereby reducing carbon emissions.
In 2023, our photovoltaic systems at the Shaoxing, Xuchang, and Yiwu bases generated a total of 1,016.50 MWh.
Zhende Medical regularly identifies and assesses potential climate-related risks and opportunities in operations
based on regional characteristics, industry attributes, and other factors, creating a climate risk and opportunity
Our Kenya factory plans to use renewable geothermal energy with an anticipated annual consumption of 144 MWh, set to begin
in 2024. assessment matrix. By evaluating the likelihood and impact of these risks and opportunities, Zhende prioritizes
Our Xuchang base procured 121,872 tons of biomass energy steam in 2023. them as the basis for decision-making in climate change response strategies and action plans, which supports its
progress in a complex and changing climate environment. Additionally, we communicate regularly with stakeholders
including customers, suppliers, and investors to gather their opinions and suggestions on climate-related risks and
opportunities.
Climate-related risks are integrated into our overall risk management framework. We have established a cross-
departmental climate risk management and coordination mechanism led by the ESG Office, aiming to enhance
climate risk managements through annual performance data tracking and target evaluation.
Metrics and Targets
In 2023, we reviewed our carbon emission targets based on current energy use and carbon emissions, and
adjusted management measures flexibly to align with development trends and industry best practices. Additionally,
Energy-saving Technological Transformation
we conducted greenhouse gas accounting covering Scope 1 and Scope 2 emissions. As of the report’s release,
Xuchang Zhende has completed its ISO 14064 greenhouse gas inventory.
Zhende adopts high-efficiency and energy-saving equipment and implements technological upgrades to reduce carbon
emissions in production and operations.
Green Office
Targets：
Disposable plastic cups and bottled water are eliminated from offices to reduce plastic waste. During the reporting period, Zhende has initiated the process of joining the Science Based
For newly renovated offices, we use high-quality materials and replace chemical treatments for formaldehyde gas with Targets initiative (SBTi) and is setting new greenhouse gas reduction targets in accordance with
indoor plants.
SBTi requirements. The new greenhouse gas targets will be disclosed after SBTi verification.
We have consolidated office areas to minimize the use of small, individual offices. At the Shaoxing headquarters, this
consolidation saved eight office spaces, resulting in reduced electricity consumption for lighting and air conditioning.
We have phased out high-energy-consuming office equipment and promoted the use of energy-efficient technologies and
products, prioritizing those that are energy-saving, water-saving, environmentally friendly, and renewable.
GHG Emissions in 2023
Our canteen sources organic or low-carbon vegetables with Zero Carbon certification.
During lunch breaks and overtime, some lights are turned off, and computers are turned off or set to power-saving modes. Emission Type Sources GHG Emissions1 (Unit: tCO2e)
Meeting room lights are turned off promptly, with reminders placed at entrances, reminding employees of turning off lights. All
lights, computers and other electrical appliances are turned off after work hours. Scope 1 Natural gas, gasoline, diesel 2,969.77
We adjust the switching time for factory area streetlights and compact water heaters.
Natural lighting is used on sunny days to reduce the use of electric lighting. Scope 2 Purchased electricity, steam 73,293.15
Note 1: The data involves all operational sites in China.
To Be a Reliable Partner
Innovation Leadership: Providing Zhende Solutions for Health Management
KPI and Targets for 2030 Targets for 2024 2022 2023 Progress
Quality Service: Contributing Zhende Strength to Customer Success 100% maintain ISO 13485 certification" 1.100% compliance of existing certification
Obtain CE/FDA certification as needed 2.New factories (e.g., in Kenya) pass certification
Win-Win Cooperation: Sharing Zhende Experience for Industry Development
/
Customer net promoter score
>60/>80 30.51/88.1 52.8/83.9
Community Engagement: Fulfilling Zhende Responsibilities for a Better Society (International >60 / Domestic >80)
Environmental and social risk of Conduct and committed to social responsibility standards
assessments cover 100% of key For key suppliers unable to provide third-party social - 80.00%
Contribution to the SDGs suppliers responsibility reports, 100% will receive ESG or social
responsibility training or communication
Compliance management 100% of factories receiving human rights audits 100% 100%
RMB RMB
Continue annual external donations Continue annual external donations
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Innovation Leadership: Providing Zhende
Zhende actively engages in "industry-university-research cooperation" and continuously promotes industrial
partnerships. Leveraging the provincial-level key enterprise research institute, we collaborate with academic
institutions to establish postdoctoral research workstations, attract high-level talents, and enhance our technological
Solutions for Health Management innovation capabilities.
Industry-University-Research Cooperation Projects
R&D and Innovation We launched strategic technological cooperation We collaborated with Zhejiang Sci-Tech
with the Shaoxing Institute of Zhejiang University University on the development and application
R&D System Construction
to address common technical issues in areas of high-end medical protective film composite
Zhende upholds an innovation-driven development strategy while ensuring compliance throughout the R&D process. including polymer materials, adhesives, and materials. The project has secured a place in
We have established a comprehensive product R&D management system that covers all stages, from demand films for modern wound care products, thereby the provincial "Leading Goose" program.
analysis to market launch. This system, with clearly defined goals and standards at each stage, aims to accelerate driving new material applications and product
performance upgrades.
product innovation, shorten time-to-market, and enhance product quality, thereby meeting customer demands and
increasing corporate competitiveness.
Zhende has implemented the Integrated Product Development (IPD) consulting project, established a product line
management mechanism, and formed a matrix management structure. This has led to the formation of a market-
oriented, data-driven decision-making system. By conducting market research, managing requirements, and
Our joint project with Donghua University, We cooperated with Professor Wang
scientifically initiating projects, we advance product design and testing in parallel. These efforts, with a focus on
titled "Functional Forming Technology of Jian, an expert in sports kinesiology, from
strategic projects, have significantly improved R&D efficiency and efficiently addressed market demands.
Textile Based High-end Dressings and Its Zhejiang University to upgraded the pressure
Application on Complex Wounds", passed support and impact protection systems, and
Product Development Process the achievement assessment by the China launched a series of next-generation body
National Textile and Apparel Council. The protection products after more than two
technology is of internationally advanced level. years’ research and development.
Summarization
Feasibility Project Project Project Achievement Product
and R&D Investment and Achievements in 2023
Study Approval Review Acceptance Transformation Launch
Evaluation
R&D Investment:
In 2023, Zhende invested RMB 138.95 million in R&D, and was awarded 20 Class II and 2 Class III medical device product
registration certificates, and 12 patents for invention.
In addition to the ongoing optimization of the product development process, we also emphasize the construction of
R&D platforms and the development of R&D talents. We have established four enterprise R&D centers at home and
R&D Project Progress:
abroad, which have received a number of national and provincial honors.
The optimized skin-compatible hydrocolloid has received the expected user satisfaction in clinical trials and is now in production.
Breakthrough progress has been made in the process and equipment development for dual-component hydrocolloid.
R&D Platform Construction
Antibacterial dressings containing iodine analogs, PHMB, and hypertonic saline have completed laboratory research and entered
the pilot and validation stages.
Research on the release, antibacterial effectiveness, and safety (animal testing) of silver ions and PHMB in foam dressings has been
Enterprise R&D centers in The First Provincial-level Key completed. Study on the application of silver ion antibacterial technology to alginate and hydrophilic fiber dressings is established.
Shaoxing, Xuchang, Shanghai, National Hi-tech Enterprise Enterprise Research Institute
Honors and Awards
and the UK in the Industry
Project Introduction Award
Key Technology for Form- The project improves the quality of wound care and the accessibility The 10th “China Top 10 Tex-
ing Highly Absorbent Bio- and affordability of functional dressing products in China. It also pro- tile Technologies” Emerging
mass Fiber Dressings vides clinicians with diverse solutions for clinical wound care. Technology Award
Collaboration with Well-known
Domestic Universities such as The project is innovative in its development of atomization-enhanced
Functional Forming Tech-
Zhejiang University and Hubei softening pretreatment, multi-thread parallel web laying technology
......
Provincial Engineering nology of Textile Based First Prize of the Science
University, as well as Medical and equipment, and graded gradient needle-punching structure for- and Technology Award of
Technology Research Center High-end Dressings and
mation technology. These advancements overcome the limitations the China National Textile
Institutions such as Beijing Hospital Its Application on Com- and Apparel Council
of existing needle-punching processes and result in highly absorbent
of Traditional Chinese Medicine plex Wounds
biomass dressings, such as alginate and chitosan.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Sustainable Product R&D
Innovative Development of PFAS-Free AS&AR Surgical Gowns
Zhende integrates the We Care sustainability strategy into every stage of product development, aiming to reduce the
environmental impact throughout the life-cycle of products while ensuring product health and safety.
In response to the REACH restriction proposal on perfluoroalkyl
and polyfluoroalkyl substances (PFAS) issued by the European
Chemicals Agency (ECHA), Zhende Medical endeavors to
Developing Biodegradable Latex Medical Examination Gloves develop PFAS-free AS&AR (anti-alcohol, anti-blood, and anti-
static) surgical gowns. We are currently developing PFAS-
free AS&AR oil agent suppliers, and have partnered with a
Zhende Medical’s natural latex gloves are made from rubber tree latex, a renewable resource, and are produced through an leading supplier to conduct sample trial production in the
environmentally friendly, pollution-free process that involves low energy consumption and no harmful chemicals, making them laboratory phase. Based on technological innovation and in-
suitable for medical use and ensuring the safety of both medical workers and patients. Additionally, these natural latex gloves depth research, we actively explore and introduce eco-friendly
are biodegradable, meaning they will gradually decompose into harmless substances in the natural environment without and health-conscious alternative materials, such as bio-based
requiring substantial energy or special processing. Compared to gloves made from synthetic materials, the natural latex gloves compounds and silane compounds, to create a safer and
require less energy during production and do not involve complex chemical reactions or high-temperature processes, thus less healthier wearing experience for consumers.
energy consumption and lower greenhouse gas emissions.
Medical Accessibility
Expanding the Breadth and Depth of Medical Services
Zhende Medical actively promotes our healthcare business by creating professional and comprehensive product
solutions tailored for home use, aiming to bring the expertise and quality honed over 30 years of serving hospitals to
individual consumers.
We fully promote the operation of the big health category by optimizing product structure and competitiveness.
Through multi-dimensional consumer research and resource integration based on Zhende's product advantages, we
have comprehensively examined our retail business, and strengthened the construction of customer and consumer
centered product efficiency integration. Tools such as SCRM, CRM, and E sales system are utilized to enhance
digital marketing capabilities, and to continuously improve customer and consumer satisfaction.
Meanwhile, we continue to expand our product coverage, which makes it easy for consumers to purchase the home
health care products they need.
Measures and Achievements for Retail Business Enhancement
Online Retail Channels
Developing Low Carbon Footprint Products for Cotton Gauze Pads and Abdominal Pads
Through various modes such as self-operation and cooperation, key sales channels such as Taobao, JD, Pinduoduo, Douyin,
Kuaishou, 1688 and Amazone have been covered.
Gauze pads and abdominal pads are made from cotton, a natural fiber that is biodegradable and renewable. The products align
with green, low-carbon emission practices throughout their life-cycle from the use of sustainable raw materials and processing In 2023, the online fans of Zhende e-commerce shops exceeded 9 million.
technologies to the final product’s degradation.
In 2023, we conducted carbon footprint certification for
several products. The cradle-to-gate carbon footprint of gauze Offline Retail Channels
swabs NA241010000103-31 is 1.18 kg CO2e, and that of
abdominal pad NA241010000103-31 is 7.40 kg CO2e. We
closely monitor the carbon footprint of these product lines and We continue to improve the market development and cooperation stickiness of national and regional chain drugstores, individual
pharmacies, and supermarket convenience stores through a variety of measures. These include dealer classification and grading
continuously optimizes efficiency across the entire production
management, key customer operation system, as well as IP cooperation, dual brand product construction, and model market creation, etc.
process from raw material sourcing and manufacturing to
waste disposal. We are committed to improve the use of green As of 2023, Zhende’s coverage rate of top 100 chain pharmacies has reached 98%, totally over 170,000 pharmacies.
energy and green production practices and drive sustainable
improvements in our products’low-carbon emissions.
To promote Zhende's deep involvement in the global medical device value chain and enhance its global
competitiveness, we have also continued to deepen our overseas factory building strategy. More efforts are made in
our overseas business landscape. We also prepare to build overseas production bases in Africa and other regions.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Providing Safe and Efficient Medical Products
Smart Surgical Waste Liquid Collection System: Reducing the Risk of Cross-Contamination in Surgery
Upholding patient-centered values, Zhende is dedicated to creating a more humane and convenient medical
experience through innovative technologies. We continuously develop medical devices and consumables to
The collection and handling of surgical waste liquids in the operating room are crucial for hospital infection control and
precisely address patient needs, offer more convenient services and greater comfort during treatment, and enhance
preventing occupational exposure for medical staff. Many hospitals still rely on traditional waste collection methods, which
patient recovery efficiency from multiple perspectives.
pose higher infection risks. Zhende Medical’s smart surgical waste collection system offers an advanced solution for
managing surgical waste liquids. It enhances hospital infection control and reduces occupational exposure risks by providing
Super Absorbent Polyurethane Foam: Reducing the Hassle of Dressing Changes for Patients closed management of surgical waste fluids from collection to disposal, separating operators from surgical waste fluids, and
strengthening safety protection of operating room personnel.
Chronic wounds are often colonized by various types of
bacteria. Zhende Medical’s polyurethane foam dressings can
effectively capture bacteria and internalize them into the core
of the dressing, thereby reducing the number of living bacteria.
For wounds with a lot of exudate, the dressings are designed
to maximize their duration of use, decreasing the frequency of
changes. This helps to minimize additional damage, protect
the surrounding skin, and enhance wound healing efficiency.
Additionally, fewer dressing changes can reduce the economic
burden and psychological stress on patients, improving their
overall comfort.
Bionic Construction of Alginate-Based Composite Hydrogels and In Situ Induction of Skin Wound Repair
Zhende Medical is committed to addressing industry pain
points through innovative product development. Embracing
the concept of natural protein-polysaccharide composites
with multifunctional properties, we are developing protein-
polysaccharide composite multifunctional hydrogel dressings
based on sodium alginate, chitosan, and gelatin, using an
environmentally friendly solvent system. The products are
expected to offer high flexibility, excellent infection resistance,
good biocompatibility, and enhanced wound healing
capabilities. They will address the limitations of traditional
hydrogel dressings, such as restricted expansion performance
and lack of biological activity, meeting the needs of chronic Medical Knowledge Popularization
wounds and better serving wound care and recovery.
Zhende Medical has launched the “Zhende Station” WeChat account as a health advisory platform for the general
public. The platform features contents like product knowledge, nursing guides, expert lectures, patient experience
sharing, and product trial applications, and provides reliable nursing information and services. Additionally, Zhende
Meanwhile, we fully understand the pressures and challenges faced by healthcare professionals. We focus on has set up the Perfectleg information station on Xiaohongshu to disseminate knowledge about varicose veins and
developing efficient and intelligent medical management systems and auxiliary tools. By introducing advanced prevention. We have also implemented a regular release mechanism for healthcare knowledge, with our posts
technologies and products, we aim to help medical staff streamline workflows, ensure safety, enhance efficiency, receiving over 100,000 views annually. Our goal is to spread more healthcare knowledge to countless homes to
and drive comprehensive improvements in medical quality. support their health anytime, anywhere.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Quality Service: Contributing Zhende Process Optimization
During the reporting period, leveraging the “I CARE” process improvement initiative launched in 2023, we completed several
Strength to Customer Success quality management-related process improvements. These improvements covered areas such as general new products,
novel products, change control, risk management, registration processes, UDI procedures (both at home and abroad),
batch record processes, supplier management, customer complaint handling, corrective and preventive actions, CNAS-
Product Quality and Safety related processes, and document control. These efforts aimed to improve and strengthen our quality management system,
Product quality stays at the core of Zhende Medical's long-term development. Holding fast to the quality policy ensuring its effectiveness and suitability.
of "providing safe, effective, and competitive medical products is the responsibility of everyone at Zhende". We
emphasize on the quality strategy of "precision, changes under control, seeking truth and being practical, and
customer first". We have established and improved the quality management system, and passed certifications such Quality Awareness Training
as ISO 9001, ISO 13485, EU MDR, EU MDD, US FDA QSR, ISO 13485 Sterilization, PPE UKCA/CE, etc. During the
We have consistently valued employee training in customer service-related knowledge and skills. Based on legal regulations,
reporting period, all certificates of Zhende were within their validity period.
quality management system requirements, and market and customer concerns, we have organized and planned 15 training
Quality Certifications sessions on topics such as quality management systems for medical devices, medical regulations in the EU, the U.S. and
the U.K., risk management, and basic microbiology. These sessions, including internal training and external training, involved
Certificates Coverage 1,000 participants in total.
Zhende Medical, Xuchang Zhende, Xuchang Zhengde, Henan Zhende and
ISO 13485 Certificate
other subsidiaries
Zhende has established a product recall system. In line with the Measures for the Administration of Medical Device
ISO 13485 Sterilization Certificate Zhende Medical, Xuchang Zhende, Xuchang Zhengde and other subsidiaries Recalls issued by the National Medical Products Administration (NMPA) and relevant recall regulations from the U.S.
FDA, we have developed internal regulations such as the Management Measures for Medical Device Recalls in China
Zhende has established a Quality and Regulations Center at the primary level, led by the Chief Quality Officer. The and the Management Regulations for Medical Device Recalls in the U.S., which define the responsible parties, recall
center includes the Quality Management Department, the CQS Department, and the Regulatory Affairs Department. categories, and procedures. Additionally, regular mock recalls are conducted. During the reporting period, no product
It overseas the establishment and maintenance of our quality management system. During the reporting period, recalls occurred.
Zhende implemented a series of measures to enhance product quality management.
Product Quality Management Measures Product Recall Process
Quality Inspection
In 2023, we conducted inspections and supervision of incoming materials, production and all other stages in strict
compliance with internal quality management requirements, thereby increasing finished product acceptance rate.
For outsourced testing, we select institutions with CNAS or CMA accreditation according to CNAS-CL-01 (ISO/IEC
outsourced testing service suppliers.
Implement
Health Hazard Severity Developing a Issuing a Executing and Validate
Quality Audit
Assessment Grading Recall Plan Recall Notice a Recall Corrective
During the reporting period, we conducted two comprehensive internal audits in accordance with the Regulations for the
Measures
Quality Management in the Production of Medical Devices, ISO 13485, EU MDR and U.S. FDA regulations, to enhance its
quality management system.
Additionally, we underwent several external audits, including unannounced inspection by Zhejiang Medical Products
Administration, GPM audit by the Inspector Management Center of Zhejiang Medical Products Administration, third-party
audits by TUV and Intertek, and multiple client audits, all of which were successfully passed.
Non-conforming Product Control
Zhende strictly controls non-conforming products according to its non-conforming product control procedures. Any product
During the reporting period, we received administrative punishment from Shaoxing Administration for Market
that fails to meet the specified inspection requirements will be classified as non-conforming and must be handled through
rework, concession acceptance, rejection, or scrap.
Regulation due to issues with advertising on e-commerce platforms. Subsequently, we conducted specialized
training sessions to enhance employees' awareness of legal and regulatory requirements.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Customer Service Information Security Management Measures
Zhende's customers mainly include domestic and foreign corporate customers and individual consumers. Our Risk identification and assessment
Quality and Regulations Center has established the Customer Quality Service (CQS) and After-Sales Quality Service
Zhende introduced Sangfor's MSS (Managed Security Service) and conducted a pre-operation security assessment.
departments. A series of management procedures have been developed, including the Process Control Procedure
This assessment involved identifying security flaws in areas such as strategy management, security protection, asset
Related to Customers, the Design and Development Control Procedure, the Alert System Management Procedure, the management, vulnerabilities, attack threats, and security incidents and developing improvement plans accordingly. These
After-Sales Supervision Control Procedure, the Medical Device Adverse Event Management Procedure, the Customer measures have significantly enhanced the overall security protection level of Zhende.
Complaint Control Procedure, the Customer Satisfaction Survey Control Procedure, and the Risk Management
Procedure. We have set up a pre-sales and post-sales customer service framework, providing support through various
channels such as customer service hotline, corporate email, and internal OA processes.
Information security audit
During the reporting period, we optimized the customer complaint process by establishing a linkage mechanism
Zhende underwent third-party vulnerability assessments and performed targeted remediation based on the vulnerability
between customer service personnel and manufacturing facilities. This effort improved customer complaint handling
scan reports provided by the third party.
efficiency, allowing for quicker responses to and resolution of customer feedback and complaints.
In 2023, we achieved a 100% complaint handling rate. Customer complaints were primarily related to product
appearance, and our factories have initiated targeted correction to address these issues.
Information security technology
Meanwhile, we conducted customer satisfaction surveys, distributing questionnaires to previous clients, distributor
clients, and retail customers. The overall Net Promoter Score (NPS) reached 83.89%. Zhende conducts remote application level backup for disarster recovery in data centers in Shaoxing and Xuchang.
To further enhance our customer service capabilities, we conducted training sessions for relevant personnel on We have established a data backup system that backs up date every two hours.
topics such as “Customer Service", "Provision of Additional Customer Services", and "Customer Service Management Viruses are automatically detected and removed weekly through Endpoint Detection & Response (EDR).
Expert." These efforts strengthened employees' awareness of customer service, improved their professional skills, and
Zhende's electronic file encryption is achieved through the Green-Shield terminal security management system.
increased overall customer satisfaction.
Additionally, we conduct system permission management which ensures that employees in different positions can only
check system information within their corresponding authority.
Supplier information security management
Zhende has established an audit team to assess the risks of proposed or adopted computer systems and to audit potential
suppliers.
Emergency response
Zhende has established the Procedure for Managing Computer System Emergency Incidents to standardize the response
procedures for issues such as system crashes, freezes, blue (or black) screens, communication interruptions, and system
failures. This ensures that in the event of emergencies like system failures, security breaches, or data loss, there will be a
prompt and accurate response, and that these issues will be addressed quickly and effectively.
Information security awareness training
Data Security and Privacy Protection To foster an information security culture, we offered employee training on information security awareness. Topics included
common information security risks and response strategies, and our information security management regulations and
To protect our data security and customer privacy, Zhende has implemented data security protection measures in
requirements. 3,102 employees participated in such training sessions.
strict compliance with relevant laws and regulations.
Zhende has established regulations such as the Information Security Management Regulations, and taken
multiple measures to safeguard data security and customer privacy. During the reporting period, Zhende achieved During the reporting period, there were no incidents where Zhende was punished by relevant authorities for violating
Cybersecurity Classified Protection 2.0 certification. laws and regulations related to information security and privacy protection.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Win-Win Cooperation: Sharing Zhende
Participation in Industry Exchange Activities in 2023
Spring/Fall China International Medical Equipment Fair
Experience for Industry Development (CMEF)
The 6th China Nursing Quality Conference
The 17th Congress of Chinese Society of Critical Care Annual National Venous Infusion Therapy Conference
Industry Exchange and Cooperation Medicine of the Chinese Nursing Association
Partners are one of the important stakeholders of Zhende Medical. Adhering to the corporate value of "sharing
success", we continue to advance mutual benefit and win-win results in the industry by participating in industry
platform construction, joint training of industry talents, standard formulation, industry exchange activities. The 6th Session of the 4th Annual Conference on
The 20th National Academic Conference on Stoma,
Zhende actively engages in industry platform construction, taking the lead in establishing industry technology Operating Room Nursing in the Six Provinces and One
Wound and Incontinence Care
alliances and the Consumables Branch of the Zhejiang Medical Device Industry Association, to promote healthy and City of East China
orderly industry growth. Additionally, Zhende strengthens industry-university-research cooperation, partnering with
vocational institutions in Shaoxing, Henan and other regions to jointly develop industry professionals through “order
class”, framework agreement and other means. Furthermore, we have participated in the formulation (revision) of The 19th National Disinfection Supply Center The 27th National Conference on Operating Room
industry and group standards multiple times, facilitating overall advancement of the industry and product quality Development Forum Nursing
enhancement.
Participation in Standard Formulation in 2023 Cardiovascular Health Conference
Burn Association
GB-19082-2023 Disposable Protective Clothing for Medical Use
Zhende led and participated in the formulation (revision) of 3 GB19083-2023 Protective Face Mask for Medical Use
Fourth-Management Meeting - Zhende Nursing Zhende National Finals of Typical VTE Nursing and
national standards. Management Experts Exchange Seminar Prevention Cases
GB/T 42770-2023 Stoma Plugs
Summit on Long-Term Care for Ostomy, Wounds, and
Zhende Stress Treatment and VTE Prevention Seminar
Medical Elastic Bandage - Characteristics and Test Methods for Incontinence
Basic Performance
Medical Thrombosis Prophylaxis Hosiery
Zhende completed the formulation (revision) of 19 industry
standards, of which 5 were mainly drafted by us. Medical Compression Hosiery for Varices Supply Chain Management
Sterile Surgical Films for Single Use Zhende Medical categorizes suppliers from multiple perspectives to achieve comprehensive management. Based
Contact Wound Dressing - Part 1: Paraffin Gauze on category positioning and the relationship with suppliers, and in view of our actual business situation, suppliers
are divided into three levels: core, important, and general. According to the annual performance evaluation of
suppliers and other factors, suppliers are divided into grades of A, B, C, and D. Over and above, Zhende formulates
differentiated procurement management strategies for suppliers of different levels to maximize the effectiveness of
Zhende completed the formulation (revision) of 12 group Transparent Dressings supplier management resources.
standards, of which 2 were completed during the reporting period. Evaluation and Grading of Mask Breathability
Sustainable Supply Chain
Supply chain quality management and stability together constitute the core of our supply chain sustainability, supporting
us to maintain competitive advantage when facing market fluctuations and uncertainties.
Zhende is currently engaged in the drafting of 4 industry standards and 3 group standards. In supplier quality management, adhering to the idea of “shared concept, value collaboration, process compliance, and
platform coordination”, we have established a life-cycle management system that covers every stage from supplier
sourcing to elimination. We have also formulated rules such as the Qualified Supplier Admission Management Rules, the
We actively take part in or organize industry exchange activities to gain genuine feedback from clinical practice Qualified Supplier Assessment Management Rules, the Supplier Quota Management Rules, and the Supplier Rectification
through in-depth interactions with medical professionals. and Elimination Management Rules to standardize life-cycle management of suppliers.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Life-cycle Supplier Quality Management In addition, Zhende has established the At-risk Supplier Management Rules to regularly identify and assess supplier
risks, and to promptly and effectively monitor and address any issues that arise during cooperation. This helps
Qualified Supplier Qualified Supplier Supplier Quota Supplier Rectification safeguard project progress and ongoing supply needs while protecting our interests. Furthermore, Zhende has
Admission Assessment Management and Elimination developed the Supplier Survey Form to systematically collect and review information on suppliers’ capabilities and
system development. This keeps us informed about supplier trends and ensures the stability and efficiency of our
After a procurement Conduct supplier Formulate and adjust Require rectification for collaborative relationships.
or change request performance monthly and annual suppliers with supply
is initiated by the assessment quota plans based on abnormalities and
requesting unit, review according to the supplier assessment poor performance, and
the shortlist of suppliers; supplier relationship results, latest material track their rectification Xuchang Zhende No.1 Factory Developed Coated Paper for Dressing Boxes to Enhance Supply Chain Stability
procurement engineers management plan. prices, and supplier progress.
are responsible Calculate supplier quality/delivery Propose supplier
for collecting and performance by the performance. elimination and Xuchang Zhende Factory I previously used PS55 coated paper
maintaining supplier information system, Execute orders risk control plan for and Tyvek for its dressing box products. However, coating for
qualifications and calibrate the results, according to the suppliers that fail to PS55 has to be done abroad, while Tyvek 2FS faces extremely
information. and generate the approved quota plans, pass the review, and
high supply challenges, with a risk of supply disruption in 2021,
The Procurement Qualified Supplier monitor performance eliminate suppliers
Department then initiates Periodic Assessment monthly, make timely according to the plan. thus poor supply chain stability. To address this issue and
the introduction of Form and the Summary adjustments, and reduce the risk of material shortages, Zhende has independently
shortlisted suppliers, and of Periodic Assessment generate cause analysis developed coated paper for dressing boxes by combining
conducts written and on- of Qualified Suppliers. and improvement purchased base paper with in-house coating. This new approach
site supplier audits. Organize performance plans.
reduced reliance on external raw materials and enhanced the
For suppliers that interview with sustainability of the supply chain.
pass the audit, suppliers.
conduct material/ Work out supplier
service certification management
according to the measures based on
Material Confirmation the assessment and Responsible Supply Chain
Management interview results, and
Regulations. Sign conduct annual audits. While strengthening our own ESG management, we are aware that environmental and social risks in the supply chain can
cooperation agreement also increase our ESG risks.
with qualified suppliers,
and rate them. In 2023, we conducted environmental and social risk assessments on 653 suppliers through a questionnaire survey. The re-
sults showed that 32.16% of the suppliers had conducted assessments of their environmental and social impacts. Addition-
ally, 12 suppliers underwent third-party human rights audits, and 2 suppliers achieved REACH certification for chemicals.
We have signed the Social Responsibility Commitment with over 470 suppliers. Additionally, social responsibility require-
The Quality Management Department of the Quality and Regulations Center conducts periodic on-site audits of
ments are outlined in the Procurement Agreements, specifying our expectations for suppliers' environmental and social per-
suppliers and completes the Supplier Audit Report to ensure the suppliers meet our quality control requirements.
formance.
Additionally, we encourage supplier quality improvement by setting up a Quality Progress Award at the annual
At Zhende's 2023 annual supplier conference, we held a special session to raise supplier awareness about environmental
supplier conference to recognize suppliers that have demonstrated outstanding performance in quality.
and social responsibilities. We encouraged compliance in supplier behavior, introduced our ESG system, and communi-
In terms of supplier stability, to meet the needs of multiple parties and ensure sufficient reserves of suppliers, cated our requirements for suppliers regarding environmental and social responsibilities. Additionally, we conducted ESG
Zhende has formulated detailed rules such as Supply Market Research and Supplier Shortlisting Management Rules information exchange meetings online and offline, where we shared details about our ESG management and human rights
and Potential Supplier Admission and Management Rules. These can fully meet the R&D, production and supply audit processes.
needs of new and old products, and continuously optimize supplier structure. We have improved the SRM digital
platform with effective implementation, ensuring the sustainable development of the supply chain.
Shared concept Value Process Platform
Automation collaboration compliance coordination
Informatization Information sharing Supplier lifecycle Using the SRM
Management ability Technical cooperation management platform to link 2023 Zhende Supplier Conference ESG Information Exchange Meeting
Behavioral Zhende with suppliers
Professional ability Cost collaboration
compliance Furthermore, Zhende has incorporated supplier environmental and social responsibility targets into the performance evalu-
ations of procurement personnel to support the effective development of a sustainable supply chain.
And ESG (Environmental, Social Development Innovations to Drive Innovations to Drive Green Governance Employee Green Partner
and Governance) Report Management Green Development Development with Lean System Growth Development
with Lean Production Production
Community Engagement: Fulfilling Zhende Zhende Cares for “Children of the Stars”
Responsibilities for a Better Society In May 2023, Zhende Medical, in partnership with Haichang Ocean Park and JD Health, hosted a "Park Adventure with Pets"
event to raise awareness for autistic children, also known as "children of the stars", and provide them with companionship and
Zhende Medical engages in various charitable activities to give back to society to the best of its ability. We have health support. With ongoing attention to these children, we expect early, accurate, and persistent interventions to help them
established the Management of External Donations to oversee our donation activities in a unified manner. During integrate into society and lead independent lives.
the reporting period, Zhende made donations to support relief efforts in the Beijing-Tianjin-Hebei flood and the
earthquake in Linxia, Gansu Province, students taking the college entrance exam, and the Asian Games.
Upholding the idea of giving back to society, Zhende actively participates in community volunteer activities.
Formulated the Management Rules for Volunteer Teams and other regulations that cover both the headquarters and
our subsidiaries, we have standardized and improved the organization of volunteer teams, enhancing the quality
and efficiency of volunteer services. During the reporting period, we donated RMB 3.245 million, and 320 employees
offered 1,953 hours of volunteer services.
Volunteer Activities in 2023
Plant a Tree for the Asian Games·Spring Fitness Walk at Yunsong Village
In April 2023, Zhende Medical’s volunteer team, in collaboration with the Youth League Committee of Yuecheng District,
organized a volunteer activity themed "Plant a Tree for the Asian Games·Spring Fitness Walk at Yunsong Village" in Potang
Yunsong Village, Jianhu Sub-district. We expect to raise public awareness of environmental protection and encourage green
actions to foster a better future.
Sending Warmth to Front-line Workers to Support the Asian Games
In 2023, as the Asian Games approached, the construction sites of the venues and various infrastructure projects in Shaoxing
were bustling with outdoor workers. To help the front-line volunteers stay cool, in July 2023, Zhende Medical, in partnership with
the Shaoxing Red Cross Society, donated cooling vests worth over RMB 1.93 million to front-line units.
And ESG (Environmental, Social
and Governance) Report
ESG Performance Tables By employment
Disclosures
Full-time employees under a
labor contract
Unit
Person
form Full-time employees under labor
Person 465 412 248
dispatch
Employee-related Performance
Male Person 431 589 485
By gender
Disclosures Unit 2021 2022 2023 Female Person 1,269 978 1,401
Employee Recruitment and Hiring Chinese Mainland Person 1,700 1,410 1,886
By work area Hong Kong, Macao, Taiwan, and
Number of incidents punished for violating Person 0 0 0
# 0 0 0 overseas
employment and labor laws and regulations
>50 Person 21 25 19
Total number of employees1 Person 8,027 8,485 6,717
By age 30-50 Person 912 784 1,094
Full-time employees under a
Person 8,027 8,485 6,717
By employment labor contract <30 Person 767 601 773
form Full-time employees under labor
Person 581 676 621 Percentage of new hires % 21.18 16.62 28.08
dispatch
Male % 15.62 20.20 23.26
Male Person 2,759 2,916 2,085 By gender
By gender Female % 24.09 17.56 30.25
Female Person 5,268 5,569 4,632
>50 % 11.11 12.44 5.09
Chinese Mainland Person 7,655 8,182 6,185
By work area By age 30-50 % 14.16 11.52 21.31
Hong Kong, Macao, Taiwan, and
Person 372 303 532
overseas <30 % 54.90 40.69 63.83
>50 Person 189 201 373 Chinese Mainland % 22.21 17.23 30.49
By work area Hong Kong, Macao, Taiwan, and
By age 30-50 Person 6,441 6,807 5,133 % 0.00 0.00 0.00
overseas
<30 Person 1,397 1,477 1,211
Employee turnover rate2 Person 955 952 3,654
Front-line employees Person 7,710 8,148 6,422
Male Person 347 432 1,316
By management By gender
Mid-level management Person 248 268 232
level Female Person 608 520 2,338
Senior management Person 69 69 63
>50 Person 35 29 182
Percentage of female employees % 65.63 65.63 68.96
By age 30-50 Person 619 567 2,375
Percentage of female senior executives (above
% 20.29 20.29 23.80 <30 Person 301 356 1,097
director level)
Employee turnover rate3 % 11.90 11.22 54.40
Percentage of ethnic minorities % 0.16 0.15 0.19
Male % 12.58 14.81 63.12
Percentage of ethnic minorities and/or vulnerable
% 1.7 1.7 1.9 By gender
groups in senior management team Female % 11.54 09.34 50.47
Coverage of diversity-related training % 100 100 100 >50 % 18.52 14.43 48.79
Total number of new hires Person 1,700 1,410 1,886 By age 30-50 % 09.61 08.33 46.27
<30 % 21.55 24.10 90.59
And ESG (Environmental, Social
and Governance) Report
Disclosures Unit 2021 2022 2023 Disclosures Unit 2021 2022 2023
Employee Rights and Benefits Male Person 30 28 33
By gender
Labor contract signing rate % 100 100 100 Female Person 51 46 36
RMB Parental leave retention rate7 % / 92.50 97.18
Employee compensation and benefits expenses4 70,152 98,650 82,296
Male % / 75.00 100
New hire satisfaction5 % 86.0 92.0 93.3 By gender
Female % / 82.14 70.59
Employee Net Promoter Score (E-NPS)6
Number of employee discrimination incidents # 0 0 0
% 60.02 62.85 69.33
Unadjusted average gender pay gap % 108.2 106.6 105.3
Employee Training and Development
Ratio of highest annual salary to median annual salary % 16.36 13.76 13.40
Number of male employees receiving training Person 2,759 2,916 2,085
Number of trade union members Person 8,027 8,485 6,717
Number of female employees receiving training Person 5,268 5,569 4,632
Percentage of employees who are trade union members % 100 100 100
Employee training coverage % 100 100 100
Percentage of employees covered by collective
% 100 100 100 Total hours of employee training Hour 630,120 560,859 435,076
bargaining agreements
Hours/
Percentage of operational sites assessed for human Average duration of employee training 78.50 66.10 64.77
% 81.82 54.55 100.00 Person
rights impacts or risks
Hours/
Percentage of operational sites with labor and Male 85.18 58.65 63.60
Person
% 50.00 50.00 63.64
human rights certification By gender
Hours/
Female 75.00 70.00 65.30
Number of employees eligible for parental leave Person 80 71 59 Person
Male Person 24 20 19 Total training hours for front-line employees Hour 605,311.5 537,130.5 404,586.0
By gender
Female Person 56 51 40 Number of front-line employees receiving training Person 7,710 8,148 6,422
Number of employees taking parental leave Person 80 71 59 Hours/
Average training hours per front-line employee 78.51 65.92 63.00
Person
Male Person 24 20 19
By gender Total training hours for mid-level management8 Hour 19,840 18,760 25,954
Female Person 56 51 40
Number of mid-level management receiving training Person 248 268 232
Number of employees returning to work after
Person 80 71 59
parental leave Hours/
Average training hours per mid-level management 80.00 70.00 111.87
Person
Male Person 24 20 19
By gender Total training hours for senior management Hour 4,968 4,968 4,536
Female Person 56 51 40
Number of senior management receiving training Person 69 69 63
Parental leave return rate % 100 100 100
Male % 100 100 100
Hours/
Average training hours per senior management 72.00 72.00 72.00
By gender Person
Female % 100 100 100
Percentage of employees receiving regular
% 100 100 100
Number of employees still employed 12 months performance and career development appraisals
Person 81 74 69
after returning from parental leave
Male % 100 100 100
By gender
Female % 100 100 100
And ESG (Environmental, Social
and Governance) Report
Disclosures Unit 2021 2022 2023 Disclosures Unit 2021 2022 2023
Percentage of senior Percentage of operational sites with health and
% 100 100 100
management receiving regular safety risk assessments
% 100 100 100
performance and career
development appraisals Percentage of employees receiving occupational
% 66.33 68.23 75.21
health and safety training13
Percentage of mid-level
By management management receiving regular 1. The total number of employees and the total number of new hires are consistent with data disclosed in our annual report and include full-time
% 100 100 100 labor contract employees from both the parent company and major subsidiaries. Part-time and other types of employees are not included.
level performance and career
development appraisals
Percentage of front-line
employees receiving regular
% 100 100 100 6. Employee Net Promoter Score (E-NPS) = Percentage of employees willing to recommend Zhende to friends and family - Percentage of employees
performance and career unwilling to recommend - Employee voluntary resignation rate.
development appraisals
of employees who returned to work after parental leave in the previous year) * 100%
Coverage of employee training % 100 100 100 8. In 2023, Zhende strengthened training for mid-level management to improve their leadership.
Hours/
Average training hours per employee10 79 66 65
Person
Occupational Health and Safety
training / Total number of employees) * 100%
Number of incidents punished for violating
# 0 0 0
occupational health and safety laws and regulations
Number of employees with occupational diseases Person 0 0 0
Injury rate per thousand employees11 % 1.00 0.59 0.45 R&D and Innovation Performance
Number of workplace injuries Person 8 5 3
Disclosures Unit 2021 2022 2023
Number of safety incidents # 8 5 3
R&D and Innovation
Number of injury incidents # 8 5 3
RMB
R&D investment 15,314 22,700 13,895
Number of lost-time incidents # 8 5 3 10,000
Number of severe injury incidents # 0 0 0 Number of R&D personnel Person 622 656 546
Number of deaths due to work-related health issues Person 0 0 0 Number of R&D projects # 438 578 512
Number of recordable work-related health issues # 0 0 0 Intellectual Property Protection
Total working hours Hour 15,604,488 16,494,840 13,057,848 Number of trademark applications during the
# 103 9 159
reporting period
Cases/
Recordable injury rate per million working hours12 0.51 0.30 0.23
Hour Number of trademarks granted during the reporting period # 337 47 17
Total work hours lost due to injuries Hour 1,128 1,272 624 Number of patent applications during the reporting period # 167 133 32
Number of deaths due to work-related injuries Person 0 0 0 Number of patents granted during the reporting period # 212 121 79
Percentage of deaths due to work-related injuries % 0 0 0 Total number of patent applications # 1,077 1,120 1,152
Number of workdays lost due to injuries Day 141 159 78 Total number of patents granted # 537 635 871
And ESG (Environmental, Social
and Governance) Report
Products and Customer Services Performance Environmental Performance
Disclosures Unit 2021 2022 2023 Disclosures Unit 2021 2022 2023
Quality Management of Products and Services Environmental Management System
Number of incidents punished for violating product Number of employees participating in
# 1 1 1 Person 3,082 3,154 3,102
and service related laws and regulations1 environmental protection training
Number of products recalled due to safety and Percentage of employees who have received
# 0 0 0 % 5.3 5.7 5.6
health issues training on specific environmental issues
Number of legal and regulatory violations related to Percentage of workplaces that have
# 0 0 0 % 90 90 90
health and safety in products and services provided undergone environmental risk assessment
Customer Relationship Management Percentage of operational sites with
% 50.00 50.00 66.67
environmental certification
Customer Net Domestic market % 80.23 88.11 83.89
Promoter Score Number of incidents punished for
(C-NPS)2 International market % 35.12 30.51 52.80 violating environmental protection laws # 1 0 0
and regulations1
Total number of complaints received about products
# 1,716 1,569 976
and services Total fines imposed for violations of RMB
Handling rate of complaints received about products environmental protection laws and regulations 10,000
% 100 100 100
and services3 Annual investment in environmental RMB
Data Security and Customer Privacy Protection protection 10,000
Number of people covered by personal information Energy Management2
Person 8,027 8,485 6,717
security training for employees
Total purchased electricity MWh 81,285.78 91,169.39 60,796.85
Number of incidents punished for violating
# 0 0 0 Purchased electricity from non-renewable
information security laws and regulations MWh 81,285.78 90,928.44 60,796.85
sources
Number of confirmed incidents of leakage, theft or
# 0 0 0
loss of client information Purchased electricity from renewable
MWh 0 240.95 0
sources
device advertising. Following the incident, we promptly removed the advertisement, redesigned the content, and submitted it for review. Future
Self-generated solar photovoltaic electricity MWh 0 966.85 10,165.05
advertisements will strictly adhere to relevant regulations.
Natural gas consumption m3 1,241,708 1,156,316 1,252,191
adopted the Customer Net Promoter Score (C-NPS) method, replacing the customer satisfaction survey method used in 2020 and 2021. Calculation
Formula: Customer Net Promoter Score (C-NPS) = Percentage of promoters - Percentage of detractors.
Purchased steam consumption GJ 434,887.8 465,487.5 358,558.8
Total number of complaints received about products and services) * 100%.
Gasoline consumption for official vehicles Liter 80,000.99 72,575.35 72,940.00
Diesel consumption for official vehicle Liter 34,198.20 26,462.64 22,191.01
Diesel consumption for fixed sources Ton 4.00 4.00 4.15
Community Public Welfare Performance LPG consumption Ton 4.29 5.59 3.76
Disclosures Unit 2021 2022 2023 Renewable energy consumption3 MWh 0 1,207.80 10,165.05
RMB Total energy consumption MWh 216,675.71 234,977.01 175,875.29
Total investment in public welfare and charity 294.20 527.40 324.57
% 0 0.51 5.78
energy consumption
Number of employees participating in voluntary
Person 160 184 320
activities
Packaging material Paper Ton 42,000 37,300 25,000
Total time of employee volunteer service Hour 800 926 1,953 usage by type Plastic Ton 14,300 10,500 600
And ESG (Environmental, Social
and Governance) Report
Disclosures Unit 2021 2022 2023 Disclosures Unit 2021 2022 2023
Total usage of finished product Total non-hazardous waste Ton Ton 5,206.2 4,735.8
Ton 56,300 47,800 25,600
packaging materials
Usage of environment-friendly packaging Non-hazardous waste density (per unit of Ton/RMB
Ton 28,150 26,290 16,640 0.008 0.008 0.011
materials for finished products revenue) 10,000
Percentage of environment-friendly Quantity of Incinerated with
% 50 55 65 Ton 18.17 7.51 29.74
packaging materials for finished products hazardous waste energy recovery
Total usage of non-renewable materials Ton 14,300 10,500 600 by disposal
method Other5 Ton 41.60 32.32 35.84
Total usage of renewable materials Ton 42,000 37,300 25,000
Total hazardous waste Ton 59.77 39.83 65.58
Percentage of recycled products and their
% 74.60 78.03 97.66 Hazardous waste density (per unit of Ton/RMB
packaging materials 0.00012 0.00006 0.00016
revenue) 10,000
Total usage of recycled packaging materials Ton 27,800 25,600 16,000
Total waste generated Ton 4,292.91 5,246.00 4,801.35
Percentage of reusable and recyclable materials % 49.38 53.56 62.50
Total waste recycled Ton 1,465.26 1,094.48 880.84
Water Resources Management
Cubic Percentage of total operational waste
Surface water 744,857 715,042 884,940 % 0.34 0.21 0.18
Water transferred from landfills
meters
consumption by
Municipal water Cubic Climate Change Mitigation and Adaption6
source 345,801 416,263 436,568
supply meters
Scope 1 GHG emissions Ton of CO2e 2,995.65 2,776.90 2,969.77
Cubic
Total water consumption 1,090,658 1,131,305 1,321,508
meters Scope 2 GHG emission (location-based) Ton of CO2e 93,097.57 101,966.74 73,293.15
Cubic
Total recycled water usage 733,855.5 659,592.7 745,372.9 Total GHG emission (Scope 1 + Scope 2)
meters Ton of CO2e 96,093.22 104,743.64 76,262.92
(location-based)
Percentage of recycled water % 67.29 58.30 56.40
Ton of
Wastewater Management GHG emission density (Scope 1 + Scope
CO2e/RMB 0.19 0.17 0.18
Industrial wastewater discharge Ton 293,916.8 384,321.7 483,204.5 10,000
Chemical oxygen demand (COD) discharge Ton 47.59 65.17 65.77
Biological oxygen demand (BOD) discharge Ton 55.15 52.23 45.1 Bureau for violating relevant regulations. After receiving the notice of the penalty decision, we took the matter very seriously. We promptly paid the fine
in full, established a special rectification team, and completed the rectifications.
NH3-N discharge Ton 1.15 1.83 1.75 2.The energy management-related data covers all operational sites in China.
Waste Gas Management
Cubic
Total emissions of waste gases 209,965,214.3 209,965,214.3 187,788,814.9
meters
Particulate matter (PM) emissions kg 113 144 98
(1) The GHG emission data covers all operational sites in China.
Nitrogen oxides (NOx) emissions kg 243 310 212 (2) Reference standard: The calculation of Scope 1 and Scope 2 greenhouse gases refers to the GHG Protocol Corporate Accounting and Reporting
Standard (Revised Edition), the ISO14064-1:2018 Greenhouse Gases - Part 1: Specification with Guidance at the Organization Level for Quantification
Sulfur oxides (SOx) emissions kg 124 140 130 and Reporting of Greenhouse Gas Emissions and Removals, and the General Guideline of the Greenhouse Gas Emissions Accounting and Reporting for
Industrial Enterprises (GB/T32150-2015), the Guidelines for Accounting Methods and Reporting of Greenhouse Gas Emissions of Enterprises - Power
Generation Facilities and other accounting standards.
Waste Management4
(3) Emission factors: The greenhouse gas types calculated in this report include CO2, CH4, and N2O in Scope 1,and CO2 in Scope 2. The selected GWP
Incinerated with value comes from IPCCAR6, where CH4 corresponds to a GWP value of 27.9 tCO2e/tCH4, and N2O corresponds to a GWP value of 273 tCO2e/tN2O.
Quantity of Ton 590.69 495.59 394.44
energy recovery
non-hazardous The default values of emission factors used in Scope 1 are derived from the Guidelines for Accounting and Reporting Greenhouse Gas Emissions
from Land Transport Enterprises (Trial) (2015), China Energy Statistical Yearbook (2021), and Guidelines for Accounting and Reporting Greenhouse
waste by Recycled/reused Ton 3,624.25 4,690.78 4,314.03 Gas Emissions from Enterprises of Other Industries (Trial) (2015). The emission factors used in Scope 2 are calculated based on relevant documents
disposal method issued by Ministry of Ecology and Environment of China. Among them, the emission factor of the power grid is 0.5568 tCO2e/MWh, as published in the
Other5 Ton 18.2 19.8 27.3
Announcement on the Release of the 2021 Power Sector CO2 Emission Factor.
And ESG (Environmental, Social
and Governance) Report
Governance Performance
Disclosures Unit 2021 2022 2023 Disclosures Unit 2021 2022 2023
Corporate Governance Number of corruption lawsuits filed
and concluded against the issuer or its # 0 0 0
Number of board members Person 9 9 9 employees during the reporting period
Number of female directors Person 3 3 3 Total number of confirmed incidents
(in which employees were dismissed or # 0 0 0
Number of independent directors Person 3 3 3 disciplined due to corruption)
Percentage of female directors on the Total number of confirmed incidents
% 33.33 33.33 33.33 (where contracts with business partners
board of directors # 0 0 0
were terminated or not renewed owing to
Number of employee supervisors Person 1 1 1 corruption-related irregularities)
Number of shareholders' meetings # 4 3 3 Anti-unfair Competition
Number of board of directors' meetings # 9 12 6 Number of cases in which Zhende was
sanctioned by the relevant authorities
Number of supervisory board meetings # 7 9 6 for unfair competition practices in its # 0 0 0
operations or violations of the antitrust
Anti-corruption and Anti-bribery and anti-monopoly laws
Number of directors participating in anti-
Person 9 9 9
corruption training
Percentage of directors covered by anti-
Economic Performance
% 100 100 100
corruption training
Disclosures Unit 2021 2022 2023
Total hours of anti-corruption training
Hour 36 36 36
received by directors Economic Performance
Hours of anti-corruption training per Hours/
director Person
Number of employees participating in Basic earnings per share RMB/Share 2.64 2.87 0.74
Person 3,082 3,154 3,102
anti-corruption training
RMB
Operating income 509,157 613,763 412,704
Percentage of employees covered by 10,000
% 38.40 37.17 46.18
anti-corruption training
Net profit attributable to ordinary shareholders RMB
Total hours of anti-corruption training after extraordinary gains and losses 10,000
Hour 12,328 12,616 12,408
received by employees
RMB
Total tax payments 9,900 26,630 33,172
Hours of anti-corruption training per Hours/ 10,000
employee Person
Total employee salaries and benefits paid RMB
Number of suppliers participating in anti- by Zhende 10,000
# 507 696 684
corruption training
Interest on borrowings from banks and RMB
Percentage of operational sites that have other creditors 10,000
% 100 100 100
undergone corruption risk assessments
Value created for other stakeholders, RMB
such as donations to external parties 10,000
Percentage of sites audited for specific
%
business ethics issues
Other social costs due to environmental RMB
Percentage of at-risk trading partners pollution, etc. 10,000
covered by the corruption and information % 100 100 100
Total shares issued by Zhende Share 227,204,736 266,451,202 266,451,202
security due diligence process
Number of reported incidents of 1.Social contribution per share = Basic earnings per share + (Total tax payments + Salaries paid to employees + Interest on borrowings from banks
# and other creditors + Value created for other stakeholders, such as donations to external parties - Other social costs due to environmental pollution,
corruption and bribery received
etc.)/Total shares issued by Zhende.
And ESG (Environmental, Social
and Governance) Report
Report Benchmarking Index Table
Supply Chain Performance
Disclosures Unit 2021 2022 2023
Supply Chain Management
Benchmarking Index Table of the Guidelines No.1 for Self-Regulation of Listed
Number of suppliers in the Chinese
Mainland
# Companies on the Shanghai Stock Exchange: Standardized Operations (Revised
December 2023)
Number of suppliers in Hong Kong,
#
Macao, Taiwan and overseas
Terms and Disclosure Content Report Chapter
Total number of suppliers # 507 696 684
% / / 100
Percentage of target suppliers that have
signed the Supplier Code of Conduct Anti-corruption and Business Ethics
Intellectual Property Protection
Percentage of suppliers signing contracts
with environmental, labor, and human % / / 10
rights provisions 8.3 Social responsibility planning and working mechanism Sustainable Development Management
Number of suppliers assessed for
# / 165 653 8.4 Social contribution per share ESG Performance Tables
environmental, labor, and ethical aspects
Percentage of suppliers assessed for
environmental, labor, and ethical issues % / 23.71 95.47
among all suppliers
and performance in environmental, social, and
corporate governance aspects in this report.
(II) Deficiencies and problems in the fulfillment of
% / 53.33 80.00
Percentage of target suppliers that have 8.6：
The specific content is detailed in the relevant
corporate social responsibility
undergone on-site CSR audits1
Number of suppliers assessed for
environmental, labor, and ethical aspects # 0 0 0 Protecting Employees’ Rights and Interests,
and failed Guaranteeing Compliant and Equal Employment
Percentage of suppliers assessed Fulfilling the Primary Responsibility, Ensuring
for environmental, labor, and ethical % 100 100 100 Occupational Health and Safety
aspects and passed
(I) Compliance with environmental protection laws and Environmental Management System
Number of suppliers identified as industry standards Emissions and Waste Management
having actual and potential significant
negative social and environmental # 0 0 0 8.8： (II) Environmental protection plans Environmental Management System
impacts and receiving support in
Water Resources Management
implementing corrective action plans 8.8： (III) Use of natural resources
Energy Management
Percentage of suppliers agreeing to
improvements after environmental and % / 76 66 8.8： (IV) Disposal of pollutants Emissions and Waste Management
social impact assessments
Percentage of procurement staff
who have completed sustainable % 100 100 100 8.8： (VI) Environmental protection-related taxes and fees Not applicable
procurement training
% 96.94 98.96 96.39
Percentage of procurement spending on
local suppliers2 8.8： (VIII) Other environmental protection responsibilities Zero Carbon Driven: Addressing Climate Change
in the target scope of on-site assessments in areas such as environmental impact, labor practices, and ethics, and were evaluated through on-site 8.9： (II) Total annual resource consumption ESG Performance Tables
inspections and comprehensive scoring. The total procurement amount from these key suppliers included in the ESG on-site audits accounted for
over 50% of Zhende’s total procurement. (III) Investment in environmental protection and Emissions and Waste Management
And ESG (Environmental, Social
and Governance) Report
Terms and Disclosure Content Report Chapter GRI Standards (2021)
(IV) Types, quantities, concentrations, and destinations
of pollutants emitted From January 1, 2023 to December 31, 2023, Zhende Medical prepared the
Note
report in compliance with the GRI Standards.
(V) Construction and operation of environmental
protection facilities GRI 1 used GRI 1: Foundation 2021
(VI) Waste treatment and disposal, and waste product
recycling
(VII) Voluntary agreements signed with environmental
protection authorities
material topics identified and the information disclosed in the 2023 Sustainability Report and ESG Report. Zhende
has determined that the following topics are non-material and thus will not be included in the Benchmarking Index
Environmental Management System
Table: GRI 202 (Market Presence), GRI 207 (Tax), GRI 301 (Materials), GRI 304 (Biodiversity), GRI 410 (Security
Emissions and Waste Management
Energy Management
Zero Carbon Driven: Addressing Climate Change
(I) New, modified, or expanded construction projects or Notes to Omission
significant investments Disclosure Location
Standards Required
Reason Explanation
(II) Violations of environmental laws and regulations Omissions
and resulting penalties
General Disclosures
(III) Major environmental lawsuits or assets being
seized, frozen, detained, pledged, or mortgaged 2-1 Organizational details About Zhende Medical
(V) Impact of newly enacted laws and regulations on organization’s sustainability About This Report
the company
About This Report
and contact point
ESG Performance Tables
information
GRI 2: other business relationships
About Zhende Medical
General
(III) Product quality safety assurance mechanisms and
emergency response plans
(2021) 2-7 Employees Hiring
(I) Employee management systems and violation Employee Recruitment and Hiring 2-8 Workers who are not
handling measures Employee Rights and Benefits employees
(II) Prevention of occupational hazards and associated Fulfilling the Primary Responsibility, Ensuring Governance-First Principle:
safety measures Occupational Health and Safety Protecting Investors’ Rights
composition
and Interests
A Comprehensive Talent Development System
Smooth Career Development Channels
Employee Recruitment and Hiring selection of the highest Protecting Investors’ Rights
Employee Rights and Benefits governance body and Interests
And ESG (Environmental, Social
and Governance) Report
Notes to Omission Notes to Omission
GRI GRI
Disclosure Location Required Disclosure Location Required
Standards Reason Explanation Standards Reason Explanation
Omissions Omissions
See the 2023 Annual Report 2-21 Annual total
ESG Performance Tables
of Zhende Medical for details compensation ratio
（http://www.cninfo.com.cn/
governance body Code=603301&announceme
sustainable development Management Strategy
ntId=1219879722&orgId=99
me=2024-04-27）
Anti-corruption and Business
Governance-First Principle: Ethics
governance body in and Interests Compliant Operations
overseeing the management Sustainable Management Anti-corruption and Business
of impacts 2-24 Embedding policy
Architecture and Ethics
commitments
Responsibilities Anti-Unfair Competition
Intellectual Property Protection
Governance-First Principle:
Protecting Investors’ Rights 2-25 Processes to remediate Employee Recruitment and
responsibility for managing negative impacts Hiring
impacts Sustainable Management General
Architecture and Disclosures 2-26 Mechanisms for seeking Anti-corruption and Business
Responsibilities (2021) advice and raising concerns Ethics
GRI 2: governance body in Architecture and 2-27 Compliance with laws Care Employee Growth
General sustainability reporting Responsibilities
and regulations Promote Green Development
Disclosures To Be A Reliable Partner
Protection of investors’ rights
(2021) and interests
Anti-corruption and Business 2-28 Membership Company Events in 2023
Ethics
associations Industry Exchange and
Cooperation
Stakeholder Communication
critical concerns
Sustainable Development
Management-Participation of
the highest governance body Management Stakeholders
This informa- 2-30 Collective bargaining
Employee Rights and Benefits
tion will not agreements
performance of the highest Omitted 2-18-b tiality re- for the time Material Topics
governance body 2-18-c strictions being, due to
confidentiality Sustainable Development
requirements. 3-1 Process to determine
GRI 3: Management-Analysis of
material topics
Material Topics
This informa- Material
tion will not Topics Sustainable Development
confidentiality
requirements. nomic Performance
This informa- GRI 3:
Sustainable Development
GRI 2: tion will not Material 3-3 Management of material
Management-Analysis of
Confiden- be disclosed Topics topics
General 2-20 Process to determine 2-20-a Material Topics
Omitted tiality re- for the time (2021)
Disclosures remuneration 2-20-b
strictions being , due to
(2021) confidentiality
requirements.
And ESG (Environmental, Social
and Governance) Report
Notes to Omission Notes to Omission
GRI GRI
Disclosure Location Required Disclosure Location Required
Standards Reason Explanation Standards Reason Explanation
Omissions Omissions
ESG Performance Tables ESG Performance Tables
generated and distributed for risks related to corruption
GRI 205:
Anti- Anti-corruption and Business
and other risks and Zero Carbon Driven: training about anti-corruption
opportunities due to climate Addressing Climate Change
corruption policies and procedures
Ethics
change (2016)
ESG Performance Tables
GRI 201: corruption and actions taken
Economic 201-3 Defined benefit 201-3-b Information tion has not
been collected, Anti-competitive Behavior
Performance plan obligations and other Omitted 201-3-c missing/
so it cannot be
(2016) retirement plans 201-3-d incomplete disclosed for
GRI 3: Sustainable Development
the time being. Material 3-3 Management of material Management-Analysis of Ma-
Topics topics terial Topics
This informa- (2021) Anti-Unfair Competition
Omitted 201-4-b missing/ GRI 206:
received from government so it cannot be
the time being. competitive competitive behavior, anti- ESG Performance Tables
Behavior trust, and monopoly practices
Indirect Economic Impacts (2016)
Sustainable Development Energy
GRI 3: Management-Analysis of
Material 3-3 Management of material Material Topics GRI 3: Sustainable Development
Topics topics Community Engagement: Material 3-3 Management of material Management-Analysis of Ma-
Fulfilling Zhende Responsibilities Topics topics terial Topics
(2021)
for a Better Society (2021) Energy Management
GRI 203: investments and services Fulfilling Zhende Responsibilities within the organization ESG Performance Tables
Indirect supported for a Better Society
Economic This informa-
Community Engagement: 302-2-a Information tion has not
Impacts 203-2 Significant indirect 302-2 Energy consumption been collected,
Fulfilling Zhende Responsibilities Omitted 302-2-b missing/
(2016) economic impacts outside of the organization so it cannot be
for a Better Society 302-2-c incomplete disclosed for
GRI 302: the time being.
Procurement Practices
Energy
(2016) Energy Management
GRI 3: 302-3 Energy intensity
ESG Performance Tables
Material Supply Chain Management
topics
Topics (2021) 302-4 Reduction of energy
Energy Management
consumption
GRI 204:
Procurement 204-1 Proportion of spending requirements of products and Energy Management
ESG Performance Tables
Practices on local suppliers services
(2016)
Water and Effluents
Anti-corruption
Sustainable Development
GRI 3: Sustainable Development GRI 3: Management-Analysis of
Material Management-Analysis of Material 3-3 Management of material Material Topics
Material Topics Topics topics Water Resources Management
Topics topics
Anti-corruption and Business (2021) Emissions and Waste
(2021) Ethics Management
And ESG (Environmental, Social
and Governance) Report
Notes to Omission Notes to Omission
GRI GRI
Disclosure Location Required Disclosure Location Required
Standards Reason Explanation Standards Reason Explanation
Omissions Omissions
Water Resources Management Waste
Emissions and Waste
as a shared resource
Management Sustainable Development
GRI 3:
Management-Analysis of Ma-
GRI 303: 303-2 Management of water Emissions and Waste
Material 3-3 Management of material
terial Topics
Water and discharge-related impacts Management Topics topics
Emissions and Waste Man-
Effluents (2021) agement
(2018) 303-3 Water withdrawal ESG Performance Tables
Emissions and Waste
significant waste-related
Management
Emissions GRI 306: impact
Waste
Sustainable Development 306-3 Waste generated ESG Performance Tables
(2020)
GRI 3: Management-Analysis of
Material Topics 306-4 Waste diverted from
Material 3-3 Management of material ESG Performance Tables
Emissions and Waste disposal
Topics topics
Management
(2021) Zero Carbon Driven:
Addressing Climate Change
Supplier Environmental Assessment
GRI 305: Zero Carbon Driven:
Emissions Addressing Climate Change
emissions GRI 3: Sustainable Development
(2016) ESG Performance Tables
Material 3-3 Management of material Management-Analysis of
Zero Carbon Driven: Topics topics Material Topics
Addressing Climate Change
ESG Performance Tables
This informa-
This informa- 308-1 New suppliers that Information
tion has not GRI 308: were screened using Omitted 308-1-a missing/
Omitted 305-3-d missing/ disclosed for
GHG emissions so it cannot be Environmental
disclosed for Assessment
the time being. 308-2 Negative environmental
impacts in the supply chain ESG Performance Tables
Omitted
intensity
Employment
ESG Performance Tables Sustainable Development
emissions GRI 3:
Management-Analysis of
Material 3-3 Management of material
This informa- Material Topics
Topics topics
Employee Recruitment and
Information (2021) Hiring
missing/
depleting substances (ODS) Addressing Climate Change 305-6-c so it cannot be
incomplete 401-1 New employee hires
the time being. and employee turnover
Omitted
depleting substances (ODS) Employment full-time employees that are
Employee Rights and Benefits
(2016) not provided to temporary or
part-time employees
And ESG (Environmental, Social
and Governance) Report
Notes to Omission Notes to Omission
GRI GRI
Disclosure Location Required Disclosure Location Required
Standards Reason Explanation Standards Reason Explanation
Omissions Omissions
Labor/Management Relations Training and Education
Sustainable Development GRI 3: Sustainable Development
GRI 3:
Material Material 3-3 Management of material
topics Material Topics terial Topics
Topics (2021) Employee Rights and Benefits
Topics topics
A Comprehensive Talent De-
(2021) velopment System
GRI 402: This infor-
Labor/ 402-1 Minimum notice Information mation is 404-1 Average hours of
Management periods regarding operational Omitted missing/ training per year per employee
Relations changes incomplete it cannot be GRI 404: 404-2 Programs for upgrading
(2016) fully disclosed. Training employee skills and transition
A Comprehensive Talent
Development System
and assistance programs
Occupational Health and Safety
Education
(2016) 404-3 Percentage of
Sustainable Development employees receiving regular
GRI 3: Management-Analysis of ESG Performance Tables
performance and career
Material 3-3 Management of material Material Topics development reviews
Topics topics Fulfilling the Primary
(2021) Responsibility, Ensuring
Diversity and Equal Opportunity
Occupational Health and Safety
GRI 3: Sustainable Development
Management-Analysis of Ma-
and safety management Responsibility, Ensuring Material 3-3 Management of material
terial Topics
system Occupational Health and Safety Topics topics
Employee Recruitment and
risk assessment, and incident Responsibility, Ensuring
investigation Occupational Health and Safety GRI 405: 405-1 Diversity of governance
GRI 403: ESG Performance Tables
bodies and employees
Diversity
Occupational 403-3 Occupational health
Fulfilling the Primary
Responsibility, Ensuring and Equal
Health services 405-2 Ratio of basic salary
Occupational Health and Safety Opportunity and remuneration of women ESG Performance Tables
and Safety
(2016) to men
(2018) 403-4 Worker participation, Fulfilling the Primary
consultation, and communication Responsibility, Ensuring Non-discrimination
on occupational health and safety Occupational Health and Safety
GRI 3: Sustainable Development
Management-Analysis of Ma-
occupational health and Responsibility, Ensuring Material 3-3 Management of material
terial Topics
safety Occupational Health and Safety Topics topics
Employee Recruitment and
Fulfilling the Primary
(2021) Hiring
Responsibility, Ensuring
health GRI 406:
Occupational Health and Safety 406-1 Incidents of
Employee Recruitment and
Non-discrimi- discrimination and corrective
nation (2016) actions taken
mitigation of occupational Fulfilling the Primary
GRI 403: health and safety impacts Responsibility, Ensuring
Freedom of Association and Collective Bargaining
directly linked by business Occupational Health and Safety
Occupational
relationships
Health GRI 3: Sustainable Development
and Safety Fulfilling the Primary Management-Analysis of Ma-
(2018) Responsibility, Ensuring terial Topics
an occupational health and Topics topics
Employee Recruitment and
Occupational Health and Safety
safety management system (2021) Hiring
ESG Performance Tables
And ESG (Environmental, Social
and Governance) Report
Notes to Omission Notes to Omission
GRI GRI
Disclosure Location Required Disclosure Location Required
Standards Reason Explanation Standards Reason Explanation
Omissions Omissions
GRI 407: This Supplier Social Assessment
Freedom of information
suppliers in which the right to Information
Association 407-1-a is temporarily GRI 3: Sustainable Development
freedom of association and Omitted missing/
and Collec- 407-1-b unavailable， Material 3-3 Management of material Management-Analysis of
collective bargaining may be incomplete
tive Bargain- so it cannot be Topics topics Material Topics
at risk Supply Chain Management
ing (2016) fully disclosed. (2021)
Child Labor This
information
GRI 3: Sustainable Development
were screened using social Omitted 414-1-a missing/ collected，so
Management-Analysis of
Material 3-3 Management of material criteria incomplete it cannot be
Material Topics GRI 414: disclosed for
Topics topics
Employee Recruitment and Supplier the time being.
(2021) Hiring Social
Assessment This
GRI 408: 408-1 Operations and ESG Performance Tables (2016) information
Child Labor suppliers at significant risk Employee Recruitment and 414-2 Negative social Information has not been
(2016) for incidents of child labor Hiring impacts in the supply chain ESG Performance Tables missing/ collected，so
and actions taken incomplete it cannot be
disclosed for
Forced or Compulsory Labor the time being.
GRI 3: Sustainable Development Customer Health and Safety
Management-Analysis of
Material 3-3 Management of material
Material Topics GRI 3:
Topics topics
Employee Recruitment and
Sustainable Development
(2021) Material 3-3 Management of material Management-Analysis of
Hiring
Topics topics Material Topics
(2021) Product Quality and Safety
GRI 409: 409-1 Operations and
ESG Performance Tables
Forced or suppliers at significant risk
Employee Recruitment and This
Compulsory for incidents of forced or
Hiring 416-1 Assessment of the information
Labor (2016) compulsory labor Information
health and safety impacts is temporarily
GRI 416: Omitted 416-1-a missing/
of product and service unavailable，
Local Communities incomplete
Customer categories so it cannot be
Health fully disclosed.
GRI 3: Sustainable Development and Safety
Management-Analysis of (2016) 416-2 Incidents of non-
Material 3-3 Management of material
Material Topics compliance concerning the Product Quality and Safety
Topics topics
Environmental Management health and safety impacts of ESG Performance Tables
(2021) System products and services
Customer Privacy
This
Information Sustainable Development
community engagement, is temporarily GRI 3:
Omitted 413-1-a missing/ Management-Analysis of
impact assessments, and unavailable， Material 3-3 Management of material
incomplete so it cannot be Material Topics
GRI 413: development programs Topics topics
fully disclosed. Data Security and Privacy
Local (2021) Protection
Communities
This GRI 418:
(2016) 413-2 Operations with 418-1 Substantiated Data Security and Privacy
Information information
significant actual and is temporarily Customer complaints concerning Protection
Omitted 413-2-a missing/ Privacy breaches of customer privacy
potential negative impacts on unavailable，
incomplete and losses of customer data ESG Performance Tables
local communities so it cannot be (2016)
fully disclosed.
And ESG (Environmental, Social
and Governance) Report
Benchmarking Index Table of SDGs
SDGs Targets Report Chapter SDGs Targets Report Chapter
Innovation Leadership: 8.5 By 2030, achieve full and productive employment and decent
currently measured as people living on less than $1.90 a day. for Health Management persons with disabilities, and equal pay for work of equal value. Protecting Employees’
and children of all ages living in poverty in all its dimensions Fulfilling Zhende labour, end modern slavery and human trafficking and secure Guaranteeing Compliant
according to national definitions. Responsibilities for a Better the prohibition and elimination of the worst forms of child labour, and Equal Employment
Society including recruitment and use of child soldiers, and by 2025 end Sharing Achievements of
child labour in all its forms. Development, Boosting
Innovation Leadership:
Providing Zhende Solutions environments for all workers, including migrant workers, in
for Health Management particular women migrants, and those in precarious employment.
Community Engagement:
medicines and vaccines for all.
Fulfilling Zhende R&D and Innovation
Responsibilities for a Better Emissions and Waste
prevention, reduction, recycling and reuse.
Society Management
Energy Management
companies, to adopt sustainable practices and to integrate
Zero Carbon Driven:
Addressing Climate Change
have relevant skills, including technical and vocational skills, for Development, Boosting
employment, decent jobs and entrepreneurship. Grow of Talents
Zero Carbon Driven:
institutional capacity on climate change mitigation, adaptation,
Addressing Climate Change
Protecting Employees’ impact reduction and early warning.
Rights and Interests,
opportunities for leadership at all levels of decision-making in
Guaranteeing Compliant
political, economic and public life.
and Equal Employment
eliminating dumping and minimizing release of hazardous
chemicals and materials, halving the proportion of untreated
Emissions and Waste
wastewater and substantially increasing recycling and safe reuse
Management
globally.
Water Resources
Management
all sectors and ensure sustainable withdrawals and supply of
freshwater to address water scarcity and substantially reduce the
number of people suffering from water scarcity.
Energy Management
in the global energy mix.
Zero Carbon Driven:
Addressing Climate Change
efficiency.
And ESG (Environmental, Social
and Governance) Report
Assurance Statement
首页
微信公众号
证券之星APP
