Stock Code: 688639
Environmental, Social andGovernance (ESG) Report
Anhui Huaheng Biotechnology Co., Ltd.Anhui Huaheng Biotechnology Co., Ltd.
Governance StructureCompliance and Risk ManagementInformation DisclosureProtection of Investors' Rights and InterestsBusiness Ethics
Environmental Management SystemResource ManagementResponse to Climate ChangeGreen Manufacturing
Product ManagementProduct Innovation and SustainabilityCustomer ServiceInformation Security Management
Corporate Governance
Green Development
Product Innovation andResponsibility
About the ReportChairwoman's Message2023 ESG HighlightsAbout AHBContribution toSustainable DevelopmentESG Development Strategy
Appendix I Laws and RegulationsAppendix II Key PerformanceIndicatorsAppendix III Content IndexAppendix IV Feedback Form
Industry Co-developmentPublic Welfare and Charity
Supply Chain ManagementSustainable Supply ChainDigital Intelligence Supply Chain
Employee Rights and InterestsTalent CultivationOccupational Health and Safety
Responsible Employer
Social Contribution
Responsible Supply Chain
About the ReportThis Report is the ?rst Environmental, Social and Governance Report ("ESG Report" or the "Report")publicly released by Anhui Huaheng Biotechnology Co., Ltd. (Stock Code: 688639.SH) ("AHB", "theCompany" or "we"). The purpose of this Report is to inform our stakeholders of the Company's environmental,social and governance vision, practices and performance in 2023. The board of directors of the Companypromises to oversee the content of this Report and ensure that there are no false records or misleadingstatements. The board of directors has reviewed and approved this Report to ensure the truthfulness,accuracy, and completeness of the contents.
Reporting StandardsThis Report is compiled in accordance with the Global Reporting Initiative (GRI) Sustainability ReportingStandard (2021), the United Nations Sustainable Development Goals (SDGs), and the China CorporateSocial Responsibility Reporting Guidelines (CASS-ESG 5.0), and combined with relevant requirments,including Guidline No. 1 Normative Operation of Self-regulatory Guidelines for Listed Companies on theScience and Technology Innovation Board of Shanghai Stock Exchange, Guideline No. 2 Voluntary InformationDisclosure for Self-regulatory Supervision of Companies Listed on the Science and Technology Innovation Boardof Shanghai Stock Exchange, and Guidline No.9- Evaluation of Information Disclosure of Self-regulatoryGuidelines for Listed Companies on the Science and Technology Innovation Board of Shanghai StockExchange.Reporting Period
This Report covers the period from 1 January 2023 to 31 December 2023, and is issued on an annual basis,aligning with the ?scal year.Reporting ScopeThe economic and social performance indicators in this Report are consistent with the scope of our annualreport; the environmental performance indicators cover three production bases, namely Changfeng Base,Bayannur Base, and Qinhuangdao Base. Considering the fact that the Chifeng Base has not yet been putinto production during the reporting period, it is not included in the scope of environmental performanceindicators for this reporting year.
Data SourcesThe content, data and cases disclosed in this Report are sourced from internal documents and internaloriginal ledgers of the Company, publicly available information on websites, and third-party review reports.Some economic performance data is sourced from our 2023 Annual Report, which has been compiled,edited, and reviewed by our ESG report preparation team. Unless otherwise speci?ed, the monetary unitsadopted in this Report is RMB.Obtain this ReportStakeholders can access and download this Report on the o?cial website of AHB (www.huahengbio. com).This Report is provided in both Chinese and English versions. In case of any ambiguity or inconsistency dueto language reasons, the Chinese version shall prevail.Contact InformationAddress: No. 197 Chang'an Road, High tech District, Hefei City, Anhui ProvinceWebsite: www.huahengbio.comEmail: ahb@ehuaheng.comTel: +86 -0551-65689046
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Chairwoman's Message
Time ?ies like an arrow, and the years go by like a song. The past year was one ?lled with both challengesand opportunities. We have consistently pursued technological innovation as our driving force, rooted inadvanced manufacturing capabilities, accelerating our pace of development. Under the leadership of XiJinping's socialism with Chinese characteristics for a new era, we have continuously promoted the sustainabledevelopment strategy of the enterprise.The synthetic biology industry serves as the underlying support for achieving green biomanufacturing. Ithas been implemented and applied in various industries such as medicine, energy, materials, chemicals,agriculture, and food, and has garnered signi?cant attention worldwide. It is regarded as the "golden track"for the future biological industry development. China's synthetic biology industry is accelerating into thefast track under the national top-level design and strong support from various provincial and municipalpolicies. AHB, a high-tech with synthetic biology as the core, has always adhered to the concept of "GreenManufacturing and Low-carbon First", driven by green techology innovaton and gripped green valuecreation. Focusing on core products such as alanine and valine, we extend synthetic biology technology intomultiple domains, continuously contributing to green manufacturing, industrial development, and theachievement of carbon peaking and carbon neutrality goals.2023 was a crucial year for us to comprehensively promote our ESG development strategy. We have establishedan ESG management system and thoroughly integrated ESG development into our business management.We have achieved fruitful progress in ESG work from the perspectives of environmental protection, socialresponsibility, and corporate governance.Environmental friendliness is an important principle for AHB’s long-term sustainable development. Weadhere to the development path of “replacing non-renewable petrochemical resources with renewablebiological resources and replacing traditional high-energy-consuming and high-polluting processes withgreen and clean biological manufacturing processes”. We implement a lifecycle management system forgreen factories, green products, and green services, and serve various industries and setors.
Social responsibility is our consistent commitment. "People-oriented" is the core principle for AHB's continuousdevelopment and growth. Every year, AHB attracts numerous like-minded and ambitious talents. On thishealthy, safe, fair, and inclusive development platform, we grow and progress together, illuminating ourpersonal value while creating value for the enterprise, the industry, and society at large. With strong combate?ectiveness, excellent execution, and remarkable cohesion, AHB's employees continue to write new chaptersin the Company's continuous development. We also remain committed to participating in public welfare andcharity causes with enthusiasm and shouldering the important responsibility of promoting social development.A sound and standardized corporate governance is a solid foundation for AHB's sustainable development.We strictly comply with the regulatory requirements of the China Securities Regulatory Commission（CSRC）and the Shanghai Stock Exchange（SSE）, aiming to achieve industry-leading governance levels. We havecontinuously maintained industry-leading positions in internal risk management and investor relationsmanagement. In 2023, we received numerous honors, including the highest grade A rating in the SSE'sinformation disclosure evaluation and being listed in the "Top 30 Value of The Science and TechnologyInnovation Board Listed Companies" by the Securities Times.Sustainable development is the only way for enterprises to achieve long-term growth. Looking forward tothe future, AHB will steadily advance the ESG development strategy, centering on customers, valuing thecontributions of the committed team members, and employing innovation to power sustainable growth.We are striving unremittingly towards our vision of becoming a global leader in the industrial biotechnologysector, continuously creating value for all stakeholders!
Dear stakeholders,
Chairwoman of AHB
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
2023 ESG Highlights
2.84
39.22%
97.5%
84.2%
7.0%
hrs49.5
Economic Performance
Environmental Performance
RMB/shareBasic Earnings per Share
95.52%
Environmental InvestmentProportion of Recycled Water Used
17%Proportion of Clean Electricity Used
Proportion of Recyclable Packaging Materials Used
Number of New IntellectualProperty Rights
Proportion ofEmployee Trained
Proportion of Employees UndergoingPerformance Appraisals and CareerPer capitaTraining Hours
Percentage ofEthnic Minority Employees
Proportion ofLocal Procurement
Charitable Donations
2.5885 millionRMB
23%
94.3%
65.4%
36.63%
Gross Operating Revenue
RMB
Operating Pro?t
510,903,260.37
49.37%
RMB449,061,466.72
Net Pro?t Attributable to Equity Holders
40.32%
RMB
Amount of Cash Dividends
44.87%
141,339,222.00RMB
66.13
millionRMB
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
1,938,268,117.78
R&D Investment
38.43%
108,824,394.48RMB
About AHB
Bio-based
MaterialMonomers
Multi-category
L-Alanineβ-AlanineCalcium D-Pantothenate
Malic AcidAmino acid nutrient solutionCompound seasoning
α-Arbutinβ-Arbutin
InositolD-PanthenolL-Arginine
DL-AlanineL-Valine
Amino Acid
Vitamin
Other Products
Multiple Products
Product Matrix
Anhui Huaheng Biotechnology Co., Ltd. is a high-tech enterprise with synthetic biology as the core, focused on green technology innovationand value creation. As of now，the company's main products include a series of amino acids (L-alanine, DL-alanine, β-alanine, L-valine,etc), a series of vitamins (D-calcium pantothenate, D-panthenol, inositol), biobased new material monomers (1,3-propanediol, 1,4-suc-cinic acid), and other products (malic acid, arbutin). These products are widely used in various ?elds such as intermediates, animalnutrition, personal care, functional and plant nutrition. After years of innovative development, the Company has become a global leaderin manufacturing bio-based products.Adhering to the concept of environmental protection, AHB has developed cutting-edge technologies in synthetic biology, successfullyundertaken the demonstration project for the bio-industry of China's National Development and Reform Commission (NDRC). AHB hasbeen awarded the Championship of Single-Item Manufacturing from the Ministry of Industry and Information Technology. Currently, AHBhas Huaheng Synthetic Biology Research Institute with sustainable innovation capability, and high-quality production capacities at threemajor bases in Changfeng, Qinhuangdao, and Bayannur, and is pushing forward the construction project of Chifeng base as planned.
L-TryptophanL-Isoleucine
Company Pro?le
Replacing non-renewable petrochemical resources with renewable biological resourcesReplacing energy-and-pollution-intensive petrochemical processes with green and clean biological manufacturing techniques
Improving production e?ciency and reducing production costs
Mission
Core Values
Development Route
VisionBecoming a global leader in the biotechnology industry
Developing biotechnology to maintain health for lives
Putting customers at the center and striving for excellence
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Applications
Intermediates
FunctionalNutritionPersonal CareAnimal Nutrition
Plant NutritionOthers
1, 3-Propanediol1,4-Succinic Acid
Development Path
2023AHB was awardedthe title of NationalGreen FactoryNational EnterpriseTechnology Center
2021Listed on the Science andTechnology Innovation Boardof the Shanghai StockExchange (Stock code: 688639)Establishment of AcademicianWorkstation with ZhejiangUniversity of Technology
2020
Qinhuangdao Basewas awarded the titleof National GreenFactoryBayannur Base wasestablished
2022Fermentation-based1,3-Propanediol and1,4-Succinic AcidProduction FacilityConstruction Project.Awarded as ForbesChina's top 50 mostInnovative companies2008Breakthrough in theenzymatic processfor DL-alanineAwarded as the ?rstbatch of nationalhigh-tech enterprisesin Anhui Province
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
2007Undertook innova-tion projects fundedby the Ministry ofScience andTechnology'sInnovation Fund
2005
AHB wasestablished
2009
Selected as AnhuiScience and TechnologyResearch Achievement
2011
Qinhuangdao Base wasestablishedThe world's ?rstinvention of L-alanineanaerobic fermentationtechnology
2013
Shareholding systemtransformation wascompleted
2016
ProvincialPostdoctoralWorkstation Unit
2015
Hefei Huaheng wasestablishedWon the China PatentExcellence AwardWon the ?rst prize ofShanghai Scienceand TechnologyAward
2019
L-alanine won themanufacturingindustry's singlechampion productNational IntellectualProperty DominanceEnterprise
2018
Breakthroughs inα-arbutin fermentation,L-dopa phosphorusmethod, L-coolinevinegar process
2010
Undertook the biologicaldemonstration project ofNational Developmentand Reform Commission
2012
Undertook the "863Plan" of theMinistry of Scienceand TechnologyEstablished strategiccooperation withBASF
2006
Awarded as High-techEnterprise in AnhuiProvinceAwarded as TopPrivate Science andTechnologyEnterprise in AnhuiProvince
Honors and Certi?cations
Quali?cations
ISO 14001 Environmental Management
System Certi?cation
ISO 9001 Quality ManagementSystem Certi?cation
ISO 50001 Energy ManagementSystem Certi?cation
ISO 22000 Food Safety Management
System Certi?cation
ISO 45001 Occupational Health and Safety Management System Certi?cation
ISO 27001 Information Security Management
System Certi?cation
China National Accreditation Service for Conformity Assessment (CNAS) Laboratory Accreditation Certi?cate
National Green Supply Chain Management
Demonstration Enterprise
National Intellectual Property Excellence Enterprise
Top 30 Value of The Science and TechnologyInnovation Board Listed Companies
Anhui Export Brand Enterprises
BASF Product Carbon Footprint Pioneer Award
Hefei Manufacturing Service Enterprise
Pegasus Award for Investor Relationsof Listed Companies in China
The “ESG Pioneer Award” of the Zhiyuan Prize
Grade A in Information Disclosure of SSE
National Industrial Product Green Design
Demonstration EnterpriseTop 10 Global Competitiveness in Science
and Technology of The Scienceand Technology Innovation Board
Forbes China ESG Innovators
Anhui Provincial Patent Gold Medal(Biological fermentation method L-valine)
Hefei Microbial Manufacturing and FoodApplication Technology Innovation Center
Recommended Green and Low Carbon Advanced Technologies
and Products in Industrial Field
(Bio-fermentation L-alanine)
“The most Socially Responsible Listed Company”
in China's Listed Company IWOM Rankings“Competitive Company of the Year”in Capital Market Value List
Top 100 Innovative Enterprises in Anhui Province
Awards
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
In 2023, with the positive performance inthe four dimensions of environment,labor and human rights, business ethics,and sustainable sourcing, AHB received abronze medal in the EcoVadis rating forthe ?rst time.
Contribution to SustainableDevelopment
AHB is committed to providing customers with innovative bio-based products, propelling society towards a bio-economy. AHB adheres to thedevelopment path centered on "Two Replacements": "Replacing non-renewable petrochemical resources with renewable biological resources"and "Replacing energy-and-pollution-intensive petrochemical processes with green and clean biological manufacturing techniques," strivingto build a modern bio-manufacturing enterprise "Driven by scienti?c and technological innovation, and rooted in advanced manufacturingcapabilities," which aligns with the development concepts of energy conservation, emission reduction and environmental protection of"Carbon peaking" and "Carbon neutrality."
In essence, synthetic biology is a technology that enables cells to produce substances required by human beings, breaking through thelimitations of natural evolution. Centered on "arti?cially designing and writing genomes," this technology involves designing and constructingcomponents or modules from an engineering perspective to meet speci?c needs. These components can be used to modify and optimizeexisting natural biological systems, or to design and synthesize entirely new, controllable arti?cial biological systems. Guided by engineeringprinciples and utilizing technologies such as genome sequencing, bioengineering, chemical synthesis, and computer modeling, syntheticbiology created a new model for scienti?c research. The technological pathways in synthetic biology enable the closed-loop recycling of carbonatoms, combining environmental bene?ts with cost reduction and e?ciency gains. This technology can decrease reliance on non-renewablepetrochemical resources and contribute to carbon peak and carbon neutrality goals by both reducing emissions and enhancing carbon seques-tration.On one hand, compared with petroleum-based products, bio-based chemicals signi?cantly reduce carbon dioxide emissions. Syntheticbiology provides the technological means for the bio-manufacture of these chemicals. This innovative production method helps reducereliance on non-renewable petrochemical resources and alleviates environmental stress, thereby facilitating low-carbon sustainable develop-ment. According to statistics from the Institute of Process Engineering, Chinese Academy of Sciences, synthetic biology manufacturing currentlyachieves an average energy saving and emission reduction of 30% - 50%, with potential to reach 50% - 70% in the future.On the other hand, synthetic biology improves the natural carbon metabolic pathway and reassembles a new arti?cial carbon metabolicpathway, thus enhancing the carbon ?xation capacity of plants and microorganisms. Synthetic biology can achieve low-carbon environmentalprotection and sustainable development through carbon capture, carbon recovery, carbon sequestration or zero-carbon or even negative-carbon material production.
Synthetic Biology is Ushering in a New Era ofLow-carbon Creation
RawMaterial
GeneModi?cation
Extraction andPuri?cation
Products
Cell FactoryIntelligent Control of
Fermentation Process
Di?erent from the traditional production paths that rely mainly on non-renewable resources such as oil and coal, the biomanufacturing AHBengaged can utilizes renewable resources like starch and carbon dioxide as raw materials for the processing and synthesis of chemicals,pharmaceuticals, and biomaterials, meeting the needs of various application ?elds while reducing dependence on non-renewable resources.This approach creates a circular economy chain that spans from cultivation to synthetic production and consumer recycling.
Contribution to Circular Economy
RenewableMaterials
Biomanufacturing
DownstreamApplications
Consumer
Phase III: Carbon dioxide, etc.
Renewable Materials
A continuous supply of renewable biomass feedstock through cultivation and production.
BiomanufacturingSynthetic bio-cell factories make bio-based material monomers in a process that dramaticallyreduces carbon. The anaerobic fermentation process of AHB has no carbon dioxide emissions.
Downstream ApplicationsCustomers use these biobased materials to make their own products that are bothenvironmentally friendly and cost e?cient.
Consumer
Products discarded by consumers are transformed into non-toxic small molecules such ascarbon dioxide, which enter the natural cycle and are absorbed by plants for photosynthesis.
Phase I: Glycogen such as corn and sugar canePhase II: Non-grain feedstocks such as lignin, straw
Two Replacements
Replace non-renewable petrochemical resources
with renewable biological resources
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Replacing energy-and-pollution-intensive
petrochemical processes
with green and clean biological manufacturing techniques
Technology Platform
Build a Sustainable Ecology in Multiple Fields
Microbial Fermentation Platform
Enzyme Catalysis Platform
Taking L-alanine as an example, a comparison of the environmental performance of the main productionmethods is as follows
Taking β-alanine as an example, a comparison of the environmental performance of the main productionmethods is as follows
The traditional manufacturing method for L-alanine primarily utilizes chemical synthesis, speci?cally through a petrochemical route thatsynthesizes from petroleum-based compounds, consequently leading to environmental concerns. The engineered bacteria obtained throughmetabolic engineering modi?cation enable fermentation under aerobic conditions with faster production and higher yields. However, in aerobicfermentation process, carbon source is used to generate energy and synthesize the bacterial cells, resulting in low sugar-acid conversion andenergy consumption for continuous aeration.By breaking through the barriers of anaerobic fermentation technology, AHB has established a microbial cell factory for anaerobic fermentationproduction of L-alanine with renewable glucose as raw material, and marked the ?rst successful international implementation of scaledmicrobial anaerobic fermentation for the production of L-alanine. Compared with the traditional chemical synthesis method to produceL-alanine, the anaerobic fermentation process of AHB signi?cantly reduces energy consumption and product costs. According to the appraisalmade by China Light Industry Council, the key technology of L-alanine production by anaerobic fermentation has reached the internationalleading level. This project is a successful example of innovative development and green manufacturing.AHB's fermentation method of L-valine production adopts highly e?cient fermentation strains for anaerobic fermentation, and shares manycommonalities with the fermentation method of L-alanine products in key technology, process ?ow and production equipment. In comparison,the AHB's anaerobic fermentation technology for the production of L-valine is featured by low energy consumption, relatively high glucoseconversion rate and low generation of by-products, and the ability to obtain products of higher purity through direct concentration and crystalli-zation, providing a strong competitive advantage.Advantages of the AHB's anaerobic fermentation process include oxygen-free process, high sugar-acid conversion rate, low cost, low energyconsumption and better environmental protection. The Company utilizes anaerobic fermentation technology to produce bio-based products,reducing consumption of non-renewable energy sources. Additionally, the fermentation process emits no carbon dioxide, aligning with green,low-carbon environmental principles. This approach meets the requirements for green ecological labeling of raw materials by downstreamclients such as BASF. for raw materials.
Production MethodEnvironmental PerformanceChemical Synthesis
Production in high temperature and high pressure conditions, with high costand environmental pressureLow sugar acid conversion rate, requiring a large amount of energy consumptionOxygen-free process, high sugar-acid conversion rate, low cost, low energyconsumption and better environmental protection
Aerobic Fermentation
MethodAnaerobic Fermentation
Method
In 2016, AHB achieved the production of β-alanine by enzymatic decarboxylation of L-aspartic acid as raw material. This process realizes thesynthesis of β-alanine in one step under mild reaction conditions, while avoiding the environmental pollution caused by the use of organicsolvents and by-product waste salts.In 2018, the Company innovatively developed a process technology that uses acrylic acid as a raw material and arti?cial synthetic enzymes tocatalyze the production of β-alanine. This new method further replaces the original β-alanine production process, achieving an upgrade anditeration of the biomanufacturing technology.
AHB adheres to the brand concept of "Green Manufacturing, Low-carbon First" and implements this concept in the core product series.As a company adhering to the strategy of sustainable development, we are committed to building a sustainable ecosystem in multipleapplication ?elds such as intermediates, animal nutrition,personal care, functional nutrition, and plant nutrition. We adopt a model thatcombines independent research and development with open innovation, integrating global technological resources to providedownstream sectors with green, reliable products and innovative solutions.
Create Low-carbon andEnvironmentally Friendly Materials
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Low production costHigh atomic conversion andlow production costHigh atomic conversion rate,low production cost,low environmental pollution
OperationsAdvantageDisadvantageProduction ProcessTraditional acrylonitrileammoniation hydrolysismethodEnzyme catalysismethod
Produce β-alanine by enzymaticdecarboxylation of L-aspartic acid asraw materialCatalytic production of beta-alaninefrom acrylic acid using syntheticenzymes
Combine acrylonitrile and ammoniasolution to form ammonia β-Aminoa-cetonitrile, then hydrolyzed in acidicor alkaline conditions to obtain β-alanine
Low atomic utilization, largeamount of inorganic saltsproduced during hydrolysis,and great di?culty inproduct puri?cation
Representative products: 1,3- Propanediol, 1,4-Succinic acid
The bio-based new material monomers produced by AHB serve as important raw materials for bio-based materials (e.g. PTT, PBT,PBS, bio-based nylon, bio-based polyurethane, etc.), helping the world move towards a low-carbon economy. AHB works withstakeholders to help customers reduce carbon emissions and waste and shift from consuming fossil fuels to using renewable energy.Relying on synthetic biotechnology, AHB has established an exclusive fermentation strain to produce high-quality 100% bio-basedcarbon 1,3-propanediol by one-step fermentation using glucose as the raw material through an e?cient metabolic pathway. It isused in many ?elds including textile, engineering and daily chemicals. Its synthesized PTT ?ber has excellent comprehensive performance,and the yarn made by melt spinning is widely used in high-end garment fabrics and carpets, making textile and garment morelow-carbon and environmentally friendly.
AHB focuses on precise nutrition solutions with L-valine as the core, helping to improve lactating sow milk production, pigletgrowth, feed conversion and body weight gain of broilers, thereby expanding breeding output, providing customers with custom-ized nutrition services for animals at di?erent growth stages, and providing practical and feasible solutions for the challenges facedby the animal feed industry. With advanced process technology, excellent product quality and green production methods, L-valine,Calcium, D-Pantothenate, and Inositol series products of AHB are contributing to the sustainable development of the animalhusbandry industry and creating a better life for human beings and our future generations.
Raise the E?ciency ofLivestock Production
Representative products: L-valine, D-calcium pantothenate, and inositol
AHB closely grasps market trends and technological breakthroughs,providing humans with bio-based, naturally, and high-qualitynutrients. We are committed to providing green and safe productsand innovative solutions for consumers' health conditions, agedemographics or lifestyles.AHB will continue to explore the multifaceted applications of nutritional solutions backed by synthetic biologyin the food and health sector in the future.
Improve HumanNutrition and HealthRepresentative products: malic acid, D-calcium pantothenate, inositol, β-alanine, and L-arginine
Against the backdrop of the global "Clean Beauty" trend, consumer demand for "natural, gentle and e?ective" cosmetics continuesto grow. In the ?eld of cosmetics, synthetic biology will create new raw materials to build new products with high di?erentiation,high barriers and high e?ciency. AHB will launch new bio-based D-panthenol, β-arbutin, 1,3-propanediol and other products thatare gentler, more e?cient and sustainable with the innovative synthetic biology ingredients featured by natural greenery andcutting-edge sci-tech achievements, which are a perfect match with the concept of clean beauty.
Innovative Solutions ofFamilies and Personal CareRepresentative products: L-alanine, 1,3-propanediol, D-panthenol, α-arbutin, and β-arbutin
AHB is committed to plant nutrition and soil improvement, contributing to the sustainable utilization of soil and taking saline-alkalisoil reclamation as the most urgent task. Our products neutralize soil salinity and alkalinity through amino acids and organic acids,mitigating the extent of soil salinity and alkalinity, and enhancing the organic matter content in the soil, thereby improving the soil'smicroenvironment and amending its physical and chemical properties.
Boost Soil Improvement
and Plant Growth
Representative products: plant source amino acid 90 powder
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
The AHB's product L-alanine is one of the main raw materials for the synthesis of the new green chelating agent MGDA, which is theperfect additive in creating a new generation of sustainable cleaning solutions. MGDA is renowned for its natural biodegradation,strong chelating ability, toxicological safety, and less washing residue. While solving the environmental and health problemsbrought by traditional chelating agents, it ensures the same cleaning e?ectiveness, making it the best new green chelating agentsat present.
ESG Development StrategyStatement of the Board of DirectorsThe Board of Directors actively integrates ESG into oversight and management, including participating in decision-making on majorESG-related matters and overseeing the strategic direction of ESG, as well as ESG-related risks and opportunities. The Board ofDirectors will continue to improve the corporate governance structure of the Company, complete internal control system, standard-ize the Company's operation and ensure that the Company is on the path of sustainable development.The Board of Directors requires management to practice environmental management policies to reduce the ecological footprint,improve resource utilization e?ciency, and reduce waste emissions as a means of protecting the health of the environment andecosystems, and to help harmonize our long-term development with society and the environment. The Board of Directors iscommitted to actively practicing social responsibilities, and safeguarding the legitimate rights and interests of the employees byattracting talents with an open, inclusive attitude. At the same time, we will concentrate on the main business of synthetic biology, enhancethe ability of industrialization of key technologies and revitalize the vitality of the industry.ESG Management SystemTo e?ciently implement our ESG initiatives, we have established a governance structure with clear hierarchy, delineating powersand responsibilities to align with strategic development needs. This ensures e?ective leadership in ESG issues, implementingmanagement practices from the top-down and creating a regularized mechanism for the Board to engage in ESG governance. Toensure the e?ective achievement of our ESG strategic goals, we have set up an ESG leadership team and assigned dedicated person-nel to follow up on ESG-related work, covering all functional departments at our headquarters as well as our four major productionbases, and to report regularly to the Board of Directors on the progress and e?ectiveness.The Board of Directors maintains a vigilant oversight of the e?ective implementation of ESG governance policies, ensuring that ourinitiatives align with industry standards and best practices. This meticulous monitoring extends to internal controls, the code ofethics, and anti-corruption policies, resulting in a corporate governance framework characterized by high ethical standards,transparency, and responsibility. These e?orts contribute signi?cantly to enhancing the Company's long-term sustainability.
Board of Directors
ESG leadership teamSupervisionReport
Functional departmentsat headquarters
Changfeng BaseQinhuangdao BaseBayannur BaseChifeng Base
Stakeholder EngagementAHB attaches great importance to communication with stakeholders such as employees, shareholders and investors, customers,suppliers, communities, and the governments. The Company continuously expands communication channels, including usinginterviews, questionnaires, and other forms to learn about the signi?cant impact of company operations on their decisions, as wellas how the risks involved in ESG related issues have a signi?cant impact on the Company. We regularly review communication with stakehold-ers and improve the communication mechanisms in a timely manner based on feedback from stakeholders.
Stakeholders
Expectations and
Demands
CommunicationChannels and Mechanisms
Employee
·Emphasize occupational health
·Unblock development channels·Better working atmosphere·
Care for employees
·Improve salary and bene?ts
·Regular and occasional meetings
·Organize cultural and sportsactivities
·Establish complaint andfeedback mechanisms
·Employee Council
Shareholders and
Investors
·High-quality informationdisclosure
·Protection of shareholderrights and interests·Good corporate governance·Increase return on investment
·Exchange on the ShanghaiStock Exchange E-interactivePlatform·Performance brie?ng·Investor research
·Information disclosureannouncement
·General Meeting ofShareholders
·
Daily phone and emailcommunication
·Attend exhibitions
·Industry exchange andseminar activities
·Sta? visits and communication
·Conduct customer satisfactionsurveys
Customer
·Product quality & safety
·Meet production capacityrequirements
·Green product·Information security andprivacy protection
·Supplier screening andevaluation
·Daily cooperation andcommunication
·QuestionnairesSupplier
·Sustainable supply chain·Fair and transparentprocurement processt
·
Ful?ll agreement in a honestand trustworthy manner
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Assessment of Material TopicsAHB follows the Global Reporting Initiative (GRI) standards and refers as the recommendations for developing material topics.During the reporting period, we conducted surveys via online questionnaires with company management, employees, and otherstakeholders to assess the impact of our business operations on the environment and society. Based on the signi?cance of thesetopics , we prioritized them accordingly.
The ?rst level of the materiality matrix is the material topics of AHB for 2023, and we have reported the corresponding managementmethods and performance.
Environmental topicsEmployee topicsOperational topicsEconomic topicsCommunity topics
Level 1Level 2Level 4
We identi?ed the material topics of AHB for the year 2023 through the process described below:
Stakeholders
Expectations and
Demands
Community
Government
Identi?-cation
Review
CommunicationChannels and Mechanisms
·Reduce environmental impact·Community investment
·Community visits and exchanges·Employee volunteer service·Conduct public welfare activities
·Participate in exchange andseminar activities·Comply with the local laws andregulations
·Collaborate with governmentdepartments
·Increase project investment
·
Drive regional economicdevelopment
·Paying taxes in accordancewith the law
·
Reduce environmentalpollution
·Facilitating employment
Prioriti-sationValida-
tion
We commissioned an independent consultant to identify sustainability topics , including reference to the GlobalReporting Initiative (GRI) Standards and relevant peer group analysis, to assist in identifying a total of 36 ESG topicsrelevant to AHB's business.We conducted a questionnaire survey of the Company's Board of Directors and other stakeholders, analyzed andprioritized the results of the survey, visualized the results, and created a materiality matrix.
The Board of Directors and the Management Team of the Company reviewed and con?rmed the results of theevaluation of the material topics.
The Company will continue to review and re?ne the entire evaluation of material topics.
Level 4Level 3Level 2Level 1
Importance to StakeholdersHigh
Importance to AHBHigh
Water management
Clean technologyopportunities
Employee training anddevelopment
Employee salary andbene?ts
Product quality and safety
Economic performance ofthe Company
Synthetic biotechnologyand environmentalprotection
Energy and resourcemanagement
Emissions managementChemical safety managementTalent managementEmployee health and safetyPrevention of child andforced laborCustomer satisfaction andcomplaint handlingInformation privacy andsecurityIntellectual propertyprotectionCompliance operationInvestor relations
Biodiversity conservationResponse to climate changeEnvironmental impactassessment of ongoing projectsProduct accessibility anda?ordabilityCommunity welfareCommunity relations
Level 3
Waste treatment andrecyclingGreenhouse gas emissionsEmployee communicationEmployee diversity andequal opportunitySupply chain managementGreen procurementIndustry chain synergydevelopmentResponsible marketingBusiness ethicsAnti-corruptionCorporate governanceRisk management
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Aligning with UN SDGs
CorporateGovernance
GreenDevelopment
ResponsibleCitizenship
Operational
Excellence
AspectUN Sustainable Development GoalsOur ActionsAspectUN Sustainable Development GoalsOur Actions
Goal 5.5 To ensure women's fulland real participation in corporatedecision-making and equal accessto all levels of decision-makingleadership
Goal 6.5 To conduct comprehensivewater resource managementGoal 7.2 To substantially increasethe share of renewable energy useby 2030Goal 12.2 To achieve the sustainablemanagement and e?cientutilization of natural resources by2030
A new ultra?ltration membrane bioreactor (MBR) systemwas built to ensure the discharge of suspended e?uentup to standardAn automated control system for the sewage station isplanned to be builtLeveraging wind power and photovoltaic power toimprove the structure of energy use, replace non-renew-able fuels with biomass to reduce carbon emissions
Expand employee recruitment scale, with 873 new employeesjoined in the year 2023Enhance the vocational skills training of employees, with 1,423employees trained during the reporting periodDevelop an Anti-Discrimination Policy to ensure equal employ-ment opportunities for all types of employees, including youngand disabled employees
Goal 13.3 To strengthen education andpublicity on climate change mitigation,adaptation, impact reduction, and earlywarning
Goal 4.4 To substantially increase theemployment of the young and adultswith technical and vocational skillsused for employment, decent workand entrepreneurshipGoal 8.5 By 2030, all men and women,including youth and people withdisabilities, will achieve full andproductive employment. A decent jobwill be accessible for everyone andequal pay for equal work will berealizedGoal 8.8 Protect labor rights andfacility to create a safe, secure workingenvironment for all workers, especiallyfemale immigrants and those withoutstable employment
Establishment of the Norms on the Managementof the Rights and Interests of Female Employeesand Labor ProtectionNumber of females in the middle and seniormanagement of companies is 12, accounting for27% of the totalDuring the reporting period, internal anti-corrup-tion training was conducted for 173 employees inkey risky positions
Breaking through technological barriers in L-alanineanaerobic fermentation process, undertaking thebiological industry demonstration project of theNational Development and Reform CommissionAccumulated 398 patent applicationsEstablishment of the new Chifeng Base, with plans tolaunch the following projects at the base: Bio-basedSuccinic Acid and Bio-based Product Raw MaterialProduction Base Project, Bio-based 1,3-PropanediolConstruction Project, Fermentation-based Alternat-ing Production of Valine and Arginine Project, InositolConstruction Project
Goal 16.5 To signi?cantly reduceall forms of corruption and bribery
Goal 8.2 To achieve higher levelsof economic productivity throughtechnological upgrading andinnovation
Goal 9.1 To develop high-quality,reliable, sustainable anddisaster-resilient infrastructure tosupport the economic developmentand enhance human well-being
Goal 12.a To strengthen scienti?cand technological capacity tointroduce more sustainablepatterns of production andconsumption
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Governance Structure
Business Ethics
Compliance and Risk ManagementInformation DisclosureProtection of Investors' Rights and Interests
Corporate Governance
AHB is strictly in accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republicof China, the Code of Governance for Listed Companies, the Rules Governing the Listing of Stocks on the Technology and InnovationBoard of the Shanghai Stock Exchange, and the Self-disciplinary Supervision and Regulation Guideline for Listed Companies on theTechnology and Innovation Board of the Shanghai Stock Exchange, No. 1 Normative Operation of Self-regulatory Guidelines forListed Companies on the Science and Technology Innovation Board of Shanghai Stock Exchange, and other laws and regulations, aswell as latest requirements on corporate governance from the China Securities Regulatory Commission and the Shanghai StockExchange, will continue to improve the working system of the general meeting of shareholders, the board of directors, the supervisoryboard and the general manager, so as to build a corporate governance structure with e?ective checks and balances among theauthority, decision-making body, supervisory body and operating management.
We continuously improve the corporate governance structure and clarify the responsibilities in order to realize the sustainable development ofAHB. During the reporting period, for the General Meeting of Shareholders, the Board of Directors, the Supervisory Committee and theManagement Team, each of them has well-de?ned power and responsibilities, performing its own duties, balancing and coordinatingwith each other. The Company complies with regulatory requirements in key governance aspects, including the relationships betweenshareholders and the general assembly, majority shareholders and the publicly listed company, directors and the board of directors,supervisors and the supervisory board, performance evaluation and incentive mechanisms, stakeholders, and information disclosureand transparency.
Governance Structure
Governance of AHB's General Meeting of Shareholders,Board of Directors and Supervisory Board
AHB has continuously improved the management system and formulated various corporate governance systems including Rules ofProcedure of the General Meeting of Shareholders , Rules of Procedure of the Board of Directors, and Rules of Procedure of theSupervisory Committee to pave ways for standardized operation.
General Meeting of
Shareholders
Board of Directors
Strategy CommitteeNomination, Remunerationand Evaluation CommitteeAudit Committee
Management Team
Supervisory Committee
The General Meeting of Shareholders is the highest decision-making body of AHB, making decisions on the appointment ofdirectors and supervisors, re?nancing, major foreign investment and connected transactions. The convening, proposal, convening,voting, and resolution of AHB's general meeting of shareholders shall be witnessed by lawyers on site, and legal opinions shall beissued in compliance with laws and regulations.
General Meeting of Shareholders
AHB's Board of Directors consists of nine members, including six non-independent directors (including one chairwoman of theboard) and three independent directors. Under the Board of Directors, there are three specialized committees: Strategy Committee,Nomination, Remuneration and Evaluation Committee and Audit Committee. The Board of Directors of the Company is responsi-ble to the General Meeting of Shareholders for deciding on the Company's business plans and investment programs, and forimplementing the resolutions of the General Meeting of Shareholders. The directors of the Company shall be elected or replacedby the shareholders' meeting for a term of 3 years. The chairwoman is elected through voting by all directors of the Board ofDirectors, and the number of votes garnered should account for more than half of the total.
Board of Directors
The Supervisory Committee of AHB consists of three members, including two shareholder representatives and one employeerepresentative. The Supervisory Committee supervises the operation of the Company, the ful?llment of duties by the Company'sdirectors and senior management in accordance with the law.
Supervisory Committee
During the reporting period, the general meeting of shareholders, the Board of Directors and the SupervisoryCommittee were held as follows;
general meetings of shareholdersA total of
proposals deliberated
A total of
proposals deliberated
meetings of directors
A total of
proposals deliberated
meetings of supervisorsKeyPerformance
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Rules of Procedure of the General Meeting of ShareholdersRules of Procedure of the Board of DirectorsRules of Procedure of the Supervisory Committee
Independent Director SystemInsider Reporting System for Signi?cant InformationFundraising Management System
Corporate Governance-related Policies
By GenderBy Age
By Major
Male
Over 55 years oldUnder 45 years old45-55 years oldFemale
Business AdministrationAccountingFinanceMarketing
Applied ChemistryBiochemistry and Molecular BiologyPolymer Materials Science
Diversi?ed Governance
Risk Management System
AHB attaches great importance to independence at the board level, and has developed and regularly updated Working System of IndependentDirectors. On this basis, AHB also emphasizes the diversity of the Board of Directors. In the nomination procedure of the Board members, we willtake background diversity into account, including but not limited to gender, age and specialty. All of our Board members have extensiveindustry experience and expertise in the ?elds of biochemistry and molecular biology, polymer materials science, applied chemistry, businessadministration, accounting and ?nance. We believe that the Board of Directors with diversi?ed backgrounds can assess the risks and opportunities ofa Company's business model from a wide array of perspectives, leading to more rational decision-making and more e?ective governance.
The Board of Directors and specialized committees are responsible for supervising and managing risks, with the Audit Committee responsible forregularly reviewing the internal control policy, audit policy and e?ectiveness, as well as evaluating the work performed by the external auditor.In order to e?ectively manage the internal risks of the company and ensure that the company operates in a compliant manner, we have set upan Audit Committee, which is responsible for reviewing the compliance management work on a regular basis, and the Audit Department is themain body responsible for identifying and analyzing the compliance risks in the process of operation, implementing preventive and controlmeasures against the risks, as well as following up on and dealing with internal and external feedbacks on the compliance issues.
Risk Management ProcedureAHB has established a risk management program to better identify, assess and deal with risks that may cause negative e?ect to theCompany's sustainability objectives and operations.
Internal ControlIn accordance with the regulations of the internal control standards system, AHB has established and e?ectively implemented comprehensiveinternal controls. We continually evaluate the e?ectiveness of these controls to ensure that operations and management are lawful andcompliant, assets are secure, and ?nancial reporting and related information are accurate and complete.
AHB has established a comprehensive risk management system, and we have formulated systems such as Control Procedures forCountermeasures against Risks and Opportunities and Management Procedures for Analysis of the Company's Internal andExternal Environment to regulate the process of risk management of the Company. We identify internal and external risks related tothe Company's business activities, covering areas of environment, health and safety, business ethics, labor, human rights and legalcompliance, through internal audit and risk assessment management. The heads of the Company's departments and the bases arerequired to report to the Board of Directors on a regular basis on the progress and objectives of the work and to assess the risks thatmay be faced in the course of the business, to assist the Board of Directors in determining the grade of each risk and implement appropri-ate procedures and controls to ensure compliance and e?ective control of identi?ed risks. On this basis, we also incorporate riskmanagement indicators into individual performance appraisals to ensure the e?ectiveness of risk management.
Compliance and Risk Management
Risk Identi?cationRisk Assessment
Risk Response andControl
Risk Monitoring andReporting
The Company shall have insightsand analysis of risks related tomacro external environment,segment, industry, technology,law and other ?elds, and identifypotential risks that may a?ectthe Company's medium- andlong-term developmentaccording to the expectations orneeds of stakeholders.
The person responsible for therisk is designated to formulatea work plan and take e?ectivemeasures to respond to therisk in a timely manner toreduce the adverse impact.An assessment is conducted todetermine the level ofidenti?ed risks.
Potential compliance risks areidenti?ed in a timely mannerthrough monitoring and earlywarning, and reported to therelevant responsible personnelin a timely manner.
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
AHB was listed on theNational EquitiesExchange andQuotations
AHB rigorously adheres to the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, theAccounting Law of the People's Republic of China, and other relevant legal and regulatory requirements established by the China SecuritiesRegulatory Commission and the Shanghai Stock Exchange. AHB in accordance with the Basic Norms for Enterprise Internal Control and theaccompanying guidelines, timely evaluates, updates, and improves the internal control system with reference to the trend of the internaland external environment, as well as the actual development of the Company. It not only improves the e?ciency of enterprise managementand decision-making capabilities, but also provides guarantees for the legality and compliance of enterprise management and assetsecurity, thus facilitating the implementation of our development strategies.AHB's internal control covers the major aspects of operation and management. During the reporting period, we have focused onmonitoring and evaluating high-risk areas such as sales revenue collection process, procurement payment process, project managementprocess, information systems management process, production management process. There are no major defects that a?ect the Compa-ny's business development, nor signi?cant omissions in the units and businesses included in the evaluation scope. The internalcontrol mechanism of the Company is sound and reasonable, and the implementation of internal control is e?ective.
In strict accordance with relevant laws and regulations such as the Regulation Guideline for Listed Companies on the Technology and InnovationBoard of the Shanghai Stock Exchange, No. 1 Normative Operation of Self-regulatory Guidelines for Listed Companies on the Science andTechnology Innovation Board of Shanghai Stock Exchange, as well as the Investor Relationship Management System and the InformationDisclosure Management System, AHB discloses the Company's information on the designated media in a true, accurate, complete and timelymanner to ensure that the majority of investors enjoy equal rights to information, following the principles of openness, fairness and impartiality.AHB has prepared the Information Disclosure Management System in accordance with relevant laws and regulations and the Articles of Associationof the Company, which clearly stipulates the general principles, management, responsibilities, speci?c procedures, con?dentiality system, archivemanagement and other matters of information disclosure of the Company. The Secretary of the Board of Directors is responsible for organizesinformation disclosure of the Company and the O?ce of the Board of Directors is responsible for daily management to ensure e?cientinformation disclosure.For regular announcements, temporary announcements, and other information o?cially released by the Company, we have set forth a standardinformation disclosure process in our Information Disclosure Management System and de?ned the information disclosure responsibilities ofeach department. All corporate disclosures are subject to this process. No violation of information disclosure was found during the reportingperiod.With the comprehensive performance in information disclosure, corporate governance, operational performance, ful?llment of social responsibilityand cooperation with regulatory work, AHB was awarded the highest rating of Grade A in information disclosure of SSE for the year 2022-2023.
Information Disclosure
Investor Relation Management
The primary communication channels between investors and AHB:
AHB keeps improving the management system and the procedure and mechanism of major decision-making of the Company by preparingvarious systems including Rules of Procedure of the General Meeting of Shareholders, and Management System for Insider Information andInformants, and stipulates to convene a general meeting of shareholders to consider and vote on statutory matters by online voting, to fullysafeguard the rights of the shareholders.
AHB has formulated the Investor Relationship Management System, established e?ective channels for communication with investors, anddisseminated the Company's investment value, brand value and industrial value in an all-round manner through emails, on-site research,teleconferences, and SSE e-interactive platform, and the Company's WeChat o?cial account and various channels, so as to deliver our strategicideas, management concepts, and stage-by-stage operation and development results to the capital market timely and accurately within thescope of compliance.We attach importance to the building of network communication platform and have opened an investor relations column in our o?cialwebsite, which provides a convenient channel for investors to learn more about AHB.
Protection of Investors' Rights andInterests
Hotline and Email
Exchange on the Shanghai StockExchange E-interactive Platform
Answer investor hotline calls and reply to emails on a daily basis to resolve investor concerns
Replying on the SSE e-interactive platform to clarify the issues of concern to investors
Including investor ?eld visits, online conference calls and other forms
Promoting company values to investors and potential investors by sharing ideas at brokeragestrategy meetingsOrganizing annual, semi-annual and quarterly results brie?ng sessions to fully communicate withinvestors on issues of concern to investors, such as the Company's performance, operations anddevelopment strategy
Brokerage StrategySessions
Performance
Brie?ng
Investor Exchange
Sessions
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Business Ethics
Amount of Cash Dividend
Investor ReturnsImplementation MeasuresAHB attaches importance to investor returns, focuses on optimizing the investor return mechanism, and gives full consideration to the opinionsof independent directors and public investors in the research, demonstration and decision-making process of pro?t distribution policy. Toformulate a proposal on pro?t distribution, the Board of Directors shall, in advance, fully listen to the opinions of shareholders (especially publicshareholders and small and medium-sized investors), consult the Supervisory Committee, obtain the approval of a majority of all independentdirectors, and submit the proposal to the general meeting of the Company for approval after it has been agreed by the Board of Directors.AHB has also formulated the Plan for Shareholders' Dividend Return for the Next Three Years (2022-2024) based on the industry characteristics, stageof development, business model, pro?tability level and capital arrangement, and ensured that the decision-making procedures and mecha-nism of the distribution plan are complete, and that the dividend distribution standards and ratios are clear and unequivocal, in line withrelevant laws and regulations and the Articles of Association, safeguarding the interests of all shareholders. We actively reward our shareholdersby providing cash dividends to investors every year after going public, and the amount of dividends increases year by year.
Periodic review by the Audit CommitteeThe Company has established an Audit Committee to periodically review the implementation of the Code and provide policyguidance. This review is conducted at least quarterly.
Employee commitment and training
AHB will inform potential employees of the requirements of the Business Code of Conduct and Ethics before o?ering them apartnership opportunity. We provide all employees with the full text of the Business Code of Conduct and Ethics, requiring allemployees to understand and study the disciplines. Employees at medium-risky and high-risky integrity positions stipulated in theIntegrity Handbook and the Integrity Risk Identi?cation and Evaluation Form are required to accept the Business Code of Conductand Ethics, and to sign a letter of commitment.
Complaint/reporting
All employees are required to report violations. Complaints/reporting of actual or suspected violations of this Code and norms willnot be considered as disloyal, but will be considered as a move to protect the reputation and integrity of the Company and employees. Allemployees may report to their immediate supervisor or to the Audit Department, HR Center, or Group Audit Committee.
Investigations and penaltiesAll complaints, reports, and feedback will be investigated by the responsible department according to the legal regulations, compa-ny articles, this guideline, and the company's relevant rules and procedures.
External communicationAHB provides complaint and feedback channels for interested parties via o?cial website.
Adhering to the core value of "Sincerity, Trustworthiness and Unity of Knowing and Doing", abiding by the business ethics and complying withthe laws and regulations of the countries where the business is carried out is the basic principle held by AHB when carrying business activitiesacross the globe. By formulating strict business ethics and internal supervision mechanism, we enhance the awareness of business ethics of allemployees and the awareness of compliance operation of partners, and build up the capacity in management of business ethics andanti-corruption in all aspects.
We have established the Business Code of Conduct and Ethics of AHB, which applies to all employees of the Company, subsidiaries, and relatedparties. We aim to provide guidelines for business and ethical behavior for all employees of our Company, and require employees to complywith the local laws and regulations and not to engage in any illegal activities. We require all management personnel and directors to ful?ll theirmanagement and supervisory responsibilities, and every one of the management layer must be aware that how important integrity and ethicalbehavior are to the management and compliance of the Company, making a code of conduct for day-to-day business, and promoting compliancewith this Code through personal leadership and training.We likewise require all of our business partners to adhere to the standards of business ethics and to be honest and law-abiding. During thereporting period, a total of 253 business partners signed the Commitment Letter of Code of Conduct for Business Partners of AHB, with a signingrate of new business partners of 100%. And no signi?cant risks in terms of child labor, forced or compulsory labor, freedom of association,environmental pollution, unfair competition, corruption, etc. were found.
During the reporting period, the Board of Directors resolved that theCompany proposes to distribute a cash dividend of RMB 9 (inclusiveof tax) for every 10 shares to all shareholders, totaling RMB141,339,222.00 (inclusive of tax), which accounts for 31.47% of theCompany's consolidated net pro?t attributable to shareholders of thelisted company for the year of 2023, and to transfer 4.5 shares for every10 shares to all shareholders out of the capital reserve. The pro?tdistribution proposal is yet to be submitted to the shareholders'meeting for consideration.
Integrity System Construction
RMB 59,728,400
RMB 97,560,000
RMB 141,339,222
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
KeyPerformance
Anti-corruptionIntegrity and Anti-fraud
AHB conducts business in an honest, ethical manner and strictly adheres to the legal requirements of anti-corruption in the jurisdictions . Toraise the awareness of anti-corruption compliance among all employees, AHB has developed an Integrity Handbook based on the BusinessPrinciples for Anti-Bribery issued by Transparency International and Social Accountability International, and has developed a good riskmanagement strategy, with zero tolerance for any behavior that is illegal or immoral, which includes, but is not limited to, corruption, bribery,malpractice, extortion, misappropriation, and kickbacks. We organize periodic reviews to assess the risk of corruption and develop appropriatecontrol measures.We have introduced anti-corruption requirements in induction trainings for new employees. We prevent and control integrity risks by arrangingemployees in key risk positions to sign a commitment to the Code of Business Conduct and Ethics, and by attending regular integrity training .
AHB adheres to the principle of good faith and complies with the speci?c integrity rules applicable upon di?erent countries and regions, theindustry or the relevant organization. We require all employees to adhere to a high standard of integrity of the code of conduct, and to treatpeople with sincerity, honesty and integrity.The principle of good faith applies both to the internal management and to external interactions and cooperation. Employees are prohibitedfrom engaging in, facilitating, supporting, condoning, or otherwise participating in any fraudulent, deceptive, or dishonest activities for thepurpose of gaining unjust or unlawful bene?ts, either directly or indirectly. They are further prohibited from engaging in any illegal activities thataim to defraud funds or personal interests, and they must not use any illegal means to harm the legitimate rights and interests of any companyor individual.
Such acts include, but are not limited to:
Unlawful fraud, cheat and other deceptive business practices with AHB or our business partners that result in ?nancial or other loss toany person or entity;Fraud committed against any other third party.
We organize periodic reviews to assess the risk of corruption and develop appropriate control measures. AHBcarried out anti-corruption internal training for173 employees in key risk positions during the reportingperiod.
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
AHB promises to observe the principles of fair business conduct and anti-unfair competition, and follow the local laws and regulationsregarding fair competition and anti-unfair competition.In business activities, no employees of AHB are allowed to:
AHB has established a reporting channel to encourage all employees, directors, suppliers and business partners to report suspectedviolations of the law, code of ethics or other company policies. We encourage real-name reporting of problems, however, allcomplaints/reports can also be submitted con?dentially and anonymously. We will handle all complaints/reports carefully andcautiously. If necessary, we will take appropriate corrective action.
All information involving whistleblowers will be kept con?dential to the extent permitted by law. No retaliation, threats, penalties orreprisals against whistleblowers are allowed. Anyone who retaliates against a complaint/whistleblower will be subject to disciplinarypenalties, including termination of the employment relationship.
We will review all reports collected, establish a log regarding all reported letters, follow up on receipt, investigation and resolu-tion of such reports. All complaints, reports, and feedback will be investigated by the responsible departments in accordancewith laws and regulations, the company's articles of association, and relevant company policies, following the prescribedprocedures.
Any employee found to be in violation of the Business Code of Conduct and Ethics will be subject to appropriate penalties dependingon the facts, including termination of the employment relationship led by a variety of speci?c facts and circumstances.
Complaining/reporting of actual or suspected violations will not be considered as disloyal, but will be considered as a move to protectthe reputation and integrity of AHB and our employees. All employees may report to their immediate supervisor or to the AuditDepartment, HR Center, or Group Audit Committee.Reporting Channels
Fair Business ConductWhistle-blowing
Obtain the trade secrets of a third party by theft, bribery, fraud, coercion, electronic intrusion or other improper means, ordisclose company information to a third party;
Maliciously disseminate and fabricate false or misleading information about competitors or their products and services, andrefrain from making o?ensive remarks about competitors and damaging their goodwill;Engage in any conduct that may unlawfully prevent, restrict or distort fair competition, including, but not limited to, entering intoany written or oral agreement, decision or other concerted action with other parties that excludes or restricts competition;
Share information, discuss or enter into formal or informal agreements with any competitor relating to competitively sensitiveinformation such as prices, pro?ts, costs and other similar terms;
Otherwise conspire, collude or coordinate business conduct to impair or reduce competition, including but not limited to theattempts to ?x, adjust or control prices;Divide or allocate customers, suppliers or markets;Restrict the sale of services, products or product lines;Coordinate bidding with competitors;
Abuse the dominant market position and achieve, without legal procedures, a concentration of business operators that has ormay have the e?ect of excluding or restricting competition;Make false or exaggerated publicity in all external display or publicity channels released through the Company's website, self-media,publications, promotional materials, exhibitions, or business negotiations.
Disclose, use, or allow others to use commercial information that suppliers, customers, or business partners require to keepcon?dential;Incite, induce, or assist others to breach their contractual obligations (including breach of con?dentiality);
Directly report to the immediate supervisorEmail: ahb@ehuaheng.comTel: 0551-65388639 (weekdays 8:30-17:30)
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Environmental Management SystemResource ManagementResponse to Climate ChangeGreen Manufacturing
Green Development
Environmental Management SystemAHB is committed to building an environmental management system, implements the "14th Five Year Plan" for Green IndustrialDevelopment, strengthens environmental management and actively undertakes environmental responsibilities. We strictly abide bynational environmental protection laws and regulations, and have developed a series of internal management systems in conjunctionwith the actual conditions of the Company, to de?ne the environmental protection responsibilities of employees at all levels, andintegrate the concept of environmental management into daily production and operation. AHB has implemented environmentalmanagement system documents including but not limited to:
In the future, we will continue to seek innovative solutions to improve the water use e?ciency of our equipment and ensure the quality ofwater use, to continuously devote to the exploration of water-saving solutions sothat we can realize our water resource goals.
By establishing an environmental management system, we have taken various measures into practices in an orderly way, including thesubmission of information, data, and materials related to environmental impact assessment, the implementation of waste and wastewa-ter prevention and treatment, the assessment of the environmental impact of the base projects, as well as the reporting of documentsinvolving environmental impact assessment, environmental impact assessment approvals, and environmental acceptance.Our three production bases have obtained ISO14001 Environmental Management System Certi?cation. We invested a total of 6,613.49million RMB in environmental protection during the reporting period, which includes but not limited to costs for production processes,optimization and upgrading of technology and equipment, investment in monitoring systems for energy-using equipment, transporta-tion clean-up, and optimization of power structure.
Environmental Management Policies
Measures for the Implementation and Management of Energy and ResourcesConservation
Hazardous Waste Management SystemQuality/Environmental/Occupational Health and Safety/Food/Feed SafetyManagement HandbookQuality/Environment/Occupational Health and Safety/Food Safety/FeedSafety/Halal Assurance Management Procedure Document
Wastewater Management StandardWater Conservation Management SystemEnergy Management StandardSolid Waste Management Standard
Environmental Protection Guidelines
Strictly comply with national and locallaws and regulations, and engage inenvironmental management inaccordance with internallyformulated procedures
Prevent and control pollutionand hazardous sources, reducepollutant discharge and preventrelated accidents
Conduct internal education onenvironental protection toenhance employee's awareness ofgreen o?ceReduce energy consumption,conserve resources, andfacilitate resource recovery andrecycling
Resource Management
We actively promote water resource conservation and rational utilization. By establishing relevant water resource management systems,implementing total water consumption control and decomposing water consumption plans. We decompose water conservation targetsand plans to each department and workshop, and promote the implementation of water conservation plans and targets with rewardand punishment mechanisms to encourage our employees to be an active part in water conservation and management.AHB uses water from the municipal water supply, consuming 1,195.35 million liters of fresh water in 2023. We are active to optimize thecomprehensive water resources management, reduce and eliminate microbial and bacterial endotoxin contamination in the waterproduction system by establishing production process water system management protocols and carrying out process modi?cations, soas to ensure process water quality. During the reporting period, with the goal of gradually improving water use e?ciency, we used a totalof 357.54 million liters of recycled water and a recycled water usage ratio of 23% through the continuous promotion of various waterconservation projects, including reclaimed water reuse, condensate reuse, and fermentation recycled water reuse.
Water Resources
Water Resources Management PoliciesWater Conservation Management SystemQuota Incentive and Penalty System for Water Conservation Management
WaterResourceTarget
Starting from the division of responsibilities, pipeline access, metering andmetering equipment, planning and water conservation management, as wellas water use inspection and assessment, we actively create a water-savingenterprise.
KeyPerformance
1,195.35Fresh waterconsumption
357.54
Recycled waterconsumption
0.80
Intensity of waterconsumptionmillion litersmillion litersmillion liters/million RMB revenue
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
A total of 23.26 tons of general waste remained undisposed at the end of the reporting period.
By making e?orts to practice resource recycling, AHB adopts various ways to reduce the use of packaging materials, and carries outpackaging reduction from the source through the management of packaging materials and the optimization of production process. In 2023,AHB used a total of 523 tons of packaging materials, of which recyclable packaging materials account for 97.51%.
By dividing the waste into general waste and hazardous waste, AHB develops di?erent treatment methods and standards for di?erentwastes and carries out corresponding classi?cation, transfer and disposal to ensure that the wastes are harmlessly treated and avoidimpacting on the environment.
AHB strengthens the internal management according to the Hazardous Waste Management System and Hazardous Chemical ManagementSystem to prevent the pollution of soil by hazardous waste. We entrust all hazardous wastes, such as waste engine oil, waste paintdrums, laboratory waste liquids, and hazardous chemicals to quali?ed third parties for ?nal disposal, and accepts the supervision oflocal environmental protection departments. To ensure the compliance of the base employees with relevant laws, regulations, andenvironmental protection department requirements for hazardous waste disposal，we provide appropriate training for the employees.
AHB continuously strengthens the control of pollutant emission in the operation and properly disposes of all kinds of emissions and solidwastes generated in the production process to ensure that the wastewater, exhaust gas, solid wastes and noise comply with the emissionstandards. We have established relevant policies for pollutant management and continuously improved and revised the environmentalmanagement system based on environmental laws and regulations and the actual situation of our business to guarantee that theemissions of various pollutants comply with national and local standards.Through the Management Procedures for Identi?cation and Evaluation of Environmental Factors, we identify, evaluate and controlimportant environmental factors in three categories, namely, production processes, o?ce processes and auxiliary processes, to minimizethe environmental impacts and potential risks caused by company operations. The emission indicators of all waste gas, wastewater andsolid pollutants，we are all controlled within the local pollutant emission limits in 2023.
Wastewater Management StandardSolid Waste Management StandardHazardous Waste Management System
Hazardous Chemical Management SystemSolid Waste Control ProceduresWastewater Control ProceduresExhaust Gas Control Procedures
Packaging MaterialsWaste Management
Pollutant Management
Initiatives to Reduce the Use of Packaging Materials
Hazardous WastePollutant Management Policies
Cooperating with quali?ed third-partyrecycling agencies to maximize therecovery or reuse of packaging materialsto reduce packaging waste, improve thesustainable utilization of resources, andreduce the environmental burden.
Focusing on the full life cycle of products,optimizing the entire process from product design,production, packaging, transportation to use anddisposal. By considering all aspects in an integratedmanner, we ensure that the use of packagingmaterials is minimized while safeguarding productquality.
Our general waste mainly consists of sludge, ash and other general industrial waste, as well as domestic waste. AHB handles generalwaste in a strict manner, classify into centralized treatment of domestic waste and general industrial solid waste. Then they aretransferred and disposed of by local environmental protection departments and quali?ed third parties, to conform the provisionsof the Solid Waste Management Standard.
Total discharge of general waste
tons
tons
tons
General Waste
General Waste IndicatorUnitAmount
General waste discharge intensitytons/million RMB revenue
-Waste transferred from disposal (recycling)
-Waste for directly disposal (incineration, with
energy recovery)
tons
-Waste for directly disposal (incineration, without
energy recovery)
-Waste directly disposed of (land?lling)tons
-Waste for directly disposal (other operations)tons
18,344.44
9.46
18,148.13
0.00
0.00
0.00
173.05
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Indicators for Hazardous WasteUnit
tonsTotal amount of hazardous waste emissionsHazardous waste discharge intensity-Waste transferred from disposal (recycling)-Waste for directly disposal (incineration, with energy recovery)-Waste for directly disposal (incineration, without energy recovery)-Waste directly disposed of (land?lling)-Waste for directly disposal (other operations)
tons
tons
tons
tons
tons
tons/million RMB revenue
Amount
Waste Disposal Targets
To reduce the impact on the natural environment through rational waste disposal, materialrecycling and reuse.
Wastewater ManagementAHB standardizes the treatment of wastewater generated in production and operation in accordance with relevant regulations andensures that all production bases strictly comply with the wastewater discharge laws, regulations and standards upon di?erentlocations. We have introduced wastewater treatment stations at each production base, monitor wastewater indicators by areal-time online monitoring system. At the sametime, we have provided n abnormality alarm system to warn of of exceeding waste-water indicators for ensuring wastewater discharge compliance. All production-related wastewater is discharged to the municipalsewage network after treatment at the wastewater treatment station.We continue to optimize the wastewater treatment process through wastewater monitoring systems, data analysis, equipmentupgrades and technological modi?cations, and reduce the amount of chemical dosage under the condition of ensuring that allindicators of wastewater meet the emission standards, so as to avoid secondary pollution. In addition, we continue to strengthenour water management capabilities and increase the proportion of water recycled in order to reduce wastewater discharges. During2023, we are upgrading our wastewater stations, which includes building a new ultra?ltration membrane bioreactor (MBR) system,revamping the denitri?cation system, developing a plan for revamping the anaerobic end of the system, and planning for theconstruction of a wastewater station automated control system.
AHB implements strict control procedures in waste gas emissions. To ensure that exhaust emissions comply with environmentalregulations, we regularly hire third-party organizations to monitor the concentration of air emissions within the base area. By verifyingemissions compliance, the third-party help us to understand emissions in a timely manner so that we can adjust and optimize productionprocesses to reduce the environmental impact. In addition, AHB also reduces the production and emission of nitrogen oxides, sulfuroxides and particulate matter to the greatest extent by strengthening the supervision of boiler exhaust treatment facilities and adoptingadvanced environmental protection technologies.
From the production base and the equipment to the personal protection, AHB has taken sevaral measures and is committed to reducingthe Company noisey pollution and creating a more comfortable working environment for the employees. In strict accordance with therequirements of the Standard for Environmental Noise Emission Within Plant Boundaries of Industrial Enterprises, we conduct regularnoise detection within the speci?ed period of time to ensure that noise emissions meet the standards.To prevent and control noise pollution, we are actively working on equipment maintenance, optimization of production structure andinstallation of sound insulation facilities. Through regular equipment overhaul and maintenance, we ensure the normal productionequipment opeartion and reduce equipment noise. We optimize the production structure with advanced production processes andtechnologies to reduce the overall noise during the production process.To reduce occupational health risks, we mitigate the impact of noise in a noisy environment by providing personal protective gear such asanti-noise earplugs and organizing regular training and activities to raise employees' awareness of noise issues and promote the use ofanti-noise measures.
Total wastewater discharge = domestic-related wastewater + production-related wastewater
Wastewater Discharge IndicatorsUnitAmount
Total wastewater discharge
million litersmillion liters/million RMB revenuetonstonstonstons
Wastewater discharge intensityChemical aerobic discharge (COD)Total phosphorus (TP)Total nitrogen (TN)Ammonia nitrogen (NH
-N)
Exhaust Management
Noise Control
With the excellent independent research and development capabilities in the biosynthetic industry, AHB is constantly committed toadvancing the design and optimization of the production process. In the related production experimental projects, we are deeply awareof the importance of chemical safety, and that improper handling of chemicals may threaten the safety of employees, the ecologicalbalance of the surrounding environment, and even cause a serious blow to the economy.
Chemical Safety
42.33
0.02
9.28
0.00
32.69
0.36
0.00
Exhaust Emission - related IndicatorsUnitAmountNitrogen oxides (NOX)tons
tonstonsSulfur oxides (SOX)Particulate matter (PM)
44.21
18.61
3.94
1,342.68
0.69
47.65
1.35
7.42
1.03
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
To control the hazardous factors in the procurement, storage, distribution, and use of chemicals and prevent potential accidents,AHB has developed and implemented the Chemical Management Speci?cation. This speci?cation is intended to promote thecomprehensive management of chemical procurement, storage, issuance, and use in our production sites, inspections, and tests.In the speci?cation, special emphasis is placed on the requirements for the use of hazardous chemicals, with clear de?nitions onthe procurement, daily management, maintenance and use of chemicals to ensure that we complies with the highest safetystandards in chemicals management.We have clari?ed the responsibilities of each department to better ful?ll the chemical management speci?cations. The MaterialDepartment is responsible for chemical procurement and warehousing, the Production, Quality and Technical Departments areresponsible for the management of the daily use of chemicals, while the Safety and Environment Department is responsible for thedaily inspection, supervision and management. The clear de?nition of responsibilities ensures that every step is professionallysupervised, thus ensuring chemicals are well-managed.
Climate change has become one of the major challenges facing all humankind. AHB deeply understands the impact of climatechange on the environment, society, and economy, as well as the risks it poses to business operations. To address climate-relatedrisks and contribute to the implementation of the national "carbon peaking and carbon neutrality goals", we have taken a series ofmeasures to reduce carbon emissions and disclose corporate climate-related risks and opportunities in four areas of governance,strategy, risk management, metrics, and targets.
The ESG leadership group of AHB is responsible for identifying climate -related risks and incorporating them into the agenda of theBoard of Directors, to ensure that the Board and the Management Team oversee the control over potential risks and opportunitiesbrought by climate- elated risks to the Company.
AHB has developed a climate change strategy and incorporated climate change into the business decision-making process. Wefocuses on climate-related risks in the supply chain and market change risks, with the aim to reduce carbon emissions, improveenergy e?ciency and promote the use of clean energy to mitigate and adapt to the potential impacts of climate change. In addition,we work with all stakeholders to address the challenges posed by climate change. We are also committed to developing andpromoting more environmentally friendly products and advocating the recycling and reuse of resources.
We have been progressively assessing the risks and opportunities associated with climate change and taking action on the poten-tial impacts.
Response to Climate Change
Governance
Risk Management
Strategy
Risks
Physical RisksAcuteChronic
Markets
Technology
Reputation
Opportunities
EnergySources
Productsand Services
Transition Risks
PoliciesandRegulations
Aspect
Potential Financial
Impact
Actions Taken
Frequent occurrence of extremeweather events (e.g., hurricanes,?oods, etc.) may impact theconstruction and operation of ourprojects to a certain extent.
Disruption of business andsupply chain may lead to adecrease in our revenue.
Develop a special inspection system andcontingency plan for natural disasters tocope with unforeseen weather conditionsand protect business properties from theimpact of climate changes.Develop disaster recovery plans to ensure thatoperations can be resumed in a short period oftime and that impacts are minimized.Extreme weather events mayincrease safety risks andtransportation costs for thetransportation of materials.Potential increase in operatingcosts and resources required asa result of adopting newtechnologies due to adjustmentof day-to-day operations.The market has higher demandsfor product projects, which maysubject our Company toincreased competitive pressure.The process of transition towardslow-carbon development (e.g.,use of low-carbon energy andtechnology, purchase oflow-carbon equipment) requiresmore investment of resources.
Implementation of energy-saving measures anduse of energy-saving and environmentallyfriendly equipment to reduce carbonemissions in daily operations and adapt tohigher environmental requirements.To optimize the level of production technologyby adhering to our philosophy of sustainabledevelopment, in order to provide betterproducts to meet market and consumerneeds.Enhance the technological upgrading ofproduction bases and develop existinggreen and clean bio-manufacturingprocesses to replace traditionalenergy-and-pollution-intensive processeswith green and clean biological manufacturingprocesses.Organize social performance training withinthe Company in line with sustainabilityphilosophy, and take appropriate measuresto manage the impacts of climate change ina timely manner.
Take actions to optimize equipment andprocesses to reduce energy waste andpromote employee participation in energyconservation initiatives.Encourage the use of green electricity.Promote the innovation and upgrading of"synthetic biology + animal nutrition".Accelerate low-carbon transformation andactively participate in low-carbondevelopment.Reduce packaging materials and turn todegradable material construction.
Chronic risks such as globalwarming and sea level rise maydamage equipment and facilities atour bases.Changes in domestic and internationalpolicies related to climate changemay result in additional costs for usto ensure compliance.Changing consumer preferencesand needs.The updating and iteration ofemerging technologies may push usto invest more in R & D and trainingof specialized personnel.If we fail to ful?ll social responsibili-ties or take appropriate measures tomanage the potential impacts ofclimate change, it may a?ect theevaluation of us by variousstakeholders.From a medium- to long-termperspective, energy e?ciencyimprovements will bring immediatecost savings to operations andcontribute to limiting global carbonemissions.Innovation and the development ofproducts and services with lowcarbon emissions will improvecompetitive positions in themarketplace, for example,customers prefer more environmentalfriendly service providers orproducts, and investors prefer toconcentrate on green enterprises.
Reduce operating costs toachieve cost reductions ande?ciency gains.
Increase the Company
,
srevenue by meeting customerdemand for low-emissionproducts and services.
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Reduced revenue due to lowermarket demand for goods/services.
The three bases of AHB have all passed ISO 50001 Energy Management System Standard Certi?cation. We continuously monitor and evaluateenergy consumption through third-party certi?cations, energy audits, and internal assessments to ensure the e?ectiveness of energy managementmeasures. During the reporting year, the Company's use of green electricity accounted for 17%.A series of energy optimization projects such as biogas recovery, biogas boiler, photovoltaic power generation initiated by AHB have achievedremarkable results.
We conduct regular energy consumption assessments, set energy consumption targets based on the actual situation to ensure that annualenergy saving targets can be met by re?ned management of energy consumption use.
Following the scienti?c carbon reduction method of "?guring out the strength, mapping the potential, implementing emission reduction andgreen transformation", AHB conducts the carbon footprint accounting and evaluation of the core products. Starting from the stage of rawmaterial acquisition and product processing, we actively promote product emission reduction through green procurement of raw materialsand biomass-fueled boilers. We also plan to expand the scope of carbon footprint veri?cation to complete the carbon footprint ranking of allproducts, covering the carbon footprint accounting of the entire life cycle of all products from planting, farming, transportation, production andexhaust, so as to reduce the carbon footprint of products year by year.AHB has established Measures for the Implementation and Management of Energy and Resources Conservation and Energy ManagementStandard, aiming at regulating and optimizing energy use. All bases are taking active steps to promote energy conservation and consumptionreduction, helping to reduce the overall carbon footprint and promote environmental sustainability.
Greenhouse gas emissions from the Company's business operations include direct emissions from gasoline and diesel fuel combustion invehicles and emissions from fugitive sources (including septic tanks, anaerobic treatment of wastewater, methane combustion, ?re extinguish-ers, and air conditioning refrigerants) (Scope 1), indirect emissions from purchased electricity and steam (Scope 2), and other indirect emissionsfrom employees' business travel (by rail and air) (Scope 3).
Energy Consumption
Greenhouse Gas Emissions
Energy Conservation and Emission Reduction Actions
Indicators related to Energy UtilizationUnitsAmount
Direct energyLignitetonstonstonsMWh
MWh/million RMB revenue
GJGJMWh
m
Natural gasDieselGasolineIndirect energyOutsourced electricitySteamBiomass fuelTotal consumption of comprehensive energyConsumption intensity of comprehensive energy
Metrics
EnergyE?ciency
Gradually improve energy e?ciency, upgrade equipment and reduce unit energyconsumption
29,149.911,216,125.18
62.32
6.22
177,025.47119 291.99329,073.24418,823.48
216.08
Greenhouse Gas Emission indicatorsUnitsAmount
Scope 1tons CO
etons CO
etons CO
etons CO
etons CO
e/million RMB revenue
Scope 2Scope 3Total greenhouse gas emissionsGreenhouse gas emission intensity
37,146.46100,958.68
100.58
138,205.72
71.30
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
To comprehensively improve the level of enterprise's response to environmental emergencies and ensure the safety and stability of the environment,as required by the national Management Measures for Emergency Response Plans for Enterprises and Institutions (Trial) (HF [2015] No. 4) andother local environmental regulations such as the Environmental Protection Law of the People's Republic of China and the EmergencyResponse Law of the People's Republic of China, we have formulated Emergency Response Plan for Sudden Environmental Incidents of AnhuiHuaheng Biotechnology Co., Ltd. to emphasize environmental protection. The purpose is to respond to various types of environmentalemergencies, including leakage of hazardous chemicals, liquid materials, natural gas, and speci?c risk scenarios such as leakage of methanolstorage tanks. AHB has developed special emergency response plans for a variety of possible risk scenarios.
The Emergency Response Plan for Environmental Emergencies provides clear emergency response strategies for di?erent levels of incidents bycategorizing them into Level I (social level), Level II (enterprise level) and Level III events (workshop level). To support the implementation of the Plan,AHB has built a corresponding emergency response system and set up an emergency response leading group and o?ce to provide quick, e?cientrespond for rescue and aftercare work.
AHB strengthens the comprehensive emergency plans for internal environmental incidents and emergency plans for workplacesafety accidents, ensuring that personnel at all levels are familiar with and execute emergency procedures. Externally, AHB emphasizesthe connection between the corporate emergency response plan and the government's emergency response plan to ensuree?cient synergy in case of emergency. In addition, we have established close contact with neighboring enterprises, so that ourenterprise emergency plan and the neighboring enterprise emergency plan are connected, forming a more complete joint preventionand control mechanism.To ensure the e?ectiveness of the plan, AHB emphasizes the emergency response capability of employees, implements full trainingand drill mechanisms, and sets up reward and punishment mechanisms to motivate employees to actively participate in emergencymanagement. By simulating a variety of unexpected environmental events, we test the feasibility of the emergency plan and theresilience of our emloyee and improve their synergy and response speed in emergency.AHB continuously enhances its contingency plans for sudden environmental incidents, providing guidance for post-incidentrecovery and investigation e?orts. Following the occurrence of such events, the Company promptly commissions professionaltesting organizations for emergency monitoring to ensure timely investigation into the causes of the incidents. Simultaneously, theCompany initiates rapid recovery plans, formulating environmental restoration schemes to minimize adverse impacts on theenvironment and safeguard the safety of the enterprise and surrounding communities.During the reporting period, we succeeded in realizing our goal of zero environmental protection accidents by continuing toimprove our emergency management mechanism for environmental emergencies for environmental protection.Environmental Emergency Management
EmergencyCommander
Level IIICommanderLevel I events(Social level)
Level II events(Enterprise level)
Level III events(Workshop level)
Answering alarm
Emergency CommandCenter
Changfeng Base Energy Saving Initiatives
Bayannur Base Energy Saving Initiatives
Qinhuangdao Base Energy Saving Initiatives
Initiated a waste heat power generation project for amino acid production, aiming to utilize the residual heat and pressurefrom the three-phase biomass boiler for electricity generation and grid supply;Improve fuel e?ciency and reduce costs through high and low di?erential speed circulating ?uidized bed boiler combustiontechnology;Advancing a technical modi?cation project for air compressors, which is expected to save 20% on electricity consumptionbased on the existing baseline.
Provide heat value for the boiler by passing the wastewater station biogas through the burner, which can save 1,100 tons ofcoal and 1,570 tons of steam annually through the biogas recovery and waste heat recovery projects;Introduce new sources of electricity and reduce the use of coal;Change to use energy-saving motors.
Improving the separation and concentration process to reduce steam usage;Replacing screw air compressors in fermentation workshops with magnetic levitation compressors, expected tosave 20% electricity;Continuously optimizing water pump frequency control projects to further enhance energy utilization e?ciencyat the base;Implementing photovoltaic power generation and biogas boiler projects to provide clean electricity and e?cientlyutilize biogas resources for the production base, achieving an annual capacity of 230,000 kWh and 1,000 tons of steam;Replacing all diesel forklifts with electric forklifts.
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Green ManufacturingGreen FactoryWe have been adhering to the principles of sustainable development and commitment to green production, aiming to minimize environmentalimpact and maximize resource e?ciency to promote green development of the Company. The three production bases of AHB have beencerti?ed as green factories. In addition, Changfeng and Qinhuangdao bases have been honored with national green factory certi?cation.
Changfeng Base (Headquarters)·Enzyme Engineering and Calcium PantothenateSmart Factory
·National green factory
·Bayannur Base· Branched-Chain Amino Acids Superfactory
Branched-Chain Amino Acids (BCAAs), Tryptophan, and Re?nedAmino Acid Project
Qinhuangdao Base· Alanine Superfactory· Bio-based malic acid construction project· National green factory
Chifeng Base
During the construction of process of our upcoming Chifeng base, we have integrated green manufacturing and sustainable developmentprojects into the full lifecycle management of the project during the design phase, aiming to reduce carbon footprint. By introducing roof-mountedsolar photovoltaic power generation, water recycling system, waste heat recovery system, biogas recovery system and optimizing the productionprocess, we e?ectively reduce reliance on traditional energy sources and minimized pollutant emissions. For the sake of energy saving andconsumption reduction, Chifeng base has introduced a digital energy management system to monitor and analyze the energy consumption of eachproduction link, providing energy optimization solutions for the management personnel and ensuring the e?cient use of energy.
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
··
Bio-based Succinic Acid and Bio-based Raw Material Production BaseProject, Bio-based 1,3-Propanediol Construction Project.Bio-based Alternating Valine and Arginine Project and InositolConstruction Project.
Rooftop Photovoltaic Power Generation at Changfeng Base.
AHB's anaerobic biomanufacturing technology for L-alanine hasrevolutionized the traditional aerobic fermentation productionmodel for amino acids. This innovation addresses the dependencyon non-renewable petrochemical raw materials and eliminatescarbon dioxide emissions during the anaerobic fermentationprocess.
AHB ?rmly believes that the maintenance of genetic diversity, species diversity and ecosystem diversity is not only necessary for ecologicalbalance, but is also the key to long-term corporate prosperity. We regularly engage third-party organizations to conduct environmental assessmentsand testing, adhering to national regulations from the Ministry of Ecology and Environment while actively responding to their action strategies andprotection plans. This ensures the harmonious coexistence of our operations with ecosystems and compliance with ecological red line requirements.
AHB actively promotes green and low-carbon working style, regularly organizes employees to participate in environmental protection, enrichestheir knowledge of environmental protection, and provides them with a low-carbon, healthy, safe and energetic working environment.Leveraging digital o?ce platforms, we facilitate collaborative work among corporate clients and employees, promoting online video conferencing tosigni?cantly reduce carbon emissions from face-to-face meetings and minimize paper usage, thereby supporting employees' low-carbon o?cebehaviors.We will work to continuously optimize our production paths in the following areas in the future to reduce environmental pollution, improveresource e?ciency and reduce carbon emissions.
Continue to optimize the biogas recovery equipment of sewage stations, and use biogas boilers instead of traditional coal-?red boilers toreduce greenhouse gas emissionsOptimize the piping design for the full recycling of waste heat to save energy and reduce emissions
Optimize the material temperature control process, use preheated materials to reduce steam use, and achieve energy savingsOptimize the temperature and humidity control of the air conditioning in the production workshop, eliminate outdated equipment, anduse the magnetic levitation air compressor and permanent magnet motor to improve energy e?ciencyIncrease the share of biomass and photovoltaic energy generation
Clean Fuel Substitution
Energy Optimization·
··
··
Reduce energy consumption by using continuous chromatography processAdopt high and low di?erential speed circulating ?uidized bed boiler combustion technology··
Introduce magnetic coagulation pretreatment system, ultra?ltration membrane and RO reverse osmosis membrane treatmentequipment for further treatment of wastewater station e?uent, to recycle water resources back to the production system and reduce thecost of production water, saving 198,000 tons of tap water per year and reducing the discharge of wastewater by 5,700 tons per dayOptimize the production process by adopting a "zero-medicament" solution and using recycled water for fermentation formulations,greatly reducing the frequency of stopping and cleaning of the recycled water station as well as the amount of wastewater dischargedThe Company used recycling pumps to recycle the condensate water produced by the evaporator and used it for other available processes,saving 5,000 tons of tap water per year
···
Process Optimization
Water Recycling
CO
Compared to traditional petroleum based routes90%
Clean Technology OpportunitiesBiodiversity
Green O?ce
Wastewaterreduced by
40%
Energy comsumptionreduced by
50%
Production costreduced by
Traditional way
AHBGlucose
PetroleumBenzeneFumaric acidAspartic acid L-alanine
L-alanine
··
··
ResourceConservation
EnergyConservation
Green
Travel
Practice "clean plate campaign"O?er no disposable tableware
·Provide shuttle buses to transport employees to and from work, reducing employee travel carbonemissions
Use solar air-conditioning for o?ce buildingsIntelligently regulate the temperature of the o?ce area
·
·Use water-saving faucets
Use energy e?cient LED lighting ?xtures
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Product Innovation andResponsibility
Product Management
Information Security ManagementCustomer ServiceProduct Innovation and Sustainability
Product Management
GeneralManagerManagementRepresentative
Quality Manager
Domestic Standards
Control of Raw andAuxiliary Materials
Process ControlProduct Inspection
···
International Standards
Management StructureAs a leading innovative research and synthetic biotechnology company, AHB regards product quality as the lifeline. We haveestablished a sound product management structure, built a normalized, standardized management team, de?ned the responsibility forproduct quality management, emphasized the product management principles of transparency, accountability and continuousimprovement, and committed to bringing long-term value to shareholders, employees, customers and all stakeholders in society.
Quality Control ProceduresTo ensure product quality, we strictly supervise and control the process ?ow. From the raw and auxiliary materials to the productionprocess and ?nally to the product inspection, the relevant personnel must comply with the corresponding production operatinginstructions, equipment operation and maintenance procedures. Before production starts, the equipment operators should checkthe technical condition of the product equipment in accordance with the Equipment and Facility Control Procedures to ensure thatthe current technical condition of the equipment meets production requirements. The supervisor of the production plant mustconduct a comprehensive inspection during the production process, and must monitor and measure semi-?nished products and?nished products according to the Product Monitoring and Measurement Control Procedures to ensure that the production resultsmeet the standards. For possible substandard products, we have also set up a thorough process whereby the supervisor of theproduction plant will handle the relevant products in accordance with the Non-conformance Control Procedure.Based on domestic and international quality management documents and legal and regulatory requirements (including but notlimited to the following) as well as the actual conditions of the Company, AHB has established quality, food, and feed safety managementsystems and compiled management manuals with speci?c management regulations and requirements.
GB/T 19001-2016 Quality Management SystemGB/T 24001-2016 Environmental Management System Requirements and Usage GuideGB/T 45001-2020 Occupational Health and Safety Management System Requirements and Usage GuideISO 22000:2018 Food Safety Management System Requirements
BRC Global Standard for Food Safety Verision 9.0FAMI-QS European Feed Additives and Pre-Mixtures Quality System Verision 6.0EFFCI GMP European Cosmetic Ingredients Good Manufacturing PracticesKOSHER Certi?cationHAS 23000 Halal Certi?cation (MUI)COSMOS Standard Version 4.0 Natural Organic Certi?cationResponsible for formulating a policy related to quality management that meetsthe needs of customers, legal and regulatory requirements, and a commitment tocontinuous improvement, and ensuring that the policy is fully understood andpractically implemented at all levels.Responsible for the implementation and maintenance of the Company'smanagement system and reports directly to the General Manager on theoperation of the management system. The management representative isauthorized to act as the company's delegate in liaising and communicatingwith external parties regarding issues related to product quality, servicequality, and quality assurance.
Responsible for leading the Quality Department to exercise inspection,control, prevention and reporting functions on the whole productionprocess in a fair manner to ensure that the factory products meetthe requirements.
Establish raw material acceptance
standards to ensure the quality and
safety of raw materials;
Ensure that the temperature and
duration of storage and transportation
of raw materials are appropriate;
Auxiliary materials must comply
with relevant national regulations
and are permitted for use only after
passing inspection.
··
Aseptic conditions are required forbiological processes;The chemical process requires thecontrol of the feeding order, timing,temperature and pressureconditions of the reaction.
·
·
The production supervisor isresponsible for monitoring andmeasuring the quality of theproduct, and the relevant recordsare kept by the Quality Department;Samples must be taken from eachbatch of product in accordancewith sampling managementstandards for testing and retentionpurposes.
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
·
Product Quality TrainingTo ensure product quality and build a more e?cient, professional product quality control team, we actively conduct quality managementtraining. During the reporting period, we mainly held quality management training for quality managers, physical and chemical testers,microbiology testers and other quality inspection employees, with an average training time of more than 22 hours per capita, covering themanagement and use of a variety of specialized instruments, product impurity detection, foreign material management, and inspectionmethods. During training, assessments are conducted to rigorously question the relevant content, and the results of these assessments, alongwith details of the training content, are documented in the "Training Implementation and E?ectiveness Evaluation Record."
We disclose the ?nal results in the form of Risk Management Report to ensure transparency and credibility of product qualitycontrol. To meet the needs of every customer and e?ectively identify market and product risks, we engage in comprehensivecommunication across all levels of personnel. We establish and maintain multidimensional contacts with our customers to nurturethese relationships. Additionally, we focus on the research and development of speci?c products and enhance training in productknowledge for relevant personnel.
We attach great importance to allergen management by implementing the Allergen Control Management Procedure to achievecomprehensive management and control of allergens throughout the entire process. This helps prevent cross-contamination ofallergens, e?ectively assesses and maintains the safety of our products, and ensures the health and safety of both consumers andemployees. And we also implement responsibilities related to allergen management to ensure e?ective management.
Product Certi?cation
AHB has passed the quality and food safety management system certi?cation; our products have received several prestigiouscerti?cations, including the Jewish "KOSHER," Islamic "HALAL," European "BRC," and the feed-speci?c "FAMI-QS" certi?cation.Some of the products have been awarded the certi?cates of National Industrial Products Production Certi?cation, High-techProducts and National Key New Products. The quality of our products has also been recognized by other international organizations,including CNAS Laboratory Certi?cation, ISO9001 Quality Management System Certi?cation, REACH Certi?cation, COSMOS NaturalOrganic Certi?cation.
Product Risk Management
As a well-established synthetic biotechnology company, we have developed comprehensive management procedures for possibleproduct risks. Starting from the product design process, AHB identi?es and evaluates the potential risks to product quality andhealth and safety, and classi?es the risks according to the identi?ed levels, and then develops corresponding countermeasures toensure that the risks are reduced to an acceptable level.
Direct QualityRisk
IndirectQuality Risk
Product quality issues can lead to risks such as returns, scrapping, and rework
··
During the use of a product, if it causes damage to a customer's other property rights orpersonal rights, the company must bear civil liability for compensation.During the transportation of products, issues can arise from logistics, improper storage conditions,or damaged packaging.
Quality Department
Material Department
Production Department
Business Department
Food Safety Team
Supervise the implementation of allergen control at the production site and develop a corresponding allergen catalog.
Responsible for allergen management audit and evaluation of raw and auxiliary material suppliers.
Responsible for the prevention and control of cross-contact of allergens in the production area
Responsible for sales tracking of allergen-related products and assisting in product recalls.
The food safety team correctly evaluates the e?ectiveness of allergen management based on the detection report of allergen contentin company products, customer complaints, feedback from relevant departments, internal and external information. According to theallergen content testing reports of company products, customer complaints, feedback from relevant departments, and both internaland external information, the e?ectiveness of allergen management is accurately assessed. The responsible personnel are required tomaintain written records and timely update the monitoring system to ensure ongoing compliance and e?ectiveness.
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
General ManagerMarketing CenterHACCP Team
Product Recall ProcessAHB is committed to providing safe, healthy, and high-quality products. In response to potential direct quality risks that cannot becompletely eradicated, we strictly follow the Product Withdrawal/Recall Management Standard to ensure that our recall-relatedregulations and processes are in line with the national regulations and practical needs, and that the health and safety of ourcustomers are put in the ?rst place.When batches of non-conformity are found in delivered products (including the existence of safety hazards), AHB will assigndi?erent personnel or departments to promote the product recall/withdrawal procedures in accordance with the speci?cations, toensure the prompt and complete control of the relevant products. When the product is recalled, we will further record and prepareit in accordance with the Product Withdrawal/Recall Record Form, and treat the withdrawn/recalled products as nonconformingproducts in accordance with the Non-conforming (Potential Unsafe) Product Control Procedures. Despite no actual productwithdrawal/recall, AHB conducts a simulated withdrawal/recall once a year, and keeps a record of the simulated withdrawal/recallof the product to rehearse, evaluate, and verify the timeliness of the withdrawal/recall procedure. In 2023, we were not involved inproduct recalls or customer health and safety incidents.
AHB has built a comprehensive synthetic biology industry chain research and development system that covers top-level planningand design to actual industry implementation. The institute and four industrialization bases together constitute the core of AHB'sglobal "innovation ecosystem". Taking market demand as the driving core, AHB develops new products in a targeted manner basedon the result of in-depth analysis of market demand, potential market exploration, assessment of technology implementationpossibilities, review of strategic suitability and evaluation of technical standards. Besides, AHB has established a comprehensiveresearch and development system to support product innovation and sustainable production operations. Adhering to the conceptof environmental protection and green development, we are committed to developing cutting-edge synthetic biology technolo-gies.
··
Approve withdrawal/recallproceduresProvide necessary resources
··Engage with customers andmarket recallsAranging shipments of recalledproducts
···
Evaluate product qualityAnalyze and correct the causes ofnon-conformityEstablish preventive measures
Product Innovation and Sustainability
Research and Development
108,824,394.48In 2023, AHB invested RMBin research and development.KeyPerformance
Open R&D Ecosystem
R&D Investment (million RMB)
We have established a dedicated research institute in Hefei., dedicated to scienti?c exploration and technological innova-tion. Our R&D team comprises over 200 members, serving as the pillar of industrialization of AHB in microbial cell-factoriesdevelopment construction, lab and pilot scale-up, industrial production and technology innovation management and otherall-round technologies.
Relying on the strength of Huaheng Synthetic Biotechnology Research Institute in Hefei, we have established cooperativerelationships with domestic and foreign universities and research institutes, such as Tian Gong Institute of the Chinese Academyof Sciences, the Institute of Microbiology of the Chinese Academy of Sciences, Beijing University of Chemical Technology, andZhejiang University of Technology. These collaborations enable us to bring together outstanding talents in the ?eld of syntheticbiology and related downstream applications to create an open R&D ecosystem that facilitates interdisciplinary collaboration andknowledge sharing to drive innovation.We also value close communication with the industry and maintain close cooperation with corporate partners to gain a deeperinsights of market demand and industry trends, and incorporate them into our research and product development. We are committedto pursuing technological and product innovations and developing biotechnology products and solutions with potential to makepositive contributions to human health and environmental protection.
30.12
52.84
78.61
108.82
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Cooperation with Research InstitutesContinue to establish cooperation with well-known institutions at home and abroad, such as cooperating with Tianjin Institute ofIndustrial Biotechnology, Chinese Academy of Sciences and the Institute of Microbiology of the Chinese Academy of Sciences tocomplete various industrial projects, achieving a huge leap in transforming science and technology into economic bene?ts andsocial values.
Cooperation with UniversitiesCooperate with well-known universities and colleges to accelerate the transformation of scienti?c and technological achievementsand personnel training, such as the establishment of academician workstation with academician Yuguo Zheng of Zhejiang University ofTechnology.Cooperation with EnterprisesCollaborate with outstanding enterprises in the industry to boost innovation and improvement in all areas of the synthetic biologyindustry chain.
Cooperation with Customers
Create a number of innovative projects for core customers to continue to promote product innovation, industrial upgrading,cooperational upgrading, such as jointly discussing biobased product development and project technology collaboration withBASF, for a sustainable development of "new chemistry".
Intellectual Property Protection
AHB has established the Intellectual Property Center, aiming to protect our innovation achievements and manage the intellectualproperty rights to safeguard our legitimate rights and interests. And the Company's intellectual property department is responsiblefor training on patent layout and infringement risk identi?cation and response and has formed a close protection mechanism withthe research institute, production bases, and sales divisions. AHB has established an intellectual property learning system toprovide employees with training on patent applications, trademark registration, and patent laws and regulations, to enhance theirsensitivity to intellectual property rights and ensure the company's compliant operations. The following is a summary of theintellectual property information of AHB for 2023:
In 2023, the Company successfully passed the re-certi?cation for the GB/T29490-2013 Intellectual Property Management Systemand was honored with the title of National Intellectual Property Demonstration Enterprise and the Anhui Province Patent GoldAward. These accolades recognize our e?orts in intellectual property management and mark the beginning of a new phase instrengthening intellectural patent protection. Looking ahead, we will actively pursue the ISO56005 Innovation Management SystemCerti?cation, integrating intellectual property management activities throughout the entire innovation process. We will focus onteam building, attracting more talent through various channels to inject new vitality into the Company's innovative research andsustainable development.
In order to ensure the legitimate rights and interests of R&D achievements and products, we carriedout the following practices during the reporting period:
Patent Application andTrademark Application
Protection ofTechnologyRouteTrademark
Application
Risk Control
Control ofCooperative R&D
Patent Layout
Focus on planning technology paths during R&D and taking measures to protectintellectual property rightsRequire relevant personnel to sign a con?dentiality agreementConduct technology searches and FTO analysis to assess the risk and probabilityof infringement to ensure that subsequent products do not infringe on others' IP rights.Promote relevant analysis before and after the event to reduce IP risks
Set KPIs, actively apply for patents, analyze and apply patent informationApply for trademark registration to serve market needs and ensure the e?ectiveapplication of trademarks
Conduct whole-process IP risk planning to avoid potential risksControl risks by purchasing patent hedging, infringement analysis by third-partyorganizations, or other methodsFocus on the risk of duplication of R&D in cooperation with institutions andacademic professors and work with partners to control risksCheck the availability of publicly published articles in the collaborative R&D processto balance the need for intellectual property protection and collaborative research
Implement a patent strategy across the entire business chain, covering the entireprocess from the development of microbial strains to product production
Newly Received in 2023Total NumberNumber of applicationsNumber of grantsNumber of applicationsNumber of grantsInvention PatentsUtility Model PatentsOtherTotal
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Technology InnovationTechnological TransformationSynthetic biotechnology, involving a cross-cutting ?eld that utilizes biological principles and engineering technologies, is thedesign and synthetic re-engineering of life through genome sequencing, bioengineering, chemical synthesis, and computer simulation,and is centered on the "arti?cial designing and writing genomes" to enable cells to produce substances needed by human beings.AHB integrates the full set of metabolic pathways of target compounds into microbial chassis for producing diversi?ed chemical productsthrough designing arti?cial enzymes, expanding endogenous metabolic pathways and the extension of heterologous expression. Intop-level design and development, we have possessed multi-pipeline engineered strain R&D capability, realized industrial strainconstruction, and have built the technological closed loop from microbial cell factory construction to digital fermentation, and realizedtechnological innovation and even revolutionary changes in many areas.As a leading synthetic biotechnology enterprise in China, AHB always focuses on innovative research and development, and takestechnological innovation as the core to promote the development of the enterprise and the industry. We have set up a national R&Dcenter and two R&D laboratories. In the next three to ?ve years, we will continue to invest a large amount in research and development,including the introduction of advanced and e?cient production equipment and energy-saving and environmentally friendlyproduction processes, to stand at the forefront of technological innovation.
Innovative Synthetic Biotechnology PlatformInnovation is the driving force behind AHB's continuous advancement. The Company keeps pace with cutting-edge technologicaltrends and maintains ongoing development of new technologies, processes, and products, resulting in a series of core technologyclusters. Through sustained technological research, AHB successfully overcame the technical bottlenecks of anaerobic fermentation in2011 and developed a high-yield L-alanine producing strains using a zero-carbon emission anaerobic fermentation method.World-leading Enabling TechnologiesDue to its cost-e?ectiveness, energy e?ciency, and environmental sustainability, the anaerobic fermentation technology possessessigni?cant advantages in terms of industrialization and large-scale production. The industrialization of L-alanine-producing strainshas been a resounding success, making our L-alanine the world's ?rst amino acid product to be commercially produced usinganaerobic fermentation technology. Since achieving industrialization in 2012, our anaerobically fermented L-alanine product hasgarnered widespread recognition in both domestic and international markets, with exports to numerous countries and regions. Ithas consistently maintained its position as the market leader, capturing the largest market share worldwide for a decade straight.The success of L-alanine anaerobic fermentation technology provides an important foundation and reference for the developmentof anaerobic fermentation technology of other bio-based products. On this basis of the existing platform technology of L-alanineproduction by anaerobic fermentation, AHB plans to expand the range of bio-based products produced by anaerobic fermentation,such as L-valine, in order to enrich the types of bio-based products.Currently, we have explored the environmental parameters suitable for the metabolism of L-valine fermentation strains anddeveloped a post-extraction process featuring streamlined steps, highly-e?cient in removing impurities, and recyclable, which isused in the production of L-valine. We have replicated the industrialized production process of L-alanine in the production ofL-valine, and achieved synergistic development among products utilizing our established technological strengths and productionexperience in intelligent fermentation control, strain creation, and product isolation and puri?cation.With the support of the latest technology, the research and development cycle for L-valine products has been reduced to approxi-mately six months. As of 2023, our Company's L-valine products have achieved a leading position in the market.During the development process of β-alanine production technology, our Company overcame the high puri?cation di?cultiesassociated with traditional processes. We innovatively developed a new technological process by using cost-e?ective and readilyavailable acrylic acid as the starting material and synthetic enzymes as catalysts to produce β-alanine, thereby replacing the existingproduction techniques. This advancement upgraded and iterated the biomanufacturing process. The technology involves thetargeted addition of ammonia to acrylic acid to form β-alanine, enhancing atomic utilization and e?ectively reducing productioncosts. The process operates under mild reaction conditions and synthesizes β-alanine in a single step, avoiding environmentalpollution from organic solvents and by-product salts. This method boasts high e?ciency and conversion rates, signi?cantlyshortening the production pathway.
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Customer ServiceCustomer Satisfaction and Complaint HandlingAHB conducts an annual customer satisfaction survey , gaining a deeper understanding of their needs, expectations, and satisfaction withthe quality of its products and services. These feedbacks are crucial for our continuous improvement, helping us identify issues andseek opportunities for innovation to further enhance customer satisfaction. We regularly review and revise the Management Guide-lines for Customer Satisfaction Surveys to ensure that the process and methods of the survey are continuously improved and adapt-ed to changes in the market and customer needs, so as to provide satisfying products and services.In response to internal quality losses and external customer complaints, we have established the Customer Complaint ManagementStandard, to clearly de?ne the criteria and process for handling complaints. We have identi?ed the priority of defects by reviewingthe list of improvement topics and developed an implementation plan for improvement paths. When the salesman receives acustomer complaint, the online complaint process will be automatically initiated, and the Quality Department, together with themain department, will analyze the cause of the complaint, through the analysis of equipment failure, material abnormality, productionprocess control abnormality, environmental abnormality, and personnel operation problems, and then formulate the correspondingsolutions and preventive measures for the di?erent causes. The customer's complaint handling cycle is required to be closed for nomore than one month. Afterwards, the responsible department shall prepare the Customer Complaint Feedback Report for internalreference and preservation, aiming at preventing similar complaints, improving our products and services, and safeguarding ourreputation.To understand the customer's product application scenarios, AHB updates the customer's goods requirement pro?le on a monthlybasis and uses QC (Quality Control) management practices to analyze process quality data to improve product quality. We willcontinue to promote research and development on technical issues leveraging the QC pillar, and gain a deeper understanding ofcustomer application scenarios and other needs to guide production process adjustments and quality standard control. With theimplementation of the above measures, we continuously optimize our customer service system, improve the quality of its productsand services, and are committed to meeting the expectations of customers, ensuring that customer satisfaction is continuouslyenhanced.
Responsible Marketing
AHB is committed to ensuring the transparency and quality of information about its products and services. We have established theProduct Labeling and Traceability Management Speci?cation, which clearly stipulates the types of product labels, methods of useand management responsibilities. At each stage of production, we clearly record product and service information, includingproduct name, production date, production lot number, quantity, and operator, to enable product quality traceability when necessary.In addition, we manage the labeling of products and services in detail to ensure that the labeling is clear, consistent and in compliancewith relevant regulations and standards. All ?nished packages are printed with product name and number. The packages are alsoprinted with the precautions to be taken in the use of the product, the seal of inspection, and the halal certi?cation mark. Weregularly conduct QA（Quality Assurance) inspections. to discuss non-conformance, identify interim corrective actions and preventiveactions, carry out continued recti?cation and follow-up activities, and track the completion e?ectiveness of the action.
Information Security ManagementInformation security is one of the major challenges faced by AHB, with potential threats including data breaches, cyberattacks, andtechnical vulnerabilities. These threats may lead to the leakage of sensitive information, system paralysis, and even data theft,causing signi?cant losses to both the Company and customers. To address these challenges, we have implemented a strict informationsecurity management system covering more than 20 requirements, covering information classi?cation, intellectual propertyprotection, access control systems, information security risk assessment, protection of trade secrets, compliance with informationsecurity laws and regulations, backup of important information, business continuity management, response to information securityincidents, access control and monitoring of information systems, and security con?guration of network equipment.
We classify corporate information into di?erent levels, including top secret commercial information, con?dential commercialinformation, secret commercial information, and sensitive information, to better protect our security. The tiered managementmode helps our information security and technical service teams to develop targeted security strategies based on di?erent protectionneeds. In addition, all three bases we own have passed the ISO27001 Information Security Management System Certi?cation, demonstratingour commitment and determination to protect information security.In addition to institutional requirements, we raise the level of our employees' awareness of copyright protection and informationsecurity through training and education to ensure that they know the basic principles of information security and their applicationin practice. We have conducted 4 information security related trainings, covering 1420 employees in 27 departments, over the past year.
InformationClassi?cation
Backup ofImportantInformation
BusinessContinuityManagement
Response toInformation
SecurityIncidents
AccessControland Monitoring of
Information
Systems
SecurityCon?guration of
NetworkEquipment
IntellectualPropertyProtection
AccessControlSystems
Information
Security
RiskAssessment
Protection ofTrade Secrets
Compliancewith Information
Security Lawsand Regulations
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Supply Chain ManagementSustainable Supply ChainDigital Intelligence Supply Chain
ResponsibleSupply Chain
Grade Classi?cationEvaluation ResultExcellent supplierQuali?ed supplierSuppliers PendingRecti?cation
Regarded as a major supplier, increase theprocurement volumeAs a replenishment or alternative supplierCounsel them to complete correctiveactions, reduce or suspend procurementEliminated, removed from the list ofquali?ed suppliersUnquali?ed supplier
Total Score
Corresponding Measures basedon Evaluation Results
Supplier Scoring Criteria
Supply Chain ManagementSupply chain management is an important link for enterprises to achieve stable operation and sustainable development. AHB hasalways adhered to the concept of sustainable development, promising to purchase products and services in a responsible mannerand always committed to working together with suppliers to achieve sustainable development.Management Method
AHB has established a comprehensive supplier management system to identify the environmental and social risks in the supplychain. This system includes contract-based, standardized, and regularized management mechanisms covering product deliverytimelines, quality control, and technological con?dentiality, fully safeguarding the legal rights and interests of suppliers. AHBformulates and revises documents related to supply chain management, based on standards pertaining to quality, business ethics,environment, and human rights. These e?orts strengthen the supplier assessment system and create a well-developed procurementsystem.AHB continuously enhances supplier management standards, encouraging suppliers to engage in more responsible purchasingpractices. Simultaneously, the Company intensi?es supervision and evaluation of suppliers to e?ectively prevent various procurementrisks and promote the long-term healthy development of the supply chain.AHB has established a complete set of supplier access and evaluation mechanism. We regularly evaluate the performance of suppliers,and set up a recti?cation and elimination mechanism for the suppliers who do not meet the requirements, allowing suppliers tohave the opportunity to grow with us while ensuring that suppliers meet the quali?cation requirements. The evaluation of performancewill be used as an important basis for supplier quali?cation review and other work to further standardize supplier behavior andachieve closed-loop management of suppliers.
Supplier Access
The Company has developed guidelines and explanatory documents concerning the selection of suppliers and standards forsupplier behavior. New suppliers are managed through system documents such as the Supplier Basic Information Survey, SupplierDue Diligence Questionnaire, and Supplier On-site Audit Checklist. Due diligence is conducted on essential credentials includingbusiness licenses, production permits, system certi?cations, third-party external inspection reports, and REACH registration details.The Company also investigates issues related to business ethics, environmental standards, labor, and human rights as speci?ed inthe respective guidelines. This comprehensive approach ensures the thorough assessment of suppliers to con?rm their compliancewith the Company's procurement requirements.
Supply Chain Management-related Policies
Supplier EvaluationAHB employs a tiered management approach, establishing a specialized supplier review panel that conducts annual evaluations ofall A and B category raw material suppliers, as well as other suppliers of key equipment and spare parts, who have cooperated withthe Company for over a year. The evaluation criteria include quality, service, and social responsibility, among others. Based on thetotal score achieved, suppliers are then classi?ed into di?erent grades.
Based on the supplier level and material level categorized by the supplier's annual evaluation results, the annual audit frequencyof raw material suppliers will be formulated. The Vendor Review Team may jointly evaluate and develop an Annual Vendor AuditSchedule based on the audit frequency table. When there are abnormalities in suppliers, temporary special audits can be conductedafter communication and determination by the Supplier Evaluation Team, which can help us respond quickly, adjust procurementstrategies and optimize the supply chain structure.During the reporting period, AHB scored major raw and auxiliary materials suppliers, and the proportion of raw and auxiliarymaterials suppliers with a total score of over 80 points reached 96%.
≥ 9090 > Total score ≥ 8080 > Total score ≥ 60< 60
DeliveryQualityServicePrice
Social Responsibility
Code of Conduct for Business Partners of AHBSupplier Management Standards of AHB
Procurement Management Standards of AHBBidding Management Standards of AHB
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Responsible PurchasingWe believe that by adopting responsible purchasing practices,AHB will create more positive social, environmental, andeconomic impacts. We select environmentally friendly suppliersand products, adhering to principles that uphold human rights,labor rights, and social equity. We ensure that workers withinour supply chain are treated fairly and work in safe environments.We do not engage with suppliers who employ child labor orforced labor.AHB has established open bidding procedures to ensure thefairness and transparency of the procurement process, andstrictly complies with applicable laws and regulations andindustry guidelines. We establish honest and cooperativerelationships with our suppliers and require them to ful?ll theircorresponding ethical, legal and environmental responsibilities.
Proportion of Local Purchases
35%
65%
Purchase fromlocal suppliers
Purchase fromnon-local suppliers
Supplier Capability Development
KeyPerformance
KeyPerformance
During the reporting period, we conducted on-site audits of31 suppliers, including 13 raw material suppliers and 18
equipment spare parts suppliers, covering the most important raw material categories for production such asindustrial-grade and food-grade materials.Upon auditing, no signi?cant risks were identi?ed in areas such as child labor, forced or compulsory labor, freedom of association,environmental pollution, unfair competition, or corruption. Additionally, the Company has identi?ed areas of weakness amongsuppliers and proposed corrective actions, continuously monitoring the progress of these improvements.The Company periodically conducts supplier capability development training for A and B category material suppliers, coveringaspects in quality, business ethics, environmental practices, labor, and human rights. The Company continuously tracks the subse-quent capability development and performance of suppliers. The results from these trainings and ongoing performance assess-ments are used as reference dimensions in the annual supplier review process.
There were224 suppliers participating in improvement actions or capability development during thereporting period.
KeyPerformance
AHB attaches importance to conducting procurement from local production bases. During the reporting period,the total amount of our local procurement amounted to RMB
519.06 million, accounting for 65% of
the total amount of annual procurement. We had a total of650 suppliers.
Sustainable Supply Chain
AHB attaches great importance to maintaining the sustainability of supply chain and encourages the suppliers to establish a socialresponsibility assurance system with high standards to drive continuous improvement of business ethics, environment and laborhuman rights. To enhance supplier awareness of social responsibilities, the procurement department of the company incorporatesobligations related to social responsibilities into the "Purchasing Contract" through contractual terms. Suppliers are required todesignate a customer management representative, empowered with the authority to monitor social responsibilities and independentfrom external organizational interference. This representative is responsible for overseeing the normal operation of social responsibilityentities; managing organizations related to social responsibilities, proposing improvement plans for issues, and organizing theimplementation; addressing concerns raised by the Company, and responding in writing about the progress and status of improvementsas per the Company’s requirements.The Company imposes strict requirements on the raw materials used by suppliers. Suppliers should ensure that the parts and rawmaterials supplied are in line with the AHB's environmental protection requirements stipulated in the procurement documents; weencourage suppliers to adopt environmentally friendly reusable or recyclable packaging materials as far as possible, and encouragesuppliers to carry out REACH registration.To ensure suppliers actively ful?ll their ESG responsibilities, the Company enhanced the process for onboarding new suppliers byadding a Supplier Due Diligence Questionnair to the existing Supplier Basic Information Survey in 2023, aiming to gather morecomprehensive information about the suppliers. Beyond the existing dimensions of operational status, quali?cations, intellectualproperty, and after-sales service, three new dimensions were added: labor and human rights, environmental protection, andbusiness ethics which bring the total to 15 categories covering 80 questions. Also, regarding the questionnaire survey on social responsibility,the procurement center conducts a review through open channels and on-site audit processes, and puts forward recti?cationsuggestions. While evaluating new suppliers more comprehensively, we encourage them to establish a social responsibilityassurance system with high requirements, promoting the development of social responsibility capabilities among upstream suppliers.
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
To oversee the development of supplier capability levels, the Company conducts periodic on-site audits of suppliers, which includeassessments of quality, management systems, environment, labor and human rights, and business ethics. These audits addressissues related to product quality, safety, and social responsibility.
Digital Intelligence Supply ChainRequirements related to supplier social responsibility
Labor and Human Rights
Prohibition of child laborProhibition of harassment or abuse of labor
Prohibition of discriminationHealth and safety
Compliance with laws and regulations of production sites
Compensation and welfare regulationsWorking hours regulationsFreedom of association and collective negotiating rights
Prohibition of forced laborEnvironmental Protection
Environmental management requirementsAnti-unfair competition
Anti-briberyCompliance with international trade laws
Anti-drugsAnti-money laundering
EnergyWater resources and wastewaterAir pollution and emissionsGreenhouse gas managementHazardous chemicals managementWaste managementResponse plans and training for environmental leakage
Business Ethics
On November 8, 2023, the Ministry of Industry and Information Technology of the People's Republic of China announced the list of greenmanufacturers in 2023. AHB, recognized for the practices and achievements in the ?eld of green biomanufacturing, was successfullynamed a National-level Green Supply Chain Management Demonstration Enterprise, continuing to lead the industry on the way ofsustainable development.
AHB promotes digital transformation, deeply integrates digital value, and comprehensively empowers supply chain management.We launched SRM (Supplier Relationship Management System) in 2023, leveraging digital technology to provide full empowerment forsupply chain management.
Driven by the power of digitalization, AHB is committed to establishing equal, fair, and mutually bene?cial cooperation with suppliers.By leveraging the strength of automation and information technology, we managed to build a one-stop procurement platform,standardize the procurement process, cut the procurement cycle, optimize the procurement e?ciency, reduce the procurement cost, tocomprehensively optimize all the steps of the supply chain management process. In this way, we saved the communication cost whendocking with suppliers, and established a digitized, intelligent, and highly e?cient supply chain.
Cut procurement cycle to improve operation e?ciency and unleash productivity
Procurement process automation
Passive responseActive operation
Supply Chain Management System Architecture of AHB
Supplier Lifecycle Management
Supplier registrationQuestionnaireSupplier admissionSupplier ?le
Supplier qualiftionInformation changeSupplier performanceClassi?cation
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Employee Rights and InterestsTalent CultivationOccupational Health and Safety
ResponsibleEmployer
InternalRecruitment
ExternalRecruitment
Employee Rights and InterestsTalents are the most valuable resources of AHB. We insist on people-oriented, learn from the experience and mechanism of international?rst-class enterprises, and formulate talent introduction and cultivation mechanism by combining with AHB's own situation. Adhering toprinciples of equal employment and legal compliance, the Company employs democratic and meticulous management practices tocreate a fair development platform for employees, truly embodying the ideals of meritocracy and optimal utilization of talent.
To improve the quality of recruitment work, AHB has set up "Talent Interviewer", and continues to strengthen the interviewer's profes-sionalism and capacity building, and continuously optimize its human resources activities.
Law-based Employment
AHB enters into labor contracts with its employees in strict accordance with the relevant provisions of the Labor Law of the People'sRepublic of China, implements contractual management covering all employees, resolutely opposes employment discrimination,prohibits child labor, and treats every employee equally. Employment, treatment or promotion of employees shall not be a?ectedby their social status such as ethnicity, race, nationality, gender, religion, age, sexual orientation, political a?liation or maritalstatus. AHB maintains principles of creating positions based on needs and selecting individuals based on positions, ensuring thatall internal sta? have equal and fair opportunities for rotation and promotion.
Internal recommendation system: We encourage internal sta? to actively recommend
candidates according to the job recruitment needs, open up recruitment channels.Successful recommenders receive varying rewards based on the recruited individual'sposition level. Additionally, the Company adopts a "relative avoidance" policy toensure fairness and impartiality in hiring; recommenders may not participate in theinterview process, and department heads must not have a direct managerial relationshipwith the recommended individuals.
Social recruitment: We introduced senior talents through online recruitment websites,
job fairs, headhunters and other diversi?ed forms.Campus recruitment: Specialized campus recruitment is carried out from August every
year to absorb excellent graduates of all kinds of majors to join the Company, so as tocontinuously inject new strength for the sustainable development of the Company.
Employee Management PoliciesStandard for Entry, Separation andSigning of Labor ContractsStandard for the Management ofWorking HoursProvisions against Child LaborStandard for Layo? ManagementAnti-discrimination PolicyStandard for Recruitment Management
Standard for the Management of FemaleEmployees' Rights and Labor ProtectionStandard for the Management ofRemunerationStandard for the Management ofQuali?cation Level Certi?cation
Gender structure of employeesGender structure of new employees
Ethnic composition of employees
Diversity in Employee Structure
The Company actively promotes equality and diversity among employees, strongly supporting the personal development anddecision-making participation of female sta?, ?rmly eliminating age discrimination, and widely welcoming new talents to genuinelycreate an equal platform for career development. As of the end of the reporting period, the total number of employees stands at1,691, with 873 new employees joining within the year.
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Male FemaleMale Female
Han EthnicityOther Ethnic Groups
Age structure of employees
Under 30 years old 31 to 50 years oldAbove 51 years old
4.32%
23.25%
7.04%
76.75%
92.96%
46.48%49.20%
Compensation and Bene?tsAHB has been committed to creating a platform for fair development for employees, stimulating employees' subjective initiativethrough competitive compensation and fair performance appraisal. In addition, AHB has built smooth promotion channels foremployees. That is to take work performance as the main basis for employees promotion, and select outstanding personnel basedon work ability, business capabilities and professionalism, so as to make the best use of talents.AHB has established a performance appraisal system, set up key appraisal indicators for employees in di?erent departmentsaccording to the annual business policies and objectives. It is distributed monthly and annual bonuses to employees according tothe appraisal results, which will serve as the basis for employees' promotion and salary adjustment. Performance appraisal is alsoan e?ective mechanism for regular communication and joint improvement between the AHB and our employees. At the end of theappraisal cycle, the employee's direct supervisor and superior leader will provide guidance to the employee through performanceinterviews, and point out the problems and improvement points at work for assisting in employee's improvement. If the employeedisagrees with the assessment result of the direct supervisor, employee can appeal to the superior leader of the direct supervisorand the human resources department to ensure accuracy of the performance evaluation result.In addition to the statutory holidays required by the state, employees are also entitled to paid annual leave, marriage leave, sickleave, family visit leave, funeral leave, parental leave and personal leave. Female employees are entitled to maternity leave andbreastfeeding leave according to law. On the basis of maternity leave required by the state, AHB extends the maternity leave for 60days and provide male employees 30 days of paternity leave.We have clari?ed the implementation of parental leavepolicy in the Employee Handbook, providing male andfemale employees with the same parental leave bene?ts.Employees are entitled to ten days of parental leave peryear until their children reach the age of six years old tosupport their balance between work and personal life.This greatly enhances the health of employees andfamilies, productivity and loyalty of employees, as well asthe overall performance and reputation of the company.While protecting employee rights, it also enhancesemployee happiness. During the reporting period, a totalof 251 employees were entitled to parental leave, with atotal of 84 taking parental leave, accounting for 33%, ofwhich 60 were male (all returned to work) and 24 werefemale (22 returned to work), with a reinstatement rate of
97.62%.
Number of Employees on Parental Leave
Male Female
Rational Employment
AHB is committed to reasonable employment practices, with approvals and records from relevant government departments, implementingstandard working hours, comprehensive working hours, and ?exible working hours systems to prevent employee fatigue andoverload. The o?ce functional personnel are subject to the standard working hours system. Due to production needs, the departments ofproduction, engineering, safety and environmental protection, quality are subject to the comprehensive working hours system,while the marketing department, procurement department and senior management are subject to the irregular working hourssystem.
We ?rmly eliminates age discrimination and does not set a threshold of over 30 years old when introducing young talents. At theend of 2023, employees aged 30 and above account for 53.52% of the Company's workforce.AHB adheres to the principle of "job positions are set up out of work needs, and personnel recruitment is based on job positions"in headquarters and bases, to e?ectively drive the employment in the region. We strictly abide by the Anti-discrimination Policy andthe Standard for the Management of Female Employees' Rights and Labor Protection, and resolutely eliminate discrimination andinjustice for various reasons, fully respect the ethnic customs of the employees, and actively create a working atmosphere of "Diver-sity, Equality and Inclusion". Up to the end of the reporting period, there are 119 ethnic minority employees among the full-timeemployees, accounting for 7%, involving 6 ethnic groups, namely, Man, Mongolian, Hui, Buyi, Dong and Tu.
Working Hours Management
In strict accordance with the Regulationsof the State Council on Working hours ofEmployees, employees in our companywork 8 hours a day, and 40 hours a week.The working hours of employees can notbe extended by any unit or individualwithout authorization.
Standard working hours system
During the period of comprehensive calculation,the total actual working time ≦ total legalstandard working time, and the actual workingtime of a holiday(or week) can exceed 8 hours(or 40 hours).The excess shall be deemed as an extension ofworking hours, and the overtime remunerationshall be paid in strict accordance with relevantprovisions of the Labor Law of the People'sRepublic of China. The average number ofhours of extended working hours ≦ 36 hours permonth.
Comprehensive working hours system
A working hours system that cannot bemeasured by standard working hours andrequires ?exible operations is adopted whenwork time is uncertain. A voluntary overtimesystem is in place, and compulsory overtimeis strictly prohibited, as is any form of punish-ment or disciplinary action against employ-ees who refuse overtime.If it is necessary to arrange employees tochange shifts, we shall ensure that employ-ees have a rest of at least 12 hours beforethey are arranged to work.
Irregular working hours system
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
AHB applies for social security and housing provident fund for employees in accordance with national regulations, and provides employeeswith various bene?ts such as free working meals, health examination, accommodation, holiday and birthday bene?ts, high-temperaturesubsidies, afternoon tea, etc. AHB is equipped with gyms and rest areas to facilitate employees to relax after work.
In 2023, AHB provided gifts, condolences and diversi?ed activities to employees on holidays, making them feel the warmth of the AHB family.For example, on the occasion of Women's Day, exclusive gifts were well prepared for female employees and various activities were carried out.During the Teacher's Day, we prepared a thanksgiving gift for outstanding teachers in the Company, and held a thank-you ceremony to expressrespect and gratitude to teachers. During the Mid-Autumn Festival, we presented gifts to hardworking employees.
Gym
Rest AreaSta? Dormitory
Labor Practice and Human Rights
In strict accordance with relevant provisions of the Labor Law of the People's Republic of China, AHB has formulated internalmanagement policies such as the Recruitment Management Speci?cations, the Salary Management Speci?cations, the Entry,Resignation and Labor Contract Signing Speci?cations, the Working Hours Management Speci?cations, the Training ManagementSpeci?cations, the Female Employee Rights and Labor Protection Management Speci?cations, the Quali?cation Level Certi?cationManagement Speci?cations, the Layo? Management Speci?cations, the Anti-discrimination Policy and the Regulations on Prohibit-ing Child Labor, all of which have been strictly followed by AHB to fully protect legitimate rights and interests of employees.We eliminate all acts of forced labor, and strictly prohibit the payment of deposit or pledge of ID card when employees areemployed. At the same time, discrimination to ethnicity, social class, language, religious belief, physical disability, gender, sexualorientation, trade union membership, political a?liation or age is strictly prohibited in matters related to employment, salary,training opportunities, promotion, dismissal or retirement. All employees who join AHB, we sign labor contracts in accordance withthe law and pay for social security.
Democratic ManagementTo assist in re?ning the Company's rules and ensuring the legal and fair protection of employee rights, the Company has establisheda labor union. Serving as a bridge between the employees and the management, the union facilitates the Company's understandingof employee needs and aids in the formulation of more reasonable human resources policies.AHB has established union committees. In accordance with the "Regulations on the Election of Grassroots Organizations of AHBUnion," the appointment of union committee members and the union chairman has been made. The Company has developed the"Enterprise Collective Negotiation System of AHB," "Democratic Management System of AHB," and "Dialogue Mechanism forEmployee Representatives and Collective Negotiations," aiming to uphold democracy and respect public opinion, fully promotingdemocracy and respecting public opinion, solving practical problems and reasonable needs of employees through active communica-tion and dialogue, and promoting harmonious development of the enterprise.
AHB’s security services are provided by a third party, and the proportion of security personnel who have received formal training interms of human rights policies, speci?c procedures and security applications has reached 100%.AHB respects the human rights of all employees and other stakeholders, and does not condone any form of discrimination, harassmentor retaliation in the workplace. In response to the potential human rights impact in business operations, we have added a survey tolabor and human rights to the Supplier Due Diligence Checklist to avoid signi?cant risks in our supply chain. During the reportingperiod, we did not ?nd any operating sites and suppliers with signi?cant risks of forced or compulsory labor incidents.
In 2023, the rate of labor contract signing is 100% and the coverage rate for the payment of socialinsurance is100%KeyPerformance
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Employee's growth is the fundamental driving force to push the enterprise forward. AHB always focuses on talent cultivation. It hasput forward ?ve-year development plan, implemented "4221" talent strategy, established dual-channel talent development pathand quali?cation system to meet our development needs for human resources, and also built a ladder of growth for employees.
Two-way Communication Mechanism for Democratic Dialogue
Dual-channel Talent Development Path
Mechanism for Handling Employee Complaints and Comments
The management seeks for opinions ofemployees, listens to public opinion,and understands the situation, covering:
Employees truthfully report issues andprovide suggestions to the management,covering:
In-depth solicitation of opinions and suggestionsfrom cadres and employees on important decisions,important matters and sensitive issuesReport on key work and hot issues concerned bycadres and employeesCommunication on major work arrangements ofsuperiors in a timely manner, and conduction ofkey discussions on key positions, key personnel,key issues and key matters
???
Opinions and suggestions on the work of the unitViews and opinions on the personal working style,working mode, working method and workingattitude of leaders and colleaguesImportant issuesPractical di?culties in work and life that need tobe resolved with assistanceReport on violations of law and discipline
??
???
Mechanism forHandling Employee
Complaints and
Comments
?
For the complaints and comments that meet thepolicy requirements and conditions and can beresolved, a clear reply and resolution deadlinewill be given on the spot
?
In case of a violation of policies andregulations, it shall be explained clearlyface to face
?
In the case that the policies and regulationsare not clear or that there are relatedregulations but the complaint andcomment cannot be solved immediately,a description of the situation and thedeadline for reply shall be provided.
Talent Cultivation
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Senior Engineer
Intermediate Engineer
Engineer
Junior Employee/Assistant
Director
ManagerSupervisor
Management Channel Technical ChannelGeneral Manager/Senior Director
Chief Scientist
By gender:
By position:
Total training hours ofemployees
Total number oftrained employees
Total training hours ofemployees
Total number oftrained employees
Per capita training hours
Per capita training hours
92.2%
2%
4.3%
3.5%
29%
71%
23%
77%
6%
92%
Employee Training
The Company actively constructs a training management system, broadening development pathways and formulating a TrainingManagement Standard. We improve the skills and professional knowledge level of employees through internal and externaltraining to optimize the employee growth and development system, and continuously empower our talent resource reserve.In 2023, AHB provided training to a total of 1,423 employees, with the proportion of trained employees reaching 76%
, and the totalnumber of hours of training reaching 70,425 hours, with the average hours of training per year per employee reaching 49.5 hours.
The Company conducts regular assessments of employee performance and career development to motivate employees to realizetheir potential, enhance work e?ciency and quality, and promote teamwork and overall e?ciency. Additionally, these assessmentso?er employees improved training and development opportunities. During the reporting period, a total of 1,595 people receivedperformance and career development appraisals, with speci?c data as follows:
The equation for calculating the training ratio is "total number of people trained during the reporting period / total number of employeesat the end of the reporting period."
Male FemaleMale Female
hrs
hrs
Male Female
hrs
hrs
Juniorprofessionals
Middle and
SeniorProfessionals
Management Team
Performance and Career Development Appraisal
By gender
73%
By age
52%
44%
4%27%
Management Team Junior Professionals Middle and Senior Professionals
Management Team Junior Professionals Middle and Senior Professionals
Male Female Under 30 years old
Above 51 years old
31 to 50 years old
KeyPerformance
Annual training expenditure: RMB1,108,720
Number of people trained: 1,423 persons
Average hours of training per year per employee: 49.5hrsNumber of people receiving regular performance and careerdevelopment appraisals:
1,595 persons
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
34.30hrs
Characteristics
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Build AHB talent development center and create talent cultivation channelCase
AHB Talent Development Center
Cutting-edge research andexploration in the syntheticbiology industry
Advanced technology
Faculty compositionauthoritative scientists + professionaltechnical experts + successful entrepre-neurs
Objectiveto cultivate scientists +engineers + technology businessmenwho will disrupt the industry
Tenetinnovation, pragmatic
Teaching form
case study + theory & practice
AHB always cares the growth and development of employees, and aims at building world leading technology andtalent advantages. Focusing on internal professional improvement, we has established AHB Talent DevelopmentCenter which is a research and learning integrated college institution to explore the most advanced technology,learn and grow the most authoritative knowledge, and cultivate the most outstanding talents through caseteaching and theoretical practice education. AHB Talent Development Center cultivates business talent, produc-tion talent, professional talent and management talent, and builds innovative talent training base with highstandard, internationalization, AI technology and specialization as the base.
Teaching philosophy
the best people cultivate betterpeople
Organizational formintegration of research andlearning, innovation researchinstitute + industry ?rst-classtraining institutionCharacteristics
Learning
format
Cadreleadershiptrainingcamp
BU trainingcamp
Base-levelprofessionalismenhancementAHBLecture Hall
EMTretreat
Employeetraining
Face-to-face
course
Casestudy
Actionlearning
BookclubFellow
shipWorkshop
Enterprise
visits
Privateboardmeeting
Core course
series
Advanced knowledge theoryconsolidation and re?nementin the synthetic biology industryAuthoritative knowledge
Cultivation of various kinds ofexcellent talents in synthetic
biology industry
Excellent talents
Phase I Development Plan
During the reporting period, AHB Talent Development Center launched six training courses and special training camps, andorganized 10 lectures of AHB Lecture Hall, with a total of 1,010 employees participating in the courses, and the passing rate ofcourse assessment was 100%.
????????????Cover and
Expand Ability
Summarize Mechanism,Conduct Periodic Consolidation
·Continue to deepen BU businesscapacity enhancement, output anumber of BU's own cases andlecturers·
Accumulate R&D process ofinstitutes
·Professionalism enhancement ofeach function
·Automation & intelligenceenhancement of the base
·
Carry out cadre reserve program
·
BU large customer developmentcapability enhancement
·
BUproduct development capabilityenhancement
·
Base-level job competency andproduction e?ciency enhancement
·Manager leadership enhancement
·
AHB Lecture Hall, continue to covertechnical and core professionalfunctions
·
New employee training enhancement
··
Normalization of professionalcompetence courses and jobpromotion or appointment needs tobe certi?ed by corresponding courses
·
Establish online learning platform
·All professional instructors aresourced internally
Cultivate a batch of AHB's ownprofessionalcourses and cultivationmechanism, and form a completesystem of AHB's training courses andoperation mechanism
Estabilsh Patterns,
Build Models
Stellar Program, cultivating new employeesCaseTo meet the employment demand of our medium and long-term strategic objectives and build the talent ladder andhigh-quality team, AHB makes great e?orts to create the "Stellar Program", which combines the knowledge theory withthe practice of activities. A series of trainings and cultivations will help the new college students to establish the senseof belonging and improve their professional quality, so that they can transform their roles from students to employeesas soon as possible, and integrate into the workplace and AHB. By the end of the reporting period,81 college students
have participated in "Stellar Program".
Overall planning
Firstimpressions
of AHB
Build connection between Stellar and AHB, focus on "Me" and AHB, understand the enterprise culture of AHBthrough the struggle history of AHB people in di?erent stages and business lines, and enhance the sense ofbelonging and overall identity of college students.Integration
Leverage military, team development, theme drill and other forms of training to quickly improve the stability,sense of belonging, responsibility and overall recognition of the Company.
Growth &
leaps
Cultivate core values of perseverance and hard work among newly hired college graduates. Assist these newemployees in understanding corporate product knowledge and production processes.Internaltwo-wayselection
leaps
After gaining a thorough understanding of the Company, college graduates are encouraged to make aninformed job selection based on their developmental aspirations and personal strengths, aligned with availablepositions. This approach ensures that the potential of college graduates is fully realized.Competentdevelopment
Arranging project management study during the on-job period, including the content of P0-P1, and passing theP0 certi?cation exam is required before the o?cial transfer.
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Pilotwarm-up
Centering on the connection and presentation between Stellar, let a group of partners who are not familiar witheach other quickly break the ice and present themselves in warm-up activities.
Employee Health ManagementAHB attaches great importance to the physical and mental health of its employees, and has set up the Safety and EnvironmentDepartment as the management department of employees' occupational health, which is responsible for formulating the system ofemployees' occupational health and establishing the standards of labor protection supplies, organizing regular occupationalphysical examinations for employees. Moreover, the department also handles health and safety issues encountered by employees intheir work, such as physiological and psychological problems caused by hazardous equipment, work methods, and harmful substances.It e?ectively controls occupational health and safety risks related to production and operation, and continuously improves occupationalhealth and safety performance. The department will regularly provide training on hazard identi?cation, noti?cation, equipment safetyoperation procedures to avoid occupational health hazards for employees to provide regular training on the identi?cation andnoti?cation of hazardous sources, equipment safety operation procedures, and other measures to avoid the existence of occupa-tional health hazards among employees.
Health Examination and Psychological GuidanceAHB fully considers the occupational disease hazards in the production and operation process, provides occupational healthexaminations before and during the employment for the employees who will be exposed to registered dust, high temperature,noise, coal dust, welding dust, power frequency electric ?eld, hydrogen sul?de methanol, ammonia, arsenic, phosphorus and itsinorganic compounds, lead and its inorganic compounds, manganese and its inorganic compounds, ultraviolet rays, aceticanhydride acid mist, nitrogen oxides, hydroquinone and other dusts, chemical factors, physical factors, biological factors and othersfactors (such as special operations), and provides free physical examinations for employees who have been on board for six months.
Health and Safety Committee of AHB
GeneralManager
Occupational Health and Safety
AHB has been always making every e?ort to ensure the physical and mental health, as well as the safety of life and property of allemployees. We has specially established the Health and Safety Committee with the participation of elected employee representatives,which is to coordinate and communicate occupational health and safety matters, ensuring e?ective operation of the occupationalhealth and safety management system.
The main responsibilities of the Health and Safety Committee include participation in the prevention of work-related accidents,identi?cation of various health and safety issues, collection of employees' opinions, submission of corresponding improvementsuggestions, implementation of relevant measures to solve problems, and promotion of the labor and capital dialogue.AHB’s Changfeng, Bayannur and Qinhuangdao production bases have passed the ISO 45001 certi?cation of the occupationalhealth and safety management system.
Managementrepresentative
Department
managersEmployeerepresentativesDeputy general
manager
Safety Management
AHB strictly abides by the Law of the People's Republic of China on Work Safety and other laws and regulations to carefully managessafety issues. On this basis, we have formulated the Fire Safety Management System, the Chemical Management Speci?cations and otherspeci?cations to ensure ?re safety and chemical safety management, and conducted ?re drills and training.AHB strictly implements the responsibility system during production and operation, regularly inspects to guarantee perfect ande?ective safety facilities and equipments, operates in accordance with the rules, and strengthens employee training and drills tomitigate the risk of accidents.
Safety Inspection and Accident HandlingAHB has always insisted on safe production and elimination of work-related accidents, and has established a safety productionaccident management mechanism, including safety awareness training, safety warning reminder and measure optimization, safetyemergency response, accident responsibility management and punishment, and regularly conducts safety inspections. In thereporting period, we held 31 safety meetings and carried out 18 comprehensive safety inspections. Through timely recti?cation ofsafety hazards found during safety inspections, the completion rate of recti?cation of safety hazards reached 100%, preventingsafety hazards from occurring in a timely manner.
Occupational health examination categories
AHB has also built a channel for employees psychological health guidance, and organized mental health training such as "Caring forWomen's Mental Health" to help employees relieve psychological pressure.
During the reporting period, we invested a total of RMB
3.54 million, which was used for safety training,
purchase of additional safety facilities and employee protective equipment.
During the reporting period, the total number of deaths due to work-related injuries was0, the accident rate of lostman-hours of the directly-a?liated labor force was
1.48%, and the rate of serious accidents of lost man-hours of
the directly-a?liated labor force was0%.
Contact dust
Contact chemical
factors
Contact physical
factors
Contact biological
factors
Others
KeyPerformance
KeyPerformance
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Safety Risk Evaluation
Emergency organization system
Safety and Occupational Health TrainingAHB has formulated the 2023 EHS Training and Education Implementation Plan. All bases hold regular meetings on productionsafety and carry out safety training on major hazard sources. During the reporting period, Qinhuangdao Base entrusted HebeiQin'an Safety Technology Co., Ltd. to provide online occupational health training for three categories of people, including mainleaders, occupational health managers, and the personnel with occupational hazard. In the reporting period, the total number ofsafety training sessions amounted to 137, with a cumulative total of 17,096 hours of training and 15 hours of safety training per capital.
Emergency Safety ManagementAHB has developed an Emergency Plan for Production Safety Accidents, which sets clear requirements and regulations for handlingsafety accidents caused by extreme weather and other factors. The aim is to improve the company's ability to quickly respond toproduction safety accidents, take e?ective measures before, during, and after accidents, control the occurrence and developmentof emergencies, and minimize the harm of accidents to personnel, environment, and property as much as possible.
AHB set up an Emergency Rescue Command, which consists of four groups, namely, Emergency Medical Rescue Group, Communication andLiaison Group, Logistics Support Group, and Accident Investigation and Aftermath Handling Group. The Command is composed of ChiefCommander and Deputy Chief Commander, and all employees of the Company are members of the rescue organization.
AHB has conducted a comprehensive identi?cation of potential hazardous factors in the process of production and operationthrough accident risk assessment, and used the risk matrix evaluation method to evaluate the consequences of possible accidenttypes and determine the risk level.
ChiefCommanderDeputy ChiefCommander
Emergency Medical
Rescue Group
Communication and
Liaison Group
Logistics Support
Group
Accident Investigation andAftermath Handling Group
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Industry Co-developmentPublic Welfare and Charity
SocialContribution
Industry Co-developmentAHB is committed to promoting industry communication and cooperation, realizing technology, facilitating the sharing of technology,resources, and knowledge, building a healthy industry ecosystem with global partners, advancing scienti?c research and biotechnology,and injecting new vitality into the industry's sustainable development.Initiated by BASF, AHB and other upstream and downstream partners of the value chain jointly create "Sustainability Covalence". Thealliance aims to gather industrial chain partners, relying on chemical innovation and global best practices, to jointly promote the low-carbondevelopment of key industries, focus on energy conservation, emission reduction, climate change mitigation, and the promotion of a circulareconomy, thereby making positive contributions to the national implementation of the sustainable development strategy.
Under the common vision of promoting China's sustainable development, as a long-term strategic partner ofBASF and an important founding member enterprise of the alliance, AHB is looking forward to joining handswith the partners of the Sustainability Covalence, and jointly exploring the new momentum of green growth inthe synthetic biology industry.
Sustainability Covalence
SUSTAINABILITYCOVALENCE
? Chairwoman of AHB
Henghua Guo
AHB held the ?rst Master and Doctoral Innovation Workshop Case
To further promote the integration of production andeducation and to achieve the resource sharing betweenacademic institutions and the corporate sector, AHB heldthe ?rst "Huaheng Master and Doctoral InnovationWorkshop" in 2023, and more than 30 excellent master anddoctoral students from Zhejiang University of Technology,Tianjin Institute of Industrial Biotechnology, ChineseAcademy of Sciences and Hefei University of Technologyparticipated in the study.Huaheng Master and Doctoral Innovation Workshop is designed to cultivate innovative talents with international perspectivesand leading-edge technologies, contributing to technological innovation and industrial upgrading. AHB is committed to bringingtogether its own mature industrialization experience and rich theoretical knowledge of universities, discussing the trending andfrontier problems in the ?eld of synthetic biotechnology with universities, and promoting the mutual integration of academicresearch and practical application. The session of the Huaheng Masters and Doctoral Innovation Workshop is themed"University-Enterprise Cooperation, Shaping the Future Together." It includes various educational segments such as o?inelectures, specialized seminars on biomanufacturing, and practical sessions at production bases. These activities provide participantswith a comprehensive and in-depth understanding of the development and prospects of the biotechnology industry, enablingstudents to fully appreciate the multi-dimensional allure of the green biotechnology ?eld.
Academic Seminar
On March 8-9, 2023, Guangdong Cosmetics Association grandly held "China Science and Technology Achievement for CosmeticsBusiness Conference" in Guangzhou, China. Under the theme of "scienti?c and technological innovation, shaping the newmomentum of development", this business conference dedicated a feast for the industry to exchange innovative achievements on"new trends, new breakthroughs in raw materials, new technology in formulations, new breakthroughs in brands", and issued theindustry's much-anticipated "Innovation Achievement Award". Among these, AHB won the Innovation Achievement Award byvirtue of the unique advantages of synthetic biology-driven cosmetic raw materials such as green manufacturing, low-carbonemission reduction, and brought the latest trend report of "synthetic biology + pure beauty".In this exchange conference, AHB invited the strategic partnerProf. Qipeng Yuan, Beijing University of Chemical Technologyand Changjiang Scholar, Distinguished Professor of theMinistry of Education, to share the achievements of bothparties in using synthetic biology to create "new energy" forfuture cosmetics.
AHB attended China Science and Technology Achievement for Cosmetics Exchange ConferenceCaseExchange of Scienti?c and Technological Achievements
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Above 50 years old
Technical Competition
Exhibition Communication
On July 18, 2023, the 8th China Innovation Challenge focusing on Biomanufacturing Technology was o?cially launched. Theevent was hosted by the Ministry of Science and Technology's Torch Center and the Tianjin Municipal Science and Technolo-gy Bureau, and was organized by the National Center for Synthetic Biology Technology Innovation. Henghua Guo,Chairwoman and President of AHB, launched the competition as a representative of enterprises. The competition inviteddomestic and foreign senior academicians and experts, enterprise backbone and market elites to research and demonstratethe "theoretical threshold" and "production threshold" of all kinds of bio-manufacturing products in the country.We encourage talented, capable, and bold individuals to step forward and take the lead, as the winning proposal will receivemillions of RMB in research and development funds, as well as ten millions RMB in investment and ?nancing. As the primarysponsor of this competition, AHB actively participates in and supports the event, facilitating the rapid and e?cient transition ofthe latest advancements in synthetic biology into industrial applications.
On February 15, 2023, at PCHi2023, the ?rst annual technology event of China's cosmetic raw materials industry, AHBo?cially launched a new bio-based 1,3-propanediol, a diol with multifunctional applications such as preservative,moisturizer and solubilizer, which is in line with the emerging concept of "CLEAN BEAUTY". AHB has developed and applieda fermentation process centered around microbial cell factories. Using glucose as a raw material and employing ane?cient metabolic pathway, the one-step fermentation process produces 100% bio-based 1,3-propanediol. This bio-basedcompound exhibits excellent skin compatibility, safety, and non-irritating properties. It o?ers advantages such as highstability, safety, and environmental friendliness.
AHB appeared in PCHi2023 ?Driving the sustainable development of personal care industry Case
AHB appeared in FIC 2023 ? Start a new way of healthy acid eating Case
FIC 2023 was held on March 15-17, 2023 at National Exhibition and Convention Center (Shanghai). As an international authoritativeprofessional exhibition of food additives and ingredients, FIC 2023 gathered more than 1,500 famous enterprises from homeand abroad, and focused on showing the cutting-edge innovation trends and directions of food additives and ingredientsindustry. With the theme of "starting a new way of healthy acid eating", AHB brought new bio-based L-malic acid products tothis exhibition, comprehensively presenting the multi-faceted application of nutritional solutions in the ?eld of food andhealth with the background of synthetic biology technology.Through this exhibition, AHB also strengthened the in-depth interaction and communication with domestic and foreignindustry partners, and injected new vitality for promoting the innovation and upgrading of food industry.
AHB appeared in China Feed Industry Exhibition? Building a new ecology of animal nutrition with global partners Case
AHB supports the China Innovation Challenge? Sponsoring the Biomanufacturing Technology segment of the competition Case
On March 29-31, 2023, China Feed Industry Exhibition wasgrandly opened in Nanjing International Expo Center, whichdemonstrated the new achievements of China feed industryin sci-tech innovation and industrial development. Respondingto the theme of "Focusing on High Quality, Setting Sail for aNew Journey", AHB appeared at the exhibition with sustainableamino acid and vitamin series products and solutions,focusing on the precise nutritional solutions centered onbiobased L-valine, which can help customers to improve theproduction performance of animals and expand the breedingoutput.
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Public Welfare and CharityAHB consistently considers social welfare as an integral part of its corporate culture. While ensuring the business development andcontinuously creating economic value, the Company remains committed to aligning social responsibility with the development goals.AHB proactively establishes mutually supportive and trustworthy relationships with the local communities, actively ful?lling the corporatesocial responsibilities. By engaging in and supporting various public charity activities and projects, we actively contributes to local publicwelfare undertakings, giving back to society with practical actions, promoting the sustainable development of the region, and achievingmutual bene?t and win-win results.
On June 18, 2023, AHB joined hands with Hefei Association of Persons with Physical Disability, Anhui Yangguang ServiceCenter for the Disabled, Hefei CPPCC Special Education Commissioners' Workshop, and the CPPCC Hefei Committee for theAssistance of the Weak and Disabled, to carry out a charity event aimed at aiding the disabled and alleviating hardship.During the event, 40 families with disabled members were provided with Dragon Boat Festival gifts, including Zongzi. Thisactivity was a gesture of love and care towards individuals with disabilities, o?ering these families a sense of societalsupport and warmth.
Philanthropy
AHB has always attached great importance to the ful?llment of community responsibility, earnestly practicing the corporatemission of "advancing biotechnology to serve life and health, " devoting itself to philanthropy, caring for and protecting vulnerablegroups within society, and actively contributing to the community. During the reporting period, our total public welfare and charitabledonations amounted to RMB 2,588,500, totaling 120 hours of community service.
"Help the Disabled and the Needy, Bear in Mind the Mission"? Paying Condolences to Disabled Families Case
On May 20, 2023, one day before the National Disabled Person's Day, Anhui Yangguang Service Center for the Disabled, HefeiCPPCC Commissioners' Workshop of Helping the Weak and the Disabled, Special Education Commissioners' Workshop andvarious institutions, together with the Party branch of AHB, organized an activity of helping the disabled and the needy, andpaid condolences to some impoverished families with severe disabilities. AHB distributed condolence goods to impoverishedfamilies, bene?ting six poor families in total.
"Party-led Care: Bringing Comfort to Underprivileged Families on Dragon Boat Festival" ? Sympathy for Families in Di?culties Case
Community Building
AHB is well aware that the development of enterprises bene?ts from local economic development. The Company places greatimportance on community development, creating more job opportunities for local residents, and promoting sustainable developmentthrough green and low-carbon operations to help achieve collaborative carbon reduction at the local level. We actively ful?ll corporatesocial responsibility, and regularly hold free lectures on safety, health ?rst aid knowledge and special lectures on synthetic biology for thepublic and school students, giving back to the society with a sense of responsibility and making contributions to the good well-being ofthe local community.Village-enterprise PartnershipAHB has been striving for integrating into the great cause of promoting the prosperity of the people and building a happy enterprisewith a sense of social responsibility. The Report of the 20th CPC National Congress has made further arrangements and deployments for"all-round promotion of rural revitalization" and proposed to "give priority to the development of agriculture and rural areas" and"accelerate the construction of an agricultural power". To actively respond to the national rural revitalization strategy, AHB relies onits strong scienti?c and technological strength with the background of the frontier technology of synthetic biology to promote thecomprehensive upgrading of local rural agriculture and farmers, making contributions to the overall promotion of rural revitalization inChina.
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
On June 19, 2023, AHB and Hefei Weimin Social Work Service Center Hand in Hand Project Group, together with BeijingShangshan Public Welfare Foundation, China Volunteer Public Welfare Project Department, Hefei CPPCC Special EducationCommissioners' Workshop, and the CPPCC Hefei Committee for the Assistance of the Weak and Disabled, held a publicwelfare activity together, and carried out a Dragon Boat Festival gathering 80 lost parents who had lost their only child, andproviding services and spiritual comfort to those families. We have carried out the Dragon Boat Festival dinner activity forthis group for ?ve consecutive years.
"Gathering Love for Dragon Boat Festival, Walking Towards Light" ? Condolences to Parents Who Have Lost Their Only Child Case
Appendix I Laws and RegulationsAspectsApplicable LawsAspectsApplicable Laws
Governance-related
Social-related
Civil Code of the People's Republic of ChinaCompany Law of the People's Republic of ChinaSecurities Law of the People's Republic of ChinaAccounting Law of the People's Republic of ChinaCriminal Law of the People's Republic of ChinaAnti-monopoly Law of the People's Republic of ChinaAnti-Unfair Competition Law of the People's Republic of ChinaLaw of the People's Republic of China on the Preservation of State SecretsBasic Standards for Internal Control of Enterprises
Production Safety Law of the People's Republic of ChinaEmergency Response Law of the People's Republic of ChinaCybersecurity Law of the People's Republic of ChinaData Security Law of the People's Republic of ChinaCopyright Law of the People's Republic of ChinaAdvertising Law of the People's Republic of ChinaFire Protection Law of the People's Republic of ChinaLaw of the People's Republic of China on Tenders and BidsLabor Law of the People's Republic of ChinaLabor Contract Law of the People's Republic of ChinaEmployment Promotion Law of the People's Republic of ChinaSocial Insurance Law of the People's Republic of ChinaSpecial Provisions on Labor Protection of Female EmployeesLaw of the People's Republic of China on the Protection of Minors
Law of the People's Republic of China on Donations for Public WelfareAmerican Foreign Corrupt Practices Act (FCPA)American Federal Trade Commission ActAmerican Data Protection ActEU General Data Protection Regulation (GDPR)
Environmental-related
Law of the People's Republic of China on the Promotion of Cleaner Production EnvironmentalProtection Law of the People's Republic of ChinaLaw of the People's Republic of China on Environmental Impact AssessmentLaw of the People's Republic of China on Prevention and Control of Water PollutionLaw of the People's Republic of China on Prevention and Control of Atmospheric Pollution
Law of the People's Republic of China on Prevention and Control of Soil PollutionLaw of the People's Republic of China on Prevention and Control of Noise Pollution
Law of the People's Republic of China on Energy ConservationBiosecurity Law of the People's Republic of China
Law of the People's Republic of China on Prevention and Control of Environmental Pollutionby Solid Waste
Regulations on the Safety Administration of Dangerous Chemicals of the People's Republic of China
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Law of the People's Republic of China on Prevention and Control of Occupational Diseases
Environmental Data
IndexExhaust gasNitrogen oxides (tons)Sulphur oxides (tons)Particulate matter (tons)
44.21
18.61
3.94
Energy consumptionDirect Energy
29,149.911,216,125.18
62.32
6.22
Indirect Energy
177,025.47119,291.99329,073.24418,823.48
216.08
Greenhouse gases
37,146.46100,958.68
100.58
138,205.72
71.30
IndexAmount
42.33
0.02
9.28
0.00
32.69
0.36
0.00
18,344.44
9.46
18,148.13
0.00
0.00
0.00
173.05
47.65
1.35
7.42
1.03
1,342.68
0.69
1,195.35
357.54
0.80
Appendix II Key Performance Indicators
Amount
Lignite (tons)Natural gas (m
)Diesel (tons)Gasoline (tons)Purchased electricity (MWh)Steam (GJ)Biomass fuel (GJ)Total Consolidated Energy Consumption (MWh)Consolidated Energy Intensity (MWh/RMB million revenue)Scope I: Direct GHG Emissions (tons CO
e)Scope II: Indirect GHG emissions from energy (tons CO
e)Scope III: Other indirect GHG emissions (tons CO
e)Total GHG Emissions (tons CO
e)GHG Emission Intensity (tons CO
e/RMB million revenue)
Waste
Total Amount of Hazardous Waste Emissions (tons)
Hazardous Waste Emission Intensity (tons/RMB million revenue)Waste transferred from disposal (recycling) (tons)Waste for directly disposal (incineration, with energy recovery) (tons)Waste for directly disposal (incineration, without energy recovery) (tons)Waste for directly disposal (land?lling) (tons)Waste for directly disposal (other operations) (tons)
Waste transferred from disposal (recycling) (tons)Waste for directly disposal (incineration, with energy recovery) (tons)Waste for directly disposal (incineration, without energy recovery) (tons)Waste for directly disposal (land?lling) (tons)Waste for directly disposal (other operations) (tons)
Total Discharge of General Waste (tons)
Hazardous Waste
General Waste
General Waste Emission Intensity (tons/RMB million revenue)
WastewaterChemical Oxygen Demand (COD) discharge (tons)Total phosphorus (TP) (tons)Total nitrogen (TN) (tons)Ammonia nitrogen (NH
-N) (tons)Total wastewater discharge (million liters)Wastewater discharge intensity (million liters/RMB million revenue)Water resourcesFresh water usage (million liters)Recycled water usage (million liters)Intensity of water use (million liters/RMB million revenue)Total use of packaging materials (tons)Packaging materials
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Social Data
IndexAmountEmployee pro?leTotal number of employees (persons)By genderMaleFemaleBy ageUnder 30 years old31-50 years oldAbove 51 years oldBy positionManagement team (Grade 5 and above)Senior professionals (Grade 4)Junior professionals (Grades 1-3)By regionChina (including Hong Kong, Macao and Taiwan)Other countriesBy ethnic groupsHan ethnicityOther ethnic groups
1,6911,257
1,3421,684
1,572
New employeesTotal number of new employees (persons)By genderMale
| 2034653971151%27%1,5951,16443170282964251 |
New employeesTotal number of new employees (persons)By genderMaleFemaleBy ageUnder 30 years old31-50 years oldAbove 50 years oldDiversity
Proportion of management team hired from local areaProportion of women in management teamPerformance evaluation and career development appraisalBy genderMaleFemaleBy ageUnder 30 years old31-50 years oldAbove 51 years oldParental leaveTotal number of employees taking parental leave (persons)
51%27%1,5951,164
Number of employees who underwent performance evaluation and careerdevelopment appraisal in the reporting period (persons)
IndexAmount
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Total number of employees who returned to work in the reporting periodafter taking parental leave
Total number of employees took parental leaveBy genderMaleFemaleBy genderMaleFemaleEmployee training
IndexAmount
Number of hours of safety training per person on duty = total number of hours of safety training during the reporting period /totalnumber of employees
Lost time injury rate of directly-a?liated labor force = Total number of lost-time accident incidents x (1,000,000 / total hours worked)
Lost time severity rate of directly-a?liated labor force = Days lost due to injury x (1,000 / total hours worked)
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
IndexAmount
By genderMaleFemale By positionsManagement team (Grade 5 and above)Senior professionals (Grade 4)Junior professionals (Grades 1-3)Total hours of employee training (hours)By genderMaleFemaleBy positionsManagement team (Grade 5 and above)Senior professionals (Grade 4)Junior professionals (Grades 1-3)
70,4251,312
Total number of employees who returned to work in the reporting periodafter taking parental leave
Total number of employees took parental leaveBy genderMaleFemaleBy genderMaleFemaleEmployee trainingTotal annual training expenditures (million RMB )Total number of employees trained (persons)
IndexAmount
Marketing and labeling
Incidents of non-compliance concerning product and service information and labelingMarketing violations
| Percentage of procurement spending from local suppliersDistribution of suppliers Total number of suppliersChina (including Hong Kong, Macao and Taiwan)Other countries or regionsNumber of target suppliers that have signed the Supplier Code of Conduct Proportion of purchasers who have received sustainable procurement trainingNumber of target suppliers that have participated in Corporate Social Responsibility(CSR) on-site audits Number of target suppliers that have participated in Corporate Social Responsibility(CSR) assessments |
Supply chain
Per capita hours of employee training (hours)By genderMaleFemaleBy positionManagement team (Grade 5 and above)Senior professionals (Grade 4)
Sustainable purchasing
Proportion of audited/assessed suppliers participating in improvement actions orcapacity building
65.46%
Junior professionals (Grades 1-3)Safety trainingTotal number of safety training sessions in the reporting periodTotal number of hours of safety training in the reporting periodWork-related InjuriesNumber of work-related fatalities (persons)Total working hoursLost time injury rate of directly-a?liated labor force
Lost time severity rate of directly-a?liated labor force
Product health and safety
Hours of safety training per person on duty
Junior professionals (Grades 1-3)Safety trainingTotal number of safety training sessions in the reporting periodTotal number of hours of safety training in the reporting periodWork-related InjuriesNumber of work-related fatalities (persons)Total working hoursLost time injury rate of directly-a?liated labor force
Lost time severity rate of directly-a?liated labor force
Product health and safety
Hours of safety training per person on duty
Per capita hours of employee training (hours)By genderMaleFemaleBy positionManagement team (Grade 5 and above)Senior professionals (Grade 4)Junior professionals (Grades 1-3)Safety training
Total number of safety training sessions in the reporting periodTotal number of hours of safety training in the reporting periodWork-related InjuriesNumber of work-related fatalities (persons)Total working hoursLost time injury rate of directly-a?liated labor force
Lost time severity rate of directly-a?liated labor force
Product health and safety
Hours of safety training per person on duty
Incidents of non-compliance concerning the health and safety impacts ofproducts and servicesNumber of products recalled for safety and health reasonsNumber of complaints for safety and health reasons
Appendix III Content Index
Usage Statement: This Report is prepared by AHB with reference to the GRI Sustainability Reporting Standards (GRI Standards),and the Guidelines for Preparation of Corporate Social Responsibility Reports in China (CASS-ESG 5.0) issued by the Corporate SocialResponsibility Research Center of Chinese Academy of Social Sciences. The reporting period is from January 1, 2023 to December31, 2023.
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
P1.2 Information descriptionP1.1 Quality assurance
About the Report
Activities and workers
Governance
2-2 Entities included in the organization’ssustainability reporting2-3 Reporting period, frequency andcontact point2-4 Restatements of information2-5 External assurance
2-8 Workers who are not employees
2-12 Role of the highest governance bodyin overseeing the management of impacts2-13 Delegation of responsibility formanaging impacts
2-7 EmployeesS1 EmploymentResponsible Employer
Key Performance Indicators
2-14 Role of the highest governancebody in sustainability reporting
ESG Development Strategy- Assessment of Material Topics
Not applicable
P2 Message from executivemanagementG2.1 The Board's ESG management policyG2.1 The Board's mechanism for ESG workand leadership
Responsible Supply Chain2-6 Activities, value chain and otherbusiness relationships
S5 Responsible supply chainmanagement
The Company has not carried out external
assurance this year.
GRI 2: General disclosures 2021
2-1 Organizational details
P1.2 Information descriptionP4.1 Basic informationP4.2 Strategy and cultureP4.3 Business overview
About the Report
About AHB
Organizations and the reporting practices
GRI StandardsCASS-ESG 5.0 GuidelinesCorresponding Chapter
Corporate Governance
- Governance Structure
Corporate Governance
- Compliance and Risk Management
G1.1 Board composition diversityG1.2 Board independence2-9 Governance structure and composition2-10 Nomination and selection of thehighest governance body2-11 Chair of the highestgovernance body
| IndexAmountMarketing and labelingIncidents of non-compliance concerning product and service information and labelingMarketing violationsPercentage of procurement spending from local suppliersDistribution of suppliers Total number of suppliersChina (including Hong Kong, Macao and Taiwan)Other countries or regionsNumber of target suppliers that have signed the Supplier Code of Conduct Proportion of purchasers who have received sustainable procurement trainingNumber of target suppliers that have participated in Corporate Social Responsibility(CSR) on-site audits Number of target suppliers that have participated in Corporate Social Responsibility(CSR) assessments Supply chainSustainable purchasingProportion of audited/assessed suppliers participating in improvement actions orcapacity buildingAnti-corruptionPercentage of Ops that have undergone corruption risk assessmentCon?rmed incidents of corruption in the reporting periodTotal hours of anti-corruption trainingBy positionManagement team (Grade 5 and above)Senior professionals (Grade 4)Junior professionals (Grades 1-3)Public welfare donation (RMB 10,000)Public service (hours)Total number of anti-corruption training participants (persons)Public welfare Inputs1,730258.85 | ||
| Marketing and labelingIncidents of non-compliance concerning product and service information and labelingMarketing violationsPercentage of procurement spending from local suppliersDistribution of suppliers Total number of suppliersChina (including Hong Kong, Macao and Taiwan)Other countries or regions | ||
Number of target suppliers that have signed the Supplier Code of Conduct
Proportion of purchasers who have received sustainable procurement trainingNumber of target suppliers that have participated in Corporate Social Responsibility(CSR) on-site auditsNumber of target suppliers that have participated in Corporate Social Responsibility(CSR) assessments
Proportion of audited/assessed suppliers participating in improvement actions orcapacity buildingAnti-corruptionPercentage of Ops that have undergone corruption risk assessmentCon?rmed incidents of corruption in the reporting periodTotal hours of anti-corruption training
By positionManagement team (Grade 5 and above)Senior professionals (Grade 4)Junior professionals (Grades 1-3)
Public welfare donation (RMB 10,000)Public service (hours)
Total number of anti-corruption training participants (persons)
Public welfare Inputs
258.85
100%
100%
1,730
34.46%
GRI 3：Material topics 2021
GRI StandardsCASS-ESG 5.0 GuidelinesCorresponding Chapter
Material topics and management methods
G3.6 Communication withstakeholders
ESG Development Strategy-Assessment of Material TopicsG3.5 Identi?cation of material ESG issues3-1 Process to determine material topics3-2 List of material topics
2023ESG ReportANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Corporate Governance- Compliance and Risk ManagementESG Development Strategy- Assessment of Material TopicsESG Development StrategyCorporate Governance- Governance StructurePlease refer to Annual ReportFor con?dentiality reasons, we do not discloseannual total compensation ratios. We willconsiderdisclosing relevant data in the future.
ESG Development Strategy
Corporate Governance - Business Ethics
About AHBDuring the reporting period, the Company didnot have any major violations, nor was itpunished with any signi?cant ?nes for violatingrelevant laws and regulations.
ESG Development Strategy- Assessment of Material TopicsResponsible Employer- Employee Rights and Interests
Not applicableG2.1 The Board's ESG management policyNot applicableG2.5 Executive compensation linked to ESGperformanceNot applicable
Not applicable
G1.3 Compliance system
Not applicable
G1.7 Anti-commercial bribery andanti-corruption system
G3.6 Communication with stakeholdersV2.8 Strategic cooperation mechanismand platform
P2 Message from executive managmentG2.1 The Board's ESG management policy
GRI StandardsCASS-ESG 5.0 GuidelinesCorresponding Chapter
Strategy, policy, and practice
Stakeholder involvement
2-15 Con?icts of interest2-16 Communication of critical concerns2-17 Collective knowledge of thehighest governance body2-18 Evaluation of the performance ofthe highest governance body2-19 Remuneration policies2-20 Process to determine remuneration2-21 Annual total compensation ratio
2-23 Policy commitments2-24 Embedding policy commitments2-25 Processes to remediate negative impacts
2-27 Compliance with laws and regulations2-28 Membership associations2-29 Approach to stakeholder engagement2-30 Collective bargaining agreements
2-22 Statement on sustainable developmentstrategy
2-26 Mechanisms for seeking advice andraising concerns
3-3 Management of material topics303-1 Interactions with water as a sharedresource303-2 Management of waterdcargerelatedimpacts303-3 Water withdrawal
3-3 Management of material topics
3-3 Management of material topics
3-3 Management of material topics201-1 Direct economic value generatedand distributed201-2 Financial implications and otherrisks and opportunities due to climatechange201-4 Financial assistance receivedfrom government202-1 Ratios of standard entry levelwage by gender compared to localminimum wage202-2 Proportion of senior managementhired from the local community
Green Development- Resource ManagementGreen Development- Environmental Management System- Resource ManagementGreen Development- Resource Management Key Performance Indicators
Green Development- Green ManufacturingContribution to Sustainable DevelomentProduct Innovation and Responsibility- Product Innovation and Sustainability
2023 ESG HighlightsGreen Development- Response to Climate Change
Please refer to Annual ReportKey Performance Indicators
Economic performance of the company
Water management
Clean technology opportunitiesSynthetic biotechnology and environmental protection
GRI 3: MaterialTopics 2021
GRI 201: EconomicPerformance 2016
GRI 202:
Market Presence2016GRI 3: MaterialTopics 2021
GRI 303: Water andE?uents 2018
GRI 3: MaterialTopics 2021GRI 3: MaterialTopics 2021
E2.10 Fresh water consumptionE3.2 Wastewater discharge
E2.9 Water utilization policyE3.1 Policy to reduce wastewaterdischargeE3.1 Policy to reduce wastewaterdischargeE2.13 Recycled watecoumption
E2.4 Clean energy utilization policyE2.5 Clean energy utilizedE1.8 Environment-friendlyproductsor technology R&D andapplication
Not applicable
Not applicable
E5.2 Impact of climate-related risksand opportunities on operationsE5.3 Climate-related risk management201-3 De?ned bene?t plan obligationsand other retirement plans
Responsible Employer- Employee Rights and InterestsS1.7 Remuneration andben?ts systemS1.8 Social security coverage
GRI StandardsCASS-ESG 5.0 GuidelinesCorresponding Chapter
303-4 Water discharge
Other environmental topics and management methods
Responsible Employer- Talent Cultivation
Responsible Employer- Employee Rights and InterestsResponsible Employer - Employee Rights and InterestsKey Performance IndicatorsResponsible Employer- Employee Rights and InterestsResponsible Employer - Employee Rights and InterestsKey Performance Indicators
Responsible Employer- Talent CultivationKey Performance IndicatorsResponsible Employer- Talent Cultivation
Product Innovation andResponsibility- Product Management- Customer Service
Responsible Employer - Talent CultivationKey Performance Indicators
During the reporting period, theCompany did not have anybreaches related to the healthand safety implications of itsproducts and services.
3-3 Management of material topics416-1 Assessment of the health andsafety impacts of product andservice categories
3-3 Management of material topics404-1 Average hours of training peryear per employee404-2 Programs for upgradingemployee skills and transitionassistance programs
3-3 Management of material topics401-1 New employee hires andemployee turnover401-2 Bene?ts provided to full-timeemployees that are not provided totemporary or part-time employees401-3 Parental leave
416-2 Incidents of non-complianceconcerning the health and safetyimpacts of products and services
404-3 Percentage of employeesreceiving regular performance andcareer development reviews
S4.2 Product quali?cation rateS4.5 Active response to customercomplaints
S2.2 Occupational training systemS2.3 Investments in occupationaltrainingS2.2 Occupational training system
S1.7 Environmental trainingand education
S1.7 Environmental trainingand educationS1.10 Care for employees
Not applicable
S4.9 Negative incidents relatedto customer health and safetyduring the reporing period
S2.4 Occupational trainingperfomance
S4.1 Product / service qualitymanagementS4.3 Responsible marketing
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
GRI StandardsCASS-ESG 5.0 GuidelinesCorresponding ChapterGRI StandardsCASS-ESG 5.0 GuidelinesCorresponding Chapter
GRI 3: Material Topics 2021
GRI 404: Training andEducation 2016
GRI 3: Material Topics 2021
GRI 416: Customer Healthand Safety 2016
GRI 401: Employment 2016
GRI 3: Material Topics 2021
Employee training and development
Employee salary and bene?ts
Product quality and safety
Not applicable
Green Development- Resource Management
Green Development- Response to ClimateChangePerformance Indicators
Green Development- Response to Climate ChangeKey Performance Indicators
Green Development- Response to ClimateChange
During the reporting period, the Companyhas not yet counted the external energyconsumption of the organization.
Green Development- Response to Climate Chanage- Green ManufacturingGreen Development - Green Manufacturing
Envirnonmental Management Policy
During the reporting period, the Companyhas not recorded emissions of Ozone- depleting Substances (ODS) .
Energy and resource management
GRI 3:
Material Topics2021
GRI 302:
Energy 2016
GRI 3:
Material Topics 2021
GRI 305:
Emissions2016
Emission management, Greenhouse gas emissions, Waste treatment and recycling
3-3 Management of material topics
302-2 Energy consumption outside ofthe organization302-3 Energy intensity
305-1 Direct (Scope 1) GHG emissions305-2 Energy indirect (Scope 2) GHG emissions305-3 Other indirect (Scope 3) GHG emissions305-4 GHG emissions intensity305-5 Reduction of GHG emissions305-6 Emissions of ozone-depleting substances(ODS)305-7 Nitrogen oxides (NOx), sulfur oxides(SOx), and other signi?cant air emissions
302-4 Reduction of energy consumption302-5 Reductions in energy requirements ofproducts and services
E2.1 Energy management systemE2.2 Energy consumptionNot applicableE2.3 Energy consumptionintensityE2.14 Green o?ce measuresNot applicable
E5.5 Direct GHG emissionE5.6 Indirect GHG emissionE5.7 GHG emission intensityNot applicableE3.4 Exhaust gas emissions cable
E3.1 Policy to reduce wastewaterdischargeE3.1 Policy to reduce wastewaterdischargeE3.5 Waste discharge managementpolicy3-3 Management of material topics
302-1 Energy consumption within theorganization
Green Development- Response to Climate Change
Other employee topics and management methods
Talent management
Employee health and safety
GRI 3: MaterialTopics 2021
GRI 403:
Occupational Healthand Safety 2018
GRI 3: MaterialTopics 2021GRI 408: ChildLabor 2016GRI 409:
Forced or CompulsoryLabor 2016
3-3 Management of material topics
403-2 Hazard identi?cation, riskassessment, and incidentinvestigation403-3 Occupational health services403-4 Worker participation, consulta-tion, and communication onoccupational health and safety403-5 Worker training onoccupational health and safety403-6 Promotion of worker health403-7 Prevention and mitigation ofoccupational health and safetyimpacts directly linked by businessrelationships403-8 Workers covered byanoccupational health and safetymanagement system403-9 Work-related injuries403-10 Work-related ill health3-3 Management of material topics
409-1 Operations and suppliers atsigni?cant risk for incidents of forced orcompulsory labor408-1 Operations and suppliers atsigni?cant risk for incidents of childlabor
Responsible Employer- Occupational Health and SafetyKey Performance IndicatorsResponsible Employer- Occupational Health and Safety
Responsible Employer - Employee Rights and Interests
403-1 Occupational health and safetymanagement system
S3.2 Occupational health and safetymanagement system certi?cationS3.7 Emergency management systemS3.6 Potential risk inspection andrecti?cationS3.8 Investments in production safetyS3.5 Safety education, publicity andtrainingS3.9 Production safety trainingperformanceS3.7 Emergency management system
S1.1 Compliance with labor lawstandardsNot applicable
S3.2 Occupational health and safetymanagement system certi?cation
S3.1 Occupational health managementS3.3 Number of new occutionaldiseases
S3.10 Number of accidents inproduction safetyS3.11 Number of work-related injuries /deathsS3.12 Lost work days due to work injury
S1 EmploymentS2 Development and trainingGRI 3: MaterialTopics 2021
3-3 Management of material topics
S3.1 Occupational health managementS3.4 Production safety managementsystem
Responsible Employer- Employee Rights and Interests- Talent Cultivation
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
Responsible Employer- Occupation Health and Safety
GRI StandardsCASS-ESG 5.0 GuidelinesCorresponding ChapterGRI StandardsCASS-ESG 5.0 GuidelinesCorresponding Chapter
Prevention of child and forced labor
Biodiversity conservation
Response to climate change
Environmental impact assessment of ongoing projects
GRI 3: MaterialTopics 2021
GRI 306:
Waste 2016
GRI 304:
Biodiversity 2016
GRI 3: MaterialTopics 2021
Green Development- Resource Management
Green Development- Resource ManagementKey Performance Indicators
Not applicable as the Company islocated in an area with low biodiversityrisk.
E3.5 Waste discharge managementpolicyE3.5 Waste discharge managementpolicyE3.6 General waste dischargeE3.7 General waste dischargeintensityE3.8 Hazardous waste discharge
Not applicable
Not applicable
E4.1 Impact of business operationson biodiversity and ecological systemE4.2 Biodiversity conservationactionsE4.1 Impact of business operationson biodiversity and ecologicalsystemE5.1 Governance mechanism toaddress climate-related risks andopportunitiesE5.2 Impact of climate-related risksand opportunities on operationsE5.3 Climate-related risk managementE5.4 Targets and performance inrelation to climate-related risks andopportunities
3-3 Management of material topics
306-1 Waste generation and signi?cantwaste-related impacts306-2 Management of signi?cantwasterelated impacts306-3 Waste generated306-4 Waste diverted from disposal306-5 Waste directed to disposal
304-1 Operational sites owned, leased,managed in, or adjacent to, protectedareas and areas of high biodiversityvalue outside protected areas304-3 Habitats protected or restored304-4 IUCN Red List species and nationalconservation list species with habitats inareas a?ected by operations
Green Development- Response to Climate Change
E4.1 Impact of business opertions onbiodiversity and ecological system
Green Development- Green Manufacturing
Green Development-Green Manufacturing
3-3 Management of material topics
GRI 3: MaterialTopics 2021
3-3 Management of material topics
Other operational topics and management methodsCustomer satisfaction and complaint handling
Intellectual property protection, Responsible marketing
GRI 3: Material Topics 2021
GRI 3: Material Topics 2021GRI 418: Customer Privacy2016
GRI 3: Material Topics 2021
GRI 417: Marketing andLabeling 2016
3-3 Management of materialtopics417-1 Requirements for productand service information andlabeling
418-1 Substantiated complaintsconcerning breaches of customerprivacy and losses of customerdata
3-3 Management of materialtopics3-3 Management of materialtopics
S4.5 Active response to customercomplaintsS4.7 Customer satisfactionS4.8 Complaint resolution rate
S4.6 Information security andprivacy protection
S4.3 Responsible marketing
Not applicable
Product Innovation and Responsibility- Customer Service
Product Innovation and Responsibility- Customer ServiceDuring the reporting period, theCompany did not have any product andservice informationand logo violations.
Product Innovation and Responsibility- Information Security ManagementDuring the reporting period, theCompany did not receive anycon?rmed complaints ofviolation of customer privacy andloss of customer data.
3-3 Management of materialtopics407-1 Operations and suppliersin which the right to freedom ofassociation and collectivebargaining may be at risk
Responsible Supply Chain-Supply Chain ManagementESG Development Strategy-Assessment of Material TopicsNot applicableG3.6 Communication withstakeholders
Supply chain management, Green procurement, Industry chain synergy development
Business ethics, Anti-corruption
GRI 308: SupplierEnvironmentalAssessmnt 2016
GRI 414: Supplier SocialAssessment 2016
GRI 3: MaterialTopics 2021
GRI 205:
Anti-corruption2016
3-3 Management of material topics205-2 Communication and trainingabout anti-corruption policies andprocedures205-3 Con?rmed incidents ofcorruption and actions taken
308-1 New suppliers that were screenedusing environmental criteria
308-2 Negative environental impacts inthe supply chain and actions taken
414-1 New suppliers that were screenedusing social criteria
414-2 Negative social impacts in thesupply chain and actions taken
Corporate Governance- Business Ethics
During the reporting period, the companydid not have any reported or investigatedcorruption incidents, corruption relatedprosecutions or administrative penalties.
Responsible Supply Chain- Supply Chain Management- Sustainable Supply Chain
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
GRI 3: MaterialTopics 2021
S1.3 Employee compositionNot applicable
3-3 Management of materialtopics405-1 Diversity ofgovernance bodies andemployees406-1 Incidents ofdiscrimination andcorrective actions taken
Responsible Employer- Employee Rights and InterestsS1.2 Diversity and equal opportunityGRI 3: MaterialTopics 2021GRI 405: Diversity and EqualOpportunity 2016GRI 406: Non-discrimination2016
GRI 407 Freedom ofAssociation andCollectiveBargaining 2016
Employee communication
GRI StandardsCASS-ESG 5.0 GuidelinesCorresponding Chapter
GRI StandardsCASS-ESG 5.0 GuidelinesCorresponding Chapter
Information privacy and security
GRI StandardsCASS-ESG 5.0 GuidelinesCorresponding Chapter
GRI 3: MaterialTopics 2021
3-3 Management of material topics
G1.3 Compliance systemG1.6 Complaint and reportingmechanism
G1.9 Corruption incidents and responsesG1.10 Information transparencyG1.11 Incidents incurring penaltiesdue to violation of informationdisclosure requirements
G1.7 Anti-commercial briberyand anti-corruption systemG1.8 Anti-corruption trainingperformance
S5.1 Supply chain ESG managementsystem
S5.4 Number of suppliers subjectto suspension of cooperation due tonon-complianceS5.5 Number of potential suppliersrejected due to non-complianceS5.6 Supplier ESG training systemS5.7 Supplier ESG training performance
S5.2 Supplier ESG review andassessmentS5.3 Number of suppliers reviewed
S5.5 Number of potential suppliersrejected due to non-complianceS5.6 Supplier ESG training systemS5.7 Supplier ESG training performance
S5.1 Supply chain ESG managementsystemS5.2 Supplier ESG reviewandassessmentS5.3 Number of suppliers reviewed
S5 Responsible supplychainmanagementEmployee diversity and equal opportunity
417-2 Incidents ofnon-compliance c oncerningproduct and service inform417-3 Incidents of non-complianceconcerning marketingcommunications
During the reporting period,AHB had no violations involvingmarketing communications.
Dear readers,
?. Category of stakeholder:
?. Your overall comments on this Report:
?. Your comments on the performance of corporate governance responsibilities of AHB:
?. Your comments on the performance of environmental responsibilities in management of AHB:
?. Your comments on the performance of social responsibilities of AHB:
?.Do you think the information disclosed in this Report is complete??.Your other opinions and suggestions on improving and enhancing the performance of ESG responsibilities by AHB:
Our contact informationAddress: No.197, Chang ‘an Road, High-tech Zone, Hefei, Anhui, ChinaWebsite: www.huahengbio.comEmail: ahb@ehuaheng.comTel: +86-0551-65689046
□Government □Shareholder □Customer □Supplier Employee □Community
□Excellent □Good □General □Poor
□Excellent □Good □General □Poor
□Excellent □Good □General □Poor
□Yes □No
□Excellent □Good □General □Poor
Thank you for reading the 2023 ESG Report of Anhui Huaheng Biotechnology Co., Ltd. In order to improve our ESG management,we expect you to put forward valuable comments and suggestions to the company by ?lling in the feedback form after reading.Your valuable advice will be an important basis for us to continuously improve our ESG working practices. Looking forward to yourreply！
Other economic topics and management methods
Appendix IV Feedback Form
Other community topics and management methods
GRI 3: Material Topics 2021
GRI 3: Material Topics 2021
GRI 3: Material Topics 2021Corporate Governance
Corporate Governance-Protection of Investors' Rights andInterests
Corporate Governance- Compliance and Risk Management
GRI 3: Material Topics 2021
Corporate Governance-Compliance and Risk Management rateGovernance
Investor relations
Corporate governance
Risk management
Compliance operation
2023ESG Report
ANHUI HUAHENG BIOTECHNOLOGY CO., LTD.
GRI StandardsCASS-ESG 5.0 GuidelinesCorresponding Chapter
3-3 Management of materialtopics3-3 Management of materialtopics3-3 Management of materialtopics3-3 Management of materialtopics
G1.3 Compliance system
G3.6 Communication with stakeholders
G1 Corporate governanceE5.3 Climate-related risk managementG3 ESG Management
GRI 3: Material Topics 2021
GRI 3: Material Topics 2021GRI 413:
Local Communities 2016
3-3 Management ofmaterial topics3-3 Management ofmaterial topics
413-2 Operations with signi?cantactual and potentialnegativeimpacts on local communities
Social Contribution-Public Welfare and CharityV3.6 Total charitable donationsV3.7 Volunteering performance
Not applicable
Responsible Employer- Employee Rights and InterestsResponsible Supply Chain- Sustainable Supply Chain413-1 Operations with localcommunity engagement, impactassessments, and developmentprograms
Social Contribution- Public Welfareand Charity
The Company is not involved in operatingsites that have an actual or potentiallysigni?cant negative impact on localcommunities.
GRI StandardsCASS-ESG 5.0 GuidelinesCorresponding Chapter
Community public welfareCommunity relations
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