BETTER EVERY TIME, ALWAYS
ENVIRONMENTAL, SOCIALAND GOVERNANCE REPORT
2023
Zhejiang Shuanghuan Driveline Co., Ltd.Stock Code: 002472Tel: 0571-81671018Fax: 0571-81671020Email: shdmb@gearsnet.comAddress: Hehe Building, No. 658-1 Jingchang Road, Wuchang Street, Yuhang District, Hangzhou, Zhejiang Province
目录CONTENTS
0103
About this Report01
Message from the ChairmanAbout Shuanghuan
Compliance OperationsESG Governance
Research and InnovationProduct Quality and SafetyCustomer Relationship Management
Environmental ManagementCleaner ProductionResponding to Climate Change
Sustainable ProcurementProcurement Employees Training
Shuanghuan Love FundCommunity Construction
Key Performance Indicators
Appendix
IndexFeedback
Establishing Robustand Compliant Governance
Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying EnvironmentalResilience for Planet
Serving High-Qualityand Innovative Services
Partnering with Employeesfor a Prosperous Future
Compliance EmploymentDevelopment and TrainingEmployee Rights and WelfareDiversity and Equal OpportunityOccupational Health and Safety
03030102
About this ReportZhejiang Shuanghuan Driveline Co., Ltd. has released its second Environmental, Social, and Governance (ESG) report(hereinafter referred to as "this report"). The purpose of this report is to disclose the company's ESG-related strategies,management measures, and performance in response to stakeholders' expectations regarding the company's sustainabledevelopment and information disclosure. It aims to help stakeholders understand the opportunities and challenges the companyfaces in the process of sustainable development, as well as the efforts made to achieve sustainable goals and to create valuetogether with stakeholders.
Basis of the ReportThis report has been prepared with reference to the Global Sustainability Standards Board (GSSB) "Sustainability ReportingStandards (GRI Standards)" and the United Nations Sustainable Development Goals (UN SDGs).
Reporting ScopeReporting Period: January 1, 2023, to December 31, 2023. Some content extends beyond the mentioned time frame.Release Cycle: Annual report.Entities Covered: The content of this report covers Zhejiang Shuanghuan Driveline Co., Ltd. and its subsidiaries, which are listedin "Explanation of References".
Contact Information
If you have any questions or suggestions regarding the content of this report or Shuanghuan Driveline ESG work, please contactus through the following ways:
Address: Hehe Building, No. 658-1 Jingchang Road, Wuchang Street, Yuhang District, Hangzhou, Zhejiang ProvincePost Code: 310023Tel: 0571-81671018Fax: 0571-81671020Email: shdmb@gearsnet.com
Obtaining the Report
The report is available in both Chinese and English, in printed and online versions. The online version can be accessed anddownloaded at: http://www.cninfo.com.cn.In the event of any discrepancies between the Chinese and English versions, the Chinese version shall prevail.
Other Statements
The board of directors of Shuanghuan Driveline guarantees that the content of this report does not contain any false records,misleading statements, or significant omissions, and assumes individual and joint responsibility for the truthfulness, accuracy,and completeness of its content.
Explanation of References
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
“Evoring”“Dalian Huanchuang”“Shuanghuan Research”, “Huanyan Driveline”“Jiangsu Huanou”“Fun Drive Technology”“Fine Motion Technology”“Fine Intelligent Technology”“Shuanghuan Supply Chain”“Chongqing Shuanghuan”“Jiaxing Shuanghuan”“Jiangsu Shuanghuan”“Zhejiang Shuanghuan”“Shuanghuan Driveline”, “Shuanghuan”,“the company”, “we”
“Huanyi Technology”Zhejiang Huanyi Technology Co.Ltd.
Zhejiang Shuanghuan Driveline Co., Ltd.Zhejiang Shuanghuan Driveline Co., Ltd – Yuhuan BaseJiangsu Shuanghuan Gear Co.,Ltd.Shuanghuan Gear (Jiaxing) Precision Manufacturing Co., Ltd.Shuanghuan Driveline (Chongqing) Precision Technology Co., Ltd.Zhejiang Shuanghuan Supply Chain Co., Ltd.
Evoring Precision Manufacturing Kft.Dalian Huanchuang Precision Manufacturing Co., Ltd.Huanyan DriveTech (Jiaxing) Research Institute Co, Ltd.Jiangsu Huanou Intelligent Transmission Equipment Co., Ltd.Zhejiang Fundrive Technology Co., Ltd.Zhejiang Fine Motion Robot Joint Technology Co., Ltd.Zhejiang Fine Intelligent Technology Co., Ltd.
0304
Message from the Chairman
Shuanghuan Driveline has been established for 43 years and is consistently dedicated to providing excellent solutions for globalmechanical transmission systems. We believe in achieving big with small steps, pursuing excellence through precision, and usingsmall gears to move the world. Reflecting on 2023, Shuanghuan focused on strengthening legal and compliance management,deepening research and development innovation capabilities, solidifying manufacturing fundamentals, advancing a diversifiedconcentric gear strategy, and expanding global layout, all in pursuit of sustainable, high-quality development.Adhering to Baselines, Respecting Limits, Promoting Healthy DevelopmentShuanghuan Driveline regards safe production, clean cooperation, and compliance as the bottom line of its operation. Fromideological safety preaching and training to various practical safety drills, Shuanghuan continuously reinforces employees' safetyawareness and strengthens the defense line of safe production. Through measures such as rulemaking and case preaching,Shuanghuan takes practical actions to build a culture of integrity and deepen clean cooperation. In terms of environmental protection,Shuanghuan is committed to sustainable development through measures such as green energy utilization, cost reduction, efficiencyincrease, and energy monitoring, with an energy intensity of 49.42 MWh per million yuan of operating income, leading the industryand earning titles such as a national-level green factory. Shuanghuan adheres to the unity of rights and obligations, fulfillsresponsibilities to the utmost extent in taxation, intellectual property rights, and other aspects, abides by legal norms, and regulatesbusiness operations.Refining Internally and Externally, Pursuing Excellence, Solidifying Foundations"Without a solid foundation, everything is shaky." Shuanghuan upholds the core values of "Better every time, always “ and focuses oninternal refinement, external perfection, and continuous improvement to ensure stability and progress. In 2005, Shuanghuanintroduced the Lean Production System, with "the shopfloor is the market" as its guiding principle, dedicating efforts to solidifying thefoundation of its development. This commitment has earned recognition from top international automotive companies. Furthermore,Shuanghuan continues to enhance on-site management, delve into manufacturing logic, and strive for excellence in product quality,cost reduction, and timely delivery through internal efficiency improvements and external service optimization.R&D-Driven, Digitally Empowered, Innovation for BreakthroughsShuanghuan always sees technology as the cornerstone of its existence, striving to build the world's largest modular assemblyresearch institute and creating an integrated model of industry-college-research institute, focusing on production, reserve, andresearch generations. While vigorously promoting the construction of existing industrial capabilities, Shuanghuan also continuouslyexplores future industrial directions, actively responding to market changes, and meeting new customer demands through in-depthresearch and forward-looking layouts. Moreover, leveraging digitization as a new productivity factor in the new era, Shuanghuanrelies on its manufacturing foundation to accumulate manufacturing data, promote green manufacturing, facilitate the digitaltransformation of enterprises, and achieve sustainable, high-quality development.
Focus on Core Business, Uphold Entrepreneurship, Cultivate a Layout with Gear at the Core
Benefiting from the accumulation in various aspects such as technology and management, Shuanghuan products have enteredvarious fields including automotive, wind power, robotics, smart home, and intelligent manufacturing. This has formed acomprehensive product layout ranging from items worth from a few cents to several million, from non-metallic to metal, from smallcomponents to large assemblies, and from hardware to software. This layout has created the Shuanghuan system with the parentcompany as the backbone, the research institute as the sword, and subsidiary companies as the driving force. Additionally,Shuanghuan actively explores overseas markets, taking going global as a new starting point, meeting customers' localized demands,and striving to achieve true globalization.
Zhejiang Shuanghuan Driveline Co., Ltd. Chairman Mr. WU ChangHong
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
0506
About Shuanghuan
Company OverviewZhejiang Shuanghuan Driveline Co., Ltd. was founded in 1980 and publicly listed on theShenzhen Stock Exchange in September 2010. For more than 40 years, the company hasbeen focusing on the R&D, manufacturing, and sales of gears and their components,which are the core components of mechanical transmission, a leading global manufacturerin the gear component industry.Shuanghuan Driveline's management headquarters is located in Hangzhou, ZhejiangProvince. It has over a dozen subsidiaries in 3 countries and 11 cities, including ZhejiangShuanghuan, Jiangsu Shuanghuan, Jiaxing Shuanghuan, Chongqing Shuanghuan, HuanyiTechnology, Fine Intelligent Technology, Fine Motion Technology, Fun Drive Technology,Jiangsu Huanou, Shuanghuan Research, Dalian Huanchuang, and Evoring.Shuanghuan's products include gears for new energy and fuel vehicles, commercialvehicles, rail transit, off-road machinery, industrial robot reducers, wind turbines, and gearsand components for the livelihood sector, covering various fields such as clothing, food,housing, transportation, labor, energy, and smart living. Shuanghuan has become asupplier for renowned enterprises in various industries including Toyota, Volkswagen, ZF,Caterpillar, BYD, BorgWarner, GAC, NIO and more. Sales to Fortune Global 500customers account for over 50% of total revenue.
Zhejiang Shuanghuan Driveline Co., Ltd. (Stock Code: 002472) is a leading global manufacturer of gear components, dedicatedto " driving the transition in the gear industry " and providing high-speed, low-noise, safe, and sustainable products for globalmechanical transmission systems.
founded in 1980
years old
cities
A global leaderin professional gearcomponents manufacturing
A national leader in NEVgear manufacturing
A national leaderin industrial robotreducer manufacturing
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
0708
Project Honor Awards
Provincial Office for the Improvement ofDigital Economy Innovation under the "Number One Development Project"
National Standard Project "GB/T37435-2019Requirements for Heat Treatment Cooling Technology"
China Machinery Industry Federation, Chinese Mechanical Engineering SocietySecond Prize for Technological Progressin the Machinery Industry in 2023
Excellent Case of Zhejiang Province's"Number One Development Project" for Improving
the Quality of Digital Economy Innovation"Future Factory" Demonstration Case of Digital-Physical Integrationin Shuanghuan Driveline’s New Energy Workshop
Corporate Culture
Committed to providing high-speed, low-noise, safe, and sustainable products to global mechanical drivelinesystems and creating continuously improved value for customers, employees, shareholders, suppliers and society.
Company Mission
Spirit
One Team. One Passion. For Life.
Five Major Corporate Cultures
Four Staff Qualities
Professionalism, Dedication, Efficiency, Integrity.
Core ValuesBetter every time, always.
Vision
National-level Awards and Honors
China Automotive News AgencyExcellent Driveline SystemSupplier - China Top 100 AutoParts Suppliers
China Automotive News Agency
Global Automotive Supply ChainESG Eco-Partner Award
China Automotive News Agency
Top 100 in the 2023 ChinaAutomotive Supply Chain
Ministry of Industry and InformationTechnology of the People's Republic of ChinaNational Technological InnovationDemonstration Enterprise
Xinhua News Agency, The People's Government
of Zhejiang Province, China Council forBrand Development, China Appraisal Society2023 China'sTop 100 Brand Valuee-works Digital Enterprise Network
2023 China's Top 100 Benchmark
Intelligent Factories
Ministry of Human Resources and Social Security
of the People's Republic of China,China Machinery Industry FederationNational Advanced Collective
in Machinery IndustryNational Development and Reform CommissionNational EnterpriseTechnology Center
Office of the Ministry of Industryand Information TechnologyNational Fifth Batch of"Little Giant" Enterprises withSpecialization and Innovation
Innovation China Design Consortium
Director Unit of the InnovationChina Design Consortium
China National Accreditation Servicefor Conformity Assessment (CNAS)
National AccreditationCNAS Laboratory
Ministry of Industry and Information Technology
of the People's Republic of ChinaNational Green Factory
The Communist Party Committee of Taizhou City,Taizhou Municipal People's Government
Top 50 Private Enterprisesin Tax Payment in Taizhou in 2023
The Communist Party Committee of Taizhou City,
Taizhou Municipal People's GovernmentTop 100 ContributingEnterprises in TaizhouChongqing Municipal Commission ofEconomy and Information TechnologyChongqing Digital Workshop
Chongqing Municipal Commission ofEconomy and Information Technology
Chongqing Green FactoryOffice of the Industrial and InformationTechnology Department of Zhejiang Province"Specialized and Innovative"SMEs in Zhejiang Province
Jiangsu Provincial General Federationof Labor UnionMay 1st Labor Certificatein Jiangsu Province
Jiangsu Provincial Committeeof the Communist Party and GovernmentExcellent Enterprisein Jiangsu Province
Jiangsu Provincial General Federationof Trade UnionsFirst Batch of Happiness EnterprisePilot Units in Jiangsu ProvinceOffice of the Leading Group for High-qualityDevelopment of Manufacturing Industryin Zhejiang ProvinceZhejiang Province"Technology-leading" Eagle Enterprise
Department of Science andTechnology of Zhejiang ProvinceZhejiang Province Leading Enterprise
in Science and TechnologyDepartment of Commerce of Zhejiang ProvinceZhejiang's Most Famous
Export BrandThe People's Government of Zhejiang ProvinceOutstanding Contribution Unit in theCultivation of New Era Zhejiang-styleCraftsmen by Zhejiang ProvinceProvincial and Municipal Level Awards and Honors
For CustomersMeeting collaborationneeds and boosting
competitiveadvantages.
For Employee
Providing room fordevelopment andrealizing the valueof life.
For Shareholders
Continuing togenerate profits andreturning withinvestment income.
For Suppliers
Sharingdevelopmentopportunities andworking together fora win-win future.
For Society
Practicing publicwelfare responsibility
and actively payingback society.
Changing the self-sufficiency pattern of the gear industry,becoming a global leader in precision transmission.
Goal Culture, Responsibility Culture, Improvement Culture,Striving Culture, Family Culture
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Development Milestone
Shuanghuan wasformally establishedwith only 3000 yuan,and five machinetools, started from asmall workshop, wherethe dream began.
1980
Ltd. was formallyestablished,and completed theshareholding reformationin the following year,officially renamed asZhejiang ShuanghuanDriveline Co., Ltd.In the same year, thesubsidiary JiangsuShuanghuan wasestablished,which is thefirst step of developmentoutside of Zhejiang.
2005
ShuanghuanHeadquarters wasestablished inHangzhou, whichattracted talents andprovided servicesglobally.
2012
The subsidiary JiaxingShuanghuan wasestablished, whichenforces the competenceof intelligentmanufacturing.
2015
Dalian Shuanghuanwas established tocreate localizedsupply base forcustomers.
2018
The subsidiary Fine MotionTechnology was established,which represented thatShuanghuan developedin-depth in research andmanufacture of industrial robotreducers and made acontribution to the localizationof industrial robot reducers.
2020
The subsidiary Fun Drive Technology wasestablished and bought all the shares ofSAN-TOHNO Intelligent Transmission, formallystepping into the field of livelihood gear.In the same year, the subsidiary JiangsuHuanou was established and held the openingceremony of the high-end transmissionequipment intelligent manufacturing project,officially advancing into the R&D andmanufacturing of industrial reducers.
2022
Shuanghuan knockedthe bell of theShenzhen StockExchangesuccessfully listed onthe stock market andentered the capitalmarket to realize thesecond leap.
2010
The subsidiaryShuanghuan SupplyChain wasestablished.
2013
Shuanghuan acquiredChongqing Shuanghuan(The original name wasChongqing Shenjian,which opened a newchapter of southweststrategy.
2017
Zhejiang Shuanghuan fully movedinto the new industrial Park, whichis positioning itself as a dreamfactory of the gear industryfeaturing high-end workshops, withfirst-class facilities, full of talentsand advanced management.In the same year, the new buildingof Shuanghuan Headquarterswhich was named Hehe Buildingwas officially completed.
2019
The subsidiary ShuanghuanResearch was established toexplore cutting-edgetechnologies and provide optimalsolutions for the group and itscustomers.In the same year, the subsidiaryFine Intelligent Technology wasestablished to facilitate the digitaltransformation of the companyand the industry chains.
2021
Acquired 100% equity ofSAN-TOHNO (HAI PHONG)Transmission TechnologyScience Company Limited inVietnam, further expandingthe livelihood gear businessoverseas.The Hungarian Evoringcompany was established tofully radiate the Europeanmarket.
2023
0910
1112
Oversea FootprintWith factories or offices in Vietnam, Italy, Hungary, and the United States, exporting to more than 20 countriesincluding Germany, Italy, France, the United Kingdom, the United States, South Korea, and Thailand. Our footprintcovers multiple important countries in Asia, Europe, North America, and South America.
Domestic FootprintHeadquartered in Zhejiang Province, with business coverage spanning over 20 provinces, autonomous regions, andmunicipalities directly under the central government.
20+Covering 20+ provinces, autonomous regions, and municipalities in China
20+
Covering 20+ countries worldwide
Headquarters
Business Layout
Over the past 40 years, Shuanghuan Driveline has grown from scratch, vigorously developing the traditional gearbusiness while solidifying its market position in industrial robot reducers. The company has also ventured into theindustrial gearbox and livelihood gear sectors, aiming to provide digital manufacturing upgrade services for theupstream and downstream industrial chains and enhancing its domestic and international presence. By the end of2023, Shuanghuan Driveline has become a modern group company operating across China, Hungary, Vietnam, Italy,and the United States, supplying precision transmission parts to over 20 countries worldwide, and striving to becomeone of the top 100 global automotive parts companies.
European Representative Office(Turin, Italy)Evoring (Székesfehérvár, Hungary)
North American Office (New Jersey, USA)
Fun Drive Technology (Tongxiang)Shuanghuan Research (Tongxiang)Jiangxing Shuanghuan (Tongxiang)Fine Intelligent Technology (Hangzhou)Shuanghuan Supply Chain (Hangzhou)Huanyi Technology (Hangzhou)Headquarters (Hangzhou)Fine Motion Technology (Yuhuan)Zhejiang Shuanghuan (Yuhuan)
Dalian Huanchuang (Dalian)Jiangsu Huanou (Nanjing)Jiangsu Huanou (Huai'an)Jiangsu Shuanghuan (Huai'an)
Chongqing Shuanghuan (Chongqing)Fun Drive Technology (Dongguan)Fun Drive Technology (Shenzhen)Fun Drive Technology (Vietnam)
Overseas OfficeSubsidiary/Base
Business Layout
Foreign Market
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
ESG Performance
40.26%
0.97
10.67%
GHG emissions (Scope 1): 20,864.45 tons CO
eGHG emissions (Scope 2):
274,595.79 tons CO
eRenewable energy usage:
9,589.4 MWh, resulting in a reduction of 6,564.16 tons of GHG emissions
GHG emissions intensity per 10,000 yuan of industrial value added:
1.01 tons CO
ea year-on-year decrease of 4.72%Internal recyclable turnover box utilization rate: 100%
Environmental Performance
Social Performance
7,26380+%1,051
million
98.08
1000+
1314
billion
yuan10 +
18.08%
Coverage rate of business ethics training: 100%.
Governance Performance
Sales volume of new energy vehicletransmission shaft products (10,000 pieces)
503.14
1348.4
1657.2
202120222023
Business income(100 million yuan)
Return on equity (%)
53.91
68.38
80.74
202120222023
3.26
5.82
8.16
202120222023
7.68
10.38
10.67
202120222023
Net profit attributable to shareholdersof the listed company (100 million yuan)
Productioncapacity
Globalsubsidiaries
Year-on-yearrevenue growth
Year-on-yearnet profit growth
Basic earningsper share
Weighted average returnon net assets
Number of employeesEmployee satisfaction rateNumber of employees withmore than 10 years of tenureResearch and development investment
Number of patents obtainedParticipation in and leadershipof national (industry) standardsAverage score of product qualityprocess auditsNumber of beneficiaries ofShuanghuan Love Fund
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Establishing Robustand Compliant Governance
BETTER EVERY TIME, ALWAYS
Compliance OperationsESG Governance
The company may face adverse impacts on its corporate image,continuity of operations, or normal functioning due to factors such asinadequate organizational structure, ineffective management decisions,employee misconduct, system and technical deficiencies, andinsufficient supervision and feedback mechanisms.To address these risks, we enhance its internal control systems,improve employee competencies, strengthen the system andtechnological infrastructure, stay updated on changes in regulations andpolicies, and establish robust supervision and feedback mechanisms.Additionally, regular internal control risk assessments and audits will beconducted to promptly identify and resolve issues, ensuring theeffectiveness of internal controls and enhancing management efficiency.
Shuanghuan Driveline strictly adheres to the requirements of laws and regulations such as the Company Law of the People'sRepublic of China, the Securities Law of the People's Republic of China, the Code of Corporate Governance for ListedCompanies, as well as relevant regulatory rules and normative documents. We deepen comprehensive risk management,promote the construction of a compliance culture, and strictly adhere to the bottom line of compliance in business operations.
Shuanghuan Driveline has established a governance structure consisting of the Shareholders' Meeting, Board of Directors,Board of Supervisors, and Executive Management. Each level operates within its authority, assuming its responsibilities,creating a clear division of powers and responsibilities, and forming a governance mechanism characterized by clarity,coordination, and checks and balances, ensuring efficient and compliant corporate governance.
Corporate Governance
Compliance Operations
Comprehensive Risk Management
The Shareholders' Meeting is thesupreme governing body of theCompany. It makes decisions on theCompany's business policies andinvestment plans by law, reviewsand approves the reports of theBoard of Directors, the Company'sannual financial budget plan,settlement plan equity incentiveplan, etc.
Shareholders Meeting
The main responsibilities of the Boardof Directors include conveningshareholders' meetings, implementingresolutions of the shareholders'meetings, managing the company'sinformation disclosure matters, etc. Ithas subcommittees such as the AuditCommittee, Nomination Committee,Strategic and Investment Committee,Remuneration and EvaluationCommittee, and ESG Committee,which complement each other andprovide strong support for the efficientdecision-making of the board.
The Board of Supervisors composedof shareholder representatives andemployee representatives, supervisesthe company's operations in terms ofaccounting and business, overseeingrisks before, during, and after events.In 2023, the Board of Supervisors’oversight activities during thereporting period did not identify anyrisks within the company.
Board of DirectorsBoard of Supervisors
Establishing Robust and Compliant Governance
Shuanghuan Driveline has comprehensively identified all risk points involved in business operations, clarifying the internalcontrol measures and control processes of risk points, strengthening the effectiveness of risk control management, andimplementing risk prevention and control for steady operation.
Economic downturns or cyclical fluctuations may lead to decreasedmarket demand, resulting in sales challenges. Factors such asabnormal financial market fluctuations and tightening bank credit mayadversely affect financing and operations.In the context of complex economic changes, both supply and demandsides face favorable and unfavorable factors. Shuanghuan Drivelinefocuses on growth opportunities, targets high-quality customers,explores new avenues for growth, and mitigates the impact ofmacroeconomic fluctuations.
The company's export business primarily settles in foreign currencies,and fluctuations in the exchange rate of the Renminbi (CNY) can havesignificant impacts. On one hand, it may affect the export sales pricesof the company's products. On the other hand, when convertingforeign currency assets generated from export business into CNY, itmay result in corresponding exchange losses for the company.To address these risks, the company closely monitors the impact ofexchange rate fluctuations and maintains exchange rate risks atmanageable levels through strengthened exchange rate managementpractices.
The company's production and operation are subject to fluctuations inthe prices of major raw materials, which may affect the company'sgross profit margin to some extent and have an adverse impact on itsperformance.Measures such as technological innovation, process equipmentoptimization, internal efficiency improvement, supply chainmanagement, and waste reduction are implemented to mitigate theimpact of fluctuations in raw material prices. Additionally, the companyhas signed price linkage agreements with most customers,collaborating with steel mills to seek mutually beneficial solutions.
Risk of Fluctuationsin Raw Material Prices
Risk of Macroeconomic
Changes
Risk of ExchangeRate Fluctuation
The threats faced by information systems and their vulnerabilities maylead to the leakage of company trade secrets and customer privacyinformation.The company, with the Information Technology Department at its core,has established a multi-tiered security management organizationalstructure and implemented the responsibilities of security managementpersonnel. Driven by policies, a comprehensive network securitymanagement system has been established. In terms of technicalsecurity, a network boundary protection system has been set up andnetwork security control policies have been configured. Identityauthentication technologies have been strengthened to ensure secureaccess identification. Remote access control measures have been builtto effectively manage remote access. In terms of operational security,the construction of physical environment security enhances protectioncapabilities. Regular emergency drills are conducted to ensure thefeasibility of emergency plans, and necessary measures such as databackup are taken to ensure the security of critical data.
1718
Audit CommitteeNomination CommitteeStrategic and Investment
CommitteeCompensation andAssessment Committee
ESG Committee
Shareholders MeetingBoard of Supervisors
Board of Directors
The ManagementBoard of Directors
Secretary Office
AppendixEstablishing Robustand Compliant Governance
Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying Environmental
Resilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employees
for a Prosperous Future
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Internal Control Risks
The environmental pollution incidents may involve public crises,causing harm to the lives, property, and safety of surrounding residents.The company has formulated emergency plans for environmentalemergencies, established emergency response teams, and equippedcorresponding emergency facilities and equipment. It has also clarifiedthe responsibilities of emergency management agencies and theon-site disposal and rescue plans for incidents. Regular drills areconducted annually according to the emergency plan to organizeeffective rescue operations for environmental incidents and minimizeenvironmental impacts.
Environmental Risks
Information Security Risks
Compliance is the fundamental baseline that Shuanghuan Driveline upholds. We adhere to ethical standards, establishing a fair,honest, and responsible business environment to demonstrate Shuanghuan's professionalism, dedication, efficiency, andintegrity.The company has established an Internal Audit Department and a Legal Department to continuously develop and improve itsrisk management and internal control systems.
Business EthicsInformation Security
We adhere to the laws and regulations of all global operating locations, maintaining a "zero tolerance" policy toward all forms ofcorruption and bribery. The company has established guidelines such as the Integrity Management Measures and created aconflict of interest matrix to clearly identify conflicts of interest among stakeholders. The Employee Code of Conduct explicitlyprohibits collusion in bidding, infringement of trade secrets, false marketing, and any other forms of unfair competition. Allbusiness activities are conducted in strict compliance with and commitment to high standards of business ethics.We encourage employees to report gifts they were unable to refuse. We incorporate integrity management into our ethicalassessments, rewarding employees who uphold honesty and loyalty. Those involved in improper earnings are subject topenalties, such as suspension, salary reduction, warning, or dismissal. Employees in key positions are required to signEmployee Integrity Commitment. Additionally, the company periodically conducts integrity training and case-based warningeducation, establishing integrity files for senior managers and critical positions across the group for systematic, comprehensivefollow-up and supervision. To ensure the legitimate rights and interests of stakeholders, we periodically investigateintegrity-related activities involving suppliers and other relevant parties, collecting evidence.We advocate for an honest and clean corporate culture, incorporating business ethics into new employee training. Foremployees in key positions, we conduct regular specialized training sessions to enhance their awareness of integrity andself-discipline, prevent conflicts of interest, and strengthen internal supervision and accountability mechanisms. During thereporting period, the coverage rate of business ethics training for our employees was 100%.
Special audits on major matters such as related party transactions, the use and custodyof raised funds, internal control evaluation audits as required by the China SecuritiesRegulatory Commission, and operational management audits on infrastructure projects,expense management, procurement management, and information security, etc.
As the company's informatization, digitalization, and intelligent construction continue to advance, we have continuouslyupgraded and improved our information security management efforts. Shuanghuan Driveline has established a comprehensiveinformation security management system and equipped a robust information technology team. We conduct risk assessmentsdevelop control measures for different stakeholders and types of information, and establish emergency response mechanisms.We provide information collection protection notices for employees, suppliers, customers, visitors, etc. We assess and auditinformation security-related services from suppliers providing information services. Company documents are encrypted, and weemploy a combination of cloud desktop and Data ferrying to deeply protect R&D data. We strictly control the R&D, office, andinternet networks to ensure data security. Additionally, the company provides information security awareness and specializedtraining for employees and relevant departments.We have conducted information security emergency drills, intranet attack and defense exercises, and security penetrationtesting for quality management systems and business intelligence systems to test and enhance system security capabilities.During the reporting period, Shuanghuan Driveline did not experience any information security or customer privacy breachincidents. The company's information security system has obtained TISAX certification, and the D-MOM system has passed thethird-level security evaluation.
Shuanghuan Driveline establishes and maintains internal and external communication procedures to ensure communicationwith all stakeholders, including employees, suppliers, and customers, through verbal, written, and fax communication as well asregular visits. We actively seek their opinions and suggestions, maintaining traceability of information. In response to queries,inquiries, and complaints from stakeholders, relevant departments conduct investigations, verify the situation, analyze theunderlying reasons, respond, and resolve the issues after making decisions.
Transparent Communication
The grievance mechanism
In 2023, Shuanghuan Driveline did not experience any incidents violatingrelevant regulations on product and service information and labeling.
Establish anonymous reporting channels such as email, phone, and enterprise WeChat, and provide timely feedback oninvestigation results;During the grievance process, strictly adhere to the principle of confidentiality. The whistleblowing materials must not becopied, accessed, confiscated, or destroyed without authorization. The personal information of the whistleblower must not bedisclosed, and the reporting materials must not be shown to the investigated unit or individual;Upon receiving a report or evidence, promptly collect and organize the information and verify its authenticity, ensuring thatthe legitimate rights and interests of the reported individuals are not violated and preventing malicious reporting;Once verified, disciplinary recommendations will be proposed for the parties involved, and suspected cases of illegalactivities will be referred to the relevant departments.
1920
AppendixEstablishing Robustand Compliant Governance
Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying Environmental
Resilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employees
for a Prosperous Future
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Internal Audit Department
Manages the contract review process, drafting, and modification, assists businessdepartments in effectively controlling legal risks in daily operations, handles legaldisputes, provides legal consultations, conducts legal training sessions, etc.
Legal Department
Stakeholder EngagementStakeholdersCommunication ChannelTopics ConcernedOur Response
Regulatory communicationGovernment announcements
Business ethicsIntellectual propertymanagement
Product quality and safetySupply chain managementContractor occupationalhealth and safetyCommunity investment
Supply Chain ManagementResponding to ClimateChangeLabor and Human Rights
Supplier conferences and othercommunication meetingsOn-site communication and auditsDaily communicationConduct visits and researchcommunity needsParticipate in communitydevelopment needscommunication meetings
Annual reportsRegularly publish corporateESG reports
Product quality and safetyOccupational health andsafetyBusiness ethics
Lean management and leanproductionConducting customer satisfactionsurveysImproving customercommunication channels
Share corporate experienceParticipate in meetings, forums,and other interactive activitiesEnhance international exchangeand cooperation
Compliance with legal and regulatoryrequirementsTax ComplianceInformation disclosureExplaining the latest developments of theGroup to shareholders and investorsSeeking support from shareholders andinvestors for management decisionsCreating investment returns forshareholders
Quarterly, semi-annual, andannual performance reportsShareholders' meetingsResponding to media inquiriesthrough meetings andcommunicationWebsite and email
Product quality and safetyInnovation and researchdevelopmentIntellectual propertyprotectionSupply chain managementInformation securityOccupational health andsafetyTalent attraction andretentionDiversity and equalopportunitiesTraining and development
Responding to ClimateChangeEnvironmental ComplianceWaste ManagementWater ResourceManagement
Constructing photovoltaic projects, and energy storageprojects to promote energy structure transformation.Purchasing green electricity and green electricitycertificatesClassifying and managing waste storage, andpromoting recyclingComplying with regulations for wastewater andemissions disposal
Support local educationOrganize public welfare activitiesSupport the local industrial chainPromote regional economic developmentParticipate in public policy and industry standardsresearch discussionsEngage in discussions on issues of public concernAttend strategic cooperation forums to discussbuilding efficient, safe, and competitive supply chains
Employee visitsEmployee satisfaction surveysCollective bargaining meetingsand communication sessionsEmployee assembliesRecognition ceremonies foroutstanding employeesTraining and performance reviewdiscussions
Establishing customer complaint and responsemechanismsOptimizing research, supply, production, and salesfull-cycle servicesTechnology-embedded marketingIntegrated sales approachSigning confidentiality agreements with customersEnsuring employee occupational health andsafetyProviding competitive compensation and benefitsConducting diversified employee trainingEstablishing a complete development pathwayEnhancing facilities in the smart living communityEnsure suppliers provide products and servicesthat meet required standards and operate incompliance with applicable laws and regulationsEstablish a cooperative atmosphere of mutual trust
Government andRegulatory Agencies
Shareholders and
Investors
Employees
Suppliers andPartners
Community andPublic
Customers
GovernmentalOrganizations (NGOs) /
Non-ProfitOrganizations (NPOs)
Environment
ESG Governance
Responsibility Vision
Shuanghuan Driveline adheres to the path of gear engagement development and fulfills its responsibility to build a harmonioussociety. Relying on the company's core values, Shuanghuan closely connects its own development with society, serving theprogress and prosperity of human society.
Shuanghuan Driveline adheres to high-quality and sustainable development. Guided by the vision of being a responsibleenterprise, we have established and enhanced an organizational system and working mechanism for ESG management,coordinated ESG work, and promoted the implementation of matters. Through the organic integration of responsibilitymanagement and ESG management, Shuanghuan has laid a robust foundation for its sustainable development in ESGmanagement.
Shuanghuan has established an ESG Committee at the board level, responsible for formulating the company's ESG goals anddevelopment plans, supervising the operation of ESG within the company, researching ways to enhance the company's ESGperformance, and reporting its work to the board and making recommendations. An ESG Working Group has been set up,which operates under the guidance of the management, to coordinate the various departments and subsidiaries in carrying outrelated tasks. This group submits formal proposals to the ESG Committee to ensure standardized progress in the company'sESG efforts.
ESG Management System
Supervision LevelManagement LevelExecution Level
Board of Directors
ESG working group
Promoting transformation andupgrade of the industry.Ensuring sustained and robustenterprise development.
Market Responsibilities
Supporting employees'career development.Participating in publicwelfare to repay society.
Social Responsibilities
Boosting resource recycling.Fulfilling commitments to energysaving and emission reduction.
Environmental Responsibilities
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Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying EnvironmentalResilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employees
for a Prosperous Future
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Enyironmental,Social andGovermance (ESG) Committee
Relevant functional andbusiness departments
Subsidiaries
Materiality AssessmentTo better respond to the expectations and demands of stakeholders, the company comprehensively identifies the concerns andexpectations of stakeholders regarding the company. By employing methods such as policy research and industrybenchmarking, we update, filter, and evaluate material topics and define the topics that are important to both the company andstakeholders, focusing on disclosing and addressing the expectations of multiple parties.The selection of material topics focuses on both non-financial and financial aspects. Non-financial materiality refers to theresponsibility undertaken by the company, driven by its core values, stakeholder expectations, and social and environmentalcontexts, to mitigate significant potential negative impacts and increase positive impacts on society and the environment.Financial materiality refers to significant short-term or long-term financial or strategic risks or opportunities brought to thecompany by environmental, social, and governance-related issues.
232423242424
Shuanghuan Driveline aligns its significant business activities with the 17 United Nations Sustainable Development Goals(UN SDGs), which encompass 169 specific targets. We formulate corresponding actions to actively respond to 9 of the SDGtargets, gradually making substantive contributions to achieving sustainable development goals.Responding to Sustainable Development Goals
Providing employees with a safe and healthy work environment, focusing on theirphysical and mental well-being, and supporting their career development.Ensuring labor and human rights, opposing child labor, forced labor, and otherhuman rights violations.Establishing fair and competitive compensation and benefits internally andexternally, fostering a conducive work environment, and offering dignifiedemployment to employees.Eliminating all forms of inequality, embracing diversity, providing equalemployment opportunities and pay for women employees, and respecting thecustoms, traditions, and religious beliefs of different groups.Collaborating with suppliers and customers to promote sustainable productionand consumption patterns, achieving a circular economy.
Achieving higher levels of economic productivitythrough technological upgrades and innovation.Constructing compliant, transparent, and responsibleinstitutions to reduce occurrences of unethicalbusiness behavior.
Reasonably managing water resources, reducingpollution, enhancing the recycling of water resourcesand solid waste, and establishing a sustainableproduction mode.Strengthening energy management, improving energystructure, and enhancing energy efficiency.Integrating climate change mitigation measures intothe corporate development strategy, activelyresponding to climate change, and undertakingcorresponding actions.
Governance
Environmental
Social
MaterialityMateriality
Conduct internal and external environmental analysis, integrate industry characteristics, andgather feedback from stakeholders in 2023 to provide a basis for the analysis of material topics.Identify material topics highly relevant to Shuanghuan’s operations based on global accountabilitytrends, national policy directions, ESG standards analysis, industry benchmarks, etc.Assess the stakeholders' level of concern regarding material topics based on Shuanghuan’s ESGmanagement and the impact of its operations on stakeholders.Validate the assessment of substantive issues in conjunction with the company's strategicplanning and operational policies, and identify the following highly material topics.
AppendixEstablishing Robustand Compliant Governance
Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying Environmental
Resilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employees
for a Prosperous Future
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Review
Identification
Assessment
Validation
Responding to Climate Change
Water Resource Management
Waste ManagementClean Technology Opportunities
Product Quality and Safety
Business EthicsIntellectual Property Protection
Information Security
Innovation and R&DDiversity and Equal Opportunities
Talent Attraction and RetentionOccupational Health and Safety
Supply Chain ManagementTraining and DevelopmentCommunity Development
BETTER EVERY TIME, ALWAYS
Research and InnovationProduct Quality and SafetyCustomer Relationship Management
Serving High-Qualityand Innovative Services
Shuanghuan Driveline always adheres to the product quality management policy of "Customer Satisfaction, Sincerity Forever"and the quality concept of "Meticulousness, Excellence." Focusing on customer needs, we continuously innovate and developproducts that excel in performance and quality, aiming to provide high-quality services to our customers.
Serving High-Quality and Innovative Services
2728
In 2023, we refined the institutional requirements for various stages of technological innovation projects based on our existinginnovation management mechanism.
Research and Innovation
Innovation R&D Management Mechanism
Innovation Incentives
Forecasting: Conduct market forecasting, market analysis, andmarket technical path analysis.Project initiation: Clearly define goals, budgets, timelines, andpersonnel allocation.Planning: Develop a project schedule.Monitoring: Regularly evaluate progress.Closure: Conduct a comprehensive assessment of results.
Project Management
Establish an efficientcommunication mechanism.Organize regular team-buildingactivities to encourage teammembers to share experiences.
Team Collaboration andCommunication
Establish a document managementsystem to ensure the secure storage andorderly management of R&D documents.Encrypt sensitive documents to preventinformation leakage and unauthorizedaccess.
Enhance intellectual property training.Improve the implementation of intellectual propertyregistration system.Regularly assess research and development outcomes toprevent infringement.
Evaluate potential risks during theR&D process.Develop responsestrategies.regularly track progress,and provide feedback on outcomes.
Risk Management
Intellectual Property Protection
Establish and enforce rigorous quality testing standards.Rectify non-conforming products until they meet qualitystandards.
The R&D budget allocation and utilization are managed by thefinance department.Develop a budget utilization plan to ensure reasonable use.Funds Management
Quality Control
Document Managementand Confidentiality
In 2023We achievedIn 2024We will continue to
Enhance the company's R&D capabilities in the commercialvehicle transmission field, and increase the value per unit.Optimize the gear grinding process for new energy electricdrive gear products to improve gear NVH performance.Deeply engaged in the design and development of customerdifferential assemblies and new structural designs fordifferentials, breaking away from the traditional split form of themain reduction gearbox housing.Increase R&D investment to build a more comprehensiveand competitive R&D team.Strengthen collaboration with universities and researchinstitutions.
Expanding Product Lines and Application Fields
Further expanded product lines based on market demand andexplored emerging application fields.
Enhance Quality Management Efforts
Continuous Improvement and Innovation
Strengthening R&D Innovation Capabilities
Optimize team structure for better adherence to standards.Enhance supply chain quality management to ensure stabilityand reliability.Define specific performance targets for each project understakeholders’ requirements, continuously monitor progress, andprogressively elevate objectives.
Recognizing teams andindividuals who havemade outstandingcontributions to marketdevelopment, productionoperations, technologicaladvancement, andmanagement innovation.
Chairman's SpecialContribution Award
Departments nominateprojects, and assessmentis based on the annualachievement rate, withrewards granted by theGeneral Manager basedon the completion ofannual targets.
Providing rewards toteams and individualswho achieve outstandingresults in research anddevelopment innovation,aiming to stimulateemployees' innovationenthusiasm.
Offering promotionopportunities foremployees who excel ininnovative activities,encouraging activeengagement ininnovation practices.
Advocating for a cultureof daringexperimentation andtolerance for failure,creating a tolerant andfree environment forinnovation amongemployees.
Quality Management PerformanceReduced internal and external quality losses and overall qualitycosts for three consecutive years.Established a supplier management system and implementedsupplier quality management.Implemented VDA6.3 system in all bases by the Group QualityDepartment.Met standards for internal and external quality losses, customerplant PPM, and return rates.
Continued High Investment in R&D
Over the past two years, R&D expenditure has consistentlyaccounted for over 4% of revenue.A Wealth of Innovations
Hold a total of 383 effective patents.Led or participated in the establishment of 23 national(industrial) standards.Initiated a total of 119 new product development projects overthe past three years.Actively Engaging in CooperationCollaborate with renowned domestic and internationaluniversities on research and development projects.Expanding Application FieldsContinuously expanded product lines and application fields.Breakthrough in Key Technologies
Successfully developed new gear structure of high-strength,low-noise for new energy electric drive, addressing thechallenges of mass production due to the complex structureand high design difficulty of integrated gear productsAchieved breakthroughs in gear manufacturing for hybridvehicle applications with high standard requirements,conducted basic research on new materials and processes,and developed innovative methods and technologies formeshing optimization, enhancing vehicle performance andefficiency while reducing energy consumption and emissions.
AppendixEstablishing Robustand Compliant Governance
Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying Environmental
Resilience for Planet
Serving High-Qualityand Innovative Services
Partnering with Employees
for a Prosperous Future
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
General Manager
ProjectAchievement Award
Establishment of
an InnovationIncentive Fund
Providing Innovation
PromotionOpportunities
Fostering anInnovative Cultural
Atmosphere
2930
R&D Capabilities
Shuanghuan Driveline continues to serve as a communication bridge, deepening industry-academia-research cooperation. Weactively engage in innovative collaborations with well-known domestic and international universities and research institutions fortechnical and industrial research, supporting innovation and development. Together with the government and partners, wepromote the development and progress of the gear industry. During the reporting period, Shuanghuan Driveline has hosted andparticipated in industry exchange meetings and exhibitions multiple times, contributing to the Chinese gear industry to usher in anew era of soaring brilliance.
Cooperation and Communication
The 2023 China Gear Industry Conference
The 2022 China Gear Industry Conference
and CGMA Annual Meeting
In November 2023, the "Innovation-Driven Development, Integration,and Sharing of the Future" 2023 China Gear Industry Conference,hosted by Shuanghuan Driveline, and the Annual Conference of theGear and Electric Drive Branch of the China Machinery General PartsIndustry Association, were grandly opened.This conference delved into the issues facing the development ofChina's gear industry, shared industry trends, strategic directions,technological innovations, policy support, and more, aiming to seekbroader development prospects and lay a solid foundation for China tobecome a manufacturing powerhouse.
In May 2023, the 2022 China Gear Industry Conference and CGMAAnnual Meeting was held in Yongchuan, Chongqing. As the VicePresident of the Association, Shuanghuan Driveline's Chairman, WuChanghong delivered the keynote report and made the concludingspeech at the conference.Shuanghuan Driveline remains committed to its mission of providing abroad platform for cooperation and exchange to promote newdevelopments and changes in the industry.
In March 2023, Shuanghuan Driveline and China Unicom Zhejiang Branch held a symposium on theoutlook of smart manufacturing in Yuhuan City and signed a strategic cooperation agreement. Thispartnership aims to achieve win-win outcomes through the digital transformation and upgrade of traditionalmanufacturing, contributing to the promotion of industrial Internet innovation applications anddissemination in the discrete manufacturing industry.
Collaborating on Digital and Intelligent Strategic Cooperation
Assembly R&D CapabilitiesComponent R&D CapabilitiesBasic R&D CapabilitiesThrough the recruitment of high-end research anddevelopment talents and the cultivation of original,independent R&D teams, Shuanghuan has graduallybuilt a "highly specialized and advanced" innovationteam capable of continuously driving the company'stechnological and product innovation and leading thedirection of industry development.
High-Quality Innovative Talent Team
Shuanghuan Group Innovation Platform
R&D in Production BasesConcentric Innovation SitesKey Processes Key Technologies
Zhejiang Shuanghuan BranchJiaxing Shuanghuan BranchJiangsu Shuanghuan BranchChongqing Shuanghuan Branch
Software Development Institute
Product Development CenterIntegration Engineering Center
Test Validation CenterGroup Project Management CenterProcess Development Center
Materials and Surface
Technology InstitutePrecision FormingResearch InstituteManufacturing Equipment
Research Institute
Industrial Gearbox Development
Livelihood Gear Development Cycloid Pinwheel and Harmonic
Reducer DevelopmentIntelligent Factory Systems
Development
1007
Research andDevelopment Personnel
Postdoctoral workstation, experts from the national“Talent Introduction Program”Provincial leaders in science and technologyentrepreneurship and innovation, key experts at theprovincial levelQianjiang talents, foreign experts, overseas engineers500 Elites in TaizhouNational Model Enterprise in Technology InnovationProvincial-level master craftsmen workshops
Composition ofElite R&D Team
R&D StaffComposition by Functions
R&D StaffComposition by Age
Process DesignProduct DevelopmentOthersSoftware Design
30 years old and below
31-40 years old
41-50 years old
51-60 years old
Currently, we have a sizable R&D platform with capabilities for innovation in multiple directions. Shuanghuan Research, inconjunction with our four major production bases and four innovation sites, has established a distinctive innovation and R&Dplatform, aiming to become a globally leading research institute in gears and assemblies.
Shuanghuan Driveline has become a national-level high-techenterprise and a national enterprise R&D center, providingcustomers with a variety of high-quality innovative products,overcoming technical challenges in the gear manufacturing industry,and helping Chinese manufacturing shine on the world stage.
Innovation and R&D Capabilities
National"Talent Introduction Program"Expert Team
R&D Investment of
over384 Million Yuan
AppendixEstablishing Robustand Compliant Governance
Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying Environmental
Resilience for Planet
Serving High-Qualityand Innovative Services
Partnering with Employees
for a Prosperous Future
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Planetary Gear MechanismTest Bench
Test Bench of Static andDynamic Torque in the Shaft
Gear Bending Fatigue Test Bench
Pendulum Impact andTensile Test Bench of Materials
NVH Test Bench
Differential Test Bench
FZG Gear Contact FatigueTest Bench
gearONE is an industrial software for gears independently developed by the Shuanghuan Research Institute. It is a newgeneration of virtual closed-loop manufacturing systems that encompasses various dimensions, including geometricparameter optimization, meshing performance analysis, machining simulation, and flexible tool design.
Platform Innovation
Shuanghuan emphasizes sustainable development by integrating environmental protection and social responsibility into theresearch and development process. We are committed to exploring the use of new materials, optimizing production processesto reduce energy consumption and emissions, and promoting circular economy practices to achieve sustainable development.These efforts aim to enhance product competitiveness and brand image. Moving forward, we'll further explore emerging fieldslike electric vehicles and wind power, emphasizing the product lifecycle and implementing low-carbon R&D strategies.
Green Research & Development
Innovation Achievements
Compared to traditional fuel vehicles, electric drive systems face new challenges:
In response to the above challenges, Shuanghuan is committed to developing high-strength, lightweight, and low-noisegear shaft components and sub-assemblies, such as welded differentials. Through the structural design of weld seams,material selection, CAE strength verification, and development of welding and assembly processes, we achieve optimizedcomponent topology design to reduce weight and costs.
Transmission systems to share power load withfewer components.
Electric motors reverse direction, exposing the electricdrive system to bidirectional alternating loads.Electric motor torque impact is stronger than internalcombustion engines.Increased vehicle weight of electric cars requireshigher torque for acceleration and deceleration.Electric motors are quieter, requiring lowervibration and noise from the electric drive.
Product Innovation
SHPR-CSHPR-E
High-Precision Harmonic
Drive Reducer
Fine Motion Technology has developed a high-precision gear reducer for industrial robots, achieving breakthroughs in overa dozen key proprietary core technologies. This advancement has successfully addressed industry technical challenges,propelled industry upgrades, and broken the foreign market monopoly. As a result, Fine Motion Technology has achievedmass production and sales domestically, making a significant contribution to the localization of key components for industrialrobots in China.
Localization of High-Precision PlanetaryCycloidal Gear Reducers for Robotics
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Partnering with Employees
for a Prosperous Future
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
StructuralDesign
ProcessPlanning
Fully considering lightweight to reduce material and energy consumption;Standardizing tooling to increase the reuse rate of production molds.
Increase the space utilization of heat treatment furnaces to reduce carbonemissions.
Shuanghuan's "Future Factory" adopts a new "1+4+1" model: one enterprise intelligent brain, four capabilities—digital design,intelligent production, green manufacturing, and lean management—emphasizing a model-based development approach.The Future Factory leverages next-generation information technologies such as 5G, edge computing, industrial IoT, digitaltwin, big data, and artificial intelligence to achieve high integration of informatization, automation, and intelligence. Thisintegration enables standardized operations, collaboration of processes, visualization of processes, full traceability, andintelligent control. As a result, the factory enhances precision levels, equipment and energy utilization rates, and productionefficiency, reduces product development cycles, and lowers defect rates.
Shuanghuan “Future Factory”
Shuanghuan Driveline has established a comprehensive system for intellectual property (IP) protection and implemented aseries of measures to ensure their effective execution. This system provides strong support for the company's development andmakes a positive contribution to the industry.Additionally, we have developed a cloud desktop system to store all design processmaterials and IP achievements, including patent applications, trade secret protection, and copyright registrations. These aresecurely stored in the cloud and protected with encryption locks to safeguard the company's core technologies and innovativeoutcomes.The company collaborates with various departments to handle infringement lawsuits properly and periodically conducts IPprotection training to raise employees' awareness of IP protection.
Patents and IP Protection
To uphold the company's commitment to "meticulousness and excellence", Shuanghuan strictly adheres to relevant quality laws,regulations, and standards applicable in each operating jurisdiction, such as the Product Quality Law of the People's Republic ofChina and the Law of the People's Republic of China on the Protection of Consumer Rights and Interests. We have formulatedinternal documents for comprehensive quality management throughout the product lifecycle, establishing and improving itsquality management system. During the reporting period, the company's quality management system obtained ISO 9001:2015and IATF 16949:2016 certifications. Additionally, Shuanghuan places significant emphasis on supplier quality. Regular on-siteaudits are conducted, and corrective actions are discussed for any non-conformities. The company promotes supplier qualitymanagement system certification, with compliance to IATF 16949 becoming a mandatory requirement for new suppliers of directmaterials to Shuanghuan.
Product Quality and Safety
2023Highlights
Number of Patent Applications
Number of GrantedPatents
To provide high-quality service to our customers, Shuanghuan Driveline has established a comprehensive project qualitymanagement framework and standardized the process for product quality improvement.Quality Management Process
Conducting on-site surveysand online interviews to gain athorough understanding of theclient's genuine needs andexpectations;Providing recommendationsbased on project developmentexperience;Addressing client feedback onproduct quality, delivery times,and costs.
Using Quality FunctionDeployment (QFD) tools todecompose customerrequirements and expectations;Converting the overall productperformance requirements fromcustomers into measurableindicators and utilizing matrixdiagrams to break downcustomer needs;Conducting rapid iterations andexperiments.
Conducting customersatisfaction surveys;Identifying common andpersonalized customer needsthrough data analysis tools todetermine specific directionsfor product improvement.
Project InitiationProject Implementation
3334
Shuanghuan Driveline is committed to driving the rapid development of the gear industry. As of December 2023, Shuanghuan hasled or participated in the formulation of a total of 23 national and industrial standards, with 5 national standards drafted during thereporting period.Establishing Industry Standards
Standard NumberStandard Name
GB/T10095.2-2023GB/T8542-2023GB/T17879-2023GB/T43146-2023/ISO23509:2016GB/Z43147-2023
Cylindrical Gears - ISO System of Flank Tolerance Classification- Part 2: Definitions and Allowable Values of Double Flank Radial Composite DeviationsGear - Surface Temper Rtch Inspection after Grinding, Chemical MethodBevel and Hypoid Gear GeometryDesign Recommendations for Bevel Gears
High-Speed Gear Units Technical Specifications
Number of Invention PatentsNumber of Utility Model Patents
Number of Design Patents
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Contributing to Societywith Love and StrengthFortifying EnvironmentalResilience for Planet
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Partnering with Employees
for a Prosperous Future
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Enterprise Intelligence Brain
Digital Design
Green Manufacturing
Intelligent Production
Lean Management
Project Completion
Shuanghuan also emphasizes conducting various forms of product quality audits, regularly organizing monthly and weeklyquality meetings, sharing typical case studies, issuing systemic quality risk alerts and preventive measures, and conductingemployee training sessions to implement targeted quality improvement initiatives.
These measures ensure that Shuanghuan consistently delivers high-quality products to its customers. In 2023, the companyachieved a substantial reduction in quality losses, with no incidents of major recalls due to product quality issues and nolawsuits related to safety and health concerns.
ProductQualityImprovement
Anticipate potential product defects andimplement preventive measures during thedesign and production stages to reduce thefailure rate after the product launch.Optimize the manufacturing process toensure high quality and produce stability.
Identify critical control elements andhigh-risk factors of the product, and developquality control plans to mitigate quality risks.
Optimize the design based on customerrequirements for functionality, appearance,durability, and other aspects.PreventiveImprovement
Design
Optimized
Design
IdentifyQuality RisksOptimizedManufacturing
Process
Product Audit
Product audits wereconducted 48 times, andcorrective and preventiveactions were formulated.No critical defects orsignificant defects werefound.
Process Audit
Process audits wereconducted 9 times with anaverage score of 98.08.
Internal Audit
Internal audits wereconducted on the company'sintegrated managementsystem, and improvementmeasures were developed forany non-conformitiesidentified, all of which havebeen successfully addressedand closed.
External Audit
External audits of thequality managementsystem were conducted,and any non-conformitiesidentified were addressed.
0 instances of large-scale recall events
due to product quality issues.0 lawsuits or cases related to safety andhealth issues.
The ratio of cumulative internal and external quality losses to output value (in RMB per 10,000 yuan of output)
20222023
97.42
85.9
D-MOM Digital Management Platform - Full Lifecycle Quality Control
Based on addressing customer pain points, Shuanghuan Driveline continuously improves product quality and advances digitalquality transformation through the development and utilization of a digital platform. We consistently employ external tools suchas Lean Production, Total Quality Management (TQM), Total Productive Maintenance (TPM), Six Sigma, etc., for riskidentification, equipment maintenance, and enhancement. Additionally, we have developed an internal digital managementplatform, the D-MOM platform, which generates product quality analysis reports, product progress statistics, product processquality reports, monthly product plans, and heat treatment dashboards, thereby achieving full lifecycle quality control.
Digital Quality Management
Leading Enterprise in the Manufacture of Gears for
China's New Energy Vehicles
Shuanghuan Driveline has become a prominent supplier with its leading product quality and safety performance forwell-known new energy vehicle (NEV) manufacturers both domestically and internationally. As a core component of thetransmission systems, we focus on continuous innovation in design and manufacturing to address NVH (Noise, Vibration,and Harshness) issues of high-speed NEV gears (18000 RPM), establishing a significant quality advantage in the industry.Through its independent quality management system of “Standardized Production Line Management,“ the companyincorporates automated inspection and MES (Manufacturing Execution System) barcode scanning systems to achieveprecise batch traceability during the production process. Additionally, key critical dimensions are managed online using SPC(Statistical Process Control) and high-precision control to ensure the highest quality delivery. This approach has garneredunanimous recognition from customers for its market performance.
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Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying EnvironmentalResilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employeesfor a Prosperous FutureENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
3738
During-sales: Lifecycle Customer Relationship Management
Shuanghuan Driveline actively participates in the design and development of customer products, striving to become the bestpartner for top global clients. We optimize customer satisfaction by optimizing internal workflows, establishingcross-departmental project teams, and conducting customer service personnel training to provide high-quality customizedservices. By continuously improving the service system, Shuanghuan is committed to taking concrete actions to enhance usersatisfaction.
Customer Relationship Management
Pre-sales: Technical Embedded MarketingProject Assessment- Opportunity StageTo evaluate the market conditions, the rationalityof product design, and the manufacturing process,providing development recommendations,preliminary process plans, and quotations.
Collaborative Development- Design StageThe company's technical personnelparticipate in customer design discussionsand implement the development.Engineering Changeand ValidationTechnical engineers/quality engineersparticipate in sample verification and theintroduction of appropriate processingtechniques.
Efficiency Enhancementand Cost OptimizationTechnical engineers, quality engineers, andproduction departments participate in discussionson design schemes for improving productionefficiency and optimizing costs.
From the introduction of a new project, we establish a dedicated project team right from the initial stagesof requirement communication. This team progresses through technical confirmation, capacity allocation,prototype production, mass production, supporting services, and secondary development. We align ourproduct positioning with the strategic direction of the host company, cultivate strategic cooperativerelationships, continuously increase customer procurement share, and achieve the strategic goal ofupgrading customer levels. The project team is involved throughout the entire project cycle.Focusing on the three core elements of technology, quality, and service, our company continuouslyenhances the product and service experience for customers. From industry-oriented innovation to over adecade of lean production implementation and a service network based on information data, we upholdthe customer-first service philosophy in technology, quality, and service. Throughout the product deliveryprocess, we consistently strive to provide customers with the highest quality service.Continuously infuse customer value through technology, quality, and service, enhancing customerstickiness and dependency, awakening latent needs, guiding technical requirements, thus maintaining thecontinuity and stability of customer relationships.
Project team
formation
Integrated sales
serviceexperience
Value penetration tomaintalnong-termstable cooperation
The company has established documents such as the "Customer Feedback Handling Management Procedure" to standardizethe process of handling customer complaints, the approach to dealling with escalated issues, and methods for managing thequality of after-sales service. After analyzing the issues, the company devises plans for product improvement, ensures timelycommunication, and guarantees that the problems are resolved.
After-sales: Customer Complaints and Grievances
CustomerFeedback
When issues arise withthe product, customersprovide feedback viaemail or by calling the400 hotline.
OA ProcessThe business managerpromptly providesfeedback on customerissues and fills out theprocess on the OAsystem.
ProblemAnalysisThe quality engineerreceives the problemand promptly conductsproblem analysis toeffectively resolve it.
Follow-up
Summarize the recordsand continuously trackwhether the issueshave been resolved.
ResultFeedback
Check if the feedbackfrom the customer ispositive and whetherthe issue recurs.
50%Sales to Fortune Global 500 customers account for over 50% of total revenue.
93%The customer satisfaction rate is 93%.
100%
Customer complaint response rate is 100%.Complaint closure rate is 100%.
No complaints have been received due to customer privacy information leakage.
400-870-9693
Performance Highlight
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Partnering with Employeesfor a Prosperous FutureENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
TechnicalEmbeddedMarketing
BETTER EVERY TIME, ALWAYS
Partnering with Employeesfor a Prosperous Future
Compliance EmploymentDevelopment and TrainingEmployee Rights and WelfareDiversity and Equal OpportunityOccupational Health and Safety
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Partnering with Employeesfor a Prosperous FutureENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
7,263Total Employees
persons
PartneringwithEmployeesforaProsperousFutureShuanghuan Driveline regards talents as the cornerstone, the core of competition,and the source of development for the enterprise. We continuously expand channelsto identify and recruit talent, adhere to legal and compliant employment practices, andcultivate an atmosphere of equality and diversity in the workplace. The company hasestablished four career development paths, supported by a comprehensive promotionsystem to facilitate career advancement. We continuously improve our trainingsystem and provide a variety of benefits and health protection measures, enablingboth the company and its employees to grow together and build a shared future.
By GeographyRegion
By Gender
Shuangliang Driveline adheres to relevant laws and regulations in each operating region, such as the Labor Law of the People'sRepublic of China and the Labor Contract Law of the People's Republic of China. It has established internal regulationsincluding the Social Responsibility Manual, Company Labor Rights Protection Management Measures, Employee Handbook,Recruitment Management System, Employee Compensation Management Measures, and Performance Management System.To ensure compliant and lawful employment practices, Shuanghuan has established a comprehensive employment system,incorporating a social responsibility framework covering aspects such as anti-child labor, anti-forced labor, andanti-discrimination measures. Regular human resources compliance audits are conducted periodically. As of the end of thereporting period, 42% of workplaces have undergone human rights audits.
During the reporting period, Shuanghuan Driveline did not engage in child labor, forced labor, workplace harassment, ordiscrimination incidents.Furthermore, Shuangliang Driveline places significant emphasis on human rights management for its employees, and its SocialResponsibility Manual applies equally to the employees of supply chain partners such as suppliers, service providers, anddistributors.
Compliance Employment
Prevention ofChild Labor
Prohibition ofForced Labor
Anti-HarassmentNon-Discrimination
Freedom ofAssociation andCollective Bargaining
By Education
Level
MaleFemale
577 persons111 personsTotal Numberand Proportionof Management
Employees
83.87%16.13%
3人Minorities
526 persons
7.24%
Minorities
6,737 persons
92.76%
Han nationality
Total Number ofDisabledEmployees andTheir Percentage
Risk Identification: Strict verification of identity documents during recruitment.Age Verification: Uniform census of new employees' ages.Remediation: Immediate settlement of wages upon inadvertent hiring, return to their original residence, andcollection by parents or guardians.Handling: Penalties for those responsible for child labor injuries, disabilities, or deaths.Oppose modern slavery and prohibit restricting personal freedom or restricting resignation.Oppose requiring employees to bear costs during the recruitment process.Prohibit collecting deposits, withholding documents, or property.Prohibit of debt bondage labor.Opposition to forced overtime.Prohibition of harassment in factories or workplaces, including coercion, threats, insults, and other forms ofharassment through language, gestures, or physical contact.Non-discrimination in recruitment, compensation management, promotion, and termination processes basedon race, color, gender, religion, political beliefs, lineage, or social background.Respect employees' freedom of association, and assembly, the right to join unions and engage in collectivebargaining, and establish and maintain effective grievance and complaint procedures.
7,193 persons
Overseas countries or regions
70 persons
99.04%
China (including Hong Kong, Macau and Taiwan)
0.96%
5,448 persons
75.01%
MaleFemale
1,815 persons
24.99%
Below associate degree
4,117 persons1,916 persons
16.94%26.38%
Associate degree
56.68%
1,230 persons
Bachelor's degree and above
3 persons
0.04%
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Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying Environmental
Resilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employees
for a Prosperous Future
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
The various initiatives taken by Shuanghuan Driveline not only enhance the company's research and development innovationcapabilities but also continuously supply the gear industry with high-quality innovative research and development talents andpractical talents, contributing to the globalization of Chinese manufacturing.
Development and TrainingCareer Development
Talent Attraction and Retention
Shuanghuan adopts an “internal first, external later” approach through both internal and external recruitment channels. We haveestablished the Internal Referral Reward System and instituted the " Talent Scout Award" to encourage employees torecommend talents internally. Utilizing the DaYi referral system to synchronize internal and external referrals and incentives. In2023, the company brought in 244 key talents.The company is committed to the long-term stability and development of its employee workforce. It conducts exit interviews withdeparting employees to record reasons for their departure and analyzes turnover rates. In 2023, through continuousimprovement of employees' career paths and implementation of various employee care initiatives, the company effectivelyreduced its employee turnover rate.Additionally, during the reporting period, we strengthened cooperation with educational institutions through school-enterprisepartnerships and campus recruitment, establishing multi-level collaborations with external organizations.
Shuanghuan Driveline annually collaborates with vocationalschools to offer customized classes and new apprenticeshipprograms, thereby attracting skilled talents.Currently, we have established partnerships with over 30universities and nearly a hundred vocational schools, resultingin the annual recruitment of over a thousand talents fromvarious fields.
Introduction and Cultivation of High-Level Scientific and
Technological Research Talent
Shuanghuan Driveline established a provincial-levelpostdoctoral research station in December 2012 and wasapproved to establish a national-level postdoctoral researchstation in September 2015. Since its establishment, thestation has successfully trained more than 10 postdoctoralfellows in collaboration with Zhejiang University and ZhejiangUniversity of Technology postdoctoral mobility stations.During the reporting period, 3 joint doctoral fellows weretrained at the station.Collaborated with Chongqing University, Hefei University of Technology, Chongqing Jiaotong University, and ChongqingTechnology and Business University on the "Key Technologies and Integrated Assembly of Green Precision Machining for NewEnergy Vehicle Gears" project.Participated jointly with Hunan University, Beijing University of Technology, Northwestern Polytechnical University, ZhongyuanUniversity of Technology, and the Xiamen University of Technology in the National Key Research and Development Program'sKey Special Project on "High-Performance Manufacturing Technology and Major Equipment" and the project on "KeyTechnologies of High-Speed Precision Electric Drive Reducers".Recruitment and Training of Applied Technology Talents
Recruitment and Training of Skilled Talents
Collaborated with Henan University of Science and Technologyto jointly establish a teaching site, build a master's workstation,and recruit applied technical talents.Partnered with Hunan University of Science and Technology tolaunch the Outstanding Engineer Joint Training Program.
In 2021, Shuanghuan implemented the "Excellent EngineerTraining Program" in a 3+1 mode with Jiamusi University andHunan University of Science and Technology. This mode brokethrough the constraints of departments and majors, successfullyexplored the course substitution evaluation system, and proved tobe an effective attempt in practical talent development for theenterprise, showcasing collaborative innovation from education toemployment. In 2022 and 2023, the company utilized this modelto train and retain 25 students, out of which 20 were employed.
Excellent Engineer Training Program
Talent Acquisition
The Shuanghuan Class at Taizhou Vocational and
Technical College
Strategic Talent Cooperation with Henan University of
Science and Technology
Professionals Category
Staff
Senior professionalsSenior professionals II
Professionals
ExpertSenior expert
Junior staff
Technique Category
Intermediatemechanic/Line leader
Mechanic
Senior mechaanicTechnicianSenior technicianSenior technician IIChief technician
Engineer Category
EngineerAssistant engineer
Technician
Deputy engineer
supervisorEngineer supervisorTechnical expert
Senior chief engineerChief engineerDeputy chief engineer/Senior technical expert
Team leaderDeputy section leader/SupervisorSection leader/ManagerDeputy department manager/Senior managerDepartment manager/Senior manager IIDirectorGroup deputy generalmanager/President ofShuanghuan research
CEOChairman
Mangement Category
Recruitment and Development of High-Level Technology R&D Talent
Adhering to the talent philosophy of "both virtue and ability, morality first; know a man well and give full play to his talents,"Shuanghuan Driveline focuses on refining employees' career development plans. We have established performancemanagement systems such as Performance Management System, Ethics Assessment Implementation Rules, EmployeePromotion Review Implementation Rules, Position Classification, and Grade Management Measures. These systems aim tocreate fair and reasonable mechanisms for assessment, evaluation, promotion, and incentives providing multiple developmentpaths for employees across different job sequences and conducting diverse employee training programs.
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AppendixEstablishing Robustand Compliant Governance
Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying Environmental
Resilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employeesfor a Prosperous Future
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Knowledge and Skill Training
We conduct various professional skills training sessions, technical exchange meetings, and specialized training seminars. Youngtechnical talents are regularly arranged to participate in frontline production to strengthen their practical skills, helpingemployees continuously improve their skills and fostering a new era of abundant talent.
Employee Skills Training at Shuanghuan Driveline
Conduct combined training sessions for production employees to master processes,technology, operational procedures, and lean production methods.Classify the skills of production employees using a matrix approach and conduct combinedtraining sessions. Use a mentorship model, where experienced workers (mentors) teachoperational skills and share working experiences with less experienced workers (apprentices).CraftsmanSkills Training
Provide training for non-production employees on job-related skills, processes, andworking methods.EssentialKnowledge andSkills Training
Collaborate with Taizhou Vocational and Technical College,Sichuan Vocational College ofInformation Technology, and other institutions to provide star-rated technician training. Thisincludes star-level skilled trades mentoring, on-the-job training, and targeted recruitment forspecialized training.Skills TalentOrder Class
Conduct specialized English training to enhance the English proficiency of the technical team,advancing the company's internationalization process.English Training
Management Personnel Training SystemKey PersonnelProgram
Provide management knowledge training for line supervisors.Key TalentDevelopment Program
Provide professional and managerial enhancement training for managerial cadres.Succession PlanningProgram
Provide training on work planning and coordination for middle and senior management cadres.
LeadershipDevelopment Program
Foster advanced business management talent by nurturing their thinking and perspectives.
Conduct executive management workshops and facilitate external exchanges to enhance
operational leadership capabilities.
Management Talent Training
CharacterAssessment
Employee Training
Shuanghuan has established the Training Management System to conduct internal and external training on management andleadership, general knowledge, and technical skills. Additionally, we encourage employees to engage in self-development andself-education through video learning, reading, and other forms.
Conduct performance evaluations.Allocate salaries, make job adjustments, establish training plans, and develop career paths basedon performance evaluation results.Employees have the right to appeal any unfair treatment during performance evaluation and areguaranteed protection against retaliation.Guided by the five major corporate cultures of integrity, dedication, teamwork, striving forprogress, and continuous learning and growth, as well as integrity and public service, employeesundergo character assessment evaluations integrated into performance appraisals. Theseevaluations are essential criteria for promotions and annual awards.We have obtained the self-evaluation qualifications for mechanical and electrical engineering inYuhuan City and the independent review qualifications for enterprise engineering titles in TaizhouCity facilitate more convenient channels for evaluating employee skills and technical levels.Additionally, we offer title subsidies to professional and technical personnel at different levels.
PerformanceManagement
Shuanghuan Eagle Training System
By conducting concentrated training and rotational job assignments, wefacilitate the transition of fresh graduates from campus to theworkplace. In 2023, over 150 individuals completed this trainingprogram.Conducted team leader training camps to develop frontline managers,strengthen team building, enhance overall on-site managementcapabilities, and create a platform for team growth.
Eaglet
Flying Eagle
Launched the Key Position Succession Program, integrating training withpractical exercises to develop a pipeline of middle management leadersfor the company.
Male Eagle
To help newly hired high-potential employees integrate quickly and become part of the company, Shuanghuan has developedthe "Eaglet- Flying Eagle- Male Eagle - Elite Eagle" training system, assisting new employees in understanding the companyculture and transitioning from campus life to becoming key contributors of Shuanghuan.
SupportingEmployee SkillEnhancement
Compensation ManagementShuanghuan Driveline actively cultivates a "contributor-centric" culture of value distribution, aiming to establish fair, equitable,and competitive compensation and benefits. Internally, we established career development paths and a comprehensivecompensation management system based on job value, performance achievements, and individual potential. Externally, thecompany continuously monitors and analyzes industry salary levels, engages in salary expectation discussions, and, inaccordance with the Employee Compensation Management Measures, supplements fixed salaries with variable componentssuch as business commissions, project bonuses, and year-end bonuses tied to performance. Shuanghuan also introducesincentive bonuses linked to overachievement, such as the "Double Ten" incentive bonus, allowing employees to share in thecompany's development and ensuring that all employees can meet their basic living needs with compensation levels maintainedat a relatively high level within the industry.Additionally, the company implements equity incentives for employees through employee stock ownership plans.
Employees Communication
To enhance internal communication and management within the company, the company has formulated Employee InternalCommunication Management Measures, establishing various channels for feedback and communication to facilitate efficientand orderly communication between employees and the company.
In addition, employee feedback channels include work meetings, employee
recognition ceremonies, the general manager's mailbox, WeChat public
platform, suggestion schemes, performance interviews, and more. Among
these, employee satisfaction surveys are a crucial channel for listening to
employee feedback. The company conducts employee satisfaction surveys
quarterly, analyzes the results, and develops corresponding action plans for
continuous improvement in areas such as corporate culture, compensation
and benefits, system policies, office environment, and talent development.
Employee Communication Channels
Performance Highlight
Labor Union
Timely understanding and
reporting of employee needs,
and supervising relevant
departments to address and
improve related issues.
Labor Union representatives will
not face unfair treatment due to
their roles.
Organize monthly staffsymposiums for employees atall levels to facilitate timelycommunication and addressissues.
Set up a public employee hotlinewith relevant departments keepinga log to ensure prompt feedback torespective departments in variousbranches for handling.
Covering more than
6,000Employees
Comprehensivescore exceeds80Points
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Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying EnvironmentalResilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employeesfor a Prosperous FutureENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Employee ForumEmployee Hotline
In accordance with the law, Shuanghuan Driveline provides social security and housing provident fundcontributions, as well as offering heat subsidies, various types of labor protection benefits or subsidies, etc.Additionally, employees are entitled to statutory holidays, annual leave, marriage leave, bereavement leave,prenatal examination leave, maternity leave, paternity leave, lactation leave, sick leave, and enjoy paid leave,among other benefits.
Shuanghuan Driveline, starting from the actual needs of its employees, has established a comprehensive system for employeewelfare and benefits. It continuously enhances employee welfare benefits, focusing on creating the "1+4" five major projects.
Employee Rights and Welfare
During the reporting period, Shuanghuan Driveline was awarded the "Most Influential Employer in Zhejiang Province",and Jiangsu Shuanghuan was selected as one of the first batches of "Happiness Enterprise Pilot Units" in JiangsuProvince. Various caring measures have received high praise from employees and various sectors of society.
Welfare System
Each base and company isequipped with fitness and sportsfacilities. Double-Ring Transmissionorganizes annual physicalexaminations for all employees, aswell as pre-employment, on-the-job,and departure medical examinationsfor special positions. It also holdshealth seminars and specializedhealth check-ups for women andorganizes a variety of cultural andsports competitions.
Design a variety of caring welfareprograms, such as providingholiday gifts, birthday blessings,length of service subsidies,seniority medals, retirementhonorariums, wedding andchildbirth blessings, condolencepayments for illness andbereavement, and supplementarycommercial insurance.
Shuanghuan Driveline providessubsidies and support in all aspectsof life, including clothing, food,housing, and transportation.Establishing living quarters in majorproduction bases and offeringsubsidies for communication,transportation, meals, andaccommodation to ensure a betterquality of life for employees.
Compliance Sunshine Project
“1+4” Projects
Provide rich internal and externaltraining courses and learningresources, establish the"Huanhuan School", carry outmulti-level talent developmentthrough school-enterprisecooperation, and organizeinternal skill competitions,internal skill level assessments,and technical title evaluations.
Key Position Competency Training Program at Jiaxing Shuanghuan
Jiaxing Shuanghuan conducts training covering general skills, managementabilities, corporate culture, and on-site management. Under the guidance ofteam leaders, employees achieve comprehensive skill enhancement, thuscontributing to the core competitiveness of the company.20 participants have completed 8 sessions of training courses and are nowproceeding to the graduation defense segment.
Life Support ProjectHealthcare Service ProjectDaily Care Project
Comprehensive StaffDevelopment Project
Zhejiang Shuanghuan Conducted a Themed Event Celebrating the Asian Games4950
Employee Care
Supporting Employees in Need
In January 2023, the Shuanghuan Driveline Labor Union presentedconsolation funds to outstanding workers, craftsmen, employeesfacing family difficulties, and cleaning staff, thanking them for theirhard work over the past year.
The Shuanghuan Driveline Labor Union Brings Warmthto Employees, Acting as a Supportive Family
The Huai'an District Federation of Trade Unions VisitedJiangsu Shuanghuan for Spring Festival Consolation Activities
To further foster a "family culture" and advance the development of a positive employment environment within thecompany, Shuanghuan actively offers condolences and assistance to internal employees facing difficulties.
In January 2023,representatives from the Huai'an DistrictFederation of Trade Unions delivered Spring Festival gift packageswith distinctive Huai'an characteristics to employees from otherregions who stayed in Huai'an for the Chinese New Year, extendingsincere Spring Festival greetings.
Care for Employees' Families
During the summer vacation of 2023, Zhejiang Shuanghuanorganized the "Love Nursery" activity, providing a safe andenjoyable summer for many employees' children. This initiativeallowed employees to work with peace of mind, free from concernsabout their children's care.
In July 2023, Jiaxing Shuanghuan held the fourth "HuanhuanClass," addressing the issue of employee children lackingsupervision during the holidays.
Zhejiang Shuanghuan "Love Nursery" ActivityThe Fourth "Huanhuan Class" of Jiaxing Shuanghuan
Shuanghuan Driveline prioritizes creating a relaxed team atmosphere for employees and actively organizes diverseteam-building activities to balance work and life for employees.In September 2023, Zhejiang Shuanghuan organized a themed event "Celebrating the Asian Games with HeartfeltUnity, Green and Low-Carbon Walk". During the walk, participants actively engaged in public welfare by carefullycleaning up litter along the way, contributing to a beautiful environment.
Zhejiang ShuanghuanFarmhouse Activity
Spring Employee Tug-of-WarActivity at Jiangsu Shuanghuan
Jiaxing Shuanghuan One-DayTour to Shaoxing Event
In April 2023, we embraced the spring season and organized a series of spring team-building activities.
Team Building Activities
AppendixEstablishing Robustand Compliant Governance
Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying EnvironmentalResilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employeesfor a Prosperous FutureENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Shuanghuan Youth, Very "YOUNG"
Spring Team Building Activity
Shuanghuan Driveline has always adhered to the principle ofrespecting human rights and promoting diversity inemployment. Currently, the company employs 526 minorityemployees, 70 foreign employees, and 3 disabled employees.Additionally, special protection provisions are established forfemale workers and underage employees, striving to create aninclusive and diverse workplace atmosphere.
Diversity and Equal Opportunity
Disabled EmployeesForeignEmployeesMinorityEmployees
3526
Team-Building ActivitiesTo further unite the strength of women, Shuanghuan Driveline has organized a variety of enriching team-building activities forfemale employees.
Host a DIY aromatherapycandle-making activity to enhanceher appreciation of life.Most Beautiful Women's Day,A "Fragrant" Date with You
Shuangliang Driveline places a high priority on safeguarding the rights and interests of employees who are disabled or ill. Thecompany provides equal employment opportunities to qualified disabled individuals who pass medical examinations and tests.For employees who are ill, the company maintains their employment status during their medical treatment period, unless theychoose to resign voluntarily.
Equip the "Mommy Care Room" toensure the normal use of the nursingroom and improve maternal and childfacilities.
Rights of Disabled Employees
5152
Care for Female Employees
Shuanghuan Driveline has established lactation rooms for female employees and has standardized the protection of femaleemployees in the Company Labor Rights Protection Management Measures and Safety Production Responsibility System,ensuring that female employees enjoy statutory benefits such as maternity leave. It also reasonably arranges the workload andworking hours for female employees during pregnancy, childbirth, lactation, and menstruation periods.Special Collective ContractShuanghuan issues the Special Collective Contract on the Protection of Female Employees’ Rights within the EnterpriseCollective Contract, safeguarding various rights and interests of female employees.
Additionally, the company has established a Female Employee Committee and a Labor Dispute Mediation Committee tomediate labor disputes.
Special CollectiveContract on theProtection of FemaleEmployees' Rights
Shuanghuan Driveline uploads the concept of gender equalityby formulating and implementing the relevant provisions ofequal pay for male and female employees as outlined in theCompensation and Benefits Manual.
Pay Equity
Average Employee Salary (Yuan/Year)
Male
147,639
Female
118,831
AppendixEstablishing Robustand Compliant Governance
Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying Environmental
Resilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employees
for a Prosperous Future
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Regularly arrange special health examinations for female employees and providemental health services.Purchase special disease insurance.
Provide targeted vocational skills training.
Do not reduce the salary or dismiss female employees due to marriage, pregnancy,childbirth, or breastfeeding.
Establish relevant rules and regulations to prevent workplace sexual harassmentincidents involving female employees.
Implement flexible work schedules, including flexible working hours and remotework, to help female employees manage childcare challenges.
Set up hotlines, mailboxes, and other complaint channels to protect the privacy offemale employees while ensuring that issues are properly resolved.
Organize special lectures onwomen's health knowledge toprovide explanations and guidanceon women's health issues.
Healthcare and Enterprise:
Collaborating for Wellness
Organized health knowledge seminarfor women, further enhancingemployees' self-care awareness.
Warmth on Women's Day,Unleashing Charm
Hosted a fun sports day,strengthening unity and cohesionamong female employees.
March Spring Blossoms
Regularly prepare exquisite gifts forfemale employees and extendblessings.
Gifts for Women, Embarkingon a New Journey TogetherWarmth for Half the Sky,Love in Action
Give Maternal Lovea Warm Space
Organize fun park activities.
The company respects and cares for employees of all races and beliefs, actively assisting foreign employees and their familieswith visa-related matters. During holidays, the company provides holiday gifts to minority and foreign employees. Additionally, fordual-career couples among Hui Minority (nationality) employees and Sarta employees, the company arranges "halal dormitory"areas to provide a harmonious living environment.
Care for Minority and Foreign Employees
Occupational Health and Safety Management SystemShuanghuan Driline upholds the safety management philosophy of "prevention first, combining prevention and control,comprehensive management." The company continuously optimizes the work environment to ensure a safe and healthyworkplace for employees. At the same time, we constantly strengthen safety risk management, promote the construction of asafety culture, and continuously enhance of the EHS management system. Our focus is on safety production management, digitalsecurity platform development, and the establishment of a voluntary firefighting team to enhance risk control capabilities. Weimplement a comprehensive safety responsibility system across all levels, raise the safety awareness of employees, andemphasize safety hazard identification and emergency preparedness. By advancing safety standardization managementsystems, we elevate overall company management. During the reporting period, the company has obtained ISO 45001:2018Occupational Health and Safety Management System certification, covering all employees.Risk Identification and Response
Occupational Health and Safety
Safety Culture ConstructionShuanghuan Driveline has established a three-level emergency management system, formulating and publishing onecomprehensive emergency plan, seven specialized emergency plans, and 14 on-site disposal plans. The company hasdeveloped a comprehensive safety training system, covering topics such as occupational disease prevention, injury prevention,hazard identification, chemical management, and emergency response. Employees are permitted to begin work only afterreceiving thorough training and obtaining the necessary qualifications for their respective positions. Additionally, the companyactively conducts activities like Work Safety Month, Fire Safety Month, and Occupational Health Awareness Week to promotesafety awareness among employees and enhance their safety consciousness.
Safety TrainingCoverage Rate
Safety Training(Including Various Drills)
Number ofWork-Related Fatalities
Occupational Disease
Incidence Rate
%
%
hours/employeeemployee5354
Occupational Health and Safety Management PolicyRiskIdentificationContinuous
EducationQualification
Ensure Proper Protection
Identify Company HazardsIdentify Occupational Prohibitive FactorsEstablish a Three-Level Safety andHealth Education SystemConduct Annual Safety Drills
Regular Safety Inspections and HazardEliminationRegular Medical Examinations toPrevent Occupational DiseasesProvide Personal Protective EquipmentEnsure Fire and Electrical Safety inWarehousesSpecial Equipment Operators to Workwith Qualification
Fire Drills
Emergency Drills
Safety KnowledgeCompetition
The company has established a Safety Production Management Committee and a Safety Production Office, responsible forformulating relevant policies and objectives, and promoting safety production management work. Additionally, we establish a dualprevention mechanism, identify risks and hazards throughout the entire process, and formulate control measures. We createsafety responsibility lists for each position, ensuring that safety responsibilities are allocated across all roles. During the reportingperiod, Zhejiang Shuanghuan organized 12 company-level safety inspections, 48 subsidiary-level safety inspections, 10 specialsafety inspections, and 580 workshop-level safety inspections. The timely rectification rate for safety hazards was 96.5%. Othersubsidiaries also regularly conduct corresponding safety inspections, with an average timely rectification rate of 90%.Additionally, the company is vigorously promoting technological upgrades to reduce safety risks. This includes installing central airconditioning in production workshops, overall ventilation and air exchange facilities, and localized dust removal and ventilationsystems, providing a comfortable working environment for employees. Furthermore, the company is upgrading existingproduction equipment to be more intelligent and automated, enhancing the inherent safety performance of the equipment. Foremployees exposed to occupational hazards, the company ensures 100% occupational health examinations, establishesoccupational health records, and regularly monitors employees' health conditions.
AppendixEstablishing Robustand Compliant Governance
Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying EnvironmentalResilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employees
for a Prosperous Future
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
BETTER EVERY TIME, ALWAYS
Environmental ManagementCleaner ProductionResponding to Climate Change
Fortifying EnvironmentalResilience for Planet
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AppendixEstablishing Robustand Compliant Governance
Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying EnvironmentalResilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employees
for a Prosperous FutureENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Shuanghuan Driveline strictly abides by the Environmental Protection Law of the People's Republic of China and the CleanerProduction Promotion Law of the People's Republic of China, among other national laws and regulations. In accordance withthese, we have formulated internal management regulations such as the Environmental Protection Management System todefine environmental management policies and tasks. As of the end of the reporting period, Shuanghuan Driveline and itssubsidiaries have achieved full coverage of ISO 14001:2015 Environmental Management System certification.
As of the end of the reporting period, Zhejiang Shuanghuan has received several honorary titles, including National GreenFactory, Provincial Green Factory, Water-Saving Enterprise, and Waste-Free Factory. Chongqing Shuanghuan has obtained theProvincial Green Factory certification, while Jiangsu Shuanghuan has been recognized as Municipal Green BenchmarkEnterprise, Advanced Water-Saving Unit, and Annual Water-Saving Enterprise. During the reporting period, the Company didnot experience any sudden environmental risk incidents, did not engage in any environmental violations or illegal activities, anddid not receive any administrative penalties from the relevant authorities.To enhance the ability to respond to sudden environmental incidents, Shuanghuan Driveline has formulated the EmergencyPreparedness and Response Management Procedure, Special Emergency Plan for Chemicals, Hazardous Waste AccidentEmergency Plan, and other preventive measures or emergency plans. Regular emergency drills are conducted annually toprevent and reduce the environmental impact associated with emergencies and incidents.
Environmental Management
Environmental Emergency Management
Environmental Management Policies
Strictly comply with legal and regulatory requirements.Improve the pollution prevention and control system.Establish a continuous improvement mechanism.Minimize environmental impact.
Promote and enforce environmental laws, regulations,and related provisions.Utilize resources and energy reasonably and effectively.Control and eliminate pollution to promote the company'sproduction development.Create good working and living environment, minimizingthe impact of the company's economic activities on thesurrounding ecological system and environment.
Environmental Management Main Tasks
GHG Emissions (Scope 1): 20,864.45GHG Emissions (Scope 2) 274,595.79Total Water Withdrawal 1,202,399 m
Total Energy Consumption 126,867 tons of standard coal equivalent (tce)GHG Emissions Intensity per 10,000 CNY Of industrial value added
1.01 tCO2e,
a decrease of 4.72% compared to the previous period
Greenhouse Gas Emissions Intensity per 10,000 CNY of output value
0.39 tCO2e,
a decrease of
4.88% compared to the previous period
Effective utilization of raw materials, auxiliary materials, and packaging materials is one of the key approaches to achieving acircular economy. Shuanghuan Driveline has undertaken a series of process optimization innovations, continuously seekingpossible ways to improve material utilization through saving and reuse.Material
Cleaner Production
By constructing intelligent manufacturing workshops, implementing one-to-three robot systems, and deploying onlineautomatic inspection and automatic matching systems, Shuanghuan Driveline has achieved transparent controlthroughout the entire process from design to processing and from customer demand to finished product delivery.Integration with systems such as CAPP, ERP, OA, and equipment cloud inspection has enabled nearly full digital controlof the entire process, significantly reducing paper usage.
案例
Key equipment CNC (Computer Numerical Control)rate has reached 100%
Annual reduction in raw and auxiliary materialconsumption by approximately1,800 tonsAnnual reduction in defective products by1,200 tons
Building a “Smart Digital Factory”
Shuanghuan Driveline has conducted experiments and in-depth exploration in secondary grooving of honing wheels,blade regrinding, and left-right hand usage, achieving significant results and effectively reducing material consumption.After comprehensive consideration of processspecifications, material matching, processingeffects, ensuring balance and stability, recordingand traceability, and personnel training, weachieved the reuse of a honing wheel, reducingof consumption of honing wheels.
Secondary Grooving of Honing Wheels
Process Optimization – Material Recycling
Contributing to Society with Love and Strength
tCO
etCO
e
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AppendixEstablishing Robustand Compliant Governance
Walking the SustainablePath Together with Partners
Contributing to Societywith Love and Strength
Fortifying EnvironmentalResilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employeesfor a Prosperous FutureENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Shuanghuan Driveline is committed to building a low-carbon logistics chain, actively exploring various measures to optimize andimprove all aspects of company logistics. While enhancing efficiency, we aim to minimize the environmental impact during thelogistics process.In 2023, the company reduced packaging materials through optimized consumable utilization and focused on promotinglogistics emission reduction. By continuously optimizing transportation efficiency, we achieved dual savings in resources andcosts while reducing greenhouse gas emissions.
CBN blades that have reached the end-of-life phase are regroundand reused, extending their service life to over 80% of the originalblades. We have improved operational processes and establishedblade usage management methods.
Blade Regrinding and Reuse
By using both sides of the blades interchangeably, we addressedthe issue of uneven wear on both sides, effectively extending theblades' service life. We plan to standardize and promote applicablemodels in future documentation.
Blade Left-right Hand Change and Reuse
Optimization and Improvement of Consumable Utilization
No disposable plastic packaging is used withinthe factory100% use of reusable turnover boxes
Replacement of wooden crates in all new energy projectsRecycling and continued use of reusable packaging boxesand pallets
BeforeAfter
Analyzing different customer shipping characteristics to differentiate shipments. Weswitched from bulk shipments to full truckload shipments for customers with largeshipping volumes and high shipping frequencies.The new logistics center project at Zhejiang Shuanghuan achieved unified logisticsmanagement and scheduling, improved efficiency of finished goods storage andshipping, and, combined with the intelligent automated warehouse design, enhancedland use efficiency.
1,422,235.28
Total Energy Consumption
tce126,867
GJ1,554,893.95
Gasoline
GJ2,682.88
Diesel
GJ4,901.26
Energy Energy Consumption
0.17
tce/ 10,000 yuan output value
2.06
GJ/ 10,000 yuan output value
5.33
GJ/10,000 yuan industrial added valuetce/10,000 yuan industrial added value
0.43
Natural Gas
103,191.48GJ
Liquefied Petroleum Gas (LPG)
GJGJ1,761.23
Purchased ElectricityRenewable Electricity
34,521.83GJ
Key Performance Indicators
物流减排LogisticEmissionReduction
Shuanghuan Driveline actively engages in the construction of an energy management system. As of the end of the reportingperiod, two of the company's subsidiaries have obtained ISO 50001:2018 Energy Management System certification.The company comprehensively carries out energy-saving and consumption-reduction projects and realizes the reduction ofenergy consumption from the source through energy-saving renovation. We continuously push forward the intelligent and digitaltransformation of energy management and promote the green transformation at the same time.
The average low calorific value is referenced according to GB/T 2589-2020 General rules for the calculation of thecomprehensive energy consumption, coal equivalent value is used for the conversion coefficient of electricity to ce.
Energy Management
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Contributing to Societywith Love and Strength
Fortifying Environmental
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Serving High-Qualityand Innovative Services
Partnering with Employees
for a Prosperous FutureENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
The company’s efficient and scientific water-saving measures have received high recognition. During the reporting period,Jiangsu Double Ring was awarded the titles of "2023 Advanced Water-Saving Unit" and "2023 Water-Saving Enterprise" inHuai'an District, Huai'an City.
In 2023, Chongqing Shuanghuan completed a 1.99 MW photovoltaic project, providing approximately 1.7 million kWhof clean energy annually. Additionally, a 1.5 MW/3 MWh energy storage project was built, achieving peak-shaving andvalley-filling of about 1.8 million kWh annually.The construction of photovoltaic and energy storage facilities has significantly enhanced Shuanghuan Driveline'senergy self-sufficiency, ensuring a stable energy supply during production processes, and optimizing resourceallocation. This marks an important step towards the company's comprehensive transition to green energy andsustainable clean production.
Shuanghuan Driveline sources its water from municipal supplies, primarily for cleaning in production, cooling waterreplenishment, auxiliary production uses, and domestic use. Using the World Resources Institute's "Aqueduct" water risk tool,we assessed the overall water risk for all production locations and found all sites to be in areas with potentially high water risk.In response, we have increased investment in water conservation, actively conducted water-saving technologicaltransformations, and promoted the use of water-saving devices. By conducting water balance calculations, we manage waterresources reasonably. To ensure the effective implementation of water-saving measures and achieving saving targets, we haveformulated a Water Conservation Management System, set monthly water usage plans, regularly monitored daily domestic andproduction water usage, and conducted various forms of water conservation publicity to raise employees' water-savingawareness.
Water Management
1,202,399.00
tons
Water Withdrawal
4.12
tons/10,000 yuan industrial industrial
value added
Water Withdrawal IntensityWater Withdrawal Intensity
1.59
tons/10,000 yuan output value
Zhejiang Shuanghuan, in collaboration with the State Grid, has developed an intelligent centralized gas supplysystem. The actual operating power of the air compressor has decreased from the original 1300 kW to 890 kW.According to estimates, this improvement is expected to save over 4.6 million kWh of electricity annually.
In June 2023, Jiangsu Shuanghuan completed the construction and upgrade of its smart energy management system.Based on the energy management platform, the system encompasses factory-level, workshop-level, office-level, andkey energy-consuming equipment levels, providing real-time energy consumption data for cost-saving andenergy-saving analysis.As of the end of the reporting period, the company has completed the installation, upgrade, and commissioning of 8power distribution rooms, 15 main box transformers, 150 communication meters, and 160 meters in 40 workshoppower cabinets, successfully achieving real-time data collection on the platform.
In December 2023, Jiangsu Shuanghuan completed and connected a 16.7 MW capacity photovoltaic project to thegrid, with an expected annual power generation of 17 million kWh. The company plans to complete the second phaseof transformer capacity expansion from 25 MW to 31.5 MW by the first half of 2024, including the construction of a 1MW energy storage station to enhance energy utilization efficiency.
Shaunghuan Driveline continues to develop renewable energy applications tailored to the characteristics of differentsites. By implementing photovoltaic installations and building energy storage systems, the company promotes cleanand intelligent energy utilization. Additionally, the company effectively reduces greenhouse gas emissions through theprocurement of green electricity and investment in green energy.
Photovoltaic Construction Projects in Jiangsu and Chongqing
Building Energy Management System
Energy-saving Improvements for Air Compressors
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Serving High-Qualityand Innovative Services
Partnering with Employeesfor a Prosperous FutureENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Jiangsu Shuanghuan leveraged its technical advantages by deeply upgrading cooling tower equipment to technicallyreduce production water usage. Additionally, it promoted water-saving concepts extensively within the plant,encouraging employees to reduce the waste of water consumption.The successful experiences of Jiangsu Shuanghuan will gradually be extended to other production bases, taking firmsteps towards creating "water-saving" enterprises.
Water-saving PromotionEquipment Improvements
In 2023, Zhejiang Shuanghuan upgraded its waste gas treatment process.
The primary air pollutants produced by Shuanghuan Driveline are dust/particulates from metal surface treatments and flue gasfrom heat treatments. The company collects all air pollutants generated during production operations and is equipped withwaste gas treatment facilities to ensure emissions meet the Integrated Emission Standard of Air Pollutants (GB 16297-1996)Class II standards for new pollution sources. Additionally, the company routinely inspects waste gas treatment facilities andconducts random checks to ensure the equipment operates properly.
Waste ManagementWaste Gas Management
The waste gas treatment stage generated a lot of dustfrom shot blasting, with pellets scattered everywhere.
Dust was significantly reduced, and the on-siteenvironment greatly improved.
Jiangsu Shuanghuan Water-saving Initiatives
Upgrade of Waste Gas Treatment Equipment and Processes
The types of wastewater produced during Shuanghuan Driveline's operations include industrial wastewater, domesticwastewater, and canteen wastewater. The company has established a Water Pollution Prevention and Control ManagementProcedure to standardize wastewater management. Different treatment devices are installed for various wastewater types, andan online monitoring system for wastewater discharge ensures that the concentration of discharged wastewater complies withthe Integrated Wastewater Discharge Standard (GB 8978-1996) Class III standards and the total volume meets therequirements of the discharge permit. Regularly disclosed monitoring data ensures transparency.Treated wastewater will then be via disinfection and precipitation and used for domestic, landscaping, and firefighting, whichsaves water resources and reduces discharge pressure.
Wastewater Management
Shuanghuan Driveline adheres to the principles of green production, source control, resource utilization, and harmlesstreatment for managing solid waste. The waste generated during production operations is classified into general industrial solidwaste, hazardous waste, and domestic waste.To create a zero-waste factory, the company has developed digital intelligent manufacturing, improved advanced CNCprocessing equipment, reduced the use of raw materials, packaging materials, hazardous chemicals, and office supplies, andcontrolled the generation of general and hazardous solid waste from the source. Recyclable solid waste is first recycled andreused internally. The company collaborates with suppliers, customers, and peers to achieve zero waste to landfill, promoting acircular economy and reducing resource consumption.For general and hazardous industrial solid waste, the company has built specialized storage warehouses for classified storagemanagement according to the Standard for Pollution on the Storage and Disposal Site for General Industrial Solid Wastes (GB18599-2020) and the Standard for Pollution Control on Hazardous Waste Storage" (GB 18597-2023). These warehouses areequipped with anti-corrosion and anti-seepage measures, and qualified units are commissioned for recycling andcomprehensive disposal. Additionally, a solid waste management ledger records and manages information on all stages ofwaste handling.
Waste Management
Waste Gas Collection Devices
BeforeAfter
Certain equipment was fitted with oil-removal and purification facilities for real-time waste gas treatment, and regularmaintenance ensures treatment efficiency.Additional equipment was installed with waste gas collection pipes for unified treatment. Various measures were takento handle workshop waste gases, heat treatment exhaust, and particulates from shot blasting.
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Serving High-Qualityand Innovative Services
Partnering with Employees
for a Prosperous FutureENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Shuanghuan Driveline has developed a Noise Pollution Prevention and Control Management Procedure based on relevant lawsand regulations. The company actively identifies potential noise sources during production operations and effectively reducesfactory noise by purchasing low-noise equipment, isolating high-noise equipment, and installing vibration-damping pads. Duringthe reporting period, the company's noise emissions were managed according to the Emission Standard for IndustrialEnterprises Noise at Boundary (GB 12348-2008) Class III standards. Third-party monitoring was conducted, and resultsshowed compliance with the standards.
Noise Management
As global warming and extreme weather trigger a series of environmental crises and socio-economic problems, climate changehas become one of the 21st century's major challenges for humanity. As a responsible corporate citizen, Shuanghuan Drivelineactively responds to the national "carbon peaking and carbon neutrality" goals, making effective management and response toclimate change risks a key focus of daily operations. The company develops strategies and management methods forsignificant climate-related risks and opportunities, referring to the recommendations of the Task Force on Climate-relatedFinancial Disclosures (TCFD). It proactively identifies major climate risks, assesses the impact of climate change on long-termgoals and strategies, and timely adjusts strategies to adapt while seizing opportunities brought by the low-carbon greeneconomy.
Responding to Climate Change
Since the establishment of the Carbon Neutrality and Energy Consumption Control Leadership Group in 2021, ShuanghuanDriveline has integrated carbon neutrality into production and operation management, controlling all aspects from technology,quality, cost, delivery, and low carbon. The company's Board of Directors and ESG Committee explicitly oversee responsibilities,jointly coordinating responses to climate change, identifying and assessing climate-related risks and opportunities, andformulating response strategies. They actively promote the implementation of climate change-related policies and measures toensure the company’s sustainable and steady development.
Governance and Strategy
Currently, the company processes 4-5 tons of grinding sludge daily, recovering about 0.8 tons of oil. Briquettingreduces the weight of grinding sludge by approximately 30-40%, potentially reducing hazardous waste by about 300tons and recovering about 200 tons of oil annually.
Grinding sludge briquetting equipmentBefore briquetting After briquetting
Carbon Neutrality and Energy Consumption Control Leadership Group
RiskIdentification
Extreme weather events such as heavy rain,typhoons, and high temperatures could:
Disrupt daily production, transportation, and supply chain,affecting business continuity.Increase energy demand, raising operational costs.Affect employee health and equipment durability, leading todecreased productivity.
Zhejiang Shuanghuan is located in thesoutheast coastal region, at lowaltitudes, making it susceptible to sealevel rise, potentially requiring therelocation of production bases.
Leading Groups for Carbon Neutrality and Energy Consumption & Intensity Control
The group is established at each subsidiary, led by general managers and heads of operations and technical departments,responsible for organizing, coordinating, and directing carbon neutrality efforts.At Shuanghuan's subsidiaries, we have established leading groups for carbon neutrality and energy consumption & intensity control.Led by the Company's general manager and head of operation and technology departments, the leading groups are responsible forthe organization, coordination, and leadership of the carbon neutrality.Functional Departments Conducting Carbon Management
According to the annual work plan for carbon neutrality, Shuanghuan has assigned relevant functional departments to jointlypromote the implementation of carbon neutrality work with the collaborative support of the heads of the departments.
Shuanghuan Driveline Carbon Emissions OfficeWe have established a Carbon Emissions Office, which is mainly in charge of senior management of the company. The office isresponsible for making deployment for carbon management at the company level in line with internal and external regulations andspecifying medium & long-term plans of carbon neutrality and the deployment of the year.
Risks and Opportunities
Shuanghuan Driveline focuses on the existing enterprise risk managementframework to remain vigilant in identifying, assessing, and addressingclimate-related risks and opportunities across various operations,incorporating climate change into the company's strategic plans. Based onactual operational conditions, a series of climate change-related risks andopportunities are identified, and corresponding measures are formulated.
Physical RisksAcute RisksChronic Risks
For grinding sludge containing metal particles, metal dust, abrasive residues, and harmful components such as oil andlubricants, the company has purchased briquetting equipment. This equipment compresses grinding sludge intobriquettes for effective collection, separation, and recycling.
Grinding Sludge Briquetting
Deployment&Planning
Implementation
&Promotion
EfficientExecution
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for a Prosperous FutureENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
RiskResponse
Regular emergency plan training and drills.Close monitoring of climate changes and continuousoptimization of emergency plans for extreme weather.Use of more durable and robust facilities and materials.Implementation of energy-saving and environmentallyfriendly equipment.Establishing strong relationships with supplies to ensuredelivery.
Gradually implement actions tomitigate climate change.
Transition Risks
In addition to identifying and responding to climate risks, Shuanghuan Driveline continuously explores and practices seizing theopportunities presented by climate change. We fulfill climate responsibilities through research and innovation, promotinglow-carbon technologies, and conducting green manufacturing. Through these actions, we create more economic value whileenhancing our brand image, helping achieve a net-zero emission target in the whole value chain and a global low-carbontransition.
RiskResponse
Closely monitormarket trends andpolicy directions.Actively participate inindustry standardsetting.Accelerate innovationinvestments in green,low-carbon projects.Regularly upgradeand improve assets.
Continuously conducttechnical research frommultiple dimensions,such as lightweightdesign, new materialapplications, vibrationand noise reduction,efficiency improvement,and extended lifespan, toprovide more efficient,environmentally friendly,and economicalsolutions for customers.Integrate green conceptsinto the product designstage and developGreen Design ProductEvaluation TechnicalSpecifications based onthe products of each site.
Monitor and analyzemarket trends to adjustproduct layout timely.
Integratesustainability into theproduct lifecycle.Strengthenstakeholdercommunication andclosely monitorcustomersatisfaction.Actively participate inand apply for greenprojects, buildinggreen factories.
Transition RisksRiskIdentification
Increasinglystringent domesticand internationalpolicies andregulations oncarbon reduction,carbon taxes, andenvironmentalprotection couldraise operationalcosts.
Climate changedrives demand fornew technologies andenvironmentallyfriendly, andlow-carbon products.Failure to respondtimely could result ina loss of marketcompetitiveness forexisting products.
With the upgrading andtransformation of theautomotive industry andmajor customers' demandfor carbon reduction intheir supply chains, themanagement of GHGemission in thecompany's products andoperations will beincluded in the scope ofcustomers' purchasingconsiderations, and themarket's preference forlow-carbon products isbecoming increasinglyobvious.Fluctuations in rawmaterial prices andenergy transition couldincrease costs.
Establishing a greenbrand enhancescorporate image.Failure to meetstakeholders'expectationsregarding climatechangemanagement andperformance couldnegatively impactthe company.
Policy and legal
Risks
Policy andLegal Risks
TechnologicalTransition Risks
Market RisksReputational Risks
TechnologicalTransition Risks
Market RisksReputational RisksPhysical RisksAcute RisksChronic Risks
In 2023, Shuanghuan Driveline conducted a greenhouse gas inventory for 2022 based on ISO 14064-1:2018 and the IPCCSixth Assessment Report, setting 2022 as the baseline year for climate change actions and establishing emission reductiontargets. Additionally, training on carbon neutrality and greenhouse gas inventory was provided to the related working group,collaboratively exploring and mapping out the path to net-zero emissions.
Targets and Actions
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Partnering with Employees
for a Prosperous FutureENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Due to the expanded scope of statistics and the identification of additional emission sources, the greenhouse gasemissions reported in the 2022 ESG report have been revised.
17,283.82tCO
e20,864.45
Scope 1
20222023
0.41
tCO
e/10,000 yuan output value
Scope 1+2 Emission Intensity
2022
0.39
tCO
e/10,000 yuan output value20232022
1.06
tCO
e/ 10,000 yuan industrial value added
1.01
tCO
e/ 10,000 yuan industrial value added
2023
274,595.79 255,124.55
Scope 2
272,408.37295,460.24
Scope 1+2
Shuanghuan Driveline Greenhouse Gas Emissions for 2022 and 2023
Shuanghuan Driveline Net-zero Emission PlanBy 2025, fully promote energy structure optimization, establishing renewable electricity setupsin pilot factories.By 2030, reach the peak of carbon emissions.By 2050, achieve net-zero emissions in operations and value chain.
Our targets
Reduce CorporateCarbon Footprint,Achieve GreenManufacturing
Adopt green electricity;Develop energy storage systems to support new power systems.Optimize energy structure,increase the use ofrenewable energy
Raise employees’ awareness of resources savingAdvocate green ways ofworking
Design and construct new buildings according to green building
standards;
Fully promote the transformation of existing factories into green
factories.Construct green buildingsand green factories
Improve energy efficiency,reduce fossil fuelconsumption
Enhance energy monitoring and fine management;
Implement energy-saving and retrofitting projects, such as
reducing equipment energy consumption and increasing waste
heat recovery.
Design sustainableproducts
Conduct product carbon footprint accounting and environmental
impact assessments;
Design and manufacture low-carbon, environmentally friendly, and
economical products from multiple dimensions, including
lightweight design, new material applications, vibration and noise
reduction, efficiency improvement, and lifespan extension.
Procure green, low-carbonmaterials
Prioritize purchasing green materials, increasing the proportion of
recycled content in raw materials.
Use greenpackaging
Ban single-use plastic packaging materials, and increase the use
of recyclable packaging materials in product shipments.
Optimize transportationmodes, promote greenlogistics
Change bulk shipments to full truckloads for customers with high
transportation volumes and frequent deliveries;
Advocate for the electrification of transport vehicles.
Reduce ProductCarbonFootprint,Promote GreenProducts
tCO
e
tCO
e
tCO
e
tCO
etCO
e
BETTER EVERY TIME, ALWAYS
Sustainable ProcurementProcurement Employees Training
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ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Shuanghuan Driveline practices its corporate mission of "sharing development opportunities and achieving mutual success inthe future." We continuously enhance our supply chain management system, collaborating with industry partners to jointlysupport the rapid development of China's gear industry and its global expansion.
Suppliers Distribution
Walking the Sustainable Path Together with Partners
Localized Procurement Rate Data Excludes EquipmentSuppliers."Local" specifically refers to the region where most factoriesare located — the East China region.
EnvironmentalSocial Assessment for New Suppliers
100%
Localized Procurement Rate
72.8%
100%
Core Suppliers Signing the Social Responsibility Code ofConduct, Integrity Cooperation Agreement, and/or Statement
of Non-use for Hazardous Substances
Supplier DensityShuanghuan Base
Proportion of suppliers
Mainland China
95.49%
Hong Kong andMacao regions of China
1.14%
Overseas
3.37%
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Supplier Energy Savingand Emission Reduction Measures
We have established the mechanisms for supplier admission, assessment and evaluation, and elimination, allowing forclassifying and grading suppliers for the orderly management of suppliers. Concurrently, the company continuously optimizesmanagement processes and progressively upgrades to digital management to create a safe, efficient, high-quality, and resilientsupply chain.
Shuanghuan Driveline strives to actively fulfill its social responsibilities while implementing management of environmental,social, and business ethics performance among its supply chain partners. We have issued the Supplier Review and SelectionManagement Procedure which standardizes the supplier selection and evaluation process. ESG factors are incorporated intothe assessment process, and the company's sustainability policies and requirements are communicated to our suppliers,subcontractors, and other stakeholders.
Sustainable Procurement
To build a sustainable supply chain, Shuanghuan integrates and centrally manages procurement resources.
To regulate bidding and procurement activities and enhance procurementpersonnel's awareness of integrity and self-discipline, ShuanghuanDriveline updated and released the "Integrity Commitment for SupplyChain Personnel" in 2023. We conducted business training and integrityself-discipline training for procurement personnel and held a signingceremony for the integrity commitment, emphasizing the necessity andimportance of maintaining integrity in their work. Additionally, the companyactively carried out self-inspection within the supply chain sequence,encouraging procurement personnel to self-reflect and self-examine theirbehavior to prevent procurement fraud.To further improve the professional skills of procurement personnel andhelp them understand the importance of procurement compliance anddigital transformation of procurement operations, the company plannedand organized internal training themed "Procurement Compliance as aPrerequisite, Exploring the Path to Digital Transformation of ProcurementBusiness." This initiative aims to promote the upgrade and development ofthe company's procurement business.
Procurement Employees Training
Supply Chain
StrategicInitiatives ofShuanghuan
Implement localized supplier support to create anagile and secure supply chain.Consolidate procurement needs and streamlinehigh-quality suppliers to further optimize
collective procurement costs.
Focus on building the procurement team andoptimizing talent development.Further promote the use of informationtechnology in supply chain management,evaluation, and settlement.
Conduct admission surveys for suppliers, comprehensively considering factors such asqualifications, costs, delivery time, service, quality, etc., to ensure the stability of thesupply chain.Integrate factors such as social responsibility, environment, and business ethics into thesupplier selection criteria.Assess suppliers based on different categories, evaluating their delivery assurance,quality assurance, and engineering capabilities. Suppliers are managed according to theirassessment scores. For outstanding suppliers, Shuanghuan Driveline offers incentivessuch as awards, increased cooperation priority, and order share.Regular evaluations are conducted to assess suppliers' sustainable developmentperformance.
Maintain effective communication and establish good cooperative relationships withsuppliers through monthly meetings, interviews, on-site inspections and improvements,training, support, and supplier conferences. These efforts aim to enhance their productquality, technical expertise, and management capabilities.We Integrate and streamline suppliers to improve service response times.We also focus on supply chain risk management, develop emergency measures, andpromote supplier integrity to ensure business continuity.For suppliers that require improvement and capability enhancement, if they still do notpass the assessment are subject to elimination after jointly developing improvement plansand implementing corrective actions, we update the list of qualified suppliers accordingly.
Utilize a refined management system to provide suppliers with a visualized ordermanagement process, covering the entire workflow from order acceptance and shipmentto warehousing entry and settlement. This enhances communication efficiency andtransparency with suppliers.
We encourage suppliers to adhere to national "dual carbon" policies, focusing on energy saving, emissions reduction, loweringproduct carbon footprint, and minimizing environmental and health impacts. Additionally, we require suppliers to respect humanrights, uphold business ethics, and work together to achieve a sustainable value chain.
Control of Prohibited/Restricted SubstancesConflict Minerals DueDiligence
Air Compressor Heat Recovery:
Saves10,179 cubic meters of gas annually,
reducing CO
emissions by approximately 915 tons.
Recycling Treated Wastewater:
Saves 432tons of water annually.
Installation of Solar Photovoltaic Panels:
Generates 2.4 million kWh of electricity annually,
reducing CO
emissions by approximately1,688 tons per year.
Suppliers involved in REACH, RoHS, and the control of banned/restrictedsubstances are required to provide MSDS (Material Safety Data Sheets), andrelevant testing certifications, and sign a compliance commitment statement.Suppliers with potential risks must commit to not using conflict minerals.AdmissionMechanism
EliminationMechanism
ManagementOptimization
VisualizationDevelopment
AssessmentMechanism
Through a series of training sessions, procurementpersonnel enhanced their business literacy, betterequipping them to respond to market changes andprovide data support for future procurementmanagement.
BETTER EVERY TIME, ALWAYS
Shuanghuan Love FundCommunity Construction
Contributing to Societywith Love and Strength
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Partnering with Employeesfor a Prosperous FutureENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
In April,representatives from Shuanghuan Driveline visited HaishanSchool in Yuhuan City to conduct the "Micro Wishes" Charity Event.Shuanghuan donated 8 drones to benefit left-behind children in HaishanTownship, supporting the school in enhancing the quality of education andpromoting qualityoriented education.
We established the "Shuanghuan Love Fund" in 2016, dedicated tosupporting various groups including impoverished high school and collegestudents in Jishan Village and Haishan Village of Yuhuan City, students atJiaoling Middle School in Huai'an, Jiangsu, students from Zhongxin RongElementary School in Batang County, Sichuan, as well as the children ofcompany employees and individuals with severe illnesses. Throughhardship relief and educational funding activities, the foundation helps toimprove educational and living conditions for disadvantaged groups at alllevels of society. By the end of the reporting period, Shuanhuan haddonated over 8 million yuan, benefiting more than 1,000 individuals.Additionally, we have established the "Country Sages and Chamber ofCommerce Prosperity Fund." In 2023, it donated 700,000 yuan towardscultural auditorium construction in rural areas, promoting integrity withinthe chamber of commerce, assistance to rural households in need,commendations for outstanding students, teachers, and medical workers,and other targeted charitable activities compliant with charity regulations.These funds are designated for specific purposes to support ruralrevitalization and common prosperity.Supporting education is a crucial part of Shuanghuan Driveline'scharitable efforts. We collaborate actively with schools to promoteeducational advancement, particularly through the "Shuanghuan LoveFund," contributing to Yuhuan City's efforts in modernizing education andpromoting common prosperity.
Shuanghuan Love Fund
Total DonationAmount
8+
million yuan
Beni?ting
1000+
Scholarships
580,000
yuanstudents
persons
Supporting
As a company deeply committed to social responsibility, Shuanghuan Driveline incorporates "practicing public welfareresponsibilities, actively giving back to society" into its corporate culture. While continuously creating value for the national gearindustry, the company actively shoulders its social responsibilities and obligations. From its inception where employees madespontaneous charitable donations to its growth into a large enterprise that supports various causes, Shuanghuan Driveline'sphilanthropy has always been a core value, with the scope of its charitable efforts gradually expanding.The company has been honored with numerous awards such as "Taizhou Employment Poverty Alleviation DemonstrationBase," "Advanced Enterprise in Charitable Donations," and the "Charity Model (Organization) Award" at the inaugural YuhuanCharity Conference. Shuanghuan Driveline is committed to becoming a leader in social responsibility within industry, bothdomestic and international.
Contributing to Society with Love and Strength
"Micro Wishes" Charity Event
Supporting impoverished students is one of the ways ShuanghuanDriveline gives back to society. For many years, we have been conductingcharitable educational support activities for Jishan students. In 2023,seven impoverished students from Jishan arrived at Zhejiang Shuanghuanto receive educational grants prepared for them.
Supporting Education and Fulfilling Dreams for UnderprivilegedStudents—Shuanghuan Love Fund aids students from Jishan Village
In December 2023,Shuanghuan Driveline Love Fund distributedscholarships to support 15 outstanding but financially challenged studentsfrom Huai'an Red Army Middle School of Jiangsu Province, contributing tothe development of education in Huai'an City.
Caring for Education with Boundless Love -Shuanghuan Driveline Love Fund Donates to Schools
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Community Construction
In December 2023, Shuanghuan Driveline Union, in collaboration with Yuhuan Blood Donation Office and TaizhouCentral Blood Station, organized a public blood donation drive. The event attracted over a hundred employees, whoconveyed positive energy and extended the gift of life through their actions.The attention was also drawn to Qingzhen Dang, a Purchasing Engineer from the Operations Center who received theNational Volunteer Blood Donation Bronze Award in June this year. Although he eagerly signed up for the event, he wasunable to donate blood this time as it had not been six months since his last donation. Nevertheless, his spirit inspired allShuanghuan employees.
After visiting the Enhui Elderly Home, we drove to Dongqing Villageto visit the elderly in need, inquiring about their well-being,delivering monetary gifts, and wishing them good health.As a vulnerable group in society, the elderly especially needattention and care. Shuanghuan Driveline hopes that every elderlyperson can blossom a happy smile during their sunset years.
The survival and development of enterprises rely on the support of a harmonious society, and building a harmonious societydepends on the active role played by enterprises.
In addition to conducting public welfare activities and volunteer services, our company continues to promote local employment.In 2023, we recruited 2 workers from Mao County, a poverty-stricken area, and provided them with appropriate job positions andaccommodation. We have employed approximately 260 registered impoverished individuals, earning the title of "TaizhouEmployment and Poverty Alleviation Demonstration Base" from the Taizhou Municipal Human Resources and Social SecurityBureau.As a demonstration base for internship programs for college graduates in Taizhou, we annually recruit around 600graduates. In 2023, we were recognized as an Outstanding Enterprise for college graduate Recruitment in Taizhou.Additionally, we actively participate in community activities to contribute to community prosperity.
Shuanghuan Driveline Launchedthe New Year Warmth Campaign
Shuanghuan Driveline deeply understands that respecting andcaring for the elderly is a traditional virtue of the Chinese nation. Forseveral years, we have consistently extended Chinese New Yeargreetings to the elderly in surrounding villages, bringing blessings totheir hearts. In January 2023, the Party Committee of ShuanghuanDriveline solemnly delivered relief supplies and monetary gifts tothe Enhui Elderly Home in Yuhuan City. We have been visiting theEnhui Elderly Home for over a decade and will continue to bringcare and warmth to the elderly in the future.
Shuanghuan Driveline Co-HostsFriendly Pairing Sports Fellowship Competition
To earnestly study the spirit of the 20th National Congress and uphold the philosophy that "Sports Make Life Better," inDecember 2023, the Yucheng Chamber of Commerce, Yuhuan Neijiang Chamber of Commerce, and Yuhuan JiangxiChamber of Commerce jointly hosted the "Run for Health, Run for Happiness" friendly pairing sports fellowship competition.This event aimed to facilitate information exchange, mutual support, and collective progress among chambers of commerceand enterprises, striving for mutual prosperity and brilliance.
Using Competitions as A Mediumto Boost the Sports Tourism IndustryThe "Yuhuan Automotive and Motorcycle Association Cup" 2023 China Offroad Championship (COC) Finals and HanweiOff-road Race took place from Nov. 24 to 26 in Taizhou. This event was deeply integrated with the local automotive industry,creating a new ecosystem for the sports industry and leading the diversified development of Yuhuan's culture, sports, andtourism industries. As one of the leading enterprises in Yuhuan, our company sponsored this event.
The Labor Union of ShuanghuanOrganized Voluntary Blood Donation Activity
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Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying EnvironmentalResilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employeesfor a Prosperous FutureENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Appendix
The average low calorific value refers to GB/T 2589-2020 General Rules for the Calculation of Comprehensive EnergyConsumption,and the standard coal coefficient for electricity conversion uses an equivalent value.Due to the expansion of statistical coverage and the identification of additional emission sources, we have revised thegreenhouse gas emissions reported in the 2022 ESG report.*Only the total emissions of characteristic pollutants in wastewater and exhaust gas from key polluting enterprises arecounted.
Greenhouse GasEmission
Hazardous WasteGeneral Waste
Total Amount of Hazardous WasteGenerated
ton2,739.45
tCO
etCO
etCO
etCO
e/10,000 yuan of industrial value addedtCO
e/10,000 yuan of output value
Greenhouse Gas Emissions(Scope 1)Greenhouse Gas Emissions(Scope 2)Total Operational GreenhouseGas EmissionsGreenhouse Gas EmissionIntensity
20,864.45274,595.79295,460.24
1.01
0.39
Total Amount of General WasteGenerated
tontonthereof Diverted from Disposal
25,102.15
12,518.92
Environmental Data and Coefficient Explanation:
Total Number and Percentage of Operational Sites That Have Undergone Corruption Risk Assessment
Number and Percentage of Employees covered by the Dissemination/Training of theAnti-corruption Policy and Procedures
Number of Company Operational SitesNumber of Operational Sites That Have Undergone CorruptionRisk AssessmentProportion of Operational Sites That Have UndergoneCorruption Risk Assessment
100.00%
Number of Employees Covered
Social Performance
7,263Percentage of Employees Covered100.00%Nitrogen Oxides (NOx)ton
ton
1.29
17.21
Water Withdrawalcubic meter
cubic metertons/10,000 yuan of industrial value addedtons/10,000 yuan of output valueCirculating WaterWater Resources
*Air Emission*Wastewater
Water Withdrawal Intensity
1,202,399.00
343,931.00
4.12
1.59
Ammonia Nitrogen(NH3-N)
tontonChemical OxygenDemand (COD)
0.26
4.58
Environmental Performance
Key Performance IndicatorsUnit2023
Key Performance IndicatorsUnit2023
Key Performance IndicatorsUnit2023
Total Energy Consumption
Energy Intensity
GasolineDieselNatural GasLiquefied PetroleumPurchased Electricity
tce126,867.00
1,554,893.95
0.17
0.43
2.06
5.33
2,682.884,901.26103,191.48
1,761.231,422,235.28
GJ
GJGJGJGJGJ
tce/10,000 yuan of outputtce/10,000 yuan of industrial value addedGJ/10,000 yuan of output valueGJ/10,000 yuan of industrial value added
Renewable Electricity34,521.83GJ
Volatile OrganicCompounds (VOCs)
Key Performance Indicators
2023Key Performance Indicators
8586
AppendixEstablishing Robustand Compliant Governance
Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying EnvironmentalResilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employees
for a Prosperous Future
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
By Gender
Number and Percentage of Employees by Gender, Job Level, Age Group, Region, Ethnicity,Educational Level, and Profession
Number of EmployeesPercentage
5,4481,815
75.01%
24.99%
Number of Incidents Resulting in Fines or Penaltiesfor Violations (Cases)Number of Incidents Resulting in Warnings forViolations (Cases)Number of Incidents of Violations of VoluntaryCodes (Cases)
Violations Involving Marketing (Including Advertising, Promotions, and Sponsorships
ProductsServices
By Age Group
30 years old and below31-40 years old41-50 years oldAbove 50 years old
33.26%
17.64%
7.56%
3,0272,4161,281
41.54%
Number and Percentage of Employees Covered by Anti-corruption Training, Categorized by Job Level
By Job Level
Senior ManagementMiddle Management
MaleFemale
General Employee
Training Coverage rate
100.00%
100.00%
100.00%
Number of Employees
7,129
Number of Incidents Resulting in Fines or Penalties Due toViolations of Regulations (Cases)Number of Incidents Resulting in Warnings Due toViolations of Regulations (Cases)Number of Incidents Violating Voluntary Codes (Cases)
Violations Involving Product and Service Information and Labeling
ProductsServices
By Job Level
Senior ManagementMiddle ManagementGeneral Employees
7,129
0.23%
1.61%
98.16%
Total Number and Percentage of R&D Personnel by Age Group and Function
By Region
Mainland ChinaOverseas and Hong Kong,Macau, and Taiwan regionsBy EducationalLevel
Bachelor's Degree and AboveAssociate DegreeBelow Associate Degree
By Profession
Ethnic MinoritiesTotal Number of Employees
Production Personnel
99.04%
0.96%
16.94%
26.38%
56.68%
7,1931,2301,9164,1175,279
72.68%
Sales PersonnelR&D PersonnelFinance PersonnelAdministrative Personnel
1,007
7,263
2.02%
13.86%
1.40%
10.02%
7.24%
Total Number and Percentage of Disabled Employees
Total number of employees3
0.04%Percentage of employees
Number of EmployeesPercentage
Total number of R&D personnel
By Age Group
30 years old and below31-40 years old41-50 years old
1,007
41641.31%
37.64%379
14914.80%Above 50 years old636.26%Process designProduct R&DSoftware designOther
30.98%
30.19%
6.75%
32.08%
By Function
2023Key Performance Indicators2023Key Performance Indicators
8788
Appendix
Establishing Robustand Compliant Governance
Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying EnvironmentalResilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employees
for a Prosperous Future
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Average Employee Salary by Gender
MaleFemale
147,639118,831
Employee Social Insurance Coverage Rate
Employee Social Insurance Coverage Rate100.00%
By Gender
Number and Rate of Employee Turnover byGender and Job LevelBy Gender
MaleFemale
By Age Group
Total Number of Discrimination Incidents During theReporting Period
Employee Turnover ratioEmployee Turnover rate *
66.84%
33.16%
1.12%
1.50%
By Region
China (Including Hong Kong,Macau, and Taiwan)Overseas Countries or Regions0.20%0.35%
99.80%1.17%
1,770
0.27
18.49
Number of Fatalities as a Result of Work-related InjuriesNumber of Recordable Work-related InjuriesLost-workday due to Work-related Injuries and Ill Health**Recordable Injury Rate (per 200,000 working hours)Lost Time Injury Rate (per 200,000 working hours)Number of Working Hours
19,149,312
Average Employee Salary (CNY/year)
31-40 years old41-50 years oldAbove 50 years old
20.83%
2.63%
30.64%
1.33%
0.44%
1.07%
30 years old and below45.90%1.44%
Discrimination Incidents and Corrective Actions TakenHealth and Safety
Total Number and Percentage of Management Employees by Gender and Age Group
Total Number of Management Employees
By Gender
Male
By Age Group
Female
57783.87%
16.13%111
Number of employeesPercentage
30 years old and below31-40 years old41-50 years oldAbove 50 years old
15.41%
53.34%
21.95%
9.30%
Total Training Hours and Average Training Hours of Employees by Gender and Job Level
Total Number and Percentage of Employees Covered by Training
By Gender
MaleFemaleBy Job Level
Senior ManagementMiddle ManagementGeneral Employees
58,58016.44
13.98
41.82
47.26
13.75
18,282
3,40272,749
Total Number and Percentage of Employees Receiving Regular Performance and Career DevelopmentReviews by Gender and Job LevelPercentage of Employees Receiving Performance andCareer Development ReviewsTotal Number of Employees Receiving Performance andCareer Development Reviews
7,263
100%
Total Training Hours (hours)Average Training Hours Per Employee Covered (hours)
76,862
15.45
Total Number of Employees Covered by Training4,975Percentage of Employees Covered by Training68.50%
Training hours (hours)Average training hours (hours)
2023Key Performance Indicators2023Key Performance Indicators
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AppendixEstablishing Robustand Compliant Governance
Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying Environmental
Resilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employeesfor a Prosperous FutureENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Basic Information on SuppliersProportion of Suppliers Certified in Quality, Environmental, and Occupational Health and SafetyManagement SystemsTotal Number of Suppliers Assessed
81%
Number of Suppliers Selected as ExcellentNumber of Contractors who have Signed EHS AgreementsCustomer Services Data
Number of Complaints Received about Products and ServicesCustomer Complaint Response RateCustomer Complaint Resolution Rate
100%100%
Number of Complaints Received about Products and Services and the Response Approach
Number of Incidents Fined or Penalized for Violations of Health and SafetyRegulationsNumber of Incidents Warned for Violations of Health and Safety RegulationsNumber of Incidents Violating the Voluntary Health and Safety Codes forProducts and Services*Employee turnover rate = (Number of permanent contract employees who left / Average number of permanent contract employeesover the year) * 100%**Recordable injury rate = (Number of recordable injuries / Number of hours worked) * 200,000
Occupational Health and Safety Drills and Inspections
Safety Emergency Drills (occurrences)Safety Training (hours)Average Duration of Safety Training (hours)Safety Promotion (occurrences)Safety Promotion Activities (occurrences)Scheduled Safety Inspections (occurrences)Unscheduled Safety Inspections (occurrences)
16,200
Index
About Shuanghuan
About ShuanghuanPartnering with Employees for a Prosperous Future
Partnering with Employees for a Prosperous FuturePartnering with Employees for a Prosperous Future
Message from the Chairman
/
/
Establishing Robust and Compliant Governance
Establishing Robust and Compliant GovernanceEstablishing Robust and Compliant GovernanceEstablishing Robust and Compliant GovernanceEstablishing Robust and Compliant GovernanceEstablishing Robust and Compliant GovernanceEstablishing Robust and Compliant Governance
About this ReportAbout this Report//
//
2-1 Organizational Details2-2 Entities included in the organization’ssustainability reporting2-3 Reporting period, frequency and contact point2-4 Restatements of information2-5 External assurance2-6 Activities, value chain and other business relationships2-7 Employees2-8 Workers who are not employees2-9 Governance structure and composition2-10 Nomination and selection of the highestgovernance body2-11 Chair of the highest governance body2-13 Delegation of responsibility for managing impacts2-14 Role of the highest governance body insustainability reporting2-15 Conflicts of interest2-16 Communication of critical concerns2-17 Collective knowledge of the highest governance body2-18 Evaluation of the performance of the highestgovernance body2-19 Remuneration policies2-20 Process to determine remuneration2-21 Annual total compensation ratio
2-12 Role of the highest governance body in overseeingthe management of impacts
GRI 2: GeneralDisclosures 2021
GRI Content Index
2023Key Performance Indicators
GRI STANDARDDISCLOSURELOCATION
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Walking the SustainablePath Together with Partners
Contributing to Societywith Love and StrengthFortifying Environmental
Resilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employees
for a Prosperous Future
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
GRI STANDARD DISCLOSURELOCATION
207-1 Approach to tax207-2 Tax governance, control, and risk management
/
/////Fortifying Environmental Resilience for PlanetFortifying Environmental Resilience for Planet
Fortifying Environmental Resilience for Planet
Fortifying Environmental Resilience for Planet
Fortifying Environmental Resilience for PlanetFortifying Environmental Resilience for PlanetFortifying Environmental Resilience for PlanetFortifying Environmental Resilience for Planet
Fortifying Environmental Resilience for PlanetFortifying Environmental Resilience for PlanetFortifying Environmental Resilience for Planet
Fortifying Environmental Resilience for PlanetFortifying Environmental Resilience for Planet/
/
207-3 Stakeholder engagement and management ofconcerns related to tax207-4 Country-by-country reporting301-1 Materials used by weight or volume301-2 Recycled input materials used301-3 Reclaimed products and their packaging materials302-1 Energy consumption within the organization302-2 Energy consumption outside of the organization302-3 Energy intensity302-4 Reduction of energy consumption
303-1 Interactions with water as a shared resource303-2 Management of water discharge-related impacts303-3 Water withdrawal303-4 Water discharge303-5 Water consumption304-1 Operational sites owned, leased, managed in, oradjacent to, protected areas and areas of high biodiversityvalue outside protected areas
302-5 Reductions in energy requirements of productsand services
///
/
304-2 Significant impacts of activities, products andservices on biodiversity304-3 Habitats protected or restored304-4 IUCN Red List species and national conservationlist species with habitats in areas affected by operations305-1 Direct (Scope 1) GHG emissions305-2 Energy indirect (Scope 2) GHG emissions305-3 Other indirect (Scope 3) GHG emissions305-4 GHG emissions intensity
GRI 207: Tax2019
GRI 302:
Energy 2016
GRI 301:
Materials 2016
GRI 303: Waterand Effluents2018
GRI 304:
Biodiversity2016
GRI 305:
Emissions 2016
2-23 Policy commitments2-24 Embedding policy commitmentsWalking the Sustainable Path Together with Partners
Partnering with Employees for a Prosperous Future
Partnering with Employees for a Prosperous FuturePartnering with Employees for a Prosperous Future
Establishing Robust and Compliant GovernanceEstablishing Robust and Compliant Governance
Establishing Robust and Compliant GovernanceEstablishing Robust and Compliant GovernanceEstablishing Robust and Compliant Governance
Establishing Robust and Compliant Governance
About Shuanghuan
Contributing to Society with Love and Strength
Key Performance Indicators
/Establishing Robust and Compliant Governance
//
//
//
Fortifying Environmental Resilience for Planet
2-25 Processes to remediate negative impacts2-26 Mechanisms for seeking advice and raising concerns2-27 Compliance with laws and regulations2-28 Membership associations2-29 Approach to stakeholder engagement2-30 Collective bargaining agreements3-1 Process to determine material topics3-2 List of material topics3-3 Management of material topics201-2 Financial implications and other risks andopportunities due to climate change201-3 Defined benefit plan obligations and otherretirement plans201-4 Financial assistance received from government202-1 Ratios of standard entry level wage by gendercompared to local minimum wage202-2 Proportion of senior management hired from thelocal community203-1 Infrastructure investments and services supported203-2 Significant indirect economic impacts204-1 Proportion of spending on local suppliers205-1 Operations assessed for risks related to corruption205-2 Communication and training about anti-corruptionpolicies and procedures205-3 Confirmed incidents of corruption and actions taken
201-1 Direct economic value generated and distributed
Message from the Chairman2-22 Statement on sustainable development strategy
Partnering with Employees for a Prosperous Future
Walking the Sustainable Path Together with Partners
GRI 2: GeneralDisclosures 2021
GRI 3: MaterialTopics 2021
GRI 201:
EconomicPerformance2016
GRI 202: MarketPresence 2016GRI 203: IndirectEconomicImpacts 2016GRI 204:
ProcurementGRI 205:
Anti-corruption2016
/206-1 Legal actions for anti-competitive behavior, anti-trust,and monopoly practicesGRI 206:
Anti-competitive
GRI STANDARDDISCLOSURELOCATION
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Contributing to Societywith Love and StrengthFortifying Environmental
Resilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employeesfor a Prosperous FutureENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
305-5 Reduction of GHG emissions
Fortifying Environmental Resilience for Planet
Fortifying Environmental Resilience for PlanetFortifying Environmental Resilience for PlanetFortifying Environmental Resilience for PlanetFortifying Environmental Resilience for PlanetFortifying Environmental Resilience for PlanetWalking the Sustainable Path Together with PartnersWalking the Sustainable Path Together with PartnersPartnering with Employees for a Prosperous FuturePartnering with Employees for a Prosperous Future
Partnering with Employees for a Prosperous FuturePartnering with Employees for a Prosperous FuturePartnering with Employees for a Prosperous FuturePartnering with Employees for a Prosperous FuturePartnering with Employees for a Prosperous FuturePartnering with Employees for a Prosperous FuturePartnering with Employees for a Prosperous FuturePartnering with Employees for a Prosperous Future
Partnering with Employees for a Prosperous Future
/
/
/
Key Performance Indicators305-6 Emissions of ozone-depleting substances (ODS)305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and othersignificant air emissions306-1 Waste generation and significant waste-related impacts306-2 Management of significant waste-related impacts306-3 Waste generated306-4 Waste diverted from disposal306-5 Waste directed to disposal308-1 New suppliers that were screened usingenvironmental criteria308-2 Negative environmental impacts in the supply chainand actions taken401-2 Benefits provided to full-time employees that are notprovided to temporary or part-time employees401-1 New employee hires and employee turnover401-3 Parental leave402-1 Minimum notice periods regarding operational changes403-1 Occupational health and safety management system403-2 Hazard identification, risk assessment, andincident investigation403-3 Occupational health services403-4 Worker participation, consultation, andcommunication on occupational health and safety403-5 Worker training on occupational health and safety403-6 Promotion of worker health403-7 Prevention and mitigation of occupational health andsafety impacts directly linked by business relationships403-8 Workers covered by an occupational health andsafety management system403-9 Work-related injuries
GRI 308:
SupplierEnvironmentalAssessment2016
GRI 306: Waste2020
GRI 401:
Employment2016
GRI 403:
OccupationalHealth andSafety 2018
GRI 402:
Labor/Management Relations 2016
GRI 305:
Emissions 2016
403-10 Work-related ill healthKey Performance Indicators
Key Performance Indicators404-1 Average hours of training per year per employee
GRI 404: Trainingand Education2016
Key Performance Indicators
Partnering with Employees for a Prosperous Future
Partnering with Employees for a Prosperous FuturePartnering with Employees for a Prosperous FuturePartnering with Employees for a Prosperous FuturePartnering with Employees for a Prosperous FuturePartnering with Employees for a Prosperous Future
/
/
/
/
Key Performance Indicators
Establishing Robust and Compliant Governance
Walking the Sustainable Path Together with PartnersWalking the Sustainable Path Together with Partners
Serving High-Quality and Innovative ServicesServing High-Quality and Innovative Services
Partnering with Employees for a Prosperous FutureWalking the Sustainable Path Together with PartnersPartnering with Employees for a Prosperous FutureWalking the Sustainable Path Together with Partners
GRI STANDARD
Establishing Robust and Compliant GovernanceServing High-Quality and Innovative Services
GRI STANDARD DISCLOSURELOCATIONGRI STANDARDDISCLOSURELOCATION
405-1 Diversity of governance bodies and employees
404-2 Programs for upgrading employee skills andtransition assistance programs404-3 Percentage of employees receiving regularperformance and career development reviews405-2 Ratio of basic salary and remuneration ofwomen to men406-1 Incidents of discrimination and correctiveactions taken407-1 Operations and suppliers in which the right tofreedom of association and collective bargaining maybe at risk408-1 Operations and suppliers at significant risk forincidents of child labor409-1 Operations and suppliers at significant risk forincidents of forced or compulsory labor410-1 Security personnel trained in human rightspolicies or procedures411-1 Incidents of violations involving rights ofindigenous peoples413-2 Operations with significant actual and potentialnegative impacts on local communities413-1 Operations with local community engagement,impact assessments, and development programs414-1 New suppliers that were screened usingsocial criteria414-2 Negative social impacts in the supply chain andactions taken415-1 Political contributions416-1 Assessment of the health and safety impacts ofproduct and service categories416-2 Incidents of non-compliance concerning thehealth and safety impacts of products and services417-2 Incidents of Non-compliance Concerning Productand Service Information and Labeling417-1 Requirements for Product and ServiceInformation and Labeling
GRI 404:
Training andEducation 2016GRI 405:
Diversity andEqualOpportunity 2016GRI 406:
Non-discrimination 201GRI 407:
Freedom ofAssociation andCollectiveBargaining 2016GRI 408: ChildLabor 2016GRI 409: Forcedor CompulsoryLabor 2016
GRI 413: LocalCommunities2016GRI 414:
Supplier SocialAssessment2016GRI 415: PublicPolicy 2016GRI 416:
Customer Healthand Safety 2016GRI 417:
Marketing andLabeling 2016
GRI 410:
SecurityPractices 2016GRI 411: Rightsof IndigenousPeoples 2016
417-3 Incidents of Non-compliance ConcerningMarketing Communications418-1 Substantiated Complaints Concerning Breaches ofCustomer Privacy and Losses of Customer Data
GRI 418:
CustomerPrivacy 2016
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Contributing to Societywith Love and StrengthFortifying Environmental
Resilience for PlanetServing High-Qualityand Innovative Services
Partnering with Employeesfor a Prosperous Future
ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT
Dear Stakeholders,Hello! Thank you for reading the "2023 ESG Report of Shuanghuan Driveline." This is our second ESG report. To betterunderstand your needs and expectations regarding Shuanghuan Driveline's ESG efforts and to enhance the company'ssustainable development capabilities, we sincerely look forward to your valuable opinions and suggestions.
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UN SDGs Index
Partnering with Employees for a Prosperous FutureKey Performance Indicators
Partnering with Employees for a Prosperous FutureWalking the Sustainable Path Together with PartnersContributing to Society with Love and StrengthKey Performance Indicators
Partnering with Employees for a Prosperous FutureWalking the Sustainable Path Together with PartnersKey Performance IndicatorsServing High-Quality and Innovative ServicesWalking the Sustainable Path Together with PartnersKey Performance IndicatorsFortifying Environmental Resilience for PlanetKey Performance IndicatorsEstablishing Robust and Compliant GovernanceServing High-Quality and Innovative ServicesPartnering with Employees for a ProsperousWalking the Sustainable Path Together with PartnersKey Performance Indicators
Fortifying Environmental Resilience for PlanetKey Performance Indicators
Fortifying Environmental Resilience for Planet
Partnering with Employees for a Prosperous FutureGoal 4 Quality Education
Goal 3 Good Health and Well-being
Goal 5 Gender Equality
Goal 6 Clean Water and Sanitation
Goal 7 Affordable and Clean Energy
Goal 8 Decent Work and Economic Growth
Goal 12 Responsible Consumption and Production
Goal 13 Climate Action
Goal 16 Peace, Justice and Strong Institutions
SDGsContent Location