ENVIRONMENTAL, SOCIAL AND
GOVERNANCE REPORT
2024 Environmental, Social and
Governance Report
The Leader in Healthy, Comfortable Environments
About the reportMessage from the ChairmanAbout Us
Index of IndicatorsFeedback Form
Strengthening the Core of Governance
Corporate GovernanceIntegrity and ComplianceESG Governance
Climate Dun-Climate ProtectionCircular Dun ? Circular Economy InitiativesEnvironmental Dun ? Environmental Protection PracticesEcological Dun ? Biodiversity Protection
Sustainability as Our Shield
Product SecurityEmployee SecuritySupply Chain SecuritySocial Security
Responsibility as Our Anchor
Environmental KPISocial KPIGovernance KPI
KPI Table
Automotive Thermal Management Technology Co., Ltd., and Zhejiang DunAn Electromechanical Technology Co., Ltd. The speci?cboundaries of the disclosed information are illustrated in the ?gure below. For social performance indicators, except for supply chainsecurity, all other metrics include DunAn and all its subsidiaries. All monetary amounts in this report are presented in Renminbi (RMB).The data used in this report is sourced from the company's annual reports, o?cial documents, and statistical records. The Board ofDirectors of the Company guarantees that the contents of this report are true, accurate, and complete, without any false statements,misleading representations, or material omissions, and assumes individual and joint responsibility for the authenticity, accuracy, andcompleteness of the information disclosed.
This report is the 2024 Environmental, Social, and Governance (ESG) Report released by Zhejiang DunAn Arti?cial Environment Co., Ltd.(hereinafter referred to as "DunAn Environment" "DunAn" "the Company" or "we"). The reporting period covers January 1, 2024 toDecember 31, 2024. To enhance data comparability and content continuity, certain information has been appropriately extended beyondthe reporting period. Going forward, DunAn will publish a Sustainability Report annually to regularly disclose its annual operationalachievements beyond ?nancial performance and to demonstrate its commitment to sustainable development through concrete actions.
Overview of the report
Report Scope and Reliability
This report is published in the form of an electronic version in simpli?ed Chinese and English, which can be found on the Company'swebsite. If you have any suggestions or questions about this report, you are welcomed to contact us by email (dunanhj@dunan.cn).
United Nations Sustainable Development Goals (SDGs)Global Reporting Initiative (GRI) Sustainability Reporting StandardsShenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 3 ? Preparation of Sustainability ReportsShenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 17 ? Sustainability Reporting (Trial)
Basis for Report Preparation
Report Access and Communication
About the report
0201
EnvironmentalPerformance
SocialPerformance
GovernancePerformance
DimensionIndicator
Zhejiang DunAn Hetian
Metal Co., Ltd.(“DunAn Hetian”)
Zhejiang DunAnMachinery Co., Ltd.(“DunAn Machinery”)
Zhejiang DunAn Thermal
Technology Co., Ltd.(“DunAn Thermal”)Green Product InnovationEnergy ConsumptionGreen Product InnovationWater Resource ConsumptionMaterial Recycling and UtilizationPollutant EmissionsEnvironmental Compliance ManagementEcological Risk Identi?cationProduct Quality AssuranceR&D Innovation and Intellectual Property ProtectionData Security and Customer Privacy ProtectionEmployeesSupply Chain SecurityIntegrity and Anti-CorruptionAnti-Unfair CompetitionTax Compliance
√√√√√√√√√√√√√
√√√√√√√√√√√√√
√√
√√
√√√√
√√√√√√√√√
DunAn Automotive ThermalManagement Technology Co., Ltd.
(“DunAn Automotive ThermalManagement”)
Zhejiang DunAn Electro-Mechan-ical Technology Co., Ltd.(“DunAn Electro-Mechanical”)
EnvironmentalPerformance
SocialPerformance
GovernancePerformance
DimensionIndicator
Green Product InnovationEnergy ConsumptionGreen Product InnovationWater Resource ConsumptionMaterial Recycling and UtilizationPollutant EmissionsEnvironmental Compliance ManagementEcological Risk Identi?cationProduct Quality AssuranceR&D Innovation and Intellectual Property ProtectionData Security and Customer Privacy ProtectionEmployeesSupply Chain SecurityIntegrity and Anti-CorruptionAnti-Unfair CompetitionTax Compliance
√√√√√√√√√√√
√√√
√√√
√√√
√√√
√√√√√√
2024 Environmental, Social and Governance ReportAbout the report
Global climate change continues to pose increasingly urgent and stringent demands on the green and low-carbon transformation of therefrigeration industry. As a refrigeration and environmental solutions provider with nearly four decades of technological heritage, DunAnEnvironment launched the “Super Silent” electronic expansion valve in 2024, integrating 87 patented technologies to successfullyovercome the persistent noise challenge in the VRF (Variable Refrigerant Flow) sector. We also advanced our “energy-e?cient, green, andeco-friendly” product strategy, leading the industry toward a more sustainable future.In 2024, thanks to our continuously enhanced product capabilities and operational excellence, DunAn Environment achieved anotherrecord-breaking performance in both revenue and pro?tability. It was also a landmark year in our sustainability journey. We participated inthe international EcoVadis sustainability rating and were awarded a Bronze Medal—an a?rmation of our alignment with global standardsin sustainable development.
Strengthening the Core of Governance: Integrity as the Foundation for Sustainable GrowthIn 2024, we continued to re?ne our ESG governance framework by establishing a dedicated Sustainability Committee and embedding ESGprinciples into all aspects of corporate governance, management, and execution. These actions have laid a strong institutional foundationfor our sustainable growth. Through enhanced compliance and risk management, improved information disclosure, and strengthenedinvestor relations, we have further raised the standard of our corporate governance. In key areas such as anti-bribery and anti-monopolypractices, we conducted over 10,000 specialized training sessions covering all members of our senior management team. We ?rmly believethat sound governance not only safeguards our growth trajectory but also enables DunAn to establish a core competitive advantage in theglobal marketplace.
Sustainability as Our Shield: Building a Healthier Environment Through Harmony with NatureWe took proactive steps in 2024 to optimize our energy structure by increasing the adoption of renewable energy sources, such as solarpower, to reduce carbon emissions. By improving production processes and resource recovery systems, we enhanced water recyclinge?ciency and reduced waste from copper materials and pallet packaging, ensuring the e?cient use of resources. At the same time, westrengthened our environmental compliance systems and enhanced pollutant monitoring and management mechanisms to ensure allemissions meet national standards—putting our green development philosophy into tangible practice.Responsibility as Our Anchor: Creating Shared Value Through Inclusive Growth
DunAn remained committed in 2024 to achieving mutual success with all stakeholders. Through ongoing product innovation and serviceexcellence, we created long-term value for our customers. Globally, a total of 887 patent （397 overseas）applications were ?led. A total of463 patents （108 overseas） were granted. By the end of the year, the total number of granted patents reached 3,738 （292 overseas. Thisdemonstrates our unwavering pursuit of technological innovation. On the people front, we cultivated an equal and inclusive workplaceand supported employee growth through ?agship training programs such as the “Three Eagles Talent Development Program” and the“Blue Force Initiative.” In our supply chain, we built a sustainable ecosystem that ensures security and resilience, protects the interests ofsmall and medium-sized partners, and achieves mutual bene?t and shared success.To our valued stakeholders, every step of DunAn Environment’s progress has been made possible through your trust and support. Lookingahead, we will continue to align with the “2030 Sustainable Development Goals,” remain driven by innovation and excellence, and workhand in hand with you to tackle new challenges, unlock greater opportunities, and co-create a greener, better, and more sustainable future.
Fang XiangjianChairman, Zhejiang DunAn Arti?cial Environment Co., Ltd
Apr. 2025
0403
Message from the Chairman
Message from the Chairman2024 Environmental, Social and Governance Report
The company has established subsidiaries or sales o?ces in North America, Europe, Japan, South Korea, Thailand, India, andMalaysia, with a manufacturing facility located in Thailand.Industrial Presence
Zhejiang DunAn Arti?cial Environment Co., Ltd. envisions becoming a “leader in healthy and comfortable environments” and upholds themission of “improving energy e?ciency and optimizing the environment.” With years of dedicated focus in the refrigeration industry, thecompany’s core business spans three major areas:
Component Manufacturing: Production of refrigeration valves, heat exchangers, and pressure vessels for residential and commercialair conditioners, heat pumps, cold storage, and refrigeration applications.Equipment Manufacturing: Development of commercial central air conditioning systems and specialized HVAC solutions for nuclearpower, puri?cation, rail transit, energy storage, and cold chain systems.
New Energy Vehicle Thermal Management: Manufacture of core components for thermal management systems in new energy vehicles.
The company was listed on the Shenzhen Stock Exchange in 2004 (stock abbreviation: DunAn; stock code: 002011).
Company Overview
Economic PerformanceTotal Assets
RMB 12.153 billion
Operating RevenueNet Pro?tTotal Tax Payment
Corporate Culture
Nantong
TianjinSuzhouWuhuChongqing
Zhongshan
Shijiazhuang
Thailand
Group LocationHefeiHangzhouDiankoNanchangChangshaZhuhai
R&D Centers in Hangzhou,Diankou, Wuhu, Zhuhai andThailand
5 R&D Layout5 R&D Layout
Zhuji2, Thailand2, Hangzhou,Zhuhai2, Zhongshan, Nantong2,Suzhou, Hefei, Wuhu, Nanchang,Chongqing, Tianjin, Shijiazhuang,Changsha
18 Production bases18 Production bases
There are overseas companies orsales o?ces in North America,Europe, Japan, South Korea,Thailand, India, Malaysia and otherplaces
9 overseas companiesor sales o?ces9 overseas companiesor sales o?cesDunAn Precision
DunAn Europe(Germany)
India OfficeDunAn ThailandMalaysia Office
Vietnam OfficeDunAn Korea
DunAn JapanIndonesia Office
About Us
0605
RMB 12.678 billionRMB 1.040 billionRMB 491 million
To be a leader in healthy andcomfortable environments
To improve energy e?ciencyand optimize the environment
Integrity, Respect, and Professionalism
With continuous innovation as the“Dun“ , customer value as the “An”Mi
ss
io
n
Brand
P
h
i
los
op
hyVis
io
n
C
o
r
e
V
a
l
ues
About Us2024 Environmental, Social and Governance Report
As a global leader in the refrigeration components industry, the company is a strategic partner to numerous well-known air conditioningmanufacturers worldwide, with its core products consistently ranking among the top in global production and sales volumes. Innovationis regarded as the driving force behind the company's development, continuously enhancing its core competitiveness in technology andquality leadership. The company is equipped with a Nationally Accredited Enterprise Technology Center, a National Postdoctoral ResearchStation, an Academician Workstation, a CNAS-certi?ed laboratory, and a National Full-Performance Testing Center for Central Air Condi-tioning. It has established a robust core technology support system with independent intellectual property rights. To date, the companyhas participated in the drafting and revision of 101 national and industry standards, and has been honored with prestigious awards suchas the National Quality Award, National Innovative Enterprise Pilot, Second Prize of the National Science and Technology Progress Award,and the China Patent Excellence Award.The company has actively participated in the drafting and revision of 101 national and industry standards, including:
Direct-acting Electronic Expansion Valves for Air ConditionersSolenoid Valves for Air Conditioning and RefrigerationCopper Refrigerant Stop Valves for Air ConditioningElectronic Expansion Valves for CO Refrigeration SystemsSolenoid Valves for CO Refrigeration SystemsRooftop Air Conditioning UnitsVapor Compression Cycle Chillers (Heat Pump Units) ? Part 1: Chillers (Heat Pumps) for Industrial, Commercial and Similar UseAmong these, the company served as the lead drafting organization for 18 standards.DunAn is also the ?rst enterprise in China to independently develop and manufacture nuclear-grade chillers for nuclear power plantswith proprietary intellectual property rights. Additionally, it successfully completed the independent R&D of the ?rst domestically-pro-duced AP1000 reactor top-mounted fan, a key component for passive nuclear power plants.
Technological StrengthHonors and Awards
The Company is a member of the Air-Conditioning, Heating, and Refrigeration Institute (AHRI) in the United States and the European HeatPump Association (EHPA). It also serves as an executive director unit of the China Association of Refrigeration and Air-ConditioningIndustry, a council member of the Chinese Association of Refrigeration, a member of the China Association for Quality, and a vice presidentunit of the Zhejiang Refrigeration and Air-Conditioning Industry Association.
Industry Position
0807
National Quality AwardSecond Prize of National Science and
Technology Progress AwardLeading low-carbon development
enterprise
China Standard InnovationContribution AwardNational innovative pilot enterprises
China Standard InnovationContribution AwardCHINAREFRIGERATION
and AC
"Double carbon" workleading group deputy
leader unitExecutive Director Unit of
China Refrigeration andAir ConditioningAssociation
About Us2024 Environmental, Social and Governance Report
Strengthening the Core of GovernanceLaying a Solid Foundation for Long-Term Development throughIntegrity in Operations
This Section Addresses:the United Nations Sustainable Development Goals (SDGs)
GRI 2General Disclosures 2021GRI 205Anti-corruption 2016
GRI 206Anti-competitive Behavior 2016GRI 207Tax 2019
Anti-commercial bribery and anti-corruptionAnti-unfair competition
1009
Global Reporting Initiative SustainabilityReporting Standards (GRI Standards)
Shenzhen Stock Exchange Guidelines forSelf-Regulation of Listed Companies No. 17 ?Sustainability Reporting (Trial Version)
Board DiversityThe Board of Directors is accountable to the General Meeting of Shareholders and operates in strict accordance with national laws,regulations, and the Company’s Articles of Association. Drawing on extensive experience, the Board e?ectively oversees the Company’sstrategic direction, manages key risks, provides guidance to the management team, deliberates and approves major decisions, supervisesbusiness operations, and evaluates corporate performance. The Company lawfully and compliantly conducts director nominationprocedures and exercises governance over their responsibilities. Emphasizing board diversity, the Company strives to enhance therepresentativeness of its Board in terms of gender, experience, quali?cations, and professional background, thereby supportingmore comprehensive and professional decision-making for the Company’s development. As of the end of the reporting period, theBoard of Directors consisted of nine members, including six non-independent directors and three independent directors.The Proportion of Independent Directors in Each Specialized Committee under the Board is as follows:
Diligent Ful?llment of Duties
In 2024, all of the directors, supervisors, senior management personnel, and key employees participated in continuous supervisiontraining. The training covered regulatory requirements and key focus areas for ongoing supervision, reminders regarding informationdisclosure, standardized operations of listed companies, penalties and impacts of supervision violations, and case studies of enforcementactions related to continuous supervision.
During the reporting period, the Company held a total of 4 General Meetings of Shareholders, 7 Board Meetings, and 4 Supervisory BoardMeetings. All major decisions were made in accordance with the law through the Shareholders’ Meeting, the Board of Directors, and theSupervisory Board. In this reporting year, the attendance rate of all directors at Board meetings reached 100%. Each specialized committeeof the Board provided professional and objective opinions and suggestions within their respective areas of responsibility to the “ThreeCommittees” (Shareholders’ Meeting, Board of Directors, Supervisory Board), thereby o?ering strong support for the Company’s sounddecision-making.
StrategicCommittee
NominationCommittee
AuditCommittee60%
Remunerationand Appraisal
Committee
60%60%67%
In accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China,the Code of Corporate Governance for Listed Companies, and other applicable laws, regulations, and normative documents, theCompany has established and implemented a series of internal governance systems, including the Articles of Association andRules of Procedure for Shareholders’ Meetings. A governance framework comprising the General Meeting of Shareholders, theBoard of Directors, the Board of Supervisors, and the Executive Management has been put in place.The General Meeting of Shareholders exercises its legal rights as stipulated by laws and the Articles of Association, includingmaking decisions on major issues such as corporate strategy, signi?cant ?nancing, investments, and pro?t distribution. TheBoard of Directors, which is accountable to the shareholders, holds the power of strategic decision-making and has establishedseveral specialized committees under it: the Strategy Committee, the Remuneration and Appraisal Committee, the NominationCommittee, and the Audit Committee. The Executive Management is responsible for the Company’s daily operations, executingthe resolutions of the Board of Directors, implementing strategic objectives, and ensuring e?cient and compliant corporateoperations. Meanwhile, the Board of Supervisors, accountable to the shareholders, oversees the lawful performance of dutiesby directors and senior management. The Company continuously improves its corporate governance structure to fundamentallysafeguard the legitimate rights and interests of shareholders and creditors.
组织简介
GuideReport
SuperviseFormulate
SuperviseExecute
EstablishReport
ElectionsReportElectionsReportShareholders' Association
Strategic Committee
Board of Directors
Executive Management
CommitteeAudit CommitteeCompensation committee
Nomination Committee
Formulateinternal management systemsanaadministrative measures
Supervise and guide
Report
Superisory Board
Governance Structure
Corporate Governance
1211
Strengthening the Core of Governance2024 Environmental, Social and Governance Report
Investor Relations ManagementThe Company continuously strengthens and improves its investor relations management. Through multiple channels such as theInteractive Platform, hotline, email, fax, and joint research activities, the Company maintains e?ective communication with investors—particularly small and medium-sized investors. By actively listening to their opinions and suggestions regarding business operations andfuture development, the Company fosters positive interaction and engagement. E?orts are made to ensure that investor relations aremanaged with integrity and professionalism, upholding the principles of fairness, impartiality, and transparency. The Company guaranteesthat all shareholders fully enjoy their legal rights and interests as stipulated by applicable laws, regulations, and rules.
Information Disclosure
Adhering to the mission of “creating value for customers, generating bene?ts for the enterprise, providing opportunities for employees,and contributing wealth to society,” the Company has established a standardized information disclosure system in accordance withrelevant laws and regulations, as well as the disclosure requirements for listed companies set by the Shenzhen Stock Exchange. Byimplementing the Information Disclosure Management System, the Company ful?lls its disclosure obligations, ensuring that all disclosedinformation is truthful, accurate, and complete. This guarantees shareholders and creditors the right to be informed about the Company’soperations and material matters. During the reporting period, the Company published a total of 115 announcements.
Information Disclosure ChannelsSecurities Daily, Securities Times, and CNINFO(www.cninfo.com.cn)
The Company strictly adheres to the Company Law of the People’s Republic of China, The basic norms of internal control and itssupporting guidelines, as well as relevant requirements issued by regulatory authorities such as the China Securities RegulatoryCommission (CSRC) and the Shenzhen Stock Exchange. Taking into account its own business characteristics and management needs,the Company has comprehensively established and continuously optimized its internal control system to ensure its e?ective operationand the absence of material de?ciencies. The Company also continues to improve its risk management system by strengtheningprocesses related to risk identi?cation, assessment, response, and mitigation, along with training and crisis response measures. Thesee?orts aim to promote the ongoing development of a comprehensive risk management framework.
Enhancing Internal Control Systems
DunAn attaches great importance to compliance management and is committed to establishing a comprehensive, systematic complianceframework. The Company has formulated and issued a series of regulatory documents, including the Contract Management Regulations,Internal Audit Management Regulations, Case Management Measures, and Business Con?dentiality Protection Regulations. Its compliancemanagement e?orts focus on areas such as bribery, production safety, environmental protection, and bidding compliance. In 2024, theCompany experienced no major compliance-related risk incidents and was not involved in any signi?cant litigation cases.The Company has built a compliance management system centered around the "three lines of defense," fully integrating compliancerequirements into every stage of its business processes. This approach has established a closed-loop risk prevention and control mecha-nism, thereby laying a solid foundation for the Company's sustainable development.
Compliance ManagementIntegrity and Compliance
1413
Responsible PartyResponsibilitiesLine of Defense
Third Lineof Defense
Internal Control
Department
As the ?rst line of defense, business departments are responsiblefor identifying, assessing, and addressing risks in daily operations.They implement appropriate control measures to ensure compliancein business processes.Functional departments are responsible for risk assessment andmonitoring, timely identi?cation of emerging risks, establishing andimproving risk management systems and processes, promotingstandardization, providing professional support, and organizingrelevant training for business departments.The internal control department independently and objectivelyreviews and evaluates the Company’s overall risk managementand compliance status. It is responsible for supervision and auditingto ensure that business activities comply with laws, regulations, andinternal policies. It identi?es potential risks, provides improvementsuggestions, and ensures timely resolution. It also continuouslyenhances the anti-corruption and anti-bribery management systemto ensure the ongoing e?ectiveness of risk and compliancemanagement.
Second Line
of Defense
FunctionalDepartments
BusinessDepartments
First Lineof Defense
Strengthening the Core of Governance2024 Environmental, Social and Governance Report
DunAn upholds the principle of integrity in business operations and is committed to building a clean and transparent business environ-ment. In 2024, the Company launched a comprehensive clean-practices campaign, requiring senior executives, middle management, andemployees in key positions (including procurement, infrastructure, ?nance, and treasury) to sign the Integrity Commitment Letter andsubmit the Self-Assessment Report on Integrity Practices. A family supervision mechanism was also introduced, encouraging employees'families to support ethical behavior through Messages from Family Members on Integrity in the Workplace.In alignment with the DunAn Corporate Charter, the Company conducted a thorough inspection of its integrity-building e?orts in 2024. Allbusiness units carried out self-inspections on issues such as familial relationships, gift and hospitality disclosures, misuse of companyvehicles, improper use of personal vehicles for work, disciplinary actions, and internal notices. Based on the results, each unit submitted aSelf-Assessment Report on Integrity Practices.In 2024, the Company also organized targeted training for new hires and key personnel on topics such as anti-bribery, anti-monopoly, andinternational contracts. More than 10,000 participants received training, covering all members of our senior management team , therebystrengthening the Company’s compliance and integrity capabilities.
Promoting Integrity and Clean Governance
Anti-Corruption and Clean GovernanceCase-Based Training
In December 2024, the Company organized a specialized training session on anti-corruptionand clean governance. The training focused on key areas such as building mechanisms forpower supervision, enforcing institutional discipline, and ensuring transparency in theexercise of authority. It served as a comprehensive introduction to the Company's integritygovernance system.By analyzing typical corruption cases, the training exposed the root causes and dangers ofcorruption. Senior internal leaders were invited to provide on-site commentary, extractinggovernance principles and methodologies with broad applicability. The initiative aimed tofoster a culture of integrity, self-discipline, and clean governance throughout the Company.
The DunAn Corporate Charter clearly designates the internal control department as responsible for integrity oversight, supervising andinspecting the integrity performance of leadership teams and management personnel at all levels. To strengthen supervision by employeesand stakeholders, the Company ensures multiple accessible whistleblowing channels. In addition to traditional methods such as companywebsite, telephone, email, and physical suggestion boxes, the Company has also developed a digital integrity reporting platform.Whistleblowers can ?le complaints via the Company’s WeChat Work platform or by scanning QR codes. These QR codes are also printedon business contracts, tender invitations, and business fax documents to partners, thereby enhancing supervision by both employees andexternal stakeholders and reinforcing a corporate culture of fairness, justice, and integrity.The Company has established a reward mechanism to encourage reporting by o?ering appropriate incentives to individuals who providecritical leads. At the same time, strict measures are in place to protect whistleblowers: personal information is kept strictly con?dential, andwhistleblowing materials are classi?ed as con?dential documents. Retaliation in any form is strictly prohibited, and any such act willbe subject to legal liability in accordance with national laws and regulations.
Whistleblowing Channels and Whistleblower Protection
IndicatorUnit2024
Number of management personnel covered by anti-bribery and anti-corruption trainingPercentage of management personnel covered by anti-bribery and anti-corruption trainingNumber of employees covered by anti-bribery and anti-corruption trainingPercentage of employees covered by anti-bribery and anti-corruption trainingTotal number of commercial bribery and corruption incidentsNumber of individuals disciplined for commercial bribery and corruption
Person
%Person
%CasePerson
13735
98.66
DunAn Whistleblowing
Channels
Reporting Email:nkb@dunan.cnReporting QR Code：
To further standardize internal audit practices and enhance its supervisory and service role in improving the Company's operations,optimizing business processes, and elevating the levels of internal control and risk management, the Company formulated the InternalAudit System in accordance with the Regulations on Internal Audit Work issued by the National Audit O?ce, the Guidelines for InternalAudit Work of SME Board Listed Companies issued by the Shenzhen Stock Exchange, and the Articles of Association of Zhejiang DunAnArti?cial Environment Co., Ltd. In 2024, the Company conducted:
7 comprehensive operational audits, 2 economic responsibility audits for senior management during their term of o?ce, 9 special audits on topics including receivables management, infrastructure project management, and automation equipment, 11 supervision and investigation reports, and 1 internal control evaluation report.
Strengthening Internal Audit
The Company actively promotes a culture of compliance through internal initiatives such as onboarding training for new employees andexecutive-level discussion sessions. Activities include legal updates, case studies, compliance reminders, and policy interpretation, allaimed at enhancing employees' awareness of compliance and their ability to prevent risks.In addition, the Company provides accessible compliance consultation channels for employees. During the reporting period, the Companyo?ered legal consultation services to employees on more than 100 occasions.
Fostering a Culture of Compliance
1615
Strengthening the Core of Governance2024 Environmental, Social and Governance Report
In 2024, DunAn established a sustainable development strategy under the vision of “Forging Shields for Security—Becoming a Leader inHealthy and Comfortable Environments” Centered around a sound governance core, the strategy drives two key sustainability gears:
“Sustainable Shield Forging” and “Responsible Security.” This approach involves the development of four sustainability shields—Climate Shield, Circular Shield, Environmental Shield, and Ecological Shield—to build a future-ready business model. At the same time,the company strives to create responsible value through “Product Security,” “Employee Security,” “Supply Chain Security,” and “SocialSecurity.” DunAn actively supports the United Nations Sustainable Development Goals and contributes its strength to China’s “dualcarbon” targets and global sustainable governance.
Forging Shields for Safety — Leading the Creation of Healthy and Comfortable Environments
1817
Fair CompetitionDunAn consistently upholds the principles of integrity, transparency, and fair competition. The Company strictly complies with theAnti-Unfair Competition Law of the People's Republic of China and other relevant laws and regulations, and is committed to fostering ahealthy and sustainable market environment. All marketing and sales activities are based on the provision of truthful and accurateinformation, avoiding any false or exaggerated claims. Promotional materials undergo rigorous review to ensure compliance with legal andindustry standards. The Company promotes fair competition, respects competitors, and ?rmly rejects actions that may disrupt marketorder. DunAn also respects and protects intellectual property rights—both its own and those of others—and strictly prohibits any unauthorizeduse. Regular supervision and evaluation are conducted on internal marketing activities and market behavior to ensure alignment with faircompetition requirements. Violations of these principles are subject to strict accountability. These measures are designed to providecustomers with trustworthy products and services while contributing positively to the sustainable development of the industry.
Tax Compliance and IntegrityDunAn upholds the principle of compliant operations and strictly adheres to the Corporate Income Tax Law of the People's Republic ofChina, the Law on the Administration of Tax Collection, and other applicable tax laws and regulations. The Company ful?lls its taxobligations in accordance with the law, ensuring truthful and compliant tax ?lings, and makes timely and full tax payments. Throughresponsible taxation, DunAn contributes to local economic development and broader sustainable growth.The Company has been awarded an A-level tax credit rating, and was recognized as one of the Top 30 Tax-Contributing Private Enterprisesin Shaoxing in 2024. Over the years, DunAn has also been repeatedly honored as a “Key Contributor Enterprise” in Zhuji City, recognizingits outstanding performance in honest tax compliance and its role in supporting regional economic progress.
Governance and Strategy
DunAn attaches great importance to sustainable development and proactively manages the environmental and social impacts of itsmanufacturing and operational activities. Committed to becoming a “specialist in healthy and comfortable environment systemsolutions in the HVAC sector,” the Company integrates the concept of sustainability into its corporate strategy, daily management, andoperations to achieve long-term value creation. In 2024, the Company further enhanced its ESG governance by issuing the Notice on theEstablishment of the Sustainability Committee. A three-tier ESG governance structure was established, comprising the Board ofDirectors ? Sustainability Committee ? Functional Departments, with clearly de?ned ESG responsibilities at each level. This frameworkenables more scienti?c, professional, and systematic advancement of ESG governance, supporting the Company’s high-quality andsteady development.
ESG Governance
IndicatorUnit2024
RMB0
Amount involved in lawsuits or major administrative penalties due to
unfair competition practices
The Board oversees the Company’s sustainabilitye?orts, including setting related policies and procedures,and conducts annual assessments of sustainabilityperformance.The Sustainability Committee is responsible forformulating the Company’s sustainability strategyand goals, executing directives from the Board,advancing ESG initiatives, and periodically reviewingprogress on ESG targets.Functional departments are responsible for executingESG-related resolutions, participating in ESGpractices, and ensuring the e?ective implementationof relevant initiatives.
Decision-makingLevel
Board of Directors
Strategic guidance,
supervision, and
review
Management
Level
Sustainability
Committee
Strategy formulation,
coordination, andoversight
Execution
Level
FunctionalDepartments
Collaborativeadvancement and
implementation
Strengthening the Core of Governance2024 Environmental, Social and Governance Report
At the same time, DunAn has set its 2030 Sustainable Development Goals, clearly de?ning the responsible departments for each target.These goals have been integrated into the agenda of the company’s quarterly management meetings. By regularly reviewing theprogress of key indicators, DunAn ensures the steady advancement of its 2030 sustainability commitments.
2019
Sustai
n
ab
ility
as
O
ur
S
h
i
e
l
d
R
e
s
p
o
n
s
i
b
il
ity
as
O
u
r
A
n
c
h
o
r
Strengthening the Core
of Governance
Climate Dun-Climate Protection
Environmental Dun ? EnvironmentalProtection Practices
Ecological Dun ? BiodiversityProtection
Quality
Community
Employee SafetySustainable Supply Chain
Circular Dun ? Circular Economy InitiativesStrategicPositioning
StrategicInitiatives
2030 Goals and Targets2024 Status
Sustainable ShieldForgingLeading theconstruction of ahealthy environmentthroughnature-friendlyapproach
Responsible SecurityCreating Diversi?edValue through SharedProsperity
Sound GovernanceCore Laying a SolidFoundation forLong-Term, SteadyGrowth throughIntegrity-DrivenManagement
Forging the ClimateShieldSupportingChina’s DualCarbon GoalsForging the CircularShieldDeveloping CircularEconomy Models
2030: Achieve a peak in greenhouse gas emissions (Scope 1 andScope 2), with a 10% reduction compared to the 2021 baseline.2030: Develop green products that contribute to emissionsreduction across the value chain, with green product revenueaccounting for 40% of total revenue.2030: Achieve a water resource recycling rate of no less than 50%.2030: Innovate recycling and reuse models for end-of-life products.Forging theEnvironmental ShieldSetting an Example inEnvironmental Safety
2030：Maintain zero incidents of environmental pollution andchemical spills on an ongoing basis.2030: Continuously advance the development of green factories.
Product SecurityBecoming a TrustedChoice for Customers
2030: Reduce the nonconformity rate of delivered products by50% compared to the 2021 baseline.2030: Achieve an annual customer satisfaction score of ≥92.Employee SecurityBuilding a ReliableCareer Platform forEmployeesSupply Chain SecurityPromoting a Respon-sible Supply ChainSocial Security AdvancingShared Developmentwithin CommunitiesCorporateGovernanceIntegratingSustainability toUnlock SynergiesBusiness EthicsResponsibleOperations thatInspire Trust
2030: Maintain zero major safety incidents; annual work-relatedinjuries ≤45 cases.2030: Achieve an employee satisfaction score of ≥90%.2030: Ensure that 80% of contracts include clauses related toenvironmental, labor, and human rights standards.2030: Ensure that ≥90% of suppliers undergo on-site auditscovering environmental and social responsibility.2030: Enhance suppliers’ ESG performance by holding at least?ve relevant training sessions annually.2030: Reach a 90% local employment rate.
Forging the EcologicalShield Embracing aNature-Friendly Future
2030: Integrate ecological principles into product R&D to developnature-friendly products.
2030: Continuously promote board diversity by increasing theproportion of female directors.2030: Continue to integrate sustainable development intocorporate governance practices.2030: Maintain zero tolerance for corruption and bribery,ensuring zero incidents occur.2030: Eliminate violations of business ethics, including unfaircompetition, con?icts of interest, money laundering, and fraud.
In ProgressIn ProgressIn Progress
In Progress
In ProgressIn ProgressIn ProgressIn ProgressIn ProgressIn Progress
In ProgressIn ProgressIn ProgressIn ProgressIn Progress
Initiated
InitiatedInitiated
Initiated
Strengthening the Core of Governance2024 Environmental, Social and Governance Report
Stakeholder
Communication & EngagementMethods
Key Concerns
Government andRegulatory Authorities
Shareholders and Other
Investors
Employees and Other
Workers
Industry Associations
Suppliers and Partners
Customers
Government-enterprise communicationand reportingCompliance disclosures
Regular announcementsEarnings brie?ngsDay-to-day communicationSurveysTimely phone communicationInvestor meetingsResults presentationsShareholder meetingsSocial mediaCustomer satisfaction surveysComplaint handlingSurveysRegular communicationSupplier/partner websitesSurveysOccupational health and safetyTalent attraction and retentionHuman rights protectionHuman capital developmentCompany websiteIndustry communication and networkingSurveys
Corporate governanceBusiness integrity and complianceRisk managementClimate change responseEmissions and waste managementEmployee rightsClimate change responseEmissions and waste managementCorporate governanceBusiness ethicsRisk managementInnovation and intellectual propertySustainable procurementProduct life cycle managementProduct life cycle managementCustomer relationship managementConsumer health and safetyCompliance and integrityCyber and information securityCyber and information securityOccupational health and safetySustainable procurementConsumer health and safetyOccupational health and safetyTalent attraction and retentionHuman rights protectionHuman capital developmentInnovation and intellectual propertyFair competition
Stakeholder EngagementThroughout its daily operations and service processes, DunAn actively expands communication channels with stakeholders. By establishingregular engagement mechanisms and conducting multi-channel, multi-format communication activities, the company strives to fullyunderstand stakeholders’ expectations and needs. DunAn responds proactively to their concerns, fostering harmonious and stablestakeholder relationships.
Material Topic Assessment
DunAn identi?es material ESG topics through benchmarking against relevant standards, trend analysis, and policy review. These insights,combined with key ?ndings from o?ine departmental interviews, informed the development of the 2024 ESG Materiality Topic List. Theselection process ensures that topics are aligned with compliance requirements, re?ect industry relevance, and anticipate regulatorytrends—while remaining tailored to the company’s speci?c characteristics. In 2024, a total of 34 potential material topics were identi?ed.A double materiality assessment was conducted using a questionnaire-based evaluation method. Separate surveys were distributed toassess both impact materiality and ?nancial materiality. By integrating quantitative analysis with qualitative judgment, the assessmentprocess ensures scienti?c rigor and credibility.
Identi?cation of Material TopicsStep1
Material topics were identi?ed based on benchmarkingagainst ESG standards, trend analysis, and policyrequirements. Combined with insights from o?ineinterviews, a total of 34 potential material topics wererecognized and compiled into a material topic database.
Questionnaire SurveyStep2
Structured surveys and interviews were conducted toassess double materiality. Two types of questionnaireswere distributed—Impact Materiality Assessment andFinancial Materiality Assessment—with 120 validresponses collected for impact and 16 valid responsesfor ?nancial materiality.
Evaluation and AnalysisStep3
Through interviews, data analysis, and group discus-sions, topics were evaluated and categorized into highlymaterial, moderately material, and generally materiallevels.
2221
Strengthening the Core of Governance2024 Environmental, Social and Governance Report
DunAn has identi?ed 13 highly material topics, characterized by a high proportion of issues related to thegovernance dimension. Over half of these topics are associated with compliance and safety, re?ecting thecompany’s focus on resilient governance as a central theme in advancing sustainable development. Amongthem, corporate governance, tax integrity, and product quality and safety carry high levels of negative impactmateriality, indicating a continued need to strengthen risk management. Conversely, innovation demonstratessigni?cant positive impact materiality, suggesting opportunities to align innovation e?orts with the company’svalues of "health and comfort" and "low-carbon and environmental protection", thereby exploring new sustainablebusiness models.
Highly Material
Topics
A total of 17 topics fall within the moderately material category, primarily concerning environmental and socialdimensions. Employee-related topics generally score higher in double materiality, while environmental issuestend to be rated more important by external stakeholders. Green product design and development, whilecategorized as moderately material, leans toward the higher end of the spectrum—potentially due to the lackof a clear association with sustainable business strategies. Moving forward, DunAn will continue to optimize theidenti?cation and transformation of material topics to better guide the company in addressing sustainablechallenges, seizing opportunities, and building long-term competitive advantages.ModeratelyMaterial Topics
There are 4 topics identi?ed as generally material: pollutant emissions, climate change response, philanthropy,and rural revitalization. Among these, pollutant emissions are a topic of high concern among stakeholders andcarry signi?cant negative impact materiality. This highlights the need for the company to strengthen internalawareness of sustainability and reinforce related risk management practices. Climate change response andrural revitalization align with broader sustainability agendas and national policy trends, and should continue tobe monitored and better understood. Philanthropy, as a social contribution topic, warrants continued investment,with attention to external stakeholder feedback to inform strategic adjustments.GenerallyMaterial Topics
Corporate GovernanceESG Governance
Economic Performance
Compliance and Riskmanagement
Anti-corruption
Anti-competitive Behavior
Tax Compliance and Integrity
Stakeholder Engagement
Sustainability-Related Risk
ManagementClimate response
Renewable energy Water resources utilization
Circular economy
Ecosystem and biodiversi…
Environmental Compliance
managementPollutant discharge
Waste ManagementChemicals and HazardousSubstances
Greenproductsand R&D
Product Quality
Customer Satisfaction SurveyData Security and Customer
PrivacyInnovation Driven
Intellectual…
EmploymentCompensation & Benefits
Health & Safety Assurance
Training & Education
Local OperationsPublic Welfare
Rural Revitalization
Support Industry Growth
Sustainable Supply Chain
Equal Treatment of SMEs
3.50
3.60
3.70
3.80
3.90
4.00
4.10
2.803.003.203.403.603.804.00
4.204.40
Impact Materiality
Financial Materiality
2423
Double Materiality Matrix
High Importance
Medium Importance
General Importance
Strengthening the Core of Governance2024 Environmental, Social and Governance Report
The GRI STANDARDS
?GRI 301Materials?GRI 302Energy?GRI 303Water and E?uents
?GRI 304Biodiversity
?GRI 305Emissions?GRI 306Waste
Self-Regulatory Guidelines No. 17 forCompanies Listed on Shenzhen StockExchange—Sustainability Report(For Trial Implementation)
?Climate response? Pollutant discharge?Waste disposal? Ecosystem and biodiversity protection?Environmental compliance management?Energy utilization?Water resources utilization?Circular economy
Sustainability as Our ShieldLeading the Creation of a Healthy Environmentthrough Nature-Friendly Principles
Response：The UN Sustainable Development Goals (SDGs)
Amid the severe global challenge of climate change, the increasing frequency of extreme weather events has had profound impacts onecosystems, socio-economic systems, and human life. DunAn deeply recognizes the urgency and importance of addressing climatechange and has made it a core component of the company’s sustainable development strategy.A dedicated Sustainability Committee has been established to formulate climate-related strategies, targets, and implementation plans,ensuring cross-departmental coordination and collaboration. Together, we actively advance actions to combat climate change, such asenergy transition and green product development.
Taking into account the industry attributes, value chain distribution and national macro policies, we selected the SSP5-8.5 scenario providedby the United Nations Intergovernmental Panel on Climate Change (IPCC) to conduct physical risk analysis, and the STEPS provided by theInternational Energy Agency to conduct transformation risk and opportunity analysis, to provide decision support for the company to addressclimate change and enhance its development resilience.We have conducted a comprehensive analysis of the physical risks, transformation risks and opportunities. Among them, physical risks arecategorized into acute risks and chronic risks, which may negatively a?ect the company's production operations, logistics and transportation,and inventory management. At the same time, we analyze transformation risks from four perspectives: policy and regulations, technology,market and reputation, discuss in depth the impact of various types of transformation risks on the company, and propose targetedcountermeasures based on the nature of the risks and the company's speci?c situation. For transformation opportunities, we analyzethem from three dimensions: energy layout, technological innovation and green investment, and discuss the positive impact of di?erentopportunities on the company.Below are the physical and transformational risks we have identi?ed to focus on:
Climate analysis
Climate Dun-Climate Protection
TypeNegative Impact
Acute physical risk (short-term)
Measures
TypeNegative Impact
Acute physical risk (short-term)
Measures
Insu?cient stability of power supply leads tointerruptions in production operations, exacerbating?uctuations in the capacity utilization rate ofenterprisesOccupational health risks caused by extreme hotweather rise signi?cantly, resulting in lower laborproductivity and higher rates of workplace accidentsInadequate provision of ?re?ghting infrastructureleads to insu?cient emergency response capacityfor ?res and other emergencies, increasing the riskof property damage
Carry out temperature prediction and assessment,and formulate production and emergency responsesystemsReasonable shift scheduling and adequate provisionof heat-prevention materialsImprove ?re-?ghting initiatives, and strengthen?re-?ghting inspections during the high-temperatureperiodImprove emergency response plans, and carry outemergency response drills to enhance the e?ectivenessof risk response
HighTemperature
Extreme cold temperatures reduce the stability ofmaterial storage, a?ecting production continuityCold snaps cause transportation disruptions anddisruptions in supply chain logisticsLow temperatures cause infrastructure damagesuch as water pipes freezing and cracking
Formulate contingency plans for extreme cold toenhance the e?ectiveness of risk responseStockpile materials in advance according to weatherforecasts to prevent supply disruptionsPrepare spare production facilities to ensure steamsupply in extreme coldScarcity of fresh water resources leads to shortageof water for critical processes, disrupting productioncontinuityIncreased capital costs for purchasing raw water,exacerbating ?nancial pressure
Comprehensively assessing and monitoring wateruse risks and improving emergency responsemechanisms.Various bases are actively promoting water conserva-tion and reuse projects to improve the recyclingrate of water resources.
Extreme Cold
TypeNegative Impact
Chronic physical risks (medium, long term)
Measures
Rising temperatures accelerate the aging of mechanicaland electronic components, shorten the lifespan oftemperature-sensitive equipment, and increase theoperational load of air conditioning and coolingsystems—leading to higher energy consumption andoperating costs.
Prioritize materials with excellent heat resistance andanti-aging properties during product design and selectionto extend equipment life.Utilize sensors to monitor temperature and operatingstatus in real-time, enabling early detection andresponse to anomaliesto prevent equipment failure.Introduce intelligent control technologies to automaticallyadjust temperature and operation modes based onactual needs, reducing energy waste.
Temperature
Deserti?cation
Flooding damages raw materials, equipment andproduction lines, signi?cantly increasing the costof repair and replacementFlooding damages transportation infrastructure,severely impeding the supply of raw materials andtransportation of ?nished products.
Improve the ?ood emergency plan, reserve emergencymaterials for ?ood prevention and ?ght against?oods, and strengthen the waterproof protection ofkey equipments.Build a diversi?ed supply chain system to ensurestable supply of raw materialsFloods
Damage to infrastructure such as plants, equipmentand warehouses, a?ecting production operationsIncreased investment in resources for disasterpreparedness, relief and resumption of production,driving up operating costs.
Establishing a comprehensive typhoon warning andemergency response mechanism, and organizingregular safety evacuation drills for employees toenhance their emergency response capabilitiesThe company has reinforced and protected itsplants and key production equipment to ensurethat they can withstand strong winds.Typhoon
Physical Risks
2827
Sustainability as Our Shield2024 Environmental, Social and Governance Report
CategoriesDescriptionDurationResponse Measures
With the acceleration of China's “dual carbon”policies, adjustments in carbon trading, greenbuilding standards, and renewable energy subsidiesmay increase compliance costs. Meanwhile, stricterinternational carbon tari?s and ESG disclosurerequirements may a?ect expansion into overseasmarkets.
Leverage national-level technical centers toproactively develop carbon capture andzero-carbon technologies.Establish a “policy?technology?market” synergymechanism and incorporate carbon footprintaccounting into supply chain management.Achieve green supply chain certi?cation toaddress trade barriers.
Policies andRegulations
Medium toLong Term
Core technologies such as magnetic suspensionsystems and transcritical CO?heat pumps facerisks of obsolescence. Emerging solutions, likesolid-state battery thermal management, maychallenge current technologies.
Allocate signi?cant annual R&D investmentinto frontier technologies.Focus on thermal management and low-GWPrefrigerants.Implement a “patent pool + scenario-basedapplication” strategy to strengthen IP barriersand speed up application in sectors like datacenters and rail transit.Technology
Short toLong Term
CategoriesDescriptionDurationResponse Measures
Customers increasingly prefer companieso?ering low-carbon products. Failure to meetthese expectations may result in loss ofmarket share. Rising traditional energy costsmay further increase operational pressure.
Increase procurement of green electricity andinvest in photovoltaic and wind powersystems.Actively engage with customers to addressclimate concerns with tangible actions.Market
Medium toLong Term
Stakeholders, including the public and investors,demand more active e?orts to reduce carbonfootprints and support sustainability. Inactionmay reduce trust, impacting both revenueand company valuation.
Ensure timely disclosure of ESG-related informationin compliance with regulations.Regularly publish ESG reports to showcaseenvironmental and social progress.Reputation
Medium toLong Term
Transition Risks
Transition OpportunitiesEnergy Structure OptimizationBy leveraging distributed photovoltaics and energy storage as entry points, DunAn is building anintegrated distributed energy network through the utilization of industrial waste heat andbiomass energy. Based on our strengths in specialized environments such as nuclear power, railtransit, and data centers, we are developing zero-carbon energy bases to promote the localizedconsumption of green electricity in high-energy-demand scenarios.
Technological InnovationWe continue to advance refrigeration technologies with a focus on microchannel heat exchangeand intelligent control algorithms. Our R&D e?orts include the development of high-e?ciency,low-carbon refrigerants and transcritical heat pump systems, leading the industry in energye?ciency standards. Collaboration with universities and research institutions accelerates thetransformation of low-carbon technologies from lab to market. In parallel, we are enhancing ourintellectual property portfolio and leading standard-setting initiatives.Green InvestmentCapitalizing on our extensive experience in the refrigeration industry and our technologicaladvantages in renewable energy, we are deepening our green investment strategy. By aligning“technology?application scenarios?capital,” we aim to establish a development model that
radiates from the Yangtze River Delta core to the rest of the country, using technical barriers as astrategic moat.
TypeNegative Impact
Chronic physical risks (medium, long term)
Measures
Increased humidity leads to excessive moistureabsorption in raw materials, negatively a?ectingproduct quality and yield. It also accelerates corrosionof metal components, raising maintenance costsand frequency.
Install industrial dehumidi?ers and optimize ventilationsystems to maintain proper indoor humidity andprevent material and product damage.Apply surface protection measures, such asanti-rust oil coating, to protect metal components.Implement regular maintenance and inspectionplans to detect and address signs of corrosionpromptly, extending equipment lifespan.Humidity
Rising sea levels may damage port infrastructure,disrupt surrounding transportation networks, anddelay logistics for raw materials and ?nished goods.
Optimize supply chain layout by integratingclimate change risks into supplier evaluations toensure stable logistics and transportation.Diversify supplier sources to reduce reliance onspeci?c ports or regions, minimizing disruptionrisks caused by extreme weather events.Sea Level Rise
Increased airborne particles can introduce impurities intokey manufacturing processes, leading to higher defectrates and reduced product performance. Maintainingcleanroom standards also increases energy usage andequipment maintenance frequency.
Implement real-time air quality monitoring andadopt high-e?ciency air puri?cation technologiesto ensure cleanroom conditions meet or exceedindustry standards.Optimize workshop layout and production processesto minimize particle contamination and improveenvironmental control e?ciency.Particulate
Matte
3029
Sustainability as Our Shield2024 Environmental, Social and Governance Report
DunAn actively implements energy-saving retro?ts to existing equipment. In 2024, the company launched two major initiatives.Energy-Saving Technology Upgrades
To support carbon reduction goals, the company actively uses renewable energy. In 2024, building on previously completeddistributed solar installations, the company added 0.849 MW of new capacity.Use of Renewable Energy
Thailand Solar ProjectIn August 2024, a new solar PV system with 0.849 MW capacity was installed at the Thailandbase, reducing CO? emissions by 600 tons per year.
Heat Recovery from Air CompressorsCase
In September 2024, the Zhuhai base installed a heat recovery system on air compressors, using recoveredheat to power cleaning machines. The system saves 350,000 kWh of electricity and reduces CO? emissionsby 184 tons annually.
Insulation Upgrade for Brazing FurnacesIn 2024, insulation upgrades to brazing furnaces at multiple bases (DianKou, Wuhu, Zhuhai) improvedthermal e?ciency, reducing energy consumption by 10% and cutting CO? emissions by 656 tonsannually.
Thanks to these initiatives, the energy cost per RMB 10,000 of output at the Hetian plant dropped from RMB 279 in 2022 to RMB 211 in2024—a 24.3% reduction.
Energy E?ciency Performance
HonorIn 2024, Zhejiang DunAn Electromechanical Technology Co., Ltd. was named a National-Level Green Factory.
Lifecycle StagesPre-useStrict energy e?ciency assesmentsof new equipment, with apreferencefor advanced and low-energytechnologies.
Real-time energy tracking,optimizedallocation, and minimizing processwaste.
Reuse of recoverable energy tolower consumption and enhanceresource recycling.
During Use
Post-use
To implement national energy conservation and emissions reduction policies and to continuously improve energy performance,DunAn has completed certi?cation under national standard GB/T23331 for the Energy Management System. An energy managementworking group, headed by senior executives, is responsible for developing annual energy-saving plans and supervising performance,including participation in internal audits and reviews, and overseeing corrective and preventive actions.In 2024, the company actively promoted energy transition by building distributed photovoltaic projects at its production basesto increase the use of clean energy. It also optimized production processes by adopting advanced technologies and equipmentto enhance energy e?ciency and reduce unit energy consumption.
Energy Transition
DunAn implements full lifecycle energy management across all stages—before, during, and after energy use—building a scien-ti?c and e?cient energy management system. This systematic and end-to-end strategy reduces operational costs and advancesthe company’s sustainable development goals.Full Lifecycle Energy Management
Performance ? Carbon EmissionsIndicatorUnit2024
Scope 1Scope 2Total EmissionsEmission Intensity
tCO2etCO2e
tCO2e
tCO2e/RMB million revenue
112872475534593
6.1
2023
98382078530623
5.4
2022
83231857126894
5.13
Carbon emission calculation is based on the "Corporate Greenhouse Gas Accounting and Reporting Guidelines ? PowerGeneration Facilities (2022 Revised Edition)" by the Ministry of Ecology and Environment and the NDRC’s "Trial Guidelines onGHG Accounting and Reporting."
3231
Case
Case
Sustainability as Our Shield2024 Environmental, Social and Governance Report
3433
Guided by the mission to “improve energy e?ciency and optimize the environment,” DunAn follows a green and energy-saving technologypath. The company adheres to the philosophy of “green serving green, safety built on safety, professionalism serving professionals,”committing to environmental protection and sustainable development. Through continuous innovation, it aims to deliver environmentallyfriendly core technologies and premium products globally.
Green Products
MPHXCaseA core product of DunAn’s low-carbon strategy, the micro-plate heat exchanger usesstacked composite plates, signi?cantly enhancing heat transfer while reducing resourceconsumption. Compared to traditional microchannel exchangers, it reduces refrigerantcharge by 48%, supporting low-charge ?ammable refrigerants and improving systemsafety and environmental performance. Its corrosion-resistant design surpasses industrystandards with over 4,000 hours of acid salt spray resistance (SWAAT A3), extendinglifespan and minimizing replacements.
Clean Heating for Relocated CommunitiesCase
In Daming County, a clean energy heating project for 29 villages and 31,381residents replaced coal and gas with air-source heat pumps across four heatingcommunities and 13 pump stations. With a heating load of 39,662 kW and991,605 sqm of heating area, the system delivers both ecological bene?ts andrural development support.
i-Super Integrated ChillerCaseDriven by eco-friendly principles, the Anjie i-Super uses advanced evaporative cooling and integrated design, eliminating the needfor external cooling towers and pumps. It achieves 15% energy savings over traditional water-cooled systems and 35% overair-cooled systems. Certi?ed by the China Refrigeration Society as an energy-e?cient and eco-friendly product, it also featureszero ozone-depleting potential.
Lead-Free Product DevelopmentCaseIn response to the industry's trend and demand for lead-free and environmentally friendlydevelopment, the company has elevated the stainless-steel transformation of itsproducts to a strategic priority, aiming to provide customers with greener, low-carbonproducts that deliver greater customer value.With 15 years of technical accumulation, DunAn has developed a highly mature stainlesssteel production process. Stainless steel products have been mass-produced acrossvarious product lines, including four-way valves, ball valves, solenoid valves, and tubingassemblies. Currently, stainless steel four-way valves account for over 25% of all four-wayvalves, and DunAn holds a 60% market share in this category — positioning the companyas an industry leader.
Nanjing Grain Emergency Supply CenterCaseThis large-scale cold-chain logistics center required high environmental performance. DunAn designed a COcascade systemintegrated with heat recovery, multi-stage ?ltration, dynamic oil return, and thermal ?eld simulation. The result is an e?cient, safe,and green refrigeration system benchmark project.
Sustainability as Our Shield2024 Environmental, Social and Governance Report
Circular Dun ? Circular Economy InitiativesDeveloping a circular economy is a proactive step toward a green societal transition and a key component of China’s dual-carbon strategy. In2024, DunAn focused on water and materials recycling, with dedicated implementation led by the EHS Department and the EquipmentManagement Department. Looking forward, the company will strengthen full lifecycle product management through coordinated e?ortsbetween R&D and manufacturing departments to build a comprehensive green circular system.Water RecyclingWater resource management is critical to environmental sustainability. During site selection for manufacturing bases, the company conductsthorough water risk assessments, prioritizing areas with strong water resource endowments and stable supply systems. Company-widewater-saving awareness is promoted, and water conservation practices are integrated across all operational phases. Technological innovationand precise management are used to maximize water-use e?ciency.
Green O?ce Water ConservationCaseA company-wide campaign titled “Energy Saving Starts with Me” was launched. Requirements included:
Shutting o? water valves when not in use. Rapid response to leaks or over?ows. Cultivating employee habits to turn o? taps promptly and reduce water waste.
Industrial Water ReuseCaseIn 2024, DunAn Hetian actively advanced the circular utilization of industrial water resources as part of its commitment to sustainabledevelopment. Within the park, reclaimed water was subject to re?ned classi?cation management and reused in multiplenon-production scenarios such as restrooms, forming an innovative, closed-loop water management system.On the production side, the four-way valve division optimized its process ?ow by repurposing high-frequency welding cooling waterfor use in the cooling systems of ?ame welding and end-cap riveting steps, signi?cantly improving water resource e?ciency.Furthermore, the company continued to invest in water-saving technological upgrades, including the expansion of cooling waterrecycling systems, driving overall improvements in water use e?ciency and supporting long-term environmental sustainabilitygoals.
Performance ? Water Use (2024)
Consumption Intensity
Indicator单位
Water
WithdrawalDischargeConsumption
10000m?10000m?10000m?Tonne / 10k RMB
2024
38.86
23.89
14.97
0.737
3635
Materials Recycling
Copper Scrap RecyclingCaseDunAn has a well-established copper scrap collection and reuse system.Collected copper ?nes and cuttings are returned to processing plants or other production stages.In 2024, a total of 11,548 tons of copper scrap was recycled, reducing mining activity and environmental impact.
DunAn actively promotes raw material reuse, green packaging, and logistics. Recyclable materials are prioritized in production to reducereliance on non-renewables, and lean management lowers scrap rates to minimize waste at the source. A sorting and recycling mechanismensures recyclable materials are e?ciently reused, reducing land?ll and incineration impacts.
Performance ? Waste Recycling (2024)
Indicator单位2024
TotalRateWaste Recycling
Tonne
%
17910.89
95.36
Pallet ReuseCaseA pallet-sharing model was implemented in cooperation with suppliers and customers.Through reuse and repair, the reuse rate reached 90% in 2024.This reduced demand for new pallets, saving 180 m? of timber and cutting 72 tons of solid waste.
Sustainability as Our Shield2024 Environmental, Social and Governance Report
Environmental Dun ? EnvironmentalProtection Practices
DunAn integrates environmental protection into its core sustainability strategy. An EHS Management Department, led by senior executives,coordinates environmental compliance and initiatives across subsidiaries. Each business unit assumes primary responsibility for environ-mental targets, which are incorporated into performance evaluations to ensure accountability at every level.
Environmental ComplianceThe company strictly adheres to China’s “Three Simultaneities” policy (design, construction, and operation of environmental facilitiessynchronized with main projects), ensuring pollution control systems are implemented in line with Environmental Impact Assessment(EIA) requirements and operating permits. DunAn continuously improves pollution treatment technologies, including wastewater, exhaustgas, and solid waste management. In 2024, all emissions met applicable discharge standards.
CompanyNo.Certi?cate Issue DateCerti?cate Expiry DateDunAn Hetian
913306007652348458001U913306007652348458002Z9133068114632514X5001U91440400769345075Q91340221588859982Q001C
2024-12-172023-7-182024-9-272024-4-112023-12-19
Val. until Dec. 31,2025Val. until Jul. 07,2028Val. until Dec. 31,2025Val. until Apr. 10,2029Val. until Dec. 18,2028
DunAn MachineryDunAn Hetian（No.1 xingan Road）
ZhuHai HuayuDunAn (WuHu) ZhongYuan
The company places great importance on wastewater management and continuously optimizes water resource utilization e?ciency bypromoting cleaner production and water-saving technologies to reduce wastewater discharge. In our production processes, we implementwater recycling and wastewater reuse measures—such as cooling water recirculation and reclaimed water reuse—to minimize theconsumption of fresh water and the total volume of wastewater discharged.To address wastewater from di?erent sources, the company has established a categorized treatment mechanism and applies a variety ofphysical, chemical, and biological treatment processes to purify industrial e?uents and domestic sewage accordingly. Advanced wastewatertreatment technologies, including membrane separation and biochemical treatment, have been introduced to enhance treatment capacity andwater quality stability.All wastewater is subject to strict monitoring to ensure that pollutant indicators comply with national and local discharge standards.Regular third-party testing is also conducted to verify compliance. In addition, the company actively explores wastewater resource utilization byincreasing the proportion of reclaimed water reuse, thereby reducing environmental impact and promoting the sustainable use of waterresources.
Wastewater Management
The company exercises strict control over air pollutant emissions and continuously optimizes its air emissions management system toenhance overall treatment performance. For pollutants generated during production—such as volatile organic compounds (VOCs), dust,and other contaminants—the company has established an e?cient exhaust gas collection system and applies advanced puri?cationtechnologies, including activated carbon adsorption, catalytic combustion, and low-temperature plasma treatment, to ensure e?ectivepollutant removal.At the same time, the company strengthens enclosure management to minimize fugitive emissions and optimizes production processes toreduce the generation of pollutants at the source. To further improve treatment e?ciency, regular maintenance and technologicalupgrades of exhaust gas treatment equipment are carried out to ensure stable and e?cient operation.Additionally, the company has implemented a stringent monitoring mechanism to track air emission data in real time, ensuring that allemission indicators comply with national and local environmental regulations. The company also undergoes supervision and inspectionby government authorities and third-party agencies. Through continuous improvement of air emissions control measures, the companyhas e?ectively reduced atmospheric pollutant emissions.
Air Emissions Management
The company manages solid waste in strict accordance with applicable laws and regulations concerning collection, storage, andoutsourced disposal. Hazardous waste is entrusted to quali?ed third-party service providers for compliant treatment and disposal. Generalindustrial solid waste is centrally collected and processed for comprehensive recycling, while domestic waste is regularly removed bysanitation services.A well-established system for classi?ed collection, treatment, and recycling of waste has been implemented to support resource recovery.The company promotes resource utilization of various types of waste generated during production and continuously improves its wasterecycling rate.
Solid Waste Management
3837
As of the reporting period, all 17 subsidiaries have passed ISO 14001
Environmental Management System certi?cation.
ISO 14001 Certi?cation
Sustainability as Our Shield2024 Environmental, Social and Governance Report
Air Emissions
IndicatorUnit2024SOxNOxVOCs
kgkgkg
796.7
4621.55635.2
Due to inclusion as a key emission unit, this period’s COD data has been adjusted based on permit monitoring requirements, resultingin di?erences from historical data. The discrepancy is due to the company’s on-site wastewater treatment meeting municipalstandards before discharge into the municipal system, which is now accounted as environmental discharge.
Water Discharge
IndicatorUnit2024
Industrial WastewaterDomestic Wastewater
CODNH3-NTotal NitrogenTotal Phosphorus
M?M?TonneTonneTonneTonne
23892252400
3.440
0.177
0.623
0.395
Solid Waste
IndicatorUnit2024
Total WasteInclude：
General Waste
Hazardous Waste
TotalIntensity
TotalIntensity
17910.89
0.01078
870.19
0.00194
TonneTonne / RMB 10k
TonneTonne / RMB 10k
Tonne18777.08
Environmental Risk Management
DunAn and its subsidiaries strictly comply with all applicable national and local environmental laws and regulations. A comprehensiveself-monitoring system has been established to ensure that all pollutants are discharged in accordance with standards. The company hasdeveloped internal environmental monitoring plans and discloses relevant information via its pollutant discharge permits and publicmonitoring platforms, subject to supervision by regulators and the public.All pollution control facilities are under 24-hour real-time monitoring to ensure stable operation. Monitoring data are recorded and reported inreal time, and any anomalies are promptly addressed. Automatic online monitoring systems are installed for key pollutants, and real-timeemission data is connected to local environmental departments to ensure full transparency.Third-party environmental monitoring agencies are regularly commissioned to verify data accuracy. All indicators during the reportingperiod complied with discharge standards, supporting the company’s commitment to green and sustainable development.As required by law, DunAn has commissioned certi?ed agencies to prepare emergency response plans for environmental pollution events.These plans have been ?led with local environmental authorities, and emergency drills are held at least once annually to raise employeeawareness and strengthen emergency response capabilities.
CompanyDate of PreparationDepartmentFiling DateNO.DunAn Hetian
ZhuHai HuayuDunAn Machinery
DunAn (WuHu)
ZhongYuan
2024-12
2021-112024-6
2024-1
Zhuji Branch, ZHB
Jinwan Branch,
ZHEE
Zhuji Branch, ZHB
Wanzhi DistrictBranch, WHEEB
330681-2024-106-M
440404-2022-0223-M
330681-2024-049-L
340221-2024-009-L
2024-12-12
2022-12-82024-6-24
2024-2-20
4039
Sustainability as Our Shield2024 Environmental, Social and Governance Report
Environmental Risk Emergency Response Flowchart
Sudden Environmental Pollution Incident
Rescue Operation
Internal Resources
Emergency Expansion
Request for RescueIncident Control
Emergency Command CenterOn-site Command Leaders
Emergency Activation
Self-Rescue
Fire?ghtingDisaster ReliefLogistics Support
On-site Cleanup
Incident
Summary ReportingEmergency Improvement
Emergency Recovery
EmergencyTermination
Ecological Dun ? Biodiversity ProtectionBuilding an ecological civilization is essential to the well-being of the people and the future of the nation. DunAn seeks to contribute bydeveloping innovative and eco-friendly product solutions under the “Nature-Friendly” concept. As sustainable development trendscontinue to evolve, products that support ecological values are expected to become increasingly important. The company will continue tomonitor demand-side trends, increase R&D investment, and contribute to biodiversity protection with its technological expertise.
DunAn is committed to maintaining the health and stability of ecosystems and protecting biodiversity. We promote the sustainable use ofland and soil resources, minimize habitat disruption, and reduce the environmental impact of operations.We also require our supply chain partners to uphold sustainable development principles and to comply with international biodiversitystandards and applicable regulations to ensure the long-term health of ecosystems.
Biodiversity Conservation
4241
Sustainability as Our Shield2024 Environmental, Social and Governance Report
Responsibility as Our AnchorCreating Diverse Value through Social Prosperity
Chapter Responds to：United Nations Sustainable Development Goals (SDGs)
Global Reporting InitiativeStandards (GRI STANDARDS)
?GRI 407Freedom of Association & Collective Bargaining
?GRI 401Employment?GRI 402Labor Relations?GRI 403Occupational Health & Safety?GRI 404Training & Education?GRI 405Diversity & Equal Opportunity?GRI 406Non-discrimination
?GRI 413Local Communities?GRI 414Supplier Social Assessment
?GRI 408Child Labor?GRI 409Forced or Compulsory Labor?GRI 308Supplier Environmental Assessment
Shenzhen Stock Exchange Self-RegulatoryGuidelines for Listed CompaniesNo. 17?Sustainability Reporting (Trial))?Employees?Data Security & Customer Privacy Protection?Supply Chain Security?Rural Revitalization?Social Contributions?Fair Treatment of SMEs
DunAn has deeply integrated the "Zero Defect" management philosophy into its ESG governance system, constructing a quality cultureecosystem centered on "Doing It Right the First Time." Through the establishment of a "Three-Leap" implementation path:
Conceptual Layer: Deepening the core of Crosby's theory, creating a value transmission mechanism of "Zero Error in Work → Zero Defectin Products → Zero Waste in Operations."Operational Layer: Innovating quality control across the entire value chain, building a product lifecycle quality ?rewall based on the IATF16949 system.Mechanism Layer: Developing a digital quality foundation, achieving penetrative management of quality data through the LIMS, DMS, LIMSsystem, and constructing a coupled system of quality performance and sustainability indicators.
The company has established a quality management system covering the entire product lifecycle, forming a closed-loop mechanism of"Planning ? Prevention ? Control ? Improvement." It systematically developed 28 core regulatory documents, creating a digital penetrativecontrol network from design input to market feedback, ensuring systematic management of all quality elements.
Product Quality
Quality Management System
Strengthening APQP advanced quality planning toensure upfront identi?cation of design input risks.
Regulatory Documents:
《Design Quality Planning Regulations》
Planning
Establish QCDS (Quality/Cost/Delivery/Service)supplier quali?cation standards, and develop asupplier development quality screening mechanism.
Regulatory Documents:
《Supplier Development Quality Control
Regulations》
Prevention
Process quality stability monitoring and management+ ?nished product dynamic sampling inspection fordual assurance.
Regulatory Documents:
《Process Product Quality Control
Regulations》 《AQL Dynamic SamplingInspection Procedures》
Control
Special improvement initiatives for critical quality painpoints + closed-loop management of after-salesquality issues, establishing a continuous optimizationmechanism of 'problem analysis → improvementimplementation → e?ectiveness veri?cation'.
Regulatory Documents:
《Product Quality Improvement Regulations》《Customer Feedback Management Regulations》Improvement
To ensure comprehensive control from product planning to market feedback, the company has established a clear quality managementframework.
Product Security
4645
General Supervisor of IT and Quality
CQO
QPE
QAMQDANPQMSQMAQMQIPMPCMQSOM
ESM
QIE
QSE
TC
STPQE
PIIQCAQEQASSQEFQC
TEMEMTPAMTPAMTPA
IQCSQEFQCAQEPQE
PI
DIANKOU
ZHUHAIWUHU
QM
QS
CD
THAIL AND
BQS
QASEDTDVD
QualityPlanning
QualityImprovement
QualitySystem
TestingCenter
Domestic QualityManagement
Overseas QualityManagement
Responsibility as Our Anchor2024 Environmental, Social and Governance Report
DunAn has established a "Process Control ? Special Breakthroughs ? Pain Point Resolution" Trinity Quality Pledge Systemassessment system. Through process quality indicators (40% weight), it achieves systematic improvement in production yield,focusing on core parameters such as overall ?rst-pass defect rate and quality loss rate. Special improvement indicators (30%weight) enable precise quality cost control, targeting key loss areas like scrap rate and leakage rate. TOP3 quality improvementprojects (30% weight) address customer pain points, establishing a closed-loop mechanism of "Problem Discovery ? Root CauseAnalysis ? Long-Term Resolution," driving continuous reduction in quality loss costs.
Quality Management Assessment
The company implemented a quality empowerment project, systematically enhancing process capability across the value chain. Theprocess capability index (Cpk) achieved breakthrough growth: Phase 1 increased the maturity index by 162% (63.02% completion), andPhase 2 further improved it by 131% (91.30% completion).Quality Empowerment Project
Through a "Three-Dimensional Timeliness Management System," the company ensures rapid response to quality incidents, e?ectivelyreducing quality risks and ensuring product reliability and customer satisfactionQuality Incident Response
DunAn identi?ed quality enhancement of its ?agship commercial component product—the Solenoid Valve 6A Series—as astrategic priority, designating the "?rst-pass defect rate in comprehensive testing" as the key quality breakthrough metric. Thecompany established clear improvement targets: while the defect rate benchmark for 2023 was set at 5000 ppm, actual performanceachieved a remarkable reduction to 1246 ppm by 2024, surpassing all objectives. This achievement was supported by a systematicquality management framework fully compliant with IATF 16949 standards, ensuring sustainable product quality advancement.
Quality Improvement
Incident LevelAssessment MechanismMajor IncidentSigni?cant Incident
General IncidentMinor incident
Response Time
Assessed and reported by business unit quality departments,
?led with DunAn Quality Department.Assessed and reported by business unit quality departments,
?led with DunAn Quality Department.Assessed by business division quality departments.Assessed by business division quality departments.
Commercial Component 50# Stainless Steel Four-Way ValveCase
Embedding ?ve core tools in key stages like product development (APQP), failure prevention (FMEA),and process control (SPC).Advanced Tool
Integration
IATF 16949: Deployed process-oriented IATF 16949 audits utilizing VDA 6.3 (process) and VDA 6.5(product) standards.IATF 16949
Executed through three progressive stages—initial pilot (solenoid valves), product line expansion(commercial components), and enterprise-wide deployment.PhasedImplementation Approach
4847
DunAn is dedicated to establishing a digital quality talent development system: On one hand, it has created a "selection-training-application-incentive" closed-loop mechanism, implementing a TQM-based talent development model through specialized quality trainingprograms, achieving training outcomes including an average theoretical assessment score of 80.02, a knowledge transfer rate of 86%, anda satisfaction rate of 91.8%; on the other hand, it has developed a must-know/must-master digital learning platform to build an intelligentlearning system integrating study, testing, evaluation and assessment, continuously enhancing the professional capabilities of qualitypersonnel and providing talent support for the company's business development.
Quality Talent Development
Quality Incident Reporting Requirements:
Submission within 24 hours via OA email.Emergency containment within 24 hours.Investigation within 72 hours.Corrective actions within one week.Preventive measures within one week.The speci?ed timelines represent standard requirements. Special circumstances requiring deviations must be reported and approved inadvance.
?SV ＜10000PPM?CPK＞1.67?Customer Complaints(≥10M）＜9.46
?Quality manual based on IATF
16949?IATF 16949 ProcedureDocuments?APQP&IPD processes andStandards System forCommercial Division?Product Audi and Process
Audi Methods?SPC Statistics Analysis andImprovement?Implementation of SupplierPPAP Methods?Launch and Developmentof the SV Failure ModeAnalysis Database（DFMEA、PFMEA）?Standardization of the IATF16949 Project and System
ProductImprove-mentStandar
dsSystemSedimen-tationKnowledgeBuilding
Implementation Steps
Solenoid ValvesCommercial ComponentsRefrigeration Accessories
First：Preserve similarities, adjust for differences
?8-10 Months?Implementation of Core Quality tools and Selected Clauses of IATF 16949 for SolenoidvalveSecond：System Implementation
?10-12 Months?Fully implement IATF 16949 in the CCPL and obtain certificationThird：Fully Implementation
?10-12 Months?Promotion of Product Lines such as Four-Way Valve, Shut-Off Valve etcFoundation
Base on IATF16949,establi-sh
a quality
management
system
Operation
ThroughtIPD&APQP,establish anR&D processbased on thefull lifecycle
Usage
Throught FMEAto build apreventive-focused qualitymanagementsystem
Application
Throught SPCand MSA，drivethe integrationof statisticaltechniques
Enhancement
Enhance thesystem thinkingand qualityawareness withinthe commercialdivision“Point”SV—“Line” Commercial Division—“Surface” DunAn
Within 24 hours (The above timerequirement is the general rule;for special circumstances, pleaseapply and report in advance.)Reporting method: OA email
Responsibility as Our Anchor2024 Environmental, Social and Governance Report
Quality Achievements & Industry RecognitionPerformance
DunAn has designed and implemented customer satisfaction questionnaires for all refrigeration component product lines, covering all directcustomers of the marketing centers to ensure 100% coverage of major accounts. The survey content includes product quality, technical support,comprehensive services, while also collecting customer feedback on future R&D directions, improvement needs and other suggestions. Surveyresults over the past three years have consistently shown customer satisfaction scores above 90 points. Through in-depth analysis of thefeedback, the company identi?es gaps with customer expectations, determines key factors a?ecting satisfaction, and continuously improvescustomer satisfaction levels.
Customer Satisfaction Survey
QC Group Achievements
Indicator
Customer-end Product RecallCustomer Complaint Rate per ?10 Million Sales
UnitCasePer ?10 Million
2024
1.95
DunAn consistently implements a "customer-?rst" development strategy, making customer value creation the core driver of sustainabledevelopment. The company has established a collaborative system where frontline needs drive R&D innovation and downstream processesoptimize upstream work?ows, ensuring accurate transformation of market insights into product-service solutions. Through continuouscustomer satisfaction management, the company has implemented regular customer satisfaction surveys while strictly protecting customerprivacy and respecting customer rights. With its needs-oriented innovation mechanism and closed-loop service system, the companyachieves e?cient, full-chain coordination from market sensing to value creation, delivering more competitive solutions and continuouslyimproving customer service standards.
Customer FeedbackRoot CauseImprovement Actions
Increase inventory levelsand improve product qualityEnhance delivery timelinessand provide more high-quality
productsMaintain quality consistency,advance technical capabilities,and improve product reliability
Customer Service
Quali?cation Certi?cationQuali?cation
The laboratory is certi?ed under CNAS-CL01:2018, recognized in over 100countries, including the U.S., EU members, Japan, Australia, Canada, SouthKorea, and Singapore.
CNAS Laboratory Certi?cation
Honor
Reducing First-Pass Defects in Stainless Steel Four-WayValve Brazing" and "Reducing Market Leakage Rate ofCopper-Steel Mu?ers" were awarded ?rst prize at the"National Machinery Industry Quality ManagementAchievements Presentation Conference"
Honor
“Reducing DSF-9 Four-Way Valve Main Valve Welding First-Pass Defect Rate”was recognized as a breakthrough project case under the "National Lean SixSigma Management Evaluation Criteria.
5049
Corrective measures:
1.Upgrade water quality for high-frequency welding with
continuous monitoring
2.Increase cleaning frequency for welding sleeves with
inspector oversight
3.Conduct comprehensive cleanliness inspection and
optimization across automated production lines
4.Systematically inspect all wire feeders, secure loose
cylinders, and establish maintenance schedules
5.Improve CPK values for pipe and main valve body
dimensions
6.Launch special project targeting ?rst-pass welding defects
as key improvement initiative
7. Enhance detection reliability of performance testing
equipment
Defects analysis:
Surface defects: Mainlyporosity in weld poolsLeakage defects: Primarily atpipe/capillary joints and endcover welds
Responsibility as Our Anchor2024 Environmental, Social and Governance Report
DunAn always prioritizes customer privacy protection, strictly complying with the "Personal Information Protection Law of the People'sRepublic of China" and other relevant laws and regulations to ensure the security and privacy of customer data. When conducting businesscooperation with key partners, we insist on simultaneously signing commercial contracts and con?dentiality agreements, ensuring allcollaborations are bound by legally e?ective con?dentiality terms. Additionally, the company has established specialized executionprocesses to protect important corporate data, clearly de?ning the usage scope and con?dentiality requirements for critical data, andformulating relevant data management policies and standards. During this reporting period, no customer privacy breaches occurred at thecompany.Regarding user-end information security, we implement access control to enforce employee intranet/extranet access management; deployantivirus software for malware protection; install encryption systems to protect important data during transmission; and promote clouddesktops for key positions, enabling centralized data management and security control. Since 2021, we have participated annually in the"Cyber Shield" exercises organized by the Zhuji Municipal Public Security Bureau's Cyber Police Unit. Through the deployment of thesecore digital transformation infrastructures, we have built an enterprise digital work platform characterized by "security, agility, and sustainability."
Customer Privacy Protection
We possess a National Accredited Enterprise Technology Center, National Postdoctoral Research Station, Academician Workstation,CNAS-Certi?ed Laboratory, and National-Grade Full-Performance Testing Center for Central Air Conditioning Systems. We have establisheda proprietary core technology support system, providing robust platform support for innovation. Additionally, we emphasize R&D teambuilding by implementing an innovation "First-in-Command" accountability system, leveraging the leadership of top talents. We conductregular training sessions and discussions on innovation knowledge and methodologies, cultivating a highly capable echelon of innovationprofessionals. Concurrently, we continuously increase investment in technological innovation, maintaining dedicated and segregated R&Dfunding that is prioritized, stable, and fully-resourced to guarantee innovation inputs.
Increase Innovation Investment
Innovation serves as the soul of corporate development and the primary driving force behind DunAn's growth. We vigorously promote aninnovation culture, progressively establishing and re?ning an innovation institutional system. Through advancing key innovation projects,implementing technology roadmaps, developing innovation platforms, organizing innovation-related training programs, and conductinginnovation award evaluations, we ensure sustained momentum in our innovation e?orts.Guided by the "Three Creations" spirit—Entrepreneurship, Initiative, and Innovation— we actively foster a company-wide innovationatmosphere that "encourages exploration, rejects mediocrity, dares to pioneer, and embraces openness." We adhere to the principle ofsubstantially rewarding innovation, providing timely incentives to encourage continuous workplace innovation that enhances performance. Wepermit trial-and-error in reforms, innovation, and other endeavors that align with corporate interests.
R&D-Driven Innovation
Customer Recognition
No.
Leadership Award of the YearOutstanding Contribution Award
Quality Excellence AwardExcellent Proposal Award
Best Partner Award (Bronze)Outstanding Partner Award
Best Quality Award of the Year
Excellent Valve Supplier AwardExcellent Tube Component Supplier Award
Distinguished Strategic Supplier Award
Collaborative Partnership Award
Synergy AwardSupplier of the Year Award
2024 Excellent Supplier Award
Co-development Award
Rising Supplier AwardCerti?cate of AppreciationPremium Supplier Award
Johnson HitachiCarrier HVAC North Asia
Songz Automobile
Shanghai Fujitsu
LG KoreaWalton Bangladesh
Sharp ThailandChongqing GreeChongqing GreeTCL ZhongshanTCL Zhongshan
Anhui PhnixSichuan Changhong
FAW Jiefang
Yinlun SharesMateng EnergyShanghai Mitsubishi ElectricGongqingcheng Zhonghuida
Award Title2024
Partial List of Honors Awarded to DunAn by Customers in 2024
5251
4.00%
3.95%
3.90%
3.85%
3.80%
3.75%
3.7%
2022
20232024
3.81%3.81%
3.96%
R&D SpendingR&D-to-revenueratio
Overview of R&D Investment
Unit: Million RMB
Responsibility as Our Anchor2024 Environmental, Social and Governance Report
Advancing Cutting-Edge Research
In pursuing an innovation-led future, DunAn enhances core competitiveness through technological innovation while boosting e?ciencyvia business model and management innovation, driving industrial upgrading and enabling the company's healthy, sustainable, andsound development.By leveraging platforms such as the National Technology Center and National Postdoctoral Research Station, we have established an open,industry-academia-research integrated technology operation platform. This strengthens independent R&D innovation capabilities,facilitates the development of forward-looking, high-tech products with signi?cant market potential, and accelerates the industrializationof new technologies.
Intellectual Property ProtectionDunAn fully recognizes that protecting intellectual property safeguards its innovation capabilities and represents a critical dimension offul?lling sustainable development and social responsibilities. The company has successively obtained certi?cations as a National IntellectualProperty Demonstration Enterprise and for National Intellectual Property Management Systems, continuously enhancing end-to-endcapabilities in IP creation, utilization, and maintenance. Building on this foundation, the company has issued the "Intellectual PropertyManagement Standards," which stipulate patent application rewards to encourage independent innovation among R&D personnel,stimulate innovation potential, and make patents a "badge of honor" for researchers."Respecting others' intellectual property while protecting our own" remains our fundamental principle. While safeguarding our inventions,we have also established a patent early-warning system to continuously monitor and analyze patent applications within the industry. Thishelps avoid patent risks during product development, further improves the originality of our product designs, forms our own productpatent portfolio, and strengthens post-market competitiveness.
R&D investment amountR&D investment/revenue ratioNumber of R&D personnel & ratioPatent applications in reporting period
Patents granted in reporting periodValid patents at the end of the reporting period
10k RMB
%Person/%
ItemItemItem
IndicatorUnit
50259.26
3. 96
1498/10.76
3049
2024
Performance
DunAn has continuously increased investment in innovation team building and R&D, achieving outstanding results. In 2024, therewere 887 patent applications globally, 463 patents were granted. And there were 3,049 valid patents at the end of the reporting period.
Intellectual Property Protection TrainingDunAn has continuously strengthened its intellectual property protection system. In 2024, the company conducted strati?edand categorized training for personnel with di?erent functions. The intellectual property management team received 16professional training sessions, signi?cantly enhancing their professional capabilities in IP protection, utilization and riskmanagement. Simultaneously, 5 specialized innovation protection training sessions were organized for R&D personnel,e?ectively raising IP awareness during the R&D process and improving protection capabilities for innovation outcomes,thereby providing solid safeguards for standardized management of technological innovation achievements.
Case
5453
Ultra-Silent Electronic Expansion ValveCaseNoise has always been a persistent technical challenge in the VRV systems. Since 2016, DunAn has beenconducting research on expansion valve noise reduction technology. In recent years, breakthroughs innoise reduction technology have continued, leading to the launch of more market-competitive silentproducts. In 2024, the company introduced an industry-?rst noise reduction solution, e?ectively reducingthe noise level of air conditioning products without subcooling before the valve, achieving a reductionof 5-6 dB(A). The product is now a leader in the industry.
Research on Vibration and Noise Reduction Technology for Four-Way ValvesCaseTo address vibration and noise issues during directional changes in typical four-way valve models, thecompany collaborated closely with Professor Wu Dazhuan's team at Zhejiang University. Through simulationanalysis, signal processing, test veri?cation and other methods, the research optimized the design offour-way valve sliders. This successfully resolved shaking and abnormal noise problems in brass four-wayvalves during directional changes, reducing their vibration acceleration from an original average of 13.36m/s? to 5.86 m/s?. Simultaneously, stainless steel four-way valves also showed signi?cant improvement, withvibration acceleration decreasing from 18.24 m/s? to 12.62 m/s? while reducing reversing time by 30%,substantially enhancing reversing performance. Based on these achievements, three research papers werepublished and included in SCI, along with ?ve invention patent applications ?led.
Electric Large-Capacity Four-Way ValveCaseDunAn's large-capacity four-way valves have been market-validated for nearly 20 years, ranking?rst in global market share with widespread recognition. For 37 years since its establishment,DunAn has consistently focused on customer needs, continuously gaining insights into customerrequirements and driving innovative R&D. The electric large-capacity four-way valve is an innova-tive product developed based on customer needs, featuring built-in sensors that enabledirectional process monitoring and self-diagnosis of faults. Its innovative structure achievesmotor-driven operation and zero-pressure-di?erence switching, signi?cantly enhancing productreliability. Driving green development through innovation and leading the future with technology,DunAn steadfastly adheres to the principle of "technology leadership, cost leadership, and serviceleadership," actively assuming dual-carbon responsibilities for the green and high-qualitydevelopment of the industry.
Responsibility as Our Anchor2024 Environmental, Social and Governance Report
Adhering to employee-centric and equality-respecting principles, the Company strictly complies with applicable laws and regulations. Weresolutely oppose all forms of illegal employment and forced labor practices, including child labor and human tra?cking. Discriminationon race, ethnicity, skin color, ancestry, religion, political opinion, social origin, educational background, gender, household registrationstatus, health condition, age, height, or language is strictly prohibited. These measures ensure full compliance in employment practices,e?ectively safeguarding human rights while guaranteeing workplace equality and safety for all employees.
The Company has established participatory communication as a cornerstone of corporate culture development, institutionalizingmulti-channel employee engagement mechanisms. Through quarterly employee forums, we maintain direct dialogue platforms betweenmanagement and frontline sta?, ensuring all voices are heard and respected in organizational decision-making.To broaden communication avenues, the company has established dedicated suggestion boxes enabling employees to submit feedbackat any time regarding operational management, workplace conditions, and bene?t policies. Complementing this, regular service satisfactionsurveys are conducted to comprehensively understand sta? needs and experiences. A closed-loop management system (collect →acknowledge → resolve → follow up) ensures every employee concern receives documented responses and actionable resolutions.
Equality & Respect
The Company consistently prioritizes employee well-being by continuously improving compensation and bene?ts systems, enhancing thequality of life care for employees, and ensuring their happiness. We are dedicated to creating a supportive and harmonious work environment.In future development, the Company will uphold its employee-centric philosophy, further re?ne the employee care and bene?ts framework, andfoster an improved working and living environment for employees, ultimately fostering mutual growth and development for both theCompany and its employees.
Compensation & Bene?ts
IndicatorUnit2024
Total WorkforceGender Distribution
Age Distribution
EducationDistribution
MaleFemaleUnder 30Aged 30-50Over 50Percentage of Employees with Associate Degree or Higher
Master's degree or above
PersonPersonPersonPersonPersonPerson
%Person
1392189624959396586511305
27.45
Democratic Communication
Public-Private Partnership for Data Security Emergency DrillsCaseIn 2024, DunAn deepened its collaboration with the Zhuji Municipal Public Security Bureau's Cyber Police Unit to enhancedata security capabilities through "knowledge exchange + drills." In May, a government-enterprise security exchange washeld to advance a "policy + technology + management" data security framework under the Cyber Police Unit's guidance. InAugust, authorized by the public security department, the company conducted practical penetration tests that simulatedcyberattacks to comprehensively identify system vulnerabilities. Based on the assessment results, security policies wereoptimized to tangibly improve proactive defense capabilities.
Five Major Systems and Classi?ed ProtectioDunAn has built a management system centered on ERP, CRM, PLM, BPM, and DMS, formulating comprehensive data security strategiesunder the Classi?ed Protection 2.0 framework. Through strict access controls, data encryption, log auditing, and perimeter protectionmeasures, the company e?ectively safeguards the integrity, con?dentiality, and availability of information assets. The continuouslyimproved information security system not only meets compliance requirements but also provides solid support for sustainable corporatedevelopment.Infrastructure DevelopmentThe company has constructed a standardized data center compliant with national classi?ed protection requirements, equipped withadvanced backup UPS, emergency power stations, and environmental monitoring systems. It has also established an industrial-gradededicated network ring, implemented local data multi-replica management, and deployed professional storage backup solutions. Thecompany's data center is housed in a China Unicom IDC facility under a leasing agreement. This facility meets national 5A-level certi?cationstandards, ensuring stable and reliable power supply to ful?ll the data center's continuous power requirements.
DunAn places high importance on data and information security. The company clearly de?nes the responsibilities of each departmentregarding data and information security while strictly complying with relevant laws and regulations. It has established and implementedinformation security management systems (including the "Network System Operation Management Regulations," "Network InformationSecurity Management Regulations," "Instant Messaging Tools Management Measures," and "Computer Room Management Measures") toensure data reliability, security, and con?dentiality. During this reporting period, no data security incidents occurred.
Data Security
Employee Security
5655
Responsibility as Our Anchor2024 Environmental, Social and Governance Report
The Company has established a comprehensive welfare system for all employees, encompassing multidimensional protections tocultivate a work environment that prioritizes safety, health, security, and humanistic care.Welfare & Care
DunAn adheres to the "Four High Principles" (High Quality, High Responsibility, High Contribution, High Compensation). The company hasestablished a competitive compensation system through methods such as position value assessment, employee capability review, perfor-mance evaluation, small-unit cost accounting, Innovation and Development Awards, and market salary benchmarking. This ensures thatemployee compensation levels are leading within the region and the industry, providing a competitive advantage.At the same time, the company has further advanced the incentive system centered around the philosophy of "Rewarding Strivers, MoreGrain for More E?ort." This system fosters a "shared understanding and responsibility" between the company and all employees, creatinga community of shared interests that stimulates employee vitality and cohesion.
Incentive Compensation
Welfare systemDetailsLiving Bene?ts
- Provides complimentary meals and company-subsidized housing for all employees- Allocates dedicated private suites for dual-career couples, ensuring comfortable living arrangementsSeasonal Care
- Distributes heat allowance during summer months, complying with China's GB/T 4200-2022 High-Tem-perature Operation Standards- Implements shift rotation systems to mitigate heat exposureLong-service Award
- Presents customized commemorative gold coins at 5/10/15-year milestones- 2024 disbursement: RMB 3.03 million to 1,057 employeesFamily Support
- Operates Employee Mutual Aid Fund providing urgent ?nancial assistance- 2024 interventions: 285 employees supported with RMB 2,249,100 disbursed
The Company prioritizes employees' quality of life by organizing diverse activities such as outdoor team-building, cultural competitions,and festive celebrations. Through these engagements, employees unwind and rejuvenate outside of work, fostering mutual understanding.Team cohesion is continuously strengthened through shared joy and collaborative experiences.Well-being & Engagement
Migrant Children Support Program, Heartwarming InitiativeCaseDuring the 2024 summer break, the Company partnered with the DiankouLabor Union to launch a “Migrant Children Support Program”, addressingchildcare challenges for migrant workers' children. This initiative created asafe learning and recreational environment for the migrant children, ando?ered structured programs, including academic tutoring, interestdevelopment, and safety education. Meanwhile, this initiative has signi?cantlystrengthened migrant workers' sense of identity and belonging toward theCompany, enabling them to focus more securely on their work. Throughthese compassionate actions, the Company not only demonstrates its socialresponsibility but also fosters a more harmonious workplace environment.
Women's Day, Blooms of CareCaseThe Company values care for female employees, heartfelt greeting are extended annually on International Women's Day. OnMarch 8, 2024, every female employee received thoughtfully arranged ?owers, symbolizing respect and care. Activities includ-ing handicraft workshops and themed lectures were organized, where employees engaged in open exchanges and talentshowcases. Within this warm, joyful atmosphere, participants profoundly experienced the care of the organization, furtherstrengthening their sense of belonging and team cohesion.
Long-Service Recognition Case StudyCaseDunAn launched the Employee Commemorative Awards Program in 2022. In 2024, weimplemented the following tiered recognition system:
48g gold coins awarded to 1 employee with 30+ years of service35g gold coins granted to 35 employees with 25+ years of service24g gold coins presented to 63 employees with 20+ years of serviceTotal investment reached RMB 3.03 million, recognizing 1,057 employees.During the annual conference, employees with 25+ years of service were honoredthrough dedicated ceremonies and public recognition. This initiative strengthens culturalidentity, demonstrates respect for employees' dedication, and enhances team cohesion andorganizational belonging.
5857
Responsibility as Our Anchor2024 Environmental, Social and Governance Report
The Company is committed to fostering a culture of lifelong learning, continuously re?ning a multi-path talent development system andpromotion mechanisms. These initiatives support employees at all levels in achieving sustained, e?ective self-improvement and professionaladvancement. By empowering individuals to excel with vitality and self-transcendence on the global industry stage, we collectivelyadvance the corporate vision of becoming "the expert of healthy and comfortable environment system solutions within HVAC industry".
Career Growth
To enhance systematic and sustainable training, the Company has established a competency-based training roadmap aligned with rolerequirements and talent development objectives. This framework guides annual training implementation through:
Digital Role-Speci?c Curricula: Structured online programs based on job requirements strengthen core competencies through essentialknowledge/skill masteryLeadership Pipeline Programs: Three Eagles Development Program (managerial capacity building) and Blue Talent Corps Program(technical specialist cultivation)These initiatives ensure e?ective knowledge transfer and continuous improvement, maintaining precise alignment between learningcontent and business imperatives.
Empowering Growth & Development
Three Eagles Development ProgramCaseThe Three Eagles initiative employs a 70-20-10 development model (70% on-the-job practice, 20% mentor-ship, 10% classroomtraining) to cultivate high-potential talents with strong ambition and learning agility, building a leadership pipeline for futurebusiness core teams.Eaglet Program：Targeting new graduates, this program immerses recruits in DunAn’s history, culture and core values, andclari?es behavioral expectations of a DunAn employee. And the program will help new graduates accelerate their school-to-worktransition through training on company organization, market layout, product know-how, and business unit rotations.Elite Eagle Program: Selecting high-potential junior employees, the program develops top-performing frontline sta? intobusiness specialists, cultivate section-manager candidates through management fundamentals training, so to strengthensmid-level talent successions.Senior Eagle Program: Empowering outstanding section managers, the program builds strategic leadership capability. It willenhance sustainable management competencies via challenging operational assignment and decision simulations workshopsand create a middle-management talent reservoir to drive business objectives.
6059
Total Dedication, Fueled by Our SpiritCase
The Company hosts 1-2 major basketball tournaments every year, showcasing the sport’s vitality and promoting valves ofteamwork, perseverance, and progress. In 2024, we partnered with leading DianKou enterprises to organize inter-companyfriendship leagues to facilitate exchanges between enterprise labor unions, enrich employees’ cultural engagement, enhanceworkforce dynamism, and ignite a collective ethos of collaborative striving and competitive excellence.
Harmony of Dreams, Voices Shaping TomorrowCaseIn September 2024, DunAn celebrated its 37th anniversary at its Zhuji (Diankou) headquarters, where 16 group and individualperformers from functional departments and business units converged. Through musical performances spanning genresfrom pop anthems to timeless classics, they embodied artistic passion while narrating stories of camaraderie, aspiration, andhuman connection. Each vocal expression and stage movement radiated individuality, transforming melodies into enduringmemories that echoed the company's enduring spirit.
Into Wild Peaks, Autumn Trails UnfoldCase
Embracing winter's charm through seasonal exploration, the company'slabor union organized a November 2024 hiking event themed "MountainTrails & Autumn Strolls". Participants traversed two renowned trails inthe Kuaiji Mountain Range, Xuedou Ridge and Zoumagang Ancient Pass.Beyond scenic vistas, the ascent fostered colleague bonds whileepitomizing the DunAn ethos: "Perseverance at life's ascents, navigationalresolve at critical junctures" through challenging terrain.
Responsibility as Our Anchor2024 Environmental, Social and Governance Report
IndicatorUnits2024Training ParticipantsAverage Training Hours per Employee
Training Coverage RateTraining Investment
Person-timeHour%10k RMB
39980
6.2
269.2
Blue Talent Corps Program CaseAs DunAn advances in precision manufacturing and high-end equipment production, skilled technicians are pivotal tomaintaining technological leadership and enabling the automation and intelligent manufacturing transition. The Blue TalentCorps Program provides frontline employees and vocational graduates with advancement pathways through:
Selection Criteria:Targeting associate/vocational diploma holders (including interns and graduates) from production linesDevelopment Framework:
Workshop immersionTechnical curriculum masteryCross-functional rotationsApprenticeship mentoringCareer Specialization Tracks:
Equipment maintenance techniciansProduction supervisorsQuality assurance specialistsTechnical service engineersProcess optimization analystsThis initiative systematically cultivates operational expertise and managerial competencies while building sustainable talentreserves for organizational growth.
Function-Speci?c Competency DevelopmentCaseTo align training with job requirements and equip employees with essential skills, the Company implemented targetedcompetency programs across key functions in 2024:
Manufacturing System Training: Focused on production teams, this program enhanced managerial critical thinking, strength-ened cross-functional collaboration, motivated high-performance team culture so to improve quality control and productionsite management.
Supply Chain Training: Focused on procurement teams, this program focused on systemic risk identi?cation and global
supply chain management strategies.
Quality Management Training: Focused on quality management team, this program covers foundational quality standards,and data-driven quality analytic methodologies.
6261
The company has established three career development Pathways: Professional Pathway (technical expertise), Management Pathway(leadership roles), Operations Pathway (business stewardship). This multi-path system transcends traditional administrative promotionconstraints, providing specialized advancement routes for technical professionals. Senior technical experts attain compensation packagescomparable to executive leadership. For instance, the Technical Pathway progression spans from Junior Technician to Chief Scientist, withtop-tier technical compensation exceeding presidential-level remuneration, fundamentally rede?ning conventional single-Pathway careersystems.
Career Progression & Performance Management
The company implements a Balanced Scorecard-based organizational performance framework, cascading strategic objectives to departmentaland individual levels to ensure e?ective execution. In the Incentive Architecture, the Company insists on business unit reform, includingindependent operation, accounting and evaluation by customer segment, region and product line. Incentive schemes are continuouslyre?ned across production, marketing, and functional units to deepen enterprise-wide business ownership. And meanwhile, the ?rst-phaseemployee stock ownership plan has been launched to stimulate employees’ engagement and innovation, fueling sustainable corporateadvancement.
Professional PathwaysManagement PathwaysBusiness Development Pathways
Three Career Pathways
Key - levelProfessional Position
Assistant
ScientistSenior ExpertExperienced Expert
ExpertProduct ManageIntermediate Engineer
Vice - President
DirectorDeputy DirectorDepartment HeadDeputy DepartmentSection Chief / Manager
CEOVice - PresidentAssistant to the President
General ManagerDeputy General Manager
Department HeadDeputy Department Head
Responsibility as Our Anchor2024 Environmental, Social and Governance Report
To advance technical competencies and career progression, the Company has established Technical Pro?ciency Evaluation Framework,including Role-speci?c criteria for engineers and frontline sta? (including Welding Technician Certi?cation Protocol). And Multi-dimensionalassessment is adopted, including e?ciency metrics, product quality outcomes, industry certi?cations and professional honors.The Company cultivates a craftsmanship ethos emphasizing mastery through deliberate practice, rejection of short-termism, andsustained specialization and incremental re?nement. In order to motivate the passion of employees, the Company organized SkillEnhancement Initiatives, including annual Skills Mastery Competitions across all function departments (from production to management), andCross-departmental technical exchange platforms.
Professional Skills Development
Forging Core Competencies, Cultivating CraftsmanshipCase
In October 2024, the Company organized its annual Skills Excellence Initiative, leveraging competitions to drive training andknowledge exchange across technical teams. Key outcomes included:
Corporate-Level Competitions: 14 events engaging 702 participants, with 41 technical experts recognizedBusiness Unit Competitions: 50 specialized contests involving 1,810 participants, awarding 217 divisional honorsParticipants spanned front line production sta?, technical specialists, and functional managers, collectively demonstratingorganizational technical prowess through hands-on skill demonstrations and process optimization challenges.
The EHS Management Department oversees the planning, implementation, inspection, and evaluation of corporate safety operations.General managers across business units are accountable for enforcing management protocols within their respective divisions. Employeesare required to strictly adhere to safety regulations and actively participate in safety training and initiatives. The company has establishedSafety Inspection and Performance Management Regulations to monitor and audit safety compliance across all units, to conduct routinechecks on employee behavior, environmental conditions, and equipment maintenance, to drive continuous improvement in processsafety performance through data-driven analysis.
Health & Safety Assurance
Occupational health and safety constitute the organization's lifeline and employees' fundamental right. The Company prioritizesworkforce well-being by adhering to safety-?rst, prevention-focused, and holistic management principles, committed to safeguardingemployees' physical and mental health while preventing work-related hazards.
Occupational Health & Safety Protection
Health Check-ups
Conduct comprehensive annual health screenings for all employees, with recentenhancements in cardiac health screenings through increased investment to proactivelyidentify and mitigate potential health risks.
Emergency Preparedness
Deliver certi?ed ?rst aid training to employees, achieving 100% department-levelresponse coverage. Deploy automated external de?brillators (AEDs) strategicallyacross facilities, enabling immediate emergency response capabilities.
Risk Assessment
Implement ongoing occupational health risk evaluations to systematically identify,assess, and control workplace hazards, ensuring operational environment safety.
Protective Equipment
Provide compliance-certi?ed personal protective equipment (PPE) tailored to diverseoperational conditions, guaranteeing safety across all work scenarios.
Advancing Humanitarian Care through Cardiac Health InitiativesCase
In 2024, demonstrating humanitarian commitment, the Company:
Enhanced Health Screenings: Introduced specialized cardiac health evaluations in annual checkupsEmergency Readiness: Aligned with the "Golden 4-Minute" response standards, the Company deployed 16 AED units across
production zones and o?ces, and established 18 ?rst aid stations.Certi?ed Training: Conducted CPR/AED certi?cation programs for production supervisors, facility managers, and securitypersonnel, achieving 100% trainee quali?cation, and promoted the "First Aid for All, by All" principle to all employees.
6463
EHS ManagementDepartment
Environmental Management TeamFire Management TeamOccupational Health and Safety Group5S on-site managementIntegrated Management Departmen
Responsibility as Our Anchor2024 Environmental, Social and Governance Report
DunAn has established a scienti?c and e?ective supplier management strategy, covering key dimensions from accurately developinghigh-quality suppliers, maintaining good supply-demand cooperation relationships, strictly evaluating to ensure supply quality, tocomprehensively controlling risks to ensure supply stability, providing supply assurance for the company's steady development.
Supplier Management Strategy
To ensure the quality of supplier cooperation and meet sustainable development requirements,the following access quali?cation review standards are set:
Independent legal entity with advanced and reasonable product process technology, completeproduction, testing, and experimental equipment.ISO9001 and ISO14001 system certi?cations from third-party certi?cation bodies, in compliancewith RoHS and REACH management standards.Provision of environmental compliance-related materials, which is a necessary condition for access.Good production and ?nancial status, signi?cant price advantages, and potential for healthydevelopment.Enterprise managers and employees have a good quality concept and awareness of qualityimprovement.Access Review
To further optimize the supply chain and ensure the stable and e?cient operation of the company,DunAn strictly follows the “Supplier Performance Management Measures” to standardize and strengthenthe performance evaluation and implementation of external purchase and outsourcing suppliers.Suppliers are comprehensively managed and evaluated regularly from multiple dimensions such as cost,delivery, quality, technology, and service according to the “Supplier Performance Evaluation Rules.”Through a systematic and standardized evaluation process, suppliers are encouraged to continuouslyimprove, ensuring they can continuously provide high-quality products that meet the company'srequirements while maintaining reasonable prices and high cost-e?ectiveness.Based on the evaluation results, the company will strictly implement subsequent follow-up measures.Suppliers with excellent performance will be given more cooperation opportunities and incentivepolicies; suppliers with issues will be promptly communicated with and assisted in developing improvementplans, setting reasonable recti?cation deadlines, and continuously following up on recti?cationprogress; for suppliers with ine?ective recti?cation or long-term non-compliance, measures such asreducing orders, suspending cooperation, or even eliminating them will be taken to promote the overallimprovement of supplier levels and achieve continuous optimization of the supply chain.
Evaluationand Appraisal
During cooperation, if a supplier's comprehensive performance score is below 60 points (Grade D) fortwo consecutive quarters, their supply quota for the next quarter will be canceled, and cooperationquali?cations will be terminated. At the same time, the company has formulated the “Supplier BlacklistManagement Measures,” which clearly stipulate that during the performance period of cooperation, if asupplier engages in illegal, irregular, breach of contract, dishonesty, or poor performance behaviors, theywill be included in the blacklist and permanently disquali?ed from supplying after supplier applicationinvestigation or company veri?cation.
Exit
Mechanism
The Company maintains a professional security team and continuously enhances its comprehensive security system. Conductingyear-round patrols across o?ces, production ?oors, and employee residential zones, we safeguard personnel safety while fostering secureworking and living environments.
Facility Security Assurance
Performance Metrics
IndicatorUnit2024
Safety Production InvestmentSafety TrainingWork Injury InsuranceSafety Liability Insurance
Occupational Health & Injuries
Total HoursPersons Hours
InvestmentCoverage Rate
InvestmentCoverage RateOccupational Disease IncidenceWork-related FatalitiesLost Workdays Due to InjuriesLost Time Injury Frequency Rate
10k RMBHourHour10k RMB
%10k RMB
%
%Person
Day
677.80
17490.5
1.66
619.90
13.41
3751.5
1.96
DunAn actively practices the concept of green development by regularly assessing the environmental performance of suppliers, urgingstrict compliance with environmental regulations, and striving to reduce pollution and resource waste during production. At the sametime, the company vigorously promotes green innovation in the supply chain, working closely with suppliers to jointly develop a series ofsustainable solutions, covering areas such as recycling of renewable resources, application of energy-saving equipment, and research anddevelopment of recyclable packaging.In terms of social responsibility, DunAn has signed the “Supplier Code of Conduct” with suppliers to ensure they strictly adhere to laborlaws, e?ectively safeguard the legitimate rights and interests of their employees, and create a safe and healthy working environment foremployees in the supply chain. Additionally, the company closely monitors various social responsibility issues within the supply chain,?rmly opposes improper practices such as child labor, excessive working hours, and forced labor, and is committed to building a responsiblesupply chain.
Sustainable Supply ChainSupply Chain Security
6665
Responsibility as Our Anchor2024 Environmental, Social and Governance Report
IndicatorUnit2024Accounts payable (including notes payable)Proportion of accounts payable (including notes payable) to total assets
Amount of overdue paymentsAmount of overdue payments to SMEs
10k RMB
%10k RMB10k RMB
389118.38 32.02
0 0
Embracing Thai Cultural TraditionsCaseIn Thailand, DunAn has deeply integrated into the local community by respecting and celebrating traditional Thai festivals. Thisculturally aligned operational approach has strengthened both economic and social outcomes. DunAn Thailand fully observes allnational holidays, including Makha Bucha Day, Songkran Festival, and the birthday of King Rama X. Employees are granted fullleave during these eight key festivals, enabling them to participate in temple o?erings, Loi Krathong ceremonies, and other localcustoms.
DunAn places great emphasis on local employment, recognizing it as a key intersection between business development and social contribution.The company actively integrates into local markets and establishes strong ties with diverse talent pools. By recruiting local professionals throughmultiple channels, DunAn not only creates a wide range of high-quality job opportunities, but also e?ectively boosts local employment, incomelevels, and quality of life.At our overseas facilities, local operations are equally prioritized. For example, at the Thailand plant, local employees accounted for 98% ofthe production workforce by the end of 2024, signi?cantly enhancing team stability and market responsiveness.
Local Operations and EmploymentCommunity Engagement
Social Security
Enhancing Quality Management Concepts and Co-creating Green SuppliersCaseOn June 12, 2024, DunAn held a supplier coaching meeting at the Diankou base, focusing on three major themes: upgradingquality management, co-building a green supply chain, and analyzing market trends. Through concept promotion, path explora-tion, and case analysis, the company encouraged suppliers to optimize management processes, implement environmentalprotection measures, and strategically layout the market, aiming to strengthen collaborative e?ciency, enhance comprehensivecompetitiveness, and achieve mutual bene?ts and win-win results in sustainable development between the company andsuppliers.
DunAn has established a supply chain risk management system focused on legal compliance and sound business operations. At the legal level, thecompany signs a "Basic Supply Agreement" with all quali?ed suppliers, emphasizing the legal compliance of suppliers. This helps prevent fraudulentcontracts, intellectual property infringements, commercial bribery, and other illegal activities. Suppliers that may cause legal disputes, economicliabilities, or reputational damage are included in the non-cooperation list.At the operational level, the company rigorously evaluates the ?nancial health of suppliers during the onboarding process. This ensures thatsuppliers have su?cient cash ?ow, a reasonable debt-to-equity ratio, and stable pro?tability. By doing so, the company e?ectively prevents supplyinterruptions or product quality issues caused by poor supplier management, thus safeguarding the continuity and stability of the company'sproduction and operations.This dual-control mechanism, through proactive prevention and dynamic monitoring, signi?cantly enhances the supply chain's resilience to risks.
Supply Chain Risk Management
IndicatorUnit2024supplier evaluations
Total numberNumber of suppliers assessed
for social impactNumber of suppliers assessed
for environmental impactNumber of unquali?ed suppliers eliminated
Number of major risk and impact eventsNumber of supplier training sessions held annuallyNumber of supplier participants in training
ItemItemItemItemItemSessionPerson
6867
DunAn actively practices corporate social responsibility and is committed to building an equal and win-win supply chain ecosystem. Thecompany establishes a fair and transparent procurement mechanism, strictly implements the “Quota Management Measures” and “SupplyChain Performance Management Measures,” providing equal market participation opportunities for SMEs. Speci?c measures include:
lowering procurement thresholds, simplifying approval processes, reducing participation barriers for SMEs; establishing long-term stablestrategic cooperation relationships, providing technical support and professional training to help SMEs enhance core competitiveness. Inaddition, the company adheres to the “three guarantees” principle: ensuring legal and standardized operations, ensuring timely and qualitydelivery, and ensuring payment according to agreements, creating a healthy and sustainable development environment for SMEs.
Equal Treatment of SMEs
Responsibility as Our Anchor2024 Environmental, Social and Governance Report
While advancing localized operations, DunAn also emphasizes deep integration with local industrial chains. The company prioritizes local suppliers inits procurement processes. For example, 72% of outsourced processing units in Zhuji are sourced locally. This strategy e?ectively reduces supplychain costs and transportation risks while supporting the coordinated development of local industries and enhancing regional economiccompetitiveness.
Local Procurement
DunAn has remained steadfast on the path of philanthropy. Every year during the Spring Festival, the company extends warmthand care to ?ve administrative villages in Diankou Town, providing gifts and support to over 900 elderly residents aged 70 andabove, as well as disadvantaged families. These e?orts help ensure that vulnerable groups feel valued and cared for duringtraditional holidays.
Elderly Care ProgramsPublic Welfare and Philanthropy
For the past 20 years, DunAn has consistently supported higher education for underprivileged students, helping 30 high school studentsand 227 university students pursue their academic dreams. This enduring commitment re?ects the company’s belief that compassion notonly warms hearts, but also unites communities and contributes to a better society.Educational Support Programs
7069
27 Consecutive Years of Community SupportSince 1998, DunAn has remained committed to poverty alleviation and community care for 27 consecutive years—are?ection of the company’s deeply rooted values. What may seem like a small task for a large enterprise has become along-standing tradition at DunAn. These sustained e?orts are not only an expression of our corporate culture, but also asincere and proactive ful?llment of our social responsibility.
Case
IndicatorUnit2024
Total philanthropic donations10k RMB44.79
20 Years of Academic Sponsorship, 257 Students SupportedCaseFacilitated by the local Working Committee for the Care of the Next Generation, 2024 marked the 20th year of DunAn’s educa-tional sponsorship for students from underprivileged families in Zhuji. The initiative, themed “Love Helps Realize Dreams,” notonly addresses essential livelihood and educational needs but also demonstrates care, empathy, and unity in action—underscoring its signi?cance as a meaningful public welfare program.
Responsibility as Our Anchor2024 Environmental, Social and Governance Report
Energy
IndicatorEnergy Use Pro?leTotal energy consumptionEnergy Consumption (by Type)
Diesel
Natural Gas
LGPNon-renewable Electricity PurchasedRenewable Electricity PurchasedProportion of Renewable ElectricityDirect Energy ConsumptionIndirect Energy Consumption
Energy IntensityClean Energy UsageTotal Clean Energy ConsumptionEnergy Consumption (by Type)PV Power GenerationProportion of PV PowerNatural Gas
Tce
LM?M?10,000 kWh10,000 kWh%TceTceTce/10k RMB
MWh10,000 kWh
%M?
16936137043173456
10328
5.3
16936
0.025
5820
6.0
3173456
Unit2024
Water resource
IndicatorUnit2024
WaterConsumption Intensity
WithdrawalDischargeConsumption
10000m?10000m?10000m?Tonne / 10k RMB revenue
38.86
23.89
14.97
0.737
KPI Table
Climate Protection
IndicatorUnit2024Environmental Protection Investment and Environmental Tax
Environmental Pollution Incidents
Penalty Amount
10k RMBTime10k RMB
1,250.15
Carbon Emissions
IndicatorUnit2024Total Emissions
Scope 1
Scope 2
tCO2e
tCO2e
tCO2e
345931128724755Air Emissions
IndicatorUnit2024
SOxNOxVOCs
kgkgkg
796.7
4621.55635.2Water Discharge
IndicatorUnit2024Industrial WastewaterDomestic Wastewater
CODNH3-NTotal NitrogenTotal Phosphorus
M?M?TonneTonneTonneTonne
23892252400
3.44
0.177
0.623
0.395
7271
KPI Table2024 Environmental, Social and Governance Report
Solid Waste
IndicatorUnit2024Total WasteInclude：
General WasteHazardous Waste
TonneTonneTons / 10k RMB
TonneTons / 10k RMB
TonneTotalIntensity
TotalIntensity
18777.0817910.89
0.01078
870.19
0.00194
Waste Recycling
IndicatorUnit2024
Waste Recycling
Tonne
%
Total
Rate
17910.89
95.36
Environmental Compliance
IndicatorUnit2024
Amount of Major Environmental Penalties
During the Reporting Period
10k RMB0
Employee
IndicatorUnit2024Total WorkforceGender Distribution
Age Distribution
Education Distribution
PersonPersonPersonPersonPersonPerson
%Person
MaleFemaleUnder 30Aged 30-50
Over 50Percentage of Employees with Associate Degree or Higher
Master’s degree or above
1392189624959396586511305
27.45
IndicatorUnit2024
Training ParticipantsAverage Training Hours per EmployeeTraining Coverage Rate
Training Investment
Person-timeHour%10k RMB
39980
6.2
269.2
Training
Social KPI
7473
KPI Table2024 Environmental, Social and Governance Report
Note:
The disclosure boundaries for Energy, Water resources, Carbon emissions, and Water Discharge performance : Dunan Hetian, DunanMachinery, Dunan Thermal Technology, Dunan Automotive Thermal Management, Dunan Electro-Mechanical.The disclosure boundaries for Air emissions performance : Dunan Hetian, Dunan Machinery, Dunan Electro-Mechanical.The disclosure boundaries for solid waste and Waste Recyling performance : Dunan Hetian, Dunan Machinery, Dunan Automotive ThermalManagement, Dunan Electro-Mechanical.
Health & Safety Assurance
IndicatorUnit2024
Safety Production InvestmentSafety TrainingWork Injury InsuranceSafety Liability Insurance
Occupational Health & Injuries
10k RMB
HourHour10k RMB
%10k RMB%%Person
Day
Total HoursPersons HoursInvestmentCoverage RateInvestmentCoverage RateOccupational Disease IncidenceWork-related FatalitiesLost Workdays Due to InjuriesLost Time Injury Frequency Rate
677.80
17490.5
1.66
619.90
13.41
3751.50
1.96
Product and Service
IndicatorUnit2024
Customer-end Product RecallCustomer Complaint Rate per ?10 Million Sales
CasePer ?10 Million
1.95
IndicatorUnit2024R&D investment amountR&D investment/revenue ratioNumber of R&D personnel & ratioPatent applications in reporting periodPatents granted in reporting periodValid patents at the end of reporting period
10k RMB
%Person/%
ItemItemItem
50259.26
3. 96
1498/10.76
3049
R&D-Driven Innovation
Data Security and Customer privacy
IndicatorUnit2024Data Security IncidentsCustomer Privacy Breach Incidents
10k RMB10k RMB
Social Contributions
IndicatorUnit2024Total philanthropic donations10k RMB44.79
Supply Chain Security
IndicatorUnit2024supplier evaluations
ItemItemItemItemItemSessionPerson-time
Total numberNumber of suppliersassessed for social impactNumber of suppliers assessedfor environmental impactNumber of unquali?ed suppliers eliminated
Number of major risk and impact eventsNumber of supplier training sessions held annually
Number of supplier participants in training
IndicatorUnit2024
Accounts payable (including notes payable)
Amount of overdue paymentsAmount of overdue payments to SMEs)
Proportion of accounts payable (including notes payable)
to total assets
10k RMB%10k RMB10k RMB
389118.38
32.02 0 0
Fair Treatment of SMEs
7675
KPI Table2024 Environmental, Social and Governance Report
IndicatorUnit2024
Total number of board membersBoard members by gender
Board members byprofessional /educational background
Average tenure of board membersProportion of independent directors on the board
Proportion of independent directors on the Audit CommitteeProportion of independent directors on the Remuneration Committee
Proportion of independent directors on the Nomination Committee
Number of board meetings heldAttendance rate of board membersNumber of Audit Committee meetings heldNumber of Remuneration Committee meetings heldNumber of Nomination Committee meetings held
PersonPersonPersonPerson (Independent Director)Person (Independent Director)Person (Independent Director)
Year%%%%Time
%TimeTimeTimePersonPersonPerson
MaleFemaleIndustry expertsLegal expertsFinancial experts
Supervisory Board members
Total NumberShareholder representative supervisorsEmployee representative supervisors
2.70
33.33
66.67
Governance KPI
Anti-Corruption and Clean Governance
IndicatorUnit2024Number of management personnel covered by anti-bribery and anti-corruption trainingPercentage of management personnel covered by anti-bribery and anti-corruption trainingNumber of employees covered by anti-bribery and anti-corruption trainingPercentage of employees covered by anti-bribery and anti-corruption trainingTotal number of commercial bribery and corruption incidentsNumber of individuals disciplined for commercial bribery and corruption
Person%Person%CasePerson
13735
98.66
Anti-Unfair Competition
IndicatorUnit2024
Amount involved in lawsuits or major administrative penalties
due to unfair competition practices
RMB0
7877
KPI Table2024 Environmental, Social and Governance Report
Index of Indicators
SectionGRI StandardsSZSE Guidelines ? No.17 (Trial)
GRI 2: General DisclosuresGRI 2: General DisclosuresGRI 2: General DisclosuresGRI 2: General DisclosuresGRI 207: TaxGRI 205: Anti-corruptionGRI 206：Anti-competitive BehaviorGRI 2: General DisclosuresGRI 3: Material TopicsGRI 305: EmissionsGRI 302：EnergyGRI 301: MaterialsGRI 303: Water and E?uents
GRI 304: BiodiversityGRI 416: Customer Health and SafetyGRI 417: Marketing and LabelingGRI 418: Customer PrivacyGRI 401: EmploymentGRI 403: Occupational Health and SafetyGRI 404: Training and EducationGRI 405: Diversity and Equal OpportunityGRI 406: Non-discriminationGRI 407: Freedom of AssociationGRI 408: Child LaborGRI 409: Forced or Compulsory LaborGRI 308: Supplier Environmental AssessmentGRI 414: Supplier Social AssessmentGRI 204：Procurement PracticesGRI 413: Local Communities///
GRI 305: EmissionsGRI 306: Waste
/Basic Company InformationBasic Company InformationVoluntary Disclosure TopicsAnti-bribery and Anti-corruption
Anti-Unfair CompetitionStakeholder Engagement
Due DiligenceClimate Action
Energy UseCircular Economy
Water UseEnvironmental Compliance
Pollutant EmissionsWaste ManagementBiodiversity & Ecosystem Protection
Product & Service Security
InnovationData Security and Privacy
RobustGovernance
CorporateGovernanceIntegrity andComplianceESG Management
Climate ShieldCircular Shield
Eco ShieldBiodiversity shieldProduct Security
Employee SecurityEmployee
Supply Chain Security
Fairness to SMEs
///
Rural RevitalizationSocial ContributionsSupply Chain
Security
Community
Security
Sustainable Shield
Responsibility&Security
About this ReportMessage from the Chairman
About Us
KPI Summary
Index of Indicators
Feedback Form
Feedback Form
Thank you for reading DunAn's Environmental, Social and Governance (ESG) Report. If you have any comments or suggestions during yourreading, please feel free to let us know. Your feedback will help us further improve our sustainability management in the future.You are from：
Your Contact Information：
What other aspects would you like to learn about through DunAn’s ESG Report?(Fill in your suggestions or interests)
Government and Regulatory AgenciesShareholders and Other InvestorsCustomersSuppliers and PartnersEmployees and Other Sta?Industry Associations
Your Feedback：
QuestionsYour overall evaluation of this reportDoes the report re?ect DunAn’s signi?cant impacts in ESG aspects?Your overall evaluation of information disclosure in this reportYour overall evaluation of the content and layout design of this report
Very GoodGoodAveragePoorVery Poor
8079
Index of Indicators2024 Environmental, Social and Governance Report