Environmental, Social, and Governance
(ESG) Report
Shanghai M&G Stationery Inc.
CONTENTS
About This Report 01
Focus: Sustainable Product Product Climate and
President's Message 03 01 Innovation and Practice
Sustainable Product Portfolio 13
Sustainable Products 18
Response to Climate Change 30
About M&G 05
Sustainable Product Series 14 Product Quality and Safety 22 Environmental Compliance and 40
Sustainable Development 06 Pollution Prevention
Management Sustainable Design 15 Marketing and After-sales 27
Waste Management 41
Green Consumption Advocacy 16
Water Resources Management 42
Biodiversity 43
Shared Prosperity Employees and Governance and
Technological Innovation 46 Occupational Health and 60 Corporate Governance 76
Safety
Supply Chain Management 50 Investor Communication 77
Employee Rights and 63
Information Security and 57 Development Risk Management 78
Privacy Protection
Diversity, Equity and 70 Business Ethics 79
Inclusion
Social Welfare 72
ESG Performance Data 82
Independent Assurance 88
Statement
Index of Indicators 89
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus
Stewardship Environment the Value Chain Communities Integrity
Appendix 01
About This Report
This report is the fifth Environmental, Social, and Governance Report (hereinafter referred to as "this Report") released by Shanghai M&G Stationery Inc.
(hereinafter referred to as "M&G Stationery," "M&G," "we," or "the Company"), focusing on the disclosure of M&G's concepts, progress, and highlights in
environmental protection, social responsibility, and corporate governance during 2025.
Basis for Preparation Statement
This Report has been prepared in accordance with the Guidelines No. 14 of Shanghai Stock Exchange for The data contained in this Report is sourced from the Company's official documents, related reports, and
Self-Regulation of Listed Companies—Sustainability Report (Trial) ("SSE Sustainability Report Guidelines") statistical records. Unless otherwise specified, all monetary amounts in this Report are denominated in
and the Guide No.4 for Self-Regulatory Supervision on Listed Companies of the SSE — Compilation of Renminbi (RMB).
Sustainable Development Reports ("SSE Sustainability Report Guide") issued by the Shanghai Stock
This Report has been reviewed and approved at the 15th meeting of the 6th Board of Directors, the 1st
Exchange website, while also referencing the Corporate Sustainability Disclosure Standards – Basic
meeting of the Strategy Committee in 2026 of M&G held on March 30, 2026.
Standards (Trial) ("Ministry of Finance Basic Disclosure Standards") and the Corporate Sustainability
Disclosure Standards No. 1 – Climate (Trial) ("Ministry of Finance Climate Disclosure Standards") issued by
nine Chinese government authorities including the Ministry of Finance of the People's Republic of China,
the GRI Sustainability Reporting Standards ("GRI Standards") issued by the Global Sustainability Standards Report Assurance
Board ("GSSB"), the IFRS Sustainability Disclosure Standards ("IFRS S1" and "IFRS S2") issued by the
To enhance the authenticity and reliability of this Report, it has undergone third-party assurance by CECEP
International Sustainability Standards Board ("ISSB"), the Recommendations of the Task Force on Climate-
(HK) Advisory Company Limited. An independent assurance statement has been provided, with detailed
related Financial Disclosures ("TCFD") and the United Nations Sustainable Development Goals (SDGs).
content available in the "Independent Assurance Statement" chapter.
Scope of Report Access to Report
Reporting scope: This Report is available in both Simplified Chinese and English versions. In the event of any discrepancy
The reporting period aligns with M&G's 2025 Annual Report, covering January 1, 2025, to December 31, between the two versions, the Simplified Chinese version shall prevail.
extend to or reference other years where appropriate. downloaded on the SSE website (www.sse.com.cn), the CNInfo Information Disclosure Platform (www.
Organizational scope: cninfo.com.cn), and M&G Stationery's official corporate website (www.mg-pen.com).
Unless specifically stated, the information and data disclosed in this Report align with the scope of M&G's
Group Co., Ltd. (hereinafter referred to as "Colipu Group"), Jiumu M&G Store Enterprise Management Feedback and Suggestions
Co., Ltd.(hereinafter referred to as "Jiumu Store"), Axus Stationery (Shanghai) Company Ltd. (hereinafter For any inquiries or feedback regarding this Report, please contact us through the following channels:
referred to as "Axus Stationery") and other subsidiaries.
Address: No. 5, Lane 288, Qianfan Road, Xinqiao Town, Songjiang District, Shanghai
Email: ESG@mg-pen.com
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus
Stewardship Environment the Value Chain Communities Integrity
Appendix 02
Chen Huxiong
President's Message President of Shanghai M&G
Stationery Inc.
With another year behind us, we have delivered meaningful progress and tangible accomplishments. 2025 marks we have continued to reduce carbon emissions in the warehousing and logistics stage and further strengthened
a period of steady progress and sustained positive momentum, with M&G navigating challenges confidently and the green resilience of our operations.
advancing forward. Faced with a complex landscape marked by the shift from old to new drivers in the global
Strengthening Win-Win Value Creation and Building a Responsible Supply System
economy, intensifying market competition, and mounting pressure on the consumer market, M&G chose to be
a long-termist and remained committed to doing what is difficult but right. Centered on the vision of "Writing Supply chain resilience and shared prosperity across the value chain are the cornerstones of M&G's steady and
a Sustainable Business Future," we made steady progress and delivered sustained efforts across the four sustained progress. We are committed to building a green, compliant, and win-win sustainable supply chain
strategic pillars: Sustainable Products, Response to Climate Change, Sustainable Supply Chain, and Empowering system, integrating ESG assessment dimensions into new supplier screening and onboarding mechanisms
Employees and Communities, achieving a series of phased breakthroughs with demonstrative significance for the to ensure control at the source. During the reporting period, we completed comprehensive and in-depth
industry. During the reporting period, M&G's MSCI ESG rating jumped to AA, and we were successfully selected for ESG assessments of 97 key suppliers. Through collaborative efforts, we promoted targeted management
the S&P Global Sustainability Yearbook 2026 , joining the leading ranks of ESG governance among global peers. improvements, achieving a rectification compliance rate of 100%. Upholding the vision of "Partnership for a
This marks that, through outstanding ESG practices, we are demonstrating to the world the responsibility and Shared Future," we continue to strengthen our support for channel partners. In 2025, we carried out a wide
excellence of "China's stationery." range of channel empowerment initiatives, including platform development, brand upgrading, and digital
transformation, providing all-around support to help channel partners build resilient risk resistance to navigate
Upholding Green Innovation and Writing a New Paradigm for Sustainable Products
business cycles and jointly create enduring value.
Products are the bridge through which M&G connects consumers with a better green life. In 2025, we deepened
Upholding the Altruistic Philosophy and Jointly Building Employee and Community Well-being
the implementation of the Sustainable Product Evaluation Standards , embedding sustainable concepts
throughout the full product life cycle and accelerating the development of a diversified sustainable product The altruistic philosophy of "Prioritizing the well-being of others before our own" is the foundation of M&G's
portfolio. On the consumer side, through materials innovation and creative design, we launched new products corporate culture. In 2025, we upheld a people-oriented approach and were committed to building a broad
in the "LOHAS" and "Rare Animals," translating biodiversity conservation concepts into accessible everyday platform for every striver to fully develop their talents. We continued to optimize talent pipeline development.
experiences; on the corporate side, we developed the "Eco+Office" low-carbon office solution to empower Through training programs such as the "Child of Light" management trainee development program and the
customers' green transformation. Moreover, we leveraged creative pop-up events and in-store sustainability M&G Lecture Class, we enabled new forces to grow rapidly and helped leading talents stand out. At the same
zones to deepen value resonance with the younger generation, and showcased our innovative achievements at time, we elevated diversity, equity, and inclusion (DEI) to a strategic level, appointing for the first time a Chief
international platforms such as the Boao Forum for Asia and COP30, contributing to the world a China solution Diversity Officer (CDO) of M&G Stationery. We released the DEI Strategy House to all employees and, by advancing
that leads the transformation toward green consumption. initiatives such as the Women's Leadership Workshop and the Employee Engagement Survey, built an open and
inclusive workplace environment. In the area of social responsibility, the Shanghai M&G Foundation remained
Deepening Climate Action, and Driving Low-Carbon Transition across the Entire Value Chain
deeply rooted in rural art education. During the year, its flagship program, the "Art Education Plan" program,
In response to the long-term challenges of climate and environmental changes, M&G implements the carbon reached 960 schools and 110 communities, benefiting a total of 860,000 individuals. We also joined hands with
neutrality roadmap with strong execution. In 2025, notwithstanding the completion and commencement of the professional psychology team of East China Normal University to publish the first Report of an Art Education
operations at our new base, we maintained carbon emissions within our targets, achieving a 36% reduction Based Mental Health, using professional expertise to fill an industry gap. From eight consecutive years of the
in total Scope 1 and Scope 2 carbon emissions compared with 2021. By increasing the construction of in- "E.G.G Walkathon" charity walk to charity art exhibitions in the heart of the city, we mobilized employees and the
house photovoltaic systems at the production and logistics base and expanding green electricity procurement, public to take action in person, converging into a powerful tide for good and enabling the M&G Charity brand to
the proportion of renewable energy in total electricity consumption increased to 21%. Our carbon reduction shine brilliantly across society.
initiatives were further extended to upstream and downstream segments of the value chain. In accordance
The way of benefiting all beings advances with the times. On our future journey, we will always remain true to our
with ISO 14067, we established a product carbon footprint accounting system and completed full life cycle
original aspiration, walking side by side with consumers, employees, customers, suppliers, and all stakeholders
carbon footprint accounting for 11 products, six of which have obtained third-party certification. In addition, by
to jointly write a new chapter for Chinese brands on the path of sustainable development, and steadily move
leveraging AI algorithms to optimize logistics scheduling and scaling up the use of reusable packaging materials,
toward the goal of becoming a world-class M&G.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus
Stewardship Environment the Value Chain Communities Integrity
Appendix 03
About M&G
As one of the world's largest stationery manufacturers, M&G Stationery is a comprehensive stationery supplier and office service provider that integrates creative value and service advantages, advocates a fashionable stationery
lifestyle, and provides learning and work scenario solutions. It is committed to making learning and work happier and more efficient, with products covering writing instruments, student stationery, office supplies, and others. The
Company was officially listed on the SSE on January 27, 2015, with the stock code 603899.
M&G has an independent and complete business system covering brand and product design and development, raw material procurement, product manufacturing, supply chain management, warehousing and logistics, and
marketing network management. It has nearly 70,000 retail terminals nationwide and 900 retail stores such as Jiumu Store and M&G Life. At the same time, it launches thousands of new products every year based on market
demand, with its products exported to over 100 countries and regions and partners all over the world. As a popular domestic brand among Chinese consumers, M&G is pioneering innovation in Chinese stationery, achieving a
magnificent transformation from "Made in China" to "Created in China." In recent years, M&G's diverse products have been featured at high-level international events such as the APEC Summit, the Boao Forum for Asia and the Global
CEO Summit, demonstrating the Company's realize the vision of becoming a "world-class M&G."
M&G Business System
Brand and product design Raw material Product Supply chain Warehousing Marketing network
and development procurement manufacturing management and logistics management
Retail stores such as Jiumu Store and Products exported to
M&G Life
+
Revenue Total number of employees Retail shops nationwide
RMB 25.06 billion 5,503 Nearly 70,000
year-over-year
UP 3 %
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus
Stewardship Environment the Value Chain Communities Integrity
Appendix 04
M&G Business Layout Corporate Culture
M&G is comprehensively promoting four product tracks—mass market stationery segment, premium stationery
segment, arts and kids drawing segment, office stationery segment. It is actively exploring channel innovation
and vigorously developing large retail store business of Jiumu Store and M&G Life, as well as general materials
digital procurement service business of Colipu Group. It has created an independent, trendy, cultural, and
creative brand, More-Than-Fun (Qizhihaowan), and has subsequently acquired and invested in Axus Stationery
(which owns the well-known wooden pencil brand Marco) and the Norwegian high-end spine-protection
backpack brand, Beckman, accelerating its international expansion and continuously expanding its brand matrix.
Values
Consumer-centric mindset,
openness and inclusiveness,
sincerity, focus, and win-win
mindset
Cultural Core
Prioritizing the
well-being of others
before our own
Company Vision Company Mission
World-class M&G Make study and work more
joyful and effective
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus
Stewardship Environment the Value Chain Communities Integrity
Appendix 05
Ratings and Awards
MSCI ESG Rating Selected for the S&P Global CDP Climate Change Wind ESG Rating
AA Sustainability Yearbook 2026 B AA
Biodiversity Conservation in of Sustainable Development
ESG 100 Index
Industry and Commerce for Listed Companies
People's Daily Overseas Online
Ministry of Ecology and Environment China Association for Public Companies
Sustainability Pioneer Cases 2025 Corporate Green Transition Children's Charity Contribution
and ESG Practice Case Award
Corporate Sustainable Development Conference All-China Environment Federation Shanghai Children's Public Welfare Foundation
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus
Stewardship Environment the Value Chain Communities Integrity
Appendix 06
Sustainable Development Management
Sustainable Development Strategy
M&G has established its sustainability vision of "writing a sustainable business future." Centered on four strategic pillars: sustainable products, response to climate change, sustainable supply chain, and empowering employees and
communities, the Company has defined its 2022-2025 Sustainable Development Strategy. Committed to leading industry-wide sustainable development, M&G focuses on advancing sustainable consumption, green production,
responsible sourcing, employee growth initiatives, and equitable education programs.
Vision
Writing a sustainable business future
Becoming an industry leader in sustainable development, including:
Strategic Positioning
Sustainable consumption, green production, responsible procurement, focus on employee development and promoting equal education
Empowering employees
Sustainable products Response to climate change Sustainable supply chain
and communities
Producing sustainable Group-level carbon emission Supply chain management Management system of
products reduction targets system occupational health and safety
Sustainable design Improving energy efficiency, Anti-corruption management Employee training and career
concept energy conservation, and of supplier development system
Sustainable raw material consumption reduction Supplier capacity building Employee benefits
selection Optimizing energy Supply chain traceability Diverse and inclusive work
Four Pillars Chemical management consumption structure culture
system Green logistics Internal social support
Green office operation mechanism
Featured community activities
Systematic Foundation Responsible corporate governance: building a top-down corporate management and governance system
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus
Stewardship Environment the Value Chain Communities Integrity
Appendix 07
M&G's Sustainable Development Goals
During the reporting period, M&G officially released its 2030 Sustainable Development Goals, promoting the transformation of ESG from a concept into quantifiable, trackable, and actionable initiatives, and using these goals to
integrate sustainable concepts into business operations further. The goals were formulated based on research into domestic and international laws and policies, reference to industry-leading practices, and an assessment of the
Company's internal status. Following multiple rounds of discussions among the Company's core management team, the implementation path and specific annual action metrics were finalized. As 2025, the first year of implementing
these quantifiable goals, begins, the Company has linked sustainability goals to the performance reviews of business unit heads. By implementing a management cycle of "monthly tracking, quarterly review, and annual
assessment," resources are allocated, and timely adjustments are made in response to business evolution and environmental changes, ensuring steady progress of all objectives.
M&G's Sustainable Development Goals and Progress in 2025
Strategic Baseline Target
Goals Progress in 2025 Status
Pillars Year Year
To adopt sustainable design for 20% of products / 2030 Total of 262 products adopting sustainable design In progress
Sustainable
products1 To perform sustainable product evaluation for Fully integrating sustainable product evaluation into new product
development and review processes
In progress
To reduce GHG emissions from our own operations (Scope 1
Response 2021 2030 Reduced Scope 1 and 2 GHG emissions by 36% in 2025 compared to 2021 In progress
and Scope 2) by 42%
to climate
change2 Established an initial supplier carbon data management system and
To achieve carbon neutrality across the entire value chain. 2021 2050 In progress
collected carbon data from 80% suppliers
To ensure that 100% of key suppliers comply with M&G ESG guidelines / 2025 100% pass rate for key suppliers in ESG assessment and remediation Achieved
Sustainable 97 suppliers participated in the M&G ESG audit, achieving 100% coverage
supply chain
To ensure that ESG assessments and audits cover 80% of suppliers / 2030
of key suppliers
In progress
To integrate ESG requirements into all new supplier screening and Incorporated ESG risk assessment factors into the assessment system for
onboarding standards / 2025
new supplier development and onboarding
Achieved
To ensure that 100% of full-time employees are covered by the
training system / 2028 Employee training coverage reached 85.6% In progress
Empowering
employees and To maintain zero severe injuries and fatalities annually 2024 / Zero severe injuries and fatalities Achieved
communities
Since 2022, the Shanghai M&G Charity Foundation's educational charity
To achieve 10 million instances of empowerment 2022 2030 In progress
initiatives have generated over 2.03 million instances of benefit
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus
Stewardship Environment the Value Chain Communities Integrity
Appendix 08
Sustainable Development Governance
M&G has established a clear and well-structured sustainable development governance framework that integrates top-down coordination. During the reporting period, the Company released its Environmental and Sustainability
Policy 3, further clarifying a tiered governance system comprising the Board of Directors, the Strategy Committee, the Sustainability Office, various business units, departments and subsidiaries that drive the implementation of
sustainability strategy initiatives. The Company has established a Sustainability Office, led by the Chief Sustainability Officer (CSO). The team members possess professional expertise and experience in sustainability. To support key
projects under annual goals, the Company runs focused training sessions for managers on new trends and related topics to strengthen science-based decision-making skills across all governance levels.
M&G's Sustainability Governance Framework and Responsibilities
• Responsible for the comprehensive management and oversight of the Company's sustainable
development impact, risks, and opportunities; reviewing and approving sustainable
development strategies, goals, and disclosures; and supervising and reviewing sustainable
Board of development-related policies, management practices, performance, and target progress.
Decision-Making Directors
Strategy
• Responsible for breaking down sustainable development goals into actionable targets;
Committee
• Coordinating role assignments across business operations, conducting internal and external
sustainability communications and dissemination;
• Identifying and tracking ESG risks and opportunities;
• Reporting progress on strategic objectives to the Strategy Committee regularly.
Coordination Sustainability Office
• Responsible for the implementation of specific projects to achieve sustainable
All business units,
Execution development goals.
departments and subsidiaries
The Company implements dynamic monitoring and hierarchical management of ESG performance. Each business unit, department, and subsidiaries gathers and regularly reports key ESG data. The Sustainability Office tracks
ESG performance in real time, using the strength of sustainability governance as a measure of each function's efficiency, thereby reinforcing management accountability. Based on this feedback, the Board's Strategy Committee
reviews progress on key goals and allocates resources to link ESG aims with operations. Concurrently, the Company integrates sustainability-related impacts, risks and opportunities into business decision processes. This includes
prudent collaboration with high-risk suppliers and partners, or implementing risk management in line with standard procedures, to ensure the precise implementation of the sustainability strategy, thereby laying a solid governance
foundation for the organization's long-term, resilient growth.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus
Stewardship Environment the Value Chain Communities Integrity
Appendix 09
Management of Sustainability Topics
Double Materiality Assessment
The materiality assessment of sustainability topics serves as the foundation for M&G's sustainability planning, internal and external communication, and information disclosure. In accordance with the requirements of the SSE
Sustainability Report Guidelines , the Company conducted a quantitative upgrade of our assessment methodology this year, effectively linking sustainability-related opportunities and risks with specific financial metrics. Through
policy analysis, peer benchmarking, internal workshops, and cross-department interviews, we systematically identified and assessed "double materiality" with respect to the potential impacts of existing sustainability topics on our
finances (financial materiality) and our actual and potential impacts on the economy, society, and the environment (impact materiality). After submitting the assessment results to the Company's Risk Management and Compliance
Committee for review and confirmation, we developed M&G's 2025 Sustainability Material Topic Matrix. In the future, we will further optimize the assessment methodology for double materiality topics, enhance the level of
quantification and accuracy of the financial materiality assessment, and disclose it when the time is right, communicating transparently with stakeholders.
M&G's 2025 Sustainability Material Topic Matrix
By analyzing sustainability trends and industry dynamics, based on the requirements of the SSE
Sustainability Report Guidelines , and in conjunction with M&G's strategic planning and operational
High
priorities, we updated and confirmed 18 sustainability topics. Compared with the topics identified
in 2024, the following changes were made: "Labor rights," "Employee benefits," and "Training and Marketing and after-
Topic Library
sales Product quality and
Update development" were merged into the "Employee rights and development" topic, "Product quality"
Occupational health safety
and "Chemical safety" were merged into the "Product quality and safety" topic, "Response to climate Business ethics
and safety Technological
change" and "Carbon emissions and energy management" were merged into the "Response to
Employee rights and innovation
climate change" topic.
development
Based on the confirmed list of topics and through benchmarking studies, internal workshops,
Risk and and business interviews, we established a mapping relationship of "topics-processes-impacts," Information
Opportunity security and privacy
Identification preliminarily identified and verified the trigger points of key risks and opportunities in business protection Environmental
Supply chain
Impact Materiality
processes, and clarified the chain of impact transmission on our operations. compliance
Social welfare management
and pollutant
Diversity and equal management Sustainable
Financial materiality assessment: Based on risk and opportunity identification, we matched each opportunities products
Risk management
topic with existing accounting items and available financial data, established a basis for quantitative Corporate
analysis, scored each topic for the degree of financial impact and likelihood of occurrence and, based governance
on the composite average score calculated as well as defined thresholds, prioritized the topics with
financial materiality After incorporating the opinions of internal experts and senior management, we
Topic
Materiality formed the financial materiality assessment results for all topics.
Assessment Impact materiality assessment: We distributed survey questionnaires to 13 stakeholder groups,
Biodiversity Response to climate
including Board members, investors, employees, suppliers, and consumers, inviting them to Waste management
Water utilization change
score each topic across two dimensions: degree of impact and likelihood of occurrence. Weighted
calculations were performed on the scores based on the perspectives of each group, and the topics
were then prioritized. This year, a total of 742 valid questionnaires were collected.
General
Development Based on the results of financial materiality assessment and impact materiality assessment, we Not material Financial Materiality Material
of the Double
prepared a topic matrix and reported it to the Company's Risk Management and Compliance
Materiality
Matrix Committee. M&G's double materiality topic matrix was thus reviewed and confirmed.
Note: In this Report, a topic marked with " " is financially material as assessed by the Company.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus
Stewardship Environment the Value Chain Communities Integrity
Appendix 10
Impacts, Risks and Opportunities
M&G follows the principle of double materiality and attaches great importance to the potential impacts of sustainability topics on our business value, especially those with high financial materiality. Through a systematic assessment
mechanism, we identify and manage the risks and opportunities associated with these topics to enhance our strategic resilience and create long-term value. The Company has integrated the management of sustainability-
related risks and opportunities into our overall strategy and enterprise-wide risk management system. Leveraging our existing the "three lines of defense" risk management system, we have clarified the responsibilities of business
departments, functional departments for risk management, and the Audit Department, established a normalized risk monitoring and early warning mechanism, and ensured that material financial risks are preventable and
controllable.
Specific Risk/ Impacts Affected Value
Topic Potential Impacts Response Measures
Metric Opportunity Timeframe4 Chain Processes
Upstream of Stricter, higher-level product quality testing and
the value chain, chemical management require additional capital Strengthen the development of the product quality and
Short,
corporate investment. Meanwhile, quality-related negative safety management system to reduce quality risks, while
Product quality Risk medium, and
operations, incidents may lead to product recalls, damage to brand strictly controlling the quality and safety of raw materials
long term
downstream of reputation, and other consequences, thereby affecting and finished products across the supply chain.
the value chain our revenue.
Product quality
and safety
Consumers are paying increasing attention to the health Continue to invest in the R&D of food-grade children's
Healthy and safety of stationery products. High-value-added art supplies while implementing chemical safety
Medium and Downstream of
and safe Opportunity products with higher safety standards can unlock new management standards that are more stringent national
long term the value chain
products profit growth drivers and promote growth in revenue standards, and raise consumers' awareness of product
and operating performance. health and safety.
If our core technologies are infringed upon or
Improve the intellectual property compliance
maliciously imitated by third parties, our differentiated
Corporate management system, embedding intellectual property
Intellectual competitive advantage may be weakened, leading to the
Medium and operations, risk identification into the end-to-end business process,
property Risk loss of market share and potential revenue. Additionally,
long term downstream of and join forces with multiple parties to strictly combat
protection involvement in intellectual property disputes or
the value chain infringement, safeguarding market share and brand
litigation may result in extra legal and compliance costs,
reputation.
as well as compensation liabilities.
Technological
innovation
Through automated production and process
improvements, we can directly reduce energy, material,
Innovation
and labor costs and improve profit margins. Over the By establishing an R&D innovation system and increasing
in materials, Medium and Corporate
Opportunity long term, technological innovation is favorable for R&D investment, we continuously enhance our
process, and long term operations
higher product pricing, new business expansion, and technological innovation capabilities.
design
asset revitalization, bringing sustainable value creation
to the Company.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus
Stewardship Environment the Value Chain Communities Integrity
Appendix 11
Specific Risk/ Impacts Affected Value
Topic Potential Impacts Response Measures
Metric Opportunity Timeframe4 Chain Processes
Improve the supplier ESG risk assessment system,
Upstream of The extent to which suppliers manage their governance,
incorporate ESG metrics into supplier onboarding,
Responsible the value chain, environmental, and labor practices affects the stability
Risk Short term management, and performance evaluation, and support
procurement corporate and security of the supply chain, as well as our
suppliers in enhancing their ESG risk management
operations reputation and profitability.
capabilities.
Supply chain
management Green procurement brings opportunities for the Establish a product carbon footprint accounting and
Upstream of
Company to enhance supply chain resilience, meet analysis platform, integrate the carbon footprint concept
the value chain,
market demand for low-carbon products, and obtain a into the product life cycle, support the development
Green Medium and corporate
Opportunity green premium. Despite the increase in procurement of a low-carbon product series, and actively carry out
procurement long term operations,
costs in the short term due to material upgrades, it helps supplier empowerment training to promote coordinated
downstream of
reduce compliance risks and enhance brand value in the green and low-carbon transformation across upstream
the value chain
long term. and downstream.
Conduct joint supply chain R&D and innovation, expand
The unit purchase prices of sustainable raw materials
upstream and downstream cooperation, build a circular
such as recycled materials and bio-based materials are
Upstream of economy system, and drive cost reduction through the
Sustainable higher than those of traditional raw materials, which
Short and the value chain, scaling up of substitute materials; meanwhile, closely
materials Risk may increase production costs. Meanwhile, ensuring
medium term corporate follow policy trends and market dynamics, carry out
substitution compliance of raw materials through traceability and
operations certification based on demand, and optimize the
green certification incurs management and compliance
effectiveness of resource allocation for sustainable
costs, which can constrain short-term profits.
Sustainable products.
products
With growing consumer attention on the environmental Clarify quantitative strategic objectives for sustainable
attributes of products, proactively developing a green products, formulate the Sustainable Product Evaluation
Green Medium and Downstream of
Opportunity product portfolio presents an opportunity to expand Standards , and gradually integrate the sustainability
consumption long term the value chain
differentiated growth, while building long-term market concept into the entire chain of product development
competitiveness and revenue streams and marketing.
Upstream of
Acute and
the value chain,
chronic Short, Heightened regulatory compliance requirements and Develop and implement carbon emission reduction
corporate
physical risks Risk medium, and increased climate-related physical and transition risks targets and plans, and continuously advance energy
operations,
and transition long term increase operating costs across multiple dimensions. conservation and emission reduction initiatives.
downstream of the
risk
value chain
Response
to climate
change5 Resource Upstream of Improvements in resource and energy use efficiency Improve data management and the quality of
efficiency, the value chain, driven by the low-carbon transition can reduce operating information disclosure to enhance the transparency of
Short,
brand corporate energy consumption expenses and hedge against climate actions and performance; embed the climate
Opportunity medium, and
reputation, operations, potential carbon trading costs, and enhanced climate strategy into corporate governance and our brand
long term
and market downstream of the governance helps improve ESG ratings and strengthen culture, and continuously enhance the brand's green
opportunities value chain brand credibility. assets.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus
Stewardship Environment the Value Chain Communities Integrity
Appendix 12
Stakeholder Engagement
M&G is committed to establishing two-way, unimpeded, and regular communication channels with all stakeholders. Through diverse communication formats, we enable timely understanding and addressing of stakeholders'
concerns and expectations.
Government
Shareholders Consumers and Community and Industry
and Regulatory Suppliers Channel Partners Employees Media
and Investors Customers General Public Associations
Departments
Product quality Marketing and Sustainable products Business ethics Business ethics Occupational health and Waste management Environmental Sustainable
and safety after-sales safety compliance and products
Supply chain Product quality Marketing and Environmental pollutant control
Supply chain Product quality management and safety after-sales Product quality and safety compliance and Employee rights
management and safety pollutant control Product quality and development
Business ethics Supply chain Technological Employee rights and and safety
Concerned Social welfare Supply chain management innovation development Response to climate Workplace health
Material management change Sustainable and safety
Topics Business ethics Technological products
innovation Product quality and Business ethics
safety
Company
governance
Special reports General Product sales and Bidding Channel Internal emails Collaboration and Official website Forums and
meetings promotion cooperation exchange and corporate seminars
Participation Supply chain conference Performance interview WeChat account
in government Investor After-sales service conference Charity projects and Participation in
meetings meetings Marketing Employee satisfaction survey activities Media interview industry standard
Consumer survey Contract signing conference and cooperation formulation
Supervision and Performance and execution Training and workshop Official website
assessment briefings Customer Market visits and WeChat official Forums and Project
satisfaction survey Daily business Employee clubs and account seminars collaboration
Field research Information communication Daily business activities
disclosure Exhibition events communication Information Visit and
Communication Information Supplier training Annual company meeting disclosure communication
Mechanisms disclosure Official website and
and Methods corporate WeChat Supply chain esg Internal corporate culture
account assessment and platform
on-site audit
Employee suggestion
platform
Cooperation and dialogue
Public welfare projects and
activities
Official website and
corporate WeChat account
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 13
Stewardship Environment the Value Chain Communities Integrity
Focus: Sustainable Product Innovation and Practice
Sustainable products are a core pillar of M&G's sustainability strategy. Since the launch of the carbon-neutral product series in partnership with Meituan's "Lush Mountain Plan" in 2023, we have gradually established a systematic
sustainable product development system, prioritizing the use of recycled, recyclable, and biodegradable materials. By implementing the Sustainable Product Evaluation Standards 6 , we have integrated sustainability evaluation into
the new product R&D process, enhancing the sustainability attributes across the entire product life cycle. Meanwhile, we actively innovate consumption scenarios, promote cross-industry collaboration and co-creation, and translate
"Writing a Greener Future" from a brand proposition into concrete actions to build a green consumption ecosystem.
Sustainable product strategy and goals 2025 highlights and progress
Sustainable design was adopted for 262 products.
By 2030
Sustainable product evaluation was fully integrated into the new product development and
Products adopting sustainable New product development undergoing
review processes.
design sustainable product evaluation
The "Huanbaoji" sustainable product portfolio was optimized, with the newly launched
LOHAS sustainable lifestyle series and "Eco+ Office" low-carbon product series.
Sustainability communication activities reached over 440 million individuals throughout
the year.
Sustainable Product Portfolio Layout
M&G continues to improve the "Huanbaoji" sustainable product portfolio through insights into the needs of individual consumers and corporate customers. We have established a differentiated sustainable product strategy for both
the retail and corporate business, providing the market with diverse green product options.
Corporate business
Centered on the two core themes of "biodiversity" and "sustainable lifestyles," we translate Focusing on the green transformation needs of government and enterprise procurement
Retail business
broad sustainability topics into tangible product experiences, adding another emotional and leveraging product life cycle assessment, we provide corporate customers with end-to-
(To B)
(To C)
element to eco-friendly raw materials and building deep resonance on environmental end solutions from green design to carbon reduction quantification by delivering verifiable
values and emotional connection between the brand and young consumers. and traceable emissions reduction data.
"Writing a Greener Future" Green Label
M&G references relevant domestic and international standards and certification specifications for green products, has formulated and implemented the
Sustainable Product Evaluation Standards 6, and conducts comprehensive evaluations of products from product safety, resource conservation, green and low-
carbon, sustainable design, and social value dimensions.
For products that passed the evaluation, we have designed an exclusive green label symbolizing green circulation. Consumers can quickly identify M&G
sustainable products through the green label on the packaging, thereby making more eco-friendly consumption choices with ease. M&G Sustainable Product Green Label
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 14
Stewardship Environment the Value Chain Communities Integrity
Sustainable Product Series
"LOHAS" Series "Endangered Animals: Wetland" Series
The barrel of the polylactic acid (PLA) biodegradable This series uses polylactic acid (PLA)
gel pen in this series is made of polylactic acid biodegradable materials and recycled plastics
derived from biomass such as corn, and can naturally as the primary raw materials for pen barrels,
decompose under composting conditions after helping to reduce plastic waste and pollution. By
disposal. minimizing the risk of animals ingesting plastic
or becoming entangled in it, the design aims to
The barrel of the mechanical pencil in this series is made
protect wildlife.
from recycled polypropylene (RPP), effectively enabling
resource circularity. In collaboration with the Mangrove Conservation
Foundation (MCF), the series incorporates the
Parts of the recycled ruler set are made from recycled
images of five endangered wetland species,
plastic bottles, and the packaging features a reusable
including the Black-faced Spoonbill and Oriental
design—after use, it can be transformed into a 6-inch
Stork, into its packaging. This initiative raises
photo frame.
consumer awareness of wetland conservation
The reduced-plastic correction tape features a hollowed- and biodiversity.
out casing design, cutting plastic usage by 20%.
"Eco+ Office" Low-Carbon Product Series "Rare Animals" Series
In collaboration with the Center for
All plastic components of the series have been
Environmental Education and Communications
replaced with recycled plastics, significantly
of the Ministry of Ecology and Environment, M&G
reducing the use of virgin plastics and cutting the
launched the "Earth Guardians" initiative and
products' carbon footprint at the source.
jointly introduced a series of stationery themed
Each product has completed a full life cycle carbon around rare animal conservation, including gel
footprint calculation with reference to the ISO pens, kraft paper notebooks, and other writing
period, a total of six products had obtained
The notebook series is co-developed by M&G
carbon footprint certificates issued by third-party
together with value chain partners Suzano and
organizations, ensuring the
Sun Paper, achieving carbon neutrality across
accuracy and transparency
the full life cycle from raw material sourcing,
of emissions reduction data.
transportation, production, use, to disposal. It is
the first paper product in China to obtain the ISO
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 15
Stewardship Environment the Value Chain Communities Integrity
Sustainable Design
In 2025
M&G fully embeds the Sustainable Product Evaluation Standards into our new product R&D management system, and organizes dedicated training on sustainable product
design for product designers, driving sustainable concepts to extend from writing instruments to our full range of business categories. We take lightweight, reuse, recycling, Sustainable design was adopted for
and safety and health as the core principles of sustainable design, aiming to optimize the environmental performance throughout the full life cycle of our products, from raw
material sourcing to end-of-life disposal. By the end of the reporting period, we had adopted sustainable design for 262 products, and in the future, we will continue to scale
up R&D and market supply of sustainable products.
M&G Professional High-Capacity
M&G Drop-Shaped Retractable Gel Pen M&G Clean-Erase Erasable Colored Pencils M&G Plastic Document Box
Oil-Based Fineliner
Lightweight design: The pen barrel adopts Extra-large capacity design: Each pen Recyclable packaging: The pencils are Material structure optimization: On the
a drop-shaped hollow-out design, reducing writes as long as two standard fineliners, packaged in kraft paper boxes using single- premise of strictly ensuring the product's
plastic use by 15%, with a lighter feel in offering extended longevity and excellent color printing to reduce environmental mechanical performance and appearance
hand. cost-performance. impact. quality, we achieved 30% to 40%
replacement of virgin plastic with recycled
Paper savings: Errors can be quickly erased
plastic in product components.
and adjusted to minimize paper waste.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 16
Stewardship Environment the Value Chain Communities Integrity
Green Consumption Advocacy
In 2025
Sustainability-related marketing
M&G is committed to leveraging its brand influence to promote the widespread adoption of sustainable consumption by establishing a multi-dimensional mechanism to activities reached
guide green consumption and mobilizing the strengths of all sectors. During the reporting period, our sustainability-related marketing activities reached over 440 million
+
individuals.
End-use scenario development "Green Credits" incentives
Across more than 860 nationwide Jiumu Stores, a dedicated sustainable Jiumu Store has established a "Green Credits" member incentive
products section has been set up at the core endcap location of the pen mechanism. Consumers who purchase products bearing the M&G Green
display counter. In partnership with suppliers, we have also introduced Label at our stores or in the membership mall can earn Green Credits.
environmentally friendly corrugated cardboard display racks, rolled out by Through quantified benefits and rewards, we cultivate consumers' low-
channel partners in 12 provinces, driving green collaboration across the carbon purchasing habits. During the reporting period, 12.3 million Green
distribution network. Credits were issued.
Jiumu Store's "Lights Off for One Hour" Pop-up Event
Integrated marketing communications Participation in international agendas
The Company deepens sustainable communications through coordinated M&G sustainable products frequently feature at high-level international
online and offline channels. Online, dedicated sustainable product sections forums and major industry events. During the reporting period, these
have been established on our self-operated e-commerce platform, and products were showcased at major domestic and international events,
themed marketing campaigns are carried out in collaboration with major including the Boao Forum for Asia, the Shanghai International Carbon
platforms such as Tmall and JD, we partner with One Planet Foundation Neutrality Expo, and the 2025 United Nations Climate Change Conference
(OPF) to carry out pop-up events themed on "Lights Out for One Hour," (COP30), demonstrating the China's stationery industry's practical
"Happy Cooperation," etc., transforming sustainable concepts into tangible, achievements in responding to climate change and advancing the circular
interactive experiences. economy to a global audience.
M&G Sustainable Products at the Boao Forum for Asia
Case "Happy Cooperation" Pop-up: Evoking Resonance with Sustainable Values among Young Consumers
On July 5, 2025, M&G partnered with OPF to host the "Happy Collaboration" themed pop-up event at HAI550, a landmark for sustainable lifestyles
in Shanghai. Taking signing and contract execution as the creative starting point, the event created an immersive space for people to enter into
agreements with nature and with all things, making M&G Sustainable Products a connection point between consumers and a better life, and
establishing an emotional contract between the brand and young consumers.
During the event, M&G launched the new "LOHAS" series of "Huanbaoji" and pledged to donate 1% of the series' sales revenue directly to OPF,
turning consumer participation into tangible actions to protect the Earth. On the day of the event, emerging star Yuncheng He appeared as
the "Sustainable Living Advocate," collaborating with influencers across multiple fields for interactive sharing. Together with seven brands, the
initiative achieved cross-sector engagement, generating over 50 million total impressions and 2.6 million interactions. It not only expanded the
reach of sustainability topics beyond traditional circles but also reshaped public perception, turning sustainable living into a lifestyle that is easy
to experience, participate in, and share.
"Happy Collaboration" Pop-up Event
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 17
Stewardship Environment the Value Chain Communities Integrity
Product
Stewardship
As one of the world's largest stationery manufacturers,
M&G Stationery has always adhered to a consumer-
centric approach and established a responsibility
management system covering the entire product
life cycle. We exercise stringent control over quality
and safety, promote sustainable product innovation,
and continuously optimize after-sales services
and marketing mechanisms. Through integrity in
operations and an outstanding experience, we have
earned long-term trust from consumers. In the future,
we will continue to craft products with dedication,
promote green consumption through responsibility,
and lead the industry's sustainable development.
Our goals
By 2030
To adopt sustainable design for 20%
To perform sustainable product evaluation for 100%
Topics addressed in this section
Sustainable products
Product quality and safety
Marketing and after-sales
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 18
Stewardship Environment the Value Chain Communities Integrity
Sustainable Products
M&G deeply embeds sustainability requirements into its business processes by building a full life cycle management approach spanning from R&D design to production and manufacturing, ensuring that every green innovation can
be accurately translated into a high-quality product experience. We strive to achieve breakthroughs in key areas such as sustainable material substitution, low-carbon process improvements, and packaging lightweighting, and take
concrete actions to fulfill our long-term commitment to consumers and the environment.
Governance Strategy Opportunity and Risk Management
M&G has established a sustainable product governance structure with M&G continues to focus on the market opportunities brought about M&G has established a systematic mechanism for managing sustainable
clear responsibilities to ensure the effective implementation and oversight by the green and low-carbon transition. We have identified that policy product opportunities and risks. On the opportunity side, by regularly
of the sustainable product strategy. The Board of Directors and its Strategy guidance and shifts in consumer preferences are jointly driving growth conducting market research, benchmarking against competitors,
Committee review and oversee the strategic direction, goal setting, and in demand for sustainable products, presenting us with opportunities participating in industry conferences and standard-setting, we
key management systems for sustainable products. We have established a to optimize our product mix and secure long-term growth drivers. In proactively assess the market opportunities arising from green
cross-center sustainable product development task force coordinated by the process of implementing our strategy, we simultaneously identify consumption trends and China's "Dual Carbon" strategy. On the risk
the Sustainability Office to promote the application of sustainable design and manage associated transition risks, particularly the risk of rising side, backed by the Company's quality control system, we prudently
concepts in our products and drive sustainable product development costs of sustainable material procurement and compliance certification. identify and address transition risks arising from the green premium
from the front end of design. The supply chain, production, and technical To address this, we will leverage technological innovation and lean for sustainable materials and compliance certifications, ensuring that
departments are responsible for implementation, such as the adoption management to balance environmental investments with business our products meet market access standards and customer needs in
of sustainable materials and the development of sustainable suppliers. returns, ensuring the robust implementation of its sustainability strategy. domestic and overseas markets.
We have established strategic goals for sustainable products and
incorporated the number of sustainably designed products as a bonus
item in the annual performance evaluations of the heads of relevant
business centers, thereby achieving a closed-loop execution mechanism
from strategic goals to management accountability.
Targets, Management Measures, and Performance
Strategic Pillars Goals Progress in 2025
To adopt sustainable design for 20% of products by 2030. Total of 262 sustainable products adopting sustainable design.
Sustainable products
To perform sustainable product evaluation for 100% of new product Fully integrating sustainable product evaluation into new product
development by 2030. development and review processes.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 19
Stewardship Environment the Value Chain Communities Integrity
Sustainable Product Evaluation
M&G released its first sustainable product evaluation standards in 2023, and in 2024 expanded the scope of application from writing instruments to multiple product lines. It has now been fully applied to the new product
development process. Drawing on both domestic and international green product certification frameworks, and tailored to the characteristics of our product portfolio, the Standards conduct a comprehensive evaluation across
five dimensions: product safety, resource efficiency, green and low-carbon performance, sustainable design, and social value. Through this approach, we have established a differentiated and industry-leading sustainable product
evaluation system.7
M&G Sustainable Product Evaluation Dimensions
Product safety Resource efficiency Green and low-carbon impact Sustainable design Social value
Comply with M&G's control Use sustainable materials with Reduce carbon emissions Adopt longer-lasting, replaceable, Procure from suppliers that meet
requirements for product quality environmental certifications or throughout the product life cycle, reusable, repairable, or more M&G ESG requirements; promote
and chemical safety (mandatory recycled/reclaimed content; use and obtain relevant green product universal designs. sustainable concepts in product
compliance item). recyclable, reusable, safer, and more certifications. design elements.
environmentally friendly packaging
materials.
Green Product Certification
M&G actively responds to policy guidance and customers'
M&G Products Obtaining Sustainability-related Certifications in 2025
green procurement needs, and has developed a portfolio
of green-certified products, as well as products made with Certification Category Standard/Certification Product Examples
certified sustainable materials. The recycled plastic used in
EU RoHS Certification Packaging tape, etc.
the "Huanbaoji" series gel pens is certified under the Global
Recycled Standard (GRS). The Red M&G Multifunctional China RoHS Certification Smart chessboard, portable timer, rotary timer, etc.
Printer Paper holds Forest Stewardship Council (FSC) Safety-related
EU REACH Regulation Ink used in heat erase gel pens and highlighters
Certification. Multiple laser printers have obtained China
Energy Conservation Product Certification; Other products, EU EN 71-3 Safety of Toys M&G Safe Crayon of MG Kids collection, modeling clay, etc.
such as copy paper and toner cartridges, have obtained
Certification under China's Hygienic Requirements of Study
China Environmental Labeling Product Certification (Ten
Products for Myopia Prevention and Control in Children and Eye protection printer paper, etc.
Ring Certification). We have continued to expand both Health-related Adolescents
the range of green certifications and the scope of certified
German IGR Ergonomics Certification Spine protection schoolbag
products. Meanwhile, Colipu Group has incorporated
environmental management and green product-related "Eco+ Office" Series stapler, whiteboard marker, permanent marker, glue
ISO14067 Product Carbon Footprint Certification
stick, etc.
metrics into the supplier access evaluation system. As of
the end of the reporting period, Colipu Mall offered nearly ISO14068 Carbon Neutral Certification "Rare Animal" Series notebook
GRS Certification Recycled plastics used in "Huanbaoji" Series gel pens
Green Product, China Environmental Labeling Product (Ten Environment-related
China Environmental Labeling Product Certification (Ten
Ring Certification), FSC, and Program for the Endorsement Printer paper, toner cartridges for laser printer
Ring Certification)
of Forest (PEFC), effectively driving the value chain's
transition toward green development. China Energy Conservation Certification Monochrome single-function laser printer
FSC Certification Red M&G multifunctional printer paper
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 20
Stewardship Environment the Value Chain Communities Integrity
Case Colipu Group's Low-Carbon Supply Chain Development
In October 2025, at the 12th Shanghai Supply Chain Development Conference hosted by the Shanghai Supply
Chain Development Conference, Colipu Group was awarded the title of "2025 Shanghai Low-Carbon Supply
Chain Benchmark Enterprise," becoming the only enterprise in the government and enterprise procurement
sector to receive this honor. The 2025 Shanghai Low-Carbon Supply Chain Benchmark Enterprise Casebook
released at the conference aims to showcase and promote best practices in carbon reduction and green
development, highlighting supply chain leaders that have made outstanding contributions to low-carbon
transformation. Colipu Group was selected for inclusion with its innovative case, "From Green Procurement
to Digital-Intelligent Collaboration: Building a Low-Carbon End-to-End Value Chain." In addition, in terms
of green management system development, Colipu Group obtained the GB/T 33635-2017 Green Supply
Chain Management System Certification in 2023, and, for its outstanding performance in environmental
management, social responsibility, resource utilization, and circular economy, was rated at the highest level
(five-star).
Colipu Group Awarded "2025 Shanghai Low-Carbon Supply Chain Colipu Group's Green Supply Chain
Benchmark Enterprise" Management System Certification
Five-Star Certificate
Sustainable Materials
M&G expands the application of new materials in products through materials R&D and technological innovation. In terms of plastic applications, by using
recycled plastics, bio-based (biodegradable) plastics, and filler materials, we reduce our reliance on traditional petroleum-based plastics. Meanwhile,
the Company continues to strengthen traceability management of sustainable raw materials, prioritizing the procurement of materials certified by third
parties (e.g., GRS and FSC), and selecting materials that meet food-grade safety standards for children's art products, thereby enhancing the health and
safety performance of the materials. Taking writing instruments as an example, we have innovatively developed, and applied lead-free, eco-friendly pen
tip materials to prevent lead contamination and harm to human health at the source of production, and have also developed Pickering emulsion ink to
enable longer writing length with the same ink volume, thereby extending product lifespan and reducing waste generation.
Ballpoint Pen using Pickering Emulsion Ink
Case Beckmann Promotes Plastic and Carbon Reduction across its Full Product Line
Beckmann, a subsidiary of M&G, is committed to driving the sustainable transformation of the textile industry through the application of circular
materials. Since 2002, Beckmann has incorporated recycled polyester (RPET) fabrics into its schoolbag range, and now uses recycled materials
derived from post-consumer plastic bottles as the primary input for all schoolbags. Certified under GRS and OEKO-TEX STANDARD 100, these
materials ensure traceability and safety while reducing CO2 emissions by 70%.
Beckmann is also advancing further green solutions, including R&D to shift lunch boxes and water bottles to stainless steel, and plans to replace
virgin low-density polyethylene (LDPE) packaging with 100% recycled LDPE from 2026. This enables plastic reduction and circular substitution
across core products and accessories, reinforcing its commitment to the circular economy and setting a benchmark for low-carbon development in
the global stationery and education supplies sector.
Beckmann Recycled
Plastic Product
Label
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 21
Stewardship Environment the Value Chain Communities Integrity
Sustainable Packaging
In 2025
M&G promotes the green transformation of packaging through initiatives across three major dimensions: eco-friendly material selection, lightweight design, and circular
packaging. In terms of material selection, we prioritize the use of biodegradable and recyclable materials for product packaging. All paper boxes used for the Company's M&G and its subsidiaries reused cartons
self-manufactured products are printed with environmentally friendly soy-based ink, which is more readily biodegradable and effectively reduces volatile organic compound cumulatively
(VOCs) emissions during the printing process. During the design stage, we implement the lightweight principle by removing redundant packaging layers, optimizing
packaging dimensions, and promoting minimalist designs. While ensuring product safety and user experience, we minimize material consumption to the greatest extent
possible. Meanwhile, we actively promote the circular use of logistics packaging by establishing a second-hand carton recycling system across e-commerce shipments,
store deliveries, and inter-plant transfers to reduce the single-use of cartons. M&G Logistics Center identifies opportunities to streamline packaging for existing products. It million
has replaced the logistics packaging for markers with cardboard and courier bags, and promoted this solution across 48 products, covering approximately 140,000 parcels.
During the reporting period, by actively promoting packaging recycling and reuse, M&G and its subsidiaries reused 2.25 million cartons cumulatively.
Case Display Rack Improvements Achieve Dual Benefits in Plastic Reduction and Cost Relief
Conventional notebook display racks are prone to product tilting and deformation, which can affect in-store presentation. After receiving feedback from channel partners, we immediately launched a dedicated
improvement initiative to address these issues. We redesigned the support structure, optimized rack configuration and back panel height, and precisely adjusted the bottom tilt angle, effectively resolving stability issues
while reducing plastic usage by approximately 20%. Following this structural optimization and upgrade, reduced plastic usage enabled a roughly 50% decrease in both cost and selling price per display rack, effectively
improving channel profitability while reducing environmental impact. This resulted in dual benefits of "plastic reduction" for the racks and "cost relief" for distributors.
Plastic usage reduced by approximately
Costs and selling prices simultaneously
decreased by approximately
Conventional Racks Cause Products to Tilt Forward Optimized Racks Enhance Product Display Quality
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 22
Stewardship Environment the Value Chain Communities Integrity
Product Quality and Safety
M&G regards high-quality products and services as the lifeline for our survival and development, and as the cornerstone for winning consumer trust and achieving sustainable development. We have established a quality management
system covering the full product life cycle, integrating quality and safety concepts into every step of R&D, procurement, production, sales, and services. With outstanding product quality, we safeguard consumers' rights and interests
and fulfill our commitments to stakeholders.
Governance Strategy
M&G has established and continuously optimized the governance and M&G has established a normalized product quality and safety risk control mechanism, and prudently manages the financially material impacts
management structure for product quality and safety. The Board of Directors of product quality and safety risks on our long-term competitiveness. In terms of quality management, we have established a sound quality
is responsible for approving the Company's overall product quality and safety management system covering the entire product life cycle by formulating and implementing internal policies and procedures such as the
strategy, guidelines, and major policies, and regularly monitoring trends in Management and Control Procedure for Product Safety , the M&G Product Audit Sampling Mechanism , and the Quality Risk and Opportunity
key performance metrics. At the management level, the President and the Control Procedure , thereby preventing unexpected operating losses resulting from rework, scrapping, and compliance penalties. In terms of
responsible Vice President are responsible for formulating our product quality chemical safety, the Company, through the Chemical Management Policy , clearly sets out specifications on chemical management principles, the
and safety strategic guidelines. For chemical safety, we have established a prohibition and phase-out of chemicals, safety standards and certification requirements, product audits, and suppliers' chemical management. In
Chemical Management Committee composed of the Sustainability Office, accordance with updates to laws, regulations, and policies, key points of consumer and market concern, and the expansion needs of our business
Procurement Center, Production Center, Technical Center, and Quality Center. and products, we regularly update the "High Concern Chemicals Control List" for prohibited or restricted chemicals to avoid legal compliance risks
The committee is responsible for coordinating chemical-related management and proactively make adequate preparations in advance for potentially more stringent international chemical safety standards during our overseas
matters and advancing the implementation of the chemical restriction and expansion process. In addition, we proactively identify consumer groups' demand for higher safety and quality. By expanding the use of safer
phase-out plan. All product departments, the Production Center, Quality materials such as food-grade materials, we seize opportunities for differentiated competition and brand premium amid the wave of consumption
Center, Technical Center, Procurement Center, and Supply Chain Management upgrading.
Center jointly carry out full-process quality inspection and control from
product development and design, raw material procurement, to product
shipment.
M&G Quality Management System M&G Product Quality Control Process
M&G has set up a dedicated Quality Center, building a quality management
Design and • Define product quality objectives and requirements, and verify the feasibility and rationality of the design;
system that includes Quality Control (QC), Quality Assurance (QA), and Quality
Development • Produce samples and conduct performance and reliability tests, improving designs based on test results.
Engineering (QE). The system covers the entire process from product design
and development, raw material procurement, production processes, finished
product inspection, to after-sales service. Meanwhile, for writing instruments, • Evaluate and select suppliers in strict accordance with supplier management measures, and sign quality
our core category, we have established eight detailed control checkpoints, Raw Material
agreements to define quality requirements and responsibilities;
Procurement
including new product review, product assembly inspection, retention • Inspect raw materials upon arrival using sampling or full inspections, determining acceptance based on results.
sample management, and grid-based business partner management, and
defined inspection procedures and guidelines for each checkpoint. During the
reporting period, the Quality Center systematically reviewed our overall quality • Establish key quality control points and conduct scheduled inspections and sampling to monitor production
management system, updated the Quality Management Control Procedures , Production process stability;
Process • Operators perform self-inspections and mutual inspections, and strictly segregate, label, review, and handle
and formulated the Injection-Molded Parts Inspection Management Provisions,
Assembly Inspection Regulations and other policies, further improving the non-conforming products.
product quality management system and quality control processes.
• Conduct final inspection on product appearance, performance, and packaging according to quality standards;
Final Product
Inspection
• Process warehousing for qualified products, and handle non-conforming products according to non-
conformance procedures.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 23
Stewardship Environment the Value Chain Communities Integrity
Risk Management
M&G incorporates product quality and safety risks into the overall risk management system. By benchmarking
against internationally recognized management standards such as ISO 9001, the Company has established
specific management system policies and objectives. Through regular internal audits and monthly statistical
analysis of non-compliant items, we implement closed-loop tracking and verification of corrective and preventive
measures. At the same time, leveraging the continuous improvement methodology of the M&G Business System
(MBS), we carry out cross-center special improvement projects to ensure the sustained and robust operation of
the quality management system and to drive continuous improvement in product quality.
Management Measures and Performance
M&G Headquarters and Core Subsidiaries (e.g., Colipu Group and Axus Stationery) Have All
Passed ISO 9001 Quality Management System Certification
M&G has continued to carry out dedicated quality improvement initiatives to enhance product quality and safety, and, with a craftsman's spirit of excellence, to build a benchmark for high quality. We continue to strengthen
chemical safety management to standards more stringent than the requirements of laws, regulations, and supervision, and gradually phase out chemicals of high concern. We proactively seek alternative materials with higher safety,
while continuously improving product information disclosure to enhance transparency in product safety. During the reporting period, the Company did not experience any significant responsibility incidents related to the safety and
quality of products and services.
Quality Improvement Initiative
M&G deeply embeds lean management into our quality governance system. Drawing on the essence of the Danaher Business System (DBS) and integrating it with our business realities, we have developed the M&G Business System
(MBS) methodology. Focusing on continuous improvement, a nine-step process—covering topic selection, current-state assessment, root cause analysis, countermeasure implementation, and recurrence prevention—creates a
closed-loop system that addresses quality issues from on-site detection to root-cause resolution. In 2025, M&G launched a special initiative for full value chain quality improvement, covering more than ten key product categories
including writing instruments, correction tapes, paper notebooks, and calculators.
R&D and design stage Raw material stage Production and testing stage Retail stage
The Quality Center fully demonstrated the The Supply Chain Management Center The Production Center focused on Jiumu Store implemented targeted
correlation between product user experience implements early-stage mobility improving quality issues arising during corrections for warehouse and quality
and quality metrics and carried out targeted management for 'Three New' products production and testing due to processes, issues, held dedicated review meetings
improvements, with a focus on enhancing involving new materials, structures, and equipment errors, and other factors. We and initiated batch-level improvement
the performance of heat erase products processes. By focusing on structural added visual inspection to a number of projects to address problems such as
to achieve first-class industry standards. A design reviews and mold validation, testing devices, converting inspected damaged packaging and abnormal fan
total of five internal training sessions related the Center ensures product quality products into image signals for analysis charging, effectively safeguarding product
to quality improvement were conducted while institutionalizing exports M&G's via dedicated systems, enhancing quality at the point of sale.
during the year, and the quality defect rate standardized quality management detection accuracy and minimizing false
decreased by 81% compared with the same systems to empower suppliers.. positives.
period last year.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 24
Stewardship Environment the Value Chain Communities Integrity
Case Intelligent Equipment Introduced to Strengthen Quality Control
M&G attaches great importance to quality inspection and continues to enhance its quality inspection capability and precision. Our in-house
testing laboratory had been accredited by the China National Accreditation Service for Conformity Assessment (CNAS), providing quality
inspection capabilities aligned with international standards. In 2025, M&G gradually deployed and applied 12 intelligent inspection devices,
shifting from traditional offline sampling inspection to online real-time quality control in the production process. These new devices enable
functional and visual inspections, including component lifespan testing, paper printing quality checks, tip quality assessment, full inspection
of finished pens, cap labeling verification, and labeler testing, effectively addressing the "missed quality checks" common in traditional manual
inspection, significantly improving inspection efficiency while ensuring the superior quality of every product leaving the plant.
M&G Product Quality and Safety Training for Management Trainee
Supplier Quality Empowerment Chemical Safety Management
To extend product quality and safety control to the source, we implement a quality empowerment program for M&G has formulated and implemented the Chemical Management Policy based on national standards and
suppliers. We assign a technical empowerment expert team to work on-site with suppliers. By providing suppliers industry regulations. This policy clearly defines regulations regarding chemical management principles, the
with standard documents, we unify and align testing standards, and strengthen the precision and stability of prohibition and phase-out of certain chemicals, safety standards and certification requirements, product
production process control through process optimization, shifting quality management from post-production audits, and supplier chemical management. The policy is managed by the Company's Chemical Management
inspection to preventive process control and improving suppliers' self-inspection capabilities. This initiative not Committee, ensuring the uniformity and standardization of chemical usage, management and control processes
only significantly improves the incoming inspection quality rate of key raw materials but also lays a more reliable in products. In line with national standards and industry rules, M&G identifies high-concern chemicals subject to
foundation for the quality of finished products, achieving both collaborative quality governance and shared limits and builds a chemical control list. At the same time, the Company updates this list as regulations change,
value across upstream and downstream of the supply chain. During the reporting period, through supplier as consumer and market needs evolve and as business and product growth require, steadily strengthening
empowerment initiatives, the Company worked with suppliers to resolve technical and process issues in multiple chemical control measures.
products, including staplers with non-rebounding staples and markers with loose packaging clasps.
Key Chemical Safety Standards Referenced by M&G
China EU
Inventory of Severely Restricted Toxic Chemicals of China Technical Requirements for Environmental Labeling Products Cultural Registration, Evaluation, Authorization and Restriction of
Paper (HJ 410-2017) Chemicals (REACH Regulation)
The Regulations of the People's Republic of China on Administration of Student Modeling Clay (T/CSSGA 1006-2018) Safety of Toys - Part 3: Migration of Certain Elements (EN71-3)
Controlled Chemicals - Various Monitored Chemicals List
Request in Common Use of Security for Student's Articles (GB 21027-2020) Book Cover and Slipcase (T/CSSGA 1001-2017) Safety of Toys - Part 9: Organic Chemical Compounds
Requirements (EN71-9)
Gel Ink Ballpoint Pens and Refills (GB/T 37853-2019) Children's Acrylic Paint and Acrylic Markers (T/SLIA 0003-2024)
National Safety Technical Code for Toys8 (GB 6675-2014) Exercise Books (QB/T 1437-2023)
Requirements of Concentration Limits for Certain Restricted Substances in Fountain Pens and Nibs (GB/T 26717-2024)
Electrical and Electronic Products (GB/T 26572-2011)
Hygienic Requirements of Study Products for Myopia Prevention and General Safety Requirements on Food Contact Materials and Articles (GB
Control in Children and Adolescents (GB 40070-2021) 4806.1-2016) and other national food safety standards
chain are completed within the specified timeframe.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 25
Stewardship Environment the Value Chain Communities Integrity
Restriction and Phase-Out of Chemicals
M&G identifies substances of high concern that are prohibited or restricted based on national standards and industry regulations, and
M&G Zero-Boron Antibacterial Ultra-Light
formulates a chemical control list and sets a plan to phase out such substances. Currently, all ink used in M&G's writing instruments must
Case Clay: From Technological Breakthrough to
not only comply with applicable product standards and the?Request in Common Use of Security for Student's Articles ?(GB 21027-2020), but
Setting Industry Standards
should also meet the more stringent EU EN71-3 standard. In addition, the control of black gel ink is benchmarked against the restricted
substances list in Appendix XVII of the EU REACH regulation. During the reporting period, six types of heat-erasable ink and 12 types of
M&G proactively implements self-regulatory controls on potentially harmful
fluorescent ink used in M&G products obtained EU REACH certification.
chemicals that exceed national standards. In 2024, M&G independently
In 2020, M&G phased out phthalates from all student products, and in 2021, the Company eliminated short-chain chlorinated paraffins from developed a boron-free clay product with an actual boron content of <50mg/
the same product category. The phase-out of both substances has now been fully completed. In the future, the Company will continue to kg, effectively lowering the risk associated with boron additives. In 2025,
implement replacement plans for chemicals, gradually replacing chemicals in products that may affect human health or the environment. M&G further launched "Boron-Free Antibacterial Ultra-Light Clay," with an
M&G's subsidiary Beckmann has set stricter chemical rules in line with EU laws, has already eliminated phthalates, polyvinyl chloride (PVC), actual boron content of <1mg/kg, achieving a safety upgrade from "Boron-
per- and polyfluoroalkyl substances (PFAS), bisphenol A (BPA), and other chemicals from its children's products worldwide. free" to "Zero-boron." To drive overall industry progress from the source,
the Company led the revision of the Modeling Clay industry standard during
the reporting period, advocating for limits on migratory elements (including
boron), free formaldehyde and preservatives. This revision project has been
In 2025 approved for implementation by the Ministry of Industry and Information
Writing instrument inks compliant with EU Technology. Through technology breakthroughs and standard leadership,
REACH regulation the Company continues to raise safety benchmarks and guide the industry
toward sustainable development.
Heat-erasable gel ink Fluorescent ink
M&G Zero-Boron Antibacterial Ultra-Light Clay
Ink REACH Certification
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 26
Stewardship Environment the Value Chain Communities Integrity
R&D of Healthy and Safe Products
In 2025, M&G adopted a full life cycle management framework to implement systematic controls spanning raw materials, user experience and packaging materials, thereby establishing a strong and trusted product safety defense.
Expanding the Food-Grade Product Portfolio Focusing on the Long-Term Health Impacts of Use Safety and Health of Packaging Materials
Food-grade pigments and raw materials are used across To safeguard eyesight, eye-safe student printer paper has The Company has adopted a policy that favors safe
many product groups, including outline pens, markers, been launched. Made from natural, unbleached pulp and materials in packaging parts such as blister packs and
watercolor pens, oil paint sticks and crayons. During the free of optical brighteners, it cuts screen strain during use. bases, and is actively developing and adopting safer, more
reporting period, the Company launched the M&G Safe environmentally friendly options, such as EVA-material
Crayons of MG Kids collection, developed for children aged drawstring bags and recyclable paper boxes, to ensure that
crayons are pure and free of talc and asbestos; they have
passed the EU EN71-3 standard and skin-sensitivity tests,
offering enhanced safety.
M&G Safe Crayons of MG Kids Collection M&G Eye-Comfort Copy Paper for Students M&G Easy-Erase Colored Whiteboard Pen Packaging has shifted
from PVC to Paper Boxes.
Raising Awareness of Chemical Safety
M&G is committed to enhancing the transparency of product chemical safety. For all chemical substances procured, the Company requires suppliers to provide Safety Data Sheets (SDS) of chemicals and respond to relevant
information requests from regulatory agencies, customers, and other stakeholders. Products promoted with health and safety as selling points are subject to strict inspection and must pass required testing and obtain relevant
certifications before being launched to the market. Certification information must be disclosed as required, and false advertising is strictly prohibited. At the same time, M&G actively promotes chemical safety knowledge among
consumers, using live-streaming e-commerce platforms and other channels to educate the public on the chemical content of products, encouraging consumers to pay greater attention to chemical safety.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 27
Stewardship Environment the Value Chain Communities Integrity
Marketing and After-Sales
Adhering to the principles of "transparent communication and responsible delivery," M&G integrates sustainable concepts into every part of its brand communication, customer service and consumer relations. By sharing accurate
information, M&G aims to guide consumers toward eco-friendly choices; with a strong after-sales system and quick-response plans, the Company protects consumer rights and improves the product-use and after-sales experience.
Responsible Marketing and Communication
M&G strictly complies with the Advertisement Law of M&G published the M&G Social Media Platform Content M&G has also formulated the M&G Media Relations
the People's Republic of China , the Copyright Law of the Guidelines to regulate content on self-media platforms, Guidelines and the M&G Public Opinion Management
People's Republic of China , and other relevant laws and requiring that "all content published on social media System , which clearly state that M&G employees are required
regulations. We have issued institutional documents such as platforms shall be truthful, legitimate, healthy, and to communicate with the media and other influential
the Promotion Compliance Guidelines and the Product Draft accurate, and must not contain false or misleading audiences based on facts, maintaining an honest, clear, and
Review White Paper to ensure that advertising is legal and information, or deceive or mislead consumers." transparent attitude, while actively practicing responsible
compliant, sales information is transparent and accurate, and marketing.
legitimate consumer rights and interests are protected.
The Company's Brand Department is responsible for executing and driving brand decisions as well as planning, managing, and executing daily brand affairs; brand building is carried out in collaboration with various company
departments and the marketing departments of branches nationwide. In terms of operational mechanisms, the Brand Department has developed the M&G Stationery Visual Guidelines Manual to ensure clear brand perception by
maintaining consistent visual expressions and to provide accurate information to consumers; the Leagl Affairs Department regularly reviews key promotional and marketing points and conducts relevant internal training to ensure
the accuracy and authenticity of product marketing information.
M&G E-commerce Marketing Management Mechanism
The Company has established and strictly enforces a "Three-Review, Three-Verification" marketing compliance mechanism to ensure that content on social media and e-commerce platforms undergoes a comprehensive review
before publication.
Omnichannel Control Three-Review, Three-Verification Process Protecting Consumer Rights
For e-commerce product detail pages, live streams, and short- Focusing on product function and material descriptions, Through our "Three-Review, Three-Verification Process," we
form video content, the team conducts pre-publication word-by- the e-commerce platform department, the relevant product eliminate false and misleading advertising. While safeguarding
word and full-screen reviews to ensure strict compliance with the department, and the Leagl Affairs Department conduct rigorous our brand's reputation, we ensure that consumers receive
Advertising Law of the People's Republic of China and platform reviews to verify the original data, assess legal risks, and ensure truthful and accurate information, thereby effectively protecting
rules. brand consistency on a case-by-case basis. their right to know.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 28
Stewardship Environment the Value Chain Communities Integrity
Customer Satisfaction and After-Sales Service
Customer Satisfaction Survey Customer Complaint Handling
M&G actively listens to customer and consumer feedback, viewing customer satisfaction as the core metric The Company continues to streamline its consumer complaint handling mechanism, establishing a multi-channel
for measuring brand health and service quality. To this end, the Company has established a routine user customer complaint response team and a grid-based management system for quality business partners. During
communication and feedback monitoring mechanism to gather authentic insights from consumers and partners the reporting period, the Quality Center improved the grid-based management mechanism to proactively collect
across multiple channels, including channel partners, e-commerce platforms and corporate clients. Additionally, customer feedback, analyze common after-sales issues and establish a regular follow-up mechanism, driving a
by conducting regular specialized surveys covering product functionality, user experience, after-sales response 32.7% decrease in the monthly average number of customer complaints; simultaneously establishing a "resolution,
and brand recognition, the Company ensures the comprehensiveness and objectivity of its evaluation results. follow-up and improvement" three-cycle management cycle for customer complaints, reducing the average
During the reporting period, the Company conducted an omnichannel customer satisfaction survey and achieved complaint resolution time by 37.5%. Additionally, in accordance with the Measures for the Recall of Defective
an overall satisfaction score of 90.9 points. Products, the Company established a quick response procedure, with the Sales Center leading the execution of
recalls to ensure immediate response, full traceability and proper disposal of defective products, thereby effectively
safeguarding consumers' legitimate rights and interests.
M&G's "Three-cycle Management Cycle" Customer Complaint Management Process
Average Customer Complaint Resolution Time
Unit: days
Handling Cycle Accountability & Recovery Cycle
Recovery from Responsible 16
Disposition Plan
Entities
Complaints Collection & Liability Rapid
Customer Feedback
Determination Compensation 8
Improvement Cycle
Define Standards for Rapid Compensation Problem
Improvement Verification
Rectification
Progress in Establishing Customer Complaint Feedback Mechanisms Across Various Channels
Channel Partners Large Retail Stores E-commerce Channels Corporate Procurement Platform
An after-sales issue feedback Jiumu Store established a M&G formulated the Customer Complaint Handling During the reporting period, Colipu Group developed a unified
and resolution process involving comprehensive complaint Standards and other management documents to online after-sales request portal, enabling sales personnel to
"channel partners and quality handling process, standardizing standardize the full process management of customer access and submit customer after-sales requests in real time
specialists" has been set up, and the handling procedures and complaints in e-commerce sales channels. The with a single click, thereby reducing the average after-sales
a grid-based management system statistical analysis for customer Company clarified the division of responsibilities for request processing cycle by more than 50%; The Company
further enables quick response complaints across online pre-sales, in-sales, and after-sales functions, and a implemented an "omnichannel consolidation and standardized
to after-sales issues. During the and offline channels, and dedicated after-sales work order team was formed to processing" mechanism for after-sales work orders, unifying the
reporting period, 85% of after-sales formulated rules for complaint shorten the waiting time for online consumers' after- entry point for work order registration and processing standards.
issues were resolved within 7days. escalation. For products with high sales issue resolution. A monthly complaint data By clarifying key points of customer complaint information and
complaint rates, on-site quality analysis dashboard is produced, and the results are handling procedures, the mechanism addressed issues such as
improvements are regularly used for subsequent complaint collection, review, the loss, distortion, and misinterpretation of critical information
conducted at suppliers to reduce and investigation and optimization work, thereby during the workflow, enabling real-time tracking and dynamic
complaint rates. developing more targeted measures to improve management of the progress of every customer complaint.
complaint service quality.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 29
Stewardship Environment the Value Chain Communities Integrity
Climate and
Environment
Against the backdrop of global efforts to address climate
change and to promote green transformation, M&G
Stationery has integrated ecological and environmental
protection into its corporate development strategy.
Building on environmental compliance and pollution
prevention, the Company is systematically advancing
its carbon-reduction roadmap, deepening resource
conservation and recycling, and actively practicing
biodiversity conservation. The Company is committed to
continuously reducing its environmental footprint across
operations and the entire value chain while achieving
steady growth, thereby helping build a future where
humanity and nature coexist in harmony.
Our Goals
By 2030
Using 2021 as the base year, to reduce GHG emissions
from our own operations (Scope 1 and Scope 2) by 42%
By 2050
To achieve carbon neutrality across the entire
value chain
Topics addressed in this section
Response to climate change
Environmental compliance and pollution prevention
Waste management
Water resources management
Biodiversity
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 30
Stewardship Environment the Value Chain Communities Integrity
Response to Climate Change
In response to severe climate challenges, M&G has incorporated climate change-related matters into the overall governance framework and set clear phased targets: using 2021 as the base year, to reduce GHG emissions from our
own operations (Scope 1 and Scope 2) by 42% by 2030. To achieve carbon neutrality across the entire value chain by 2050.. Leveraging a carbon reduction pathway spanning R&D, production, warehousing, and logistics, we are
steadily enhancing business resilience and actively responding to the national dual carbon goals.
Governance Strategy
M&G's sustainability governance framework has integrated climate change-related matters into its overall To assess the impact of climate-related risks and opportunities on the Company's short-, medium- and
management framework9. During the reporting period, the Company established the "M&G Climate Action long-term strategies, M&G conducted a climate scenario analysis in accordance with the SSE Sustainability
Group," comprising the Sustainability Office, heads of key energy-consuming business units such as the Report Guidelines and the Ministry of Finance's Climate Disclosure Guidelines. The Company adopted the
Production Center and the Logistics Center, and leaders of subsidiaries. The Sustainability Office is responsible Intergovernmental Panel on Climate Change (IPCC) SSP1-2.6 (temperature rise of 1.5° C to 2° C) and the IEA's Net-
for coordinating and advancing the Company's climate strategy, regularly monitoring progress toward climate Zero Emissions (NZE) scenario as low-carbon scenarios, and the IPCC's SSP5-8.5 (temperature rise of 4° C) as
targets, and managing climate-related disclosures. Heads of each business unit collaborate to establish carbon a high-carbon scenario. By comparing trends in physical, environmental and socioeconomic conditions under
management systems, form cross-departmental working mechanisms and drive the implementation and different temperature rise paths, the Company identifies potential climate risks and opportunities facing its core
execution of greenhouse gas reduction measures. Emission reduction targets have been broken down annually business and assesses their potential financial impacts, thereby enabling the formulation of more effective and
and incorporated into the annual performance evaluations of heads at each facility and business unit, ensuring targeted response strategies. Because of limitations in current data precision and model certainty, this year's
routine tracking and completion of the management cycle. scenario analysis primarily used qualitative methods, employing narrative-based scenarios to assess business
and strategic resilience. In the future, the Company will continue to improve the integration of GHG emission data
with financial metrics and gradually introduce quantitative tools such as stress testing to more accurately assess
climate-related financial impacts.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 31
Stewardship Environment the Value Chain Communities Integrity
Climate-Related Risks, Opportunities, and Financial Impacts
Climate-Related Risks and Potential Financial Impacts
Risk Type Impacts Timeframe Affected Value Chain Potential Financial Impacts Response Measures
Processes
• Extreme weather events such as high temperatures, • Conduct regular inspections and upgrades of facilities
typhoons, and heavy rainfall may cause damage to and equipment stability to improve resilience against
facilities and equipment, disrupt logistics, and affect natural disasters;
the supply of raw materials. Thereby enabling timely
deliveries that avoid penalty payments and control • Map climate risks across the supply chain and diversify
Short, medium, Upstream of the Value Chain,
Acute Risk costs; supplier locations;
and long term Company Operations
• Extreme weather events such as heatwaves and • Develop disaster emergency response plans, conduct
thunderstorms may endanger employee health and emergency drills, purchase accident insurance, and
safety, leading to production pauses or higher labor maintain daily reserves of disaster prevention and
costs. relief supplies.
Physical Risk
• Rising sea levels may lead to greater operational
• Gradually incorporate climate risk considerations
instability and increased costs for the Company's
into infrastructure development and future business
facilities located in coastal areas;
planning;
• Increased ecosystem vulnerability may affect the stable
Chronic Medium and Upstream of the Value Chain, • Strengthen prevention and control of forest-related
supply of raw materials in M&G's supply chain, such as
Risks long term Company Operations risks such as fire, wind damage, and pest outbreaks;
timber and pulp, leading to higher procurement costs;
deepen sustainable forest land management;
• The likelihood of virus transmission and outbreaks
• Improve employee health and safety benefits,
may increase, potentially impacting employee health
including insurance coverage.
and safety, raising labor costs.
• Monitor and stay informed about national climate
• With the continued advancement of the Dual Carbon policy developments, and incorporate policy
policy, enterprises will face stricter regulations on requirements into operational planning in a timely
energy conservation and carbon reduction. M&G manner;
may need to intensify emission reduction efforts and
increase financial investment; • Continuously enhance carbon management
Transition Risks
Company Operations, capabilities, promote energy structure transformation,
Policy and • Companies included in the Emissions Trading Scheme and implement energy-saving technological upgrades;
Medium term Downstream of the Value
Legal Risks (ETS) are required to fulfill their carbon allowance
Chain • Calculate product carbon footprints to proactively
settlement responsibilities. Rising carbon prices will
lead to increased compliance costs; meet potential compliance requirements and identify
processes with high carbon emissions;
• International green trade rules, such as the EU Carbon
Border Adjustment Mechanism (CBAM), will increase • Strengthen carbon management across the supply
export costs. chain and implement green procurement to drive
emission reductions throughout the value chain.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 32
Stewardship Environment the Value Chain Communities Integrity
Risk Type Impacts Timeframe Affected Value Chain
Potential Financial Impact Response Measures
Processes
• Stricter future carbon reduction policies will require • Actively identify carbon reduction potential,
continuously increasing R&D investment in energy- implement energy-saving and emission-reducing
Technology Short and medi- Company Operations, Down- saving and emission-reducing technologies. Failure projects, and continue to increase the share of
Risks um term stream of the Value Chain to adopt green low-carbon technologies in time may renewable energy usage;
weaken market competitiveness and lead to revenue
• Promote digitalization and intelligent technologies
decline.
to improve energy efficiency.
Transition Risks
• The phase out of petrochemical feedstocks is expected • Developing green low-carbon new materials
Upstream of the Value Chain,
Market Risks Medium term to lift prices for raw materials such as plastics, thereby and applying them to the development of more
Company Operations
raising operational costs. sustainable products.
• Increasing attention from media, professional
• Implement carbon reduction measures and ensure
organizations, and industry associations on corporate
Reputation Risks Short and medium Corporate Operations that related communication and promotional
ESG performance may result in reputational damage
term content is objective, accurate, and traceable.
and revenue loss if related expectations are not met.
Climate-Related Opportunities and Potential Financial Impacts
Affected Value Chain
Opportunity Type Impacts Timeframe Potential Financial Impacts Response Measures
Processes
• Identify energy-saving potential and continuously
• Improvements in energy and carbon emissions improve energy efficiency;
management can promote energy conservation and
Resource Efficiency Short term Company Operations • Actively promote green logistics and green office
emission reduction, while also reducing costs and
enhancing efficiency. practices to strengthen energy conservation and
emission reduction across all operational stages.
• Early deployment of renewable energy can reduce • Expand the use of renewable energy and optimize the
Energy Sources Medium and long term Company Operations
future dependence on fossil fuels. energy mix.
Company Operations, • As consumer awareness of green and low-carbon
Short, medium, • Increase investment in the R&D and promotion of
Products and Services Downstream of the practices increases, and green procurement becomes
and long term sustainable products;
Value Chain a growing trend among government and corporate
entities, the market demand for high-quality • Guide product development by adopting sustainable
sustainable products will continue to rise. Developing design principles;
Company Operations, green and low-carbon products will help the Company
Market Medium and long term Downstream of the • Communicate the concept of sustainability to
further enhance its competitiveness and increase
Value Chain consumers and engage them in joint climate action.
revenue.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 33
Stewardship Environment the Value Chain Communities Integrity
Climate Strategy and Action Plan
To address the aforementioned climate-related financial risks and opportunities, M&G has formulated a comprehensive emissions reduction strategy and action plan covering the entire process – including manufacturing,
warehousing and logistics, office operations, eco-friendly stores, supply chain management, and product waste management – aimed at enhancing the Company's strategic resilience and striving to achieve carbon neutrality.
M&G Carbon Emission Reduction Strategy and Action Roadmap
Target Target
Using 2021 as the base year, to reduce GHG emissions from our own operations (Scope 1 and Scope 2) by 42% by 2030. To achieve carbon neutrality across the
entire value chain by 2050.
Action Action
Scope 1 and Scope 2 Scope 3 • Conduct regular carbon management;
• Continue expanding renewable energy
Manufacturing Supply Chain Management use;
• Explore energy-saving potential, optimize energy • Establish a carbon emissions accounting system for the • Introduce innovative low-carbon
management, and improve energy efficiency; supply chain; technologies, processes, and
management models;
• Increase the proportion of renewable energy and • Encourage suppliers to set energy-saving and emission
gradually transition to clean energy. reduction targets and regularly track progress; • Explore additional carbon reduction
opportunities such as carbon credits.
• Gradually conduct product carbon footprint accounting
Warehousing and Logistics
and management;
• Optimize logistics routes and improve transportation • Empower suppliers to enhance carbon management and
efficiency; supply capabilities for green products.
• Use new energy transportation vehicles;
• Enhance warehouse intelligence and improve energy Product End-of-Life Management
efficiency in storage facilities. • Explore recycling, remanufacturing, and reuse of materials
and products;
Office Operations & Green Stores
• Promote sustainable product design to improve the
• Optimize lighting and heating, ventilation, and air
recyclability of products and packaging.
conditioning systems;
• Promote low-carbon office and lifestyle concepts.
Base Year
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 34
Stewardship Environment the Value Chain Communities Integrity
Risk management
M&G integrates the identification, assessment and management of climate-related risks and opportunities into the Company's overall risk management system to methodically manage climate risks.
M&G Climate Risk Identification and Assessment Process
Climate Risk Identification Climate Risk Assessment Climate Risk Response
The Sustainability Office compiles a The Risk Management and Compliance Committee evaluates business risks, climate risks, and other ESG- Climate risks identified as high priority are
climate risk list based on domestic related risks through qualitative and quantitative analysis from short, medium, and long term perspectives, assigned to responsible departments to
and international policy trends and prioritizes them, and submits the results to the Board Strategy Committee for review; develop and implement mitigation plans.
stakeholder feedback;
Metrics and Targets
Strategic Pillars Goals Progress in 2025
Using 2021 as the base year, to reduce GHG emissions from our own operations (Scope 1 The Group's Scope 1 and Scope 2 GHG emissions reduced 36% reduction
and Scope 2) by 42% by 2030. compared to 2021.
Response to climate
change10 Collected carbon data from 80% suppliers, establishing an initial supplier
To achieve carbon neutrality across the entire value chain by 2050.
carbon data management system.
M&G continues to calculate and disclose Scope 1 and Scope 2 GHG emissions at the organizational level on an annual basis. The accounting follows standards and specifications such as ISO 14064-1:2018 Specification with Guidance
at the Organization Level for Quantification and Reporting of Greenhouse Gas Emissions and Removals , GB/T 32150-2015 General Guideline of the Greenhouse Gas Emissions Accounting and Reporting for Industrial Enterprises , and
complied with the 2019 Refinement to the 2006 IPCC Guidelines for National Greenhouse Gas Inventories , with the organizational boundary defined based on the operational control approach. During the reporting period, the scope
of the calculation covered the M&G Shanghai base, the Shanghai Headquarters Office Building, the South China base, the North China base, Axus Stationery, Colipu Group, and Jiumu Store (directly operated stores), and the Central
China base, which is newly constructed and put into operation in 2025, has been included in the scope.
Building on this foundation, the Company is steadily advancing its efforts to track Scope 3 emissions and continuously improving the management of GHG emission data across its value chain. This year, we have initiated the
accounting of Scope 3 greenhouse gas emissions for certain categories, collected GHG emission data from 80% of our suppliers, and calculated the carbon footprints for 11 products.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 35
Stewardship Environment the Value Chain Communities Integrity
Notes on Data Corrections and Changes in Accounting Methods
M&G GHG Emissions Data
Data correction
Total GHG Emissions (Scope 1 and 2)
Unit: tCO2e
This year, we re-verified the thermal energy content (enthalpy value) of steam. Given that steam was added
as a new energy category starting in 2024, the corresponding energy consumption and GHG emissions data
for 2024 have been adjusted in this Report to ensure the accuracy of historical records.
Change in accounting method
This year, the accounting method for purchased electricity data for the directly operated stores of Jiumu
Store was updated from a sampling-based estimate to a survey-based estimate using actual electricity
bills, providing a more accurate reflection of actual consumption. As this change cannot be applied
retroactively to prior years, the disclosed purchased electricity data for 2025 and the corresponding Scope
While advancing emissions reductions, we also focus closely on carbon emissions compliance and fulfillment, as well as carbon asset management. Since its inclusion in the Shanghai Carbon Emissions Trading System in 2016,
M&G's Shanghai base has strictly complied with all obligations by completing annual settlements in full and continuously optimizing overall compliance costs through the effective rollover of surplus allowances. During the reporting
period, we completed the 2024 annual settlement, and the 2025 settlement will proceed on schedule. Over the past five years, the Company has consistently maintained compliant operations, with no penalties associated with
carbon emissions settlements.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 36
Stewardship Environment the Value Chain Communities Integrity
Climate Action
To systematically advance the implementation of our climate strategy, we have broken down our emission reduction targets level by level into core areas
including energy management, low-carbon logistics, and green operations, and established a comprehensive management system covering the entire
process. Through quantitative management and regular tracking, we ensure a clear carbon emissions reduction pathway and effective implementation.
Energy Management
M&G strictly complies with laws and regulations such as the Law of the People's Republic of China on Energy Conservation and the Administrative Measures
for Energy Conservation of Key Energy Consumers Units , has established an energy management system coordinated and integrated by the Climate Action
Task Force and implemented by major energy-consuming departments such as the Production Center, and has obtained the ISO 50001 Energy Management
System certification. The Company has developed and implemented the M&G Energy Management Manual , and each base has been developing annual
energy conservation targets based on the Group's climate strategy and action roadmap and in light of actual conditions, and actively implementing energy
conservation measures such as equipment upgrading and retrofitting, process optimization, waste heat recovery, and digital management. While ensuring
a stable energy supply, we are gradually increasing our share of clean energy through expanded investment in solar power generation and green electricity
procurement. Our Shanghai base has been included in the list of National Green Factories since 2024 and successfully passed its recertification during the
reporting period. In 2025, our subsidiary Axus Stationery was awarded the Shanghai Three-Star Green Factory Certification. M&G ISO 50001 Energy Management
System Certification
M&G Energy Consumption Data
Renewable Energy Consumption Total Energy Consumption Total Energy Consumption Intensity
Unit: 10,000 kWh Unit: tce Unit: tce/RMB10,000 revenue
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 37
Stewardship Environment the Value Chain Communities Integrity
M&G Energy Conservation and Carbon Reduction Initiatives
Energy-Saving Technical Retrofit Measures
Air compressor energy efficiency optimization Injection molding workshop upgrades Diesel-to-electric conversion and efficiency upgrades
We have been upgrading and retrofitting air compressors Following the energy-saving retrofit of 31 injection molding In 2025, Axus Stationery's Shanghai plant launched an "Diesel-to-
and air compressor stations since 2024. During the reporting machines and the reduction of molding cycle times in 2024, we electric" initiative, replacing diesel forklifts with electric models to
period, we continued to upgrade centrifugal air compressors continued equipment replacement and process optimization reduce fossil fuel use. At the same time, the heating system of the pencil
to centrifugal air compressors, improving equipment efficiency in the injection molding workflow during the reporting period. paint-drying ovens was upgraded, significantly reducing both drying
and achieving annual electricity savings of approximately The new water pump in the workshop consumes 30 kW less time and equipment energy consumption.
Clean Energy Consumption
Photovoltaic project development Purchased green electricity
M&G continues to advance the deployment of distributed photovoltaic systems, with all bases actively carrying out photovoltaic The Company continues to increase its share of renewable energy
construction and capacity expansion. In 2025, the South China Base's 3.5 MW photovoltaic system was officially connected to the grid, the through the purchase of green electricity. In 2025, purchased green
Central China Base commenced its photovoltaic project, expected to generate 4 million kWh annually, and Axus Stationery's Shanghai electricity totaled 7.44 million kWh.
plant expanded its photovoltaic capacity to 2.9 MW. Benefiting from the continuous expansion of installed photovoltaic capacity, during
the reporting period, the Company's photovoltaic power consumption increased by 11% year on year, and renewable energy accounted
for 21% of total electricity consumption.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 38
Stewardship Environment the Value Chain Communities Integrity
Case Raw Material Improvements Achieve Energy Conservation and Consumption Reduction
To implement its climate strategy objectives, M&G actively explores energy conservation and consumption reduction through raw material and process improvements. During the reporting period, after extensive
comparisons and experiments, we found that using high-melt-index novel materials such as PP/PBT ceramic-like polymers, PLA biodegradable materials, and plant residue-based materials can significantly optimize melt
temperature control before injection and melt flow performance after injection, while ensuring that product appearance and tactile quality meet standard requirements. After implementing the material substitutions, the
melt temperature of raw materials in the production process can be reduced by 15° C to 25° C, effectively shortening melting time and reducing energy consumption during production. These material innovations have
improved processing efficiency and optimized production energy use, providing technological support for the Company's low-carbon manufacturing and sustainable development goals.
Case M&G Central China Base: Low-Carbon Design and Intelligent Operations
M&G's Central China base was officially completed and put into
operation in July 2025. The project has integrated green concepts
and intelligent technologies since the planning stage, aiming to build
an operational benchmark that emphasizes both efficiency and
environmental protection.
• Green infrastructure: High-energy-efficiency air-conditioning
systems and energy-saving designs are adopted to reduce
baseline energy consumption, and variable-frequency water
source heat pumps and air-cooled units are used to achieve
variable-frequency coverage of core power systems.
• Intelligent integration: Automated hardware is deployed
and fully integrated with the Warehouse Management System
(WMS), Warehouse Control System (WCS), and Robot Control
System (RCS) to achieve digital warehouse scheduling, while
air compressor units are scientifically matched and controlled
through variable-frequency intelligent systems to allow
equipment loads to be closely aligned with production demand
and eliminate no-load energy losses.
• Energy efficiency optimization: Storage density is increased
through "vertical space optimization," reducing the need for
warehouse floor area. Modular zoning is implemented for
cooling towers so that the heat dissipation system can be
operated on a "demand-driven" basis according to real-time
process water temperature feedback to maximize energy
efficiency. Equipment operation is dynamically planned
Rooftop Photovoltaic System at M&G's Central China Base
through "intelligent scheduling optimization," thus minimizing
idle and standby energy consumption.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 39
Stewardship Environment the Value Chain Communities Integrity
Low-Carbon Logistics
M&G continues to strengthen energy-saving initiatives in logistics and warehousing. Leveraging digital technologies and upgrading equipment, we have achieved high efficiency and low energy consumption in materials
transportation and warehouse management.
New energy vehicle replacement
In-warehouse operations at our Logistics Center have achieved 100% coverage of electric forklifts. In the future, we will gradually replace trucks with renewable energy models to further reduce carbon
emissions during transportation.
Digital vehicle scheduling
Through M&G's Transportation Management System (TMS), we have achieved real-time monitoring of self-operated vehicles' transport status and location, so as to plan optimal routing and minimize
empty return trips.
Intelligent warehouse management
Rail guided vehicles (RGV) have been upgraded, an energy-saving mode has been added, and automated logistics equipment has been configured with non-operational standby states to reduce energy
consumption during idle hours. During the reporting period, we saved nearly 90,000 kWh of electricity.
Green Operations
We integrate low-carbon principles into our daily operations. Through digital empowerment and action advocacy, we reduce energy and resource waste in our operations, thereby reducing carbon emissions.
Paperless office
We actively promote paperless office practices. Except for hard-copy documents that must be printed, we encourage employees to use electronic documents at work. During the reporting period, we
achieved paperless financial reimbursement, eliminating 87% of paper vouchers. This not only significantly reduced paper consumption but also minimized the time employees spent printing, organizing,
affixing, and submitting documents, while improving accounting efficiency.
Energy conservation in buildings and stores
The "Lunch Break One-Hour Lights-Out" initiative has been implemented in our Shanghai office building, LED energy-efficient lighting is promoted for use during store renovations, and some
channel partners are encouraged to turn off air conditioning one hour before closing to reduce electricity consumption without affecting normal work operations.
Procurement of low-carbon office supplies
We prioritize procuring office supplies with low carbon footprints. During the reporting period, all printer paper purchased was PEFC/CFCC-certified.
Promotion of low-carbon philosophy
Energy-saving signs are posted on the switches in public areas, employees are encouraged to turn off office equipment during idle hours, and low-carbon advocacy activities such as stair-climbing check-ins
are regularly conducted to enhance employees' energy conservation awareness.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 40
Stewardship Environment the Value Chain Communities Integrity
Environmental Compliance and Pollution Prevention
M&G regards environmental compliance as a core standard and is committed to establishing comprehensive environmental compliance management, integrating the concepts of "pollution prevention" and "source control" into
operational management.
Environmental Compliance Management Pollutant Emission Management
M&G strictly complies with the Environmental Protection Law of the People's Republic of China, the Law of In the planning and construction stage of the base, the Company strictly adheres to the Environmental Impact
the People's Republic of China on Environmental Impact Appraisal , and other relevant laws and regulations. Assessment System and the "Three Simultaneities" principle, implements 100% environmental assessment and
The Company has established environmental management systems, including the Environmental and Safety construction of environmental protection facilities, and minimizes environmental impact during the construction
Management Operation Control Procedures and the Environmental Factor Identification and Control Procedures . period through scientific planning. In the manufacturing and operating phase, the Company has established a
Additionally, to address environmental emergencies, the Company has established the Control Procedures pollutant emission control system covering monitoring, recording, reporting, and emergency response, and has
for Emergency Preparedness and Response . It regularly conducts inspections to identify environmental and systematically implemented pollutant emission management through regular testing of wastewater, exhaust
safety hazards, develops emergency preparedness and response plans for identified risks, and implements risk gas, and noise and implementation of relevant management systems, so as to achieve stable and standardized
assessments for environmental incidents and emergency management protocols for sudden environmental emissions.
events. Both M&G Headquarters and Colipu Group have obtained ISO 14001 certification for their Environmental
The Company has fully implemented the pollutant discharge permit system. All M&G sites have completed
Management Systems. During the reporting period, the Company did not experience any significant
pollutant discharge registration in accordance with the law, and the Axus Stationery Shanghai plant and Siyang
environmental incidents, nor was it subject to any major administrative penalties from the Ministry of Ecology
plant have obtained pollutant discharge permits in accordance with the law and submitted implementation
and Environment or other relevant departments, or held criminally liable, as a result of such incidents.
reports on time. During the reporting period, all M&G sites and subsidiaries achieved 100% compliance with
emissions standards and continued to carry out pollutant treatment and improvement projects. Among these,
Axus Stationery added two-stage activated carbon adsorption units for exhaust gas, effectively reducing VOCs
emissions.
M&G's Pollutant Emission Control Measures
Exhaust Gas Pollutant Treatment Wastewater Treatment Noise Control
Installed complete dust and odor removal systems for equipment Formulated the M&G Stationery Water Treatment Facility Operation Set up cushioning rubber pads and soundproof covers, reduce the
involving exhaust gas and adopted measures such as adding Manual and strictly followed its procedures to ensure compliant running speed of pneumatic stations, use sound-absorbing covers,
desulfurization and denitrification systems, using low-nitrogen discharge into municipal sewage pipelines. silent fans and other measures to control noise problems from
burners, and replacing biomass boilers with centralized heating to multiple angles, such as physical isolation, mechanical pressure
eliminate or reduce negative environmental impacts as much as reduction and equipment upgrading.
possible.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 41
Stewardship Environment the Value Chain Communities Integrity
Waste Management
M&G strictly complies with the Law of the People's Republic of China on Prevention and Control of Environmental Pollution by Solid Waste and other relevant laws and regulations. The Company has developed systems and
management procedures, such as the Solid Waste Control Plan and the Hazardous Waste Storage Facility Management System , assigning clear responsibilities across departments for the classification and compliant disposal of
waste.
The Company follows the principles of "reduction, reuse, and recycling" to maximize resource utilization and minimize waste at the source. Recyclable waste is promptly handed over to recycling companies for recycling and reuse;
non-recyclable waste and domestic garbage are collected and processed by qualified service providers; hazardous waste is entrusted to licensed third-party companies for compliant disposal.
Waste Recycling
With waste reduction at its core, M&G has implemented resource recycling initiatives, including recycled packaging, prop recycling, and promoting bring-
your-own cups. During the reporting period, M&G's Shanghai office building was awarded the title of "Waste-Free Building" in Shanghai's Songjiang Folding crates can reuse The Company reused cartons
District for its outstanding resource utilization and waste reduction at source. The Company has established an internal recycling management system cumulatively
to maximize the recycling of wooden packaging, e-commerce cartons and production wastes used between factories. During the reporting period, the
Company promoted the "100 times reusable folding crates" to replace disposable cartons, which were used in the distribution of Jiumu Store; and
carried out a pilot project for the integration of inventory between channels and headquarters to reduce GHG emissions and packaging consumption
times million
in the secondary transportation link; at the same time, set up carton dismantling and recycling points in the logistics link of each base to realize the
direct reuse of complete cartons, significantly reducing the number of brand-new cartons and the amount of waste. At the same time, we set up carton
dismantling and recycling points along the logistics chain at each base to enable direct reuse of complete cartons and significantly reduce procurement
of brand-new carton packaging.
Case Exploring "Cartonless Direct Inbound Warehousing" to Reduce Packaging Waste at the Source
M&G actively explores new pathways to reduce GHG emissions in the supply chain. By promoting the
"Cartonless Direct Inbound Warehousing" model, the Company delivers products directly from production
lines to warehouses, replacing packaging at the source to reduce waste and resource use. During the
reporting period, the Company completed the transition to direct-to-warehouse delivery without cartons for
Past
Subsidiary Plant Outer Carton Warehouses Channel Partner
products and categories. Moving forward, the Company will focus on promoting standardized coordination Packaging
and deep inventory integration between channel partners and headquarters logistics hubs. By building an
integrated green logistics network, it aims to further reduce packaging and enhance resource utilization
efficiency.
Present
In 2025, the Company completed the transformation of
warehoused without carton packaging.
Subsidiary Plant Warehouses/
Channel Partner
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 42
Stewardship Environment the Value Chain Communities Integrity
Water Resources Management
M&G is committed to water conservation and integrates sustainable water use into its production and operations. The Company continuously monitors indicators such as municipal water intake, water recycling and reuse volumes,
and wastewater discharge, maintaining comprehensive visibility over water usage. There are no reported issues with water resource availability. At the same time, the Company actively promotes water recycling and conducts water-
saving upgrades on equipment and infrastructure to continuously improve water efficiency.
Upgrading to Water-Saving Appliances
The Company actively promotes water-saving appliances and installs sensor-type water-saving
Optimization of Water Use in Board-Making Machines
faucets in the office and production areas to eliminate "running, bubbling, dripping and leaking"
and the loss of resources caused by human error.
The Company has upgraded the cooling system of its PP board-making machines. For the small
volume of non-recycled cooling water, a float-activated pump system was installed to enable
water recycling, resulting in annual savings of approximately 1,200 tons of fresh water.
M&G Water Resource Utilization Data
Total Water Use Water Intensity Water Recycled and Reused
Unit: ton Unit: ton/ RMB10,000 revenue Unit: ton
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 43
Stewardship Environment the Value Chain Communities Integrity
Biodiversity
M&G is committed to environmental protection and fostering ecological harmony by protecting the natural environment, conserving natural habitats and promoting ecological awareness to minimize the environmental negative
impact of its operations.
Compliance and Mitigation
M&G is committed to implementing ecological and environmental protection measures in strict compliance with the Law of the People's Republic of China on Water and Soil Conservation , and local rules in its operational areas.
During the reporting period, all major M&G operational and business sites were located outside the scope of ecological protection redlines, and the Company has not been subjected to major administrative penalties or been held
criminally liable for environmental incidents by Ministry of Ecology and Environment and other relevant departments.
In 2025, M&G officially released its Commitment to Environment and Sustainable Development 11, aiming at reducing and gradually eliminating the negative impacts of the Company's
operations on ecosystems and biodiversity. Regarding forest and biodiversity conservation, the Company commits to:
• Assess the impact of project or construction site selection and development on local biodiversity, and protect natural habitats, wetlands, forests, wildlife corridors and
agricultural land;
• Assess biodiversity risks at operational sites and take measures (such as avoidance, mitigation, restoration and offsetting) to address potential or actual impacts;
• Progressively achieve "No Net Loss" of biodiversity and "No Gross Deforestation" across operations and the value chain;
• Minimize the adverse impacts of operations on forests and biodiversity as much as possible, if some impacts on ecosystems still occur, the Company will implement
restoration actions in the affected areas.
M&G's Ecological and Biodiversity Conservation Measures
Project Site Selection Project Construction Production and Operation
• Conduct on-site inspections to assess the impact of • Carry out environmental impact assessments for construction • Formulate and implement strict management measures
construction on local biodiversity, and avoid natural habitats, projects to identify key environmental impact factors, for wastewater, exhaust gas, and noise and forest land
wetlands, forests, wildlife corridors, and agricultural land; formulate and implement various environmental protection protection, monitor the surrounding environment, and
measures, and maintain the original ecological state of the reduce environmental impact.
• Confirm the project scope and minimize the impact of
plant area;
construction on flora and fauna.
• Conduct ecological monitoring of the environment
surrounding the plant as required to understand
environmental changes and potential impacts.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 44
Stewardship Environment the Value Chain Communities Integrity
As a wood-based pencil manufacturer, Axus Stationery
Reforestation Activities Forest Ranger Patrol System
attaches great importance to the sustainable
management of forests and the conservation of Carry out reforestation activities in Xinjiang to enhance Establish a team of professional forest rangers to
woodland biodiversity. Its 1,853 mu of forest land local ecosystem stability and improve the regional implement regular woodland inspections, monitor the
has Forest Stewardship Council (FSC) Certification ecological environment. survival of wildlife, assess the impact of operational
for Forest Management (FM) and Chain of Custody activities on the ecological environment, and promptly
(CoC), granted by Bureau Veritas. In managing its own identify and deal with potential woodland safety hazards.
forest land, Axus Stationery strictly adheres to limited
harvesting requirements to protect large stands of Axus Stationery's
Forest Ecosystem
trees; the Company pledges to use only certified tree Conservation
species, continuously monitors forest biodiversity Safety Education and Training for Villagers Initiatives Joint Inspection by Villages and Enterprises
during operations, and implements various measures
Provide training on woodland protection and safety Establish a joint inspection mechanism with local
to ensure the sustainable use of forest resources.
for villagers around woodlands to raise community communities to jointly protect and manage forest land
awareness of biodiversity conservation. and build a cooperative force for ecological protection.
Ecological Protection Awareness
M&G deeply integrates biodiversity protection and sustainable consumption advocacy to convey knowledge of wetland, marine and other ecological environmental protection to the public. With the "Endangered Animals" series
of sustainable products as the carrier, the Company organizes diversified activities such as parent-child wetland tours, wetland ecological virtual reality (VR) experiences, marine conservation flash mobs, and ocean beach clean-
up operations, and donates part of its product sales to public welfare foundations in the field of ecological conservation. On World Environment Day 2025, M&G officially announced its strategic cooperation with the Center for
Environmental Education and Communications of Ministry of Ecology and Environment, launched the "Earth Guardian" sustainable action plan, and released co-branded gel pens and carbon-neutral notebooks featuring rare
animal-themed designs. By integrating the concept of biodiversity into products and consumption scenarios, the Company was selected as one of the 2025 Exemplary Cases of Biodiversity Conservation in Industry and Commerce .
Case Jiumu Store Transforms Biodiversity from a Concept into a Tangible Brand Experience
At the beginning of 2024, M&G released the "Endangered Animals: Wetland" series, incorporating images of five endangered animals in wetlands, such as the Black-faced
Spoonbill and Oriental Stork, into the product packaging design, thereby initiating the exploration of conveying ecological values from the product side. In 2025, Jiumu
Store further strengthened its offline reach and public advocacy: on May 28th, during the "World Otter Day," it launched the topic "There are otters in my city" together with
Ton-Ton Otter. During "World Otter Day," Jiumu Store and OTTERdun launched the topic "Otters in my city," which effectively aroused the attention of urban consumers to
the protection of endangered animals through interactive card playing and badge collecting activities in five stores in Shanghai; in November of the same year, Jiumu Store
launched the "Warm Winter Recycling" campaign. In November of the same year, the Company launched the "Warm Winter Cycle" program, giving endangered animals
storytelling through vivid illustration narratives, and opened the "Nature Notebook Workshop" in Shenzhen and Shanghai, guiding consumers to record the beauty of nature
in their handwritten notebooks, and promoting the awareness of the harmonious coexistence of man and nature.
The "Warm Winter Recycling" section at Jiumu Store
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 45
Stewardship Environment the Value Chain Communities Integrity
Shared Prosperity
Across the Value
Chain
Amid the convergence of deep collaboration across the industrial
chain and the wave of digital transformation, M&G has regarded
"Shared Prosperity Across the Value Chain" as the core engine
of sustainable development. Centering on four key dimensions,
namely technology innovation-driven development, sustainable
supply chain management, channel partner empowerment, and
information security and privacy protection, we have established
a collaborative management system covering both upstream and
downstream stakeholders. By integrating R&D resources, deepening
partner development, and strengthening data defenses, we have
built a transparent, resilient, and mutually growing business
ecosystem. While enhancing risk prevention and control capabilities
across the entire value chain, we have injected lasting momentum
into the industry's high-quality development.
Our goals
By 2025
To ensure that 100% of key suppliers comply with M&G ESG
guidelines
To integrate ESG requirements into all new supplier
screening and onboarding standards
By 2030
To ensure that ESG assessments and audits cover 80%
of suppliers
Topics addressed in this section
Technological innovation
Supply chain management
Partner development
Information security and privacy protection
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 46
Stewardship Environment the Value Chain Communities Integrity
Technological Innovation
M&G has remained committed to making technological innovation the core driver of our high-quality development and has established a sound R&D management system. At the same time, we regard intellectual property as a
key strategic asset and have built a systematic risk management and protection system. Through specific management measures, we ensured the effective implementation of technological innovation and intellectual property
protection, providing solid support for the Company's long-term high-quality development. Building on our strengthened competitiveness, we continued to provide technological empowerment to upstream and downstream
players across the value chain, leading the industry's high-quality development through our innovation capabilities.
Governance Strategy Opportunity and Risk Management
M&G's technology innovation governance structure is based on the M&G adheres to a consumer-centric innovation strategy and In response to the uncertainties associated with technological innovation,
Company's overall governance system12. To ensure the forward-looking comprehensively advances coordinated innovation across products, we have established a dynamic risk and opportunity assessment
nature and accuracy of our technology strategy, we have established marketing, channels, and digitalization, building long-term competitive mechanism. By combining quantitative assessment with qualitative
a dedicated strategic function department and an external expert barriers with solid technological capabilities. The Company focuses on analysis, we accurately identify key risk points and allocate dedicated
advisory mechanism to regularly conduct comprehensive assessments building reserves in material development, precision manufacturing resources accordingly, ensuring the effectiveness of our innovation
of industry technology iteration trends, scientifically demonstrate processes, and innovative design concepts to ensure sustained investments and strategic focus. In operational management and control,
technology pathways, and effectively mitigate the risk of deviation in technological leadership and product iteration capabilities. It aims to we adhere to the principle of "compliance as a prerequisite," integrating
technology roadmaps. At the execution level, the Technology Center translate technological advantages into market competitiveness, driving intellectual property protection and compliance risk management
takes the lead in overseeing the development and technical validation revenue and profit growth. At the same time, we elevate intellectual throughout the entire product life cycle to build a strong defensive
of our new structures, new materials, and new processes. The Digital property protection to a strategic level, effectively preventing the risk of moat for innovation. Meanwhile, the Company actively embraces open
Center coordinates and advances the Company's digital innovation and core technology leakage and safeguarding the expected returns on our innovation. Through in-depth collaboration with universities and research
transformation initiatives. The Legal Affairs Department takes the lead in innovation investments. In addition, we support business continuity institutes, we built an integrated industry-academia-research community,
implementing the intellectual property management system, covering through digital and intelligent capabilities, assist in improving business accelerating the commercialization of scientific and technological
patent and copyright applications, intellectual property protection, efficiency, and accurately capture strategic opportunities in the achievements while diversifying R&D risks.
and rights safeguarding, among other tasks, thereby safeguarding the digitalization process.
achievements of technological innovation.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 47
Stewardship Environment the Value Chain Communities Integrity
Management Measures and Performance
R&D Capabilities and Commercialization of Results
M&G continues to consolidate its innovation foundation as a national-level high-tech enterprise. During the reporting period, we invested
RMB190 million in technology R&D and product innovation, and received honors including the Science and Technology Progress Award
of the CNLIC, and the National Advanced Collective in the Light Industry; Axus Stationery received the "Specialized, Refined, Distinctive
and Innovative (SRDI) SMEs" honor awarded by the Shanghai Municipal Commission of Economy and Informatization.
Based on our R&D capabilities and deep insights into consumer needs, we continued to achieve technological breakthroughs in
underlying category technologies, functional uniqueness, and meeting consumers' core needs. In terms of deepening underlying
technologies, the Development and Industrial Application of New Environmental-Friendly Materials for Neutral Ballpoint Pens project
led by M&G, with participation from Taiyuan Iron and Steel Group, as well as the Key Technologies and Industrialization of High-
Performance Environmental-Friendly Ink , and R&D and Industrialization of High Specific Surface Area Fiber Materials with Sheath-Core
Structures and Environmental-Friendly Products projects, in which M&G participated in joint breakthroughs, were selected as advanced M&G Products Have Repeatedly Won the Four Major International Industrial Design Awards
scientific and technological innovation achievements in the light industry under the 14th Five-Year Plan; R&D and Application of TPE
Erasers with High Erasure Rate was selected for the Second Prize of the 2025 Science and Technology Progress Award of the CNLIC. In In 2025
terms of product design and aesthetics, M&G products have repeatedly won the world's four major industrial design awards: Germany's
iF Design Award and Red Dot Design Award, Japan's Good Design Award, and the United States' International Design Excellence Awards Investment in technology R&D Total R&D personnel
(IDEA). In addition, we have also received major design awards such as the Golden Pin Design Award and the Red Star Design Award.
During the reporting period, the Company successfully launched a series of innovative products, including the M&G Premium Retractable
Fountain Pen, Retractable Soft-Tip Highlighter, and the Meeboki Notebook Collection. Multiple products won honors in the "ISOSF China
Stationery Industry Innovation Competition," among which the M&G Premium Safety Scissors with Rotating Blade Sheath won the 2025
Germany iF Design Award.
RMB 190 million 405
Case "Chinese Paper, Better for Chinese Characters": Micro-innovation in the Technology of M&G Meeboki Notebook Collection
In response to increasingly refined user needs, M&G drove innovation based on consumers' real needs, transforming hard-core technologies into perceptible, high-quality
experiences. The Company focuses on Chinese-character writing, the most basic and core scenario, aiming to address consumers' key pain points through targeted technological
innovation. The Meeboki series builds its differentiated product strength across three dimensions: Paper craftsmanship, notebook structure, and detail design:
• Paper craftsmanship: 80 g/m? double-speed smooth-glide paper, specifically addressing common issues such as fountain pen's ink bleeding and gel pen's ink splattering; ink is less
likely to show through when writing on both sides, ensuring clear content and usability of the reverse side of the paper
• Notebook structure: 9 mm line spacing, avoiding the problem of Chinese characters being too crowded when writing or overly large blank spaces between lines; 180-degree lay-flat
design, delivering "convenient cross-page writing and more comfortable note-taking"
• Detail design: 360° weight reduction, using a flexible cover and lightweight materials; thin and rollable without leaving creases, while still offering a certain degree of water and dust
resistance
In addition, M&G combined technological innovation with emotional value by contracting emerging illustrators to enhance the product's aesthetic design, inviting top student
Pu Yixing as the "Good Notebook Traceability Officer" for transparent communication, and jointly publishing the White Paper on Notebook Consumption Insights in China with
Southern Weekly, strengthening consumers' perception of and trust in M&G's technological innovation from both public and professional perspectives.
M&G Meeboki Notebook Collection
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 48
Stewardship Environment the Value Chain Communities Integrity
Intellectual Property Protection
To strengthen the foundation of M&G's tech innovation, the Company formally established and implemented an intellectual property management system in 2021 and has
steadily refined its management policies to protect R&D and innovation outcomes. As national standards have evolved, the Company has closely tracked industry trends
and updates to the intellectual property management system and has revised 16 management policies, including the Intellectual Property Handbook and the Patent
Management Method , in line with the revised standard (GB/T 29490-2023). During the reporting period, the Company successfully passed the audit against the new standard
and officially obtained the Intellectual Property Compliance Management System Certification. During the reporting period, M&G filed 25 invention patent applications and
received 5 grants; the total number of valid patents stands at 1,488.
M&G invention patent applications Granted patents Total number of valid patents
In 2025
M&G Patent Applications and Grants
Cumulative Number of Patent Applications Cumulative Number of Granted Patents
Unit: item Unit: item
M&G Stationery
Intellectual Property Compliance Management System
Certification
To protect the rights and interests of distributors and consumers, the Company places great emphasis on the application and protection of patents, trademarks and copyrights. The "M&G 晨光 " trademark was recognized as a "Well-
Known Trademark" by the Shanghai High People's Court in 2,023, and the " 九木杂物社 " trademark was included in the "Shanghai Key Trademark Protection List" in 2025. In response to intellectual property infringements, the
Company promptly files complaints and reports with law enforcement departments, including market supervision departments, public security departments and customs. During the reporting period, M&G cooperated with public
security departments in 68 anti-piracy operations, including 57 administrative actions and 11 criminal investigations, successfully completing the anti-piracy mission and effectively protecting the Company's intellectual property and
technological achievements.
Case Enforcing Rights and Disrupting Illegal Chains
During the reporting period, M&G worked with public security authorities and dismantled a group in Chaonan District, Shantou City, Guangdong Province, that made, wholesaled and sold fake "M&G" G-5 refills. The
action led to the seizure of 340,000 fake G-5 refills and 270,000 packaging boxes, and to the arrest of more than 10 suspects. This operation delivered an exact strike against the entire "production-wholesale-sales" chain,
dismantling the operation, severing the supply chain, and targeting the source. It encouraged legal conduct, purified the market environment, and safeguarded the Company's brand reputation and consumer rights.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 49
Stewardship Environment the Value Chain Communities Integrity
Digital and Intelligent Transformation
M&G actively explores the business opportunities brought by digitalization and intelligent transformation, and We proactively embrace the AI+ era, making the deep integration of artificial intelligence technologies with
continues to advance the dual-engine drive of "Core Business Digitalization" and "Organizational Collaboration business scenarios a core engine for improving organizational quality and efficiency. During the reporting period,
Digitalization." In terms of core business, we launched a product life cycle management system, integrating we actively promoted innovative internal applications of artificial intelligence technologies and developed
fragmented data across the product development cycle into standardized transferable assets, significantly our first digital employee, Xiaochen, with a human resources knowledge Q&A function. Throughout the year,
reducing communication losses from ideation to market launch and improving collaboration efficiency between Xiaochen answered a total of 11,424 HR-related questions from employees, including leave policies and process
R&D and the supply chain; Colipu Group used digital employees to replace inefficient repetitive tasks. Through inquiries. This improved efficiency in handling basic employee inquiries by 98% and process handling efficiency
robotic process automation (RPA) and an intelligent rules engine, we achieved automated processing from by 50%, enabling HR services for employees to become more immediate and standardized. Meanwhile, to foster
customer order placement to inquiry and quotation, enabling automatic matching of customer requirements. In an AI atmosphere of innovation for all employees, the Company organized the "Excellence Selection of the
terms of organizational collaboration, based on having brought our core business online, we further advanced Most Advanced AI Practice Pioneer of M&G" event, attracting employees from various center departments to
the automation of production equipment, connecting the data chain from the production site to management participate. It collected 37 innovative topics across multiple business scenarios, such as data analysis, inventory
decision-making. During the reporting period, the automated stereoscopic warehouse at the M&G Central China management, and information review. Ultimately, six outstanding teams and three outstanding individual cases
Base was put into operation. After completion, the trunk line throughput capacity is expected to increase by two were selected, fully stimulating the innovation vitality of all employees in the field of AI practice.
times compared with the original level.
M&G's First Digital Employee, "Xiaochen" Excellence Selection of the Most Advanced AI Practice Pioneer of M&G
Total HR-related inquiries answered for Employee Basic Inquiry Efficiency Process Handling Efficiency
Innovation Topics Collected
employees Improved by Improved by
M&G's First Digital Employee, "Xiaochen" "Xiaochen" Chat Interface The "Excellence Selection of the Most Advanced AI Practice Pioneer of M&G" Event
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 50
Stewardship Environment the Value Chain Communities Integrity
Supply Chain Management
M&G is committed to building a stable, secure, and green sustainable supply chain. The Company has established and continuously improved its supplier ESG management system and empowers its suppliers, continuously
enhancing supply chain sustainability and building a green, transparent, and resilient value chain ecosystem.
Governance Strategy Opportunity and Risk Management
M&G has established a comprehensive supply chain governance Supply chain stability and compliance are the cornerstone of business M&G has established supply chain risk management covering
structure to ensure the compliance and sustainability of supply chain continuity. We identified that the key risk factors faced by the supply "identification-evaluation-integration-monitoring" and has incorporated
management13. The Company has established a cross-functional chain include the increasingly stringent ESG compliance requirements it into the Company's overall risk management system. The Company
collaborative supply chain ESG management structure. The Sustainability for supply chains by global and national governments, which may continuously improves its supply chain management system and has
Office coordinates the formulation of supply chain ESG strategic accordingly increase the complexity of supplier management and the formulated a series of policy documents, including Supplier Management
objectives, improves ESG management policies, and coordinates ESG associated input costs, as well as, in the context of the green transition, Method, Supplier Code of Conduct 14, New Supplier Onboarding
audits and performance evaluations of key suppliers. The procurement fluctuations in commodity market prices, which may bring pressure on Management Method, Supplier Evaluation Management Method, and
teams across all business lines embedded ESG risk management and our raw material cost control. The combined impact of these factors Supplier Management Control Procedures , to implement standardized,
control metrics into the overall management process for supplier may pose potential challenges to our operational efficiency and overall end-to-end process management for supplier development, evaluation,
onboarding, evaluation, and exit, and organized systematic training to profitability. At the same time, we also recognized that building a and control. We established a risk management and control model of
enhance the ESG awareness and management capabilities of personnel sustainable supply chain system can significantly enhance customer "onboarding screening, dynamic monitoring, closed-loop rectification,
in core positions, continuously improving the level of sustainable supply trust, bringing us long-term and stable procurement advantages as well and mechanism-based exit." At the onboarding stage, we conduct due
chain management. as opportunities to strengthen our brand reputation. To this end, we diligence on suppliers' performance in environmental compliance, labor
are committed to establishing an integrated four-in-one supply chain rights and interests, and business ethics, and require all cooperating
integration strategy of "quality-cost-delivery-sustainability," implementing suppliers to sign the Supplier Code of Conduct . During the monitoring
ESG management covering the entire process from onboarding to exit stage, we implement multidimensional tiered and categorized
to mitigate compliance risks, and actively promoting the green and management, and conduct high-frequency on-site audits and key
low-carbon transition and digital and intelligent empowerment of the monitoring for high-risk suppliers. At the same time, through internal
supply chain, so as to achieve mutual benefit and win-win outcomes audit oversight and regular risk communication and training, we continue
with upstream and downstream partners in the process of advancing a to enhance supply chain compliance awareness and risk resilience.
sustainable supply chain.
to the "Sustainable Development Management - Sustainable Development
Governance" section.
official website under "Investor Relations - ESG - Reports and Policies."
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 51
Stewardship Environment the Value Chain Communities Integrity
Targets, Management Initiatives and Performance
Strategic Pillars Goals Progress in 2025
To ensure that 100% of key suppliers comply with M&G ESG guidelines. 100% compliance rate for key suppliers in ESG assessment and remediation.
To ensure that ESG assessments and audits cover 80% of suppliers. 97 suppliers participated in M&G's ESG audits, achieving 100%
Sustainable supply coverage of key suppliers.
chain
To integrate ESG requirements into all new supplier screening and onboarding ESG risk audit elements have been added to the system used to rate and
standards since 2025. bring in new suppliers.
Supply Chain Management Process
M&G has set up a strong supply chain management system, defining a standard supplier management path that spans new supplier onboarding, quality monitoring, performance evaluation, and de-listing. This approach secures
supply chain stability and ensures a safe, high-quality supply of products. During the reporting period, the Company revised the New Supplier Onboarding Management Method and the comprehensive evaluation form for new
suppliers, further clarifying the audit standards and inspection methods used during on-site audits. Additionally, ESG-related risk factors are incorporated into the scope of assessment to improve risk management during supplier
access.
M&G Supplier Management Process
New Supplier Onboarding Tiered Management Routine Management
All suppliers must sign the Supplier Code of Conduct and pass Suppliers are grouped by product type, strategic fit and level Regular training sessions, on-site coaching and routine com-
an evaluation across three dimensions – supply capability, of cooperation. munication are held; incoming inspections are carried out on
compliance status, and audit – before being accepted. every batch of materials and unscheduled on-site spot audits
are conducted at suppliers' premises.
Exit or Relist Improvement and Enhancement Performance Evaluation
Taking into account both supplier performance evaluations Based on performance evaluation results, suppliers receive In accordance with the Supplier Evaluation Management
and corrective actions, the Company will start the supplier support to develop plans to improve scores; initiatives such Method suppliers are evaluated across five key areas: "Quality,
exit process when necessary. as regular quality training and deploying technical teams are Cost, Delivery, ESG and Service." Supplier classifications are
used. adjusted based on the evaluation results.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 52
Stewardship Environment the Value Chain Communities Integrity
Key Supplier ESG Assessment
M&G conducts annual ESG assessments and audits of suppliers, evaluating their ESG performance across five areas: sustainable procurement, environmental protection, health and safety, labor practices, and business ethics. Eight
zero-tolerance items are defined to prevent major ESG risks. The ESG evaluation process consists of five steps: self-assessment questionnaire, document review, on-site audit, rating, and corrective actions, forming a closed-loop
management system for continuous improvement. During the reporting period, 97 suppliers participated in M&G's ESG audits, achieving 100% coverage of key suppliers. M&G conducted 36 on-site audits and required suppliers to
rectify any non-compliance issues. The corrective action pass rate reached 100%.
M&G's ESG Audit Process for Key Suppliers
Self-Assessment Questionnaire Document Review On-Site Audit Rating Corrective Actions
The ESG self-assessment checklist The Sustainability Office reviews An annual on-site audit plan is Combine ESG self-assessment Based on the lost points from the
is issued to suppliers, and after all submitted materials. Depending developed based on the ESG self- scores and on-site audit scores to on-site audit, assist the supplier
suppliers complete the self- on the completeness of the assessment results. Suppliers are determine the supplier's annual in formulating a rectification and
assessment based on their actual documentation, the Office may audited on-site and scored using the composite ESG score rating. improvement program and track the
ESG management level and submit contact suppliers to request Supplier ESG Assessment Form . progress of corrective actions. After
supporting materials, procurement adjustments or clarifications the corrective action is completed,
staff conduct an initial audit. and subsequently determine the the Sustainability Office will review
supplier's ESG self-assessment it and determine the supplier's ESG
score. assessment results for the year.
Zero-Tolerance Items in M&G ESG Assessments for Suppliers
Operating with-
Illegal hazardous Failure to pass fire Employment of Discrimi- Non-compliance with mini-
out environmen- Forced labor Bribery
waste disposal safety inspections child labor nation mum wage standards
tal permits
Integrity in Procurement
In 2025
M&G adheres to the principles and commitments of clean procurement and ensures the fairness and transparency of the supply system by establishing a tight set of constraints and a
closed management cycle of supervision. The Company takes the Supplier Code of Conduct , Transparent Procurement & Integrity Convention and Supply Chain System Integrity Risk
The signing rate of the Supplier Code
Prevention and Control Management System as key management tools, and explicitly prohibits any form of commercial bribery and undue benefit transactions. During the reporting
of Conduct for finished goods and
period, the Company systematically sorted out the signing status of the Supplier Code of Conduct and promoted the completion of the retroactive signing work, achieve 100% signing of
raw/auxiliary material suppliers has
the Supplier Code of Conduct by all suppliers of finished products and raw material procurement to ensure that the relevant requirements were effectively conveyed and implemented
reached
in place.
On the basis of the system guarantee, the Company continues to extend its management tentacles. In 2025, the Audit Department further expanded integrity education from
procurement personnel to suppliers and conducted online anti-fraud propaganda targeting 314 suppliers throughout the year. In order to ensure that the system falls into place, the
Company's Audit Department regularly carries out special investigations and internal audits of supply chain fraud every year, and relies on the Anti-retaliation for reporting complaints
Management System to closely protect the whistleblower's relevant information and rights and interests; for procurement personnel who violate the relevant integrity system, the
Company will be investigated and verified in accordance with the Supply Chain System Integrity Risk Prevention and Control Management System to give sanctions, and continue to
optimize the clean and healthy supply ecology.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 53
Stewardship Environment the Value Chain Communities Integrity
Supplier Empowerment
Raw and Auxiliary Material Suppliers
M&G empowers suppliers to enhance their capabilities through regular communication, experience sharing, on-
site guidance, the M&G Business System (MBS), and periodic training. During the reporting period, for raw material Pre-shipment inspection
On-site empowerment for
empowerment for
procurement, a total of 29 on-site empowerment was carried out, while 22 suppliers participated in outbound
inspection empowerment, which enhanced the suppliers' ability in production site management and shipment
quality control; for the suppliers of finished products of the key categories, a total of 2 quality improvement
training camps held for were held to provide professional knowledge training for 42 suppliers. Moreover, 9 key
suppliers were provided with multi-stage and all-round empowerment covering 5S management, lean production
transformation, and innovation capability enhancement. M&G collaborated with suppliers to trace and analyze
the key issues identified in the ESG audit and provided targeted improvement suggestions. With M&G's support Finished Products of the Key Categories
during the reporting period, multiple suppliers made tangible improvements in areas such as chemical storage
and use management, workplace safety equipment optimization, safety signage posting, use of renewable Quality improvement Professional knowledge
energy, waste management optimization, etc. training camps held for training provided for
M&G Supplier Quality Improvement Training Camps M&G On-site ESG Audits and Training for Suppliers
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 54
Stewardship Environment the Value Chain Communities Integrity
Partner Development In 2025
M&G upholds the concept of "Partnership for a Shared Future" and considers its channel network, which spans 1,200 cities and
nearly 70,000 retail stores nationwide, a core strategic asset. The Company adheres to benefit sharing and continues to enhance Retail store image upgrades completed Specialized sales zones created
the resilience of the value chain through digitalization and the standardization of the entire chain. Meanwhile, through cross-
border integration of multiple resources, deepening industry-education integration, advancing green transformation, and
collaborating with industry partners to build a high-quality, sustainable industrial development ecosystem.
Store Operations Support
Through brand extension and capability transfer, M&G continuously enhances the effectiveness of product displays and operational quality in retail
stores. Throughout the year, the Company completed image upgrades at 45,000 retail stores, creating 388,000 specialized sales zones.
Store Image Refresh Category Zone Development
By optimizing store layouts, implementing a unified visual Focusing on peak stationery sales seasons such as the back-
identity system (VI), and conducting training on the proper to-school period, the team implemented zoned layouts for
use of materials, store image upgrades are supported and categories including writing instruments, correction tape,
sales are boosted. rulers and compasses, erasers, and paper products. The team
also redesigned and provided implementation support for in-
store themed zones and product display counters to enhance
the consumer shopping experience.
Store Display Optimization
Digital tools
M&G is committed to building an end-to-end digital system covering the entire product life cycle. With the goal of achieving 100% online operation of core business systems, the Company uses digital tools to deeply integrate the
supply chain with retail outlets, driving systematic improvements in channel operational efficiency and responsiveness.
The Company continues to refine its proprietary "Jubaopen" To meet end-user needs, the team raised the user experience Overseas versions of " JuBaoPen" and " M&G Alliance" were
app, providing data support to channel partners across three by adding tools such as automated new product displays, successfully launched. By exporting mature digital tools
dimensions: "task tracking (people), category discovery real-time logistics tracking, and support for multiple across regions, the Company provided systematic support
(products), and business analysis (stores)." During the packaging barcode scanning. At the same time, by linking to for overseas sales operations, effectively enhancing product
reporting period, the Company further enhanced visual food delivery platform interfaces, the system lets end-users accessibility and purchasing convenience for global users.
management of channel operations through dashboard join with one click and manage inventory across platforms,
redesigns and improved store-quality analysis. along with out-of-stock alerts and discount tools, which
strongly supported the rapid growth of the on-demand retail
(O2O) business.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 55
Stewardship Environment the Value Chain Communities Integrity
Training and Guidance
Through systematic training and on-site support, the Company enhances channel partners' operational capabilities. During the reporting period,
the Company organized a series of events, including marketing conferences, spring new product launches, elite training camp summits, partner
meetings, nationwide mobile training sessions for retail elites, and the 2026 Spring Schooling Peak Season Empowerment Program. Training content
spanned multiple dimensions, including strategic benchmarking, new product promotion, and refined retail management, with a total of 5,876 partner
participants. In addition to central training, the headquarters team conducts daily and periodic checks to track the growth of retail outlets and partner
platforms. Based on market trends and feedback, the team helps channel partners adjust their business plans, thereby enhancing overall operational
stability.
National Retail Elite Training
Case Retail Empowerment for Direct-Supply Large Stores: Building a Standardized Management Cycle
M&G aims to create a leading retail solution benchmark in the stationery industry by exporting the M&G Space Brand Visual Guidelines 2.0 to key direct supply partners
with scale and influence, and by constructing a closed management cycle of retail services that covers "product matrix, display standard, and marketing drive."
• Precise Product Allocation: The Company has built a core product pool covering five series and over 500 SKUs. Relying on the commodity hierarchical
management model, the Company realizes "one product portfolio" precise stocking and automatic replenishment, optimizing the partners' inventory structure
and turnover efficiency from the source.
• Standard Visual Output: Provide direct supply partners with full case design support from the visual identity system (VI), soft furnishing materials, and space
layout. During the reporting period, more than 70 sets of in-depth, customized design solutions were produced to ensure a high-quality presentation of the
terminal image and brand consistency.
• Data-Driven Operational Conversion: Relying on the marketing timeline and diversified interactive games, the Company assists its partners in establishing an
all-link consumer reach mechanism. By standardizing business processes and sharing resources, the Company's successful operational experience is transformed
into partners' marketing capabilities.
广西新华书店阵地打造
Guangxi Xinhua Bookstore Store
Development
Case Empowering Clients to Launch Instant Retail Business
Sichuan Paperclip Network Technology Co., Ltd. (hereinafter "Sichuan Paperclip"), a core strategic partner of M&G for over 15 years, sought to innovate and transform its business model amid market changes in the
traditional office supplies sector. Through multiple in-depth surveys and thematic workshops, the M&G project team guided and supported Sichuan Paperclip in entering the new instant retail (O2O) market. During the
start-up phase, M&G assisted the client in completing the opening of an online store and standardized product display, analyzing sales data to enhance the daily product selection and promotion plan during the operation
period, and assisting the client in achieving a 15% increase in instant retail sales through special subsidies and dynamic adjustment of categories during the school season, successfully realizing the dual-mode operation of
"offline + online." This transformation created new growth opportunities for the partner and strengthened the partnership within the value chain through practical support.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 56
Stewardship Environment the Value Chain Communities Integrity
Industry Collaboration
In 2025
Adhering to the philosophy of mutual development and win-win cooperation, M&G actively participates in the work of industry associations, including the China Stationery and
Sporting Goods Association and the China Writing Instrument Association. The Company shares its strategic plans and practical achievements at industry conferences to contribute to
Industry associations and
the industry's healthy and orderly development. During the reporting period, the Company joined 21 industry associations and chambers of commerce, paying annual membership chambers of commerce joined
fees totaling RMB240,000.
M&G actively fulfills its responsibilities as a leading enterprise in the industry through cross-border resource integration and industrial collaboration, driving the transformation of
the stationery industry toward specialization, greening, and higher value. The Company partnered with People's Education Press to pioneer an integrated education and stationery
model, filling a gap in specialized educational stationery solutions; it collaborated with the China Student Sports Federation (CSSF) to respond to the strategy of "Sports Powering the
Nation," and promotes the integration of sports and education and the development of sports products; it partnered with the Ministry of Ecology and Environment to launch the "Earth
Guardians" initiative, setting benchmarks for sustainable products and guiding the value chain toward low-carbon development. Additionally, in collaboration with Southern Weekly, it
released the White Paper on Notebook Consumption Insights in China to lead industry-wide consumer insights, and leveraged international platforms such as the Boao Forum for Asia
and COP30 to showcase the professional quality and sustainable concepts of Chinese stationery.
M&G and the China Student Sports Federation (CSSF) Announce Strategic Partnership M&G's Sustainable Products Debut at the UN Climate Change Conference (COP30)
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 57
Stewardship Environment the Value Chain Communities Integrity
Information Security and Privacy Protection
M&G places a high priority on information security and privacy protection. By establishing and improving its information security management system, the Company safeguards the information security and privacy rights of its
customers, employees, and partners, protects the security of its corporate data assets, and supports the sustained and healthy development of its business.
Information Security and Privacy Protection
Management System Information Security Management
M&G places a high priority on information security and privacy protection and strictly complies with laws and The Company relies on a comprehensive system of policies and procedures for information security and privacy
regulations, including the Cybersecurity Law of the People's Republic of China , the Data Security Law of the protection to establish an end-to-end management mechanism covering early warning, response, and resolution.
People's Republic of China, and the Personal Information Protection Law of the People's Republic of China. M&G has formulated a business continuity plan (BCP), which includes data backup, system redundancy, disaster
The Company has formulated multiple management policies, including the Information Security Management recovery solutions, and specific operational procedures and responsibilities. BCP simulation tests are conducted
Manual, the Information Security Policy, the Information Security Management Organization, the System at least semi-annually. During the reporting period, we actively responded to the cybersecurity vulnerability
Construction Security Management Policy, the Information Classification and Grading Labeling Management guidelines issued by the Cyberspace Administration of Songjiang District, Shanghai. We promptly mobilized our
Policy . By continuously improving and refining our information security and privacy protection management technical resources to conduct a comprehensive review and remediation of our website and information systems.
framework, we ensure that the Company's information security management activities are conducted in a This enabled us to eliminate potential risks promptly and further ensure the effectiveness of our current systems.
compliant and orderly manner. The Company strictly adheres to the principles of "legality, legitimacy, and
In 2025, the Company fully adopted Feishu as its unified office platform and use this as an opportunity to
necessity," clearly and transparently informing clients and consumers of the purpose, scope, and rationale for
strengthen its information security governance. The Company has established a working group to promote
data collection, and ensuring that all business operations are conducted only after obtaining explicit consent.
the Confidentiality Classification Management System, issued the Guidelines for Document Confidentiality
Currently, the M&G Alliance has obtained Level 3 certification of the Security Classified Protection for Information
Classification and Access Control , and established a protection system covering the entire document life cycle.
System Registration. The Jiumu Store social membership system has obtained Level 3 certification of the Security
Through a "tiered authorization and external access approval" mechanism, we implement granular controls over
Classified Protection for Information System Registration, and the email system has obtained Level 2 certification
document viewing, forwarding, and external access, thereby strengthening internal information security barriers
of the same scheme. Colipu Group has obtained ISO 27001 Information Security Management System and
and driving significant improvements in the Company's information security management standards.
ISO 27701 Privacy Information Management System certifications. During the reporting period, M&G did not
experience any data security breaches or incidents involving the leakage of customer privacy.
M&G Data Breach Response Mechanism M&G Information Security Early Alert Mechanism
Emergency System administrators and security administrators at all levels will check whether the devices under
Take prompt action to prevent or minimize losses resulting from an incident. Receiving Alerts
Response their management contain the vulnerabilities mentioned in the alert.
Prompt Targeted Security administrators at all levels will urge their departments to implement targeted preventive
Notify the data subject promptly.
Notification Prevention measures and conduct random inspections of the department's systems.
Improvement Investigate the cause of the incident, develop and implement corrective Timely Once a related incident occurs and is resolved, report it to the department's security management
Plan measures to prevent recurrence. Reporting organization.
To enhance information security awareness among all employees, the Company has continued to conduct a variety of information security training and awareness campaigns. During the reporting period, the Company released
the instructional video M&G Employee Information Security Training . It produced specialized training materials to raise awareness of fraud prevention, which were uploaded to the learning platform. Concurrently, the Company
implemented email alerts to warn against fraudulent messages, thereby strengthening employees' daily security vigilance.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 58
Stewardship Environment the Value Chain Communities Integrity
Privacy Protection Management
The Company has established Group-wide Personal Information Security Protection Management Measures that clearly define the channels for obtaining personal information, collection methods, usage principles, retention
periods, and deletion procedures. We strictly adhere to publicly disclosed privacy policies to ensure the compliant use of information. The Company has established an agile emergency response mechanism; should any personal
information breach be detected, we will immediately launch an investigation, implement control measures, and promptly notify relevant parties. We will also take remedial actions based on the results of the investigation to
minimize the impact of the incident on our clients and consumers. During the reporting period, all business segments further strengthened their security measures. Jiumu Store continued to enhance its procedures for responding to
data breaches and conducted regular employee awareness campaigns; Colipu Group completed a comprehensive upgrade to its website security, effectively mitigating data breach risk through data anonymization, access control,
and log analysis.
The Company's Audit Department conducts annual audits covering the collection, storage, and deletion of personal information, as well as account and access management, policy development, and third-party oversight. Building
on the keen insights into compliance risks in the recruitment process gained in 2024, the Company will extend its information security protections to job applicants through its online recruitment system in 2025, thereby ensuring
comprehensive privacy protection across all stages—from talent acquisition to day-to-day operations.
Case Jiumu Store Member Privacy Protection Initiative
In terms of data security and risk management, Jiumu Store strictly adheres to a five-step response process, which includes risk identification, system isolation, root cause investigation (locating the source of the leak
and determining the scope of impact), business notification, and reporting to regulatory authorities. To ensure data security, the Company implements measures to isolate data and administrative backends between
development and testing environments and the production environment, restricting development and testing personnel from querying, exporting, logging into, viewing, or editing data in the production environment.
During the reporting period, Jiumu Stores conducted annual simulation drills, effectively improving the team's emergency response efficiency; simultaneously, the Company implemented a comprehensive backup strategy
to ensure a 100% success rate for disaster recovery. For technical roles, the Company focused on hands-on training in encryption, data masking, and cryptographic computing. In contrast, for testing roles, it strengthened
training in system operation standards, thereby comprehensively enhancing employees' data security literacy.
Five-Step Response Process
Reporting to
Risk identification System isolation Root cause investigation Business notification
regulatory authorities
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 59
Stewardship Environment the Value Chain Communities Integrity
Employees and
Communities
M&G embraces the development philosophy of co-
building and sharing and regarded employee well-being
and community prosperity as important components of
corporate value. By establishing an occupational health
and safety assurance system, improving the support
mechanisms for employee rights and development, and
fostering a diverse, equitable, and inclusive workplace
environment, we provide employees with a platform
for self-growth and value realization. At the same
time, the Company actively fulfills its corporate social
responsibilities. The Shanghai M&G Charity Foundations
continues to deepen its efforts in rural art education,
community development, and public welfare initiatives,
supporting national strategies such as rural revitalization
and contributing to the joint creation of a better home
for society.
Our goals
From 2024
To maintain 0 severe injuries and fatalities annually
By 2028
To ensure that 100% of full-time employees are
covered by the training system
BY 2030
To achieve 10 million instances of empowerment
Topics addressed in this section
Occupational health and safety
Employee rights and development
Diversity, equity and inclusion
Social welfare
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 60
Stewardship Environment the Value Chain Communities Integrity
Occupational Health and Safety
M&G has always regarded production safety and employees' occupational health as its top priorities, and has continued to improve its safety management systems and occupational health and safety management system to create
a healthy and safe working environment.
Strategic Pillars Goals Progress in 2025
To maintain zero severe injuries and fatalities annually. Zero serious injuries and fatalities.
Empowering employees
and communities
Safety Management System
M&G strictly complied with laws and regulations such as the Law of the People's Republic of China on Work Safety , Law of the People's Republic of
China on Prevention and Control of Occupational Diseases , and Regulations on Work-related Injury Insurance , established a comprehensive quality,
environmental, and occupational health and safety (QEHS) management system, and formulated and implemented a series of safety management
systems, including the Occupational Health and Safety (OHS) Policy 15, Operational Control Procedures for Environmental and Safety Management ,
and Safety Management Standards . At present, M&G headquarters and subsidiaries including Colipu Group and Axus Stationery have obtained ISO
Standardization of Corporate Work Safety (GB/T33000) and was rated as a Level 3 safety standardization certified enterprise. In terms of the management
mechanism, we have established a safety management team at the Group level, continuously strengthening compliance audits and institutional
penetration across subsidiaries at all levels to ensure consistency in Safety Management Standards and effective implementation. We also clarified
the boundaries of health and safety responsibilities through the EHS management responsibility map, and carried out grid-based management with
responsibilities assigned to individuals. The signing rate of work safety responsibility statements reached 100%. We continued to increase investment in
production safety, achieving 100% coverage of work injury insurance for all employees. Annual dedicated investment reached RMB2.96 million. Through
resource allocation and a risk-sharing mechanism, we strengthened the occupational health and safety safeguard. During the reporting period, the
number of recordable work-related injury incidents decreased by 31% compared with the previous year. In addition, we actively promoted the digital
and intelligent upgrade of safety management. Leveraging the upgraded M&G Appointment Management System (TMS), the Logistics Center carried out
safety inspections and realized automated management of hazards from identification to closure, thereby enhancing the efficiency and management
accuracy of risk inspections through technical means.
Work safety responsibility agreement
Work-related injury insurance coverage rate Annual special investment
signing rate
Signing of the Safety Responsibility Agreement for the M&G Production Center
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 61
Stewardship Environment the Value Chain Communities Integrity
Safety Risk Prevention
In 2025
The Company continues to improve the emergency management system, and has formulated and regularly
updates Emergency Preparedness and Response Control Procedures . In terms of risk inspections, we have
established a routine on-site safety inspection mechanism to identify potential safety hazards and risks, Drill coverage rate across all production
compiled a list of issues, and continuously tracked rectification progress to ensure the implementation of bases reached
safety risk rectification requirements. We proactively carry out in-depth reviews of work-related injury accidents
and ongoing inspections for safety hazards. In response to identified deviations in policy implementation
and localized protection gaps, we systematically mitigate safety risks by promptly addressing omissions and
improving production safety rules and regulations. During the reporting period, we promptly rectified non-
compliant operations and protection gaps identified through inspections, strengthened warning notices,
optimized operational procedures, and improved our safety management level. In terms of special equipment
management, the Company strictly complied with the requirements of State Administration for Market Fire Emergency Drill Conducted at the Logistics Center
Regulation Order No. 74, established a working mechanism of "daily management, weekly inspections, and
monthly scheduling," implemented primary responsibility, and promptly eliminated safety hazards. In addition,
we routinely organized multi-scenario emergency drills, such as fire emergency response and hazardous waste
leakage. During the reporting period, the drill coverage rate across all production bases reached 100%, ensuring
that employees at all levels were familiar with emergency procedures and preventing safety risks.
Case Axus Stationery Established A Safety Risk Management and Control Mechanism with Full Participation by All Employees
The Axus Stationery Shanghai plant innovatively launched a "near-miss" incident collection campaign, systematically collecting safety hazards that had not yet caused
actual harm to achieve early risk identification and control. During the campaign, more than 120 hazards of various types were reported cumulatively, with a corrective Hazards of various types Corrective action
action closure rate of 100%, effectively enhancing the depth of on-site safety risk identification. reported cumulatively closure rate reached
+
Based on this collection campaign, the plant established a normalized safety risk early-warning mechanism. Through a "three-level feedback mechanism," a weekly
issue list was formed, and high-frequency hazard points were incorporated into the "Safety Red and Black List" for public disclosure as training materials for safety
briefings. In addition, the Company established a dedicated incentive mechanism, effectively motivating a shift in awareness among frontline employees from "passive cases %
compliance" to "proactive risk avoidance."
Three-level Feedback Mechanism for Safety Hazards at Axus Stationery Shanghai Plant
Responsible Body Operational Requirements Time Requirements
Employees Report locations, operational contexts, and potential risks of hidden hazards to unit heads or team leaders. On the same day
Unit Heads/Team Leaders Summarize and report in written form to supervisors and the EHS working group. On the same day or the following day
Supervisors and the EHS Working Group Visit the site to verify actual conditions and develop improvement plans. On the same day or the following day
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 62
Stewardship Environment the Value Chain Communities Integrity
Health and Safety Education
In 2025
The Company legally organizes employees at our sites to participate in safety education and training, strictly
implements the three-level safety education for new employees at the plant level, workshop level, and pre-
job level, and requires 100% of personnel engaged in special operations and in critical safety positions to work Cumulative safety-related training totaled
with valid certificates. At the same time, based on the annual safety training plan, we have established a tiered
empowerment system covering "management personnel, safety officers, and all employees." The training
content covered fire safety emergency management, hazard identification and risk assessment, workplace
safety laws and responsibilities, and operational safety. During the reporting period, each subsidiary plant of hours
M&G held four routine training sessions per month for all employees, with a cumulative total of 23,840 hours of
safety-related training. In addition, we promote cultural development mechanisms such as "Job Safety Chant
Lessons," embedding a safety culture into workshop practices and fostering a safety culture atmosphere in which
"everyone pays attention and everyone participates."
Health and Safety Training at the South China Base
Occupational Health Management
M&G continues to improve the occupational disease prevention and control system, and remains committed to systematically reducing exposure risks to occupational disease hazard factors such as dust, toxic gases, and noise.
The Company has implemented a pre-employment and on-the-job health examination system, established and maintained occupational health records, and promptly reassigned employees identified as having occupational
contraindications to avoid exposure to occupational disease hazard factors such as dust, toxic gases, and noise. Besides, we regularly conduct on-site testing of occupational disease hazard factors to effectively ensure environmental
safety, while providing employees with labor protection supplies and requiring employees to wear them. Taking the renovation of sanding line in the Axus Stationery Siyang Plant as an example, the plant reduced the generation
of dust at the source through an integrated equipment dust removal system. At the same time, it adjusts the regional layout of personnel density in the workshop to reduce personnel density in operating areas, thereby effectively
safeguarding the respiratory health and operational safety of employees.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 63
Stewardship Environment the Value Chain Communities Integrity
Employee Rights and Development
M&G actively protects the rights and interests of all employees and places great importance on their comprehensive development. By focusing on the characteristics and needs of talent, the Company has established a multi-level,
multi-format, and diversified talent development system, providing high-quality learning resources and growth platforms to stimulate talent vitality and support mutual growth between the Company and its employees.
Protection of Employee Rights
M&G strictly complies with the Labor Law of the People's Republic of China, the Labor Contract Law of the People's Republic of China , and other relevant laws and regulations, as well as
the seven fundamental conventions of the International Labor Organization (ILO) ratified by China, including the Equal Remuneration Convention . We have developed human resources
management systems, such as the Employee Handbook , to lawfully safeguard employees' legal rights and interests. M&G firmly prohibits forced labor and the employment of child labor, does
not tolerate any unlawful infringement of employees' legitimate rights and benefits, and forbids discrimination based on gender, region, ethnicity, religion, age, pregnancy or marital status,
disability, or any other legally protected characteristic. We maintain zero tolerance towards harassment and violence. During the reporting period, the Company ensures all employees to
sign employment contracts, maintains 100% coverage of social insurance for employees, pays salaries in full and on time, and ensures that employee wages exceed the local minimum wage
standard.
The Company established a trade union in line with laws and regulations, and all employees are members of the union. Relying on the union, management forums, anonymous surveys and
other formats, we have set up regular and varied channels for employee communication. We foster an open and clear feedback system, encouraging employees to open and equal consultation
channels with colleagues, superiors and subordinates through public and formal communication platforms and channels and to submit reasonable suggestions or views to management.
During the reporting period, the Company actively coordinated to address labor disputes and maintained a record with no major labor disputes.
Employee Social Insurance Coverage Rate
Trade Union Coverage Rate
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 64
Stewardship Environment the Value Chain Communities Integrity
Talent Attraction and Recruitment
M&G strictly enforces the Recruitment Management Policy and establishes selection procedures with unified standards and transparent processes to
Colipu Group Actively Explores
ensure that evaluation criteria focus on the position's professional nature and safeguard the rights and interests of all candidates in fair competition. Case
Under this mechanism, the Company actively recruits talent through multiple channels, including campus recruitment, social hiring, internal referrals,
AI-Empowered Recruitment
and the "Huoshui Plan" (an internal talent mobility mechanism) to offer flexible employment opportunities, to continuously expand our talent pool and
In order to further develop a fair, diversified and efficient
invigorate the organization.
interview environment, Colipu Group continued to improve its
recruitment management system. During the reporting period,
the system introduced AI technology on the original basis
M&G actively engages in university-industry partnerships and continuously expands campus recruitment and realized a number of new functions online, including AI
channels to precisely match graduates' employment and internship needs. Particular emphasis is customer service robots, intelligent resume scoring, automatic
placed on the "Child of Light" Management Trainee Program, which offers a comprehensive 18-month message push, AI-assisted interviews, recruitment data Kanban,
Campus Recruitment
development system. This program provides systematic support – from onboarding guidance to etc., which effectively promoted the intelligence and efficiency
professional empowerment – to cultivate a solid reserve of talent for the Company's long-term of the recruitment process, and at the same time improved the
development. interview experience of the applicants.
The Company responds to the policy of stabilizing employment.
New jobs created in 2025
Leveraging its stable production and operations, it continues to provide
a large number of labor positions, offering a reliable career starting
Diverse Employment
point for both local and migrant workers. With the completion and
commissioning of the Central China base, more than 400 new jobs
were created during the reporting period, of which more than 60%
of which
were local employees, effectively boosting regional employment. To
address the flexible labor demands in production and logistics, the
local employees accounted
Company provides diverse flexible employment opportunities, such as for over
manual labor, equipment operation, sorting, loading and unloading.
Specifically, we have established inclusive positions tailored for 'stay-
at-home mothers' to effectively absorb and empower the social labor
force.
The Company has expanded the use of a digital recruitment platform,
promoted the online construction of internal recommendations, Proportion of hires
and realized the self-service inquiry and recommendation function through internal referral
channels in 2025 reached
of internal promotion positions, which effectively improved the
Internal efficiency of the internal promotion process and enhanced the degree
Recommendation
of professional suitability of the candidates and the organizational
culture fit. During the reporting period, hires through internal referrals %
accounted for 9.5% of total hires, making it an integral part of the
Company's talent recruitment and development system.
M&G Awarded "Best Recruitment Team" in the 8th China HR Sirius Awards
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 65
Stewardship Environment the Value Chain Communities Integrity
Training and Development
M&G is committed to building a systematic and forward-looking talent development ecosystem, closely aligning the cultivation of employee potential with the Company's strategic objectives. We provide diverse learning resources
and clear career paths, fostering an atmosphere of continuous learning to ensure that employees are empowered and can realize their personal value within a dynamic business environment.
Strategic Pillars Goals Progress in 2025
To ensure that 100% of full-time employees are covered by the training Employee training coverage reached 85.6%.
Empowering employees
system by 2028.
and communities
Promotions and Incentives
M&G has formulated the Employee Promotion Management System to provide employees with a clear career The Company has built a differentiated compensation system, deeply linked to business achievements, to
development framework and advancement pathway. The Company has established multiple promotion drive organizational effectiveness through incentive mechanisms. We have a performance-based variable
mechanisms, including annual promotion, on-post promotion, management trainee promotion, and compensation mechanism for all employees that accounts for employee performance bonuses and year-end
management-level promotion. Promotion criteria are determined based on comprehensive performance awards based on performance evaluations, as well as position and salary adjustments. During the reporting
evaluations, center achievements, and other dimensions to ensure fairness and transparency in the promotion period, the Company further revised the Performance Management System , optimized the link between
system. During the reporting period, new management specifications for promoting senior management performance results and individual bonuses, and increased bonus incentives for top performers. At the same
personnel were added, and the scope of application and qualification requirements for top-ranking promotion time, special incentive programs were tailored for core business lines such as overseas business, product
were optimized. By optimizing the standardization and scientificity of the promotion management process, research and development, and large retail stores to effectively stimulate the enthusiasm and creativity of key
a clearer career development path is provided for employees, and core talents are accurately selected and business teams.
cultivated.
Training and Progress
In 2025
M&G is committed to improving the training system so that each employee can access the training resources that best suit their stage of career development. The Company
has built a "Talent Development Panorama" that centers on the three dimensions of general knowledge, professionalism, and leadership, forming an employee training Average Training Hours per Employee
system characterized by "full-cycle, multi-level, and practice-oriented" features. Currently, the training system covers 100% of full-time employees.
During the reporting period, in terms of professional skills empowerment, the Company conducted in-depth talent assessments across core functional sequences, including
product, sales, and procurement. By precisely identifying gaps in position-specific competencies, we provided employees with a multi-level and classified customized
curriculum system, effectively transforming theoretical knowledge into practical capabilities. In terms of general competence empowerment, the Company launched
the "M&G Lecture Class" program, which was open to all employees for active enrollment, with a total of 6 offline training sessions and 2 online thematic camps covering
Investment in Training
practical topics such as Digital Transformation and AI Practice, Project Management Course for Product People, Business Negotiation Skills, etc. A total of more than 880
participants attended the training. In terms of leadership development, we continue to deepen the classic management training program and launch a new specialized
training program for middle and senior management to systematically improve managers' strategic vision and comprehensive leadership.
RMB 3.04 million
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 66
Stewardship Environment the Value Chain Communities Integrity
M&G's subsidiaries organize specialized training and empowerment programs tailored to their respective business requirements. Jiumu Store has launched three-phase courses, namely "Star Start," "Leading Plan," and "Huangpu
War Camp," for employees at different levels in retail stores to enhance their knowledge and empower their career development, covering 1,650 people during the reporting period. Through years of internal trainer training, Colipu
Group has built a team of 311 internal trainers and constructed a three-dimensional training system of "business-oriented, online and offline integration" to realize the effective precipitation of organizational knowledge and ability.
In addition, we encourage employees to pursue external professional qualifications highly relevant to their positions during their employment and establishes an incentive mechanism to reimbursements for professional certification
exam fees. We continuously empower employees in audit and finance positions to deepen their professional fields, with 3 employees certified as Certified International Internal Auditors (CIA) and 8 employees certified as finance
professionals. In 2025, we further expanded the coverage of the certification incentive mechanism, introduced a special certification for safety management, and subsidized and supported 18 employees in completing the safety
officer training certification, to consolidate the foundation of safety production.
Case "Child of Light" Management Trainee Development Program
M&G regards management trainees as strategic reserve talent for the future and has prioritized their development. During the reporting period, the Company conducted a comprehensive upgrade of the management
trainee program across the entire chain, from talent selection and identification to process-oriented training and career development. By the end of the reporting period, the retention rate of this cohort of management
trainees had reached 98%. Through systematic training and real work, a group of reserve talents has taken on duties in key roles. The M&G Management Trainee Development Program centers on "Cultural Heritage and
Job Competence" and focuses on the following key areas:
• Cultural Integration and Value Transmission: Through intensive training, face-to-face training for executives, and
cultural classes, the Company deepens its understanding of M&G's culture, strategy, and business, and the lead
instructors model M&G's values.
• Development of Practical Job Skills: Through task guidance, instant feedback, and monthly review, the course
helps students complete transition into skilled professionals and proficient role-holders; it emphasizes the daily task
management cycle, weekly summary and other workplace habits.
• Systematic Learning and Habit Formation: Through a four-week online course on The 7 Habits of Highly Effective
People , supplemented by reflective and practical assignments, bussiness professional is driven.
• Cross-Cohort Integration and Innovation: Through the "Integration and Innovation Camp," deep links and team
creation are fostered among the 2024 and 2025 management trainee groups.
Case "Combination of Training and Operation"-New Leaders Training Camp
To accelerate the development of business acumen and integrated management capabilities among core leadership,
the Company launched the "New Leaders Training Camp," focusing on the breakthrough in three dimensions of business
solutions: business thinking, innovation and ability to change and innovate. By imparting management tools such as the
MBS methodology and the M&G six-step method, we emphasize application and practice through real business cases.
Through the improvement of eight critical t of replicable problem-solving methodologies,business initiatives, we have
achieved several substantive operational enhancements.This process has led to the developmen, such as Return Process
Optimization and Store Attachment Rate Enhancement . These efforts prioritize situational awareness and collective
problem-solving, successfully internalizing the MBS methodology as a common business language and management logic
for our leaders.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 67
Stewardship Environment the Value Chain Communities Integrity
Happy Workplace
M&G actively builds an all-round, multi-level welfare and culture system and is committed to creating a warm corporate culture. We use the dedication survey to listen to and respond to employees' voices and demands. At the same
time, we provide comprehensive welfare policies and organize colorful cultural activities to foster a positive, harmonious, and pleasant workplace atmosphere and enhance employees' sense of belonging and happiness.
Employee Engagement Survey
The Company annually commissions a professional, independent third-party agency to conduct a company-wide employee engagement
survey, which is anonymous and covers dimensions such as company strategy, organizational capabilities, career development, cultural
values, etc. In the inaugural survey conducted in early 2025, employee participation reached 90%, yielding over 1,400 pieces of authentic
feedback. Following the results, management initiated in-depth discussions that identified "collaboration, leadership, and care" as three
strategic areas for improvement. To ensure that these changes are effectively implemented, improvement actions were cascaded down
to various functional centers through co-creation workshops. For example, the Digital Center leveraged the opportunity presented by a
switch in collaboration tools to release the Rules for Efficient Work, breaking down collaboration barriers. Jiumu Store quickly adjusted
restroom ratios based on staff demographics, improving facility inclusivity. Through the rapid execution of these initiatives, employees
have experienced more empathetic and efficient management, effectively strengthening organizational cohesion and a sense of
belonging.
Employee participation in the inaugural
engagement survey reached
Authentic feedback received
totaled over
Executive Workshop on Employee Engagement
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 68
Stewardship Environment the Value Chain Communities Integrity
Employee Benefits
In addition to ensuring the implementation of statutory benefits such as social insurance and paid leave, M&G
Highlights of the 2025 Employee Benefits Upgrade
has established and continues to refine a multi-tiered employee benefits system. During the reporting period,
the Company released the "Employee Benefits Panorama," which systematically integrates the five dimensions
of growth and development, respect and recognition, emotional connection, health protection and customized
• Benefit Holidays: Half-day benefit holidays were added for International Women's Day and
care to protect employees in all aspects. The platform for employee benefits and the "Xiaochen" AI assistant
Children's Day to encourage employees to spend more time with their families and achieve a
were put online during the year, realizing the intelligent integration of policy consultation, activity guidance
better work-life balance;
and process application. This has promoted the transformation of benefits services from "people looking for
benefits" to "benefits looking for people," and effectively enhanced the efficiency of achieving benefits and • Flexible Work Arrangements: Implemented a pilot flexible work hours for selected functional
employees' sense of happiness. roles, allowing employees to adopt staggered shifts based on business requirements and
personal needs;
• Health Check-ups Coverage: Continuously broadening coverage of employee health check-
ups to benefit a greater number of frontline employees;
• Health Services: Utilizing the on-site gymnasium and medical room in our headquarters,
employees can book fitness sessions, medical exams, and club activities via a self-service
welfare platform; introduced the physical therapy resources of traditional Chinese medicine
to provide services such as pulse questioning, neck and shoulder adjustment, and meridian
unblocking to alleviate the occupational physical fatigue of employees;
• Mental Health: Introducing an online "Mental Health Hub" as part of the Employee Assistance
Program (EAP) to provide professional psychological support;
• Benefits Promotion: Launched "Benefits Month" activities, transforming traditional benefits
promotion into a fun employee experience through interactive forms such as live lectures,
creative bazaars, and treasure hunts.
Online Employee Benefits Platform M&G Employee Benefits Panorama
M&G Employee Benefits Month Activities
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 69
Stewardship Environment the Value Chain Communities Integrity
Culture and Care
M&G is committed to transforming corporate culture into an internal driver of organizational evolution. During the reporting period, the Company integrated and upgraded
its workplace cultural activities by linking the festival activities, sports competitions, art festivals, public welfare activities and other isolated programs in the past into an
annual cultural map with the theme of "Growing Towards the Sun." Relying on the seasonal theme of "Sowing, Growing, Blooming," the Company creates a predictable and
perceivable cultural experience for its employees. This initiative creates a predictable and perceptible cultural experience for its employees. The "Photosynthesis Alliance,"
composed of young representatives from each business unit, serves as the "capillaries" of cultural dissemination. Operating through a decentralized model, the alliance
stimulates grassroots cultural co-creation within each department. While effectively alleviating workplace pressure, this system also drives cross-functional collaboration
and team innovation. During the reporting period, subsidiaries across the Group also launched distinctive employee activities. For instance, Colipu Group hosts monthly
birthday celebrations for employees while Jiumu Store holds a "Most Inspiring Workspace" contest, collectively fostering a warm workplace atmosphere.
M&G "Family Day" M&G Sports Day Curling Event M&G Mid-Autumn Festival "Garden Party" Event Colipu Group Employee Birthday Party Jiumu Store "Most Inspiring Workspace" Contes
Case Building a Culture of Sustainability
M&G continues to expand the reach and depth of its sustainability culture. For the third consecutive year, we have appointed Sustainability Ambassadors across
all functional centers and departments. Serving as "communicators" and "connectors" of our corporate strategy, these ambassadors bridge the gap between high-
level objectives and the daily lives of our employees. In 2025, supported by optimized incentives, we upgraded this initiative into the "Photosynthesis Alliance." The
ambassadors' scope has evolved from basic energy conservation and philanthropy to a broader focus on employee well-being and brand co-creation, ensuring that
sustainability is deeply integrated into the daily experience of our workforce.
Building on this long-term cultural foundation, the Company holds an annual "Sustainability Month." In 2025, the second edition, themed "Hello Sustainability:
Green Ideas Innovation Call," invited employees to submit creative solutions for sustainable practices. The campaign received over 60 innovative proposals covering
circular economy, sustainable product design, and green office initiatives. Following a selection process involving company-wide voting and executive evaluation, six
outstanding cases were identified for potential inclusion in the next year's sustainability work plan. This initiative was not only a synthesis of collective intelligence but
also a pioneering step in expanding the pathways for employee participation in ESG governance.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 70
Stewardship Environment the Value Chain Communities Integrity
Diversity, Equity and Inclusion
M&G integrates the principles of Diversity, Equity and Inclusion (DEI) with the Company's "openness and inclusiveness" values, actively fostering a workplace environment where employees from diverse backgrounds can fully realize
their potential and achieve self-worth.
Equal Opportunity and Respectful Conduct Building a Culture of Diversity and Inclusion
M&G is committed to respecting employees from diverse backgrounds and cultures, each with unique Upholding the core value of "Openness and Inclusivity," M&G continuously strengthens the foundation of a fair
characteristics and perspectives. The Company ensures that every employee receives equal opportunities and and diverse workplace through initiatives such as the Women's Leadership Program, the "Huoshui Plan," and
fair treatment throughout all stages of recruitment, career development, and performance appraisal, fostering Openness & Inclusivity Workshops. In 2024, we formally identified Diversity, Equity, and Inclusion (DEI) as a
a workplace environment built on mutual respect and free from discrimination or harassment. The Company core strategic priority and released our 2030 Action Roadmap. To ensure the substantive implementation of this
has established the Anti-Discrimination and Anti-Harassment Policy16, which explicitly prohibits such behaviors. strategy, we officially established the "Chief Diversity Officer (CDO)" mechanism in 2025. Led by the Vice President
Furthermore, we have extended our DEI requirements to suppliers and business associates, identifying and of Human Resources, a dedicated DEI Task Force—composed of core senior executives—was formed to oversee
continuously tracking potential impacts across the value chain through labor risk assessments. The Employee the development of our DEI framework and culture. This ensures that DEI principles are woven into the very
Handbook clearly outlines reporting channels and detailed handling procedures, with strict confidentiality fabric of our business operations, fostering a more resilient organizational ecosystem.
maintained regarding the whistleblower's information. M&G prioritizes fairness in the recruitment process.
During the reporting period, it conducted multiple rounds of internal communication with recruitment teams
and initiated revisions to the Recruitment Management System , with the aim of formally incorporating anti-
discrimination and anti-harassment guidelines into the institutional framework.
M&G DEI Strategy House
Vision
Cultivating a Diverse and Inclusive Environment, Nurturing Every Individual with Care
Define the DEI development strategy, establish a DEI task force and make DEI a shared consensus for development
Diversity Equity Inclusion
Diversity in Talent: Valuing employees Equal Opportunity: Establishing Cultural Inclusion: Fostering an open,
Goals and Strategies from diverse backgrounds, genders and clear and fair talent selection and trusting and safe work setting
cultures development mechanisms
Inclusive Decision-Making: Establishing
Diverse Thinking: Encouraging new Equitable Access to Resources: decision-making mechanisms that
thought and the flow of ideas Providing equal opportunities for access promote democratic participation and
to resources and differentiated support listen to diverse perspectives
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 71
Stewardship Environment the Value Chain Communities Integrity
Empowerment of Female Employees In 2025
M&G places great importance on the rights and interests of all employees, supporting their professional growth and helping them achieve a work-life balance. M&G and Percentage of Female Employees
its subsidiaries provide employees with various leave options, including maternity and parental leave, and have established nursing rooms to offer clean, private spaces
for breastfeeding employees. The Company continues to offer "Parent Child Mother EQ Course" and organized the second session of the Women's Leadership Workshop
during the reporting period to help female employees better understand their strengths and potential, thereby encouraging them to pursue their career goals with greater
confidence.
Case Women's Leadership Workshop
To help female managers translate their empathy, meticulousness, and resilience into unique leadership
strengths, the Company hosts a women's leadership workshop titled "Flexibility: The Inner Strength of
Female Leaders." The program focuses on M&G's senior and mid-level executives, and has reached 79%
of women at management level in headquarters teams. The workshop integrates the three modules of
"Skills Advancement, Mental Empowerment, and Identity" to help female talents build up their professional
confidence while assisting them in building a peer support network, which effectively promotes the growth
of female leaders and the construction of a mutual support ecosystem, and enriches M&G's management
connotation in the field of diversity and inclusion.
M&G Women's Leadership Workshop
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 72
Stewardship Environment the Value Chain Communities Integrity
Social Welfare
Since its inception, M&G has been actively fulfilling its social responsibilities. In 2015, the M&G Rainbow Charity Fund was established. In 2020, the Shanghai M&G Charity Foundation ("M&G Charity") was officially founded. Upholding
the philosophy of "promoting quality education and empowering inclusive community development," M&G Charity has carried out a variety of charity programs. M&G Charity adheres to the philosophy of guiding the industry
in joining the efforts for doing good, focusing on three major areas: rural education, care for special groups, and community care. It has carried out the rural art education program, the "Golden Seed Plan" education assistance
program, and the Autism Support Program. It also actively engages employees, customers, and other stakeholders in charitable activities. As of the end of the reporting period, M&G Charity had carried out educational charity
initiatives in 138 prefecture-level cities across 32 provinces, municipalities and autonomous regions in China. In 2025, the total amount of public welfare funds and materials donated by M&G Charity and its subsidiaries was RMB11.6
million, benefiting more than 921,000 people.
Strategic Pillars Goals Progress in 2025
Since 2022, the educational charity initiatives have generated over 2.03 million
To achieve 10 million instances of empowermen by 2030.
Empower employees and instances of benefit.
communities
Focus on Art Education in Rural Areas
M&G Charity actively responds to national policy requirements on art education and makes rural art education a long-term strategic focus. Through its systematic program, M&G Charity continues to invest resources to support art
education in rural schools and to promote the balanced development of educational resources across urban and rural areas. Base on the years of deep cultivation in the field of rural art education, the Company launched the "Art
Education Plan" program in 2022, which aims to comprehensively improve the quality of art education in rural schools and communities through the collection of lesson plans, teacher training and donation of art kits, as well as
linking the resources of public welfare foundations, corporations, and university teaching clubs to promote the construction of an industry ecosystem in the field of art education for rural children.
In 2025, the "Art Education Plan" program is committed to building a three-in-one empowerment system of "teaching and research, practice and innovation, and popularization of resources" to open up a window of knowledge for
the diversified growth of rural children.
Teaching and research empowerment Practical innovation Resource popularization
M&G Charity has teamed up with the Academy of Arts & Design, M&G Charity, under the guidance of the National Permanent M&G Charity has linked 800 college volunteers to serve more than
Tsinghua University to develop professional lesson plans covering Standing Commission-Young Pioneers of China (NPSC-YPC), has 35,000 children through summer tutoring and pioneered the model
the dimensions of non-genetic inheritance and green environmental organized the Village Painting Competition and a series of public of "community art education stationery cabinet," which brings
protection, and open them to primary and secondary schools welfare painting exhibitions, gathering over 170,000 entries, to high-quality art education resources and materials to schools,
nationwide for free; simultaneously partnering with a professional create an art stage for rural children to showcase themselves. communities, and urban spaces, thus realizing the extension of the
team from East China Normal University to develop mental health chain of art education from campus life to the social scene.
arts education courses, using artistic interventions to improve
children's psychological well-being
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 73
Stewardship Environment the Value Chain Communities Integrity
Case Art Education Empowers Rural Children's Mental Health
Mental health needs are especially strong in rural areas, and these regions have a limited supply of professional help. In response, M&G Charity
partnered with a team led by Associate Professor Zhang Ya from the School of Psychology and Cognitive Science at East China Normal University
to develop a mental health and art education curriculum tailored for rural children. The curriculum covers four key dimensions – emotional
awareness, emotional regulation, emotional expression and emotional understanding – and uses art forms such as painting and crafts as vehicles
to integrate emotional management knowledge into art education, thereby subtly enhancing students' emotional management skills. During
the reporting period, the curriculum was implemented in over 200 schools across 16 provinces, reaching a total of more than 20,000 students. To
systematically evaluate the program's effectiveness, M&G Charity and the East China Normal University team measured key indicators – including
overall mental health status and mental health literacy – before and after the curriculum was implemented. The results showed that more than
one-third of children who previously showed signs of mental health issues successfully returned to a healthy mental state. The findings of this study
were officially published in the Implementation Report of an Art Education Based Mental Health Education Programme for Rural Children , providing
strong evidence for the empowering role of art education in children's mental health education. Student Self-Assessment of Emotional Well-being in art Education Courses
Everyone for Charity
In 2025
M&G actively promotes a corporate culture of "Everyone for Charity." Each year, it organizes senior executives and employees to participate in large-scale
charity events such as the "E.G.G Walkathon" charity walk, the "99 Giving Day" events, and Executive Charity Trips. It also hosts charitable activities in Volunteer service participation by M&G and its subsidiaries
various themes, including autism day integration activities, charity bazaar sales, summer study and teaching assistance for rural students, and charitable
ice show attendances gradually integrating charity into the daily lives of employees. M&G established the M&G Volunteer Team, implemented a volunteer
service point and reward system, and enabled volunteers to log their service hours in the official Shanghai volunteer database, thereby allowing them
to benefit from government incentive policies. M&G Charity also presents commemorative certificates to volunteers to establish a long-term incentive person-times
mechanism that encourages employees' continued participation in charity.
In 2025, M&G Charity participated in the "E.G.G Walkathon" for the eighth year, with more than 400 employees raising over RMB30,000 through sports
challenges. Since 2023, the Company has launched the "Light Encounter in the Countryside, Fulfilling New Year Dreams" themed public welfare Total volunteer service
campaign internally for three consecutive years. Through a targeted "micro-wish" matching model, it provides substantial support for children's daily life
and education in underdeveloped regions. In 2025, the initiative fulfilled New Year's wishes for 125 children. Additionally, Colipu Group partnered with
M&G Charity to donate a wide variety of supplies, including stationery gift packs and art supplies, to the Southern Weekly Hope Primary School. They
also carefully prepared art education courses for the children, enriching their dreams through a dual approach of "supplies plus empowerment." During
the reporting period, M&G and its subsidiaries recorded a total of 1,196 volunteer participation instances, amounting to 4,946 volunteer service hours.
The "E.G.G Walkathon" charity walk Employee Volunteers Employees participating in the Autism Support Program Colipu Group's Rural Art Education Charity Tour
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 74
Stewardship Environment the Value Chain Communities Integrity
Innovative Charity
M&G Charity actively explores integrating business thinking with philanthropic goals, enabling projects to take root and flourish within communities, creating a virtuous cycle. The initiative transitions from a one-way donation model
to a sustainable philanthropic ecosystem, achieving self-sustaining and long-term development of charitable projects through resource linkage and model innovation.
In 2025, M&G launched the "Community Charity Stationery Cabinet" to explore a new model of social welfare that focuses on skills building, empowering grassroots social organizations to enhance community vitality. The Company
lowers the barrier to entry by supplying goods at charitable pricing, supporting community partners in achieving sustainable operations through independent management. At the same time, M&G Charity is deeply involved in
the construction of the stationery cabinets and provides materials for charitable activities and capacity-building training. By linking sales to social aid, this plan strengthens the self-sustaining capacity of local groups and creates a
mutually beneficial system that includes firms, social groups, and community residents. As of the end of the reporting period, the project has been implemented in Shanghai, Guizhou, Sichuan, Hangzhou, Zhengzhou, Chongqing
and other provinces and cities, covering nearly 50 communities nationwide, with over 200 communities expressing intent to collaborate.
Case China's First "M&G Charity Store"
In November 2025, the first "M&G Charity Store" in China was officially launched in the Duling Subdistrict of Jinshui District, Zhengzhou, marking the inaugural pilot of M&G Charity's "Business Empowering Charity" model.
Jointly developed by M&G Charity and the Xinshan Volunteer Service Center of the Zhengzhou Economic and Technological Development Zone, the project converts retail profits from community stationery sales into a
dedicated community public welfare fund. This fund provides standardized services for children in distress, including art education, psychological counseling, and after-school care, establishing a sustainable "Retail Self-
Sustenance and Targeted Assistance" mechanism. The store features multi-functional zones for art, reading, and mental health, while initiatives such as "Points for Charity" and "Idle Items Recycling Plans" encourage
residents to co-create social value through their purchasing behavior. As an innovative model of "Government-Enterprise-Society" collaborative governance, this project provides a replicable, systematic solution for
corporate social responsibility and community co-construction.
Zhengzhou "M&G Charity Store"
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 75
Stewardship Environment the Value Chain Communities Integrity
Governance
and Integrity
M&G is committed to building a corporate governance
system that is "transparent, accountable, and
sustainable." Through a sound governance structure
and effective risk management, we safeguard the
achievement of our strategic objectives, protect the
interests of shareholders, employees, customers,
and all sectors of society, and promote the shared
sustainable development of both the enterprise and
society.
Topics addressed in this section
Corporate governance
Investor communication
Risk management
Business ethics
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 76
Stewardship Environment the Value Chain Communities Integrity
Corporate Governance
M&G strictly complies with the requirements of laws, regulations, and normative guidance documents such as the Company Law of the People's Republic of China , Securities Law of the People's Republic of China , Code of Corporate
Governance for Listed Companies , and Self-Regulatory Guidelines for Listed Companies of the Shanghai Stock Exchange , strengthens the development of our corporate governance system, and standardizes our operations. During
the reporting period, we proactively benchmarked against the requirements of the new Company Law , revised the Articles of Association and supporting governance systems, ensured that corporate governance remains aligned with
regulatory requirements, and enhanced governance effectiveness and modernization. Through this adjustment, we canceled the establishment of the Board of Supervisors and strengthened the functions of the Audit Committee of
the Board of Directors, which exercised the supervisory authority. We established a mechanism for special meetings attended entirely by independent directors, and strengthened the powers and authority of independent directors.
Duties of the Board of Directors
The M&G Board of Directors operates strictly in accordance with the Articles of Association and the Rules of Procedure of the Board of Directors. All directors perform their duties with diligence, effectively fulfilling their supervisory
and strategic guidance responsibilities. During the reporting period, a total of five meetings were held, with a 100% attendance rate among directors. The Board has established four Committees: the Strategy Committee, the Audit
Committee, the Remuneration and Appraisal Committee, and the Nomination Committee. These Committees handle deep study and discussion on key areas such as strategic plans, audit oversight, pay and review and nomination
and choice.
Responsibilities of the Committees of the Board of Directors
Strategy Committee Audit Committee Remuneration and Appraisal Committee Nomination Committee
Responsible for studying and recommending Fully exercising the supervisory powers of the Responsible for formulating the assessment Responsible for researching, reviewing, and
the Company's long-term growth plan and former Board of Supervisors, it is responsible criteria for directors and senior executives providing recommendations on the selection
key investment decisions. for supervising the Company's finance, and conducting assessments; formulating criteria and procedures for candidates for the
internal control and the performance of and reviewing the remuneration policies and Company's directors, president, and other
duties by directors and senior management. plans for directors and senior executives with senior management positions that need the
the authorization of the Board of Directors. appointment of the Board of Directors.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 77
Stewardship Environment the Value Chain Communities Integrity
Composition of the Board of Directors
In 2025
Directors are elected by the shareholders' meeting. The term of office for directors is three years, and they can be re-elected for consecutive terms upon expiration of their
term. Independent directors shall not serve for more than 6 years consecutively. The Company attaches importance to the independence of the Board of Directors, and
there are 3 independent directors among the 7 members of the Board of Directors, which meets the Measures for the Management of Independent Directors of Listed Number of female Proportion of female
Companies , which requires that the proportion of independent directors of the Company to the Board of Directors shall not be less than one-third, and that the independent board members board members
directors shall not serve in more than 3 listed companies at the same time. The Company's three independent directors have professional experience in law, accounting,
and management consulting respectively, as well as expertise in strategic development, corporate governance, and risk management, allowing them to provide effective
advice for decision-making in various dimensions of the Company's development. An independent director also has experience in the manufacturing industry
The Company has clarified its policy on diversity of the Board of Directors by specifying in the Rules of Work of the Nomination Committee of the Board of Directors that
the selection of directors shall be based on a diversity perspective, including such as professional experience, cultural and educational background, age, and gender, to
ensure the competency of the Board of Directors to make scientific decisions. As of the end of the reporting period, there was one female member on the Board of Directors,
accounting for 14% of the total.
Director and Executive Compensation and Evaluation
The pay plan for the Company's directors and senior management comprises fixed and variable components. Variable pay is closely tied to the achievement of the Company's strategic goals, profit growth, and key ESG performance
metrics, and is subject to ongoing review. Under the new governance structure, the Audit Committee reviews the accuracy of financial data to provide the Remuneration and Appraisal Committee with an objective basis for
evaluation, ensuring the fairness and compliance of compensation distribution. In terms of clawback and retrospective requirements, the Company has clarified the behavioral prohibitions and legal liabilities of controlling
shareholders and executives, and restrained directors or executives who have suffered losses to the Company as a result of non-compliance with their duties through an institutionalized recovery mechanism to ensure that the
incentives are equal to the risks and responsibilities.
Investor Communication In 2025
M&G consistently upholds the principle of maximizing shareholder value and operates
with an open and transparent philosophy, continually strengthening communication and
interaction with investors while listening to diverse opinions and suggestions. We have
established the Investor Relations Management System to standardize related operations M&G was honored with the
and built a communication system to enhance the engagement with investors and potential
investors through announcement disclosures, performance briefings, the SSE E-interactive,
Investor Relations Manage-
on-site research, telephone, email, and other channels to provide timely and effective
ment of Chinese Listed Com-
responses to investor inquiries.
panies during the reporting
To effectively safeguard the legal rights and interests of minority shareholders, M&G assigns period
dedicated personnel to maintain and monitor communication platforms, ensuring the
smooth operation of the SSE E-interactive platform, public investor email, and hotline.
During the reporting period, M&G responded to over 40 questions on the SSE E-interactive
platform with a 100% response rate. The Company also proactively disclosed 7 institutional
investor research summaries in the "Listed Company Announcements" section of the
platform. M&G was honored with the 16th Tianma Award for Investor Relations Management
of Chinese Listed Companies during the reporting period.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 78
Stewardship Environment the Value Chain Communities Integrity
Risk management
M&G conducts risk management and control with the objectives of "optimizing operations, preventing corruption, and controlling risks." In 2023, the Company established the Risk Management and Compliance Committee, which is
led by the President. Members of this committee include heads of the Sustainability Office, Human Resources Center, Audit Department, Legal Affairs Department, and Finance Center. The committee functions independently from
business management departments to ensure the objectivity and independence of the Company's risk management function. During the reporting period, the Risk Management and Compliance Committee continued to deepen its
operation, drew the annual risk map of the Company, identified and locked the 3 major core risk areas and implemented special optimization, and constructed a complete early warning, monitoring and response mechanism; and in
view of the Company's globalization layout, set up the Overseas Risk Management and Compliance Committee to carry out risk tracking and closed-loop management cycle for the whole life cycle of the overseas business. The Risk
Management and Compliance Committee convened twice during the year. Additionally, the committee provided ad hoc reports to the President on key risk control priorities, such as risk early warnings and the optimization of risk
response strategies.
Organizational Structure of the M&G Risk Management and Compliance Committee
President
Risk Management and Compliance Committee
Finance Center Audit Department Legal Affairs Department Human Resources Center Sustainability Office
M&G continuously refines its three-line-of-defense risk management system, comprising "business departments, functional departments for risk management, and the audit department" During the reporting period, M&G focused
on high-risk business processes, conducting specialized improvement initiatives in policy development, process optimization and system enhancements. Policies and documents were revised to reflect actual conditions and clarify
implementation standards; the Company also identified key risk control points and continuously monitored business improvements through internal control maturity assessments, thereby reducing potential risk exposure.
M&G's "Three Lines of Defense" Risk Management System
Business units/
First line of defense functional Each business unit is the primary responsible party for internal Developing business Developing relevant
departments control, responsible for resolving over 95% of issues process standards processes
Functional departments for risk
management (Internal Control Developing risk Monitoring activities Providing "coaching" on the Carrying out inspections to ensure
Second line of defense strategies and conducting internal control system sound internal control of high-risk
Department and Compliance
Department) inspections businesses
Carrying out Carrying out internal Carrying out spot inspections for audits for
Third line of defense Audit Department
special audits control audits corruption and fraudulent incidents as a deterrent
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 79
Stewardship Environment the Value Chain Communities Integrity
Business Ethics
M&G is committed to building a "zero tolerance" business ethics management system. Through comprehensive institutional development, strict risk control and regular integrity education, the Company fosters a business
culture characterized by "openness, transparency and integrity" to ensure the Company's sustainable development. During the reporting period, the Company maintained full compliance and avoided any litigation or significant
administrative penalties related to embezzlement, bribery or unfair competition.
Business Ethics and Compliance Management System
M&G strictly complies with the Anti-Monopoly Law of the People's Republic of China , the Interim Provisions on Prohibiting Commercial Bribery , the Law of the People's Republic of China Against Unfair Competition , and other relevant laws and
regulations. Relying on a series of management systems, including the Code of Business Conduct 17, the Company continuously strengthens its management of business ethics, fair trade practices, and ethical competition. This has resulted in
a comprehensive and systematic business ethics and compliance management system. The M&G Risk Management and Compliance Committee serves as the coordinating organization for compliance work and is responsible for system and
process optimization, compliance risk assessment, implementation review and supervision, and the building of a compliance culture to ensure that the Company's business activities comply with laws and regulations, industry guidelines and
internal management requirements.
M&G Business Ethics and Compliance Management System
Anti-Corruption and An- Anti-Unfair Com- Anti-Mo- Data Security and Cus- Product Intellectual
ti-Bribery petition nopoly tomer Privacy Protection Compliance Property
Anti-Unfair Competition
M&G abides by the business principle of fair competition and has built a competition compliance management system covering the entire business chain. Based on the Law of Anti-Unfair Competition and the laws and regulations
of the business locations, the Company has completed a systematic sorting and benchmarking of its compliance system to improve it. The Company has formulated the Trademark Management System, the Management
System Against Fraudulence, the Management System for Trade Secrets , and the Online Omni-Channel Store Operation Rules to prevent and address confusing behavior, commercial bribery, trade secret infringement, and unfair
competition on the Internet. In terms of product publicity and promotion, the Company has integrated and sorted out the existing systems and released the Product Development Compliance Knowledge Base to eliminate false
publicity, commercial defamation and illegal marketing behavior, and to ensure that the Company always maintains norms, transparency and integrity in its omni-channel operations.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 80
Stewardship Environment the Value Chain Communities Integrity
Anti-Commercial Bribery and Anti-Corruption
The Company has formulated the Management System Against Fraudulence18, the Letter of Commitment on Integrity and Self-Discipline , the Transparent Procurement & Integrity Convention 19, and other anti-bribery and anti-
corruption documents and systems to establish mechanisms to constrain the compliance behaviors of its employees and suppliers, and continues to make improvements. The Company places high importance on identifying risks
related to commercial bribery and corruption, as well as on internal control efforts. The Audit Department conducts internal audits in accordance with the Company's Internal audit management system . By reviewing the Company's
business scope, identifying high-risk key positions and mapping out a "Risk Map," the Company has achieved dynamic optimization of internal control measures.
To strengthen employees' integrity and self-discipline in external communications and internal operations, the Company issued the Integrity Gift Management System during the reporting period. The system embedded integrity
requirements into daily operations by clarifying behavioral boundaries and standardizing the approval process, continuously regulating the professional conduct of employees and maintaining a fair environment for cooperation
with business partners. During the reporting period, Colipu Group further revised the Anti-Bribery, Anti-Corruption, and Anti-Fraud Management System , clarified the red lines and the standards for disciplinary actions in the Internal
Audit Management System , and passed certification for the ISO 37001 Anti-Bribery Management System Against Fraudulence.
M&G has established multi-channel complaint and whistleblowing channels, which are publicly disclosed on the official website. Additionally, the Company has established the Internal Investigation and Handling System for
Employee Misconduct and the Whistleblower Protection and Non-retaliation System . These ensure the strict confidentiality of whistleblower information and prohibit any form of discrimination or retaliation. During the reporting
period, the Company added a "M&G Anti-Fraud" portal to its office software and sent monthly emails to all employees to promote awareness of the anti-fraud reporting channels. Colipu Group launched a dedicated WeChat official
account titled "Integrity Colipu" and included a "One-Click Reporting" portal within the account.
M&G Anti-Fraud Reporting
Hotline: 021-31820110 Email: mg110@mg-pen.com
Channels
Business Ethics Audit
In 2025
M&G annually conducts internal audits of its Code of Business Conduct , covering 27 items, including compliance with laws and regulations, business
ethics, fair competition, and 18 key business processes such as sales, procurement, financial management, and information systems management.
The scope of internal business ethics audits covered
By combining on-site checks with systematic sampling, the Company has broadened its focus beyond basic fraud control and asset safety to cover
intellectual property, product quality, and information security, thereby achieving full auditing of all business operations. For any risks identified during
audits, the Audit Department promptly reports them to the relevant departments and actively tracks progress on improvements to ensure that each
department turns Business ethics rules into sound management practices. 22 operational sites
The coverage rate of the Company's operation process achieved
M&G's Management System Against Fraudulence has been publicly posted on the Company's website in the "Investor Relations - ESG - Reports and Policies" section.
For supplier-related anti-bribery and anti-corruption management, please refer to the section "Supply Chain Management - Targets, Management Measures and
Performance – Integrity in Procurement."
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 81
Stewardship Environment the Value Chain Communities Integrity
Building a Culture of Integrity and Compliance
M&G requires all new employees and key personnel at its headquarters and subsidiaries – including Colipu Group, Jiumu Store, and Axus Stationery –
to sign the Letter of Commitment on Integrity and Self-Discipline The "Code of Business Conduct" course is mandated as a prerequisite for onboarding,
and all new employees who joined the Company during the reporting period have completed the training. The Company continues to conduct routine
business ethics training for all employees. In 2024, 90% of full-time employees completed the Code of Business Conduct and Management System
Against Fraudulence courses via the online learning platform. In 2025, the coverage of these courses was further expanded to include employees in the
production operations and retail systems, with the training coverage rate for the Code of Business Conduct increasing to 98%. Throughout the year,
Colipu Group conducted 35 in-person integrity sessions covering all regional subsidiaries, with a total of over 1,000 participants. Colipu Group Integrity and Red Line Training
Case Anti-Corruption and Integrity-Themed Activities
Since 2024, M&G has held an annual summer integrity care campaign titled "Integrity
Accompanied, Care Along the Way," advocating for employees to maintain high
personal standards and build a work culture based on integrity and fairness. This
year's event featured diverse interactive activities such as the "Instagrammable
the Integrity Tree," "Compliance Blind Boxes," and a call for "Outstanding Integrity
Works," and introduced the integrity mascot "Sunflower Police" along with a series of
goods. By blending learning with active tasks, the event guided employees to deepen
their integrity awareness through hands-on work and public pledges. After the event,
the outstanding integrity works remained on display, further consolidating the
learning outcomes. The initiative was recognized by the Sunshine Integrity Alliance
and awarded the "Best Practice Award for Integrity Culture."
M&G received the "Best Practice Award for Integrity Culture" M&G's "Integrity Accompanied, Care Along the Way" Activity
from the Sunshine Integrity Alliance.
Case Colipu Group's Fun Integrity Awareness Campaign
On "International Anti-Corruption Day," Colipu Group hosted an "Integrity Personality
Quiz" for employees, where participants could earn personalized integrity personality
tags and custom integrity-themed phone lanyards by answering questions. By using a
fun self-assessment as a starting point, the activity made integrity education vivid and
relatable. In addition to offline interactions, Colipu Group also conducts daily integrity
promotion and education through its official WeChat account "Integrity Colipu." By
publishing engaging content such as comics and scenario-based Q&As, the account
helps more employees integrate integrity and compliance into their daily work and lives.
Colipu Group's "Integrity Personality Quiz" Event
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 82
Stewardship Environment the Value Chain Communities Integrity
ESG Performance Board of Directors
Data20
Metric Unit 2023 2024 2025
Number of directors person 7 7 7
Governance Performance
Number of independent directors person 3 3 3
Attendance rate of directors at annual board meetings % 100 100 100
Rate of directors by age
≤ 30 years % 0 0 0
≥ 50 years % 86 86 100
Rate of directors by gender
Male % 86 86 86
Female % 14 14 14
Business Ethics
Metric Unit 2023 2024 2025
Number of operational sites audited for business ethics unit 22 22 22
Rate of operational sites covered by business ethics audits % 100 100 100
Anti-Bribery and Anti-Corruption21
Metric Unit 2023 2024 2025
Number of public legal cases regarding bribery and corruption
case 0 0 0
brought against the company or its employees
Total number of employees participating in anti-bribery and anti-
person 2,364 2,868 4,513
corruption training
Percentage of directors receiving anti-bribery and anti-corruption
% 100 100 100
M&G and its subsidiaries. The newly constructed plant at M&G's Central China
Base officially commenced production in 2025 and has been included in this Percentage of personnel receiving anti-bribery and anti-corruption training by position level
year's data statistics.
included includes M&G, Jiumu Store, More-Than-Fun (Qizhihaowan) and
Colipu Group. In 2025, the scope was expanded to encompass M&G and its Management % / 60 95
subsidiaries; as a result, the reported figures show corresponding variations.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 83
Stewardship Environment the Value Chain Communities Integrity
Environmental Performance22 Environmental Investment
Metric Unit 2023 2024 2025
Environmental investment RMB10,000 239 594 439
Energy23
Metric Unit 2023 2024 2025
Gasoline ton 89 59 58
Diesel ton 414 418 257
Liquefied petroleum gas ton / 40 43
related indicators in the environmental performance section have been
adjusted from "/Million RMB of Revenue" to "/RMB10,000 revenue." Historical Natural gas24 cubic meter / 189,421 568,510
data for previous years has been synchronously converted and restated to
maintain consistency. Steam ton / 29,102 21,554
Shanghai Headquarters Office Building, the South China Base, the North China
Purchased electricity 25
kWh 92,582,027 102,087,954 95,898,455
Base, the Central China Base, Axus Stationery, Colipu Group and Jiumu Store
(directly operated stores). This year, the Company re-calibrated the thermal Renewable energy consumption kWh 13,222,559 21,603,572 26,079,349
energy content (enthalpy value) of steam. Given that steam was a newly added
energy category since 2024, the corresponding energy consumption and GHG Percentage of renewable energy electricity consumption of total
% 12 17 21
emission data for 2024 have been restated in this Report to ensure the accuracy electricity consumption
of historical data.
Direct energy consumption tce 870 993 1,223
new heat press machines, natural gas consumption increased compared to the
previous year. Indirect energy consumption tce 13,003 17,883 16,977
directly operated stores was upgraded from historical sampling estimates to
survey statistics based on actual utility bills, ensuring a more accurate reflection
of real consumption. As this change cannot be applied retroactively to previous
of which: clean energy consumption tce 1,625 2,655 3,205
years, the 2025 purchased electricity data and the corresponding Scope 2 GHG
emissions disclosed in this Report are not fully comparable with historical data. tce/RMB10,000
Total energy consumption intensity 0.006 0.008 0.007
revenue
Shanghai headquarter office building, the South China base, the North China
base, the Central China base, Axus Stationery, Colipu Group and Jiumu Store
(directly operated stores). In both 2024 and 2025, the Company procured
green electricity. To enhance data rigor, this Report calculates and discloses
GHG Emissions26
Scope 2 GHG emissions for these two years using both the "location-based"
and "market-based" methods, with a restatement of the 2024 data.The grid Metric Unit 2023 2024 2025
emission factors used for 2024 and 2025 are derived from the Announcement
on the Release of 2022 Electricity CO2 Emission Factors (issued Dec 26, 2024) Scope 1 GHG emissions tCO2 e 2,115 2,393 2,612
and the Announcement on the Release of 2023 Electricity CO2 Emission Factors
(issued Dec 31, 2025) by the Ministry of Ecology and Environment, respectively. Location-based scope 2 GHG emissions tCO2 e 45,940 61,346 56,486
Additionally, in compliance with the Notice on Further Optimizing the Electricity
and Heat Emission Factors Applicable to the Shanghai Carbon Emission Trading Market-based scope 2 GHG emissions tCO2 e / 60,327 55,934
Market issued by the Shanghai Municipal Bureau of Ecology and Environment
on Jan 16, 2026, the electricity emission factors for the Shanghai region for 2024
and 2025 have been adjusted accordingly. The "Total GHG Emissions (Scope 1
Total GHG emissions (scope 1 and 2) tCO2 e 48,055 62,720 58,546
and 2)" in this Report are calculated using the market-based method, remaining
consistent with the methodology used for setting the Company's Scope 2 GHG emission intensity tCO2 e/RMB10,000 revenue 0.021 0.026 0.023
emission reduction targets.
tCO2 e / / 11,021
newly added metrics for 2025. As historical data for these indicators is not
retroactively traceable, figures for 2023 and 2024 are not disclosed in this Investment for GHG emission reductions RMB10,000 / / 424
Report.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 84
Stewardship Environment the Value Chain Communities Integrity
Materials28
Metric Unit 2023 2024 2025
Total material usage ton 58,019 61,708 57,083
of which, plastic ton 23,286 23,648 18,400
paper ton 28,887 31,425 33,466
ink ton 3,114 3,124 2,974
wood ton 495 1,760 970
pencil lead ton 2,247 1,751 1,273
Material usage intensity ton /RMB10,000 revenue 0.025 0.025 0.022
Packaging Materials29
Metric Unit 2023 2024 2025
Carton usage unit / / 37,811,979
Total count of reused cardboard boxes unit / / 2,246,492
Water Resources30
Metric Unit 2023 2024 2025
Total water consumption ton 570,185 588,923 461,589
Water intensity ton/RMB10,000 revenue 0.24 0.24 0.18
Recycled and reused water ton 49,772 38,851 53,923
Waste and Wastewater31
Stationery. Metric Unit 2023 2024 2025
and the total volume of reused boxes was adjusted from weight to units in 2025. Total solid waste ton 663 5,951 5,949
As the historical data for these indicators is incomparable with the new metric,
figures for 2023 and 2024 are not disclosed in this Report. of which, hazardous waste ton 29 22 20
base, the Shanghai headquarters office building, the South China base, Axus
general solid waste (non-hazardous) ton 634 5,929 5,929
Stationery and the Central China base.
Shanghai base; the scope for 2024 adds the South China base and North
Solid waste intensity ton/RMB10,000 revenue 0.0003 0.003 0.002
China base; and the scope for 2025 adds the Central China base. This year,
the Company optimized its waste statistical methodology. To ensure data Amount of recycled and reused waste ton / 5,212 5,222
comparability, the figures for total solid waste, general solid waste (non-
hazardous waste), and recycled waste for 2024 have been restated in this Wastewater discharge ton 1,876 2,413 2,252
Report..
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 85
Stewardship Environment the Value Chain Communities Integrity
Social Performance Employee Hiring
Metric Unit 2023 2024 2025
Total number of employees person 5,839 5,549 5,503
Number of employees, by age
Under 30 years old person 2,080 1,833 1,738
Over 50 years old person 448 437 395
Number of employees, by educational background
Bachelor's (college) degree or above person 3,621 3,659 3,766
High school, vocational school person 964 618 724
Other person 1,254 1,272 1,013
Number of employees, by position level
Non-management person 4,506 4,277 4,222
Management person 1,333 1,272 1,281
Total number of employees on parental leave person 78 142 206
Number of employees on parental leave, by gender
Male person 28 62 110
Female person 50 80 96
Ratio of basic salary and compensation for male employees32
Basic salary % 66 77 81
Additional compensation % 34 23 19
Ratio of basic salary and compensation for female employees
Basic salary % 77 82 83
Additional compensation % 23 18 17
Percentage of vacancies filled by internal candidates (internal recruitment)33 % 20 33 35
New employee ratio % / 14.2 13.1
scope includes M&G, Jiumu Store and More-Than-Fun (Qizhihaowan). Employee turnover rate % 11.9 16.5 16.7
recruitment) data reporting scope includes M&G, Jiumu Store and More-Than- Percentage of employees covered by the trade union % 100 100 100
Fun (Qizhihaowan).
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 86
Stewardship Environment the Value Chain Communities Integrity
Employee Training34
Metric Unit 2023 2024 2025
Employee training coverage rate35 % / / 85.6
Percentage of employees trained, by gender
Male % / / 83.8
Female % / / 87.4
Percentage of employees trained, by position level
Non-management % / / 81.4
Management % / / 99.4
Average training hours per capita hour 11.8 14.6 11.4
Investment annual training RMB10,000 / 205 304
Performance Assessment
Metric Unit 2023 2024 2025
Percentage of employees receiving regular performance assessment % 100 100 100
Occupational Health and Safety36
Metric Unit 2023 2024 2025
Percentage of workers covered by occupational health and safety management system % 100 100 100
Fatalities caused by work-related injuries case 0 0 0
Rate of fatalities caused by work-related injuries % 0 0 0
Severe work-related injuries (excluding fatalities) case 0 0 0
Severe work-related injury rate (excluding fatalities) % 0 0 0
Recordable work-related injuries case 21 69 46
Recordable work-related injury rate (per million working hours) / 5.8 3.6 2.5
Total safety training hours hour 20,220 25,489 23,840
Total number of employees who received safety training person 202,020 230,035 221,300
More-Than-Fun (Qizhihaowan), Colipu Group and Axus Stationery. In 2025, the Investment in labor protection RMB10,000 208 274 245
scope was expanded to encompass M&G and its subsidiaries; as a result, the
reported figures show corresponding variations.
since this change cannot be applied retroactively to previous years' data, Products and Services
the "Employee training coverage rate," "Percentage of employees trained by
gender" and "Percentage of employees trained by position level" aredisclosed Metric Unit 2023 2024 2025
Number of health and safety violations related to products and services case 1 0 0
M&G Shanghai base, the South China base and Axus Stationery; the Central
Customer satisfaction by average satisfaction score score 83.5 92.2 90.9
China base was added in 2025. Starting in 2024, the reporting scope includes
both regular and non-regular employees.
Completion rate of after-sales problem implementation % / 99.8 99.4
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 87
Stewardship Environment the Value Chain Communities Integrity
Intellectual Property and Technological Innovation
Metric Unit 2023 2024 2025
Technological improvement, innovation, and R&D investment RMB10,000 17,752 18,915 18,964
Number of R&D personnel % 0.8 0.8 0.8
Number of patent filings during the year person 503 467 450
Number of invention patent filings item 212 290 309
Number of patents granted during the year item / 20 25
Number of invention patents granted item 148 229 231
Number of valid patents item / 8 5
Cumulative patent filings item 1,211 1,336 1,488
Cumulative patents granted item 2,612 2,901 3,212
Number of R&D personnel item 2,407 2,625 2,868
Supply Chain Management37
Metric Unit 2023 2024 2025
Number of suppliers participating in ESG audit during the year number 71 85 97
Percentage of key suppliers participating in ESG audit during the year % 100 100 100
Number of assessed suppliers with substantial actual/potential negative impacts number 6 1 0
Charity and Public Welfare38
Metric Unit 2023 2024 2025
Total investment in rural revitalization39 RMB10,000 / / 630
Number of people benefiting from rural revival person / / 811,000
Colipu Group, Jiumu Store and Axus Stationery.
from rural revitalization" are new metrics disclosed in 2025. As historical data
for these indicators cannot be retrieved retroactively, the data for 2023 and Number of participants in volunteer services 40
person 3,778 4,435 1,196
which led to fewer participants than in 2024.
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 88
Stewardship Environment the Value Chain Communities Integrity
Independent Assurance Statement
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 89
Stewardship Environment the Value Chain Communities Integrity
Index of Indicators Dimension Corresponding Clause Topic Report Page Number or Explanation
Articles 21 to 28 Response to climate change 06-11; 29-39; 83; 88
The SSE Sustainability
Article 30 Pollutant discharge 06-11; 40
Article 31 Waste management 06-11; 41; 84
Report Guidelines Article 32 Ecosystem and biodiversity protection 06-11; 43-44
Content Index
Environment
Environmental compliance
Article 33 06-11; 40; 84
management
Article 35 Energy utilization 06-11; 36-38; 83; 88
Article 36 Water resources utilization 06-11; 42; 84
Article 37 Circular economy 06-11; 20-21; 41; 84; 88
Article 39 Rural revitalization 06-11; 72-74; 87
Article 40 Social contributions 06-11; 72-74; 87
Article 42 Innovation-driven development 06-11; 46-49; 87
Since M&G did not engage in sensitive fields such as life
Article 43 Ethics of science and technology sciences or AI during the reporting period, therefore this
topic is not applicable
Article 45 Supply chain security 06-11; 50-53; 87-88
Society Since M&G did not have any instances during the reporting
period where accounts payable (including notes payable)
Fair treatment of small and medium- accounted for more than 50% of total assets, nor any
Article 46
sized enterprises outstanding unpaid information regarding payments to
small and medium-sized enterprises (SMEs), therefore this
topic is not applicable
Article 47 Product and service safety and quality 06-11; 22-28; 86
Data security and customer privacy
Article 48 06-11; 57-58
protection
Article 50 Employees 06-11; 59-71; 85-86; 88
Article 52 Due diligence 09-11; 52; 79-80;
Article 53 Stakeholder communication 06-12; 77; 88
Sustainability-
related
Anti-commercial bribery and anti-
governance Article 55 06-11; 80-82;
corruption
Article 56 Anti-unfair competition 06-11; 79; 82
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 90
Stewardship Environment the Value Chain Communities Integrity
GRI Standards (2021) Usage Notes:
M&G Stationery has reported the information cited in this GRI content index for the period January 1, 2024 to December 31,
Content Index GRI 1 Used: GRI 1: Foundation 2021
GRI Standard Disclosure Pages
GRI 2: General Disclo- 2-15 Conflicts of interest 08;79-81
sures 2021
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 91
Stewardship Environment the Value Chain Communities Integrity
GRI Standard Disclosure Pages
GRI 3: Material Topics
GRI 101: Biodiversity 2024 101-2 Management of biodiversity impacts 43-44
GRI 201: Economic Per-
formance 2016
GRI 202: Market Presence
GRI 205: Anti-Corruption
GRI 206: Anti-competitive
Behavior 2016
GRI 301: Materials 2016
GRI 302: Energy 2016 302-3 Energy intensity 36-38;83;88
GRI 303: Water and Efflu-
ents 2018
GRI 305: Emissions 2016 305-3 Other indirect (Scope 3) GHG emissions 35;83
GRI 306: Waste 2020 306-3 Waste generated 84
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 92
Stewardship Environment the Value Chain Communities Integrity
GRI Standard Disclosure Pages
GRI 308: Supplier Envi- 308-1 New suppliers that were screened using environmental criteria 51-52;87
ronmental Assessment
GRI 401: Employment 401-2 Benefits provided to full-time employees that are not provided to temporary or
GRI 403: Occupational 403-6 Promotion of worker health 60-62
Health and Safety 2018
linked by business relationships
GRI 404: Training and 404-2 Programs for upgrading employee skills and transition assistance programs 65-66
Education 2016
reviews
GRI 405: Diversity and
Equal Opportunities 2016
GRI 413: Local Communi- 413-1 Operations with local community engagement, impact assessments, and develop-
ties 2016 ment programs
GRI 414: Supplier Social
Assessment 2016
GRI 416: Customer Health
and Safety 2016 416-2 Incidents of non-compliance concerning the health and safety impacts of products
and services
GRI 417: Marketing and
Labeling 2016
GRI 418: Customer Priva- 418-1 Substantiated complaints concerning breaches of customer privacy and losses of
cy 2016 customer data
Product Climate and Shared Prosperity Across Employees and Governance and
Foreword Focus Appendix 93
Stewardship Environment the Value Chain Communities Integrity
Writing a Sustainable Business Future
Shanghai M&G Stationery Inc.
Website: www.mg-pen.com
Address: No. 5, Lane 288, Qianfan Road, Xinqiao Town, Songjiang District, Shanghai
Email: ESG@mg-pen.com
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